Sterling and Wilson Renewable Energy Limited has informed the Exchange about Investor Presentation
January 19, 2023
BSE Limited Phiroze Jeejeebhoy Towers Dalal Street Mumbai – 400 001
National Stock Exchange of India Limited Exchange Plaza Bandra Kurla Complex Bandra (East), Mumbai – 400 051
Scrip Code: 542760
Symbol: SWSOLAR
Dear Sir/ Ma’am,
Sub.: Investor presentation on the Unaudited Standalone and Consolidated Financial results of Sterling and Wilson Renewable Energy Limited (“the Company”) for the quarter and nine months ended December 31, 2022
Ref.: Regulation 30 read with Part A of Schedule III of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 (“Listing Regulations”)
Dear Sir/ Madam,
Pursuant to the Listing Regulations, please find enclosed herewith the Investor presentation on the Unaudited Standalone and Consolidated Financial results of the Company for the quarter and nine months ended December 31, 2022.
Request you to take the same on record.
Yours faithfully, For Sterling and Wilson Renewable Energy Limited
Bahadur Dastoor Chief Financial Officer
Encl: As above
Sterling and Wilson Renewable Energy Limited (Formerly known as Sterling and Wilson Solar Limited) Regd. Office: Universal Majestic, 9th Floor, P. L. Lokhande Marg, Chembur (W), Mumbai - 400043 Phone: (91-22) 25485300 | Fax: (91-22) 25485331 | CIN: L74999MH2017PLC292281 Email: info@sterlingwilson.com | Website: www.sterlingandwilsonre.com
The future of solar energy is
STERLING AND WILSON RENEWABLE ENERGY LIMITED ONE OF THE LEADING SOLAR EPC AND O&M SOLUTIONS PROVIDER IN THE WORLD
Investor Presentation – 3Q FY23 19 Jan 2023
This presentation and the accompanying slides (the “Presentation”), which have been prepared by Sterling and Wilson Renewable 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 securities, and shall not form the basis or be relied on in connection with any contract or binding commitment whatsoever. 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, completeness, fairness and reasonableness 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.
This presentation contains certain forward looking statements concerning the Company’s future business prospects and business profitability, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, competition (both domestic and international), economic growth in India and abroad, ability to attract and retain highly skilled professionals, time and cost over runs on contracts, our ability to manage our international operations, government policies and actions, regulations, interest and other fiscal costs generally prevailing in the economy. The Company does not undertake to make any announcement in case any of these forward looking statements become materially incorrect in future or update any forward looking statements made from time to time by or on behalf of the Company.
| WHO WE ARE
Leading Solar EPC and O&M Solutions Provider
We offer Design, Detailed Engineering, Procurement, Construction, Installation, Commissioning and Operations & Maintenance services under turnkey EPC and BoS (Balance of System) solutions for utility-scale, rooftop and floating solar power projects. We also offer solar plus storage solutions.
E C N E L L E C X E L A N O T A R E P O
I
EPC Portfolio 12.9 GWp
O&M Portfolio 7.0 GWp*
Global Manpower 2,411
I
I
N O T N G O C E R L A B O L G
EPC and O&M of Abu Dhabi 1,177 MWp One of the world’s largest single location PV plant
Regional presence across 28 countries Significant cost benefit and timely execution
End-to-end “concept to commission” solar EPC
* O&M portfolio includes EPC projects under construction/commissioning for which contractual revenue is expected to commence by March 23
Market Leader
Leading Solar EPC solutions provider in the world
Leading Solar O&M player globally
No. 1 Solar EPC
player in Australia
| A GLOBAL LEADER IN SOLAR EPC IN 8 YEARS
2016 Diversified into Rooftop Solar
Started third-party O&M services
2013 Completed our first turnkey EPC project
Started international solar operations
2018
Expanded operations in Australia by acquiring a controlling stake in GCO Electrical Pty Ltd
2020 Ranked 2nd largest O&M player in the world by Wood Mackenzie
2022
Reliance New Energy acquired 40% stake in Sterling and Wilson Renewable Energy Limited
Awarded one of the largest domestic EPC contract of 1.6 GW by NTPC
2015
Recognized as the largest Indian solar EPC player
Largest single-axis tracker plant in India (60 MWp)
2011 Ventured into solar EPC business
2017
Demerger of S&W Solar from S&W Group
Incorporated a subsidiary in Spain
Started operations in USA
Bagged world’s largest single location solar EPC project in Abu Dhabi
2019
Listed on BSE and NSE
Commissioned our first floating solar project of 450 kWp
Ranked No. 1 solar EPC in the world by IHS Markit
2021 Expanded our offerings to include Hybrid Energy, Energy Storage and Waste-to- Energy solutions.
| WHAT DIFFERENTIATES US
Expeditious Quick Decision Making & well-defined internal processes leading to timely execution
Experience Strong Track Record of executing complex & large-scale EPC projects leading to high customer retention and repeat business
Talent Pool Strong in-house Design and Engineering team providing customized solutions
Cost Effective Leveraging the Low-Cost India Base for global execution providing cost competitive solutions
Global Presence One of the only Global Pure-Play Solar EPC players with a significant presence and operational experience across geographies
Strong Relationships A Bankable Player with strong relationships with customers and other key stakeholders
| ACROSS THE GLOBE
USA
Mexico
UK
Spain
Jordan
Kazakhstan
USA 454.73 MWp
Morocco
Egypt
UAE
Vietnam
MENA 1,962.48 MWp
Mali
Saudi Arabia
Thailand
Oman
Kenya
Tanzania
Zambia
India
India 8,223 MWp
Philippines
Malaysia
Indonesia
Singapore
Southeast Asia 323.18 MWp
Latin America 575.30 MWp
Chile
Argentina
Namibia
Offices in 28 Countries
Projects in 19 Countries
South Africa
Rest of Africa 250.11 MWp
Australia
Australia 1,112.88 MWp
New Zealand
| SOLAR IS CHEAPER.. FASTER.. CONSISTENT
SOLAR PV LCOE IS NOW THE LOWEST GLOBALLY
$/MWh
150
149
85
82
69
120
90
60
30
Onshore wind
Fixed-axis PV
Tracking PV
Coal
Gas
81
74
46 45 40
1H
2H
1H
2H
1H
2H
1H
2H
1H
2H
1H
2H
1H
2H
1H
2H
1H
2014
2015
2016
2017
2018
2019
2020
2021
2022
Source: BNEF (1) The global benchmark is a country weighted-average using the latest annual capacity additions
Years to install
Nuclear
Natural Gas
Wind
Solar
t u p t u o e t a r e n e g
3
3
2
6
Standard deviation (%)
Hydro
Wind
9%
Solar
4%
n o i t c u d o r p h W M w o L s a H
y t i l i
b a i r a v
20%
d n a
l l
a t s n
i
o t
r e t s a F
Source: US EIA, Annual Energy Outlook, Feb 2021; Moody’s, Apr 2017
| SOLAR INSTALLATIONS TO GROW AT ~15% CAGR IN KEY MARKETS
Annual Utility-Scale PV installations (GW)
India
South-East Asia & Australia
Middle East and North Africa
Rest of Africa
Europe
USA
Latin America
9.8
1.7
3.8
1.2
7.4
7.3
2.1
2019
2021
2022E
2025E
CAGR 21-25E
10.8
11.8
18.6
14.6%
1.9
2.9
1.7
11.5
17.8
3.7
50.3
3.3
5.1
2.0
13.5
18.7
6.7
61.1
4.8
9.8
4.0
17.3
29.2
4.5
88.2
41.3%
35.6%
23.9%
10.7%
13.2%
5.0%
15.1%
Grand Total (excluding Rest of World)
33.3
Source: BNEF (1) China and Japan constitute major countries in rest of world (2) Annual solar PV installations in India, SEA, Middle East, Africa, Europe, USA, Latin America and Australia.
| KEY COSTS ARE ON THE DECLINE
0.28
0.27
0.27
0.25
0.23
0.22
0.19
Australia
LATAM
18,400
14,000
11500
9300
10,000
8,000 7,500
4900
2000
1,800
3,500 3,500
4,000
2,500
i
a n h C x E s e t a r
i
t h g e r F
) r e n i a t n o c
t e e f 0 4 r e p
(
Sep ’20 Mar ’21 Sep ‘21 Mar ’22 Jun ‘22
Sep ‘22
Dec ‘22
Sep ’20 Mar ’21 Sep ‘21
Mar ’22
Jun ‘22 Sep ‘22 Dec ‘22
Aluminum
Copper
72,500
73,900
9,776 10,235
9,005
6719
8,254
7,647 8,372
1,745 2,192
2,954
3,537
2,397 2,180 2,350
Sep ’20 Mar ’21 Sep ‘21 Mar ’22 Jun ‘22 Sep ‘22
Dec ‘22
)
T M
/ s R
(
e c i r P
l
e e t S n a i d n I
53790
45000
61,400
57,500
53,700
Sep ’20 Mar ’21 Sep ‘21 Mar ’22 Jun ‘22 Sep ‘22
Dec ’22`
s d n e r t e c i r p e u d o M
l
* *
)
p W
r e p D S U n
i
e c i r p
(
) )
T T M M
/ / D D S S U U
( (
x x e e d d n n I I E E M M L L
** Module Prices are expected to further decline in CY23E as per BNEF estimates.
| 3Q FY 2023
| KEY HIGHLIGHTS FOR 3Q FY23
• Company has been awarded two new contracts in India for Solar EPC from Amplus and Ampyr for projects located in Bikaner, Rajasthan and Koppal, Karnataka respectively
• Unexecuted EPC order book of INR 2,703 crore as of January 18,
2023 with nearly 84% domestic EPC
•
Revenue decreased by 51.0% YoY in 9MFY23 due to lower contribution from on-going EPC projects. Revenue increased by 1.7% QoQ aided by higher contribution from O&M segment
• Gross margins remain suppressed primarily on account of
International EPC projects
• Net debt of Rs 1,374 crore as of 31 December 2022
• Advance and performance bank guarantees encashed by four
customers amounting to Rs 588.5 crore of which
•
•
Final settlement agreement signed with customer for two projects and a sum of Rs 349.7 crore has been refunded
The Company is in discussion with the other two customers (projects completed)
• No further impact on the results of the Company beyond 31 December 2021 on account of LDs and other matters in accordance with the Indemnity agreement (refer Note 5 of Consolidated Financial results)
| CONSOLIDATED PROFIT & LOSS – 3Q FY23
INR Crore
Q3FY23 Q3FY22 Q2FY23
9MFY23
9MFY22
FY2022
• Revenue increased by 1.7% QoQ aided by higher contribution from
Revenue from Operations *
Gross Margin (post project MTM)
Gross Margin %
410
(30) (7.2%)
1,495
(295) (19.7%)
403
2,022
4,128
(170) (42.1%)
(376) (18.6%)
(444) (10.8%)
5,199
(503) (9.7%)
O&M segment. For 9MFY23, revenue has decreased by 51.0% YoY
due to lower contribution from on-going EPC projects
Other Income *
4
5
4
7
30
35
• Gross margins remain suppressed primarily on account of International
Recurring Overheads
Recurring Overheads %
93 22.7%
90 6.3%
86 21.5%
277 13.7%
261 6.3%
345 6.6%
EPC projects
Non-recurring Overheads
3
-
MTM (gain)/ loss on cancellation of forward cover Forex
(5)
(63)
(37)
42
-
(3)
24
9
(8)
20
17
21
46
21
8
20
• O&M constituted 14.4% of revenue in 3QFY23 and have grown 55%
sequentially. While O&M gross margins have improved sequentially
(6.7% in Q3FY23 versus -13% in Q2FY23), they still remain impacted
by projects where O&M costs were incurred, however, revenue
EBITDA
(53)
(385)
(275)
(667)
(759)
(862)
recognition has not commenced due to client delaying final handover
EBITDA Margin %
(13.0%)
(25.8%)
(67.9%)
(33.0%)
(18.4%)
(16.6%)
EBIT
EBIT Margin %
PBT
PBT Margin %
PAT
PAT Margin %
(59)
(389)
(278)
(678)
(770)
(896)
• PAT loss during the quarter has declined to INR 99 crore versus INR
(14.3%)
(26.0%)
(68.9%)
(33.5%)
(18.7%)
(17.2%)
299 crore in the previous quarter and INR 429 crore last year
(95)
(416)
(308)
(761)
(787)
(910)
(23.2%)
(27.8%)
(76.3%)
(37.7%)
(19.1%)
(17.5%)
(99) (24.2%)
(429) (28.7%)
(299) (74.1%)
(754) (37.3%)
(789) (19.1%)
(916) (17.7%)
* To be read in conjunction with Note 5 of the consolidated financial results
CONSOLIDATED BALANCE SHEET
INR Crore
Dec-22
Sep-22
Breakdown of Net Debt (INR Crore)
Dec-22
Sep-22
Sources of Funds Shareholders Funds Borrowings from Banks Total Application of Funds Fixed assets (including right to use assets) Core Working Capital Bank balance (including fixed deposit) Other assets/ (liabilities) Deferred tax and income tax balance GST and VAT balances (net) Total
218 1,555 1,773
48 (140) 236 1,166 158 305 1,773
338 1,313 1,651
47 (272) 483 953 146 294 1,651
Breakdown of Core Working Capital (INR Crore)
Dec-22
Sep-22
Current Assets Inventories
Receivables (net of LD provision)
Receivable days Advances to suppliers
Current Liabilities
Trade payables Payable days
Advances from Customers
Net Working Capital
1,413 5
1,349 180 59
1,553
1,027 116 526 (140)
1,375 4
1,332 158 39
1,647
1,353 124 294 (272)
Term debt
Working capital related debt
Total Debt
Less: Cash and Bank balance
Net Debt
1,050
505
1,555
(181)
1,374
700
613
1,313
(428)
885
Mix of receivables > 1 year as at Dec 2022 – Rs 325 crore
Others 28%
(1)
Related party 3%
Matter under NCLT 28%
Argentina 41%
(1) Related party receivables (~Rs 11 crore) is net of Rs 208 crore that the Company needs to pay back to the related party against advance received for Waste to Energy project (2) Of the Non-related party receivables, ~INR 259 crore is covered under Indemnity agreement
| NEW ORDERS/ MoUs ANNOUNCED IN 9MFY23
• Aggregate capacity of 242 MW DC
•
Project located at Bikaner, Rajastan
• Aggregate capacity of 60 MW DC
•
Project located at Koppal, Karnataka
• Contract signed for the BOS package comprising 4 blocks of proposed solar PV plant of NTPC at Khavda, RE Power Park, Rann of Kutch, Gujarat
• Aggregate capacity of 1,570 MW DC
•
Sterling and Wilson Solar Solutions, Inc (SWSS), the US step down subsidiary signed a MOU with the Government of the Federal Republic of Nigeria, along with its consortium partner Sun Africa
• MOU is for the development, design, construction, and commissioning of solar PV power plants aggregating 961 MWp at five different locations in Nigeria along with battery energy storage systems (BESS) with total installed capacity of 455 MWh
•
Financing for these projects are under negotiations between US EXIM, ING and the Government of Nigeria
• D&EPC agreement under negotiation
SWREL has announced ~2.8 GW of new orders / MOU in 9MFY23
| ORDER BOOK & PIPELINE
Unexecuted Order Value Movement
+2,222
-929
-1,878
+35
3,253
2,703
Gross UOV as on 18 January 2023
USA 6.5%
LATAM 1.4%
Australia 8.4%
UOV as on 31 Mar 2022
Forex adjustments
Order inflow Order exited in
2QFY23
Projects executed in 9M FY23
UOV as on 18 Jan 2023
FY24 Bid Pipeline remains robust
New order inflows are lumpy – Impacted by cyclicality and seasonality
India 83.7%
Europe 5.4%
MENA & Africa 24.9%
US & LATAM 8.9%
SEA 0.6%
Australia 4.8%
21.6 GW
India 55.5%
INR Cr
FY18
FY19
FY20
FY21
FY22
FY23
Q1
-
Q2
843
Q3
Q4
2,030
2,793
Total
5,666
346
1,482
1,195
1,417
4,440
1,629
1,057
1,070
987
3,353
1,601
221
-
254
1,858
364
-
-
1,820
244
4.743
6,774
719
2,222
SWREL is on track to achieve/exceed our FY22 guidance of ~USD 1 bn in new orders (ex-Group companies)
| WAY FORWARD - REGAIN THE POSITION OF WORLD’S LARGEST SOLAR EPC PLAYER
Industry Outlook
Target large EPC markets
Expand new businesses
Grow O&M Portfolio
• Unprecedented commodity super cycle over last 2 years coupled with COVID led to Solar Industry suffering huge losses and IPP’s deferring projects
• Significant consolidation observed
in the industry with stronger players expected to take a larger share of the market in the future
• Solar industry well poised to grow in long term as IPPs have huge plans for global capacity additions
• The global tariffs have already corrected upwards with the revision in prices and a lot of projects are expected to get finalized in FY23
• Reliance group’s investment in
Company has led to strengthening of Company’s balance sheet and increased confidence to customers, suppliers, bankers and other stakeholders
• Focus to grab large share of EPC
capacity additions in FY23 like US (23 GW), Europe (16 GW), Australia (3 GW) and India (16 GW)
• Round-The-Clock Renewable Energy Projects with Battery Storage are the future
•
Increased focus of countries globally towards Clean Hydrogen mission
• Natural Hydrogen mission
announced by Indian Govt to transform India into a global hub for green hydrogen production
• Pursue development activities In International markets to secure more EPC business
• Focus on large Solar PV + BESS projects in US, Europe and Australia
• Leverage client relationships to gain meaningful market share in these new businesses
• O&M market size to grow as more
solar capacity comes online
•
Increased focus on third party O&M in International markets through organic and inorganic route
• Provide enhanced value to customers through O&M differentiators like drone thermography, strong analytics and predictions, underground cable fault finder etc.
•
In-house learning and training to upgrade the technical skills of the team
For further information, please contact:
Company :
Investor Relations Advisors :
Sterling and Wilson Renewable Energy Limited
Strategic Growth Advisors Private Limited
CIN: L74999MH2017PLC292281
CIN: U74140MH2010PTC204285
Mr Sandeep Mathew Head – Investor Relations
Email: ir@sterlingwilson.com
www.sterlingandwilsonre.com
Mr Jigar Kavaiya / Mr. Parin Narichania
+91 9920602034 / +91 9930025733
Email: jigar.kavaiya@sgapl.net / parin.n@sgapl.net
www.sgapl.net