Ormat Technologies, Inc. · NYSE:ORA

Ormat Technologies — Q2 2020 Earnings Presentation

31 slides from Ormat Technologies's earnings presentation, August 2020

  1. Slide 1: Ormat Technologies Inc. Investor Presentation August 2020

    ORMAT TECHNOLOGIES INC. INVESTOR PRESENTATION AUGUST 2020 Copyright Copyright©©2020 2020Ormat OrmatTechnologies, Technologies,Inc. Inc.

  2. Slide 2: Safe Harbor Statement

    SAFE HARBOR STATEMENT 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 amounts for 2022 growth (MW) or 2022 operational performance metrics such

  3. Slide 3: Non-GAAP Metrics

    NON-GAAP METRICS Reconciliation to US GAAP Financial Information This presentation includes certain “non-GAAP financial measures” within the meaning of Regulation G under the Securities Exchange Act of 1934, as amended, including EBITDA and Adjusted EBITDA. The presentation of these non-GAAP financi

  4. Slide 4: Introduction to Ormat

    INTRODUCTION TO ORMAT Market leader with proven track record in the geothermal energy sector Our mission is to become a leading global renewable energy provider 55 years ~1,410 Own & operate 933 MW of experience Employees Generating Capacity 746$M FY2019 revenues 73 MW/136 MWh of operating storage 3

  5. Slide 5: The World's Only Vertically Integrated Geothermal Company: Electricity segment

    THE WORLD’S ONLY VERTICALLY INTEGRATED GEOTHERMAL COMPANY Electricity segment Development Drilling Engineering Manufacturing Construction Operation Customers: & exploration Utilities, CCA and Municipalities 70% of total revenues (1) (1) Average 2017-2019 Copyright © 2020 Ormat Technologies, Inc. 5

  6. Slide 6: The World's Only Vertically Integrated Geothermal Company: Product segment

    THE WORLD’S ONLY VERTICALLY INTEGRATED GEOTHERMAL COMPANY Product segment Development Drilling Engineering Manufacturing Construction Operation Customers: & exploration Utilities and Developers 29% of total revenues (1) (1) Average 2017-2019 Copyright © 2020 Ormat Technologies, Inc. 6

  7. Slide 7: Vertical Integration as a Platform to Grow in the Storage Market

    VERTICAL INTEGRATION AS A PLATFORM TO GROW IN THE STORAGE MARKET Energy Storage & Management Services segment Development Engineering Procurement Construction Operation Development Inverter and Pipeline battery 1% of total revenues (1) (1) Average 2017-2019 Copyright © 2020 Ormat Technologies, Inc.

  8. Slide 8: Electricity Segment Overview

    ELECTRICITY SEGMENT OVERVIEW Stable, well managed, cash generating assets • Global operation of 933 MW at 25 sites Global portfolio (933 MW) • 93% geothermal, 6% REG and 1% solar • Weighted average PPA life: 17 years(1) Annual revenue ($M) U.S. Guadeloupe 648 MW 15 MW (2) Guatemala Indonesia 40 MW K

  9. Slide 9: Product Segment Overview

    PRODUCT SEGMENT OVERVIEW Built approximately 190 power plants and installed over 3,000 MW of geothermal & REG over the years • Backlog of $66 million as of August 3, 2020 • Continuing improving engineering, technology and delivery lead-time (1) Revenue from 3rd party sales ($M) Backlog breakdown 15%

  10. Slide 10: Energy Storage and Management Services Overview

    ENERGY STORAGE AND MANAGEMENT SERVICES OVERVIEW Holistic offering that combines energy storage and energy management • 50 highly experienced staff • Operating Portfolio • 73 MW/136 MWh operating assets • Plumsted and Stryker – connected to PJM Interconnect • Hinesburg – connected to ISONE • ACUA – c

  11. Slide 11: Growth Plan – Geothermal and Solar

    GROWTH PLAN – GEOTHERMAL AND SOLAR • Added 19 MW from Steamboat Hills Enhancement in June 2020 • Expect adding between 160 MW and 180 MW by the end of 2022(1) • Continue to look for M&A opportunities Projected Added Project Expected COD PPA Capacity (MW) Geothermal Projects U.S - Heber Complex 11 20

  12. Slide 12: PTC Extender – Driver for Growth in the United States

    PTC EXTENDER – DRIVER FOR GROWTH IN THE UNITED STATES • In December 2019, the tax extenders package was signed into law and retroactively revived, extending the full PTC for geothermal facilities • Continues U.S. support for the geothermal industry. • PTC provides a tax credit of 2.5 cents per kWh o

  13. Slide 13: Growth Plan - Energy Storage and Management Services

    GROWTH PLAN - ENERGY STORAGE AND MANAGEMENT SERVICES Holistic offering that combines energy storage, demand response and energy management Projects released for construction • Valecito, California (10 MW / 40 MWh) • EPC and permitting are delayed due to Covid-19. Development pipeline(1) • Continuing

  14. Slide 14: Funding Growth – Secured $400 Million of Capital

    FUNDING GROWTH – SECURED $400 MILLION OF CAPITAL Successfully raised over $400M year-to-date • $50.0 million from existing lender • Additional loan at 5.44% interest rate • $79.0 million - bond series 3 expansion • Expansion interest rate - 4.45% • $290 million unsecured bonds series 4 • Effective i

  15. Slide 15: Funding Growth – Risk Management

    FUNDING GROWTH – RISK MANAGEMENT Global expansion - risk mitigation aspects • Portfolio approach - diversification • Host country guarantee • Project finance (OPIC, ADB, DEG and AFDB) • Political risk insurance • Competitive pricing Copyright © 2020 Ormat Technologies, Inc. 15

  16. Slide 16: Strong Execution - Revenue ($M)

    STRONG EXECUTION - REVENUE ($M) $746 $693 $719 15 $663 7 3 191 202 224 226 $383 $367 7 4 104 91 510 540 436 466 272 272 H1 2019 H1 2020 2016 2017 2018 2019 Electricity Products Energy Storage and management services Copyright © 2020 Ormat Technologies, Inc. 16

  17. Slide 17: Strong Execution - Adjusted EBITDA ($M)

    STRONG EXECUTION - ADJUSTED EBITDA(1) ($M) By Segments -1.0% 12.8% FY 2018 FY 2018 $384 $368 $344 $324 88.2% -0.2% 8.8% $197 $204 FY 2019 91.4% H1 2019 H1 2020 2016 2017 2018 2019 Electricity Products Energy Storage and management services (1) See appendix for Adjusted EBITDA reconciliation. Copyrig

  18. Slide 18: Well Positioned to Support Growth

    WELL POSITIONED TO SUPPORT GROWTH Total Debt ($M) Net Debt ($M)(1) $1,350 $1,268 $1,238 $1,090 $1,085 $1,100 $939 $914 509 522 660 $817 273 305 $674 666 759 716 690 609 2016 2017 2018 2019 June 30, 2016 2017 2018 2019 June 30, 2020 2020 Project Finance Corporate Debt Net Debt to Adjusted EBITDA(1) N

  19. Slide 19: Investment Highlights

    INVESTMENT HIGHLIGHTS Sustainable Efficient operation Well positioned ESG Investment growth • Substantial and growing • Focus on increasing • Market leader • Pure play in the cash flow from operation efficiencies • Strong cash flow renewable sustainable • Growth from identified • vertical integratio

  20. Slide 20: Thank You!

    THANK YOU! Contact IR: Smadar Lavi VP Corporate Finance and Head of Investor Relations 775-356-9029 (ext. 65726) slavi@ormat.com Copyright Copyright©©2020 2020Ormat OrmatTechnologies, Technologies,Inc. Inc. 20

  21. Slide 21: Puna Plant in Hawaii - Update

    PUNA PLANT IN HAWAII - UPDATE • Substation construction • Building the electrical substation • Construction was completed by Ormat, • Awaiting HELCO to complete their part – expected in the third quarter • Wellfield • Completed drilling of two production wells • One well blocked after flow test and

  22. Slide 22: Adjusted EBITDA ($M)

    ADJUSTED EBITDA1 ($M) Total adjusted EBITDA Electricity segment Product segment Energy Storage $3.0M (3.2%) $4.4M (5.1%) $-2.3M (-26.9%) Management Services segment $0.9M (-137.9%) $97.9 $94.9 $91.4 $86.9 93% of total adjusted EBITDA 92% of total adjusted EBITDA $8.6 $6.3 ($0.6) $0.2 Q2 2019 Q2 2020

  23. Slide 23: Air-Cooled Binary Geothermal Power Plant

    AIR-COOLED BINARY GEOTHERMAL POWER PLANT Copyright © 2020 Ormat Technologies, Inc. 23

  24. Slide 24: Worldwide Geothermal Installed Capacity 2015-2019

    WORLDWIDE GEOTHERMAL INSTALLED CAPACITY 2015-2019 444 MW 1250 MW 16% 44% 700 614 2,818 MW 600 555 TOTAL 1124 MW 500 40% 400 342 MW 300 STG Binary - Ormat Binary - Others 220 200 180 158 136 100 53 44 45 54 41 55 16 15 28 20 16 2 2 0 12 4 - Binary - Ormat Binary - Others STG Total Source: Ormat Copyr

  25. Slide 25: Suppliers of Geothermal Power Plants

    SUPPLIERS OF GEOTHERMAL POWER PLANTS 2015-2019 Capacity (MW) Fuji 414 MW All Binary 56% 1568 MW Ormat 1124 MW Toshiba 411 MW Kaishan 49 MW TAS 2 MW Exergy 202 MW Egesim 24 MW Atlas Copco 117 MW Mitsubishi 364 MW Alstom 25 MW Turboden 40 MW Fuji 10 MW others 36 MW others Alstom Mitsubishi Toshiba Fuj

  26. Slide 26: Market Opportunities for Geothermal Growth

    MARKET OPPORTUNITIES FOR GEOTHERMAL GROWTH Full Geothermal potential is more than 10x the installed capacity Europe Europe 3.4 GW 7.2 GW U.S U.S Asia pacific Asia pacific 3.6 GW 35 GW 4.7 GW 74.3 GW Africa Africa 0.8 GW 5.1 GW LATAM LATAM Ring of Fire 1.7 GW 36.4 GW Oceania Oceania 1.0 GW 3.6 GW Are

  27. Slide 27: Market Share - Electricity Segment

    MARKET SHARE - ELECTRICITY SEGMENT MW Top 10 Geothermal owners & operators1 (MW) 1,400 45 40 1,200 35 1,000 30 800 25 20 600 15 400 10 200 5 0 0 EDC Ormat/ CFE ENEL Star Energy Calpine Aboitiz Contact Mercury Terra-Gen (PNOC) worldwide Consortium Energy (ECP) Operation (MW) Estimated Project Count (

  28. Slide 28: Market Share - Products Segment

    MARKET SHARE - PRODUCTS SEGMENT Major geothermal equipment suppliers (MW & project count)1 4,000 140 3,500 120 3,000 100 2,500 80 2,000 60 1,500 40 1,000 500 20 0 2 0 Toshiba Mitsubishi Fuji Ormat Ansaldo/Tosi GE Alstom Exergy MW Operating Estimated Project Count (1) Source: Study based on Think Geo

  29. Slide 29: Reconciliation of EBITDA and Adjusted EBITDA for the Three and Six-Months Periods

    RECONCILIATION OF EBITDA AND ADJUSTED EBITDA FOR THE THREE AND SIX-MONTHS PERIODS ENDED JUNE 30, 2020 AND 2019 (UNAUDITED) We calculate EBITDA as net income before interest, taxes, depreciation and amortization. We calculate Adjusted EBITDA as net income before interest, taxes, depreciation and amor

  30. Slide 30: 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 twelve-month periods ended December 31, 2019, 2018, 2017, 2016, and 2015. 2019 2018 2017 2016 2015 Net income 93,543 110,111 147,109 96,294 124,148 Adjusted for: Inte

  31. Slide 31: Reconciliation of Non-GAAP Financial Measures

    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Copyright © 2020 Ormat Technologies, Inc. 31

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