IBERIA. Thursday Jerónimo Martins Trading Statement 2012FY. Best & Worse Performers -1 Week (%)

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1 EQUITY RESEARCH IBERIA 04 January 2013 TOP STORIES WEEKLY António Seladas, CFA Electric utilities - In December, monthly electricity consumption (adjusted for temperature and working days) went down by 0.5% YoY in Portugal, the smallest decline recorded in Annual consumption (- 3.6% YoY) is similar to the consumption levels recorded in In Spain, monthly electricity consumption dropped by 3.00% YoY and annual consumption fell by 1.8% YoY (page 4). OUT THIS WEEK Other Snapshots/Company Reports Media Sector, Retail Sector Price Target / Recommendation Changes Bankinter, BES, Altri, Portucel, Mota Engil Other News Media Sector, Utilities Sector, Iberdrola, EDP, EDP Renováveis, Retail Sector, Jerónimo Martins, Galp WEEK AHEAD Thursday Jerónimo Martins Trading Statement 2012FY PORTFOLIOS This week, Mib Aggressive Portfolio went up 2.59%, underperforming the PSI20 by 1.28pp. Excluding Galp, all stocks contributed for this underperformance (page 12). This week, Mib Liquidity Portfolio went up 5.07%, outperforming the PSI20 by 1.19pp. Only Galp and Semapa contributed for this outperformance (page 13). Stock Market Last 1W YTD 2011 Daily Vol. ( mn) 1W 1M 6M 2011 PSI 20 5, % 4.52% % PSI IBEX 35 8, % 3.53% % IBEX 35 2,963 3,167 2,381 4,925 Euro Stoxx 50 2, % 2.51% -5.56% Euro Stoxx 50 6,083 7,140 7,209 14,831 Forex Rates Last 1W YTD 2011 Interest Rates Last 1W Chg YE11 EUR/USD % -1.38% -3.17% Euribor 6m 0.33% 0.32% 1bp 1.62% EUR/GBP % -0.47% -2.96% 10Y Bond PT 6.31% 7.01% -71bp 13.36% EUR/BRL % -1.92% 8.86% 10Y Bond SP 5.09% 5.26% -17bp 5.09% antonio.seladas@millenniumbcp.pt Best & Worse Performers -1 Week (%) Bankinter 15.5 Best & Worse Performers - YTD (%) Bankinter 25.8 Banco Popular 12.0 Mota-Engil 17.7 Sonae Industria 11.1 Banco Popular 16.2 Semapa 9.1 Sonae Industria 14.7 Av. José Malhoa, Lote Lisboa Mota-Engil Impresa Cimpor Sonae Capital EDP Renováveis Cofina Tel / Fax: / 09 Iberdrola -0.6 Brisa -1.4 Cofina -1.0 Iberdrola -1.9 Brisa -1.4 Cimpor 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 16

2 CHANGES New Previous Rating Target Rating Target Motive Bankinter Reduce 3,70 Buy 3,70 Price Performance BES Reduce 0,95 Neutral 0,95 Price Performance Altri Reduce 1,65 Neutral 1,65 Price Performance Portucel Neutral 2,55 Buy 2,55 Price Performance Mota Engil Sell 1,50 Reduce 1,50 Price Performance EARNINGS Company 4Q2012 Investor Day Jerónimo Martins * AM Galp Energia * BM Sonae * AM Bankinter BM Banco Popular BM BCP AM Galp Energia BM Jerónimo Martins BM Sonae Indústria AM Telefónica BM EDP AM Sonaecom BM REN AM Sonae AM Impresa AM Glintt Portucel BPI Iberdrola Media Capital Novabase Semapa Brisa Sonae Sierra EDP Renováveis Altri Cofina Zon Multimedia BES Cimpor Indra Martifer Sonae Capital Ibersol Mota-Engil Portugal Telecom ESFG Soares da Costa SAG AM - After market; BM - Before market; - Not available; (e) Expected; * Trading Update 2012 FY Page 2 of 16

3 MEDIA Media Sector Audience Shares Dec12 - Happy Christmas in TVI João Flores; Equity Analyst Analyzing 2012 figures, Cable+Others reached 1st place in audience shares both in all-day (35.3%) and prime-time (30%). Recall numbers strongly benefited from new technology to measure audience shares (GfK replaced Marktest from March 1st). Furthermore, increasing new cable channels, growing competition from operators offering triple-play (TV Cabo / Zon Multimédia and Meo / Portugal Telecom) and attractive new technologies (HD, 3D, ) also benefited Cable channels. Audience numbers from private-broadcasters TVI and SIC declined as expected, reflecting new audience numbers from GfK. We highlight SIC prime-time rose 0.5pp, benefiting from prime-time soap strong audience share numbers. State-owned RTP1 numbers were a negative surprise, showing very bad numbers both in all-day (-6.6pp) and prime-time (-6.5pp). We believe instability/uncertainty in company regarding its next future (privatized / not privatized / cost cutting measures) partially explained strong negative trend. DECEMBER On a monthly basis, TVI benefited from an aggressive programming grid in Christmas season (film premieres, reality show Secret Story a French format of Big Brother and Football / Portugal League Cup), closing gap to Cable (+others) channels. TVI /Media Capital All-Day 26.0% (+1.1pp MoM, -0.5pp YoY) and prime-time 29.6% (+1.5pp MoM, - 0.1pp YoY). State-owned channel RTP1 kept showing (very) bad numbers: prime-time audience shares below 10%!!! CABLE 2012: SIC Noticias led audience shares in Jan-Feb while Disney Channel led audience shares from Mar-Dec, reflecting changes from GfK audience shares numbers. News channels were penalized in December by Christmas holidays, since younger generations were focused on youth channels. We highlight Disney channel returned to 1st place while news channel SIC Noticias kept 4th place. (For further details, please refer to our snapshot out this week) Will RTP privatization be decided next week? According to the news, RTP Executive President Mr. Alberto da Ponte expects that Government will decide RTP privatization scenario (privatize 49% is the most likely solution to him) at the next Council of Ministers, which will be held on January 10th. Recall the Minister Assistant and of Parliamentary Affairs (Miguel Relvas) wanted to decide RTP privatization scenario till the end of We highlight minister Relvas cabinet denied RTP solution would be known on January 10th. According to weekly newspaper Expresso site on December (from Impresa Media Group which owns private TV channel SIC), Portuguese Government is considering the possibility of privatizing 49% of state-owned channel RTP, following the analysis of the models proposed by the board of directors of the station and the public and strategic advisors. The state will keep a majority stake while private investors will manage the group. Page 3 of 16

4 Our Media scenario expects a possible RTP private owned channel from 2H13, which has embedded 12 min advertising per hour (from currently 6 min advertising per hour). UTILITIES Utilities Sector Electricity consumption almost stabilizing in Portugal Vanda Mesquita, Equity Analyst In December, monthly electricity consumption (adjusted for temperature and working days) went down by 0.5% YoY in Portugal, the smallest decline recorded in Annual consumption (-3.6% YoY) is similar to the consumption levels recorded in 2006, as shown in the table below. In Spain, monthly electricity consumption dropped by 3.00% YoY and annual consumption fell by 1.8% YoY. Source: REN, REE Source: REN We recall that in the case of EDP, earnings from the distribution business are not significantly affected by the drop in volumes (as the bulk of the distribution model has a fixed component) and liberalized activities only accounted for 10% of 2011 EBITDA. Regarding Iberdrola, Spanish liberalized activities represented about 20% of 2011 EBITDA, but given the drop of consumption, we do not expect a meaningful impact. Fiscal cliff deal includes a one-year extension of Production Tax Credit The fiscal cliff deal includes a one-year extension of the Production Tax Credit (PTC). We recall that PTC was due to expire in December 2012, meaning that following this renewal PTC will be in force until Wind parks under construction by the end of 2013 will also benefit from this extension. This is the seventh consecutive time that PTC was extended. Last year, companies rushed to install wind Page 4 of 16

5 parks, since the renewal was a question mark (due to the US election). Obama s re-election reinforced the support to renewable companies. Companies such as EDPR and IBE said that they were not going to install wind parks in the US this year. However, this renewal could change their plans. We consider that this announcement is positive, although in our opinion it does not solve the problems of the sector, since power prices are still unattractive due to the very low gas prices (shale gas). Valuation wise, in the case of both companies, we consider no installations in the US in 2013 and that both companies will resume their installations from 2014 onwards. If both companies decide to install wind parks in 2013, the impact in both valuations will not be very meaningful. For instance, if both companies install 200MW in 2013, there will be a positive impact of 3 cents in the case of EDPR and 1 cent in the case of Iberdrola. Iberdrola Buy Low Risk (Target YE13: 5.00) Expropriation in Bolivia Vanda Mesquita, Equity Analyst The Bolivian Government announced that it has nationalized four Iberdrola s companies in Bolivia (2 branches of power distributors, a service company and an investment company), mentioning that it will pay a fair compensation to the Spanish company. According to the Spanish press, those assets are valued at about 75 million. This expropriation follows other expropriations in other business areas. Red Eléctrica s subsidiaries expropriation was one of the latest expropriations announced in Bolivia. In terms of our valuation, we do not value these assets separately, but together with other assets, whose valuation accounts for less than 1% of our enterprise value. Under a more adverse scenario, i.e. in a scenario in which the company did not receive any compensation, the impact should be immaterial taking into account the weak weight of those assets. Iberdrola sold wind farms in France Iberdrola announced that it has sold all the wind farms in France to GE (40%), MEAG (40%) and EDF Nouvelles (20%). These wind farms totaling approximately 321.4MW were sold for 350mn. This sale is subject to an additional contingent payment of 50 million, which is dependent on the fulfillment of certain conditions. This sale came as no surprise and is within the framework of the sale of strategic assets in nonstrategic countries. We recall that the company said that it intended to sell 2bn of assets, mentioning that 300mn of it had already been sold at the time of the Outlook presentation. Following this sale and bearing the other ones previously announced last month (Medgaz and wind parks in Germany sale), IBE has sold 850mn, meaning that 42.5% of its divestment plan was accomplished. The multiple implied in the operation is 1.09mn per MW without considering the contingent payment and 1.25mn per MW considering that payment. The company did not disclose the years in which those wind farms began its operations, so we cannot assess if the multiple is broadly in line with the implied multiples in the latest wind farms sales. In addition, we cannot compare to our valuation, as we value this business unit using a DCF approach without separating installed capacity and pipeline and also without separating countries. Renewable unit accounts for 24% of our enterprise value, but following the aforesaid mentioned sales, that weight of renewable should decrease. Page 5 of 16

6 EDP Buy Low Risk (Target YE13: 2.80) Parpública s full divestment in EDP may be completed soon Vanda Mesquita, Equity Analyst We recall that last month, Parpública had announced the exercise of the early repayment option on the 5th anniversary of the exchangeable bond linked to EDP s shares (linked to 151,517,000 shares in EDP, which represents 4,14% of EDP s share capital), mentioning that 99.6% of the investors had requested the cash reimbursement. Parpública also said that it would proceed to the compulsory acquisition of the remaining shares, which is a process that we presume that is underway and should be completed soon (maybe by the end of this month). Following the completion of this process, all EDP s shares held by Parpública will be available and the sale process may be initiated. We also remind that on October 31st, 2012 the Portuguese Council of Ministers approved this operation and said that EDP s remaining shares might be sold through one or more direct sales to domestic or foreign investors and that it also can be done through an accelerated bookbuilding or through block trade (one or more blocks). On December 5th, 2012 China Three Gorges (EDP s main shareholder) said that it was interested in buying those shares (corresponding to 4.14% of EDP s outstanding shares). On December 20th, 2012 there were some comments in the local press, mentioning that CTG was negotiating that purchase with the Portuguese State. One year ago, CGT paid 3.45 per share last December to acquire 21.35% stake in EDP. If CTG buys this 4.14% stake, which is the most likely scenario in our view, it will be interesting to know the price that CTG will offer. We believe that the Portuguese State is strongly focused on this sale, as under the Memoradum signed between the Portuguese State and troika (May 2011) was stated that The Government commits to go even further, by pursuing a rapid full divestment of public sector shares in EDP and also that under the Portuguese Council of Ministers was decided the way to sell the remaining EDP s shares held by Parpública. We believe that CTG is not going to pay the same premium that it paid one year ago, since the acquisition of 4.14% does not increase its control significantly. However, if the Portuguese State decides to sell at lower price from last years deal (EDP s current market price does not differ very much different from last year s market price when the privatization was announced), it may be criticized by public opinion. All in all, we don t think that this topic will affect strongly stock price. EDP Renováveis Buy Low Risk (Target YE13: 5.30) EDPR maintains its investment in the US Vanda Mesquita, Equity Analyst Following this week s announcement related to a one-year extension of the tax incentives for wind energy, EDPR said that it maintains its investment plan presented at its Investor Day (May, 2012), which includes no additions in 2013 and 400MW additions from 2014 to We recall that the company said that the expansion in the US was subject to the renewal of the aforesaid tax incentives. In our valuation, we consider no additions in 2013 and 400MW of new capacity from 2014 to 2015, in line with the company s business plan. Therefore, this announcement does not have impact in our valuation. Page 6 of 16

7 RETAIL Retail Sector Retail Sales Nov12 - Iberia recovered João Flores, Equity Analyst Retail sales recovered in Iberia while Greece slumped. Poland keeps showing lackluster numbers. Overall, numbers are neutral to our Jerónimo Martins (Rating: Buy; Target YE13: 16.50, Medium Risk) and Sonae (Rating Buy; Target YE13: 1.00; Medium Risk) valuations. We highlight Jerónimo Martins will disclose its Trading Statement 2012 FY on January 10th while Sonae will disclose its Trading statement on January 23rd. Portuguese retail sales (disclosed on Jan 02nd) reduced pace of decline in November to 5.3% YoY from 6.5% YoY in October. On a monthly basis, sales were down 1.3% YoY (- 4.0% in October). We believe encouraging number reflected: i) favorable comparison basis; ii) private sector employees were expecting a cut in extra month`s Christmas pay which did not happened (increasing household disposable income). Food Retail sales declined 2.6% YoY in November from minus 4.3% YoY in October. Non-food Retail sales fell 8.0% YoY in November (-8.9% YoY in October). Recall Portugal light vehicles sales increased pace of decline in November, following a 19% YoY decline in October, not benefiting from an increasing favorable comparison basis (market strongly accelerated pace of decline from September 2011). We highlight December car sales in Portugal are expected to be disclosed today, after market close. Spanish retail sales (disclosed on Dec 28th) reduced pace of decline in November to 7.8% YoY (vs concensus -10%), following a 8.4% YoY decline in October. Retail sales in Spain have now contracted for 30 months straight in annual terms. Sales in the retail sector officially starts in January, but shops started offering discounts on some items in December. We highlight Spain's trade federation said Christmas shopping did not go as well as expected and sales were down compared to Polish retail-sales (disclosed on Dec 21st) increased 2.4% on an annual basis in November (2.9% consensus), lower than the 3.3% growth seen in October. On a monthly basis, retail sales declined 6.4% during the month (-5.9% consensus), following 4.3% increase in October. Recall new car sales in Poland increased pace of decline in November to -8% YoY from -3% YoY in October, not benefiting from an increasing favorable comparison basis (market strongly accelerated pace of decline from September 2011). Food: There was a 2.4% YoY gain in retail sales of food, beverages and tobacco products (from 1.3% in October), thus YTD average declined to 5.1% from 5.4%. Following polish numbers, we keep confident with our JM`s numbers (recall we estimate Biedronka`s LfL sales in 2012 will reach 6%, keeping outperformance to the market). The unemployment rate rose to 12.9% in November from 12.5% in October. (For further details, please refer to our snapshot out this week) Page 7 of 16

8 December car sales in Iberia suggests non-food retail sales recovery will not be straightforward 2012 sales numbers back to the eighties: sales reached numbers 26 years ago Portugal: Car sales increased pace of decline in December, not benefiting from a favorable comparison basis According to ACAP (Portuguese Automobile Trade Association) light vehicle sales fell 43.6% YoY in December (6.342 vehicles). We highlight Portugal light vehicles sales in Portugal increased pace of decline, following a 25% YoY decline in November. Sales declined 37.9% in 2012 (from 37.4% Ytd in November). Overall, Portugal showed negative numbers, not benefiting from an increasing favorable comparison basis (market strongly accelerated pace of decline from September 2011). Spain: New car sales in Spain slightly increased pace of decline in December In spite of the PIVE plan, the Spanish new car market is down 23% YoY in December to just registrations. Spanish market declined 13% in 2012 to units. According to the market, the PIVE plan did energise a market that would have fallen even further down without it, but it s pretty obvious that the plan hasn t had the anticipated positive effect so far. More worrying, PIVE-linked car orders are slowing down, from 30,000 in November to an estimated 16,000 in December. Not hard to see that it will be very difficult to reverse the trend in 2013, with the plan expected to end in March 2013 or will it? With 55,700 PIVE requests so far, it seems the 75,000 the plan was designed for will be reached in January and the PIVE government funds will then be exhausted One of the main explanations suggested by car dealers is: i) the lack of stock of the models most in demand as a result of the plan, meaning a waiting period of over one month from the moment the car is ordered; ii) another reason is the burocracy/red tape/paperwork necessary to gain approval with the Instituto para la Diversificación y el Ahorro de Energía (IDAE). Following dramatic fall in September car sales, the Government of Spain has approved a plan called Page 8 of 16

9 PIVE (Incentive Program Efficient Vehicle) of aid for the purchase of vehicles. This plan started on October 1 and will end on March 31, Each person invoking the plan PIVE receive for the purchase of a new car. Jerónimo Martins Buy Medium Risk (Target YE13: 16.50) Car sales in Poland increased pace of decline in December, not benefiting from a favorable comparison basis João Flores, Equity Analyst New car sales in Poland are down -25% YoY in December to registrations, bringing the year-todate total to units, down 2.5% vs 2011 (-0.1% YTD in November) We believe Poland showed negative numbers, not benefiting from an increasing favorable comparison basis (market strongly accelerated pace of decline from September 2011: 30% decline in December 2011). Overall, car sales numbers in Poland are potentially negative news for Biedronka/JM, since numbers suggested Polish economy is (excessive) cooling down. Recall Polish Central Bank is expected to cut Base Rate on January 09th (from 4.25% to 4.00%). Polish retail sales in December will be disclosed on January 24th. JM will disclose its Trading Statement 2012 FY next week (January 10th after the market close) while 2012 Results will be disclosed on February 27 th 2012 Trading Statement JM will release its 2012 Trading Statement on January 10 th after market close. Sales are expected to increase by 10.1% YoY to mn, benefiting from strong growth in Poland (+15.3% YoY) while Portugal reflects a tough environment (2.5% YoY). Furthermore, we believe JM`s accurate strategy led to increased market share both in Portugal and Poland. Page 9 of 16

10 OIL & GAS Galp Energia Buy High Risk (Target YE13: 17.05) Carcará well confirms huge potential and declaration of Commerciality was postponed Vanda Mesquita, Equity Analyst The consortium, that explores BM-S-8 formed by Galp s subsidiary in Brazil, Petrogal Brasil (14%), Petrobras (66%), Barra Energia do Brasil Petróleo and Gás (10%) and Queiroz Galvão Exploração e Produção (10%) has announced that it has completed the drilling of the third well in BM-S-8. The well, known as Carcará, was drilled at a water depth of meters. In August, the consortium said that it had found an over 400-meter column of oil. Now, the consortium said that starting at meters of drilling there is an oil column containing at least 471 meters of excellent oil. The consortium said that it needs to perform more exploration activities in this area. Due to the Carcará potential, the consortium informed that it requested an extension of the deadline of the Declaration of Commerciality, which was due to expire in We recall that this discovery was previously announced in March 2012 and that Carcará is due to start its production in 2018, in line with Petrobras plan. Albeit considering this piece of news positive, we still wait for new information regarding the extent of this discovery. Indeed, the consortium continues to not unveil the extent of this discovery (in terms of volumes). In our valuation, we consider that BM-S-8 contains 1 billion barrels of oil equivalent. We were not surprised by the request of the extension of the deadline of the Declaration Commerciality, because there were some previous comments about this topic in the Brazilian press. Finally, we would like to remind that Galp holds 70% stake of Petrogal Brazil, while Sinopec holds the remaining stake, implying that Galp s interest in this block is 9.8%, while Sinopec s interest is 4.2%. SECTOR PERFORMANCE Sector Performance -1 Week (%) Sector Performance - YTD (%) PSI20 3,9 PSI20 4,0 Industrials & Other 7,8 Industrials & Other 8,6 Oil & Gas 6,7 Oil & Gas 5,6 Financials 3,8 Financials 4,5 Telecoms 3,4 Telecoms 3,7 Electric Utilities 2,7 Retail * 3,0 Retail * 2,6 Electric Utilities 2, * includes Jeronimo Martins and Sonae This week, the PSI20 went up 3.9%. The best performing sector was Industrial & Other with a 7.8% growth and the worst was Retail with a 2.6% growth. On a Ytd basis, the PSI20 went up 4%. The best performing sector was Industrial & Other with a 8.6% growth and the worst was Electric Utilities with a 2.5% growth. AGGRESSIVE PORTFOLIO This week, Mib Aggressive Portfolio went up 2.59%, underperforming the PSI20 by 1.28pp. Excluding Galp, 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. Page 10 of 16

11 LIQUIDITY PORTFOLIO This week, Mib Liquidity Portfolio went up 5.07%, outperforming the PSI20 by 1.19pp. Only Galp and Semapa 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 11 of 16

12 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 Novabase High % 2.2% 0.44pp -0.33pp 240 Impresa High % 0.0% 0.00pp -0.77pp 210 Telefónica Medium % 3.0% 0.61pp -0.17pp 180 Sonaecom High % 1.0% 0.20pp -0.55pp 150 Galp Energia High % 6.7% 1.34pp 0.15pp 120 Portfolio 2.59% PSI % 90 Gain/loss -1.28pp 60 Explained by the portfolio -1.68pp 23/07/04 20/12/05 19/05/07 15/10/08 14/03/10 11/08/11 07/01/13 Explained by being underweight in the remaining PSI20 stocks 0.39pp Portfolio PSI20 Ytd Return Next week Portfolio Changes in Portfolio Company Risk Market Price Upside Rating Price ( ) Target ( ) Potential In Out Impresa High % Sonae Galp Novabase High % Telefónica Medium % Sonaecom High % Sonae Medium % Return vs. PSI /12/12 30/12/12 01/01/13 03/01/13 05/01/13 07/01/ YTD 1 Month 1 Week Portfolio 71.9% -7.30% -36.6% 14.6% 2.6% 5.3% 2.6% PSI % % -27.6% 2.9% 3.9% 8.1% 3.9% Gain/loss 38.5pp 3.0pp -9.0pp -3.9pp -1.3pp -2.8pp -1.3pp 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 12 of 16

13 Return since inception (30Dec11) Portfolio PSI /12/11 01/04/12 03/07/12 04/10/12 05/01/13 Ytd Return Portfolio PSI /12/12 30/12/12 01/01/13 03/01/13 05/01/13 07/01/13 Mib LIQUIDITY PORTFOLIO Portfolio weekly return Company Risk Price Upside Weekly Performance Market Price ( ) Rating Target ( ) Potential Return Contribution Deviation Telefónica Medium % 3.0% 0.61pp -0.17pp Galp Energia High % 6.7% 1.34pp 0.15pp Semapa High % 9.1% 1.83pp 0.95pp Sonae Medium % 3.3% 0.66pp -0.09pp Portugal Telecom Medium % 3.1% 0.63pp -0.03pp Portfolio 5.07% PSI % Gain/loss 1.19pp Explained by the portfolio -1.68pp Explained by being underweight in the remaining PSI20 stocks 2.87pp Next week Portfolio Changes in Portfolio Company Risk Price Upside Market Price ( ) Rating Target ( ) Potential In Out Telefónica Medium % Sonaecom Semapa Sonaecom High % Sonae Medium % Galp Energia High % Portugal Telecom Medium % Return vs. PSI YTD 1 Month 1 Week Portfolio % 5.1% 9.7% 5.1% PSI % 2.9% 3.9% 8.1% 3.9% Gain/loss pp 1.6pp 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. Page 13 of 16

14 2013/01/04 Latest Target Risk Trnvr ( mn) M Cap Change (%) EPS P / E EV / Sales EV / EBITDA Div Yield P/BV Upsd Rating Pr ( ) YE13 Rating 3m 6m ( mn) Week 1M 3M 12M YTD E 2013E E 2013E E 2013E E 2013E E 2012E PSI 20 5, , Financials , Banco Popular % Buy High , loss % 0.0% 2.1 Bankinter % Reduce High , % 2.2% 0.7 BCP (1) , BES % Reduce High , loss % 0.0% 0.5 BPI % Neutral High , loss % 0.0% 1.1 Telecoms , % 0.7% 2.0 Telefónica % Buy Medium , % 0.1% 2.2 Portugal Telecom % Buy Medium , % 8.4% 1.2 Zon Multimedia % Neutral Medium % 5.1% 4.5 Sonaecom % Buy High % 4.5% 0.5 Media loss % 4.3% 0.7 Impresa % Buy High loss 51.6 loss % 0.0% - Media Capital (2) % % 8.1% - Cofina % Sell High % 2.7% 3.4 Technology Indra % Buy High , % 1.9% 1.6 Novabase % Buy High % 3.9% 0.7 Utilities , % 4.4% 0.7 Iberdrola % Buy Low , % 7.3% 0.6 EDP % Buy Low , % 7.9% 1.0 EDP Renováveis % Buy Low , % 0.7% 0.7 REN % Buy Low , % 8.0% 1.1 Motorways Brisa (3) , % - - Conglomerates , Sonae % Buy Medium , % 4.6% 1.1 Semapa % Buy High % 3.9% 0.6 Sonae Capital % Buy High loss loss loss loss loss 0.0% 0.0% 0.1 Retail Jerónimo Martins % Buy Medium , % 3.6% 7.1 Industrials , % - - Sonae Industria % Buy High loss loss loss % 0.0% 0.5 Altri % Reduce High % 1.2% 2.0 Portucel % Neutral Medium , % 6.9% 1.2 Cimpor (3) , % - - Construction Mota-Engil % Sell High % 5.8% 1.0 Oil & Gas Galp Energia % Buy High , % 1.9% 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 14 of 16

15 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 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 77% 65% 78% 72% 68% 76% 79% 63% 54% 41% 37% 30% 63% Neutral 12% 19% 4% 7% 11% 14% 7% 15% 4% 27% 11% 40% 6% Reduce 4% 4% 0% 3% 0% 0% 0% 7% 0% 0% 21% 5% 6% Sell 4% 8% 7% 3% 7% 0% 4% 4% 0% 14% 16% 5% 0% Unrated/Under Revision 4% 4% 11% 14% 14% 10% 11% 11% 42% 18% 16% 20% 25% Performance 8.7% 10.7% -15% 1% -25% -3% -10% 33% -51% 16% 30% 13% na PSI 20 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 15 of 16

16 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 (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