Slide 1: Fourth Quarter 2023 Presentation
FOURTH QUARTER 2023 PRESENTATION Kurt Levens, CEO Jack Yun, CFO 1 © REC Silicon ASA. All rights reserved. Confidential
Slide 2: Disclaimer
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 projections abo
Slide 3: Agenda
AGENDA › Highlights › The Business Opportunity › Activity Update › Operations › Financials › Summary 3 © REC Silicon ASA. All rights reserved. Confidential February 8, 2024
Slide 4: Highlights
HIGHLIGHTS › Q4 2023 revenues of $40.5M, up from $34.8M in Q3, driven by increased silicon gas sales and semiconductor product mix › EBITDA ($31.2M) impacted by Butte poly shutdown accruals and increased manufacturing cost at Moses Lake › Moses Lake startup process commenced, process on time for fir
Slide 5: The Business Opportunity
THE BUSINESS OPPORTUNITY 5 © REC Silicon ASA. All rights reserved. Confidential
Slide 6: A Silicon Material Company Providing Enabling Materials for the Green Energy Transition
A SILICON MATERIAL COMPANY PROVIDING ENABLING MATERIALS FOR THE GREEN ENERGY TRANSITION 6 © REC Silicon ASA. All rights reserved. Confidential
Slide 7: Exposure to Energy Transition Megatrends
EXPOSURE TO ENERGY TRANSITION MEGATRENDS Silane Gas ~30,000 tonnes capacity combined * Specialty gases Solar grade polysilicon Semiconductors Solar PV Battery Anode Material Digitalization Renewable energy Energy storage * From 2025 and onwards 7 © REC Silicon ASA. All rights reserved. Confidential
Slide 8: Silane-Based Industries Facing Disruptive Changes
SILANE-BASED INDUSTRIES FACING DISRUPTIVE CHANGES › China dominance › Investments moving from Asia to the US › Strong political and regulatory push › High-emission energy › Support from US legislative initiatives › Low-emission energy › Political risks › Supply chain geographical diversification › E
Slide 9: Strategic Product Mix Transformation / Optimizing Silane Gas Capacity
STRATEGIC PRODUCT MIX TRANSFORMATION/ OPTIMIZING SILANE GAS CAPACITY Moses Lake Butte Silane Gas Idle Capacity Idle Capacity Specialty Gases Nameplate Nameplate Specialty Silane Gas Silane Gases Capacity Ramp-Up Idle FBR Gas Capacity FBR Poly Shut-Down Capacity Ramp-Up Capacity Poly Portfolio Optimi
Slide 10: The Road to Sustainable Profitability
THE ROAD TO SUSTAINABLE PROFITABILITY 2023 Exposure Exposure 2025 -> › ~ 5,200 MT silane gas production › ~ 30,000 MT silane gas production › 2/3 of revenues in Asia › 2/3 of revenues in the US From exposure to To high exposure to volatile China US value chains with Additional growth markets and low
Slide 11: Activity Update
ACTIVITY UPDATE 11 © REC Silicon ASA. All rights reserved. Confidential
Slide 12: Accomplishments
ACCOMPLISHMENTS What we’ve said What we’ve done Status • Refinance $110M bond • Corporate debt financing $110M, April 2023 • $30M one-year bank loan facility, June 2023 • $100M three-year term loan agreement, July 2023 • Financing of Moses Lake restart and Butte investments • $40M term loan, Septemb
Slide 13: Moses Lake Restart Process
MOSES LAKE RESTART PROCESS Silane Unit (3.0) Lab construction Silane Unit (4.0) ready for start up completed ready for start up Product Handling system installation completed FBR offtake first prepayment Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 FBR Production FBR poly start first delivery Ful
Slide 14: Positioning for New Silane Gas Opportunities
POSITIONING FOR NEW SILANE GAS OPPORTUNITIES › Hanwha MoU for Silane Gas Offtake terminated › REC Silicon focusing on optimizing value creation - Direct with battery anode material producers - Through selected distributors › Moses Lake - Several initiatives ongoing - Silane-based anode material a co
Slide 15: Butte Restructuring
BUTTE RESTRUCTURING Capacity expansions EG Poly shutdown Average Electricity Price (Yearly MW) › Total investments of $13.8M › Increase EBITDA by $10-13MM per year › DCS expansion › Reduce exposure to unbalanced energy - 3X previous capacity market - Some production volume shipments expected in 2024
Slide 16: Operations
OPERATIONS 16 © REC Silicon ASA. All rights reserved. Confidential
Slide 17: Silicon Gases
SILICON GASES Silicon Gas Silicon Gas Sales Sales Volumes (MT) - 832 MT shipped in Q4 2023 - 10.4% volume increase vs. Q3 2023 - Silicon gas sales price 2.0% increase vs. Q3 2023 Semiconductor showing sign of improvement - Some gases seeing supply chain replenishment - Package cycle improving - Stil
Slide 18: Semiconductor Grade Polysilicon
SEMICONDUCTOR GRADE POLYSILICON Semiconductor Grade Polysilicon Sales Volumes (MT) Semiconductor Grade Polysilicon Sales - 145 MT shipped in Q4 2023 - Increase of 3.5% compared to Q3 2023 - Semiconductor grade polysilicon price – 35.6% increase vs Q3 2023 Production of Polysilicon - CZ polysilicon d
Slide 19: PV Polysilicon
PV POLYSILICON Solar shipments and installations strong in 2023 N-Type Polysilicon USD/KG - Total installations above 350GW - Total module shipments over 400GW 45 - Module inventory builds reported in US and Europe 40 35 30 Prices stabilizing 2H 2024 - China price drop slowing as approaching reporte
Slide 20: Financials
FINANCIALS 20 © REC Silicon ASA. All rights reserved. Confidential
Slide 21: Group Earnings
GROUP EARNINGS (Millions USD) Q4-23 Q4-22 2023 2022 Q3-23 Revenues $40.5M Semiconductor Materials $ 40.3 $ 31.5 $ 140.6 $ 147.4 $ 34.7 - Polysilicon Sales volume decrease by 8.9% vs. Q3-23 Solar Materials 0.1 0.1 0.4 0.2 0.1 - Silicon Gas Sales volume increase by 10.4% vs. Q3-23 Other 0.0 0.1 0.2 0.
Slide 22: Semiconductor Materials Segment
SEMICONDUCTOR MATERIALS SEGMENT Quarterly Revenue and EBITDA (USD Million) Revenues $40.3M - 16.3% increase in revenues vs. Q3-23 $40.3M $36.6M - Polysilicon Sales Volume – 8.9% decrease vs. Q3-23 $34.7M - Semiconductor Grade Polysilicon - increase by 3.5% $31.5M $29.0M - Polysilicon Sales Price – 3
Slide 23: Cash Flows
CASH FLOWS December 31, 2023 Cash Balance $170.9M Cash Flows (USD Million) $49.2M Increase in Cash During Q4-23 $250 Cash Flows From Operating Activities ($44.8M) $136.1 - ($31.2M) EBITDA $1.2 ($7.9) - ($7.9M) Working Capital $200 ($8.0) - ($9.1M) Increase in inventories $0.7 - ($6.7M) Increase in r
Slide 24: Financial Position
FINANCIAL POSITION Debt Maturity Profile (USD Million) Nominal Debt $354.1M $261.0 - $1.4M Increase during Q4-23 - ($1.1M) Repayment of Debt - $2.5M Changes in Lease Liabilities Term Loans - Completion of Yulin JV share sale, Gross proceeds of USD 136.1M $170.9 Lease Liabilities Property Tax Settlem
Slide 25: Summary
SUMMARY › Successful restart of Moses Lake initiated in November on track for first delivery in Q1 2024 › Successful close of Yulin JV interest › Silicon Gas market still at stable level with increasing replenishment in some markets › Continued optimization of Butte operations and portfolio addressi
Slide 26: Thank You
Thank You Q1 2024 Reporting May 9, 2024 www.recsilicon.com