Suzlon Energy Ltd · NSE:SUZLON
Suzlon Energy — Q1 FY16 Earnings Presentation
30 slides from Suzlon Energy's earnings presentation, Jul 31, 2015
Slide 1: Suzlon Energy Limited Q1 FY16 Earnings Presentation
Suzlon Energy Limited Q1 FY16 Earnings Presentation 31st July 2015
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 Quarterly Performance Industry Opportunities Products & Technology Strategic Focus Detailed Financials 3
Slide 4: Q1 FY16 - Key Performance Highlights
Q1 FY16 - Key Performance Highlights 205 MW –Domestic Sales Volume 15.3% - Normalized EBITDA Margin Rs. 7,010 crs - Consolidated Net Debt (Excl. FCCB); From Rs. 14,821 crs QoQ >1,107 MW - Strong Order Book Rs. 3,070 crs –Strong liquidity position to capitalize growth opportunity Note: 1. Information
Slide 5: Business Turnaround
Business Turnaround (Rs. Crs) *PAT includes one time exceptional gain of Rs. 1,289 crs (below EBIT line item) Turnaround Commences Note: 1. Information pertains to Suzlon Wind unless otherwise stated; 55 2. Consolidated Results includes one month of Senvion’s performance, hence not comparable
Slide 6: Back in Business
Back in Business Volume: • Highest quarterly volume (205 MW) in India in last 3 years Financial Performance: • Highest quarterly normalized EBITDA and Margin at 15.3% in last 3 years • Quarterly EBIT break even after 3 years Demonstrates Order Intake: Turnaround • Net Order Intake up 28% YoY, 69% Qo
Slide 7: Domestic Volume Gains Traction
Domestic Volume Gains Traction Volume (MW) India Volumes YoY Growth 28% 239% Overseas 61 34 205 Domestic 160 105 60 35 Q1 FY15 Q2 FY15 Q3 FY15 Q4 FY15 Q1 FY16 Q1 FY16 Quarterly Sales Volume constitutes 45% of FY15 Annual Volume Delivers highest quarterly volumes in India since FY12 Note: 1. Informat
Slide 8: Reduced Debt Balance
Reduced Debt Balance As on 30th June 2015 Suzlon Consolidated Debt Overview Total Debt (Excluding FCCB) Particulars Amount Rate Maturity (Rs. Crs) 10,080 Back Ended Rupee Term Debt (Rs. Crs) Rs. 3,322 Crs. ~11% Next 3 years - Nil 3,070 $ Denominated Term Debt $689M 7,010 Credit Enhanced Bonds ($M) $
Slide 9: Service Business
Service Business External Service Revenues (Rs. Crs.) • Growing into a sizeable & highly profitable business +5.6% ― Reduces turbine volume break even level 361 342 • Annuity-like cash flows ― Non cyclical business in nature ― ~100% renewal track record • 100% track record in India ― Every turbine s
Slide 10: Result Snapshot
Result Snapshot Rs Crs Q1 FY16 Q4 FY15 Q1 FY15 Gross Profit • India volume ramp up MW Sales 205 60 221 • Improved service profitability • Execution of current orders Revenue 1,542 926 1,698 • Favorable product mix and scope Gross Profit 694 264 599 Operating Profit • After considering provisions ~3-
Slide 11: Order Book
Order Book Order Book as on 30th June 2015 India Net Order Intake QoQ Growth 69% ; YoY Growth 28% Particulars Amount Order Book Volume ~1,107 MW 188 147 Order Book Value Rs. 6,839 crs. 111 Q1FY15 Q4FY15 Q1FY16 • Huge traction seen, especially in India market • Service order backlog is over and above
Slide 12: Strong Momentum Across Customer Segments
Strong Momentum Across Customer Segments Customer Segment Wise Break-up - Order Book, Q1 Order Intake and Q1 Sales Our Key Strength in India Non IPP 11% 17% 18% • >20 years of operating history 89% 83% IPP 82% • Strong & diversified customer base • Pan India presence Order Book Q1 Intake Q1 Sales •
Slide 13: Only Player with Pan India Presence
Only Player with Pan India Presence States with Dominant IPP demand Key Drivers of Demand • Remunerative FiTs • Conducive state policies Reason for Low Non IPP Demand • Low level of industrialization States with Dominant Non IPP demand Key Drivers for Non IPP Demand • Moderate FiTs • Good Industrial
Slide 14: FCCB Conversion to Equity
FCCB Conversion to Equity FCCB Principal Value* (US$ Mn) 575.7 Current and Diluted No. of Shares (Crs) Current Outstanding 483 248.1 Pending Conversion 116 (Jul’19 series) 546.9 327.6 Post Full Conversion 599 Jul’19 Series Conversion Details 298.8 Price Rs. 15.46 per share 28.8 28.8 Exchange Rate Rs
Slide 15: Net Working Capital
Net Working Capital Net Working Capital (%) Net Working Capital (Rs. Crs.) Rs. +767 Crs. +15.8% 2.3% 109 -6.8% -399 -13.5% -658 Q1 FY15 Q4 FY15 Q1 FY16 Q1 FY15 Q4 FY15 Q1 FY16 • Increase in NWC primarily due to decrease in current liabilities Business cycle getting normalized Note: 1. Information pe
Slide 16: Contents
Contents Quarterly Performance Industry Opportunities Products & Technology Strategic Focus Detailed Financials 16
Slide 17: India Market: Government Target
India Market: Government Target India plans to increase wind capacity to 60,000 MW by March 2022 • Translates into > 5,000 MW of annual market size +36,600 MW — More than double the size of FY15 market (~2,300 MW) 60,000 MW • Key Initiatives taken: — Reinstatement of key incentives (AD, GBI) — Green
Slide 18: India Market: A Huge Opportunity
India Market: A Huge Opportunity Annual Wind Installations (MW) - India Growing wind competitiveness and increasing preferential tariffs SME + PSU + Captive + IPP + PSU IPP + PSU + SME + Captive SME + PSU + Captive Emergence of IPP Suzlon +33% -10% 4,100 +29% 3,500 3,179 2,345 1,161 2,312 2,077 1,56
Slide 19: Key Strengths in India: Unique Leadership Position
Key Strengths in India: Unique Leadership Position 01 Pan India Presence • Large project pipeline across states • Presence across customer segments • >1,700 satisfied customer base • High repeat business potential 05 02 Strong Track Record Technology Leadership • 18+ years of leadership in India • I
Slide 20: Global Industry Overview
Global Industry Overview Global Wind Industry Installations (GW) +31% 58 • Wind approaching grid parity 49 5 5 ― Wind energy not linked to oil 11 34 11 ― Oil contributes only 4% of world power 3 14 11 11 • Installations to reach record high in 2015 4 25 ― US, China and India to drive the growth 20 1
Slide 21: Contents
Contents Quarterly Performance Industry Opportunities Products & Technology Strategic Focus Detailed Financials 21
Slide 22: S111: Moving Towards Bigger Turbines and Better Yields
S111: Moving Towards Bigger Turbines and Better Yields 2MW series evolution Higher energy yield Lower cost of energy Higher returns 33% Increase in Energy Yield S97-90 S97-120 S111-90 S111-120 ~900 MW already Prototype Installed Prototype Installed Next year Launch installed till date >300 MW sold F
Slide 23: Hybrid Towers: First of its Kind
Hybrid Towers: First of its Kind Hybrid Tower: Combination of lattice and tubular • Higher hub height (120 M) at optimized cost • 10-12% increase in annual generation • Optimized logistical solution • Available in S97 and S111 product suite • Over 300MW orders already received • Prototype installed
Slide 24: Contents
Contents Quarterly Performance Industry Opportunities Products & Technology Strategic Focus Detailed Financials 24
Slide 25: Strategic Focus
Strategic Focus High growth, High volume, Better margin markets only • Focus on the Indian market as well as North America, China and Brazil Superior Technology • Continued focus on R&D aimed at reducing cost of energy Increasing Market Competitiveness Best in Class Service; Growing Service business
Slide 26: Contents
Contents Quarterly Performance Industry Opportunities Products & Technology Strategic Focus Detailed Financials 26
Slide 27: Income Statement
Income Statement Rs Crs. Particulars Q1 FY16 Q1 FY15 Q4 FY15 FY15 Revenue from operations 1,542 1,698 926 4,883 Less: COGS 848 1,099 662 3,138 Gross Profit 694 599 264 1,745 Margin % 45.0% 35.3% 28.5% 35.7% Employee benefits expense 192 198 161 747 Other expenses (net) 289 411 273 1,336 Exchange Los
Slide 28: One Time Exceptional Gain – Senvion Related
One Time Exceptional Gain – Senvion Related Exceptional gain primarily pertains to release of foreign currency translation reserve (FCTR) due to currency impact Reversal on account of Senvion Impairment Provision 1,289 Release on account of investment, Sale and deconsolidation of Senvion Rationale f
Slide 29: Working Capital
Working Capital Rs Crs. As on Particulars 30th Jun 2015 31st Mar 2015 31st Dec 2014 30th Sep 2014 30th June 2014 Inventories 1,699 1,639 1,630 1,683 1,734 Trade receivables 1,665 1,614 1,796 1,928 1,985 Loans & Advances and Others 1,630 1,809 1,897 2,184 2,184 Total (A) 4,995 5,061 5,323 5,795 5,902
Slide 30: Thank You
THANK YOU S111 Turbine, USA S-111 I One of the largest commercially available rotor diameters in India 30