WATERCO LIMITED — AGM Information 2012

Oct 29, 2012

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WATERCO LTD A.B.N. 62 002 070 733 36 South Street, Rydalmere NSW 2116 P.O. Box 230, Rydalmere BC NSW 1701 Ph: + 61 2 9898 8600 Fx: + 61 2 9898 1877 www.waterco.com

Chairman’s 2012 AGM Address

You would have read the CEO’s Review of Operations for 2011/2012 included in the Annual Report. Hence rather than repeating these details, at this AGM I would like to focus on reviewing the factors that will influence the outlook for the new financial year 2012/2013.

We are just about to complete four months of trading in the new financial year, so armed with these results, I shall attempt to provide you with a view of our expectation for the full year.

In Australia and New Zealand, weak consumer confidence has continued into the first quarter of the new financial year. As a result, we have seen a reduction in the uptake of forward orders. Whilst customers have generally been cautious and have been preserving their cash-flows, sales improved significantly in October and should make up for most of the shortfall of the first quarter.

The recent reduction in interest rates is also encouraging for business, and that, combined with prevailing good weather, means we may see an improved position for Australia and New Zealand over the full financial year. However, it is still early in the year, and in order not to be overly optimistic, we have factored in equivalent results with those of the previous year in our projections.

In the Northern Hemisphere - namely Canada, the USA and Europe - poor economic conditions remain unchanged from the previous year. Nevertheless, in the USA we will see further progress in the inroads we have made into the water treatment industry and expect an improved performance in this entity over the full year. In Europe, we have been successful in securing new distributors to list our products in their catalogues; however, again, we have not factored this improvement into our forecasts. This is in view of the current Eurozone debt crisis, which is affecting the confidence of our customers in Europe and causing continuing price pressures.

Taking the above into consideration, we project a Profit After Tax of $2.0 million for the full financial year ending 30 June 2013. We acknowledge that this is disappointing, as it represents a flat performance compared with the previous year’s results of $2.0 million. However, we will work hard towards improving on this forecast and hope that we will be favoured by external factors, such as a resolution of the current Eurozone debt crisis and, as a result, the return of some certainty to the economy. In recent times we have read that the UK has come out of recession, yet it remains to be seen whether this will be sustained.

Since the onset of the Global Financial Crisis, economic conditions have been poor. Thus we have focused on being profitable, as the markets consolidate, so that we can take advantage of the recovery when it happens. We have succeeded in doing that, in the face

of intense market competition. In addition, we have maintained our levels of service to our customers and have gained new ones.

In the longer term, our plan for a brighter future rests in our development of new products and making further inroads into the water treatment industry. We are maintaining our substantial efforts into these areas, particularly with the recent acquisition of a patented technology covering the sanitization of household pools with an environmentally-friendly chlorine-free water treatment system.

We believe that this investment in Research and Development sets us apart from others in the industry. We have successfully attained registration of several patents and are in the process of registering several more. These patents, which will improve performance and reliability of our products, include:

• Pump Secondary Seal, that protects motors from corrosion;

• Fish-tail laterals, that consume less energy;

• Nozzle Filter Assembly Process for greater reliability;

• Skimmer Deck Lid Locking Mechanism for improved child safety;

• Improved Heat Exchanger design, for better performance; and

• Various design improvements to commercial filters, to improve reliability.

I would like to thank Waterco’s shareholders for their continuing support, and my fellow directors, the management and employees for the efforts they have put in during the year.

About Waterco Ltd – www.waterco.com

Established in 1981 and listed on the ASX in 1989, Waterco (ASX: WAT) manufactures and distributes a diverse range of products for the international swimming pool and water treatment markets. Waterco is also the franchisor of Swimart, Australia and New Zealand's largest network of pool and spa retail outlets, and is also the distributor of Zane Pool Heating solutions via a network of Australian dealerships.

Waterco delivers high quality, innovative products at exceptional value in over 40 countries. This includes a comprehensive range of swimming pool & spa equipment and chemicals as well as domestic and industrial water treatment equipment.

The company’s head office is in Sydney, Australia with international offices, manufacturing plants and warehouses located in Australia, New Zealand, Malaysia, Indonesia, Singapore, China, US, Canada and the UK.

For further information, please contact:

Soon Sinn Goh CEO 612 9898 8600