Rec Silicon Asa · OSL:RECSI
Rec Silicon Asa — Q2 2021 Earnings Presentation
27 slides from Rec Silicon Asa's earnings presentation, Jul 22, 2021
Slide 1: Second Quarter 2021
SECOND QUARTER 2020 SECOND QUARTER 2021 1 © REC Silicon ASA. All rights reserved. Confidential July 23, 2020
Slide 2: Disclaimer
SECOND 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
SECOND QUARTER Agenda 2021 Q2 Results Financial Review Silicon Gases & Semiconductor Update Yulin Update FBR Technology Update US Based Low-Carbon Solar Value Chain Battery Update Q&A 3 © REC Silicon ASA. All rights reserved. Confidential July 22, 2021
Slide 4: Second Quarter Highlights
SECOND QUARTER Second Quarter Highlights 2021 Revenues: $35.6M EBITDA: $ 7.9M June 30, 2021 cash balance of $123.6M - Cash decrease of $7.8M - Cash outflows from operating activities of $6.1M C.A.R.E.S. Act loans forgiven - $3.9M Solar Materials segment loan forgiven (Loan repaid on June 28, 2021) -
Slide 5: Financial Review
SECOND QUARTER 2021 Financial Review 5 © REC Silicon ASA. All rights reserved. Confidential July 22, 2021
Slide 6: Summary of Segments
SECOND QUARTER Summary of Segments 2021 (USD million) Q2 2021 Q1 2021 2020 Revenues EBITDA Revenues EBITDA Revenues EBITDA Semiconductor Materials 35.5 11.5 28.0 10.8 121.4 36.3 Solar Materials 0.0 1.2 0.1 (1.9) 0.5 6.7 Other 0.1 (4.8) 0.1 (4.9) 0.1 (19.3) REC Silicon Group 35.6 7.9 28.1 4.0 122.1 2
Slide 7: Key Financial Results – Semiconductor Materials
SECOND QUARTER Key Financial Results – Semiconductor Materials 2021 Revenues EBITDA Revenues: $35.5M (27.0% increase vs. Q1’21) $40 M › Total polysilicon sales volumes 466MT (105.5% increase vs. 227MT in Q1’21) $35.9 $35.5 - Semiconductor grade volumes 375MT (173.9% increase vs. 137MT in Q1’21) - 12
Slide 8: Key Financial Results – Solar Materials and Other
SECOND 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: $1.2M $10 M › $3.9M Government Grant $14.6 - Forgiveness of C.A.R.E.S. Act loan › Underlying Ex
Slide 9: Cash Flows
SECOND QUARTER Cash Flows 2021 $150 Cash outflows from operating $145 activities ($6.1M) › EBITDA of $7.9M $140 $7.9 - Less ($8.3M) Government Grant $3.2 (C.A.R.E.S. Act loan forgiveness) $135 › Working capital increase $3.2M $130 ($8.3) - Decrease in inventories $3.5M USD million $0.4 - Decrease in
Slide 10: Debt
SECOND QUARTER Debt 2021 Debt maturity profile USD Million Nominal debt - $211.4M Indemnity Loan › Decrease of ($8.9M) in Q2’21 Lease Liabilities - ($8.3M) Decrease in C.A.R.E.S. Act Loan USD Senior Secured Bond (Government Grant) - ($0.5M) Decrease in Lease Liabilities (IFRS 16) - ($0.1M) Decrease
Slide 11: Silicon Gases and Semiconductor Polysilicon
Silicon Gases and Semiconductor Polysilicon
Slide 12: Electronic Grade Polysilicon In line with expected demand
SECOND Electronic Grade Polysilicon QUARTER In line with expected demand 2021 REC Shipments - Semiconductor Polysilicon 400 350 › Q2 ‘21 shipments increased to 300 375MT - Semiconductor grade 210MT 250 - Inventory of Teardrop polysilicon Metric tons sold as semiconductor grade 200 quality 165MT 150
Slide 13: Demand for Silicon Gases Strong
SECOND Demand for Silicon Gases Strong QUARTER Some logistical problems 2021 REC Shipments - Silicon Gases 1,000 900 › Increased shipments in Q2 ‘21 - Q2 ‘21 819 MT 800 - Semi, FPD and PV remained at 700 high utilization - Backlog increasing due to 600 global logistics challenges Metric tons 500 › U
Slide 14: Yulin JV Update
SECOND QUARTER 2021 Yulin JV Update 14 © REC Silicon ASA. All rights reserved. Confidential July 22, 2021
Slide 15: Yulin JV, China
SECOND Yulin JV, China QUARTER FBR-B achieving its intended quality and cost structure 2021 Plant characteristics 2nd Quarter Production › Construction completed in 2018 › Q2 Production › Large scale silicon manufacturing facility with - 119 MT of Loaded Silane - 19,000 MT FBR-B granular Polysilicon
Slide 16: FBR Technology is Very Competitive
SECOND QUARTER 2021 FBR Technology is Very Competitive 16 © REC Silicon ASA. All rights reserved. Confidential July 22, 2021
Slide 17: FBR - Most Competitive Technology for Polysilicon
SECOND FBR - Most Competitive Technology for Polysilicon QUARTER REC has developed the FBR technology over the last 20 years 2021 N C o nt i nual P r o c e s s I m p r o ve m ent O › Silane-based FBR is I 2004 the only commercial 2009 T FBR-A Pilot Reactors granular technology 2010 A • Feasibility F
Slide 18: FBR Technology Significantly Outcompetes Siemens
SECOND QUARTER FBR Technology Significantly Outcompetes Siemens Low cash cost and low CO 2 footprint due to favorable power consumption, continuous process 2021 Siemens REC Silicon FBR Description Effect Description Effect Energy ~40% of total ~10% of total Consumption High cash cost Low cash cost Y
Slide 19: Polysilicon from Yulin FBR-B meets Mono Quality Requirements
SECOND QUARTER Polysilicon from Yulin FBR-B meets Mono Quality Requirements Semiconductor specification achieved when surface metals removed 2021 Yulin FBR-B Granular Product Total Metals June 2021 › Yulin FBR-B granular well within mono specifications as illustrated by sample collection - Samples f
Slide 20: US Based Low-Carbon Solar Value Chain
SECOND QUARTER 2021 US Based Low-Carbon Solar Value Chain 20 © REC Silicon ASA. All rights reserved. Confidential July 22, 2021
Slide 21: US Solar PV Installation Growth Continues
SECOND QUARTER US Solar PV Installation Growth Continues 2021 › Investment Tax Credit extended 3 years - Driving increased installation - More support for further extensions › Increasing governmental support for renewable energy › Biden Administration pushing for faster transition Source: Wood Macke
Slide 22: Idled Capacity at REC and other US Polysilicon Companies
SECOND Idled Capacity at REC and other US Polysilicon Companies QUARTER Ability to support 50% of US demand for solar installations 2021 Solar Value Chain Polysilicon Ingot growth / Solar cell Solar m odule Installations w afers US, 2% US, 13% US Capacity Others, ~2% ROW , 20% ROW , 23% China, Co. A
Slide 23: A Non-Chinese, Low CO2 PV Value Chain can be Established
SECOND QUARTER A Non-Chinese, Low CO2 PV Value Chain can be Established Requires investment in ingot & wafer capacity 2021 10-12GW Idled Ingot & Wafer Outside China Cell Outside China Module US PV Installations US poly production ~33GW ~72GW ~20-25GW EU, India, Taiwan, South Taiwan, 11.2 Korea, 1.1
Slide 24: US Political Initiatives
SECOND US Political Initiatives QUARTER Create US manufacturing jobs and support the renewable US agenda 2021 › US Senate and Congress Supporting Investments - Senate introduces bill to support advanced solar manufacturing production - Discussion around further extension of the solar investment tax
Slide 25: Battery Update
SECOND QUARTER 2021 Battery Update 25 © REC Silicon ASA. All rights reserved. Confidential July 22, 2021
Slide 26: Commercial Discussions with Silicon Anode Companies Continue
SECOND QUARTER Discussions with Silicon Anode Companies Continue 2021 › Ongoing discussions with several REC Silicon Next Generation Silicon Anode Manufacturing Moses Lake, WA interested silicon Moses Lake, WA anode companies SiH4 Silicon Anode Cell/ Battery › Framework for Materials manufacturing o
Slide 27: Q3 2021 Reporting October 20, 2021
SECOND QUARTER 2021 Q3 2021 Reporting October 20, 2021 27 © REC Silicon ASA. All rights reserved. Confidential July 22, 2021 recsilicon.com