Made in Spain, Making it in Britain.

The case of AQUALOGY

Madrid Chamber of Commerce, 25th April 2013

Antoni Ventura (Managing Director Aqualogy UK)

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ABOUT US

LANDING IN UK

WATER INDUSTRY

BRISTOL WATER

DEVELOPING BUSINESS

NON REGULATED MARKETS

AQUALOGY UK

INDEX

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1 ABOUT US

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Agbar and Aqualogy

All the activities related to

Solutions and

Technologies are

under Aqualogy who

offers services based on its

knowledge and experience.

Agbar is water Aqualogy is Solutions

and Technologies

Agbar is the standard-

bearer of a group composed

of 152 businesses and more

than 16,000 employees who

manage all processes related

with the integral water

cycle.

1. ABOUT US

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28 million people served

since 1867

144 years of experience

Activity in 15 countries Adaptation to the

environment

3.268 million euros aggregate financial

turnover

580 million aggregate

investment.

3,500 Industrial clients

16,383 professionals

Main figures

1. ABOUT US

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Presence in the world

1. ABOUT US

MEXICO (2001) (Saltillo) 724,624 inh.

UNITED KINGDOM (2006) (Bristol) 1,153,839 inh.

COLOMBIA (1994) (Cartagena de Indias) 926,778 inh.

CHILE (1999) (Santiago)

6,227,267 inh.

SPAIN (1867) 13,250,582 inh.

ALGERIA (2007) (Oran) 1,443,000 inh. PERU (2010)

(Lima) 8,000,000 inh.

USA (Atlanta)

BRAZIL

TURKEY CUBA (1994)

(Havana, Varadero) 1,129,713 inh.

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Consulting Project/

Design

Construction Technology Operations

Integral solutions provider

Market positioning

1. ABOUT US

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Management

solutions

Environmental

technologies

Knowledge

technologies

Infrastructures

Business Lines

1. ABOUT US

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2 LANDING IN UK

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•Oct 08 : AGBAR

SERCO (JV

between Agbar and

Serco to provide IT

solutions to BW)

• Jan 10 : AGBAR bought

50% BWBSL

•May 10 : AGBAR

bought Marral

Chemicals Ltd

2. LANDING IN UK

2006 2007 2008 2009 2010 2011

• July 09 : Agbar Environment Ltd

(AEL)

• July09 : Ice Pigging Agreement with

University of Bristol to hold worldwide

license

•Aug 09 : Agbar Solutions Ltd (ASL)

• July 06 : AGBAR

acquires Bristol

Water Group plc

•Aug 11: Cordon

Sanitaire integrated

into Marral Chemicals

Ltd

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First Period 2006-2011

AGBAR acquired BRISTOL WATER 2006 – and subsequently looked to grow the non-regulated

business on the back of this.

Organization

AGBAR appointed the CEO and the CFO

CEO and CFO also Directors of the non regulated business

During this period several junior and senior managers from Barcelona were involved in the non

regulated business

Companies

October 2008: AGBAR SERCO- Joint Venture between AGBAR and SERCO to provide IT solutions

to Bristol Water

July 2009: AGBAR ENVIRONMENT LTD (now AQUALOGY ENVIRONMENT LTD)

August 2009: AGBAR SOLUTIONS LTD (now AQUALOGY SOLUTIONS LTD)

January 2010: AGBAR bought 50% of BRISTOL WESSEX BILLING SERVICES LTD

May 2011: AGBAR acquired MARRAL CHEMICALS LTD

2. LANDING IN UK

3 WATER INDUSTRY

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The UK water sector comprises 3 regional markets

with different characteristics

England & Wales

Scotland

Northern Ireland

Population connected to main services in the UK

Drinking water: 99.5%

Sanitation: 96.5%

Each of the 3 regional water markets are governed by

an economic regulator, monitoring tariffs and the return

on capital of water & wastewater operators, but having

no control over contract services

In England & Wales operators are privatised, whilst in

Scotland and Northern Ireland they are publicly owned

(Scottish Water and Northern Ireland Water

respectively)

3. WATER INDUSTRY

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Source: UK Office for National Statistics Service & delivery performance 2008-09 report_England & Wales, Scotland Waterwatch, Northern Ireland Water

Population: 62m inhabitants

GDP / capita: €27,280

Last general elections: May 2010

3. WATER INDUSTRY

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1989: Water and sewerage industry in

England and Wales privatised.

1991: Water Industry Act 1991:

Regulates the water supply and the

provision of wastewater services in

England and Wales

10 Water and Sewerage

Companies (WaSC) were

appointed in England and Wales.

12 Water only Companies

(WoC), being Bristol Water one

of them

WaSC turnover in the regulated market vary considerably. Thames Water, covering the London area, is the largest

WaSC in the UK. Most WaSCs and WoCs are owned by private equity funds that concentrate on regulated

services

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3. WATER INDUSTRY

WaSC’s regulated business 2010-2011 (in £bn)

Source: Ofwat (2010-11 prices)

WoC’s regulated business 2010-2011 (in £m)

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6 Sutton & East Surrey Water

5 Sembcorp Bournemouth Water

4 Portsmouth Water

3 Dee Valley Water

2 Cambridge Water

7 South East Water

9 Affinity Water

8 South Staffs Water

WoCs 1 Ofwat – Economic regulator setting standards and prices

5 year periodic price reviews set in context of 25 year plans

Independent body accountable to Parliament

Regulatory framework established for over 20 years

Highly transparent and stable

Other key regulators

Drinking Water Inspectorate

Environment Agency

Consumer Council for Water (CCWater)

Key Elements of Regulation England & Wales Water Sector

Source: Ofwat.

3. WATER INDUSTRY

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4 BRISTOL WATER

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1846

Reservoirs

Treatment Works Potable Water Mains

Raw Water Mains

Pumping Stations

Area of Supply

Purton

Supply to

Severn Trent Water

Alderley

Tetbury

Long

Newnton Shipton Moyne

Pucklechurch

Tolldown

Supply to

Wessex Water

Supply to

Wessex Water

BATH

Stowey

Sherborne

Radstock

Midsomer Norton

Chew Hill

Head Spring

Maesbury

Shepton

Mallet

Wells

Glastonbury

Street

Cheddar

Axbridge

Rowberrow

Blagdon Banwell

Weston

Super Mare

Chelvey

Clevedon

Portishead

Avonmouth Almondsbury

Littleton Thornbury

Yate

Bristol

Barrow Head Office

Chew

Stoke

Frome

Egford

Oldford

Key Supply Areas

Regulated water only supply company (“WoC”)

Licensed monopoly water services provider

Abstracts, treats and distributes water

Population connected to drinking water: 1.16m inhabitants

Supplies an Area of 2,400 km² Regulated Water Only Company

4. BRISTOL WATER

Founded in 1846

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Agbar (Spain)

Bristol Water Holdings Ltd

Bristol Water plc

Bristol Water Core Holdings Ltd

100%

30% 70%

100%

100%

Bristol Water Holdings UK Ltd

O&M Agreement

Bristol Wessex Billing Services Ltd

50%

CSE Water UK Ltd

Capstone Infrastructure

Corp

Current Corporate structure

Itochu Corporation of

Japan

71.43% 28.57%

The shareholders have agreed specific

working arrangements which are working

well allowing them to contribute from their

respective knowledge bases

The Board is positive and engaged, very

committed to delivering for customers and

stakeholders.

Bristol Water Board composition:

Chairman

Three members of current management

team (CEO, CFO and Regulatory

Director)

Three Independent Directors

Three Capstone representatives

Two Agbar representatives

One Itochu representative

Governance

4. BRISTOL WATER

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2012 Employee Survey highlights a significant

improvement from responses received in 2009

84% of respondents very committed to the

organisation (74% in 2009)

91% like their job (74% in 2009)

91% agree the quality of service provided by

the organisation is very good (77% in 2009)

Good relationship with the two unions

represented in the company (unionisation rate

30%)

Employee Breakdown Committed and Positive Workforce

462 employees (430 FTEs) (1) with average

length of service of 12 years

Employee Awards Team Building

Network 43%

Production 23%

Engineering 9%

Finance 6%

Quality 5%

Other 14%

Note: (1) Employee breakdown for appointed business.

4. BRISTOL WATER

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Value Chain

Bristol Water’s Value Chain

Treatment 2 Customer 4 Network 3 Sources 1

4. BRISTOL WATER

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5 DEVELOPING BUSINESS

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• Jan 10 : AGBAR starts

development of Ice Pigging

• Jan 10 : Activity in Sludge

Management starts

•Oct11 : Capstone acquires a 70% stake

of Bristol Water Holdings UK

•Oct11 : Agbar Solutions sells 50% of

BWBSL to BWHoldings

•Dec11 : move to new headquarters

(Aztec West, Bristol)

• Jan12 : First trial of iMeters

•Mar12 : Aqualogy rebrand in UK

•May12 : Launch of Smart Sales

Project

5. DEVELOPING BUSINESS

• 2013 : Aqualogy UK global Strategy:

•New products

•New markets

•Two Divisions:

• Water Utilities

• Industrial Solutions

2010 2011 2012 2013

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Second period 2010-2013

The main characteristic of this period was the creation a new AQUALOGY organization, and the

separation from Bristol Water headquarters and its facilities.

Organization:

January 2011- Appointed New Managing Director of Agbar Environment & Agbar Solutions

All the secondments between Bristol Water and Agbar Environment were terminated and the

majority of staff transferred to Agbar

New Agbar organization

December 2011 - New Aqualogy headquarters in Aztec West Bristol

January 2012 - Appointed a New Financial Controller and new Sales & Marketing Manager

Outsourcing of managing accounts, payroll, IT and other back office services.

Companies and Key moments:

Agbar sold 70% of Bristol Water in October 2011.

Cordon Sanitaire was integrated into Marral Chemicals Ltd

Agbar sold BWBSL to BW, but keep a strong relationship

Business activity:

2010 - Commencement of Ice Pigging operations

2010 - Commencement of Sludge management development

2012 – First trials of iMeters

2012 – Aqualogy rebrand in UK

2013 – Aqualogy UK Global Strategy: towards an unique organization

5. DEVELOPING BUSINESS

6 NON REGULATED MARKETS

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Our Aim: Provide Technologies, Services and Solutions to the UK

industry

Entering a saturated market

Heavy financial and environmental regulation

Industry that is typically slow to change

Entry and Growth in the UK water industry

What Customers want

Solutions to managing water infrastructure

Reduce energy consumption/costs

Lower operating costs

Environmental friendly solutions

To stay ahead of the regulator / the market

Seen to be innovative

6. NON REGULATED MARKETS

Challenges

Long sales cycles

2 – 10 years, depending on product

Selling to large organisations with complex decision making

Drought – Flood – Cold - Heatwave : can disrupt business as usual

Very competitive market

Advantages

Water companies keen to be ‘Innovative’

Transparent rules

Strong employment market

Excellent results from Graduate intake

Growth not restricted by lack of good candidates

Once Water companies have made strategic decisions they are slow to change

6. NON REGULATED MARKETS

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7 AQUALOGY UK

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7. AQUALOGY UK

Agbar / Spain

Bristol Water Holdings

Aqualogy Solutions &

Technologies UK

Aqualogy Solutions

Agbar Serco J.V

Bristol Water plc

BWBSL

Aqualogy Environment

Marral Chemicals

30% 100%

100%

50%

100%

100%

100%

50%

Current Corporate structure Governance

After AGBAR sold 70% of BW,

AQUALOGY has independent

governance.

Corporate Structure in 2013:

Aqualogy Solutions &

Technologies UK (Holding

Company)

Aqualogy Environment Ltd

(Operative Company)

AgbarSerco JV

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Through R+D+I :

Ice Pigging

iMeters

Sludge Drying

Water Treatment Processes

Through acquisitions:

Consultancy Services

Engineering Services

Chemical Services

Hygiene Services

Two ways of entering the market

7. AQUALOGY UK

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A method for cleaning pressurized pipes using

slush ice

Patented, unique, highly innovative, faster and

less disruptive

Advantages over traditional methods include lack

of enabling works, shorter downtime for mains,

higher effectiveness and lower water usage.

Worldwide license for water and wastewater

industry

Successful projects in UK, Netherlands, Germany,

Spain, USA, Chile, Australia and Japan.

Ice Pigging

7. AQUALOGY UK

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Low cost, robust, end-to-end solution for remote monitoring water meters

First developed in UK, now moving to the global market

Attaches to existing meter then collects and sends data via GPRS. The info is then

accessed via a website or sent to other systems such as customer Billing system

iMeter

Currently in use at Bristol Water and Wessex Water

Other UK Water companies interested

Also in use in Spain, Peru and Colombia

7. AQUALOGY UK

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Technology for drying solid/liquid waste

Unique low temperature design that can use waste heat

sources

Aligned with renewable energy technologies

Improvement in waste management efficiency thanks to:

Minimization of the environmental impact:

reduction of the waste volume up to 70%

Increase in final uses: energetic valorisation (waste

to energy), recycling,..

Successful projects in Spain, France and Ireland

Sludge Drying

7. AQUALOGY UK

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Patented & Trade Marked Processes

Breadcare™

Golfcare™

Printcare™

7. AQUALOGY UK

R & D Driven Water Processes

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Tailored solutions including:

Water risk assessment

Recycling schemes

Alternative water sources

Water efficiency surveys

Olfactometry studies

7. AQUALOGY UK

Consultancy services

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Design, installation and maintenance

Water softeners

Reverse Osmosis

Filters

Chemical control equipment

7. AQUALOGY UK

Engineering services

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In-house blending facility

Steam boilers

Cooling towers

Effluent treatment

Closed circuit systems

7. AQUALOGY UK

Chemical services

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In-house cleaning team

Cooling towers

Boiler de-scales

Chlorination

7. AQUALOGY UK

Hygiene services

7. AQUALOGY UK

AQUALOGY have obtained knowledge about water sector and built a strong networking in UK:

Institutional networking

Environmental Agency

Water UK

Water Intelligent

Invest in people

Trade Commercial UK Embassy

British Chamber of Commerce in Spain

Spanish Chamber of Commerce in UK

R+D and Academic Networking

Bristol University

Isle networking

Bath University

Commercial networking

Water Companies

Industrial sector

GDF SUEZ Club Pays

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