Water Intelligence : 2020 Annual Results and YTD Trading Update

Audited Results For Year Ended 31 December 2020

Trading Update Through 30 April 2021

Water Intelligence plc (AIM: WATR.L) (the "Company" or "Group") a leading multinational provider of precision, minimally-invasive leak detection and remediation solutions for both potable and non-potable water, is pleased to present its full, audited results for the year ended 31 December 2020 and unaudited Trading Update through 30 April 2021.

For full year 2020: Compared with 2019, Group revenue grew by 17% and statutory profits before tax by 78%. The Company demonstrated market leadership in providing solutions for failing water infrastructure as an "essential service provider" for a Covid-affected marketplace. Results reinforce the Group's reputation for delivery as a growth company. Compounded annual growth ("CAGR") since 2016 has been 33% in terms of revenue and 53% in terms of statutory profits before tax.

Trading through 30 April 2021: 2021 has started with an even higher growth trajectory than its five year CAGR. Through 30 April, revenues have grown by 47% and statutory profits before tax by 154% against the same period in 2020, despite the Group's markets being adversely affected by the pandemic during both periods.

2020-21Corporate Development: Beyond strong results, the Group continues to reinvest in new technologies to reinforce its brand leadership as a technology-enabled solutions provider for the Green Economy; a provider that has strong national channels, such as insurance, that are demanding more minimally-invasive technology solutions for water conservation. During 2020, the Group was pleased to be recognized with the Green Economy Mark from the London Stock Exchange and addition to various MSCI market indexes.

Copies of the Annual Report will be made available to view on the Company's website at www.waterintelligence.co.uk

Highlights from the Group's 2020 Audited Results:

• Revenue growth once again strong at 17% reaching $37.9 million (2019: $32.4 million)

1. Total franchise System-wide sales (franchisee gross sales from which royalty income is derived) and corporate-operated sales surpassed $140 million

• 1. Sales footprint across the United States and in UK, Australia, and Canada creates distribution platform for matrix of residential, commercial, and municipal products and solutions
• Statutory Profits Before Tax growth at 78% reaching $4.2 million (2019: $2.4 million)
• 1. Profit Before Tax Adjusted (adjusting for non-cash expenses - amortization and share-based payments - and non-recurring costs such as transactions fees) grows 50% to $5.1 million (2019: $3.4 million)
• EPS (fully diluted) grows 69% to 18.8 cents (2019: 11.1 cents)
• Balance sheet strong at 31 December 2020

1. Cash: $6.8 million

1. Cash Net of Bank Borrowings: Breakeven with bank amortization spread through 2025

Core business units - American Leak Detection (ALD) (residential and commercial markets) and UK- based Water Intelligence International (WII) (municipal market) each grows strongly

1. ALD revenue grows 15% to $33.6 million (2019: $29.1 million)
2. • Royalty income from franchisees still grows by 3% to $6.7 million (2019: $6.5 million) despite eight franchise reacquisitions during 2020 reducing the pool of royalty income
   • • Equipment sales grow 11% to approximately $1 million (2019: $0.9 million) showing franchisee reinvestment in brand despite Covid-19 disruptions
   • Insurance channel revenue grows by 20% to $8.5 million (2019: $7.1 million)
   • U.S. Corporate-operated sales grow by 21% to $17.4 million (2019: $14.4 million) with
     profit margins expanding to 22% (2019: 14%)

1. WII revenue grows 27% to $4.3 million (2019: $3.4 million)

Trading Update Through 30 April

• All financial KPIs show acceleration
• Revenue grows 47% to $15.6 million (30 April 2020: $10.7 million)

1. Royalty income grows 6% to $2.5 million (30 April 2020: $2.3 million) despite franchise reacquisitions during 2020

• 1. Insurance B-to-B Channel revenue grows 25% to $3.1 million (30 April 2020: $2.5 million) o U.S. Corporate-operated sales grow 76% to $8.1 million (30 April 2020: $4.6 million)
     o WII revenue grows 71% to $1.7 million (30 April 2020: $1 million)
• Statutory Profits Before Tax grow $154% to $2.2 million (30 April 2020: $0.9 million)
  Corporate Development Highlights
• 2020 Corporate Development

1. Corporate finance transactions in October to fuel growth: approximately $2.7 million net from equity placement and an additional $6 million available from expanded credit facilities

1. Franchise reacquisitions: 8 strategic locations - in United States executed in each region for
   greater operational control: Maryland and Melbourne, Fla (East); Minneapolis (Midwest);
   New Orleans (South): San Jose and Seattle (West); in Australia: Melbourne and Brisbane

1. National accounts: three new national insurance companies

1. Technology investments: (i) Sewer diagnostic product launched in the UK with pilots in the US; (ii) Salesforce.com CRM integration to drive field service automation creating improved operating efficiencies, security and standardisation

• 1. Appointment of Silicon Valley veteran Daniel McDonald to the management team as Chief Innovation Officer to accelerate our deployments and investments in water and wastewater related technology
• Corporate Development through May 2021
• 1. Credit facility expansion by $3.2 million on the same terms as 2020 refinancing

1. 3 national insurance contract wins

1. 3 transactions: 2 strategic reacquisitions of franchises - Central Florida and Reno, Nevada - as well as PlumbRight Services, Inc. to extend the plumbing services capabilities of the Group's fast-growing, multimillion dollar Louisville, Kentucky location

1. Acquisition of IP assets from FastDitch, Inc. for stormwater runoff and irrigation

1. Appointment of C. Daniel Ewell to the board as Independent Non-Executive Director adding significant capital markets experience

1. Appointment of industry leader John Spenard to management team as Chief People Officer to accelerate organizational build-out of execution teams for market capture

Dr. Patrick DeSouza, Executive Chairman of Water Intelligence, commented: "Despite Covid-19 disruptions, we delivered a breakthrough 2020 and an even more remarkable first third of 2021 with strong advances in every part of our business: financial results, operating KPIs, technology reinvestment to keep differentiating our brand, new business lines to address market demand and experienced leaders to strengthen both board and management as we move to the next level of corporate development. Our business is scaling rapidly.

Ironically, the pandemic only served to reaffirm our sense of mission and the value of our enterprise. Our team worked very hard to deliver for our customers as an "essential service" provider for water and wastewater infrastructure needs while communities had to "shelter in place."

We aspire to lead the technological transformation of the industry and, in so doing, both conserve the world's most precious resource and provide solutions for collateral public health issues from wastewater overflow. We have been gratified to be recognized during 2020 with the Green Economy Mark from the London Stock Exchange and by communities, such as Flint, Michigan, that have suffered from water and

wastewater infrastructure issues. With the public visibility of $100 billion in investment in water infrastructure sought by the American Jobs Plan, market demand for our technology-based solutions will continue to grow rapidly."

The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

Enquiries:
Water Intelligence plc
Patrick DeSouza, Executive Chairman	Tel: [phone]
WH Ireland Limited - NOMAD and Broker	Tel: [phone]
Adrian Hadden
James Sinclair-Ford
Matthew Chan
Dowgate Capital Limited - Joint Broker	Tel: [phone]
Stephen Norcross

Chairman's Statement

Overview.

Despite the marketplace disruptions produced by Covid-19, our strong financial and operating performance for full year 2020 and further acceleration during 1H 2021, point to the importance of water infrastructure services for consumers and our ability to execute, even during challenging times, to meet inelastic market demand.

Our team showed resilience, navigating the pandemic using rigorous health and safety protocols for the benefit of our customers and our technicians. Throughout the crisis, we delivered our matrix of solutions covering the entire range of residential, commercial and municipal pipes to address both clean water and wastewater problems. Moreover, not only did we manage through the crisis successfully, we also reinvested in field service automation technology to make our business even more scalable as we emerge from the pandemic. Undeterred by the challenges, we are delivering rapidly on our vision of technology-enabled services and a "One Stop Shop" for water infrastructure solutions. Given the strength of our Green Economy brand across 150 locations in the U.S. and our sales footprint in the UK, Australia and Canada, we are also creating a distribution platform for new product offerings from third parties seeking market access to our 200,000+ annual customers.

Our message for this coming year is simple: Full steam ahead. Because of our strong outcomes, even during Covid, we are updating our five-year growth plan for 2H 2021 and beyond. We are lifting our sights in more ambitious fashion. Because of our range of technology-based solutions, we seek to contribute private sector leadership to the shaping of the Green Economy. Last summer, we were pleased to receive from the London Stock Exchange its Green Economy Mark.

Core Commitments.

Two commitments will continue to drive our ambitious growth plan. The pandemic tested each of these commitments and we surpassed expectations. First, we are building a multinational growth company. Since 2016, we have delivered strong compounded annual growth in terms of both revenue and profits. Despite public health lockdowns in all of our operating geographies, we continue to deliver results because water infrastructure is considered by regulators to involve an "essential service". Given growing market demand, we plan to increase our pace of market capture in our current operating geographies as public health restrictions ease. Moreover, because the addressable market for failing water infrastructure is global, we plan to selectively add new geographies adjacent to current operations. The Biden Administration's American Jobs Plan seeks over $100 billion for water infrastructure repair underscoring a global need to preserve and distribute the world's most precious resource.

Second, our brand is differentiable because of our use of technology (proprietary and third party) to pinpoint water leaks and remediate such leaks in minimally-invasivefashion. Our solutions-basedapproach has always been akin to that of precision medicine. Here as well, the pandemic tested our resolve to reinvest in our technology leadership. Because of the continued growth of profits from our core business and our

confidence in our value as an "essential service", we reinvested during the pandemic to become a true "technology-enabled" service with greater operating efficiencies.

We have implemented Salesforce.com's field service automation software, together with a range of other technology-based applications from web forms to video e-commerce. Now we have not only more efficient delivery of our solutions to customers but also a leading-edge,cloud-based system with the highest level of data security for personal data and payments. This latter dimension is a very attractive attribute for our national business accounts, such as insurance companies, and for consumers. Moreover, during the pandemic, we reinvested in new technology-driven service offerings for our customers. During 2H, we will release in the US a proprietary sewer diagnostic product for homeowners that was first pioneered in the UK in 2020 with utilities such as Thames Water. The Group has now adapted the device for the U.S. residential market. During the pandemic, as consumers disposed of sanitary wipes, collateral public health issues surrounding sewer backups became more visible. Further, in 1Q 2021, we invested in new technology for the lining of open water channels. Open channel conveyance, typically designed with concrete structures, is used around the world for irrigation and stormwater run-off but highly susceptible to leakage. These investments during the pandemic will reinforce our leadership role in transforming water infrastructure services through technology.

Financial Performance

We produced a set of results for 2020 that were ahead of market expectations. We maintained strong revenue growth and also reinvested to drive future market capture. Much like pre-pandemic 2018 and 2019, our statutory profits before tax grew even faster than revenue growth displaying various efficiencies from scaling operations. For full year 2020, Group revenue increased 17% to approximately $37.9 million while statutory profits before tax grew 78% to approximately $4.2 million. Our compounded annual growth rate (CAGR) since 2016 is now 33% in terms of revenue and 53% in terms of profits before tax. Especially given the disruptions of Covid, our 2020 results underscore the Group's consistent delivery and point to a sustainable growth trajectory.

1Q 2021 reinforced and accelerated this already strong trajectory. Covid-19 marked the first quarters of both 2020 and 2021 making comparisons straight forward. Group revenue grew 38% to $11.4 million (1Q 2020: $8.3 million). Statutory profit before tax grew an outstanding 152% to $1.66 million (1Q 2020: $0.66 million) indicating continued scaling of operations.

Our overall market presence has passed $140 million in gross sales to customers which includes indirect sales by our franchisees from which franchise royalty income is derived plus direct sales from corporate operations. Such critical mass of gross sales to third parties alongside our reinvestment in technology positions us well for the next level of brand development. And we are now raising our profile in the market. Not only did we receive the Green Economy Mark from the London Stock Exchange during 3Q 2020, we were also added to various MSCI indices during 4Q.

Operating KPIs.

Water Intelligence KPIs are explained more fully in the Strategic Report. Our 2020 KPI results show the underlying components that are leading to the acceleration of our growth trajectory. First, royalty growth from the American Leak Detection ("ALD") franchise System remains strong. During 2020, ALD royalty income grew by 3% in absolute terms to $6.7 million (2019: $6.5 million). This absolute growth is noteworthy because the Group doubled 2019's rate of franchise reacquisitions thus removing royalty income faster from the pool of potential 2020 royalty income. Eight strategic reacquisitions were executed during 2020. Despite this pace of corporate activity, the increase in royalty shows the health of the franchise System and demand for our solutions. As discussed below, the franchise System offers the Group an opportunity for additional leverage in selling and delivering solutions to national accounts, such as insurance companies, across the US. Moreover, the recurring monthly income from franchise royalties leads to efficient capital formation for equityholders by enabling a mix of non-dilutive bank debt.

Second, our franchise-related activities reinforce the continued growth of royalty income. Franchise-related activities include: (i) national accounts such as insurance; (ii) franchisee purchases of equipment; and (iii) sales of franchise territory. Our national account channel which feeds jobs to both franchisees and corporate locations continues to grow rapidly. During 2020, our insurance channel grew by 20% to $8.5 million (2019: $7.1 million). We added three more national insurance accounts during 2020 which will fuel continued growth in 2021 and beyond. In addition, franchisee purchases of equipment grew 11% in absolute terms to $0.95 million (2019: $0.85 million), despite the reacquisitions. Such growth shows continued franchisee commitment to reinvesting in the growth of the ALD brand. This positive KPI feature is remarkable given that Covid generally had a negative impact on reinvestment in the broader marketplace.

Third, U.S. corporate-run operations complement our franchise system by adding to the critical mass of sales presence and execution across our operating geographies. During 2020, corporate-run operations grew 21% to $17.4 million (2019: $14.5 million). These fast-growing locations reinforce franchise operations with increased regional marketing presence. During 2020, the Group completed reacquisitions in each region of the United States: Southeast, South, Upper Midwest and Northwest. In particular, the Northwest set of transactions - combining 2 locations in Silicon Valley and reacquiring Seattle in order to link existing Portland operations and a greenfield target of Vancouver - is expected to yield collateral strategic benefits. A sales corridor between Silicon Valley and Seattle will accelerate technology sourcing thus reinforcing our brand differentiation. Further, the critical mass of existing municipal operations in Seattle will support the establishment of a US headquarters for our UK-based Water Intelligence International ("WII") subsidiary to cross-sell its municipal solutions in the US.

The Group has efficiently executed the transition to corporate operations after franchise reacquisitions thus unlocking profits for our shareholders. Profit before tax for corporate locations grew by an outstanding 87% reaching $3.8 million (2019: 2.0 million). Moreover, corporate-run operations have been continually increasing profit margins, while still reinvesting in growth. Profit margins for corporate-run locations reached 22% as compared to 14% in 2019. Such margin expansion contributed to the jump in Water Intelligence profits during 2020. As a result, reacquisitions are unlocking significant shareholder value because the net profits that they produce are significantly higher than foregone net royalty income for doing the same execution activity in the same location under the same brand.

Fourth, our WII business continues to grow steadily. During 2020, WII grew revenue by 27% to $4.3 million (2019: $3.4 million). WII complements ALD's residential and business-to-business focus with larger scale municipal solutions; moreover, given the team's professional experience globally, WII leads the Group's multinational growth efforts. For example, WII productized and introduced a new sewer diagnostic product in the UK and conducted field trials in the US with ALD franchisees. In addition, WII continues to expand in Australia. Franchise reacquisitions during 2020 in Melbourne and Brisbane, combined with WII's Sydney operations, now give WII a critical mass of corporate operations in the 3 largest population centres in Australia. Because of its climate and water scarcity issues, Australia is anticipated to be a strong growth geography for integrating all of the Group's offerings from municipal to residential given its initial base of ALD franchisees and now WII expansion.

Strategic Direction.

Given the success of our business plan and our strong capital base, our next steps are very straight forward. We plan to do more of the same in executing our core business offerings only more aggressively given our traction. Two tactics - one organic-based and one acquisition-based - would be the drivers for us to reach the next level of market capture.

First, we have plenty of customer demand for our minimally-invasive solutions whether residential, commercial or municipal. We can feed organic growth simply by deploying more trained execution staff and service vehicles. To be sure, our Salesforce implementation will make our execution more efficient. Importantly, we recently recruited and hired a Chief People Officer with significant experience in our industry. Such appointment will provide leadership and additional organizational structure for hiring, training, deploying and retaining solutions professionals.

Second, we will continue to execute selective franchise reacquisitions that integrate regional operations and convert more franchisee royalty income into Group revenue and profits. Currently, there is approximately $110 million of highly profitable sales to third parties by our franchisees that is recorded as $6.7 million of royalty income. Reacquisitions are strongly accretive financially for the Group and its shareholders. Yet is it important to reiterate that we still seek to grow and maintain the vitality of the entire franchise System so that the brand continues to grow and add to the $140 million "gross sales pie" from which reacquisitions may be strategically selected.

Beyond these two tactics, we will continue to invest in technology solutions that distinguish our brand with respect to water infrastructure problems. During 2020, we added a Chief Innovation Officer to the management team who had significant Silicon Valley experience. Such appointment produced immediate benefits: we adapted our new sewer diagnostic product for the residential market and we acquired patents for irrigation and storm-waterrun-off products that we are now manufacturing. Our ability to source and drive additional technology solutions for water infrastructure problems continues to differentiate our brand from traditional water infrastructure service providers.

We are confident about our ability to fuel a strong growth trajectory for 2021 and beyond. Our investment in a Chief People Officer and Chief Innovation Officer during the pandemic underscores that we will be relentless in building a management team and organization that can drive and sustain a significant