Ormat Technologies, Inc. · NYSE:ORA

Ormat Technologies — FY2021 Earnings Presentation

38 slides from Ormat Technologies's earnings presentation, Feb 24, 2022

  1. Slide 1: Ormat Technologies, Inc. Earnings Call

    ORMAT TECHNOLOGIES, INC. EARNINGS CALL DORON BLACHAR, CEO ASSI GINZBURG, CFO FEBRUARY 24, 2022 Copyright© Copyright 2022 Ormat Technologies, Inc. ©2022

  2. Slide 2: Safe Harbor Statement and Non-GAAP Metrics

    SAFE HARBOR STATEMENT AND NON-GAAP METRICS THIS PRESENTATION INCLUDES FORWARD-LOOKING STATEMENTS, AND THE DISCLAIMER SHOULD BE READ CAREFULLY FORWARD-LOOKING STATEMENTS This presentation, and information provided during any discussion accompanying this presentation, These forward-looking statements

  3. Slide 3: 2021 Highlights

    2021 HIGHLIGHTS DELIVERING SOLID RESILIENCE BUSINESS ADVANCING PROFITABLE COMMITTED TO FINANCIAL PERFORMANCE ACCELERATING IN Q4 GROWTH IN ATTRACTIVE A SUSTAINABLE FUTURE MARKETS Copyright © 2022 Ormat Technologies, Inc. 3

  4. Slide 4: Financial Performance

    FINANCIAL 01 PERFORMANCE Copyright © 2019 Ormat Technologies, Inc. Copyright © 2022 Ormat Technologies, Inc. 4 Copyright © 2021 Ormat Technologies, Inc.

  5. Slide 5: Solid Financial Performance

    SOLID FINANCIAL PERFORMANCE FY 21 Revenues Gross margin Adjusted EBITDA(1) EPS/Adjusted EPS(1,2,3) $663.1M 39.9% $401.4M $1.10/1.39 (6.0%) +70 bps (4.5%) (33.3%)/(15.8)% Q4 21 Revenues Gross margin Adjusted EBITDA(1) EPS/Adjusted EPS(1,2) $191.0M 39.6% $116.0M $0.34/0.41 +6.5% (220) bps +6.3% (12.8%

  6. Slide 6: Revenues by Segment

    REVENUES BY SEGMENT FY 21 Total Electricity Products Energy Storage 88% 7% $663.1 $585.8M $46.9M $30.4M Electricity Products (6.0%) +8.2% (68.3%) +92.1% 5% Storage Q4 21 Total Electricity Products Energy Storage 86% 11% $191.0 $164.3M $20.3M $6.4M Electricity Products +6.5% +12.4% (25.7%) +10.0% 3%

  7. Slide 7: Gross Margin by Segment

    GROSS MARGIN BY SEGMENT FY 21 Total Electricity Products Energy Storage 39.9% 42.5% 11.8% 33.0% +70 bps (210) bps (1,060) bps +2,190 bps Q4 21 Total Electricity Products Energy Storage 39.6% 44.1% 10.6% 16.4% (220) bps (110) bps (1,920) bps +340 bps Copyright © 2022 Ormat Technologies, Inc. 7

  8. Slide 8: Adjusted EBITDA by Segment

    ADJUSTED EBITDA(1) BY SEGMENT FY 21 Total Electricity Products Storage 95% 2% $401.4 $380.9M $10.1M $10.4M Electricity Products (4.5%) (2.0)% (64.3%) +223.4% 3% Storage Q4 21 Total Electricity Products Storage 94% 3% Products $116.0 $108.6M $3.9M $3.5M Electricity +6.3% +11.0% (59.3%) +106.0% 3% Sto

  9. Slide 9: YE 2021 Cash and Net Debt

    YE 2021 I CASH AND NET DEBT Cash and Cash Equivalents, Marketable Securities and restricted cash and Cash Equivalents ($M) Net Debt ($M) 37 419 275 Tax Equity transaction $1,521 259 Proceeds 171 Debt proceeds Investment $537 in CapEx 93 $919 27 11 Cash from M&A $387 operating Debt activities Dividen

  10. Slide 10: Maintaining a Strong Capital Position

    MAINTAINING A STRONG CAPITAL POSITION TO SUPPORT ACCELERATED GROWTH 2022 expected capital needs(1) $515M to support future growth target Approx. Cash, cash equivalents, $ 900M restricted cash and available lines of credit Access to various 43% 3.8x sources of capital Net debt to Net debt to capitali

  11. Slide 11: Resilience Business Accelerating in Q4

    02 RESILIENCE BUSINESS ACCELERATING IN Q4 Copyright © Copyright © 2022 2022 Ormat Ormat Technologies, Technologies, Inc. Inc. 11

  12. Slide 12: Ormat Moves Towards Achieving Its Growth Goals

    ORMAT MOVES TOWARDS ACHIEVING ITS GROWTH GOALS OPERATION UPDATE M&A UPDATE PRODUCT BACKLOG ENERGY STORAGE STRONG TAILWIND Copyright © 2022 Ormat Technologies, Inc. 12

  13. Slide 13: Electricity Operation

    ELECTRICITY OPERATION Robust and balanced portfolio Global portfolio increased by 80MW vs 2020 and reached 1,012 MW Main generating capacity adjustments vs 2020: 5 4 2 15MW addition from MGH Expansion 1 3 6 72MW addition from new acquired assets, Dixie Valley and Beowawe, and higher performance than

  14. Slide 14: Operation Update - Puna

    OPERATION UPDATE - PUNA Nov. 2020 10 MW Resumed operation Year end 2021 25 MW Stable capacity Year end of 2022 Working to maximize long term capacity PPA is subject to PUC approval Current PPA prices in Puna are positively impacted by higher oil prices Puna complex, Hawaii Copyright © 2022 Ormat Tec

  15. Slide 15: Operational Challenges

    OPERATIONAL CHALLENGES $21M and $5M total impact on gross margin and Olkaria Adjusted EBITDA in Q4 and full year 2021, respectively. • Power plant is generating 123MW due to lower performance of the resource • Resulting in lower gross profit by approx. $3 million and approx. $14 million in the fourt

  16. Slide 16: M&A Update

    Acquired assets: M&A UPDATE • 56 MW Dixie Valley Off taker: SCE I In PPA by 2038 I above market prices 2021 Generated $26M Revenue & $19M EBITDA • 11.5 MW Beowawe Off taker: NV Power I PPA by 2025 I below market prices Improved generation capacity in Dixie • Greenfield development asset with Valley

  17. Slide 17: Product Backlog

    PRODUCT BACKLOG Signing 3rd parties’ contracts Backlog at $53.5M(1) – 60% increase vs last year • Almost 100% of backlog will be captured in 2021 Signed a few contracts • Salak 14MW power plant in Indonesia • San Jacinto 10MW power plant in Nicaragua Significant pipeline of new potential contracts:

  18. Slide 18: Energy Storage

    ENERGY STORAGE Improved profitability of the storage facilities 4 Energy Storage performance 3 1 Gross profit • Fourth quarter - $1.0 million • Full year 2021 - $10.0 million Adjusted EBITDA 2 • Fourth quarter - $3.5 million • Full year 2021 - $10.4 million New projects coming online in 2022 are exp

  19. Slide 19: A Strong Tailwind

    A STRONG TAILWIND The Glasgow climate change conference set an ambitious targets to reduce global warming. Governments, including U.S., made a commitment to reach those targets CPUC recommendation: • To procure 1 GW of zero emission high-capacity and weather independent power by 2026 - namely geothe

  20. Slide 20: Advancing Profitable Growth in Attractive Markets

    ADVANCING PROFITABLE 03 GROWTH IN ATTRACTIVE MARKETS Copyright © 2019 Ormat Technologies, Inc. Copyright © 2022 Ormat Technologies, Inc. 20 Copyright © 2021 Ormat Technologies, Inc.

  21. Slide 21: Robust Growth Plan: 1.5 GW - 1.6 GW

    Increase solar and geothermal capacity significantly Accelerate storage capacity to establish ROBUST leading position in the U.S. storage sector GROWTH PLAN YE 2023 portfolio target: 1.5 GW - 1.6 GW Total expected MW growth vs 2021: ~ 40% - 45% This growth plan is subject to obtaining all permits an

  22. Slide 22: 2023 Growth Target by Segments

    2023 GROWTH GEOTHERMAL & ENERGY SOLAR ENERGY STORAGE TARGET BY SEGMENTS (VS 2021) 1,215 - 1,226 MW 313 – 373 MW / 722 – YE 2023 TARGET 842 MWh MW ADDITION 203 – 214 MW 230 - 290 MW MW GROWTH 20%-21% 277%-349% Increase in MW growth is compared to a 1,012MW Geothermal & Solar portfolio and an 83 MW st

  23. Slide 23: Geothermal Projects Under Development

    Projected Expected Project Capacity PPA COD (MW) U.S - Heber Complex 11 Q1 2023  U.S - CD4 30 H1 2022  End 2022/Early U.S - North Valley 25 Under negotiation 2023 GEOTHERMAL U.S. – Puna expansion 8 H1 2024  Subject to PUC 12 PROJECTS U.S – Dixie Meadows 12 End of 2022  137-148 MW(2) U.S. - Tungs

  24. Slide 24: Solar Energy Projects Under Development

    Projected Expected Project PPA Capacity (MW) COD U.S - Wister Solar 20 AC H2 2022  SOLAR U.S. - Tungsten Solar 2 9 AC 2022  6 PROJECTS 66 MW AC U.S. - Brady Solar 6 AC 2022  BY 2023 U.S. - Steamboat Solar 10 AC(1) (half in 2022 and half 2023)  U.S. – North Valley Solar 7 AC H2 2023  U.S. – McGi

  25. Slide 25: Energy Storage Projects Under Development

    Projected Projected Expected Project Capacity PPA MWh COD (MW) Capacity CA - Tierra 5 20 Q1 2022 PPA and Buena Merchant TX - Upton 25 25 Q1 2022 Merchant ENERGY STORAGE NJ - Andover 20 20 Q2 2022 Merchant 8 PROJECTS NJ - Howell 7 7 Q2 2022 Merchant 189 MW/464 MWh ENERGY Capacity STORAGE OH – Bowling

  26. Slide 26: Energy Storage Pipeline

    2.3 GW 32 230MW - 290MW/ potential capacity of named 546-666MWh U.S. storage pipeline prospects expected addition by YE 2023 ENERGY STORAGE PIPELINE Copyright © 2022 Ormat Technologies, Inc. 26

  27. Slide 27: 2022 Guidance

    2022 GUIDANCE (3) Total revenues Electricity revenues Products revenues Storage revenues Adjusted EBITDA $725M-$750M $645M-$655M $50M-$60M $30M-$35M $430M-$450M + 11% + 11% + 17% + 30%(4) + 10% MW EXPECTATIONS ADJUSTED EBITDA EXPECTATIONS >1,500MW >$500M run-rate(2) 1,095MW $401M (1) 2021 2022 2023

  28. Slide 28: Executed M&A Growth Strategy

    Executed M&A growth strategy Robust portfolio with new added capacity that we plan to enhance Delivered record fourth quarter revenue and Adjusted EBITDA Contribution from new assets and restored loss generation A strong tailwinds to support renewable and storage energy Increasing demand creates bet

  29. Slide 29: Committed to a Sustainable Future

    COMMITTED TO 04 A SUSTAINABLE FUTURE Copyright © 2022 Ormat Technologies, Inc. 29 Copyright © 2021 Ormat Technologies, Inc.

  30. Slide 30: ESG Initiatives

    ESG INITIATIVES ENVIRONMENT GOVERNANCE We are moving to strengthen our ESG commitments Building our approach and policy on significant valuable issues • Water management • Taxation • Suppliers and procurement policy • political communication We issued corporate sustainability report, the third one b

  31. Slide 31: Thank You!

    THANK YOU! SMADAR LAVI I VP HEAD OF INVESTOR RELATIONS AND ESG PLANNING & REPORTING 775-356-9029 (EXT. 65726) I SLAVI@ORMAT.COM Copyright © 2019 Ormat Technologies, Inc. 31 Copyright © 2022 Ormat Technologies, Inc. Copyright © 2021 Ormat Technologies, Inc.

  32. Slide 32: Products Segment Third-Party Backlog

    6% 11% 3% PRODUCTS SEGMENT Germany Guatemala THIRD-PARTY Turkey 15% 15% BACKLOG(1) Indonesia $53.5M Taiwan Israel 6% 1% Nicaragua 98.9% CONTRACTS GEOGRAPHIC New Zealand Geothermal BREAKDOWN Others 11% contracts 32% Backlog as of February 16, 2022. The backlog includes revenues for the period between

  33. Slide 33: Payment of Principal Due by Period ($M)

    PAYMENT OF PRINCIPAL DUE BY PERIOD ($M) AVERAGE INTEREST RATE: 4.3% Q1-2022 Q2-2022 Q3-2022 Q4-2022 Year 2022 Long-term non-recourse debt & limited recourse debt 17.0 15.2 13.6 15.8 61.6 Long-term loans (full recourse) 18.2 45.8 236.2 13.6 313.8 Finance Liability 3.8 0.0 7.0 0.0 10.8 Total 39.0 60.9

  34. Slide 34: CapEx for 2022

    CAPEX FOR 2022 ACTUAL INVESTED TOTAL CAPEX ($M) IN 12 MONTHS 2021 FOR 2022 Electricity Segment 383 417 Construction & Enhancements – fully released 207 226 Development enhancement, drillings and Exploration 31 104 Puna restoration (including drilling) 32 29 Olkaria recovery, partially released for c

  35. Slide 35: P&L Highlights

    P&L HIGHLIGHTS Q4 2021 Q4 2020 Change (%) FY 2021 FY 2020 Change (%) GAAP MEASURES Revenues ($M) Electricity 164.3 146.2 12.4 % 585.8 541.4 8.2 % Product 20.2 27.4 (25.7) % 46.9 148.1 (68.3) % Energy Storage 6.4 5.8 10.0 % 30.4 15.8 92.1 % Total Revenues 191.0 179.4 6.5 % 663.1 705.3 (6.0) % Gross m

  36. Slide 36: Reconciliation of EBITDA and Adjusted EBITDA

    RECONCILIATION OF EBITDA AND ADJUSTED EBITDA (DOLLARS IN THOUSANDS) Three Months Twelve-Months Ended Dec 31, Ended Dec 31, 2021 2020 2021 2020 Net income 22,273 23,532 76,077 101.806 Adjusted for: Interest expense, net (including amortization of deferred financing costs) 22,252 18,891 80,534 76,236

  37. Slide 37: Reconciliation of Adjusted Net Income and Adjusted EPS

    RECONCILIATION OF ADJUSTED NET INCOME ATTRIBUTABLE TO THE COMPANY’S STOCKHOLDERS AND ADJUSTED EPS Three Months Ended Dec 31, Twelve-Months Ended Dec 31, 2021 2020 2021 2020 (in millions, except for EPS) GAAP Net income attributable to the Company's stockholders $ 18.9 $ 20.7 $ 62.1 $ 85.5 One-time n

  38. Slide 38: Reconciliation of Non-GAAP Financial Measures

    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES December 31, 2021 Cash and cash equivalents, marketable securities and Restricted cash (in millions $) Cash and cash equivalents 239 Marketable Securities at fair value 43 Restricted cash and cash equivalents 104 Total cash and cash equivalents, marketab

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