Suzlon Energy Ltd · NSE:SUZLON
Suzlon Energy — Q2 FY2017 Earnings Presentation
36 slides from Suzlon Energy's earnings presentation, Nov 11, 2016
Slide 1: Suzlon Energy Limited Q2 & H1 FY17
Suzlon Energy Limited Q2 & H1 FY17 11 November 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 Q2 & H1 FY17 Order Book Debt Overview Highlights Technology Update Industry Opportunity Detailed Financials 3
Slide 4: Q2 FY17 Financial Performance Highlight
Q2 FY17 Financial Performance Highlight IND AS Rs. 238 Cr (8.7% Margin) Growth: +498 Cr Q-o-Q +439 Cr y-o-y Net Profit Rs. 2,746 Cr Rs. 586 Cr (21.3% Margin) Growth: Growth: 66% Q-o-Q 242% Q-o-Q 57% y-o-y 101% y-o-y Revenues EBITDA (Pre-Fx Gain / Loss) 4 Operating leverage and favorable revenue mix
Slide 5: Volume Trend
Volume Trend IND AS (MW) Revenue Recognition Volumes Quarterly Growth Half Yearly Growth H1 is typically 30-35% of +56% full year volumes 353 +29% +73% 1,131 227 204 557 431 Q2 FY16 Q1 FY17 Q2 FY17 H1 FY16 FY16 H1 FY17 FY17 5 Growth momentum continues
Slide 6: Profitability Metrics
Profitability Metrics IND AS (Rs. Cr) EBITDA (Pre-Fx Gain / Loss) Net Profit +498 +101% 238 586 291 +242% 171 17% 10% 21% -202 -260 Q2 FY16 Q1 FY17 Q2 FY17 Q2 FY16 Q1 FY17 Q2 FY17 Revenue Type Margin Profile EPC Lowest Blended Margins WTG driven primarily by mix of revenue type SEFL Service Highest
Slide 7: Result Snapshot (Consolidated)
Result Snapshot (Consolidated) IND AS (Rs. Cr) Particulars Q2 FY17 Q1 FY17 Q2 FY16 H1 FY17 H1 FY16 Limited Review Limited Review Unaudited Limited Review Unaudited Revenue 2,746 1,650 1,746 4,396 4,333 Gross Profit 1,281 735 807 2,016 1,836 Gross Margin 46.6% 44.6% 46.2% 45.9% 42.4% Employee Expense
Slide 8: Net Working Capital Bridge
Net Working Capital Bridge IND AS (Rs. Cr) Increase due to 66% q-o-q Revenue Growth 61 days* 86 days* 633 2,232 1,049 1,419 397 Jun’16 Inventory Build-up Increase in Debtors Payables, Customer Sep’16 Advances and others Q2 FY17 Build-up due to stronger expected H2 *Calculated on trailing 12 months R
Slide 9: Operation and Maintenance Service Business
Operation and Maintenance Service Business IND AS (Rs. Cr) Service Revenues Growing into a sizeable & profitable business +6.6% ― ~15% revenue share in Q2 FY17 883 828 ― ~18% revenue share in H1 FY17 71 Internal 63 Annuity like business ― Non cyclical business in nature External 765 812 ― Steady
Slide 10: Solar Bidding Status Update
Solar Bidding Status Update 515 MW Rs. 5.36 340 MW 195 MW Divested Bids Won Per unit PPA signed (49% Stake) average tariff Summary of Divestments Cash SPV Project Size State Investor Stake Divested Consideration SE Solar 100 MW AP CLP Wind Farms Rs. 73.5 crs 49% Prathmesh Solarfarms 50 MW AP Ostro E
Slide 11: Agenda
Agenda Q2 & H1 FY17 Highlights Order Book Debt Overview Technology Update Industry Opportunity Detailed Financials 11
Slide 12: Strong Wind Order Backlog
Strong Wind Order Backlog (MW) Order Book 449 -557 Rs. 7,165 Crs. 1,243 1,136 Others 9% PSU 79% IPP Mar’16 H1 Intake H1 RR Sep’16 Backlog for Operation and Maintenance Service, SE Forge and Solar is over and above 12 Firm order book backed by customer advances of more than Rs. 1,000 Crs.
Slide 13: Agenda
Agenda Q2 & H1 FY17 Highlights Order Book Debt Overview Technology Update Industry Opportunity Detailed Financials 13
Slide 14: Debt Profile: Credit Rating upgraded to Investment Grade BBB
Debt Profile IND AS Credit Rating upgraded to Investment Grade BBB (Bank facilities of SEL and its 8 domestic subsidiaries) (Excluding FCCB) 30thSep’16 5 year Maturity Profile Rs. 4,145 Cr • Current bullet maturity of March 2018 SBLC Backed AERH Debt (US$ 626 M) • SBLC facility lenders consented to
Slide 15: July 2019 FCCB Series Overview
July 2019 FCCB Series Overview IND AS (US$ Mn) FCCB Principal Value 547 Current and Diluted No. of Shares (Cr) 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
Slide 16: Agenda
Agenda Q2 & H1 FY17 Highlights Order Book Debt Overview Technology Update Industry Opportunity Detailed Financials 16
Slide 17: Globally Proven In-House R&D Capabilities
Globally Proven In-House R&D Capabilities Suzlon Technology Locations: Hamburg - Development & Integration Hamburg - Certification Germany - Development & Integration Rostock Rostock - Design & Product Engineering - Innovation & Strategic Research The Netherlands Hengelo - Blade Design and Integrati
Slide 18: 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 – 80/90/100 S97-120 S111-90 S111-120 >5.7 GW >1.9 GW >1,100 MW sold >425 MW sold Prototype installed Installed till date Installed till dat
Slide 19: 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 20: 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 21: Agenda
Agenda Q2 & H1 FY17 Highlights Order Book Debt Overview Technology Update Industry Opportunity Detailed Financials 21
Slide 22: India: Strong Growth Fundamentals for Renewables
India: Strong Growth Fundamentals for Renewables (Billion Units) (GW) Estimated India Power Demand Renewables Target 2022 +132 GW 175 >4000 Others +9% 40 Solar Rooftop 60 Solar Utility Scale 1108 43 60 Wind Utility Scale 2015 2030 Mar-16 2022 Source: Ministry of Power Source: MNRE India’s COP21 comm
Slide 23: FY16 Saw Highest Annual Wind Capacity Addition in Two Decades
FY16 Saw Highest Annual Wind Capacity Addition in Two Decades (MW) India Commissioning Volumes +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 23 On a strong grow
Slide 24: Stable Feed in Tariff (FiT) Regime and Revised RPO trajectory
Stable Feed in Tariff (FiT) Regime and Revised RPO trajectory State Control Period Non AD Tariff (Rs./Unit) Revised RPO trajectory FY17 FY16 17.00% 14.25% AP 31st March 2020 4.84 4.83 11.50% 6.75% 4.75% Solar 2.75% GJ 31st March 2019 4.19 4.15 Non-Solar 8.75% 9.50% 10.25% KN 31st March 2018 4.50 4.5
Slide 25: Incremental Market Segment - Non Windy States / UTs
Incremental Market Segment - Non Windy States / UTs 1 GW Inter State Transmission Scheme (ISTS) for CTU connected Wind Farms 1 GW wind capacity to be built across windy states • Background ‒ 302 GW India wind potential concentrated in 8 Developers states Awarded through transparent ‒ RPO applicable
Slide 26: Strengthening Demand Environment
Strengthening Demand Environment New Demand Areas • Implementing Renewable Generation Obligations (RGO) – Demand from large conventional utility players • ISTS Scheme for CTU connected wind farms – Demand from Non Windy States • Incentivizing Repowering - Replacement Demand • Wind-solar Hybrid - Ena
Slide 27: Suzlon Strengths in India Wind Market
Suzlon Strengths in India Wind Market 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 27 End-to-end service provider with strong presence across value chain
Slide 28: 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 28 Prioritizing marke
Slide 29: Agenda
Agenda Q2 & H1 FY17 Highlights Order Book Debt Overview Technology Update Industry Opportunity Detailed Financials 29
Slide 30: Consolidated Income Statement
Consolidated Income Statement IND AS (Rs. Cr) Particulars Q2 FY17 Q1 FY17 Q2 FY16 H1 FY17 H1 FY16 FY16 Limited Review Limited Review Unaudited Limited Review Unaudited Unaudited Revenue from operations 2,746 1,650 1,746 4,396 4,333 9,461 Less: COGS 1,466 914 939 2,380 2,497 5,602 Gross Profit 1,281
Slide 31: Reconciliation between IND GAAP and IND AS – Income Statement
Reconciliation between IND GAAP and IND AS – Income Statement (Rs. Cr) Net Profit Q2 FY16 H1 FY16 FY16 Reported Consolidated Profit / (Loss) as per IND GAAP -181 866 483 Effect of discounting long term liabilities -6 -11 -24 Acturial gain/ (loss) on defined benefit obligation recognised in other 0 -
Slide 32: Consolidated Net Working Capital
Consolidated Net Working Capital IND AS (Rs. Cr) 30th Sep’16 30th Jun’16 31st Mar’16 31st Dec’15 Inventories 3,475 3,078 2,554 2,512 Trade receivables 3,109 2,060 2,616 1,946 Loans & Advances and Others 1,667 1,675 1,481 1,637 Total (A) 8,251 6,814 6,651 6,095 Sundry Creditors 2,959 2,540 2,813 2,34
Slide 33: Consolidated Balance Sheet
Consolidated Balance Sheet IND AS (Rs. Cr) Liabilities Sep-16 Mar-16 Assets Sep-16 Mar-16 Shareholders' Fund -7,421 -7,346 Non Current Assets Preference Shares 3 3 (a) Property, Plant and Equipment 1,426 1,287 Non controlling interest -0 -1 (b) Intangible assets 270 339 -7,418 -7,344 (c) Investment
Slide 34: Key Accounting Policies – Revenue Recognition and Order Booking
Key Accounting Policies – Revenue Recognition and Order Booking Opening Order Book • Sales (WTG Revenue Recognition) (-) Sales during the period ‒ WTG revenue is recognised upon transfer of risks and rewards to the buyer of complete WTG viz: Nacelle, Blade and Tower. (+) Order Intake during • Order
Slide 35: Key Accounting Policy: Maintenance Warranty Provisions
Key Accounting Policy: Maintenance Warranty Provisions Maintenance Warranty Provisions Accounting Policy: (Average calculated as % of Revenue) ― Comprise of provisions created against maintenance warranty issued in connection with WTG sale 3.5% Created when revenue from sale of wind turbine is r
Slide 36: Thank You
CIN of Suzlon Energy Ltd - L40100GJ1995PLC025447 THANK YOU 36