REC Silicon ASA

Good morning, and welcome to the REC Silicon Third Quarter 2025 Results Presentation. My name is Kurt Levens.

I'm the CEO; and with me is Jack Yun, our CFO. Today, we're going to give our usual highlights and updates as well as a financial review and then spend a few slides on our strategic direction as well as summarizing where we're at right now.

Our restructuring efforts continue, and we will have an approximate 10% reduction in force in Q4 of this year. Our Moses Lake optionality costs are starting to stabilize near a lower run rate level.

There are some incremental reductions that will continue, and we expect it to continue to lower quarter-over-quarter for the foreseeable future. There are still more opportunities in Butte for reduction in terms of our cost structure, and we are continuing to identify and actualize on those projects.

Our markets are mixed right now, aggressive China supply in some segments and delays across new end user capacity continue. We finalized additional loans from Hanwha International and continue discussions on further short- and long-term financing options.

Trade actions are still creating uncertainty as well as shifts in some of our silane gas markets. And in the quarter, the mandatory offer for shares was completed with Anchor AS assuming 60.2% ownership in REC Silicon.

We're still operating in the range that we had indicated last time, and we expect Q4 to be similar from a volume perspective to potentially marginally better. There is some pickup in our non-silane silicon gases, primarily driven by our DCS, MCS offerings and the markets that they serve.

PV outside of China continues to remain weak. PV cell production outside of China continues to remain weak.

And utilization is low and new projects are being pushed out. Our EBITDA was negative $7.2 million.

This is primarily driven by weak sales. In our Butte segment, our costs were mainly improved over the prior quarter as a result of the activities in the prior quarter being dominated by shutdown -- planned shutdown activities.

Increase in silicon gas price is attributable to product mix, more higher value products relative to previous quarter and as a percent of our mix. And as I said before, in additional to the planned maintenance items, our input costs were also stable to declining for our Butte facility.

Our cash balance at the end of the quarter was $10 million. Our cash flow increase was entirely driven by our borrowing proceeds.

I think the important thing to note here is the amount of debt maturing in '26. We have begun discussions with entities regarding this, and we'll have more information as we go forward.

Additionally, subsequent to the end of the quarter or since towards the end of the quarter, we secured a $7 million short-term loan with Anchor AS. So I think over the past year, we've had a large amount of challenges as a company.

And I think that I've tried to keep us focused on the here and the now. We've talked a lot about opportunities, but I think our reality needs to still remain in how do we get from where we are now to the future state in small interval increments.

Meaning what do we do this month? What do we do next month?

What do we do the next quarter, for us to be able to get to that other side. Our reality is that we're in a very challenging situation.

We have market softness, delays in key projects that we've been waiting on. We have aggressive competition, and we have policy turbulence.

None of these things are things that we can control. But what we can control is how we respond and the amount of time we take to respond to these changing situations.

We will continue to look for the correct way to respond to the changing situations while focusing on preserving our positions, increasing market share where we can and being there when these projects come into place and begin to operate. We've been working constantly towards a sustainable financial platform.

Here's the -- we've said it in a number of different disclosures and a number of different times. And I want to say it again.

We do not have sufficient cash to meet our debt service and other operating cash flow requirements for the coming year, even with the aggressive moves we've made in cost control and also increasing our focus on sales. We are going to continue to require additional financing beyond our existing facilities from Hanwha or from other sources of capital.

We continue to discuss additional financing with Hanwha as well as evaluating a more comprehensive restructuring of our $420 million of term loans that mature next year. So this is a very serious situation for us, and it's one that we are -- along with the previous slide where I show the actions that we're taking that we're very focused on.

As I mentioned in the overview, the completion of the mandatory offer was done and settled on 29 August 2025, with Anchor AS receiving a total shareholding of 60.2% in REC Silicon. During the quarter, the request for investigation process was dismissed by Norwegian District Court.

And in the U.S., REC Silicon is complying with the court process for the subpoena. I want to reiterate again that in the U.S., what we are doing is responding to a subpoena for information.

So in summary, we have markets that are affected by aggressive competition. We have trade policy uncertainties.

We have demand that's being pushed out and delays in some of our key growth drivers. We've been very focused on cost discipline as well as trying to restructure our organization to make decision-making and actions more streamlined.

In Q4, we think that we will once again be in somewhere in the same range as we have been here for the past few quarters, potentially slightly better. Our priority continues to look at how do we secure short- to midterm funding for our operations, how do we monetize noncore assets?

And how do we continue to look at additional financing as well as more comprehensive restructuring. Thank you.

And that concludes the presentation part of our results, and I'll take some questions.

Okay. Moving on to questions that are being submitted.

What noncore assets have been sold? And what future noncore assets are you looking to sell?

And is there an approximate value associated with this?

The noncore assets that we have sold are mainly minor property items that are no longer going to be needed for, or excessive inventory that are no longer going to be needed for operations, equipment, various other things. However, the majority of it is coming in our contemplated land disposal.

We're not -- currently, we're involved in private discussions, and we're not currently disclosing what the value may be of any contemplated transaction.

Are there any players that are currently delivering a commercial quantities of silane for silicon anode battery?

At this time, outside of China, there is nobody who's delivering commercial quantities. All of the capacity outside of China is still being delivered to either started up -- being in the process of being started up or being delivered in -- to the pilot plants.

Are you working with creating value from unused power access that you have in Moses Lake and Butte, as an example, by entering into an agreement with stakeholders with the silicon anode industry or data center industry?

I'll just make it -- without going into specifics, I'll make a general comment that we are looking to leverage, again, both our land as well as access to any rights we might have or capacities we may have for any of our -- whether that's power or natural gas rights, whatever it may be. If we have it, we are naturally open to discussions, particularly with companies that would potentially want to be an offtaker of any of our materials.

If data centers open near the Butte facility, how do you anticipate that will affect the electricity pricing in Butte?

If it's the Moses Lake facility, is that -- did I hear that correctly?

No, this question is stating there's -- data centers are considering building in the Butte area.

Yes. I would imagine that we can expect that there could be some pressure on electricity prices, but we don't know that.

What we have seen in general is that electricity prices in that particular region have been much more stable over the past year, particularly once we took off a large load. I think that, that our impression would be the market signal is such that it eased some of the pressure in the supply-demand picture there.

But it's a market. So I don't know.

I can only say that if there's going to be more consumers and there's no more production assets, then something is going to give at some point. But fortunately, I want to point out that on silane, electricity is a very small part of our cost stack.

Is there any plan to sell either Butte facility or the Moses Lake facility or enter into any kind of mergers or joint venture agreements?

At this time, we are not contemplating sale of any of our core operating assets or assets that we have set up in order to maintain optionality. As far as joint ventures or potential other agreements, there is nothing -- obviously, if we had something that we were in the middle of, we wouldn't necessarily disclose that until it is done.

All I will say is that we are obviously open to any ideas which have the potential to create value for all of our shareholders. But an idea and a discussion is one thing, actualizing is an entirely different thing.

Can you give an update on ongoing negotiations -- supply negotiations with battery anode manufacturers?

All I can say is that we continue to have discussions with battery manufacturers. Say that to date, I would characterize it as the fact that they have some delays on their ends regarding their own challenges in the market space or their technologies or whatever it may be.

So those are taking obviously longer. But outside of that, I'm not going to comment on specific negotiations with specific anode producers.

There's been a large parcel of land in Moses Lake that's been on the market for a number of months. Is this area likely to be sold before the end of the year?

A large parcel of land on the market for -- is this specific to REC Silicon or...

Well, it says you have a large parcel of land...

So as we stated, on the noncore assets that we're looking to dispose of is some land that we had procured for future expansion. And we are involved in discussions.

I think that when we have more information as to that coming to fruition, we will disclose that.

Have you heard or do you plan to sell the FBR reactors in Moses Lake?

At this time, we have no plan to sell the FBR reactors in Moses Lake. I will say that if and when there's ever opportunities to somehow monetize on that, something with that, then we would probably discuss it and then that would be another opportunity.

But nothing as of now.

Do you have any plans to hold future presentations in Oslo?

At this time, the next presentation that's contemplated is in February of 2026. And they have not made any decisions as to whether that will be in person or whether we will do it via the web.

And others -- there's one more question here. You answered concerning the FBR reactors themselves.

How about the patents related to the FBR reactors?

Yes. I think we have stated that if there's opportunities to monetize, then, of course, we are open to discussing.

That covers all the questions that have been submitted.

Okay. All right.

Well, thank you for your participation and questions, and we will see you next February.