Conference Call 2Q14 Results August/2014 Economic-Financial Office and Investor Relations Office Notice 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. 2 Billed Volume Total water and sewage billed volume, including wholesale (million m³) 1.7% (1.8)% 389.6 Water 525.5 2Q13 1,863.8 898.3 915.1 Sewage 1,833.3 (0.6)% (2.8)% 387.3 2.5% 797.8 778.7 1.1% 511.0 1,054.6 1,066.0 2Q14 1H13 1H14 Produced Water Volume Billed Water Volume 752.0 710.0 2Q13 2Q14 525.5 2Q13 511.0 2Q14 3 Financial Highligts (R$ million) 2,754.1 Net operating revenue 2,796.3 Costs, adm. exp., selling and construction 2,315.0 2,081.5 Net income 11.2% 0,4% (27.4)% 661.7 Adjusted EBITDA EBIT (1.5)% 911.4 10,2% (38.6)% 439.1 714.7 4,0% (16.4)% 38,9% 302.4 361.7 2Q14 2Q13 4 Costs and Expenses (R$ million) Costs and expenses in 2Q13*: R$1,438.3 Costs and expenses in 2Q14*: R$1,650.8 12.1% 551 14.8% *Not including construction costs 492 19.1% 352 295 2.0% 13.2% 8.6% 186 190 (5.1)% 49 47 Payroll and Benefits Supplies 17.0% 223 197 227.7% 133 145 62 55 65 12 18 19 Treatment supplies 49.2% Services Electric power 2Q13 General Expenses 2Q14 Depreciation and Amortization Credit writeoffs Tax expenses % Net Revenue in 2Q13 17.6% 1.8% % Net Revenue in 2Q14 20.0% 1.7% 2.0% 10.6% 4.8% 6.7% 7.0% 0.7% 0.4% 2.3% 12.8% 5.2% 6.9.5% 8.1% 2.2% 0.6% 5 Net Income – Main variations 361.7 (42.2) (233.5) 26.9 185.7 302.4 3.8 2Q13 Net Income 2Q13 Net operating revenue 2,796.3 Costs and expenses (2,081.5) Other revenues and expenses 1.4 Net Financial (207.3) Income tax and social contribution (147.2) 2Q14 2,754.1 (2,315.0) 5.2 (21.6) (120.3) Net Income 2Q14 Net Income 2Q13 N.O.R. Costs and Expenses Other Rev. and Expenses Chg. 361.7 (42.2) (233.5) 3.8 185.7 26.9 302.4 Net Financial Income Tax and Social Contribution Net Income 2Q14 6 Reservoirs levels CANTAREIRA SYSTEM (%) JAN FEB 22,2 16,4 MAR APR MAY JUN 13,4 JUL ALTO TIETÊ SYSTEM (%) AUG JAN 10,7 24,9 20,6 15,4 13,2 FEB 44,7 38,8 MAR APR MAY JUN 37,3 JUL AUG 36,0 30,8 26,0 20,8 18,2 RIO CLARO SYSTEM (%) ALTO COTIA SYSTEM (%) JAN JAN FEB 63,2 55,8 MAR APR MAY JUN 56,8 JUL JAN GUARAPIRANGA SYSTEM (%) FEB 67,2 66,7 MAR APR MAY JUN 77,0 98,7 93,0 RIO GRANDE SYSTEM (%) 50,6 48,4 46,7 43,0 40,5 JAN FEB MAR APR MAY JUN JUL AUG AUG JUL FEB 92,7 94,3 MAR APR MAY JUN 94,6 JUL 96,6 101 102 99,0 83,0 84,4 AUG 95,8 94,2 92,0 86,0 83,7 AUG 77,9 74,3 71,8 65,0 61,2 7 The Path of the Waters Cantareira System 19.7 m³/s PCJ Water Basin Alto Tietê Water Basin Measures taken by the Company due to the compulsory reduction of water withdrawal from the PCJ Water Basin to Cantareira from 33m ³/s to 19.7 m³/s: Bonus Program: 20% reduction in water consumption 30% discount on water and sewage bill Use of Alto Tietê, Guarapiranga, Rio Claro and Rio Grande water systems more than 2.3 million people prior served by the Cantareira Systems Partial use of the Technical Reserve 286.5 billion liters 8 Cantareira System – Rainfall (mm) mm 300.0 250.0 105% 200.0 150.0 93% 59% 100.0 33% 96% 35% 28% 81% 45% 50.0 52% 28% 0.0 Média Histórica Historical average Oct-13 Oct-13 132.6 132.6 Nov-13 Nov-13 Dec-13 Dec-13 163.8 226.8 163.8 226.8 Jan-14 Jan-14 265.9 Feb-14 Feb-14 206.5 Mar-14 Mar-14 184.1 Apr-14 Apr-14 89.2 May-14 May-14 83.2 Jun-14 Jun-14 56.0 Jul-14 Jul-14 49.9 Aug-14 Aug-14 Sep-14 Sep-14 36.9 91.9 Minima Histórica 21.4 52.4 104.5 111.8 265.9 206.5 184.1 89.2 83.2 8.8 0.0 56.0 49.9 0.0 0.1 0.9 Historical low 2013/14 21.4 123.4 52.4 97.0 104.5 62.9 111.8 87.8 40.2 73.0 55.8 193.3 7.6 85.7 8.8 37.3 0.0 15.8 0.0 40.4 0.1 5.3 0.9 2013/14 123.4 97.0 62.9 87.8 73.0 193.3 85.7 37.3 15.8 40.4 19.2 40.2 55.8 7.6 36.9 91.9 Up to August 18, 2014 9 Cantareira System – Water inflow 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 Média Histórica Historical average Mínima Histórica Historical low 2013/14 Oct outubro 30.6 30.6 14.0 14.0 25.1 Nov Dec novembro dezembro 35.0 53.1 35.0 53.1 14.0 21.8 14.0 21.8 22.1 22.5 Jan janeiro 70.9 70.9 26.9 26.9 15.4 Feb fevereiro 73.9 73.9 27.6 27.6 10.5 Mar março 66.9 66.9 28.1 28.1 18.9 Apr abril 48.4 48.4 24.7 24.7 17.2 May maio 38.4 38.4 19.9 19.9 10.1 Jun junho 35.3 35.3 16.5 16.5 10.0 Jul julho 28.8 28.8 13.9 13.9 6.4 Aug agosto 24.5 24.5 12.0 12.0 7.7 Sep setembro 25.6 25.6 11.8 11.8 1953 2013/14 17.5 25.1 26.0 22.1 31.5 22.5 26.9 15.4 34.5 10.5 29.8 18.9 34.6 17.2 23.8 10.1 20.7 10.0 17.6 6.4 16.3 8.3 16.2 1953 17.5 26.0 31.5 26.9 34.5 29.8 34.6 23.8 20.7 17.6 16.3 16.2 Affluence between January and August 18/14 ¼ of the historical average 10 December November October September August July June May April March February January Temperature - 2013/2014 TEMPERATURES 11 Cantareira’s Active Storage Capacity and Technical Reserve 100% Active storage Capacity 982.7 billion liters SPMR 0% 182.5 billion liters Authorized use + 106.0 billion liters Technical Reserve 286.5 billion liters 510.9 billion liters Campinas 12 Bonus Program Bonus Program 20% water bill savings = 30% discount on water and sewage bill Scope: Since February consumers served by the Cantareira System Since April all consumers directly served in the SPMR Since May 12 municipalities served by Sabesp in the Piracicaba, Capivari and Jaguari Water Basin SPMR - Bonus Program Balance 52% 52% 46% 45% 31% Reduced consumption and reached the bonus 24% 28% 26% 27% 26% 21% Reduced consumption but not the bonus 22% Increased consumption Up to August 11, 2014 mai jun jul ago 13 www.sabesp.com.br IR Contacts Mario Azevedo de Arruda Sampaio [email protected] (55 11) 3388-8664 Angela Beatriz Airoldi [email protected] (55 11) 3388-8793