Ormat Technologies, Inc. · NYSE:ORA
Ormat Technologies — Q4 2023 Earnings Presentation
38 slides from Ormat Technologies's earnings presentation, Feb 22, 2024
Slide 1: Ormat Technologies, Inc. Earnings Call
I 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: Q4 & YE 2023 Earnings Call Agenda
Q4 & YE 2023 EARNINGS CALL AGENDA 01 02 03 04 Delivering strong Improving our Advancing profitable Remaining committed financial performance portfolio growth to a sustainable future COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC. 3
Slide 4: COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC.
COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC. 4
Slide 5: Solid Financial Performance
SOLID FINANCIAL PERFORMANCE Q4 Revenues Gross margin Adjusted EBITDA(1) EPS/Adj. EPS $241.3M 32.5% $139.0M $0.59/0.67 +17.4% vs 39.0% Q4 2022 +11.5% +84.4%/(8.2)% FY 2023 Revenues Gross margin Adjusted EBITDA(1) EPS/Adj. EPS $829.4M 31.8% $481.7M $2.08/2.05 +13.0% vs 36.6% Q4 2022 +10.6% +77.8%/+25.
Slide 6: Revenues by Segment
REVENUES BY SEGMENT Q4 Total Electricity Products Energy Storage 76% 21% $241.3M $183.9M $50.4M $7.0M Electricity Products +17.4% +11.3% +56.7% (14.0)% 3% Storage FY 2023 Total Electricity Products Energy Storage 80% 16% $829.4M $666.8M $133.8M $28.9M Electricity Products +13.0% +5.5% +87.3% +(6.8)%
Slide 7: Gross Margin by Segment
GROSS MARGIN BY SEGMENT Q4 Total Electricity Products Energy Storage 32.5% 39.5% 12.6% (8.9)% vs 39.0% Q4 2022 vs 43.5% Q4 2022 vs 22.8% Q4 2022 vs 11.7% Q4 2022 FY 2023 Total Electricity Products Energy Storage 31.8% 36.6% 13.4% 6.4% vs 36.6% FY 2022 vs 39.8% FY 2022 vs 15.3% FY 2022 vs 21.0% FY 20
Slide 8: Adjusted EBITDA by Segment
(1) ADJUSTED EBITDA BY SEGMENT Q4 Total Electricity Products Energy Storage 91% 7% $139.0M $125.9M $10.3M $2.8M Electricity Products +11.5% +7.4% +110.0% +9.1% 2% Storage FY 2023 Total Electricity Products Energy Storage 94% 4% $481.7M $451.7M $20.1M $9.9M Electricity Products +10.6% +8.8% +142.8% (
Slide 9: Regulatory Financial Impact of IRA
REGULATORY FINANCIAL IMPACT OF IRA ENVIRONMENT Income attributable 2024 outlook to sale of tax benefits1 Income attributable to sale of Q4 2023 tax benefits – will be reduced by approx. $5 - $10 million 18.7 4.0 Income tax line - $40 million 7.5 14.7 benefit that will be recorded 7.5 proportionally
Slide 10: Cash and Net Debt
CASH AND NET DEBT Successfully raised ~$ 342 M of equity in FY 2023 Cash and Cash Equivalents and restricted cash Net Debt1 ($M) and Cash Equivalents ($M) Successfully raised $1,800 $1,801 $ 250M $ 309 $618 of new debt in FY 2023 $ 612 $ 42 4.3% Cash from Sale of operating LLC activities $207 Invest
Slide 11: Maintaining a Strong Capital Position
MAINTAINING A STRONG CAPITAL POSITION TO SUPPORT ACCELERATED GROWTH Access to multiple sources of liquid capital 3.7x Net debt to Adj. EBITDA2 $550M $741M Expected CapEx for Total FY 20241 liquidity3 42% Net debt to Raised $ 200 M long-term corporate capitalization2 loan after quarter-end (1) For de
Slide 12: Electricity Update, Product Backlog, Energy Storage
Electricity update Product backlog Energy storage COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC. 12
Slide 13: Electricity Operation
ELECTRICITY OPERATION Global portfolio reached 1,215 MW 1,2 Robust and balanced portfolio 1 935 MW 3 33 MW 5 150 MW 57MW added from new geothermal and solar assets U.S. Honduras Kenya 2 40 MW 4 15 MW 6 42 MW 1 100MW added from newly acquired assets Guatemala Guadeloupe Indonesia 12MW reduction in op
Slide 14: Electricity Operation Updates
ELECTRICITY OPERATION UPDATES Puna, Hawaii Olkaria, Kenya Caribbean Acquisition Generation reached Current capacity stands Dominica Completed Enel assets above 30MW at 125MW Signed PPA acquisition: for new 10MW power 100MW of Geothermal New PPA approved by Continue our efforts to plant and Solar PV
Slide 15: Value Creation
Cove Fort, UT I VALUE CREATION January $272M TOTAL CONSIDERATION 2024 Geothermal – 40MW Solar – 60 MW Two greenfield By end of UPGRADE ALL THREE GEOTHERMAL ASSETS 2025 Expect to add 17MW Improve EBITDA by $15 million Expected $55 million investment Geothermal CT Solar PV By end of CA NV UT 2029 EXPA
Slide 16: Product Backlog
PRODUCT BACKLOG TAOM, NZ 28MW 3RD PARTY CONTRACTS $ 152M 2.4% 5% 5% Backlog1 Increase vs. 4% Q4 2022 4% 76% 4% 2% 93% Approx. Geothermal $ 157M contracts New contracts and orders Geographic Breakdown signed in 2023 New Zealand Guatemala Indonesia 2 Turkey USA Other Taiwan 1) Backlog as of February 2
Slide 17: Energy Storage Operation
ENERGY STORAGE OPERATION 2023 Storage revenues breakdown ($millions) 12.5 0.1 11.5 7.5 12.4 4.9 4.0 4.9 East cost California Texas 82 MW/102 MWh Merchant Fixed revenues 5 CODs in 2023 Signed 2 fixed price tolling agreements Pomona 2 20 MW/ 40 MWh 1 55MW/180MWh 3 33MW/33MWh CA TX Arrowleaf 35 MW/ 140
Slide 18: COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC.
COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC. 18
Slide 19: Robust Growth Plan
ROBUST GROWTH PLAN 2.1GW – 2.3GW 92% - 103% 2026 portfolio target Expected MW growth vs driven by successful 2023 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 to o
Slide 20: 2026 Growth Target
2026 GROWTH TARGET CD4 part of Mammoth complex, CA, USA 65MW BY SEGMENTS GEOTHERMAL & ENERGY SOLAR ENERGY STORAGE YE 2026 TARGET 1,450MW-1,470MW 700MW-800MW/ 1.9 GWh-2.3 GWh MW ADDITION (VS END OF 2023) 335W-355MW 530MW-630MW MW GROWTH 30%-32% 312%-370% Change in MW growth is compared to a 1,115MW G
Slide 21: Geothermal Development
GEOTHERMAL DEVELOPMENT North Valley, NV, USA 25MW Projected Expected Project PPA Capacity (MW) COD U.S – Beowawe Repowering 6 Q3 2024 ✓ Guatemala – Zunil 5 Q4 2024 ✓ Under development: Indonesia – Ijen 15(1) Q4 2024 ✓ 131MW Negotiating PPA Guadeloupe- Bouillante 10 Q4 2025 terms from Dominica 10 Q4
Slide 22: Solar Development
SOLAR DEVELOPMENT Ormat's geologists during exploration activity Projected Expected Project Capacity PPA COD (MW) U.S. – Steamboat Hills Solar 4 Q1 2024 ✓ Under development: U.S. – North Valley Solar 6 Q2 2024 ✓ 72 MW U.S. – Beowawe Solar 6 Q2 2024 ✓ from 5 projects U.S. – Arrowleaf 42 H1 2025 ✓ U.S
Slide 23: Geothermal Development
GEOTHERMAL DEVELOPMENT Ormat's geologists during exploration activity Region Location # of sites Nevada 22 42 California 4 prospects U.S. Oregon 2 Utah 4 New Mexico 1 Guatemala 2 CENTRAL AMERICA Honduras 1 AFRICA Ethiopia 4 ASIA PACIFIC Indonesia 2 COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC. 23
Slide 24: 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 – East Flemington1 20 20 30% Q1 2024 Merchant Under development: CA – Bottleneck 80 320 40% Q2 2024 Full Tolling 355 MW/ NJ – Montague 20 20 30% Q1 2025 Me
Slide 25: Energy Storage Pipeline
ENERGY STORAGE PIPELINE Rabbit Hill storage facility, TX, USA 10MW/10MWh ~3.6GW/13.1GWh 33 potential capacity of named U.S. storage pipeline prospects GEOGRAPHICAL Others 150 BREAKDOWN (MW) WECC 355 Texas 425 1 East Coast 595 California 2,025 1) East coast market includes PJM, ISO-NE, NYISO and SERC
Slide 26: 2024 Guidance
2024 GUIDANCE ($M) (1) Total revenues Electricity Products Storage Adjusted EBITDA 860-910 710-730 115-135 35-45 515-545 +7% +8% -7% +38% +10% 2.1GW-2.3 GW TRANSITIONING TO ACCELERATED +19%-21% GROWTH 1.3 GW CAGR 2023-2026E IN STORAGE & ELECTRICITY 1.1 GW 1.16 GW SEGMENTS Storage Solar Geothermal 20
Slide 27: Summary: Strengthening the Foundation, Preparing for Faster Growth
SUMMARY: STRENGTHENING THE FOUNDATION, PREPARING FOR FASTER GROWTH Executing on our Strong growth plans tailwinds added 239 MW since support renewable the beginning of 2023 and storage energy Delivered strong Recovery in Product 2023 results segment backlog driven by new assets backlog stands and IR
Slide 28: COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC.
COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC. 28
Slide 29: ESG Highlights
ESG 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 hou
Slide 30: 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 31: COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC.
COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC. 31
Slide 32: Committed to Continued Profitable Growth
COMMITTED TO CONTINUED PROFITABLE GROWTH IR@ORMAT.COM
Slide 33: Payment of Principal Due by Period
PAYMENT OF PRINCIPAL DUE BY PERIOD ($M) AVERAGE INTEREST RATE: 4.30% ($ millions) Q1-2024 Q2-2024 Q3-2024 Q4-2024 Year 2024 Long-Term non-recourse & limited recourse debt 17.4 12.9 13.6 13.3 57.2 Long Term Loans Full Recourse 23.2 49.0 23.2 21.4 116.9 Finance Liability 2.5 - 2.7 - 5.1 Total $43.1 $6
Slide 34: CapEx for 2024
CAPEX FOR 2024 ACTUAL INVESTED TOTAL CAPEX ($M) IN 12 MONTHS 2023 FOR 2024 Electricity Segment 460 340 Construction & Enhancements – fully released 190 185 Development enhancement, drillings and Exploration 102 89 Puna restoration (including drilling) 39 0 Olkaria recovery, partially released for co
Slide 35: P&L Highlights
P&L HIGHLIGHTS Q4 2023 Q4 2022 YTD 2023 YTD 2022 GAAP MEASURES Revenues ($M) Electricity 183.9 165.2 666.8 631.7 Product 50.4 32.2 133.8 71.4 Energy Storage 7.0 8.1 28.9 31.0 Total Revenues 241.3 205.5 829.4 734.1 Gross Profit ($ millions) 78.5 80.2 264.0 268.8 Gross margin (%) Electricity 39.5% 43.
Slide 36: Reconciliation of EBITDA and Adjusted EBITDA
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA (DOLLARS IN THOUSANDS) Three Months Twelve-Months Ended December 31, Ended December 31, 2023 2022 2023 2022 Net income 38,833 20,230 133,137 77,795 Adjusted for: Interest expense, net (including amortization of deferred financing costs) 23,440 22,604 86,8
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 Twelve-Months Ended December 31, December 31, 2023 2022 2023 2022 (in millions, except for EPS) GAAP Net income attributable to the Company's stockholders 35.7 18.0 124.4 65.8 Impact
Slide 38: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES December 31, 2023 Cash and cash equivalents, marketable securities and Restricted cash (in millions $) Cash and cash equivalents 196 Restricted cash and cash equivalents 92 Total cash and cash equivalents, marketable securities and Restricted cash (in mi