Suzlon Energy Ltd · NSE:SUZLON
Suzlon Energy — 9M FY19 Earnings Presentation
41 slides from Suzlon Energy's earnings presentation, Feb 7, 2019
Slide 1: Suzlon Energy Limited 9M FY19
Suzlon Energy Limited 9M FY19 07 February 2019 SECI-1 Sembcorp Project
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: Industry Poised For Huge Growth
Industry Poised For Huge Growth 10.7 GW ~34 GW ~44 GW Capacity auctioned till date Bidding expected by 2022 Auctions by 2022 Will lead to Year FY20 FY21 FY22 Total FY19 estimated 2022 Target installed base Turbine Supply 11 GW 12 GW 12 GW 35 GW ~36 GW 67 GW Commissioning 8 GW 11 GW 12 GW 31 GW Sourc
Slide 4: FY20 Onwards: Strong Uptick In Volumes
FY20 Onwards: Strong Uptick In Volumes FY18 and FY19: FY20 and FY21: High bidding activity High commissioning activity 11.0 (GW) +45% 7.6 8.0 5.5 5.5 2.4 5.2 2.0 FY17 FiT Upto FY18* 9M FY19 FY19 FY20 FY21 Commissioning Strong commissioning outlook for FY20 & FY21 Transition to auctions • 21 months e
Slide 5: Traction In Auctions In FY19
Traction In Auctions In FY19 SECI 6 FY18 Feb’17 SECI 4 NTPC SECI 5 Hybrid 1 1.2 GW auctions 1.0 GW 2.0 GW 1.2 GW 1.2 GW 0.8 GW Bid 4.5 GW submission Feb’17 FY18 Apr’18 Aug’18 Sep’18 Dec’18 Feb’19 Deliveries 5.2 GW Auctions Concluded in 9M FY19 Commissioning 2,350 MW bids commenced commenced submitte
Slide 6: 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) 1,740 202 285 Deliveries Fully Ongoing 752 commissioned 252 250 SECI I SECI II SECI III SECI IV State Bids Total → ~23% of auctioned and tied up orders → Top Quality Customer Profile: Orders from marqu
Slide 7: Wind Solar Hybrid Gaining Momentum
Wind Solar Hybrid Gaining Momentum 1st Wind Solar Hybrid Auction Concluded Key Positives of Wind Solar Hybrid • Efficient utilisation of transmission infrastructure and land Auction Date Bid Capacity • Reduce variability in renewable power generation • Improved grid stability 5th Dec 2018 840 MW Pro
Slide 8: Suzlon Only Player To Commission Entire SECI-1 Project
Suzlon Only Player To Commission Entire SECI-1 Project • Commissioned 1st SECI-1 project despite initial challenges • Delivered 6 months ahead of revised schedule • Provide comprehensive O&M services for entire project life Customer Sembcorp Energy India Project Size 250 MW Project Scope Full Scope
Slide 9: FY19 Debt Reduction Target
FY19 Debt Reduction Target Debt Reduction Target 30% - 40% Plan to reduce debt through strategic initiatives Medium to long term outlook for wind continues to remain positive 9 Committed to reduce debt
Slide 10: Financial Performance Debt Overview Industry Outlook
Financial Performance Debt Overview Industry Outlook Technology Suzlon Strengths Detailed Financials 10
Slide 11: Q3 FY19 Financial Highlights
Q3 FY19 Financial Highlights (₹ Cr.) Q3 FY19 Q3 FY18 Particulars Remarks Unaudited Unaudited Net Volumes (MW) 67 316 Net Revenue 1,091 2,187 Gross Profit 484 668 Primarily due to revenue mix Gross Margin 44.3% 30.5% Employee Expenses 219 193 Other Expenses (net) 193 228 EBITDA (Pre FX) 73 247 Primar
Slide 12: 9M FY19 Financial Highlights
9M FY19 Financial Highlights (₹ Cr.) 9M FY19 9M FY18 Particulars Remarks Unaudited Unaudited Net Volumes (MW) 349 844 Net Revenue 3,557 5,909 Primarily due to low volume Gross Profit 1,512 2,197 Primarily due to revenue mix Gross Margin 42.5% 37.2% Employee Expenses 625 602 Other Expenses (net) 622
Slide 13: Consistent Reduction In Net Working Capital
Consistent Reduction In Net Working Capital Fig. in ₹ Cr. 3,543 -1,877 Working Capital to optimize under Auction regime 2,780 2,401 • Reduced regulatory uncertainty 1,999 • Elongated execution schedule 1,667 • Smoothened out quarterly volumes • Large scale project size • Make to Order Q3 FY18 Q4 FY1
Slide 14: 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) +6.7% ― 12+ GW in India; ~3 GW Overseas 1,429 1,340 89 Internal 111 +9.1% ― 2nd Largest O&M player in India Power Sector, after NTPC Nearly 100% renewal track
Slide 15: ~2.1 GW Backlog
Largest Backlog In India Wind Industry Particulars Capacity Remarks Central Auctions 1,073 MW All orders backed by signed PPA’s State Auctions 183 MW Retail, Captive, PSU & IPP 123 MW Backed by advance, Not dependent on PPAs Wind Firm Order Book 1,379 MW ~2.1 GW Backlog Value of Order Book ₹7,749 Cr
Slide 16: Financial Performance Debt Overview Industry Outlook
Financial Performance Debt Overview Industry Outlook Technology Suzlon Strengths Detailed Financials 16
Slide 17: Term Debt Profile
Term Debt Profile (Excl. FCCB) 31st Dec’18 30th Sep’18 Back Ended Maturity Profile (₹ Cr.) US$ 569 M US$ 569 M 64% SBLC Backed AERH Loans (₹ 3,958 Crs.) (₹ 4,110 Crs.) 4,515 Change only due to FX; No change in US$ value US$ 61 M US$ 64 M FY19-22 Repayments: 36% Other FX Term Debt (₹ 427 Crs.) (₹ 460
Slide 18: 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 (₹ 1,234 Cr.*) 172 Conversion Details Price (Per Share) ₹ 15.46 Exchange Rate ₹ 60.225 Jul’14 Conversions Till Dec’18 Dec’18 18 69% FCCBs a
Slide 19: Financial Performance Debt Overview Industry Outlook
Financial Performance Debt Overview Industry Outlook Technology Suzlon Strengths Detailed Financials 19
Slide 20: 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 10.6 GW commissioned in last 3 years 21.0 GW commissioning in next 3 years (MW) 11,000 8,000 5,502 3,415 1,766 2,000 FY16 FY17 FY18 FY19E FY20E FY21E Source: MNRE Source: Intern
Slide 21: 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 “India plans to auction 10 GW of wind energy for the next 10 years”, MNRE Secretary, Anand Kumar
Slide 22: Nearing The End Of Transition Phase
Nearing The End Of Transition Phase Parameter Upto FY17 Apr’17 – Mar’19 FY20 and Onwards PPA Mechanism Feed-in-Tariff Competitive Bidding Wind Tariff ₹ 4.0 – 5.0 /unit ₹ 2.5 – 3.0 /unit Transition from FiT to Auction Annual Market Size 3 – 4 GW 10 – 12 GW impacted turbine sales due to Order Book Cov
Slide 23: Other Emerging Opportunities For Growth
Other Emerging Opportunities For Growth Offshore • National offshore policy already notified 1 GW • Suzlon has commissioned 1st Offshore Met Station 2018 (Expression of Interest) • Offshore Advantage: Higher PLF due to high wind power density and shallow water 2022 Target 5 GW depth enables lower co
Slide 24: Financial Performance Debt Overview Industry Outlook
Financial Performance Debt Overview Industry Outlook Technology Suzlon Strengths Detailed Financials 24
Slide 25: S120: Four Variants Launched
S120: Four Variants Launched S120 – 140 HLT S120 – 140 HCT S120 – 120 STT S120 – 105 TT (Dec ‘18) (Sep ‘18) (Jan ‘19) (Jun ‘18) Hybrid Lattice Tower Hybrid Concrete Tower Smart Tubular Tower Tubular Tower Reduces LCoE and improves ROI for customers ~900 MW orders already booked 25 Enables us to reac
Slide 26: 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 S128 S111-90 S111-120 S111-140 S120 2.6-2.8 MW Proto at 105m commissioned in Jan’18 26 Over 4,500 turbines of 2.1 MW platform across 17 countries
Slide 27: 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 28: 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 29: Financial Performance Debt Overview Industry Outlook
Financial Performance Debt Overview Industry Outlook Technology Suzlon Strengths Detailed Financials 29
Slide 30: Suzlon Strengths In India Wind Market
Suzlon Strengths In India Wind Market Full Turnkey Solution Pan India Presence Provider Technology Leadership Strong Customer Relationship Best In Class Service 23+ Years Track Record Capabilities 30 End-to-end service provider with strong presence across value chain & customer segments
Slide 31: 18+ GW Global Installations
18+ GW Global Installations (GW) Global mix India cumulative installed base Africa Europe Australia 0.1 11.9 12.4 0.5 11.3 0.8 Americas 9.5 8.2 8.6 3.6 7.4 7.8 1.0 Asia (ex-India) 12.4 India Upto FY13 FY14 FY15 FY16 FY17 FY18 9M FY12 FY19 Strongly positioned in India market Presence across all 1,700
Slide 32: Accolades
Accolades World’s 1st solar project quality certification for Suzlon’s 100 MW project • Certificate from DNV GL confirms safety features and technical compliance • Testament of our commitment to high quality standards CII Southern Region's 13th Kaizen Competition • Suzlon's Coimbatore Generator Unit
Slide 33: ~12 GW Wind Energy Installations In India
~12 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% - All Indi
Slide 34: Suzlon's Global Presence
Suzlon’s Global Presence As on 31st Dec 2018 2 5 2 1 North 6 America 3 1 2,779 MW 4 Asia 3 5 13,332 MW South America Europe 806 MW 508 MW 4 South Australia Africa 764 MW 139 MW 6 34 Suzlon’s strong relationships across regions positions it well Map not to scale. All data, information, and map is pro
Slide 35: 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 36: Financial Performance Debt Overview Industry Outlook
Financial Performance Debt Overview Industry Outlook Technology Suzlon Strengths Detailed Financials 36
Slide 37: Consolidated Income Statement
Consolidated Income Statement (₹ Cr.) 9M FY19 9M FY18 FY18 Particulars Unaudited Unaudited Audited Revenue from operations 3,557 5,909 8,075 Less: COGS 2,046 3,712 5,116 Gross Profit 1,512 2,197 2,959 Margin % 42.5% 37.2% 36.6% Employee benefits expense 625 602 805 Other expenses (net) 622 765 1,006
Slide 38: Consolidated Net Working Capital
Consolidated Net Working Capital (₹ Cr.) 31st Dec’18 30th Sep’18 31st Dec’17 Inventories 3,233 3,151 3,590 Trade receivables 1,925 2,297 3,565 Loans & Advances and Others 1,962 1,889 1,923 Total (A) 7,120 7,336 9,078 Sundry Creditors 2,966 2,902 2,515 Advances from Customers 1,138 992 1,505 Provisio
Slide 39: 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 based on satisfaction of performance obligation whereby revenue for WTG equipment is recognised on dispatch of WTG and revenue for BoP is
Slide 40: 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 41: Thank You
CIN of Suzlon Energy Ltd - L40100GJ1995PLC025447 THANK YOU 41