Ormat Technologies, Inc. · NYSE:ORA
Ormat Technologies — Q2 2016 Earnings Presentation
25 slides from Ormat Technologies's earnings presentation, Aug 3, 2016
Slide 1: Second Quarter 2016 Earnings Call
Ormat Technologies, Inc. Second Quarter 2016 Earnings Call August 3, 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 • Second Quarter 2016 prepared remarks • Q2 2016 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: Q2 2016 Highlights
Q2 2016 Highlights Quarterly Results Electricity Growth Backlog Growth +14% +69% +20% +11% $228M Revenues Net Income Adjusted EBITDA Generation Backlog Improved efficiencies Increase Guidance +6% $310-$320 Gross Margin 2016 Expected Adjusted EBITDA Q2 2016 compared to Q2 2015. Backlog is as of Augus
Slide 5: Financial Results
Financial Results Doron Blachar, CFO Green energy you can rely on 5 Copyright © 2016 Ormat Technologies, Inc.
Slide 6: Total Revenues
Total Revenues Total Revenues Total Cost of Revenues Segment Contribution +19.4 million (13.8%) +4.4 million (4.9%) 159.9 140.5 $94.1 35% 35% $89.7 65% 65% Q2 2015 Q2 2016 Q2 2015 Q2 2016 Q2 2015 Q2 2016 Electricity Segment Product Segment All amounts in million USD 6 Copyright © 2016 Ormat Technolo
Slide 7: Electricity Segment
Electricity Segment Revenues Cost of Revenues +$13.1 million (14.4%) -$0.3 million (0.4%) $104.0 $90.9 $62.5 $62.2 Q2 2015 Q2 2016 Q2 2015 Q2 2016 • Commencement of the second phase of Don A. • Slight decrease was primarily due to a reduction in Campbell and plant 4 in Olkaria III the cost of revenu
Slide 8: Product Segment
Product Segment Revenues Cost of Revenues +$6.3 million (12.7%) +$4.6 million (17.1%) $55.9 $49.6 $31.8 $27.2 Q2 2015 Q2 2016 Q2 2015 Q2 2016 All amounts in million USD 8 Copyright © 2016 Ormat Technologies, Inc.
Slide 9: Gross Margin
Gross Margin Combined Electricity Segment Product Segment 45.2% 43.0% 41.2% 40.2% 36.1% 31.2% Q2 2015 Q2 2016 Q2 2015 Q2 2016 Q2 2015 Q2 2016 9 Copyright © 2016 Ormat Technologies, Inc.
Slide 10: Operating Income
Operating Income Total Electricity Segment Product Segment +$13.3 million (34.3%) +$11.9 million (56.9%) +$1.4 million (7.6%) $51.9 $38.6 $32.8 $20.9 $17.7 $19.1 Q2 2015 Q2 2016 Q2 2015 Q2 2016 Q2 2015 Q2 2016 All amounts in million USD 10 Copyright © 2016 Ormat Technologies, Inc.
Slide 11: 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)1 Company's Stockholders +$9.9 million (68.9%) $24.3 $0.49 $14.4 $0.28 Q2 2015 Q2 2016 Q2 2015 Q2 2016 All amounts in million USD; 1. Weighted average number of shares used in compu
Slide 12: Adjusted EBITDA
Adjusted EBITDA Total Electricity Segment Product Segment +$13.4 million (19.7%) +$12.2 million (25.0%) +$1.2 million (6.4%) 81.2 67.8 60.8 48.7 19.2 20.4 Q2 2015 Q2 2016 Q2 2015 Q2 2016 Q2 2015 Q2 2016 Q2-15 Q2-16 Q2-15 Q2-16 Q2-15 Q2-16 D&A 24.4 23.8 D&A 23.5 23.0 D&A 0.9 0.8 All amounts in millio
Slide 13: Cash, Cash Equivalents, Marketable Securities and Short-Term Bank Deposit
Cash, Cash Equivalents, Marketable Securities and Short-Term Bank Deposit 119.6 67.8 31.4 19.0 11.5 12.2 6.0 $192.6 $185.9 $0.0 $0.0 $0.0 December 31, 2015 Other Net change in Cash from Capital Debt Repayment Cash dividend Cash paid to non- June 30, 2016 restricted cash and operating activities expe
Slide 14: Payment of Principal Due by Period
Payment of Principal Due by Period The average interest rate for the total debt is 6.1% Q3-2016 Q4-2016 Year 2016 Long-term non-recourse debt & limited recourse debt 5,374 5,374 10,748 Senior Secured Notes (non-recourse) due 2020 2,326 12,581 14,907 Long-term loans (full recourse) 1,666 3,948 5,614
Slide 15: Operations & Business Updates
Operations & Business Updates Isaac Angel, CEO Green energy you can rely on 15 Copyright © 2016 Ormat Technologies, Inc.
Slide 16: Progressing with Our Strategic Plan
Progressing with Our Strategic Plan Expansion to new activities Funding M&A Organic Growth Geographical & Technological expansion Improve efficiencies 16 Copyright © 2016 Ormat Technologies, Inc.
Slide 17: Improve Efficiencies
Improve Efficiencies • Value chain improvements • Reduce manufacturing lead-time • Automation • Improve management control • Improve procurement process • Reduce operating costs • Shared control center • Improve management control Total Gross Margin Total Adjusted EBITDA Margin 48.7% 49.0% 51.1% 40.
Slide 18: Organic Growth
Organic Growth • Generation increased by 10.8% QoQ due to commencement of commercial operation of: • The second phase of Don A. Campbell power plant in Nevada in September 2015 • Plant 4 at the Olkaria III complex in Kenya in January 2016 • Increase in generation at McGinness Hills complex due to hi
Slide 19: Organic Growth and M&A
Organic Growth and M&A • Closed the acquisition of geothermal power plant in Guadeloupe • Ormat together with Caisse des Dépôts et © Géothermie Bouillante Consignations(CDC) acquired approximately 80% interest in GB in the proportion of 75% to Ormat and 25% to CDC • Expect to optimize the existing f
Slide 20: Organic Growth and M&A
Organic Growth and M&A • Expanding geographical footprint and diversifying technologies • Added 10 MW in July 2016 - Bouillante, Guadeloupe • Added 29 MW in January 2016 - Olkaria III, Plant 4, Kenya • Expect to add between 150 MW and 180 MW by YE 2018 • Extensive activities to support long term gro
Slide 21: CapEx for the Remainder of 2016
CapEx for the Remainder of 2016 CapEx ($ millions) 94 Construction & enhancements 13 Development 12 Exploration 6 New activity 8 Maintenance CapEx 2 Production facility $135 Total CapEx $31 Debt repayment $166 Total 21 Copyright © 2016 Ormat Technologies, Inc.
Slide 22: Product Segment
Product Segment • May 2016 - signed $36 million supply and EPC contracts for a geothermal power plant in New Zealand • Backlog increase to approximately $228 million as of August 2, 2016 • Includes revenues for the period between July 1 and August 2, 2016 22 Copyright © 2016 Ormat Technologies, Inc.
Slide 23: 2016 Guidance
2016 Guidance • We are reiterating our 2016 full-year revenue 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 • We are increasing our adjusted EBITDA guidance: • Adjusted EB
Slide 24: 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
Slide 25: Reconciliation of EBITDA Adjusted EBITDA
Reconciliation of EBITDA Adjusted EBITDA Three Months Ended June 30 Six Months Ended June 30 2016 2015 2016 2015 (in thousands) (in thousands) Net income ..................................................................................................................................................