Hyflux LtdFull Year FY2010 Results Review

Cho Wee PengGroup CFO

23 February 2011

Executive Headlines

• Our 2010 results represent a historic high in revenues and profits

• Tight cost control has enabled our profit growth to keep in line with our revenue growth, notwithstanding higher forex losses

• Our regional and sectoral diversification strategies which we embarked on 5 years ago, show strong performance embarked on 5 years ago, show strong performance

• Our orderbook continues to gain momentum with Hyflux having won US$76 mil in projects in China in the past 2 months

• Our investments in human capital have significantly grown in the last 2 years to position ourselves for the future

2

• Our core competitive advantage relies on innovative membrane technologies coupled with integrated engineering and delivery capabilities across the value chain

• Notwithstanding political tensions in one of our future growth markets (Libya), currently with no revenue contribution in 2010, the intrinsic need for clean water only continues to grow as governments and

Executive Headlines

3

need for clean water only continues to grow as governments and people strive to quality water security

• Our strategic alliances with JBIC, JGC and Mitsui enable market and capital access to propel our future growth

85

105

131

83

101

100

120

140EBITDA PBT

S$ mil

Our 2010 revenues & profits are highest in company’s 10-year listing history …

11 1422

33

57

34

55

85

9 12

20

29

50

20

39

70

83

0

20

40

60

80

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

4

EBITDA and PBT CAGR ; 32% and 31% respectively from 2001 – 2010

Through stringent cost management, our profit increase is in line with revenue …. overcoming higher forex losses

S$ mln FY2010 FY2009 % Change

Raw Materials & Consumables 303.0 309.4 (2)

Staff Costs 65.4 59.4 10

Depreciation & Amortisation 17.1 16.5 4

5

Other Expenses 78.4 57.9 35

Finance Costs 16.8 9.3 81

Total Operating & Fin Expenses 480.7 452.5 6

S$ mln FY2010 FY2009 % Change

Total Revenue 569.7 524.8 9

PBT 100.5 83.0 21

PATMI 88.5 75.0 18

Our PATMI is a healthy 18% increase over 2009

6

PATMI 88.5 75.0 18

Our EPS is ahead of last year

FY2010 FY2009

Gross Margin 47% 41%

Net Margin 16% 14%

EPS (cents) 10.5 9.5

ROE 17% 19%

7

ROE 17% 19%

Key highlights

• EPS for FY2009 has been restated to reflect the 1-for-2 bonus share issue.

• ROE decreased as a result of the increase in the share capital arising from shares issued under the Warrant Subscription Agreement with Istithmar.

2.29

3.33

4.17

Dividend Per Share (S$ cents/share)

We propose our shareholders receive the highest dividend payout in Hyflux’s listing history

8

0.47

0.85 0.90 0.90

1.26

2.29

2003 2004 2005 2006 2007 2008 2009 2010

*Dividends have been restated to reflect 1-for-2 bonus share issue

Through our growth, we continue to maintain a healthy balance sheet

S$ mln 31 Dec 10 31 Dec 09

Equity 515 393

LT Assets 666 523

LT Liabilities 529 361

Current Liabilities 316 318

9

Current Liabilities 316 318

Net Current Assets 378 231

Net Gearing 0.73x 0.59x

We maintain good cash balances to capitalise on future growth opportunities

S$ mln FY2010 FY2009

CF Operations (49) 61

CF Investing (96) (93)

CF Financing 213 112

Net Cash Changes 68 80

10

Net Cash Changes 68 80

Cash & Equivalents 222 167

Our 2010 revenues exhibit the results of our geographic and sectoral diversification strategy

Revenue by Country Revenue by Sector

400

500

600

75.1 (14%)SG/OTH

400

500

600

55.1 (9%)

3.4 (1%)

INDUSTRIAL

OTHERS

S$ milS$ mil

11

0

100

200

300

400

FY2005 FY2010

CHINA

343.8 (60%)

150.8 (26%)

73.6 (56%)

23.7 (18%)

MENA

0

100

200

300

400

FY2005 FY2010

MUNICIPAL

511.2 (90%)

74.2 (56%)

56.6 (44%)34.2 (26%)

74.2 (56%)

Last 2 Months’ Orders

We have secured US$76 mil in China projects in last 2 months

Jan 2011 30-year BOT contract for plants at Hechuan Industrial Park, China• Hexin District Wastewater Treatment Plant (20,000m3/day), • Weituo Wastewater Treatment Plant (20,000m3/day), and• Weituo Water Treatment Plant (50,000m3/day)

US$45 mil

12

• Weituo Water Treatment Plant (50,000m3/day)

Feb 2011 30-year BOT contract for Zunyi Wastewater Treatment Plant (150,000m3/day), China

US$31 mil

S$ mil

7481500

2000

2500

1,480

1,848

1,608

653

We see growth in the China market

13

30166 254 335

1100

435

435

863

1,450

0

500

1000

Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Feb 11

EPC

O&M

601

1,117

465

653

955

Note:

O&M order book is a summation of future revenues of our portfolio of plants over the concession periods.

•Possibility of delay in start of work for Tobruk desalination project

•Potential delay in negotiations for two desalination plants in Libya

•Though political unrest affects Libya today, we do not have any

Long-term water management and security will continue to be key concerns for any government

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•Though political unrest affects Libya today, we do not have any investments in Libya

•Our 2 Algerian desalination projects are progressing as planned

•Risk management procedures, including evacuation measures, all in place for all overseas projects

Key Milestone

Our strategic alliances with the likes of Mitsui, JBIC and JGC enhance market and capital access

� Joint venture (Galaxy NewSpring) with Mitsui & Co to develop water projects in China

15

O & MEPCProcess

EngineeringComponent

Manufacturing

Our core competitive advantage relies on innovative membrane technologies coupled with integrated engineering and delivery capabilities across the value chain

Project Origination /Market Access

R&D

Supported by strong financial platform

16

Today, Hyflux enjoys unique differentiation and advantage in the critical links of the value chain

Financial structuring capability as demonstrated through

Scalability with expertise in large-scale projects

Scalability with growing portfolio

Manufacturing of Hyflux’s proprietary membranes with

+ ++

Capital EPC O&M Component Manufacturing

17

demonstrated through credible JVs established with JBIC, JGC and Mitsui

scale projects membranes with entrenched replacement demand

+ ++

Independent publications rate Hyflux as a significant global player … And Asia’s only

18 Source: GWI Desalination Market Report, 2010

6,900

8,000

)

1,5001,500

Wa

ter

Su

pp

ly/D

em

an

d (

bil

lio

n m

3)

GLOBALLY

2,800 billion m3 by 2030

Caused by increased demand for agriculture and industry

CHINA & INDIA

By 2030, China and India together will account for around 41% of projected global water demand

Wastewater treatment/recycling has to develop in tandem with demand to ensure water quality

The future need for water remains unquestioned

19 Source: McKinsey Report: Charting Our Water Future, 2009

4,5004,200

0

2,000

4,000

6,000

Existing

Withdrawals

2030

Withdrawals

Existing Supply

Vo

lum

e o

f W

ate

r (b

illi

on

m3)

818740

618

0

500

1,000

India China

Wa

ter

Su

pp

ly/D

em

an

d (

bil

lio

n m

Forecasted 2030 Domestic Demand

Existing Water Supply

Gap between current supply and 2030 demand

Gap between current supply and 2030 demand

For a young listed company, we’re proud to have delivered stellar returns to our shareholders

Total annualised shareholder returns over the last 10 years since IPO

20

last 10 years since IPO

≈ 32% (About 21x since IPO)

AppendicesAppendices

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China Boosts Budget for Water Infrastructure Projects

� China to invest US$300 bil in water infrastructure projects from 2011 to 2015

� At the same time, China will implement firm targets, assign responsibility and strengthen supervision of:

– quantity of water consumption– efficiency of water use– water pollution levels

to enhance the enforcement of water management measures

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to enhance the enforcement of water management measures

� Local governments will be required to spend 10% of land sales revenue on water projects (gross land sales totaled over US$300 bil in 2010)

� China’s banking regulator has asked banks to expand loans for water conservancy projects and water treatment facilities in spite of the credit tightening

Source: Xinhua, Wall Street Journal

World Water Availability, 2025

Water Scarcity

23 Source: GWI Desalination Market Report, 2010

Global Forecast for Water, Wastewater and Desalination Expenditure

80

100

120

US$ bil

24 Source: GWI Global Water Market Report, 2011

0

20

40

60

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Desalination

Water

Wastewater

8

10

12

14

16

Annual A

dditio

nal C

apacity

(mill

ion m

3/d

ay)

Desalination and Water Reuse Additional Capacity

25 Source: GWI Global Water Market Report, 2011

0

2

4

6

8

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Desalination

Water Reuse

Annual A

dditio

nal C

apacity

(mill

ion m

Disclaimer

This presentation has been prepared by Hyflux Ltd for the information of the attendees of this presentation.

This presentation is not and does not constitute or form part of any offer, invitation or recommendation to subscribefor or purchase any security and neither this presentation nor anything contained in it shall form the basis of, or befor or purchase any security and neither this presentation nor anything contained in it shall form the basis of, or berelied upon in connection with, any contract, commitment or investment decision. This document may not be used orrelied upon by any party, or for any other purpose, and may not be reproduced, disseminated or quoted without theprior written consent of Hyflux Ltd.

No representation or warranty express or implied is made as to, and no reliance should be placed on, thefairness, accuracy, completeness or correctness of the information or opinions contained herein. None of Hyflux Ltdor any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) forany loss howsoever arising from any use of this document or its contents or otherwise arising in connection with thispresentation.

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WATER SOLUTIONS THAT

IMPACT LIVES