HYD.L Regulatory News (HYD)

HYDRO INTERNATIONAL PLC ("the Group")

2010 AGM Trading Statement

As indicated in our 2009 Annual Report, residential housing and commercial construction markets appear to have stabilised and enquiry levels in the Group's Stormwater businesses are now showing encouraging signs of improvement. This continues to support our expectation of the start of a gradual recovery in private sector projects through the second half of 2010.

In anticipation of the recovery we have strengthened our management team in our US Stormwater business with the appointment of a National Sales Manager and Operations Manager. Since the start of the year the US team has made good progress improving sales channels and expanding our network of distributors.

Whilst any private sector recovery should benefit the Group's Stormwater businesses, we continue to recognise the uncertainty surrounding public sector investment, and the potential knock-on impact into private sector activity, as governments debate reductions in public spending levels. However, water issues remain high on the public agenda as demonstrated in the UK by the passing of the Flood and Water Management Act in the closing days of the outgoing administration.

Prospects for the Group's wastewater businesses remain encouraging with a number of strategic projects being pursued in the UK, US and Middle East. In the UK the expected hiatus between the 4th Asset Management Programme and the start of the 5th programme in April 2010 has materialised, but there are now signs that projects are beginning to move forward.

Similarly in the US there have been some delays in both order placement for new projects and progression of existing projects as municipalities await clarification on whether additional federal stimulus funding may become available.

Taking the above factors together, the directors believe the Group is nevertheless trading in line with its expectations for the full year to 31 December 2010, albeit with profits reported in the first half expected to be lower than the result for the first half of last year.

The management team continue to work hard to develop the business to take advantage of emerging environmental regulation and increasing trends that favour the use of sustainable solutions to drainage and water treatment. The Group is in robust financial condition with a strong balance sheet and remains focused on its long-term strategy to achieve growth.

For further information, please contact:

Hydro International plc Tel: +44 (0) 1275 878371

Tony Hollox, Chief Financial Officer

KBC Peel Hunt Tel: +44 (0) 20 7418 8900

Nominated adviser

Julian Blunt (Corporate)

20 May 2010