Suzlon Energy Limited

Q2 FY14 Earnings Presentation

30th October 2013

Thornton Bank Offshore Wind Farm, Belgium

1 www.suzlon.com

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 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. Certain matters discussed in this Presentation may contain statements regarding the Companys 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, competition, the companys ability to successfully implement its strategy, the Companys future levels of growth and expansion, technological implementation, changes and advancements, changes in revenue, income or cash flows, the Companys market preferences and its exposure to market risks, as well as other risks. The Companys 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 offering of the Companys 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 Companys 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.

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Second Quarter Takeaways Q2 FY14

Suzlon wind farm in Kutch, India

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Key highlights 2Q FY14

Operations: Total revenues at Rs 4,769 Crs in Q2 FY14; 23.8% QoQ growth

Suzlon wind volumes @ 220 MW; First half volumes at @ 440 MW

Group EBITDA excluding FX positive @ Rs 39 Crs Order inflow of 395 MW in 2Q; aggregating to order inflow of 751 MW in H1 Launched 3.0M122- new low wind speed product variant for Canada Entry in Uruguay market with first order of 65 MW REpower installations crosses 5,000 WTGs; Group installations at ~22.5 GW

Asset Sale: China unit divested 75% stake to a JV with a strong local partner Project Transformation: Group headcount reduction of ~450, in addition to 2,500+ reductions since FY13

4

Opex reduced by 38% YoY Working capital further rationalized to 9.9% of sales, against 13.6% as on March13
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Operation ramp up at Suzlon Wind:

Constrained liquidity
MW sold
+46%

Focus on Liability Management

+32%

Volume ramp up

219 150 167

220

FY14 & Beyond

16

-77
1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14

- $360mn FCCB payment

- FCCB extension failed - Filed for CDR

- Completed CDR process in Apr13 - Execution ramp up post CDR completion

Execution volume to gather pace in balance year

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China JV Meets dual objective

Deal Overview
Monetization
Divested 75% in the China based manufacturing facility Total realization - $28M (Rs. ~173 crs)

Benefits

Regaining foothold in China

China is the largest wind market in the world

Maintaining a presence in the market is of strategic importance to us

With the combined strength of both the groups, we will be better positioned in China

Strong JV partner
A conglomerate focused on energy investment State owned with strong local connections

Combines best of both groups

Being a strong and recognized player in China energy market, the JV partner will lead marketing and sales operations Being a pioneer in wind technology, Suzlon will lead manufacturing and quality

Asset light model ideal for the Group

In line with our strategy to deleverage through asset sale

Meets dual objective of deleveraging and ensuring presence in worlds largest market
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First order in Uruguay market 65 MW

High Potential Market
Wind Market Outlook (MW)
+110%
440 210 10 2 265

Suzlon Presence

Entered Uruguay with a marquee order

Won its first order for 65 MW 31 units of S9X turbines Responsible for full EPC scope Scheduled to be completed in Sep 2014

2011

2012

2013e

2014e

2015e

Source: Make Consulting, 2013

Over 315 MW contracted in 2013 alone Key policies supporting renewable

Energy Target 15% renewable power installed capacity by 2015 Auctions UTE conducted three auctions 630 MWs for 20 year contracts

Relationship with major utilities in South America

Project with Rouar S.A. , a JV between state owned utilities of Uruguay (UTE) and Brazilian utility (Electrobras)

Re-affirms our best in class technology for emerging market

S9X portfolio highly optimized for medium to low wind sites High cost competitiveness, ideal for emerging markets

Tax Incentives Tax deduction & VAT exemption available

Poised to become the main renewable source in Uruguay in the next 2-3 years
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3.0M 122 Product for low wind sites

Moving proven 3MW into 60Hz markets
3.0M122 for Class III: Lower Wind Sites Key Features
Launched 60 Hz variant for Canada market; Brings successful 3XM platform to North America, built on proven 50Hz design, having sold over 250 turbines since launch

Cold climate capabilities to particularly address wind projects in Canada

Improved energy yield by 5-7% over 3.2M114 Optimal energy yield at low wind speed sites and by that unlocks new market potential

Suitable also for challenging areas (hilly terrain)

Key technical details
Rated power: 3 MW

High performance and low noise level

Key Timelines
Official launch: Husum Wind fair 2012 Start of sales: End of 2013 Serial delivery: 2015

Rotor diameter: 122 M

(Largest rotor diameter among all Suzlon onshore WTGs) Hub height: 100 M Wind Class: IEC IIIA Sound power level < 104.5 dB(A)

High rated power + large rotor + low noise level = Turbine for low wind sites of developed economies
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Business Performance

Suzlon wind farm in Minnesota, USA

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Q2 FY14 Group financial snapshot

Rs Crs

Particulars

Q2 FY14
4,769
39 -31 -229 1,677 14,156

Q2 FY13
5,702
-108 -132 -300 5,278 13,604

Q1 FY14
3,851
-147 -302 -482 2,027 13,705

H1 FY14
8,621
-108 -333 -711 1,677 14,156

H1 FY13
10,449
-274 -390 -735 5,278 13,604

FY13
18,743
-990 -1,296 -2,037 2,543 13,003

FY12
21,082
1,880 1,821 1,160 4,861 11,129

Revenue EBITDA (before FX loss) EBITDA EBIT

Net working capital Net debt Key takeaways:

Business performance
Achieved 220MW in Q2FY14 (440MW in H1FY14) against ~250MW annual sales in entire FY13 at Suzlon wind Performance continues to be impacted due to lower volumes REpower performance on track

Progress achieved in reducing fixed costs through project transformation

Non recurring Group-wide restructuring costs under Project Transformation Rs. 67 Crs

Net results after tax impacted by

Forex losses due to unfavorable currency fluctuations Rs 70 Crs
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Moving towards positive EBITDA

Revenue (Rs. Crs)
5,702 4,014 4,281 3,851

+24%
4,769

Improvement supported by: Improving contribution margins

Q2 FY13

Q3 FY13

Q4 FY13

Q1 FY14

Q2 FY14

Geographic sales mix Continuous focus on cost

EBITDA before FX loss (Rs. Crs)

39

reduction Reducing fixed cost

-108 -147 -266

-450 Q2 FY13 Q3 FY13 Q4 FY13 Q1 FY14 Q2 FY14

Opex reduction Manpower reduction

Increasing Volume + Higher Margins + Lower Fixed Costs = Reduced EBITDA Breakeven
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REpower : Performance on track

REpower revenues* (M)
Highlights of 1H FY14

1,158

Performance on track despite adverse market dynamics

Decline in revenues mainly due to lower demand in US and lumpy execution cycle in offshore H1 FY14 offshore revenues at 56m
721

627

Substantial progress made on group restructuring

Visibility of 100m+ on cost saving with high degree of confidence Fixed costs at the lowest level since last six quarters

REpower launched 3.0M122 Continued low Working capital levels (~5%)

1HFY12 1HFY13 1HFY14

Comfortable liquidity position of 302 mn REpower installations crosses 5,000 WTGs; cumulatively at 9.6 GW

Evolving as a leaner and more profitable organization

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Service Business: Growing revenues with stable margins

Revenues (Rs. Crs)*
+49%
1,312 667 384 880 505 672

Key Highlights H1 FY14 OMS revenue at ~Rs. 1,312 crs

~50% YoY growth

283
H1 FY12
*External only

375
H1 FY13

640
H1 FY14

High growth with stable and consistent margins Large service order backlog - ~$2.8bn
$2.8bn spread over 5+ year horizon

Suzlon

REpower

Service Order Backlog - ~$2.8bn*

27%

Service order backlog stable, with near 100% renewal track record The order book does not include potential renewals

73%

Suzlon

REpower

* - Suzlon wind typically enjoys almost close to 100% renewal rates, specially in its largest market India. Including the potential renewals, the total order book size would be close to $4bn
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Annuity like cash flows over turbine life

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Robust order book position

Total value of US$7.1 bn
Order book by geography US$7.1bn
RoW Series LatAm 6% Australia 4% 3% France 1% 6% UK 7% Belgium 5% 13% Canada 16%

Order book at ~5.1 GW Order book value: US$ 7.1bn

40%
Germany

Onshore markets: Emerging : ~US$1.4bn (India, Brazil, Uruguay and South Africa) Developed : ~US$4.4bn

India

Order book evolution (US$ bn)

7.1 6.8 6.5

Offshore: US$1.3bn

Order inflow of 395 MW in Q2; 751 MW in H1 FY14 Strong order book with deliveries up to FY15

Q2FY12

Q2FY13

Q2FY14

Strong order backlog in home markets, India and Germany

As on 30th October 2013. Exchange rate USD/EUR 1.36, INR/EUR 83.61, INR/USD 61.35 Order book for the quarter reflects orders booked between two board meetings and does not net off sales of the next quarter

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Project Transformation Update

Suzlon wind farm in Penamacor, Portugal

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Right-sizing across verticals continued in Q2 FY14

Employee Headcount

Suzlon*
*Ex REpower *Permanent

REpower*
221^

2,000+
-18% 11,093 9,050

778
-9%

-7%

54^
-2% 3,095 3,041

391
-5%

3,316

8,272

7,881

2,795

Mar 12

Mar 13

Jun 13

Sep 13

Mar 12

Mar 13

Jun 13

Sep 13

Headcount reduced by ~1,200 in H1, over and above 2,000+ reductions achieved in FY13 Further reductions planned in H2 FY14

500 permanent + 250 temporary employee reductions planned in FY14 Progressing well on the restructuring program

Reductions are net of increase in service business headcount

Right-sizing employee base across business verticals
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^ includes employees in notice period

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Further reduction in fixed costs achieved

Consolidated operating expenses* (Rs. Crs)
1,097 1,090 1,100

Key actions taken:

Stringent cost control measures in place
-38% 758

Rationalizing travel and consulting expenses Rationalized office and factory space

747

759

709

684

539

443

Plan for further reductions:

-31%

350

331

391 219 241

~100 mn cost reduction plan initiated at REpower

Savings targeted in purchase, production, employee costs and Opex

2Q13
* - As per Clause 41 results

3Q13

4Q13

1Q14

2Q14

Other Opex Costs

17

Suzlon Wind Fixed Costs

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Continuing to optimize Working Capital ratio

Net Working Capital Ratio*

Key actions underway:
23.9% 23.8%

Leaner inventory cycle Make vs Buy analysis Controlled procurement

13.6% 11.4%

Focus on realizations
9.9%

Project prioritization, better receivables management Expediting order execution

Clearing up commissioning pipeline

2QFY12 2QFY13 4QFY13 1QFY14 2QFY14

* - Net Working Capital/Trailing twelve months 18 www.suzlon.com

Comprehensive Liability Management Update

Suzlon wind farm in Rajasthan, India

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Liability Management in place

CDR: Back-ended maturity profile & Interest Rate reduced to 11%
CDR*
Credit enhanced Bonds / FX Loans Debt Under CDR

Pre-Restructuring
818

Mn USD

Liability Management

Credit Enhanced Bond

246

258

146

206

118

H2FY13 FY14 FY15 FY16 FY17 FY18 Beyond

Post-Restructuring
791
Complete WIP

818

FCCB Restructuring 0 0 23 68 91

136

H2FY13 FY14 FY15 FY16 FY17 FY18 Beyond

More cash flow available for business

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*Additional working capital sanctioned of ~$330m;

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FCCB: Status update

Paid the first tranche of FCCBs of $360mn in July 2012 after 45 days extension Prior to maturity had officially sought four months extension for October series with intention to meet our obligations in their entirety
Extension did not achieve required super-majority, resulting in non payment

Continue to be in active and constructive dialogue with our bond holders Select bond holders, representing significant majority across all series, have formed an ad hoc committee and have engaged financial and legal advisors to fast track the process to arrive at a consensual solution for the benefit of all stakeholders Active negotiations with bondholders and their advisors in an organized process is a conscious effort on part of the Company and its key stakeholders to facilitate an efficient and consensual solution finding process

Stakeholders are aligned for preserving business value and need for a quick resolution
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FCCBs: Status update

Outstanding amount (US$ mn) 121.4 20.8 90.0 175.0 Conversion price (Rs) 97.26 76.68 90.38 54.01 Coupon rate 0% 7.5% 0% 5.0% Maturity value with redemption premium 144.88% 157.72% 134.20% 108.70%

FCCBs

Maturity date

October 2012 Old October 2012 Exchange July 2014 New issuance April 2016 New issuance

October 2012 October 2012 July 2014 April 2016

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Equity base evolution since March 13

Issuance to CDR Lenders Rs 820 Crs Following cumulative obligations were converted to equity pursuant to CDR scheme Rs 423 Crs in April 13 Rs 130 Crs in July 13 Rs 130 Crs in Oct 13 Promoters & others Rs 225 Crs Rs 22 Crs in Apr 13* Rs. 103 crs conversion in Oct 13 Rs. 100 crs converted from existing loan of Rs. 145 crs provided before CDR
(No of shares in Crs)

Current Share base breakup

Public

Promoters

241.7

18.5
7.0 7.1 30.2 177.7 1.2

40%

40%

20% FI / Banks

As on March 13

Apr 13

Jul 13

Oct 13

Allotment to CDR lenders

Samimeru Promoter windfarms Loan Conversion

Current

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* - Not part of Promoter Group

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Key Priorities for FY14

Suzlon Manufacturing unit in Dhule, India

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FY14 priorities
Asset light / Debt light
Asset sales
~$400mn targeted from non-critical assets

Products / Orders
Continued R&D focus to optimize yield and reduce cost of energy
Launched 3.0M122 for low wind sites in developed market

Strategic

Working capital optimization

Significant progress achieved, rationalized to 9.9%

Investing in project pipeline in India

Sustaining quality and profitability of orders Focus on core and profitable markets Improving contribution margin Make vs Buy analysis for critical components Rationalizing headcount / fixed costs

Optimize asset base and reduce debt

75% stake in China asset divested

Improve liquidity and drive execution

Operational

Reducing project cycle time Project wise business management

Enhancing service profitability

50% YOY growth in high margin service revenue

3,000 headcounts reduced in FY13 / FY14 Opex costs down by 38%

Business Efficiency
25

Reduced Breakeven
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Detailed Financials Q2 FY14

Manufacturing unit in Daman, India

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Consolidated financial results

Rs Crs.

Particulars
Revenue from operations Less: COGS Gross Profit Gross Profit %
Employee benefits expense Other expenses Exchange Loss / (Gain) Other Operating Income EBITDA EBITDA % Less: Depreciation EBIT EBIT % Finance costs Finance Income Profit / (Loss) before tax Less: Exceptional Items Less: Tax Less: Associates Less: Minority Net Profit / (Loss) after tax
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Q2 FY14 Q2 FY13 Q1 FY14 H1 FY14 H1 FY13 FY13 Unaudited Unaudited Unaudited Unaudited Unaudited Audited
4,769 -3,533 1,236 25.9%
-552 -684 -70 40 -31 -0.7%

FY 12 Audited
21,082 -14,074 7,009 33.2%
-2,009 -3,396 -59 277 1,821 8.6%

5,702 -4,226 1,476 25.9%

-541 -1,099 -24 56 -132 -2.3%

3,851 -2,731 1,120 29.1%

-554 -758 -155 45 -302 -7.8%

8621 -6264 2356 27.3%

-1106 -1443 -225 85 -333 -3.9%

10449 -7781 2668 25.5%

-1079 -1943 -116 80 -390 -3.7%

18,743 -13,640 5,104 27.2%

-2,133 -4,131 -307 170 -1,296 -6.9%

-198 -229 -4.8%

-484 12 -702 -67 -10 0 -4 -782

-168 -300 -5.3%

-418 26 -692 -1 -116 0 2 -808

-180 -482 -12.5%

-497 11 -968 -136 42 0 2 -1059

-378 -711 -8.2%

-981 22 -1669 -203 33 0 -2 -1841

-346 -735 -7.0%

-911 103 -1544 43 -163 0 7 -1657

-740 -2,037 -10.9%

-1,855 152 -3,740 -643 -349 0 8 -4,724

-661 1,160 5.5%

-1,655 126 -369 227 -331 -33 27 -479
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Consolidated net working capital

Rs Crs

Particulars
Inventories Trade receivables Short-term loans and advances Other current assets Total (A) Sundry Creditors Advances from Customers Other Current Liabilities Provisions Total (B) Net Working Capital (A-B)

As on 30th Sept13
5,274 5,889 2,819

As on 30th June13
5,386 5,759 2,435 384 13,964 4,645 3,987 1,575 1,730 11,936 2,027

As on 31st Mar 13
5,264 6,382 2,185 443 14,274 4,651 4,168 1,354 1,558 11,730 2,543

As on 31st Dec 12
5,928 6,990 2,375 491 15,785 4,916 3,517 1,449 1,591 11,473 4,311

As on 30th Sept12
5,421 8,584 2,549 577 17,132 5,739 3,206 1,421 1,488 11,853 5,278

As on 30th June12
5,960 8,265 2,677 677 17,579 5,761 3,060 1,428 1,499 11,748 5,831

As on 31st Mar12
5,580 8,201 2,368 645 16,794 5,807 3,432 1,091 1,603 11,932 4,861

375
14,358 5,183 3,766 2,005 1,727 12,681 1,677

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Financial leverage(a)
As on (Rs. Crs) Debt type Sept 13 Jun 13 Mar 13 Dec 12 Sep 12 Jun 12 Mar 12

Suzlon Wind Debt FX loans* FCCBs W.Cap, Capex and other loans Gross debt (A) Cash (B) Net Debt (A-B) 4,050 2,549 9,541 16,141 312 15,828 3,843 2,418 9,218 15,479 346 15,133 3,513 2,211 8,701 14,425 502 13,924 3,555 2,239 8,383 14,177 608 13,569 3,475 2,152 8097 13,724 512 13,212 2,053 3,641 7,783 13,477 455 13,022 1,920 3,327 7,895 13,142 1,037 12,105

Suzlon Consol^ Group Debt Gross Debt Cash (B) Net Debt (A-B) (a) (b) (c) 17,044 2,888 14,156 16,290 2,585 13,705 15,191 2,188 13,003 15,040 1,453 13,587 14,568 964 13,604 14,389 1,372 13,017 14,034 2,905 11,129

Unaudited Cash balance includes cash and cash equivalents and non current bank balances Debt includes short term loans, long term loans, current maturities of long term borrowings and interest accrued and due

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* - Credit enhanced bonds were issued in 4QFY13. Thus, in the all the quarters prior to 4QFY13, Earlier it pertained to acquisition loan and loan taken from domestic banks to pay June FCCBs ^- Suzlon Consol includes SE Forge and REpower in addition to Suzlon Wind www.suzlon.com

Suzlon Consolidated Balance sheet

(As per new Schedule VI format)
Rs Crs. Liabilities Shareholders' Fund a)Share Capital b) Reserves and Surplus Share application money pending allotment Preference Shares Minority Interest Non Current Liabilities a) Long Term Borrowings 11,878 835 12,713 Current Liabilities a) Short Term Borrowings b) Trade Payables c) Other Current Liabilities d) Due to customers 3,093 5,183 7,823 376 1,762 18,237 Total equity and liabilities
30

Sep13

Mar13

Assets Non Current Assets

Sep13

Mar13

432 495 928

355 -35 320 582 a) Fixed Assets b) Non Current Investments c) Deferred Tax Asset (Net) d) Long Term Loans & Advances e) Trade Receivables e) Other Non Current Assets 10,858 912 11,770 2,835 4,651 7,092 200 1,473 16,251 14,516 88 25 574 822 468 16,493 12,382 36 10 672 713 503 14,316

6 86

6 78

b) Other Non Current Liabilities

Current Assets
a) Current Investments b) Inventories c) Trade Receivables d) Cash and bank balances e) Short Term Loans & Advances f) Due from customers 0 0

5,274
2,332 2,697 2,154 2,735 285 15,477

5,264
2,732 1,959 1,549 2,936 250 14,691

e) Short Term Provisions

g) Other Current Assets

Total Assets

31,970

29,007

31,970

29,007
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Thank you

Suzlon wind farm in Paracuru, Brazil

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