Ormat Technologies, Inc. · NYSE:ORA
Ormat Technologies — Q2 2021 Earnings Presentation
33 slides from Ormat Technologies's earnings presentation, August 2021
Slide 1: Ormat Technologies, Inc. Investor Presentation August 2021
ORMAT TECHNOLOGIES, INC. INVESTOR PRESENTATION AUGUST 2021 Copyright Copyright©©2021 2021Ormat OrmatTechnologies, Technologies,Inc. Inc.
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
Slide 3: Introduction
INTRODUCTION Copyright © 2021 Ormat Technologies, Inc. 3
Slide 4: A Leading Renewable Energy Provider
A LEADING RENEWABLE over Own & operate ENERGY PROVIDER 55 1,100MW WITH A PROVEN TRACK RECORD Years of experience Geothermal, Storage, Solar PV & REG(1) IN GEOTHERMAL AND ENERGY STORAGE 1,400 $ 705M Employees 2020 revenues $ 420M $ 86M 2020 adj. EBITDA(2) 2020 Net income(3) (1) REG – Recovered Energy
Slide 5: Our Business Segments
OUR BUSINESS SEGMENTS 84% 11% 5% of LTM of LTM of LTM revenues revenues revenues ELECTRICITY PRODUCT ENERGY STORAGE Develop, build, own and operate Design, manufacture and sell Growing to establish geothermal, solar and recovered equipment for geothermal and leading position energy-based (REG) power
Slide 6: Our Core Competencies
OUR CORE COMPETENCIES THE WORLD’S ONLY VERTICALLY INTEGRATED GEOTHERMAL COMPANY Development Drilling Engineering Manufacturing Construction Operation and/or exploration ELECTRICITY PRODUCT STORAGE Copyright © 2021 Ormat Technologies, Inc. 6
Slide 7: Electricity Segment Overview
ELECTRICITY SEGMENT OVERVIEW 5 4 Diversified 1 2 3 portfolio 6 63% 37% U.S. International 2020 01 U.S. 02 03 Honduras Geographic 730 MW Guatemala 38 MW breakdown 40 MW 05 Kenya of revenues 04 Guadeloupe 06 Indonesia 15 MW 150 MW 42 MW(1) $540 $541 $510 Global operation $436 $466 94% geothermal; High
Slide 8: Geothermal Market
GEOTHERMAL MARKET Ormat -the 2nd largest geothermal owner & operator 1,400 100 1,200 80 1,000 800 60 600 40 400 20 200 0 0 EDC (PNOC) Ormat CFE ENEL Star Energy Calpine Aboitiz Contact Mercury Terra-Gen Consortium Energy (ECP) Operation (MW) Estimated Project Count 13.5GW Global Installed geothermal
Slide 9: Product Segment Overview
PRODUCT SEGMENT OVERVIEW Market leader Primary provider of geothermal binary plants Suppliers of geothermal power plants 2015 – 2019 capacity, MW Built approx. 190 power plants and installed approx. 3,200 MW of geothermal & REG over the years 56% 72% Binary Ormat STG & BINARY 3rd parties’ backlog BI
Slide 10: Energy Storage Overview
ENERGY STORAGE OVERVIEW 4 Growth in U.S. energy storage incremental 1 3 capacity (MW) 2 6,062 5,260 01 CA 02 TX 4,115 30MW/120MW 10MW/10MW 3,705 h h 03 NJ 04 VT 41MW/41MW 2MW/5MWh h Establishing strong market position 1,151 Focus on largest and most lucrative markets California, Texas, New York and
Slide 11: Strong Tailwinds for Renewable Energy and Energy Storage
STRONG TAILWINDS FOR RENEWABLE ENERGY AND ENERGY STORAGE Governments around the world continue to support renewable energy California leading the way in renewables Recent ruling by the CPUC requiring Electric Load Service Entities (LSEs) to procure 11.5 GW of new clean electricity by 2026. 1 GW must
Slide 12: Ormat's Growth Drivers
ORMAT’S GROWTH DRIVERS Copyright © 2021 Ormat Technologies, Inc. 12
Slide 13: Robust Growth Plan
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: 1,528MW - 1,648MW Total expected MW growth: ~ 50% This growth plan is subject to obtaining all permits and regulatory
Slide 14: 2023 Growth Target by Segments
2023 GROWTH GEOTHERMAL & ENERGY SOLAR ENERGY STORAGE TARGET BY SEGMENTS (VS 2020) YE 2023 TARGET 1,255MW-1,275MW 273MW-373MW MW ADDITION (VS 2020) 323MW-343MW 200MW-300MW MW GROWTH (VS 2020) 35%-37% 274%-411% Change in MW growth is compared to a 932MW Geothermal & Solar portfolio and a 73 MW storage
Slide 15: Geothermal and Solar Projects Under Development
15 MW McGinness Hills expansion started operation in May 2021 Projected Expected Project Capacity PPA COD (MW) U.S - Heber Complex 11 End 2022 U.S - CD4 30 Q1 2022 U.S - North Valley 25 End 2022 - GEOTHERMAL U.S. - Puna expansion 8 2023/TBU Suspended 9 PROJECTS U.S - Dixie Meadows 15 H2 2022 1
Slide 16: Energy Storage Projects Under Development
10MW/40MW Vallecito project started operation in April 2021 Projected Expected Type of Project Capacity COD contract (MW) Capacity PPA CA - Tierra Buena 5 Q4 2021 and Merchant TX - Upton 25 Q4 2021 Merchant ENERGY STORAGE ENERGY NJ - Andover 20 Q1 2022 Merchant 6 PROJECTS STORAGE 89 MW PROJECTS NJ -
Slide 17: Energy Storage Pipeline
2 GW 36 200MW - 300MW potential capacity of named expected addition U.S. storage pipeline prospects by YE 2023 ENERGY STORAGE PIPELINE Copyright © 2021 Ormat Technologies, Inc. 17
Slide 18: Growth: MW and Adjusted EBITDA Expectations
GROWTH MW EXPECTATIONS ADJUSTED EBITDA EXPECTATIONS 1,500MW >$500M run-rate(2) 1,005MW $420M (1) 2020 2021 2022 2023 2020 2021 2022 2023 (1) For non –GAAP financial measures reconciliation please see the appendix slides (2) Annual run-rate towards the end of 2022 Copyright © 2021 Ormat Technologies,
Slide 19: Acquisition of TG Geothermal Portfolio
$377M total estimated consideration $171M for 100% of the equity interests Entered into a purchase agreement with TG Geothermal Portfolio, LLC1 to acquire: $206M total debt & associated lease obligations CLOSING : July 2021 67.5 MW from two geothermal plants in Nevada: 56 MW Dixie Valley I Off taker
Slide 20: Acquisition Revenue, EBITDA and Cost Saving Outlook
In 2022 $55M REVENUE & $37M EBITDA From operating contracted assets By IMPROVE EFFICIENCIES AND COST SAVING 2025 Operational proximity to our power plants Refinancing the current debt supported by our strong balance sheet 20% INCREASE IN EBITDA Asset's expansion using our technology and expertise, m
Slide 21: Key Investment Highlights
KEY INVESTMENT HIGHLIGHTS Copyright © 2021 Ormat Technologies, Inc. 21
Slide 22: Key Investment Highlights
KEY INVESTMENT HIGHLIGHTS Strong financial Innovative Robust growth ESG positioning potential Copyright © 2021 Ormat Technologies, 22Inc. 22
Slide 23: Strong Financial Positioning
STRONG FINANCIAL POSITIONING Installed capacity growth (MW) Revenue growth ($m) Geothermal REG Solar Storage Electricity segment Product segment Energy Storage 1,005 931 957 $693 $719 $746 $705 795 $663 713 857 854 872 742 660 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Electricity segment gro
Slide 24: Strong Financial Positioning: Debt and Leverage
STRONG FINANCIAL POSITIONING Total Debt ($M) Net Debt ($M)(1) Project Finance Corporate Debt $1,456 $1,416 $1,090 $1,085 $1,041 $1,268 $1,238 $919 $817 $914 795 509 522 786 305 759 716 661 630 609 2017 2018 2019 2020 June 30, 2017 2018 2019 2020 June 30, 2021 2021 Net Debt to Capitalization (Total E
Slide 25: Pure-Play Renewables Platform Aligned with ESG Principles
PURE-PLAY RENEWABLES PLATFORM ALIGNED WITH ESG PRINCIPLES Singular focus on renewables ORMAT CO2 EMISSIONS ARE LOWER THAN ALTERNATIVE RESOURCES (MM)1 Publish annual Corporate 7.6 tons of Sustainability Report CO2 5.4 tons of CO2 3.2 100% local employment at tons of CO2 0.1 operational facilities ton
Slide 26: Attractive Investment Thesis
ATTRACTIVE INVESTMENT THESIS Strong financial Robust growth ESG positioning potential Renewable asset growth in Consistent track record of Significant, consistent the U.S. supported by strong returns for shareholders Domestic growth favorable regulatory dynamics International geothermal Pure-play re
Slide 27: Appendix
APPENDIX Copyright © 2021 Ormat Technologies, Inc. 27
Slide 28: Reconciliation of EBITDA and Adjusted EBITDA (Cont'd)
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA (CONT’D) The following table reconciles net income to EBITDA and Adjusted EBITDA for the twelve-month periods ended December 31, 2020, 2019, 2018, 2017, 2016 and 2015. Year Ended December 31, 2020 2019 2018 2017 2016 (Dollars in thousands) Net income 101,
Slide 29: Reconciliation of EBITDA and Adjusted EBITDA
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA Three Months Six-Months Ended June 30, Ended June 30, 2021 2020 2021 2020 Net income 15,195 25,270 33,024 55,176 Adjusted for: Interest expense, net (including amortization of deferred financing costs) 17,818 19,344 36,571 36,215 Income tax provision (ben
Slide 30: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Year Ended December 31 June 30, 2020 2019 2018 2017 2016 2021 Cash and cash equivalents and Restricted cash (in millions $) Cash and cash equivalents 250 448 71 99 48 230 Marketable Securities at fair value 46 Restricted cash and cash equivalents 80 89 8
Slide 31: CAPEX for 2021
CAPEX FOR 2021 ACTUAL INVESTED CAPITAL NEEDS TOTAL CAPEX ($M) IN H1 2021 FOR H2 2021 FOR 2021 Electricity Segment 185 248 433 Construction & Enhancements – fully released 101 200 301 Development enhancement, drillings and Exploration 19 20 39 Puna restoration (including drilling) 25 25 Olkaria recov
Slide 32: Products Segment Third-Party Backlog
June 2021 - signed supply contract for a 14 MW project in Indonesia PRODUCTS 5% 3% SEGMENT 7% 26% THIRD-PARTY Germany BACKLOG(1) Taiwan Guatemala Japan 15% Chile $59.1M NZ CONTRACTS GEOGRAPHIC 98.3% Others BREAKDOWN Geothermal contracts 21% 23% Copyright © 2021 Ormat Technologies, Inc. 32 Backlog as
Slide 33: Air-Cooled Binary Geothermal Power Plant
AIR-COOLED BINARY GEOTHERMAL POWER PLANT Copyright © 2021 Ormat Technologies, Inc. 33