1Q18 Results

Economic-Financial Office and Investor Relations Office

DISCLAIMER

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.

AGENDA

1 COMPANY OVERVIEW

2 OUR OPERATIONS

3 OUR FINANCIAL PERFORMANCE

4 SPMR – WATER SITUATION

...ONE OF THE LARGEST WATER AND SEWAGE PROVIDERS IN THE WORLD

COMPANY OVERVIEW MAIN OPERATIONAL INDICATORS(1)

Water Sewage

Connections (million) 8.9 7.3

Coverage(2) (%) 98 90

Service(3) (%) 95 83

Treatment(4)(%) 75

Billed Volume (m³ million) 531.0 412.6

(1) As of Mar 31, 2018 (2) Service Available (3) Households connected (4) Consumer units connected to the

sewage treatment

Regional Systems

Metropolitan Region

*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

Sabesp is one of the largest water and sewage service providers in the world based on the number of Customers

Provides water to 24.9 million people and sewage services to 21.6 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 367 out of 645 municipalities in the State

Covers around 60% of State's urban population, including the wholesale

Operations in the São Paulo Metropolitan Region* represent 69.5% of our total revenues

4

...WITH STRONG CORPORATE GOVERNANCE

OWNERSHIP STRUCTURE % (1)

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$ 23.9 billion (as of March, 2018)

Law nº 13.303/16 – Government-Controlled Companies Law

5 (¹) March/2018

The Transaction involves:

Sabesp to raise capital to provide additional funding for expansion and investment plans

GESP to raise resources for the state (through the proceeds of the sale of GESP’s shares in Holdco), while helping Sabesp to accelerate its investment program, and maintaining control of Sabesp

The proceeds of the Transaction may allow:

Sabesp to raise capital to provide additional funding for expansion and investment plans

GESP to raise resources for the state (through the proceeds of the sale of GESP’s shares in Holdco), while helping Sabesp to accelerate its investment program, and maintaining control of Sabesp

THE POTENTIAL TRANSACTION

TRANSACTION OVERVIEW

USE OF PROCEEDS

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

Listed in the Novo Mercado segment of B3 under the ticker symbol SBSP3 since April 2002

Listed in the New York Stock Exchange (NYSE) as American Depositary Receipts (“ADRs”) Level III, under the SBS code, since May 2002

Government of São Paulo

50.3%

HoldCo.

Holding Company is created to house all capital stock of the GESP, and is owned 100% by GESP

GESP remains in control of Sabesp

OS: 100.0% PS: 0.0%

49.7%

Government of São Paulo

A capitalization may be launched at Sabesp level with the subscription proceeds (primary component) raised at the HoldCo level. Proceeds may fund Sabesp expansion and investment plans

Should the capitalization be done through issuance of ordinary shares of Sabesp, existing shareholders have the right to subscribe to a follow-on capital increase in the proportion of their stake in Sabesp.

Potential Investor

HoldCo.

Government of São Paulo

6

AGENDA

1 THE COMPANY

2 OUR OPERATIONS

3 OUR FINANCIAL PERFORMANCE

4 SPMR – WATER SITUATION

80% of water volume and revenue come from residential, commercial and industrial customer

90% of sewage volume and revenue come from residential, commercial and industrial customer

DIVERSIFIED CONSUMER BASE

WATER BILLED VOLUME BY TYPE OF CUSTOMER SEWAGE BILLED VOLUME BY TYPE OF CUSTOMER

WATER REVENUES BY TYPE OF CUSTOMER SEWAGE REVENUES BY TYPE OF CUSTOMER

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

Nº of contracts % of revenue

Renewed/Secured (Program and Service Contract from 2007-March 2018) 289 81.5%

Metropolitan Region Without Contract 34 9.3% Expired Contracts / under negotiation 15 0.9% To be Expired (2018 - 2025) 05 0.2% To be expired (2026 - 2030) 27 6.3% Total Retail 370* 98.2% Wholesale 5 1.8% Total Sabesp 375 100.0%

BROAD COVERAGE OF MUNICIPALITIES

CONTRACTS

CONTRACT WITH THE MUNICIPALITY OF SÃO PAULO

Municipality % of Total Revenue Remaining Period

São Paulo 55.0% 22 years

São Bernardo do Campo 2.9% 15 years

Santos 2.5% 27 years

São Jose dos Campos 0.9% 20 years

Osasco 1.8% 11 years

Barueri 1.1% 27 years

Franca 1.1% 19 years

Suzano 1.0% 23 years

Taboão de Serra 0.7% 24 years

Presidente Prudente 0.7% 25 years

Total 10+ / Average 67.6% 21 years

TOP 10 CONTRACTS

*Includes 2 partial contracts with Mogi das Cruzes

9

REGULATORY FRAMEWORK

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

State Legislative has to create an entity and mechanisms to implement the ruling to adjust to the legislation

As Regulation activities and responsibilities include: Service quality Tariff structure and reviews

Planning is a concession holder attribution

Legal proceeding related to this matter under Supreme Court (STF) appraisal was ruled in March 2013

The decision was released in September 2013

FEDERAL LAW 11.445/07 / FEDERAL DECREES: 7.217/10, 8.211/14, 8.629/15, 9.254/17

CONCESSION POWER IN METROPOLITAN REGIONS

ARSESP’S ATTRIBUTION

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

10

Taxes

Required Revenue

Average

Tariff (P0)

PRICE CAP

Billed

Volume

Output of

the Model

= + +

Reduced by X

Factor X defined by

Arsesp (after year1)

Income

Taxes

Revenue

Taxes

TARIFF REVIEW

OPEX

CAPEX

+

Personnel

Energy

Materials

Others

Water

Sewage

Others

Sabesp 4 year Business Plan

+

Arsesp Review

RABt – RAB0

Amortization

Rate

Asset

Useful Life

WACC

Cost of Equity

Cost of Debt

Arsesp

Technical

Note

Productivity Factor (0.9386%)

New Average Tariff = 1

Inflation (IPCA)

100 x Previous

Average Tariff

Quality

Factor* -

- +

*Not defined yet

METHODOLOGY OF TARIFF REVIEW (PRICE CAP)

ANNUAL TARIFF ADJUSTMENT FORMULA

11

TARIFF AJUSTMENTS AND REVISIONS

TARIFF REVISION - 2º CYCLE FROM 2017 TO 2021

19/01/2017 Resolution nº 706 → Arsesp approves the beginning of Sabesp’s 2nd Ordinary Tariff Revision (OTR) in two stages

06/10/2017 Arsesp discloses the Final Technical Note NT/F/004/2017 → First Stage

RAB = R$ 40.3 bn WACC = 8.11% Preliminary P0 = R$ 3.6386/m³ updated to the price of April, 2017 Repositioning Index = 7.8888% Regulatory, Control and Inspection Fee of 0,5% – in effect since November, 2017

ADJUSTMENTS AND REVISIONS INDEXES

2013

3.15% in April 22 + 2.35% in December 11

2015 Adjustment + Residual + ETR = 15.24%

12

09/05/2018 Arsesp discloses the Resolution nº 794 and Final Technical Note NT/F/0006/2018 → Final Stage

RAB = R$ 39 bn X Factor = 0,8885% P0 = R$ 3.7702/m³ Tariff Repositioning Index = 3.507%

ORT- Ordinary Tariff Revision ERT- Extraordinary Tariff Revision IPCA up to May/18

Add 783 thousand new connections by 2022

Add 1.1 million new connections by 2022 Coverage: 93% in 2022 Treatment: 83% in 2022

WATER AND SEWAGE OPERATIONS

WATER CONNECTION EVOLUTION (million) WATER COVERAGE (Connection in 000’s)

SEWAGE CONNECTION EVOLUTION (million) SEWAGE COVERAGE (´000s)

13

Metropolitan Water Program

Tietê Project

Corporate Program for Water Loss Reduction

Clean Stream Program

Clean Wave Program

INVESTMENT AND FINANCING

INVESTMENT PLAN OF R$ 17.3 BILLION FROM 2018 TO 2022

FINANCING MAIN PROGRAMS

(*) Book Value – Includes non-cash items (**) Book Value – Items that affected cash - Additional information is presented in

Note 29 of the 2018 Financial Information

14

Financial Values (in R$ million)

689* 232**

AGENDA

1 COMPANY OVERVIEW

2 OUR OPERATIONS

3 OUR FINANCIAL PERFORMANCE

4 SPMR – WATER SITUATION

LONG TERM AND LOW COST FUNDING

TOTAL DEBT BREAKDOWN TOTAL DEBT BY CURRENCY

DEBT AMORTIZATION PROFILE (R$ million)

16

2012 2013 2014 2015 2016 2017

Dividends declared (R$) 2.35 0.78 0.37 0.22 1.20 1.03

Pay Out % 27.9 27.9 27.9 27.9 27.9 27.9

Outstanding Shares (million)

227.8 683.5 683.5 683.5 683.5 683.5

CONSISTENT PERFORMANCES

NET REVENUE (R$ million) NET INCOME (R$ million)

ADJUSTED EBITDA (R$ million) DIVIDENDS / PAY OUT

Adjusted EBITDA – Last 12 months Adjusted EBTIDA Margin – Last 12 months Adjusted EBITDA Margin Without Construction – Last 12 months 17

HISTORICAL LEVERAGE (R$ million)

Covenant: 3.65 Covenant: 2.35

Covenant: 3.50

ADJUSTED TOTAL DEBT VS. ADJUSTED EBITDA* ADJUSTED EBITDA* VS. FINANCIAL EXPENSES**

NET DEBT VS. ADJUSTED EBITDA* NET DEBT VS. EQUITY

Adjusted Total Debt = Total Debt - Interest

* Adjusted EBITDA – LTM ** Financial Explosures paid - LTM Calculated in accordance with CPCs/IFRS 18

COVENANT – ADJUSTED TOTAL DEBT vs. EBITDA

19

FINANCIAL HIGHLIGHTS (R$ million)

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

** R$ / 000 shares

AGENDA

1 COMPANY OVERVIEW

2 OUR OPERATIONS

3 OUR FINANCIAL PERFORMANCE

4 SPMR – WATER SITUATION

SPMR – WATER SITUATION

WATER PRODUCTION IN HYDROLOGICAL YEAR

ACTIVE VOLUME AVALIABLE (daily)

22

(m³/s)

(hm³) 1,280*

1,157 *

-200

0

200

400

600

800

1000

1200

1400

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

2013/2014 2014/2015 2015/2016 2016/2017 2017/2018 *As of May 14th, 2018

SPMR – WATER SITUATION

WATER PLAN FOR SPMR – FROM 2015 TO 2019 (MAIN ACTIONS)

23

DESCRIPTION

FLOW (m³/s)

EST. PURPOSE STATUS

AVAILABILITY / SECURITY

Initiatives accomplished in 2015

1 Reversal increase from Guaratuba River to the Ponte Nova reservoir by 0.5 m³/s

0.5 Jan-15 ◦ Recover the storage volume and ensure Alto Tietê's water source

completed

2 Reversal from the Guaió River to the Taiaçupeba reservoir: 1 m³/s 1 May-15 completed

3 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

4 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

5 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

Initiatives accomplished in 2018

6 Jaguari → Atibainha Interconnection: 5.13 m³/s to the Cantareira system (security increase)

5.13 mar/18 ◦ Recover storage volume and ensure the Cantareira System's water source

completed

7 São Lourenço Production System: 6.4 m³/s 6.4 abr/18 ◦ Produce 6.4 m³/s for the Greater São Paulo's western region

completed

total 2018 11.53

Initiative planned for 2019

8 Reversal from Itapanhaú River (Ribeirão Sertãozinho) to the Biritiba reservoir

2 2019 ◦ Recover the storage volume and assure Alto Tietê's water source

under development

total 2019 2

Total 2015 – 2019 20.03

www.sabesp.com.br

IR Contacts

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