Ormat Technologies, Inc. · NYSE:ORA
Ormat Technologies — Q1 2016 Earnings Presentation
26 slides from Ormat Technologies's earnings presentation, May 5, 2016
Slide 1: Ormat Technologies, Inc. First Quarter 2016 Earnings Call
Ormat Technologies, Inc. First Quarter 2016 Earnings Call May 5, 2016 Green energy you can rely on Copyright © 2016 Ormat Technologies, Inc.
Slide 2: Disclaimer
Disclaimer Information provided during this presentation may contain statements relating to current expectations, estimates, forecasts and projections about future events that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking sta
Slide 3: Agenda
Agenda • First Quarter 2016 prepared remarks • Q1 2016 highlights: Isaac Angel, CEO • Financial overview: Doron Blachar, CFO • Operations & business updates: Isaac Angel, CEO • Q&A 3 Copyright © 2016 Ormat Technologies, Inc.
Slide 4: Q1 2016 Highlights
Q1 2016 Highlights • Total revenues of $151.6 million, up 26.1% vs. Q1 2015 • Product segment revenues of $43.7 million, up 44.4% vs. Q1 2015 • Electricity segment revenues of $107.9 million, up 19.9% vs. Q1 2015 • Electricity generation increased 16.4% to 1.4 million MWh • Gross margin increased to
Slide 5: Financial Results
Financial Results Doron Blachar, CFO Green energy you can rely on 5 Copyright © 2016 Ormat Technologies, Inc.
Slide 6: Total Revenues
Total Revenues Total Revenues Total Cost of Revenues Segment Contribution +31.4 million (26.1%) +11.5 million (15.1%) $151.6 $120.2 25% 29% $87.7 $76.2 75% 71% Q1 2015 Q1 2016 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Electricity Segment Product Segment All amounts in million USD 6 Copyright © 2016 Ormat Tech
Slide 7: Electricity Segment
Electricity Segment Revenues Cost of Revenues +$17.9 million (19.9%) +$8.1 million (14.6%) $107.9 $90.0 $63.7 $55.6 Q1 2015 Q1 2016 Q1 2015 Q1 2016 • Commencement of the second phase of McGinness • Additional cost of revenues from the second Hills, Don A. Campbell and plant 4 in Olkaria III phase of
Slide 8: Product Segment
Product Segment Revenues Cost of Revenues +$13.4 million (44.4%) +$3.4 million (16.5%) $43.7 $30.3 $24.0 $20.6 Q1 2015 Q1 2016 Q1 2015 Q1 2016 All amounts in million USD 8 Copyright © 2016 Ormat Technologies, Inc.
Slide 9: Gross Margin
Gross Margin Combined Electricity Segment Product Segment 45.0% 42.1% 41.0% 38.2% 36.6% 31.9% Q1 2015 Q1 2016 Q1 2015 Q1 2016 Q1 2015 Q1 2016 9 Copyright © 2016 Ormat Technologies, Inc.
Slide 10: Operating Income
Operating Income Total Electricity Segment Product Segment +$20.7 million (69.3%) +$10.8 million (45.2%) +$9.9 million (168.0%) $50.5 $34.8 $29.9 $24.0 $15.8 $5.9 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Q1 2015 Q1 2016 All amounts in million USD 10 Copyright © 2016 Ormat Technologies, Inc.
Slide 11: Net Income Attributable to the Company's Stockholders & EPS
Net Income Attributable to the Company's Stockholders & EPS Net Income Attributable to the Earnings per Share (Diluted)1 Company's Stockholders $29.3 $0.59 $10.0 $0.21 Q1 2015 Q1 2016 Q1 2015 Q1 2016 All amounts in million USD; 1. Weighted average number of shares used in computation of earnings per
Slide 12: Adjusted EBITDA
Adjusted EBITDA Total Electricity Segment Product Segment +$14.9 million (22.8%) +$3.7 million (6.3%) +$11.3 million (178.7%) 80.2 65.3 62.6 58.9 17.6 6.3 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Q1-15 Q1-16 Q1-15 Q1-16 Q1-15 Q1-16 D&A 23.8 24.3 D&A 23.1 23.4 D&A 0.7 0.9 All amounts in millio
Slide 13: Cash, Cash Equivalents, Marketable Securities and Short-Term Bank Deposit
Cash, Cash Equivalents, Marketable Securities and Short-Term Bank Deposit $185.9 31.0 $148.5 15.5 5.5 9.0 14.6 11.6 27.1 6.3 $0.0 $0.0 $0.0 $0.0 Dec. 31 2015 Capital Cash dividend Net change in Debt Repayment Cash paid to Cash from Proceeds from Other March 31, 2016 expenditures restricted cash non-
Slide 14: Payment of Principal Due by Period
Payment of Principal Due by Period The average interest rate for the total debt is 5.9% Q1-2016 Q2-2016 Q3-2016 Q4-2016 Year 2016 Long-term non-recourse debt & limited recourse debt 0 5,374 5,374 5,374 16,122 Senior Secured Notes (non-recourse) due 2020 0 10,432 2,326 12,581 25,339 Long-term loans (
Slide 15: Operations & Business Updates
Operations & Business Updates Isaac Angel, CEO Green energy you can rely on 15 Copyright © 2016 Ormat Technologies, Inc.
Slide 16: Progressing with Our Strategic Plan
Progressing with Our Strategic Plan Expansion to new activities Funding M&A Organic Growth Geographical & Technological expansion Improve efficiencies 16 Copyright © 2016 Ormat Technologies, Inc.
Slide 17: Improve Efficiencies
Improve Efficiencies • Value chain improvements • Reduce manufacturing lead-time • Automation • Improve management control • Improve procurement process • Reduce operating costs • Shared control center • Improve management control Total Gross Margin Total Adjusted EBITDA Margin 48.7% 49.0% 36.4% 36.
Slide 18: Organic Growth
Organic Growth • Generation increased by 16.4% QoQ due to commencement of commercial operation of: • The second phase of the McGinness Hills power plant and Don A. Campbell power plant in Nevada in February and September 2015, respectively • Plant 4 at the Olkaria III complex in Kenya in January 201
Slide 19: Organic Growth and M&A
Organic Growth and M&A • Signed definitive agreements to acquire 85% gradually of geothermal power plant in Guadeloupe © Géothermie Bouillante • Expect to optimize the existing facilities and recover its current production to its design capacity of 14.75MW in 2017 • Potential of reaching a total of
Slide 20: Organic Growth and M&A
Organic Growth and M&A • Expanding geographical footprint and diversifying technologies • Added 29 MW in January 2016 • Expect to add between 160 and 190 MW by YE 2018 • Extensive activities to support long term growth Project Projected Expected Capacity COD Guadeloupe- Bouillante 7 MW 1 H2 2016 Ind
Slide 21: Expansion to New Activities
Expansion to New Activities • Signed agreement to jointly build, own and operate the Rabbit Hill Energy Storage Project in Georgetown, Texas • Storage market is key to Ormat’s long term growth plan • The agreement moves us for the first time into the energy storage arena • Ormat will own and fund th
Slide 22: CapEx for the Remainder of 2016
CapEx for the Remainder of 2016 CapEx ($ millions) 75 Construction & enhancements 70 Development 28 Exploration 36 New activity 31 Maintenance CapEx 5 Production facility $245 Total CapEx $51 Debt repayment $296 Total 22 Copyright © 2016 Ormat Technologies, Inc.
Slide 23: Product Segment
Product Segment • Backlog of approximately $214 million as of May 4, 2016 • Includes revenues for the period between March 31 and May 4, 2016 Veyo REG Project in Utah, US Veyo REG Project in Utah, US 23 Copyright © 2016 Ormat Technologies, Inc.
Slide 24: Regulatory Updates
Regulatory Updates Continued support for renewables & geothermal • In April 2016, the United States Senate passed the Energy Policy Modernization Act of 2015 (S. 2012) • Should the bipartisan energy bill pass the House, it will improve our ability to assess potential geothermal resources faster than
Slide 25: 2016 Guidance
2016 Guidance • We are reiterating our 2016 full-year guidance: • 2016 revenues guidance to be between $620 and $640 million • Electricity Segment - between $410 and $420 million • Product Segment - between $210 and $220 million • Adjusted EBITDA 2016 guidance between $300 and $310 million 25 Copyri
Slide 26: Reconciliation of EBITDA Adjusted EBITDA and Additional Cash Flows Information
Reconciliation of EBITDA Adjusted EBITDA and Additional Cash Flows Information • We calculate EBITDA as net income before interest, taxes, depreciation and amortization. We calculate Adjusted EBITDA as net income before interest, taxes, depreciation and amortization, adjusted for (i) termination fee