May 30, 2014
Suzlon Group turns EBITDA positive in Q4, after 7 quarters
- Revenue at Rs. 6,581 crore , 54 % YoY growth
- Positive EBITDA of Rs. 328 crore/ ~ 56 Million USD
- Positive EBIT of Rs 116 crore / ~ 20 Million USD
- Strong order Book of Rs. 46,000 crore / 7.6 Billion1 USD
Pune, India: Suzlon Group, the worlds fifth largest* wind turbine maker, on Friday May 30th
2014, announced its results for fourth quarter (Q4) of financial year 2013-14 (FY14).
Mr Tulsi Tanti, Chairman Suzlon Group, said: FY14 has been an important year for Suzlon,
wherein we achieved significant progress by improving our business efficiency. The group is now
transiting from a restructuring mode to a growth phase given the opportunities due to strong
industry outlook. On the global front we remain confident about the wind sector and expect
~40% growth in Industry due to buoyancy in global markets, policy initiatives and economic
recovery. The Indian markets will show growth and momentum with the re-instatement of GBI,
availability of funds and a stable government.
In FY15, our key priorities will be to ramp up volumes, improving business efficiency and
rebalancing our capital structure. With innovations in technology and solutions, we remain
competitive and well positioned in all the key markets for onshore and offshore WTGs.
Mr. Kirti Vagadia, Group Head of Finance, said: We have delivered revenues of Rs. 6,581 crore
in quarter four (Q4) which is the highest in the last 8 quarters. We turned EBITDA and EBIT
positive after 7 quarters. Our Q4 EBIDTA show significant improvement by Rs 923 crores on YoY
basis. We continue to improve on Net working Capital which is at 3.6% of revenue as against
13.6 % in FY13. On the FCCB front, we have concluded our discussions with the ad-hoc
committee of bondholders. The Board has approved cashless restructuring of its Foreign
Currency Convertible Bonds (FCCBs) and the new restructured FCCBs will come up for maturity
in July 2019.
Key Updates
1. Financial Performance:
Revenues
o Rs. 6,581 Cr in Q4 FY14, a 54% YoY growth.
o Consolidated revenues of Rs. 20,212 cr in FY14, a 8% YoY growth
EBITDA & EBIT
o Positive EBITDA achieved after 7 quarters
o Positive EBITDA at Rs. 328 cr/~US$ 56mn, vis-a-vis negative Rs.(594)cr / US$ (101) mn
o Increase in revenue by leveraging on a favourable geographic and product mix with focus on cost reduction
o Substantial progress achieved in cost reduction through group wide restructuring efforts
? Robust performance by Senvion; Increased Profitability
o EBITDA at ~EUR 146mn is 22% higher, despite 19% drop in revenue at ~EUR 1,806mn
2. Robust Order book :
Consolidated Group order book at ~5.3 GW approx. Rs. 46,141 crore / USD 7.6 bn
o Onshore markets:
Emerging : ~US$ 1.3 bn ( India, Brazil, Turkey & Uruguay),
Developed : ~ $5.1 bn
o Offshore US$1.2 bn
3. Comprehensive Liability Management:
We had launched a Comprehensive Liability Management Programme last year. With the CDR
implemented, overseas FX facility refinanced via largest and unique credit enhanced bonds issuance
the programme has now reached its last leg. The bondholders meeting is scheduled on 9th July 2014
to approve a restructuring proposal including cashless exchange into new bonds with 5 year bullet
maturity.
- Negotiations with ad-hoc committee of FCCB holders concluded
- Equity infusion under CDR completed.
4. Project transformation completed:
- Approx. 3,200 headcount right sized since FY12
- ~31 % fixed opex reduction since FY12 (Suzlon Wind)
- Restructuring goals at Senvion achieved, savings significantly exceeded target
- Working capital rationalized to ~3.6%
5. Asset sale achieved during FY14
- Big Sky wind farm sale completed for ~US $ 90mn
- China asset stake sale completed for US $ 28mn
6. OMS: Owing to a large installed base in the country i.e. installation to the tune of over 8GW, the
India OMS business has been carved out into a separate wholly owned subsidiary namely; Suzlon
Global Services Limited. This has enabled better transparency and helped realize business
efficiencies. In FY14, Suzlon Group OMS division has achieved revenues of ~Rs.2,700 Cr, with
~37% YoY growth.
7. Senvion: Suzlon acquired Senvion in 2007 and has enabled it grow manifold. From revenues of
~400m, Senvion has now grown to ~1800m of revenues with strong presence not only in its
traditional European markets (Germany, France and UK) and but also acquired dominating
position in new markets like Canada and Australia. Senvion has also solidified its position in
offshore segment with its 5M/6M products and now boasts of 100+ offshore turbines operating.
Over the last five years, Senvion has been probably one of the very few companies to have
consistently remained profitable despite very difficult market conditions. Some of the key
highlights of Senvion FY14 performance:
Achieved ~26% increase in EBIT despite ~19% decline in revenue
Senvion successfully closed its cost restructuring exercise by significantly exceeding its initial
cost saving target
Crossed the 1 GW milestone in UK bringing its cumulative installation to > 10 GW while
strengthening its position in core markets around the world
The Group is now transiting from restructuring mode to growth phase given the opportunities
and strong industry outlook. In FY15 we will focus on enhancing business efficiency, increase in
sales volumes and rebalancing our capital structure.
The group remains confident of improving the performance further in FY15.
