Strategy

Our relevant position in the Brazilian private sanitation market and future prospects derive from the following factors:

Well-established business, with significant scale and know-how. We provide services in six Brazilian states in 18 operations (15 concessions and 3 PPPs) that together serve around 7 million people, which demonstrates our flexibility in adapting to municipalities of different sizes and socioeconomic realities. The know-how developed over the years has helped us in the latest successful achievements, such as the public-private partnership operated by our subsidiary SPAT Saneamento with Companhia de Saneamento do Estado de São Paulo – SABESP, the full concession of public service of water supply and sanitary sewage collection and treatment in the capital of the State of Mato Grosso, operated by our subsidiary Águas Cuiabá, the full concessions in the municipality of Paranaguá, in the State of Paraná and our largest operation, Iguá Rio.

Quality diversified assets and long-term concession contracts. We have a diversified and high-quality asset base, with long-term concession contracts. Our asset base has the following characteristics: (i) demand is relatively inelastic; (ii) tariffs are adjusted annually based on inflationary indices; (iii) concession contracts have economic rebalancing clauses for events not foreseen at the time of bidding, resulting in predictable cash flows.

The scope of our operations and diversification of our regulatory and contractual counterparties also makes it possible to spread regulatory risks usually applicable to companies subject to regulation by a single granting authority.

The water resources available in the regions where we operate, such as rivers, dams, lakes and groundwater, guarantee us an adequate supply to the population we serve. Furthermore, we monitor consumption and make demand projections to guide our investments in water production, distribution and storage, which allows us to meet current and future demand in a predictable manner.

Strong corporate governance practices. We maintain a solid corporate governance structure, based on the principles of transparency, equality, accountability and corporate responsibility.

Access to diverse sources of long-term financing. Our strong cash generation occurs through operations, and our role as an essential public service provider places us in a privileged position in obtaining long-term, low-cost financing from Brazilian public banks, national and international multilateral agencies, development banks and capital markets – through the issuance of debt securities in both the local and international markets. Not depending on a limited number of sources allows us to diversify financing alternatives in the Brazilian and international markets in order to finance our working capital and investment needs.

We intend to continue expanding our revenues and increasing our profitability through the organic growth of our current operations, through (i) acceleration of activities to install sewage collection networks and initiatives to reduce losses in water distribution; and (ii) increasing our operational efficiency; and (iii) increased provision of services to our customers, related to water supply and sewage collection.