Suzlon Energy Ltd · NSE:SUZLON
Suzlon Energy — FY2018 Earnings Presentation
47 slides from Suzlon Energy's earnings presentation, May 30, 2018
Slide 1: Suzlon Energy Limited Annual Results FY18
Suzlon Energy Limited Annual Results FY18 30 May 2018
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: No. 1 Player in India Wind Industry
No. 1 Player In India Wind Industry Annual Commissioning RANK # ~35% Market Share; Highest by any OEM in India Cumulative Installations Largest cumulative installed base by any OEM in India Fleet under Maintenance Largest renewable fleet in India, ~12GW fleet under service 2nd largest O&M company in
Slide 4: 3rd Consecutive Year of Market Share Gains
3rd Consecutive Year Of Market Share Gains Suzlon Annual Market Share (%) (Based on Commissioning) 35% 32% 26% 19% FY15 FY16 FY17 FY18 4 Strong execution capabilities demonstrated
Slide 5: FY18 Performance Highlights
FY18 Performance Highlights ₹8,292 Cr. 13.9% 1,173 MW* 966 MW* (Incl. 231 MW Solar) (Incl. 340 MW Solar) Revenues EBITDA Margins Deliveries Commissioning (pre-fx) In Line with Guidance ~1.2 GW volumes Despite Transition Year; ~14% EBITDA margins Despite Lower Operating Leverage Despite 11% Revenue f
Slide 6: Strong Bidding Momentum; Tariffs Bottoming Out
Strong Bidding Momentum; Tariffs Bottoming Out Strong Volume Visibility Bid Volumes (MW) Bids Announced Capacity 23,000 SECI V 2,000 MW 6,000 NTPC 2,000 MW Gujarat 1,000 MW 9,500 7,500 Wind Solar Hybrid 2,500 MW Wind in Existing Solar Farms 1,000 MW Offshore 1,000 MW Bids Concluded Bids Announced Bi
Slide 7: 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) Only player under SECI I: • to achieve land milestone • to complete equipment delivery 1,413 126 285 500 250 252 SECI I SECI II SECI III SECI IV State Bids Total → ~97% volumes won through “Pre Bidding
Slide 8: ~2 GW Backlog
Largest Backlog In India Wind Industry Particulars Capacity Remarks SECI III, SECI IV and MH Bids PPA yet to be signed Auction based Order Book 1,144 MW (100% certainty of signing) Retail, Captive & PSU 59 MW Backed by advance, Not Dependent on PPAs Wind Firm Order Book 1,203 MW ASP ₹ ~6 Cr. / MW (N
Slide 9: 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 Expected Q1 FY19 Proto Commissioned* Jan’18 S111-140 S120 S1
Slide 10: FY19 Guidance
FY19 Guidance Revenue ₹ 12,000 – 13,000 Cr. EBITDA Margin Around 14% Debt Reduction Target 30% - 40% 10 Strong order backlog backing the guidance
Slide 11: Financial Performance
Financial Performance Debt Overview Industry Outlook Technology Suzlon Strengths Detailed Financials 11
Slide 12: FY18 Result Snapshot
FY18 Result Snapshot (₹ Cr.) Particulars FY18 FY17 Remarks Audited Audited Revenue 8,292 12,693 Gross Profit 3,177 5,150 Gross Margin 38.3% 40.6% Despite 11% revenue from low margin solar Employee Expenses 805 1,046 Significant Cost Optimizations Other Expenses (net) 1,223 1,901 EBITDA (Pre FX) 1,14
Slide 13: Stringent Focus on Fixed Cost Optimization
Stringent Focus On Fixed Cost Optimization Fig. in ₹ Cr. Continuous Improvement in Expense Ratio Manpower Expenses Other Expenses* (Mostly Fixed in Nature) (Semi Variable in Nature) -23% -36% 1,046 1,901 805 1,223 FY17 FY18 FY17 FY18 13 Lean cost structures to increase competitiveness * Net of other
Slide 14: Reduction in Net Working Capital in Q4
Reduction In Net Working Capital In Q4 Fig. in ₹ Cr. -764 3,544 3,131 • Debtors reduced by ₹575 Cr. 2,780 • Inventory reduced by ₹564 Cr. 2,212 -1,442 -679 1,619 9,078 5,534 7,636 4,856 Reduction in Current Assets Reduction in Current Liabilities Mar’17 June’17 Sep’17 Dec-17 Mar-18 14 To further red
Slide 15: Stable Service Revenue Insulated from Business Cycles
Stable Service Revenue Insulated From Business Cycles Operations and Maintenance Revenues (₹ Cr.) ~15 GW of Assets under Management (AUM) +1.4% ― ~12 GW in India; ~3 GW Overseas 1,755 1,780 ― 2nd Largest O&M player in India Power Sector, after NTPC Internal 132 125 100% renewal track record in I
Slide 16: Order Book Reconciliation
Order Book Reconciliation (MW) Remarks Opening as on 31st Mar’17 901 • Mytrah’s Long Term Order of 436.8 MW cancelled due to change in regime from FiT to Auction. (+) Order Intake 1,957 • 218.4 MW orders from Renew, Greenko and other IPPs and retail customers were cancelled (-) Net RR 1,173 due to n
Slide 17: Debt Overview
Financial Performance Debt Overview Industry Outlook Technology Suzlon Strengths Detailed Financials 17
Slide 18: Term Debt Profile
Term Debt Profile (Excl. FCCB) Mar’17 Mar’18 Change Back Ended Maturity Profile (₹ Cr.) 64% SBLC Backed AERH Loans US$ 626 M US$ 569 M US$ 57M 4,422 Other FX Term Debt US$ 74 M US$ 66 M US$ 8M FY19-22 Repayments: 36% 735 815 388 565 Rupee Term Debt ₹ 2,877 Cr. ₹ 2,843 Cr. ₹ 34Cr. FY19 FY20 FY21 FY22
Slide 19: 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 (₹ 1,139 Cr.*) 172 Conversion Details Price (Per Share) ₹ 15.46 Exchange Rate ₹ 60.225 Jul’14 Conversions Till FY18 March’18 19 69% FCCBs a
Slide 20: Increase in Working Capital Debt Due to Transition Year Impact
Increase In Working Capital Debt Due To Transition Year Impact Fig. in ₹ Cr. “Transition Year” Impact Regulatory uncertainty “Auction Regime” Project delays • Reduced regulatory uncertainty • Elongated execution schedule Creditors paid but realizations delayed • Smoothened out quarterly volumes • La
Slide 21: 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 15.1 GW commissioned in last 5 years 14.5 GW in next 2 years (MW) 10,000 5,502 4,500 3,415 2,077 2,312 1,766 FY14 FY15 FY16 FY17 FY18 FY19E FY20E Source: MNRE Source: Internal E
Slide 23: ~5 GW Announced Pipeline for Wind Solar Hybrid
~5 GW Announced Pipeline For Wind Solar Hybrid Announced Pipeline • Wind Solar Hybrid Gaining Traction 2.5 GW Hybrid ‒ 14th May 2018: Wind Solar Hybrid Policy issued by MNRE (New Hybrid) ‒ 25th May 2018: Scheme for 2,500 MW Wind Solar Hybrid Sanctioned; Bidding Guidelines Issued 1 GW Wind (in existi
Slide 24: Wind Emerging as Most Competitive Source of Power
Wind Emerging As Most Competitive Source Of Power Tariff Levels (₹ /unit) India APPC 3.48 NTPC Avg. Coal Plant Tariff (FY17 ) SECI Tender (May’18) SECI 4 Bidding (April’18) 3.18 2.82 2.51 Coal Solar Wind Equipment Domestic / Imported Largely Imported “Made in India” Fuel Domestic / Imported No Fuel
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 Power Grid working on creation of transmission infrastructure • Increasing inter-regional capaci
Slide 26: Positive Aspects of Competitive Bidding
Positive Aspects Of Competitive Bidding Until FY17 FY19 onwards Pan India Demand Demand from Wind States only (Wind + Non Wind States) FiT + Incentive Regime Auction based / Market Based pricing (High tariff uncertainties) (Reduced uncertainties) (Reluctance from DISCOM) (Most competitive source of
Slide 27: Suzlon Best Positioned in Auction Regime
Suzlon Best Positioned In Auction Regime Auction Regime – Path Ahead Reduced Risk Profile • Reduced Counterparty Risk • Reduced grid risk • 25 years PPA Lower Cost of Capital Lower Power Cost • Lower Cost of Debt + • Longer Maturity Profile • Lower Cost of Equity Technology Market Expansion • Higher
Slide 28: Other Emerging Opportunities for Growth
Other Emerging Opportunities For Growth Feed in Tariffs <25 MW projects • Wind projects less than 25 MW ₹3.45 per unit (Announced by Karnataka) • 25 years PPA period • To boost retail investor participation Others states to follow Offshore • National offshore policy already notified 1 GW • Suzlon ha
Slide 29: Technology
Financial Performance Debt Overview Industry Outlook Technology Suzlon Strengths Detailed Financials 29
Slide 30: S111-140 2.1 MW: India's Tallest Turbine Commissioned in FY18
S111-140 - 2.1 MW: India’s Tallest Turbine Commissioned In FY18 First 12 Months PLF ~20% ~5-6% Higher Energy Yield Higher Energy Yield ~35% PLF ~42% PLF ~44% PLF (Est.) LCOE reduction LCOE reduction S97-120 S111-120 S111-140 June’14 Mar’16 Aug’17 Prototype Installation Dates 30 Tallest all steel hyb
Slide 31: S120: Accelerate Near Term Competitiveness of Current Platform
S120: Accelerate Near Term Competitiveness Of Current Platform Site Installation underway SB59 Main Mould 2 installed at Bhuj • Proto Commissioning (E): Q1FY19 • Rated Capacity: 2.1 MW • Rotor Diameter: 120M • Tower Height: 120-140M Site Installation underway S120 Nacelle Assembly at Plant • 6-7% Hi
Slide 32: S128 – 2.6-2.8 MW: Readying for the Future
S128 – 2.6 - 2.8 MW: Readying For The Future S120 – 2.1 MW • Rotor Diameter: 128m ‒ Country’s largest ‒ New carbon fibre blade enabling better aerodynamic profile • Hub height: up to 140 • 33% greater swept area ‒ Country’s largest • 20-22% higher energy yield ‒ New Hybrid concrete tower • Reduced L
Slide 33: 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 >1.2 GW ~840 MW ~135 MW ~365 MW ~520 MW 1st Turbine Installed till date Installed till date Installed till date Sold till date Sold till da
Slide 34: 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 35: 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 36: Suzlon Strengths
Financial Performance Debt Overview Industry Outlook Technology Suzlon Strengths Detailed Financials 36
Slide 37: 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 22+ Years Track Record Capabilities 37 End-to-end service provider with strong presence across value chain & customer segments
Slide 38: 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. 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% -
Slide 39: Suzlon's Global Presence
Suzlon’s Global Presence As on 31st Mar 2018 2 5 2 1 North America 6 3 1 2,779 MW 4 Asia 3 5 12,879 MW South America Europe 806 MW 508 MW 4 South Africa Australia 139 MW 764 MW 6 39 Suzlon’s strong relationships across regions positions it well Map not to scale. All data, information, and map is pro
Slide 40: 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 41: Detailed Financials
Financial Performance Debt Overview Industry Outlook Technology Suzlon Strengths Detailed Financials 41
Slide 42: Consolidated Income Statement
Consolidated Income Statement Particulars Q4 FY18 Q3 FY18 Q4 FY17 FY18 FY17 (₹ Cr.) Audited Unaudited Audited Audited Audited Revenue from operations 2,236 2,204 4,993 8,292 12,693 Less: COGS 1,404 1,519 3,295 5,116 7,543 Gross Profit 833 685 1,698 3,177 5,150 Margin % 37.2% 31.1% 34.0% 38.3% 40.6%
Slide 43: Consolidated Balance Sheet
Consolidated Balance Sheet (Rs. Crs.) Liabilities Mar-18 Mar-17 Assets Mar-18 Mar-17 Shareholders' Fund -6,967 -6,841 Non Current Assets Non controlling interest 10 9 (a) Property, Plant and Equipment 1,267 1,420 -6,957 -6,833 (b) Intangible assets 155 211 (c) Investment property 41 34 (d) Capital w
Slide 44: Consolidated Net Working Capital
Consolidated Net Working Capital (₹ Cr.) 31st Mar’18 31st Dec’17 31st Mar’17 Inventories 3,026 3,590 3,469 Trade receivables 2,990 3,565 3,673 Loans & Advances and Others 1,620 1,923 1,764 Total (A) 7,636 9,078 8,906 Sundry Creditors 2,527 2,515 4,812 Advances from Customers 932 1,505 793 Provisions
Slide 45: 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 46: 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 47: Thank You
CIN of Suzlon Energy Ltd - L40100GJ1995PLC025447 THANK YOU 47