Companhia de Saneamento Básico do Estado de São Paulo - SABESP

Good morning and welcome to Sabesp's fourth quarter of 2024 earnings presentation. With us here today are Carlos Piani, CEO, Daniel Zlack, CFO, and Thiago Levi, Investor Relations. Before we begin, we clarified that the statements made during this presentation will not include projections or estimates of future events. However, they may contain forward-looking statements indicating potential trends related to Sabesp, based on the reasonable expectations, beliefs and assumptions of Sabesp's management as of today. These statements involve risks and uncertainties and are based on assumptions and factors such as market, regulatory and economic conditions, which may not materialize in addition to the risk factors disclosed in SABESP filings with the Brazilian Securities and Exchange Commission and on its Investor Relations website. Investors should understand that changes in such factors may lead to outcomes that differ from current trends and that undue reliance should not be placed on these statements. The full disclaimer will be presented next and must be read carefully by all participants. I will now turn the floor over to Tiago Levi, who will discuss the results. Tiago, you may proceed.

Good afternoon. My name is Thiago Levi. I'm the Investor Relations Director at Sabesp. Welcome to our fourth quarter earnings results call. Today, I'm joined by our CEO, Carlos Piani, and our CFO and Investor Relations Officer, Mr. Daniel Slak. Before handing it over to Danielle, I'd like to share some important update. As the majority of our investor base consists of international investors, we will now conduct these earnings calls in English with simultaneous translations into Portuguese. Please note that this call is being recorded and all participants will be in listen-hold mode during the presentation. For the Q&A session, we kindly ask you to submit your questions via the Zoom chat. Additionally, all the relevant files for this call will be available on our investor relations website. With that, I will now turn it over to Daniel, who will walk us through our 2024 financial highlights.

Thank you, Thiago. Good morning to all our partners. Thank you for joining us today for a 2024 full year's earnings call. We will start by looking at our operational highlights. The company has produced and treated significant volumes of water and sewage, ensuring the quality and reliability of our services. Our customer base has continued to grow with an increase in both registered and active water and sewage connections. This growth is a testament to our ongoing efforts to meet the needs of our customers, the universalization targets, and provide excellent service. Now, let's move on to our financial highlights for the year 2024. we have achieved net operational revenues of roughly 21.7 billion, an increase of 8.8% compared to the previous year. Our EBITDA has grown by 18.8%, reaching 11.4 billion. Additionally, our net profit has seen a remarkable increase of 172%, amounting to $9.5 billion and allowing us to propose a $2.5 billion distribution to our shareholders, which represents a 4.2% dividend yield considering our market cap at the end of 2024. And it's more than two and a half times 2023 distribution. Now, moving forward on the revenue front, the growth was driven by a 7.5 net price and mix increase, 3% growth in volumes, where we added 35,000 new connections. These were partially offset by a negative 2% impact from the introduction of FAUSP in July. On the EBITDA front, we had favorability driven by, one, the revenue growth I just mentioned, and two, the reduction of 11% of our workforce with the incentivized dismissal plan from 2023. These two favorable drivers were partially offset by the increasing number of cities that received municipal transfers. It is important to remember that this last driver is a pass-through in the rates and should be picked up in the annual tariff adjustments. Our operations have generated 53% more cash than prior year, reaching $7.4 billion operating free cash flow in 2024. And we have deployed substantial investments in water and sewage infrastructure, with a total investment of $6.9 billion and growing. This demonstrates our commitment to accelerating the universalization, bringing dignity and a better center of living inside our concession area. Finally, on the Covenant side, we remain very comfortable, an important competitive advantage in times where base interest rates are high globally, where our net debt to EBITDA ratio stands at 1.8 and our interest coverage ratio sits at 5.1. We have also been able to maintain the same level of operational return on capital. These KPIs highlight our strong financial position and the financial strength of our business. Now, I would like to pass to our CEO, Mr. Carlos Piatti, for the next chapter. Thank you and see you on the Q&A.