Economic-Financial Office and Investor Relations Office
Conference Call – 3Q17 November /2017
2
This presentation may contain forward-looking statements referring to SABESP’s
business outlook. operating and financial results estimates. and growth prospects.
These are only projections. 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. amongst other factors. in
addition to risks exhibited in disclosure documents filed by SABESP. Therefore.
they are subject to changes without prior notice.
Notice
390 393 411 411 387 385 380 371 363 368 379 382 386 386 399 405 395 404
526 529 550 555 511 508 501 485 472 473 484 490 494 495 512 520 509 519
915 922
961 966
898 892 881
856 835 841 863 872 880 880 910 925 904 923
2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
Sewage Water Water + Sewage
494.5 519.2
385.9 403.6
3Q16 3Q17
Sewage
Water
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Billed Volume (million m3)
Total water and sewage billed volume, including wholesale
Historical Billed Volume
1,478.6 1,547.6
1,153.8 1,203.3
9M16 9M17
4.8%
4.6%
5.0%
922.8 880.4
4.5%
4.7%
4.3%
2,750.9 2,632.4
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Financial Highlights (R$ million)
573.9
1,057.3
1,337.5
2,689.0
3,745.8
2,854.1
900.5
1,131.8
1,456.3
2,405.9
3,536.5
2,999.7
Net income
Adjusted EBIT
Adjusted EBITDA
Costs, adm. & selling expensesand construction costs
Net operating revenue
Gross operating Revenue
3Q17 3Q16
5.1%
(5.6%)
(10.5%)
8.9%
56.9%
7.0%
292.3
45.6 64.0
347.1
224.7 249.3
280.2
89.7
22.6
623.4
39.8 60.1
288.4
203.6 184.4
324.5
-34.4
21.6
Salaries and payrollcharges and Pension
plan obligations
General Supplies Treatment Supplies Services Electricity General Expenses Depreciation andAmortization
Allowance for doubtfulaccounts
Tax Expenses
3Q16 3Q17
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Costs and expenses of 3Q16*: R$ 1,615.5
Costs and expenses of 3Q17*: R$ 1,711.4
Costs and Expenses (R$ million)
% Net Revenue in 3Q16
7.8% 1.2% 1.7% 9.3% 6.0% 6.7% 7.5% 2.4% 0.6%
% Net Revenue in 3Q17 17.6% 1.1% 1.7% 8.2% 5.8% 5.2% 9.2% -1.0% 0.6%
*It does not consider construction costs
113.3%
15.8%
-12.7% -6.1%
-16.9%
-9.4% -26.0%
-4.4% -138.4%
5.9%
283.1
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Net income – Main variations (R$ million)
*Including equity result
Net Income
3Q16
N.O.R. Costs and
Expenses
Other Rev. and
Expenses (*)
Net Financial Income Tax
and Social
Contribution
Net Income
3Q17
3Q17 3Q16 Chng.
Net Income 3Q16: 573.9
Net Operating Revenue 3,536.5 3,745.8 (209.3)
Costs and Expenses (2,405.9) (2,689.0) 283.1
Other Revenues and Expenses* 15.8 6.8 9.0
Net Financial 222.9 (176.8) 399.7
Income Tax and Social Contrib. (468.8) (312.9) (155.9)
Net Income 3Q17: 900.5
9.0
(209.3)
573.9
(155.9)
331,8
399.7
900.5
Rainfall (mm) – Hydrological Year Reservoirs’ Storage
Water Inflow (m³/s) – Hydrological Year Monthly Average Production
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Hydrological Status in SPMR
Average Rainfall in Hydrological Year Rainfall in Hydrological Year 2016/17
Oct/16 – Sep/17
Average Inflow in Hydrological Year Rainfall in Hyrological Year 2016/17
Oct/16 – Sep/17
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Technical Reserves were used between May, 15th, 2014 and December 12th, 2015 which were not considered above
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Active Volume stored/ Total active volume
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2nd Ordinary Tariff Revision
10/06/2017 - ARSESP released Final Technical Note NT/F/004/2017
Initial Stage of the 2nd Ordinary Tariff Revision of Sabesp
NT/F/003/2017
NT/F/004/2017
Initial Regulatory Asset Base R$ 40.3 billion R$ 40,3 billion
WACC 8.01% 8.11%
Current Average Tariff R$ 3.47484/m³ R$ 3.37255/m³
Preliminary P0 R$ 3.62652/m³ R$ 3.63861/m³
Tariff Repositioning Index 4.3650% 7.8888%
Holding Company and Capitalization of Sabesp
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50.3%
HoldCo.
50.3% 49.7% OS: 100.0%
PS: 0.0%
49.7%
Government of São Paulo
49.7%
Potential Investor
HoldCo.
Government of São Paulo Government of
São Paulo
The importance of the holding company:
To the State Government:
Platform to attract private capital to develop Basic Sanitation and related businesses
To alienate part of its shares in the holding company and raise funds for State investments
To Sabesp:
Possibility of accessing equity for its expansion incorporation of long-term and active investor
To implement Management Contract deepen its management model emphasis on efficiency and results
Preemptive conditions for Sabesp Capitalization and Follow-on
Creation and capitalization of the holding company entry of private investors
Conclusion of the Tariff Revision
Inclusion of new investments arising from capitalization in the regulatory asset base
Favorable market conditions
www.sabesp.com.br
IR Contacts
Mario Azevedo de Arruda Sampaio Angela Beatriz Airoldi Head of Capital Markets and Investor Relations Investor Relations Manager [email protected] [email protected] +55 (11) 3388-8664 +55 (11) 3388-8793