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REC Silicon

Investor Presentation • May 9, 2014

3726_rns_2014-05-09_7c02ffba-903b-4fa1-815b-fa45013520b7.pdf

Investor Presentation

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FIRST QUARTER 2014

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 projecti estimates projections about global economic conditions, the economic conditions of the regions and the economic the 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 directors, employees will have any liability to you or any other persons will resulting from your use.

This presentation was prepared for the first quarter 2014 results presentation on May 9, 2014. 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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Revenues: USD 113.4 million

EBITDA: USD 17.5 million

EBITDA f Sili S t USD 19 5 illi for Silicon Segment 19.5 million

Yulin Joint Venture in China

  • Planned 19,000 MT polysilicon capacity
  • Upfront payment of USD 99 million received in March

Increased average sales price

  • ~10% py p ol ysilicon price increase

Strong silicon gas sales

Volumes in line with Q4'13, but seasonally strong

Planned outage lowered production

  • Silane IV planned outage was extended due to unexpected repair
  • Identified and made permanent repair to component within the silane process

REC Silicon ASA Q1 2014 Key Metrics

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5© REC Silicon ASA. All rights reserved. Confidential May 8, 2014

Polysilicon Production and FBR Cash Cost

Q1 2014 Silicon Gas Sales: Continued Market Leadership

Silicon Gas Volume

778

783

  • › Volumes in line with Q4 '13 900 but seasonally strong
  • › PV, TFT, and Semiconductor d d dl i t 665 demand and low inventory driving volumes
  • › Gains can also be attributed to also to competitive capacity currently offline
  • › Sales volumes anticipated through Q3

600

500

)

700

800

2013 2014

P l ili Polysilicon Market Landscape

Polysilicon – Q2 Market Outlook

›PV

  • Market demand to remain inline with Q1
  • -Prices expected to hold steady in Q2

  • -Limited inventory in the value chain

  • › Semiconductor

  • Demand remains flat with little price elasticity
  • Potential end-market demand improvement will reduce inventory but may not lead to increased sales

Polysilicon Shipment and Price History

› Q1 shipments slightly below Q4, but remain the strongest Q1 on record

Tier 1 Shipment estimates FBR ASPs vs. PV Spot Indices

Note: REC FBR ASP's benchmarked against spot indices from BNEF, EnergyTrend & PV Insights.

Source: SEMI & REC Silicon internal model.

REC Estimates: Most Likely Capacity Expansion 2014 – 2016

Capacity Expansion 2014 – 2016

  • ›Market improvement
  • -Spurrin g plant re-starts p gp
  • -Expansion announcements
  • ›Most likely expansions
    • Some replacing older lines/plants 2014 Demand
  • Full capacity not realized until following year
  • › Polysilicon market balance will depend on PV demand

400 2345061623003502015 Demand2016 Demand406150200250K MT 260501000Active Capacity End-20132014 Projects 2015 Projects 2016 Projects Estimated Capacity End-2016

Note: Supply data via REC Silicon internal model. Yellow bars represent polysilicon projects likely to come online. Estimated portion of new capacity coming online on the 2nd half of each year: 2014–27K MTY; 2015–46K MTY; & 2016–23K MTY.

U S / China Trade U.S. Update

US/China Solar Trade Issues

  • › US imposed AD and CVD orders against Chinese solar panel companies exporting to the US in 2011/2012
  • › Chi th i d P li i AD (J l 2013) d CVD O d (S 2013) China then issue Preli minary uly 2013) an rders (Sep against US polysilicon producers
  • › Final Determination issued on January 20, 2014
  • -57% AD tariff and 0% CVD tariff imposed on REC REC
  • › REC is continuing to sell its solar grade polysilicon into China by working with customers to utilize available options under existing laws, including current "Process in TradeTrade," under China Customs laws Customs
  • › New US trade cases filed at the end of 2013 against China and Taiwan could potentially escalate US/China solar trade issues and preliminary tariff d t i ti th h d l d i J /J l 2014 eterminations on these are sceule in June/July 2014.
  • › Political and diplomatic negotiations between the US and China are underway to resolve but outcome and timing are uncertain

Financial Review

REC Silicon Group Financial Results – Total and Continuing Operations

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  • › REC Silicon & Other
  • The continuing operations

›Change Reporting Currency to USD

  • Ongoing operations almost exclusively USD Based
  • Comparable historic periods have been restated

REC Silicon & OtherKey Financial Results

Revenues - USD 113.4 million

  • › Increased polysilicon ASP
  • ~10% Price increase from Q4'13
  • › Continued strong silicon gas volume
  • High spot market sales due to offline 81.1 spot competitive capacity

EBITDA - USD 17.5 million

  • 40% decrease from Q4'13
  • Extended maintenance outage Silane IV
  • Increased polysilicon unit cost due to lower production volumes

* Q1'13 EBITDA Includes special items of USD 20 million associated with the cancelation of a sales contract

Q1 2014 Cash Flows

Operations - USD 35.1 million

  • ›Settlement of derivatives
  • › Working capital change due primarily to lower accounts receivable150

Joint Venture - USD 99.0 million 11

  • ›Received first upfront payment in March
  • › Not reflected in income until technology transfer complete 62 p

Debt Maturity Profile

Nominal Net Debt - USD 182 million

  • › Reduced by USD 131 million from Q4'13
  • Nominal Debt USD 377 millionDebt -
  • ›No change from Q4'13

Liquidity improvement

› Cash available for 2014 debt maturities

USD million

  • 2014 Convertible Bond
  • 2014 NOK Bond
  • 2016 NOK Bond
  • Indemnification Loan
  • 2018 NOK Bond
  • 2018 Convertible Bond

Yulin JV: Shaanxi Non-ferrous (SNF) & REC Sili Silicon

Strong JV Partner: Established SOE with Operational Experience and Financial Strength

  • › Youser (SNF Parent Company)
  • Major business: metals mining, refining, and alloy (Moly Ti Al coal etc ) (Moly, Ti, Al, coal, etc.)-
  • 2012 group revenue USD 14 billion, total assets USD 17 billion
  • Polysilicon subsidiary: 4,250 MT TCS Siemens plant in Xian
  • 30,000 employees
  • › Shaanxi NonEnergy Co., Ltd. (SNF)
  • Established to carry out polysilicon investment in Yulin, Shaanxi Province
  • Majority of SNF's Engineering team are from Tian Hong Silicon Materials in Xian
  • Considerable operational experience

Significant Step for REC in Reaching Critical Markets

  • › Anticipated total investment USD 1.4 billion ( g includin g cost of technology transfer)
  • › 35% Fixed Registered Capital
  • ›REC – USD 244 million
  • SNF USD 254 illi › –254 million
  • › REC to receive USD 198 million for Technology Transfer
  • › Next generation (FBR-B) technology to be used
  • › Technology to be used in China and Taiwan only

Early Technology Payment / Late Capital Contribution

Yulin JV - Q1 2014 Activities

  • › FEED (Front End Engineering and Design) activities
  • Dedicated REC team mobilized and co-located with Fluor in Aliso Viejo, California
  • -On target to meet August 2014 deadline
  • › SNF has begun the business license approval process
  • -On track to meet August 2014 deadline meet deadline
  • › FSR (Feasibility Study Report) submitted to approval authorities
  • -Joint effort between SNF and REC
  • Contains preliminary technical details

2014 Yulin JV Activities Moving Forward

Q2 Activities:

  • REC and Fluor continue FEED
  • SNF continues app p roval process toward business license
  • › Q3 Activities:
  • -Business License and establishment of Yulin JV company
    • C l ti f FEED i th U S P j t t t Xi Completion of in the U.S., Project to move to Xian
  • -Second \$99 Million Technology Payment
  • SNF and REC make first capital contributions
  • › Q4 Activities:
  • -Yulin JV begins detailed engineering activities in China

Sales JV to be Established Q2 2016

Q4 and 2014 Outlook

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* Change from 2014 guidance presented Feb 12, 2014

Thank you Welcome back July 18, 2014

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