Suzlon Energy Ltd · NSE:SUZLON
Suzlon Energy — H1 2019 Earnings Presentation
44 slides from Suzlon Energy's earnings presentation, Nov 14, 2018
Slide 1: Suzlon Energy Limited H1 FY19
Suzlon Energy Limited H1 FY19 14 November 2018 SECI-1 Sembcorp Project
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 DOES not constitute any offer, recommendation or invitation to purchase or subscribe for any secu
Slide 3: Industry Poised For Huge Growth
Industry Poised For Huge Growth 9.9 GW 10 GW 12 GW ~44 GW Capacity auctioned Bidding expected by Bidding expected in To be auctioned over till date Mar’19 FY20 & FY21 each next three years Will lead to Year FY19 FY20 FY21 FY22 Total Current 2022 Target installed base Turbine Supply 3 GW 10 GW 12 GW
Slide 4: Traction In Auctions In FY19
Traction In Auctions In FY19 Feb’17 FY18 auctions SECI 4 NTPC SECI 5 1.0 GW 4.5 GW 2.0 GW 1.2 GW 1.2 GW Feb’17 FY18 Apr’18 Aug’18 Sep’18 4.4 GW Auctions Concluded in H1 FY19 Commissioning commenced Deliveries commenced for SECI 2 ~30% of the concluded auctions is yet to close orders 4 9.9 GW of auct
Slide 5: FY19 Outlook: Another Challenging Year For Execution
FY19 Outlook: Another Challenging Year For Execution (GW) FY18 and FY19: High bidding activity FY20 and FY21: High commissioning activity 10.0 11.0 8.0 4.0 4.4 1.5 2.0 Upto H1 H2 FY18 H1 FY19 To be FY19 FY20 FY21 FY18* auctioned * Includes 1GW auctioned in Feb’17 Transitional delays impact FY19 exec
Slide 6: Suzlon Only Player To Commission Entire SECI-1 Project
Suzlon Only Player To Commission Entire SECI-1 Project • Commissioned 1st SECI-1 project despite initial challenges • Delivered 6 months ahead of revised schedule • Provide comprehensive O&M services for entire project life Customer Sembcorp Energy India Project Size 250 MW Project Scope Full Scope
Slide 7: 18+ GW Global Installations
18+ GW Global Installations (GW) Global mix India cumulative installed base Africa Europe Australia 0.1 11.9 12.1 11.3 0.5 0.8 9.5 Americas 8.2 8.6 3.6 7.4 7.8 1.0 12.1 Asia (ex-India) India Upto FY13 FY14 FY15 FY16 FY17 FY18 H1 FY12 FY19 Strongly positioned in India market Presence across all 1,700
Slide 8: Introduced Tallest Hybrid Concrete Tower S120-140
Introduced Tallest Hybrid Concrete Tower S120-140 • Hybrid Concrete Tubular Tower ‒ Offers greater stability ‒ Cost efficient vis-à-vis all steel towers • Concrete tower manufactured at site ‒ Reduces logistics complexity • Harnesses better availability of wind at higher altitudes • Testing underway
Slide 9: Accolades
Accolades World’s 1st solar project quality certification for Suzlon’s 100 MW project • Certificate from DNV GL confirms safety features and technical compliance • Testament of our commitment to high quality standards CII Southern Region's 13th Kaizen Competition • Suzlon's Coimbatore Generator Unit
Slide 10: FY19 Debt Reduction Target
FY19 Debt Reduction Target Debt Reduction Target 30% - 40% Plan to reduce debt through strategic initiatives Medium to long term outlook for wind continues to remain positive 10 Committed to reduce debt
Slide 11: Financial Performance Debt Overview Industry Outlook
Financial Performance Debt Overview Industry Outlook Technology Suzlon Strengths Detailed Financials 11
Slide 12: Wind Volumes: Low Volumes Due To Back Ended Auctions In FY18
Wind Volumes: Low Volumes Due To Back Ended Auctions In FY18 (MW) 326 256 260 155 126 101 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 FiT Order Book Executed in H1 FY18 FY19 Volumes to be back ended • Auction regime setting in • 6 GW of auctions concluded between Oct’17 – Apr’18 • Last leg of Hi
Slide 13: Q2 FY19 Financial Highlights
Q2 FY19 Financial Highlights (₹ Cr.) Q2 FY19 Q2 FY18 Particulars Remarks Unaudited Unaudited Revenue 1,195 1,151 Gross Profit 539 521 Gross Margin 45.1% 45.3% Employee Expenses 213 208 Other Expenses (net) 211 206 EBITDA (Pre FX) 115 107 EBITDA Margin (Pre FX) 9.6% 9.3% Depreciation 88 79 Primarily
Slide 14: H1 FY19 Financial Highlights
H1 FY19 Financial Highlights (₹ Cr.) H1 FY19 H1 FY18 Particulars Remarks Unaudited Unaudited Revenue 2,467 3,722 Primarily due to low volume Gross Profit 1,028 1,529 Gross Margin 41.7% 41.1% Employee Expenses 407 409 Other Expenses (net) 429 538 Includes partly variable cost EBITDA (Pre FX) 192 582
Slide 15: Consistent Reduction In Net Working Capital
Consistent Reduction In Net Working Capital Fig. in ₹ Cr. +412 3,543 -1,545 3,131 2,780 Working Capital to optimize under Auction regime 2,401 • Reduced regulatory uncertainty 1,999 • Elongated execution schedule • Smoothened out quarterly volumes • Large scale project size • Make to Order Q2 FY18 Q
Slide 16: Stable Service Revenue Insulated From Business Cycles
Stable Service Revenue Insulated From Business Cycles ~15 GW of Assets under Management (AUM) Operations and Maintenance Revenues (₹ Cr.) ― 12+ GW in India; ~3 GW Overseas +4.7% 925 883 ― 2nd Largest O&M player in India Power Sector, after 59 Internal 70 +6.5% NTPC 100% renewal track record in I
Slide 17: Largest Backlog In India Wind Industry
Largest Backlog In India Wind Industry Particulars Capacity Remarks Auction based Order Book 958 MW All orders backed by signed PPA’s Retail, Captive, PSU & IPP 99 MW Backed by advance, Not dependent on PPAs Wind Firm Order Book 1,057 MW ~1.8 GW Backlog Value of Order Book ₹6,306 Cr. Framework Agree
Slide 18: Financial Performance Debt Overview Industry Outlook
Financial Performance Debt Overview Industry Outlook Technology Suzlon Strengths Detailed Financials 18
Slide 19: Term Debt Profile
Term Debt Profile (Excl. FCCB) 30th Sep’18 30th Jun’18 Back Ended Maturity Profile US$ 569 M US$ 569 M (₹ Cr.) SBLC Backed AERH Loans 66% (₹ 4,110 Crs.) (₹ 3,881 Crs.) 4,898 Increase only due to FX; No change in US$ value US$ 64 M US$ 64 M Other FX Term Debt FY19-22 Repayments: 33% (₹ 460 Crs.) (₹ 4
Slide 20: July 2019 FCCB Series Overview
July 2019 FCCB Series Overview (US$ Mn) FCCB Principal Value 547 No. of Shares (Crs.) Current Outstanding 532 Pending Conversion 67 375 Post Full Conversion 599 (₹ 1,265 Cr.*) 172 Conversion Details Price (Per Share) ₹ 15.46 Exchange Rate ₹ 60.225 Jul’14 Conversions Till Sep’18 Sep’18 20 69% FCCBs a
Slide 21: Financial Performance Debt Overview Industry Outlook
Financial Performance Debt Overview Industry Outlook Technology Suzlon Strengths Detailed Financials 21
Slide 22: Strong Visibility On Growth For India Wind Market
Strong Visibility On Growth For India Wind Market Feed-in-Tariff + Captive / PSU / Retail Auction + Captive / PSU / Retail 10.6 GW commissioned in last 3 years 21.0 GW commissioning in next 3 years (MW) 11,000 8,000 5,502 3,415 1,766 2,000 FY16 FY17 FY18 FY19E FY20E FY21E Source: MNRE Source: Intern
Slide 23: Largest Order Volume Share In Auctions Concluded Till Date
Largest Order Volume Share In Auctions Concluded Till Date Auction Wise Order Wins for Suzlon (MW) 1,413 126 285 500 252 250 SECI I SECI II SECI III SECI IV State Bids Total → ~98% volumes under full turnkey scope → ~92% volumes from Large Utility Companies – Top Quality Customer Profile Around 30%
Slide 24: ~1.5 GW Announced Pipeline For Wind Solar Hybrid
~1.5 GW Announced Pipeline For Wind Solar Hybrid Announced Pipeline • Wind Solar Hybrid Gaining Traction 1.2 GW Hybrid ‒ 14th May 2018: Wind Solar Hybrid Policy issued by MNRE (New Hybrid) ‒ 25th May 2018: Bidding Guidelines Issued ‒ 22 June 2018: RFS issued 160 MW Hybrid • Key Features of Policy an
Slide 25: Poised To Become A 10+ GW Annual Market
Poised To Become A 10+ GW Annual Market India Annual Wind Market Potential Size and Segmentation 10 – 12 GW 8 – 10 GW 1 - 2 GW 1 GW Central Auctions State Auctions Captive / PSU / FiT Total Annual Market “India plans to auction 10 GW of wind energy for the next 10 years”, MNRE Secretary, Anand Kumar
Slide 26: Nearing The End Of Transition Phase
Nearing The End Of Transition Phase Parameter Upto FY17 Apr’17 – Mar’19 FY19 Onwards PPA Mechanism Feed-in-Tariff Competitive Bidding Wind Tariff ₹ 4.0 – 5.0 /unit ₹ 2.5 – 3.0 /unit Transition from FiT to Annual Market Size 3 – 4 GW 10 – 12 GW Auction impacted turbine Order Book Coverage 3 – 6 month
Slide 27: Other Emerging Opportunities For Growth
Other Emerging Opportunities For Growth Offshore • National offshore policy already notified • Suzlon has commissioned 1st Offshore Met Station 1 GW Expression of Interest • Offshore Advantage: Higher PLF due to high wind power density and shallow 5 GW water depth enables lower cost in terms of proj
Slide 28: Financial Performance Debt Overview Industry Outlook
Financial Performance Debt Overview Industry Outlook Technology Suzlon Strengths Detailed Financials 28
Slide 29: New Turbines Launched In FY18: Pushing Technology Boundaries
3 New Turbines Launched In FY18: Pushing Technology Boundaries S111-140 S120-140 S128-140 2.1 MW 2.1 MW 2.6 – 2.8 MW India’s Tallest Wind Turbine India’s Largest 2.1 MW Turbine India’s Largest Rotor Diameter Proto Commissioned Aug’17 Proto Status Date Proto Status Date S120-105 Commissioned Jun ’18
Slide 30: Focus On Reducing LCOE
Focus On Reducing LCOE Higher energy yield Lower cost of energy Sustains Lower Tariffs >70% Increase in Energy Yield S97-120 S111-90 S111-120 S111-140 S120 S128 30 Over 4,500 turbines of 2.1 MW platform across 17 countries
Slide 31: Pioneer In India Offshore
Pioneer In India Offshore Support Platform Offshore LiDAR • India’s 1st Private Far Offshore Met Station ‒ Opportunity to harness India’s 7,600km coastline ‒ Government plans to auction 5 GW of Offshore project next year • State of Art Installation ‒ 16km from the Shore Powered Through Solar ‒ 11m W
Slide 32: Global In-House R&D Capabilities
Global In-House R&D Capabilities Suzlon Technology Locations: Hamburg - Development & Integration Hamburg - Certification Germany Rostock - Development & Integration Rostock - Design & Product Engineering - Innovation & Strategic Research Hengelo The Netherlands Hengelo - Blade Design and Integratio
Slide 33: Financial Performance Debt Overview Industry Outlook
Financial Performance Debt Overview Industry Outlook Technology Suzlon Strengths Detailed Financials 33
Slide 34: Suzlon Strengths In India Wind Market
Suzlon Strengths In India Wind Market Full Turnkey Solution Pan India Presence Provider Strong Customer Technology Leadership Relationship Best In Class Service 23+ Years Track Record Capabilities 34 End-to-end service provider with strong presence across value chain & customer segments
Slide 35: ~12 GW Wind Energy Installations In India
~12 GW Wind Energy Installations In India Ranked No. 1 in Renewables Sector Largest fleet under Operation and Maintenance fold in India Ranked No. 2 in Power Sector (31st Mar’18) # of Turbines MW <= 1 MW 1,678 777 >1 MW < 2 MW 4,268 5,774 =>2 MW 2,557 5,368 Total 8,503 11,919 2.0 GW • 35% - All Indi
Slide 36: Suzlon's Global Presence
Suzlon’s Global Presence As on 30th Sep 2018 2 5 2 1 North America 6 3 1 2,779 MW 4 Asia 3 5 13,019 MW South America Europe 806 MW 508 MW 4 South Africa Australia 139 MW 764 MW 6 36 Suzlon’s strong relationships across regions positions it well Map not to scale. All data, information, and map is pro
Slide 37: USA PTC Volume: ~500 MW Pipeline Created For 100% PTC Projects
USA PTC Volume: ~500 MW Pipeline Created For 100% PTC Projects Production Tax Credit (PTC) Extension: Huge Volume Opportunity • PTC in USA extended until 2019 with benefits stepping down every year before phase out • In order to qualify, projects only need to start construction and make a minimum 5%
Slide 38: Financial Performance Debt Overview Industry Outlook
Financial Performance Debt Overview Industry Outlook Technology Suzlon Strengths Detailed Financials 38
Slide 39: Consolidated Income Statement
Consolidated Income Statement (₹ Crs.) H1 FY19 H1 FY18 FY18 Particulars Unaudited Unaudited Audited Revenue from operations 2,467 3,722 8,075 Less: COGS 1,439 2,193 5,116 Gross Profit 1,028 1,529 2,959 Margin % 41.7% 41.1% 36.6% Employee benefits expense 407 409 805 Other expenses (net) 429 538 1,00
Slide 40: Consolidated Net Working Capital
Consolidated Net Working Capital (₹ Cr.) 30th Sep’18 30th Jun’18 30th Sep’17 Inventories 3,151 2,923 4,518 Trade receivables 2,297 2,720 3,131 Loans & Advances and Others 1,889 1,749 1,900 Total (A) 7,336 7,392 9,549 Sundry Creditors 2,902 2,627 3,390 Advances from Customers 992 935 1,616 Provisions
Slide 41: Consolidated Balance Sheet
Consolidated Balance Sheet (Rs. Crs.) Liabilities Sep-18 Mar-18 Assets Sep-18 Mar-18 Shareholders' Fund (8,122) (6,967) Non Current Assets Non controlling interest 5 10 (a) Property, Plant and Equipment 1,248 1,267 (8,117) (6,957) (b) Intangible assets 325 155 (c) Investment property 39 41 (d) Capit
Slide 42: Key Accounting Policies – Revenue Recognition And Order Booking
Key Accounting Policies – Revenue Recognition And Order Booking Opening Order Book • Sales (WTG Revenue Recognition) (-) Sales during the period ‒ WTG revenue is recognised upon transfer of risks and rewards to the buyer of complete WTG viz: Nacelle, Blade and Tower. (+) Order Intake during the • Or
Slide 43: Key Accounting Policy: Maintenance Warranty Provisions
Key Accounting Policy: Maintenance Warranty Provisions Maintenance Warranty Provisions Accounting Policy: ― Comprise of provisions created against maintenance warranty issued in connection with WTG sale Created when revenue from sale of wind turbine is recognized ― Provisions estimated based on
Slide 44: Thank You
CIN of Suzlon Energy Ltd - L40100GJ1995PLC025447 THANK YOU 44