Ormat Technologies, Inc. · NYSE:ORA
Ormat Technologies — FY2015 Earnings Presentation
31 slides from Ormat Technologies's earnings presentation, Feb 24, 2016
Slide 1: Fourth Quarter and Year-End 2015 Earnings Call
Ormat Technologies, Inc. Fourth Quarter and Year-End 2015 Earnings Call February 24, 2016 Green energy you can rely on Copyright © 2016 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 2016 prepared remarks • 2015 highlights: Isaac Angel, CEO • Financial overview: Doron Blachar, CFO • Operations & business updates: Isaac Angel, CEO • Q&A 3 Copyright © 2016 Ormat Technologies, Inc.
Slide 4: 2015 Financial Highlights
2015 Financial Highlights • Total revenues of $594.6 million in 2015, an increase of 6.3% from 2014; • Product segment revenues reached record levels of $218.7 million in 2015 from $177.2 million in 2014 representing a 23.4% increase; • Electricity segment revenues decreased 1.7% to $375.9 million i
Slide 5: 2015 Operational and Business Developments
2015 Operational and Business Developments • Steps to enhance shareholder value • Signed a strategic collaboration agreement with Toshiba Corporation to develop strategic opportunities in the areas of geothermal power generation systems and related equipment • Closed and received $162.3 million cash
Slide 6: Financial Results
Financial Results Doron Blachar, CFO Green energy you can rely on 6 Copyright © 2016 Ormat Technologies, Inc.
Slide 7: Total Revenues
Total Revenues Total Revenues Total Cost of Revenues Segment Contribution +35.1 million (6.3%) +20.6 million (5.8%) $594.6 $559.5 $355.8 $376.4 32% 37% 68% 63% YE 2014 YE 2015 YE 2014 YE 2015 2014 2015 Electricity Segment Product Segment All amounts in million USD 7 Copyright © 2016 Ormat Technologi
Slide 8: Electricity Segment
Electricity Segment Revenues Cost of Revenues -$6.4 million (1.7%) -$4.0 million (1.6%) $382.3 $375.9 $246.6 $242.6 YE 2014 YE 2015 YE 2014 YE 2015 • Lower energy rates due to actual natural gas and oil prices • Decrease in O&M costs in many of our power • Lower generation at Puna power plant plants
Slide 9: Product Segment
Product Segment Revenues Cost of Revenues +$41.5 million (23.4%) +$24.6 million (22.5%) $218.7 $177.2 $133.8 $109.1 YE 2014 YE 2015 YE 2014 YE 2015 All amounts in million USD 9 Copyright © 2016 Ormat Technologies, Inc.
Slide 10: Gross Margin
Gross Margin Combined Electricity Segment Product Segment 38.4% 38.8% 36.4% 36.7% 35.5% 35.5% YE 2014 YE 2015 YE 2014 YE 2015 YE 2014 YE 2015 10 Copyright © 2016 Ormat Technologies, Inc.
Slide 11: Operating Income
Operating Income Total Electricity Segment Product Segment +$20.6 million (14.3%) $164.1 $143.5 $99.3 $90.4 $64.7 $53.1 YE 2014 YE 2015 YE 2014 YE 2015 YE 2014 YE 2015 All amounts in million USD 11 Copyright © 2016 Ormat Technologies, Inc.
Slide 12: Interest Expense, Net
Interest Expense, Net Interest Expense, Net Gross Interest Expense Capitalized Interest -12.1 million (14.3%) $84.7 $87.9 $76.7 $72.6 $3.2 $4.1 YE 2014 YE 2015 YE 2014 YE 2015 YE 2014 YE 2015 Decrease was primarily due to • Lower interest expense as a result of debt payment • $2.8 million decrease i
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 (Diluted)2 Company's Stockholders $119.6 $2.43 $70.9 $54.2 $1.44 $1.18 1 1 YE 2014 YE 2015 YE 2015 YE 2014 YE 2015 YE 2015 All amounts in million USD; 1. Excluding deferred tax asset and rel
Slide 14: Fourth Quarter Revenues
Fourth Quarter Revenues Total Revenues Electricity Segment Product Segment +21.8 million (14.6%) +4.5 million (4.8%) +17.3 million (31.0%) $171.1 $149.2 $93.3 $97.8 $73.3 $56.0 Q4 2014 Q4 2015 Q4 2014 Q4 2015 Q4 2014 Q4 2015 All amounts in million USD; 14 Copyright © 2016 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) +14.3 million (41.1%) $49.1 $34.8 $0.46 $23.0 $0.15 $7.0 Q4 2014 Q4 2015 Q4 2014 Q4 2015 Q4 2014 Q4 2015 All amounts in million USD; 15 Copyright © 2016 Ormat Technologies, Inc.
Slide 16: Adjusted EBITDA
Adjusted EBITDA Total Electricity Segment Product Segment 291.3 272.7 224.0 212.6 79.1 68.3 60.1 67.3 50.8 57.5 17.5 21.6 Q4 Q4 YE YE Q4 Q4 YE YE Q4 Q4 YE YE 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 Q4-14 Q4-15 YE-14 YE- 15 Q4-14 Q4-15 YE-14 YE- 15 Q4-14 Q4-15 YE-14 YE- 15 D&A 24.
Slide 17: Cash and Cash Equivalents
Cash and Cash Equivalents 152.5 190.0 92.0 30.6 19.1 156.6 7.8 $185.9 43.7 42.0 $40.2 15.4 Dec. 31 2014 Share Proceeds Net change in Issuance of Cash from Capital Debt Repurchase Cash paid to Cash dividend Dec. 31, 2015 exchange from the loan restricted shares to operating expenditures Repayment 1 o
Slide 18: Payment of Principal Due by Period
Payment of Principal Due by Period The average interest rate for the total debt is 5.9% Q1-2016 Q2-2016 Q3-2016 Q4-2016 Year 2016 Long-term non-recourse debt & limited recourse debt 5,373 5,374 5,374 5,374 21,495 Senior Secured Notes (non-recourse) due 2020 4,591 10,432 2,326 12,581 29,930 Long-term
Slide 19: Operations & Business Updates
Operations & Business Updates Isaac Angel, CEO Green energy you can rely on Copyright © 2016 Ormat Technologies, Inc.
Slide 20: Building Foundation for Long-Term Sustainable Growth
Building Foundation for Long-Term Sustainable Growth Expansion to new activities M&A Organic Growth Geographical & Technological expansion Improve efficiencies 20 Copyright © 2016 Ormat Technologies, Inc.
Slide 21: Strategy Implementation - Improve Efficiencies
Strategy Implementation - Improve Efficiencies Total Gross Margin 36.4% 36.7% 30.0% • Value chain improvements 25.7% • Reduce manufacturing lead-time • Automation • Improve management control • Improve procurement process • Reduce operating cost 2012 2013 2014 2015 • Shared control center Total Adju
Slide 22: Improve Operations - Electricity Segment
Improve Operations - Electricity Segment • Adding value to the Electricity segment • Reducing CapEx/MW to 4.0-4.5 M$/MW • Reducing operating Cost • Improving Adjusted EBITDA Adjusted EBITDA vs. Generation (million MWh) operating Cost 1 ($/MWh) 47.2 46.7 4.8 42.9 4.3 4.5 39.4 36.9 3.9 33.9 34.5 29.6
Slide 23: Strategy Implementation
Strategy Implementation • Proactively looking at M&A opportunities • Signed MOU to acquire, gradually, 85% of a 14.75 MW geothermal power plant in Guadeloupe with potential expansion to up to 45 MW • Continued diversification of technologies • Signed a strategic collaboration agreement (SCA) with To
Slide 24: Operation Update
Operation Update 2015 Generating capacity Region Region Plant (MW) 2015 CF Geothermal California Ormesa complex 42 Heber Complex 92 Mammoth 29 80% Complex North Brawley 18 West Steamboat Nevada complex 73 85% Brady Complex 18 East Nevada Tuscarora 18 Jersey Valley 10 96% McGinness Hills 83 Don A. Ca
Slide 25: Operation Update
Operation Update • Added over 90 MW in the last twelve months • Plant 4 in Olkaria III in Kenya in Jan. 2016 • Phase 2 of Don A. Campbell in Sept. 2015 • Phase 2 of the McGinness Hills in Feb. McGuinness Hills phases 1 & 2 2015 • All three plants were constructed and started operating ahead of plann
Slide 26: Growth Initiatives - Organic Growth and M&A
Growth Initiatives - Organic Growth and M&A • Expanding geographical footprint and diversifying technologies • Added 29 MW in January 2016 • Expect to add between 160 and 190 MW by YE 2018 • Extensive activities to support long term growth Project Projected Expected Capacity COD Guadeloupe- Bouillan
Slide 27: CapEx Needs for 2016
CapEx Needs for 2016 Capital Needs ($ millions) 83 Construction & enhancements 81 Development 28 Exploration 36 New activity 31 Maintenance CapEx 5 Production facility $264 Total CapEx $63 Debt repayment $327 Total 27 Copyright © 2016 Ormat Technologies, Inc.
Slide 28: Product Segment
Product Segment • Backlog of approximately $256 million as of February 23, 2016 • Includes revenues for the period between January1 and February 23, 2016 Ready for shipment to Sarulla, Indonesia Shipment to the Site, Chile 28 Copyright © 2016 Ormat Technologies, Inc.
Slide 29: Regulatory Updates
Regulatory Updates Continued support for renewables & geothermal • California expanded on its historic 33% by 2020 renewable portfolio standard (RPS) policy to 50% by 2030 • Hawaii - Governor David Ige signed a bill that sets the state’s renewable energy goal at 100% by 2045 • PTC extension • 195 co
Slide 30: 2016 Guidance
2016 Guidance • 2016 revenues guidance to be between $620 and $640 million • Electricity Segment - between $410 and $420 million • Product Segment - between $210 and $220 million • Adjusted EBITDA 2016 guidance: • Between $300 and $310 million 30 Copyright © 2016 Ormat Technologies, Inc.
Slide 31: Reconciliation of EBITDA, Adjusted EBITDA and Additional Cash Flows Information
Reconciliation of EBITDA Adjusted EBITDA and Additional Cash Flows Information • 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 fee