IBERIA. Tuesday Galp Energia s 1Q14 Trading Update. Best & Worse Performers -1 Week (%)

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1 EQUITY RESEARCH TOP STORIES IBERIA April WEEKLY Sonaecom shares plummeted this week, with Sonae no longer acquiring shares in the market and investors concerned that delisting might take longer than expected (page 6). Portugal Telecom - Oi will launch a capital increase later this month. Roadshow is underway and bookbuilding in the next weeks will result in the announcement of the capital increase price on April 28th. If we assume cash capital increase won t exceed R$9 bn (target is R$8 bn), then capital increase price will be between R$1.73 and R$2.70 (page 4). OUT THIS WEEK Snapshots/Company Reports Model Portfolio, Portugal Telecom Price Target / Recommendation Changes Jerónimo Martins, BES, Zon Optimus, Indra, Iberdrola, Sonae, Sonae Capital, Inditex, CTT, Altri, ES Saúde Other News Banking Setor, PT & TEF, Sonaecom, EDP, Iberdrola, REN, Utilities Sector WEEK AHEAD Tuesday Galp Energia s 1Q14 Trading Update PORTFOLIOS This week, Mib Aggressive Portfolio went down 3.18%, outperforming the PSI20 by 1.21pp. Excluding Sonaecom, all stocks contributed for this underperformance (page 10). This week, Mib Liquidity Portfolio went down 3.18%, outperforming the PSI20 by 1.21pp. Excluding Sonaecom, all stocks contributed for this underperformance (page 11). Stock Market Last 1W YTD 2013 Daily Vol. ( mn) 1W 1M 6M 2013 PSI 20 7, % 11.82% 15.98% PSI IBEX 35 10, % 2.91% 21.42% IBEX 35 2,803 3,031 2,960 2,570 Euro Stoxx 50 3, % 0.24% 17.95% Euro Stoxx 50 8,797 9,151 8,163 7,456 Forex Rates Last 1W YTD 2013 Interest Rates Last 1W Chg YE13 EUR/USD % 0.59% 4.46% Euribor 6m 0.43% 0.43% 0bp 0.38% EUR/GBP % -0.55% 2.49% 10Y Bond PT 3.96% 3.85% 11bp 5.66% EUR/BRL % -5.81% 20.33% 10Y Bond SP 3.19% 3.15% 4bp 3.90% António Seladas, CFA antonio.seladas@millenniumbcp.pt Best & Worse Performers -1 Week (%) Jerónimo Martins 1.7 Portugal Telecom 0.3 EDP -0.5 Novabase -0.5 REN -0.7 ES Saúde -6.4 Indra -7.8 Sonae Capital -8.0 BES Sonaecom Best & Worse Performers - YTD (%) BPI 56.0 Novabase 48.6 Sonae Capital 39.4 CTT 37.0 Sonae 25.8 Telefónica -3.0 Zon Optimus -5.6 Inditex Jerónimo Martins Sonaecom Page 1 of 14 All prices are those of the end of the trading session unless otherwise indicated. For important Disclosure and Disclaimer go to the second last page.

2 CHANGES EARNINGS Page 2 of 14

3 DIVIDENDS Page 3 of 14

4 EQUITY MARKETS Equity Markets Model Portfolio April No growth, no gain... António Seladas, CFA All in all markets are bouncing around new highs in the US, expecting positive news regarding earnings growth rates, meanwhile 1Q14 earnings were revised downwards. However an inclement weather in the US at the beginning of the year was the perfect excuse to avoid selling equities while growth is now clearly skewed towards the end of the year. As we mentioned several times before, the economic cycle is now 5 years old so we should see lower growth rates and should pay lower multiples instead of paying higher multiples. PE s close to 16x and 12M growth rates around 9%, means a PEG around to 2x vs. a long term average of 1.2; so unless growth actually appears and preferably by the summer, markets should adjust downwards to more reasonable levels, 13x to 15x earnings. (For further details, please refer to our report out this week) FINANCIALS Banking Sector Vanda Mesquita; Overdue loans ratio at a high level in February We initiated a monthly report publication that aggregates the key banking data. On the banking asset side, in February corporate loans fell by 6.3% yoy and individual loans dropped by 4.4% yoy, while deposits in January rose by 4.5% yoy for corporates and by 1.3% yoy for individuals. As for the pricing, the annualized agreed rate for corporate dropped by 0.7% yoy to 5% and for mortgages it went up by 0.1% yoy to 3.4%. Deposit rates for corporate companies dropped by 0.8% yoy to 1.2% and for individuals dropped by 0.6% yoy to 1.9%. Overdue loans ratio (> 30 days) for corporate reached its peak in February (13.3%, +2.4pp yoy and +0.4pp mom). For individuals, overdue loans stood at 4.6% in February, +0.4pp yoy and +0.1pp mom. To sum up, the Portuguese Banking System is still deleveraging. Overdue loans ratio continue to rise, suggesting that non performing loans should continue to grow. The decrease of loan yields suggest that there might be little scope for further repricing. Deposits rates continue its falling trend, which is positive for net interest income. (For further details, please refer to our sector news out this week) TELECOMS Portugal Telecom Buy Medium Risk (Target YE14: 3.80) Merger with Oi (IV) Road to Oi s capital increase Alexandra Delgado, CFA Oi will launch a capital increase later this month, in what is the most important step towards merger of Oi, its holding companies and Portugal Telecom. Roadshow is underway and bookbuilding in the next weeks will result in the announcement of the capital increase price on April 28th. Oi s capital increase should be between R$12.7 bn (minimum) and R$13.7 bn (target, but not maximum). Portugal Telecom will participate in the capital increase through the contribution of company s assets (exc. stakes in Oi and Contax), valued at R$ 5.7 bn. The remaining amount, a minimum of R$7 bn, will be a cash capital increase. R$2 bn were underwritten by current shareholders of TmarPart and Banco BTG Pactual. Contrary to what was expected, the remainder of the cash capital increase is not underwritten by a banking syndicate. Page 4 of 14

5 If we assume cash capital increase won t exceed R$9 bn (target is R$8 bn), then capital increase price will be between R$1.73 and R$2.70; discount vs. current Oi market price will be between 17% and 47%. This interval results in PT stock trading between 2.61 and Our price target for Portugal Telecom is 3.80 (YE14) and is a function of our CorpCo valuation, i.e. of the CorpCo shares a PT shareholder is expected to receive. We value CorpCo s Enterprise Value at R$64,719 million, 5.6x EV/EBITDA 2014E. Please note our CorpCo valuation includes R$3.3 bn of operational synergies announced, but not R$2.2 bn of financial synergies. Our price target for PT assumes Oi s capital increase would be performed at Oi s market price at the time the report was issued by mid- December 2013 (R$3.70). Given that the capital increase price should be significantly below mid-december price and that the Brazilian Real has appreciated since, this should increase our price target for PT. Given that Oi stock price has declined c. 27% since merger was announced, we maintain the view that massive capital increase is mostly incorporated by investors and that capital increase should require a relatively small discount, possibly between 10% and 20%. In our base case scenario, minimum number of shares (5,751 mn) are issued at a price of R$2.70 for ordinary shares (17% discount), amounting to R$14,710 mn (R$5,710 mn subscribed by PT + R$9,000 mn cash capital increase), leading our price target to increase to 4.30/ share. (For further details, please refer to our snapshot out this week) Portugal Telecom Telefónica Buy Medium Risk (Target YE14: 3.80) Buy Medium Risk (Target YE14: 14.40) Pay TV in Brazil Market growth continues to slow down Alexandra Delgado, CFA The Brazilian regulator released last Friday February Pay TV subscribers numbers. The market grew 0.5% MoM in the month to 18.3 million subscribers, which stands for 28.0% penetration of households. Subscribers grew 9.6% vs. February February registered 93k net adds, -42% vs. February Market growth has slowed down this year: average net adds in the first two months of 2014 were 118k, which compares to average net adds of 153k in Oi lost 5k clients in February, which translated into the loss of 0.1pp subscribers market share, to 4.5%. Oi has been losing customers since September, on the back of a more restrictive credit policy adopted by the company. Oi expects to improve performance in this segment as of this month, with the usage of a new satellite that increases capacity to broadcast high definition channels. Telefónica added 3k clients in the month, reversing January losses, and maintaining its 3.3% market share. Telefónica s performance in this segment has markedly improved since July, with the operator posting positive net adds (average 14k monthly) in the last 6 months of 2013, but good momentum has cooled down in Net/ Embratel (America Movil) continues to lead the market with a subscribers market share of 53.5%, -0.1pp in the month. Sky has maintained its market share in the month (29.8%), as well as GVT (3.9%). Page 5 of 14

6 Sonaecom Buy High Risk (Target YE14: 2.80) Alexandra Delgado; CFA Sonae stopped buying Sonaecom shares and Sonaecom plummets Sonaecom has had a terrible week, dropping 14.1%. Sonae has started to buy Sonaecom shares after the tender over minorities was completed (mid February). It reached million Sonaecom shares by the end of March, which stands for 89.40% of voting rights (excluding 5.6 million own shares held by Sonaecom). Sonae needs to buy 1.84 million shares in order to reach the 90% threshold. We remind that in order for Sonae to be able to delist Sonaecom it needs shareholders representing more than 90% of capital to approve that resolution in a shareholders meeting. Sonae must then buy shares (in the following 3 months) from shareholders that vote against this resolution in the meeting. Sonaecom price was sustained in March by Sonae s acquisitions and by the expectation that Sonae wanted to delist Sonaecom rapidly, paying between 2.35 (average price in the last 6 months) and 2.45 (price of the tender over minorities) for each share. However, Sonae stopped acquiring Sonaecom shares since early April and investors are now concerned delisting might take longer than expected, hence the stock s poor performance this week. We remind Sonaecom will hold an annual general meeting on April 24th. The Board has proposed that net results are fully transferred to reserves, so there won t be a dividend payment this year. We remind that as a result of merger of Optimus with Zon, Sonaecom ended up with a significant net cash position: 162 million by the end of UTILITIES Utilities Sector Electricity consumption in Portugal dropped for the first time after eight months of continuous rises Vanda Mesquita, Monthly electricity consumption (adjusted for temperature and working days) went down by 3.1% YoY in Portugal in March (please see Iberian indicators table presented below). This is the first drop following eight consecutive months of increases. In Spain, monthly electricity consumption dropped by 1% YoY. Page 6 of 14

7 In the case of EDP, earnings from the distribution business in Portugal are not significantly affected by the changes in volumes (as the bulk of the distribution model has a fixed component), meaning that the aforesaid decrease does not have a very meaningful impact. At the same time, in terms of liberalized activities, the effect of those decreases is minimized, since liberalized activities in Iberia only accounted for 10% of 2013 EBITDA. In the case of Iberdrola, given the aforesaid drop in consumption in Span, we do not expect a meaningful impact (Spanish liberalized activities represented about 19% of 2013 EBITDA). (For further details, please refer to our sector news out this week) Iberdrola Neutral Low Risk (Target YE14: 4.80) Iberdrola raised 750mn via bonds Vanda Mesquita, IBE has announced that it has raised 750mn 8-year bond with a 2.5% coupon (spread of 97bp over mid swap, according to Bloomberg). If we compare this spread with the spread of the last 8-year issue bond (in October IBE issued a 500mn 8-year with a spread of 138bps over mid swap), we conclude that there is an improvement of conditions. The pricing associated to bond is lower than the average cost of debt (4.60% at YE13), which is positive. Bankia sold its entire stake in Iberdrola Bankia announced that it sold its 4.94% stake in Iberdrola through an accelerated book building. Following this sale, Bankia is no longer an Iberdrola s shareholder. The price was set at 4.85, meaning a 3% discount over the previous day s closing price. This announcement came as no surprise, since Bankia has been selling its stakes in several companies, due to the restructuring process that this bank is going through. Following this announcement, stock overhang has been reduced, which we consider positive. EDP Reduce Low Risk (Target YE14: 3.10) Vanda Mesquita, EDP raised 650mn via bonds EDP announced that it has raised 650mn 5-year bond with a 2.625% coupon (spread of 183bp over mid swap, according to Bloomberg). If we compare this spread with the spread of the last 5-year issue bond (in September 2012 EDP issued a 750mn 5-year bond with a spread of 478bps over mid swap), we conclude that there is a substantial improvement of conditions. The pricing associated to bond is lower than the average cost of debt (4.4% at YE13). Millennium BCP acted as a Joint-Bookrunner on this bond issue. Page 7 of 14

8 EDP postponed the beginning of operations of one of its hydro plants According to the press, EDP postponed the beginning of operations of one of its hydro plants (Fridão) to 2020 from 2018, i.e. 4 years later than initially estimated. Valuation wise, we were already assuming that this hydro plant would begin its operations in 2020 (two years later than the initial scheduled date), since it was our belief that EDP would postpone some investments in hydro power plants due to the substantial drop of electricity consumption and also based on our belief that additional investments would be lower. If we were to consider that this hydro plant begins its operations in 2022, the impact in our price target would be irrelevant (less than 1 cent). REN Reduce Low Risk (Target YE14: 2.80) Vanda Mesquita ERSE criticizes the company s investment plan According to the press, ERSE (the Energy Services Regulatory Authority) criticized REN s investment plan for electricity network, advising the company to change it. The investment plan presented by REN includes investments amounting to 1,065 million in the coming 5 years. Still according to the press, ERSE mentioned that it is concerned with the likely impact of those investments in the final price of electricity to be paid by consumers. In addition, ERSE stated that the company s business plan lacks detailed information. In our valuation, we assume that the company will invest 834 million in the coming 5 years, an amount that is 22% lower than the one considered by REN. For this reason, we are comfortable with the capex for electricity assets included in our estimates. RETAIL Jerónimo Martins Buy Medium Risk (Target YE14: 16.45) Company Update: Unchanged scenario in Poland: strong competition João Flores, Based on JM`s 2013 Annual Report and changes in Fx (minor positive impact from updated Euro/Zloty) we decided to fine-tune our JM`s valuation. Furthermore, we updated the Portuguese 10yr Government Bond to 5% (from 6%). Our price target was slightly revised downwards to YE14 from YE14 (Buy recommendation, Medium Risk), meaning a 36% upside vs current price. Overall, we believe the major execution risk is on LfL sales in Poland since stores openings (3000 stores by 2015YE) will not be a problem. According to JM, Polish Food retail market is not benefiting from encouraging Polish economic indicators since there`s a strong competition between Food retail players. Food inflation declined in Poland and the effect is more pronounced in Biedronka`s basket. Updated estimates in Poland had a 1.20 negative effect on JM`s price target: i) Biedronka`s LfL sales numbers were downwards revised to 4% in 2014 from 6%; to 5% in 2015 from 6%); ii) EBITDA margin downwards revised (to 7.6% in 2014 from 7.9%; to 7.7% in 2015 from 7.9%); iii) while Euro/Zloty update (to 4.23YE14 from 4.25YE14) had a minor positive effect. Updated estimates in Portugal had a 0.10 positive effect: valuation was slightly revised upwards, leveraging on 2013 numbers higher than estimated. Furthermore Portuguese 10yr Government Bond update to 6% (from 7%) also benefited valuation. Updated estimates in Colombia had a 0.70 positive effect: based on JM`s 2013FY numbers and guidelines we fine-tuned Colombia estimates (lower Capex benefited valuation). JM will disclose 1Q14 Earnings on April 29th, after the market close. We highlight company will face an unfavorable comparison basis, since Biedronka`s LfL sales numbers reached 8.8% YoY in 1Q13. We estimate consolidated sales will grow by 5.3% YoY (penalized by numbers from Poland) while Page 8 of 14

9 consolidated EBITDA margin is expected to reach 5.4% (from 6.0% in 1Q13). Overall, numbers are expected to show unchanged tough environment in Polish Food Retail market (strong competition, low/negative basket inflation) since consumers are increasingly price oriented (focused on prices campaigns). (For further details, please refer to our company update out this week) SECTOR PERFORMANCE Sector Performance -1 Week (%) PSI Media Retail * Electric Utilities Oil & Gas Telecoms & IT Industrials & Other Financials PSI20 Media Financials Electric Utilities Industrials & Other Oil & Gas Retail * -3.8 Telecoms & IT -4.3 Sector Performance - YTD (%) * includes Jeronimo Martins and Sonae This week, the PSI20 went down 4.4%. The best performing sector was Media, plus 2.0% and the worst was Financials, minus 9.9%. On a Ytd basis, the PSI20 went up 11.8%. The best performing sector was Media, plus 11.8% and the worst was Telecoms & IT, minus 4.3%. AGGRESSIVE PORTFOLIO This week, Mib Aggressive Portfolio went down 3.18%, outperforming the PSI20 by 1.21pp. Excluding Sonaecom, all stocks contributed for this underperformance. We highlight that the portfolio is composed by the five stocks with the highest upside potential of our coverage universe. It is equal weighted and rebalanced on a weekly basis. LIQUIDITY PORTFOLIO This week, Mib Liquidity Portfolio went down 3.18%, outperforming the PSI20 by 1.21pp. Excluding Sonaecom, all stocks contributed for this underperformance. We highlight that the portfolio is composed by the five stocks with the highest upside potential of our coverage universe, excluding the less liquid stocks. It is equal weighted and rebalanced on a weekly basis. Page 9 of 14

10 Return since inception (30th July 2004) Portfolio PSI Jul 05-Mar 16-Oct 28-May 08-Jan 20-Aug 02-Apr Mib AGGRESSIVE PORTFOLIO Portfolio weekly return Company Risk Market Price Upside Weekly Performance Rating Price ( ) Target ( ) Potential Return Contribution Deviation Jerónimo Martins Medium % 1.7% 0.33pp 1.21pp Sonaecom High % -14.1% -2.83pp -1.95pp Galp Energia High % -2.1% -0.43pp 0.17pp Telefónica Medium % -1.6% -0.33pp 0.55pp Portugal Telecom Medium % 0.3% 0.06pp 0.56pp Portfolio -3.18% PSI % Gain/loss 1.21pp Explained by the portfolio 0.54pp Explained by being underweight in the remaining PSI20 stocks 0.67pp Ytd Return Portfolio PSI Dec 31-Jan 03-Mar 03-Apr Next week Portfolio Changes in Portfolio Company Risk Market Price Upside Rating Price ( ) Target ( ) Potential In Out Sonaecom High % EDP R PT Jerónimo Martins Medium % Galp Energia High % Telefónica Medium % EDP Renováveis Low % Return vs. PSI YTD 1 Month 1 Week Portfolio -43.6% 71.9% -7.30% -36.6% 22.1% 47.1% 9.6% 0.5% -3.2% PSI % 33.5% % -27.6% 2.9% 16.0% 11.8% 0.2% -4.4% Gain/loss 7.7pp 38.5pp 3.0pp -9.0pp 19.2pp 31.1pp -2.2pp 0.3pp 1.2pp Source: Bloomberg; Millennium investment banking "Mib Aggressive Portfolio" is composed by the five stocks with a higher upside potential of our coverage universe. "Mib Aggressive Portfolio" is equal-weighted and its composition changes at the end of the last trading day of each week. The portfolio YTD return was recalculated on the week of March 15. Page 10 of 14

11 Return since inception (31th December 2011) Portfolio PSI Dec 15-May 29-Sep 13-Feb 30-Jun 14-Nov 31-Mar Mib LIQUIDITY PORTFOLIO Portfolio weekly return Company Risk Upside Weekly Performance Rating Market Price ( ) Price Target ( ) Potential Return Contribution Deviation Jerónimo Martins Medium % 1.7% 0.33pp 1.21pp Sonaecom High % -14.1% -2.83pp -1.95pp Galp Energia High % -2.1% -0.43pp 0.17pp Telefónica Medium % -1.6% -0.33pp 0.55pp Portugal Telecom Medium % 0.3% 0.06pp 0.56pp Portfolio -3.18% PSI % Gain/loss 1.21pp Explained by the portfolio 0.54pp Explained by being underweight in the remaining PSI20 stocks 0.67pp Ytd Return Portfolio PSI Dec 31-Jan 03-Mar 03-Apr Next week Portfolio Changes in Portfolio Company Risk Rating Market Price ( ) Price Upside Target ( ) Potential In Out Sonaecom High % EDP R PT Jerónimo Martins Medium % Galp Energia High % Telefónica Medium % EDP Renováveis Low % Return vs. PSI YTD 1 Month 1 Week Portfolio % 41.2% 3.1% 0.5% -3.2% PSI20-2.9% 16.0% 11.8% 0.2% -4.4% Gain/loss pp 25.2pp -8.7pp 0.3pp 1.2pp Source: Bloomberg; Millennium investment banking "Mib Liquidity Portfolio" is composed by the five stocks with a higher upside potential, excluding less liquid stocks. "Mib Liquidity Portfolio" is equal-weighted and its composition changes at the end of the last trading day of each week. The portfolio YTD return was recalculated on the week of March 15. Page 11 of 14

12 Latest Pr ( ) Target YE14 Upsd Rating Risk Trnvr ( mn) M Cap Change (%) EPS P / E EV / Sales EV / EBITDA Div Yield P/BV Rating 3m 6m ( mn)o Week 1M 3M 12M YTD E 2014E E 2014E E 2014E E 2014E E 2013E PSI 20 7, , IBEX 10, , Financials , BCP (1) , BES % Reduce High , loss % 0.0% 0.6 BPI % Sell High , % 0.0% 0.9 Telecoms , % 6.0% 2.0 Telefónica % Buy Medium , % 6.5% 2.1 Portugal Telecom % Buy Medium , % 3.1% 0.9 Zon Optimus % Buy Medium , % 3.7% 2.6 Sonaecom % Buy High % 3.6% 0.9 Media % - - Impresa (2) % - - Media Capital (2) % - - Cofina (2) % - - Technology Indra % Neutral High , % 2.5% 1.7 Novabase % Neutral High % 1.9% 0.9 Utilities , % 4.0% 0.8 Iberdrola % Neutral Low , % 6.3% 0.8 EDP % Reduce Low , % 5.8% 1.1 EDP Renováveis % Buy Low , % 1.0% 0.6 REN % Reduce Low , % 6.0% 1.1 Conglomerates , Sonae % Neutral Medium , % 2.5% 1.3 Semapa % Sell High , % 2.4% 1.1 Sonae Capital % Neutral High loss loss loss loss % 0.0% 0.3 Retail , % 1.9% 7.9 Inditex % Neutral Medium , % 2.1% 8.1 Jerónimo Martins % Buy Medium , % 2.5% 6.5 Industrials , CTT % Reduce Medium 6.0-1, % 2.9 Sonae Industria % Reduce High loss loss loss % 0.0% 1.2 Altri % Reduce High % 1.0% 2.0 Portucel % Sell Medium , % 8.1% 1.5 Construction , Mota-Engil % Sell High , % 2.0% 1.8 Oil & Gas Galp Energia % Buy High , % 2.3% 1.8 HealthCare ES Saúde % Buy High (1) We do not have a recommendation on BCP, as Mib is a registered trademark of BCP; (2) Not Covered Page 12 of 14

13 DISCLOSURES This report has been prepared on behalf of Millennium investment banking (Mib), a registered trademark of Banco Comercial Português, S.A. (Millennium BCP). Millennium BCP is regulated and supervised by Comissão do Mercado de Valores Mobiliários (CMVM). Recommendations: Buy means more than 10% absolute return; Neutral means between 0% and +10% absolute return; Reduce means between -10% and 0% absolute return; Sell means less than -10% absolute return. Unless otherwise specified, the time frame for price targets included in this report is current year-end or next year-end. Risk is defined by the analyst s view in a qualitative way (High, Medium, Low). Usually we update our models and price targets in between 3 and 9 months. Millennium BCP prohibits its analysts and members of their households to own any shares of the companies covered by them. BCP group may have business relationships with the companies mentioned in this report. Millennium BCP expects to receive or intends to seek compensations for investment banking services from the companies mentioned in this report. The views expressed above, accurately reflect personal views of the authors. They have not and will not receive any compensation for providing a specific recommendation or view in this report. There were not any agreements between the companies covered and the analysts regarding the recommendation. Analysts are paid in part based on the profitability of BCP group, which includes investment banking revenues. BCP group has more than 2% of EDP. BCP group was chosen to evaluate EDP regarding the 8th stage of the privatization process. BCP group was chosen to evaluate REN regarding the 2nd stage of the privatization process. A member of the Executive Board of Directors of Millennium BCP is member of the General and Supervisory Board of EDP - Energias de Portugal, SA. Millennium BCP through its investment banking department is providing investment banking services to Tagus Holdings S.a.r.l. ( Offeror in the launch of a tender offer over Brisa - Autoestradas de Portugal, S.A. shares). Banco Comercial Português, S.A. (also known as Millennium BCP) was chosen as a Co-leader of the Initial Public Offering of CTT, that took place on December The Board of directors of Mota Engil has appointed Banco Comercial Português as joint-book runner concerning the offering of ordinary shares of Mota Engil through an accelerated book building according to the announcement released on 25th of February Banco Comercial Português, S.A. (also known as Millennium BCP) was chosen as a Co-leader of the Initial Public Offering of ES Saúde, that took place on February Millennium investment banking acted as Joint Bookrunner in the private offering, launched by José de Mello SA, through an accelerated bookbuilding, concerning the sale of EDP shares, according to the announcement released on the 3rd of April According to the announcement released on the 8th April 2014, Millennium BCP acted as Joint Bookrunner in the Eurobond EDP Finance BV 5-year in the total amount of 650,000,000. Recommendations on Millennium BCP covered companies (%) Recommendation Mar-14 Dec-13 Sep-13 Jun-13 Dec-12 Jun-12 Dec-11 Dec-10 Dec-09 Dec-08 Dec-07 Dec-06 Dec-05 Dec-04 Buy 25% 55% 59% 77% 77% 78% 68% 79% 63% 54% 41% 37% 30% 63% Neutral 13% 23% 9% 9% 12% 4% 11% 7% 15% 4% 27% 11% 40% 6% Reduce 33% 18% 18% 14% 4% 0% 0% 0% 7% 0% 0% 21% 5% 6% Sell 29% 5% 14% 0% 4% 7% 7% 4% 4% 0% 14% 16% 5% 0% Unrated/Under Revision 0% 0% 0% 0% 4% 11% 14% 11% 11% 42% 18% 16% 20% 25% Performance 16.0% 10.2% 7.1% -1.7% 20.4% -14% -28% -10% 33% -51% 16% 30% 13% na PSI 20 7,608 6,559 5,954 5,557 5,655 4,698 5,494 7,588 8,464 6,341 13,019 11,198 8,619 7,600 The Politics of Conflict of Interests Millennium BCP is available at or sent to customers when requested. DISCLAIMER This information is not an offer to sell or a solicitation to enter into any particular deal or contract. It consists of data compiled by or of opinions or estimates from Banco Comercial Português, S.A. and no representation or warranty is made as to its accuracy or completeness. This information is merely an auxiliary means of analysis to be used by its recipients, who will be solely responsible for its use, including for any losses or damages that may, directly or indirectly, derive from it. Its reproduction is not allowed without permission from the BCP group. The data herein disclosed are merely indicative and reflect the market conditions prevailing on the date they have been collected. Thus, its accuracy and timing must absolutely be confirmed before its usage. Any alteration in the market conditions shall imply the introduction of changes in this report. This information / these opinions may be altered without prior notice and may differ or be contrary to opinions expressed by other business areas of BCP group as a result of using different assumptions and criteria. The analysis contained herein is based on numerous assumptions. Different assumptions could result in materially different results. Page 13 of 14

14 OFFICE LOCATIONS Millennium investment banking Av. Prof. Dr. Cavaco Silva (Tagus Park) Edif 2 - Piso 2 B Porto Salvo Porto Salvo Portugal Telephone Fax / 39 Equity Team Luis Feria - Head of Equities Equity Research António Seladas, CFA - Head (Industrials and Small Caps) Alexandra Delgado, CFA (Telecoms and IT) João Flores (Retail, Industrials and HealthCare) Vanda Mesquita (Banks, Utilities and Oil&Gas) Ramiro Loureiro (Market Analysis) Sónia Primo (Publishing) Prime Brokerage Vitor Almeida Equity Sales/Trading Paulo Cruz - Head Gonçalo Lima Jorge Caldeira Nuno Sousa Paulo Santos Pedro Ferreira Cruz Pedro Gonçalves Pedro Lalanda Equity Derivatives Maria Cardoso Baptista, CFA Head Ana Lagarelhos Diogo Justino Marco Barata