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
Q1 | 202) ORMAT TECHNOLOGIES, INC. EARNINGS CALL DORON BLACHAR, CEO ASSI GINZBURG, CFO MAY 6, 2021
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, may contain “forward-looking stat
Slide 3: Q1 2021 Highlights
Q1 2021 | 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: 01 Financial Performance
rx TA ORMAT O1 FINANCIAL “ PERFORMANCE Copyright © 2021 Ormat Technologies, Inc.
Slide 5: Q1 2021 Financial Performance
Q1 2021 | FINANCIAL PERFORMANCE Revenues $166.4M (13.4%) Total $166.4 (13.4%) Gross margin 44.3% +169 bps Electricity $145.0M +1.5% Adjusted EBITDA® EPS/Adjusted EPS“? $99.2M $0.27/$0.42 (6.4)% (47.1%)/(17.6)% Products Storage 87% 5% $8.6M $12.7M Electricity Products (81.8%) +589.1% 8% Storage e the
Slide 6: Q1 2021 Segment Contribution
Q1 2021 | SEGMENT CONTRIBUTION Total 44.3% +170 bps Total $99.2 (6.4)% Electricity 44.9% -510 bps Electricity $95.1M (5.3%) Products 6.6% NA Products $1.1M (82.3%) Storage 62.4% NA Storage $3.0M NA (1) For key financial results and non-GAAP financial measures reconciliation please see the appendix s
Slide 7: February Power Crisis in Texas
FEBRUARY POWER CRISIS IN TEXAS 1 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 $3.0M Expense under General and
Slide 8: Q1 2021 Cash and Net Debt
Q1 2021! CASH AND NET DEBT Cash and Cash Equivalents, and restricted cash and Cash Equivalents ($M) 69 Cash from operating activities 88 Investment 28 17 in Capex Bothere — Marketable Debt Securities payment 7 Dividend $465 DEC. 31, 2020 (1) Net debt takes into account $27.7M marketable securities a
Slide 9: 02 Business Resilience in the Face of COVID-19
nx SI ORMAT O2 BUSINESS RESILIENCE IN THE FACE OF COVID-19 tt i =
Slide 10: Ormat Continues to Demonstrate It's Resilient
ORMAT CONTINUE TO DEMONSTRATE IT’S RESILIENT IN A CHALLENGING AND VOLATILE ENVIRONMENT 1 2 3 OPERATION PUNA HAWAII KENYA 4. 5 6 PRODUCT SEGMENT STORAGE UPDATE A STRONG TAILWINDS Copyright © 2021 Ormat Tec!
Slide 11: Electricity Operation
O01 ELECTRICITY OPERATION GROWING PORTFOLIO 2% increase in generation Steamboat Hill enhancement operation in June 2020 Partial operation of Puna power plant 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 Executing growth McGinn
Slide 12: Puna, Hawaii
02 PUNA, HAWAII Nov. 2020 Feb. 2021 April 2021 Mid 2021 Resumed operation ag 20 MW Expect to reach” 10 MW a fulloperation New well to be connected Fea 3 F3| Bottoming binar
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
24 PRODUCT BACKLOG Signing 3° parties’ contracts Covid remains a challenge Backlog at $37M 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 t
Slide 15: Energy Storage
OS ENERGY STORAGE Improved gross profitability Energy Storage performance without one-time impact Q1/21 gross adjusted” profit - $2.5M Q1/21 gross adjusted” margin - 34.7% Pushing for growth Commercial operation 1OMW/40MWh Vallecito, CA Released for construction O1CA 02 TX 20MW/20MWh Andover, NJ 30M
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
nx <I ORMAT 3 Le V4 04 DRIVING PROFITABLE GROWTH
Slide 18: Robust Growth Plan
ROBUST GROWTH PLAN Increase solar and geothermal capacity significantly Accelerate storage capacity to establish leading position in the U.S. storage sector YE 2023 portfolio target: Total expected MW growth: This growth plan is subject to obtaining all permits and regulatory approvals required as w
Slide 19: 2023 Growth Target by Segments
2023 GROWTH GEOTHERMAL & ENERGY TARGET SOLAR ENERGY STORAGE BY SEGMENTS YE 2023 TARGET 1,182MW-1,202MW 273MW-373MW 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 Copyright © 2021 Ormat Technologies, Inc.
Slide 20: Geothermal and Solar Projects
Projected Project oe Expected PPA U.S - Heber Complex 1 H1 2022 v U.S - CD4 30 Ql 2022 v U.S - North Valley 30 2022 - GEOTHERMAL =— Spansion 8 22021 v 10 PROJECTS U.S. - Puna expansion 8 2023/TBU Suspended 143-148 MW U.S - Dixie Meadows 15 2022 v U.S - Tungsten Mountain 2 1 H2 2022 v Guadeloupe - Bo
Slide 21: Energy Storage Development
DEVELOPM 1OMW/40MW Vallecito project started operation in April 2021 Projected | 5 Expected Type of Project Capacity (MW) coD contract CA - Tierra Buena 5 a42021 Capacity PPA and Merchant ENERGY STORAGE TX - Upti 25 Q4 2021 Merchant 4 PROJECTS pron erenan 57 MW NJ - Andover 20 Q1 2022 Merchant NJ -
Slide 22: U.S. Storage Pipeline Prospects
2 GW 40 200MW - 3OOMW potential capacity of named expected addition U.S. storage pipeline prospects by YE 2023 Copyright © 2021 Ormat Technologies, Inc.
Slide 23: Maintaining a Strong Capital Position
MAINTAINING A STRONG CAPITAL POSITION TO SUPPORT ACCELERATED GROWTH $360m Remaining of 2021 expected capital needs® to support future growth target Over $900m Cash, cash equivalents, restricted cash and available lines of credit Access to various sources of capital 32% 2.3X Net debt to Net debt to c
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 TRANSITIONING TO ACCELERATED GROWTH IN STORAGE AND ELECTRICITY SEGMENTS MW EXPECTATIONS ADJUSTED EBITDA EXPECTATIONS 1,500MW $500M run-rate® —_
Slide 25: Summary
SUMMARY: STRENGTHENING THE FOUNDATION, PREPARING FOR FASTER GROWTH Delivered revenue growth in our leading segments Reiterated 2021 adjusted EBITDA guidance Continued to drive profitable growth Increased energy storage pipeline to 2GW A strong tailwinds to support renewable and storage energy Well-p
Slide 26: Thank You
FULL COMMITMENT TO SUSTAINABLE GROWTH THANK YOU! SMADAR LAVI! VP CORPORATE FINANCE AND HEAD OF INVESTOR RELATIONS 775-356-9029 (EXT. 65726) | SLAVI@ORMAT.COM
Slide 27: Products Segment Third-Party Backlog
1% 2% PRODUCTS SEGMENT THIRD-PARTY «Germany BACKLOG” = Guatemala = Taiwan = Chile NZ CONTRACTS GEOGRAPHIC Others BREAKDOWN Turkey Backlog as of May 5, 2021. The backlog includes revenues for the period between April 1, 2021 and May 5, 2021; Copyright © 2021 Ormat Technologies, Inc. 27
Slide 28: Payment of Principal Due by Period
PAYMENT OF PRINCIPAL DUE BY PERIOD ($M) AVERAGE INTEREST RATE: 4.9% @2-2021 Q3-2021 @Q4-2021 ‘Year 2021 Long-term non-recourse debt & limited recourse debt 9.5 85 9.7 27.7 Senior Secured Notes (non-recourse) 5.6 5.0 5.9 16.5 Long-term loans (full recourse) 47 8.4 47 17.8 Total 19.8 21.9 20.3 62.0 Re
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 $360 To
Slide 30: P&L Highlights
P&L HIGHLIGHTS @1 2021 @Q12020 Change (%) GAAP MEASURES Revenues ($M) Electricity 145.0 142.9 15 % Product 86 474 (81.8) % Energy Storage 12.7 18 589.1 % Total Revenues 166.4 192.1 (13.4) % Gross margin (%) Electricity 449 % 50.0 % Product 66% 22.0 % Energy Storage 62.4 % (5.6) % Gross margin (%) 44
Slide 31: Reconciliation of EBITDA and Adjusted EBITDA
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA Three Months Ended March 31 2021 2020 (Dollars in thousand) 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 investmen
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) 88 - Adjusted Net income attributabl
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 $)