Slide 1: Ormat Technologies, Inc. Earnings Call
ORMAT TECHNOLOGIES, INC. EARNINGS CALL AUGUST 7, 2024
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: Q2 2024 Earnings Call Agenda
Q2 2024 EARNINGS CALL AGENDA 01 02 03 04 Delivering strong Increasing 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 Q2'24 comparisons vs. Q2'23 Revenues Gross margin Adjusted EBITDA(1) EPS/Adj. EPS $213.0M 28.8% $126.1M $0.37/$0.40 +9.3% vs 25.4% +25.0% (7.5)%/Flat H1'24 comparisons vs. H1'23 Revenues Gross margin Adjusted EBITDA(1) EPS/Adj. EPS $437.1M 32.1% $267.3M $1.00/$1.05 +15.0%
Slide 6: Revenues by Segment
REVENUES BY SEGMENT Q2'24 comparisons vs. Q2'23 Total Electricity Products Energy Storage 78% 18% $213.0M $166.2M $37.8M $8.9M Electricity Products +9.3% +7.0% +13.1% +48.1% 4% Storage H1'24 comparisons vs. H1'23 Total Electricity Products Energy Storage 82% 14% $437.1M $357.5M $62.7M $17.0M Electri
Slide 7: Gross Margin by Segment
GROSS MARGIN BY SEGMENT Q2'24 comparisons vs. Q2'23 Total Electricity Products Energy Storage 28.8% 33.5% 13.7% 5.7% vs 25.4% vs 29.6% vs 10.4% vs 1.9% H1'24 comparisons vs. H1'23 Total Electricity Products Energy Storage 32.1% 36.4% 14.1% 6.6% vs 33.0% vs 37.3% vs 9.6% vs (0.5)% (1) For key financi
Slide 8: Adjusted EBITDA by Segment
(1) ADJUSTED EBITDA BY SEGMENT Q2 comparisons vs. Q2'23 Total Electricity Products Energy Storage 91% 5% $126.1M $114.5M $6.8M $4.7M Electricity Products +25.0% +16.7% +373.0% +254.3% 4% Storage H1 comparisons vs. H1'23 Total Electricity Products Energy Storage 92% 5% $267.3M $245.2M $13.7M $8.5M El
Slide 9: Regulatory Boost Financial Impact of IRA
REGULATORY FINANCIAL IMPACT OF IRA BOOST Q2 2024 2024 outlook Income attributable to sale of tax Income tax (provision) benefit($M) benefits($M) $15.0 $15.8 Expecting $38 million benefit 2.7 3.6 on an annual basis that will be recorded proportionally throughout the year. 12.3 12.2 Cash proceeds from
Slide 10: Cash and Net Debt
CASH AND NET DEBT Successfully raised $ 397M Cash and Cash Equivalents and restricted cash Net Debt1 ($M) of new debt in 3 and Cash Equivalents ($M) H1 2024 $ 146 $ 12 $ 2,186 $275 $ 393 Non- Controlling 4.63% & Others Weighted Cash from $250 $ 1,801 operating average activities Acquisition interest
Slide 11: Maintaining a Strong Capital Position
MAINTAINING A STRONG CAPITAL POSITION TO SUPPORT ACCELERATED GROWTH Access to multiple sources of liquid capital 4.2x Net debt to Adj. EBITDA2 $292M $653.8M Expected CapEx Total for H2 20241 liquidity3 47% Net debt to Expanded convertible bonds by $45.5 capitalization2 million through new issuance s
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 Robust and balanced portfolio Global portfolio reached 1,230MW 1,2 1 950MW 3 33MW 5 150MW U.S. Honduras Kenya 6MW added 2 40MW 4 15MW 6 42MW 1 from COD of Beowawe Repowering Guatemala Guadeloupe Indonesia 1 5.1% 9.8% 2 3 4 Generation Revenue 5 increase vs 6 increase vs H1 2023
Slide 14: Electricity Operation Updates
ELECTRICITY OPERATION UPDATES Acquired ENEL assets, U.S. Olkaria, Kenya Dixie valley, U.S. Unplanned outage $8.6M revenues Successful capacity test at caused to lower generation, $6.1M EBITDA 148MW revenues and EBITDA 17MW upgrade to the High curtailments during the Anticipating an annual reduction
Slide 15: Product Backlog
PRODUCT BACKLOG TAOM, NZ 28MW 3RD PARTY CONTRACTS $ 165M 38% 40% Backlog1 Increase vs. 50% Q2 2023 5% 98% 72M 5% $ Geothermal New contract contracts signed in Q2 2024 Geographic Breakdown New Zealand Dominica Guatemala Others 2 1) Backlog as of August 5th, 2024. The backlog Includes revenues for the
Slide 16: Energy Storage Operation
ENERGY STORAGE OPERATION Current operating portfolio Storage revenues breakdown ($M) by region and type Q2 2024 H1 2024 17.0 4.7 10.9 8.9 6.0 2.3 3.7 1.8 12.3 6.6 7.2 4.2 Q2 23 Q2 24 H1 23 H1 24 Merchant Fixed Q2 2024 H1 2024 0.9 0.7 1 55MW/180MWh 3 33MW/33MWh 2.9 CA TX 6.0 5.3 10.1 2 100MW/100MWh 4
Slide 17: COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC.
COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC. 17
Slide 18: Robust Growth Plan
1 ROBUST GROWTH PLAN INSTALLED CAPACITY GROWTH Significantly 15%-17% CAGR increase geothermal & solar capacity 2.6GW-2.8GW 2.1GW-2.3GW Storage (MW) +780-880 Storage (MW) 1.3GW +530-630 Electricity (MW) Electricity (MW) Accelerate +335-355 +535-635 storage capacity to establish leading Additional cap
Slide 19: Geothermal Development
GEOTHERMAL DEVELOPMENT North Valley, NV, USA 25MW Projected Expected Project PPA Capacity (MW) COD U.S – Beowawe Repowering 6 ✓ Indonesia – Ijen 15(1) Q4 2024 ✓ Under development: Guatemala – Zunil 5 2025 ✓ 125MW Guadeloupe- Bouillante 10 Q4 2025 ✓ from Dominica 10 Q4 2025 ✓ 10 projects New Zealand
Slide 20: Solar Development
SOLAR DEVELOPMENT Projected Expected Project PPA Capacity (MW) COD U.S. – Steamboat Hills Solar 5 ✓ U.S. – North Valley Solar 7 ✓ Under development: U.S. – Beowawe Solar* 6 Q4 2024 ✓ 62MW U.S. – Arrowleaf 42 Q4 2025 ✓ from U.S. – McGinness Hills Solar 14 H2 2026 ✓ 3 projects Commercial operation was
Slide 21: 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 Flemington 20 20 30% Merchant Under development: CA – Bottleneck 80 320 40% Q3 2024 Full Tolling 435 MW/ NJ – Montague 20 20 30% Q1 2025 Merchant 1,2
Slide 22: Energy Storage Pipeline
ENERGY STORAGE PIPELINE Rabbit Hill storage facility, TX, USA 10MW/10MWh ~3.5GW/13.2GWh 34 potential capacity of named U.S. storage pipeline prospects GEOGRAPHICAL Others 75 BREAKDOWN (MW) East Coast1 395 Texas 405 WECC 655 California 2,025 1) East coast market includes PJM, ISO-NE, NYISO and SERC C
Slide 23: 2024 Guidance ($M)
2024 GUIDANCE ($M) (1) Total revenues Electricity Products Storage Adjusted EBITDA 875-910 710-720 130-145 35-45 520-550 +7% +7% +1% +38% +11% TRANSITIONING TO 2.6GW-2.8GW ACCELERATED 2.1GW-2.3GW GROWTH IN STORAGE & ELECTRICITY + 15%-17% 1.3GW CAGR SEGMENTS 2023-2028E2 Storage Solar Geothermal 2023
Slide 24: Summary: Strengthening the Foundation, Preparing for Faster Self-Funded Growth
SUMMARY: STRENGTHENING THE FOUNDATION, PREPARING FOR FASTER SELF-FUNDED GROWTH Executing on our Strong growth plans tailwinds added 135 MW in H1 Increased demand and prices for 2024 geothermal and energy storage driven by increased demand from data centres Delivered strong Improved profitability in
Slide 25: COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC.
COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC. 25
Slide 26: ESG Update
ESG UPDATE Zero emission Board diversity Reporting project growth Increasing avoided Increased female Preparing to new SEC emissions from new representation regulation and expected projects to 44% alignment to TCFD requirements COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC. 26
Slide 27: COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC.
COPYRIGHT © 2024 ORMAT TECHNOLOGIES, INC. 27
Slide 28: Committed to Continued Profitable Growth
COMMITTED TO CONTINUED PROFITABLE GROWTH IR@ORMAT.COM
Slide 29: Payment of Principal Due by Period
PAYMENT OF PRINCIPAL DUE BY PERIOD ($M)1,2 AVERAGE INTEREST RATE: 4.63% ($ millions) Q3-2024 Q4-2024 Year 2024 Long-Term non-recourse & limited recourse debt 14.0 19.1 33.2 Long Term Loans Full Recourse 39.1 24.8 63.8 Finance Liability 2.7 - 2.7 Total $55.8 $43.9 $99.7 Remaining Total 2024 2025 2026
Slide 30: CapEx for 2024
CAPEX FOR 2024 ACTUAL INVESTED TOTAL CAPEX TOTAL CAPEX ($M) IN H1 2024 FOR H2 2024 FOR 2024 Electricity Segment 175 138 313 Construction & Enhancements – fully released 75 90 165 Development enhancement, drillings and Exploration 48 20 68 Maintenance CapEx 52 28 80 Storage Segment 62 140 202 Product
Slide 31: P&L Highlights
P&L HIGHLIGHTS Q2 2024 Q2 2023 H1 2024 H1 2023 GAAP MEASURES Revenues ($M) Electricity 166.2 155.3 357.5 325.6 Product 37.8 33.5 62.7 43.5 Energy Storage 8.9 6.0 17.0 10.9 Total Revenues 213.0 194.8 437.1 380.0 Gross Profit ($ millions) 61.4 49.5 140.2 125.6 Gross margin (%) Electricity 33.5% 29.6%
Slide 32: 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, 2024 2023 2024 2023 Net income 23,965 24,511 64,315 57,972 Adjusted for: Interest expense, net (including amortization of deferred financing costs) 31,112 19,451 60,241 41,231 In
Slide 33: Reconciliation of Adjusted Net Income Attributable and Adjusted EPS
RECONCILIATION OF ADJUSTED NET INCOME ATTRIBUTABLE TO THE COMPANY’S STOCKHOLDERS AND ADJUSTED EPS Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 (in millions, except for EPS) GAAP Net income attributable to the Company's stockholders $22.2 $24.2 60.8 53.2 Write-off of long
Slide 34: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES June 30, 2024 Cash and cash equivalents, marketable securities and Restricted cash (in millions $) Cash and cash equivalents 66 Restricted cash and cash equivalents 97 Total cash and cash equivalents, marketable securities and Restricted cash (in million