Corporate Presentation January, 2017
Forward-Looking Statements This presentation, and its commentary, may contain forward-looking statements, including, without limitation, statements containing the words "should", "believe", "anticipate", "may", "plan", "will", "continue", "intend", "expect", "estimate" and other similar expressions. These statements constitute “forward -looking information” within the meaning of applicable Canadian securities laws. These statements are based on the Company’s current expectations, estimates, forecasts and assumptions. Forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other important factors that could cause the Company’s actual performance to be materially different from that projected. Examples of these statements would include those where the Company forecasts the timing of new and existing projects and the success of the Company’s new technologies and entering new markets. The assumptions, risks and uncertainties that could cause actual results to differ materially from the forward-looking information, include, but are not limited to grow the Wachs Water Services business through addition of senior business development staff, market changes, the Company’s ability to deliver services in a timely and cost effective manner, technological change, changes in general economic conditions and other risks detailed from time to time in our ongoing filings with the Canadian securities regulatory authorities, including those in the Company’s Annual Information Form, which filings can be found at www.sedar.com. Given these assumptions, risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Unless otherwise required by applicable securities laws, the Company undertakes no obligation to publicly update or revise any forward-looking statements either as a result of new information, future events or otherwise. Unless otherwise stated, all dollar amounts are expressed as CAD$.
About Pure At Pure, we work to protect the critical infrastructure necessary for everyday life. We are driven by the ambition to change the way this infrastructure is managed. Our technologies and expertise are being used around the world to help manage pipeline deterioration and reduce water, wastewater and oil and gas loss. By fostering an environment that values and encourages creativity and innovation, we have become the world leader in the development and application of innovative technologies for inspection, monitoring and management of pipeline infrastructure. Mission To provide owners of critical infrastructure with innovative technologies and management solutions that prevent failures, reduce capital expenditure and lost revenue, and contribute to a sustainable future. Vision To remain a trusted advisor for infrastructure owners around the world as they assess and renew their critical infrastructure assets; Pure will remain renowned for its engineering and technical expertise, client-first approach and ability to develop innovative technologies. 3
Overview: Leader in Pipeline Sustainability Solutions Serving the Water and Oil & Gas Sectors • First mover in large, under-served, water/wastewater sector with attractive secular growth drivers • Premium technology-driven services for federally mandated O&G pipeline inspections • Uniquely positioned to benefit from growing trends towards proactive asset management • Scalable platform supported by proprietary technology portfolio and high barriers to entry SALES BY GEOGRAPHY* SALES BY SEGMENT* United States Canada International Water Oil & Gas Bridges/Structures 15% 2% 13% 21% 66% 83% 4 * FY 2015
Overview: Key Management • $113.6M Q3/’16 TTM* revenue; up 12% over Q3 2015 TTM • $16.7M Q3/’16 TTM Adjusted EBITDA; up 10% over Q3 2015 TTM • $21.2M Q3/’16 TTM O&G Sector revenue; 107% CAGR over 3 years Jack Elliott Mark Holley Geoff Krause President & CEO Executive VP & COO CFO 107% 3-yr CAGR for O&G sector revenue • Highly experienced management team • >500 employees 5 * Trailing-12-mth revenue (TTM) Q3 2016
Key Milestones: Established Growth Platform Serving Water/Wastewater & Oil and Gas Pipeline Sectors 6
Major Market Segments Water & Wastewater Bridges and Oil & Gas Pipeline Pipelines – 83%* Structures – 2%* Integrity - 15%* Proprietary Technologies Premium Technology Industry Leader in / Industry Leader Driven Services Real-time structural Condition Assessment Condition Assessment / monitoring Leak Detection Cathodic Protection 36 building and bridges world-wide Monitoring Pig Tracking Not a major focus area Asset Management Right of Way Surveys Optimization and Management 7 * FY 2015
Sustainable Growth Strategy Our technologies and data analytics , used to assess the Expanding Markets health of pipelines, are the core of Pure’s offering Through our Engineering/Asset Management capability , critical data is converted to actionable information for the proactive management of pipelines, allowing owners to optimize and safely operate these important assets Our solutions are applicable for pipeline owners within the water and oil and gas sectors. Pure will increase its distribution channels and complementary revenue streams globally 8
Revenue by Product Group • $99.4M Q3/’16 TTM for core Consulting and Inspection revenue; 38% CAGR over 3 38% CAGR for Consulting and years Inspection revenue 9
Financial Performance – Q3 Overview For the period ended Three Three Change Nine Nine Change September 30 (000s months months $ % months months $ % • Q3 Adj. EBITDA except per share 2016 2015 2016 2015 improved 9% despite amounts) 28,453 29,559 (1,106) (4) 82,763 73,636 9,127 12 4% decline in revenue; Revenue mainly due to strong 6,415 8,142 (1,727) (21) 17,823 19,564 (1,741) (9) Cost of sales O&G sector growth 22,038 21,417 621 3 64,940 54,072 10,868 20 Gross profit 77 72 - 78 73 - Gross margin (%) • YTD revenue and adj. 21,282 20,721 561 3 65,525 58,223 7,302 13 Operating Expenses 1 EBITDA up 12% and 4,216 3,883 333 9 9,876 6,393 3,483 54 Adjusted EBITDA 2 54% reflecting revenue Adjusted EBITDA (%) 15 13 12 9 growth and operating Profit (loss) for the 895 1,076 (181) (17) (596) (811) 215 (27) period efficiencies 0.02 0.02 (0.01) (0.02) Per share – basic 0.02 0.02 (0.01) (0.02) Per share – diluted 4,192 3,507 685 20 9,308 5,747 3,561 62 Cash Flow from Operations Before Working Capital Changes 2 931 808 123 15 (413) (2,638) 2,225 (84) Adjusted Profit (Loss) for the period 2 1. Excludes Libya accounts receivable recovery and loss or gains on asset disposals 10 2. See Non-GAAP Measures.
Water Pipeline Integrity Sector Industry Tailwinds Outlook • Continue to lead/win multi-year programs for Annual multi-billion dollar shortfall to replace or repair water utilities aging facilities • Increased number of requests for proposals with emphasis on comprehensive asset management solutions • Continue to grow metallic and wastewater Population growth, growing pipeline markets economic activity and high water losses/use drive the need for • International opportunities cost effective management and • Pure benefits from water utility budget constraints maintenance programs Increasingly stringent environmental regulations 11
Our Work Speaks Volumes Water Sector To date, we have located more than 4,500 leaks, representing over 375 billion litres* in water savings Through over 25,700 kms of structural assessment, we have helped our clients prevent over 4,000* failures , resulting in billions of dollars in savings 12 *Figures are based on internal data (2014; updated in 2016)
Water Sector Technology 13
Oil & Gas Pipeline Integrity Sector – PureHM Competitive Advantage Outlook • PureHM is currently Pure’s fastest growing business unit Integrated solutions offering – industry • 107% 3-yr CAGR for O&G Sector revenue seeking vendors who can provide solutions to both corrosion and inline Turnkey • Completed acquisition of E-MAC Corrosion* allowing for Solutions inspection groups within pipeline vertical integration of business unit integrity departments • Improved solutions portfolio and increased management and operational capacity SMARTBALL inline inspection • Focus on program growth with top clients technology; SPECTRUM XLI aggregates multiple pipeline inspections, • Technology top 4 clients have an integrity budget over $1Bln, in including leak detection, depth of over aggregate and cathodic protection, into one secure platform; ongoing R&D • 30 Master Service Agreements, to date, will assist in driving future growth • Up from 13 MSAs when PureHM was formed in Q4/’14 Leading ARMADILLO remote pig Safety & tracking solution significantly reduces • Continued focus on recruitment and training and development Efficiency number of field technicians and hours worked compared to conventional pig of its workforce tracking 14 * See Company’s news release dated December 21, 2016
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