Suzlon Energy Ltd · NSE:SUZLON
Suzlon Energy — FY2012 Earnings Presentation
48 slides from Suzlon Energy's earnings presentation, May 25, 2012
Slide 1: Suzlon Energy Limited FY12 Earnings Presentation
Suzlon Energy Limited FY12 Earnings Presentation 25th May, 2012 REpower offshore project : Beatrice 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 • Full Year FY12 – Group order backlog of $7.4 Bn of 5.7 GW – Guidance for FY12 achieved – Turbine availability consistently above 97% – REpower 100% ownership achieved • Industry Outlook – Industry estimates suggests 7%+ growth over next five years – Emerging markets and Offshore to lead g
Slide 4: Contents: Suzlon Group - Key highlights FY12
Contents Suzlon Group - Key highlights : 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 visible
Slide 5: FY12 – Key takeaways
FY12 – Key takeaways Operational Full Year FY12 performance - Revenues Rs 21,082 Crs against FY11 revenues of Rs 17,879 Crs - EBIT of Rs 1,160 Crs in FY12, against Rs 390 Crs in FY11, ~200% growth - Order intake of ~3,817 MW including offshore order inflow of 344 MW - Emerged as 4th largest WTG su
Slide 6: We are now the 4th largest wind player in the world
We are now the 4th largest wind player in the world Ranking 2010 Ranking 2011 Strengthened global position # 4 in the Global Wind Market # 2 in Offshore # 4 in Asia 4 # 1 in India # 1 Australia 5 # 4 in Americas # 4 in USA # 5 in Europe # 2 in Italy & France # 3 in Germany & UK # 4 in Portugal & Spa
Slide 7: Financial performance snapshot
Financial performance snapshot Rs Crs. Q4 Q4 Full Year Full Year Particulars FY12 FY11 FY12 FY11 Unaudited Unaudited Audited Audited Consolidated revenue 6,699 7,276 21,082 17,879 Consolidated EBITDA 403 1,074 1,821 1,047 Consolidated EBIT 202 823 1,160 390 Consolidated Net Working Capital 4,255 3,1
Slide 8: Improving Performance
Improving Performance Revenues (Rs Crs) Gross margins (%) EBIT (Rs Crs) +18% +10% +197% 5.5% 21,082 33.2 1,160 30.3 17,879 2.2% 390 FY11 FY12 FY11 FY12 FY11 FY12 Figures in bracket show EBIT margins Revenues growing in a Gross margins improving Resulting in healthy EBIT difficult market due to: due
Slide 9: Performance against Guidance
Performance against Guidance Guidance FY12 Actual Performance • Revenues: Rs 21,000 – 22,000 Crs As per New Schedule VI format* • EBIT Margin: 5% - 6% • Revenues: Rs 21,082 Crs • EBIT Margin: 5.5% As per Old Schedule VI format • Revenues: Rs 21,082 Crs • EBIT Margin: 4.2% Performance in line despi
Slide 10: Update on FCCB obligations
Update on FCCB obligations ($ Mn) Jun 2012 Jun 2012 Oct 2012 Oct 2012 FCCBs due in FY13 (Old) (New) Total (Old) (New) Total Principal amount 211 36 247 121 21 142 Redemption amount 307 53 360 176 33 209 Total FY 13 FCCB Liability- $ 569 Mn Already at advanced stages of raising up to $300mn from ba
Slide 11: Rebalancing Human Resources based on market needs
Rebalancing Human Resources based on market needs FY11 Group headcount breakup FY12 Group headcount breakup 2,330 2,795 (18.0%) (21.6%) 1,830 1,200 (14.2%) (9.3%) 8,761 8,956 (67.8%) (69.2%) Total Headcount: 12921 Total Headcount: 12951 Suzlon India Suzlon International REpower Re-aligning our hum
Slide 12: Challenges - FY12
Challenges - FY12 - Working capital higher than anticipated - Key reasons included: Working - US receivables Capital - Inventory in Europe - Higher commissioning pipelines in India in Q4 - Interest costs up by ~20% YoY - Key reasons included: Interest Cost - Higher interest rates in India: interest
Slide 13: Order backlog summary
Order backlog summary Order backlog Firm Order book - $ 7.4Bn Service Order book - ~$2 Bn SE Forge - $210mn • 5.7 GW • Spanning over 15 years+ • NON SUZLON Long term • Spanning over 3 years agreements spanning over 5 years • Well diversified exposure to countries and clients Additional Frame agreeme
Slide 14: Order book – Momentum Continues
Order book – Momentum Continues Total value of $7.4 Bn Fig in MW • Robust order intake of 3,817 MW Suzlon India • Order book at ~5.7 GW 1,169 (up 24% YOY) (20%) • Order book value: 887 - Suzlon India - $1.2bn 3,675 (15%) Suzlon International - Suzlon International – $1.1bn (64%) REpower - REpower -
Slide 15: Growing Service order backlog
Growing Service order backlog Service backlog at ~$2bn+ Scheduled OMS Revenue stream ($ mn) Global Turbine Availability – above par Total installations over 19 ,000 MW across 28 countries Suzlon REpower 99% 755 98% (40%) 97% 1,137 (60%) 96% 95% Feb-12 Jun-11 Apr-11 Jul-11 Aug-11 Dec-11 Oct-11 Nov-11
Slide 16: Announced framework contracts of ~5.3 GW
Announced framework contracts of ~5.3 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 - Total 543 MW converted to orders 3. Frame ag
Slide 17: 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 24th May 2012) ...with majority orders from IPPs and large utilities Others 10% India UK 5% 20% China 30% 9% France 3% 3%5% Brazil 5% 7% 58% Belgium 6% 19% 24% 12% Germany 11% Canada 13% USA IPP U
Slide 18: Diversified Order inflow in FY12– 3,817 MW
Diversified Order inflow in FY12– 3,817 MW Emerging Markets Europe North America India – 1,188 MW Germany – 671 MW USA – 587 MW Brazil - 146 MW Italy - 128 MW Canada - 237 MW Sri Lanka – 21 MW Netherlands – 133 MW France – 139 MW UK - 200 MW Others – 368 MW Total: 1,354 MW Total: 1,639 MW Total: 824
Slide 19: Improving Product Portfolio
Improving Product Portfolio FY12 saw a series of product launches aimed at higher efficiencies and lowering cost of generation S8X – 1.5 MW Class III Low wind sites MM100 – 1.8MW developed for low wind sites Designed specifically for Indian market Developed specifically for low wind locations
Slide 20: Increased bank facilities exhibit support and confidence of our lenders
Increased bank facilities exhibit support and confidence of our lenders behind the Group Incremental ~$350mn working capital facility at Suzlon Wind level in FY12: - Financing based on future growth plans of the company - Facility will enable smooth execution of our order book - Evidence of solid fa
Slide 21: Outlook for the FY13 and beyond
Outlook for the FY13 and beyond Suzlon windfarm at Dhule, India 21 www.suzlon.com
Slide 22: Annual installations grew by 6% in 2011
Annual installations grew by 6% in 2011 Annual installations (MW) …but our key markets witnessed huge growth +6% India Germany 41,713 +54% 39,404 909 +29% 655 3,300 2,007 2,139 1,551 21,005 21,130 CY10 CY11 CY10 CY11 10,226 Brazil Canada 10,980 +79% +84% 583 1,267 9,573 6,639 326 690 CY10 CY11 Rest
Slide 23: Industry estimates for annual installations
Industry estimates for annual installations Fig in GW +7% +24% 57.0 54.7 50.1 51.7 1.4 47.6 1.4 0.9 1.4 40.5 1.3 0.1 27.2 27.9 22.4 26.4 25.1 20.9 13.0 14.3 15.2 13.4 10.6 13.0 9.0 13.8 10.5 11.9 12.5 8.2 CY11 CY12E CY13E CY14E CY15E CY16E ROW Asia Europe Americas Source: MAKE • Growth rates globall
Slide 24: Offshore: Next Big Growth Story
Offshore : Next Big Growth Story 6,008 5,075 +46% 3,816 2,821 1,990 920 CY11 CY12E CY13E CY14E CY15E CY16E Source: MAKE • Offshore market’s global share in total installations will increase from ~1% in CY11 to ~9% in CY16, driven by Northern Europe and Asia • UK, Germany, France, Belgium and China t
Slide 25: India will continue to grow backed by REC model
India will continue to grow backed by REC model Wind Potential Recent C-WET estimates suggest the installable potential of wind power in the country at 80M hub height against 50M earlier, at above 100 GW Earlier 49,130 +109% - Cumulative installed capacity in India is only ~16 GW Latest 102,788 as
Slide 26: Western Markets making a comeback
Western Markets making a comeback Americas – Booming 2012 for USA but poor visibility for 2013 USA: • About to experience the biggest year for installed, more than what was achieved in 2009. • Visibility beyond 2012 is poor due to expiry of cash grants & PTC Canada: • Most of the provinces establish
Slide 27: Huge potential unlocking in emerging markets
Huge potential unlocking in emerging markets Brazil: Annualized Tenders drive market uptake • Leader in South American wind energy market installing 583 MW of capacity in 2011, an increase over 90% from the year before • In recent auction in Brazil, 39 wind farm projects were awarded with a total in
Slide 28: Chairman's Message / Focus Areas for FY13
Chairman’s Message Mr. Tulsi Tanti, Chairman and Managing Director – Suzlon Group, said: “I am pleased to Focus Areas for FY13 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 29: Focus areas: Specific Priorities for FY13
Focus areas Specific Priorities for FY13 1 2 3 Strengthening Balance Markets REpower Sheet • Strengthening position in • Accelerate operating • Meeting all debt high growth/high margin synergies realisation obligations markets like • Realize market synergies • Achieve significant debt India, emergin
Slide 30: Strengthening our position in emerging markets through end-to-end business model
Strengthening our position in emerging markets 1 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 Land and site farms for all identification ancillary activities End to end • Avoids need
Slide 31: Track record of executing large end-to-end projects in India
...backed by successful track record of executing 1 large end-to-end projects in India Some of our largest wind parks in India India’s largest wind park in • Installed base of 7,357+ MW in Wind park at Kutch, Gujarat Over 967 Jaisalmer, Rajasthan with a India (>1,000 MW in four states) MW & expandin
Slide 32: Significant progress made in the Offshore Segment
1 Significant progress made in the Offshore Segment Partner of choice for True offshore (“Far offshore”) • Installed ~200 MW of offshore turbines till date • Offshore order book stands at 1,038 MW valued at $1.9Bn • Strong expertise in deep offshore installations with > 32m water depth and > 50KM
Slide 33: World's Largest Turbine
Super-sized 6.15MW Wind Turbine up and 1 running Installation of the world’s largest and most powerful offshore wind turbine, with a rated power of 6.15MW, off the coast of Belgium. It is the first of 48 such new-generation turbines being erected at the Thornton Bank Wind Farm, a project being under
Slide 34: Synergy realization and consolidation with REpower on accelerated track
Synergy realization and consolidation with 2 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 r
Slide 35: Improving Balance Sheet
3 Improving Balance Sheet Majority Group debt at India level , with assets across the globe Potential for debt rebalancing Our international assets are relatively debt free Suzlon + REpower synergies adds substantial value to our international assets - Making it a strong investment case High
Slide 36: Group well positioned in current market environment
Group well positioned in current market environment • India: high growth/high margin market 1 Emerging markets • Entrenched in Brazil, South Africa Offshore & key • Comprehensive product portfolio for Offshore 2 stable developed • Performing well in Germany, Canada, France, UK and Turkey markets Glo
Slide 37: Suzlon Group: Guidance for FY13
Suzlon Group: Guidance for FY13 Rs Crs Guidance backed by: Historical FY11 FY12 • Robust order book and scheduled Revenue 17,879 21,082 deliveries – Order coverage of 80 - 90% for FY13 Guidance EBIT Margin 2.2% 5.5% • Low cost supply chain based in Asia • Entrenched in high growth / high Guidance FY
Slide 38: Detailed financials – Q4 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 Q4 FY2012 matured markets are showing sustained momentum. Our strategy to focus on these
Slide 39: Consolidated financial results (New Schedule VI)
Consolidated financial results (New Schedule VI format) Rs Crs. Particulars 4QFY12 Unaudited 4QFY11 Unaudited FY12 Unaudited FY11 Unaudited Revenue from operations 6,699 7,276 21,082 17,879 Less: COGS 4,622 5,110 14,074 12,454 Gross Profit 2,077 2,166 7,009 5,425 Gross Profit % 31% 30% 33% 30% Emplo
Slide 40: Consolidated financial results (Old Schedule VI)
Consolidated financial results (Old Schedule VI format) Rs Crs. Particulars 4QFY12 Unaudited 4QFY11 Unaudited FY12 Unaudited FY11 Audited Revenue from operations 6,699 7,276 21,082 17,879 Less: COGS 4,622 5,110 14,074 12,454 Gross Profit 2,077 2,166 7,009 5,425 Gross Profit % 31% 30% 33% 30% Employe
Slide 41: Consolidated Net Working Capital (New Schedule VI)
Consolidated Net Working Capital (New Schedule VI format) Rs Crs. As on As on Particulars 31st Mar’12 31st Mar’11 Current investments 64 945 Inventories 5,580 5,352 Trade receivables 5,315 3,356 Short-term loans and advances 1,912 1,347 Due from customers 2,861 1,679 Other current assets 109 53 Tota
Slide 42: Consolidated Net Working Capital (Old Schedule VI)
Consolidated Net Working Capital (Old Schedule VI format) Rs Crs. Particulars As on As on As on As on As on 31st Mar’12 31st Dec’11 30th Sept’11 30th June’11 31st Mar’11 Inventories 5,580 6,005 5,907 5,755 5,352 Receivables 8,201 7,565 6,332 6,131 5,915 Advances 2,368 2,533 2,229 2,145 1,973 Deposit
Slide 43: Group Financial Leverage
Group Financial Leverage(a) Rs Crs. As at As at As at As at As at 31st Mar. 2012 31st Dec. 2011 30th Sept. 2011 30th June. 2011 31st Mar. 2011 Particulars SEL SEL Consol. SEL Consol. SEL Consol. SEL Consol. Consol. Wind Wind Group Wind Group Wind Group Wind (a) Group (a) (a) (a) (a) (a) (a) (a) Grou
Slide 44: Suzlon Wind: Financial leverage
Suzlon Wind: Financial leverage(a) INR Cr. Balance as on Balance as on Balance as on Balance as on Balance as on Debt type 31st Mar. 2012 31st Dec. 2011 30th Sept. 2011 30th June 2011 31st Mar. 2011 Acquisition loans 1,920 2,004 2,277 2,079 2,074 FCCBs 3,327 3,473 3,203 2,924 2,136 W.Cap, Capex and
Slide 45: FCCBs: Post restructuring & new issuance
FCCBs: Post restructuring & new issuance Maturity value Key Terms: FCCBs Outstanding amount (USD Mn) Conversion 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 46: Suzlon Wind: Volumes by geography
Suzlon Wind: Volumes by geography Region Q4 FY12 Q4 FY11 FY12 FY11 (MW) (MW) (MW) (MW) India 391 415 1366 1169 USA 27 0 59 27 Brazil 0 0 90 6 China 0 20 64 201 ANZ 0 0 4 57 Europe & ROW 0 57 0 61 Total 419 492 1583 1521 Domestic 93% 84% 86% 77% International 7% 16% 14% 23% 46 www.suzlon.com
Slide 47: Suzlon Consolidated Balance sheet
Suzlon Consolidated Balance sheet (As per new Schedule VI format) Rs Crs. Liabilities FY 2012 FY 2011 Assets FY 2012 FY 2011 Shareholders' Fund Non Current Assets a) Share Capital 355 355 a) Fixed Assets 12,602 11,332 b) Reserves and Surplus 4,825 6,170 b) Non Current Investments 33 22 5,181 6,526 c
Slide 48: 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