H2O Innovation Inc. ('H2O Innovation' or the 'Corporation') announces its financial results for the fourth quarter and fiscal year ended June 30, 2023.

'Our growth momentum remained strong during our fiscal year 2023 and is among the best in the industry, with an organic revenue growth above the industry average in all our business pillars. The strategy to expand the sales of our Specialty Products in key locations with the addition of strategic sales resources and distributors, combined with our focus on industrial opportunities for the Water Technologies and Services (WTS) business pillar has really paid off. We also directed our efforts towards the development of the Corporation's O&M customer base through scope of work expansions. Meanwhile, the pressure on gross profit margins represented our main challenge for FY2023, notably in the Maple business line as previously mentioned in September 19, 2023 press release. After managing constant price increases in our supply chain and high inflation in the labor market, we now see more stability on the horizon. We have implemented initiatives to recover and improve our gross profit margin profile in the coming quarters, such as amongst others, price increase programs, CPI adjustments on O&M contracts and the insourcing of some of our manufactured products. With an improvement of cash flow generated from operating activities resulting into a reduction of our net debt level, we look into the future with confidence in maintaining the sustained organic revenue growth and improved margin profile as per our Three-Year Strategic Plan. The Corporation's financial position, more favorable market conditions and our disciplined approach for mergers and acquisitions (M&A) should enable us to capture new organic and acquisition growth opportunities. Overall, we remain committed to our 3-Year Strategic Plan and objectives,' stated Frederic Dugre, President, Chief Executive Officer and co-Founder of H2O Innovation.

Non-IFRS financial measurements

Certain indicators used by the Corporation to analyze and evaluate its results, which are listed below, are non-IFRS financial measures or ratios, supplementary financial measures, or non-financial information. Consequently, they do not have a standardized meaning as prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. These non-IFRS measures are presented as additional information and should be used in conjunction with the IFRS financial measurements presented in consolidated financial statements. Even though these measures are non-IFRS measures, they are used by management to make operational and strategic decisions. Providing this information to the stakeholders, in addition to the Generally Accepted Accounting Principles ('GAAP') measures, allows them to see the Corporation's results through the eyes of management and to better understand the financial performance, notwithstanding the impact of GAAP measures. However, these measures should not be viewed as a substitute for related financial information prepared in accordance with IFRS.

Forward-Looking Statements

Certain information and statements contained in this press release and in other Corporation's oral and written public communications regarding the Corporation's business and activities and/or describing management's objectives, projections, estimates, expectations or forecasts may constitute forward-looking statements within the meaning of the applicable securities legislation. Forward-looking statements include the use of words such as 'anticipate,' 'believe,' 'continue,' 'could,' 'estimate,' 'expect,' 'if,' 'intend,' 'may,' 'plan,' 'potential,' 'predict,' 'project,' 'should' or 'will,' and other similar expressions, as well as those usually used in the future and the conditional, although not all forward-looking statements include such words. H2O Innovation would like to point out that forward-looking statements involve a number of uncertainties, known and unknown risks and other factors which may cause the actual results, performance or achievements of the Corporation, or of its industry, to materially differ from any future results, performance or achievements expressed or implied by such forward-looking statements. Major factors that may lead to a material difference between the Corporation's actual results and the projections or expectations set forth in the forward-looking statements include, without limitation, statements regarding future capital expenditures, revenues, expenses, earnings, economic performance, indebtedness and financial position; business and management strategies; expansion and growth of the Corporation's operations; the Corporation's backlog, the execution of such backlog and the timing of new and existing projects and contracts; the Corporation's ability to deliver projects and contracts in due time, without additional costs, considering labor shortage and the global impact on the supply chain; the Corporation's ability to generate future cash flows; the Corporation's ability to capitalize on future growth opportunities; anticipated trends in the Corporation's revenue streams and business mix; expectations of customers' needs; customers' acceptance of and confidence in the Corporation's existing technologies and product innovation and other expectations, beliefs, plans, goals, objectives, assumptions, information and statements about possible future events, conditions and results and such other risks as described in the Corporation's Annual Information Form dated September 27, 2023, which is available on SEDAR+ (www.sedarplus.ca). The forward-looking information contained in this press release is based on information available as of the date of the release and is subject to change after this date. Unless otherwise required by the applicable securities laws, H2O Innovation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

About H2O Innovation

Innovation is in our name, and it is what drives the organization. H2O Innovation is a complete water solutions company focused on providing best-in-class technologies and services to its customers. The Corporation's activities rely on three pillars: i) Water Technologies & Services (WTS) applies membrane technologies and engineering expertise to deliver equipment and services to municipal and industrial water, wastewater, and water reuse customers, ii) Specialty Products (SP) is a set of businesses that manufacture and supply a complete line of specialty chemicals, consumables and engineered products for the global water treatment industry, and iii) Operation & Maintenance (O&M) provides contract operations and associated services for water and wastewater treatment systems.

Contact:

Tel: +1 418-688-0170

Email: marc.blanchet@h2oinnovation.com

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