Suzlon Energy Ltd · NSE:SUZLON
Suzlon Energy — FY2014 Earnings Presentation
44 slides from Suzlon Energy's earnings presentation, May 30, 2014
Slide 1: Suzlon Energy Limited FY14 Results Presentation
Suzlon Energy Limited FY14 Results Presentation 30th May 2014 Senvion offshore wind farm in Thornton Bank, Belgium 1 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: Suzlon Group Turning Positive After 7 Quarters
Suzlon Group Turning Positive After 7 Quarters EBITDA Trend (Rs. Crs) EBIT Trend (Rs. Crs) 328 116 -31 -229 -137 -323 -302 -482 Q1’14 Q2’14 Q3’14 Q4’14 Q1’14 Q2’14 Q3’14 Q4’14 WORST BEHIND US Priorities FY15 Enablers: • Completion of liability management allows business focus • Volume Ramp up • Righ
Slide 4: Suzlon Group: Improving business environment
Suzlon Group: Improving business environment Factors Past 2 years Current Impact / Change • GBI re-introduced • Market Size Halved • Lack of Incentives • Low cost fund from National India • Unfavorable policy shifts Clean Energy Fund Industry • Political Uncertainty • Pro-renewables government • Poi
Slide 5: Key highlights - FY14
Key highlights - FY14 Strategic Operational FCCB negotiations concluded Ramping up volumes 1. Last remaining piece in comprehensive liability 1. ~723MW in FY14 against ~251MW last year; management program 188% YoY growth (Suzlon Wind) 2. Consol. Revenue Rs 20,212 Crs in FY14; Rs. 6,581 Crs in Q4 FY1
Slide 6: Business Turnaround: Positive EBITDA & EBIT after 7 quarters
Business Turnaround: Positive EBITDA & EBIT after 7 quarters Revenue (Rs. Crs) +54% YoY 6,581 5,702 5,010 4,747 4,014 4,281 4,769 3,851 Improvement supported by: EBITDA (Rs. Crs) • Ramping up volumes 328 Highest revenue in past 8 quarters • Improving contribution margins -31 -132 -137 Favorable
Slide 7: FCCB: Negotiations Concluded
FCCB: Negotiations Concluded • Negotiations with the ad hoc committee concluded Ad hoc committee: Formed by select bondholders with significant holdings across all series Zero cash solution: Cashless exchange into new FCCBs • Proposed terms for the new FCCBs Options with 2016 series bondholder
Slide 8: Asset sale gaining traction
Asset sale gaining traction Big Sky Wind Farm Sale Completed • Acquired wind farm for token consideration in lieu of dues in March 2014 • Sticky US receivable monetization complete • Successfully sold the wind farm to Everpower and realized cash in May 2014 • Everpower continuous OMS • Net Realizati
Slide 9: Group Business Performance
Group Business Performance Suzlon windfarm at Arataci, Brazil 9 www.suzlon.com
Slide 10: FY14 Group financial snapshot
FY14 Group financial snapshot Rs Crs Particulars Q4 FY14 Q4 FY13 FY14 FY13 Revenue 6,581 4,281 20,212 18,743 EBITDA 328 -594 -141 -1,296 EBITDA (before FX loss) 268 -450 115 -990 EBIT 116 -786 -918 -2,037 Net working capital 722 2,543 Net debt 14,423 13,003 Key takeaways: • Business performance Ac
Slide 11: Financial performance confirms the upward trend
Financial performance confirms the upward trend Revenue (Rs. Crs) EBITDA (Rs. Crs.) EBIT (Rs. Crs.) +54% 328 Fx Loss 60 116 6,581 268 4,281 -144 Rs. +922 crs Rs. +902 crs -450 -594 -786 Q4 FY13 Q4 FY14 Q4 FY13 Q4 FY14 Q4 FY13 Q4 FY14 +8% 115 -307 -256 18,743 20,212 -141 -918 -990 Rs. +1,041 crs Rs.
Slide 12: Service Business: Growing revenues with stable margins
Service Business: Growing revenues with stable margins Revenues (Rs. Crs)* Key Highlights 2,695 +39% CAGR • FY14 OMS revenue at ~Rs. 2,700 crs 1,963 1,340 ~37% YoY growth 1,395 878 • High growth with stable and consistent 549 margins 1,355 1,085 846 • Near 100% renewal track record FY12 FY13 FY14
Slide 13: Order Intake: Regaining Momentum
Order Intake: Regaining Momentum Half yearly Order Intake (MW) Significant orders in last 6 months ReNew Wind Energy, India 1,940 (100.80 MW); +103% Bald Hills, Australia 1,524 (106.6 MW) Strathy North, UK (67.65 MW) 751 GDF Suez, France (40 MW) Königshovener Höhe, Germany (38.04 MW) H2 FY13 H1 FY14
Slide 14: Robust order book position
Robust order book position Total value of US$7.6 bn Order book by geography – US$7.6 bn RoW LatAm Australia 2% 7% • Order book at ~5.3 GW 6% France 5% • Order book value: US$ 7.6bn UK 4% 44% Germany Onshore markets: Belgium 4% – Emerging : ~US$1.3bn (India, 12% Brazil, Turkey & Uruguay) Canada 15%
Slide 15: R&D focus to better our products and improve yields
R&D focus to better our products and improve yields Expansive product portfolio covering all wind classes Class I Class II Class III S66 S86.5 S52 <1.5 MW S82 S89 MM100 MM100 MM82 S97 90 S111 1.5 – 2.5 MW S88 AEP 25% S97 120 (Vs S88) AEP 20% MM92 AEP 10% (Vs S97) S95 (Vs S97 90) 3.4M 3.4M 3.2M 3.2M
Slide 16: Moving towards newer and bigger turbines
Moving towards newer and bigger turbines Higher energy yield Lower cost of energy Higher returns • Better generation • Lower cost of energy • High profitability for customers S88 S9X S111 ~5.5 GW already ~900 MW already First agreement in US installed till date installed till date concluded • Better
Slide 17: Hybrid Towers: First of its kind
Hybrid Towers: First of its kind • Hybrid Tower Hybrid Tower Combination of lattice and tubular Saves costs • Higher Hub height – 120 mts (33% increase over current 90 mts) 4-5% better wind speed at higher height 12-15% increase in annual generation • Higher generation and lower costs result
Slide 18: Suzlon Group retained No. 5 Globally
Suzlon Group retained No. 5 Globally Top 10 Suppliers at the end of 2013 2013 Installation Rank OEM % Market Share (GW) 1 Vestas 4.7 13.2% 2 Goldwind 3.7 10.3% 3 Enercon 3.7 10.1% 4 Siemens 2.9 8.0% 5 Suzlon Group ` 2.3 6.3% 6 GE 1.8 4.9% 7 Gamesa 1.7 4.6% 8 United Power 1.4 3.9% 9 Mingyang 1.3 3.7%
Slide 19: Senvion: Stellar Performance
Senvion: Stellar Performance Clauen Onshore Wind Farm, Germany 19 www.suzlon.com
Slide 20: Higher profitability despite lower volume
Higher profitability despite lower volume Financial Performance (€M) Highlights of FY14 • Performance on track despite adverse market Revenue dynamics -19% 2,221 1,675 1,806 ~25% increase in profitability despite ~20% decline in revenue • Restructuring goal achieved FY12 FY13 FY14 Exceeded the €
Slide 21: Strengthening Market Position
Strengthening Market Position 3 3 2 Germany United Kingdom Poland 15.0% 11.0% 14.0% 11.0% 7.0% 5.0% 2012 2013 2012 2013 2012 2013 2 2 2 Canada France Austria 30.0% 20.0% 18.0% 17.0% 10.0% 11.0% 2012 2013 2012 2013 2012 2013 Source: MAKE consult report 2013 Market Position Strengthened position in co
Slide 22: Gaining Strength in Offshore
Gaining Strength in Offshore • Proven product technology Largest commercially proven offshore turbine – 6.2 MW Evolving Product Technology Large rotor diameter with sweeping area larger than 3 football pitches – 152 mts 2014 Prototype Sold Nacelle alone is as big as two detached houses • >10 y
Slide 23: Offshore track record and success story
Offshore track record and success story Beatrice Thornton Alpha Ormonde Thornton Nordsee Bank I ventus Bank II/III Ost 2006-2007 2008-2009 2009-2010 2011 2012-2013 2014* *under installation 23 www.suzlon.com
Slide 24: Completed its largest offshore wind farm in FY14
Completed its largest offshore wind farm in FY14 325 MW Thornton Bank project with 6M • Project with largest fleet of 6M turbines • One of the largest project financed offshore wind farms in Europe (~€900mn) • Total project cost: ~€1.3bn • ~30KM off the coast & up to ~30 meters deep) • On time and w
Slide 25: Higher banking limits to support growth
Higher banking limits to support growth Existing facility refinanced Facility Size (Eur Mn) • Enhanced facility significant for growth Long Tenure: 3 year (Mar’17) +13% Timely refinancing: Existing facility maturing in Aug’14 850 30 Structure: Unchanged, Largely Non fund based 750 • Participat
Slide 26: Lot of Value has been created since acquisition
Lot of Value has been created since acquisition Senvion Performance (€M) • High Growth and Profitability Revenue 4x since acquisition, profitability Revenue 8 times +19% • Newer markets Entered new high growth markets such as 2,221 USA, Canada, Australia, Romania etc. 1,675 1,806 1,209 1,304 1,2
Slide 27: Comprehensive Liability Management Update
Comprehensive Liability Management Update Suzlon wind farm in Rajasthan, India 27 www.suzlon.com
Slide 28: Comprehensive liability management approaches completion
Comprehensive liability management approaches completion Status Update CDR Overseas FX Facilities FCCB Restructuring • CDR approved and • Refinanced out of proceeds of • Negotiations with ad hoc committee implemented new credit enhanced bond concluded Extended maturity profile Bullet maturity in
Slide 29: Sustainable solution to debt across the group
Sustainable solution to debt across the group As on 31th March 2014 Suzlon Wind Rupee Foreign Currency Denominated Denominated 1 1 FCCBs(1) $577M Secured Domestic Debt Rs. 9,016 Crs. Negotiations concluded Restructured through CDR / 5 yr bullet maturity in FY2019-20 Bilateral Negotiations 2 Credit E
Slide 30: Minimal repayment pressures for next 4 years for Suzlon Wind
Minimal repayment pressures for next 4 years for Suzlon Wind 5 year Debt Repayment Profile (Suzlon Wind) Rupee Denominated Debt FX debt (Rs. Crs.) ($mn) 647 Term Debt 484 699 699 FCCB SBLC Backed Bonds 466 350 117 95 0 0 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 • Next large repayment only i
Slide 31: FCCBs: Overview of the bonds
FCCBs: Overview of the bonds Pre-Restructuring – 4 series Principal Conversion Redemption FCCBs Coupon rate Maturity date (US$ mn) price (Rs) premium October 2012 – Old 121.4 97.26 0% 144.88% October 2012 October 2012 – Exchange 20.8 76.68 7.5% 157.72% October 2012 July 2014 90.0 90.38 0% 134.20% Ju
Slide 32: Equity Issuances conditions under CDR met
Equity Issuances conditions under CDR met Equity Shares as on date Issuance since 31st March 2013 271.3 9.0 Value No. of Locked Up 26.3 Entity (Rs. Crs.) Shares (Crs.) Portion 58.3 177.7 Promoters 295 26.3 100% CDR Lenders 1080 58.3 100% As on CDR Promoters Others Current Key Business March 13 Lende
Slide 33: Industry Outlook Improving
Industry Outlook Improving Suzlon wind farm in Aracati, Brazil 33 www.suzlon.com
Slide 34: Global Wind Market Outlook: Poised to bounce back
Global Wind Market Outlook: Poised to bounce back Annual Installations (GW) • Recovery in global economy to fuel +11% renewable industry growth +40% 51 52 52 • High order intake seen in H2FY14 and 48 continuing 34 • Increase in renewable investments 2013 2014e 2015e 2016e 2017e Source: Make Suzlon P
Slide 35: India Market poised for a strong growth
India Market poised for a strong growth • Strong fundamentals Annual Installations (MW) Growing Electricity Demand 5-6% Constrained conventional sources +20% Increasing wind competitiveness Huge untapped Potential 100 GW+ +44% 3,600 3,179 3,300 • Strong regulatory push 3,000 2,077 Average
Slide 36: High Growth High Margin Offshore business
High Growth High Margin Offshore business Annual Installations (MW) • Strong fundamentals +31% 5,678 Installations to be dominated by Europe, particularly in Germany and UK +44% Lot of countries are exploring offshore 2,995 3,183 potential, such as India, North America, 2,805 1,950 China, Japan
Slide 37: Growth potential in other markets
Growth potential in other markets North America • Last minute PTC extension in the beginning of 2013 lead to low installations in USA in 2013. • 2014 is expected to be a bumper year with 10+ GW installations predicted • Policy environment continue to remain positive for Canada, supporting growth in
Slide 38: Key Priorities for FY15
Key Priorities for FY15 Suzlon Manufacturing unit in Dhule, India 38 www.suzlon.com
Slide 39: FY15: Key Priorities
FY15: Key Priorities Specific Priorities for FY15 1 2 3 Volume Ramp up Realizing Business Efficiencies Optimizing Capital Structure • Suzlon Wind: • Improving Margins • Asset Sale Program Focus on India and select Focus on profitable orders Focus monetizing India based non overseas markets V
Slide 40: Detailed Financials – FY14
Detailed Financials – FY14 Manufacturing unit in Daman, India 40 www.suzlon.com
Slide 41: Consolidated financial results
Consolidated financial results Rs Crs. Q4 FY14 Q4 FY13 Q3 FY14 FY14 FY13 Particulars Audited Unaudited Unaudited Audited Audited Revenue from operations 6,581 4,281 5,010 20,212 18,743 Less: COGS -4,741 -3,185 -3,430 -14,435 -13,640 Gross Profit 1,840 1,095 1,580 5,776 5,104 Gross Profit % 28.0% 25.
Slide 42: Consolidated net working capital
Consolidated net working capital Rs Crs As on As on As on As on As on As on As on Particulars 31st Mar’14 31st Dec’13 30th Sept’13 30th June’13 31st Mar ’13 31st Dec ‘12 30th Sept’12 Inventories 4,033 5,016 5,274 5,386 5,264 5,928 5,421 Trade receivables 5,946 5,725 5,889 5,759 6,382 6,990 8,584 Loa
Slide 43: Suzlon consolidated balance sheet
Suzlon consolidated balance sheet Rs Crs. Liabilities FY 2014 FY 2013 Assets FY 2014 FY 2013 Shareholders' Fund Non Current Assets a) Share Capital 498 355 a) Fixed Assets 13,948 12,382 b) Reserves and Surplus -1,041 -35 b) Non Current Investments 4 36 -544 320 d) Long Term Loans & Advances 518 672
Slide 44: Thank You
Thank You Suzlon wind farm in Texas, USA 44 www.suzlon.com