Suzlon Energy Ltd · NSE:SUZLON
Suzlon Energy — Q2 FY2009-10 Earnings Presentation
42 slides from Suzlon Energy's earnings presentation, Oct 31, 2009
Slide 1: Q2 FY 2009-10 Result Presentation
Suzlon Energy Limited Q2 FY 2009-10 Result Presentation 31st October 2009
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 securit
Slide 3: Agenda
Agenda • Overview • Q2 FY 2009-10 result update • Business update • Market focus • Suzlon tomorrow • Additional financial information 3
Slide 4: Overview
Overview • Q2 FY 2009-10 consolidated revenues at Rs.4,793 cr. • Orderbook O d b kU Update: d 1 1,487 487 MW SSuzlon l WiWind d • Market Conditions • Policy Regime Changes • Improving operational efficiencies • Optimizing O i i i debt d b profile fil
Slide 5: Agenda
Agenda • Overview • Q2 FY 2009-10 result update • Business update • Market focus • Suzlon tomorrow • Additional financial information 5
Slide 6: Q2 FY 2009-10 result update
Q2 FY 2009-10 result update INR C Cr. Q2 FY10 Q2 FY09 Change H1 FY10 H1 FY09 Change Particulars Unaudited Unaudited Unaudited Unaudited Consolidated Revenue 4,793 , 6,921 , ((31)% ) 8,946 , 10,039 , ((11)% ) Suzlon Wind Business Revenue 1,868 4,182 (55)% 3,031 6,268 (52)% MW Volume 283 727 (61)% 406
Slide 7: Consolidated financial results
Consolidated financial results (Suzlon Wind + SE Forge + Hansen + REpower) INR Cr. Q2 FY10 Q2 FY09 H1 FY10 H1 FY09 FY09 Particulars Unaudited Unaudited Unaudited Unaudited* Audited Sales 4,793 6,921 8,946 10,039 26,082 Raw Material cost 3 220 3,220 4 661 4,661 6 132 6,132 6 451 6,451 16 857 16,857 G
Slide 8: Consolidated financial results: Quarter-on-quarter
Consolidated financial results: Quarter-on-quarter INR Cr. Q2 FY10 (Unaudited) Q2 FY09 (Unaudited) Particulars Suzlon SE Forge Hansen REpower Suzlon SE Forge Hansen REpower Sales MW 283 727 Sales 1,868 11 1,032 2,059 4,182 - 1,028 1,947 Raw Material cost 1,367 6 570 1,443 2,870 - 462 1,527 Gross Pro
Slide 9: Consolidated financial results: Quarter-on-quarter (contd.)
Consolidated financial results: Quarter-on-quarter (contd.) INR Cr. Q2 FY10 (Unaudited) Q2 FY09 (Unaudited) Particulars Suzlon SE Forge Hansen REpower Suzlon SE Forge Hansen REpower Sales MW 283 727 EBITDA (149) (12) 65 229 428 (8) 227 68 EBITDA margin (8.0%) (112.7%) 6.3% 11.1% 10.2% - 22.1% 3.5% I
Slide 10: Consolidated financial results: Year-on-year
Consolidated financial results: Year-on-year INR Cr. H1 FY10 (Unaudited) H1 FY09 (Unaudited) Particulars Suzlon SE Forge Hansen REpower Suzlon SE Forge Hansen REpower* Sales MW 406 1 065 1,065 Sales 3,031 28 1,957 4,125 6,268 - 1,939 2,202 Raw Material cost 2,197 13 1,107 3,010 4,244 - 878 1,652 Gro
Slide 11: Consolidated financial results: Year-on-year (contd.)
Consolidated financial results: Year-on-year (contd.) INR Cr. H1 FY10 (Unaudited) H1 FY09 (Unaudited) Particulars Suzlon SE Forge Hansen REpower Suzlon SE Forge Hansen REpower* Sales MW 406 1 065 1,065 EBITDA (322) (18) 114 359 731 (8) 432 108 EBITDA margin (10.6%) (64.0%) 5.8% 8.7% 11.7% - 22.3% 4.
Slide 12: Financial leverage
Financial leverage (a) INR Crs. As at 30th Sept. 2009 As at 30th June 2009 As at 31st March 2009 Particulars SEL Wind (a) Consol. SEL Wind (a) Consol. SEL Wind (a) Consol. Group (a) Group (a) Group Gross Debt 13,477 16,541 13,085 15,987 12,452 14,870 Cash 952 2,780 862 2,157 1,359 3,070 Net Debt 12,
Slide 13: Group Wind Business Orders in CY 2009
Group Wind Business Orders in CY 2009 • New order wins since January 2009 – Suzlon International new orders: 593 MW • 245 MW from Australia • 199 MW from China • 42 MW from USA • 97 MW from Europe • 10 MW from Sri Lanka – Suzlon India new orders: 488 MW • REpower order wins announced: • 165 MW from
Slide 14: Business update: Firm order book for Suzlon Wind
Business update: Firm order book for Suzlon Wind Orders as New Sales in Q2 Orders as Sales in Sales in Region on 30/7/09 Orders FY10 on 30/10/09 FY09 FY08 India 66 186 129 123 749 975 USA 582 -- -- 582 989 593 China 586 -- 112 475 249 134 ANZ 132 -- 19 113 430 143 E Europe 118 84 23 179 166 298 S.Am
Slide 15: Business update: NOWC reduction in progress
Business update: NOWC reduction in progress • Suzlon Wind Business: – Gradual reduction in working capital intensity – Inventories level stabilizing – Receivables level decreasing steadily INR Crs. Net Operating Working Capital in Rs. As on 30th As on 30th Jun As on 31st As on 31st C o es (Una Crore
Slide 16: Business update: Performance of acquisitions
Business update: Performance of acquisitions Hansen Transmissions* REpower Systems* Parameter ((EUR mln)) H1 FY 2009- H1 FY 2008- FY 2008-09 H1 FY 2009- H1 FY 2008- FY 2008-09 10 09 10 09 Sales 286 295 609 610 530 1,209 EBIT (2.3) 31 64 31 23 77 EBITmargin % (0.8%) 10.6% 10.5% 5.0% 4.3% 6.3% * As pe
Slide 17: Agenda
Agenda • Overview • Q2 FY 2009-10 result update • Business update • Market focus • Suzlon tomorrow • Additional financial information 17
Slide 18: Business update: Summary
Business update: Summary • Business review • Guidance • Debt management exercise – Hansen sale process – Refinancing • Financing environment • Induction of senior professionals p • Organisational transformation exercise 18
Slide 19: Suzlon Wind Business: Review at H1 FY 2009-10
Suzlon Wind Business: Review at H1 FY 2009-10 • Sales volumes in FY 2009-10 are highly skewed towards H2, especially Q4, as guided earlier – This trend has further strength over the course of Q2 – Due D to thishi unprecedented d d variability, i bili quarterly l margins i will ill be b highly hi hl
Slide 20: Business update: Guidance
Business update: Guidance • Continuing impact of financial crisis – Push back of deliveries against firm contracts, however no cancellations expected t d – Supply guidance for FY 2009-10 being revised downwards • 1,900 – 2,100 MW expected for full year • Customer push back resulting in spillover of
Slide 21: Business update: Debt management exercise
Business update: Debt management exercise • In the current challenging industry environment we have planned to manage our debt through various initiatives: – De-leverage our balance sheet through asset sale – Refinance our existing debt 21
Slide 22: Business update: Debt management exercise (contd.)
Business update: Debt management exercise (contd.) • Endeavour to reduce absolute debt level: – The process for evaluating a possible full or partial sale of stake in H Hansen Transmissions T i i International I i l NV continuesi – Further announcement will be made at appropriate time 22
Slide 23: Business update: Debt management exercise (contd.)
Business update: Debt management exercise (contd.) •Refinancing of debt: INR Cr. Balance as on 30th Balance as on Balance as on Debt type September 2009 30th June 2009 31st March 2009 Acquisition loans 3,097 3,253 3,402 FCCBs , 2,304 1,864 , 2,536 , Capex loans 1,143 1,190 1,187 Working Capital loan
Slide 24: Business update: Debt management exercise (contd.)
Business update: Debt management exercise (contd.) • Rationale: Refinancing of debt – Challenging industry environment necessitates rationalisation of debt structure from a long term perspective – Realignment of security arrangement among various lenders – Sufficient flexibility on timing of monetiz
Slide 25: Business update: Debt management exercise (contd.)
Business update: Debt management exercise (contd.) • Broad contours of proposed refinancing scheme – Foreign currency loans of approx. USD 900 million • Refinancing R fi i existing i ti acquisition i iti loans l • Funding of balance stake purchase in REpower – Rupee facilities of approx. Rs.7,000 cr
Slide 26: Business update: Financing environment for Wind
Business update: Financing environment for Wind • Funding slowly picking up pace – US-based lenders have restarted project funding with deal sizes of USD 100 million individually – Tax equity transactions have restarted – Leading Europe-based Europe based developers have raised / are planning to rai
Slide 27: Business update: Induction of senior professionals
Business update: Induction of senior professionals • Mr.John O’Halloran, President Technology, worked with Caterpillar, Schlumberger & Cummins across various senior management roles. He created the Cummins Research & Technology Centre in Pune as its CEO, and served as CTO for Cummins India and comes
Slide 28: Business update: Achieving Collective Excellence
Business update: Achieving Collective Excellence* Project ACE – Strengthen Suzlon’s competitive position in a changing external landscape – Optimize operational efficiencies to achieve excellence – Enhance concept-to-delivery model for evolving marketplace; – Address immediate fiscal challenges and
Slide 29: Business update: Achieving Collective Excellence
Business update: Achieving Collective Excellence* World class Suzlon 1 Building excellence 5 Business model and People Go to Market Key enablers for business excellence excellence Immediate concerns 2 4 3 Product Finance and performance controls excellence Order to excellence cash process excellence
Slide 30: Agenda
Agenda • Overview • Q2 FY 2009-10 result update • Business update • Market focus • Suzlon tomorrow • Additional financial information 30
Slide 31: New global policy regimes
New global policy regimes • India moving towards long term feed-in tariffs, renewable energy certificates and nation-wide renewable portfolio mandates • USA: Incentives announced under the ARRA now being rolled out – Improves viability of projects and reduces financing burden – Improves credit profi
Slide 32: Indian policy regime headed towards maturity
Indian policy regime headed towards maturity • Overhaul of policy framework underway, will greatly increase renewable penetration – Prime Minister Minister’ss National Action Plan on Climate Change (NAPCC) advocates national level RPS target of 15% by 2020, starting at 5% by 2010 – CERC notifies tar
Slide 33: Major market focus: India
Major market focus: India • Demand drivers – Increased electricity demand – Renewable power mandates – Greatly improved policy environment – Improving project viability • Government Mandates – 19 States currentlyy have RPS ranging g g from 2%-10% – National targets under NAPCC will foster nation-wid
Slide 34: Major market focus: USA
Major market focus: USA • Demand drivers – Policy impetus on reducing oil dependence – Improving cost cost-competitiveness competitiveness of wind – Employment and investment generation potential • Policy support – Existing State-level State level Renewable Portfolio Standards – Moving towards Feder
Slide 35: Major market focus: China
Major market focus: China • Demand drivers – Growing energy demand – Strong government focus on controlling emissions and energy efficiency – Employment generation in underdeveloped regions and sustainable investment potential • Policy support – Government’s Renewable Energy Standard (RES) target of
Slide 36: Major market focus: Australia
Major market focus: Australia • Demand drivers – New Renewable Energy Target of 20% penetration by 2020 – Positive Positi e approach on global lobal emission red reduction ction tar targets ets and multi-lateral m lti lateral agreements • Excellent wind resource and land availability • Highly indust
Slide 37: Agenda
Agenda • Overview • Q2 FY 2009-10 result update • Business update • Market focus • Suzlon tomorrow • Additional financial information 37
Slide 38: Our priorities
Our priorities • Create a healthy balance sheet • Optimize operational efficiencies • Promote greater reater penetration of clean energy ener • Capitalize on global opportunities 38
Slide 39: Agenda
Agenda • Overview • Q2 FY 2009-10 result update • Business update • Market focus • Suzlon tomorrow • Additional financial information 39
Slide 40: Suzlon Wind business: WTG revenue by geography
Suzlon Wind business: WTG revenue by geography (a) Q2 FY10 Sales H1 FY10 Sales Region (MW) (MW) India 129 187 USA 0 65 China 112 112 ANZ 19 19 Europe & ROW 23 23 T t l Total 283 406 (a) Unaudited 40
Slide 41: Suzlon Wind business: Capex program
Suzlon Wind business: Capex program (a) INR Crs. Investments Investments in Planned Commercialization Particulars Budget up to FY09 H1 FY10 Capex / completion date Integrated WTG unit 865 642 9 65 H1 FY09 Forging, Foundry and Machining units 1,100 901 29 11 H2 FY09 Suzlon Campus 361 230 29 102 H1 FY
Slide 42: Thank you
Thank you For inquiries: investorrelations@suzlon.com 42