Slide 1: Ormat Technologies, Inc. Earnings Call
ORMAT TECHNOLOGIES, INC. EARNINGS CALL
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 These forward-looking statements are not intended to be a guarantee of future results, but instead This presentation, and informati
Slide 3: Q3 2023 Earnings Call Agenda
Q3 2023 EARNINGS CALL AGENDA 01 02 03 04 Delivering strong Growing our Advancing profitable Remaining committed financial performance portfolio growth to a sustainable future COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC. 3
Slide 4: COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC.
COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC. 4
Slide 5: Solid Financial Performance
SOLID FINANCIAL PERFORMANCE Q3 Revenues Gross margin Adjusted EBITDA(1) EPS/Adj. EPS $208.1M 28.8% $118.3M $0.59/0.47 +18.3% vs 34.7% Q3 2022 +15.8% +84.4%/ +42.4% 9 MONTHS Revenues Gross margin Adjusted EBITDA(1) EPS/Adj. EPS $588.1M 31.6% $342.7M $1.49/1.37 +11.2% vs 35.7% 9M 2022 +10.3% +75.3%/ +
Slide 6: Revenues by Segment
REVENUES BY SEGMENT Q3 Total Electricity Products Energy Storage 76% 19% $208.1M $157.2M $39.8M $11.0M Electricity Products +18.3% +2.9% +180.2% +24.5% 5% Storage 9 MONTHS Total Electricity Products Energy Storage 82% 14% $588.1M $482.8M $83.3M $21.9M Electricity Products +11.2% +3.5% +112.4% (4.3)%
Slide 7: Gross Margin by Segment
GROSS MARGIN BY SEGMENT Q3 Total Electricity Products Energy Storage 28.8% 31.8% 18.7% 22.9% vs 34.7% Q3 2022 vs 36.5% Q3 2022 vs 18.0% Q3 2022 vs 31.5% Q3 2022 9 MONTHS Total Electricity Products Energy Storage 31.6% 35.5% 13.9% 11.2% vs 35.7% 9M 2022 vs 38.5% 9M 2022 vs 9.2% 9M 2022 vs 24.3% 9M 20
Slide 8: Adjusted EBITDA by Segment
(1) ADJUSTED EBITDA BY SEGMENT Q3 Total Electricity Products Energy Storage 90% 6% $118.3M $106.9M $6.4M $5.0M Electricity Products +15.8% +10.2% +444.7% 24.2% 4% Storage 9 MONTHS Total Electricity Products Energy Storage 95% 3% $342.7M $325.8M $9.8M $7.1M Electricity Products +10.3% +9.3% +190.5% (
Slide 9: Regulatory Environment: Financial Impact of IRA U.S.
REGULATORY FINANCIAL IMPACT OF IRA U.S. ENVIRONMENT Income attributable to sale of Income tax provision tax benefits $14.9M +63.9% increase vs Q3 2022 Tax benefits related to tax equity Transferable ITC Q3 2023 transaction in Q3 2023 $6.6M $12.5M Increase of $3.4 million mainly due to Mainly related
Slide 10: Cash and Net Debt
CASH AND NET DEBT Successfully raised ~$ 342 M of equity in 9M Cash and Cash Equivalents and restricted cash Net Debt1 ($M) and Cash Equivalents ($M) Successfully raised $1,800 $1,786 $ 100M $ 170 $449 of new debt in 9M $ 477 Cash from operating activities Investment $176 4.15% in CapEx (2) Average
Slide 11: Maintaining a Strong Capital Position
MAINTAINING A STRONG CAPITAL POSITION TO SUPPORT ACCELERATED GROWTH Access to multiple sources of liquid capital 3.8x Net debt to Adj. EBITDA2 $110M $673M Expected capital Total needs for Q4 20231 liquidity3 42% Raised $ 166M after quarter-end Net debt to capitalization2 $43M $73M $50M Tax equity Co
Slide 12: Electricity update, Product backlog, Energy storage, Regulatory tailwind
Electricity update Product backlog Energy storage Regulatory tailwind COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC. 12
Slide 13: Electricity Operation
ELECTRICITY OPERATION Global portfolio reached 1,115 MW 1,2 Robust and balanced portfolio 1 830 MW 3 38 MW 5 150 MW U.S. Honduras Kenya 8 MW added 7.6% Heber complex Electricity 2 40 MW 4 15 MW 6 42 MW 1 Guatemala Guadeloupe Indonesia generation increase 1 2.9% 1.7 GWh 2 4 Revenue Electricity 3 incr
Slide 14: M&A Announcement
M&A ANNOUNCEMENT $271M total estimated consideration Entered into a purchase agreement with Enel Green Power North America(1) : Expects to finance the acquisition with new long- term corporate debt 43 MW net from three geothermal power plants EXPECTED CLOSING: By Q1 2024 under long-term contracts in
Slide 15: Value Creation
VALUE CREATION Salt Wells, NV I 3 years average $35M REVENUE & $24M EBITDA 20-22 From operating contracted assets By end of UPGRADE ALL THREE GEOTHERMAL ASSETS 2025 Expect to add 17MW Improve EBITDA by $15 million Expected $55 million investment Approx. an 8X EV/EBITDA multiple By end of 2029 EXPANS
Slide 16: Product Backlog
PRODUCT BACKLOG TAOM, NZ 28MW 3RD PARTY CONTRACTS 192M 40.1% 10% $ 7% Backlog1 Increase vs. Q3 2022 73% 4% 3% 3% 94% Approx. Geothermal $ 150M contracts New contracts and orders YTD Geographic Breakdown New Zealand Indonesia Other2 Guatemala Taiwan USA 1) Backlog as of November 8, 2023.. The backlog
Slide 17: Energy Storage
ENERGY STORAGE 82 MW/102 MWh COD of 5 new facilities YTD 155MW/380 MWh 3 new assets started construction YTD 1 55MW/180MWh 3 33MW/33MWh CA TX 2 80MW/80MWh 4 2MW/5MWh East Coast1 VT 1) East Coast market includes PJM COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC. 17
Slide 18: COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC.
COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC. 18
Slide 19: Robust Growth Plan
ROBUST GROWTH PLAN 1.9GW – 2.0GW 64% - 73% NEW 2025 portfolio target Expected MW growth vs driven by successful 2022 expansion efforts Significantly Accelerate increase solar storage capacity & geothermal to establish leading position in the U.S. capacity storage sector This growth plan is subject t
Slide 20: 2025 Growth Target by Segments
2025 GROWTH TARGET CD4 part of Mammoth complex, CA, USA 65MW BY SEGMENTS GEOTHERMAL & ENERGY SOLAR ENERGY STORAGE 600MW-670MW YE 2025 TARGET 1,300MW-1,330MW 1,470 MWh-1,700 MWh MW ADDITION (VS 2022) 230MW-260MW 512MW-582MW MW GROWTH 21%-24% 582%-661% Change in MW growth is compared to a 1,070MW Elec
Slide 21: Geothermal Development
GEOTHERMAL DEVELOPMENT North Valley, NV, USA 25MW Projected Expected Project PPA Capacity (MW) COD U.S - North Valley 25 ✓ Under U.S. – Dixie Valley 6 ✓ development: U.S - Heber Complex 8 ✓ 94 MW from Guatemala – Zunil 5 2024 ✓ 6 projects U.S – Beowawe Repowering 6 Q2 2024 ✓ Indonesia – Ijen 15(1) Q
Slide 22: Solar Development
SOLAR DEVELOPMENT Projected Expected Project Capacity PPA COD (MW) U.S. - Brady Solar 6 ✓ Under development: U.S. - Steamboat Solar 7 Q4 2023 ✓ 79 MW from U.S. – Steamboat Hills Solar 4 Q4 2023 ✓ 6 projects U.S. – North Valley Solar 6 H1 2024 ✓ U.S. – Beowawe Solar 6 Q2 2024 ✓ U.S. – McGinness Hills
Slide 23: Energy Storage Development
ENERGY STORAGE DEVELOPMENT Stryker storage facility, NJ, USA 20MW/20MWh Projected Projected Expected Project Capacity ITC %1 PPA MWh COD (MW) NJ - Howell 7 7 30% Merchant Under Capacity PPA development: OH – Bowling Green 12 12 40% and Merchant 275 MW/ TX - Upton 23 23 40% Merchant 740MWh NJ - Andov
Slide 24: Energy Storage Pipeline
ENERGY STORAGE PIPELINE Rabbit Hill storage facility, TX, USA 10MW/10MWh ~3.4GW/11.4GWh 33 potential capacity of named U.S. storage pipeline prospects GEOGRAPHICAL East Coast1 112 BREAKDOWN Others 275 WECC 275 Texas 505 California 2,205 1) East coast market includes PJM, ISO-NE, NYISO COPYRIGHT © 20
Slide 25: 2023 Guidance ($M)
2023 GUIDANCE ($M) (1) Total revenues Electricity Products Storage Adjusted EBITDA 825-838 670-675 125-130 30-33 480-495 +12%-14% +6%-7% +75%-82% -3%-7% +10%-14% 1.9 GW-2.0 GW TRANSITIONING TO ACCELERATED +18%-20% GROWTH 1.16 GW CAGR 2022-2025E IN STORAGE & 1.1 GW ELECTRICITY SEGMENTS Storage Produc
Slide 26: COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC.
COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC. 26
Slide 27: 2022-2023 Activities - What's New?
2022-2023 ACTIVITIES - WHAT’S NEW? 2022 ESG REPORT Published the 2022 ESG report, with updated ESG-aligned structure and emphasis on impact. In addition to that, we conducted ESG materiality analysis, to identify the material ESG topics for the company. CLIMATE RISKS ASSESSMENT AND TCFD Initiated cl
Slide 28: Environment Highlights
HIGHLIGHTS 2.2 M tCO2e AVOIDED emissions compared to ENVIRONMENT the local grid, only in 2022 19% Absolute reduction in Scope 1 and 2 GHG emissions compared with 2019 baseline 25% Reduction in GHG emissions intensity (tCO2e/MWh) compared with 2019 baseline 30% Women in VP-level 25.3 Training hours p
Slide 29: Governance Highlights
HIGHLIGHTS COMMITMENT TO UPHOLDING GOVERNANCE THE HIGHEST STANDARDS ACROSS THE ORGANIZATION Our corporate governance practice is defined by honesty, openness and fairness We are constantly improving our governance and our level of disclosure on related topics, such as anti- corruption, executive rem
Slide 30: COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC.
COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC. 30
Slide 31: Summary: Strengthening the Foundation, Preparing for Faster Growth
SUMMARY: STRENGTHENING THE FOUNDATION, PREPARING FOR FASTER GROWTH Executing on our Strong tailwinds growth plans added 127 MW since support renewable the beginning of 2023 and storage energy Delivered strong Q3 Recovery in Product results segment backlog driven by new assets backlog stands and IRA
Slide 32: Committed to Continued Profitable Growth
COMMITTED TO CONTINUED PROFITABLE GROWTH IR@ORMAT.COM
Slide 33: Payment of Principal Due by Period ($M)
PAYMENT OF PRINCIPAL DUE BY PERIOD ($M) AVERAGE INTEREST RATE: 4.15% Q4-2023 Year 2023 Long-term non-recourse debt & limited recourse debt 13.8 13.8 Long-term loans (full recourse) 18.3 18.3 Total $32.1 $32.1 Remaining Total 2023 2024 2025 2026 2027 Thereafter Long-term non-recourse debt & limited r
Slide 34: CapEx for 2023
CAPEX FOR 2023 ACTUAL INVESTED CAPEX TOTAL CAPEX ($M) IN 9 MONTHS 2023 FOR Q4 2023 FOR 2023 Electricity Segment 327 70 397 Construction & Enhancements – fully released 168 19 187 Development enhancement, drillings and Exploration 59 20 79 Puna restoration (including drilling) 31 5 36 Olkaria recover
Slide 35: P&L Highlights
P&L HIGHLIGHTS Q3 2023 Q3 2022 YTD 2023 YTD 2022 GAAP MEASURES Revenues ($M) Electricity 157.2 152.8 482.8 466.5 Product 39.8 14.2 83.3 39.2 Energy Storage 11.0 8.8 21.9 22.9 Total Revenues 208.1 175.9 588.1 528.7 Gross Profit ($ millions) 60.0 61.1 185.6 188.6 Gross margin (%) Electricity 31.8% 36.
Slide 36: Reconciliation of EBITDA and Adjusted EBITDA
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA (DOLLARS IN THOUSANDS) Three Months Nine Months Ended September 30, Ended September 30, 2023 2022 2023 2022 Net income 36,332 19,826 94,304 57,564 Adjusted for: Interest expense, net (including amortization of deferred financing costs) 22,227 20,744 63,45
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 Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (in millions, except for EPS) GAAP Net income attributable to the Company's stockholders 35.5 18.1 88.7 47.8 Impact o
Slide 38: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES September 30, 2023 Cash and cash equivalents, marketable securities and Restricted cash (in millions $) Cash and cash equivalents 78 Restricted cash and cash equivalents 108 Total cash and cash equivalents, marketable securities and Restricted cash (in m