Suzlon Energy Ltd · NSE:SUZLON
Suzlon Energy — H1 FY16 Earnings Presentation
35 slides from Suzlon Energy's earnings presentation, Oct 30, 2015
Slide 1: Suzlon Energy Limited H1 FY16 Earnings Presentation
Suzlon Energy Limited H1 FY16 Earnings Presentation 30th October 2015
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: Suzlon in India
Suzlon in India 20 Years of operations Installed Base ~9 GW No. of Customers >1,700 Annual Service Revenue Rs. ~900 crs 3
Slide 4: Contents
Contents Key Performance Highlights Debt and Interest Order Book Industry Opportunities Products & Technology Strategic Focus Detailed Financials 4
Slide 5: Q2 FY16 – Delivers Another Strong Quarter
Q2 FY16 – Delivers Another Strong Quarter 227 MW – Sales Volume; 11% QoQ growth; 64% YoY Growth 18.0% - Normalized EBITDA Margin; increase by 262 bps QoQ* Rs. 233 crs – Net Interest Cost; 21% QoQ decline*, 47% YoY decline* Rs. 963 Crs. – QoQ Consolidated Gross Debt Reduction Note (*): 1. Q2 FY16 Con
Slide 6: Q2 FY16 – Back to Profit
Q2 FY16 – Back to Profit Consolidated Net Profit (Rs. Crs.) 12 33 7 209 -181 Reported Fx Loss Liquidated Damages Exceptional Gains Normalized • Fx Loss (Rs. 209 crs) – Primarily Notional (Non Cash) in nature; ‒ Primarily due to $ denominated debt ‒ FCCBs - Loss reversals upon conversions ‒ Others –
Slide 7: H1FY16 Performance Highlights
H1FY16 Performance Highlights 431 MW Rs. 3,251 Cr Rs. 1,467 Cr 20.2% y-o-y 5.0% y-o-y Margin 45.1% Volume Revenues Gross Profit Rs. 530 Cr Rs. 508 Cr Rs. 7,597 Cr Margin 16.3% (44.2%) y-o-y 30th Sep (YoY) EBITDA(2) Net Interest Net Debt Reduction Note: 1. All Information pertains to Suzlon Wind 2. R
Slide 8: India Volume Continues Traction
India Volume Continues Traction Delivery Volumes (MW) H1 FY16 Total 431 MW = Domestic 410 MW + Export 21 MW India Half Year volume higher than annual domestic volume of past 3 years 8
Slide 9: Service Business
Service Business External Service Revenues (Rs. Crs.) • Growing into a sizeable & highly profitable business +5.5% ― Reduces turbine volume break even level 732 694 • Annuity like cash flows ― Non cyclical business in nature ― ~100% renewal track record • 100% track record in India ― Every turbine s
Slide 10: Result Snapshot
Result Snapshot Consol. Suzlon Wind Suzlon Wind Rs Crs Q2 FY16 Q1 FY16 Q2 FY15 H1 FY16 H1 FY15 MW Sales 227 227 205 138 431 359 Gross Profit Revenue 1,768 1,709 1,542 1,397 3,251 3,095 • India volume ramp up • Improved service profitability Gross Profit • Execution of current orders primarily 827 77
Slide 11: Contents
Contents Key Performance Highlights Debt and Interest Order Book Industry Opportunities Products & Technology Strategic Focus Detailed Financials 11
Slide 12: Reinstatement of Investment Grade Rating
Reinstatement of Investment Grade Rating Amount CARE Facilities (Rs Crs) Rating Long Term Facilities Rationale for Investment Grade Rupee Term Loans 2,744 • Reduced debt Fund Based Working Capital 2,192 BBB- • Improved liquidity position SBLC (Non Fund Based) 3,928 Short Term Facilities • Turnaround
Slide 13: Current Debt Profile and Interest Costs
Current Debt Profile and Interest Costs As on 30th Sep 2015 Suzlon Consolidated Debt Overview Net Interest Cost Particulars Q2 FY16 Q1 FY16 Maturity (Rs. Crs) Rupee Term Debt Back Ended -46.5% 3,305 3,322 (Rs. Crs) Next 3 years - Nil 436 $ Term Debt 688 689 293 Credit Enhanced 233 647 647 Mar’18 (Bu
Slide 14: FCCB Overview
FCCB Overview FCCB Principal Value* (US$ Mn) 576 Current and Diluted No. of Shares (Crs) Current Outstanding 497 269 Pending Conversion 102 (Jul’19 series) 17 290 547 Post Full Conversion 599 278 261 Jul’19 Series Conversion Details 29 29 Price (Per Share) Rs. 15.46 July’14 Conversions 30 Sep’15 Con
Slide 15: FCCB - Mandatory Conversion / Redemption Option
FCCB - Mandatory Conversion / Redemption Option Key Terms of July 2019 Bonds • Option 1: Dependant on Share Price Performance ‒ Up to $~183M Bonds can be converted in a single tranche ‒ Can be exercised post 16 July 2016 ‒ Subject to meeting with Share Price Performance Criteria • Option 2: If Bonds
Slide 16: Contents
Contents Key Performance Highlights Debt and Interest Order Book Industry Opportunities Products & Technology Strategic Focus Detailed Financials 16
Slide 17: Order Book
Order Book Figures in MW 1,123 1,092 431 401 Rs. 6,812 crs Opening Net Revenue Recognized Net Orders Inflow Closing (31st Mar’15) (Q1 +Q2) (Q1 +Q2) (30th Sep’15) Strong pipeline to drive future performance 17
Slide 18: Strong Momentum Across Customer Segments
Strong Momentum Across Customer Segments Customer Segment Wise Break-up - Order Book, H1 Order Intake and H1 Sales Our Key Strength in India Non IPP 15% 21% 35% • >20 years of operating history IPP 85% 79% • Strong & diversified customer 66% base Order Book H1 Intake H1 Sales • Pan India presence •
Slide 19: Only Player with Pan India Presence
Only Player with Pan India Presence States with Dominant IPP demand Key Drivers of Demand • Remunerative FiTs • Conducive state policies Reason for Low Non IPP Demand • Low level of industrialization States with Dominant Non IPP demand Key Drivers for Non IPP Demand • Moderate FiTs • Good Industrial
Slide 20: Contents
Contents Key Performance Highlights Debt and Interest Order Book Industry Opportunities Products & Technology Strategic Focus Detailed Financials 20
Slide 21: India Market: Government Target
India Market: Government Target India Plans to Increase Wind Capacity to 60,000 MW by March 2022 • Translates into > 5,000 MW of annual market size — More than double the size of FY15 market (~2,300 MW) +36,600 MW • Key Initiatives taken: 60,000 MW — Reinstatement of key incentives (AD, GBI) — Green
Slide 22: India Market: Revised Estimate of Wind Power Potential
India Market: Revised Estimate of Wind Power Potential at 50 m level at 80 m level at 100 m level CWET 2004 CWET 2010 NIWE 2015 Potential: 48000+ MW 102,000+ MW 302,000+ MW • Recent mapping done by NIWE at 100 meter reference height • India’s estimated wind power potential revised from earlier 102+
Slide 23: India Market: A Huge Opportunity
India Market: A Huge Opportunity Annual Wind Installations (MW) - India Growing wind competitiveness and increasing preferential tariffs SME + PSU + Captive + IPP + PSU IPP + PSU + SME + Captive SME + PSU + Captive Emergence of IPP Suzlon -10% +23% +29% 3,500 3,179 3,100 2,345 1,161 2,312 2,077 1,72
Slide 24: Key Strengths in India: Unique Leadership Position
Key Strengths in India: Unique Leadership Position 01 Pan India Presence • Large project pipeline across states • Presence across customer segments • >1,700 satisfied customer base • High repeat business potential 05 02 Strong Track Record Technology Leadership • 18+ years of leadership in India • I
Slide 25: Global Industry Overview
Global Industry Overview Global Wind Industry Installations (GW) 62 58 • Long term growth story remains intact 55 56 5 53 52 11 ― Climate change mitigation 49 9 10 6 8 5 14 11 ― Energy security 8 9 10 11 13 ― Lower cost of energy and 14 13 17 ― Energy accessibility for all 13 14 13 11 • Wind approac
Slide 26: Contents
Contents Key Performance Highlights Debt and Interest Order Book Industry Opportunities Products & Technology Strategic Focus Detailed Financials 26
Slide 27: S111: Moving Towards Bigger Turbines and Better Yields
S111: Moving Towards Bigger Turbines and Better Yields 2MW Series Evolution Higher energy yield Lower cost of energy Higher returns ~65% Increase in Energy Yield S88-80 S97-90 S97-120 S111-90 S111-120 5.5 GW >1 GW ~350 MW sold ~150 MW sold 2016 Launch Installed till date Installed till date >30MW In
Slide 28: Hybrid Tower: First of its Kind
Hybrid Tower: 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 • Optimized logistical solution • Available in S97 and S111 product suite • Over 350MW orders already received • Prototype installed i
Slide 29: Contents
Contents Key Performance Highlights Debt and Interest Order Book Industry Opportunities Products & Technology Strategic Focus Detailed Financials 29
Slide 30: Strategic Focus
Strategic Focus High growth, High volume, Better margin markets only • Focus on the Indian market as well as North America, China and Brazil Reliable Technology • Continued focus on R&D aimed at reducing cost of energy Increasing Market Competitiveness Best in Class Service; Growing Service business
Slide 31: Contents
Contents Key Performance Highlights Debt and Interest Order Book Industry Opportunities Products & Technology Strategic Focus Detailed Financials 31
Slide 32: Income Statement
Income Statement Rs Crs. Consolidated Suzlon Wind Suzlon Wind ` Q2 FY16 Q1 FY16 Q2 FY15 H1 FY16 H1 FY15 FY15 Revenue from operations 1,768 1,709 1,542 1,397 3,251 3,095 4,883 Less: COGS 941 936 848 898 1,784 1,998 3,138 Gross Profit 827 773 694 499 1,467 1,098 1,745 Margin % 46.8% 45.2% 45.0% 35.7%
Slide 33: Working Capital
Working Capital Rs Crs. Consolidated Suzlon Wind Suzlon Wind Particulars 30th Sep 2015 30th Jun 2015 31st Mar 2015 31st Dec 2014 30th Sep 2014 Inventories 2,088 2,000 1,699 1,639 1,630 1,683 Trade receivables 2,030 1,989 1,665 1,614 1,796 1,928 Loans & Advances and Others 1,679 1,765 1,630 1,809 1,8
Slide 34: Consolidated Balance Sheet
Consolidated Balance Sheet Rs Crs. Liabilities Sep-15 Mar-15 Assets Sep-15 Mar-15 Shareholders' Fund -7,191 -7,322* Non Current Assets Preference Shares 6 6 a) Fixed Assets 1,878 6,200 Minority Interest 18 64 b) Non Current Investments 13 15 -7,167 -7,253 c) Long Term Loans & Advances 281 368 d) Oth
Slide 35: Thank You
THANK YOU S111 Turbine, USA S-111 I One of the largest commercially available rotor diameters in India 35 CIN of Suzlon Energy Ltd - L40100GJ1995PLC025447