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REC Silicon Investor Presentation 2014

Jul 18, 2014

3726_rns_2014-07-18_cc430cd9-eb5d-4b1d-8a35-05d6d410fa6d.pdf

Investor Presentation

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

This presentation was prepared for the second quarter 2014 results presentation on July 18, 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 126.9 million

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REC Silicon ASA Q2 2014 Key Metrics

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5© REC Silicon ASA. All rights reserved. Confidential July 17, 2014

Polysilicon Production and FBR Cost

Q2 2014 Silicon Gas Sales: Record Sales Volume

  • ›Volumes 5.6% over guidance
  • › Silane gas price increase 5% over Q1
  • › PV and Flat Panel Displays demand up slightly
  • › Offline competitive capacity has not fully returned

P l ili Polysilicon Market Landscape

Spot Indices vs. REC Prime Granular

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN
2013 2014

Productive Capacity Evolution: 2013 - 2016

  • › New capacity takes time to impact the market
  • › Limited greenfield projects, recent additions are debottleneck and incremental additions only ( l i ld it t it ) (replacing older capacity at sit e)
  • › More balance upstream as polysilicon supplied to the market is aligned with wafer/cell production forecasts

Note: Estimated incremental capacity is the realistic additional capacity able to supply the market at that given year. This takes into account a ramp factor and commissioning schedules. The balance from nameplate is carried over to Year 2 of operations.

External View on PV Demand 2014

  • › Estimates have narrowed to 42-50 GW (40-56 GW prior), but demand likely to end up in the lower range due to recent market developments
  • China now expects 2014 installations to come in at 10 GW compared to prior target of 14 GW Distributed Grid (Rooftop) PV from 8GW to 4 GW from
  • AD/CVD ruling in the US creates uncertainty in the US demand

Note: Based on available PV demand forecasts as of end-May 2014.

US/China Solar Trade Update

  • › REC is continuing to sell its solar grade polysilicon into China by working with customers to utilize available options under existing laws, namely the "Process in Trade, "under China Customs laws
  • › New US trade cases filed at the end of 2013 against China and Taiwan resulted in preliminary CVD duties against Chinese panel producers on June 2, 2014, py g reliminar y AD orders a gainst China & Taiwan are scheduled to be announced July 24, 2014
  • › We understand that the Chinese panel makers have lower costs workarounds to the new duties and are continuing to ship panels into the US, and continue to have access to the US panel market
  • › Political and diplomatic negotiations between the US and China are underway to resolve but outcome and timing are uncertain

Market Update

  • › Solar Grade Polysilicon
  • Installation for Q2 sequentially flat, but demand normally back-loaded every 2nd half
  • Average spot indices up approximately 4% from the previous quarter
  • Aft t i d i li i th i di h t bili d d \$21/k After a sustained increase earlier in the year, indices have stabilized around \$21/kg since March
  • Major market influences
    • Distributed Generation PV deployment in China
    • US AD/CVD decision
    • Upside in Japan due to more competitive system pricing and land integration resolution
  • › Semiconductor Polysilicon
  • In terms of unit shipment, market continues to be flat due to excess inventories
  • Prices remain stable and are not sensitive to short term changes in demand
  • › Silicon Gases
  • Demand continued to be robust due to strong PV and TFT markets

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

Yulin JV Update

›Business License approval process is on schedule for issuance by August

Q3 A ti iti Activities

  • ›Business License and establishment of Yulin JV company
  • ›Completion of FEED in the U.S., Project to move to China
  • ›Second \$99 Million Technology Payment
  • SNF d REC k fi t it l t ib ti› SNF andREC make first capital contributions

Financial Review

REC Silicon Group Financial Results – Total and Continuing Operations

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  • › REC Silicon & Other
  • The continuing operations

›EBITDA of USD 31.6 million

  • US Operations EBITDA USD 33.1 million
  • Parent Company Expenditures of USD 1.5 million

REC Silicon & OtherKey Financial Results

Revenues - USD 126.9 million

  • › Increased polysilicon revenues 123.4
  • ~4% Price increase from Q1'14
  • ~2% Volume increase from Q1'14 (Excluding Fines & Powders)
  • › Continued strong silicon gas volume
  • High spot market sales due to offline competitive capacity

EBITDA - USD 31.6 million

  • Higher Prices

18© REC Silicon ASA. All rights reserved. Confidential July 17, 2014

Cash Flows

Operations - USD 1.5 million

  • › Working capital change due to:
  • Increased accounts receivable

Repayment of Debt

EUR 81 2 illi ibl b d› 81.2 million convertible bond on June 4, 2014

Nominal Net Debt - USD 179 million

›Reduced by USD 134 million from

Nominal Debt - USD 261 million

  • › Reduced by USD 116 million during 82 2014
  • › Repayment of EUR 81 million convertible bond

Q4 and 2014 Outlook

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Q3 Reporting

N b 4 2014November 4, 2014

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