REC Silicon — Investor Presentation 2017

Oct 30, 2017

PRESENTATION

Disclaimer

THIRD QUARTER 2017

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's (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 third quarter 2017 results on October 30, 2017. 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.

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REC Silicon Q3 Financial Results	T. Torvund, CEO
Financial Overview	J.A. May II, CFO
PV Market Outlook	T. Torvund
U.S. / China Trade Dispute Update	T. Torvund
Yulin JV Update	T. Torvund
Guidance	T. Torvund
Q & A

Highlights 2017

Revenues:	\$75.5M
EBITDA:	\$ 3.6M

FBR Cash Cost of \$10.4/kg

• FBR Facility Continues Operation at ~50% Capacity Utilization
• Continued Low Cost Demonstrates Capability of FBR Technology

Strong Silicon Gas Sales Volumes

• Sales Volume of 904MT (12.0% Increase vs. Prior Quarter)
• 1.9% Silane Gas Price Decrease vs. Prior Quarter

September 30, 2017 Cash Balance of \$88.0M

• Cash Increase of \$16.6M vs. Prior Quarter
• \$13.7M Cash Flows From Operations (\$12.2M Working Capital)
• Expect to Remain Near Cash Neutral Through Q4 2017

Yulin JV Start-up Scheduled for Q4 2017

• Sequential Start-up Beginning in Q4 2017
• Full Production Rates in Q2 2018

Polysilicon Sales Volume **
Total	4,091MT
Inventory Decrease	1,280MT

FBR Production
Actual	2,254MT
Guidance*	2,290MT
Deviation	-1.6%

Total Polysilicon Production
Actual	2,835MT
Guidance*	3,070MT
Deviation	-7.6%

Semiconductor Production
Actual	164MT
Guidance*	230MT
Deviation	-28.7%

Silicon Gases Sales Vol.
Actual	904MT
Guidance*	840MT
Deviation	7.7%

** Guidance Presented July 20, 2017

** Excludes Fines and Powders

5 © REC Silicon ASA. All rights reserved. Confidential October 30, 2017

RECSiLICON
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›Silicon Gas Sales Volumes 904MT

• Increased 12.0% Compared to Q2'17
• Increased 17.1% Compared to Q3'16

›Q4 2017 Sales Volumes Expected to Increase to 920MT

Silicon Gases

Key Financial Results

Revenues - \$75.5M

• › 23.0% Increase vs. Q2'17
• › Polysilicon Sales Volumes 4,091MT (Excluding Fines & Powders)
• 38.2% Sales Volume Increase vs. Q2'17
• 0.2% Average Solar Grade Price Increase vs. Q2'17
• 4.7% Prime Grade Solar Price Increase vs. Q2'17
• › Silicon Gas Sales Volumes 904MT
• 12.0% Sales Volumes Increase vs. Q2'17
• 1.9% Silane Price Decrease vs. Q2'17

EBITDA of \$3.6M

• › Reflects:
• High Silicon Gas Sales Volumes
• Prime Solar Grade Price Increase
• FBR Cash Cost of \$10.4/kg
• \$1.0M Collection of Reserved Accounts Receivables
• (\$1.2M) Other Expense

Loss Before Interest and Tax of (\$82.2M)

• › Derecognition of Grant Receivable of \$89.7M
• AEMTC Related to FBR Construction
• Increase in Depreciation of \$65.7M
• Net Increase in PP&E of \$24.1M
• No Cash Impact

Cash Flows 2017

Cash Flows From Operating Activities \$13.7M

• › EBITDA of \$3.6M
• › Working Capital Decrease \$12.2M
• Decreased Inventories \$15.2M
• Increased Accounts Payable \$4.1M
• Increased Accounts Receivable (\$7.1M)
• › Interest payments (\$1.8M)
• › Other (\$0.3M)

Cash Outflows From Investing Activities (\$0.2M)

• › CapEx (\$0.3M)
• › Restricted Cash \$0.1M

Currency Gain of \$3.0M

Liquidity at September 30, 2017

Cash \$88M NOK Bond \$57M USD Convertible Bond \$110M Indemnity Loan \$25M Income Taxes \$30M JV Equity Contribution \$169M Sept 2017 May 2018 Sept 2018 2018? After 2018 To Be Determined USD Million Nominal Debt - \$192M › Increased by \$4M in Q3'17 - Due to Weaker USD Relative to NOK Nominal Net Debt - \$104M › Decreased by \$13M in Q3'17 - Increase in Cash of \$17M - Increase in Nominal Debt of \$4M due to Currency Exchange Rates Reassessment of Tax › Preparing Response to Draft Ruling › Potential \$30M Payable with Final Ruling › Uncertain Timing and Outcome Indemnity Loan (Included in Net Debt) › Callable Beginning in February 2016 › Has not Been Called › Due Date is Uncertain JV Equity Contribution › Negotiations Continue to Defer Remaining Contribution › Agreements Allow REC to Forego Remaining

Contribution if Unable to Pay

Cash Flow Trend 2017

Cash Balance

Positive Cash Flows From Operations

• › Cost Savings Initiatives Have Reduced Spending
• › Low FBR Cash Costs due to Stable Operations at ~50% Capacity Utilization
• › Increase in Silane Sales Volumes
• › Increase in Receivable Turnover Efficiency
• › Substantial Contribution from Inventory Decline

Debt Maturities

• › \$ 57.1M NOK Denominated Bond (REC03) Due in May 2018
• › \$110.0M USD Convertible Bond Due in Sept. 2018

Expect to Have the Ability to Repay REC03 With Cash on Hand

• › Estimates of Cash Flows From Operations Plus Excess Cash Sufficient to Meet Working Capital Requirements
• › Uncertainty Associated with the Indemnity Loan and Tax Examination

PV MARKET OUTLOOK

THIRD QUARTER

2017

• › Increase in Global Forecast 120
• › China Still Dominates Demand Followed by US and India
• › US Demand Uncertainty Pending Section 201 Trade Case Decision

GW

IHS Markit 2015-2021F Installation Forecast

Europe Middle East and Africa USA Rest of Americas China Japan India ROW

Polysilicon Spot Price 2017

• › Polysilicon Supply Remains Tight Inside China
• › REC Continues Discounts to Maintain Market Share Outside China
• › REC Expects Stable Prices During 4th Quarter

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

2016 2017

Copyright © 2017 PVinsights.com All rights reserved

Market Demand Exceeds FBR Production 2017

Note: Excludes Fines & Powder

U.S./ CHINA TRADE DISPUTE UPDATE

US / China Solar Trade Dispute Continues 2017

› Section 201

• Affects all Imported Cells & Modules into US, all Countries
• Petitioners Solarworld & Suniva, Request Tariffs & Quota
• Section 201 Timeline
• ITC Remedy Indicated on October 31, 2017
• Final Recommendation November 13, 2017
• Decision by President Trump by January 12, 2017

› AD/CVDs

• Existing Tariffs on Chinese & Taiwanese Cells And Modules, Since 2011
• AD/CVD On US Polysilicon Imports Since 2012

› Section 201 Creates Framework For Global Resolution

• US Government Supportive of Opportunity to Create Win for US Interests
• China Motivated to Resolve all Trade Barriers
• Solarworld Americas Remains a Pivotal Player

YULIN JV UPDATE

Yulin JV - Start-Up Status 2017

• › First Silane Unit and FBR Reactors Progressing for Start-up Q4 2017
• › Second Silane Unit and Remaining FBR Reactors Start-up in Q1 2018
• › Total Investment Within Budget of \$1.25 Billion
• › Negotiations Continue to Defer Remaining Contribution
• › Agreements Allow REC to Forego Remaining Contribution if Unable to Pay

FBR Production			FBR Cash Cost			Total Polysilicon Production
Q4	2,260MT		Q4	\$11.2/kg	Q4	2,610MT
2017	9,310MT		2017	\$10.8/kg	2017	11,630MT

	Semiconductor Production		Silicon Gas Sales		CapEx *
Q4	220MT	Q4	920MT		Maintenance	\$4M
2017	908MT	2017	3,452MT		Expansion	\$0M
					2017 Total	\$4M

** Additions to Property Plant and Equipment

Financial Options: 2018 Bonds and the Yulin JV Contribution

THIRD QUARTER 2017

Contribution

Loan

› Agreements Allow REC to Forego Remaining Contribution if Unable to Pay

Q4 2017 Reporting February 9, 2018

THIRD QUARTER

2017