Sterling And Wilson Renewable Energy Limited · NSE:SWSOLAR
Sterling And Wilson Renewable Energy — Sterling and Wilson Solar — Antique Stock Broking Investor Conference, February 17, 2020
54 slides from Sterling And Wilson Renewable Energy's conference presentation, Feb 16, 2020
Slide 1: Regulation 30 intimation of investor conference
` January 16, 2020 BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers, Exchange Plaza, Dalal Street, Bandra Kurla Complex, Mumbai – 400 001 Bandra (East), Mumbai – 400 051 Scrip Code: 542760 Symbol: SWSOLAR Sub.: Intimation under Regulation 30 of the Securities and Exchan
Slide 2: Investor Presentation February 2020
STERLING AND WILSON SOLAR LIMITED Investor Presentation Noor Abu Dhabi - World’s Largest Single Location Solar Project February 2020
Slide 3: Safe Harbor
Safe Harbor This presentation and the accompanying slides (the “Presentation”), which have been prepared by Sterling and Wilson Solar Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for
Slide 4: Contents
Contents 1 About us 3 2 Industry Potential 14 3 Key Differentiators 21 4 Financial Performance – Q3FY20 and 9mFY20 31 5 Historical Financial Performance 43 6 Way Forward 50 2
Slide 5: Contents
Contents 1 About us 3 2 Industry Potential 14 3 Key Differentiators 21 4 Financial Performance – Q3FY20 and 9mFY20 31 5 Historical Financial Performance 43 6 Way Forward 50 3
Slide 6: The Largest Global Solar EPC Player
Sterling and Wilson Solar – The Largest Global Solar EPC Player #1 World’s No. 1 Solar EPC(1) Abu Dhabi Operational Excellence 1,177 MWp End-to-end “Concept to 25 Commission” solar EPC Countries Market Leader Largest Solar EPC player in Installing world’s largest #1 India, Middle East & Africa (1) s
Slide 7: Journey of growth and Global presence
Journey of growth and Global presence Increasing global market share over the years 2017 Demerger of S&W Solar focusing on pure-play solar 4.6% EPC business 2019 from the S&W group Emerged as World’s largest (1) Solar EPC player in 2018 Bagged world’s largest single 2.2% location solar EPC project G
Slide 8: Significant geographic diversification over the years
Significant geographic diversification over the years 19 5 Projects 17 Projects 3 Projects Projects 3 Countries 10 Countries 2 Countries 10 Countries EPC + O&M Revenue break-up by geography over the years SEA FY16 FY17 SEA FY18 FY19 9mFY20 Australia 13.1% 0.2% India 1.3% Africa India 0.4% 30.3% 40.9
Slide 9: Order Inflow – Apr to 12 Feb 2020
Order Inflow – Apr to 12 Feb 2020 Country MW Rs mn UPTO SEPT 2019 (a) 105 8,280 Oct 2019 to Dec 2019 India 50 1,850 Kingdom of Saudi Arabia 1090 44,450 Chile 122 6,720 Australia 344 17,500 Oct 2019 to Dec 2019 (b) 1,606 70,520 Jan 2020 onwards India (c) 478 6,707 TOTAL (a+b+c) 2,189 85,507 India Eur
Slide 10: Sweihan Abu Dhabi – World's Largest Single Site Solar Project
Sweihan Abu Dhabi – World’s Largest Single Site Solar Project Bid for 1,177MWp against min. Installed 200 MWp within a requirement of 350MWp short timeline of one month One of Lowest tariff globally Built with over 5mn accident free at the time for any PV plant until safe man hours the time of award
Slide 11: State-of-the-art Robotics Optimizes the Yield at Sweihan
State-of-the-art Robotics Optimizes the Yield at Sweihan Project Solutions Emerged as the sole winner, offering 1,177 MWp capacity The world's largest single location solar PV plant (1) Modules installed East to West • A unique eight high fixed structure design used to optimize generation To optimiz
Slide 12: Expertise in Advanced Technologies
Expertise in Advanced Technologies Unique installation structure of How to fit maximum placing PV modules in east-west capacity in a given land area with minimum bid orientation instead of standard 175 Persons south facing orientation to criteria of 350MWp maximize electricity generation Strong desi
Slide 13: Trusted Provider for Global Clients
Our Esteemed Clients High bid conversion rate (1) India 24% Overall 22% High % of Repeat Customers (2) Outside India 64.4% India 83.3% TRUSTED PROVIDER FOR GLOBAL CLIENTS (1) Bid Conversion rate under EPC contracts for FY19 (2) Percentage of total commissioned capacity from customers with whom more
Slide 14: Awards and Recognitions
Awards and Recognitions Excellence in Renewable Energy Project Execution Award 2017 Leading EPC – Project of the Year Award 2017 Solar – Ground Based, 2018 Immense contribution to the Infrastructure sector, 2016 Solar Today Utility Scale Solar EPC Solar O&M contractor of the year -Roof Contractor 20
Slide 15: Our Strategy
Our Strategy Maintain market leadership Grow our customer base and Expand product offerings - O&M, Increase operational & through strategic expansion of maintain relationships with other rooftop solar EPC and financial efficiency overseas operations key stakeholders solar storage solutions Well plan
Slide 16: Contents
Contents 1 About us 3 2 Industry Potential 14 3 Key Differentiators 21 4 Financial Performance – Q3FY20 and 9mFY20 31 5 Historical Financial Performance 43 6 Way Forward 50 14
Slide 17: Solar: The Future of the World
Solar: The Future of the World Declining Cost of Energy Increasing share in Complex & Large Projects Sustainable Benefit to Solar with Global Power Generation Partnering with Large EPC Players Energy Storage Market Growth ✓ Across geographies the tariffs ✓ Share in installed power ✓ Increasing trend
Slide 18: Solar: Declining Cost of Energy
Solar : Declining Cost of Energy Solar tariffs have seen a sharp decline globally and have fallen significantly below those of traditional Solar has increasingly competitive in terms of LCOE energy sources like coal (cost of producing each unit of electricity over the lifetime) Solar auction prices
Slide 19: Solar: Increasing share in Global Power Generation
Solar : Increasing share in Global Power Generation Rapid uptick in the share of solar in the global power generation capacity, annual additions, and global installed power capacity base Key advantages and growth drivers of solar Solar share in Already among the lowest cost power sources even with
Slide 20: Solar: Complex & Large Projects Partnering with Large EPC Players
Solar : Complex & Large Projects Partnering with Large EPC Players Market-share is shifting towards larger solar EPC players with existing capabilities and sound financial strength Market shares evolution of Top 5 (as in 2018) solar EPC players(1) 19.3% Increasing market share of Top 20 players With
Slide 21: Sustainable Benefit to Solar with Energy Storage Market Growth
Sustainable Benefit to Solar with Energy Storage Market Growth A significant reduction in battery costs… $/kWh 960 720 600 420 320 260 255 245 230 220 209 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Average Li-ion battery module prices … is driving the increased adoption of battery energy
Slide 22: Market Positioning: International and India
Market Positioning : International and India Policy Drivers for Solar PV Annual solar PV installations (GW) ▪ Carbon Emission Target ▪ Country/State Wise Target on +22% share of Renewables in the 70.0 generation mix 63.4 57.1 ▪ Renewable Energy Targets for Utilities/Power Generators 38.5 ▪ Input Tax
Slide 23: Contents
Contents 1 About us 3 2 Industry Potential 14 3 Key Differentiators 21 4 Financial Performance – Q3FY20 and 9mFY20 31 5 Historical Financial Performance 43 6 Way Forward 50 21
Slide 24: Differentiated Business Model
Differentiated Business Model Strong track record of executing complex One of the only global pure-play & large-scale EPC projects leading to high solar EPC players with a significant customer retention and repeat business presence and operational experience across geographies 06 01 Quick decision m
Slide 25: Comprehensive end-to-end EPC Solutions Provider
Comprehensive end-to-end EPC Solutions Provider with end-to- end capabilities Utility scale solar projects Rooftop Projects Solar + Energy Storage O&M Services Key financial metrics (EPC business) Key financial metrics (O&M business) Rs. 81,453 mn 11.6% 124% Rs. 936 mn 43.6% 96% FY19 Revenue from FY
Slide 26: Flexible Hub-and-Spoke business model
Company’s flexible Hub-and-Spoke business model facilitating geographic expansion to capture the global opportunities Hub-and-Spoke business model driving global expansion through a cost-effective India base… Design & engineering and Procurement Regional presence across Significant cost benefits & t
Slide 27: Dedicated design and engineering team focused on innovation
Dedicated design and engineering team focused on innovation and developing efficient technology Value engineering solutions provided through a strong in-house design team with expertise in advanced technologies Innovation & Development of 175Persons Real-time and predictive analytics capabilities in
Slide 28: Complete Control over Project Lifecycle
Complete Control over Project Lifecycle 26
Slide 29: Best in Class Execution Capabilities
Best in Class Execution Capabilities EPC Division O&M Vertical Engineering Procurement Construction • Soiling station to measure • Centralized monitoring system • Effective and efficient supply soiling loss & determine chain for spares management cleaning frequency Grid code Optimally-rated Robust e
Slide 30: Strong Parentage
Strong Parentage SP group’s experience translated into multiple advantages for Emerged as a credible solar EPC S&W initially player globally ▪ SP group’s presence in India, Middle East, Global 45 Africa, APAC, South America and Europe ▪ Assisted the Company in getting a Access Countries assisted S&W
Slide 31: Board of Directors
Board of Directors Khurshed Daruvala Bikesh Ogra (Non-Executive Director) Arif Saleh Doctor (Non-Executive Chairman) (Independent Director) ▪ Holds a bachelor’s ▪ Holds Bachelor’s degree in Electrical ▪ Holds a bachelor’s degree in Engineering from the degree in arts as well commerce from Pallon Sha
Slide 32: Experienced management team with global operational experience
Experienced management team with global operational experience 22+ 22+ Bahadur Dastoor 23+ 8+ Bikesh Ogra CFO Director & Global CEO ▪ Heads the finance & accounting function of Company ▪ 22 years experience in EPC sector ▪ Previously served at Godrej & Boyce, Lovelock & Lewes ▪ Education - B.E. and
Slide 33: Contents
Contents 1 About us 3 2 Industry Potential 14 3 Key Differentiators 21 4 Financial Performance – Q3FY20 and 9mFY20 31 5 Historical Financial Performance 43 6 Way Forward 50 31
Slide 34: Key Order Book Highlights
Key Order Book Highlights Healthy order inflow and robust order book ✓ Order inflow of 2.2 GW (Rs 85,507mn) until 12 Feb 2020 ✓ 7.4 GW contracted O&M as at 12 Feb 2020 ✓ Gross Unexecuted Order Value (UOV) as on 12 Feb 2020 is above Rs 129,000 mn compared to over Rs 77,000 mn as at 31 Mar 2019 UOV (R
Slide 35: Key Financial Highlights for 9mFY20
Key Financial Highlights for 9mFY20 ✓ Revenue impacted due to delay in commencement of few projects ✓ O&M contribution to overall revenue increased to 3.7% in 9mFY20 vs 1% in 9mFY19 ✓ Gross margins at 13.1% compared to 9.3% in 9mFY19 ✓ Higher EBITDA margins at 6.7% in 9mFY20 compared to 5.9% in 9mFY
Slide 36: Unexecuted Order Value (UOV) Movement
Unexecuted Order Value (UOV) Movement Rs mn Gross UOV as at 12 Feb 2020 (before adjusting revenue post 31 Dec 2019) India Europe 9.9% Africa [EPC Revenue] 13.3% 6.6% +78,800 -33,788 Australia 13.2% +6,707 Rs 129,170* mn 1,29,116 1,22,409 MENA 39.2% Americas 17.8% 77,397 UOV as on 31 New Orders Proje
Slide 37: Consolidated Financial Highlights – 9mFY20
Consolidated Financial Highlights – 9mFY20 Rs mn Revenue from Operations Gross margins & Gross Margin % Operating EBITDA & EBITDA Margin % 13.1% 9.3% 6.7% 5.9% 59,151 5,526 3,510 4,618 2,372 35,147 9MFY20 9MFY19 9MFY20 9MFY19 9MFY20 9MFY19 PBT & PBT Margin Cash flow from Operations Net Working Capit
Slide 38: O&M Business – Key Highlights
O&M Business – Key Highlights Rs mn Revenue from O&M Operations Key Highlights O&M revenue more than doubled in GW of solar power 9mFY20 compared to corresponding period in previous year 7.4 projects with active 1,317 service contracts O&M constitutes 3.7% of revenue in 9mFY20 compared to 1% in
Slide 39: Consolidated Profit & Loss – Q3 and 9m
Consolidated Profit & Loss – Q3 and 9m Rs mn Q3FY20 Q3FY19 9MFY20 9MFY19 FY19 Key Highlights Revenue from Operations 10,764 16,440 35,147 59,151 82,404 Overall revenue lower due to delay in commencement of a large project coupled Gross Margin 836 2,864 4,618 5,526 9,850 with higher revenue in prev
Slide 40: Consolidated Balance Sheet
Consolidated Balance Sheet Rs mn Dec 19 Mar 19 Dec 18 Key Highlights Assets Business continues to remain asset light Non current assets 789 672 581 Tangible assets (incl. CWIP) 334 265 261 Borrowings decreased by Rs 7,507 mn due to repayment of loan Intangible assets 54 49 50 Deferred tax assets
Slide 41: Consolidated Cashflow
Consolidated Cashflow Rs mn 9MFY20 9MFY19 FY19 Key Highlights Profit before tax 2,394 4,182 7,592 Cash flow from Operations has been positive for 9mFY20 as Adjustments for noncash / other items 707 (469) (434) compared to 9mFY19 and FY19 Operating profit before working capital changes 3,101 3,713
Slide 42: Core Working Capital
Core Working Capital Rs mn Dec 19 Sep 19 Mar 19 Key Highlights Working capital remained stable as compared to Mar 19 Current Assets 26,466 24,227 23,770 Debtor days higher due to lower 9mFY20 revenue Inventories 107 170 131 Trade receivables (Incl. 24,377 22,798 22,507 Unbilled) Receivable days
Slide 43: External Debt and Intercompany Deposit movement post listing
External Debt and Intercompany Deposit movement post listing External Debt Intercompany Deposit (ICDs) Rs mn Note: the above table excludes interest • External debt reduced by Rs 13,400 mn from the date of listing till 31st • Repayment schedule for ICDs December 2019 • Rs. 5,000 mn on or before Marc
Slide 44: Coronavirus impacting execution of projects
Coronavirus impacting execution of projects ✓ Several cities of China are on lockdown due to coronavirus ✓ Production activities stopped and expected to commence by end of Feb 2020 ✓ Raw material scarcity estimated in China ✓ Inspection by agencies not being possible ✓ Port congestions both inbound
Slide 45: Contents
Contents 1 About us 3 2 Industry Potential 14 3 Key Differentiators 21 4 Financial Performance – Q3FY20 and 9mFY20 31 5 Historical Financial Performance 43 6 Way Forward 50 43
Slide 46: Performance Trend on Yearly basis
Performance Trend on Yearly basis Rs mn Revenue from Operations Gross margin & Gross Margin % 12.1% 13.0% 11.0% 11.9% +44% 82,404 9,850 68,717 +44% 7,527 27,394 3,323 16,403 2,132 FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19 Operating EBITDA & Op. EBITDA Margin PAT & PAT Margin 7.0% 3.5% 7.8% 8.3% 4.6% 1
Slide 47: Consolidated Profit & Loss
Consolidated Profit & Loss Rs mn FY16 FY17 FY18 FY19 Key Highlights Revenue from Operations 27,394 16,403 68,717 82,404 Decline in FY17 revenue due to decrease in EPC revenue from international projects Revenue growth NA -40.1% 318.9% 19.9% 3,323 2,132 7,527 – 90MWp project in South Africa and 51M
Slide 48: Consolidated Balance Sheet
Consolidated Balance Sheet Rs mn FY16 FY17 FY18 FY19 Key Highlights Assets Asset light model with low fixed assets and nominal capital investments Non current assets 82 208 416 672 Tangible assets (incl. CWIP) 61 76 231 265 Intangible assets 6 9 10 49 – Customers provide real estate assets for pro
Slide 49: Consolidated Cashflow
Consolidated Cashflow Rs mn FY16 FY17 FY18 FY19 Key Highlights Profit before tax 1,943 603 5,287 7,592 Adjusted Cash flow from Operations has Adjustments for non cash / other items 15 134 275 (434) been positive during FY16 to FY18 (except FY17 which was marginally negative) Operating profit befor
Slide 50: Working Capital
Working Capital Rs mn Mar 16 Mar 17 Mar 18 Mar 19 Key Highlights Low working capital requirements due to asset light model, short duration Current Assets 5,109 5,324 36,841 23,770 of contracts and nature of payment cycles Inventories 13 149 186 132 − Advance payment from customers typically − Long
Slide 51: Impact of De-merger on Financials
Impact of De-merger on Financials Financial Year 2017-18 Financial Year 2018-19 ▪ The de-merger of Solar EPC business of Sterling and ▪ As on 31st March 2019, the other financial assets Wilson Pvt. Ltd. (SWPL) into Sterling and Wilson Solar amounting to Rs. 10,299 mn were re-classified as inter- Ltd
Slide 52: Contents
Contents 1 About us 3 2 Industry Potential 14 3 Key Differentiators 21 4 Financial Performance – Q3FY20 and 9mFY20 31 5 Historical Financial Performance 43 6 Way Forward 50 50
Slide 53: Way Forward
Way Forward ✓ Execute the projects at faster pace once operations are normalised in China ✓ Strong order pipeline including bids pending decision ✓ Diversification into newer markets like Far East and additional countries in South America and Europe ✓ Improved O&M strategy under implementation for t
Slide 54: Thank You
THANK YOU For further information, please contact: Company : Investor Relations Advisors : Sterling and Wilson Solar Limited Strategic Growth Advisors Private Limited CIN: U74999MH2017PLC292281 CIN: U74140MH2010PTC204285 Mr Vishal Jain Mr Jigar Kavaiya / Mr. Parin Narichania Head – Investor Relation
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