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REC Silicon

Investor Presentation • May 6, 2015

3726_rns_2015-05-06_3bd707ba-ebaa-40c3-887f-5fd3039fa0e0.pdf

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Disclaimer

This Presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this Presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for REC Silicon ASA (including subsidiaries and affiliates) lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for REC Silicon ASA's businesses, energy prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time in the presentation. Although REC Silicon ASA believes that its expectations and the presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the presentation. REC Silicon ASA makes no representations or warranties, expressed or implied, as to the accuracy, reliability or completeness of the presentation, and neither REC Silicon ASA nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use.

This presentation was prepared for the First quarter 2015 results presentation on May 6, 2015. Information contained herein will not be updated. The following slides should be read and considered in connection with the information given orally during the presentation.

REC Silicon ASA shares have not been registered under the U.S. Securities Act of 1933, as amended (the "Act"), and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Act.

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REC Silicon ASA First Quarter 2015 Highlights

Revenues: \$74.4 M

EBITDA: \$24.8 M

Strong Polysilicon Production

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  • Inventory Build 2,818 MT
  • Solar Grade price decline 7.9%

Silicon Gas Sales

  • 736 MT Sales
  • Prices remained stable

U.S. West Coast Port slowdown

  • 9 Month slowdown impacted shipments
  • -Resolved late February

Expansion Initiatives On-track

Yulin JV – Investment decision approved

REC Silicon ASA Q1 2015 Key Metrics

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Semiconductor ProductionActual 324 MTGuidance* 380 MTDeviation -14.7%

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* Guidance presented February 13, 2015

Polysilicon Production

FBR Cost

Q1 2015 Prime ASPs Compared to Spot Indices

› REC Silicon average Solar Grade sales price dropped 7.9% in Q1

  • › Limited quantities warehoused in China due to U.S. West Coast port slowdown
  • › Polysilicon sales price in March prompted sales hold

FBR Prime vs. Spot Indices

  • › Sales in line with expectations 6MT over Guidance
  • ›Silicon gas prices remained stable
  • ›Competitive capacity back on line
  • › REC Silicon gas Q1 shipments impacted by U.S. West Coast port slowdown
  • -Will also impact Q2 volumes

Q1 2015 REC Silicon Built Finished Goods Inventory

  • ›Weak market conditions
  • ›Limited availability due to port slowdown
  • ›Increased demand moving forward

Market Outlook

  • › Detailed analysis performed by GTM Research for REC Silicon
  • › GTM estimate 54 GW in 2015
  • › China › Japan › Europe › U.S. 43 GW
  • › In line with other industry analyst long-term views

Global PV Demand Views

Source: GTM Research PV Pulse, April, 2015

Regional Solar Installation Forecasts

› Solar a component in offsetting generation loss from decommissioned older nuclear plants

7

China announced target of 17.8 GW

›

for 2015

Regional Solar Installation Forecasts Cont.

› Solar Investment Tax Credit (ITC) step down likely in 2017

› European Commission set target of 27% renewable energy consumption by 2030

Polysilicon Shipments and Productive Capacity Expectation

  • › Additional capacity to come on stream in 2015-2016
  • › Limited capacity addition in 2017-2018
  • ›Main capacity addition in China
  • › Market should be relatively balanced given predictive PV installation forecast
  • › Cash cost for marginal producer approximately \$25/KG

Productive Capacity

Source: Internal database, Financial reports, press releases, construction/production calculations

2015 Solar Grade Polysilicon Capacity vs. Cash Cost

Balanced Market Expected for 2015 - Stronger H2

›PV Installation growth in 2015

  • › Increased demand in H2
  • ›H1 26 GW
  • ›H2 31 GW

Silicon Supply and Solar Demand

Note: PV silicon demand based on 5 g/W.

Analyst PV Forecast 2015 (GW) I.H.S 57Photon 57GTM 54Deutsche Bank 54Energy Trend 51

IHS – PV Integrated Market Tracker - Q1 2015

16 © REC Silicon ASA. All rights reserved. Confidential May 6, 2015

U.S. China Trade

Current Trade Conditions between U.S. and China

SolarWorld Cases in U.S

  • › Dec 2014 Preliminary Determination: 17% Duty for Chinese produced modules
  • ›Final Determination expected mid-2015
  • › Dec 2014 Final Determination 77-90% for panels with cells produced outside in China

MOFCOM / China DOC

  • China› ~57% duty will apply to all Solar grade polysilicon imported from the U.S. beginning in September, if Process in Trade is closed
  • › Will affect REC Silicon, Hemlock Semiconductor, and Wacker's Tennessee production

Trade Resolution Efforts within the United States

  • › U.S. & China have bilateral discussions focused on environmental co-operation, prior to UNFCC in Paris (Nov/Dec 2015)
  • Re-opening Process in Trade raised by U.S. Cabinet Ministers with Vice Premier Wang
  • › U.S. polysilicon producers engaged with U.S. Government agencies regarding Process in Trade and global resolution of solar trade cases
  • › Substantial U.S. Congressional support to resolve trade issues

Senator's letter to the DOC and DOE

Trade Resolution Efforts in China

Initiatives toward MOFCOM

  • › JV partner, SOE Youser Group (#142 China Fortune 200) submitted formal request with MOFCOM to reopen Process in Trade for REC and initiate interim tariff review
  • › Shaanxi provincial government also supports Youser Group's request
  • › MOFCOM has accepted and will review Youser Group's formal request

Importance to Youser Group

› REC's continued partnership in the JV is critical to establish the JV as China's polysilicon technological and production leader

REC Granular Important to China

  • › Only non-integrated supplier of FBR granular to Chinese wafer producers
  • ›Granular provides competitive advantage
  • › Access to FBR material is important to develop optimized wafer production processes, until JV material available

"Therefore, we sincerely request that MOFCOM adjust related trade sanction measures to make the project's continued operation possible. Our specified requests are as below:

(1) MOFCOM should accept REC's request of review of AD/CVD tariffs …

(2) … we sincerely request that MOFCOM and the General Administration of Customs reopen Process in Trade for REC's granular polysilicon"

Youser Group's formal request to MOFCOM (English translation)

Financial Review

Revenues - \$74.4 M

  • › Decreased Polysilicon Revenues
  • 48% Sales volume decrease from Q4'14
  • 7.9% Solar Grade price decrease from Q4'14 (Excluding Fines & Powders)
  • › Silicon Gas Sales Volumes 736 MT
  • 13% Sales volume decrease from Q4'14
  • Stable Sales prices compared to Q4'14

EBITDA \$24.8 M

  • 35% Decrease From Q4 2014
  • Lower Prices
  • Lower Volumes

RevenuesEBITDA

* Excludes Special Items of USD 101 million Gain on Sale of Technology to the Yulin JV

Cash Outflows from Operations \$27.2 M

  • › Working capital increase \$48 M
  • Increased Inventories \$42.5 M
  • Increased Accounts Receivable \$1.6 M
  • Decreased Accounts Payable \$2.2 M

›Increased by \$36 M from Q4'14

Nominal Debt - \$201 M

› Reduced by \$8 M in Q1'15 due to stronger U.S. dollar

Yulin JV Update

Yulin JV – On track for start up in 2017

  • › Detailed engineering finalized, utilizing Fluor in Shanghai
  • › Formal investment decision approved April 24, 2015
  • › Long lead items have been ordered, for delivery mid 2016
  • › 57 Yulin JV employees will be on-site in Moses Lake and Butte for training beginning in September 2015

Yulin plant Site, March 2014

Optimized Capacities and Yulin Plant Layout

Yulin Plant Layout

Total Investment \$1.25 B

  • ›~86% Total Cost Sourced in China
  • ›~14% likely to be sourced outside China

Critical Equipment from qualified suppliers

  • › FBR
  • ›Fluid Bed Reactors
  • › Silane Unit
  • ›Hydrogenation reactors
  • ›Chlorosilane Recovery
  • › Siemens
  • ›Silane-based reactors
  • ›Other critical components

Master Schedule for Yulin JV

Key Investment Parameters (FBR and Siemens combined)

Total Investment: \$1.25 B

Investment Parameters :

  • ›CAPEX: \$65/kg
  • ›Cash Cost: ~\$9.0
  • › Production Development
  • -2017 ~ 7,300 MT
  • -2018 ~ 16,300 MT
  • -2019 ~ 19,300 MT

Construction - Manpower Projection

Q2 Guidance

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Q2 2015 Reporting July 17, 2015

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