28 March 2019

CLEANTECH BUILDING MATERIALS PLC, NASDAQ FIRST NORTH, COPENHAGEN

TICKER: CBM

Cleantech Building Materials plc

Annual Results to 31 December 2018

Cleantech Building Materials plc (“CBM” or the “Company” or the “Group”), presents its results for the twelve months ended 31 December 2018.  The audited financial statements are appended to this announcement.

Chairman’s Statement

2018 continued to be a year of progress but at a much slower pace than we had hoped.

During the course of 2018 Diamond Wood continued to invest in the development of its marketing and sales operations in China and the ASEAN countries, which resulted in several new offtake agreements being added to the growing list of manufacturers and wholesalers in the region committing to purchase significant volumes of Accoya® wood. These agreements and the ongoing business with our existing base of distribution partners attest to a strong and increasing demand for Accoya® wood.

The Group anticipated receiving a greater allocation of Accoya® wood in mid-2018 following public announcements by Accsys Technology (AIM: AXS), owner of Titan Wood, that it had added additional annual capacity of 20,000 m3 at its Arnhem factory in Europe. Unfortunately, the corresponding increase in Accoya® wood allocated to Diamond Wood has not yet materialised. Titan Wood is currently the sole producer of Accoya® wood in the world.

As a consequence of this shortage of Accoya® wood supply, Diamond Wood’s partners have been unable to tender large-volume projects, and our manufacturing customers have had to delay their market launch plans. This inability to serve the growing demand in the region has been a frustrating development for all concerned.

However, it is the Board’s view that there is sufficient demand in China and the ASEAN territories to warrant the construction of our own Accoya® wood factory. The Company’s subsidiary, Diamond Wood, purchased the exclusive license to sell and produce Accoya® wood in those regions from Accsys Technology (AIM: AXS) subsidiary Titan Wood.

The Company has been in detailed discussions regarding the financing and construction of an Accoya® wood factory with several potential Chinese partners. Those discussions and the corresponding due diligence processes have now advanced significantly, and it is our expectation that in the near term a comprehensive agreement will be reached to begin construction of the second Accoya® wood factory in the world. We are hoping to finally begin to realise the tremendous potential of supplying large volumes of Accoya® wood in China and the ASEAN markets.

In closing, I would like to take this opportunity to again express my sincere gratitude to my fellow Directors and staff for their hard work and commitment over the past year.

The Group reported a loss of €4,661,000 for the 12 months ended 31 December 2018, which reflects the fact that the Group has borne the cost of its infrastructure and staff.

I look forward to providing you with further updates at our next Annual General Meeting which is scheduled to be held at the end of May 2019.

Strategy and Objectives

The Group’s primary strategic objectives for 2019 are to:

1. secure the financing required to commence the construction of its own Accoya® Wood manufacturing facility in China during 2019 to facilitate the commercial production of its own Accoya® Wood.
2. secure a Build and Operate agreement with an experienced firm to ensure the Accoya® Wood manufacturing facility is constructed on time and on budget, and operated efficiently.
3. grow sales of Accoya® Wood both to new and existing distributors, and directly to wood product manufacturers.
4. build strong relationships with large-volume wood manufacturers through testing and trials in anticipation of Accoya® Wood being produced in the Group’s own factory.
5. develop its marketing and sales initiatives to further expand market channels and offtake agreements in the Chinese and ASEAN markets.

Financial Overview

The Group’s revenues for the 12 months ended 31 December 2018 remained steady at €703,000 (2017: €874,000) and consisted mainly of Accoya® Wood sales to Thailand, Vietnam, Singapore and Malaysia.

The Group realised a net loss of €4,661,000 for the year to 31 December 2018 (2017: €4,936,000).

Since reaffirming its Accoya® licence with Titan Wood Limited, a subsidiary of Accsys Technologies plc in 2014, the Group has successfully appointed a number of distributors of Accoya® Wood in the ASEAN region, including offtake agreements in China and Thailand. The demand from the Group’s distributors exceeded supply in 2018 due to product shortages from Titan Wood in Europe, a situation which is expected to continue through the first half of 2019.

During 2018 the Group advanced its discussions with several potential partners  to significantly grow its business and to construct and operate its own Accoya® Wood manufacturing facility. Once the Group is producing its own Accoya® Wood, the Board believes the financial performance of the Group will be radically transformed.

As at 31 December 2018, the Group had cash and cash equivalents of €8,000 (2017: €120,000) and net current liabilities of €1,531,000 (2017: €1,214,000).

Going Concern

The Directors have considered the future liquidity of the Group in light of the net loss of €4,661,000 (2017: loss of €4,936,000) during the current year and the net current liabilities as at 31 December 2018 of €1,531,000 (2017: €1,214,000) and the material uncertainty regarding the Group’s ability to raise funding and to execute the Group’s business plan.

The Directors have reviewed the Group’s cash flow projections prepared by management covering a year of twelve months from the date of the consolidated financial statements. Management’s projections make key assumptions with regard to (i) the anticipated cash flows from the Group’s operations and (ii) availability of future funding from the loan facility. Based on these cash flow projections, the Group will have sufficient financial resources in the coming twelve months from 1 January 2019 to 31 December 2019 to meet its financial obligations as and when they fall due. Accordingly, the directors consider that it is appropriate to prepare the consolidated financial statements on a going concern basis.

Future Developments

The Group continues to advance its discussions with potential partners to significantly grow its business and to construct and operate its own Accoya® Wood manufacturing facility. The Group expects to commence construction of its own Accoya® Wood manufacturing facility during 2019.

The Company’s next financial report will be unaudited accounts for the six months to 30 June 2019 which will be published on 29 August 2019.

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:

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

Attachment

• CBM - IFRS GROUP accounts to 311218