2Q17 Results

Economic-Financial Office and Investor Relations Office

This presentation may contain forward-looking statements referring to

SABESP’s business outlook, operating and financial results estimates, and growth

prospects. These are only forecasts, and as such, they are exclusively based on

SABESP’s management expectation in relation to the future of business and its

continuous access to capital to finance the Company’s business plan. These

forward-looking statements largely depend on changes in market conditions,

governmental rules, industry performance and the Brazilian economy, among

other factors, in addition to risks exhibited in disclosure documents filed by

SABESP. Therefore, they are subject to changes without prior notice.

Disclaimer

Agenda

Company Overview1

Our Operations2

Our Financial Performance3

4 SPMR – Water Situation

Sabesp is one of the largest water and sewage

service providers in the world based on the

number of Customers

Provides water to 24.8 million people and sewage

services to 21.4 million people

Also sells wholesale treated water to 5

municipalities (3.0 million people)

Natural monopoly, low operating risk

Serves the City of São Paulo and 366 out of 645

municipalities in the State

Covers around 66% of State's urban population,

including the wholesale

Operations in the São Paulo Metropolitan Region*

represent 70.2% of our total revenues

(1) As of June 30, 2017 (2) Service Available

(3) Households connected (4) Consumer units connected to the

sewage treatment

São PauloRegional Systems

Metropolitan Region

One of the largest water and sewage service

providers in the world…

*The Metropolitan Region we consider for this estimate, includes 8

municipalities outside the legal boundaries of the São Paulo

Metropolitan Region and represents the municipalities served by

the Company’s Metropolitan Division

4

Main Operational Indicators(1)Company Overview

Water Sewage

Connections (million) 8.7 7.2

Coverage(2) (%) 98 89

Service(3) (%) 95 82

Treatment(4)(%) 74

Billed Volume (m³ million) 1,028.4 799.7

We are a mixed capital company, majority-owned by the State of São Paulo, with significant private

ownership

State law requires the State of São Paulo to own at least 50% + 1 voting shares at all times

Currently the Government of São Paulo has 50.3% share

100% common shares

Market Cap: R$ 21.6 billion (as of June, 2017)

(1) As of June, 2017

…with strong corporate governance

5

Ownership Structure % (1)

Agenda

6

3

Our Operations2

Our Company1

Our Financial Performance

4 SPMR – Water Situation

Diversified customer base

7

Water Billed Volume by Type of Customer Sewage Billed Volume by Type of Customer

Over 80% of water volume comes from residential,

commercial and industrial customer Over 90% of sewage volume comes from residential,

commercial and industrial customer

Water Revenues by Type of Customer Sewage Revenues by Type of Customer

Broad coverage of municipalities Municipalities

8

30-year-service agreement between Sabesp, Municipality of São Paulo and State Government (expires

in 2040)

Minimum investment of 13% of the Gross Revenue, net of Cofins and Pasep

Transfer of 7.5% of the Gross Revenue, net of Cofins and Pasep, to the Municipal Environmental

Sanitation and Infrastructure Fund – to be recovered in tariff

Contract with the Municipality of São Paulo

*Incluides 2 partial contracts with Mogi das Cruzes

Nº of contracts % of revenue

Renewed/Secured (Program and Service Contract – 2007-2Q17) 282 79,1%

Metropolitan Region Without Contract 38 11.6%

Expired Contracts 16 0.6%

To be expired (2017 - 2030) 33 6.6%

Total Retail 369* 97.9%

Wholesale 5 2.1%

Total Sabesp 374 100.0%

9

Regulatory Framework

Concession Power in Metropolitan Regions

Legal proceedings related to this matter under Supreme Court (STF) appraisal were ruled in

February 2013

Final decision released in September 2013:

Sanitation services in metro regions are subject to shared responsibility between State and

Municipality

State Legislative has two years to adjust the legislation, create entities and mechanisms to

implement the ruling

Obligatory creation of a Regulatory Agency Municipal or State level

Clarifies the payment conditions of non-amortized investments up to 4 years

Disbursement of federal funds conditioned to the existence of a sanitation plan

Federal Law # 11,445/07 Federal Decree 7,217/10 and Federal Decree 8,211/14

Regulation activities and responsibilities include:

Service quality

Tariff structure and reviews

Planning is a concession holder attribution

ARSESP´s attribution

2nd Ordinary Tariff Revision

10

RAB0CAPEX + OPEX + IRCS + ∆ WC

RABT = RAB0 + ∑(CAPEX+∆ WC-DEP)Volume (M3)

P0 IRR = WACC (8.01%)

ARSESP: Recent Resolutions 14/10/2016 Resolution 672 → Arsesp discloses the Methodology for the update of Sabesp’s Regulatory Asset Base (RAB) for 2nd Ordinary Tariff Revision

19/01/2017 Resolution 706 → Arsesp approves the beginning of Sabesp’s 2nd Tariff Revision in two stages

27/04/2017 Resolution 720 → Arsesp postpones the timeline of stages of the Tariff Revision

10/05/2017 Sabesp request to Arsesp to postpone for 30 days the ongoing Tariff Revision

07/08/2017 Resolution 748 → Arsesp discloses the timeline for the initial stage of the 2nd Tariff Revision

• Maximum Average Preliminary Tariff (Preliminary P0) – until October, 03, 2017

• Final Maximum Average Tariff (Final P0) – until April, 10th, 2018

11/08/2017 Arsesp discloses the Preliminary Technical Note NT/F/003/2017 and opens for Public Consultation

• RAB = R$ 40.3 bi

• WACC = 8.01%

• Preliminary P0 = R$ 3.62652/m³ updated to the price of March, 2017

• Repositioning Index = 4.37%

Timeline for the 2nd Tariff Revision

Stage No. Description Start End7 Opening of the Public Consultation and Public Hearing - Preliminary Tariff P0 and WACC Aug 14, 2017 Sep 04, 2017

8Analysis of the contributions received, development of the Final Technical Note and Detailed Report - Preliminary Tariff P0 and WACC

Sep 27, 2017

9Approval and disclosure of the Detailed Report and Approval of the Financial Technical Note and of the Resolution with the Preliminary Tariff P0

Oct 2, 2017

10 Disclosure of the Final Technical Note and Publication of the Resolution with the Preliminary Tariff P0 Oct 3, 2017

Tariff Adjustment and Revisions

11

Annual tariff adjustment formula

Productivity

Factor

(0.9386%)New Average

Tariff = 1

Inflation

(IPCA)

100x

Previous

Average TariffQuality

Factor *--

+

OTR – Ordinary Tariff Revision ETR – Extraordinary Tariff Revision IPCA – Amplified Consumer Price Index as of May/16

* Not yet defined

1) 3.15% in April, 22nd plus 2.35% in December, 11th

2) Adjusment + Residual + ETR = 15.25%

1 2

12

Water Connection Evolution (million) Water Coverage (Connections in ´000s)

Water and Sewage Operations

Sewage Connection Evolution (million) Sewage Coverage (Connections in ´000s)

Add 1.0 million new connections by 2022

Add 1.3 million new connections by 2022

Coverage: 93% in 2021

Treatment: 83% in 2021

Capex plan

13

Capex Plan of R$ 13.9 billion from 2017 to 2021

Metropolitan Water Program

Tietê Project

Corporate Program for Reduction of Water Loss

Clean Stream Program

Clean Wave Program

Main Programs

Financial Value (R$ million)

(*) Book Value – Includes non-cash items

(**) Book Value – Items that affected cash

- Additional information is presented in

Note 29 of the 2Q17 Financial Information

1,548*

681**

Investment Plan – Financing

14

2017 to 2021 – R$ 13.9 billion

Company’s FundsR$ 10.2 bn

73.7 %

ContractedR$ 3.5 bn

95.9%

FinancingR$ 3.6 bn

26.3 %

Under Negotiation R$ 0.1 bn 4.1%

BNDES R$ 1.3 bnCAIXA R$ 1.1 bnBID R$ 580 mmJICA R$ 350 mmBIRD R$ 70 mmFINEP R$ 40 mm

CAIXA

15

Our Company1

Our Operations2

Our Financial Performance3

Agenda

4 SPMR – Water Situation

16

Long term and low cost funding

Total debt breakdown Total debt by currency

Debt amortization profile (R$ million)

(*) IDB 713 agreement

17

Net Revenues (R$ million)

Adjusted EBITDA (R$ million)

Consistent performance

Net Income (R$ million)

2012 2013 2014 2015 2016

Dividend Declared (R$) 2.35 0.78 0.37 0.22 1.20

Pay Out % 27.9 27.9 27.9 27.9 27.9

Outstanding Shares (million) 227.8 683.5 683.5 683.5 683.5

Dividends/Pay Out

Adjusted EBITDA – Last 12 months Adjusted EBTIDA Margin – Last 12 months Adjusted EBITDA Margin Without Construction – Last 12 months

18

* Adjusted EBITDA – LTM ** Financial Explosures paid - LTM Calculated in accordance with CPCs/IFRS

Historical leverage metrics (R$ million)

Net Debt vs. Adjusted EBITDA* Net Debt vs. Equity

Adjusted Total Debt vs. Adjusted EBITDA* Adjusted EBITDA* vs. Financial Expenses**

Adjusted Total Debt = Total Debt - Interest

19

* Adjusted EBITDA – LTM ** Financial Explosures paid - LTM Calculated in accordance with CPCs/IFRS

Historical leverage metrics (R$ million)

Adjusted Total Debt vs. Adjusted EBITDA*

Adjusted Total Debt = Total Debt - Interest

Financial Highlights (R$ million)

20

* In accordance with CPCs / IFRS, which includes Construction Costs.

** R$ / 000 shares

2002 2003 2004 2005 2006 2007 2008* 2009* 2010* 2011* 2012* 2013* 2014* 2015* 2016* 1H17*

Gross Revenues (R$) 3.962 4.308 4.642 5.356 5.984 6.448 6.839 9.085 9.787 10.530 11.391 11.985 11.823 12.284 14.855 5.931

Net Revenues (R$) 3.767 4.131 4.397 4.953 5.527 5.971 7.809 8.580 9.231 9.927 10.738 11.316 11.213 11.712 14.098 7.053

Adjusted EBITDA (R$) 1.860 2.076 1.927 2.286 2.446 2.699 2.865 2.727 3.222 3.371 3.605 4.007 2.919 3.974 4.572 2.419

Adjusted EBITDA Margin (%) 49,4 50,3 43,8 46,1 44,3 45,2 36,7 31,8 34,9 34,0 33,6 35,4 26,0 33,9 32,4 34,3

Adjusted EBITDA w ithout Construction Margin (%)- - - - - - 46,3 41,2 44,7 43,2 43,0 44,6 34,4 46,6 43,3 44,5

Net Income (R$) (651) 833 513 866 789 1.055 863 1.508 1.630 1.381 1.912 1.924 903 536 2.947 1.006

Net Margin (%) - 20,2 11,7 17,5 14,3 17,7 11,0 17,6 17,7 13,9 17,8 17,0 8,1 4,6 20,9 14,3

- - - - - - - - - - - - - - - -

Total Assets (R$) 16.332 16.590 16.784 17.431 18.000 18.660 17.206 20.243 23.293 25.019 26.476 28.274 30.355 33.707 36.745 37.136

Total Debt (R$) 7.878 7.264 7.051 6.664 6.327 5.685 6.865 6.560 8.209 8.423 8.875 9.450 10.786 13.122 11.964 11.625

Short-term Debt (R$) 1.132 997 1.497 759 853 742 1.449 1.010 1.240 1.629 1.343 641 1.207 1.526 1.247 1.342

Long-Term Debt (R$) 6.593 6.267 5.554 5.905 5.474 4.943 5.416 5.548 6.970 6.794 7.533 8.809 9.579 11.595 10.718 10.283

Foreign Currency Debt (R$) 3.708 3.013 2.681 1.576 1.472 1.242 2.281 1.746 2.249 3.053 3.216 3.699 4.346 6.618 5.660 5.694

Shareholders' Equity (R$) 4.217 7.577 7.952 8.483 9.019 9.781 6.758 8.439 9.682 10.546 11.257 12.931 13.304 13.717 15.419 16.363

Total Debt/Total Cap. (%) 65,1 48,9 47,0 44,0 41,2 36,8 50,4 43,7 45,9 44,4 44,1 42,2 44,8 48,9 43,7 41,5

Investments (R$) 619 594 601 678 905 921 1.734 2.059 2.194 2.440 2.536 2.716 3.211 3.482 3.878 1.548

- - - - - - - - - - - - - - - -

Dividend Declared (R$/ share) - 17,7 5,4 12,2 9,5 1,3 1,3 1,7 2,0 2,5 2,3 0,8 0,4 0,2 1,2 -

Pay Out (%) - 60,5 29,8 40,2 34,7 28,5 34,3 26,1 28,0 47,3 27,9 27,9 27,9 27,9 27,9 -

Dividend Yield (%) - 10,8 3,4 7,8 3,2 3,2 4,7 5,0 4,7 4,9 2,7 3,0 2,2 1,2 4,2 -

Outstanding shares (million) 28,5 28,5 28,5 28,5 28,5 227,8 227,8 227,8 227,8 227,8 227,8 683,5 683,5 683,5 683,5 683,5

Our Company1

Our Operations2

Our Financial Performance3

SPMR – Water Situation4

Agenda

Production Systems RMSP- Storage and Production

22

-10

0

10

20

30

40

50

60

70

80

jan-13 jan-14 jan-15 jan-16 jan-17

Storage (%)Production m³/s

Storage

Production

170176 179 175

169164

147

158153 151

146 145

120

140

160

180

200

Jan Feb Mar Apr May Jun

Consumption l/hab.day

2013 2017

Rainfall (mm) Reservoirs’ Storage

Water Inflow (m³/s) Monthly Average Production

23

Hidrological Status in SPMR

Rainfall in Hidrological Year - Average since 1953Rainfall in Hidrological Year 2016/17

Reservoirs Storage

Active volume Stored/ Total active volume

Technical Reserves were used between May, 15th, 2014 and December 12th, 2015 which were not considered above

Monthly Average Production

Rainfall in Hidrological Year - Average since 1953Rainfall in Hidrological Year 2016/17

Water Plan for the SPMR - 2015 to 2019 (main initiatives)

24

flow (m³/s)

Availability /

security

Reversal increase from Guaratuba River to the Ponte Nova

reservoir by 0.5 m³/s0.5 Jan/15 completed

Reversal from the Guaió River to the Taiaçupeba reservoir: 1

m³/s1 May/15 completed

Increase of the ABV Water Treatment Station production

from 15 to 16 m³/s Jun/15

◦ Transfer water from Guarapiranga to the

Cantareira area via the aqueduct system completed

Interconnection between: Pequeno River → Grande River

(Billings) → Taiaçupeba (Alto Tietê) 4 m³/s 4 Sep/15

◦ Recover the storage volume and ensure

the Alto Tietê reservoir completed

1 m³/s transfer increasefrom Taquacetuba to Guarapiranga

(from 4 to 5 m³/s)1 Dec/15 ◦ Assure Guarapiranga's water source completed

total 2015 6.5

Jaguari → Atibainha Interconnection: 5.13 m³/s to the

Cantareira system (security increase)5.13 2017

◦ Recover storage volume and ensure the

Cantareira System's water sourceworks in progress

total 2017 5.13

São Lourenço Production System: 6.4 m³/s 6.4 2018◦ Produce 6.4 m³/s for the Greater São

Paulo's western regionworks in progress

Reversal from Itapanhaú River (Ribeirão Sertãozinho) to the

Biritiba reservoir2 2018

◦ Recover the storage volume and assure

Alto Tietê's water sourceunder development

total 2018 8.4

Reversal of 1 m³/ sfrom Alto Juquiá to Ribeirão Santa Rita

(Guarapiranga basin)1 2019 ◦ Increase Guarapiranga's water source under development

total 2019 1

Total 2015 - 2019 21.03

Purpose StatusDescription Est.

Initiatives planned for 2018

Initiatives accomplished in 2015

Initiative planned for 2017

◦ Recover the storage volume and ensure

Alto Tietê's water source

Initiative planned for 2019

www.sabesp.com.br

IR Contacts

Mario Azevedo de Arruda Sampaio Angela Beatriz AiroldiHead of Capital Markets and Investor Relations Investor Relations Managermaasampaio@sabesp.com.br abairoldi@sabesp.com.br+55 (11) 3388-8664 +55 (11) 3388-8793