Slide 1: Ormat Technologies, Inc. Earnings Call
Qs | 202) ORMAT TECHNOLOGIES, INC. EARNINGS CALL DORON BLACHAR, CEO ASSI GINZBURG, CFO NOVEMBER 4, 2021 Copyright © 2021 Ormat Technologies, Inc.
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: Q3 2021 Highlights
Q3 2021 | HIGHLIGHTS TRANSITIONING TO ACCELERATED GROWTH 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: Financial Performance
FINANCIAL PERFORMANCE Revenues Gross margin Adjusted EBITDA® EPS/Adjusted EPS ° $158.8M 39.8% $101.6M $0.26/0.32 (0.1%) +580bps (5.1%) (16.1%) /+3.6% Revenues Gross margin Adjusted EBITDA” EPS/Adjusted EPS“? $472.1M 40.0% $285.4M $0.77/0.99 (10.2%) +170bps (8.2%) (38.9%)/(21.6%) 26 and $0.77 uutable
Slide 6: Revenues by Segment
REVENUES BY SEGMENT Total $158.8M (0.1%) Total $472.1 (10.2%) Electricity $142.7M +15.4% Electricity $421.5M +6.7% Products $10.5M (64.5%) Products $26.6M (78.0%) Storage $5.7M Storage $24.0M +139.6% 90% 7% Electricity Products 3% Storage 89% 6% Electricity Products 5% Storage Copyright © 2021 Ormat
Slide 7: Gross Margin by Segment
GROSS MARGIN BY SEGMENT Total Electricity 39.8% 42.8% +580 bps +480 bps Total Electricity 40.0% 41.8% 170 bps -250 bps Products 12.8% -610 bps Products 12.8% -790 bps Storage 12.2% -1,340 bps Storage 37.5% +2,740 bps Copyright © 2021 Ormat Tec!
Slide 8: Adjusted EBITDA by Segment
ADJUSTED EBITDA’ BY SEGMENT Total $101.6 (5.1%) Total $285.4M (8.2%) Electricity $97.6M (1.3%) Electricity $272.3M (6.3%) Products $2M (66.9%) Products $6.2M (66.9%) Storage $2M (3.5)% Storage $6.9M +354.9% (1) For key financial results and non ~GAAP financial measures reconciliation please see the
Slide 9: Q3 2021 Cash and Net Debt
Q3 2021! CASH AND NET DEBT Cash and Cash Equivalents, Marketable Securities and restricted cash and Cash Equivalents ($M) 275_ 288 145 171 $537 proceeds eden 5B 4g Cash from 15 $402 operating M&A Debt Dividend DEC. 31, 2020 September 30, 2021 $225M $275M SUCCESSFUL RAISING OF DEBT IN Q3 2021 CREDIT
Slide 10: 02 Ormat Resilience
ORMAT 02 a. RESILIENCE Livia a
Slide 11: Ormat View 2021 as a Build Up Year
ORMAT VIEW 2021 AS A BUILD UP YEAR MOVE TOWARDS ACHIEVING ITS GROWTH GOALS 1 2 3 OPERATION UPDATE KENYA UPDATE M&A UPDATE Generation Puna, Hawaii Operational challenges 4. 5 4. PRODUCT SEGMENT STORAGE UPDATE LEGISLATION UPDATE Copyright © 2021 Ormat Tec!
Slide 12: Electricity Operational Update
01 ELECTRICITY OPERATION a3 : 2021 e added in NV GROWING PORTFOLIO ~ < 13.8% increase in generation Puna power plant - 26 MW average . McGinness Hills expansion - start of operation in May 2021 “NX Dixie Valley and Beowawee - acquired in July 2021 2 Offset by lower generation at Olkaria in Kenya, Bo
Slide 13: Operation Update | Puna, Hawaii
01 OPERATION UPDATE | PUNA, HAWAII e e > > @-----> Q3 2020 Q1 2021 Q2 2021 Q3 2021 End of 2021 10 MW 13-MW 20 MW 26 pies Working to Resumed operation a pribie conan ey maximize long” \ __ term capacity — Continue reservoir study and improvement of e PUC suspended the new PPA approval ee ek Bie ae ae
Slide 14: Operational Challenges
O01 OPERATIONAL CHALLENGES Olkaria + Lower performance of the resource, drilling campaign continue * Continued curtailment by KPLC cause reduction in energy revenues + Resulting in lower gross profit by $3.6 million year over year * Capacity will increase gradually, and we expect to restore it in th
Slide 15: Kenya Update
KENYA UPDATE Presidential task force * Task force completed their review of all Independent Power Producer’s PPAs * Ormat’s rates in Kenya are significantly lower than many other IPP’s operating in the country We remain committed to providing clean, renewable base load energy to Kenya and working wi
Slide 16: M&A Update
M&A UPDATE Generated $14.4M Revenue & $11.2M EBITDA Acquired from TG Geothermal Portfolio, LLC! : In 67.5 MW from two geothermal plants in Nevada: 2022 pe fo) ease cap Dixie Valle 56 MW Dixie Valley Off taker: SCE | PPA by 2038 | above market prices 11.5 MW Beowawe By Develop Off taker: NV Power | P
Slide 17: Ching-Shui Geothermal Power Plant, Taiwan
Ching-Shui geothermal power plant, Taiwan successfully commissioned in June 2021 ee PRODUCT BACKLOG Signing 34 parties’ contracts Backlog at $66.9M” Signed a few contracts including Salak 14MW power plant in Indonesia and IOMW San Jacinto in Nicaragua. We see more opportunities that can be matured b
Slide 18: Energy Storage
04 ENERGY STORAGE Improved profitability of the storage facilities Energy Storage performance Q3/21 gross profit - $0.7M Q3/21 Adjusted EBITDA - $2.0M $M Storage Segment Revenues 6.0 5.7 5.7 26% 45.2 5.0 4.1 4.0 30 O1CA 02 TX 30MW/120MWh 10MW/1OMWh 2.0 1.6 1.0 0.5 O3 NJ 04 VT 0.0 41IMW/4IMWh =. 2MW/
Slide 19: A Strong Tailwind
A STRONG TAILWIND Governments around the world continue to support renewable energy In the U.S., negotiations between the White House and Congress have made substantial progress over the past week The Bill draft includes, among others: * Extension of PTC and ITC until the end of 2026 for geothermal
Slide 20: 03 Driving Profitable Growth
nx <I ORMAT 3 Le V4 o3 DRIVING PROFITABLE GROWTH
Slide 21: 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 22: 2023 Growth Target by Segments
2023 GROWTH TARGET BY SEGMENTS GEOTHERMAL & ENERGY SOLAR ENERGY STORAGE YE 2023 TARGET 1,255MW-1,275MW 273MW-373MW MW GROWTH 35%-37% 274%-411% Change in MW growth is compared to a 932MW Geothermal & Solar portfolio (including 83MW added in 2021) and a 73 MW storage portfolio in YE 2020 (including 10
Slide 23: Geothermal and Solar Projects
July A 2021 in NV Projected Project ce Expected PPA U.S - Heber Complex 1 End 2022 v U.S - CD4 30 Q1 2022 v End Under U.S - North Valley 25 2022/Farly negotiation GEOTHERMAL U.S. - Puna expansion 8 2023 Suspended 10 PROJECTS U.S - Dixie Meadows 15 2023 v 134-139 MW U.S - Tungsten Mountain 2 1 H1 202
Slide 24: Energy Storage Development
DEVELOPM Projected ji ‘i Expected Type of Project Capacity (MW) coD contract CA - Tierra Buena 5 Q1 2022 Capacity PPA and Merchant TX - Upton 25 Q1 2022 Merchant ENERGY STORAGE 6 PROJECTS NJ - Andover 20 Q2 2022 Merchant 89 MW NJ - Howell 7 Q2 2022 Merchant OH - Bowling Green 12 @32022 ~~ Cabacity a
Slide 25: U.S. Storage Pipeline
2.1GW 30 200MW - 3OOMW potential capacity of named expected addition U.S. storage pipeline prospects by YE 2023 Copyright © 2021 Ormat Technologies, Inc. 25
Slide 26: Maintaining a Strong Capital Position
MAINTAINING A STRONG CAPITAL POSITION TO SUPPORT ACCELERATED GROWTH $177 Q4 2021 expected capital needs® to support future growth target Over $780 Cash, cash equivalents, restricted cash and available lines of credit Access to various sources of capital 44% 3.9x Net debt to Net debt to capitalizatio
Slide 27: ESG Initiatives
ENVIRONME! SOCIAL J GOVERNANCE ESG INITIATIVES We are moving to strengthen our ESG commitments Building our approach and policy on significant valuable issues Water management Taxation Suppliers and procurement policy political communication Planning to issue corporate sustainability report in the n
Slide 28: 2021 Guidance
2021 GUIDANCE [<) Total revenues Electricity revenues Products revenues Storage revenues Adjusted EBITDA $652M-$675M $585M-$595M $40M-$50M $27M-$30M $400M-$410M TRANSITIONING TO ACCELERATED GROWTH IN STORAGE AND ELECTRICITY SEGMENTS MW EXPECTATIONS ADJUSTED EBITDA EXPECTATIONS >1,500MW > >$500M) run
Slide 29: Summary
SUMMARY: STRENGTHENING THE FOUNDATION, PREPARING FOR FASTER GROWTH Executed M&A growth strategy Robust portfolio with new added capacity Delivered revenue growth in our leading segments Contribution from new assets and restored loss generation A strong tailwinds to support renewable and storage ener
Slide 30: Full Commitment to Sustainable Growth
FULL COMMITMENT TO SUSTAINABLE GROWTH THANK YOU! SMADAR LAVI! VP CORPORATE FINANCE AND HEAD OF INVESTOR RELATIONS 775-356-9029 (EXT. 65726) | SLAVI@ORMAT.COM
Slide 31: Products Segment Backlog
2% 5% PRODUCTS SEGMENT «cermany sex \ THIRD-PARTY «Guatemala BACKLOG” sen y —_—_—— J} = Indonesia = Taiwan = Chile 11% = Nicaragua CONTRACTS GEOGRAPHIC = Canada BREAKDOWN Others Backlog as of November 3, 2021. The backlog includes revenues for the period between October 1, 2021 and November 3, 2021;
Slide 32: Payment of Principal Due by Period
PAYMENT OF PRINCIPAL DUE BY PERIOD ($M) AVERAGE INTEREST RATE: 4.4% @4-2021_ Year 2021 Long-term non-recourse debt & limited recourse debt 9.7 97 Senior Secured Notes (non-recourse) 61 61 Long-term loans (full recourse) 13.6 13.6 Total $29.4 $29.4 Remaining Total 2021 2022 2023 2024 2025 Thereafter
Slide 33: CapEx for 2021
CAPEX FOR 2021 (sm) ACTUAL INVESTED CAPITAL NEEDS TOTAL CAPEX IN 9 MONTHS 2021 FOR @4 2021 FOR 2021 Electricity Segment 263 145 408 Construction & Enhancements - fully released 156 file) 266 Development enhancement, drillings and Exploration 24 15 39 Puna restoration (including drilling) 27 5 32 Olk
Slide 34: P&L Highlights
P&L HIGHLIGHTS @3 2021 @3 2020 YTD 2021 YTD 2020 GAAP MEASURES Revenues ($M) Electricity 142.7 123.7 4215 395.2 Product 105 29.6 26.6 1207 Energy Storage 57 57 24.0 10.0 Total Revenues 158.8 158.9 472.1 526.0 Gross margin (%) Electricity 428 % 38.0 % 418 % 443% Product 128 % 18.8 % 128 % 20.7 % Ener
Slide 35: Reconciliation of EBITDA and Adjusted EBITDA
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA (DOLLARS IN THOUSANDS) Three Months Nine-Months Ended June 30, Ended June 30, 2021 2020 2021 2020 Net income 20,780 23,098 53,804 78,274 Adjusted for: Interest expense, net (including amortization of deferred financing costs) 21,711 21,130 58,282 57,345 I
Slide 36: 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 September 30, 2021 Nine Months Ended September 30, 2021 2021 2020 2021 2020 Cin millions, except for EPS) GAAP Net income attributable to the Company's stockholders $ 14.9 $ 15.7 $ 43
Slide 37: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES September 30, 2021 Cash and cash equivalents and Restricted cash (in millions $) Cash and cash equivalents 268 Marketable Securities at fair value 45 Restricted cash and cash equivalents 88 Total cash and cash equivalents and Restricted cash (in millions