Slide 1: Ormat Technologies, Inc. Earnings Call
ORMAT TECHNOLOGIES, INC. EARNINGS CALL DORON BLACHAR, CEO ASSI GINZBURG, CFO NOVEMBER 3, 2022 Copyright© Copyright ©2022 Ormat Technologies, 2022 Ormat Technologies, Inc. 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, These forward-looking statements
Slide 3: Q3 2022 Highlights
Q3 2022 HIGHLIGHTS DELIVERING SOLID EXPANDING OUR PORTFOLIO ADVANCING PROFITABLE FINANCIAL PERFORMANCE GROWTH Copyright © 2022 Ormat Technologies, Inc. 3
Slide 4: Financial Performance
FINANCIAL 01 PERFORMANCE Copyright © 2019 Ormat Technologies, Inc. 4 Copyright © 2022 Ormat Technologies, Inc. 4 Copyright © 2022 Ormat Technologies, Inc.
Slide 5: Q3 Highlights and 9 Months 22
FINANCIAL PERFORMANCE Q3 22 HIGHLIGHTS Revenues Gross Margin EPS/Adjusted EPS( (2,3) Adjusted EBITDA(1) $175.9M 34.7% $0.32/0.33 $102.2M +10.7% -501 bps +23.1%/+2.5% +0.6% +475 bps (Adj.)(4) 9 MONTHS 22 Gross margin Revenues Adjusted EBITDA(1) EPS/Adjusted EPS(1,2,3) 35.7% $528.7M $310.8M $0.85/0.90
Slide 6: Revenues by Segment
REVENUES BY SEGMENT Q3 22 Total Electricity Products Storage 87% 8% $175.9M $152.8M $14.2M $8.8M Electricity Products +10.7% +7.1% +35.1% +56.2% 5% Storage 9 MONTHS 22 Total Electricity Products Storage 88% 8% $528.7M $466.5M $39.2M $22.9M Electricity Products +12.0% +10.7% +47.6% (4.6)% 4% Storage
Slide 7: Gross Margin by Segment
GROSS MARGIN BY SEGMENT Q3 22 Total Electricity Products Storage 34.7% 36.5% 18.0% 31.5% -510 bps -634 bps +520bps +1,930 bps +450 bps (Adj.)(1) 9 MONTHS 22 Total Electricity Products Storage 35.7% 38.5% 9.2% 24.3% -430 bps -338 bps -360 bps -1,320 bps -9 bps (Adj.)(1) . (1) Excluding $15.5 million
Slide 8: Adjusted EBITDA by Segment
ADJUSTED EBITDA(1) BY SEGMENT Q3 22 Total Electricity Products Storage 95% 4% Storage $102.2M $97.0M $1.2M $4.0M Electricity +0.6% (0.7)% (40.0)% +104.9% 1% Products 9 MONTHS 22 Total Electricity Products Storage 96% 3% Storage $310.8M $298.0M $3.4M $9.4M Electricity 1% +8.9% +9.4% (45.5)% +35.2% Pr
Slide 9: Q3 2022 Cash and Net Debt
Q3 2022 I CASH AND NET DEBT Cash and Cash Equivalents, Marketable Securities and restricted cash and Cash Equivalents ($M) Net Debt1 ($M) 206 408 495 $1,759 $1,523 Cash from 355 operating activities Investment in CapEx $387 20 18 25 9 Proceeds from Debt $253 Debt raising Dividend Shares Capped Repay
Slide 10: Strong Tailwind: Inflation Reduction Act
STRONG TAILWIND INFLATION REDUCTION ACT Extension of Geothermal and solar tax credits 1 for projects beginning construction before January 1, 2025 AUG 16 New tax credit rate structure 2022 IRA signed 2 New geothermal projects can receive up to 3.37 cents per kWh based on compliance with new wage req
Slide 11: Maintaining a Strong Capital Position
MAINTAINING A STRONG CAPITAL POSITION TO SUPPORT ACCELERATED GROWTH Q4 expected capital needs(1) $160M to support future growth $ 749M Cash, cash equivalents, restricted cash and available lines of credit Access to various 47% 4.1x sources of capital Net debt to Net debt to capitalization (2) Adj. E
Slide 12: Operational Update
02 OPERATIONAL UPDATE Copyright © Copyright © 2022 2022 Ormat Ormat Technologies, Technologies, Inc. Inc. 12
Slide 13: Ormat Moves Towards Achieving Its Growth Goals
ORMAT MOVES TOWARDS ACHIEVING ITS GROWTH GOALS ELECTRICITY UPDATE PRODUCT BACKLOG ENERGY STORAGE Copyright © 2022 Ormat Technologies, Inc. 13
Slide 14: Electricity Operation
ELECTRICITY OPERATION Robust and balanced portfolio Global portfolio increased by 73MW since the beginning of the year to 1,085MW 5 4 6.6% increase in generation 1 2 3 6 Revenue per MWh was approximately $94 in Q3 2022 Generation growth 01 U.S. 02Guatemala 03 Honduras 1,624 800 MW 40 MW 38 MW 1,523
Slide 15: Electricity Operation
ELECTRICITY OPERATION April June July September End of 2023 Tungsten 2 Steamboat CD4 Tungsten Solar New additional 13MW Solar 30 MW 5MW 100-110 MW 5 MW Wister Solar 20 MW Added 73MW to the Electricity segment portfolio CD4, NV, USA Copyright © 2022 Ormat Technologies, Inc. 15 Copyright © 2022 Ormat
Slide 16: Puna
PUNA Q3 2022 23 MW Generation reduced temporarily due to drilling campaigns High energy rates due to high oil prices Year end of 2022 into 2023 Ongoing drilling campaigns targeting to restore capacity to 38 MW New 46MW PPA In discussion with HELCO for improved fixed PPA prices within our existing co
Slide 17: Operation Update
OPERATION UPDATE Olkaria Starting our drilling campaign, which should allow us to increase plant production during 2023 Heber 1 Fire Steam unit is down since Feb 28th Optimizing the complex through repowering work, which is expected to be completed in Q2 2023 Recorded $8 million aggregate insurance
Slide 18: Product Backlog
PRODUCT BACKLOG 12% 3% 62% 3rd parties’ contracts New Zealand 6% Philippines Backlog at $137.1M – 150% increase (1) Far East 3% 2% vs last quarter Guatemala 3% IL $137.1M 3% Signed $100M Supply and EPC USA Contracts in New Zealand and Germany 6% Indonesia Taiwan Others 97.1% Geothermal contracts EFE
Slide 19: Energy Storage
ENERGY STORAGE Improved Adjusted EBITDA profitability 4 46.3% 3 1 35.7% 4.1 2 2.0 Q3 2021 Q3 2022 Adjusted EBITDA EBITDA Margin 01 CA 02 TX 35MW/140MWh 10MW/10MWh Signed a 15 years power purchase agreement (tolling) for 80MW/320MWh 03 NJ 04 VT Bottleneck Battery Energy Storage System (1) 41MW/41MWh
Slide 20: Advancing Profitable Growth
ADVANCING PROFITABLE 03 GROWTH Copyright © 2019 Ormat Technologies, Inc. 20 Copyright © 2022 Ormat Technologies, Inc. 20 Copyright © 2022 Ormat Technologies, Inc.
Slide 21: Robust Growth Plan
Increase geothermal and solar capacity significantly Accelerate storage capacity to establish ROBUST leading position in the U.S. storage sector GROWTH PLAN YE 2023 portfolio target: ~1.5 GW Total expected MW growth vs 2021: ~ 35% This growth plan is subject to obtaining all permits and regulatory a
Slide 22: 2023 Growth Target by Segments
2023 GROWTH ` GEOTHERMAL & ENERGY SOLAR ENERGY STORAGE TARGET BY SEGMENTS (VS 2021) YE 2023 TARGET ~1,200MW 273 MW / 640 MWh MW ADDITION(1),(2) ~180MW 190 MW/465MWh MW GROWTH ~18% 228%/264% (1) Increase in MW growth is compared to a 1,012MW Geothermal & Solar portfolio and an 83 MW storage portfolio
Slide 23: Geothermal: 6 Projects, 60-65 MW by YE 2023
Projected Expected Project Capacity PPA COD (MW) U.S - North Valley 25 Q1 2023 ✓ U.S. - North Valley 2 5-10 Q4 2023 ✓ U.S. – Dixie Valley 4 Q2 2023 ✓ U.S - Heber Complex 11 Q2 2023 ✓ GEOTHERMAL Guatemala - Zunil 5 H1 2023 ✓ 6 PROJECTS(2) GEOTHERMAL 60-65 MW Guadeloupe- Bouillante 10 End 2023 Under n
Slide 24: Solar: 5 Projects
Projected Expected Project Capacity PPA COD (MW) U.S. - Brady Solar 6 Q1 2023 ✓ SOLAR U.S. - Steamboat Solar 5 Q1 2023 ✓ 5 PROJECTS 35 MW AC U.S. – North Valley Solar 7 Q2 2023 ✓ BY YE 2023 U.S. – McGinness Hills Solar 14 H2 2023 ✓ SOLAR ENERGY U.S. – Steamboat Hills Solar 3 Q3 2023 ✓ PROJECTS UNDER
Slide 25: Energy Storage: 7 Projects
Projected Projected Expected Project Capacity PPA MWh COD (MW) TX - Upton 25 25 Q4 2022 Merchant NJ - Andover 20 20 Q1 2023 Merchant NJ - Howell 7 7 Q1 2023 Merchant ENERGY STORAGE 7 PROJECTS OH – Bowling Green 12 12 Q1 2023 Capacity PPA and Merchant 184 MW/444 MWh ENERGY BY 2023 CA – Pomona 2 20 40
Slide 26: Energy Storage Pipeline
2.9 GW 34 184MW/444MWh potential capacity of named expected addition U.S. storage pipeline prospects by YE 2023 ENERGY STORAGE PIPELINE Copyright © 2022 Ormat Technologies, Inc. 26
Slide 27: 2022 Guidance
2022 GUIDANCE (3) Total revenues Electricity revenues Products revenues Storage revenues Adjusted EBITDA $720M-$735M $630M-$638M $60M-$67M $30M $430M-$442M MW EXPECTATIONS ADJUSTED EBITDA EXPECTATIONS ~1.5GW ~$500M run-rate(2) 1.1GW $401M (1) 2021 2022 2023 2021 2022 2023 (1) For non –GAAP financial
Slide 28: Executing on Our Growth Plans
Executing on our growth plans COD for 78MW new projects in the nine months of 2022 Delivered solid third quarter results Driven by growth in the Electricity and Energy Storage segments A strong tailwinds to support renewable and storage energy Inflation Reduction Act supporting tax incentives Recove
Slide 29: Thank You!
THANK YOU! SMADAR LAVI I VP HEAD OF INVESTOR RELATIONS AND ESG PLANNING & REPORTING 775-356-9029 (EXT. 65726) I SLAVI@ORMAT.COM Copyright © 2019 Ormat Technologies, Inc. 29 29 Copyright © 2022 Ormat Technologies, Inc. Copyright © 2022 Ormat Technologies, Inc.
Slide 30: Payment of Principal Due by Period
PAYMENT OF PRINCIPAL DUE BY PERIOD ($M) AVERAGE INTEREST RATE: 3.9% Q4-2022 Year 2022 Long-term non-recourse debt & limited recourse debt 15.8 15.8 Long-term loans (full recourse) 18.3 18.3 Finance Liability 0.0 0.0 Total 34.1 34.1 Remaining Total 2022 2023 2024 2025 2026 Thereafter Long-term non-re
Slide 31: CapEx for 2022
CAPEX FOR 2022 ACTUAL INVESTED TOTAL CAPEX TOTAL CAPEX ($M) IN 9 MONTHS 2022 FOR Q4 2022 FOR 2022 Electricity Segment 326 135 465 Construction & Enhancements – fully released 207 88 295 Development enhancement, drillings and Exploration 57 19 76 Puna restoration (including drilling) 20 8 28 Olkaria
Slide 32: P&L Highlights
P&L HIGHLIGHTS Q3 2022 Q3 2021 YTD 2022 YTD 2021 GAAP MEASURES Revenues ($M) Electricity 152.8 142.7 466.5 421.5 Product 14.2 10.5 39.2 26.6 Energy Storage 8.8 5.7 22.9 24.0 Total Revenues 175.9 158.8 528.7 472.1 Gross Profit ($ millions) 61.1 63.1 188.6 188.8 Gross margin (%) Electricity 36.5 % 42.
Slide 33: Reconciliation of EBITDA and Adjusted EBITDA
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA (DOLLARS IN THOUSANDS) Three Months Nine-Months Ended September 30, Ended September 30, 2022 2021 2022 2021 Net income 19,826 20,780 57,564 53,804 Adjusted for: Interest expense, net (including amortization of deferred financing costs) 20,744 21,711 61,72
Slide 34: 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 Nine Months Ended September 30 September 30 2022 2021 2022 2021 (in millions, except for EPS) GAAP Net income attributable to the Company's stockholders $18.1 $14.9 $47.8 $43.2 One-ti
Slide 35: Reconciliation of Non-GAAP Financial Measures
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES September 30, 2022 Cash and cash equivalents, marketable securities and Restricted cash (in millions $) Cash and cash equivalents 155 Restricted cash and cash equivalents 98 Total cash and cash equivalents, marketable securities and Restricted cash (in m