Ormat Technologies, Inc. · NYSE:ORA

Ormat Technologies — Q2 2021 Earnings Presentation

35 slides from Ormat Technologies's earnings presentation, Aug 5, 2021

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

    ORMAT TECHNOLOGIES, INC. EARNINGS CALL DORON BLACHAR, CEO ASSI GINZBURG, CFO AUGUST 5, 2021 Copyright © 2021 Ormat Technologies, Inc. Copyright © 2021 Ormat Technologies, Inc.

  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: Q2 2021 Highlights: Transitioning to Accelerated Growth

    Q2 2021 I HIGHLIGHTS TRANSITIONING TO ACCELERATED GROWTH GROWTH DEMONSTRATED CONTINUED TO DRIVE IN THE LEADING SEGMENTS BUSINESS RESILIENCE PROFITABLE GROWTH Copyright © 2021 Ormat Technologies, Inc. 3

  4. Slide 4: Financial Performance

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

  5. Slide 5: Financial Performance

    FINANCIAL PERFORMANCE Q2 21 Revenues Gross margin Adjusted EBITDA(1) EPS (2,3) $146.9M 35.4% $84.5M $0.23 (16.0%) -200 bps (13.6%) (48.9%) H1 21 Revenues Gross margin Adjusted EBITDA(1) EPS/Adjusted EPS(1,2,3) $313.3M 40.1% $183.8M $0.50/0.66 (14.6%) 0 bps (-9.9%) (47.4%)/(30.5%) (1) For key financi

  6. Slide 6: Revenues by Segment

    REVENUES BY SEGMENT Q2 21 Total Electricity Products Storage 91% 5% $146.9 $133.9M $7.4M $5.6M Electricity Products (16.0%) +4.0% (83.0%) +123.8% 4% Storage H1 21 Total Electricity Products Storage 89% 5% $313.3 $278.9M $16.1M $18.3M Electricity Products (14.6%) +2.7% (82.4%) +320.8% 6% Storage Copy

  7. Slide 7: Gross Margin by Segment

    GROSS MARGIN BY SEGMENT Q2 21 Storage Total Electricity Products 35.4% 37.4% 20.1% 6.4% -200 bps -670 bps -50 bps NA H1 21 Total Electricity Products Storage 40.1% 41.3% 12.8% 45.2% 0 bps -590 bps -850 bps NA Copyright © 2021 Ormat Technologies, Inc. 7

  8. Slide 8: Adjusted EBITDA by Segment

    ADJUSTED EBITDA(1) BY SEGMENT Q2 21 Total Electricity Products Storage 94% 4% $84.5 $79.5M $3.1M $2.0M Electricity Products (13.6%) (13.0%) (51.0%) +712.3% 2% Storage H1 21 Total Electricity Products Storage 95% 2% $183.8 $174.6M $4.2M $4.9M Electricity Products (9.9%) (8.9%) (66.9%) NA 3% Storage (

  9. Slide 9: Q2 2021 Cash and Net Debt

    Q2 2021 I CASH AND NET DEBT Cash and Cash Equivalents, and restricted cash and Cash Equivalents ($M) Net Debt ($M) 99 208 $537 Cash from operating activities 48 Investment 36 $1,041 (1) in CapEx Marketable 13 1 $330 $919 Securities Debt Payment Dividend Other DEC. 31, 2020 June 30, 2021 Dec. 31, 202

  10. Slide 10: Business Resilience

    02 BUSINESS RESILIENCE Copyright © 2021 Ormat Technologies, Inc. Copyright © 2021 Ormat Technologies, Inc. 10

  11. Slide 11: Ormat Continues to Demonstrate Resilience in a Challenging Environment

    ORMAT CONTINUE TO DEMONSTRATE IT’S RESILIENT IN A CHALLENGING AND VOLATILE ENVIRONMENT OPERATION UPDATE PRODUCT SEGMENT M&A UPDATE Generation Puna, Hawaii Operational issues STORAGE UPDATE A STRONG TAILWIND Copyright © 2021 Ormat Technologies, Inc. 11

  12. Slide 12: Electricity Operation

    ELECTRICITY OPERATION Q2 Portfolio increased by 83MW 2021 GROWING PORTFOLIO 2.4% increase in generation 4 5 2 1 3 Steamboat Hills enhancement – start of operation in 6 June 2020 Puna power plant – 25 MW average McGinness Hills expansion - start of operation in May 2021 Offset by lower generation at

  13. Slide 13: Puna Power Plant Restart Progress

    I Nov. 2020 Feb. 2021 April 2021 July 2021 End of 2021 Resumed operation 13 MW 20 MW 28 MW Expect to reach 10 MW 30MW Completed repairs work to a bottoming turbine 25MW average capacity in Q2 21 PUC suspended the new PPA approval Copyright © 2021 Ormat Technologies, Inc. 13

  14. Slide 14: Operational Issues

    OPERATIONAL ISSUES Olkaria • Generation is lower by approximately 25 MW due to resource performance; expect to see an increase generating capacity by YE 2021 • Curtailments due to COVID-19 Steamboat Complex Extended outage due to transformer failure • Reduced generation • Increased COGS Power plant

  15. Slide 15: M&A Update

    M&A UPDATE Acquired from TG Geothermal Portfolio, LLC1 : In Expects $55M Revenue & $37M EBITDA 67.5 MW from two geothermal plants in Nevada: 2022 56 MW Dixie Valley Off taker: SCE I PPA by 2038 I above market prices 20% increase in EBITDA from operating assets 11.5 MW Beowawe By Development of Coyot

  16. Slide 16: Product Backlog

    PRODUCT BACKLOG Signing 3rd parties’ contracts Backlog at $59M(1) Signed a few contracts including Salak 14MW power plant in Indonesia We see more opportunities that can be matured before year-end Focusing manufacturing capacity on internal projects Manufacturing our owned power plants to support or

  17. Slide 17: Energy Storage

    ENERGY STORAGE 4 Improved gross profitability 3 1 Energy Storage performance Q2/21 gross profit – $361k Q2/21 Adjusted EBITDA - $2M 2 Pushing for growth Released for construction 12MW/12MWh Bowling Green, OH 20MW/40MWh Pomona 2, CA 01 CA 02 TX 30MW/120MWh 10MW/10MWh 03 NJ 04 VT 41MW/41MWh 2MW/5MWh C

  18. Slide 18: A Strong Tailwind

    A STRONG TAILWIND 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 deliver firm power with an 80% capacit

  19. Slide 19: Driving Profitable Growth

    04 DRIVING PROFITABLE GROWTH Copyright © 2019 Ormat Technologies, Inc. Copyright © 2021 Ormat Technologies, Inc. 19 Copyright © 2021 Ormat Technologies, Inc.

  20. Slide 20: Growth Plan: 1,528MW - 1,648MW by YE 2023

    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

  21. Slide 21: 2023 Growth Target by Segments

    2023 GROWTH GEOTHERMAL & ENERGY SOLAR ENERGY STORAGE TARGET BY SEGMENTS YE 2023 TARGET 1,255MW-1,275MW 273MW-373MW MW ADDITION* 323MW-343MW 200MW-300MW MW GROWTH 35%-37% 274%-411% Change in MW growth is compared to a 932MW Geothermal & Solar portfolio (including 83MW added in 2021) and a 73 MW stora

  22. Slide 22: Geothermal and Solar Projects Under Development

    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  130-135 MW U.S - Tungsten Mountain 2 11 H1 2022  Guadeloupe -

  23. Slide 23: Energy Storage Projects Under Development

    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 NJ - Andover 20 Q1 2022 Merchant 6 PROJECTS 89 MW NJ - Howel 7 Q2 2022 Merchant ENERGY OH – Bowling Green 12 Q3 2022 Capacity and Merchant

  24. Slide 24: 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. 24

  25. Slide 25: Maintaining a Strong Capital Position to Support Accelerated Growth

    MAINTAINING A STRONG CAPITAL POSITION TO SUPPORT ACCELERATED GROWTH H2 2021 expected capital $278M needs(1) to support future growth target Over Cash, cash equivalents, $ 750 restricted cash and available lines of credit Access to various 35% 2.6x sources of capital Net debt to Net debt to capitaliz

  26. Slide 26: 2021 Guidance

    2021 GUIDANCE Total revenues Electricity revenues Products revenues Storage revenues Adjusted EBITDA $650M-$685M $585M-$595M $40M-$60M $25M-$30M $400M-$410M 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

  27. Slide 27: Summary of Priorities and Results

    Executing M&A growth strategy Increasing 2021 revenue guidance following recent acquisition Delivered revenue growth in our leading segments Added new capacity and restored loss generation Continued to drive profitable growth Releasing two new energy storage projects for construction A strong tailwi

  28. Slide 28: Thank You

    THANK YOU! SMADAR LAVI I VP CORPORATE FINANCE AND HEAD OF INVESTOR RELATIONS 775-356-9029 (EXT. 65726) I SLAVI@ORMAT.COM Copyright © 2021 Ormat Technologies, Inc. 28 Copyright © 2021 Ormat Technologies, Inc.

  29. Slide 29: Products Segment Third-Party Backlog

    5% 3% 7% PRODUCTS Germany 26% SEGMENT Taiwan THIRD-PARTY Guatemala 15% Japan BACKLOG(1) Chile $59.1M NZ 98.3% Others Geothermal contracts CONTRACTS GEOGRAPHIC BREAKDOWN 21% 23% Backlog as of May 5, 2021. The backlog includes revenues for the period between April 1, 2021 and May 5, 2021; Copyright ©

  30. Slide 30: Payment of Principal Due by Period

    PAYMENT OF PRINCIPAL DUE BY PERIOD ($M) AVERAGE INTEREST RATE: 4.9% Q3-2021 Q4-2021 Year 2021 Long-term non-recourse debt & limited recourse debt 8.5 9.7 18.2 Senior Secured Notes (non-recourse) 5.0 5.9 10.9 Long-term loans (full recourse) 8.4 4.7 13.1 Total $21.9 $20.3 $42.2 Remaining Total 2021 20

  31. 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

  32. Slide 32: P&L Highlights

    P&L HIGHLIGHTS Q2 2021 Q2 2020 H1 2021 H1 2020 GAAP MEASURES Revenues ($M) Electricity 133.9 128.7 278.9 271.5 Product 7.4 43.7 16.1 91.1 Energy Storage 5.6 2.5 18.3 4.4 Total Revenues 146.9 174.9 313.3 367.0 Gross margin (%) Electricity 37.4 % 44.1 % 41.3 % 47.2 % Product 20.1 % 20.6 % 12.8 % 21.3

  33. Slide 33: Reconciliation of EBITDA and Adjusted EBITDA

    RECONCILIATION OF EBITDA AND ADJUSTED EBITDA (DOLLARS IN THOUSANDS) 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 In

  34. Slide 34: Reconciliation of Adjusted Net Income and EPS

    RECONCILIATION OF ADJUSTED NET INCOME ATTRIBUTABLE TO THE COMPANY’S STOCKHOLDERS AND EPS Three Months Ended Six Months Ended June 30 June 30 2021 2020 2021 2020 Net income attributable to Company’s stockholders ($M) 13.0 23.0 28.3 49.1 One-time tax items ($M) - - 8.8 - Adjusted Net income attributab

  35. Slide 35: Reconciliation of Non-GAAP Financial Measures

    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES June 30, 2020 Cash and cash equivalents and Restricted cash (in millions $) Cash and cash equivalents 250 Marketable Securities at fair value 46 Restricted cash and cash equivalents 80 Total cash and cash equivalents and Restricted cash (in millions $) 3

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