Private Water Utilities: Global Rankings & Company Strategies

PRIVATE WATER INSIGHT SERVICE GREENFIELD + WATER = BLUEFIELD

FOCUS REPORT

Private Water U2li2es: Global Rankings & Company Strategies Preliminary Table of Contents July 2015

Water Pressure // Flickr // Cropped // Hans Splinter // CC BY-ND 2.0

PRIVATE WATER INSIGHT SERVICE

MARKET INSIGHT Private Water Utilities: Global Rankings & Company Strategies FOCUS REPORT

About This Focus Report

Private Water Utilities: Global Rankings & Strategies is an in-depth analysis of leading privately-owned water utilities with global footprints in more than 20 countries, serving more than 310 million people.

This report is aimed at companies looking to better understand company strategies, market attractiveness, and key drivers to increased global expansion of private participants in water. Key takeaways include:

•  Regional demands foster mix of utility investment strategies. Private water players are tapping municipalities’ overwhelming need for investment to fill gaps in network coverage and treatment capacity. Bluefield’s analysis of more than 20 countries and highlights market attractiveness for private water participation in utilities by country.

•  Annual utility ranking highlights leading private water utility players. Bluefield’s rigorous methodology and bottom-up data analysis of key utility metrics– population served, company revenues, M&A – highlight consolidated and national market-share positions of more than 65 private water players. These profiled companies are delivering more than 20 billion cubic meters (m3) annually of drinking water, generating over US$50 billion in revenues.

•  M&A, concession activity signal shift in competitive landscape. The global water landscape is transitioning, as demonstrated by Bluefield’s critical analysis of more than 86 M&A transactions and 72 concessions since 2013. While entrenched players hold onto key national positions, the emerging global presence of Japanese and Brazilian players indicate changes in the rankings going forward.

Bluefield Takeaways

•  Where does the private sector participate most in water utilities, under what management model?

•  How is the role of the private sector as a water utility services provider changing in key markets and high-growth regions?

•  Which privately-participated utilities are market movers on a national and global level that present bidding competition and/or partnering opportunities?

•  How are utilities’ portfolios shifting through acquisitions, concession awards, or asset sales?

•  On a company level, how are privately-participated utilities structured in terms of asset type, geographic footprint, and scale?

Key Questions Addressed in Report

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Table of Contents TABLE OF CONTENTS Section 1 – Executive Summary Section 2 – Global Private Water Utility Rankings 9. Summary 10. Summary (cont'd) 11. Global Private Water Utility Ranking & Analysis – Methodology Overview 12. Global consolidated Private Water Utility Ranking Shifts by Revenues, 2013/2014 13. Tier 1 Ranking Shifts, 2013-2014 14. Tier 2 Ranking Shifts, 2013-2014 15. Tier 3 Ranking Shifts, 2013-2014 16. Global consolidated private water utility ranking by revenues, 2014 17. Global consolidated private water utility ranking by population 18. Global consolidated private water utility rankings by volume supplied 19. Ownership Footprints Overview of Europe-headquartered Utility Groups 20. Utility Ownership Footprints Overview of Japanese Trading Houses 21. Ownership Footprints Overview of Latin American and African Utility Groups 22. Global national private water utility ranking by revenues 2013-2014 23. Global national private water utility ranking by population served 24. Global national private water utility ranking by volume supplied 25. Europe top 25 private water utilities 2013-2014 26. US top 20 national private water utilities 2013-2014 27. Latin America top 15 national private water utilities 2013-2014 28. Southeast Asia top 10 national private water utilities 2013-2014 Section 3 – Regional Trends in Private Water Utility Participation 30. Summary 31. Country Attractiveness Overview for Private Water Utility Model 32. Country Positioning: Private Participation Trend vs. Market Concentration 33. Patchwork of Models for Private Participation in Water Utilities 34. Private Water Utility Presence in Western Europe 35. Private Water Utility Presence in Southeast Asia 36. Private Water Utility Presence in the US 37. Private Water Utility Presence in Latin America Section 4 – Strategy Trends Analysis 39. Summary 40. Private Water Utility Model – Global Footprint Overview 41. Veolia, Suez Take Divergent Paths in Global Utility Strategies 42. Incumbents retrench positions through M&A in core European markets 43. France, Spain Concession Renewals Key to Shore Up Positions 44. Japanese players pick off assets to build global utility portfolios 45. US IOUs Add Incremental Growth Through Tuck-ins

Section 2, cont. 46. Brazil Concession Awards Build Out Private Water Utility Players47. Chile Water Scarcity, Privatization Approach Present Opportunities48. Colombia breeds regional players with local concessions49. Philippines Provides Model for Private Utility Growth50. Malaysia Restructuring Clarifies Positions for Major Concessionaires51. Concessions in Limbo to Shift Ranking Positions

Section 5 – Private Water Utility Profiles 53. Acciona Agua 54. ACEA 55. Acuatico 56. Aegea 57. Agbar/Aquadom Affinity Water 58. Aguas Andinas 59. Aguas Nuevas 60. Aguas de Valencia 61. American States 62. American Water 63. Anglian Water 64. Aqua America 65. Cab Ambiental 66. California Water 67. Veolia – France 68. COPASA 69. Eranove 70. FCC Aqualia – Spain 71. FCC Aqualia – Spain/Con. 72. Foz do Brasil 73. Gelsenwasser 74. Grupo EPM 75. Gruppo Hera

76. Grupo INASSA 78. Groupe Saur 79. Itochu 80. Suez 81. Manila Water 82. Maynilad 83. Marubeni 84. Mitsui Corp. 85. Northumbrian Water 86. PBA Holdings 87. Pennon Group 88. Puncak Niaga 89. Aguas do Brasil 90. SABESP 91. SANEPAR 92. San Jose Water Co. 93.Severn Trent 94. South West Water UK 95. SouthWest Water 96. Southern Water 97. Suez Environment 98. SAJ Holdings 99. SODECI 100. Affinity Water

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100. South East Water 100. Bristol Water 101. Apa Nova Bucuresti, 101. Sofiyska Voda 102. PVK Prague, SmVak 103. Rosvodokanal 103. Roscomsys 104. Thai Tap Water Supply 105. Thames Water 106. Triple A Barranquilla 107. United Water 108. United Utilities 109. Utilities, Inc. 110. Valoriza Agua 111. Veolia – France/Con. 112. Yorkshire Water

Private Water Utilities: Global Rankings & Company Strategies is part of Bluefield’s Private Water Insight Service. Private Water Insight Service provides clients with research and analysis on the private sector’s growing role in the ownership & management of water production and distribution, including the tracking of private utilities, independently owned water systems, concessions, and investment strategies.



Focus Report Exhibits Section 1 – Executive Summary Section 2 – Global Private Water Utility Rankings

11. Global Private Water Utility Ranking & Analysis – Methodology Overview 12. Top 35 Consolidated Private Water Utilities by Revenues (Net Equity), 2013/2014 13. Tier 1 Consolidated Utility Revenue Changes and Ranking Shifts, 2013/2014 14. Tier 2 Consolidated Utility Revenue Changes and Ranking Shifts, 2013/2014 15. Tier 3 Consolidated Utility Revenue Changes and Ranking Shifts, 2013/2014 16. Top 35 Private Water Utilities by Revenues (Net Equity), 2014 17. Top 35 Consolidated Private Water Utilities by Population Served (Net Equity), 2014 18. Top 35 Consolidated Private Water Utilities by Volume Supplied (Net Equity), 2014 19. Ownership Footprints Overview of Europe-Headquartered Utility Groups 20. Utility Ownership Footprints Overview of Japanese Trading Houses 21. Ownership Footprints Overview of Latin American and African Utility Groups 22. Top 50 National Private Water Utilities by Revenues, 2013-2014 23. Top 50 National Private Water Utilities by Population Served, 2014 24. Top 50 National Private Water Utilities by Volume Supplied, 2014 25. Europe Top 25 National Private Water Utilities by Revenues, 2013-2014 25. Europe Top 25 National Private Water Utilities by Population Served, 2013-2014 25. Europe Top 25 National Private Water Utilities by and Volume Supplied, 2013-2014 26. US Top 20 National Private Water Utilities by Revenues, 2013-2014 26. US Top 20 National Private Water Utilities by Population Served, 2013-2014 26. US Top 20 National Private Water Utilities by Volume Supplied, 2013-2014 27. Latin America Top 15 National Private Water Utilities by Revenues, 2013-2014 27. Latin America Top 15 National Private Water Utilities by Population Served, 2013-2014

Section 2, cont. 27. Latin America Top 15 National Private Water Utilities by Volume Supplied, 201-2014 28. Southeast Asia Top 10 National Private Water Utilities by Revenues, 2013-2014 28. Southeast Asia Top 10 National Private Water Utilities by Population Served, 2013-2014 28. Southeast Asia Top 10 National Private Water Utilities by Volume Supplied, 2013-2014

Section 3 – Regional Trends in Private Water Utility Participation 31. Country Attractiveness Overview for Private Water Utility Model 32. Country Positioning: Private Participation Trend vs. Market Concentration 33. Patchwork of Models for Private Participation in Water Utilities 34. Private Water Utility Presence in Western Europe 35. Private Water Utility Presence in Southeast Asia 36. Private Water Utility Presence in the US 37. Private Water Utility Presence in Latin America

Section 4 – Strategy Trends Analysis 40. Private Water Utility Model – Global Footprint Overview 41. Veolia, Suez Take Divergent Paths in Global Utility Strategies 42. Market Entrant M&A Overview 43. Concession Tender Results, 2014-2015 44. Global Utility Footprint Overview/Utility Portfolio, Population Served 45. Large Scale Water IOU M&A, 2011-2014* 46. Private Contract Awards Population Served 47. Chile Footprint – Leading International Players 48. EPM, Inassa Geographic Footprint 49. Manila Water, Maynilad Philippines Footprint 50. Malaysia Private Concessionaires Footprint 51. Major Concessions at Risk

Section 5 – Private Water Utility Profiles

•  Headquarters •  Revenues (US$ millions) •  Shareholding (%) •  Background & Positioning •  Geographic Footprint •  Portfolio Evolutions •  Recent M&A

•  Population Served (millions) •  Water Supplied (m3) •  Water Treatment Plants (#): Water &

Wastewater •  Wastewater Treatment Plants (#) •  Networks Infrastructure (km): Water &

Wastewater

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Purchasers receive the report’s complete Global Private Water Rankings Data Appendix, which includes:

Appendix: Global Private Water Utilities

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Water utility business metrics •  Revenues, 2011–2013 •  # of Customers, 2011–2013 •  Population Served •  # of Employees •  Capital Improvements, 2013

Markets Summary •  # of Global Private Water Leaders present •  Private utility population served •  Private water player capacity additions by

segment

M&A Transactions, 2010–2014 •  Announced Date •  Target Name •  Target State •  Type of Transaction •  Acquirer Name •  Announced Total Value (US$)

Water concession contracts •  Contract type •  Location •  Population served •  Years •  Concessionaire



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Chile: Early-privatizing market, key regional entry point for European (Agbar), Japanese players (Marubeni)

The private water utility model is concentrated in four regions led by Europe, followed by Latin America, with an increasing level of private participation in Southeast Asia.

Brazil: Rapidly scaling private concession model led by Odebrecht Ambiental, Àguas do Brasil, Aegea

Central/Southern Europe: France, Spain hub for global leaders Veolia, Suez, Aqualia – trend towards increased municipalization

Eastern Europe: Select cities within EU licensed concessions (Prague, Ostrava, Bucharest,

Gdańsk)

Private Water Utility Model – Global Footprint Overview

England: Host of largest group of private utilities through monopoly market structure

Malaysia: Concession restructure solidifies position of Ranhill, PBA Holdings

Thailand: Bulk water supply concessions deliver scale to Thai Tap, Eastern Water

Philippines: Manila private concessions builds regional player Manila Water Co.

Western Africa: France’s Eranove holds beachhead positions in Senegal, Ivory Coast

USA: Led by American Water, six players account for over half the investor-owned utility market

Mature (>20% Private)

Scaling (10-20% Private)

Nascent (<10% Private)

Colombia: EPM, Inassa scaling as domestic leaders expanding regionally

Indonesia: Acuatico positioned with major concessions in select provinces

Russia: Rosvodokanal, RKS, building concession portfolios

SAMPLE EXHIBITS



Global private water utility ranking by revenues 2013-2014

Sources: Utilities, Bluefield Research Estimates.

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Top Private National Water Utilities by Annual Revenue

Bluefield Research has analyzed over 100 national, privately-participated utilities globally – 50 utilities serve over 1.2 million people each and generated over US$45 billion in combined annual revenue.

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SAMPLE EXHIBITS



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SP State 51% BOVESPA

free float 24%

NYSE free float 25%

Headquarters: São Paulo

2014 Revenues $million: $4,832

2014 EBITDA $million: $1,134

Employees: 14,753

Systems owned/operated: 364

Population served: 25.1 million

Capital improvements 2014 $million: $1,128

São Paulo, Brazil water and sanitation utility (SABESP) is the incumbent utility serving metropolitan Sao Paulo and nearly half of the state’s total municipalities. The firm ranks as the world’s fifth largest water utility and is facing increasing competition as municipalities tender systems to smaller private operators.

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Water Wastewater Supplied water Treated wastewater

SABESP (Brazil)

Company Background & Positioning

Network Infrastructure

Company Ownership Structure

Connections, Volume Evolution

Geographic Footprint

# Water treatment plants/m3 day

235/ 5.8mln m3/d

# Wastewater treatment plants/m3 day

515/4.4 mln m3/d

Network pipes (kms) 70,800

CAPEX Plan 2014-2020 ($mln) $5,540

% population covered water supply

99%

% population covered WWT

85%

% wastewater treated 77% 0

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# WWTPs # WTPs Pipes (kms) SAMPLE EXHIBITS



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Global Private Water Utilities: Rankings & Strategies 2015 Publication Date: July 2015

This Focus Report highlights the following:

•  Global ranking and in-depth analysis of the Top 50 privately-owned water utilities with footprints in more than 20 countries

•  Bottom-up data analysis of key utility metrics– population served, company revenues, M&A– including national and consolidated company positions

•  Critical analysis of more than 86 M&A transactions and 72 concessions since 2013

•  Company profiles of 65 players generating over US$50 billion in revenue, globally

•  Competitive strategy analysis including routes to market, value chain positioning, asset purchases and tender bids

Complete the order form to the right and fax or email a scanned copy to Bluefield Research at +1 617 249 2082, or [email protected]

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PRIVATE WATER: STRATEGIES & OPPORTUNITIES IN WATER ASSET OWNERSHIP & OPERATION INSIGHT SERVICE

CLIENT FOCUS: The Private Water Insight Service is designed for companies that need to track market trends, competitive shifts, and unique opportunities in private water asset ownership, including:

•  Municipal water and wastewater operators with concessions/O&M contracts

•  Independent water (and power) providers •  Water infrastructure investors seeking to scale asset portfolios •  Water service providers seeking new industrial wastewater

opportunities •  Water technology providers targeting private water asset owners

RESEARCH COVERAGE: a 12-month cycle of data- and analytics-driven research provided in multiple formats to support client strategies, covering:

•  Market environment attractiveness for private asset ownership •  Historical trends and upcoming private sector opportunities for

concessions, PPPs, DBO, BOO, BOT, other contract types •  Private water asset portfolio rankings in terms of equity ownership,

total revenues, connections, population served, location, project type •  Player segmentation and expansion strategy analysis including entry

into emerging markets, vertical integration, and service/segment diversification initiatives

METRICS: primary research and analysis is supported by proprietary market, project and company databases updated continuously:

•  Private water asset portfolio database (water, wastewater, desalination/concession, PPP, DBO, etc.)

•  Comparative data driving private water valuations: tariffs, NRW, connections, volume, cost structures

•  M&A transaction database tracking water asset deals •  Country-specific private water sector data (PPPs, infrastructure

spending, private ownership penetration, tariffs)

Insight Service Description

SELECT LIST OF COMPANIES COVERED:

PRIVATE WATER SEGMENTS COVERED:

Ownership Structures

Valuation Drivers

M&A Activity

Regulatory Drivers Rankings

MARKET SEGMENTS COVERED:

Regional Analysis •  Asia Pacific •  China •  Europe •  Latin America •  MENA •  North America •  Sub-Saharan Africa

Water Treatment

Desalination

Utility Concessions

Independent Water

Producers

Independent Water & Power

Producers

Wastewater Treatment

Water Reuse



© 2015 BLUEFIELD RESEARCH, LLC.

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Private Water Utilities: Global Rankings & Company Strategies