Avantium N.V. (Euronext Amsterdam and Brussels: AVTX) (“Avantium” or “the Company”), a leading chemical technology company and forerunner in renewable chemistry, today reports its half year 2017 results.

Key indicators first half year 2017:
•Consolidated revenues for the first half year increased 37% to € 5.8 million (H1 2016: € 4.2 million). Catalysis business performed well above expectations, particularly due to strong sales of its Flowrence™ systems.
•€ 109 million gross proceeds raised with successful listing on Euronext Amsterdam and Brussels. Avantium is included in the Small Cap Index Euronext (AScX) since 19 June 2017.
•€ 25 million subsidy granted to Synvina, Avantium’s Joint Venture with BASF in renewable plastics; European PET Bottle Platform has given interim approval for the recyclability of PEF.
•In its Renewable Chemistries business, Avantium initiated construction of second generation sugar Pilot Plant in Delfzijl and secured new subsidies for electrochemistry development program amounting to € 2.4 million for Avantium. Next step in Zambezi process announced after the period under review: contract signed with AkzoNobel for pilot biorefinery.
•Outlook: focus will remain on delivering the strategic plans.

Tom van Aken, Chief Executive Officer of Avantium: “The first half year of 2017 has been of great importance to our company. On 15 March 2017, we completed the successful listing of Avantium on Euronext Amsterdam and Brussels raising gross proceeds of €109 million. This capital raise will support us in realizing our ambitious growth plans and capturing the increasing demand for renewable chemicals and materials.
Avantium was also included in the AScX index of Euronext. The AScX index comprises of the top 25 small cap funds that trade on the Euronext Amsterdam exchange. This index further raises Avantium?s profile among the investor community, improves liquidity and enhances visibility on financial markets.
Synvina, our joint venture with BASF, announced that a Horizon 2020 Bio Based Industries flagship subsidy of € 25 million was granted to the Industry Consortium “PEFerence”. The consortium, consisting of eleven companies, will jointly work on establishing an innovative supply chain for FDCA and PEF, including the intended construction of a 50,000 tons reference plant in Antwerp.
In the period under review, we recorded strong revenue growth of 33% in our Catalysis business, mainly driven by the successful launch of a new Flowrence™ system. Overall we have made important progress throughout the company as evidenced by reaching milestones in Renewable Chemistries and our Catalysis business.

Furthermore, we entered the Global Cleantech Hall of Fame after our 7th consecutive year in the Global Cleantech 100. The Global Cleantech 100 represents the most innovative and promising companies impacting the future of a wide-range of industries. The addition to the Hall of Fame is recognition that Avantium is well-positioned to solve tomorrow?s clean technology challenges.
Our CTO Gert-Jan Gruter was nominated for the European Inventor Award 2017 as one of three finalists in the category “Small and Medium-sized Enterprises”. EPO President Benoît Battistelli, announcing the European Inventor Award 2017 finalists stated of Gert-Jan: “His invention is a major step forward in reducing the environmental impact from plastics, and it demonstrates that we can overcome some of our biggest challenges through innovation.”
The appointment of Zanna McFerson as Chief Business Development Officer has further strengthened our management team and commercial leadership of our renewable chemistry business. She brings a wealth of experience and a strong deal track record structuring, negotiating and managing strategic partnerships for transformative products and the renewables industry.
In July, just after the period under review, we signed a contract with AkzoNobel for a pilot biorefinery at Chemie Park Delfzijl. We have closed an agreement for the pilot plant accommodation and the supply of various facilities and services, with which we take another step in our Zambezi process. We are well on track to deliver on our strategic goals for the future.”
Operational developments
Catalysis
Avantium?s Catalysis business specializes in groundbreaking innovations and technologies for catalytic R&D services and systems. The business supports companies in reaching their sustainability, profitability and growth targets by providing unique technology and catalysis research expertise. Avantium?s customers benefit from the strong synergy between its Catalysis and Renewable Chemistries businesses, whereby they get access to R&D technologies developed in-house. Similarly, Avantium?s Renewable Chemistries business benefits from the enabling technologies developed to meet market demand.
Avantium recorded strong revenue growth of 33% in its Catalysis business in the first half of 2017 compared to the same period in 2016, which was well above expectations. This resulted from strong performance in systems sales, in particular the sales of our Flowrence™ systems to companies and academic institutions around the globe. Growth was driven by the successful launch of the new Flowrence™ XD system and the entry into new geographies with favorable order intake in the first half of 2017. This achievement is a direct result of strong execution of the Catalysis strategy and is foreseen to result in 10%-20% revenue growth for the full year 2017.

Renewable Chemistries
The Renewable Chemistries business unit continues its focus on the conversion of biomass to chemical building blocks and plastic materials. Significant progress has been made in the three lead programs:

Zambezi Program
Pilot plant construction has been initiated to demonstrate the conversion of 2G feedstock (woody biomass) to glucose, lignin and mixed sugars, under industrial settings. This pilot plant will be located at the Chemie Park Delfzijl in the North of the Netherlands. After the period under review, in July 2017, Avantium signed a contract with AkzoNobel for the supply of various utilities and services. The plant is expected to be operational mid-2018 and will lead to the employment of approximately 20 people. Pivotal to the advancement of the technology, we have formed a partnership with AkzoNobel, RWE, Chemport Europe and Staatsbosbeheer to demonstrate the integrated value and business case for further scale-up and construction of a reference plant. These steps are proof points in executing Avantium?s business strategy in renewable chemistry. After the successful development of the YXY technology for the production of biobased FDCA and the new plastic material PEF, followed by the formation of the Joint Venture with BASF, under the name Synvina, the Zambezi program is Avantium?s next technology to be scaled-up at pilot-plant scale to demonstrate the technology and as part of the commercialization strategy of Avantium.
Mekong Program
In order to meet the growing demand for biobased mono ethylene glycol (MEG), we have developed a direct, catalytic process for manufacturing MEG from plant based sugars. This proprietary process technology is protected by a range of patents and patent applications. Process data demonstrating commercial scale feasibility has been generated and we expect to reach a final decision on the construction of a dedicated pilot plant in the second half of 2017.
Volta Program
In January, we announced the completion of the acquisition of the assets and patent portfolio of Liquid Light Inc. The combined technologies of Liquid Light and Avantium shall lead to the development of an electro-catalysis platform that will commercialize new process technologies using CO2 as feedstock. The successful grant of two subsidy programs to Avantium supports the expansion of talent to the existing electrochemistry team. The two granted subsidies total € 13.4 million for the consortium of participating companies and institutions, of which Avantium will receive a total subsidy of € 2.4 million. The Volta electrochemistry team now resides in the high-tech lab space at the Amsterdam Science Park leased for this exciting effort.
Synvina
Synvina, the joint venture of BASF and Avantium, aims to become the market leader in the production and marketing of FDCA and PEF. FDCA is a biobased chemical building block for various products, most significantly the polyester PEF, which is suitable for use in the packaging industry, in applications such as bottles and films.
At the time Avantium transferred the YXY technology to Synvina, it also contributed a European subsidy application to Synvina. This application entailed a € 25 million Horizon 2020 Bio Based Industries flagship subsidy to establish a first-of-its-kind, commercial scale, cost-effective FDCA reference plant with a consortium of eleven partners. On 8 June 2017, Synvina announced that the entire subsidy of € 25 million was granted to the consortium, consisting of reputable industrial companies and iconic brand owners covering the PEF value chain, including Synvina, Avantium, and BASF. This announcement was followed by the European PET Bottle Platform granting interim approval for the recyclability of PEF in the European PET bottle recycling market. This represents a major step towards the integration of PEF in the circular economy.
Pre-engineering studies of the intended FDCA reference plant have been initiated and discussions between Synvina and potential customers are progressing.

Financial results
Consolidated statement of comprehensive income and segment reporting
Consolidated first half year revenues from continued operations increased 37% from € 4.2 million in 2016 to € 5.8 million in 2017, driven by increased sales in Avantium?s Catalysis systems business.
In the first half of 2017 operating expenses increased to € 11.3 million (H1 2016: € 5.7 million). This is the result of i) increased development costs in Renewable Chemistries for external trials in our Mekong and Volta programs and engineering and dedicated equipment costs for our Zambezi program, ii) increased raw materials and contract costs to € 1.6 million (H1 2016: € 0.5 million) which mainly relates to the corresponding increase in revenues in the Catalysis systems business, and iii) increased employee benefit expenses to € 5.8 million (H1 2016: € 2.5 million) which is predominantly explained by the initiation of the new Share Based Compensation plan. Due to the closure of the former option plan, accelerated vesting occurred resulting in a non-cash expense amounting to € 2.6 million.
The share in the loss of joint ventures of € -2.9 million results from the 49% stake in our Joint Venture Synvina and corresponds with their first half year result.
Net result for the first half year of 2017 amounts to € -9.1 million (H1 2016: € -6.8 million).
Total Adjusted EBITDA improved from € -3.6 million in 2016 to € 0.0 million in 2017. This was mainly caused by the establishment of Synvina in November 2016 and consequently discontinuation of the YXY segment within Avantium. Furthermore the lower result of Renewable Chemistries was mainly due to significant investments in its programs, amongst others the start of engineering and building of the new Zambezi Pilot Plant, which will be located in Delfzijl. The Adjusted EBITDA of Catalysis improved as a result of the growth in revenues.

Balance sheet and financial position
Balance sheet total increased to € 174.3 million (31 December 2016: € 86.2 million) with net equity of € 166.5 million. This increase was the result of the listing of Avantium N.V. on Euronext Amsterdam and Brussels, which had corresponding gross proceeds of € 109 million.
Cash and cash equivalents amounted € 104.7 million at half year 2017 (31 December 2016: € 14.2 million), mainly driven by the listing.

Prior to the IPO, a capital restructuring took place, consisting of the following steps: an amendment to the Company?s articles of association providing for a reverse share split and consequently an increase of the nominal value of the Shares from €0.01 to €0.10. The share capital of the company was increased by the combination of the issuance of ordinary shares at the offering and the conversion of the 2016 convertible loan. Following these transactions, the outstanding share capital as of 31 December 2016 of 131.866.911 ordinary shares, changed to 25.764.466 ordinary shares. Following the IPO, a new Share Based Compensation plan was initiated, which includes both a long term incentive plan and an employee stock option plan that replaces the former Avantium option plan.
With successfully reaching the next phase of the YXY Technology by the transfer to Synvina, Avantium complied with all requirements pertaining to the RVO Innovation Loan. Avantium repaid the principal amount and accrued interest pertaining to € 4.7 million in April 2017.

Outlook
The first half of 2017 was in line with our expectations, with Catalysis above expectations. The focus for the second half will remain on delivering our strategic plans, for which we are well on track. The risks as outlined in the risk management paragraph of the Avantium N.V. 2016 annual report remain and continue to require focused and decisive attention in the second half of 2017. No new risks were identified in the first half of 2017.
The Catalysis business is expected to continue to deliver profitable growth, by meeting the needs of our customer?s research and development plans. We will continue to invest in our portfolio and increasing our sales and marketing initiatives.
Overall, we expect to deliver on our communicated milestones for 2017.

Supervisory Board
During the AGM held on 14 June 2017, the shareholders approved the appointment of Ms. Margret Kleinsman to the Supervisory Board. In this same meeting, Mr. Michiel Boersma and Mr. Claude Stoufs stepped down and were discharged from liability for the performance of their duties as members of the supervisory board. The Supervisory Board of Avantium now consists of the following members: Mr. Jan van der Eijk (Chairman), Ms. Gabrielle Reijnen, Mr. Jonathan Wolfson, Mr. Denis Lucquin and Ms. Margret Kleinsman.

Auditor’s Involvement
This Interim Report for the six months ended 30 June 2017, and the Condensed consolidated financial statements included herein have not been audited or reviewed by an external auditor.

Risks
The management team of Avantium has regularly reviewed the risk profile of the company in the first half of 2017 and will continue to do so throughout the rest of the year. For those risks deemed material, comprehensive mitigation action plans are developed and reviewed by the management team. The outcome of the company?s risk management process is shared and discussed with the audit committee of the Supervisory Board and with the Supervisory Board.
The risks as outlined in the risk management paragraph of the Avantium N.V. 2016 annual report remain and continue to require focused and decisive attention in the second half of 2017. No new risks were identified in the first half of 2017. It should be noted that no matter how good a risk management and control system is, it cannot be assumed to be exhaustive nor can it provide certainty that it will prevent negative developments in Avantium?s business and business environment from occurring or that mitigation actions are fully effective. It is important to note that new risks could be identified that are not known currently.

Executive board compliance statement
The executive board of Avantium N.V. declares that, to the best of their knowledge, the condensed consolidated financial statements give a true and fair view of the assets, liabilities, financial position and the result of Avantium N.V. and its subsidiaries included in the condensed consolidated financial statements and the interim report includes a fair review of the information required pursuant to section 5:25d, subsections 8 and 9 of the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht).
Amsterdam, 25 August 2017

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