Slide 1: Ormat Technologies, Inc. Earnings Call
Q2 | 2021 ORMAT TECHNOLOGIES, INC. EARNINGS CALL DORON BLACHAR, CEO ASSI GINZBURG, CFO AUGUST 5, 2021 Copyright © 2021 Ormat Technologies, 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, may contain “forward-looking stat
Slide 3: Q2 2021 Highlights
Q2 2021! HIGHLIGHTS TRANSITIONING TO ACCELERATED GROWTH GROWTH DEMONSTRATED CONTINUED TO DRIVE IN THE LEADING SEGMENTS BUSINESS RESILIENCE PROFITABLE GROWTH Copyright ©2021 Ormat Technologies, Inc. 3
Slide 4: Financial Performance
rx TA ORMAT O1 FINANCIAL “ PERFORMANCE Copyright © 2021 Ormat Technologies, Inc.
Slide 5: Financial Performance
FINANCIAL PERFORMANCE Revenues Gross margin $146.9M 35.4% (16.0%) -200 bps Revenues Gross margin $313.3M 40.1% (14.6%) O bps AP financial measures re stockholders in t! ectively, in the 3 and 8M, net income attrib ciliation plea Adjusted EBITDA® $84.5M (13.6%) Adjusted EBITDA” $183.8M (-9.9%) 2e the
Slide 6: Revenues by Segment
REVENUES BY SEGMENT Total $146.9 (16.0%) Total $313.3 (14.6%) Electricity $133.9M +4,.0% Electricity $278.9M +2.7% Products $7.4M (83.0%) Products $16.1M (82.4%) Storage $5.6M +123.8% Storage $18.3M +320.8% 91% 5% Electricity Products 4% Storage 89% 5% Electricity Products 6% Storage Copyright ©2021
Slide 7: Gross Margin by Segment
GROSS MARGIN BY SEGMENT Total Electricity 35.4% 37.4% -200 bps -670 bps Total Electricity 40.1% 41.3% O bps -590 bps Products 20.1% -50 bps Products 12.8% -850 bps Storage 6.4% NA Storage 45.2% NA Copyright ©2021 Ormat Technologies, Inc. 7
Slide 8: Adjusted EBITDA by Segment
ADJUSTED EBITDA’ BY SEGMENT Total $84.5 (13.6%) Total $183.8 (9.9%) Electricity $79.5M (13.0%) Electricity $174.6M (8.9%) Products $3.1M (51.0%) Products $4,.2M (66.9%) Storage $2.0M +712.3% Storage $4.9M NA () For key financial results and non ~GAAP financial measures reconciliation please see the
Slide 9: Q2 2021 Cash and Net Debt
Q2 2021! CASH AND NET DEBT Cash and Cash Equivalents, and restricted cash and Cash Equivalents ($M) 99 208 $537 Cash from operating 48 activities Investment 36 in Capex Marketable 13 1 $330 Securities Debt Payment Dividend Other DEC. 31, 2020 June 30, 2021 $125M $175M CREDIT FACILITY SUCCESSFUL RAIS
Slide 10: Ormat Resilience
ORMAT 02 a. RESILIENCE Livia a
Slide 11: Ormat Continue to Demonstrate It's Resilient
ORMAT CONTINUE TO DEMONSTRATE IT’S RESILIENT IN A CHALLENGING AND VOLATILE ENVIRONMENT | 2 3 OPERATION UPDATE PRODUCT SEGMENT M&A UPDATE Generation Puna, Hawaii Operational issues 4. 5 STORAGE UPDATE A STRONG TAILWIND Copyright ©2021 Ormat Techn
Slide 12: Electricity Operation Q2
01 ELECTRICITY OPERATION @2 2021 Ww GROWING PORTFOLIO ~ < 2.4% increase in generation Steamboat Hills enhancement - start of operation in June . 2020 ‘ “NX Puna power plant - 25 MW average 2 McGinness Hills expansion - start of operation in May 2021 ~~ Offset by lower generation at Olkaria, Kenya an
Slide 13: Operation Update | Puna, Hawaii
01 OPERATION UPDATE | PUNA, HAWAII e e oe a -@ Nov. 2020 Feb. 2021 April 2021 July 2021 End of 2021 Resumed operation ~ 13 MW _20 MW 28 MW Expect to reach — 10 MW Completed repairs work to a bottoming turbine ola : ee 25MW average capacity in Q2 21 —— PUC suspended the new PPA Spproval
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
Slide 15: M&A Update
M&A UPDATE Acquired from TG Geothermal Portfolio, LLC! : 67.5 MW from two geothermal plants in Nevada: 56 MW Dixie Valley Off taker: SCE | PPA by 2038 | above market prices 11.5 MW Beowawe Off taker: NV Power | PPA by 2025 | below market prices Greenfield development asset with high resource potenti
Slide 16: Product Backlog
2S PRODUCT BACKLOG Signing 3" parties’ contracts Backlog at $59M® 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
Slide 17: Energy Storage
04 ENERGY STORAGE Improved gross profitability Energy Storage performance Q2/21 gross profit - $361k Q2/21 Adjusted EBITDA - $2M Pushing for growth Released for construction 12MW/12MWh Bowling Green, OH 20MW/40MWh Pomona 2, CA 83 MW O1CA 02 TX 30MW/120MWh 10MW/10OMWh 03 NJ 04 VT 41MW/41MWh 2MW/SMWh
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. 1GW must deliver firm power with an 80% capacity
Slide 19: 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 TARGET BY SEGMENTS GEOTHERMAL & ENERGY SOLAR ENERGY STORAGE YE 2023 TARGET 1,255MW-1,275MW 273MW-373MW 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 storage portfolio in YE 2020 (including 10
Slide 22: Geothermal & Solar Energy Projects Under Development
GEOTHERMAL & SOLAR ENERGY PROJECTS UNDER DEVELOPMENT Projected Expected Project Capacity PPA (MW) cop U.S - Heber Complex 1 End 2022 v U.S - CD4 30 Ql 2022 v 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 v 130-135 MW
Slide 23: Energy Storage Projects Under Development
ENERGY STORAGE PROJECTS UNDER DEVELOPMENT Projected ji ‘i Expected Type of Project Capacity (MW) coD contract CA - Tierra Buena 5 Q4 2021 Capacity PPA and Merchant TX - Upton 25 Q4 2021 Merchant ENERGY STORAGE 6 PROJECTS NJ - Andover 20 Ql 2022 Merchant 89 MW NJ - Howel 7 Q2 2022 Merchant OH - Bowli
Slide 24: U.S. Storage Pipeline Prospects
2 GW 36 200MW - 3OOMW potential capacity of named expected addition U.S. storage pipeline prospects by YE 2023 Copyright ©2021 Ormat Technologies, Inc. 24
Slide 25: Maintaining a Strong Capital Position
MAINTAINING A STRONG CAPITAL POSITION TO SUPPORT ACCELERATED GROWTH $275m H2 2021 expected capital needs® to support future growth target Over $750 Cash, cash equivalents, restricted cash and available lines of credit Access to various sources of capital 35% 2.6x Net debt to Net debt to capitalizati
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 TRANSITIONING TO ACCELERATED GROWTH IN STORAGE AND ELECTRICITY SEGMENTS MW EXPECTATIONS ADJUSTED EBITDA EXPECTATIONS >1,500MW > >$500M) run-rat
Slide 27: Summary
SUMMARY: STRENGTHENING THE FOUNDATION, PREPARING FOR FASTER GROWTH Executing M&A growth strategy Increasing 2021 revenue guidance following recent acquisition Delivered revenue growth in our leading segments Added new capacity and restored loss generation Continued to drive profitable growth Releasi
Slide 28: Full Commitment to Sustainable Growth
FULL COMMITMENT TO SUSTAINABLE GROWTH THANK YOU! SMADAR LAVI! VP CORPORATE FINANCE AND HEAD OF INVESTOR RELATIONS 775-356-9029 (EXT. 65726) | SLAVI@ORMAT.COM
Slide 29: Products Segment Contracts Geographic Breakdown
5% PRODUCTS SEGMENT « Germany THIRD-PARTY = Taiwan BACKLOG” = Guatemala = Japan = Chile NZ CONTRACTS GEOGRAPHIC Others BREAKDOWN Backlog as of May 5, 2021. The backlog includes revenues for the period between April 1, 2021 and May 5, 2021; Copyright ©2021 Ormat Technologies, Inc. 29
Slide 30: Payment of Principal Due by Period ($M)
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 85 9.7 18.2 Senior Secured Notes (non-recourse) 5.0 5.9 10.9 Long-term loans (full recourse) 8.4 47 13.1 Total $21.9 $20.3 $42.2 Remaining Total 2021 2022
Slide 31: Capex for 2021
CAPEX FOR 2021 (sm) ACTUAL INVESTED CAPITAL NEEDS TOTAL CAPEX IN H1 2021 FOR H2 2021 FOR 2021 Electricity Segment 185 248 433 Construction & Enhancements - fully released 101 200 301 Development enhancement, drillings and Exploration 19 20 39 Puna restoration (including drilling) 25 25 Olkaria recov
Slide 32: P&L Highlights
P&L HIGHLIGHTS @2 2021 @2 2020 H1 2021 H12020 GAAP MEASURES Revenues ($M) Electricity 133.9 1287 278.9 25 Product 74 437 161 oul Energy Storage 5.6 25 18.3 4.4 Total Revenues 146.9 174.9 313.3 367.0 Gross margin (%) Electricity 374 % 441 % 41.3% 472% Product 201 % 20.6 % 128 % 213% Energy Storage 6.
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
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
Slide 35: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES March 31, 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 $)