Slide 1: Third Quarter 2021 Presentation
SECOND QUARTER 2020 THIRD QUARTER 2021 1 © REC Silicon ASA. All rights reserved. Confidential July 23, 2020 PRESENTATION
Slide 2: Disclaimer
THIRD QUARTER Disclaimer 2021 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
Slide 3: Agenda
THIRD QUARTER Agenda 2021 Q3 Results Financial Review Silicon Gases & Semiconductor Update US Solar Update Battery Update Yulin Update Short-term Business Plan Q&A 3 © REC Silicon ASA. All rights reserved. Confidential October 20, 2021
Slide 4: Third Quarter Highlights
THIRD QUARTER Third Quarter Highlights 2021 Revenues: $36.2M EBITDA: ($ 3.7M) Loss September 30, 2021 cash balance of $126.3M Settlement of indemnification loans - Cash increase of $2.7M - Agreement reached on October 18, 2021 - Cash inflows from operating activities of $3.8M - Settlement of all cla
Slide 5: Financial Review
Financial Review
Slide 6: Summary of Segments
THIRD QUARTER Summary of Segments 2021 (USD million) Q3 2021 Q2 2021 2020 Revenues EBITDA Revenues EBITDA Revenues EBITDA Semiconductor Materials 36.2 1.8 35.5 11.5 121.4 36.3 Solar Materials 0.0 (2.3) 0.0 1.2 0.5 6.7 Other 0.1 (3.3) 0.1 (4.8) 0.1 (19.3) REC Silicon Group 36.2 (3.7) 35.6 7.9 122.1 2
Slide 7: Key Financial Results – Semiconductor Materials
THIRD QUARTER Key Financial Results – Semiconductor Materials 2021 Revenues EBITDA Revenues: $36.2M (1.9% increase vs. Q2’21) $40 M › Total polysilicon sales volumes 397MT $36.2 (15.0% decrease vs. 466MT in Q2’21) $35.9 $35.5 - Semiconductor grade volumes 234MT (37.6% decrease vs. 375MT in Q2’21) $3
Slide 8: Key Financial Results – Solar Materials and Other
THIRD QUARTER Key Financial Results – Solar Materials and Other 2021 Revenues (Solar Mat'ls) EBITDA (Solar Mat'ls) EBITDA (Other & Eliminations) $20 M Solar Materials Revenues: $0.0M EBITDA Contribution: ($2.3M) Loss › Net Expense of $2.3M $10 M - Comparable to prior period results excluding items o
Slide 9: Cash Flows
THIRD QUARTER Cash Flows 2021 Cash inflows from operating $135 activities $3.8M › EBITDA Loss of ($3.7M) $2.1 › Working capital decrease $8.3M $130 $1.4 - Decrease in inventories $6.8M $8.3 ($2.2) ($0.3) - Decrease in receivables $1.8M ($0.2) ($2.1) - Decrease in payables ($0.2M) $125 ($0.5) › Custo
Slide 10: Debt
THIRD QUARTER Debt 2021 Debt maturity profile Nominal debt - $198.5M USD Million › Decrease of ($12.9M) in Q3’21 - ($ 0.3M) Decrease in Lease Liabilities (IFRS 16) USD Senior Secured Bond Note - Property Tax Settlement - ($12.5M) Decrease in indemnity loan Lease Liabilities - ($12.0M) due to Settlem
Slide 11: Semiconductor and Silicon Gases
THIRD QUARTER 2021 Semiconductor and Silicon Gases 11 © REC Silicon ASA. All rights reserved. Confidential October 20, 2021
Slide 12: Electronic Grade Polysilicon: Strong demand continues
THIRD Electronic Grade Polysilicon QUARTER Strong demand continues 2021 REC Shipments - Semiconductor Polysilicon 400 › Underlying Q3 ‘21 350 Semiconductor shipments increased to 234 MT 300 - Customer provided logistics caused some volume to move to Q4 250 Metric tons › Commitments for Q4 provide fo
Slide 13: Demand for Silicon Gases Strong: Global logistics shorts volume
THIRD Demand for Silicon Gases Strong QUARTER Global logistics shorts volume 2021 REC Shipments - Silicon Gases › Shipments dampened in Q3 ‘21 1,000 - Ship and container delays 900 create bottlenecks - Supply chain logistics costs 800 increasing for customers - Semiconductor remains at high 700 util
Slide 14: Investment for Growth - Now and into the Future
THIRD Investment for Growth - Now and into the Future QUARTER Maintain Global Leadership Position 2021 › Increase Silicon Gases distribution capacity - Support recently online and future awarded business across the globe - Provides cushion against logistics shocks and customer location transitions ›
Slide 15: US Solar Update
THIRD QUARTER 2021 US Solar Update 15 © REC Silicon ASA. All rights reserved. Confidential October 20, 2021
Slide 16: AD/CVD towards Imports from China in place since 2012
THIRD QUARTER AD/CVD towards Imports from China in place since 2012 2021 › Antidumping and Countervailing Duties against China and Taiwan crystalline silicon photovoltaic products went into effect in December 2012 - AD/CVD penalties range from 90% - 240% - The duties have been reviewed and continued
Slide 17: Section 201 Tariff on Solar Panels
THIRD Section 201 Tariff on Solar Panels QUARTER Applied to all countries 2021 › Trump Administration imposed tariffs against solar panels produced outside the US in 2018 - At end of 2020, Year 4 increased to 18% › Expires Feb 6, 2022. Currently US module companies are asking for an extension of the
Slide 18: Solar Panel Import to the US, by Country
THIRD Solar Panel Import to the US, by Country QUARTER Administration wants to increase production of solar panels in US 2021 › 2020 US PV Installations 19.2GW US Solar Modules Import 2020 Vietnam › 2020 US PV Module Capacity South Korea and Thailand 6.5GW - Cell Capacity <1GW Malaysia - Wafer Capac
Slide 19: US Political Initiatives
THIRD US Political Initiatives QUARTER Increased government support for renewable energy 2021 › US Senate and Congress Supporting Investments - Senate introduces bill to support advanced solar manufacturing production - House companion version has been introduced › The SMTC is part of the $3.5T budg
Slide 20: Polysilicon Prices Approaching $40/kg
THIRD Polysilicon Prices QUARTER Approaching $40/kg 2021 Average Price China Mono Grade Polysilicon 40 35 › Chinese polysilicon producers 30 25 have been asked to shut down 20 due to power shortage 15 10 5 0 › Subsidized power has been the basis for the Chinese poly and ingot production Source: PV I
Slide 21: Battery Update
THIRD QUARTER 2021 Battery Update 21 © REC Silicon ASA. All rights reserved. Confidential October 20, 2021
Slide 22: Electrical Vehicle will Dominate in the Future
THIRD Electrical Vehicle will Dominate in the Future QUARTER US Manufacturers/Government motivation to build a competitive EV Industry 2021 Battery production dominated by China › US Government has allocated $6B for battery development • 2020 77% China › Bipartisan Infrastructure bill • 2025 Forecas
Slide 23: Silicon Anodes may be next step in Increased Battery Efficiency
THIRD Silicon Anodes may be next step in Increased Battery Efficiency QUARTER Anodes containing silicon increases capacity by ~40% 2021 REC Silicon Next Generation Silicon Anode › Silane is the most efficient Moses Lake, WA Manufacturing Moses Lake, WA silicon source for advanced silicon anodes › RE
Slide 24: Yulin Update
THIRD QUARTER 2021 Yulin Update 24 © REC Silicon ASA. All rights reserved. Confidential October 20, 2021
Slide 25: Yulin JV, China
THIRD Yulin JV, China QUARTER FBR-B achieving its intended quality and cost structure 2021 Plant Characteristics 3rd Quarter Production › Construction completed in 2018 › Q3 Production › Large scale silicon manufacturing facility with - 102 MT of Loaded Silane - 19,000 MT FBR-B granular Polysilicon
Slide 26: Short-term Business Plan
THIRD QUARTER 2021 Short-term Business Plan 26 © REC Silicon ASA. All rights reserved. Confidential September 15-16, 2021
Slide 27: Maintain ability for possible Moses Lake startup in 2023
THIRD QUARTER Maintain ability for possible Moses Lake startup in 2023 2021 › Tight polysilicon market - High polysilicon prices - High energy prices - FBR would be very competitive in today’s market (low energy consumption) › Approached by several companies for polysilicon supply › Government suppo
Slide 28: Thank you.
THIRD QUARTER 2021 Thank you. 28 © REC Silicon ASA. All rights reserved. Confidential October 20, 2021