Ormat Technologies, Inc. · NYSE:ORA

Ormat Technologies — Investor Day (September 2022)

56 slides from Ormat Technologies's investor day presentation, September 2022

  1. Slide 1: Ormat Technologies, Inc. Investor Presentation September 2022

    ORMAT TECHNOLOGIES, INC. INVESTOR PRESENTATION SEPTEMBER 2022 TEL AVIV Copyright Copyright©©2022 2022Ormat OrmatTechnologies, Technologies,Inc. Inc.

  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 This presentation, and information provided during any discussion accompanying this presentation, These forward-looking statements

  3. Slide 3: Our Speakers for Today

    OUR SPEAKERS FOR TODAY DORON BLACHAR ASSI GINZBURG SMADAR LAVI CEO CFO VP, HEAD OF IR & ESG Copyright © 2022 Ormat Technologies, Inc. 3

  4. Slide 4: Today's Agenda

    TODAY’S AGENDA 1 2 3 4 5 Introduction & Growth drivers Financial ESG Summary recent developments and future targets positioning initiatives and Q&A Copyright © 2022 Ormat Technologies, Inc. 4

  5. Slide 5: Copyright Copyright © © 2022 2020 Ormat

    1 Copyright Copyright©©2022 2020Ormat OrmatTechnologies, Technologies,Inc. Inc. 5

  6. Slide 6: A Leading Renewable Energy Provider

    A LEADING RENEWABLE ENERGY PROVIDER Over Own & operate WITH A PROVEN TRACK RECORD IN GEOTHERMAL & ENERGY STORAGE 55 ~1.17GW Years of experience Geothermal, Storage, Solar PV & REG(1) 1,400 $ 703M Employees LTM revenues $ 426M $ 64M LTM adj. EBITDA(2) LTM Net income(3) (1) REG – Recovered Energy Gene

  7. Slide 7: Our Business Segments

    OUR BUSINESS SEGMENTS 88% 8% 4% Of LTM Of LTM Of LTM 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 energy-based (REG) power

  8. Slide 8: Global Net Zero by 2050

    GLOBAL NET ZERO BY 2050 RENEWABLES AND ELECTRIFICATION PLAY KEY ROLES EMISSION REDUCTION BY MITIGATION MEASURES IN THE NET THE PREDICTED SHARE OF RENEWABLES IN TOTAL ZERO EMISSION SCENARIO ELECTRICITY GENERATION GLOBALLY 29% 90% GtCO2 +24% -50% +51% -100% 45 2020 2050 Activity 30 Fossil fuels Other

  9. Slide 9: Ormat's Solutions Play Key Roles to Achieve a Carbon-Free Future

    ORMAT’S SOLUTIONS PLAY KEY ROLES TO ACHIEVE A CARBON-FREE FUTURE GEOTHERMAL STORAGE Generates firm & flexible Enables stability of the grid power and flexibility Copyright © 2022 Ormat Technologies, Inc. 9

  10. Slide 10: Recent Development

    RECENT DEVELOPMENT 1 ELECTRICITY 2 PRODUCTS 3 STORAGE 4 CORPORATE Up to 285MW ~$ 100M 5MW /20MWh $ 431M New PPAs New contracts Started operation in Green convertible Q2 bonds at 2.5% coupon 68MW ~$ 150M Started operation backlog 100MW Joining since the end of Q1 S&P Mid Cap 400 /340MWh index Release

  11. Slide 11: Copyright Copyright © © 2022 2020 Ormat

    2 Copyright Copyright©©2022 2020Ormat OrmatTechnologies, Technologies,Inc. Inc. 11

  12. Slide 12: Electricity Segment

    ELECTRICITY SEGMENT Copyright © 2022 Ormat Technologies, Inc. 12

  13. Slide 13: Electricity Overview

    ELECTRICITY OVERVIEW 5 4 Diversified 1 2 3 6 portfolio 72% 28% U.S. International 2021 Geographic 01 U.S. 02 Guatemala 03 Honduras breakdown 795 MW 40 MW 38 MW of revenues 04 Guadeloupe 05 Kenya 06 Indonesia 15 MW 150 MW 42 MW(1) $621 $586 Global operation $510 $540 $541 Profitable $436 $466 94% geo

  14. Slide 14: U.S. Geothermal Market

    U.S. GEOTHERMAL MARKET THE U.S. IS THE WORLDS LEADING PRODUCER OF GEOTHERMAL POWER GEOTHERMAL OPERATORS’ SHARE OF U.S. GENERATION Calpine Ormat 3.7GW 23% CalEnergy Installed capacity of global COSO NCPA through 20211 installed capacity1 Cyrq Vulcan AltaRock ~ 30% ENEL generated by Ormat, Other and g

  15. Slide 15: IRA: A Strong Tailwind

    A STRONG TAILWIND IRA Increase in demand to drive Extended tax benefits potential upside on PPA pricing Modification to previous act that enables improved economics Geothermal goals: CPUC – 1GW (2) NV Energy - 500MW (3) LADWP(4) – 0.5GW-1.5GW Illustrates the demand for geothermal capacity U.S. PPA p

  16. Slide 16: Securing Future Growth: Electricity Segment

    SECURING FUTURE GROWTH ELECTRICITY SEGMENT Up to Up to 135MW Portfolio PPA New and existing geothermal projects 285MW Off taker NV Energy I Term 25 years Start of energy delivery Q4 2024 - YE 2028 New PPAs 25MW CA NV North Valley Geothermal Project Off taker NV Energy I Term 25 years Start of energy

  17. Slide 17: Securing Future Growth: Electricity Segment

    SECURING FUTURE GROWTH ELECTRICITY SEGMENT 13MW Tungsten 68MW Geothermal power plant Off taker SCPPA Started 5MW Steamboat Hills operation Hybrid Solar PV NV Off taker SCPPA CA 30MW CD4 Geothermal power plant 3 Off takers: 16 MW SCPPA & 14MW for two CCAs 20MW Wister Stand alone Solar PV Off takers:

  18. Slide 18: Indonesia

    INDONESIA #1 4th BBB/Baa2 Largest Largest Investment economy in country in the grade by both Southeast Asia1 world 2 S&P and Moodys3 ~33GW ~12% ~99% 2020 electricity Renewables of population production4 (5% geothermal)5 has access to electricity6 Jakarta , Indonesia Sources: (1) By GDP (2) By Popula

  19. Slide 19: Ormat's Development in Indonesia

    ORMAT’S DEVELOPMENT IN INDONESIA SARULLA TOKA TINDUNG 42MW 12.75% Under development: in operation ownership initial drilling 75- 100% ownership 100% ownership IJEN 15MW Under development: drilling work and EPC WAPSALIT 49% Under development: engagement in progress ownership civil work in progress Ea

  20. Slide 20: Ormat's Global Geothermal Prospects

    ORMAT’S GLOBAL GEOTHERMAL PROSPECTS: 41 geothermal prospects for future development 30 prospects in the U.S. U.S. 30 OR: 2 INDONESIA 4 NV: 21 CA: 4 CENTRAL AMERICA 3 MW AFRICA NEW ZEALAND UT: 2 3 1 NM: 1 Expanding drilling activity to support expedited growth Copyright © 2022 Ormat Technologies, Inc

  21. Slide 21: Summary: Electricity Segment Growth Drivers

    SUMMARY ELECTRICITY SEGMENT GROWTH DRIVERS TARGETED ELECTRICITY SEGMENT GROWTH (MW) 1,445-1,500 ~1,200 1,012 1,080 +20% - 25% 914 +7 % +11% +11% 2019 2021 Current 2023E 2026E Geothermal Solar PV Copyright © 2022 Ormat Technologies, Inc. 21 Note: Please see appendix for detailed list of projects incl

  22. Slide 22: Storage Segment

    STORAGE SEGMENT Copyright © 2022 Ormat Technologies, Inc. 22

  23. Slide 23: Storage Segment

    STORAGE SEGMENT TARGET THE LARGEST AND MOST 1 LUCRATIVE MARKETS: California, Texas, and PJM 01 CA (3 facilities) 02 TX 35MW/120MWh 10MW/10MWh 03 NJ (2 facilities) 04 VT FOCUS ON STANDALONE ENERGY 41MW/41MWh 2MW/5MWh 2 STORAGE Providing ancillary service, energy and capacity to the grid 4 3 1 EXPANSI

  24. Slide 24: Steep Market Growth Trajectory

    STEEP MARKET GROWTH TRAJECTORY 49,904 U.S. FTM storage is expected to reach 49 GW in 2026 39,273 22x from 2020 29,215 50 % 18,815 of projected growth from California & Texas 9,405 5,185 2,201 1,092 2019 2020 2021 2022E 2023E 2024E 2025E 2026E California Texas Nevada Arizona Hawaii New York PJM (& NJ

  25. Slide 25: Regulatory and Policy Drivers

    REGULATORY AND POLICY DRIVERS State-level Energy Storage Targets CPUC1: Oregon Nevada New York Maine Massachusetts Procure additional 15 GW 10 MWh(2) 1 GW 6 GW 400 MW 1 GW by by 2030 by 2030 by 2030 YE 2025 of new storage and demand response 9 states have energy resources by 2032 storage targets IRA

  26. Slide 26: Storage Energy Under Development

    STORAGE ENERGY UNDER DEVELOPMENT: 7 projects, 184 MW, all secured for battery supply and revenue source Started operation of Tierra Buena – 5MW/20MWh Projected Projected Expected State Project PPA Capacity (MW) MWh COD TX 1 Upton 25 25 Q3 2022 Merchant Capacity PPA 2022 CA 2 Pomona 2 20 40 H2 2022 a

  27. Slide 27: Leveraging Our Market Expertise to Enhance and Build Storage Pipeline

    LEVERAGING OUR MARKET EXPERTISE TO ENHANCE AND BUILD STORAGE PIPELINE 2.4 GW 30 named projects 2.1 GW 30 named projects 1.2 GW 33 named projects 0.3 GW 19 named projects 2019 2020 2021 Q1 2022 Copyright © 2022 Ormat Technologies, Inc. 27

  28. Slide 28: Leveraging BD Efforts to Grow Our Portfolio

    LEVERAGING BD EFFORTS TO GROW OUR PORTFOLIO Ormat energy storage development (MW) Ormat energy storage development (MWh) 1,850-2,250 700-800 70%-74% 49%-52% CAGR CAGR 273-353 640-780 73 83 88 176 196 43 136 46 2019 2020 2021 Current 2023E 2026E 2019 2020 2021 Current 2023E 2026E Operational Incremen

  29. Slide 29: Product Segment

    PRODUCT SEGMENT Copyright © 2022 Ormat Technologies, Inc. 29

  30. Slide 30: Product Segment Overview

    PRODUCT SEGMENT OVERVIEW Market leader Primary provider of geothermal binary plants Built approx. 190 power plants and installed Suppliers of geothermal power plants 2017 – 2021 capacity, MW approx. 3,200 MW of geothermal & REG over the years 60% 78% Binary Ormat 2,426 1,460 MW TOTAL MW BINARY Provi

  31. Slide 31: Securing Future Growth: Product Segment

    SECURING FUTURE GROWTH PRODUCT SEGMENT $ 100 M 59MW EPC contract Tehuka 3 Geothermal power plant Customer Contact Energy of New Zealand New product segment contracts Indonesia 6MW Supply contract New Zealand Geothermal power plant Customer Sarulla Operations Ltd. in Indonesia Increase backlog1 to ap

  32. Slide 32: Backlog Development ($M)

    BACKLOG DEVELOPMENT ($M) 281 251 243 229 226 226 216 207 201 192 182 167 142 1501 97 66 59 67 50 54 55 46 31 37 Q2/21 Q3/21 Q2/22 Q2/20 Q3/17 Q4/16 Q1/17 Q1/18 Q3/18 Q4/17 Q4/18 Q1/19 Q3/19 Q4/19 Q3/20 Q4/20 Q4/21 Q2/18 Q2/19 Q1/20 Q1/21 Q1/22 Current Q2/17 2016 2017 2018 2019 2020 2021 2022 (1) Bac

  33. Slide 33: Focusing on Strategic Territories

    FOCUSING ON STRATEGIC TERRITORIES (MW & PROJECT COUNT) U.S. TURKEY 200 MW 280 MW INDONESIA 140 MW LATAM 230 MW 1,200 MW NEW ZEALAND of geothermal binary capacity 350 MW is expected to be released by 2024 Source: Thinkgeoenergy.com and Ormat analysis Copyright © 2022 Ormat Technologies, Inc. 33

  34. Slide 34: Copyright Copyright © © 2022 2020 Ormat

    3 Copyright Copyright©©2022 2020Ormat OrmatTechnologies, Technologies,Inc. Inc. 34

  35. Slide 35: Strong Positioning in TASE

    STRONG POSITIONING IN TASE Ranked largest Joined #10 Energy S&P MidCap 400 TA35 index company traded in July 7, 2022 TSE 5Y stock performance, NYSE and TASE 53.91% 60.56% Ormat (TASE) ORA (NYSE) 44.21% 59.43% 43.68% S&P500 DOW TA35 Ormat (NYSE) Ormat (TASE) S&P500 TA35 DOW Google finance: Sept. 7, 2

  36. Slide 36: Strong Financial Positioning

    STRONG FINANCIAL POSITIONING Installed Capacity (MW) Net Debt to Capitalization(1) Geothermal REG Solar Storage 1,168 1,095 957 1,005 931 43% 43% 46% 42% 795 32% 2017 2018 2019 2020 2021 Current 2018 2019 2020 2021 June 30, 2022 Adjusted EBITDA ($M)(1) Equity ($) $420 $426 $401 $1,998 $1,979 $384 $1

  37. Slide 37: Maintaining a Strong Capital Position to Support Accelerated Growth

    MAINTAINING A STRONG CAPITAL POSITION TO SUPPORT ACCELERATED GROWTH $426M ~$2B Adj. EBITDA for Total equity the LTM $ 760M Cash, cash equivalents, restricted cash and available lines of credit Access to various 46% 4.0x sources of capital Net debt to Net debt to capitalization (2) Adj. EBITDA(2) (1)

  38. Slide 38: Supporting Accelerated Growth: Green Convertible Bonds

    SUPPORTING ACCELERATED GROWTH GREEN CONVERTIBLE BONDS 2.5% coupon $ 431M Green Reduced dilution by: convertible • Capped call transaction bonds • Buyback of 260K of shares Strengthen financial flexibility Refinance higher-cost debt Proceeds to support our Repayment of $221.9M- renewable energy growt

  39. Slide 39: Strong Tailwind: Inflation Reduction Act

    STRONG TAILWIND INFLATION REDUCTION ACT 1 Extension of Geothermal and solar tax credits for projects beginning construction before January 1, 2025 AUG 16 2022 For the first time, 30% ITC for stand-alone IRA signed 2 energy storage assets Can reach 50% ITC into law 3 New mechanism for the direct tran

  40. Slide 40: Ormat Portfolio Growth Targets (GW)

    ORMAT PORTFOLIO GROWTH TARGETS (GW) 2.15-2.3 14-16% CAGR 700-800 MW Storage 1.5 1.1 1.17 1,445-1,550 MW Electricity: Geothermal Solar 2021 Current 2023E 2026E Geothermal Solar Storage 40 Note: Please see appendix for detailed list of projects including MW and MWh numbers of the respective projects.

  41. Slide 41: MW Expectations and Adjusted EBITDA Expectations

    MW EXPECTATIONS ADJUSTED EBITDA EXPECTATIONS ~1.5GW >$500M run-rate(2) 1.1GW $401M (1) 2021 2022 2023 2021 2022 2023 (1) For non –GAAP financial measures reconciliation please see the appendix slides (2) Annual run-rate towards the end of 2022 Copyright © 2022 Ormat Technologies, Inc. 41

  42. Slide 42: ESG Initiatives

    ESG INITIATIVES Copyright © 2022 Ormat Technologies, Inc. 42

  43. Slide 43: Strengthening Our ESG Commitments

    STRENGTHENING OUR ESG COMMITMENTS APPROACH AND POLICY Building our approach and policy on ENVIRONMENT GOVERNANCE significant valuable issues REPORTING We issued our ESG report, the fourth in accordance with GRI standards and the second according to SASB framework. SOCIAL TARGETS We have established

  44. Slide 44: Issues 2021 Sustainability Report

    ISSUES 2021 SUSTAINABILITY WHAT’S NEW? REPORT NEW REPORT STRUCTURE AND TCFD Updated ESG-aligning structure; Begun aligning our disclosures to the Taskforce for Climate-Related Financial Disclosure’s (TCFD) recommendations BROADENING OF ENVIRONMENTAL DATA Improved our environmental data collection an

  45. Slide 45: Environment Highlights

    HIGHLIGHTS 22% ENVIRONMENT Absolute reduction in scopes 1&2 emissions from 2019 to 2021 16.5% Improvement in GHG emission intensity by generation compared to 2020 84% retention rate in 2021 SOCIAL 100% of plant employees were from local communities 30% female managers Copyright © 2022 Ormat Technolo

  46. Slide 46: Governance Highlights

    HIGHLIGHTS GOVERNANCE COMMITMENT TO UPHOLDING THE HIGHEST STANDARDS ACROSS THE ORGANIZATION Our corporate governance practice is defined by honesty, openness and fairness We are constantly improving our governance and our level of disclosure on related topics, such as anti-corruption, executive remu

  47. Slide 47: Copyright Copyright © © 2022 2020 Ormat

    4 Copyright Copyright©©2022 2020Ormat OrmatTechnologies, Technologies,Inc. Inc. 47

  48. Slide 48: Committed to Continued Profitable Growth

    COMMITTED TO CONTINUED PROFITABLE GROWTH SECURED U.S. GROWTH UP TO 285MW NEW PPAs IN CA & NV, U.S. EXPANDING SIGNIFICANTLY DEVELOPMENT EFFORTS IN INDONESIA GROWING OUR ENERGY STORAGE TARGETING 10X THE CURRENT CAPACITY BY 2026 STRONG REGULATORY TAILWIND Copyright © 2022 Ormat Technologies, Inc. 48 Co

  49. Slide 49: Q&A / Thank You

    Q&A COMMITTED TO CONTINUED PROFITABLE GROWTH THANK YOU! IR@ORMAT.COM Copyright © 2022 Ormat Technologies, Inc. 49

  50. Slide 50: Appendix

    APPENDIX Copyright © 2022 Ormat Technologies, Inc. 50

  51. Slide 51: Reconciliation of EBITDA and Adjusted EBITDA

    RECONCILIATION OF EBITDA AND ADJUSTED EBITDA The following table reconciles net income to EBITDA and Adjusted EBITDA for the years ended December 31, 2021, 2020, 2019, 2018, and 2017. Year Ended December 31, 2021 2020 2019 2018 2017 (Dollars in thousands) Net income 76,077 101,806 93,543 110,111 147

  52. Slide 52: Reconciliation of EBITDA and Adjusted EBITDA

    RECONCILIATION OF EBITDA AND ADJUSTED EBITDA (DOLLARS IN THOUSANDS) Three Months Six-Months Ended June 30, Ended June 30, 2022 2021 2022 2021 Net income 14,945 15,195 37,738 33,024 Adjusted for: Interest expense, net (including amortization of deferred financing costs) 20,239 17,818 40,978 36,571 In

  53. Slide 53: Reconciliation of Non-GAAP Financial Measures

    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Three Months Year Ended December 31 Ended June 30, 2022 2021 2020 2019 2018 Cash and cash equivalents, marketable securities and Restricted cash (in millions $) Cash and cash equivalents 263 239 448 71 99 Marketable Securities at fair value 0 43 Restrict

  54. Slide 54: Geothermal Under Development

    GEOTHERMAL UNDER DEVELOPMENT: 6 projects, 65-70 MW by 2023 Expected Projected Country/State Project COD PPA Capacity (MW) 2022 1 U.S - North NV Valley 25 End 2022/Early 2023 ✓ 2 U.S. – Dixie 4 Q1 2023 ✓ Valley 3 U.S - Heber CA Complex 11 Q2 2023 ✓ 2023 4 U.S. - North NA Valley 2 5-10 H1 2023 ✓ Guate

  55. Slide 55: Solar Energy Under Development

    SOLAR ENERGY UNDER DEVELOPMENT: 5 projects, 41 MW AC by 2023 Projected Expected State Project PPA Capacity (MW) COD 2022 1 Tungsten Solar 2 9 AC Q2 2022 ✓ 2 Steamboat Solar 10 AC Q2 2023 ✓ NA 3 North Valley Solar 7 AC Q1 2023 ✓ 2023 4 McGinness Hills Solar 14 AC H2 2023 ✓ 5 Brady Solar 6 AC Q1 2023

  56. Slide 56: Air-Cooled Binary Geothermal Power Plant

    AIR-COOLED BINARY GEOTHERMAL POWER PLANT Copyright © 2022 Ormat Technologies, Inc. 56

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