Suzlon Energy Ltd · NSE:SUZLON
Suzlon Energy — Q1 FY18 Earnings Presentation
37 slides from Suzlon Energy's earnings presentation, Aug 11, 2017
Slide 1: Suzlon Energy Limited Q1 FY18
Suzlon Energy Limited Q1 FY18 11 August 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: Agenda
Agenda FY18 Q1 Highlights Debt Overview Technology Update Industry Opportunity Detailed Financials 3
Slide 4: Robust Financial Performance
Robust Financial Performance Delivery Volume (MW) Revenue (₹ Crs.) +102% +62% 412 2,665 86 Solar 1,648 204 326 Wind Q1 YoY Growth Q1 FY17 Q1 FY18 +102% Volumes Q1 FY17 Q1 FY18 (Wind + Solar) EBITDA (₹ Crs.) +62% Revenue Net Profit (₹ Crs.) +296 crs +168% +168% EBITDA 90 475 177 11% 18% -206 Q1 FY17
Slide 5: Strong Q1 Volumes
Strong Q1 Volumes Wind (MW) Solar (MW) 1,573 231 1,131 145 9M 9m 87% 82% 109 +60% 326 Q1 205 204 86 Q1 (18%) (13%) FY16 FY17 FY18 FY17 FY18 Additional up to 175 MW solar execution opportunity in FY18, subject to PPA signing 5 Strong performance in a seasonally low volume quarter
Slide 6: Wind Volume Mix
Wind Volume Mix MW Delivered Customer Mix (%) Product Mix (%) Retail PSU Captive 14% S97 24% 76% 79% S111 IPP / Utilities 14% from Captive (Not dependent on PPA) Newer products are gaining traction (Hedge against PPA uncertainty) (Supports margin in declining tariff regime) 6 Right customer and prod
Slide 7: Steady Growth of Service Business
Steady Growth of Service Business (₹ Crs.) Operation and Maintenance Revenues +7.5% Growing into a sizeable & profitable business 458 ― External OMS revenue is ~16% of total revenue 426 32 Internal 31 +7.8% (Q1 FY18) Annuity like business 426 ― Non cyclical (Annuity) nature of business External
Slide 8: Net Working Capital
Net Working Capital Net Working Capital (NWC) Days [ (NWC / LTM Revenues) X 365 ] -7% 89 83 63 59 51 47 13.9% 17.4% 24.3% 22.8% 12.8% 16.1% Mar’16 Jun’16 Sep’16 Dec’16 Mar’17 Jun’17 Amount (₹ Crs.) NWC as on 31st Mar’17 1,619 Inventory Built-up +483 Net Decrease in Debtors -141 Q1 Customer Collectio
Slide 9: Result Snapshot (Consolidated)
Result Snapshot (Consolidated) (₹ Crs.) Particulars Q1 FY18 Q1 FY17 FY17 Unaudited Unaudited Audited Revenue 2,665 1,648 12,693 Gross Profit 1,102 727 5,150 Gross Margin 41.3% 44.1% 40.6% Employee Expenses 201 257 1,046 Other Expenses (net) 426 293 1,901 EBITDA (Pre FX) 475 177 2,203 EBITDA Margin (
Slide 10: Order Book (Wind + Solar)
Order Book (Wind + Solar) (Fig. in MW) (₹ 7,757 Crs) 412 680 1,169 901 As on March’17 Q1 Net Order Intake Q1 Net RR Total Backlog Almost half is PPA backed + Captive 10 Backed by strong customer advances
Slide 11: Strategy for FY18: Year of Transition for India Wind Market
Strategy for FY18: Year of Transition for India Wind Market Volume Uncertainty Suzlon USP Suzlon Strategy • Existing PPA backed orders • Target high market share of bid volumes through • Execution of solar backlog ‒ Strategic customer tie ups • Capitalizing the strength of captive customer base ‒ Be
Slide 12: Agenda
Agenda FY18 Q1 Highlights Debt Overview Technology Update Industry Opportunity Detailed Financials 12
Slide 13: Term Debt Profile
Term Debt Profile (Excl. FCCB) 30th June’17 5 year Maturity Profile • Current bullet maturity of March 2018 ₹ 4,022 Crs.* SBLC Backed AERH Debt • SBLC facility lenders consented to SBLC extension till 2023 (US$ 626 M) • RBI approval received (₹ Crs.) ₹ 464 Crs. Other FX Term Debt (US$ 72 M) 816 757
Slide 14: Working Capital
Working Capital LTM Revenues (₹ Crs) Net Working Capital (₹ Crs.) Working Capital Debt (₹ Crs.) +61% +50% +3% 13,710 2,212 2,468 2,545 1,477 8,490 63 Days 59 Days 17.4% 16.1% Jun’16 Jun’17 Jun’16 Jun’17 Jun’16 Jun’17 Note: NWC % and no. of days calculated on trailing 12 months Revenue 14 Optimizing
Slide 15: July 2019 FCCB Series Overview
July 2019 FCCB Series Overview (US$ Mn) FCCB Principal Value 547 299 FY18 YTD Conversions $68M 248 43 205 179 25 Jul’14 Conversions Mar’17 Conversions Jun’17 Conversions As on Date (₹ 1,372 Crs) No. of Shares (Crs.) Conversion Details Current Outstanding 529 Price (Per Share) ₹ 15.46 Pending Convers
Slide 16: Agenda
Agenda FY18 Q1 Highlights Debt Overview Technology Update Industry Opportunity Detailed Financials 16
Slide 17: Commercialized S111-120: Industry Game Changer
Commercialized S111-120: “Industry Game Changer” First 12 Months PLF Measured on Same Site Location Proven Technology ~20% Higher Energy Yield S111-120 ~35% PLF ~42% PLF (>1 year generation track record) (~475 MW already Sold) LCOE reduction = S97-120 (>1 GW already Installed) + S111-90 (>630 MW alr
Slide 18: 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 19: 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 >630 MW ~475 MW sold 1st Turbine Installed till date Install
Slide 20: 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 21: 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 22: Agenda
Agenda FY18 Q1 Highlights Debt Overview Technology Update Industry Opportunity Detailed Financials 22
Slide 23: India Renewables Exceeds Thermal Capacity Addition in FY17
India Renewables Exceeds Thermal Capacity Addition in FY17 India Power Mix FY17 Thermal Vs Renewable Cumulative Capacity Thermal Renewable Hydro Nuclear Thermal (GW) Renewables (GW) 2% 7.7 GW 14.4 GW 44 GW 218.3 210.7 (14%) 57.2 42.8 57 GW (18%) 218 GW (67%) FY16 FY17 FY16 FY17 Source: CEA Source: M
Slide 24: Poised To Become A 10 GW Market
Poised To Become A 10 GW Market Demand for Wind Power Investors for Wind Power projects Demand from Non Wind States Utilities: Domestic + Foreign 2.2 GW of SECI auctions already announced • Emerging customer group • Procurement through central auctions 5 - 6 GW • Mainstream investment from domestic
Slide 25: SECI Wind Bidding: Central Level Auctioning
SECI Wind Bidding: Central Level Auctioning Typical Bidding Structure Incremental Demand Existing With SECI Auction Developers Awarded through transparent Inter State 2-stage bidding process Transmission Charges 25 year PPA Waved Enables installation in Windy State but SECI authorised Entity procure
Slide 26: Sustainable Reduction In Wind Tariff
Sustainable Reduction In Wind Tariff OEM Developer / Bidder Strong Technology (Lower LCOE) Low Cost of Capital + + Vertical Integration Long Tenure Debt + + Operating Leverage due to Volume Change in Investor Profile + + Tighter Control on Cost Lower IRR Expectations Reduced Equipment Pricing Reason
Slide 27: 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 27 End-to-end service provider with strong presence across value chain
Slide 28: 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 28
Slide 29: 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 30: 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 31: Suzlon's Global Presence
Suzlon’s Global Presence As on 30th June 2017 2 5 2 1 North America 6 3 1 2,779 MW 4 Asia 3 5 12,355 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 pr
Slide 32: Agenda
Agenda FY18 Q1 Highlights Debt Overview Technology Update Industry Opportunity Detailed Financials 32
Slide 33: Consolidated Income Statement
Consolidated Income Statement (₹ Crs.) Particulars Q1 FY18 Q1 FY17 FY17 Unaudited Unaudited Audited Revenue from operations 2,665 1,648 12,693 Less: COGS 1,563 921 7,543 Gross Profit 1,102 727 5,150 Margin % 41.3% 44.1% 40.6% Employee benefits expense 201 257 1,046 Other expenses (net) 426 293 1,901
Slide 34: Consolidated Net Working Capital
Consolidated Net Working Capital (₹ Crs.) 30th Jun’17 31st Mar’17 30th Jun’16 Inventories 3,952 3,469 3,044 Trade receivables 3,532 3,673 2,073 Loans & Advances and Others 2,051 1,764 1,708 Total (A) 9,535 8,906 6,825 Sundry Creditors 4,594 4,812 2,560 Advances from Customers 945 793 1,141 Provision
Slide 35: 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 36: 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 37: Thank You
CIN of Suzlon Energy Ltd - L40100GJ1995PLC025447 THANK YOU 37