Ormat Technologies, Inc. · NYSE:ORA
Ormat Technologies — Q3 2019 Earnings Presentation
27 slides from Ormat Technologies's earnings presentation, November 2019
Slide 1: Ormat Technologies Inc. Investor Presentation November 2019
ORMAT TECHNOLOGIES INC. INVESTOR PRESENTATION NOVEMBER 2019 Copyright Copyright©©2019 2019Ormat OrmatTechnologies, 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 2021 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 ~1,400 917 MW Employees 719$M FY2018 revenues 54 years 368$M of experience FY2018 adj. EBITDA(1) (1) See appendix for reconci
Slide 5: Continuing Execution - Summary
CONTINUING EXECUTION - SUMMARY Improve Organic Strategic New efficiencies growth M&A activities Product segment backlog (1) of Secured over (3) 167 $M 242 $M of capital to support growth plan Commissioned Plan to add by the end of 2021 (2) Added(3) 55 MW 42 /45 MW MWh 120-135 MW storage projects in
Slide 6: The World's Only Vertically Integrated Geothermal Company: Electricity
THE WORLD’S ONLY VERTICALLY INTEGRATED GEOTHERMAL COMPANY Development Drilling Engineering Manufacturing Construction Operation Customers: & exploration local utilities, C&I Electricity segment 67% of total revenues (1) (1) 2014-2018 average. Copyright © 2019 Ormat Technologies, Inc. 6
Slide 7: The World's Only Vertically Integrated Geothermal Company: Products
THE WORLD’S ONLY VERTICALLY INTEGRATED GEOTHERMAL COMPANY Development Drilling Engineering Manufacturing Construction Operation Customers: & exploration local utilities, developers C&I Products Product segment segment 32% of total revenues (1) (1) 2014-2018 average. Copyright © 2019 Ormat Technologi
Slide 8: Vertical Integration as a Platform to Grow in the Storage Market
VERTICAL INTEGRATION AS A PLATFORM TO GROW IN THE STORAGE MARKET Development Engineering Procurement Construction Operation Other segment Development Inverter and Pipeline battery 1% of total revenues (1) (1) 2017-2018 average. Copyright © 2019 Ormat Technologies, Inc. 8
Slide 9: Electricity Segment Overview
ELECTRICITY SEGMENT OVERVIEW Stable, well managed, cash generating assets • Global operation of 917 MW at 25 sites • 94% geothermal and 6% REG • Weighted average PPA life: 18 years(1) Annual revenue ($M) Global portfolio (917 MW) (2) $510 (4) $466 $436 $382 $376 U.S. Guadeloupe 629 MW 15 MW (3) Guat
Slide 10: Product Segment Overview
PRODUCT SEGMENT OVERVIEW Built approx. 180 power plants and installed over 2,900 MW of geothermal & REG over the years • Backlog of $167M as of November 6, 2019 (1) • Continued improvement in costs, technology and delivery lead-time Revenue from 3rd party sales ($M) Backlog breakdown 1% $219 $226 3%
Slide 11: Energy Storage Overview
ENERGY STORAGE OVERVIEW Unique holistic offering that combines energy storage, demand response and energy management • 50 highly experienced staff • Operating Portfolio • 40MW/40MWh operating assets • Plumsted and Stryker – connected to PJM • 2MW/5MWh Hinesburg project – was connected to ISO New Eng
Slide 12: Delivering Growth and Expanding Geographical Footprint
DELIVERING GROWTH AND EXPANDING GEOGRAPHICAL FOOTPRINT LTM portfolio growth summary: 55 MW 2 New power plants 42 /45MW MWh of new capacity Geothermal and storage Solar Tungsten Mountain Geothermal U.S. & Solar Hybrid Power Plant in Nevada Kenya 20MW/20MWh system, NJ, U.S. 2MW, Vermont, U.S. December
Slide 13: Growth Plan – Geothermal and Solar
GROWTH PLAN – GEOTHERMAL AND SOLAR • Added 7 MW from Tungsten Solar in Nevada • Expect adding between 120 MW and 135 MW by the end of 2021(1) • Continue to look for M&A opportunities Projected Project Expected COD PPA Capacity Geothermal Projects U.S - Steamboat Hills Enhancement 19 MW 2020 Guadel
Slide 14: Growth Plan - Energy Storage
GROWTH PLAN - ENERGY STORAGE Unique holistic offering that combines energy storage, demand response and energy management • Portfolio Growth • 20MW/52.5MWh under construction and development • 10MW/12.5MWh Rabbit Hill project under construction – will be connected to ERCOT in Texas • 10MW/40MWh Vall
Slide 15: Funding Growth – Secured Over $200M of Capital
FUNDING GROWTH – SECURED OVER $200M OF CAPITAL • Successfully raised year-to-date $242M • $59.3M tax partnership transaction of McGinness Hills phase 3 • $50.0M of commercial paper • Three months LIBOR + 0.75%, issued for 90 days and extends automatically for additional periods of 90 days for up to
Slide 16: Funding Growth – Risk Management
FUNDING GROWTH – RISK MANAGEMENT • Global expansion - risk mitigation aspects • Portfolio approach - diversification • Host country guarantee • Project finance (OPIC, ADB, DEG and AFDB) • Political risk insurance • Competitive pricing (1) (1) ’ these are potential sources of funding and financial su
Slide 17: Strong Execution - Revenue ($M)
STRONG EXECUTION - REVENUE ($M) $719 $731-743 $693 $662 8 11-13 3 $595 $554 $559 185-190 $529 202 225 10 226 5 147 177 219 152 510 535-540 436 466 396 376 372 382 1 9M 2018 9M 2019 2014 2015 2016 2017 2018 2019E Electricity Products Other (1) 2019E is based on the Company’s current guidance. Copyrig
Slide 18: Strong Execution - Adjusted EBITDA ($M)
STRONG EXECUTION - ADJUSTED EBITDA(1) ($M) By Segments -2% 13% 385-390 $368 FY 2018 $344 $324 $291 89% $282 $281 $255 $273 $250 -0.4% 18% FY 2017 83 % 9M 20189M 2019 9M 2018 9M 2019 2014 2015 2016 2017 2018 2 2019E Electricity W/O Puna W/O Puna 3 Products Other (1) See appendix for Adjusted EBITDA r
Slide 19: Well Positioned to Support Growth
WELL POSITIONED TO SUPPORT GROWTH Total Debt ($M) Net Debt ($M)(1) $1,268 $1,231 $1,090 $1,051 $1,001 $868 $817 $920 $939 $914 509 486 $685 $674 324 280 273 305 677 640 666 759 745 609 2014 2015 2016 2017 2018 30.9.19 2014 2015 2016 2017 2018 30.9.19 Project Finance Corporate Debt Net Debt(1) to Cap
Slide 20: Investment Highlights
INVESTMENT HIGHLIGHTS Sustainable Efficient operation Well positioned ESG Investment growth • Substantial and growing • Focus on increasing • Market leader • Pure play in the cash flow from operation efficiencies • Strong cash flow renewable sustainable • Accelerated growth • Improving margins • Str
Slide 21: 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©©2019 2019Ormat OrmatTechnologies, Technologies,Inc. Inc. 21
Slide 22: Gross Margin by Segment
GROSS MARGIN BY SEGMENT Electricity gross margin Product gross margin Other gross margin Gross margin (Total) 29.3% 32.5% 35.4% 38.7% 31.7% 26.4% 27.8% Q3 2018 Q3 2019 Q3 2019 Q3 2018 Q3 2019 Q3 2018 Q3 2019 Q3 2018 Q3 2019 W/O Puna (9.2)% (89.0)% (1) Gross margin in Q3 2019 included $4.5 million pr
Slide 23: Adjusted EBITDA ($M)
ADJUSTED EBITDA1 ($M) Total adjusted EBITDA Electricity segment Product segment Other segment $9.9M (13.0%) $7.5M (11.1%) $0.8M (9.1%) $1.6M (-209.7%) $85.5 $87.0 $74.8 $75.6 $67.3 88% of total adjusted EBITDA 89% of total adjusted EBITDA $9.0 $9.8 ($0.8) $0.8 Q3 2018 Q3 2019 Q3 2019 Q3 2018 Q3 2019
Slide 24: FY 2018 - Adjusted EBITDA ($M)
FY 2018 - ADJUSTED EBITDA1 ($M) Total adjusted EBITDA Electricity segment Product segment Other segment $24.1M (7%) +$43.9M (15.5%) -$14.3M (-23.3%) $343.8 $368.0 $327.6 $283.7 89% of total adjusted EBITDA 82% of total adjusted EBITDA $61.5 $47.2 2017 2018 2017 2018 2017 2018 2017 2018 ($1.4) ($6.8)
Slide 25: Reconciliation of EBITDA and Adjusted EBITDA
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA FOR THE THREE- AND NINE-MONTHS PERIODS ENDED SEPTEMBER 30, 2019 AND 2018 (UNAUDITED) We calculate EBITDA as net income before interest, taxes, depreciation and amortization. We calculate Adjusted EBITDA as net income before interest, taxes, depreciation a
Slide 26: 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, 2017, 2016, 2015 and 2014. (In thousands $) Year Ended December 31, 2018 2017 2016 2015 2014 Net Income.......................
Slide 27: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Year Ended December 31 September 30 2019 2018 2017 2016 2015 2014 Cash and cash equivalents and Restricted cash (in millions $) Cash and cash equivalents 98 99 48 230 186 40 Restricted cash and cash equivalents 82 79 49 34 50 93 180 178 97 264 235 133 To