Slide 1: Q4 | YE 2020 Ormat Technologies Earnings Call
Q4 | YE 2020 ORMAT TECHNOLOGIES, INC. EARNINGS CALL DORON BLACHAR, CEO ASSI GINZBURG, CFO FEBRUARY 25, 2021
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, may contain “forward-looking stat
Slide 3: 2020 Highlights
2020 HIGHLIGHTS DELIVERED SOLID DEMONSTRATED COMMITTED TO CONTINUED TO DRIVE FINANCIAL PERFORMANCE BUSINESS RESILIENCE A SUSTAINABLE FUTURE PROFITABLE GROWTH Copyright ©2021 Ormat Technologies, Inc. 3
Slide 4: 01 Financial Performance
rx TA ORMAT O1 FINANCIAL “ PERFORMANCE Copyright © 2021 Ormat Technologies, Inc.
Slide 5: Solid Financial Performance
SOLID FINANCIAL PERFORMANCE Revenues Gross margin Adjusted EBITDA” EPS/Adjusted EPS“? $705.3M 39.2% $420.2M $1.65 (5.5%) +310 bps +9,3% (4.1%) /13.0% Revenues Gross margin Adjusted EBITDA” EPS® $179.4M 41.8% $109.2M $0.39 (6.8%) +310 bps +6.9% +62.5% financial measures reconciliation please see the
Slide 6: Revenues by Segment
REVENUES BY SEGMENT Total $705.3 (5.5%) Total $179.4 (6.8%) Electricity $541.4M +0.2% Electricity $146.2M +1.3% Products $148.1M (22.5%) Products $27.4M (37.5%) Storage $15.8M +7.6% Storage $5.8M +36.2% 77% 21% Electricity Products 2% Storage 82% 15% Electricity Products 3% Storage Copyright © 2021
Slide 7: Gross Margin by Segment
GROSS MARGIN BY SEGMENT Total 39.2% +310 bps Total 41.8% +310 bps Electricity 44.6% +250 bps Electricity 45.2% +160 bps Products 22.4% -120 bps Products 29.8% +160 bps Storage 11.1% NA Storage 13.0% NA Copyright © 2021 Ormat Tec!
Slide 8: Adjusted EBITDA by Segment
ADJUSTED EBITDA’ BY SEGMENT Total $420.2 +9.3% Total $109.2 +6.9% Electricity $388.6M +10.6% Electricity $97.8M +5.4% Products $28.4M (15.7%) Products $9.7M 3.4% Storage $3.2M NA Storage $1.7M NA (1) For key financial results and non-GAAP financial measures reconciliation please see the appendix sli
Slide 9: YE 2020 - Cash and Cash Equivalents and Restricted Cash ($M)
YE 2020 - CASH AND CASH EQUIVALENTS AND RESTRICTED CASH ($M) 193 342 Net Investment 340 borrowingm Bows Proceeds aa Sos sm 265 acquisition Dividend ther Cash from Setiitled $153 DEC. 31, 2019 DEC. 31, 2020 3759M $340M $290M $128M SUCCESSFUL PUBLIC UNSECURED CREDIT FACILITY RAISING OF OFFERING BONDS
Slide 10: 02 Business Resilience in the Face of COVID-19
nx SI ORMAT O2 BUSINESS RESILIENCE IN THE FACE OF COVID-19 tt i =
Slide 11: Ormat Demonstrated It's Resilient
ORMAT DEMONSTRATED IT’S RESILIENT IN A CHALLENGING AND VOLATILE ENVIRONMENT 1 2 3 OPERATION PUNA HAWAII KENYA 4. 5 PRODUCT SEGMENT STORAGE UPDATE Copyright © 2021 Ormat Tec!
Slide 12: Electricity Operation
O01 ELECTRICITY OPERATION Global portfolio reached 932 MW Main generating capacity adjustments: 19MW addition from Steamboat Hills enhancement 8MW addition due to higher resource performance at Mammoth, McGinnis Hills, Tungsten, Neal Hot Springs and Raft River 9MW reduction due to lower resource per
Slide 13: Puna, Hawaii
02 PUNA, HAWAII Nov. 2020 ee Mid 2021 Continue field recovery
Slide 14: Kenya
KENYA Resolved all 3 tax assessments Three assessments of $200M were favorably settled Increased Curtailments Continued curtailments due to COVID-19 Overdue invoices payment $48.9M overdue as of Dec. 31, 2020, of which $16.2M was paid in January and February 2021 Olkaria III complex, Kenya
Slide 15: Product Backlog
24 PRODUCT BACKLOG Reduction in 3rd parties’ backlog Backlog at $33M® Continued impact of COVID-19 Company is in late stage of signing two mid size projects Focusing manufacturing capacity on internal projects Manufacturing our owned power plants to support organic growth Intersegment revenue in 202
Slide 16: Energy Storage
OS ENERGY STORAGE Reached gross profitability 2020 gross profit - $1.8M 2020 gross margin - 11% Pushing for growth Commercial operation 1OMW Rabbit Hill, Texas nan 73 20MW Pomona energy, California - under operation 25MW Upton County, Texas - under construction MW O1CA 02 TX 20MW/S8OMWh 10MW/10MWh 0
Slide 17: 03 Committed to a Sustainable Future
nx SI ORMAT O3 | comm TED TO A SUSTAINABLE FUTURE
Slide 18: Employees / Environment / Community
Oo ORMAT EMPLOYEES ENVIRONMENT * COMMUNITY
Slide 19: 04 Driving Profitable Growth
nx <I ORMAT 3 Le V4 04 DRIVING PROFITABLE GROWTH
Slide 20: Robust Growth Plan
ROBUST GROWTH PLAN Increase solar and geothermal capacity significantly Accelerate storage capacity to establish leading position in the U.S. storage sector YE 2023 portfolio target: Total expected MW growth: This growth plan is subject to obtaining all permits and regulatory approvals required as w
Slide 21: 2023 Growth Target by Segments
2023 GROWTH GEOTHERMAL & ENERGY TARGET SOLAR ENERGY STORAGE BY SEGMENTS YE 2023 TARGET 1,182MW-1,202MW 273MW-373MW MW GROWTH 27%-29% 274%-411% Change in MW growth is compared to a 932MW Geothermal & Solar portfolio and a 73 MW storage portfolio in YE 2020 Copyright © 2021 Ormat Technologies, Inc. 21
Slide 22: Projected Projects: Geothermal and Solar
Projected Project oe Expected PPA U.S - Heber Complex 1 H1 2022 v U.S - CD4 30 Ql 2022 v U.S - North Valley 30 2022 - GEOTHERMAL U.S - McGinness Hills Expansion 8 2021 v 10 PROJ ECTS U.S. - Puna expansion 8 2022 v 143-148 MW U.S - Dixie Meadows 15 2022 v U.S - Tungsten Mountain 2 1 H2 2022 v Guadelo
Slide 23: Geothermal Prospects by Region
Region Location # of sites Nevada 22 California 4 US. Oregon 2 Utah 2 GEOTHERMAL New Mexico 1 41 PROSPECTS Guatemala 2 CENTRAL AMERICA Honduras 1 AFRICA Ethiopia 4 ASIA PACIFIC New Zealand 1 Indonesia 2 Copyright © 2021 Ormat Technologies, Inc. 23
Slide 24: Projected Projects: Energy Storage
Projected | 5 Expected Type of Project Capacity (MW) coD contract Capacity PPA CA - Valecito 10 @2 2021 and Merchant CA- Tierra Buena 5 42021 Capacity PPA ENERGY STORAGE 5 PROJECTS TX - Upton 25 a4 2021 Merchant 67 MW ~ NJ - Andover 20 Q1 2022 Merchant DEVELOPM NJ - Howel 7 Q2 2022 Merchant Copyrigh
Slide 25: U.S. Storage Pipeline Prospects
1.2GW 33 200-300MW potential capacity of named expected addition U.S. storage pipeline prospects by YE 2023 Copyright © 2021 Ormat Technologies, Inc.
Slide 26: Maintaining a Strong Capital Position
MAINTAINING A STRONG CAPITAL POSITION TO SUPPORT ACCELERATED GROWTH 2021 expected capital $445m needs® to support future growth target Over Cash, cash equivalents, 3$900m restricted cash and available lines of credit 9 Access to various 45% 2.4x sources of capital Net debt to Net debt to capitalizat
Slide 27: 2021 Guidance
2021 GUIDANCE Total revenues Electricity revenues Products revenues Storage revenues Adjusted EBITDA $640-675M $570-580M $50-70M $20-25M $400-410M TRANSITIONING TO ACCELERATED GROWTH IN STORAGE AND ELECTRICITY SEGMENTS MW EXPECTATIONS ADJUSTED EBITDA EXPECTATIONS 1,500MW $500M run-rate® —_ ater) 1,0
Slide 28: The Way We Deliver Sustainable Growth
THE WAY WE DELIVER SUSTAINABLE GROWTH PROVEN IN GEOTHERMAL, APPLICABLE TO STORAGE AND TO NEW ACTIVITIES Creating a greater profit potential by applying vertical integration approach Mitigating portfolio risk through diversification Geothermal activity serves as a solid foundation for Storage activit
Slide 29: Full Commitment to Sustainable Growth - Thank You
FULL COMMITMENT TO SUSTAINABLE GROWTH THANK YOU! SMADAR LAVI! VP CORPORATE FINANCE AND HEAD OF INVESTOR RELATIONS 775-356-9029 (EXT. 65726) | SLAVI@ORMAT.COM
Slide 30: Products Segment
PRODUCTS SEGMENT THIRD-PARTY eGermany BACKLOG” = Guatemala = Chile mNZ = Others CONTRACTS GEOGRAPHIC Israel BREAKDOWN Turkey Backlog as of February 24, 2021. The backlog Includes revenues for the period between January 1, 2021 and February 24, 2021; Copyright © 2021 Ormat Technologies, Inc. 30
Slide 31: Payment of Principal Due by Period ($M)
PAYMENT OF PRINCIPAL DUE BY PERIOD ($M) AVERAGE INTEREST RATE: 4.7% Q@1-2021 @2-2021 Q3-2021 @Q4-2021 ‘Year 2021 Long-term non-recourse debt & limited recourse debt 81 9.5 8.6 9.8 35.9 Senior Secured Notes (non-recourse) 85 5.6 5.0 5.9 25.0 Long-term loans (full recourse) 0.0 47 8.4 47 17.8 Total 16
Slide 32: Expected Capital Needs for 2021
EXPECTED CAPITAL NEEDS FOR 2021 CAPITAL NEEDS ($M) Construction & Enhancements - fully released 200 Development enhancement and Exploration - not yet released 150 Maintenance CapEx (including drilling in Puna) 40 Storage activity 45 Enhancement of the production facilities 10 $445 Total CapEx Copyri
Slide 33: P&L Highlights
P&L HIGHLIGHTS Q4 2020 @42019 Change (%) FY 2020 FY 2019 Change (%) GAAP MEASURES Revenues ($M) Electricity 146.2 144.4 13% 541.4 540.3 0.2% Product 27.4 43.8 (375) % 1481 191.0 (22.5) % Energy Storage 58 43 36.2% 15.8 147 76 % Total Revenues 179.4 192.4 (6.8) % 705.3 746.0 (5.5) % Gross margin (%)
Slide 34: Reconciliation of EBITDA and Adjusted EBITDA
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA Three Months Ended December 31, Twelve-Months Ended December 31, 2020 2019 2020 2019 (Dollars in thousands) (Dollars in thousands) Net income 23,532 14,127 101,806 93,543 Adjusted for: Interest expense, net (including amortization of deferred 18,891 17248
Slide 35: Reconciliation of Adjusted Net Income and EPS
RECONCILIATION OF ADJUSTED NET INCOME ATTRIBUTABLE TO THE COMPANY’S STOCKHOLDERS AND EPS Three Months Ended Twelve Months Ended December 31 December 31 2020 2019 2020 2019 Net income attributable to Company's stockholders ($M) 20.7 12.6 85.5 88.1 One-time tax items ($M) - - - (13.3) Adjusted Net inc