Suzlon Energy Ltd · NSE:SUZLON
Suzlon Energy — FY2017 Earnings Presentation
42 slides from Suzlon Energy's earnings presentation, May 19, 2017
Slide 1: Annual Results FY17
Suzlon Energy Limited Annual Results FY17 19 May 2017
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: Agenda
Agenda FY17 Key Highlights Debt Overview Technology Update Industry Opportunity Detailed Financials 3
Slide 4: FY17: Strong Growth and Profitability
FY17: Strong Growth and Profitability 1,131 MW +49% 1,682 MW Volume Growth Wind: 1,573 MW 50 Days -8% 47 Days Solar: 109 MW NWC Reduction 13.8% Net Working Capital / LTM Revenue 12.8% Rs. 1,343 +64% Rs. 2,203 Crs. Crs. EBITDA Growth 14.2% EBITDA Margins 17.4% Rs. 10,261 Crs. Rs. 341 crs Rs. 9,920 Cr
Slide 5: Highest Ever Annual Wind Volumes
Highest Ever Annual Wind Volumes Revenue Recognition Volumes (MW) FY15: 454 MW FY16: 1,131 MW FY17: 1,573 MW 12.6% 149.2% 39.1% 554 443 462 353 221 227 256 205 204 138 35 60 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Commissioning Volumes in India (MW) FY17: 1,779 MW 97.7% FY16: 900 MW 103.6% FY15: 442 MW
Slide 6: Increasing Market Share in Growing India Market
Increasing Market Share in Growing India Market India Commissioning Volumes (MW) 37% 24% 19% 19% 26% 32% +61% 5,502 1,779 +48% -19% 3,415 3,179 900 1,161 2,312 2,077 1,721 442 403 3,723 415 2,515 2,018 1,870 1,306 1,674 FY12 FY13 FY14 FY15 FY16 FY17 Suzlon Others Suzlon Market Share Source: MNRE 6 G
Slide 7: Net Working Capital
Net Working Capital ~Rs. 11,250 crs collections 50 Days 83 Days 47 Days 22.8% 13.8% 12.8% Mar’16 Dec’16 Mar’17 Note: NWC % and no. of days calculated on trailing 12 months Revenue 7 Strong operating efficiency
Slide 8: Result Snapshot (Consolidated)
Result Snapshot (Consolidated) (Rs. Crs.) Particulars Q4 FY17 Q4 FY16 Q3 FY17 FY17 FY16 Audited Audited Unaudited Audited Audited Revenue 4,993 3,219 3,316 12,693 9,430 Gross Profit 1,698 1,153 1,457 5,150 3,826 Gross Margin 34.0% 35.8% 43.9% 40.6% 40.6% Employee Expenses -279 -232 -253 -1,046 -959
Slide 9: Order Book
Order Book (Fig. in MW) 1,562 1,331 231 Rs. 2,757 crs 250 Rs. 4,045 crs 411 670 As on Mar’17 Q1 FY18 Bid Order Wind Backlog Solar Project Total Backlog Intake till date Backlog Order Book does not include • Strong discussion pipeline (Domestic + International) • Frame Contracts • OMS backlog • SEFL
Slide 10: Surpassed 11 GW wind energy installations in India
Surpassed 11 GW wind energy installations in India Ranked No. 1 in Renewables Sector Largest fleet under Operation and Maintenance fold in India Ranked No. 4 in Power Sector # of Turbines MW <= 1 MW 1,749 850 >1 MW < 2 MW 4,196 5,702 =>2 MW 2,259 4,744 Total 8,204 11,296 2.0 GW • 35% - All India ins
Slide 11: Operation and Maintenance Service Business
Operation and Maintenance Service Business (Rs. Crs.) Service Revenues +5.4% Growing into a sizeable & profitable business 1,755 ― ~13% external revenue share in full year FY17 1,665 132 Internal 126 +5.5% Annuity like business ― Non cyclical business in nature 1,623 ― Steady cash flow generatio
Slide 12: Solar Update
Solar Update Rs. 5.36 340 MW 210 MW 109 MW Divested Revenue Per unit average PPA signed (49% Stake) Recognized tariff Note: Additional bids won for 175 MW solar project in Jharkhand, for which PPA is yet to be signed 12 Advanced negotiations for further divestments of 130 MW
Slide 13: Agenda
Agenda FY17 Key Highlights Debt Overview Technology Update Industry Opportunity Detailed Financials 13
Slide 14: Gross Debt Levels
Gross Debt Levels (All figures in Rs Crs, except wherever mentioned) -37% 17,752 12,489 11,414 11,114 US$248M FCCB US$ 626M SBLC Backed Debt US$ 74M Other Fx Debt 2,877 Rupee Term Debt 2,076 Rupee Working Capital Debt Mar’15 Mar’16 Dec’16 Mar’17 FCCB worth US$26.6M further converted post Mar’17 14 3
Slide 15: Mar'17 Debt Profile
Mar’17 Debt Profile (Excluding FCCB) 31st Mar’17 5 year Maturity Profile • Current bullet maturity of March 2018 Rs. 4,038 Crs.* SBLC Backed AERH Debt • SBLC facility lenders consented to SBLC extension till 2023 (US$ 626 M) • RBI approval received Rs. 477 Crs. (Rs. Crs.) Other FX Term Debt 816 (US$
Slide 16: July 2019 FCCB Series Overview
July 2019 FCCB Series Overview (US$ Mn) FCCB Principal Value 547 No. of Shares (Crs.) Current Outstanding 513 299 Rs. 1,646 crs. Pending Conversion 86 248 Post Full Conversion 599 27 221 Conversion Details Price (Per Share) Rs. 15.46 Jul’14 Conversions Mar’17 Conversions As on Date Exchange Rate Rs.
Slide 17: Enhancement in Credit Rating
Enhancement in Credit Rating Company Previous Rating Current Rating Remarks Suzlon • Suzlon Energy Limited and its domestic subsidiaries, except SE Forge BBB- BBB 1 Notch Upgrade • Pooled together under CDR for security purposes SE Forge Limited BBB- BBB 1 Notch Upgrade Suzlon Global Services Limite
Slide 18: Agenda
Agenda FY17 Key Highlights Debt Overview Technology Update Industry Opportunity Detailed Financials 18
Slide 19: Commercialized S111-120: Industry Game Changer
Commercialized S111-120: “Industry Game Changer” First 12 months PLF measured on same site location Proven Technology ~20% Higher Energy Yield S111-120 ~35% PLF (>1 year generation track record) ~42% PLF (>150 MW already Sold) LCOE reduction = S97-120 (>1 GW already Installed) + S111-90 (>550 MW alr
Slide 20: Next Generation Products
Next Generation Products ~10% LCOE Reduction Enables lower tariffs bids while protecting OEM margins and Developer returns S111 S128 Product S128 – 2.6 MW S128 – 3.0 MW MW Rating 2,600 kW 3,000 kW Rotor Diameter 128 meters 128 meters Tower Height 120 m - 140 m 120 m - 140 m Wind Class IEC III (Low W
Slide 21: Hybrid Towers – Innovation at Work, Unique in the World
Hybrid Towers – Innovation at Work, Unique in the World Accessing higher wind speed at higher altitude, increasing energy output Advantage Hybrid • Enables to achieve higher hub height at optimized cost • Reduced steel requirement; reduced overall weight • Lower foundation cost • Simplified logistic
Slide 22: Globally Proven In-House R&D Capabilities
Globally Proven In-House R&D Capabilities Suzlon Technology Locations: Hamburg - Development & Integration Hamburg - Certification Germany - Development & Integration Rostock Rostock - Design & Product Engineering - Innovation & Strategic Research The Netherlands Hengelo - Blade Design and Integrati
Slide 23: 2.1 MW Series: Proven Platform with >100,000,000 Operating Hours
2.1 MW Series: Proven Platform with >100,000,000 Operating Hours Higher energy yield Lower cost of energy Higher returns ~65% Increase in Energy Yield S88-80 S9X – 80/90/100 S97-120 S111-90 S111-120 >5.7 GW >2.3 GW >1.0 WW >550 MW Prototype installed Installed till date Installed till date Installed
Slide 24: Agenda
Agenda FY17 Key Highlights Debt Overview Technology Update Industry Opportunity Detailed Financials 24
Slide 25: India Renewables Exceeds Thermal Capacity Addition in FY17
India Renewables Exceeds Thermal Capacity Addition in FY17 India Power Mix FY17 Thermal Vs Renewable Cumulative Capacity Thermal Renewable Hydro Nuclear Thermal (GW) Renewables (GW) 2% 7.7 GW 14.4 GW 44 GW 218.3 210.7 (14%) 57.2 42.8 57 GW (18%) 218 GW (67%) FY16 FY17 FY16 FY17 Source: CEA Source: M
Slide 26: Wind Vs Solar – Target Vs Actual Capacity Addition
Wind Vs Solar – Target Vs Actual Capacity Addition Cumulative Until FY17 (GW) Renewables Target 2022 (GW) Wind 175 +8% 15 Others 30 32 40 Solar Rooftop Target Actual 60 Solar Grid Connected Solar 57 -28% 13 17 12 12 60 Wind Grid Connected 32 Target Actual Mar’17 2022 Source: MNRE 26 Wind is ahead of
Slide 27: Wind Market Expected to Touch New High for 3rd Consecutive Year in FY18
Wind Market Expected to Touch New High for 3rd Consecutive Year in FY18 India Commissioning Volumes (MW) 6,000 5,502 +28% 3,415 2,312 2,077 1,721 32% 26% 24% 19% 19% FY13 FY14 FY15 FY16 FY17E FY18E* Others Suzlon *Source: Internal Estimates 27 Suzlon consistently gaining market share
Slide 28: SECI Wind Bidding: Central Level Auctioning
SECI Wind Bidding: Central Level Auctioning Typical Bidding Structure Incremental Demand Existing With SECI Auction Developers Awarded through transparent Inter State 2-stage bidding process Transmission Charges 25 year PPA Waved Enables Installation in Windy State but SECI authorised Entity procure
Slide 29: Direct Bidding Vs Pre-Bid Tie Up for Bidding Volumes
Direct Bidding Vs Pre-Bid Tie Up for Bidding Volumes Pre Bid Tie Up Direct Bidding Customer Confidence + Strong Project Pipeline 51% mandatory to be held until 1 + year from COD Strong Technology + Execution Capabilities Low Risk Approach Riskier Approach • Financial Criteria only for the Bidding En
Slide 30: Sustainable reduction in Wind Tariff
Sustainable reduction in Wind Tariff OEM Developer / Bidder Strong Technology (Lower LCOE) Low Cost of Capital + + Vertical Integration Long Tenure Debt + + Operating Leverage due to Volume Change in Investor Profile + + Tighter Control on Cost Lower IRR Expectations Reduced Equipment Pricing Reason
Slide 31: Expanded Customer Base
Expanded Customer Base Demand for Wind Power Investors for Wind Power projects Demand from Non Wind Sates Utilities: Domestic + Foreign • Procurement through central auctions • Emerging customer group 5 - 6 GW • 2 GW already initiated • Mainstream investment from domestic utilities p.a. • Driven by
Slide 32: Suzlon Strengths in India Wind Market
Suzlon Strengths in India Wind Market Full Turnkey Solution Pan India Presence Provider Target Strong Customer Technology Leadership Relationship REGAIN 50%+ MARKET SHARE Best In Class Service 20+ Years Track Record Capabilities 32 End-to-end service provider with strong presence across value chain
Slide 33: International Market Roadmap
International Market Roadmap FY18 Europe FY19 North America Latin America FY20 Emerging APAC EMEA Markets Global Wind Industry Outlook (GW) 293 GW 60 62 59 57 54 15 15 17 12 America 12 17 17 17 EMEA 17 16 APAC 26 27 29 28 31 2017E 2018E 2019E 2020E 2021E Source: MAKE Q1 2017 Market Outlook Update 33
Slide 34: 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 35: Suzlon's Global Presence
Suzlon’s Global Presence 2 5 2 1 North America 6 3 1 2,779 MW 4 Asia 3 5 12,256 MW South America Europe 806 MW 508 MW 4 South Africa Australia 139 MW 764 MW 6 35 Suzlon’s strong relationships across regions positions it well Map not to scale. All data, information, and map is provided “as is” withou
Slide 36: Agenda
Agenda FY17 Key Highlights Debt Overview Technology Update Industry Opportunity Detailed Financials 36
Slide 37: Consolidated Income Statement
Consolidated Income Statement (Rs. Crs.) Particulars Q4 FY17 Q4 FY16 Q3 FY17 FY17 FY16 Audited Audited Unaudited Audited Audited Revenue from operations 4,993 3,219 3,316 12,693 9,430 Less: COGS -3,295 -2,066 -1,859 -7,543 -5,604 Gross Profit 1,698 1,153 1,457 5,150 3,826 Margin % 34.0% 35.8% 43.9%
Slide 38: Consolidated Balance Sheet
Consolidated Balance Sheet (Rs. Crs.) Liabilities Mar-17 Mar-16 Assets Mar-17 Mar-16 Shareholders' Fund -6,810 -7,499 Non Current Assets Non controlling interest 9 0 (a) Property, Plant and Equipment 1,464 1,282 -6,801 -7,499 (b) Intangible assets 211 339 (c) Investment property 34 33 (d) Capital wo
Slide 39: Consolidated Net Working Capital
Consolidated Net Working Capital (Rs. Crs.) 31st Mar’17 31st Dec’16 31st Mar’1`6 Inventories 3,469 3,747 2,525 Trade receivables 3,673 3,517 2,593 Loans & Advances and Others 1,764 1,989 1,520 Total (A) 8,906 9,253 6,638 Sundry Creditors 4,812 3,823 2,970 Advances from Customers 793 1,427 1,123 Prov
Slide 40: 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 41: 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 42: Thank You
CIN of Suzlon Energy Ltd - L40100GJ1995PLC025447 THANK YOU 42