ORMAT TECHNOLOGIES, INC - INVESTOR PRESENTATION MAY 2021
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ORMAT TECHNOLOGIES, INC.
INVESTOR PRESENTATION
MAY 2021
Copyright
Copyright©©2021
2021Ormat
OrmatTechnologies,
Technologies,Inc.
Inc.
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 are not intended to be a guarantee of future results, but instead
may contain “forward-looking statements” within the meaning of the Private Securities Litigation constitute Ormat’s current expectations based on assumptions that Ormat currently believes are
Reform Act of 1995. These statements involve estimates, expectations, projections, goals, objectives, reasonable. You are cautioned not to place undue reliance on the expectations, projections and other
assumptions and risks, and activities, events and developments that may or will occur in the future. forward-looking statements made in or during the course of this presentation as actual future results
When used in or during the course of this presentation, the words “may”, “will”, “could”, “should”, and developments may differ materially from such expectations, projections and forward-looking
“expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “projects”, “thinks”, “forecasts”, statements due to a number of risks, uncertainties and other factors, many of which are beyond
“guidance”, “continue”, “goal”, “outlook”, “potential,” “prospect” or “target”, or the negative of these Ormat’s control.
terms or other comparable terminology are intended to identify forward-looking statements, These risks, uncertainties and other factors include, but are not limited to, the risks, uncertainties and
although not all forward-looking statements contain such words or expressions. Such forward- other factors described in Ormat Technologies, Inc.'s Form 10-K filed with the SEC on February 26,
looking statements include, but are not limited to: 2021 and from time to time, in Ormat’s quarterly reports on Form 10-Q that are filed with the SEC.
statements about Ormat Technologies, Inc.’s and its affiliates’ (“Ormat”) business strategy;
statements about Ormat’s competitive strengths; NON-GAAP METRICS
statements about Ormat’s development and operation of electricity generation, storage and energy
management assets, including distributed energy resources; RECONCILIATION TO US GAAP FINANCIAL INFORMATION
statements about Ormat’s other plans, expectations, objectives and targets; This presentation includes certain “non-GAAP financial measures” within the meaning of Regulation
statements about Ormat’s views on market and industry developments and economic conditions, G under the Securities Exchange Act of 1934, as amended, including EBITDA and Adjusted EBITDA.
and the growth of the markets in which Ormat conducts its business; and The presentation of these non-GAAP financial measures is not intended as a substitute for financial
statements about the growth and diversification of Ormat’s customer base and Ormat’s future information prepared and presented in accordance with GAAP and such non-GAAP financial
revenues, expenses, earnings, capital expenditures, regional market penetration, electricity measures should not be considered as a measure of liquidity or as an alternative to cash flow from
generation, and other operational performance metrics, including statements about “target” or operating activities, net income or any other measures of performance prepared and presented in
“targeted” amounts for 2022 and 2023 growth (MW) or 2022 and 2023 operational performance accordance with GAAP. Such non-GAAP financial measures may be different from non-GAAP
metrics such as growth (MW) and adjusted EBITDA, among others. financial measures used by other companies.
The appendix slides in this presentation reconcile the non-GAAP financial measures included in the
All of these and other forward-looking statements made in or during the course of this presentation
presentation to the most directly comparable financial measures prepared and presented in
are made only as of the date hereof and Ormat undertakes no obligation to update or revise any
accordance with U.S. GAAP .
forward-looking statements, whether as a result of new information, future developments or
otherwise, except as required by law. Forward-looking statements about “target” or “targeted”
amounts represent current goals of Ormat’s management and are neither estimates of Ormat’s actual
Copyright © 2021 Ormat Technologies, Inc. All Rights Reserved. This document contains information
results nor financial projections or forecasts that have been prepared in accordance with Securities
proprietary to Ormat Technologies, Inc. Reproduction in any form without prior written permission is
and Exchange Commission (“SEC”) rules or guidelines adopted by the American Institute of Certified
strictly prohibited.
Public Accountants.
Copyright © 2021 Ormat Technologies, Inc. 2
INTRODUCTION
Copyright © 2021 Ormat Technologies, Inc. 3
A LEADING RENEWABLE over Own & operate
ENERGY PROVIDER 55 1,015MW
WITH A PROVEN TRACK RECORD Years of experience Geothermal, Storage, Solar PV
& REG(1)
IN GEOTHERMAL AND ENERGY STORAGE
1,400 $ 705M
Employees 2020 revenues
$ 420M $ 86M
2020 adj. EBITDA(2) 2020 Net income(3)
(1) REG – Recovered Energy Generation
(2) See appendix for reconciliation of non-GAAP financial measures.
(3) Net income attributable to the company stockholders
Copyright © 2021 Ormat Technologies, Inc. 4
OUR BUSINESS SEGMENTS
87% 5% 8%
of Q1 2021 of Q1 2021 of Q1 2021
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 plants REG power plants in the U.S. storage sector
Primary customers include utilities, Provide EPC and O&M services for Leverage Ormat’s core competencies in
CCA and municipalities geothermal and REG power plants EPC, O&M and project finance
Copyright © 2021 Ormat Technologies, Inc. 5
OUR CORE COMPETENCIES
THE WORLD’S ONLY VERTICALLY INTEGRATED GEOTHERMAL COMPANY
Development Drilling Engineering Manufacturing Construction Operation
and/or
exploration
ELECTRICITY
PRODUCT
STORAGE
Copyright © 2021 Ormat Technologies, Inc. 6
ELECTRICITY SEGMENT OVERVIEW
5
4
Diversified
1 2
3
6
portfolio
63% 37%
U.S. International
2020
01 U.S. 02 Guatemala 03 Honduras Geographic
647 MW 40 MW 38 MW breakdown
05 Kenya
of revenues
04 Guadeloupe 06 Indonesia
15 MW 150 MW 42 MW(1)
$540 $541
$510
Global operation $436
$466
94% geothermal; Highest capacity factor Profitable
of any renewable resource growing
45%
portfolio 40%
42% 42% 42%
Visible cash generating assets
Weighted average PPA life: 16 years (2) 2016 2017 2018 2019 2020
Revenues Gross Margin
(1) In the Sarulla complex, we include our 12.75% share only
(2) Including re-contracting under the SCPPA Portfolio PPA and amended HELCO PPA.
(3) Electricity segment revenues were impacted by the shutdown of Puna during 2018, 2019 and 2020. Copyright © 2021 Ormat Technologies, Inc.
GEOTHERMAL MARKET
Ormat -the 2nd largest geothermal owner & operator
1,400 100
1,200
80
1,000
800 60
600 40
400
20
200
0 0
EDC (PNOC) Ormat CFE ENEL Star Energy Calpine Aboitiz Contact Mercury Terra-Gen
Consortium Energy (ECP)
Operation (MW) Estimated Project Count
13.5GW
Global Installed
geothermal capacity
9x
Global Potential
vs. Installed
EU Africa ASIA Oceania U.S LATAM
Installed 3.4 0.8 4.7 1.0 3.6 1.7
Potential 7.2 5.1 74.3 3.6 35.0 36.4
Source of above charts: Geothermal Power Market Forecast 2019-2029, Visiongain; Think
GeoEnergy - “Geothermal Market Analysis YE 2019” by Alexander Richter from February
Olkaria III complex, Kenya 2020; Data is presented at gross installed capacity.
Copyright © 2021 Ormat Technologies, Inc.
PRODUCT SEGMENT OVERVIEW
Market leader Primary provider of geothermal binary plants
Suppliers of geothermal power plants 2015 – 2019 capacity, MW
Built approx. 190 power plants and installed approx.
3,200 MW of geothermal & REG over the years 56% 72%
Binary Ormat
STG &
BINARY
3rd parties’ backlog BINARY
Backlog of $37M as of May 5, 2021 Exergy 16%
Fuji 15%
Toshiba 14% 28% Atlas Copco 5%
44%
Other Kaishan 3%
Continuing improving engineering, technology and STG Mitsubishi 10%
Binary Turboden 3%
Other 4%
delivery lead-time to maintain leadership position Other 1%
Provides flexibility Geothermal equipment suppliers
(MW & project count)
Manufacturing our owned power plants 4,000 140
to support organic growth 3,500 120
3,000
100
2,500
2020 Segment revenue $148.1M
80
2,000
60
2020 Intersegment revenue $113.2M 1,500
40
1,000
500 20
0 0
Toshiba
Toshiba Mitsubishi
Mitsubishi Fuji
Fuji Ormat
Ormat Ansaldo/Tosi
Ansaldo/Tosi GE
GE Alstom
Alstom Exergy
Exergy
(1) Includes revenues for the period between January 1, 2021 and February 24, 2021; MW Operating Estimated Project Count
for backlog breakdown by contracts - see appendix slide
Copyright © 2021 Ormat Technologies, Inc. 9
ENERGY STORAGE OVERVIEW
4
Growth in U.S. energy storage incremental
1
3
capacity (MW)
2
6,062
5,260
01 CA 02 TX 4,115
30MW/120MWh 10MW/10MWh 3,705
03 NJ 04 VT
41MW/41MWh 2MW/5MWh
Establishing strong market position
1,151
Focus on largest and most lucrative markets
California, Texas, New York and PJM 523
227 231 224 311
65
Creating a diversified portfolio
Covering multiple regions, multiple applications and 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
multiple business models
Increased scale could result in increased operating margins Source: Wood Mackenzie – Energy Storage Monitors Q3 2020 forecast.
Copyright © 2021 Ormat Technologies, Inc. 10STRONG TAILWINDS FOR
RENEWABLE ENERGY
AND ENERGY STORAGE
Governments around the world continue to
support renewable energy
Current U.S. administration:
Calling to invest in infrastructure, particularly for
clean energy, and energy storage
Proposing a ten-year extension and phase down
of an expanded direct-pay investment tax credit
and production tax credit for clean energy
generation and storage
Copyright © 2021 Ormat Technologies, Inc. 11ORMAT’S GROWTH DRIVERS
Copyright © 2021 Ormat Technologies, Inc. 12Increase solar and geothermal
capacity significantly
Accelerate storage capacity to establish
ROBUST leading position in the U.S. storage sector
GROWTH
PLAN YE 2023 portfolio target:
1,455MW - 1,575MW
Total expected MW growth:
~ 50%
This growth plan is subject to obtaining all permits and regulatory approvals required as well as
completing the development and construction of these power plants as planned.
Copyright © 2021 Ormat Technologies, Inc.
132023
GROWTH GEOTHERMAL & ENERGY
SOLAR ENERGY STORAGE
TARGET
BY SEGMENTS
YE 2023 TARGET 1,182MW-1,202MW 273MW-373MW
MW ADDITION 250MW-270MW 200MW-300MW
MW GROWTH 27%-29% 274%-411%
Change in MW growth is compared to a 932MW Geothermal & Solar portfolio and a 73 MW storage portfolio in YE 2020
Copyright © 2021 Ormat Technologies, Inc. 14Projected
Expected
Project Capacity PPA
COD
(MW)
U.S - Heber Complex 11 H1 2022
U.S - CD4 30 Q1 2022
U.S - North Valley 30 2022 -
U.S - McGinness Hills Expansion 8 Q2 2021
GEOTHERMAL
10 PROJECTS U.S. - Puna expansion 8 2023/TBU Suspended
143-148 MW U.S - Dixie Meadows 15 2022
U.S - Tungsten Mountain 2 11 H2 2022
Guadeloupe - Bouillante 10 2023 -
GEOTHERMAL & Guatemala – Zunil 5 2022
SOLAR ENERGY
Indonesia - Ijen 15-20(1) 2023
PROJECTS UNDER
DEVELOPMENT U.S - Wister Solar 20 AC H2 2021
SOLAR U.S. -Steamboat Solar 10 AC
2022 &
2023(1)
4 PROJECTS
40 MW AC U.S. - Tungsten Solar 2 4 AC 2022
U.S. - Brady Solar 6 AC 2022
(1) Ormat’s share Copyright © 2021 Ormat Technologies, Inc. 15
(2) 5 AC in 2022 and 5AC in 202310MW/40MW Vallecito project started operation in April 2021
Projected
Expected Type of
Project Capacity
COD contract
(MW)
Capacity PPA
CA - Tierra Buena 5 Q4 2021
and Merchant
ENERGY STORAGE
TX - Upton 25 Q4 2021 Merchant
ENERGY 4 PROJECTS
STORAGE 57 MW
NJ - Andover 20 Q1 2022 Merchant
PROJECTS
UNDER NJ - Howel 7 Q2 2022 Merchant
DEVELOPMENT
Copyright © 2021 Ormat Technologies, Inc. 162 GW 40 200MW - 300MW
potential capacity of named expected addition
U.S. storage pipeline prospects by YE 2023
ENERGY
STORAGE
PIPELINE
Copyright © 2021 Ormat Technologies, Inc.GROWTH
MW EXPECTATIONS ADJUSTED EBITDA EXPECTATIONS
1,500MW
$500M
run-rate(2)
1,005MW $420M (1)
2020 2021 2022 2023 2020 2021 2022 2023
(1) For non –GAAP financial measures reconciliation please see the appendix slides
(2) Annual run-rate towards the end of 2022 Copyright © 2021 Ormat Technologies, Inc.
18KEY INVESTMENT HIGHLIGHTS
Copyright © 2021 Ormat Technologies, Inc. 19KEY INVESTMENT HIGHLIGHTS
Strong financial
Innovative Robust growth ESG
positioning potential
Copyright © 2021 Ormat Technologies,
20Inc. 20STRONG FINANCIAL POSITIONING
Installed capacity growth (MW) Revenue growth ($m)
Geothermal REG Solar Storage Electricity segment Product segment Energy Storage
1,005
931 957
$693 $719 $746 $705
795 $663
713
857 854 872
742
660
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
Electricity segment gross margin (%) Adjusted EBITDA growth ($m)
$420
$368 $384
45% $344
42% 42% $324
42%
40%
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
Note: CAGRs represent 4-year CAGR (2016-2020)
Copyright © 2021 Ormat Technologies, Inc. 21STRONG FINANCIAL POSITIONING
Total Debt ($M) Net Debt ($M)(1)
Project Finance Corporate Debt
$1,456 $1,428 $1,090 $1,085
$1,268 $1,238
$919 $936
$817
$914 795 784
509 522
305
759 716 661 644
609
2017 2018 2019 2020 March 31, 2017 2018 2019 2020 March 31,
2021 2021
Net Debt to Capitalization (Total Equity) (1) Net Debt to Adjusted EBITDA (1)
43% 42%
39% 3.0x 2.8x
32% 32% 2.4x 2.2x 2.3x
2017 2018 2019 2020 March 31, 2017 2018 2019 2020 March 31,
2021 2021
(1) See appendixes for reconciliation of non-GAAP financial measures.
Copyright © 2021 Ormat Technologies, Inc. 22PURE-PLAY RENEWABLES
PLATFORM ALIGNED WITH
ESG PRINCIPLES
Singular focus on renewables ORMAT CO2 EMISSIONS ARE LOWER
THAN ALTERNATIVE RESOURCES (MM)1
Publish annual Corporate 7.6
tons of
Sustainability Report CO2
5.4
tons of
CO2
3.2
100% local employment at tons of
CO2
0.1
operational facilities tons of CO2
Ormat Natural Oil plants Coal
plants gas plants plants
(1) Ormat renewable electricity offset figures represent the emissions produced through the
generation of renewable power at Ormat’s owned power plants in 2019; Other electricity
sources are from “CO2 Emissions from Fuel Combustion Highlights 2019” International
Energy Agency (IEA), 2019.
Copyright © 2021 Ormat Technologies, Inc. 23ATTRACTIVE INVESTMENT THESIS
Strong financial Robust growth ESG
positioning potential
Consistent track record of Significant, consistent Renewable asset growth in the
strong returns for shareholders Domestic growth U.S. supported by favorable
regulatory dynamics
International geothermal Pure-play renewables
Long-term contracted growth to displace existing platform aligned
cash flows fossil fuel generation with ESG principles
Strong balance sheet and Robust growth in
favorable leverage profile energy storage
Copyright © 2021 Ormat Technologies, Inc. 24APPENDIX
Copyright © 2021 Ormat Technologies, Inc. 25RECONCILIATION OF EBITDA AND ADJUSTED EBITDA (CONT’D)
The following table reconciles net income to EBITDA and Adjusted EBITDA for the twelve-month periods ended December 31, 2020, 2019, 2018, 2017, 2016 and 2015.
Year Ended December 31,
2020 2019 2018 2017 2016
(Dollars in thousands)
Net income 101,806 93,543 110,111 147,109 96.294
Adjusted for:
Interest expense, net (including amortization of deferred financing costs) 76,236 78,869 69,950 53,154 66,418
Income tax provision 67,003 45,613 34,733 21,664 37,059
Adjustment to investment in an unconsolidated company:
11,549 13,089 9,184 (265) -
our proportionate share in interest expense, tax and depreciation and amortization in Sarulla
Depreciation and amortization 151,371 143,242 127,732 108,693 99,141
EBITDA 407,965 374,356 351,710 330,355 298,912
Mark-to-market gains or losses from accounting for derivative (1,192) (1,402) 2,032 (1,500) 319
Stock-based compensation 9,830 9,358 10,218 8,760 5,157
Gain on sale of subsidiary and property, plant and equipment - - - - (686)
Insurance proceeds in excess of assets carrying value - - (7,150) - -
Loss from extinguishment of liability - 468 - 1,950 5,780
Impairment of goodwill, net of reversal of a contingent liability - - 3,142 - -
Termination fee - - 4,973 - -
Merger and acquisition transaction costs 2,279 1,483 2,910 2,460 335
Settlement expenses 1,277 - - - 11,000
Write-off unsuccessful exploration activities - - 126 1,796 3,017
Adjusted EBITDA 420,159 384,263 367,961 343,821 323,834
Copyright © 2021 Ormat Technologies, Inc. 26RECONCILIATION OF EBITDA AND ADJUSTED EBITDA
Three Months Ended March 31
2021 2020
(Dollars in thousands)
Net income 17,829 29,906
Adjusted for:
Interest expense, net (including amortization of deferred financing costs) 18,753 16,871
Income tax provision (benefit) 3,007 18,148
Adjustment to investment in an unconsolidated company: our proportionate share in interest expense, tax and
2,465 2,677
depreciation and amortization in Sarulla
Depreciation and amortization 40,829 35,288
EBITDA 82,883 102,890
Mark-to-market gains or losses from accounting for derivative 2,086 (561)
Stock-based compensation 2,097 1,989
Merger and acquisition transaction costs 484 540
Reversal of a contingent liability (418) —
Allowance for bad debts related to February power crisis in Texas 2,980 —
Hedge losses resulting from February power crisis in Texas 9,133 —
Settlement expenses — 1,188
Adjusted EBITDA 99,245 106,046
We calculate EBITDA as net income before interest, taxes, depreciation and amortization. We calculate Adjusted EBITDA as net income before interest, taxes,
depreciation and amortization, adjusted for (i) termination fees, (ii) impairment of long-lived assets, (iii) write-off of unsuccessful exploration activities, (iv) any
mark-to-market gains or losses from accounting for derivatives, (v) merger and acquisition transaction costs, (vi) stock-based compensation, (vii) gain or loss
from extinguishment of liabilities, (viii) gain or loss on sale of subsidiary and property, plant and equipment and (ix) other unusual or non-recurring items. EBITDA
and Adjusted EBITDA are not measurements of financial performance or liquidity under accounting principles generally accepted in the United States, or U.S.
GAAP, and should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net earnings as
indicators of our operating performance or any other measures of performance derived in accordance with U.S. GAAP. We use EBITDA and Adjusted EBITDA as a
performance metric because it is a metric used by our Board of Directors and senior management in evaluating our financial performance. However, other
companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do.
The table reconciles net income to EBITDA and Adjusted EBITDA for the three-Month periods ended March 31, 2021 and 2020.
Copyright © 2021 Ormat Technologies, Inc. 27RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Three Months
Year Ended December 31
Ended
March 31, 2021 2020 2019 2018 2017 2016
Cash and cash equivalents and Restricted cash (in millions $)
Cash and cash equivalents 377 448 71 99 48 230
Marketable Securities at fair value 28
Restricted cash and cash equivalents 88 89 82 79 49 34
Total cash and cash equivalents and Restricted cash (in millions $) 493 537 153 178 97 264
Total Debt (in millions $)
Current portion of long-term debt:
Short term revolving credit lines with banks (full recourse) 0 0 41 159 52 0
Commercial paper 0 0 50 0 0 0
Limited and non-recourse
Senior secured notes 25 25 24 33 33 32
Other loans 36 36 34 30 21 21
Full recourse 26 18 77 5 3 12
Total current portion of long-term debt: 87 79 226 227 109 66
Long-term debt, net of current portion:
Limited and non-recourse
Senior secured notes (less deferred financing costs of $8,113 and $9,177, respectively) 307 315 339 375 312 350
Other loans (less deferred financing costs of $5,258 and $6,409, respectively) 276 285 317 320 242 262
Full recourse:
Senior unsecured bonds (less deferred financing costs of $580 and $755, respectively) 698 718 286 304 204 204
Other loans (less deferred financing costs of $1,011 and $1,346, respectively) 60 60 69 42 46 57
Total long-term debt, net of current portion: 1,341 1,377 1,012 1,041 804 873
Total Debt 1,428 1,456 1,238 1,268 914 939
Total Debt Breakdown (in millions $):
Full recourse: 784 795 522 509 305 273
Limited and non-recourse 644 661 716 759 609 666
Total Debt 1,428 1,456 1,238 1,268 914 939
Net Debt (in millions) 936 919 1085 1090 817 674
Total Equity 1,950 1941 1515 1445 1296 1168
Net Debt to Capitalization (Total Equity) (%) 32% 32% 42% 43% 39% 37%
Net Debt to Adjusted EBITDA
Net Debt (in millions) 936 919 1085 1090 817 674
Adjusted EBITDA (in millions) 413 420 384 368 344 324
Net Debt to Adjusted EBITDA (x) 2.3 2.2 2.8 3.0 2.4 2.1
Copyright © 2021 Ormat Technologies, Inc. 28
(1) Reflects LTM Adjusted EBITDA.AIR-COOLED BINARY GEOTHERMAL POWER PLANT
Copyright © 2021 Ormat Technologies, Inc. 29EXPECTED CAPITAL NEEDS FOR THE REMAINING OF 2021
CAPITAL NEEDS ($M)
Construction & Enhancements – fully released 200
Development enhancement and Exploration – not yet released 78
Maintenance CapEx (including drilling in Puna) 33
Storage activity 36
Enhancement of the production facilities 13
Total CapEx $360
Copyright © 2021 Ormat Technologies, Inc. 301%
2%
PRODUCTS SEGMENT 10%
THIRD-PARTY Germany
27%
BACKLOG(1) Guatemala
Taiwan
14%
$37.2M
Chile
NZ
CONTRACTS GEOGRAPHIC Others
99%
Turkey
BREAKDOWN Geothermal
contracts
24%
22%
Copyright © 2021 Ormat Technologies, Inc. 31
Backlog as of May 5, 2021. The backlog includes revenues for the period between April 1, 2021 and May 5, 2021;You can also read
