Ormat Technologies, Inc. · NYSE:ORA

Ormat Technologies — Q3 2020 Earnings Presentation

46 slides from Ormat Technologies's earnings presentation, November 2020

Slide 1: Ormat Technologies, Inc. November 2020
ORMAT TECHNOLOGIES, INC. NOVEMBER 2020 Copyright Copyright Copyright©© 2020 ©2020 Ormat 2020Ormat Technologies, OrmatTechnologies, Inc. Technologies,Inc. Inc.
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
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
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 Own & operate 55 years ~1,410 933MW of experience Employees Generating Capacity $746M FY2019 revenues 73MW/136MWh $384M of operating storag
Slide 5: Market Presence - Electricity Segment
MARKET PRESENCE - ELECTRICITY SEGMENT Top 10 Geothermal owners & operators1 (MW) 1,400 45 40 1,200 35 1,000 30 Projects Count 800 25 MW 600 20 15 400 10 200 5 0 0 Operation (MW) Estimated Project Count (1) Source: Think GeoEnergy - “Geothermal Market Analysis YE 2019” by Alexander Richter from Febru
Slide 6: Market Presence - Products Segment
MARKET PRESENCE - PRODUCTS SEGMENT Major geothermal equipment suppliers (MW & project count)1 4,000 140 3,500 120 3,000 100 2,500 Projects count 80 MW 2,000 60 1,500 40 1,000 500 20 0 0 Toshiba Mitsubishi Fuji Ormat Ansaldo/Tosi GE Alstom Exergy MW Operating Estimated Project Count (1) Source: Think
Slide 8: Potential for Geothermal Growth
POTENTIAL 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 Areas with ins
Slide 9: Geothermal Global Growing Market
GEOTHERMAL GLOBAL GROWING MARKET Expected1 geothermal capacity addition of 1 GW a year for the next 10 years • Binary share in the geothermal market is expected to increase by approximately 80% in the next 10 years1 Other = EGS, Hybrid, Co-Gen Source: Geothermal Power Market Forecast 2019-2029, Visi
Slide 10: Load Serving Entities in California Demand Greater Deployment of Geothermal
LOAD SERVING ENTITIES IN CALIFORNIA DEMAND GREATER DEPLOYMENT OF GEOTHERMAL • California’s Load Serving Entities' have continued to demand geothermal be required as part of their clean and renewable Integrated Resource Planning Estimated Procurement by 2030 Southern California Edison 180 MW Clean Po
Slide 11: Trends in the International Geothermal Market
TRENDS IN THE INTERNATIONAL GEOTHERMAL MARKET • Global growing demand for electricity • Energy security as a domestic source • Geothermal is suitable for base load generation • Geothermal is a cost-effective solution • Government agencies invest capital in developing countries; DFC (formerly OPIC),
Slide 12: Geothermal as an Essential Source of Energy in California
GEOTHERMAL AS AN ESSENTIAL SOURCE OF ENERGY IN CALIFORNIA • As renewable energy increases on the California grid more energy storage are needed • To shift PV energy to the hours of the day where it is needed • Increasing efficiency losses and costs for PV with integrated storage • During recent blac
Slide 13: Growth in Energy Storage, Slower Than Previously Forecasted
GROWTH IS HAPPENING IN ENERGY STORAGE , YET SLOWER THAN PREVIOUSLY FORECASTED Wood Mackenzie Estimates Total MW in the US: 2016 vs. 2020 6,062 5,260 4,115 3,705 2,045 1,450 1,151 950 650 450 523 227 231 224 311 83 46 65 2012 2013 2014 2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E Q4 2016 ES
Slide 15: Industry's Only Vertically Integrated Geothermal Company
INDUSTRY’S ONLY VERTICALLY INTEGRATED GEOTHERMAL COMPANY Development Drilling Engineering Manufacturing Construction Operation Customers & exploration Segment Revenues contribution 1.1% 28.0% Better maintain quality, cost and timeline 2019 control 70.9% Differentiate from competitors and provide uni
Slide 16: 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. 16
Slide 17: Electricity Segment Overview
ELECTRICITY SEGMENT OVERVIEW Profitable growing portfolio with visible cash generating assets • Global operation of 933 MW at 25 sites • Weighted average PPA life: 17 years(1) Diversified Geographic • 94% of the portfolio is geothermal Footprint (933 MW) U.S. Annual revenue ($M) 648 MW Guadeloupe 15
Slide 18: Growth Plan - Geothermal and Solar
GROWTH PLAN – GEOTHERMAL AND SOLAR • Added 19 MW in June 2020 from Steamboat Hills enhancement, Nevada • Reached a portfolio of 933 MW • Expect adding between 160 MW and 180 MW by the end of 2022 Projected Project Expected COD PPA Capacity (MW) Geothermal Projects U.S - Heber Complex 11 End 2021  U
Slide 19: 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. 19
Slide 20: Product Segment Overview
PRODUCT SEGMENT OVERVIEW Provides flexibility to allocate manufacturing capacity to grow organically • Backlog of $49.6 million as of November 3, 2020 • Continuing improving engineering, technology and delivery lead-time to Maintain leadership position (1) Revenue from 3rd party sales ($M) Backlog b
Slide 21: Ormat's Improved Technology
ORMAT’S IMPROVED TECHNOLOGY Turbine Size (MW) 35 5++ stages 30 4 stages 25 3 stages 20 MW 3 stages 15 3 stages 10 2 stages 2 stages 5 0 Until 1993 1993-2002 2002-2007 2007-2017 2017-2018 2018-2019 2019-2020 Copyright © 2020 Ormat Technologies, Inc. 21
Slide 22: Vertical Integration as a Platform to Grow in Storage
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.
Slide 23: Providing Diversification and Growth into New Markets
PROVIDING DIVERSIFICATION AND GROWTH INTO NEW, LUCRATIVE MARKETS Ormat energy storage development timeline State-level support for energy storage Tierra Buena and other 250 future developments Up to 175MW Oregon utilities to Nevada proposed New York Massachusetts deploy 5 MW a 1 GW target approved a
Slide 25: Ormat Primary Growth Areas in the Next Five Years
ORMAT PRIMARY GROWTH AREAS IN THE NEXT FIVE YEARS • Primary growth areas next five years • US • Indonesia • Kenya • Ethiopia • Turkey • New Zealand Copyright © 2020 Ormat Technologies, Inc. 25
Slide 26: Funding Growth - Risk Management
FUNDING GROWTH – RISK MANAGEMENT Global expansion - risk mitigation strategy • All US denominated PPAs (except for 1 Euro PPA) • Diversified asset base • Non-recourse project finance • Political risk insurance • Most international contracts with government related entities • International projects s
Slide 27: Current US Development to Support Future Growth
CURRENT US DEVELOPMENT TO SUPPORT FUTURE GROWTH CA 5 sites under construction construction: 2 site 34 prospects under exploration and development to Exploration: 5 sites support our commitment under SCPPA Portfolio PPA and growth beyond 2022 NV Construction: 3 sites Exploration: 24 sites OR Explorat
Slide 28: Asia Pacific
ASIA PACIFIC Indonesia Exploration: 3 sites Multiple prospects New Zealand 1 prospect Indonesia - average of about 100 MW per year during the past 10 years Corporation agreement with ORIX • Enhance and accelerate strategic growth plans in the renewable energy market leveraging ORIX's global presence
Slide 29: Africa
AFRICA Kenya Operation: 150 MW (Olkaria III). Additional potential of 50MW under current PPA Prospects: 1 Ethiopia 4 concessions • Negotiating PPA Copyright © 2020 Ormat Technologies, Inc. 29
Slide 31: Strong Execution - Revenue
STRONG EXECUTION - REVENUE ($M) $719 $746 $693 15 7 $662 3 191 202 $553 224 $526 226 10 10 147 540 121 510 466 436 396 395 9M 2019 9M 2020 2016 2017 2018 2019 Electricity Products Energy Storage and management services Copyright © 2020 Ormat Technologies, Inc. 31
Slide 32: Strong Execution - Adjusted EBITDA
STRONG EXECUTION - ADJUSTED EBITDA(1) ($M) By Segments -1.0% 12.8% FY 2018 FY 2018 $384 $368 $344 $324 $311 88.2% $282 -0.2% 8.8% FY 2019 91.4% 9M 2019 9M 2020 2016 2017 2018 2019 Electricity Products Energy Storage and management services (1) See appendix for Adjusted EBITDA reconciliation. Copyrig
Slide 33: Well Positioned to Support Growth
WELL POSITIONED TO SUPPORT GROWTH Total Debt ($M) Net Debt ($M)(1) $1,454 $1,268 $1,238 $1,164 $1,090 $1,085 $939 $914 509 779 522 $817 273 305 $674 666 759 716 675 609 2016 2017 2018 2019 Sep 30, 2020 2016 2017 2018 2019 Sep 30, 2020 Project Finance Corporate Debt Net Debt to Adjusted EBITDA(1) Net
Slide 34: Pure-Play Renewables Platform Aligned with ESG Principles
PURE-PLAY RENEWABLES PLATFORM ALIGNED WITH ESG PRINCIPLES Singular focus on renewables Publish annual Corporate Sustainability Report 100% local employment at operational facilities Ormat CO2 emissions are much lower than alternative resources (mm)1 7.6 tons of CO2 5.4 tons of CO2 3.2 tons of CO2 0.
Slide 35: Attractive Investment Thesis
ATTRACTIVE INVESTMENT THESIS Strong financial Robust growth ESG positioning potential Renewable asset growth in Consistent track record of Significant, consistent the U.S. supported by strong returns for domestic growth favorable regulatory shareholders dynamics International geothermal Pure-play re
Slide 37: 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. 37
Slide 39: Recent Development
RECENT DEVELOPMENT Electricity Storage • Encouraging development in Kenya • Completed acquisition of 20 MW/80 MWh • Reached a settlement on the most Pomona storage facility for $43.3 million significant tax assessment in Kenya • Signed two new Resource Adequacy • Improved collection Agreements for t
Slide 40: Puna - Operation Update
PUNA - OPERATION UPDATE • Substation construction • Construction of the electrical substation and electrical transmission lines is completed • Wellfield • KS-18 (Production) • . Completion of the works and start flowing to the plant is scheduled for the end of November. • KS-17 (Production) • Comple
Slide 41: Funding in Place to Capitalize on Growth Opportunities
FUNDING IN PLACE TO CAPITALIZE ON GROWTH OPPORTUNITIES Support from existing lenders demonstrates their confidence in Ormat, our growth strategy, and our future financial performance Successfully raised over $400M year-to-date • $50.0 million from existing lender • Additional loan at 5.44% interest
Slide 44: Reconciliation of EBITDA and Adjusted EBITDA
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA FOR THE THREE AND NINE-MONTHS PERIODS ENDED SEPTEMBER 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 an
Slide 45: 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
Slide 46: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Year Ended December 31 September 30, 2020 2019 2018 2017 2016 2015 2014 Cash and cash equivalents and Restricted cash (in millions $) Cash and cash equivalents 197 71 99 48 230 186 40 Restricted cash and cash equivalents 92 82 79 49 34 50 93 290 153 178

Ormat Technologies — Q3 2020 Earnings Presentation on 6ix

Ormat Technologies — Q3 2020 Earnings Presentation

Slide 1: Ormat Technologies, Inc. November 2020

Slide 2: Safe Harbor Statement

Slide 3: Non-GAAP Metrics

Slide 4: Introduction to Ormat

Slide 5: Market Presence - Electricity Segment

Slide 6: Market Presence - Products Segment

Slide 7: Global Potential and Market Trends

Slide 8: Potential for Geothermal Growth

Slide 9: Geothermal Global Growing Market

Slide 10: Load Serving Entities in California Demand Greater Deployment of Geothermal

Slide 11: Trends in the International Geothermal Market

Slide 12: Geothermal as an Essential Source of Energy in California

Slide 13: Growth in Energy Storage, Slower Than Previously Forecasted

Slide 14: Ormat

Slide 15: Industry's Only Vertically Integrated Geothermal Company

Slide 16: Vertically Integrated Geothermal Company - Electricity Segment

Slide 17: Electricity Segment Overview

Slide 18: Growth Plan - Geothermal and Solar

Slide 19: Vertically Integrated Geothermal Company - Product Segment

Slide 20: Product Segment Overview

Slide 21: Ormat's Improved Technology

Slide 22: Vertical Integration as a Platform to Grow in Storage

Slide 23: Providing Diversification and Growth into New Markets

Slide 24: Growth Plans Beyond 2022

Slide 25: Ormat Primary Growth Areas in the Next Five Years

Slide 26: Funding Growth - Risk Management

Slide 27: Current US Development to Support Future Growth

Slide 28: Asia Pacific

Slide 29: Africa

Slide 30: Why Ormat?

Slide 31: Strong Execution - Revenue

Slide 32: Strong Execution - Adjusted EBITDA

Slide 33: Well Positioned to Support Growth

Slide 34: Pure-Play Renewables Platform Aligned with ESG Principles

Slide 35: Attractive Investment Thesis

Slide 36: Proven, Experienced Management Team

Slide 37: Thank You!

Slide 38: Recent Updates

Slide 39: Recent Development

Slide 40: Puna - Operation Update

Slide 41: Funding in Place to Capitalize on Growth Opportunities

Slide 42: Appendixes

Slide 43: Air-Cooled Binary Geothermal Power Plant

Slide 44: Reconciliation of EBITDA and Adjusted EBITDA

Slide 45: Reconciliation of EBITDA and Adjusted EBITDA (Cont'd)

Slide 46: Reconciliation of Non-GAAP Financial Measures