Ormat Technologies, Inc. · NYSE:ORA
Ormat Technologies — Q1 2021 Earnings Presentation
33 slides from Ormat Technologies's earnings presentation, May 6, 2021
Slide 1: Ormat Technologies, Inc. Earnings Call
ORMAT TECHNOLOGIES, INC. EARNINGS CALL DORON BLACHAR, CEO ASSI GINZBURG, CFO MAY 6, 2021 Copyright © Copyright 2021 Ormat © 2021 Ormat Technologies, Technologies, Inc. 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, These forward-looking statements
Slide 3: Q1 2021 Highlights: Transitioning to Accelerated Growth
Q1 2021 I HIGHLIGHTS TRANSITIONING TO ACCELERATED GROWTH DELIVERED SOLID GROWTH DEMONSTRATED CONTINUED TO DRIVE IN THE LEADING SEGMENTS BUSINESS RESILIENCE PROFITABLE GROWTH Copyright © 2021 Ormat Technologies, Inc. 3
Slide 4: Financial Performance
FINANCIAL 01 PERFORMANCE Copyright © 2019 Ormat Technologies, Inc. Copyright © 2021 Ormat Technologies, Inc. 4 Copyright © 2021 Ormat Technologies, Inc.
Slide 5: Q1 2021 Financial Performance: First Quarter Summary
Q1 2021 I FINANCIAL PERFORMANCE First quarter summary Revenues Gross margin Adjusted EBITDA(1) EPS/Adjusted EPS(1,2,3) $166.4M 44.3% $99.2M $0.27/$0.42 (13.4%) +169 bps (6.4)% (47.1%)/(17.6)% Revenues by segment Total Electricity Products Storage 87% 5% $166.4 $145.0M $8.6M $12.7M Electricity Produc
Slide 6: Q1 2021 Segment Contribution
Q1 2021 I SEGMENT CONTRIBUTION Gross margin Total Electricity Products Storage 44.3% 44.9% 6.6% 62.4% +170 bps -510 bps NA NA Adjusted EBITDA(1) Total Electricity Products Storage 96% 1% $99.2 $95.1M $1.1M $3.0M Electricity Products (6.4)% (5.3%) (82.3%) NA 3% Storage (1) For key financial results a
Slide 7: February Power Crisis in Texas
FEBRUARY POWER CRISIS IN TEXAS In Q1 2021 we recorded one-time net expense of $12.1M pre-tax and $8.8M after tax related to the February power crisis in Texas The breakdown of the pre-tax net expense as recorded in our P&L: $5.4M Revenue under Energy Storage segment $3.0M Expense under General and A
Slide 8: Q1 2021 Cash and Net Debt
Q1 2021 I CASH AND NET DEBT Cash and Cash Equivalents, and restricted cash and Cash Equivalents ($M) Net Debt ($M) 69 Cash from operating activities $537 88 $465 Investment 28 17 7 in CapEx 1 Marketable Debt Dividend & others Other Securities Payment $919 $936 (1) DEC. 31, 2020 March. 31, 2021 Dec.
Slide 9: Business Resilience in the Face of COVID-19
BUSINESS RESILIENCE IN 02 THE FACE OF COVID-19 Copyright © 2021 Ormat Technologies, Inc. Copyright © 2021 Ormat Technologies, Inc. 9
Slide 10: Ormat Continues to Demonstrate Resilience
ORMAT CONTINUE TO DEMONSTRATE IT’S RESILIENT IN A CHALLENGING AND VOLATILE ENVIRONMENT OPERATION PUNA HAWAII KENYA PRODUCT SEGMENT STORAGE UPDATE A STRONG TAILWINDS Copyright © 2021 Ormat Technologies, Inc. 10
Slide 11: Electricity Operation
ELECTRICITY OPERATION GROWING PORTFOLIO 2% increase in generation 5 4 Steamboat Hill enhancement operation in June 2020 1 2 3 Partial operation of Puna power plant 6 Offset by: Lower generation at Olkaria, Kenya Steady Revenues per MWh $86.5/MWh in Q1/21 compare to $86.8/MWh in Q1/20 01 U.S. 02 03 H
Slide 12: Puna Hawaii Update
Nov. 2020 Feb. 2021 April 2021 Mid 2021 Resumed operation 13 MW 20 MW Expect to reach 10 MW full operation New well to be connected Bottoming binary unit repair PUC suspended the new PPA approval Copyright © 2021 Ormat Technologies, Inc. 12
Slide 13: Kenya
KENYA Continued curtailment Curtailments due to COVID-19 Kenya under lockdown since the beginning of April Resource performance affecting generation Plant generation is lower by approximately 25 MW due to resource performance; a recovery plan to restore the complex’s generating capacity is under eva
Slide 14: Product Backlog
PRODUCT BACKLOG Signing 3rd parties’ contracts Covid remains a challenge Backlog at $37M(1) Continued impact of COVID-19 Signed new small contract and see more opportunities that can be matured before year-end Focusing manufacturing capacity on internal projects Manufacturing our owned power plants
Slide 15: Energy Storage
ENERGY STORAGE 4 Improved gross profitability 3 1 Energy Storage performance without one-time impact Q1/21 gross adjusted(1) profit – $2.5M Q1/21 gross adjusted(1) margin – 34.7% 2 Pushing for growth Commercial operation 10MW/40MWh Vallecito, CA Released for construction 01 CA 02 TX 20MW/20MWh Andov
Slide 16: Strong Tailwinds
STRONG TAILWINDS Governments around the world continue to support renewable energy Current U.S. administration: Calling to invest in infrastructure, particularly for clean energy, and energy storage Proposing a ten-year extension and phase down of an expanded direct-pay investment tax credit (ITC) a
Slide 17: Driving Profitable Growth
04 DRIVING PROFITABLE GROWTH Copyright © 2019 Ormat Technologies, Inc. Copyright © 2021 Ormat Technologies, Inc. 17 Copyright © 2021 Ormat Technologies, Inc.
Slide 18: Robust Growth Plan: 1,455MW - 1,575MW
Increase solar and geothermal capacity significantly Accelerate storage capacity to establish ROBUST leading position in the U.S. storage sector GROWTH PLAN YE 2023 portfolio target: 1,455MW - 1,575MW Total expected MW growth: ~ 50% This growth plan is subject to obtaining all permits and regulatory
Slide 19: 2023 Growth Target by Segments
2023 GROWTH GEOTHERMAL & ENERGY SOLAR ENERGY STORAGE TARGET BY SEGMENTS YE 2023 TARGET 1,182MW-1,202MW 273MW-373MW MW ADDITION 250MW-270MW 200MW-300MW MW GROWTH 27%-29% 274%-411% Change in MW growth is compared to a 932MW Geothermal & Solar portfolio and a 73 MW storage portfolio in YE 2020 Copyrigh
Slide 20: Geothermal and Solar Projects Under Development
Projected Expected Project Capacity PPA COD (MW) U.S - Heber Complex 11 H1 2022 U.S - CD4 30 Q1 2022 U.S - North Valley 30 2022 - U.S - McGinness Hills 8 Q2 2021 GEOTHERMAL Expansion 10 PROJECTS U.S. - Puna expansion 8 2023/TBU Suspended 143-148 MW U.S - Dixie Meadows 15 2022 U.S - Tungsten
Slide 21: Energy Storage Projects Under Development
10MW/40MW Vallecito project started operation in April 2021 Projected Expected Type of Project Capacity COD contract (MW) Capacity PPA CA - Tierra Buena 5 Q4 2021 and Merchant ENERGY STORAGE TX - Upton 25 Q4 2021 Merchant ENERGY 4 PROJECTS STORAGE 57 MW NJ - Andover 20 Q1 2022 Merchant PROJECTS UNDE
Slide 22: Energy Storage Pipeline
2 GW 40 200MW - 300MW potential capacity of named expected addition U.S. storage pipeline prospects by YE 2023 ENERGY STORAGE PIPELINE Copyright © 2021 Ormat Technologies, Inc.
Slide 23: Maintaining a Strong Capital Position to Support Accelerated Growth
MAINTAINING A STRONG CAPITAL POSITION TO SUPPORT ACCELERATED GROWTH Remaining of 2021 expected $ 360M capital needs(1) to support future growth target Over Cash, cash equivalents, $ 900M restricted cash and available lines of credit Access to various 32% 2.3x sources of capital Net debt to Net debt
Slide 24: 2021 Guidance
2021 GUIDANCE Total revenues Electricity revenues Products revenues Storage revenues Adjusted EBITDA $645M-$680M $570M-$580M $50M-$70M $25M-$30M $400M-$410M MW EXPECTATIONS ADJUSTED EBITDA EXPECTATIONS 1,500MW $500M run-rate(2) 1,005MW $420M (1) 2020 2021 2022 2023 2020 2021 2022 2023 (1) For non –G
Slide 25: Summary
Delivered revenue growth in our leading segments Reiterated 2021 adjusted EBITDA guidance Continued to drive profitable growth Increased energy storage pipeline to 2GW A strong tailwinds to support renewable and storage energy Well-positioned to take advantage of these trends Copyright © 2021 Ormat
Slide 26: Thank You!
THANK YOU! SMADAR LAVI I VP CORPORATE FINANCE AND HEAD OF INVESTOR RELATIONS 775-356-9029 (EXT. 65726) I SLAVI@ORMAT.COM Copyright © Copyright 2021 Ormat © 2021 Ormat Technologies, Technologies, Inc. Inc. 26
Slide 27: Products Segment Third-Party Backlog
1% 2% PRODUCTS 10% SEGMENT Germany 27% THIRD-PARTY Guatemala BACKLOG(1) Taiwan 14% $37.2M Chile NZ Others 99% Turkey Geothermal CONTRACTS GEOGRAPHIC contracts BREAKDOWN 24% 22% Copyright © 2021 Ormat Technologies, Inc. 27 Backlog as of May 5, 2021. The backlog includes revenues for the period betwee
Slide 28: Payment of Principal Due by Period
PAYMENT OF PRINCIPAL DUE BY PERIOD ($M) AVERAGE INTEREST RATE: 4.9% Q2-2021 Q3-2021 Q4-2021 Year 2021 Long-term non-recourse debt & limited recourse debt 9.5 8.5 9.7 27.7 Senior Secured Notes (non-recourse) 5.6 5.0 5.9 16.5 Long-term loans (full recourse) 4.7 8.4 4.7 17.8 Total 19.8 21.9 20.3 62.0 R
Slide 29: Expected Capital Needs for the Remaining of 2021
EXPECTED CAPITAL NEEDS FOR THE REMAINING OF 2021 CAPITAL NEEDS ($M) Construction & Enhancements – fully released 200 Development enhancement and Exploration – not yet released 78 Maintenance CapEx (including drilling in Puna) 33 Storage activity 36 Enhancement of the production facilities 13 Total C
Slide 30: P&L Highlights
P&L HIGHLIGHTS Q1 2021 Q1 2020 Change (%) GAAP MEASURES Revenues ($M) Electricity 145.0 142.9 1.5 % Product 8.6 47.4 (81.8) % Energy Storage 12.7 1.8 589.1 % Total Revenues 166.4 192.1 (13.4) % Gross margin (%) Electricity 44.9 % 50.0 % Product 6.6 % 22.0 % Energy Storage 62.4 % (5.6) % Gross margin
Slide 31: Reconciliation of EBITDA and Adjusted EBITDA
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA Three Months Ended March 31 2021 2020 (Dollars in thousands) Net income 17,829 29,906 Adjusted for: Interest expense, net (including amortization of deferred financing costs) 18,753 16,871 Income tax provision (benefit) 3,007 18,148 Adjustment to investme
Slide 32: Reconciliation of Adjusted Net Income and EPS
RECONCILIATION OF ADJUSTED NET INCOME ATTRIBUTABLE TO THE COMPANY’S STOCKHOLDERS AND EPS Three Months Ended March 31 2021 2020 Net income attributable to the Company's stockholders ($M) 15.3 26.0 One-time net expense related to February power crisis in Texas ($M) 8.8 — Adjusted Net income attributab
Slide 33: 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 377 Marketable Securities at fair value 28 Restricted cash and cash equivalents 88 Total cash and cash equivalents and Restricted cash (in millions $)