Suzlon Energy Ltd · NSE:SUZLON
Suzlon Energy — Q1 FY2012 Earnings Presentation
43 slides from Suzlon Energy's earnings presentation, Jul 30, 2011
Slide 1: Suzlon Energy Limited Q1 FY12 Earnings Presentation
Suzlon Energy Limited Q1 FY 12 Earnings Presentation 30th July, 2011 Suzlon windfarm at Dhule, India 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: Contents
Contents • Q1 FY12: Strong YoY performance and de-leveraging initiated – Revenues grew by 80% YoY – Performance on track to meet the guidance for FY12 – REpower “squeeze out” price announced – Hansen stake sale initiated to deleverage • Outlook for FY12 and beyond – Industry estimates suggests 15%+
Slide 4: Suzlon Group - Key highlights: Q1 FY12
Contents Suzlon Group - Key highlights : Q1 FY12 • Suzlon Group: Key highlights – Q4 FY2011 – Volumes continue to grow sequentially and YoY – Strong order book, improving visibility for FY2012 – Robust turbine fleet performance across the globe • Outlook for the FY2012 and beyond – Green shoots visi
Slide 5: Q1 FY12 – Key takeaways
Q1 FY12 – Key takeaways Consistently improving operating performance - Revenues growing by ~80% YoY basis with improving Gross profit margins On track to meet full year Guidance - First quarter revenues – ~17% of full year Guidance* - EBIT margin for Q1 FY12 @ 8.1% - top end of the Guidance - Or
Slide 6: Financial performance snapshot
Financial performance snapshot INR Crs. Q1 Q1 Full Year Full Year Particulars FY12 FY11 FY11 FY10 Unaudited Unaudited Audited Unaudited(a) Consolidated revenue 4,326 2,399 17,879 18,133 Consolidated EBITDA 490 (546) 808 703 Consolidated EBIT 349 (672) 151 220 Consolidated Net Working Capital 5,132 3
Slide 7: Q1 performance in line with the Guidance
Q1 performance in line with the Guidance Rs Crs Guidance FY12: Revenues Q1 YoY Revenues Comments 26,000 4,326 Proportion of Q1 revenues 17,879 34%-45% to full year revenues - 2,399 +80% Q1FY12 ~17% 24,000 Q1 FY11- 13% FY11 FY12 Q1 FY11 Q1 FY12 Guidance FY12: EBIT Q1 YoY EBIT 2,080 349 EBIT mar
Slide 8: Consistent improvement in performance
Consistent improvement in performance Q1 FY12 Volumes – Highest in the history of Suzlon Wind +111% 500 437 MW 338 317 196 207 77 123 54 0 Q1 FY05 Q1 FY06 Q1 FY07 Q1 FY08 Q1 FY09 Q1 FY10 Q1 FY11 Q1 FY12 Consolidated EBITDA Margin (%) Consolidated PAT (Rs Crs) Order Book ($bn) FY11 FY11 +35% 14.1% 21
Slide 9: Hansen sale: ~Rs 828 Crs helps de-leveraging
Hansen sale : ~Rs 828 Crs* helps de-leveraging Hansen acquisition and divestment • Strategic objective of de-bottlenecking supply chain met – Hansen expanded capacity in India and China – Long-term supply arrangements with Suzlon in place – Cost reduction of gearboxes achieved with significant manuf
Slide 10: SE Forge – on a growth curve
SE Forge – on a growth curve SE Forge – Revenues (Rs Crs) Developing trends +244% +109% • Improving volumes 358 115 • High operational leverage • Proportion of non-Suzlon 55 business increasing 104 • Widening product portfolio FY10 FY11 Q1 FY11 Q1 FY12 • Marquee client profile, SE Forge – EBITDA (Rs
Slide 11: Group order book
Group order book Firm Group order book Announced framework contracts Suzlon Group • 300 MW business agreement with Techno Electric • Total MW: 4,739 MW • 225 MW framework agreement with EUFER • Value: $6.6bn (JV between ENEL Green Energy and Union Fenosa) for Spain Suzlon Wind • Frame agreement for
Slide 12: Robust turbine fleet performance
Robust turbine fleet performance Outlook for the FY12 and beyond Improving global fleet availability*... ...is the result of a globally coordinated execution effort Total installations across the Globe over 10 GW OMS teams across Suzlon have worked on a program focussed on increasing availability Gl
Slide 13: Industry estimates for annual installations
Industry estimates for annual installations Europe Americas Asia (incl OECD) RoW 64,059 +14% 58,304 52,598 17,675 48,152 16,211 14,768 40,018 12,728 15,372 33,995 10,369 14,313 12,165 9,664 12,897 9,189 7,344 26,280 29,672 24,200 20,035 21,427 16,658 331 425 1,100 1,465 1,500 1,340 2010 2011 2012 20
Slide 14: Industry estimates for offshore installations
Industry estimates for offshore installations 5,857 Europe RoW +37% 4,926 4,529 3,800 3,256 2,628 3,211 2,070 1,212 1,413 911 1,901 1,715 2,057 907 1,186 305 502 CY10 CY11 CY12 CY13 CY14 CY15 Source: MAKE Consulting, 2011 • Offshore market’s global share in total installations will increase from ~3.
Slide 15: India: market estimated to touch ~5 GW by 2015
India: Analysts estimates market to touch ~5 GW by 2015 5,251 Actual installations +16% 4,527 3,902 +60% 3,364 2,900 2,500 1,565 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Source: World Institute for Sustainable Energy, India, 17 March, 2011 • The World Institute for Sustainable Energy, India (WISE) conside
Slide 16: Emerging economies continue to grow strongly
Emerging economies continue to grow strongly Emerging Economies - Growth continues with strong policy push China: • Again a year of record installations, dominated by domestic players • 12th Five Year Plan sets a target of 90 GW of wind installations by 2015 • China is targeting wind power capacity
Slide 17: Developed western economies gaining momentum
Developed western economies gaining momentum Americas - Growth in Canada and Brazil to offset sluggish US market USA: • Market is showing improved prospects for 2011-12, compared to 2010 lows • Extension of cash grants continue to drive the market • Uncertainty continues with low PPA prices Canada:
Slide 18: Few economies showing some early promise
Few economies showing some early promise Rest of the World - Positive developments continue South Africa: • Approved RE feed-in tariff of ZAR1.25 per KWh • South Africa Wind Association targets 25% of total generation from wind by 2025 Australia: • Australia saw a drop in installations in 2010 due t
Slide 19: Chairman's Message
Chairman’s Message Mr. Tulsi Tanti, Chairman and Managing Director – Suzlon Group, said: “I am pleased to Focus Areas for FY12 report that our Group performance is steadily improving. Emerging, offshore and key matured markets are showing sustained momentum. Our strategy to focus on these markets is
Slide 20: Focus areas FY12: Turnaround year
Focus areas FY12: Turnaround year 1 2 3 4 Operational Markets Products Strategic Efficiency • Increased focus on • High penetration of • Reduction in product • Strengthening India, emerging new products in costs Group’s competitive markets and Offshore various markets • Focus on cash positioning • H
Slide 21: Strengthening our position in emerging markets through end-to-end business model
Strengthening our position in emerging 1 markets through end-to-end business model • Allows customers to benefit Wind from cost-efficiencies and resources mapping economies of scale in wind Support to customers for all Land and farms site ancillary identification activities • Avoids need for custome
Slide 22: Track record of executing large end-to-end projects in India
...backed by successful track record of 1 executing large end-to-end projects in India Some of our largest wind farms in India • Installed base of 6,200+ MW in India (>1,000 MW sites in four Jaisalmer Windpark in states) Asia’s largest wind farm at Rajasthan with a total Kutch, Gujarat Over 850 MW c
Slide 23: Focus on executing offshore projects
1 Focus on executing offshore projects Some of our large operational offshore projects Alpha Ventus Project, Thornton Bank Project, Germany Belgium Customer: Consortium of EWE, Customer: C-Power E.ON & Vattenfall - 6 WTGs of 5M (Phase I) - 6 WTGs of 5M - Installed in 2008 - Installed in 2009 - Next
Slide 24: High penetration of new products in various markets
High penetration of new products in various 2 markets • New products backed by proven performance and efficient processes, as well as customer-focused team: a global company with local reach • Enhancements, innovation and comprehensive design driven through the entire technology platform for even be
Slide 25: S9X turbines already installed in India and Australia
2 S9X turbines already installed in India and Australia S9X: Focus on providing higher yields at a lower cost from low wind sites Operating successfully across the world….. 2 MW-class turbines, designed for moderate to low wind regimes S9X in Australia Robust, reliable design optimized to delive
Slide 26: Complete commercially proven portfolio
2 With new products, Suzlon Group boasts a complete commercially proven portfolio 0.60 – 1.25 – 1.5 – 2.5MW 2.5 – 3.XMW 5.0 – 6.15MW 1.25MW 1.5MW India China USA / Australia / Brazil / Europe Offshore Products spanning all capacities - sub-MW to multi-MW turbines Products spanning technologies - var
Slide 27: Focus on cash generation
3 Focus on cash generation • Operations to be cash generating - Maximise volumes, focus on key markets, improvement in margins, optimisation of costs - Endeavours to generate cash from operations, while keeping investments into balance sheet at a minimum • Focused efforts to reduce working capital i
Slide 28: Completion of squeeze-out in REpower
4 Completion of “squeeze-out” in REpower Status update on Squeeze out process: “Squeeze out” initiated by Suzlon’s wholly owned subsidiary AE-Rotor Holding B.V. (“AERH”) Valuation expert appointed by AERH to assist in preparing valuation of REpower and independent valuation auditor has also been
Slide 29: Group well positioned in current market environment
Group well positioned in current market environment • India: high growth market 1 Emerging markets • Entrenched in China, Brazil • Early entrant in South Africa, Chile, Argentina and Mexico Offshore & key • Comprehensive product portfolio for Offshore 2 • Performing well in Germany, France, UK, Ital
Slide 30: Suzlon Group: Guidance for FY12
Suzlon Group: Guidance for FY12 We continue to reiterate the Guidance: • Revenues: Rs 24,000 – 26,000 Crs ($5.3bn – $5.8bn) • EBIT Margin: 7%-8% 30 Assuming exchange rate $/Rs - 45 www.suzlon.com
Slide 31: Detailed financials – Q1 FY2012
Chairman’s Message Mr. Tulsi Tanti, Chairman and Managing Director – Suzlon Group, said: “I am pleased to Detailed financials – report that our Group performance is steadily improving. Emerging, offshore and key Q1 FY2012 matured markets are showing sustained momentum. Our strategy to focus on these
Slide 32: Consolidated financial results
Consolidated financial results (Suzlon Wind + SE Forge + Hansen + REpower) INR Cr. Q1 FY12 Q1 FY11 Full Year 2011 Particulars Unaudited Unaudited Audited Sales 4,326 2,399 17,879 Raw material cost 2,813 1,777 12,454 Gross Profit 1,513 622 5,425 Gross Profit margin 35.0% 25.9% 30.34% Manpower cost 46
Slide 33: Consolidated financial results – Q1 FY12
Consolidated financial results – Q1 FY12 Q1 FY12 (unaudited) (INR Cr.) Q1 FY11 (unaudited) (INR Cr.) Particulars Suzlon SE Forge Hansen REpower Consol. Suzlon SE Forge Hansen REpower Consol. Sales MW 437 207 Sales 2,590 115 - 1,713 4,326 1,441 55 -- 949 2,399 Raw material cost 1,687 62 - 1,148 2,813
Slide 34: Consolidated financial results: Full Year
Consolidated financial results: Full Year FY11 (audited) (INR Cr.) FY10 (audited) (INR Cr.) Particulars Suzlon SE Forge Hansen REpower Consol. Suzlon SE Forge Hansen REpower Consol. Sales MW 1,521 1,460 Sales 9,175 358 -- 8,615 17,879 9,635 104 2,656 8,502 20.620 Raw material cost 6,061 212 -- 6,443
Slide 35: Suzlon Group order book
Suzlon Group order book Orders as on New Sales in Orders as on Region Sales in FY11 Sales in FY10 Sales in FY09 13/05/11 Orders Q4 FY11 29/07/11 India 1,353 190 304 1,255 1,169 688 749 North America 246 32 277 27 410 989 China 304 39 265 201 182 249 ANZ 4 4 0 57 128 430 Europe 105 105 61 53 166 S. A
Slide 36: Consolidated Net Working Capital
Consolidated Net Working Capital INR Cr. Particulars As on As on As on As on As on As on 30th June’11 31st Mar’11 31st Dec. ’10 30th Sept. ’10 30th Jun ’10 31st Mar ‘10 Inventories 5,755 5,352 6,907 6,321 5,890 5,994 Receivables 6,131 5,915 5,010 4,283 4,428 6,192 Advances 2,145 1,956 1,915 2,268 1,
Slide 37: Suzlon Wind: Net Working Capital
Suzlon Wind: Net Working Capital INR Cr. Particulars As on As on As on As on As on As on 30th June’11 31st March’11 31st Dec. ’10 30th Sept. ’10 30th Jun ’10 31st Mar ‘10 Inventories 3,207 3,144 3,241 3,013 2,910 2,877 Receivables 4,510 4,156 4,180 3,304 3,798 4,726 Advances 1,262 1,272 1,266 1,578
Slide 38: Suzlon Wind: Volumes by geography
Suzlon Wind: Volumes by geography Region Q1 FY12 Q1 FY11 FY 11 Sales FY10 Sales FY09 Sales (MW) (MW) (MW) (MW) (MW) India 304 139 1,169 688 749 USA 0 25 27 410 989 China 39 39 201 182 249 ANZ 4 57 128 430 Europe & ROW 90 4 67 52 373 Total 437 207 1,521 1,460 2,790 Domestic 70% 67% 76% 47% 26% Intern
Slide 39: Group Financial Leverage
Group Financial Leverage(a) As at 30th June. 2011 As at As at As at As at 31st Mar. 2011 31st Dec. 2010 30th Sept. 2010 30th June 2010 Particulars SEL Consol. SEL Consol. SEL Consol. SEL Consol. SEL Consol. Wind Group Wind Group Wind Group Wind Group Wind Group (a) (a) (a) (a) (a) (a) (a) (a) (a) (a
Slide 40: Suzlon Wind: Financial leverage
Suzlon Wind: Financial leverage(a) INR Cr. Debt type Balance as on Balance as on Balance as on Balance as on Balance as on Balance as on 30th June 31st Mar. 31st Dec. 30th Sept. 30th June 31st March 2011 2011 2010 2010 2010 2010 Acquisition loans 2,074 2,074 2,073 2,085 2,155 2,083 FCCBs 2,924 2,136
Slide 41: FCCBs: Post restructuring & new issuance
FCCBs: Post restructuring & new issuance Outstanding amount Conversion Redemption Key Terms: FCCBs (USD mln) price (Rs.) Maturity date Coupon rate Premium June 2012 - Old 211.3 97.26 June 2012 0% 145.23% October 2012 - Old 121.4 97.26 October 2012 0% 144.88% June 2012 - Exchange 35.6 76.68 June 2012
Slide 42: REpower Net Profit Reconciliation
REpower Net Profit Reconciliation Q1 FY 2012 FY 2011 Particulars EURO m INR Crs. EURO m INR Crs. Profit / (loss) as per REpower books 4.2 28 56.3 343 Less: Policy alignment impact 0 0 (18.1) (88) Profit / (loss) before translation loss 4.2 28 74.4 431 Less: FX loss on translation of COGS (12.9) (84)
Slide 43: Thank You
REpower Net Profit Reconciliation Q4 FY 2011 9m FY 2011 Particulars EURO m INR Crs. EURO m INR Crs. Profit / (loss) as per REpower books 4 32 26 158 Less: Policy alignment impact (6) (36) (2) (12) Profit / (loss) before translation loss 10 68 28 171 Less: FX loss on translation of COGS Profit / (los