Slide 1: Second Quarter 2020 Presentation
SECOND QUARTER 2020 SECOND QUARTER 2020 1 © REC Silicon ASA. All rights reserved. Confidential July 23, 2020 PRESENTATION
Slide 2: Disclaimer
SECOND QUARTER Disclaimer 2020 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 2020 Q2 Results Silicon Gases & Semiconductor Market Outlook Financial Review US/China Trade & US Manufacturing Update PV Market Outlook Yulin JV Update Battery Update Short-Term Business Plan Q&A 3 © REC Silicon ASA. All rights reserved. Confidential July 23, 2020
Slide 4: Highlights
SECOND QUARTER Highlights 2020 Revenues: $31.0M vs. $24.5M (Q1’20) EBITDA: $ 2.9M vs. $1.0M (Q1’20) June 30, 2020 cash balance of $31.6M - Cash increase of $1.3M - Cash outflows from operations $5.1M Silicon gas sales - Sales volume of 831MT Semiconductor segment polysilicon sales - Semiconductor gr
Slide 5: Key Metrics
SECOND QUARTER Key Metrics 2020 Polysilicon Sales Volume ** Total 385MT Inventory Decrease 151MT Total Polysilicon Production Semiconductor Production Silicon Gases Sales Vol. Actual 234MT Actual 136MT Actual 831MT Prior Quarter* 242MT Prior Quarter* 168MT Prior Quarter* 730MT Deviation -3.4% Deviat
Slide 6: Silicon Gases and Semiconductor
Silicon Gases and Semiconductor
Slide 7: Global Semiconductor Market
SECOND Global Semiconductor Market QUARTER Mixed signals and 2nd Half uncertain 2020 2020 Global IC Market Forecast › Recent revenue forecasts are $390.00 expected to grow 3% from 2019 to $380.00 2020 - Primarily ASP driven $370.00 - IC unit volume down 3% from 2019 $360.00 › Polysilicon and silicon
Slide 8: Silicon Gas Sales Rebound
SECOND QUARTER Silicon Gas Sales Rebound 2020 Silicon Gases 1,000 › Silicon gas sales volumes 800 - Q2’20 831MT Sales Volumes (MT) 600 › Silicon gas markets - Stable demand through Q3’20 860 857 - Chinese tariffs on silicon gases 400 834 831 730 reduced from 10% to 7.5% - Continued uncertainty due t
Slide 9: Electronic Grade Polysilicon Increase
SECOND QUARTER Electronic Grade Polysilicon Increase 2020 › Semiconductor grade polysilicon REC Shipments - Float Zone sales Polysilicon - 203MT in Q2’20 vs. 85MT in Q1’20 - (8.6%) Semiconductor grade average price decrease vs. Q1’20 › Expect higher sales volumes of semiconductor grade polysilicon i
Slide 10: Financial Review
SECOND QUARTER 2020 Financial Review 10 © REC Silicon ASA. All rights reserved. Confidential July 23, 2020
Slide 11: Summary of Segments
SECOND QUARTER Summary of Segments 2020 (USD million) Q2 2020 Q1 2020 2019 Revenues EBITDA Revenues EBITDA Revenues EBITDA Semiconductor Materials 30.7 9.4 24.5 8.0 126.7 37.8 Solar Materials 0.3 (2.3) 0.2 (2.8) 33.4 (26.6) Other 0.0 (4.1) 0.0 (4.1) 0.0 (24.1) Eliminations - - - - 0.0 0.0 REC Silico
Slide 12: Key Financial Results – Semiconductor Materials
SECOND QUARTER Key Financial Results – Semiconductor Materials 2020 Revenues EBITDA $40 M Revenues: $30.7M (25.5% increase vs. Q1’20) $34.8 › Polysilicon sales volumes 323MT $30 M $30.7 (267.9% increase vs. 88MT in Q1’20) $29.7 $30.0 - Semiconductor grade volumes 203MT (139.9% increase vs. 85MT in Q
Slide 13: Key Financial Results – Solar Materials and Other
SECOND QUARTER Key Financial Results – Solar Materials and Other 2020 Revenues EBITDA (Solar Materials) EBITDA (Other & Eliminations) $20 M Solar Materials Revenues: $0.3M $12.2 EBITDA Contribution: ($2.3M) Loss $10 M › Polysilicon sales volumes 62MT $6.6 - Sales of remaining inventories only $0.2 $
Slide 14: Cash Flows
SECOND QUARTER Cash Flows 2020 $40 Cash outflows from operating activities ($5.1M) $35 › EBITDA of $2.9M $2.9 › Working capital increase ($0.9M) $8.3 - Decrease in inventories $2.2M ($0.9) - Increase in trade receivables ($2.4M) $30 - Decrease in payables and accruals ($0.7M) USD million $0.7 › Inte
Slide 15: Debt
SECOND QUARTER Debt 2020 USD Million Nominal debt - $210.3M Indemnity Loan $113M › Increase of $34.4M in Q2’20 Lease Liabilities - $24.6M Increase in lease liabilities (IFRS 16) US Senior Secured Bond - $26.0M Increase due to lease modification C.A.R.E.S. Act Loan - ($1.4M) Repayment of lease liabil
Slide 16: US / China Trade and US Manufacturing Update
SECOND QUARTER 2020 US / China Trade and US Manufacturing Update 16 © REC Silicon ASA. All rights reserved. Confidential July 23, 2020
Slide 17: US/China Trade & US Manufacturing Update
SECOND QUARTER US/China Trade & US Manufacturing Update 2020 › China’s Phase 1 commitments intact - US Government recognition of strategic importance of US polysilicon - Impact is to open the China market for US polysilicon - US has enforcement options - COVID-19 causing delay and complication › Tru
Slide 18: PV Market Outlook
SECOND QUARTER 2020 PV Market Outlook 18 © REC Silicon ASA. All rights reserved. Confidential July 23, 2020
Slide 19: PV Market Set to Gain Outside China Manufacturing Support
SECOND QUARTER PV Market Set to Gain Outside China Manufacturing Support 2020 › The European Commission Green Hydrogen Agenda over the next decade calls for: - 340 Billion Euro in solar and wind investment - 120 GW of renewable capacity › Covid-19 has increased political awareness of China reliance
Slide 20: Strong PV demand expected in the next years
SECOND Strong PV demand expected in the next years QUARTER Spurred by Covid-19 stimulus 2020 › Global demand expected to rebound with solid growth - EU Covid-19 support plan - US to increase support for PV - China installation remain steady ~ 40GW per year - APAC and MEA increased PV installation ›
Slide 21: Polysilicon Market may already be in balance in 2021
SECOND QUARTER Polysilicon Market may already be in balance in 2021 2020 › Covid-19 stimulus packages prioritize 150 GW investments in renewable energy 123 GW › 2021 Medium demand ~150 GW - 532k MT Polysilicon - Restart of idle and cost competitive capacity (kMT) 2019 2021 › Chinese companies contin
Slide 22: Restart of REC Silicon's Moses Lake plant
SECOND Restart of REC Silicon’s Moses Lake plant QUARTER Dependent on the US/China Phase 1 Agreement and PV Market Outlook 2020 Restarted › 2021/22 Installations ~150 GW PV PV Added PV Total PV - Polysilicon ~532 kMT Company Production 2020 Production 2022 Capacity 2022 Capacity 2022 East Hope 30 10
Slide 23: Yulin JV Update
SECOND QUARTER 2020 Yulin JV Update 23 © REC Silicon ASA. All rights reserved. Confidential July 23, 2020
Slide 24: Yulin, China – REC Silicon Presence in Primary Market
SECOND QUARTER Yulin, China – REC Silicon Presence in Primary Market 2020 Plant characteristics Positioned to capitalize on growing PV industry › Construction completed in 2018 › FBR-B is semiconductor grade capable which is optimal for monocrystalline PV applications › Large scale silicon manufactu
Slide 25: Battery Update
SECOND QUARTER 2020 Battery Update 25 © REC Silicon ASA. All rights reserved. Confidential July 23, 2020
Slide 26: Strong Silane Interest from Anode Makers
SECOND QUARTER Strong Silane Interest from Anode Makers 2020 › Silicon anodes the next generation LIB technology expected to dominate battery market by 2025 Market Acceptance Score Card › Most silicon anode development companies 6 located in the US 4 - Most technologies mix silicon and carbon, some
Slide 27: Short Term Business Plan and Guidance
SECOND QUARTER 2020 Short Term Business Plan and Guidance 27 © REC Silicon ASA. All rights reserved. Confidential July 23, 2020
Slide 28: 2020 Business Plan for REC Silicon
SECOND QUARTER 2020 Business Plan for REC Silicon 2020 › Continue to operate stable and profitable Butte facility › Restart of the Moses Lake FBR plant postponed - Verify compliance by China with Phase 1 Trade Agreement commitments - Monitor PV market development - Moses Lake restart will require ad
Slide 29: Q3 2020 Reporting October 29, 2020
SECOND QUARTER 2020 Q3 2020 Reporting October 29, 2020 29 © REC Silicon ASA. All rights reserved. Confidential July 23, 2020 recsilicon.com