ormat technologies, inc. · 2020. 4. 29. · indonesia - sarulla project, phase 1, (330 mw project)...
TRANSCRIPT
Green energy you can rely on
Copyright © 2016 Ormat Technologies, Inc.
Don A. Campbell Complex, Nevada, U.S.
May 2016
Ormat Technologies, Inc.
Copyright © 2016 Ormat Technologies, Inc.
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 statements generally relate to the company’s plans, objectives and expectations for future operations, and are based on
management’s current estimates and projections of future results or trends. Actual future results may differ materially from those projected as a result of
certain risks and uncertainties.
For a discussion of such risks and uncertainties, please see risk factors as described in the Annual Report on Form 10-K filed with the Securities and
Exchange Commission on February 26, 2016.
In addition, during this presentation, statements may be made that include a financial measure defined as non-GAAP financial measures by the
Securities and Exchange Commission, such as EBITDA and adjusted EBITDA. These measures may be different from non-GAAP financial measures
used by other companies. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial
information prepared and presented in accordance with GAAP.
Management of Ormat Technologies believes that EBITDA and adjusted EBITDA may provide meaningful supplemental information regarding liquidity
measurement that both management and investors benefit from referring to this non-GAAP financial measures in assessing Ormat Technologies’
liquidity, and when planning and forecasting future periods. This non-GAAP financial measures may also facilitate management’s internal comparison to
the company’s historical liquidity.
EBITDA and Adjusted EBITDA are not a measurement of financial performance or liquidity under accounting principles generally accepted in the United
States of America 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 accounting principles
generally accepted in the United States of America. EBITDA and Adjusted EBITDA are presented because we believe they are frequently used by
securities analysts, investors and other interested parties in the evaluation of a company’s ability to service and/or incur debt. However, other companies
in our industry may calculate EBITDA and Adjusted EBITDA differently than we do.
Copyright © 2016 Ormat Technologies, Inc. All Rights Reserved. This document contains information proprietary to Ormat Technologies, Inc.
Reproduction in any form without prior written permission is strictly prohibited
1
Copyright © 2016 Ormat Technologies, Inc.
Introduction
2
Market leader with proven track record in the geothermal sector
Our mission is to become a leading global renewable energy provider
Own &
Operate nearly
700MW
$million Revenue
in 2015
595Years of
experience
50
Employees
1,060
Copyright © 2016 Ormat Technologies, Inc.
Local
Utilities
The Only Vertically Integrated Geothermal Player
3
Development Engineering Construction OperationManufacturing
(1) Five years average (2011-2015)
Electricity Segment
66% of total revenues1
Copyright © 2016 Ormat Technologies, Inc.
The Only Vertically Integrated Geothermal Player
4
Products Segment
Local Utilities,
Developers
C&I
34% of total revenues1
Engineering ConstructionManufacturing
(1) Five years average (2011-2015)
Copyright © 2016 Ormat Technologies, Inc. 5
Why Geothermal
Renewable
• Supporting legislation
• Growing demand
Global growth potential
• Estimated 10X the
installed capacity
Competitive
• Firm & flexible
• Cost effective
High entry barriers
• Niche market
• Capital intensive
• Expertise
Copyright © 2016 Ormat Technologies, Inc.
Market Opportunities for Geothermal Growth
6
Industry estimate: potential is over 10x the global installed capacity of over 13GW
U.S. 3.6 GW
LATAM 1.6 GW
Europe 2.4 GW
Africa 0.6 GW Asia Pacific 3.9 GW
Oceana 1 GW
Source: Hydrothermal Geothermal Resources Potential, EMERGING ENERGY RESEARCH, LLC. Global “Geothermal Markets and Strategies: 2009–2020”, May 2009.
"Geothermal Power Generation in the World 2005–2010 Update Report" Ruggero Bertani Enel Green Power, via Dalmazia 15 – 00198 Roma (Italy) April 2010. 2015
Annual U.S. & Global Geothermal Power Production Report GEA Feb.2016.
Copyright © 2016 Ormat Technologies, Inc.
Geothermal Market
7
148
55
153208
Steam Binary
Ormat
Others16%
Ormat84%
Binary17%
Steam83%
Global Installed Capacity by
Technology Type(%)
2015 Actual Installed Capacity by
Technology Type (MW)
Liquid-
dominated
Steam-
dominated
Binary
Steam
Geothermal Combined Cycle
Copyright © 2016 Ormat Technologies, Inc.
0
20
40
60
80
100
120
140
0
500
1000
1500
2000
2500
3000
3500
Toshiba Mitsubishi Fuji Ormat Ansaldo/Tosi GE Alstom TAS
MW Operating Estimated Project Count
Low-mid temperature geothermal binary market is led by Ormat
Market Share - Products Segment
8
Major Geothermal Equipment Suppliers (MW & Project Count)
1GEA 2015 Annual U.S. & Global Geothermal Power Production Report & Ormat
MW# Projects
Copyright © 2016 Ormat Technologies, Inc.
Market Share - Electricity Segment
9
1Ormat study based on presented public disclosure;
Top 10 Geothermal owners & operators1 (MW)
0
5
10
15
20
25
30
35
40
45
0
200
400
600
800
1000
1200
EDC (PNOC) Chevron ENEL CFE Calpine Ormat Mighty RiverPower
ContactEnergy
Aboitiz Terra-Gen
Operation (MW) Estimated Project Count
MW
Most active global developer - with over 400 MW developed in the last decade
Copyright © 2016 Ormat Technologies, Inc.
Stable, well managed, cash generating assets
• Global operation of nearly 700 MW in 18 sites
• 92% geothermal; 8% REG
• Weighted average PPA life -15 years
$315 $330
$382 $376
$410-$420
2012 2013 2014 2015 2016E
Electricity Segment Overview
10
Annual Revenue ($million)
U.S. 515 MW Guatemala 43 MW Kenya 139 MW
Copyright © 2016 Ormat Technologies, Inc.
Reducing the Impact of Commodity Prices
84%
4%
12%
11
86%
5%9%
No Impact
Oil
Natural gas
Limited exposure currently; expect further significant reduction at the end of 2017
91%
3%6%
Portfolio (MW) as of 01/2016
Expected Portfolio (MW) as of 12/2017
2015 Revenues
Less than 10% from 2016 expected
Electricity segment revenue
Copyright © 2016 Ormat Technologies, Inc.
• Backlog of $214 million1
• Added value to our customers
• Customized design based on resource characteristics
• EPC expertise
$187$203
$177
$219$210-$220
2012 2013 2014 2015 2016E
Product Segment Overview
12
Built over 150 power plants and installed over 2,000 MW of Geothermal & REG
$197 million - 4 yr. Average
Revenue from 3rd Party Sales ($million)
1 The backlog is as of May 4, 2016. Includes revenues for the period
between March 31, 2016 and May 4, 2016
Geothermal Power plants
REG (Recovered Energy Generation)
Remote Power Units
Copyright © 2016 Ormat Technologies, Inc.
2000 2005 2015
Acquisition (MW) Organic Growth (MW)
Increasing Shareholders Value
13
M&A
Organic
Growth
Proactive growth initiatives to accelerate profitable growth
$238MRev.: $595M
M&A
Expansion to new activities
Organic Growth
Geographical & Technological expansion
Improve efficiencies
Fu
nd
ing
~$60M
Copyright © 2016 Ormat Technologies, Inc.
Improve Efficiencies
14
Development Engineering Construction OperationManufacturing
Reduce costs
Increase efficiencies
Copyright © 2016 Ormat Technologies, Inc.
The Numbers Tell It All
15
Total Adjusted EBITDA Margin
Reduction in equipment and
construction cost
Reducing the CapEx per MW
from $4.5M-$5M to $4M-$4.5M
26%30%
36% 37% 39%
2012 2013 2014 2015 LTM
Total Gross Margin
37%45%
49% 49% 49%
2012 2013 2014 2015 LTM
Copyright © 2016 Ormat Technologies, Inc.
Organic Growth - Market Growth Drivers
Energy Shortage Supportive Legislation
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Leadership
Copyright © 2016 Ormat Technologies, Inc.
• Expanding geographical footprint and diversifying technologies
• Added 29 MW in January 2016
• Expect to add between 160 and190 MW by YE 2018
• Extensive activities to support long term growth
Organic Growth and M&A
Business Development & Exploration
17
Construction & Development
1 Ormat’s share (12.75% in Sarulla ; 51% in Menangai 85% in Bouillante) ;
M&A
Guadeloupe
IndonesiaKenya
Chile
Guatemala
Honduras
U.S.
New Zealand
Ethiopia
Project Projected
Capacity
Expected
COD
Guadeloupe- Bouillante 7 MW1 H2 2016
Indonesia - Sarulla Project, Phase 1,
(330 MW project)
14 MW1 YE 2016
Guadeloupe- Bouillante 4 MW1 2017
Honduras, Platanares 35 MW 2017
U.S. - Tungsten 25 MW-35 MW 2017
U.S. - Dixie Meadows 25 MW-35 MW 2018
Kenya, Menangai (35 MW project) 18 MW1 2018
Indonesia - Sarulla Project, Phases
2 & 3 (330 MW project)
28 MW1 2018/2019
Copyright © 2016 Ormat Technologies, Inc.
Expansion to New Activities - Long-Term Growth
18
Growing global
demand driven by
legislation and/or
energy shortage
Leveraging our capabilities to exploit growth opportunities
Capabilities and
global presence to
provide reliable
integration solutions
What activities
Solar PV and /or
Storage solutions
Why Why Ormat
Copyright © 2016 Ormat Technologies, Inc.
How We Fund Growth
19
Strong balance sheet to support growth initiatives
*As of December 31, 2015
• Approx. $232 million available cash to fund growth
• Cash and cash equivalent
• Borrowing capacity under committed lines of credit
• Growing cash from our existing portfolio
• Access to capital
• Project debt financing
• Cash from equity transactions
• Potential tax equity transactions
• McGinness, Campbell, Dixie Meadows and Tungsten
• New potential equity partnerships
• Low leverage
Copyright © 2016 Ormat Technologies, Inc.
Portfolio Approach
Geographical & Technological Expansions
• Portfolio approach - diversification
• Geographies
• Technologies (Geothermal, REG, Solar, Storage)
• Additional risk mitigation aspects
• Host country guarantee
• Project finance (OPIC, ADB, DEG and AFDB)
• Political Risk Insurance (MIGA)
• Competitive pricing
• Low incentive for breach of contract
20
Copyright © 2016 Ormat Technologies, Inc.
90 108
315 330382 376
410-420
3044
187203
177 219
210-220
Q1 2015 Q1 2016 2012 2013 2014 2015 2016E
Electricity Products
$502$533
$620-
$640
$560
$120$152
$595
Strong Execution - Revenue ($million)
21
AnnualQuarterly
Copyright © 2016 Ormat Technologies, Inc.
Continued Improvements - Annual Gross Margin
25.7%
30.0%
36.4% 36.7%
2012 2013 2014 2015
24.6%
29.4%
35.5% 35.5%
2012 2013 2014 2015
Combined Electricity Segment Product Segment
27.6%30.9%
38.4% 38.8%
2012 2013 2014 2015
22
Copyright © 2016 Ormat Technologies, Inc.
Continued Improvements - Quarterly Gross Margin
23
Combined Electricity Segment Product Segment
36.6%
42.1%
Q1 2015 Q1 2016
38.2%41.0%
Q1 2015 Q1 2016
31.9%
45.0%
Q1 2015 Q1 2016
Copyright © 2016 Ormat Technologies, Inc.
Strong Execution - Adjusted EBITDA ($million)
By Segments
24
$65$80
$187
$241
$273
$291
$300-$310
Q1 2015 Q1 2016 2012 2013 2014 2015 2016E
AnnualQuarterly
78%
22%
Electricity Product
77%
23%
FY 2015
FY 2014
Copyright © 2016 Ormat Technologies, Inc.
Well Positioned to Support Growth - Organic & M&A
595 633 677 640 624
436445 324
280 276
2012 2013 2014 2015 Q1 2016
Project Finance Corporate Debt
25
56% 57%52%
39% 39%
2012 2013 2014 2015 Q1 2016
Total Debt ($ million) Net Debt ($ million)
$885$970
$868
$685 $688
2012 2013 2014 2015 Q1 2016
Net Debt to Capital
$1,078$1,031 $1,001
$920
4.7x4.0x
3.2x2.4x
2012 2013 2014 2015
Net Debt to Adjusted EBITDA (<3)
$900
Copyright © 2016 Ormat Technologies, Inc.
Investment Highlights
• Market leader
• Substantial and growing
cash flow from operation
• Potential for accelerated
growth from new activities
• Global regulatory support
26
Sustainable growth Efficient operation Well positioned to fund growth
• Strong balance sheet
• Access to various
sources of capital
• Efficient operation - new
management focus
• Improving margins
Green energy you can rely on
Copyright © 2016 Ormat Technologies, Inc.
Don A. Campbell Complex, Nevada, [email protected]
Thank you!
Copyright © 2016 Ormat Technologies, Inc.
Same Technology- Different Applications
Air-Cooled Binary Geothermal Power Plant Recovered Energy Generation (REG) System
28
Copyright © 2016 Ormat Technologies, Inc.
0
500
1000
1500
2000
2500
3000
3500
2015 2016 2017 2018 2019 2020 2021 2022
Latin America East Africa Asia Pacific Europe US
Geothermal in a Growing Global Market
Source : Ormat 2015, Accumulated estimated MW potential for organic growth
Ormat’s estimated geothermal potential for electricity and product segments
29
MW
Industry estimate: potential is over 10x the global installed capacity of 13GW
Copyright © 2016 Ormat Technologies, Inc.
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 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 cost, (vi) stock-based compensation, (vii) gain from
extinguishment of liability, and (viii) gain on sale of subsidiary and property, plant and equipment. EBITDA and Adjusted EBITDA are not a measurement of financial performance or liquidity under accounting principles generally accepted in
the United States of America 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 accounting principles generally accepted in the United States of America. EBITDA and Adjusted EBITDA are presented because we believe they are frequently used by securities analysts, investors
and other interested parties in the evaluation of a company’s ability to service and/or incur debt. However, other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do.
•
• The following tables reconcile net cash provided by (used in) operating activities and net income to EBITDA and Adjusted EBITDA for the three-month periods and years ended December 31, 2015 and 2014: the quarterly table is not correct –
there should be an M&A line and not share exchange, the M&A line is should be write off of exploration
30
Net cash provided by operating activities.................................................................................................................. $ 67,060 $ 34,465 $ 190,025 $ 213,235
Adjusted for:
Interest expense, net (excluding amortization
of deferred financing costs).................................................................................................................................... 16,231 17,604 63,802 76,970
Interest income................................................................................................................................................................ (191) (76) (297) (312)
Income tax provision ..................................................................................................................................................... 11,438 9,877 (15,258) 27,608
Adjustments to reconcile net income or loss to net cash
provided by operating activities (excluding
depreciation and amortization).................................................................................................................................... (16,169) (1,360) 40,530 (57,422)
EBITDA............................................................................................................................................................................ $ 78,369 $ 60,510 $ 278,802 $ 260,079
Mark to market on derivative instruments which represents swap contracts on natural gas and oil prices — (2,493) 4,129 (6,960)
Stock-based compensation 878 1,263 3,955 5,571
Gain on sale of a subsidiary and property, plant and equipment — — — (7,628)
Loss from extinguishment of liability — — 1,710 —
Merger and acquisition transaction costs — 1,000 3,800 1,000
Write-off of unsuccessful exploration activities 1,220 7,332 1,579 15,439
Mark to market on derivatives which represents currency forward contracts (1,385) 699 (2,720) 5,172
Adjusted EBITDA........................................................................................................................................................... $ 79,082 $ 68,311 $ 291,255 $ 272,673
Net cash provided by investing activities.................................................................................................................. $ (14,433) $ 6,273 $ (90,971) $ (129,162)
Net cash provided by (used in) financing activities.................................................................................................. $ (38,249) $ (42,959) $ 46,635 $ (101,197)
Three Months Ended December 31
2015 2014
(in thousands)
Year Ended December 31
2015 2014
(in thousands)
Copyright © 2016 Ormat Technologies, Inc.
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 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 cost, (vi) stock-based compensation, (vii) gain from extinguishment of liability, and (viii) gain on sale of subsidiary
and property, plant and equipment. EBITDA and Adjusted EBITDA are not a measurement of financial performance or liquidity under accounting principles generally accepted in the
United States of America 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 accounting principles generally accepted in the United States of America.
EBITDA and Adjusted EBITDA are presented because we believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of a
company’s ability to service and/or incur debt. However, other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do.
• The following tables reconcile net cash provided by (used in) operating activities and net income to EBITDA and Adjusted EBITDA for the three-month periods ended March 31,
2016 and 2015
31
Net cash provided by operating activities.................................................................................................................. $ 27,044 $ 83,147
Adjusted for:
Interest expense, net (excluding amortization
of deferred financing costs).................................................................................................................................... 14,127 15,972
Interest income................................................................................................................................................................ (320) (9)
Income tax provision ..................................................................................................................................................... 9,509 5,459
Adjustments to reconcile net income or loss to net cash
provided by operating activities (excluding
depreciation and amortization).................................................................................................................................... 30,082 (47,220)
EBITDA............................................................................................................................................................................ $ 80,442 $ 57,349
Mark to market on derivative instruments which represents swap contracts on natural gas and oil prices 174 4,129
Stock-based compensation 842 1,127
Merger and acquisition transaction costs 147 3,400
Write-off of unsuccessful exploration activities 557 174
Mark to market on derivatives which represents currency forward contracts (1,920) (860)
Adjusted EBITDA........................................................................................................................................................... $ 80,242 $ 65,319
Net cash provided by investing activities.................................................................................................................. $ (44,620) $ (47,257)
Net cash provided by (used in) financing activities.................................................................................................. $ (19,845) $ (5,396)
Three Months Ended March 31
2016 2015
(in thousands)