Slide 1: Ormat Technologies, Inc. Earnings Call
ORMAT TECHNOLOGIES, INC. EARNINGS CALL DORON BLACHAR, CEO ASSI GINZBURG, CFO FEBRUARY 23, 2023 Copyright© Copyright 2023 Ormat ©2023 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: 2022 Highlights
2022 HIGHLIGHTS DELIVERING STRONG EXPANDING OUR ADVANCING PROFITABLE COMMITTED TO FINANCIAL PERFORMANCE PORTFOLIO GROWTH A SUSTAINABLE FUTURE Copyright © 2023 Ormat Technologies, Inc. 3
Slide 4: Financial Performance
FINANCIAL 01 PERFORMANCE Copyright © 2019 Ormat Technologies, Inc. 4 Copyright © 2023 Ormat Technologies, Inc. 4 Copyright © 2023 Ormat Technologies, Inc.
Slide 5: Solid Financial Performance
SOLID FINANCIAL PERFORMANCE FY 22 Revenues Gross margin Adjusted EBITDA(1) EPS/Adjusted EPS(1,2,3) $734.1M 36.6% $435.5M $1.17/$1.63 +10.7% (330) bps +8.5% +6.4%/+17.1% Q4 22 Revenues Gross margin Adjusted EBITDA(1) EPS/Adjusted EPS(1,2) $205.5M 39.0% $124.7M $0.32/0.73 +7.6% (60) bps +7.5% (5.9)%/+
Slide 6: Revenues by Segment
REVENUES BY SEGMENT FY 22 Total Electricity Products Energy Storage 86% 10% $734.1 $631.7M $71.4M $31.0M Electricity Products +10.7% +7.8% +52.2% +2.1% 4% Storage Q4 22 Total Electricity Products Energy Storage 80% 16% $205.5 $165.2M $32.2M $8.1M Electricity Products +7.6% +0.6% +58.2% +27.3% 4% Sto
Slide 7: Gross Margin by Segment
GROSS MARGIN BY SEGMENT FY 22 Total Electricity Products Energy Storage 36.6% 39.8% 15.3% 21.0% (330) bps (270) bps +350 bps (1,200) bps Q4 22 Total Electricity Products Energy Storage 39.0% 43.5% 22.8% 11.7% (60) bps (60) bps +1,220 bps (470) bps Copyright © 2023 Ormat Technologies, Inc. 7
Slide 8: Adjusted EBITDA by Segment
ADJUSTED EBITDA(1) BY SEGMENT FY 22 Total Electricity Products Storage 95% 2% $435.5 $415.3M $8.3M $11.9M Electricity Products +8.5% +9.0% (18.3%) +14.3% 3% Storage Q4 22 Total Electricity Products Storage 94% 4% Products $124.7 $117.2M $4.9M $2.6M Electricity +7.5% +8.0% +24.4% (26.9%) 2% Storage (
Slide 9: YE 2022 Cash and Net Debt
YE 2022 I CASH AND NET DEBT Cash and Cash Equivalents, Marketable Securities and restricted cash and Cash Equivalents ($M) Net Debt1 ($M) 50 564 281 Tax Equity $1,800 554 $1,521 Cash from operating 404 activities Investment in CapEx $387 45 25 8 Proceeds from Debt raising Debt $227 Repayment Return
Slide 10: Maintaining a Strong Capital Position to Support Accelerated Growth
MAINTAINING A STRONG CAPITAL POSITION TO SUPPORT ACCELERATED GROWTH 2023 expected capital needs(1) $ 589M to support future growth ~$ 690M Total liquidity (3) Access to multiple 47% 4.1x sources of liquid Net debt to Net debt to capital (4) capitalization (2) Adj. EBITDA(2) (1) For details on CapEx
Slide 11: Operational Update
02 OPERATIONAL UPDATE Copyright © Copyright © 2023 2022 Ormat Ormat Technologies, Technologies, Inc. Inc. 11
Slide 12: Ormat Moves Towards Achieving Its Growth Goals
ORMAT MOVES TOWARDS ACHIEVING ITS GROWTH GOALS ELECTRICITY UPDATE ENERGY STORAGE PRODUCT BACKLOG IRA Copyright © 2023 Ormat Technologies, Inc. 12
Slide 13: Electricity Operation
ELECTRICITY OPERATION Robust and balanced portfolio Global portfolio reached 1,070 MW Main generating capacity adjustments vs 2021: 73 MW addition from new geothermal and solar 5 assets 2 4 1 3 5 MW addition in CD4 due to better performance 6 14 MW reduction in McGinness Hills due to lower resource
Slide 14: Operation Update
OPERATION UPDATE Puna Generation is between 23MW and 25MW High energy rates in 2022 due to high diesel prices Negotiating new amendments to the fixed price PPA On going drilling campaign Olkaria Generating currently 125 MW On going drilling campaign Heber 1 Fire Steam unit is down since Feb 28th Opt
Slide 15: Product Backlog
PRODUCT BACKLOG 50% 3rd parties’ contracts New Zealand 22% Indonesia Backlog at $148.1M – 177% increase (1) Philippines vs Q4 2021 Guatemala 8% USA Signed approximately $163 million of IL $148.1M 5% new product contracts since the Germany 3% beginning of 2022 Taiwan Others 3% 94.7% 2% Geothermal con
Slide 16: Energy Storage
ENERGY STORAGE Storage Facilities Performance 4 Gross profit 3 1 • Q4 2022 - $1.0 million • FY 2022 - $6.5 million Adjusted EBITDA 2 • Q4 2022- $2.6 million • FY 2022 - $11.9 million Storage Segment Revenues Breakdown 01 CA 02 TX 30.4 31.0 35MW/140MWh 10MW/10MWh 03 NJ 04 VT 30.2 8.1 41MW/41MWh 2MW/5
Slide 17: Strong Tailwind: Inflation Reduction Act
04 STRONG TAILWIND INFLATION REDUCTION ACT ON AUGUST 16, 2022, IRA SIGNED INTO LAW PTC ITC Benefits to the Benefits to the Storage Geothermal Assets Assets PTC tax equity transaction ITC sale reduces tax EBITDA impact over up-to expenses and boosts EPS 10 years $150M cash that reduces capital needs
Slide 18: Advancing Profitable Growth
ADVANCING PROFITABLE 03 GROWTH Copyright © 2019 Ormat Technologies, Inc. Copyright © 2023 Ormat Technologies, Inc. 18 Copyright © 2023 Ormat Technologies, Inc.
Slide 19: Robust Growth Plan
Significantly increase solar and geothermal capacity Accelerate storage capacity to establish ROBUST leading position in the U.S. storage sector GROWTH PLAN YE 2025 portfolio target: 1.8 GW - 1.86 GW Total expected MW growth vs 2022: ~ 55%-60% This growth plan is subject to obtaining all permits and
Slide 20: 2025 Growth Target by Segments
2025 GROWTH GEOTHERMAL & ENERGY SOLAR ENERGY STORAGE TARGET BY SEGMENTS (VS 2022) YE 2025 TARGET 1,300MW-1,330MW 500MW-530MW 1,070 MWh-1,140 MWh MW ADDITION 230MW-260MW 412MW-442MW MW GROWTH 21%-24% 468%-502% Change in MW growth is compared to a 1,070MW Geothermal & Solar portfolio and a 88 MW stora
Slide 21: Geothermal Projects Under Development
Projected Expected Project PPA Capacity (MW) COD U.S - North Valley 25 Q1 2023 U.S. – Dixie Valley 6 Q2 2023 U.S - Heber Complex 8 Q2 2023 Guatemala - Zunil 5 H2 2023 GEOTHERMAL U.S – Beowawe Repowering 6 Q3 2024 4 PROJECTS GEOTHERMAL 44 MW Indonesia - Ijen 15(1) Q4 2024 PROJECTS UNDER B
Slide 22: Solar Projects Under Development
Projected Expected Project Capacity PPA COD (MW) U.S. - Brady Solar 6 Q1 2023 U.S. - Steamboat Solar 7 Q2 2023 SOLAR 4 PROJECTS U.S. – North Valley Solar 6 Q3 2023 23 MW AC U.S. – Steamboat Hills Solar 4 Q3 2023 BY YE 2023 U.S. – Beowawe Solar 6 H1 2024 SOLAR ENERGY U.S. – McGinness Hills
Slide 23: Energy Storage Projects Under Development
Projected Projected Expected Project Capacity PPA MWh COD (MW) TX - Upton 25 25 Q1 2023 Merchant NJ - Andover 20 20 Q1 2023 Merchant NJ - Howell 7 7 Q1 2023 Merchant ENERGY OH – Bowling Green 12 12 Q1 2023 Capacity PPA and Merchant STORAGE Capacity PPA 6 PROJECTS CA – Pomona 2 20 40 Q3 2023 and Merc
Slide 24: Energy Storage Pipeline
~3GW 34 104MW/124MWh potential capacity of named expected addition U.S. storage pipeline prospects by YE 2023 Hawaii East Coast WECC ENERGY Texas STORAGE California PIPELINE Copyright © 2023 Ormat Technologies, Inc. 24
Slide 25: 2023 Guidance
2023 GUIDANCE (2) Total revenues Electricity revenues Products revenues Storage revenues Adjusted EBITDA $823M-$858M $670M-$685M $120M-$135M $33M-$38M $480M-$510M +12%-17% +6%-8% +68%-89% +7%-23% +10%-17% 1.8-1.86 16-17% GW CAGR 1.1 1.16 GW GW 2021 Actual 2022 Actual 2025 Expected Electricity capaci
Slide 26: Executing on Our Growth Plans
Executing on our growth plans 83MW of new capacity was added during 2022 Expecting new 170MW in 2023 Delivered strong 2022 results Driven by all three segments A strong tailwinds to support renewable and storage energy Inflation Reduction Act supporting tax incentives CPUC proposed order create dema
Slide 27: Committed to a Sustainable Future
COMMITTED TO 04 A SUSTAINABLE FUTURE Copyright © 2023 Ormat Technologies, Inc. 27 27 Copyright © 2023 Ormat Technologies, Inc.
Slide 28: ESG Initiatives
ENVIRONMENT GOVERNANCE ESG INITIATIVES We are moving to strengthen our ESG commitments Building our approach and policy on significant valuable issues SOCIAL We issued our ESG report, the fourth in accordance with GRI standards and the second 22% according to SASB framework. Absolute reduction in sc
Slide 29: Thank You!
THANK YOU! SMADAR LAVI I VP HEAD OF INVESTOR RELATIONS AND ESG PLANNING & REPORTING 775-356-9029 (EXT. 65726) I SLAVI@ORMAT.COM Copyright © 2019 Ormat Technologies, Inc. 29 29 Copyright © 2023 Ormat Technologies, Inc. Copyright © 2023 Ormat Technologies, Inc.
Slide 30: Payment of Principal Due by Period
PAYMENT OF PRINCIPAL DUE BY PERIOD ($M) AVERAGE INTEREST RATE: 4.05% Q1-2023 Q2-2023 Q3-2023 Q4-2023 Year 2023 Long-term non-recourse debt & limited recourse debt 18.6 15.2 14.4 15.8 63.9 Long-term loans (full recourse) 18.2 46.7 18.2 18.3 101.5 Finance Liability 6.0 0.0 10.3 0.0 16.3 Total $42.8 $6
Slide 31: Capex for 2023
CAPEX FOR 2023 ACTUAL INVESTED TOTAL CAPEX ($M) IN 12 MONTHS 2022 FOR 2023 Electricity Segment 451 386 Construction & Enhancements – fully released 266 172 Development enhancement, drillings and Exploration 50 101 Puna restoration (including drilling) 53 21 Olkaria recovery, partially released for c
Slide 32: P&L Highlights
P&L HIGHLIGHTS Change Change Q4 2022 Q4 2021 (%) FY 2022 FY 2021 (%) GAAP MEASURES Revenues ($M) Electricity 165.2 164.3 0.6 % 631.7 585.8 7.8 % Product 32.2 20.3 58.2 % 71.4 46.9 52.2 % Energy Storage 8.1 6.4 27.3 % 31.0 30.4 2.1 % Total Revenues 205.5 191.0 7.6 % 734.1 663.1 10.7 % Gross Profit ($
Slide 33: Reconciliation of EBITDA and Adjusted EBITDA
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA (DOLLARS IN THOUSANDS) Three Months Twelve-Months Ended Dec 31, Ended Dec 31, 2022 2021 2022 2021 Net income 20,230 22,273 77,795 76,077 Adjusted for: Interest expense, net (including amortization of deferred financing costs) 22,604 22,252 84,326 80,534 I
Slide 34: Reconciliation of Adjusted Net Income and Adjusted EPS
RECONCILIATION OF ADJUSTED NET INCOME ATTRIBUTABLE TO THE COMPANY’S STOCKHOLDERS AND ADJUSTED EPS Three Months Ended Dec 31, Twelve-Months Ended Dec 31, 2022 2021 2022 2021 (in millions, except for EPS) GAAP Net income attributable to the Company's stockholders $18.0 $18.9 $65.8 $62.1 Hedge losses r
Slide 35: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES December 31, 2022 Cash and cash equivalents, marketable securities and Restricted cash (in millions $) Cash and cash equivalents 96 Restricted cash and cash equivalents 131 Total cash and cash equivalents, marketable securities and Restricted cash (in mi