Suzlon Energy Ltd · NSE:SUZLON
Suzlon Energy — FY2008-09 Earnings Presentation
33 slides from Suzlon Energy's earnings presentation, Jun 27, 2009
Slide 1: Suzlon Energy Limited Annual Results FY 2008-09
Suzlon Energy Limited Annual Results FY 2008-09 27th June 2009 1
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: FY 2008-09: A challenging year
FY 2008-09: A challenging year • Debt covenants • Working capital reduction • Blade crack issue • Business performance 3
Slide 4: Challenges met: Debt covenants
FY 2008-09: Challenges met Debt covenants • Financial covenants in FCCBs and Acquisition Loan Facility – Liability Management Exercise for $500 million FCCBs (June 2007 and October 2007 series) undertaken – Modification of debt covenants achieved – Reduction in FCCB liability by $111 million achieve
Slide 5: Challenges met: Working capital
FY 2008-09: Challenges met Working capital • Suzlon Wind Business: – Gradual improvement in working capital intensity – Release of Rs.1,500 crs. from Inventory from December 2008 to March 2009 – Collection from receivables improving • Receivables reduced by 25-30% from March 2009 levels by May 2009
Slide 6: Challenges met: Blade crack issue
FY 2008-09: Challenges met Blade crack issue • Additional provisions during Q4 FY09 due to cost and time overruns Provisions (Rs. crores) Particulars FY08 9m FY09 Q4 FY09 Total Retrofit and replacement 122 171 51 344 Availability compensation 20 136 53 209 Total 142 307 104 553 • Status of completio
Slide 7: Challenges met: Business performance
FY 2008-09: Challenges met Business performance Parameter FY 2008-09 FY 2007-08 (Rs. in Crores) Suzlon Wind Business Suzlon Wind Business Volume 2,790 2,311 Sales Turnover 15,897 11,467 Realisation / MW 5.70 4.96 Gross Profit / MW 1.94 1.58 Gross Profit % 34% 32% EBITDA / MW 0.57 0.74 EBITDA % 10% 1
Slide 8: Escalation in operating and other expenses
Suzlon Wind business: escalation in Operating and other expenses • Substantial increases in certain operating expenses – Consultancy charges: related to working capital reduction exercise and advisory fees – Bank charges – Performance guarantee provisions : related to lower machine availability of U
Slide 9: Challenges met: Performance of acquisitions
FY 2008-09: Challenges met Performance of acquisitions Parameter FY 2008-09 FY 2008-09 (Euros million) Hansen Transmissions* REpower systems* Sales 609 1,209 COGS 465 981 Gross Profit 144 228 EBITDA 94 91 EBIT 64 77 PAT 45 52 * As per published results of respective companies. Suzlon’s consolidated
Slide 10: Medium-term market dynamics
Medium-term market dynamics • De-growth in industry’s sales in 2009 followed by rebound in 2010 – Slowdown expected in US and Europe markets in 2009 – China may be major growth market • Pricing pressure and raw material cost decline • Availability of debt funds for new wind power projects has reduce
Slide 11: Long term story still intact
Long term story still intact • USA: President Obama approves $787 bn stimulus package (American Recovery and Reinvestment Act) – $70 bn assigned for renewable energy industry includes tax incentive and government spending • EU: Parliament and heads of nations commit to Renewable Energy Directive – 2
Slide 12: Business outlook FY 2009-10
Business outlook FY 2009-10 Suzlon Energy Limited
Slide 13: FY 2009-10: Year of consolidation
FY 2009-10: Year of consolidation • Balance sheet management – Focus on debt reduction • Exploring various strategic financing options • Working capital rationalization • Repayment obligations of fixed maturity loans – Acquisition loan: EUR 129 million in FY10 (Rs.874 crs. at INR 67.52 / EUR 1) – Ca
Slide 14: Year of consolidation: S88 performance and order outlook
FY 2009-10: Year of consolidation (contd.) • S88 2.1 MW performance – S88 V3 delivering target or near-target availability in large majority of installations – S88 V2 fleet availability steadily improving with blade retrofit progress and implementation of design changes / technical correction initia
Slide 15: Information on group companies: SE Forge
FY 2009-10: Year of consolidation (contd.) • Information on group companies – SE Forge Limited • Foundry and Machining: planned capacity of 120,000 MT annually – Location: Coimbatore, Southern India – Total capex Rs.600 crs. • Foundry Products: Hub body, Main Frame, Rotor Shaft, Bearing Housing, Gea
Slide 16: Information on group companies: REpower and Hansen
FY 2009-10: Year of consolidation (contd.) • Information on group companies – REpower Systems AG • Suzlon owns 90.72% of REpower • Onshore order book: 1,317 MW as on March 2009 • Firm order book EUR 1.54 bn as on March 2009 • For FY 2009-10 further growth expected (source: REpower forecast): – Incre
Slide 17: Positioning for future growth
FY 2009-10: Year of consolidation (contd.) • Positioning for future growth – Appointment of Boston Consulting Group (BCG) for a business transformation initiative • Financial and operational planning • Delivery excellence and efficiency • Product and technology • Organisation and people 17
Slide 18: Financial Highlights FY 2008-09
Suzlon Energy Limited Financial Highlights FY 2008-09 27th June 2009 18
Slide 19: Consolidated financial results
Consolidated financial results (Suzlon Wind + SE Forge + Hansen + REpower*) Q4 FY09 Q4 FY08 FY09 FY08 INR Cr. Particulars Unaudited Unaudited Audited Audited Sales 9,121 4,924 26,082 13,679 Raw Material cost 5,804 3,148 16,857 8,870 Gross Profit 3,317 1,776 9,225 4,809 Gross Profit margin 36% 36% 35
Slide 20: Consolidated financial results: Year-on-year
Consolidated financial results: Year-on-year FY09 (unaudited) FY08 (unaudited) Particulars INR Cr. Suzlon SE Forge Hansen REpower Suzlon SE Forge Hansen REpower Sales MW 2,790 2,311 Sales 15,897 17 3,994 7,125 11,467 -- 2,405 -- Raw Material cost 10,481 3 1,939 5,288 7,813 -- 1,236 -- Gross Profit 5
Slide 21: Consolidated financial results: Quarter-on-quarter
Consolidated financial results: Quarter-on-quarter Q4 FY09 Unaudited Q4 FY08 Unaudited INR Cr. Particulars Suzlon SE Forge Hansen REpower Suzlon SE Forge Hansen REpower Sales MW 1,046 765 Sales 5,703 14 1,052 2,763 4,193 -- 865 -- Raw Material cost 3,898 4 545 1,730 2,818 -- 452 -- Gross Profit 1,80
Slide 22: Consolidated Balance Sheet: Sources of Funds
Consolidated Balance Sheet: Sources of Funds* INR Cr. Particulars FY09 FY08 Share Capital 300 299 Employee Stock options 10 10 Reserves and Surplus 8,222 7,792 Shareholders’ funds 8,532 8,101 Share application money, pending refund 95 -- Preference share issued by subsidiary company 3 3 Minority Int
Slide 23: Consolidated Balance Sheet: Applications of Funds
Consolidated Balance Sheet: Applications of Funds* INR Cr. Particulars FY09 FY08 Gross block 15,102 5,600 Less: Accumulated depreciation / amortization 1,821 1,032 Net block 13,281 4,568 Capital work-in-progress 1,984 1,120 Net Fixed Assets (including intangible assets) 15,265 5,688 Investments 5 3,
Slide 24: Suzlon Wind Business Balance Sheet: Sources of Funds
Suzlon Wind Business Balance Sheet: Sources of Funds INR Cr. Particulars FY09 (unaudited) FY08 (unaudited) Share Capital 300 299 Employee Stock options 8 10 Reserves and Surplus 6,277 6,451 Shareholders’ funds 6,585 6,760 Share application money, pending refund 95 -- Preference share issued by subsi
Slide 25: Suzlon Wind Business Balance Sheet: Applications of Funds
Suzlon Wind Business Balance Sheet: Applications of Funds INR Cr. Particulars FY09 (unaudited) FY08 (unaudited) Gross block 2,679 1,767 Less: Accumulated depreciation / amortization 702 432 Net block 1,977 1,335 Capital work-in-progress 595 398 Fixed Assets 2,572 1,733 Investments 9,862 5,756 Deferr
Slide 26: Financial leverage
Financial leverage* INR Crs. As at 31st March 2009 As at 31st March 2008 Particulars SEL Wind Consol. Group SEL Wind Consol. Group Gross Debt 12,452 14,870 8,643 9,935 Cash 1,359 3,070 4,887 6,960 Net Debt 11,093 11,800 3,756 2,975 26 * REpower results were not consolidated in FY08
Slide 27: Suzlon Wind business: Net Operating Working Capital
Suzlon Wind business: Net Operating Working Capital INR Crs. As on 31st Mar. 2009 As on 31st Mar. 2008 Particulars (unaudited) (unaudited) Sales 15,897 11,467 Inventories 3,878 3,328 Raw Materials 2,193 1,711 Semi finished goods, finished goods, work-in-progress and contracts in progress 1,490 1,511
Slide 28: Suzlon Wind business: Exceptional Items
Suzlon Wind business: Exceptional Items* INR Crs. Particulars Q4 FY09 Q4 FY08 FY09 FY08 Blade retrofit provisions 51 103 222 122 Availability related to blade cracks 53 20 190 20 FCCB MTM Loss / (Gain) (303) 35 131 (4) Other MTM Loss / (Gain) 139 23 354 23 Others -- 59 -- 125 Total (60) 240 897 286
Slide 29: Suzlon Wind business: Sales and order breakup
Suzlon Wind business: Sales and order breakup Orders as on Sales in Q4 Orders as on New Orders Sales in FY09 Sales in FY08 Region 26/01/09 FY09 25/06/09 India 98 207 230 75 749 975 USA 1,013 42 407 647 989 593 China 472 100 84 488 249 134 ANZ 128 246 242 132 430 143 Europe 105 -- -- 105 166 298 S.Am
Slide 30: Suzlon Wind business: WTG revenue by geography
Suzlon Wind business: WTG revenue by geography FY09 Sales FY09 Sales FY08 Sales FY08 Sales Region (MW) (Rs.Crs) (MW) (Rs.Crs) India 749 4,420 976 5,572 USA 989 5,229 593 2,289 China 249 1,104 134 455 ANZ 431 2,519 143 1,023 Europe & ROW 373 2,624 466 2,129 Total 2,790 15,897 2,311 11,467 Realisation
Slide 31: Suzlon Wind business: WTG sales by product
Suzlon Wind business: WTG sales by product 350 kW 600 kW 1250 kW 1500 kW 2100 kW Total Markets Sales in Units No. of WTGs No. of WTG FY09 -- 93 131 353 -- 577 India FY08 15 181 149 449 1 795 FY09 -- -- -- -- 471 471 USA FY08 -- -- 51 -- 252 303 FY09 -- -- 80 99 -- 179 China FY08 -- -- 107 -- -- 107
Slide 32: Suzlon Wind business: Capex program
Suzlon Wind business: Capex program INR Crs. Investments Investments Investments Investments Commercialization / Particulars Budget in FY07 in FY08 in FY09 in FY10 completion date Integrated WTG unit 865 -- 94 549 113 H1 FY09 Forging, Foundry and Machining units 1,100 34 322 545 40 H2 FY09 Suzlon ca
Slide 33: Thank you
Thank you www.suzlon.com 33