2016 Global Water Market Outlook

Water & Wastewater Treatment Market

European Network Rehabilitation Market

Fredrick Royan
Vice President, Global Environment & Water Practice
Energy & Environment

13th October 2016

British Water International Forum Meeting

2015 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of
Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.
 Global Water MarketOverall Market Outlook 2016
At nearly $625 billion, the market comprises utilities and solutions and services equally.

Total Water Market: Percent Forecast by Total Water Market: Percent Expenditure Forecast by
Expenditure Type, Global, 2016 Treatment, Global, 2016
$624.97 Billion $306.24 Billion
Design/ Build/
Consulting Construct
9% 16%

Operation
W & WW Services 19%
W & WW
Solutions &
Utilities
Services 49%
51% Maintenance
& Monitoring
Solutions Services
49% 7%

Total Water Market: Percent Expenditure 14%

Forecast by Segment, Global, 2016
10.0%
8.2% 42.0% 15.9% 18.6% Chemicals
16% 54%

5.3%
pH Conditioners
Coagulants & Flocculants 32%
Disinfectants and General Biocidal Products $150.06B
Scale and Corrosion Inhibitors Treatment Sludge Management
Process Technologies
Antifoam Chemicals Control & 36% Wastewater Treatment
Other Chemicals Management Technologies
47% Water Treatment
Technologies
Water and wastewater (W & WW) technology segment considered in this slide
includes only equipment and not service. Note: All figures are rounded. The base year is 2015. Source: Frost & Sullivan

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 Treatment Equipment Breakdown
Membrane-based treatment technologies will see the highest growth in both the municipal and industrial
sector.

Water & Wastewater Treatment Equipment Market: Revenue Growth Outlook (20152016)
Forecast by Key Technologies, Global, 2016 Expected degree of growth
2016 Revenue Market Share (Low) (Medium) (High)
Key Technology ($ Billion) (%)
Membrane Bio-Reactor (MBR) 1.07 2
Reverse Osmosis (RO) Membrane 2.91 5.4
Micro-Filtration (MF) Membrane 1.57 2.9
Ultra-Filtration (UF) Membrane 2.00 3.7
Nano-Filtration (NF) Membrane 0.71 1.3
Ultra Violet (UV) 0.86 1.6
Ozone 0.30 0.5
Chlorination 1.68 3.1
Ind Demineralisation 1.29 2.4
Clarification 5.24 9.7
Activated Sludge 5.73 10.6
WW Pre-Treatment 2.14 4
Sludge Thickening 2.24 4.1
Sludge Dewatering 2.84 5.3
Sludge Digestion 1.06 2
Sludge Drying 1.19 2.2
Other Biological WWT 5.89 10.9
Other Primary WWT 6.07 11.2
Other Filtration 8.65 16
Other Treatment Equipment 0.59 1.1

Note: Water and wastewater equipment segment considered in this slide includes only equipment and not associated services. Source: Frost & Sullivan

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 Key 2016 Municipal Water Market Predictions
Minimizing non-revenue water, renewal, and expansion of the network and greater implementation
of smart water technologies are amongst the key trends in 2016.
Increase in Tariff Stronger Focus on
and Metering Rate Asset Management
Average water prices are forecast
to rise further in 2016, as utilities An essential step towards
focus on maximizing revenues and sustainability of the water systems
minimizing non-revenue water. and networks is strong asset
management.
Global Growth Driven by
Emerging Economies
APAC will record the highest
growth rate of 3.8% in 2016, as the
region continues to expand access
to the municipal water and
wastewater network.
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Leapfrogging in Network Renewal
Developing Nations
Emerging economies with Network rehabilitation continues
greenfield infrastructure in 2016 with increasing focus on
installations will adopt the latest utilizing new pipe materials to
technology thereby futureproofing
maximize effectiveness.
themselves.
Rise of Smart Water
Investment in smart water
solutions will increase by
16.8% in 2016 to be worth
$11.85 billion.
Source: Frost & Sullivan
4
 Market SegmentationMunicipal
Strongest growth for 2016 will be in the process control and management segment of the market.

$85.14B $248.11B
in 2016 with a growth
in 2016 with a growth
rate of 2.6% $478.16B rate of 3%
Design & (Total Market in 2016)
Engineering Operations &
Maintenance

$52.59B $32.79B
in 2016 with a growth in 2016 with a growth Treatment
rate of 4.2% rate of 4.2% plants
Water &
Wastewater
Technology

$44.6B
$14.92B in 2016 with a growth
rate of 6.5%
Networks
Process Control
& Management
in 2016 with a growth
rate of 1.4%
Chemicals Source: Frost & Sullivan

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 Key 2016 Industrial Water Market Predictions
Decline in oil prices has reduced investment in that sector, yet it benefitted a number of industrial
sectors, enabling them to expand production, and, as a result, invest in water treatment.
Integration of Internal
and External Assets
Companies are expected to
vertically integrate their offerings
to enhance services.
Strongest Growth to Come
from Power Sector
Production of electricity will
account for the major share of
revenue in the industrial water
market in 2016.
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Increase in Smart Solutions
for Dosing & Chemical
Management
Investment in smart solutions in
2016 will improve the
management of chemicals
supply chain.
Process Control and
Management
The process control and
management market is forecast to
increase by 9% to $24.21 billion in
2016, out of a total market of
$146.81 billion.
Slowdown in Oil & Gas
Market Impacts Water
With oil and gas capex forecast to
decline, the water market will also
suffer, as water treatment is required
for all new oil and gas projects.
Reducing Water
Footprint
Focus will continue on reducing
water footprint by means of
reuse and implementation of
efficient treatment solutions.
Source: Frost & Sullivan
6
 Market SegmentationIndustrial
The global industrial water market is expected to grow at 5.4% in 2016.

$14.70B $68.26B
in 2016 with a growth
in 2016 with a growth
rate of 4.6%
rate of 4.4%
Design &
Engineering Operations &
Maintenance
$146.81B
$26.77B (Total Market in 2016)
in 2016 with a growth
Water and rate of 5.8%
Wastewater
Technology
$24.21B
in 2016 with a growth
rate of 9%
$12.86B
in 2016 with a growth Process Control
rate of 3.9% & Management
Chemicals Source: Frost & Sullivan

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 Key Conclusions

Global water market revenues are forecast to increase by 4% to be worth

nearly $625 billion in 2016.

Greater urgency for water and wastewater treatment as well as

increased industrial output in emerging markets are expected to
drive market growth.

There will be a tangible shift from a linear economy to a circular

2016 Global
economy, wherein wastage is minimal and resources are re-
Water Market
used. Investment in technologies to improve efficiencies and to
facilitate reuse will continue to increase.

Transformation of the UNs Millennium Development Goals to

Sustainable Development Goals will change the nature of
technologies and solutions used in water and wastewater
management.

Shift to TotEx and customer-centric approach, especially in developed

markets, is expected to drive implementation of asset modernization.

Source: Frost & Sullivan

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 European Wastewater Network Rehabilitation Market

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 European Wastewater Network Rehabilitation Market
- Market Definitions

Design and Engineering

This segment includes spending towards the design and re-engineering of
networks. Consulting and construction expenses that are mainly attributed to
man hours are also included in this segment.

Rehabilitation Solutions
Rehabilitation solutions include repair and renovation. The segment also
includes methods of both trenchless and trenched rehabilitation. Hard
components such as pipes of various materials, protective coatings, and liners
constitute this segment. Clearing blockages is also considered in this segment.

Network Monitoring and Inspection

For a network to sustain, it requires periodic inspection, assessment, and
monitoring. Such services and software provided for network management
account for this segment.

Image Source: www.rmcwater.com, www.cornerstonehomeinspections.net Source: Frost & Sullivan

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 European Wastewater Network Rehabilitation Market
- Rehabilitation Methods
Total Wastewater Network Rehabilitation Market: Rehabilitation Methods, Europe, 2016

Pipe Rehabilitation
Methods

Repair Renovation

Injection Sealing Correction Coating Lining

Method Method Method Method Method

Inner Pressure Partial Robotic Assembly Lining with

CIPP Manual Manual
Sleeves Renewal Rehabilitation Method Pipes

Locally Locally Pre-

Fabricated, Fabricated fabricated
Hardened

CIPP Pipe-Reducer Long/

SPR
(with or
Short
without ring
Relining
space)

Source: KANSAS Collaborative Research Program; Frost & Sullivan

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 European Wastewater Network Rehabilitation Market
- CEOs Perspective
European wastewater network rehabilitation
market is estimated to be worth 11.52 billion
1 in 2016, driven by the critical need to renew
ageing sewer infrastructure.

Utilities and network operators are

increasingly embracing trenchless methods in
2 order to be efficient and to ensure minimum
disruption.

Regulations push renovation of networks

over repair. Key success factors of
3 renovators include price competitiveness,
turnaround time, and technical capabilities.

Use of intelligent solutions in inspecting and

evaluating networks and services to aid
4 rehabilitation solutions is estimated to have
a potential of 1.75 billion by 2021.

Germany remains the forerunner in the

5 implementation of sustainable methods,
followed by the United Kingdom and Benelux.
Source: Frost & Sullivan

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 European Wastewater Network Rehabilitation Market
- Market Engineering Measurements

Total Wastewater Network Rehabilitation Market: Market Engineering Measurements, Europe, 2016

Market Overview
Market Size for Base Year
Market Stage Market Revenue Last Year of Market Growth
Study Period Rate

Growth 11.52 B 14.87 B 5.0%

(2016) (2021)

Compound Degree of
Customer Price
Annual Growth Technical
Sensitivity
Rate Change

5.2% 6 6

(CAGR, 2016-2021) (scale:1 [low] to 10 [high]) (scale:1 [low] to 10 [high])

For a tabular version, click here

Decreasing Stable Increasing
Note: All figures are rounded. The base year is 2016. Source: Frost & Sullivan

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 European Wastewater Network Rehabilitation Market
- Percent Revenue Forecast by Region

Key Takeaway: Eastern Europe is the key engine for market revenue growth in the midterm.

Total Wastewater Network Rehabilitation Market: Percent Revenue Forecast

by Region, Europe, 20132021
100.0

80.0
Revenue (%)

60.0

40.0

20.0

0.0
2013 2014 2015 2016 2017 2018 2019 2020 2021
Eastern Europe 11.6 11.8 11.9 12.0 12.1 12.2 12.4 12.5 12.6
Rest of Western Europe 19.0 19.0 19.0 19.0 19.0 19.0 18.9 19.0 18.9
Iberia 10.2 10.1 10.1 10.0 9.9 9.9 9.8 9.7 9.7
Italy 12.3 12.2 12.1 12.0 11.9 11.8 11.6 11.5 11.4
United Kingdom 13.8 13.9 13.9 14.0 14.0 14.1 14.2 14.2 14.3
France 13.0 13.0 13.0 13.0 13.0 13.0 13.0 13.0 13.0
Germany 20.0 20.0 20.0 20.0 20.0 20.0 20.1 20.1 20.2
Year
Note: All figures are rounded. The base year is 2016. Source: Frost & Sullivan

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 European Wastewater Network Rehabilitation Market
- Overall Value Chain and Representative Participants
Total Wastewater Network Rehabilitation Market: Value Chain, Europe, 2016

Design & Rehabilitation Pipe & Allied Inspection &

End Users
Engineering Services Materials (OEMs) Monitoring Solutions

MWH, AECOM Georg Fisher

Municipalities and
Lanes for Drains, Soncini, OnSite Utilities

Picacorp, Pure
Hobas, Oliner
Technologies

Agriapipe, Amiantit

Insituform, Brandenburger, Reline

Network Pipeline and Equipment Inspection, Inspection,

Evaluation, Sewer Supplier, Monitoring, Maintenance,
Tender Writing, Construction, Promotion Calibration Calibration,
Inspection Open or Tenders
Consultation Trenchless,
Project
Management,
Cleaning,
Inspection

Industry Bodies (Certifications, Technology Evaluations, and Recommendations)

Source: Frost & Sullivan

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 United Kingdom Snapshot

Wastewater Network Rehabilitation Market: Wastewater Network Rehabilitation Market: Percent

Key Statistics, United Kingdom, 2016 Revenue Breakdown, United Kingdom, 2016
Eastern
Rest of Europe Germany
Western 12% 20%
Population Area Europe
19% France
13%

64.2 M 242,495 km
(2016) (2016)

Iberia
10% United
Italy Kingdom
12% 14%

Length of Rehabilitation
Revenue CAGR
Network Rate

Approx. 546,200 2% 1.61 B 5.6%

Kilometers (2016) (2016-2021)

Note: All figures are rounded. The base year is 2016. Source: Frost & Sullivan

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 Revenue Forecast by Vertical Market

Key Takeaway: Deciding factor in most projects is cost. However, some utilities engage in
discussions to analyse cost-benefit over performance.
Wastewater Network Rehabilitation Market: Revenue Forecast by Vertical Market,
United Kingdom, 20132021
Rehabilitation Solutions (CAGR): 5.7%
Network Monitoring and Inspection (CAGR): 6.0%
2500.0 Design & Engineering (CAGR): 3.4%

2000.0
Revenue ( Million)

1500.0

1000.0

500.0

0.0
2013 2014 2015 2016 2017 2018 2019 2020 2021
Rehabilitation Solutions 1,148.8 1,212.0 1,278.7 1,349.0 1,425.9 1,507.2 1,593.1 1,683.9 1,781.5
Network Monitoring and Inspection 127.5 134.7 142.4 150.7 159.6 169.1 179.2 190.1 201.7
Design & Engineering 103.0 106.1 109.5 113.1 117.0 120.9 125.0 129.4 133.9
Year
Note: All figures are rounded. The base year is 2016. Source: Frost & Sullivan

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 The Last Word3 Big Predictions

Confluence of information technology, software, and data to enable

1 industry transformation in evaluating network conditions and optimising
rehabilitation costs.

Trenchless technology to account for close to half of the total rehabilitation

2 solutions by 2021.

Performance-based contracting in sewer networks to drive product and

3 service innovation to bring in efficiency.

Source: Frost & Sullivan

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