Suzlon Energy Limited Q3 & 9M FY17 10 Feb 2017
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 securities, and shall not form the basis of or be relied on in connection with any contract or binding commitment whatsoever. The Presentation is not intended to form the basis of any investment decision by a prospective investor. No offering of securities of the Company will be made except by means of a statutory offering document containing detailed information about the Company. • This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, reliability or fairness of the contents of this Presentation. This Presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of or any omission from, this Presentation is expressly excluded. In particular, but without prejudice to the generality of the foregoing, no representation or warranty whatsoever is given in relation to the reasonableness or achievability of the projections contained in the Presentation or in relation to the bases and assumptions underlying such projections and you must satisfy yourself in relation to the reasonableness, achievability and accuracy thereof. • Certain matters discussed in this Presentation may contain statements regarding the Company’s market opportunity and business prospects that are individually and collectively forward-looking statements. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but are not limited to, the performance of the Indian economy and of the economies of various international markets, the performance of the wind power industry in India and world-wide, the Company’s ability to successfully implement its strategy, the Company’s future levels of growth and expansion, technological implementation, changes and advancements, changes in revenue, income or cash flows, the Company’s market preferences and its exposure to market risks, as well as other risks. The Company’s actual results, levels of activity, performance or achievements could differ materially and adversely from results expressed in or implied by this Presentation. The Company assumes no obligation to update any forward-looking information contained in this Presentation. Any forward-looking statements and projections made by third parties included in this Presentation are not adopted by the Company and the Company is not responsible for such third party statements and projections. • No responsibility or liability is accepted for any loss or damage howsoever arising that you may suffer as a result of this Presentation and any and all responsibility and liability is expressly disclaimed by the Management, the Shareholders and the Company or any of them or any of their respective directors, officers, affiliates, employees, advisers or agents. • No offering of the Company’s securities will be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”) . Accordingly, unless an exemption from registration under the Securities Act is available, the Company’s securities may not be offered, sold, resold, delivered or distributed, directly or indirectly, into the United States or to, or for the account or benefit of, any U.S. Person (as defined in regulation S under the Securities Act). • The distribution of this document in certain jurisdictions may be restricted by law and persons into whose possession this presentation comes should inform themselves about and observe any such restrictions 2
Agenda Q3 & 9M FY17 Order Book Debt Overview Highlights Technology Update Industry Opportunity Detailed Financials 3
Q3 FY17 Financial Performance Highlights Rs. 304 Crs. (9.2% Margin) Delta: +350 Cr y-o-y Rs. 745 Crs. +99 Cr q-o-q (22.5% Margin) Growth: Net Profit 124% y-o-y 27% q-o-q Rs. 3,307 Crs. EBITDA Growth: 76% y-o-y 20% q-o-q Revenues Continuing strong growth and profitability 4 Note: EBITDA and Net Profit is pre FX and exceptional items
9M FY17 Financial Performance Highlights Rs. 296 Crs. (3.8% Margin) Delta: Rs. 1,502 Crs. +610 Cr y-o-y (19.5% Margin) Net Profit Growth: 70% y-o-y Rs. 7,703 Crs. EBITDA Growth: 24% y-o-y Revenues Operating leverage and favourable revenue mix enables strong financial performance 5 Note: EBITDA and Net Profit is pre FX and exceptional items
Quarterly Volume Trend (MW) Quarterly Revenue Recognition Volumes FY16: 1,131 MW 9M FY17: 1,019 MW FY15: 454 MW 462 443 353 256 227 221 205 204 138 60 35 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY15 FY16 FY17 Strong growth momentum continues 6
Result Snapshot (Consolidated) (Rs. Crs.) Q3 FY17 Q2 FY17 Q3 FY16 9M FY17 9M FY16 Particulars Unaudited Unaudited Unaudited Unaudited Unaudited Revenue 3,307 2,746 1,883 7,703 6,216 Gross Profit 1,466 1,281 860 3,482 2,696 Gross Margin 44.3% 46.6% 45.7% 45.2% 43.4% Employee Expenses 256 259 202 774 732 Other Expenses (net) 465 436 326 1,206 1,082 EBITDA (Pre FX) 745 586 332 1,502 882 EBITDA Margin (Pre FX) 22.5% 21.3% 17.6% 19.5% 14.2% Depreciation 109 95 98 288 280 Net Finance Cost 314 281 272 885 912 Taxes, Minority and Others 19 6 9 33 3 PAT (Pre Fx and Ex. Items) 304 204 -46 296 -314 FX (Gain) / Loss 29 (33) 75 44 342 Exceptional Items 0 0 0 0 (1,347) Reported PAT 274 238 -122 252 691 Note: Senvion was fully divested by Suzlon group on 29th April 2015. Accordingly 9M FY16 consolidated results 7 include 1 month of Senvion performance, hence not directly comparable
Other Key Highlights Net working capital reduced to 79 days as on Dec’16 compared to 86 days in Sep’16 Net term debt reduced to Rs. 6,538 Crs. (excluding FCCB) Credit rating upgraded from BBB- to BBB for Suzlon and its domestic subsidiaries as well as SE Forge • SGSL (India OMS Division) rated A- (Provisional) Strong quarterly order intake of 557 MW; Closing order book at 1,231 MW Solar project divestments completed for 49% stake in 210 MW solar projects in Telangana Surpasses 10 GW milestone in India 8
Net Working Capital -7.2% 86 days 79 days 23.4% 21.8% Sep’16 Dec’16 NWC as on Sep’16 ( Rs. Crs.) 2,232 Remarks Add: Inventories Build-up 294 Due to stronger expected Q4 Add: Increase in receivables 409 Increase due to 20% q-o-q Revenue Growth Add: Loans, Advances & Others 181 Due to increase in volumes Less: Increase in Creditors (654) Due to increase in volumes Less: Increase in Customer Advances (79) Due to increased order inflow NWC as on Dec’16 ( Rs. Crs.) 2,383 Note: NWC % and no. of days calculated on trailing 12 months Revenue Continuous efforts to optimize working capital 9
Operation and Maintenance Service Business (Rs. Crs.) Service Revenues Growing into a sizeable & profitable business +4.8% ― ~12% external revenue share in Q3 FY17 1,314 1,254 ― ~16% external revenue share in 9M FY17 99 Internal 101 Annuity like business ― Non cyclical business in nature 1,216 External 1,154 ― Steady cash flow generation 100% renewal track record in India ― Every turbine sold by us in India is under our Service fold 9M FY16 9M FY17 ― Custodian of >10 GW of Assets (US$ 10 bn) in India ― 20 years of track record in India Note: All information pertaining to Suzlon Wind Only Stable cash generation 10
Surpasses 10 GW wind energy installations in India Ranked No. 1 in Renewables Sector Largest fleet under Operation and Maintenance fold in India Ranked No. 4 in Power Sector # of Turbines MW <= 1 MW 1,751 850 >1 MW < 2 MW 4,195 5,701 =>2 MW 1,697 3,564 Total 7,643 10,115 2.0 GW • 35% - All India installed Wind Capacity 2.1 • 22% - All India installed renewable capacity 0.4 GW GW • ~1,700 customer relationships 2.1 GW • 22 years of operating track record 0.1 GW • 22 TWh estimated of annual clean energy; 0.7 0.8 =1,500 mn trees planting p.a. GW GW =16.2 mn tonnes coal avoidance p.a. 2.1 =~21.5 mn tonnes CO2 emission savings p.a. GW Custodian of 4 th highest installed power capacity (from all sources) in India 11 Map not to scale. All data, information, and map is provided “as is” without warranty or any representation of accuracy, time liness or completeness.
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