Suzlon Energy Ltd · NSE:SUZLON
Suzlon Energy — FY2013 Earnings Presentation
30 slides from Suzlon Energy's earnings presentation, May 30, 2013
Slide 1: Suzlon Energy Limited Annual earnings presentation (FY13)
Suzlon Energy Limited Annual earnings presentation (FY13) 30 May 2013 Suzlon wind farm in Minnesota, USA 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: Key Takeaways – FY13
Key Takeaways – FY13 Suzlon wind farm in Kutch, India 3 www.suzlon.com
Slide 4: Key highlights - FY13
Key highlights - FY13 What went right? What went wrong? Liability Management FCCB default 1. CDR implemented – Domestic bank loans 1. Successfully repaid $360mn to June FCCB restructured 2. Defaulted on ~$209mn Oct FCCB, after 4 months 2. Credit enhanced bond issued - Refinanced extension was denied
Slide 5: Despite challenges, Suzlon Group is world's 5th largest WTG manufacturer
Despite challenges, Suzlon Group is world’s 5th largest WTG manufacturer 5th largest in 5th largest in 5th largest in 2nd largest in Europe APAC America Offshore France Germany (3rd Largest*) Canada (9th Largest*) Offshore 3 3 2 2 CAGR ~20%+ CAGR ~10% CAGR ~10% th UK (5 Largest*) Italy (6 Largest*)
Slide 6: Significant progress achieved under Comprehensive Liability Management exercise
Significant progress achieved under Comprehensive Liability Management exercise Status Update CDR Overseas FX Facilities FCCB Restructuring • CDR approved and implemented • Refinanced out of proceeds of • In active dialogue with bondholders ― Extended maturity profile new credit enhanced bond and th
Slide 7: Key priorities: FY14
Key priorities: FY14 Asset light / Debt light Products / Orders Asset sales Continued R&D focus to optimize yield and • ~$400mn targeted from non-critical reduce cost of energy assets Strategic Investing in project pipeline in India Working capital optimization • Focus on realization of stic
Slide 8: Liability Management Update – FY13
Liability Management Update – FY13 Suzlon Manufacturing unit in Dhule, India 8 www.suzlon.com
Slide 9: CDR update
CDR update 31 Dec 2012 April 2013 29 Oct 2012 Final proposal was MRA signed, process Referred to CDR approved by CDR Cell complete October 2012 November 2012 December 2012 April 2013 8 Nov 2012 Admitted to CDR Cell Facilities approved under CDR Rupee Term Loan Working Capital Term Working Capital Ot
Slide 10: Successful credit enhanced bond issue
Successful credit enhanced bond issue Key Terms Issue Size $647M Benefits for the company Coupon ~4.969% Near term maturing debt refinanced with long Maturity 5 years (2018) term bonds Ratings Baa2 (Moody’s) 5 yr bullet maturity Credit Standby and irrevocable enhancement SBLC from SBI Achieved
Slide 11: Liability management to allow focus on operations
Liability management to allow focus on operations Back-ended maturity profile… …leading to significant cash flow relief Credit enhanced Bonds / FX Loans Debt Under CDR • Back-ended debt maturity profile ― ~Rs. 3,720 crs - Existing term loan expiring by FY18 Pre-Restructuring Rs Crs rolled over to FY
Slide 12: FCCB: Status update
FCCB: Status update • Paid the first tranche of FCCBs of $360mn in July 2012 after 45 days extension • Prior to maturity had officially sought four months extension for October series with intention to meet our obligations in their entirety - Extension did not achieve required super-majority, result
Slide 13: Business Update – FY13
Business Update – FY13 Manufacturing unit in Daman, India 13 www.suzlon.com
Slide 14: Financial snapshot
Financial snapshot Rs Crs Q4 FY13 Q4 FY12 FY13 FY12 Particulars Audited Unaudited Audited Audited Consolidated Revenue 4,281 6,699 18,743 21,082 Consolidated EBITDA -594 403 -1,296 1,821 Consolidated EBIT -786 202 -2,037 1,160 Consolidated Net working capital 2,182 4,861 Consolidated Net debt 13,003
Slide 15: FY13 results impacted by non-routine expenses
FY13 results impacted by non-routine expenses FX Loss Rs Crs Comments FX Loss 307 FX fluctuations primarily due to two major FX loan repayments Breakup of exceptional items Rs Crs Comments Asset impairments 587 Impairments in assets in China, USA, Australia and US receivables Refinance cost 100 Refi
Slide 16: REpower: Robust growth continues
REpower : Robust growth continues Highlights of FY13 REpower revenues (€M) Continues to grow at a healthy pace ― With support from Group on markets and project execution synergies and cost reductions 2,221 Improved market position +35% ― 4.7% in CY2012 (2.4%, CY2011)* 1,675 Highest ever annual
Slide 17: Service Business: Global installed fleet and availability
Service Business: Global installed fleet and availability MW Under Service Suzlon REpower Total Key Highlights Europe 428 4,949 5,377 America 2,716 994 3,710 • Annuity like cash flows Asia pacific^ 8,710 914 9,624 — Every MW installed, generates 20 yrs of service Offshore 0 408 408 income potential
Slide 18: Service Business: High margins, stable cash flow
Service Business: High margins, stable cash flow Stable Revenues(Rs. Crs) +27% +38% 2,500 Key Highlights 1,806 1,396 1,300 • FY14 OMS revenue estimate – ~Rs. 2,500 crs 1,115 928 598 846 — Based on actual installation plans 878 1,200 517 550 • High margin business FY11 FY12 FY13 FY14E Suzlon REpower
Slide 19: Optimizing working capital
Optimizing working capital Net Working Capital Ratio* Key actions taken: • Controlled procurement -57% • Project prioritisation for better 27.1% receivables management 23.8% • Focus on realizations 20.4% FY13 Target 20% Plan for further reductions: 11.6% • Expedite order execution in Brazil and Sout
Slide 20: Project Transformation: Rationalizing employee headcount
Project Transformation: Rationalizing employee headcount Employee Headcount Suzlon Wind REpower >2,000 reduced +19% -19% 11,093 FY14 3,316 Further FY14 reductions Up to 750 9,035 planned 2,795 Reductions planned * Mar 12 Mar 13 Mar 12 Mar 13 (550 permanent + 200 temporary) Reductions are net of incr
Slide 21: Project Transformation: Rationalizing fixed expenses
Project Transformation: Rationalizing fixed expenses Consolidated Opex (Rs. Crs) Key actions taken: • Reduced headcount 1,259 -13% • Stringent cost control measures in place 1,097 1,090 1,100 • Rationalizing travel and consulting expenses 770 844 • Rationalized office and factory space 799 730 709 7
Slide 22: Robust order book position
Robust order book position Total value of US$7.5 bn Order book by geography – US$7.5bn ROW • Order book at ~5.9 GW USA 12% Belgium 3% Germany • Order book value: US$ 7.5bn 5% 34% Brazil 4% - Onshore markets: France 5% • Emerging : ~US$1.7bn 7% UK (India, Brazil and South 14% 16% Africa) Canada India
Slide 23: Launching new products to continuously improve yields
Launching new products to continuously improve yields Expansive product portfolio covering all wind classes Class I Class II Class III S66 S86.5 S52 <1.5 MW S82 S89 MM100 MM82 MM100 S97 S111 1.5 – 2.5 MW S88 AEP 12-18% AEP 20% MM92 (Vs S88) (Vs S97) S95 S97 3.4M 3.4M 3.2M 3.2M 3.0M Multi MW Upgraded
Slide 24: Detailed Financials – FY13
Detailed Financials – FY13 Suzlon wind farm in Penamacor, Portugal 24 www.suzlon.com
Slide 25: Consolidated financial results
Consolidated financial results Rs Crs. Q4 FY13 Q4 FY12 Q3 FY13 FY13 FY 12 Particulars Audited Unaudited Unaudited Audited Audited Revenue from operations 4,281 6,699 4,014 18,743 21,082 Less: COGS -3,185 -4,622 -2,673 -13,640 -14,074 Gross Profit 1,095 2,077 1,341 5,104 7,009 Gross Profit % 25.6% 31
Slide 26: Consolidated net working capital
Consolidated net working capital Rs Crs As on As on As on As on As on Particulars 31st Mar ‘13 31st Dec ‘12 30th Sept’12 30th June’12 31st Mar’12 Inventories 5,264 5,928 5,421 5,960 5,580 Trade receivables 6,382 6,990 8,584 8,265 8,201 Short-term loans and advances 2,185 2,375 2,549 2,677 2,368 Othe
Slide 27: Financial leverage
Financial leverage(a) As on (Rs. Crs) Debt type 31st Mar 13 31st Dec 12 30th Sept. 12 30th Jun. 12 31st Mar. 12 Suzlon Wind Debt FX term loans* 3,513 3,555 3,475 2,053 1,920 FCCBs 2,211 2,239 2,152 3,641 3,327 W.Cap, Capex and 8,701 8,383 8149 7,783 7,895 other loans Gross debt (A) 14,425 14,177 13,
Slide 28: FCCBs: Status update
FCCBs: Status update Outstanding Conversion Coupon Maturity value with FCCBs Maturity date amount (US$ mn) price (Rs) rate redemption premium October 2012 – Old 121.4 97.26 October 2012 0% 144.88% October 2012 – 20.8 76.68 October 2012 7.5% 157.72% Exchange July 2014 – New 90.0 90.38 July 2014 0% 13
Slide 29: Suzlon consolidated balance sheet
Suzlon consolidated balance sheet Rs Crs. Liabilities FY 2013 FY 2012 Assets FY 2013 FY 2012 Shareholders' Fund Non Current Assets a) Share Capital 355 355 a) Fixed Assets 12,382 12,602 b) Reserves and Surplus -35 4,623 b) Non Current Investments 36 33 320 4,978 c) Deferred Tax Asset (Net) 10 22 Sha
Slide 30: Thank you
Thank you Suzlon wind farm in Paracuru, Brazil 30 www.suzlon.com