Sunpower Group Ltd. · SGX:5GD
Sunpower — FY2019 Earnings Presentation
37 slides from Sunpower's earnings presentation, Feb 27, 2020
Slide 1: Sunpower Group Ltd. Investor Presentation
SUNPOWER GROUP LTD. Investor Presentation 27 February 2020
Slide 2: Agenda
2 Agenda 1 Sunpower Group at a Glance 2 Investment Highlights 3 GI Performance 4 Financial Highlights 5 Q&A Session
Slide 3: Sunpower Group at a Glance
Sunpower Group at a Glance Environmental Protection Solutions Specialist: Energy-saving solutions, waste heat recovery, clean power >20 Years of Proven Track Record: Established in 1997, listed on SGX since 2005 Strong R&D Capabilities: 163 patents, including 61 invention patents Business se
Slide 4: Sunpower Group at a Glance
Sunpower Group at a Glance Established Businesses with Stable Profits and Cashflow Value Creator &Growth Driver Manufacturing & Services (M&S) Green Investment (GI) Manufacturing Services Major Industries Main Solutions Major Industries Main Solutions Main Solutions High • Petrochemical Flare & Cent
Slide 5: Agenda
5 Agenda 1 Sunpower Group at a Glance 2 Investment Highlights 3 GI Performance 4 Financial Highlights 5 Q&A Session
Slide 6: Investment Highlights
Investment Highlights GI, Our Value Creator and Growth Driver Well-positioned to Build Sizeable GI Portfolio GI Forms the Bulk of the Group’s Value M&S: Stable and Growing with Strong Order Book ~ RMB 2.5 billion Professional and Disciplined Management Team DCP and CDH as strategic institutional inv
Slide 7: GI - Our Value Creator and Growth Driver
GI - Our Value Creator and Growth Driver I Enormous Government orders mandatory closure of small boilers. Manufacturing plants in industrial parks across China to use highly efficient centralised steam boilers Business Opportunities Manufacturing plants are increasingly concentrated in industria
Slide 8: GI - Our Value Creator and Growth Driver
GI - Our Value Creator and Growth Driver III Unique Competitive Edge Proprietary energy-saving & long-distance distribution technology Experienced management with full interest alignment: strong discipline in project evaluation & low cost overrun risks Fully integrated capabilities: in-house d
Slide 9: GI - Our Value Creator and Growth Driver
GI - Our Value Creator and Growth Driver Proprietary Technologies Temperature Loss Differential Pressure Coverage Radius 15℃/Km 0.06-0.1 MPa/Km Long Distance Steam Distribution Pipelines 30 Km Technology • Increase geographical reach to captive 0.015-0.05 MPa/Km customers. Achieve economies of sca
Slide 10: Well-positioned to Build Sizeable GI Portfolio
Well-positioned to Build Sizeable GI Portfolio Steam/Heat Designed Project Equity Projects Electricity Designed Capacity Capacity (RMB mm) Changrun Project (Phase 1) 2×220 tons/hour (t/h) 2×25MW 434.1 Yongxing Plant 2×100t/h+1×150t/h 2×18MW 306.0 Xinyuan Plant 3×75t/h+1×220t/h 2×6MW+1×25MW 85.0 In O
Slide 11: GI Forms the Bulk of the Group Value
GI Forms the Bulk of the Group Value (1) Environment Green Protection Investments R&D Manufacturing & (GI) Services (M&S) Sunpower has seen strong ramp-up of GI operations and is well prepared for the next phase. Successfully enhanced into a company driven by long-term, recurring, high-quality i
Slide 12: Stable and Growing Manufacturing & Services
Stable and Growing Manufacturing & Services > 20 years of proven track record Order book remains strong and has sustained Stable and growing revenue Positive operating cash flows at RMB2.5 billion for 5 consecutive quarters Resilient & sustainable business Large and diversified base of cus
Slide 13: Professional and Disciplined Management Team
Professional and Disciplined Management Team Management are proven professionals with high personal integrity and follow international best practices in corporate governance Dr. Guo Hong Xin Mr. Ma Ming Ms. Ge Cuiping Mr. Chen Kai Executive Chairman & Founder Co-founder, Executive Director CFO CIO M
Slide 14: DCP and CDH are strategic institutional investors
DCP and CDH are strategic institutional investors Among the largest and most experienced Chinese private equity (PE) investors. Invested/committed US$180 million in Sunpower through 2 rounds of CBs. Provide institutional support for Sunpower’s long-term growth. Strong track record in investmen
Slide 15: Agenda
15 Agenda 1 Sunpower Group at a Glance 2 Investment Highlights 3 GI Performance 4 Financial Highlights 5 Q&A Session
Slide 16: Rapid Expansion of GI Business Exceeded Expectations
Rapid Expansion of GI Business Exceeded Expectations GI’s leap forward has taken only < 3 years after the issue of CB1 from 0 to 8 projects in operation and 1 project in trial production With double-digit IRR, all GI projects in operation are in line with or even beat the Company’s targets Sun
Slide 17: GI’s Growth Sustained
GI’s Growth Sustained Revenue (RMB mil) EBITDA (RMB mil) 433 1155 17-19’ CAGR 176% 17-19’ CAGR 152% 276 17-19’ CAGR 737 17-19’ CAGR 56% 58% 166 318 379 121 152 152 68 68 FY2017 FY2018 FY2019 4Q2017 4Q2018 4Q2019 FY2017 FY2018 FY2019 4Q2017 4Q2018 4Q2019 GI Projects Operating Cash Flow GI performed
Slide 18: Tongshan Project
Tongshan Project Tongshan District Estimated investment of ~RMB420 million for Phase 1, secured by equity investment of RMB107 million. To be developed under a joint venture, of which Sunpower owns an 85% stake. Capacity Phase 1 Total Designed steam capacity (t/h) 1×130 2×130 (=260) Designed electri
Slide 19: Significant Acquisition of Suyuan Plant
Significant Acquisition of Suyuan Plant Total investment of ~RMB293 million, secured by~RMB117 million of equity Location: Changshu, Suzhou, Jiangsu province. The textile industry has been a mainstay of Changshu’s economy for the last 40 years with annual turnover of >RMB100 billion Capacity: 1x90 (
Slide 20: Significant Acquisition of Yongxing Plant
Significant Acquisition of Yongxing Plant Transaction done at attractive valuation multiple Total investment of RMB765 million, secured by RMB306 million of equity. About Yongxing Plant Sizeable capacity: 350t/h (steam)+36MW (electricity), ~160 km total length of pipeline. Customer mix: captive cust
Slide 21: Changrun Project
Changrun Project Investment: Total investment of RMB934 million, secured by RMB434 million in equity. About Changrun Project – Phase 1: Location: Gaoyang, Hebei (supplies 1/3 of household textiles in the whole of China). Capacity: 2x220t/h (steam) + 2x25MW (electricity). Pipeline network: ~50 km in
Slide 22: Shantou Project
Shantou Project Equity Investments Phase 1 RMB 167 million Phase 1 is in trial production and Phase 2 is Phase 2 RMB 133 million under construction Capacity Phase 1 Phase 1 + Phase 2 Designed steam capacity (t/h) 3x150 (=450) 3x150 + 2x260 (=970) Annualized steam supply capacity (GJ) 5.7 million (1)
Slide 23: Strong Pipeline and Significant Targeted Investment in GI
Strong Pipeline and Significant Targeted Investment in GI Sunpower is on target to make equity investments of ~ RMB2.5 billion in GI assets by 2021 Rapid scale-up: Acquired 4 “brownfield” projects and built up 5 Update on GI Investments to-date “greenfield” projects. 8 projects in operation and 1
Slide 24: Agenda
24 Agenda 1 Sunpower Group at a Glance 2 Investment Highlights 3 GI Performance 4 Financial Highlights 5 Q&A Session
Slide 25: Stepped Up The Pace
Stepped Up The Pace GI’s rapid ramp-up has driven Sunpower to achieve another record high in top and bottom line in 2019. Quality of earnings and cashflow significantly enhanced by GI’s long-term, recurring and high-quality contributions. Revenue (RMB mil) Gross Profit (RMB mil) & Gross Margin 16-19
Slide 26: Significant Earnings Growth With Quality
Significant Earnings Growth With Quality Sunpower has met its target of ~50% of income from the recurring GI business for two consecutive years. Sunpower’s reliable GI business model and strong execution capabilities have again been proven through the stronger-than-expected 2019 results. With
Slide 27: Group Operating Cashflow Surged in FY2019
Group Operating Cashflow Surged in FY2019 (RMB million) Robust cashflow: Underlying operating cash flow surged mainly due to continued expansion and ramp-up of GI. (2) 463.1 17-19’ CAGR Potential realised: Proven the huge potential of GI to 132% generate long-term, recurring, high-quality cashfl
Slide 28: FY2019: Strong Foundation for 2020 and beyond
FY2019: Strong Foundation for 2020 and beyond Group Group GI M&S Record revenue: RMB3.6 billion, up 11% Record revenue of RMB1,155 million, up 57% YoY. YoY. Revenue of RMB2.4 billion, EBITDA: Up 43% YoY to RMB707 million. profitability was further and Robust EBITDA: RMB433 million, up 57%
Slide 29: FY2020 Outlook
FY2020 Outlook The Group has been managing the situation in line with the guidelines of the local governments where its operations are located to gradually regain stable production, thanks to the robust and rigorous handling of prevention and control measures. Barring unforeseen circumstances, the G
Slide 30: Appendices
Appendices
Slide 31: Financial Effects of Convertible Bonds (CBs) and Warrants
Financial Effects of Convertible Bonds (CBs) and Warrants CBs were issued on 3 March 2017 and 15 October 2018 with the debt host liability component and the derivative liability component carried at amortised cost and fair value respectively. The changes in the fair value of the derivative liabiliti
Slide 32: Income Statement Summary
Income Statement Summary* RMB million FY2019 FY2018 %Change Revenue 3,604.6 3,262.9 10.5 Gross Profit 888.6 693.8 28.1 Gross Profit Margin 24.7% 21.3% 3.4 pps EBITDA 706.6 496.0 42.5 EBITDA Margin (%) 19.6% 15.2% 4.4 pps Underlying Net Profit (1) 352.2 267.8 31.5 Underlying Net Profit 9.8% 8.2% 1.6p
Slide 33: Balance Sheet Summary
Balance Sheet Summary* RMB million As of December 31, 2019 As of December 31, 2018 Cash and cash equivalents & pledged 797.5 797.7 bank deposits Trade Receivables 1,321.3 1,191.5 Inventories 558.8 499.9 Total Current Assets 3,302.5 2,982.4 Non Current Assets 4,350.5 3,641.0 Short-term Borrowings 1,0
Slide 34: Cash Flow Summary
Cash Flow Summary* RMB (million) FY2019 FY2018 Net cash generated from/(used in) 443.4 229.3 operating activities Underlying operating cash flow 463.1(1) 246.6(2) Interest expense 109.9 61.8 Net cash (used in) investing activities (1,246.4) (766.7) Net cash from (used in) financing activities 808.2
Slide 35: Related Environmental Protection Policies in GI segments
Related Environmental Protection Policies in GI segments Air Pollution Prevention Action Plan (大气污染防治行动计划)，国务院，国发[2013]37号 Implementation of Coal Fired Boiler’s Energy Saving and Environmental Protection Scheme 燃煤锅炉节能环保方案的实施，国家发改委、环保部及其他部门，发改环资[2014]2451号 Clean and Efficient Use of Coal Action Plan
Slide 36: Agenda
36 Agenda 1 Sunpower Group at a Glance 2 Investment Highlights 3 GI Performance 4 Financial Highlights 5 Q&A Session
Slide 37: Disclaimer
Disclaimer This presentation is not financial product advice and prepared for informational purposes only, without regard to the objectives, financial situation nor needs of any specific person. This presentation and the information contained herein does not constitute an offer to sell or issue or t