Suzlon Energy Ltd · NSE:SUZLON
Suzlon Energy — H1 FY18 Earnings Presentation
39 slides from Suzlon Energy's earnings presentation, Nov 10, 2017
Slide 1: Suzlon Energy Limited H1 FY18
Suzlon Energy Limited H1 FY18 10 November 2017
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: FY18: Year of Transition
Yr FY18: Year of Trai SUZLON POWERING A GREENER TOMORROW
Slide 4: FY18: Strategy During Transition Period
FY18: Strategy During Transition Period Volume Uncertainty Suzlon USP Suzlon Strategy • Target high market share of bid volumes through • Execution of potential PPA backed orders ‒ Strategic customer tie ups (25 – 40% Share) • Capitalizing strength in captive & PSU customer base ‒ Best in class tech
Slide 5: FY19: Strong Volume Visibility
FY19: Strong Volume Visibility Central Auctions Completed 2.2 GW Central Level Auctions SECI 1 1,050 MW Completed SECI 2 1,100 MW Completed H2 FY18 target for Central Auctions 4.5 GW State Level Auctions TN 500 MW Completed State Auctions under Process 1.0 GW GJ 500 MW In Process RJ Under Discussion
Slide 6: Poised To Become A 10+ GW Market
Poised To Become A 10+ GW Market India Annual Wind Market Potential Size and Segmentation 1 GW 3-4 GW 8-10 GW 4-6 GW Central Auctions State Auctions Captive / PSU Annual Market Central Auctions State Auctions Power Consuming State Non Wind States Wind States Project Installations Windy State Windy S
Slide 7: 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 8: 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 • Increa
Slide 9: Financial Update
PAANACWAALLIY ATTUVVANY SUULLLLLLCONUY igs Financial Update SUZLON POWERING A GREENER TOMORROW
Slide 10: H1 FY18 Performance Despite Transition Period
H1 FY18 Performance Despite Transition Period Despite Ongoing Transition period • 527 MW Delivery Volumes • ₹ 3,852 Cr. Revenues • $76M FCCBs converted (Debt Reduction) Despite Lower Operating Leverage • 15.1% EBITDA margins(1) • Rs. 117 crs Reported PAT • 94 Days NWC (Vs 89 days YoY) 10 Delivering
Slide 11: H1 FY18 Result Snapshot
H1 FY18 Result Snapshot (₹ Crs.) Particulars H1 FY18 H1 FY17 Unaudited Unaudited Revenue 3,852 4,384 Transition period impacted volume Gross Profit 1,659 1,995 Revenue Mix impacted margins Gross Margin 43.1% 45.5% (19% Solar Volume Share) Employee Expenses 409 514 Result of ongoing optimization effo
Slide 12: Q2 FY18 Result Snapshot
Q2 FY18 Result Snapshot (₹ Crs.) Particulars Q2 FY18 Q2 FY17 Unaudited Unaudited Revenue 1,187 2,736 Transition period impacted volume Gross Profit 557 1,268 Gross Margin 46.9% 46.3% Employee Expenses 208 257 Optimization efforts + Lower volumes Other Expenses (net) 242 452 EBITDA (Pre FX) 107 559 L
Slide 13: H1 Deliveries
H1 Deliveries Wind Solar Mix Customer Mix - Wind (%) Product Mix - Wind (%) Others Solar S9x Captive 6% 19% 21% 14% 81% 80% 79% Wind IPP / Utilities S111x • >30% volumes from Solar and Captive • New products gaining traction 13 Right customer and product mix supports volume and profitability
Slide 14: Order Backlog
Order Backlog Wind SECI I PPA based 250 MW Firm Backlog 670 SECI II PPA based 252 MW (As on Date) MW Others Captive 38 MW Solar Solar Projects PPA based 130 MW Firm Order Criterion changed from “Threshold level of Customer Advance” to “Certainty of PPA” • Orders contingent upon projects getting PPA
Slide 15: Steady Growth of Service Business
Steady Growth of Service Business (₹ Crs.) Operation and Maintenance Revenues Growing into a sizeable & profitable business ― External OMS revenue is ~21% of total revenue +0.5% 883 888 (H1 FY18) Internal 71 70 +0.7% Annuity like business ― Non cyclical (Annuity) nature of business ― Steady cash
Slide 16: Net Working Capital And Working Capital Debt
Net Working Capital And Working Capital Debt Seasonal build-up of working capital in lean quarters for strong execution in Q4 NWC Days (NWC / LTM Revenues) X 365 Net Working Capital NWC % (NWC / LTM Revenues) X 100 89 94 83 63 59 51 47 13.9% 17.4% 24.3% 22.8% 12.8% 16.1% 25.8% Mar’16 Jun’16 Sep’16 D
Slide 17: July 2019 FCCB Series Overview
July 2019 FCCB Series Overview (US$ Mn) FCCB Principal Value 31% of opening bond balance converted in H1 FY18 547 No. of Shares (Crs.) Current Outstanding 532 299 Pending Conversion 67 Post Full Conversion 599 248 (₹ 1,143 Crs*) 76 172 Conversion Details Price (Per Share) ₹ 15.46 Exchange Rate ₹ 60.
Slide 18: Debt Profile
Debt Profile (Excl. FCCB) 30th Sep’17 5 year Maturity Profile • Current bullet maturity of March 2018 ₹ 4,068 Crs.* SBLC Backed AERH Debt • SBLC facility lenders consented to SBLC extension till 2023 (US$ 626 M) • RBI approval received (₹ Crs.) ₹ 456 Crs. Other FX Term Debt (US$ 70 M) 814 731 565 38
Slide 19: Technology Update
Technology Update 19 SUZLON POWERING A GREENER TOMORROW
Slide 20: S111-140 First Turbine Commissioned
S111-140 First Turbine Commissioned 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 20 Tallest all steel hybrid tower offering in India
Slide 21: S111-140: Most Competitive Across Suzlon 2.1 MW Series
S111-140: Most Competitive Across Suzlon 2.1 MW Series • 17% higher hub height enables: ‒ Accessing better wind profile; ‒ Increasing the attractiveness / viability of the low wind sites ‒ Unlocking unviable sites • Award winning tubular-lattice tower: ‒ Enables to achieve higher hub height at optim
Slide 22: 2.1 MW Series: Proven Platform with >100,000,000 Operating Hours
2.1 MW Series: Proven Platform with >100,000,000 Operating Hours Higher energy yield Lower cost of energy Sustains Lower Tariffs >70% Increase in Energy Yield S88-80 S9X – 80/90/100 S97-120 S111-90 S111-120 S111-140 >5.7 GW >2.3 GW >1.0 GW >670 MW 10 MW 1st Turbine Installed till date Installed till
Slide 23: Next Generation Products
Next Generation Products ~10% LCOE Reduction Enables lower tariffs bids while protecting OEM margins and Developer returns S111 S128 Product S128 – 2.6 MW S128 – 3.X MW Rotor Diameter 128 meters 128 meters Tower Height 120 m - 140 m 86 m - 140 m Wind Class IEC III (Low Wind) IEC II Focus Markets Dom
Slide 24: Global In-House R&D Capabilities
Global In-House R&D Capabilities Suzlon Technology Locations: Hamburg - Development & Integration Hamburg - Certification Germany - Development & Integration Rostock Rostock - Design & Product Engineering - Innovation & Strategic Research The Netherlands Hengelo - Blade Design and Integration Hengel
Slide 25: Industry Update
Industry Update SUZLON POWERING A GREENER TOMORROW
Slide 26: Government Strongly Committed to Renewables
Government Strongly Committed to Renewables Fastest Growing Segment in Power Sector Strong Government Backing due to: • Sustainability: Clean Power 175 GW 15 Others • Scalability: Short execution cycle and quickly deployable 40 Rooftop Solar • Affordability: At Grid Parity (Cheaper than thermal) 60
Slide 27: Wind Emerging As Most Competitive Source Of Power
Wind Emerging As Most Competitive Source Of Power Tariff Levels (₹ /unit) India APPC 3.48 3.18 2.65 2.64 Coal* Solar# Wind Equipment Domestic / Imported Largely Imported “Made in India” Fuel Domestic / Imported No Fuel Cost No Fuel Cost Tariff Stability Variable Constant for 25 years Constant for 25
Slide 28: Suzlon Strengths in India Wind Market
Suzlon Strengths in India Wind Market Full Turnkey Solution Pan India Presence Provider Target Strong Customer Technology Leadership Relationship REGAIN 50%+ MARKET SHARE Best In Class Service 22+ Years Track Record Capabilities 28 End-to-end service provider with strong presence across value chain
Slide 29: Increasing Market Share in Growing India Market
Increasing Market Share in Growing India Market India Commissioning Volumes (MW) 37% 24% 19% 19% 26% 32% +61% 5,502 1,779 +48% -19% 3,415 3,179 900 1,161 2,312 2,077 1,721 442 403 3,723 415 2,515 2,018 1,870 1,306 1,674 FY12 FY13 FY14 FY15 FY16 FY17 Suzlon Others Suzlon Market Share Source: MNRE 29
Slide 30: 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’17) # of Turbines MW <= 1 MW 1,678 777 >1 MW < 2 MW 4,268 5,774 =>2 MW 2,258 4,742 Total 8,204 11,293 2.0 GW • 35% -
Slide 31: Suzlon's Global Presence
Suzlon’s Global Presence As on 30th Sep 2017 2 5 2 1 North America 6 3 1 2,779 MW 4 Asia 3 5 12,521 MW South America Europe 806 MW 508 MW 4 South Africa Australia 139 MW 764 MW 6 31 Suzlon’s strong relationships across regions positions it well Map not to scale. All data, information, and map is pro
Slide 32: 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 33: Detailed Financials
Detailed Financials | 2 SUZLON POWERING A GREENER TOMORROW
Slide 34: Consolidated Income Statement
Consolidated Income Statement (₹ Crs.) Particulars H1 FY18 H1 FY17 FY17 Unaudited Unaudited Audited Revenue from operations 3,852 4,384 12,693 Less: COGS 2,193 2,389 7,543 Gross Profit 1,659 1,995 5,150 Margin % 43.1% 45.5% 40.6% Employee benefits expense 409 514 1,046 Other expenses (net) 668 745 1
Slide 35: Consolidated Net Working Capital
Consolidated Net Working Capital (₹ Crs.) 30th Sep’17 30th Jun’17 30th Sep’16 Inventories 4,518 3,952 3,450 Trade receivables 3,131 3,532 3,083 Loans & Advances and Others 1,900 2,051 1,733 Total (A) 9,549 9,535 8,266 Sundry Creditors 3,390 4,594 3,029 Advances from Customers 1,616 945 1,312 Provisi
Slide 36: Consolidated Balance Sheet
Consolidated Balance Sheet (Rs. Crs.) Liabilities Sep-17 Mar-17 Assets Sep-17 Mar-17 Shareholders' Fund -6,525 -6,841 Non Current Assets Non controlling interest 16 9 (a) Property, Plant and Equipment 1,369 1,420 -6,509 -6,833 (b) Intangible assets 181 211 (c) Investment property 33 34 (d) Capital w
Slide 37: 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 38: 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 39: Thank You
CIN of Suzlon Energy Ltd - L40100GJ1995PLC025447 THANK YOU 39