IBERIA. Best & Worse Performers -1 Week (%) EDP Portugal Telecom Telefónica

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1 EQUITY RESEARCH IBERIA 15 February 2013 TOP STORIES WEEKLY Parpública sold 4.144% of EDP s outstanding shares through an accelerated book building at 2.35 per share, which represents a 3% discount over the closing price the day before the announcement ( 2.422, the highest price in the last year). We consider this deal positive not only because it helps to increase EDP s free-float, but also because it helps to reduce overhang pressure. Still regarding overhang pressure, Liberbank may be forced to sell its 5.01% stake in EDP and Iberdrola considers its 6.79% stake in EDP as available for sale (page 5). OUT THIS WEEK Earnings Comment Iberdrola, Semapa, Galp Energia Other Snapshots/Company Reports Model Portfolio, Price Target / Recommendation Changes Altri, Portucel Other News Telefónica, Portugal Telecom, Zon Multimedia, Sonaecom & Zon, EDP, Sonae Capital, Construction sector WEEK AHEAD Monday: Oi s 4Q12 Earnings (after market) Thursday Sonae Capital s 4Q12 Earnings During the week - Brazilian mobile subscribers by the end of January (Anatel) PORTFOLIOS This week, Mib Aggressive Portfolio went up 0.49%, outperforming the PSI20 by 0.60pp. Excluding Telefónica, all stocks contributed for this outperformance (page 10). This week, Mib Liquidity Portfolio went up 0.87%, outperforming the PSI20 by 0.98pp. Excluding Telefónica, all the stocks contributed for this outperformance (page 11). Stock Market Last 1W YTD 2012 Daily Vol. ( mn) 1W 1M 6M 2012 PSI 20 6, % 8.33% 2.93% PSI IBEX 35 8, % -0.21% -4.66% IBEX 35 1,649 2,033 2,379 2,578 Euro Stoxx 50 2, % -0.78% 13.79% Euro Stoxx 50 6,210 6,992 7,171 7,867 António Seladas, CFA antonio.seladas@millenniumbcp.pt Forex Rates Last 1W YTD 2012 Interest Rates Last 1W Chg YE12 EUR/USD % 0.99% 1.97% Euribor 6m 0.36% 0.37% -1bp 0.32% EUR/GBP % 5.43% -2.30% 10Y Bond PT 6.19% 6.55% -36bp 7.01% EUR/BRL % -3.09% % 10Y Bond SP 5.19% 5.36% -18bp 5.26% Best & Worse Performers -1 Week (%) Best & Worse Performers - YTD (%) Zon Multimedia 5.7 Impresa 51.6 Sonaecom 5.1 Mota-Engil 42.3 Av. José Malhoa, Lote 27 Brisa Cimpor BCP BPI Lisboa Ibersol 3.8 Sonae Capital 35.7 Tel / Fax: / 09 Novabase -2.0 EDP Renováveis -1.1 Iberdrola -2.3 Telefónica -4.3 EDP -2.9 Cofina -4.4 Portugal Telecom -3.2 Indra -8.6 Telefónica -3.2 Iberdrola 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. Page 1 of 14

2 CHANGES New Previous Rating Target Rating Target Motive Altri 1.65 Reduce 1.65 Sell Price Performance Portucel 2.55 Sell 2.55 Reduce Price Performance EARNINGS Company 4Q2012 1Q2013 2Q2013 3Q2013 Investor Day Jerónimo Martins * AM BM BM BM Galp Energia * BM BM BM BM Zon Multimedia BM n.a. n.a. n.a. Sonae * AM n.a. n.a. n.a. Bankinter BM n.a. n.a. n.a. Portucel AM AM AM AM BPI AM n.a. n.a. n.a. Banco Popular BM n.a. n.a. n.a. BES AM AM AM AM Sonaecom ** AM n.a. n.a. n.a. Novabase AM AM AM AM BCP AM n.a. n.a. n.a. Semapa AM AM AM AM Galp Energia BM BM BM BM Iberdrola BM BM BM BM Sonae Capital AM AM AM AM Brisa AM n.a. n.a. n.a. Jerónimo Martins BM n.a. n.a. n.a. Sonae Indústria AM AM AM AM EDP Renováveis BM n.a. n.a. n.a. Telefónica BM BM BM BM Indra AM AM n.a. n.a. Portugal Telecom BM BM BM BM Martifer AM AM AM AM EDP AM n.a. n.a. n.a. Sonaecom AM AM n.a. n.a. REN AM AM AM AM Sonae Sierra AM AM AM AM Sonae AM n.a. n.a. n.a. Cimpor AM AM Impresa AM n.a. n.a. n.a. Glintt Media Capital n.a. n.a. n.a. n.a. Altri n.a. n.a. n.a. n.a. Cofina n.a. n.a. n.a. n.a. Ibersol n.a. n.a. n.a. n.a. Mota-Engil n.a. n.a. n.a. n.a. Portugal Telecom* n.a. n.a BM n.a. ESFG n.a. n.a. n.a. n.a. Soares da Costa n.a. n.a. n.a. n.a. SAG n.a. n.a. n.a. n.a. AM - After market; BM - Before market; n.a. - Not available; (e) Expected; * Trading Update ** Optimus results Page 2 of 14

3 NEXT WEEK RESULTS Sonae Capital Reduce High Risk (Target YE13: 0.19) 4Q12 Earnings Preview António Seladas, CFA; Sales YoY EBITDA YoY EBIT YoY Net Profit YoY 27-26% -1.3 nm -4.7 nm -5.6 nm Sonae Capital should release 4Q12 earnings Thursday after the market close. We are expecting a weak set of figures pretty much in line with prior quarters. However Troia Resort Tourism operations could surprise on the upside as a month ago a managing director of Sonae Turismo mentioned in the press that revenues went up 15% in the Aqualuz Suite Hotel in Lagos, Algarve and 5% in the Troia Resort Apartments, in the turn of the year period. We are estimating that revenues went down 15%YoY in this business segment on the quarter and data from INE is also pointing to weak figures in the Alentejo region. EQUITY MARKETS Equity Markets Model Portfolio February 2013 Growth or a market correction António Seladas, CFA; The S&P500 is approaching record levels, above 1500, for the third time in the last 13 years. This time unequivocally, the market is cheaper than before, PE and ERP are clearly below March 2000 and October 2007, however PEG is pretty much in line with the prior periods, between 1.40X and 1.50X and earnings growth rate is lower now. For the last 4 years, since S&P500 reached the lowest levels and excluding 4 or 5 initial months, PEG went up from levels close to 0.5x to 1.45x now. So earnings behaviour over the next 6 months will be critical to assess S&P500 performance, reductions on the earnings estimates will pose a considerable onus on S&P500 and quite probably would lead to a correction that could easily reach 10% from the current levels. (For further details, please refer to our report out today) TELECOMS Telefónica Buy Medium Risk (Target YE13: Alexandra Delgado, CFA Telefónica suspends Latin America IPO, according to El Confidencial According to El Confidencial early this week, Telefónica has suspended the IPO of its assets in Latin America. According to the same source, the Spanish operator will only resume the project if there is strong investor appetite or pressure from rating agencies increases. Telefónica had announced last May that it intended to float 10% - 15% of its Latin America business, which could raise between 4 and 6 billion. Asset sale in 2012 (Atento, Telefónica Germany IPO) and dividend cut should result in a net financial debt reduction of over 6 billion in This combined with an improvement in debt markets (Telefónica issued 1,500 mn in 10-year bonds in early January) eased pressure on Telefónica regarding the IPO. This news is not a complete surprise; we remind that Telefónica s CFO said last November in the 3Q12 Earnings conference call, that because of the strong deleverage, the IPO of Latin America was not necessary and would only be done if it created value for shareholders. As Latin America is Telefónica s market with the highest growth potential, if the Spanish operator avoids selling part of these assets while assuring a good access to the debt markets, then it guarantees a more interesting growth profile, which is positive. Page 3 of 14

4 Portugal Telecom Buy Medium Risk (Target YE13: 5.40) S&P downgrades Portugal Telecom Alexandra Delgado, CFA S&P downgraded Portugal Telecom s long term rating to BB from BB+ on Monday, maintaining the negative outlook. PT s credit rating attributed by S&P is the same as the one attributed to the Portuguese Republic and two notches below investment grade. Since the credit rating maintains the negative outlook, this means the rating can be downgraded over the next one or two years. S&P said PT faces intense pressure over domestic EBITDA and that the negative environment in the Portuguese market is not offset by the positive evolution in the residential wireline segment and by dividends received from subsidiaries abroad. It added that it is now forecasting a higher debt level than previously and that it forecasts no substantial deleveraging at parent level as long as domestic EBITDA remains pressured. Zon Multimedia Reduce Medium Risk (Target YE13: 3.20) Alexandra Delgado, CFA News say Vodafone is preparing bid for Kabel Deutschland According to news published Wednesday by German magazine Manager Magazin, Vodafone is considering a bid for Kabel Deutschland, largest German cable operator. None of the companies has issued a formal statement on this subject. Kabel Deutschland shares rose 8.83% that day, trading at a 10.4x EV/EBITDA 2013E. Vodafone lacks a significant presence in the wireline segment, as bundled and convergent offers appear across European markets; if this offer is confirmed, then Vodafone has decided to make a more aggressive incursion into wireline. Zon has also enjoyed from this news, rosing 5.69% on Wednesday. First, because the multiple of this potential deal is quite high. And second, because the other strong consolidation possibility in the Portuguese market, other than a merger between Zon and Sonaecom, has always been Vodafone buying Zon. So, the possibility of Vodafone buying a cable operator increases Zon s speculative appeal. Nevertheless, we believe the merger between Zon and Optimus has a high probability of success and that Vodafone has lost its timing in Portugal. We remind that Liberty Global announced last week the acquisition of Virgin Media, British cable provider. The offered price represents a 24% premium and implies a 8.5x EV/EBITDA multiple, when the sector s average in Europe is 8.2x. Zon Multimédia currently trades at 5.85x EV/EBITDA 2013E, the cheapest cable operator in Europe. We remind that our price target for Zon ( 3.20/ share, YE13) does not include the possible merger with Optimus. Please note that including our synergies estimate ( 317 mn, 60% of synergies to Zon shareholders) would increase our Zon s price target to 3.85 (YE13). Sonaecom Zon Multimedia Buy High Risk (Target YE13: 2.40) Reduce Medium Risk (Target YE13: 3.20) Competition authority has already been notified of merger between Alexandra Delgado, CFA Zon and Optimus The competition authority has already been notified of the merger between Zon and Optimus. According to the announcement published on Wednesday in several newspapers, the deal was communicated to the regulator on February 1 st and the parties interested in the operation have until February 22 nd to give their views on the deal. Portugal Telecom, Vodafone and Cabovisão should be heard in the analysis process. The merger has still to be approved by shareholders; Zon has called an extraordinary shareholders meeting for March 7 th. Then, CMVM has to issue a declaration exempting from the launch of a mandatory tender and the Competition Authority has to approve the deal. Since the latter step is the one that can take the longest time, the fact that the communication has been anticipated and that the process has began is obviously positive. Page 4 of 14

5 UTILITIES Iberdrola Buy Low Risk (Target YE13: 5.00) 4Q12 Earnings Comment - Operational results as expected, good debt reduction Vanda Mesquita, Iberdrola disclosed its 4Q12 earnings this week, followed by a conference call. EBITDA came out in line with our estimates (in spite of a different breakdown) and net profit came out lower than our estimates due to higher than expected D&A and provisions (due to one-offs). We would like to highlight the debt reduction, which is clearly a sign that IBE is on track to meet its 2014 deleveraging targets. Following this set of results, we feel confident in our estimates. Gross profit for 4Q12 went up by 3% yoy to 3.287mn (7% above our estimates) and EBITDA for 4Q12 dropped by 6% YoY to 1.949mn (in line with our estimates). By business, EBITDA from renewable activities rose by 4% YoY (8% below our estimates) mostly due to higher production. In regulated activities business (-11% YoY, 10% below our estimates), the better performance in the UK (+9% YoY) and in the US (+6% YoY) mainly due to higher revenues was not enough to compensate the much worse performance in Brazil (-48% YoY mainly due to the downward tariff revision in Elektro in August and also to the higher generation costs due to the drought that will be passed to consumers in the next year review period) and in Spain (-5% YoY, as a consequence of the revenues cuts decided in March). Liberalized business (+23% YoY, 31% above our estimates) was helped by the good performance in Spain (+11% YoY driven by higher prices and also gains obtained with gas trading) and in the UK (+76% YoY due to lower generation costs and rise of tariffs). Net profit for 4Q12 went down 33% YoY (27% below our estimates) hampered by higher than expected D&A and provisions (one-offs related to gas assets in the US and also renewable assets). Net debt YE12 stood at 30.3bn vis-à-vis 31.7bn in 2011 and 31.9bn in the previous quarter and below our estimates of 31.1bn (MIB s debt calculation are more conservative). Capex for YE12 stood at 3.3bn, slightly below our estimates of 3.4bn. The company announced a share buyback of up to 1% IBE s outstanding shares. This buyback together with the current treasury stock (1.4% IBE s outstanding shares) will allow IBE to reduce its capital (up to 2.4%). By doing this, the company reduces the impact of dilution derived from the payment of a scrip dividend. This capital reduction will be compensated by the issue of a hybrid instrument issue ( mn) that is considered as equity by rating agencies. Regarding divestments, IBE s CEO said that it has no plans to sell minority stakes in Scottish Power and added that more news should be unveiled in the coming days. (For further details, please refer to our snapshot out this week) EDP Buy Low Risk (Target YE13: 2.80) Vanda Mesquita, Parpública sold 4.144% of EDP s outstanding shares Parpública sold 4.144% of EDP s outstanding shares through an accelerated book building at 2.35 per share. This price represents a 3% discount over the closing price the day before the announcement ( 2.422) and a 9% premium over the 6-month average price ( 2.16). This sale was already expected, since the Portuguese Government had already stated that it intended to sell the aforesaid stake this quarter. We consider this deal positive not only because it helps to increase EDP s free-float, but also because it helps to reduce overhang pressure. We would also like to point out that Liberbank (one of EDP s current shareholders) may be forced to sell its 5.01% stake in EDP due to the need for balance sheet reduction imposed by DGCom and that Iberdrola considers its 6.79% stake in EDP as available for sale. We also would like to remind that China Three Gorges (CTG) showed interest in acquiring this participation, therefore we assume that the Portuguese Government did not reach an agreement in terms of price (CTG s first offer was rejected and probably the likely second offer was also rejected). Page 5 of 14

6 CONGLOMERATE Semapa Buy High Risk (Target YE13: 8.20) João Mateus; 4Q12 Earnings Comment Pretty much as expected... Semapa released the 4Q12 earnings. Main figures were not strongly different from our estimates, but EBITDA. Top line, 508.9Mn, plus 11% YoY and similar with our estimates, EBITDA, 146.4Mn and a margin of 28.8% vs. 21% estimated, mainly due to several non recurrent items at the holding level with a value of 45.4Mn ( 9.6Mn related with the reimbursement of expenses by CRH in connection with Secil deal, 16.8Mn related with the reappraisal of the original Secil holding and 19Mn due to the discount on redemption of the pension plan). Below the operating line higher depreciations than our estimates mainly from Portucel and related with assets written off, higher net financials and lower minorities than our estimates led to a net income of 16.1Mn, pretty much in line with our estimates; By segments the Portuguese cement sector is still in an adjustment phase, in 2012 the market went down by 26.9% and Secil turnover went down 12.3% mainly due to an increase in exports. The company is pretty cautious regarding 2013, as the domestic demand decreased sharply during the 2H12, mentioning that is implementing a cost cutting plan in order to defend operating margins. Tunisia did well annual turnover went up 12.5% YoY, Lebanon and Angola both recorded higher prices and lower volumes however the net results were different while in Lebanon the annual total turnover went up 9.2%, in Angola turnover dropped by 6.2% this was due to a new cement mill installed in the region (Benguela). Brazil is still in its infancy the EBITDA contribution was 1.5Mn; Net debt as the company measure went down sequentially, from 1.62Bn in the 2Q12 to 1.53Bn at the end of 3Q12 and 1.45Bn at the end of year (vs. our estimate of 1.42Bn), however it was mainly due to Portucel performance, as the debt at the holding level went up from 0.82Bn to 0.87Bn. So clearly the balance sheet is unbalanced as there is too much debt at the holding level while Portucel could be leveraged. All in all figures as expected, cement in Portugal is still in the doldrums, while the paper business is performing strongly. Despite some adjustments would need to be done. We maintain our valuation of Semapa at 8.20 per share for the YE13, with a buy, high-risk recommendation. (For further details, please refer to our snapshot out last Friday) Sonae Capital Reduce High Risk (Target YE13: 0.19) António Seladas, CFA; Portuguese Tourism Revenues in December stabilizing at low levels The INE (The Portuguese Statistic Institute) released yesterday, 14 of February, the Tourism activity regarding the month of December; The figures are presented below, the positive trend in overnight stays by non residents persists and was able to close the year 4.6% above However total revenues in the year were negative 2.2%, even that the trend improved in November and December; By regions, Algarve was able to keep the positive trend, while Lisbon recorded the first positive month of the year. Alentejo where Troia resort is accounted continues to underperform even that the relationship between this data and Troia Resort figures hasn t been strong, however the Hotel business revenues in the 3Q12 went down 5.3% vs. -5% INE data. Regarding the 4Q12 we are expecting revenues to drop by 15.2%YoY vs. -12%; -16% and -25% INE data, October, November and December respectively; All in all the sector is stabilizing at low levels. However, Alentejo will need for several years of strong promotion to become an holiday destination. Page 6 of 14

7 CONSTRUCTION Construction Sector António Seladas, CFA Portuguese Construction trying to stabilize at very low levels The INE (The Portuguese Statistic Institute) released today the Production in the Construction index regarding the month of December. The YoY change (3M moving average) is negative 17.4%, showing a slight improvement vs. last data. The absolute level, 3M moving average, is consolidating slightly above 50, even that last data was the lowest on record. The Confidence Indicator in the Industry released on a monthly basis by the European Commission has had a positive performance since May/June, even that the last figure released at the beginning of the month, was sequentially slightly negative. All in all the sector is trying to stabilize at very low levels and any recovery will be very slow. Our estimates, regarding Mota Engil Construction revenues in Portugal are -19%; -12% and -5%; 2012; 2013 and 2014 respectively. So we feel comfortable with our estimates. Page 7 of 14

8 Source: INE Source: European Commission OIL & GAS Galp Energia Buy High Risk (Target YE13: 16.85) 4Q12 Earnings Comment - E&P affected by higher opex; R&M driven by higher refining margins Vanda Mesquita, Galp disclosed its 4Q12 earnings this week. Adjusted EBITDA stood at 229mn (+10% yoy), coming short of our estimates by 7% and adjusted net profit for 4Q12 went up by 10% yoy to 83mn (14% above MIB estimates basically due to lower Depreciations & Amortizations and lower taxes than the ones included in our estimates). By business, earnings surprised on the upside due to better than expected performance in Refining & Marketing (Adjusted EBITDA came out 19% above our estimates; +52% YoY; despite lower sales to direct clients and lower crude processed, adjusted EBITDA was boosted by a recovery of Galp s refining margin YoY), but have disappointed due to lower than expected performance in Exploration & Production (Adjusted EBITDA came out 12% below our estimates; +17% YoY; in spite of higher production, earnings were penalized by higher operating costs due to maintenance works). Net debt YE12 stood at 1.7 bn, 0.3bn above our estimates. Following this set of results, we feel confident in our estimates. No major news was unveiled at CC. The company said that it is discussing the size of the Carcará field with the consortium. In Jupiter, the data gathered confirms that volumes are in line with previous estimates (5bn of recoverable reserves, 1/3 oil, 1/3 gas and 1/3 condensates, in line with our estimates). In the Lula field, the FPSO Cidade de Paraty deliver is on track and will start its operations in 2Q13 (production ramp-up should take one and a half years). Namibia will start to be de-risked soon. Hydrocracker complex started its commercial production on January, 10 th and production will gradually increase (maximum capacity is expected to be reached during the 1st quarter and full impact in terms of margins should only be noticed in the second quarter). Regarding short-term outlook, the company said that 1Q13 crude production is targeted to reach 24 kboepd (slightly below our estimates of 24.9 kboepd). Refining margin should increase on a quarterly basis benefiting from the production ramp-up of the hydrocracker complex and marketing volumes should continue to drop due to the austerity measures in Iberia. Natural gas volumes should increase QoQ supported by higher trading opportunities. (For further details, please refer to our snapshot out this week) Page 8 of 14

9 SECTOR PERFORMANCE Sector Performance -1 Week (%) Sector Performance - YTD (%) PSI PSI Retail * 1.5 Industrials & Other 24.4 Financials 1.4 Financials 21.7 Oil & Gas 0.5 Telecoms 9.3 Industrials & Other -0.2 Retail * 7.8 Telecoms -1.2 Electric Utilities 1.9 Electric Utilities -1.7 Oil & Gas * includes Jeronimo Martins and Sonae This week, the PSI20 went down 0.1%. The best performing sector was Retail with a 1.5% growth and the worst was Electric Utilities with a 1.7% fall. On a Ytd basis, the PSI20 went up 8.3%. The best performing sector was Industrials & Other with a 24.4% growth and the worst was Oil & Gas with a 0.0% performance. AGGRESSIVE PORTFOLIO This week, Mib Aggressive Portfolio went up 0.49%, outperforming the PSI20 by 0.60pp. Excluding Telefónica, all stocks contributed for this outperformance. 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 up 0.87%, outperforming the PSI20 by 0.98pp. Excluding Telefónica, all the stocks contributed for this outperformance. 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 Mib AGGRESSIVE PORTFOLIO Portfolio weekly return 300 Return since inception (27Jul04) Risk Market Price Upside Weekly Performance Company 270 Rating Price ( ) Target ( ) Potential Return Contribution Deviation Portfolio PSI20 Telefónica Medium % -3.2% -0.65pp -0.63pp 240 Impresa High % 0.0% 0.00pp 0.02pp 210 Sonaecom High % 5.1% 1.01pp 0.99pp 180 Banco Popular % 0.03pp 0.05pp 150 Galp Energia High % 0.5% 0.09pp 0.04pp 120 Portfolio 0.49% PSI % 90 Gain/loss 0.60pp 60 Explained by the portfolio 0.47pp 23/07/04 18/08/05 13/09/06 09/10/07 03/11/08 29/11/09 25/12/10 20/01/12 14/02/13 Explained by being underweight in the remaining PSI20 stocks 0.13pp Portfolio PSI20 Ytd Return Next week Portfolio Changes in Portfolio Company Risk Market Price Upside Rating Price ( ) Target ( ) Potential In Out Telefónica Medium % Novabase B. Popular Impresa High % Sonaecom High % Galp Energia High % Novabase High % Return vs. PSI /12/12 04/01/13 11/01/13 18/01/13 25/01/13 01/02/13 08/02/13 15/02/ YTD 1 Month 1 Week Portfolio 71.9% -7.30% -36.6% 22.1% 16.2% 6.1% 0.5% PSI % % -27.6% 2.9% 8.2% -2.1% -0.1% Gain/loss 38.5pp 3.0pp -9.0pp 19.2pp 8.0pp 8.2pp 0.6pp 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. Page 10 of 14

11 Return since inception (30Dec11) Portfolio PSI /12/11 07/03/12 14/05/12 21/07/12 27/09/12 04/12/12 10/02/ Portfolio PSI20 Ytd Return /12/12 04/01/13 11/01/13 18/01/13 25/01/13 01/02/13 08/02/13 15/02/13 Mib LIQUIDITY PORTFOLIO Portfolio weekly return Company Risk Upside Weekly Performance Rating Market Price ( ) Price Target ( ) Potential Return Contribution Deviation Telefónica Medium % -3.2% -0.65pp -0.63pp Sonaecom High % 5.1% 1.01pp 0.99pp Banco Popular % 0.03pp 0.05pp Galp Energia High % 0.5% 0.09pp 0.04pp Indra High % 1.9% 0.38pp 0.40pp Portfolio 0.87% PSI % Gain/loss 0.98pp Explained by the portfolio 0.47pp Explained by being underweight in the remaining PSI20 stocks 0.50pp Next week Portfolio Changes in Portfolio Company Risk Rating Market Price ( ) Price Upside Target ( ) Potential In Out Telefónica Medium % Iberdrola B. Popular Sonaecom High % Sonae Indra Galp Energia High % Sonae Medium % Iberdrola Low % Return vs. PSI YTD 1 Month 1 Week Portfolio % 6.9% -1.0% 0.9% PSI % 2.9% 8.2% -2.1% -0.1% Gain/loss pp -1.4pp 1.1pp 1.0pp 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. Page 11 of 14

12 2013/02/15 Latest Pr ( ) Target YE13 Upsd Rating Risk Trnvr ( mn) M Cap Change (%) EPS P / E EV / Sales EV / EBITDA Div Yield P/BV Rating 3m 6m ( mn) Week 1M 3M 12M YTD E 2013E E 2013E E 2013E E 2013E E 2012E PSI 20 6, , Financials , Banco Popular (3) , % - - Bankinter (3) , % - - BCP (1) , BES % Buy High , loss % 0.0% 0.5 BPI % Buy High , loss % 0.0% 1.4 Telecoms , % 0.7% 1.9 Telefónica % Buy Medium , % 0.1% 2.0 Portugal Telecom % Buy Medium , % 8.0% 1.2 Zon Multimedia % Reduce Medium , % 4.6% 5.1 Sonaecom % Buy High % 4.4% 0.5 Media loss % 4.5% 0.8 Impresa % Buy High loss % 0.0% - Media Capital (2) % % 11.1% - Cofina % Neutral High % 2.3% 3.6 Technology Indra % Buy High , % 2.1% 1.4 Novabase % Buy High % 3.1% 0.9 Utilities , % 4.7% 0.6 Iberdrola % Buy Low , % 8.1% 0.5 EDP % Buy Low , % 7.9% 1.0 EDP Renováveis % Buy Low , % 0.7% 0.6 REN % Buy Low , % 7.3% 1.2 Motorways Brisa (3) , % - - Conglomerates , Sonae % Buy Medium , % 4.5% 1.1 Semapa % Buy High % 3.4% 0.7 Sonae Capital % Reduce High loss loss loss loss loss 0.0% 0.0% 0.2 Retail Jerónimo Martins % Neutral Medium , % 3.4% 7.5 Industrials , % - - Sonae Industria % Buy High loss loss loss % 0.0% 0.5 Altri % Reduce High % 1.1% 2.1 Portucel % Sell Medium , % 6.0% 1.4 Cimpor (3) , % - - Construction Mota-Engil % Sell High % 4.7% 1.2 Oil & Gas Galp Energia % Buy High , % 2.0% 1.8 (1) We do not have a recommendation on BCP, as Mib is a registered trademark of BCP; (2) Unrated due to low free-float; (3) 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 by Comissão de Mercado de Valores Mobiliários. 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 has more than 2% of Sonaecom. 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. Banco Millennium bcp Investimento, S.A. (merged into Millennium bcp) was chosen as a joint global coordinator of the Initial Public Offering of EDP Renováveis. Banco Millennium bcp Investimento, S.A. (merged into Millennium bcp) was part of the consortium, as a Co-Leader, of BES rights issue, done in April Millennium bcp was part of the consortium, as Co-Manager, of BES rights issue completed in May Millenniumbcp 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). Recommendations on Millennium bcp covered companies (%) Recommendation Jan-13 Dec-12 Sep-12 Jun-12 Mar-12 Dec-11 Jun-11 Dec-10 Dec-09 Dec-08 Dec-07 Dec-06 Dec-05 Dec-04 Buy 65% 77% 65% 78% 72% 68% 76% 79% 63% 54% 41% 37% 30% 63% Neutral 8% 12% 19% 4% 7% 11% 14% 7% 15% 4% 27% 11% 40% 6% Reduce 12% 4% 4% 0% 3% 0% 0% 0% 7% 0% 0% 21% 5% 6% Sell 12% 4% 8% 7% 3% 7% 0% 4% 4% 0% 14% 16% 5% 0% Unrated/Under Revision 4% 4% 4% 11% 14% 14% 10% 11% 11% 42% 18% 16% 20% 25% Performance 9.7% 8.7% 10.7% -15% 1% -25% -3% -10% 33% -51% 16% 30% 13% na PSI 20 6,201 5,655 5,203 4,698 5,557 5,494 7,324 7,588 8,464 6,341 13,019 11,198 8,619 7,600 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. José Malhoa, Lote Lisboa Portugal Telephone Fax / 39 Equity Team Luis Feria (Head of Equities) Equity Research António Seladas, CFA (Head) Fundamental Analysis Alexandra Delgado, CFA (Telecoms and IT) António Seladas (Industrials & Small caps) João Flores (Media and Retail) Rita Silva (Banks) Vanda Mesquita (Banks, Utilities and Oil&Gas) Market Analysis Ramiro Loureiro Sónia Martins Telma Santos Publishing Sónia Primo Prime Brokerage Vitor Almeida Equity Trading Paulo Cruz (Head) Gonçalo Lima Jorge Caldeira Nuno Sousa Paulo Sousa Pedro Ferreira Cruz Pedro Gonçalves Pedro Lalanda Rodrigo Roque Pinho Equity Derivatives Jorge Pina (Head) Ana Lagarelhos Diogo Justino Marco Barata Maria Cardoso Baptista, CFA