Arteris

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Business Model and Strategy

  • The Company
  • Business Model and Strategy

Business Model

The Company’s activities are aimed solely at the administration, through concession, of the highway system under its management. It is responsible for the restoration, reconstruction, expansion, modernization, monitoring, improvement, maintenance, conservation and operation of the stretches under concession, in compliance with the terms of the respective Concession Contracts.

The services offered 24 hours a day to its users include pre-hospital care, assistance for vehicles with mechanical problems, animal rescue on the highway, firefighting vehicles, traffic inspection and a 0800 helpline.   

The highways under management are equipped with operational bases, covered bus stops and pedestrian overpasses. In addition, Arteris uses advanced traffic control and operation technology, including cameras, message boards and other equipment for monitoring and communicating weather and traffic conditions.

Arteris's activities are regulated and supervised by the São Paulo State Transportation Agency (ARTESP) at the state level and the National Land Transportation Agency (ANTT) at the federal level. The highways are operated in accordance with the concession contracts signed with the State of São Paulo and the Federal Government.

The Company’s investments are focused on the expansion and maintenance of the highways it manages, in accordance with the terms and conditions established in the concession contracts, according to which, among other obligations, the Company must provide guarantees of compliance with the obligations therein established, maintain the appropriate insurance policies, obtain funding to make the investments necessary to the normal development of the services covered, as well as take the steps necessary to obtain all of the environmental permits.

In contrast to these obligations, the Company will have as its main source of revenue the receipt of the tolls collected, and it will be allowed to explore other sources of complementary, ancillary or alternative revenue, such as income from financial investments, advertising fees, etc.

Strategy

The Company’s long-term strategy is focused on three main areas:

Compliance with investment commitments

Before the end of the respective concession periods, the Company will execute a relevant construction plan for all of its highways, which includes the addition of infrastructure and improvements, mainly at the federal concessions, and constant investments in the maintenance of all of the stretches under concession, in order to ensure the perfect condition of the roads under its management, ensuring the flow of traffic, as well as the comfort and safety of the users. The investment plan is based on economic, social and environmental sustainability, always respecting the conditions set forth in the concession contracts.

Efficient Operations

One of Arteris’s main strategic objectives is the implementation of an efficiency program in all of its operations, based on the best practices already in place at Abertis (the parent company), in search of synergy, economies of scale and cost savings. The measures in place include a redefinition of the organizational policies, the creation of a department of corporate purchasing centralized with the holding company to reduce operating costs and investments (through a greater purchasing and bargaining power and the use of an electronic bidding process for purchases), the implementation of SAP integrating all of the Company’s businesses, the development of new toll collection technologies, compensation based on performance, and other measures.

Strengthening the corporate image, and the corporate and social responsibility (CSR) initiatives

With the advent of the creation of the Arteris brand in late 2012, the Company has increasingly strengthened ties with its stakeholders. We want to have open lines of communication with journalists, hear from the neighboring communities in the regions where we operate, provide quality information to our users and investors, and present our corporate social and environmental responsibility projects to Brazil, including volunteering initiatives and actions focused on education, health, the environment, culture and security, many of which have been in place for more than 10 years.

In addition to the above main strategic areas, the Company’s strategy also includes the following:

Increasing highway revenue

The Company constantly analyzes the new technologies being applied to the business in order to enhance its results. These projects aim to increase the flow of vehicles on the highways under management and the agility of the toll collection process, contributing an increase in traffic and the satisfaction of our users. In addition, new forms of expanding the use of the right of way may generate complementary revenue, such as, for example, the installation of fiber optic cables or the maintenance of highway access roads.

Optimization of the financial framework

In order to finance the capital structure necessary for these investment projects, the Company has its own cash flow within the Group and funds from long-term structured transactions (in local currency) with risks linked to the projects.

Expansion of highway concessions in Brazil

Seek out new highway concession projects through the acquisition of existing concessionaires or participation in concession bidding processes.

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