Ormat Technologies, Inc. · NYSE:ORA

Ormat Technologies — Investor Presentation (September 2022)

41 slides from Ormat Technologies's investor presentation, Sep 19, 2022

  1. Slide 1: Ormat Technologies, Inc. Investor Presentation

    ORMAT TECHNOLOGIES, INC. INVESTOR PRESENTATION AUGUST 2022 Copyright Copyright©©2022 2022Ormat OrmatTechnologies, Technologies,Inc. 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: Introduction

    INTRODUCTION Copyright © 2022 Ormat Technologies, Inc. 3

  4. Slide 4: A Leading Renewable Energy Provider

    A LEADING RENEWABLE ENERGY PROVIDER Over Own & operate WITH A PROVEN TRACK RECORD IN GEOTHERMAL & ENERGY STORAGE 55 ~1.17GW Years of experience Geothermal, Storage, Solar PV & REG(1) 1,400 $ 703M Employees LTM revenues $ 426M $ 64M LTM adj. EBITDA(2) LTM Net income(3) (1) REG – Recovered Energy Gene

  5. Slide 5: Our Business Segments

    OUR BUSINESS SEGMENTS 88% 8% 4% 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

  6. Slide 6: Recent Development

    RECENT DEVELOPMENT 1 ELECTRICITY 2 PRODUCTS 3 STORAGE 4 CORPORATE Up to 285MW ~$ 100M 5MW /20MWh $ 431M New PPAs New contracts Started operation in Green convertible Q2 bonds at 2.5% coupon 68MW ~$ 150M Started operation backlog 100MW Joining since the end of Q1 S&P Mid Cap 400 /340MWh index Release

  7. Slide 7: Electricity

    ELECTRICITY Generates firm & flexible power Copyright © 2022 Ormat Technologies, Inc. 7

  8. Slide 8: Electricity Overview

    ELECTRICITY OVERVIEW 5 4 Diversified 1 2 3 portfolio 6 72% 28% U.S. International 2021 Geographic 01 U.S. 02 Guatemala 03 Honduras breakdown 795 MW 40 MW 38 MW of revenues 04 Guadeloupe 05 Kenya 06 Indonesia 15 MW 150 MW 42 MW(1) $621 $586 Global operation $510 $540 $541 Profitable $436 $466 94% geo

  9. Slide 9: Geothermal Market

    GEOTHERMAL MARKET Ormat -the 2nd largest geothermal owner & operator 1,400 1,200 1,000 800 600 400 200 0 ~16 GW Global Installed geothermal capacity 9x Global Potential vs. Installed EU Africa ASIA Oceania U.S LATAM Installed 3.6 0.9 4.9 1.0 3.7 1.7 Potential 7.2 5.1 74.3 3.6 35.0 36.4 Source of abo

  10. Slide 10: U.S. Geothermal Market

    U.S. GEOTHERMAL MARKET THE U.S. IS THE WORLDS LEADING PRODUCER OF GEOTHERMAL POWER GEOTHERMAL OPERATORS’ SHARE OF U.S. GENERATION Calpine 35% Ormat 3.7GW 23% 29% CalEnergy 16% Installed capacity of global COSO 7% NCPA through 20211 installed capacity1 5% Cyrq 3% Vulcan AltaRock 2% 1% ~ 30% ENEL 1% g

  11. Slide 11: A Strong Tailwind

    A STRONG TAILWIND 3 PPAs With NV Energy (NV) Increase in demand to drive potential upside on PPA pricing and with CC Power (CA)2 For up to 285 MW Cover new projects in NV and CA and renewal of PPAs in NV Geothermal goals: CPUC – 1GW (2) NV Energy - 500MW (3) LADWP(4) – 0.5GW- Illustrates the demand

  12. Slide 12: Strong Tailwind: Inflation Reduction Act

    STRONG TAILWIND INFLATION REDUCTION ACT 1 Extension of Geothermal and solar tax credits for projects beginning construction before January 1, 2025 AUG 16 2022 For the first time, 30% ITC for stand-alone IRA signed 2 energy storage assets Can reach 50% ITC into law 3 New mechanism for the direct tran

  13. Slide 13: Ormat's Development in Indonesia

    ORMAT’S DEVELOPMENT IN INDONESIA 12.75% SARULLA TOKA TINDUNG #1 4th ownership 42MW Under development: Largest Largest in operation initial drilling economy in country in the 75- Southeast Asia1 world 2 100% ownership BBB/Baa2 ~33GW 100% Country’s 2020 electricity ownership rating by S&P production4

  14. Slide 14: Summary Electricity Segment Growth Drivers

    SUMMARY ELECTRICITY SEGMENT GROWTH DRIVERS TARGETED ELECTRICITY SEGMENT GROWTH (MW) 1,445-1,500 ~1,200 1,080 1,012 +7% +11% +20% - 25% 2021 Current 2023E 2026E Geothermal Solar PV Copyright © 2022 Ormat Technologies, Inc. 14 Note: Please see appendix for detailed list of projects including MW and MW

  15. Slide 15: Storage

    STORAGE Enables stability of the grid and flexibility Copyright © 2022 Ormat Technologies, Inc. 15

  16. Slide 16: Steep Market Growth Trajectory

    STEEP MARKET GROWTH TRAJECTORY U.S. FTM storage is expected to reach 49,904 49 GW in 2026 39,273 22x from 2020 29,215 50 % 18,815 of projected growth from California & Texas 9,405 5,185 2,201 1,092 2019 2020 2021E 2022E 2023E 2024E 2025E 2026E California Texas Nevada Arizona Hawaii New York PJM (& N

  17. Slide 17: Regulatory and Policy Drivers

    REGULATORY AND POLICY DRIVERS State-level Energy Storage Targets CPUC1: Oregon Nevada New York Maine Massachusetts Procure additional 15 GW 10 MWh(2) 1 GW 6 GW 400 MW 1 GW by by 2030 by 2030 by 2030 YE 2025 of new storage and demand response 9 states have energy resources by 2032 storage targets IRA

  18. Slide 18: Storage Segment

    STORAGE SEGMENT TARGET THE LARGEST AND MOST 1 LUCRATIVE MARKETS: California, Texas, and PJM 01 CA (3 facilities) 02 TX 35MW/120MWh 10MW/10MWh 03 NJ (2 facilities) 04 VT FOCUS ON STANDALONE ENERGY 41MW/41MWh 2MW/5MWh 2 STORAGE Providing ancillary service, energy and capacity to the grid 4 3 1 EXPANSI

  19. Slide 19: Storage Energy Under Development

    STORAGE ENERGY UNDER DEVELOPMENT: 7 projects, 184 MW, all secured for battery supply and revenue source Projected Projected Expected State Project PPA Capacity (MW) MWh COD TX 1 Upton 25 25 Q3 2022 Merchant 2022 Capacity PPA and CA 2 Pomona 2 20 40 H2 2022 Merchant 3 Andover NJ 27 27 H2 2022 Merchan

  20. Slide 20: Leveraging Market Expertise to Build Storage Pipeline

    LEVERAGING OUR MARKET EXPERTISE TO ENHANCE AND BUILD STORAGE PIPELINE 2.3 GW 2.1 GW 32 named projects 30 named projects 1.2 GW 33 named projects 0.3 GW 19 named projects 2019 2020 2021 Q2 2022 Copyright © 2022 Ormat Technologies, Inc. 20

  21. Slide 21: Leveraging BD Efforts to Grow Our Portfolio

    LEVERAGING BD EFFORTS TO GROW OUR PORTFOLIO Ormat energy storage development (MW) Ormat energy storage development (MWh) 1,850-2,250 700-800 53%-57% 60%-66% CAGR CAGR 273-353 640-780 83 88 176 196 2021 Current 2023E 2026E 2021 Current 2023E 2026E Operational Incremental Copyright © 2022 Ormat Techno

  22. Slide 22: Product

    PRODUCT Vertical integration advantage Copyright © 2022 Ormat Technologies, Inc. 22

  23. Slide 23: Product Segment Overview

    PRODUCT SEGMENT OVERVIEW Primary provider of geothermal binary plants Suppliers of geothermal power plants 2017 – 2021 capacity, MW Market leader Built approx. 190 power plants and installed approx. 60% 78% 3,200 MW of geothermal & REG over the years Binary Ormat 2,426 1,460 MW MW TOTAL BINARY 3rd p

  24. Slide 24: Ormat's Growth Targets

    ORMAT’S GROWTH TARGETS Copyright © 2022 Ormat Technologies, Inc. 24

  25. Slide 25: Ormat Portfolio Growth Targets

    ORMAT PORTFOLIO GROWTH TARGETS (GW) 2.15-2.3 14-16% 700-800 MW CAGR Storage 1.5 1.1 1.17 1,445-1,550 MW Electricity: Geothermal Solar 2021 Current 2023E 2026E Geothermal Solar Storage 25 Note: Please see appendix for detailed list of projects including MW and MWh numbers of the respective projects.

  26. Slide 26: MW and Adjusted EBITDA Expectations

    MW EXPECTATIONS ADJUSTED EBITDA EXPECTATIONS ~1.5GW >$500M run-rate(2) 1.1GW $401M (1) 2021 2022 2023 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 © 2022 Ormat Technologies, Inc. 26

  27. Slide 27: Financial Position & Summary

    FINANCIAL POSITION & SUMMARY Copyright © 2022 Ormat Technologies, Inc. 27

  28. Slide 28: Strong Financial Positioning

    STRONG FINANCIAL POSITIONING Electricity and Energy Storage Segments Installed Capacity (MW) Revenue ($M) Geothermal REG Solar Storage 1,168 $647 1,095 $616 $555 $557 1,005 $518 957 $469 931 795 2017 2018 2019 2020 2021 LTM 2017 2018 2019 2020 2021 Current Adjusted EBITDA ($M)(1) $420 $426 $401 $384

  29. Slide 29: Strong Financial Positioning

    STRONG FINANCIAL POSITIONING Total Debt ($M) Net Debt ($M)(1) $2,055 $1,908 $1,698 $1,521 $1,456 $1,268 $1,090 $1,085 $1,238 $919 2018 2019 2020 2021 June 30, 2018 2019 2020 2021 June 2022 30,2022 Project Finance Finance liability Corporate Debt Net Debt to Capitalization (Total Equity) (1) Net Debt

  30. Slide 30: Maintaining a Strong Capital Position to Support Accelerated Growth

    MAINTAINING A STRONG CAPITAL POSITION TO SUPPORT ACCELERATED GROWTH $426M ~$2B Adj. EBITDA for Total equity the LTM $ 760M Cash, cash equivalents, restricted cash and available lines of credit Access to various 46% 4.0x sources of capital Net debt to Net debt to capitalization (2) Adj. EBITDA(2) (1)

  31. Slide 31: ESG Initiatives

    ENVIRONMENT GOVERNANCE ESG INITIATIVES We are moving to strengthen our ESG commitments Building our approach and policy on significant valuable issues SOCIAL We issued our ESG report, the fourth in accordance with GRI standards and the second 22% according to SASB framework. Absolute reduction in sc

  32. Slide 32: Committed to Continued Profitable Growth

    COMMITTED TO CONTINUED PROFITABLE GROWTH SECURED U.S. GROWTH UP TO 285MW NEW PPAs IN CA & NV, U.S. EXPANDING SIGNIFICANTLY DEVELOPMENT EFFORTS IN INDONESIA GROWING OUR ENERGY STORAGE TARGETING 10X THE CURRENT CAPACITY BY 2026 STRONG REGULATORY TAILWIND Copyright © 2022 Ormat Technologies, Inc. 32 Co

  33. Slide 33: Appendix

    APPENDIX Copyright © 2022 Ormat Technologies, Inc. 33

  34. Slide 34: 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 years ended December 31, 2021, 2020, 2019, 2018, and 2017. Year Ended December 31, 2021 2020 2019 2018 2017 (Dollars in thousands) Net income 76,077 101,806 93,543 11

  35. Slide 35: 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, 2022 2021 2022 2021 Net income 14,945 15,195 37,738 33,024 Adjusted for: Interest expense, net (including amortization of deferred financing costs) 20,239 17,818 40,978 36,571 In

  36. Slide 36: Reconciliation of Non-GAAP Financial Measures

    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Year Ended December 31 June 30, 2022 2021 2020 2019 2018 Cash and cash equivalents, marketable securities and Restricted cash (in millions $) Cash and cash equivalents 263 239 448 71 99 Marketable Securities at fair value 0 43 Restricted cash and cash eq

  37. Slide 37: CapEx for 2022

    CAPEX FOR 2022 ACTUAL INVESTED TOTAL CAPEX TOTAL CAPEX ($M) IN H1 2022 FOR H2 2022 FOR 2022 Electricity Segment 208 199 407 Construction & Enhancements – fully released 123 132 255 Development enhancement, drillings and Exploration 20 20 40 Puna restoration (including drilling) 24 10 34 Olkaria reco

  38. Slide 38: Products Segment Third-Party Backlog

    5% 5% 5% 4% 3% PRODUCTS New Zealand 11% SEGMENT Philippines 7% THIRD-PARTY Guatemala Far East BACKLOG(1) Asia $146M Germany Taiwan 97.1% Others 60% Geothermal contracts CONTRACTS GEOGRAPHIC BREAKDOWN Backlog as of August 1, 2022. The backlog Includes revenues for the period between August 1, 2022 an

  39. Slide 39: Air-Cooled Binary Geothermal Power Plant

    AIR-COOLED BINARY GEOTHERMAL POWER PLANT Copyright © 2022 Ormat Technologies, Inc. 39

  40. Slide 40: Geothermal Under Development

    GEOTHERMAL UNDER DEVELOPMENT: 6 projects, 65-70 MW by 2023 Expected Projected Country/State Project COD PPA Capacity (MW) 2022 1 U.S - North NV Valley 25 End 2022/Early 2023  2 U.S. – Dixie 4 Q1 2023  Valley 3 U.S - Heber CA Complex 11 Q2 2023  2023 4 U.S. - North NV Valley 2 5-10 H1 2023  Guate

  41. Slide 41: Solar Energy Under Development

    SOLAR ENERGY UNDER DEVELOPMENT: 5 projects, 41 MW AC by 2023 Projected Expected State Project PPA Capacity (MW) COD 2022 1 Tungsten Solar 2 9 AC Q2 2022  2 Steamboat Solar 10 AC Q2 2023  NV 3 North Valley Solar 7 AC Q1 2023  2023 4 McGinness Hills Solar 14 AC H2 2023  5 Brady Solar 6 AC Q1 2023

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