Suzlon Energy Ltd · NSE:SUZLON
Suzlon Energy — Q1 FY2011 Earnings Presentation
34 slides from Suzlon Energy's earnings presentation, Aug 13, 2010
Slide 1: Result Presentation – Q1 FY11
Suzlon Energy Limited Result Presentation – Q1 FY11 13th August 2010
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 Key highlights – Q1 FY2011 – Growth in volumes compared to Q1FY10 – Significant increase in Order flows in India – Rights issue completed Outlook for the FY2011 – Wind industry will continue to see robust growth in long term – Growing G i IIndia di market k t augurs wellll ffor S Suzlon
Slide 4: Financial Performance snapshot
Financial Performance snapshot INR Cr. Particulars Q1 FY2010-11 Q1 FY2009-10 FY2009-10 FY2008-09 Unaudited Unaudited Audited (a) Audited MW Volume ((Suzlon Wind)) 207 123 1,460 , 2,790 , Suzlon Wind Business Revenue 1,441 1,164 9,635 15,897 REpower revenue 949 2,066 8,502 7,125 Consolidated Revenue
Slide 5: Order book status
Order book status Firm order book Announced Framework Contracts 9 Order book as on 11th August ‘10 is 9 225 MW framework agreement with EUFER 1,458MW : Rs.7,938 crs (USD 1.7 bln*) (JV b between t ENEL Green G Energy E and d Union U i – India : 580MW Fenosa) for Spain Suzlon – International : 878MW 9
Slide 6: Significant progress made in resolving the balance sheet issues
Significant progress made in resolving the balance sheet issues FY11 Rupee Loan refinancing of Rs.10,694 crs closed 9 Refinancing of Rupee facilities of approx approx. Rs Rs. 6 6,587 587 crs and trade credit facilities May 2010 (non-fund based) of Rs. 4,037 crs which provides liquidity 9 Holiday o
Slide 7: Contents
Contents Key highlights – Q1 FY2011 – Growth in volumes compared to Q1FY10 – Significant increase in Order flows in India – Rights issue completed Outlook for the FY2011 – Wind industry will continue to see robust growth in long term – Growing G i IIndia di market k t augurs wellll ffor S Suzlon
Slide 8: Wind industry has grown steeply over last decade and will continue to outgrow other energy capacities
Wind industry has grown steeply over last decade and will continue to outgrow other energy capacities Annual Installation (GW) Cum. Installation (GW) 140 126 1,000 New Installations (GW) 9Wind capacities 900 120 Cumalative (GW) have grown at 29% 800 CAGR from 2000 to 100 700 2009, while total 80 600
Slide 9: Industry reports suggest decent growth in medium term
Industry reports suggest decent growth in medium term Annual new wind installations (2010-2015) CAGR (10-14) Cumulative capacity (GW) 122 160 202 251 310 376 448 22% MW 80,000 Projected Actual 71,650 70,000 +14% 2,750 Rest of world 35% 65 400 65,400 2,350 60,000 59,475 1,600 25,550 Asia Pacific 9% 4
Slide 10: Industry reports suggest decent growth in medium term
Industry reports suggest decent growth in medium term Annual new wind installations (2010-2015) Annual capacity addition (GW) CAGR (10-14) GW 28 38 42 49 59 65 72 14% Actual Projected Emerging Markets 29,800 27,000 2,750 Rest of world 35% 24,050 2,350 21,250 1,600 19,325 16,372 16 372 1 100 1,100 82
Slide 11: Short term environment challenging in few markets...
Short term environment challenging in few markets... In US, low electricity demand and delays in securing firm PPAs continues In Europe: In few markets like Spain, Greece etc 9 The sovereigng crisis has affected the pproject j financing g 9 Fiscal deficit tightening has resulted in subsidy reduc
Slide 12: Emerging markets key to growth for Suzlon
Emerging markets key to growth for Suzlon 1 2 3 India China Brazil 9 Positive regulatory 9 Addressable market for cchanges a ges 9 Expected pected market a et ssize e international players 500-700 MW growing decently 9 Huge potential for the industry to grow 9 Strong response 9 Suzlon and REpower re
Slide 13: India: Swiftly evolving regulatory scenario fuels strong growth
India: Swiftly evolving regulatory scenario fuels strong growth 1 June 2008 – National Action Plan on Climate Change Suggests RPO at 5% in year 2010, increasing 1% every year for 10 years Penalties may be levied (as ( stated in EA 2003), ) iff utilities are still falling f short in RPOs O 2 Sept
Slide 14: Industry experts suggest a spurt in the installations…
Industry experts suggest a spurt in the installations… Wind installations in India Observations Analysts expect the market to grow to 2000-2,200 MW this Actual Projected j year and to 22,600 600-3 3,000 000 MW next year underpinned by conducive regulatory environment and general buoyancy 2600 in t
Slide 15: Exuberance in India reflects in our order book as well
Exuberance in India reflects in our order book as well India Order book trend at end of Q1 Generally, first quarter in India remains weak, however, we have seen strong 580 interest in India in Q1 of current year, indicating a stronger full year ahead 267 Suzlon is well placed to cater to the 66
Slide 16: Other emerging markets: China
Other emerging markets: China 13.8 Removes local content requirement for WTG China Market size (GW) manufactures 1.8 International Cos Amends RE law Local Cos 9 Enables more central government supervision of grid companies to purchase renewable power and imposes fines on grid companies for non-c
Slide 17: Other emerging markets: Brazil
Other emerging markets: Brazil Favorable industry dynamics What it means for Suzlon Market leader in Brazil The market is expected to grow from ~700 MW to 9 50% of the country’s wind installations 6GW of cumulative installations by 2019 supplied by Suzlon 9 Currently, half of the installations i
Slide 18: Several efforts underway to further strengthen market position of the Group
Several efforts underway to further strengthen market position of the Group Suzlon REpower Expand market footprint into emerging Reduce COGS by addressing a combination markets backed by a large scale sales and of cost levers service organisation Leverage growth in offshore and 3MW Develop n
Slide 19: Group new product / variants
Group new product / variants Low wind speed (IEC Class-III) sites presents significant opportunity New offerings from Suzlon Group are designed with large rotor diameters, increased hub heights, improved aerodynamic efficiency, and grid- friendly characteristics for delivering higher project per
Slide 20: Suzlon Group has all the relevant competencies
Suzlon Group has all the relevant competencies Suzlon strengths REpower strengths Group Positioning ¾ Asia, US, ANZ, ¾ Global player Market coverage Brazil ¾ Present across ¾ Europe, US, Canada ¾ Customer ¾ Developing markets geographies, with flexible ¾ Developed markets ¾ Geographic ¾ Strong custo
Slide 21: Contents
Contents Key highlights – Q1 FY2011 – Growth in volumes compared to Q1FY10 – Significant increase in Order flows in India – Rights issue completed Outlook for the FY2011 – Wind industry will continue to see robust growth in long term – Growing G i IIndia di market k t augurs wellll ffor S Suzlon
Slide 22: Consolidated financial results
Consolidated financial results (Suzlon Wind + SE Forge + Hansen + REpower*) INR crs. Particulars Q1 FY11 Unaudited Q1 FY10 Unaudited FY10 Audited (a) Sales 2,399 4,153 20,620 R Raw M Material t i l costt 1 777 1,777 2 911 2,911 13 628 13,628 Gross Profit 622 1,242 6,992 Gross Profit margin 26% 30% 3
Slide 23: Consolidated financial results: Q1 - Year-on-year
Consolidated financial results: Q1 - Year-on-year INR crs. Q1 FY11 (unaudited) Q1 FY10 (unaudited) Particulars Suzlon SE Forge Hansen REpower Suzlon SE Forge Hansen REpower Sales MW 207 123 Sales 1,441 55 -- 949 1,164 17 952 2,066 Raw Material cost 1,059 32 -- 733 830 8 537 1,567 Gross Profit 382 24
Slide 24: Consolidated financial results: Excluding impact of foreign exchange loss / (gain)
Consolidated financial results: Excluding impact of foreign exchange loss / (gain) Suzlon Wind Consolidated – Ex Hansen Consolidated INR Particulars Q1 FY11 Q1 FY10 Q1 FY11 Q1 FY10 Q1 FY11 Q1 FY10 crs. Sales 1,441 1,164 2,399 3,228 2,399 4,153 Raw Material cost 1,059 830 1,677 2,374 1,677 2,911 Gros
Slide 25: Consolidated financial results: Year-on-year
Consolidated financial results: Year-on-year INR crs. FY10 (unaudited) (a) FY09 (unaudited) (b) Particulars Suzlon SE Forge Hansen REpower Suzlon SE Forge Hansen REpower Sales MW 1,460 2,790 Sales 9,635 104 2,656 8,502 15,897 17 3,994 7,125 Raw Material cost 6,391 60 1,491 6,010 10,481 4 1,939 5,288
Slide 26: Suzlon Group order book
Suzlon Group order book Orders as on New Sales in Orders as on Sales in Region Sales in FY09 Sales in FY08 26/05/10 Orders Q1 FY11 11/08/10 FY10 India 230 489 139 580 688 749 975 USA 273 -- 25 248 410 989 593 China 404 51 39 416 182 249 134 ANZ 53 -- -- 53 128 430 143 Europe 166 -- 4 162 53 166 298
Slide 27: Consolidated: NOWC reduction in progress
Consolidated: NOWC reduction in progress Consolidated: 9 Consistent reduction in NOWC continues, ~Rs.950 crs reduced in Q1 INR Cr Net Operating Working Capital in Rs Rs. Crores As on 30th Jun ’10 10 As on 31st Mar ‘10 10 As on 31st Dec. Dec ’09 09 (Unaudited) Inventories 5,890 5,994 5,796 Receivab
Slide 28: Suzlon Wind: NOWC reduction in progress
Suzlon Wind: NOWC reduction in progress Suzlon Wind Business: 9 Consistent reduction in NOWC continues, after ~Rs.1,000 crs last year, in the current quarter the reduction is Rs.259 crs 9 Inventories level has stabilized 9 Collections from receivables improving 9 Significant and consistent reducti
Slide 29: WTG revenue by geography
WTG revenue by geography Region Q1 FY11 Sales FY10 Sales FY09 Sales FY08 Sales (MW) (Rs.Crs.) (MW) (Rs.Crs.) (MW) (Rs.Crs.) (MW) (Rs.Crs.) India 139 804 688 4,094 749 4,420 976 5,572 USA 25 230 410 2,483 989 5,229 593 2,289 China 39 172 182 813 249 1,104 134 455 ANZ -- 178 128 1,192 430 2,519 143 1,
Slide 30: Group Financial Leverage
Group Financial Leverage INR crs. Particulars As at 30th June 2009 As at 31st March As at 31st Dec. 2009 As at 30th Sept. As at 30th June 2009 2010 2009 SEL Consol. SEL Consol. SEL Consol. SEL Consol. SEL Consol. Wind (a) Group (a) Wind (a) Group (a) Wind (a) Group (a) Wind (a) Group (a) Wind (a) Gr
Slide 31: 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 30th June 2010 31st March 2010 31st Dec. 2009 30th Sept. 2009 30th June 2009 Acquisition loans 2 155 2,155 2 083 2,083 2 159 2,159 3 097 3,097 3 253 3,253 FCCBs 2,225 2,151 2,2
Slide 32: FCCBs: Post restructuring
FCCBs: Post restructuring Key Terms: Outstanding amount Conversion Redemption FCCBs Maturity date Coupon rate (USD mln) price (Rs.) 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 7.5% 150.24% O
Slide 33: REpower Net Profit Reconciliation
REpower Net Profit Reconciliation Particulars EURO m INR crs Profit / (loss) as per REpower books 1.8 10 Less: Policy alignment impact 5.0 29 Profit / (loss) before translation loss (3.2) (19) Less: FX loss on translation of COGS 17.2 100 Profit / (loss) as per Suzlon Books (20.4) (119) (a) Unaudite
Slide 34: Thank You
| ot Thank You 34 ee aT www.suzlon.com