Suzlon Energy Ltd · NSE:SUZLON
Suzlon Energy — 9M FY15 Earnings Presentation
35 slides from Suzlon Energy's earnings presentation, February 2015
Slide 1: Suzlon Energy Limited 9MFY15 Earnings Presentation
Suzlon Energy Limited 9MFY15 Earnings Presentation Suzlon wind farm in Maharashtra, India www.suzlon.com
Slide 2: Disclaimer
Disclaimer • This presentation and the accompanying slides (the “Presentation”), which have been prepared by Suzlon Energy Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securi
Slide 3: Long Term Strategic Initiatives
Long Term Strategic Initiatives Suzlon wind farm in Camocim, Brazil 3 www.suzlon.com
Slide 4: Equity infusion by a Strong Investor
Equity infusion by a Strong Investor Preferential Allotment – Rs. 1,800 crs. Dilip Shanghvi Family and Shareholding New Investor Promoter Associates (DSA) Post Allotment 22.7% 23.8% Preferential Allotment of 100 crs. shares Diluted 16.7% 17.5% To accelerate growth, invest in wind farm and technology
Slide 5: Potential Shareholding Structure
Potential Shareholding Structure No. of shares in Crs. % Holdings 598.7 36.9% 158.4 47.7% 53.6% Public 16.6% 21.5% 12.2% Lenders 22.7% 100.0 16.7% DSA 340.3 30.9% 23.8% 17.5% Tanti Family Current DSA FCCB Diluted Current Post New Fully Diluted Conversions Equity Strong equity base 5 www.suzlon.com
Slide 6: Proposed Wind Farm Joint Venture
Proposed Wind Farm Joint Venture Deal Specifics Dilip Shanghvi Family and Associates Debt funding Wind Farm JV Lenders Additional working capital facilities to Suzlon for execution of the project • Subject to customary closing conditions To develop 450 MW within 2 years 6 www.suzlon.com
Slide 7: Additional Working Capital Facilities
Additional Working Capital Facilities Deal Specifics Lakshdeep Investments Credit Enhancements Lender’s Group Working Capital Facilities Demonstrates confidence in Suzlon capabilities and business model • Subject to customary closing conditions The facility is over and above provided to Suzlon from
Slide 8: Senvion Sale
Senvion Sale Deal Specifics Total Consideration • Reduced debt Immediate Cash EUR 1 bn Earn Out EUR 50 mn (Subject to conditions) Licensing Arrangements • Reduced interest India - Offshore Suzlon to get Offshore technology license for India market US - S111 Senvion to get Suzlon’s S111 license • Red
Slide 9: Immensely Beneficial to Operations
Immensely Beneficial to Operations Long Term Strategic Initiatives Strong Industry Opportunity Backing of Strong Investor Business Volume • Equity Investment in Suzlon Growth Ramp up • Wind Farm JV with Suzlon Profitability • Incremental Working Capital Facilities Lower Break Deleveraging Even Senvi
Slide 10: Strategic Focus
Strategic Focus Focus on markets like India, America, China, South Africa, Turkey etc. • High growth, High volume, Better margin markets only Superior Technology • Continued focus on R&D aimed at reducing cost of energy Increasing Market Competitiveness Best in Class Service; Growing OMS business •
Slide 11: Back to Business Growth
Back to Business Growth Multiple initiatives taken in last couple of years FY13 FY14 FY15 FY16 • FCCB restructuring • CDR • FCCB default • Senvion Sale • Focus on profitable • Credit Enhanced Bond Issuance • Equity Infusion • Cross default on other growth debt facilities • Business restructuring • W
Slide 12: 9M Performance Update
9M Performance Update Suzlon wind farm in Aracati, Brazil 12 www.suzlon.com
Slide 13: Performance Snapshot
Performance Snapshot 9M FY15 9M FY15 9M FY14 9M FY14 Particulars Suzlon Wind Consolidated Suzlon Wind Consolidated Revenue 3,957 14,928 4,134 13,631 EBITDA -280 482 -979 -469 EBIT -558 -141 -1,270 -1,034 Key takeaways: • 9M FY15 Consol EBITDA Rs. 482 crs vis-à-vis Rs. -469 crs YoY • 9M FY15 Suzlon W
Slide 14: Suzlon Wind Performance – Key Trends
Suzlon Wind Performance – Key Trends Volume (MW) EBITDA (Rs. Crs.) 138 106 -100 -198 35 -436 Q3 FY14 Q2 FY15 Q3 FY15 Q3 FY14 Q2 FY15 Q3 FY15 • Improving profitability – Favorable geographic and product mix • Reduced Fixed Expenses – Driven by business restructuring and stringent cost control • Inter
Slide 15: Suzlon Wind: OMS Business
Suzlon Wind: OMS Business Revenues (Rs. Crs.) +35.0% • Strong Growth at 35% CAGR 1,082 979 • 50+% Contribution margin 594 • ~100% renewal track record • Contractual, annuity-like, cash flows 9M’13 9M’14 9M’15 • Non cyclical business in nature *External only Growing into a sizeable business Annuity l
Slide 16: Suzlon Wind: Order Book
Suzlon Wind: Order Book Order Book as on 31st Dec 2014 • Deliveries within next 12 months Particulars Amount • 6-9 months execution cycle in India Order Book Volume 1,147.50 MW Order Book Value Rs. 7,250 crs. • Spot orders not captured Delivery Schedule By Mar’16 • Strong order pipeline Huge tractio
Slide 17: Debt Profile
Debt Profile Suzlon wind farm in Rajasthan, India 17 www.suzlon.com
Slide 18: Existing Debt Profile
Existing Debt Profile As on 31st Dec 2014 Suzlon Wind Rupee Foreign Currency Denominated Denominated 1 FCCBs(2) $436M 1 Secured Domestic Debt(1) Rs. 8,901 Crs. Effective Interest Rate @ ~3.3% Effective Interest Rate @ ~11% Restructuring concluded 5 yr bullet maturity in FY2019-20 Restructured throug
Slide 19: FCCB Conversion to Equity
FCCB Conversion to Equity FCCB Principal Value* (US$ Mn) • Conversion Details 575.7 — Debt Converted: US$139.6M — Exchange Rate: Rs. 60.225 139.6 — Conversion Price: Rs. 15.46 per share 436.1 — Issue of ~54+crs shares 546.9 • Strengthening Balance Sheet 407.3 — Debt reduced by ~Rs. 880 crs 28.8 28.8
Slide 20: Industry Opportunities
Industry Opportunities Suzlon windfarm at Dhule, India 20 www.suzlon.com
Slide 21: India Market: A Huge Opportunity
India Market: A Huge Opportunity Annual Wind Installations (MW) - India Growing wind competitiveness and increasing preferential tariffs SME + Captive Only SME + Captive mostly IPP mostly Growing IPP (Improved GBI) Emergence of IPP SME + Captive minimal SME + Captive demand restored (AD) +32% +29% -
Slide 22: Key Incentives Driving Growth
Key Incentives Driving Growth Accelerated Overview and Policy Depreciation • Withdrawn in Mar 2012, reintroduced in July 2014 and notified in September 2014 (AD) Impact: Brings back SME interest, Captive demand Overview and Policy Generation • Withdrawn in March 2012, reintroduced in Mar 2013 and no
Slide 23: Global Industry Overview
Global Industry Overview Global Wind Industry Installations (GW) +12% 52 48 45 3 • Wind approaching grid parity 6 3 2 7 34 5 9 2 11 10 • Installations to reach record high in 2015 3 11 16 11 11 • US, China, and India to drive the growth 4 16 17 19 14 • Wind energy not linked to oil 2013 2014e 2015e
Slide 24: Suzlon Wind Overview
Suzlon Wind Overview Suzlon Manufacturing unit in Dhule, India 24 www.suzlon.com
Slide 25: Suzlon Wind: Business Overview
Suzlon Wind: Business Overview Suzlon Wind Existing Business Proposed New Businesses • Tap offshore opportunities in India Overseas Domestic • Developing solar parks in India (America, China, South Africa, (India) Australia, Europe etc.) • Third party component supply >8.5 GW installations till >6.0
Slide 26: Manufacturing Capacity
Manufacturing Capacity Global Wind Industry Installations (MW) Manufacturing Capacity Nacelle and Hub Generators • Largely India based India based ~ 3,600 MW • Most vertically integrated China JV * ~600 MW Tower Panels Total ~4,200 MW • Leading technology to drive down cost Blades Transformers Exist
Slide 27: Suzlon Wind: Proven Capability and Track Record
Suzlon Wind: Proven Capability and Track Record MW Volumes 2,790 Impacted due to constrained liquidity and liability management 2,311 1,456 1,460 1,521 1,583 964 723 251 393 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 9M FY15 Revenues (Rs. Crs.) 15,897 11,467 9,635 9,175 10,003 6,129 5,628 3,841 3,
Slide 28: Suzlon Wind Technology
Suzlon Wind Technology Manufacturing unit in Daman, India 28 www.suzlon.com
Slide 29: S111: Moving Towards Bigger Turbines and Better Yields
S111: Moving Towards Bigger Turbines and Better Yields 2MW series evolution Class III: Low Wind Sites • Better generation Higher energy yield Lower cost of energy Higher returns • Lower cost of energy • Higher IRR for customers • Makes low wind sites viable S88 S9X S111 • Prototype installed in Tami
Slide 30: Hybrid Towers: First of its Kind
Hybrid Towers: First of its Kind Hybrid Tower: Combination of lattice and tubular • Higher hub height (120 M) at optimized cost • 10-12% increase in annual generation • Available in S97 and S111 product suite • First order booked for 100MW 3-4 years of head start in this technology • Prototype commi
Slide 31: Detailed Financials
Detailed Financials Suzlon wind farm in Kutch, India 31 www.suzlon.com
Slide 32: Financial results – Q3
Financial results – Q3 Rs Crs. Q3 FY15 Q2 FY15 Q3 FY14 Particulars Suzlon Wind Consol Suzlon Wind Consol Suzlon Wind Consol Revenue from operations 861.4 4,954.2 1,397.5 5,330.6 1,072.6 5,009.8 Less: COGS 478.4 3,388.2 898.5 3,649.2 803.9 3,430.2 Gross Profit 383.0 1,566.0 499.0 1,681.4 268.7 1,579.
Slide 33: Financial results – 9M
Financial results – 9M Rs Crs. 9M FY15 9M FY14 FY14 Particulars Suzlon Wind Consol Suzlon Wind Consol Suzlon Wind Consol Revenue from operations 3,956.8 14,927.9 4,134.0 13,630.6 5,627.0 20,211.6 Less: COGS 2,476.0 10,124.2 3,140.9 9,694.6 4,335.1 14,435.4 Gross Profit 1,480.9 4,803.7 993.1 3,936.0
Slide 34: Net Working Capital
Net Working Capital Rs Crs. As on 31st Dec 2014 As on 31st Dec 2013 As on 31st Mar 2014 Particulars Suzlon Wind Consol Suzlon Wind Consol Suzlon Wind Consol Inventories 1,629.8 3,911.7 2,345.4 5,015.6 2,017.5 4,032.9 Trade receivables 1,796.4 4,554.8 2,106.2 5,725.1 1,744.9 5,945.5 Loans & Advances
Slide 35: Thank You
Thank You Suzlon wind farm in Paracuru, Brazil 35 www.suzlon.com