Suzlon Energy Ltd · NSE:SUZLON
Suzlon Energy — 9M FY2012 Earnings Presentation
44 slides from Suzlon Energy's earnings presentation, Feb 11, 2012
Slide 1: Suzlon Energy Limited 9M FY12 Earnings Presentation
Suzlon Energy Limited 9M FY 12 Earnings Presentation 11th February, 2012 Suzlon windfarm at Dhule, India 1 www.suzlon.com
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 • 9M FY12 – Group order backlog of $7.5Bn of 5,755 MW – Revenues of Rs 14,383 Crs in 9M FY12 as against Rs. 10,603 Crs in 9M FY11, a growth of ~36% – Proceeds from Hansen sale received – REpower “squeeze out” registered and Suzlon now owns 100% stake of REpower • Outlook for the Industry –
Slide 4: Contents: Suzlon Group - Key highlights 9M FY12
Contents Suzlon Group - Key highlights : 9M FY12 • Suzlon Group: Key highlights – Q4 FY2011 – Volumes continue to grow sequentially and YoY – Strong order book, improving visibility for FY2012 – Robust turbine fleet performance across the globe • Outlook for the FY2012 and beyond – Green shoots visi
Slide 5: 9M FY12 – Key takeaways
9M FY12 – Key takeaways Highest ever order backlog ~$7.5Bn (5,755 MW) - Robust high order inflows of 2,845 MW worth ~$3.7 Bn in 9M FY12 - Q3 Order inflow of ~US$1.9 Bn - International orders from North America, Europe and Brazil improve visibility of FY13 Calendar Year 11 (CY11) performance* - R
Slide 6: Financial performance snapshot
Financial performance snapshot Rs Crs. Q3 Q3 9M FY11(a) Full Year Particulars FY12 FY11 9M FY12 FY11 Unaudited Unaudited Unaudited Unaudited Audited Consolidated revenue 4,985 4,433 14,383 10,603 17,879 Consolidated EBITDA 322 182 1,200 (216) 808 Consolidated EBIT 152 40 741 (622) 151 Consolidated N
Slide 7: CY11: Improving performance
CY11: Improving performance Figures in $ Mn CY11* CY10* Particulars (Unaudited) (Unaudited) Consolidated revenue 4,332 3,337 Consolidated GP 1,420 1,104 Consolidated EBIT 303 (46) EBIT Margin 7.0% (1.4%) Order intake 5,565 4,538 * - Based on quarterly summation CY11 Key highlights: • Revenues grew b
Slide 8: Strong momentum in order inflow continues
Strong momentum in order inflow continues Significant visibility for FY13 Yearly Order inflow (MW)* Quarterly Order inflow (MW)^ +46% 1,490 4,961 +60% 339 3,395 2,647 333 775 1,473 580 242 411 349 205 818 32 21 1,573 2,072 344 343 CY10 CY11 Q1 FY12 Q2 FY12 Q3 FY12 Suzlon India Suzlon International R
Slide 9: Diversified Order inflow in CY11 – 4,961 MW
Diversified Order inflow in CY11– 4,961 MW Total value of $5.6 Bn Emerging Markets Europe North America India – 2,647 MW Germany – 384 MW USA – 618 MW Brazil - 24 MW Italy - 169 MW Canada - 657 MW Netherlands – 145 MW France – 120 MW UK – 111 MW Others – 86 MW Total: 2,671 MW Total: 1,015 MW Total:
Slide 10: Group Order book at Peak – ~5.7GW / ~$7.5Bn
Group Order book at Peak – ~5.7GW / ~$7.5Bn Strong Long term Visibility Order book in MW – 5,755 MW Order book Value Suzlon India Suzlon India • Value: $1.5Bn 1,355 (24%) Suzlon International • Value: $1.3 Bn REpower 3,348 REpower (58%) 1,052 • Value: $4.7Bn (18%) Suzlon International •Exchange rate
Slide 11: Announced framework contracts of ~4.1 GW
Announced framework contracts of ~4.1 GW 1. RWE Innogy for up to 250 units of 5 MW / 6 MW offshore turbines 1,500 MW - 295 MW already confirmed for 6M turbines announced in Jan’10 2. Frame contract with EDF Energies Nouvelles for onshore turbines 954 MW - 300 MW & 80 MW already confirmed announced i
Slide 12: Order book has well balanced exposure to strong markets and large utilities
Order book has well balanced exposure to strong markets and large utilities Order book of ~5.7GW (As on 10th February 2012) ...with majority orders from large utilities Others Private investors UK 10% India 10% China 3% 24% 4% France 9% Large utilities 4%5% 37% Brazil 5% 7% Belgium 5% 19% 17% German
Slide 13: Synergy realization and consolidation with REpower on accelerated track
Synergy realization and consolidation with REpower on accelerated track Key initiatives being executed/targeted Markets • Streamline market SBUs – One Organization, One Team & One product portfolio Key Outcomes in FY13: • Suzlon Australia and Europe operations realigned with REpower • Create regio
Slide 14: SE Forge – Stabilizing performance
SE Forge – Stabilizing performance SE Forge – Revenues (Rs Crs) Developing trends +9% • Recently signed Rs 600 Crs frame order with a 262 240 major bearing manufacturer • Signed two major third party agreements from two large wind players worth Rs 200 Crs cumulatively • Marquee client profile, from
Slide 15: Robust turbine fleet performance
Robust turbine fleet performance Outlook for the FY12 and beyond Improving global fleet availability*... ...is the result of a globally coordinated execution effort Total installations across the Globe over 10 GW OMS teams across Suzlon have worked on a program focussed on increasing availability Gl
Slide 16: Annual installations grew by 8% in 2011
Annual installations grew by 8% in 2011 Annual installations (MW) …but our key markets witnessed huge growth +8% India Germany +41% 41,235 +40% 38,265 373 3,019 2,086 389 2,139 1,493 21,298 21,450 CY10 CY11 CY10 CY11 10,281 Brazil Canada 9,918 +79% +84% 583 1,267 9,283 6,508 326 690 CY10 CY11 Rest o
Slide 17: Industry estimates for annual installations
Industry estimates for annual installations Fig in GW +11% 62.5 57.1 3.5 52.7 2.6 48.1 2.2 41.2 1.6 28.0 0.4 26.0 25.0 24.0 21.3 13.0 14.0 12.0 11.0 10.3 13.5 15.5 17.0 9.3 11.5 CY11 CY12 CY13 CY14 CY15 Source: GWEC RoW Asia (incl OECD) Europe Americas • The share of wind power in global electricity
Slide 18: Offshore: Next Big Growth Story
Offshore : Next Big Growth Story 6,355 Europe 5,601 +32% 4,230 3,206 2,460 1,212 1,071 CY10 CY11 CY12 CY13 CY14 CY15 CY16 Source: MAKE Consulting, 2011 • Offshore market’s global share in total installations will increase from ~4% in CY10 to ~11% in CY16, driven by Northern Europe and Asia • UK, Ger
Slide 19: India: 2011 is a record year of growth for Wind
India: 2011 is a record year of growth for Wind Analysts estimates market to touch ~5 GW by 2015 5,251 Actual installations +16% 4,527 3,902 +60% 3,364 2,900 2,500 1,565 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Source: World Institute for Sustainable Energy, India, 17 March, 2011 • Investment in clean ene
Slide 20: Improving momentum in Indian REC market
Improving momentum in Indian REC market – Strong driver for Wind • Growing demand of RECs to meet RPO requirements from the obligated entities • Long term certainty over the pricing range (Floor / Cap) is a positive development • Significant demand potential for RECs as the volume currently traded i
Slide 21: Western Markets making a comeback
Western Markets making a comeback Americas – Reviving US market coupled with strong growth in Canada USA: • Market size is expected to double in CY12 due to expiry of PTC and ITC benefits Canada: • Most of the provinces established wind energy targets - Ontario and Quebec expect WTG installations of
Slide 22: Huge potential unlocking in emerging markets
Huge potential unlocking in emerging markets Brazil: • In recent auction in Brazil, 39 wind farm projects were awarded with a total installed capacity of ~1 GW, in addition to the 2GW projects announced in the last auctions in August • Contracted wind projects posted some of the most competitive pri
Slide 23: Chairman's Message / Focus Areas for FY12
Chairman’s Message Mr. Tulsi Tanti, Chairman and Managing Director – Suzlon Group, said: “I am pleased to Focus Areas for FY12 report that our Group performance is steadily improving. Emerging, offshore and key matured markets are showing sustained momentum. Our strategy to focus on these markets is
Slide 24: Focus areas FY12: Turnaround year
Focus areas FY12: Turnaround year 1 2 3 4 Operational Markets Products Strategic Efficiency • Increased focus on • High penetration of • Reduction in COGS • Strengthening India, emerging new products in • Focus on cash Group’s competitive markets, select various markets generation positioning develo
Slide 25: Strengthening our position in emerging markets through end-to-end business model
Strengthening our position in emerging 1 markets through end-to-end business model • Allows customers to benefit Wind from cost-efficiencies and resources mapping economies of scale in wind Support to customers for all Land and farms site ancillary identification activities • Avoids need for custome
Slide 26: Track record of executing large end-to-end projects in India
...backed by successful track record of 1 executing large end-to-end projects in India Some of our largest wind farms in India • Installed base of 6,800+ MW in India (>1,000 MW sites in four Jaisalmer Windpark in states) Asia’s largest wind park at Rajasthan with a total Kutch, Gujarat Over 890 MW c
Slide 27: Focus on executing offshore projects
1 Focus on executing offshore projects Some of our large operational offshore projects Alpha Ventus Project, Thornton Bank Project, Germany Belgium Customer: Consortium of EWE, Customer: C-Power E.ON & Vattenfall - 6 WTGs of 5M (Phase I) - 6 WTGs of 5M - Installed in 2008 - Installed in 2009 - Next
Slide 28: High penetration of new products in various markets
High penetration of new products in various 2 markets • New products backed by proven performance and efficient processes, as well as customer-focused team: a global company with local reach • Enhancements, innovation and comprehensive design driven through the entire technology platform for even be
Slide 29: S9X turbines already installed in India and Australia
2 S9X turbines already installed in India and Australia S9X: Focus on providing higher yields at a lower cost from low wind sites Operating successfully across the world….. 2 MW-class turbines, designed for moderate to low wind regimes S9X in Australia Robust, reliable design optimized to delive
Slide 30: Complete commercially proven portfolio
2 With new products, Suzlon Group boasts a complete commercially proven portfolio 0.60 – 1.25 – 1.5 – 2.5MW 2.5 – 3.XMW 5.0 – 6.15MW 1.25MW 1.5MW India China USA / Australia / Brazil / Europe Offshore Products spanning all capacities - sub-MW to multi-MW turbines Products spanning technologies - var
Slide 31: Focus on cash generation
3 Focus on cash generation • Operations to be cash generating - Maximise volumes, focus on key markets, improvement in margins, optimisation of costs - Endeavours to generate cash from operations, while keeping investments into balance sheet at a minimum • Focused efforts to reduce working capital i
Slide 32: Suzlon owns 100% stake in REpower with successful squeeze out
Suzlon owns 100% stake in REpower with successful 4 completion of “squeeze out” Squeeze out process: Possible benefits that can accrue: Squeeze out initiated by Suzlon’s Supply chain synergies to drive down costs wholly owned subsidiary - Manufacturing and Sourcing in Low cost countries of Asia
Slide 33: Group well positioned in current market environment
Group well positioned in current market environment • India: high growth market 1 Emerging markets • Entrenched in China, Brazil • Early entrant in South Africa, Chile, Argentina and Mexico Offshore & key • Comprehensive product portfolio for Offshore 2 stable developed • Performing well in Germany,
Slide 34: Suzlon Group: Revised Guidance for FY12
Suzlon Group: Revised Guidance for FY12 Original Guidance Revised Guidance • Revenues: Rs 24,000 – 26,000 Crs • Revenues: Rs 21,000 – 22,000 Crs • EBIT Margin: 7% - 8% • EBIT Margin: 5% - 6% • Guidance revision due to: – Volumes impacted in Q3 Slow grid infrastructure ramp up in China Extended m
Slide 35: Detailed financials – Q3 FY2012
Chairman’s Message Mr. Tulsi Tanti, Chairman and Managing Director – Suzlon Group, said: “I am pleased to Detailed financials – report that our Group performance is steadily improving. Emerging, offshore and key Q3 FY2012 matured markets are showing sustained momentum. Our strategy to focus on these
Slide 36: Consolidated financial results
Consolidated financial results Rs Crs. Q3 FY12 Q3 FY11 9M FY12 9M FY11 Particulars Unaudited Unaudited Unaudited Unaudited Sales 4,986 4,433 14,383 10,603 Raw material cost 3,335 3,031 9,452 7,344 Gross Profit 1,651 1,402 4,931 3,259 Gross Profit margin 33.1% 32.0% 34.3% 31.0% Manpower cost 528 415
Slide 37: Consolidated Net Working Capital
Consolidated Net Working Capital Rs Crs. Particulars As on As on As on As on As on 31st Dec’11 30th Sept’11 30th June’11 31st Mar’11 31st Dec. ’10 Inventories 6,152 5,907 5,755 5,352 6,907 Receivables 7,323 6,332 6,131 5,915 5,010 Advances 2,533 2,229 2,145 1,956 1,915 Deposit / Advance Tax 479 475
Slide 38: Group Financial Leverage
Group Financial Leverage(a) Rs Crs. As at As at As at As at As at 31st Dec. 2011 30th Sept. 2011 30th June. 2011 31st Mar. 2011 31st Dec. 2010 Particulars SEL Consol. SEL Consol. SEL Consol. SEL Consol. SEL Consol. Wind Group Wind Group Wind Group Wind Group Wind Group (a) (a) (a) (a) (a) (a) (a) (a
Slide 39: FCCBs: Post restructuring & new issuance
FCCBs: Post restructuring & new issuance Maturity value Outstanding amount Conversion Key Terms: FCCBs (USD Mn) price (Rs.) Maturity date Coupon rate with Redemption 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 3
Slide 40: Consolidated financial results: Q3 FY12
Consolidated financial results: Q3 FY12 Rs Crs. Q3 FY12 (unaudited) (Rs Crs.) Q3 FY11 (unaudited) (Rs Crs.) Particulars Suzlon SE Forge REpower Consol. Suzlon SE Forge REpower Consol. Sales 1,955 45 3,069 4,985 2,509 91 1,903 4,433 EBITDA 6 (2) 312 322 136 8 44 182 EBITDA margin 0.3% (4.2)% 10.2% 6.
Slide 41: Consolidated financial results: 9M FY12
Consolidated financial results: 9M FY12 Rs Crs. 9M FY12 (unaudited) (Rs Crs) 9M FY11 (unaudited) (Rs Crs) Particulars Suzlon SE Forge REpower Consol. Suzlon SE Forge REpower Consol. Sales 7,221 262 7,163 14,383 6,138 240 4,411 10,603 EBITDA 456 31 713 1200 (274) 13 53 (216) EBITDA margin 6.3% 11.7%
Slide 42: Suzlon Wind: Volumes by geography
Suzlon Wind: Volumes by geography Region Q3 FY12 Q3 FY11 9M FY12 9M FY11 FY 11 Sales FY10 Sales (MW) (MW) (MW) (MW) (MW) (MW) India 275 325 974 754 1,169 688 USA 32 - 32 27 27 410 China - 73 64 181 201 182 ANZ - 57 4 57 57 128 Europe & ROW - 6 90 10 67 52 Total 307 461 1164 1029 1,521 1,460 Domestic
Slide 43: 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 31st Dec. 2011 30th Sept. 2011 30th June 2011 31st Mar. 2011 31st Dec. 2010 Acquisition loans 2,004 2,277 2,079 2,074 2,073 FCCBs 3,473 3,203 2,924 2,136 2,141 W.Cap, Capex and
Slide 44: Thank You / REpower Net Profit Reconciliation
REpower Net Profit Reconciliation Q4 FY 2011 9m FY 2011 Particulars EURO m INR Crs. EURO m INR Crs. Profit / (loss) as per REpower books 4 32 26 158 Less: Policy alignment impact (6) (36) (2) (12) Profit / (loss) before translation loss 10 68 28 171 Less: FX loss on translation of COGS Profit / (los