Suzlon Energy Ltd · NSE:SUZLON
Suzlon Energy — Q4 FY2011 Earnings Presentation
46 slides from Suzlon Energy's earnings presentation, May 14, 2011
Slide 1: Suzlon Energy Limited Q4 FY 2010-11 Earnings Presentation
Suzlon Energy Limited Q4 FY 2010-11 Earnings Presentation 14th May, 2011 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 • Suzlon Group: Key highlights – Volumes & EBIT continues to improve – Starting FY12 with strong order book backed by meteoric rise in order flows in India – Key milestones achieved during FY11 – Turbine availability– consistently above par – SE Forge – on a growth curve • Outlook for FY12
Slide 4: Suzlon Group - Key highlights: Q4 FY2011
Contents Suzlon Group - Key highlights : Q4 FY2011 • 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 vi
Slide 5: Financial performance snapshot
Financial performance snapshot INR Crs. Q4 Q4 Full Year Full Year Particulars FY11 FY10 FY11 FY10 Unaudited Unaudited Unaudited Unaudited(a) Consolidated revenue 7,276 6,084 17,879 18,133 Consolidated EBITDA 1,024 535 808 703 Consolidated EBIT 773 390 151 220 Net Working Capital 3,788 4,872 Net Debt
Slide 6: Q4 performance confirms the upward trend
Q4 performance confirms the upward trend Consolidated Revenues (Rs Crs) Consolidated EBITDA (Rs Crs) Consolidated EBIT (Rs Crs) +20% +91% +98% 7,276 1,024 773 6,084 535 390 Q4 FY10 Q4 FY11 Q4 FY10 Q4 FY11 Q4 FY10 Q4 FY11 6 www.suzlon.com
Slide 7: Improvement in performance
Improvement in performance Evolution of Consolidated EBITDA Margin Evolution of Consolidated PAT (Rs Crs) 14.1% 432 8.8% 14 4.9% 3.9% 4.1% 2.5% -188 0.3% -254 -356 -369 -453 -22.8% -912 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Reduction in other Expenses* (Rs Crs) Key highlights 3,679 3,174 -505 • Tighter cost contr
Slide 8: Group order book
Group order book Firm Group order book Announced framework contracts Suzlon Group • 300 MW business agreement with Techno Electric • Total MW: 4,639 MW : • 225 MW framework agreement with EUFER • Value: $6.7bn (JV between ENEL Green Energy and Union Fenosa) for Spain Suzlon Wind • RWE Innogy for up
Slide 9: Order book update – momentum continues
Order book update – momentum continues Suzlon Group Year End* order book* (MW) Developing trends 4,639 2,780 2,882 1,353 +60% • Largest annual Order 75 230 877 Intake of 4, 026 MW 1,388 896 2,409 (Suzlon Wind 2626 MW) 1,317 1,756 FY09 End* FY10 End* FY11 End* • Robust Order book, up 60% Suzlon Wind
Slide 10: Key milestones achieved in FY11
Key milestones achieved in FY11 Key milestones Operational Strategic Financial • Suzlon Group: Largest yearly order • “Squeeze-out” • Successful issuance of FCCBs intake booked in last three years: threshold of 95% of $175mn for strategic 4,026 MW, with Suzlon wind achieved in REpower initiatives ac
Slide 11: Turbine availability - consistently above par
Turbine availability* - consistently above par Global availability – above par Fully dedicated global OMS team for coordinated execution effort Total installations over 17 GW across 32 countries OMS teams across Suzlon have worked on a program focussed on increasing availability Suzlon REpower 99% •
Slide 12: SE Forge – on a growth curve
SE Forge – on a growth curve SE Forge – Revenues (Rs Crs) Developing trends +244% +141% • Improving volumes 358 118 • High operational leverage • Proportion of non Suzlon 49 business increasing 104 • Widening product portfolio FY10 FY11 Q4 FY10 Q4 FY11 • Marquee client profile, SE Forge – EBITDA (Rs
Slide 13: Robust turbine fleet performance; Outlook for FY12 and beyond
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 14: Industry estimates for annual installations
Industry estimates for annual installations Europe Americas Asia (incl OECD) RoW 64,059 +14% 58,304 52,598 17,675 48,152 16,211 14,768 40,018 12,728 15,372 33,995 10,369 14,313 12,165 9,664 12,897 9,189 7,344 26,280 29,672 24,200 20,035 21,427 16,658 331 425 1,100 1,465 1,500 1,340 2010 2011 2012 20
Slide 15: Industry estimates for offshore installations
Industry estimates for offshore installations 5,857 Europe RoW +37% 4,926 4,529 3,800 3,256 2,628 3,211 2,070 1,212 1,413 911 1,901 1,715 2,057 907 1,186 305 502 CY10 CY11 CY12 CY13 CY14 CY15 Source: MAKE Consulting, 2011 • Offshore market’s global share in total installations will increase from ~3.
Slide 16: India: market to touch ~5 GW by 2015
India: 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: Presentation from World Institute for Sustainable Energy, India, 17 March, 2011 • The World Institute for Sustainable Energy, In
Slide 17: Emerging economies continue to grow strongly
Emerging economies continue to grow strongly Emerging Economies - Growth continues with strong policy push China: • Again a year of record installations, dominated by domestic players • 12th Five Year Plan sets a target of 90 GW of wind installations by 2015 • China is targeting wind power capacity
Slide 18: Developed western economies gaining momentum
Developed western economies gaining momentum Americas - Growth in Canada and Brazil to offset sluggish US market USA: • Annual installations dropped by ~50% in 2010, mainly due to ongoing recession & delays in project financing • Industry buffeted by tepid order inflows and uncertainty over federal
Slide 19: Few economies showing some early promise
Few economies showing some early promise Rest of the World - Positive developments continue South Africa: • Approved RE feed-in tariff of ZAR1.25 per KWh • South Africa Wind Association targets to achieve 25% of total generation from wind by 2025 Australia: • Australia saw a huge drop in installatio
Slide 20: 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 21: 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 Product • Strengthening India, emerging new products in costs Group’s markets and Offshore various markets • Focus on cash competitive • Higher revenu
Slide 22: Strengthening 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 23: 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 6,200+ MW in India (>1,000 MW sites in four Jaisalmer Windpark in states) Asia’s largest wind farm at Rajasthan with a total Kutch, Gujarat Over 850 MW c
Slide 24: 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 - Avail
Slide 25: 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 with a global company and local reach • Enhancements, innovation and comprehensive design driven through the entire technology platform for even
Slide 26: Complete commercially proven portfolio
2 With new products, Suzlon Group boasts of 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 -
Slide 27: Focus on cash generation
3 Focus on cash generation • Operations to be cash generating - Maximise volumes - Endeavours to generate cash from operations, while keeping investments into balance sheet at a minimum • Focused efforts to reduce working capital intensity - Reduce debtor days, with efforts to recover slow moving de
Slide 28: Completion of squeeze-out in REpower
4 Completion of “squeeze-out” in REpower Status update on Squeeze out process: Squeeze out initiated by Suzlon’s wholly owned subsidiary AE-Rotor Holding B.V. (“AERH”) Valuation auditor appointed by AERH Independent valuation auditor has also been appointed by German Court Annual General Meeting
Slide 29: Group well positioned in current market environment
Group well positioned in current market environment • India: A 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 • Performing well in Germany, France, UK, It
Slide 30: Suzlon Group: Guidance for FY12
Suzlon Group: Guidance for FY12 • Revenues: Rs 24,000 – 26,000 Crs ($5.3bn – $5.8bn) • EBIT Margin: 7%-8% 30 Assuming exchange rate $/Rs - 45 www.suzlon.com
Slide 31: Chairman's Message; Detailed financials – Q4 FY2011
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 Q4 FY2011 matured markets are showing sustained momentum. Our strategy to focus on these
Slide 32: Consolidated financial results
Consolidated financial results (Suzlon Wind + SE Forge + Hansen + REpower) INR Cr. Q4 FY11 Q4 FY10 Full Year 2011 Full Year 2010 Particulars Unaudited Unaudited Unaudited Audited(a) Sales 7,276 6,084 17,879 20,620 Raw material cost 5,110 3,822 12,454 13,628 Gross Profit 2,166 2,262 5,425 6,992 Gross
Slide 33: Consolidated financial results - Q4 FY11
Consolidated financial results - Q4 FY11 Q4 FY11 (unaudited) (INR Cr.) Q4 FY10 (unaudited) (INR Cr.) Particulars Suzlon SE Forge Hansen REpower Consol. Suzlon SE Forge Hansen REpower Consol. Sales MW 492 650 Sales 3,037 118 -- 4,204 7,276 4,150 49 -- 1,923 6,084 Raw material cost 1,953 67 -- 3,174 5
Slide 34: Consolidated financial results: Full Year
Consolidated financial results: Full Year FY11 (unaudited) (INR Cr.) FY10 (unaudited) (INR Cr.) Particulars Suzlon SE Forge Hansen REpower Consol. Suzlon SE Forge Hansen REpower Consol. Sales MW 1,521 2,372 1,460 2,323 Sales 9,175 358 -- 8,615 17,879 9,635 104 2,656 8,502 20.620 Raw material cost 6,
Slide 35: Consolidated financial results ex Hansen
Consolidated financial results ex Hansen INR Cr. Consolidated – Ex Hansen Consolidated – Ex Hansen Particulars FY11 FY10 Q4 FY11 Q4 FY10 Sales 17,879 18,133 7,276 6,084 Raw material cost 12,454 12,353 5,110 3,822 Gross Profit 5,425 5,780 2,166 2,262 Gross Profit margin 30.34% 31.88% 29.77% 37.18% Ma
Slide 36: Suzlon Group order book
Suzlon Group order book Orders as on New Sales in Orders as on Region Sales in FY10 Sales in FY09 Sales in FY08 04/02/11 Orders Q4 FY11 13/05/11 India 1,624 144 415 1,353 688 749 975 USA 246 0 0 246 410 989 593 China 324 0 20 304 182 249 134 ANZ 4 0 0 4 128 430 143 Europe 162 0 57 105 53 166 298 S.
Slide 37: Consolidated: NWC improving
Consolidated: NWC improving INR Cr. Particulars As on As on As on As on As on 31st Mar’11 31st Dec. ’10 30th Sept. ’10 30th Jun ’10 31st Mar ‘10 Inventories 5,352 6,907 6,321 5,890 5,994 Receivables 5,915 5,010 4,283 4,428 6,192 Advances 1,956 1,915 2,268 1,771 1,684 Deposit / Advance Tax 393 370 31
Slide 38: Suzlon Wind: Net Working Capital
Suzlon Wind: Net Working Capital INR Cr. Particulars As on As on As on As on As on 31st March’11 31st Dec. ’10 30th Sept. ’10 30th Jun ’10 31st Mar ‘10 Inventories 3,144 3,241 3,013 2,910 2,877 Receivables 4,156 4,180 3,304 3,798 4,726 Advances 1,272 1,266 1,578 1,209 1,187 Deposit / Advance Tax 391
Slide 39: Suzlon Wind: Volumes by geography
Suzlon Wind: Volumes by geography Region FY 11 Sales FY10 Sales FY09 Sales (MW) (MW) (MW) India 1,169 688 749 USA 27 410 989 China 201 182 249 ANZ 57 128 430 Europe & ROW 67 52 373 Total 1,521 1,460 2,790 Domestic 76% 47% 26% International 24% 53% 74% India business again becoming dominant in overal
Slide 40: Group Financial Leverage
Group Financial Leverage As at 31st Mar. 2011 As at As at As at As at 31st Dec. 2010 30th Sept. 2010 30th June 2010 31st March 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) (a) (a) G
Slide 41: 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 Mar. 2011 31st Dec. 2010 30th Sept. 2010 30th June 2010 31st March 2010 Acquisition loans 2,074 2,073 2,085 2,155 2,083 FCCBs 2,136 2,141 2,153 2,225 2,151 W.Cap, Capex an
Slide 42: FCCBs: Post restructuring & new issuance
FCCBs: Post restructuring & new issuance Outstanding amount Conversion Redemption Key Terms: FCCBs (USD mln) price (Rs.) Maturity date Coupon rate 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
Slide 43: Consolidated Balance Sheet: Sources of Funds
Consolidated Balance Sheet: Sources of Funds FY11 FY10 Particulars Unaudited (a) Audited (b) Share Capital 355 311 Employee Stock options 20 16 Reserves and Surplus 6,361 6,274 Shareholders’ funds 6,736 6,601 Preference share issued by subsidiary company 3 3 Minority Interest 307 328 Loan Funds 12,2
Slide 44: Consolidated Balance Sheet: Applications of Funds
Consolidated Balance Sheet: Applications of Funds INR Cr. FY11 FY10 Particulars Unaudited Audited Gross block 13,023 11,538 Less: Accumulated depreciation / amortization 2,028 1,377 Net block 10,995 10,161 Capital work-in-progress 336 413 Net Fixed Assets (including intangible assets) 11,331 10,574
Slide 45: REpower Net Profit Reconciliation
REpower Net Profit Reconciliation Q4 FY 2011 FY 2011 Particulars EURO m INR Crs. EURO m INR Crs. Profit / (loss) as per REpower books 30.1 184 56.3 343 Less: Policy alignment impact (16.1) (77) (18.1) (88) Profit / (loss) before translation loss 46.2 261 74.4 431 Less: FX loss on translation of COGS
Slide 46: Thank You
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