Cleantech Building Materials: Unaudited Interim Results to

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Cleantech Building Materials: Unaudited Interim Results to 30 June 2018

22 August 2018

CLEANTECH BUILDING MATERIALS PLC, NASDAQ FIRST NORTH, COPENHAGEN

TICKER: CBM

Cleantech Building Materials plc

Unaudited Interim Results to 30 June 2018

Cleantech Building Materials plc ("CBM" or the "Company" or the "Group"), presents its unaudited results for the six months ended 30 June 2018. The financial statements are appended to this announcement.

Business Overview

On 23 December 2016, the Company's shares were Admitted to trading on the Nasdaq First North market in Copenhagen and the acquisition of Diamond Wood was completed. With the successful completion of the admission to Nasdaq First North, Copenhagen, our attention has turned to delivering on Diamond Wood's objective of constructing an Accoya ® wood factory in China.

In March 2018 the Company also applied to the Wiener Börse for its ordinary shares to be included for trading on the Third Market of the Vienna exchange. The Directors believed that such a quotation, in addition to the Company's primary quotation on Nasdaq First North, would enhance the ability of investors, particularly those located in Central Europe, to deal in the Company's shares. The Wiener Börse accepted the Company's application and the Company's shares are now included in the Third Market in addition to being traded on Nasdaq First North, Copenhagen.

Financial Review of the Business

The CBM Group's revenues for the six months ended 30 June 2018 amounted to €385,000 (six months ended 30 June 2017: €294,000). The revenues were limited by the constrained supply of Accoya ® wood from Titan Wood Limited ("Titan Wood"), which is the Group's licensor and a wholly-owned subsidiary of Accsys Technologies plc ("Accsys"). Titan Wood is currently the sole worldwide producer of Accoya ® wood. There continues to be strong demand for Accoya ® wood from the Group's distributors. Accsys has announced that the first stage of Accsys' Arnhem factory expansion was completed in June 2018, and the Group is now expecting additional volume allocation from the newly increased production capacity, which is expected to be available during the fourth quarter of 2018 and into 2019.

The Group realised a net loss of €2,169,000 for the six months ended 30 June 2018 (six months ended 30 June 2017: €2,209,000). The net loss for the current period was mainly due to salaries and professional costs, and a lower than expected contribution margin from sales.

Since reaffirming its Accoya ® licence agreement with Titan Wood in 2014, the CBM Group has been investing to increase its marketing and sales activities, and has successfully appointed seven wholesalers and distributors of Accoya® wood in the China and ASEAN regions. The Group has entered into two new Offtake Distribution agreements during the first half of 2018 - with Seedatanarice of Thailand and Wise Group of Beijing, China. These agreements include escalating volume purchase commitments over a three-year period in exchange for market segment exclusivity, and build on a similar agreement entered into with Xinli Door Group in China back in November 2017. All of these Offtake Distribution agreements are extendable beyond 2020 conditional on sales performance. The Group foresees a growing order book from 2018 onwards; but in the short term remains reliant on Titan Wood's supply of Accoya ® wood until it has completed the construction of its own Accoya ® wood factory.

The CBM Group has been in the final phase of negotiations regarding financing and local support from a state-owned chemical company in China to begin construction of the Group's first Accoya ® wood factory during 2018. However, as has been widely reported in the news, the Chinese national government has been implementing new policies related to the environment, which has had a material impact on the land available in chemical industrial parks, and on the approval process for new chemical-related projects, like the Accoya ® wood factory. This has caused some delay in the initiation of the Group's manufacturing facility. However, the Group has taken advantage of this delay to enter into negotiations with a second strategic partner, a private chemical group listed on the Shanghai Stock Exchange. The Group's management is working to get the best possible terms for our shareholders, ensuring that our factory is built on time and budget with a highly reputable partner, while securing a stable supply of timber and chemicals at attractive rates.

Future Developments

Once the CBM Group is producing its own Accoya® wood, now expected to be during the final quarter of 2020 depending on the speed of new regulatory approvals, the CBM Board believes the financial performance of the Group will be radically transformed. In the meantime with Accsys' June 2018 announcement regarding increased production capacity at its Arnhem factory, we expect that this should enable the Group to bridge the gap between current demand and supply until the Group's own Accoya® wood facility is fully operational.

As at 30 June 2018, the CBM Group had cash and cash equivalents of €58,000 (30 June 2017: €1,000), € Nil (30 June 2017: €Nil) in interest bearing borrowings from independent third parties and net current liabilities of €1,377,000 (30 June 2017: €1,027,000). The Company increased its existing loan facility by a further €1.5 million during Feb 2018 to provide sufficient working capital to continue the expansion of its marketing and sales activities in China and the ASEAN markets, and to progress the financing and build plans for its own Accoya ® wood factory in China. The Group continues to closely manage its cash position to ensure that any costs of financing are mitigated as fully as possible.

The interim financial information for the six months ended 30 June 2018 was approved by the Board on 22 August 2018.

THE DIRECTORS OF CLEANTECH BUILDING MATERIALS PLC ACCEPT RESPONSIBILITY FOR THE CONTENTS OF THIS ANNOUNCEMENT

Further information may be found at the Company's website at www.cbm-plc.com

Further Enquiries:

Cleantech Building Materials plc Adrian Wyn-Griffiths info@cbm-plc.com +44 20 3053 8671    
Keswick Global AG (Certified Adviser) info@keswickglobal.com   +43 1 740 408045    
IFC Advisory Limited (Financial PR) Tim Metcalfe Miles Nolan Zach Cohen +44 20 3934 6630

The information communicated in this announcement is "inside information" for the purposes of article 7 of the Market Abuse Regulation 596/2014.

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