Ormat Technologies, Inc. · NYSE:ORA
Ormat Technologies — FY2014 Earnings Presentation
29 slides from Ormat Technologies's earnings presentation, Feb 25, 2015
Slide 1: Fourth Quarter and Year-End 2014 Earnings Call
Ormat Technologies, Inc. Fourth Quarter and Year-End 2014 Earnings Call February 25, 2015 Green energy you can rely on Copyright © 2015 Ormat Technologies, Inc.
Slide 2: Disclaimer
Disclaimer Information provided during this presentation may contain statements relating to current expectations, estimates, forecasts and projections about future events that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking sta
Slide 3: Agenda
Agenda • Fourth Quarter and Year-End 2014 Prepared Remarks • 2014 highlights: Isaac Angel, CEO • Financial overview: Doron Blachar, CFO • Operations & business updates: Isaac Angel, CEO • Q&A 3 Copyright © 2015 Ormat Technologies, Inc.
Slide 4: 2014 Financial Highlights
2014 Financial Highlights • Total revenues of $559.5 million in 2014, up 4.9% from 2013 • Electricity segment revenues up 15.9% to $382.3 million • Gross margin increased to 36.4% in 2014 vs. 30.0% in 2013 • Operating income grew 48.0% to $143.5 million in 2014 vs. $97.0 million in 2013 • Adjusted E
Slide 5: 2014 Operational and Business Developments
2014 Operational and Business Developments • Steps to enhance shareholder value • Completed share exchange transaction to streamline the corporate structure and to increase float • Monetized operational assets at an attractive valuation of $438 million by signing a $175 million agreement with Northl
Slide 6: Financial Results
Financial Results Doron Blachar, CFO Green energy you can rely on 6
Slide 7: Total Revenues
Total Revenues Total Revenues Total Cost of Revenues Segment Contribution +26.3 million (4.9%) -17.6 million (4.7%) Electricity Segment Product Segment $559.5 $533.2 $373.4 $355.8 32% 38% 2013 2014 62% 68% YE 2013 YE 2014 YE 2013 YE 2014 All amounts in million USD 7 Copyright © 2015 Ormat Technologi
Slide 8: Electricity Segment
Electricity Segment Revenues Cost of Revenues +52.6 million (15.9%) +13.8 million (5.9 %) 36.7 $382.3 1 $329.7 5.2 10.7 $232.9 $246.6 YE 2013 Net increase in Net increase in Contribution of YE 2014 YE 2013 YE 2014 generation & gain on Olkaria and other derivative DAC contracts • Increase due to addi
Slide 9: Product Segment
Product Segment Total Revenues Total Cost of Revenues -26.3 million (12.9%) -31.4 million (22.3%) $203.5 $177.2 $140.5 $109.1 YE 2013 YE 2014 YE 2013 YE 2014 • The decrease was primarily due to timing of revenue recognition and different product mix All amounts in million USD 9 Copyright © 2015 Orma
Slide 10: Gross Margin
Gross Margin Combined Electricity Segment Product Segment 38.4% 36.4% 35.5% 30.0% 30.9% 29.4% YE 2013 YE 2014 YE 2013 YE 2014 YE 2013 YE 2014 10 Copyright © 2015 Ormat Technologies, Inc.
Slide 11: Operating Income
Operating Income Total Electricity Segment Product Segment +46.5 (48.0%) +36.1 (66.5%) +10.4 (24.4%) $143.5 $97.0 $90.4 $54.3 $53.1 $42.7 YE 2013 YE 2014 YE 2013 YE 2014 YE 2013 YE 2014 The increase was principally attributable to: • The increased gross margins in both our electricity and product se
Slide 12: Interest Expense, Net
Interest Expense, Net Interest Expense, Net +10.9 million (14.7 %) Gross Interest Expense Capitalized Interest $84.7 $87.9 $81.4 $73.8 $7.6 $3.2 YE 2013 YE 2014 YE 2013 YE 2014 YE 2013 YE 2014 Increase was primarily due to • Conversion of OPIC interest loans from floating interest rate to fixed inte
Slide 13: Net Income Attributable to the Company's Stockholders & EPS
Net Income Attributable to the Company's Stockholders & EPS Net Income Attributable to the Earnings per Share Company's Stockholders (Diluted) +12.9 million (31.4 %) $1.51 $1.18 $69.6 $1.00 $0.91 $54.2 $45.3 $41.2 YE 2013 YE 2013 YE 2014 YE 2014 YE 2013 YE 2013 YE 2014 YE2014 Excluding Excluding Exc
Slide 14: Fourth Quarter Revenues
Fourth Quarter Revenues Total Revenues Electricity Segment Product Segment +18.3 million (14.0%) +8.5 million (10.1%) +9.8 million (21.2%) $149.2 $130.9 $93.3 $84.7 $56.0 $46.2 Q4 2013 Q4 2014 Q4 2013 Q4 2014 Q4 2013 Q4 2014 All amounts in million USD; 14 Copyright © 2015 Ormat Technologies, Inc.
Slide 15: Fourth Quarter Results
Fourth Quarter Results Operating Income Net Income Attributable to the Earnings per Share Company's Stockholders (Diluted) $34.8 $21.6 $14.3 $12.3 $8.2 $0.27 $0.31 $7.0 $0.18 $0.15 Q4 2013 Q4 2014 Q4 2013 Q4 2013 Q4 2014 Q4 2014 Q4 2013 Q4 2013 Q4 2014 Q4 2014 Excluding Excluding 1 Excluding Excludi
Slide 16: Adjusted EBITDA
Adjusted EBITDA Total Electricity Segment Product Segment $272.7 $241.0 $212.6 $184.6 +31.7 M (13.1%) +6.1 M (9.9%) +28.0M (15.2%) +1.8 M (3.7%) +3.7M (6.5%) +4.3 M (32.8%) $62.2 $68.3 $56.4 $60.1 $49.0 $50.8 $13.2 $17.5 2013 2014 Q4 Q4 2013 2014 Q4 Q4 2013 2014 Q4 Q4 2013 2014 2013 2014 2013 2014 2
Slide 17: Reconciliation of Adjusted EBITDA as Currently Calculated
Reconciliation of Adjusted EBITDA as Currently Calculated 2012 2013 2014 Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year Net cash provided by operating activities 41,874 30,205 (9,695) 27,087 89,471 18,216 1,734 12,276 54,534 86,760 68,076 35,503 75,191 34,465 213,235 Adjusted for:
Slide 18: Cash and Cash Equivalents
Cash and Cash Equivalents 151.1 213.2 111.2 140.0 91.7 35.3 42.2 12.9 57.4 12.7 27.4 11.3 40.2 Dec. 31 2013 Cash grant Proceeds from Proceeds from Cash from Capital Repayment of Net repayment Net change in Repurchase Cash dividend Cash to OPC Dec. 31 2014 from the U.S. Heber Solar OFC 2 operating ex
Slide 19: Payment of Principal Due by Period
Payment of Principal Due by Period Average cost of Debt 6.1% Q1-2015 Q2-2015 Q3-2015 Q4-2015 Year 2015 Long-term non-recourse debt & limited recourse debt 4,499 4,499 4,499 4,498 17,995 Senior Secured Notes (non-recourse) due 2020 2,414 11,173 2,111 18,669 34,367 Long-term loans (full recourse) 3,58
Slide 20: Operations & Business Update
Operations & Business Update Isaac Angel, CEO Green energy you can rely on
Slide 21: Operations Highlights
Operations Highlights • Completed 56 MW of new capacity: • Olkaria III, Plant 3 Kenya • McGinness Hills phase 2, Nevada in operation since Feb. 2015 Annual Generation (GWh) 4,253 4,451 3,682 3,943 3,560 2010 2011 2012 2013 2014 21 Copyright © 2015 Ormat Technologies, Inc.
Slide 22: Generating Capacity Update
Generating Capacity Update Generating 2014 Capacity Type Region Plant capacity (MW) Factor Geothermal California Ormesa complex 54 Heber Complex 92 Mammoth Complex 29 North Brawley 18 Total 193 78% West Nevada Steamboat complex 73 Brady Complex 18 Total 91 86% East Nevada Tuscarora 18 Jersey Valley
Slide 23: Investment Plan
Investment Plan • New projects in development and construction • 19 MW Don A. Campbell, Phase 2 in Q1 2016 • 24 MW Plant 4, Olkaria III, Kenya in H2 2016 • 14 MW Sarulla Phase 1, Indonesia in 2016 • 18 MW Platanares Phase 1, Honduras in 2017 • 18 MW Menangai, Kenya1 • Above and other global projects
Slide 24: Long Term Prospects - Strong Land Position
Long Term Prospects - Strong Land Position 32 Prospects: U.S. - 26; Global - 6 U.S., 26 Guatemala, 2 OR, 5 Chile, 3 NV, 12 UT, 1 CA, 4 NM 1 NZ, 1 HI, 3 24 Copyright © 2015 Ormat Technologies, Inc.
Slide 25: Product Segment
Product Segment • 2014 revenues within guidance range of $170 to $180 million • Secured $41 million in new contracts in fourth quarter 2014 • Approximately $326 million backlog as of February 16, 2015 • Revenues for the period between January 1 and February 16, 2015 are included 25 Copyright © 2015
Slide 26: Business Updates
Business Updates • Corporate Restructuring • Share exchange transaction completed Feb. 12, 2015 • Ormat Technologies became a non-controlled public company • Public float increased from approximately 40% to approximately 76% • Successfully listed on the TASE • Equity Investment Transaction • Signed
Slide 27: Regulatory Updates
Regulatory Updates Continued support for renewables & geothermal • California • Gov. Jerry Brown announced Jan. 5 that he would like to raise the renewables portfolio standard target to 50% by 2030 • Legislature introducing Assembly Bill 197 • Requires the California PUC to evaluate the cost-effecti
Slide 28: CapEx Needs for 2015
CapEx Needs for 2015 As of December 31, 2014 Capital Needs ($ millions) 153 Construction & Enhancements 77 Development & Exploration 16 Maintenance CapEx 3 Production Facility & other 249 Total CapEx 92 Debt repayment $341 Total 28 Copyright © 2015 Ormat Technologies, Inc.
Slide 29: 2015 Guidance
2015 Guidance • Revenues • Electricity Segment - between $380 and $390 million • Product Segment - between $180 and $190 million • Total: between $560 and $580 million • Adjusted EBITDA • Adjusted EBITDA - between $280 and $290 million 29 Copyright © 2015 Ormat Technologies, Inc.