Suzlon Energy Ltd · NSE:SUZLON
Suzlon Energy — Investor Presentation (October 2016)
45 slides from Suzlon Energy's investor presentation, October 2016
Slide 1: Suzlon Energy Limited Corporate Presentation
Suzlon Energy Limited CORPORATE PRESENTATION OCTOBER 2016
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 DOES not constitute any offer, recommendation or invitation to purchase or subscribe for any secu
Slide 3: Agenda
Agenda Introduction Wind Business Solar Business SE Forge Finance Vision 2022 3
Slide 4: Suzlon Overview
Suzlon Overview • >15 GW cumulative worldwide installations • ~4,200 MW manufacturing capacity (Wind) • >7,500 Workforce • In house Global R&D centers in USA, Germany, Netherlands, Denmark, India • Largest renewable company in India • Recent foray in Solar Space 4 We are just a 20 year old company
Slide 5: ~15.5 GW of Cumulative Worldwide Wind Installations till date
~15.5 GW of Cumulative Worldwide Wind Installations till date 2 5 2 1 North 6 America 3 1 2779 MW 4 Asia 3 5 10477 MW Europe South America 508 MW 806 MW 4 South Australia Africa 764 MW 139 MW 6 Note: Does not include Senvion Installations 5 Presence in 19 countries across 6 continents
Slide 6: Business Overview
Business Overview Suzlon Group Wind Forging & Foundry Solar Manufacturing + Supply Turnkey Solution Provider Turnkey Solution Provider End-to-End Expertise Land, Approvals, Life Cycle Asset Infrastructure & PE Supply Chain EPC Management (Service) Strong Customer Relationships 6 Complete renewable s
Slide 7: Executive Board
Executive Board Tulsi Tanti, CMD • Group Strategy and Vision • Product Strategy and Marketing • Stakeholder Relationship J.P. Chalasani, Group CEO • Group Business Management • India Business (Wind and Solar) • Corporate Communication • Human Resource Kirti Vagadia, Group CFO • Group Finance • Inves
Slide 8: Executive Board
Executive Board Vinod R. Tanti, Whole Time Director & COO • Supply Chain Management • Project Execution • Global QHSE Rakesh Sarin, CEO - International Business and Global Service • International Business • Global Services • SE Forge Duncan Koerbel, CTO • Innovation • New Product Development • Globa
Slide 9: Our Vision, Mission and Values - 2022
Our Vision, Mission and Values - 2022 Vision To be the Best Renewable Energy Company in the world Work towards Social, Economic and Sustainable development to create better life for future generations Mission Deliver utility scale, best in class, end to end integrated renewable energy solutions to o
Slide 10: Agenda
Agenda Wind Business Introduction Solar Business Technology, Manufacturing & Service SE Forge Finance Vision 2022 10
Slide 11: Globally Proven In-House R&D Capabilities
Globally Proven In-House R&D Capabilities Suzlon Technology Locations: Hamburg - Development & Integration Hamburg - Certification Germany Rostock - Development & Integration Rostock - Design & Product Engineering - Innovation & Strategic Research The Netherlands Hengelo - Blade Design and Integrati
Slide 12: 2.1 MW Series: Proven Platform with 100,000,000 Operating Hours
2.1 MW Series: Proven Platform with 100,000,000 Operating Hours Higher energy yield Lower cost of energy Higher returns ~65% Increase in Energy Yield S88-80 S9X-90 S97-120 S111-90 S111-120 >5.7 GW >1.8 GW >800 MW sold >300 MW sold Prototype Installed till date Installed till date ~330 MW Installed ~
Slide 13: Hybrid Towers – Innovation at Work
Hybrid Towers – Innovation at Work Hybrid Tower - Combination of lattice and tubular • Higher hub height (120 M) at optimized cost ‒ Reduced LOCE due to higher AEP ‒ Reduced steel requirement ‒ Lower foundation cost ‒ Logistic friendly – access to sites that were earlier logistically challenging • A
Slide 14: Global Coverage - Next Generation Products
Global Coverage - Next Generation Products ~20% reduction in Wind Levelized Cost Of Electricity (LCOE) 10% LCOE Reduction 10% LCOE Reduction Over S97 Over S111 S97 S111 S128 Product S128 – 2.6 MW S128 – 3.0 MW MW Rating 2,600 kW 3,000 kW Rotor Diameter 128 meters 128 meters Tower Height 120 m - 140
Slide 15: Vertically Integrated Low Cost Supply Chain
Vertically Integrated Low Cost Supply Chain Installed Capacity (MW) - spread across 20 manufacturing & testing locations in India Manufacturing Capacity India based ~3,600 MW Nacelle and Hub Generator Foundry China JV* ~600 MW Total ~4,200 MW *Holds 25% stake in China JV Calculated based on Nacelle
Slide 16: Pan India Manufacturing Footprint
Pan India Manufacturing Footprint Blade Tower Nacelle Andhra Pradesh * Gujarat (Daman) Karnataka Madhya Pradesh Maharashtra * Rajasthan Tamil Nadu * (Puducherry) *Contract Manufacturing Reduced Logistic Time Lower Cost Lower Working Capital Days • Blade Logistics is most cos
Slide 17: Best In Class Service Capabilities
Best In Class Service Capabilities Custodian of US$ 13.5 bn • Large Operating Fleet under Service asset base worldwide – 20 years of operating history – ~15.5 GW of installations ~15 GW Under Service fold – 100% of turbine sold in India is under our service – 90+% turbine sold outside is under our s
Slide 18: Agenda
Agenda Wind Business Introduction Solar Business Markets SE Forge Finance Vision 2022 18
Slide 19: India: Strong Growth Fundamentals for Renewables
India: Strong Growth Fundamentals for Renewables Estimated India Power Demand Renewables Target 2022 Cumulative Wind Market (Billion Units) (GW) (GW) +132 GW 175 Annual Average > 5.5 GW >4000 40 60 +9% 60 43 60 27 1108 Mar-16 2022 Solar Rooftop Solar Utility Scale 2015 2030 Wind Utility Scale FY 16
Slide 20: FY16 Saw Highest Annual Wind Capacity Addition in Two Decades
FY16 Saw Highest Annual Wind Capacity Addition in Two Decades India Commissioning Volumes (MW) +26% 4,300 +48% 3,415 3,179 -19% 900 1,161 2,312 2,077 442 1,721 403 415 2,515 2,018 1,870 1,674 1,306 FY12 FY13 FY14 FY15 FY16 FY17E* Suzlon Others *FY17 E – Source: Internal Estimates 20 On a strong grow
Slide 21: Increasing Comfort of Global Institutional Customers in India Wind
Increasing Comfort of Global Institutional Customers in India Wind Installed Capacity in India (Fig in MW) CLP 981 Foreign Diversified Utility Sembcorp 726 ENEL 150 Others Tata Power 620 Domestic Diversified Utility Torrent Power 50 15% Reliance 55 PSU 10% Renew 880 OSTRO Energy 237 India Renewable
Slide 22: Key Government Initiatives: Demand Drivers
Key Government Initiatives: Demand Drivers Strengthening Grid and Future Growth Drivers Strengthening Demand Environment transmission systems (Policy Under Draft) ‒ Introducing Renewable Generation ‒ Green Corridor ‒ Wind Solar Hybrid Farms Obligation (RGO) ‒ Scheduling and Forecasting ‒ Repowering
Slide 23: Suzlon Strengths in India
Suzlon Strengths in India Full Turnkey Solution Pan India Presence Provider TARGET Strong Customer Technology Leadership Relationship REGAIN 50%+ MARKET SHARE Best In Class Service 20+ Years Track Record Capabilities 23 End-to-end service provider with strong presence across value chain & customer s
Slide 24: International Business Strength & Strategy
International Business Strength & Strategy Globally Proven Technology • Equipment Supply and Supervision Low Cost Supply Chain and Manufacturing • Cost effective manufacturing from India • Lean Management; Minimal Fixed Cost • Market with established service base • Optimize logistics cost through ma
Slide 25: International Market Roadmap
International Market Roadmap FY18 FY19 Europe Latin America FY20 North America APAC EMEA Global Wind Industry Outlook (GW) 332 GW 74 69 70 58 61 19 17 17 13 America 16 16 16 15 16 EMEA 13 33 36 37 39 APAC 30 2016E 2017E 2018E 2019E 2020E Source: BENF Q2 2016 Wind Market Outlook 25 Prioritizing marke
Slide 26: US Market Offers Substantial Opportunity
US market Offers Substantial Opportunity US Market Outlook (Annual Installations in GW) 10.1 10.5 8.6 9.3 8.4 7.5 Suzlon Strengths in USA ~15 Years of Strong Presence ~2.7 GW of Cumulative Installations 2015 2016E 2017E 2018E 2019E 2020E Proven Technology Source: MAKE Strong customer relatio
Slide 27: Solid Presence in USA – Customer & Geographic
Solid Presence in USA – Customer & Geographic 2.7 GW Installed – 1,024 WTGs Under Service Contract Nova Customer Name MW Scotia WA ME Exelon 599 VT MT ND Iberdrola 517 NH MN NY MA OR ID WI RI NRG 416 SD CT MI WY PA NJ EDPR 399 IA DE NE OH NV IL IN MD Everpower 239 UT WV CO VA CA KS MO KY Atlantic Po
Slide 28: Agenda
Agenda Introduction Wind Business Solar Business SE Forge Finance Vision 2022 28
Slide 29: Solar Foray: Turnkey Solution Provider
Solar Foray: Turnkey Solution Provider Leveraging Common Strengths in Wind for Solar Technical Strength Relationship Strength Site Development Process Regulatory Approvals EPC – Wind more complex than Solar Customers O&M – Wind more complex than solar Project Financing assistance to cust
Slide 30: Solar Bidding Status Update
Solar Bidding Status Update 100 MW CLP Deal Synopsis 515 MW • Turnkey Price Bids Won • O&M Service Charges Suzlon Arms Length Rs. 5.36 SE Solar Ltd. Per unit • Full Turnkey Solution (100 MW Veltoor Project) average tariff • 25 Years O&M 340 MW 20% Equity 80% Debt PPA Signed Suzlon CLP (51%) (49%) 10
Slide 31: Wind Solar Hybrid is the Future
Wind Solar Hybrid is the Future Improve Grid Utilization Complimentary Generation profile 1 MW Wind-Solar Hybrid 60% 40% Watts 20% Solar Hybrid Integrated Hourly Spread of a Day Key benefits of Hybrid Power (Wind and Solar) Better Grid Management Limited Investments • Improved Grid Utilization • Red
Slide 32: Agenda
Agenda Introduction Wind Business Solar Business SE Forge Finance Vision 2022 32
Slide 33: Forging & Foundry Business
Forging & Foundry Business Wind Energy 42,000 Rings P.A. forging capacity Bearings Oil & Gas 1,20,000 MTPA Power Melting Capacity Defence 55,000 MTPA Transportation Machined Casting Capacity Others 33 Well diversified clientele
Slide 34: Growth Profile
Growth Profile Revenue Diversification Future Performance Volume Growth Drivers 40% Suzlon Growing Wind Sector Customer 60% External Growing share of Non Wind Sectors Imposition of Anti Dumping duty Non Wind 6% Operating leverage Low EBITDA break-even at 20% capacity level Sector 94% Growth
Slide 35: Agenda
Agenda Introduction Wind Business Solar Business SE Forge Financial Snapshot Vision 2022 35
Slide 36: 2 Decades of Strong Operating History
2 Decades of Strong Operating History Strong Global Market Weak Global Market Weak India Market Strong India Market Strong India Market Weak Global Market Operational × High Debt Balance Turnaround Overseas India × Liability Management (MW) 2,790 × Liquidity Constraints 2,311 73% 58% 1,522 1,583 1,4
Slide 37: FY16: A turnaround year
FY16: A turnaround year Fig. in MW EBITDA (US$ Mn) Deliveries Commissioning (India) 2.5x 2.0x 1,131 900 196 21 15.7% 442 454 1,110 95 359 FY15 FY16 FY15 FY16 -25 FY15 FY16 Overseas Domestic *Exchange Rate $1 = Rs. 66 37 Increased Volume and Strong Profitability
Slide 38: An All-Round Performance Across Financial Metrics
“An All-Round Performance” – Across Financial Metrics 1,131 MW $ 1,251 M $ 196 M 149% y-o-y 69% y-o-y Margin 15.7% Volume Revenues EBITDA(2) $ 32 M $ 166 M $ 1,025 M +$330M y-o-y (41%) y-o-y 31st March (y-o-y) Cash Profit(3) Net Interest Net Debt Reduction *Exchange Rate $1 = Rs. 66 Note: (1) All In
Slide 39: Substantial debt reduction achieved in past year
Substantial debt reduction achieved in past year Consolidated Gross Debt Next 5 Year’s Maturity Profile ($ Mn) ($ Mn) (As on 30st Jun 2016) 2,826 $ Denominated (Fig. $mn) 98 Rupee Denominated 7 1,079 73 1,747 11 248 Jul’19 FCCBs 50 375 Working Capital 11 91 21 62 1,124 Term Debt 10 10 39 3 7 11 Mar
Slide 40: July 2019 FCCB Series Overview
July 2019 FCCB Series Overview FCCB Principal Value (US$ Mn) 547 Current and Diluted No. of Shares (Crs.) Current Outstanding 502 299 Pending Conversion 97 248 Post Full Conversion 599 Conversion Details Price (Per Share) Rs. 15.46 July’14 Conversions till date Current Exchange Rate Rs. 60.225 40
Slide 41: Disciplined Working Capital Levels
Disciplined Working Capital Levels Consolidated Net Working Capital Days 78 61 51 • Inventory built-up in Q1 to cater to growth volumes in FY17 • Offset by focussed receivables management Dec’16 Mar’16 Jun’16 Note: Working capital days calculated on trailing 12 months revenue 41 Disciplined Working
Slide 42: Strong Visibility for FY17
Strong Visibility for FY17 Order Book (Fig. in MW) 1470 1243 166 204 1205 265 FY16 End Q1 Net Intake Q1 Sales Volume Q1 FY17 End Post Q1 Announced Current Backlog Order Wins Backlog for Service, SE Forge and Solar is over and above 42 Strong pipeline discussions
Slide 43: Agenda
Agenda Introduction Wind Business Solar Business SE Forge Finance Vision 2022 43
Slide 44: Vision 2022
Vision 2022 Best Renewable Energy Company In the World 20 - 22 20 - 22 10 % ZERO GW % Renewable Installations LCOE Reduction Working Capital Net Term Debt • India Market CAGR: 14%+ • Wind to remain competitive Vs Solar • Suzlon to exceed market growth 44
Slide 45: Thank You
Suzlon Campus - One Earth, Pune THANK YOU Suzlon One Earth is LEED Platinum and GRIHA certified campus This campus has received the prestigious Asia Pacific Property Award in 2011 45