Water-as-a-Service February 2018 Safe Harbor Statement Statements - PowerPoint PPT Presentation

TM Water-as-a-Service February 2018

Safe Harbor Statement Statements in this presentation regarding management’s future expectations, beliefs, intentions, goals, strategies, plans or prospects, include, without limitation, statements relating to AquaVenture’s strategic focus; expectations regarding future business development and acquisition activities; its anticipated impacts and incremental costs related to recent hurricanes; its expectations regarding performance, growth, cash flows, and margins from recently completed acquisitions; its expected margins and the impacts thereon from various customer contracts; and the impacts on operating results of the timing, size and accounting treatment of acquisitions constitute forward-looking statements. Forward-looking statements can be identified by terminology such as “anticipate,” “believe,” “could,” “could increase the likelihood,” “estimate,” “expect,” “intend,” “is planned,” “may,” “should,” “will,” “will enable,” “would be expected,” “look forward,” “may provide,” “would” or similar terms, variations of such terms or the negative of those terms. Such forward-looking statements involve known and unknown risks, uncertainties and other factors including those risks, uncertainties and factors detailed in AquaVenture’s filings with the Securities and Exchange Commission. As a result of such risks, uncertainties and factors, AquaVenture’s actual results may differ materially from any future results, performance or achievements discussed in or implied by the forward-looking statements contained herein. AquaVenture is providing the information in this presentation as of this date and assumes no obligations to update the information included in this presentation or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 2

AquaVenture Management Team Doug Brown, Founder, Chairman & CEO of AquaVenture  Former CEO of Ionics  Former CEO of Advent International  20 years of experience in water company management  B.S. in Chemical Engineering, MIT and MBA, Harvard Business School Anthony Ibarguen, President of AquaVenture  Former interim CEO of Insight Enterprises  Former CEO of Alliance Consulting Group  Former President of Tech Data  Leadership experience from investor-backed startups to Fortune 500  B.A. in Marketing, Boston College and MBA, Harvard Business School Lee Muller, CFO of AquaVenture  Former Executive VP and CFO of ContourGlobal  Former investment banker at Goldman Sachs, specializing in international project financing and corporate finance  Responsible for negotiating several Euromoney Project Finance Deals of the Year at ContourGlobal  B.S. in Accounting, Boston University and MBA, University of Chicago 3

Investment Highlights The supply of drinking and process water to municipal, industrial and commercial customers under long-term Water-as-a-Service contracts using company-owned facilities and equipment 1 2 3 $ 1 2 Experienced 3 Differentiated, high- management team margin Water-as-a- Recurring and with a demonstrated Service (WAAS) contracted revenue track record of driving business model growth 4

One WAAS Business, Two Platforms Seven Seas Water (SSW) (~49% of Revenue (1) ) Quench (~51% of Revenue (1) ) Bulk Clean Water Supply Platform Point-of-Use (POU) Water Filtration Platform  Provides desalination, wastewater treatment and water  One of the largest providers of POU filtered water and reuse services related services in the U.S.  Currently operates 10 plants under long-term agreements  Serving ~40,000 customers with more than 96,000 company-owned units in over 250 metropolitan statistical  Primary water supplier to the U.S. Virgin Islands, the British areas (MSAs) across North America (2) Virgin Islands and Dutch St. Maarten – Customers include more than half of the Fortune 500 – Significant plant operations in Trinidad and Curacao  New contracts are typically 3 years and auto-renewing – Began operations in Peru in October 2016 through – Bayovar acquisition Implied average rental period is over 11 years  Strategic inventory of quick-deploy units for emergency – ~8% annual unit attrition rate as of September 30, 2017 situations Ice and Sparkling Water Coolers Coffee Machines Water Machines Quench Quench Quench Quench Quench Quench 750 810 525 980 152 160 Quench Quench 735 975 (1) Based on first nine months 2017 revenue (2) 2010 U.S. Census. 5

̶ ̶ Water Demand Outpacing Supply = Desalination Opportunity  From 1950 to 2000, water use increased more than twice as fast as population and that trend will accelerate through 2050  Development and increased wealth drives substantially more water use per capita As the world gets wealthier, it becomes thirstier Non-agricultural water demand is growing by 26 billion cubic meters per year  Water tables are rapidly declining and reserve depletion is accelerating, creating growing opportunity for desalination, which is an increasingly economical solution due to improved technology  Global medium-scale (2-13 MGD) desalination market is ~$6 Billion and about 29% of total capacity (1) Global Contracted Desalination Capacity (2) Population up 138% Water use up 327% 7.0 1,000 ~24 billion GPD ~11 billion GPD 6.0 800 5.0 600 4.0 3.0 400 2.0 200 1.0 - - 1950 2000 1950 2000 Population Non-Agricultural Water Use 2004 2014 2015 (billions) (km3/yr) Note: MGD = Million gallons per day (1) Source: Beyond scarcity: Power, poverty and the global water crisis, Human Development Report (HDR), United Nations Development Programme, 2006 (2) Global Water Intelligence (GWI) Desalination Markets 2016 report. 6

On-Demand Filtration Benefits = POU Growth  Americans are now drinking more bottled water than soda (1)  Increasing awareness of issues related to bottles creates an opportunity for POU ─ Environmental impact of plastic bottles, 80% of which become litter and take over 1,000 years to bio-degrade (2) ─ Potential health impact of chemicals in plastic bottles (2)  POU eliminates hassles of storing and lifting 42 pound 5 gallon jugs, and typically saves money ─ Average 5 gallon bottled cooler customer spends $70.56 per month versus average POU unit rent of $35.15 (3)  U.S. water cooler market generated $4.2 billion of revenues in 2015 and had more than 5.8 million units installed (3) ─ Bottled water coolers make up 76.5% (4.4 million units) and Point of Use (POU) coolers 23.5% (1.4 million units) (3)  POU is a disruptive technology to bottled water coolers and is taking market share U.S. Point of Use (POU) Market Share (3) 40.0% 30.7% 23.5% 20.0% 16.4% 0.0% 2010 2015 2020E Point-of-Use Market % (1) Beverage Marketing as reported by Fortune Magazine (2) ValleyWater.org and SunTimes (3) 2015 Zenith USA POU and Bottled Coolers Report 7

Our Water-as-a-Service Value Proposition For Customers For AquaVenture and Shareholders Outsourcing of a Non-core Activity to Water Experts Contracted, Recurring Revenue Attractive Unit Economics, High Margins Limited Upfront Capital Investment and Strong Cash Flow Higher Reliability and Better Quality Attractive Return on Capital Deployed More Predictable Lifecycle Cost Strong Customer Retention Significant Opportunity to Expand and Healthy, Hassle-free and Environmentally Sustainable Extend Customer Lifetime Value 8

Attractive Unit Economics – Bulk Water Initial Plant Investment (1) Year 1 Plant Revenue Year 1 Plant Unit Cash Flow (2) Illustrative ~$50mm ~$12mm ~$9mm Plant Assumptions  Initial contract period of 15  Function of capacity and commercial  Contracts include inflation protection years terms and customers typically pay for electricity directly Bulk Clean Water Platform Indicative Cash Flow Profile For An Illustrative Plant Plant Unit Cash Flow (2, 3, 4) Cumulative Plant Unit Cash Flow (2, 3, 4) Year 0 Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Unit economics for acquired or future company-built plants may vary significantly from this illustrative example. Examples are not forward-looking statements nor a target for future investments. (1) Initial plant investment is defined as the initial cash outflow related to plant capital expenditures and/or long-term contract costs; actual initial plant investments may vary. (2) Plant unit cash flow after initial plant investment (year 0) is net income before depreciation and amortization, net interest expense; income tax expense (benefit) and intercompany allocations. (3) The illustrative model assumes an annual increase for inflation of 2% to both revenues and operating expenditures. (4) The cash flow profile for an illustrative plant is based on a plant that is built, owned and operated by us; the cash flow profile for an acquired plant may differ. 9