Ormat Technologies, Inc. · NYSE:ORA

Ormat Technologies — Q1 2023 Earnings Presentation

43 slides from Ormat Technologies's earnings presentation, May 10, 2023

  1. Slide 1: Ormat Technologies, Inc. Investor Presentation May 2023

    ORMAT TECHNOLOGIES, INC. INVESTOR PRESENTATION MAY 2023

  2. 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 These forward-looking statements are not intended to be a guarantee of future results, but instead This presentation, and informati

  3. Slide 3: COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC.

    COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC. 3 3

  4. Slide 4: A Leading Renewable Energy Provider

    A LEADING RENEWABLE CD4, Mammoth Complex, NV, USA, 65MW ENERGY PROVIDER WITH A PROVEN TRACK RECORD IN GEOTHERMAL AND ENERGY STORAGE over Own & operate 55 ~ 1.2GW 1,480 Years of Geothermal, Storage, Employees experience Solar PV & REG1 $ 734M $ 436M $ 66M 2022 revenues 2022 adj. EBITDA2 2022 Net inco

  5. Slide 5: Our Business Segments

    OUR BUSINESS SEGMENTS 86% 10% 4% Of 2022 Of 2022 Of 2022 revenues revenues revenues ELECTRICITY PRODUCT ENERGY STORAGE Develop, build, own and operate Design, manufacture and sell Growing to establish geothermal, solar and recovered equipment for geothermal and leading position in the energy-based (

  6. Slide 6: Overview, Geothermal market, Business updates

    Overview Geothermal market Business updates Regulation updates Development in Indonesia COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC. 6 6

  7. Slide 7: Overview

    OVERVIEW Generates firm & flexible power Diversified portfolio 2022 revenue geographic breakdown 1 822 MW U.S. 3 38 MW Honduras 5 150 MW Kenya 1,107MW 73% U.S. 27% International Geothermal, Solar PV & REG 2 40 MW 4 15 MW 6 42 MW1 Guatemala Guadeloupe Indonesia 92% Growing Profitable portfolio3 Geoth

  8. Slide 8: Geothermal Market

    GEOTHERMAL MARKET # 2 Ormat - the 2nd largest geothermal ABOITIZ POWER STAR ENERGY PERTAMINA owner & operator1 ON POWER MERCURY ORMAT CALPINE KENGEN ENEL EDC CFE ~ 16GW Global Installed geothermal capacity2 9x EU Africa ASIA Oceania U.S LATAM Global Potential Installed 3.6 0.9 4.9 1.0 3.7 1.7 vs. In

  9. Slide 9: Strong IRA Tailwind

    STRONG IRA SIGNED INTO LAW AUG. 16 ,2022 TAILWIND INFLATION REDUCTION PTC ITC ACT (IRA) BENEFITS TO THE BENEFITS TO THE GEOTHERMAL ASSETS STORAGE ASSETS TAX EQUITY TRANSACTION ITC SALE EBITDA IMPACT OVER REDUCES TAX EXPENSES & UP-TO 10 YRS. BOOSTS EPS $150M CASH THAT REDUCES CAPITAL NEEDS COPYRIGHT

  10. Slide 10: Regulatory Environment US and International

    REGULATORY ENVIRONMENT US INTERNATIONAL Contribution of IRA New legislation in Turkey: benefits in Q1 2023 new opportunities to the product segment $ 4.8M Government approved new Feed in tariff for local developers and PTC1 impact on additional incentives that sum up EBITDA to approx. $118/MWh $ 1.6

  11. Slide 11: Development in Indonesia

    DEVELOPMENT IN INDONESIA SARULLA 42MW TOKA TINDUNG Under development: # 1 4 th 12.75% ownership in operation initial drilling Largest Largest economy in country in Southeast Asia1 the world 2 75- 100% ownership BBB/ Baa2 ~ 33GW Country’s 2020 electricity 100% ownership rating by S&P production4 and

  12. Slide 12: Storage market, Regulation, Pipeline update

    Storage market Regulation Pipeline update COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC. 12 12

  13. Slide 13: Steep Market Growth Trajectory

    STEEP MARKET GROWTH TRAJECTORY U.S. FTM storage is expected to reach 59GW in 2026 58,965 26x from 2020 46,084 54% 32,604 of projected growth from California & Texas 19,689 9,671 5,185 2,201 1,092 2019 2020 2021 2022 2023E 2024E 2025E 2026E California Texas Nevada Arizona Hawaii New York PJM (& NJ) A

  14. Slide 14: Regulatory and Policy Drivers

    REGULATORY AND POLICY DRIVERS Hinesburg storage facility, VT, USA 2MW/5MWh STATE-LEVEL ENERGY STORAGE TARGETS Oregon Nevada New York Maine Massachusetts 10 MWh1 1 GW by 2030 6 GW by 2030 400 MW by 2030 1 GW by YE 2025 CPUC2: Procure additional 15GW of new storage and demand response states have ener

  15. Slide 15: Energy Storage

    ENERGY STORAGE TARGET THE LARGEST AND MOST LUCRATIVE MARKETS: 4 California, Texas, and PJM 1 5 3 2 FOCUS ON STANDALONE ENERGY STORAGE Providing ancillary service, energy and capacity to the grid EXPANSION TO NEW REGIONS Short-term: additional markets in the U.S. Mid-term: international regions 1 35M

  16. Slide 16: Energy Storage Development

    ENERGY STORAGE DEVELOPMENT Stryker storage facility, NJ, USA 20MW/20MWh 40MW/60MWh To come online in 20231 104MW/340MWh Under construction secured for battery supply and revenue source (1) See appendix for Energy Storage projects in development. COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC. 16 16

  17. Slide 17: Segment overview, Backlog updates

    Segment overview Backlog updates COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC. 17 17

  18. Slide 18: Product Segment Overview

    PRODUCT SEGMENT Primary provider of geothermal binary plants Suppliers of geothermal power plants 2018 – 2022 capacity, MW OVERVIEW 61% 73% Binary Ormat A market leader 1837 BINARY MW TOTAL Built approx. 190 power plants and installed approx. 3,200 MW of geothermal Kaishan 14% & REG over the years 2

  19. Slide 19: Product Backlog

    PRODUCT BACKLOG TAOM, NZ 28MW 3RD PARTIES’ CONTRACTS 24% $ 147M 210% 49% backlog increase vs. Q1 2022 15% 6% 6% 94% Approx $ M 40 Geothermal new contracts Geographic Breakdown contracts signed2 New Zealand Indonesia Other 3 Philippines Guatemala Backlog recovery 281 251 243 229 226 216 226 207 192 2

  20. Slide 20: COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC.

    COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC. 20 2

  21. Slide 21: Robust Growth Plan

    ROBUST GROWTH PLAN 1.8GW - 1.86GW 55% - 60% 2025 Portfolio target expected MW growth vs 2022 Significantly Accelerate increase solar storage capacity & geothermal to establish leading position in the U.S. capacity storage sector Change in MW growth is compared to a 1,070MW Geothermal & Solar portfol

  22. Slide 22: 2025 Growth Target

    2025 GROWTH TARGET Puna complex, HI, USA 38MW BY SEGMENTS GEOTHERMAL & ENERGY SOLAR ENERGY STORAGE YE 2025 TARGET 1,300MW-1,330MW 500MW-530MW 1,070 MWh-1,140 MWh MW ADDITION (VS 2022) 230MW-260MW 412MW-442MW MW GROWTH 21%-24% 468%-502% Change in MW growth is compared to a 1,070MW Electricity portfol

  23. Slide 23: Geothermal Development

    GEOTHERMAL DEVELOPMENT McGinness Hills Complex , NV, USA 146MW Projected Expected Project PPA Capacity (MW) COD U.S - North Valley 25 YE 2023: ✓ U.S. – Dixie Valley 6 ✓ 44 MW from U.S - Heber Complex 8 Q2 2023 ✓ 4 projects Guatemala – Zunil 5 H2 2023 ✓ U.S – Beowawe Repowering 6 Q3 2024 ✓ Indonesia

  24. Slide 24: Solar Development

    SOLAR DEVELOPMENT Projected Expected Project Capacity PPA COD (MW) U.S. - Brady Solar 6 ✓ YE 2023: U.S. - Steamboat Solar 7 Q3 2023 ✓ 23 MW from U.S. – North Valley Solar 6 Q3 2023 ✓ 4 projects U.S. – Steamboat Hills Solar 4 Q3 2023 ✓ U.S. – Beowawe Solar 6 H1 2024 ✓ U.S. – McGinness Hills Solar 14

  25. Slide 25: Energy Storage Development

    ENERGY STORAGE DEVELOPMENT Stryker storage facility, NJ, USA 20MW/20MWh Projected Projected Expected Project Capacity PPA MWh COD (MW) NJ - Howell 7 7 Merchant YE 2023: 102 MW/122 Capacity PPA OH – Bowling Green 12 12 and Merchant MWh from 6 projects TX - Upton 23 23 Merchant NJ - Andover 20 20 Merc

  26. Slide 26: Energy Storage Pipeline

    ENERGY STORAGE PIPELINE Rabbit Hill storage facility, TX, USA 10MW/10MWh ~3.4GW 37 potential capacity of named U.S. storage pipeline prospects Hawaii 30 1 East Coast 112 WECC 515 Texas 720 California 2,040 1) East coast market includes PJM, ISO-NE, NYISO COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC. 26

  27. Slide 27: Geothermal Development

    GEOTHERMAL DEVELOPMENT Indonesia Region Location # of sites Nevada 20 39 California 3 prospects U.S. Oregon 2 Utah 2 New Mexico 1 Guatemala 2 CENTRAL AMERICA Honduras 1 AFRICA Ethiopia 4 Madagascar 1 New Zealand 1 ASIA PACIFIC Indonesia 2 Commence commercial operation was compiled COPYRIGHT © 2023 O

  28. Slide 28: 2023 Guidance ($M)

    2023 GUIDANCE ($M) 1,2 Total revenues Electricity Products Storage Adjusted EBITDA 823-858 670-685 120-135 33-38 480-510 +12%-17% +6%-8% +68%-89% +7%-23% +10%-17% 1.8 GW-1.86 GW TRANSITIONING TO ACCELERATED GROWTH IN STORAGE & ELECTRICITY +16%-17% SEGMENTS 1.1 GW 1.16 GW CAGR 2022-2025E Storage Prod

  29. Slide 29: COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC.

    COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC. 29 2

  30. Slide 30: Strong Financial Positioning

    STRONG FINANCIAL POSITIONING Installed capacity growth (MW) Revenues growth ($m) 1,158 1,095 1,005 931 957 $719 $746 $734 $705 $663 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 Adjusted EBITDA growth ($m) $420 $436 $384 $401 $368 2018 2019 2020 2021 2022 COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC

  31. Slide 31: Strong Financial Positioning

    STRONG FINANCIAL POSITIONING Total Debt ($M) Net Debt ($M)1 $2,027 $2,078 $1,800 $1,908 $1,521 $1,556 $1,456 $1,268 $1,238 $1,090 $1,085 $919 2018 2019 2020 2021 2022 Q1 2023 2018 2019 2020 2021 2022 Q1 2023 Project Finance Finance liability Corporate Debt Net Debt to Capitalization (Total Equity)1

  32. Slide 32: ESG Initiatives

    ESG INITIATIVES Established an annual absolute average We are moving to strengthen our ESG commitments reduction target of 5% in Scope 1 and 2 Building our approach and policy on significant valuable measured against the issues 2019 We issued our ESG report, the fourth in accordance with GRI standar

  33. Slide 33: Attractive Investment Thesis

    ATTRACTIVE INVESTMENT THESIS Strong financial positioning Robust growth potential ESG Consistent track record of strong Significant, consistent Renewable asset growth returns for shareholders domestic growth in the U.S. supported by favorable regulation Long-term contracted International geothermal

  34. Slide 34: Committed to Continued Profitable Growth

    COMMITTED TO CONTINUED PROFITABLE GROWTH IR@ORMAT.COM

  35. Slide 35: Highlights

    HIGHLIGHTS Growth execution IRA Operation- Kenya, Puna Demand in US Products-NZ and Turkey market Storage growth COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC. 35

  36. Slide 36: Business Updates: Signed New PPAs for up to 285MW

    BUSINESS UPDATES SIGNED NEW PPAS FOR UP TO 285MW Up to Up to 130-160MW 125MW under two PPAs under Portfolio PPA With NV Energy1 With California Cover new projects Community Power3 and renewal of PPAs Covers new projects in Nevada and California 105-135MW COD2 – 2024 - 2026 Portfolio PPA 20-years con

  37. Slide 37: Payment of Principal Due by Period ($M)

    PAYMENT OF PRINCIPAL DUE BY PERIOD ($M) AVERAGE INTEREST RATE: 4.14% Q2-2023 Q3-2023 Q4-2023 Year 2023 Long-term non-recourse debt & limited recourse debt 15.1 14.4 15.8 45.3 Long-term loans (full recourse) 46.0 23.2 18.3 87.5 Finance Liability 0.0 10.3 0.0 10.3 Total $61.1 $47.9 $34.1 $143.1 Remain

  38. Slide 38: Capex for 2023

    CAPEX FOR 2023 ACTUAL INVESTED TOTAL CAPEX ($M) IN Q1 2023 FOR Q2-Q4 2023 Electricity Segment 96 302 Construction & Enhancements – fully released 56 122 Development enhancement, drillings and Exploration 12 89 Puna restoration (including drilling) 7 18 Olkaria recovery, partially released for constr

  39. Slide 39: P&L Highlights

    P&L HIGHLIGHTS Q1 2023 Q1 2022 Change (%) GAAP MEASURES Revenues ($M) Electricity 170.3 162.5 4.8 % Product 10.0 14.6 (31.4) % Energy Storage 4.9 6.6 (25.6) % Total Revenues 185.2 183.7 0.8 % Gross Profit ($ millions) 76.1 69.9 7.8 % Gross margin (%) Electricity 44.4 % 41.8 % 260 bps Product 6.9 % 6

  40. Slide 40: Reconciliation of EBITDA and Adjusted EBITDA

    RECONCILIATION OF EBITDA AND ADJUSTED EBITDA (DOLLARS IN THOUSANDS) Three Months Ended March 31, 2023 2022 Net income 33,461 22,793 Adjusted for: Interest expense, net (including amortization of deferred financing costs) 21,780 20,739 Income tax provision (benefit) 8,885 10,163 Adjustment to investm

  41. Slide 41: 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 March 31, 2023 2022 (in millions, except for EPS) GAAP Net income attributable to the Company's stockholders $29.0 $18.4 Write-off of related to Energy Storage projects and activity —

  42. Slide 42: Reconciliation of Non-GAAP Financial Measures

    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES March 31, 2023 Cash and cash equivalents, marketable securities and Restricted cash (in millions $) Cash and cash equivalents 415 Restricted cash and cash equivalents 107 Total cash and cash equivalents, marketable securities and Restricted cash (in mill

  43. Slide 43: Air-Cooled Binary Geothermal Power Plant

    AIR-COOLED BINARY GEOTHERMAL POWER PLANT COPYRIGHT © 2023 ORMAT TECHNOLOGIES, INC. 43

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