IBERIA. Thursday Bankinter s 2Q12 Earnings; Portucel s 2Q12 Earnings. Best & Worse Performers - YTD (%)

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1 IBERIA 13 July 2012 EQUITY RESEARCH TOP STORIES Brisa went up almost 15% on the week supported on the upwards revision of the offer price from Tagus Holdings, from 2.66 to We remind that we are restricted on the stock. (page 9). WEEKLY OUT THIS WEEK Snapshots / Company Reports Galp Energia, EDPR, BES, BPI, Media Sector Price Target / Recommendation Changes Impresa, Media Capital, Cofina, BPI, BES Other News Galp Energia, Iberdrola, EDP, Brisa, BPI, Bankinter WEEK AHEAD Thursday Bankinter s 2Q12 Earnings; Portucel s 2Q12 Earnings PORTFOLIOS This week, Mib Aggressive Portfolio went down 1.61%, underperforming the PSI20 by 3.71pp. All stocks contributed for this underperformance (page 12). This week, Mib Liquidity Portfolio went up 1.28%, underperforming the PSI20 by 0.81pp. Excluding BPI and Galp Energia, all stocks contributed for this underperformance (page 13). Stock Market Last 1W YTD 2011 Daily Vol. ( mn) 1W 1M 6M 2011 PSI 20 4, % % % PSI IBEX 35 6, % % % IBEX 35 2,444 3,466 2,830 4,925 Euro Stoxx 50 2, % -2.48% -5.56% Euro Stoxx 50 7,342 8,916 8,672 14,831 Forex Rates Last 1W YTD 2011 Interest Rates Last 1W Chg YE11 EUR/USD % -5.83% -3.17% Euribor 6m 0.77% 0. 83% -6bp 1.62% EUR/GBP % -5.72% -2.96% 10Y Bond PT 10.51% % 29bp 13.36% EUR/BRL % 3.25% 8.86% 10Y Bond SP 6.68% 6. 95% -28bp 5.09% António Seladas, CFA Best & Worse Performers -1 Week (%) Best & Worse Performers - YTD (%) antonio.seladas@millenniumbcp.pt Br isa Galp Energia BPI Sonaecom Portugal Telecom BPI Brisa Jerónimo Martins Altri 2.7 Portucel 2.6 Sonae Capital -5.3 EDP Renováveis Av. José Malhoa, Lote 27 Sonae Industria -5.4 Martifer Lisboa Tel / Fax: / 09 Cofina Martifer Impresa Bankinter Banco Popular Cofina 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 Motive Rating Target Rating Target Impresa Reduce 0.35 Sell 0.31 Valuation Update Media Capital Unrated 2.15 Unrated 2.1 Valuation Update Cofina Buy 0.43 Buy 0.49 Valuation Update BES Buy 0.85 Under Revision Valuation Update BPI Buy 0.80 Buy 0.95 Rights Issue Adjusment EARNINGS Company 2Q2012 3Q2012 Investor Day Galp Energia ** BM BM Portucel AM AM Bankinter BM n.a. Impresa AM AM BPI AM AM Jerónimo Martins BM BM Iberdrola BM BM EDP Renováveis BM n.a Novabase AM AM Sonae Indústria AM AM Indra AM AM Telefónica BM BM EDP AM n.a Galp Energia BM BM Brisa AM AM BCP AM AM Glintt Banco Popular BM n.a. BES AM AM Cimpor BM BM REN AM AM Sonae Sierra AM AM Portugal Telecom BM BM Martifer AM AM Sonae Capital AM AM Sonae AM AM Altri AM 07-11AM Cofina AM AM Ibersol AM AM Semapa AM 30-10AM Mota-Engil AM 21-11AM Sonaecom n.a. n.a Zon Multimedia n.a. n.a. ESFG n.a. n.a. Media Capital n.a. n.a. SAG n.a. n.a. Jerónimo Martins * n.a. n.a. Sonae * n.a. n.a. Soares da Costa n.a. n.a. AM - After mark et; BM - Before market; n.a. - Not available; (e) Expected; ** Trading update Page 2 of 16

3 DIVIDENDS Company Gross Payment Ex-Div Last Year AGM Obs DPS Date Date Pay Date Gross DPS Banco Popular* (1) '1x21 ou 8c (1) 11-Jun-12 26/06/2012 (2) 21/06/2012 (2) Approved 11-Oct Jul-11 1x May-11 1x J an Bankinter * Jan-12 Approved 28-Sep Apr-12 Approved 2-Jul Jan BCP Jun BES Mar Approved 11-Apr BPI Jun Estimate - - Banif Mar ESFG May Jun Portugal Telecom Apr May May-12 Approved 3-J un Sonaecom Apr May May-12 Approved 25-May Zon Multimedia Apr May May-12 Approved 6-May Telefónica** May May May-12 Approved 6-May Estimate 7-Nov Impresa Apr Approved Media Capital Mar Apr Apr-12 Approved 15-Apr Cofina Apr May-12 8-May-12 Approved 21-Jun Indra Jun-12 4-Jul-12 4-Jul-12 Approved 4-Jul Novabase May-12 4-Jun May-12 Approved 6-Jun Jul Glintt May Approved - - Iberdrola** Jun Jul Jul-12 Approved 5-Aug Jun Approved 13-Jul EDP Apr May May-12 Approved 13-May EDP Renováveis Apr Approved REN Mar Apr Apr-12 Approved 12-May Brisa Apr Rejected 5-May Sonae Apr May May-12 Approved 27-May J. Martins Mar Apr Apr-12 Approved Portucel Apr Apr Apr-12 Approved - - Alt ri Apr May May-12 Approved 21-Jun F Ramada Jun Inapa Sonae Industria Mar Approved Sonae Capital Mar Approved Cimpor - 20-Apr May Jul Proposed - - Semapa May J un-12 6-Jun-12 Approved Mota-Engil Apr May May-12 Approved 13-May Soares da Costa May Approved 13-Jun Teixeira Duarte May Approved 16-Jun Martifer Apr Approved Galp Energia May May May-12 Approved 30-May Sep Ibersol Apr May-12 8-May-12 Approved 11-May SAG Apr Approved na - Not available Estimate: Estimated by the Millennium investment banking Proposed: Announced by the company to be proposed in AGM Approved: Dividend already approved by AGM (1) Remuneration system, which allows choosing between new, shares or cash. Cash dividend: 0.08; Scrip dividend: one new share for every 21 shares. (2) These dates apply for shareholders in Portugal * Company pays dividends four times a year ** Company pays dividends twice a year. Page 3 of 16

4 NEXT WEEK RESULTS Bankinter Buy High Risk (Target YE12: 3.20) 2Q12 Earnings Preview Rita Silva, NII YoY B. Income YoY Op. Income YoY Net Profit YoY % % % -1 nm Bankinter will disclose its quarterly earnings on the 19th July before the market opening. NII should improve significantly in the quarter drive by the increased exposure of ECB cheap funding through LTRO s. Also, asset repricing should continue to improve as Bankinter is shifting its strategy towards corporate lending and away from retail mortgages. We expect NII to reach 165mn in 1Q12. Other operating income should decrease considerably as it includes the contributions to FGD. Linea Directa should continue to contribute with about 21% of total banking income. Provisioning charges should reflect RD 18/2012 ( 136mn), which we assume to be divided in the remaining three quarters of the year. Net income should reach - 1mn. Portucel Buy Medium Risk (Target YE12: 2.25) 2Q12 Earnings Preview João Mateus; Sales YoY EBITDA YoY EBIT YoY Net Profit YoY % % % % Portucel will release the 2Q12 earnings next Thursday, 19 July. EBITDA may have come in line or slightly higher YoY (+1.3%), on growing pulp prices and relatively stable paper prices. On a QoQ basis, EBITDA must have increased only slightly on increasing pulp prices and paper volumes, partially offset by lower energy earnings that should have come down from an exceptionally profitable 1Q12. The top line must have come 2.8% higher YoY on higher pulp prices and energy revenues. On a QoQ basis, the top line should have come 7.8% higher mainly on the recovery of volume sales in paper and pulp as consequence of the technical idle times concentrated in the 1Q12. Net financial costs may have come relatively in line on a QoQ basis, but more than 30% higher on a YoY basis as consequence of positive one-offs in the 2Q11. FINANCIALS Bankinter Buy High Risk (Target YE12: 3.20) Rita Silva, Creative ways of improving CT1 Bankinter has clarified some rumors that were published on the media regarding their preference shares. Bankinter informed that it was considering the possibility of offering preferred shares holders 70% of its value in equity and the remaining in cash in a couple of years time, contingent to the keeping of such shares. This would allow Bankinter to transform these hybrids in EBA compliant capital. Currently, Bankinter has about 168mn in preferred shares. If 100% of this operation (voluntary) was completed, the impact on CT1 would be of 42bp raising CT1 from 9.44% (1Q12) to 9.9%. However, the issuance of the new shares (47mn, 9% of current shares outstanding) would have a potential EPS dilutive effect. It is important to note that this operation is not related to the conditions that the ESM is thinking of imposing to banks that need to tap the European lifeline regarding losses (of 65%) to owners of these preference shares. Page 4 of 16

5 BES Buy High Risk (Target YE12: 0.85) Valuation Update - Still with maneuver to avoid state help Rita Silva; We have fine tuned our estimates on BES along with the update of the cost of equity. Our price target now stands at Given the 60% upside on the stock it is rated as a Buy (High Risk) recommendation. This update valuation follows a blackout period in which we were restricted on the stock given that Mib participated in BES s rights issue operation as a co-manager. Main estimate changes were driven by an aggravation of loan impairments and deleveraging process. We have nevertheless, improved estimates on NII backed by the buildup of a high yield sovereign portfolio but also by an improvement on credit spreads and an expected downward trend of deposit spreads. Consolidated NII should grow by 4% in 2012, while NIM should stand at 1.8%; Domestic NII should grow 24% - thanks to the contribution of the sovereign portfolio - and international NII should fall 20% penalized by Angola (where government yields are currently much lower than a few months ago). Furthermore, we have updated both the CoE assumptions and the market values of its main non-financial stakes (Portugal Telecom and EDP). We expect BES to end 2012 with a 10.5% CT1, implying a 50bp cushion vs. minimum capital requirements. Looking forward, in spite of Basel 3 requirements being much lower than the current regulatory minimum (10%), we kept this level as the capital threshold as we consider that the demand for capital is clearly skewed to the upside. The estimated capital buffer ( 240mn in 2013) gives BES some maneuver if potential losses from its public debt portfolio take place (which we consider unlikely, given the good track record regarding BES s trading strategies). However, one other potential source of capital erosion lies on the deterioration of asset quality. If cost of credit risk rises about 60bp from our expectations of 143bp for 2013, CT1 would fall back to 10%, bringing BES back to brink of another rights issue, or State help. This said it is also true that the underlying issues that we believe have been penalized BES s stock performance remain in place: uncertainty surrounding the recovery of the Portuguese economy (irrespectively of the improvements under Troika s oversight and BES s international diversification) and by the vicious cycle between sovereigns and banks as well as ongoing regulatory changes. (For further details, please refer to our company update out today) BPI Buy High Risk (Target YE12: 0.80) Rita Silva, BPI rights issue BPI has approved the previously announced 200mn capital increase under the following conditions: share capital increased from the current 990mn to 1190mn; subscription price 0.5 per share, implying a surprisingly low 8% discount vis-à-vis yesterday s closing price and 2% when compared to the TERP, implying a significantly smaller discount than the ones made by recent operations; number of shares to be issued 400 million; should the capital increase not be fully subscribed, it shall be limited to the subscriptions collected. BPI intends to list the new shares by mid-august. We estimate EPS dilution of 24%. We recall that the decision to make a capital increase was related to the fact that part of the capital requirements were not strictly related to temporary needs (that can be filled by CoCo's). However, even if this rights issue is not totally subscribed, solvency ratios are still expected to be comfortably above regulatory requirements. Main shareholders (La Caixa, Allianz and Santoro that have already stated their intention to subscribe new shares) represent about two thirds of the shareholder structure, meaning that if only these subscribe to the rights issue, cash proceeds would stand at about 133mn. We reiterate that impacts are neutral valuation wise [please refer to Snapshot: BPI - Recapitalization plan - Too much money (I) 6/6/2012]. Page 5 of 16

6 Solvency Source: Millennium investment banking, company EPS dilution Source: Millennium investment banking, company Rights Issue - Adjustment to new number of shares We have adjusted BPI s price target from 0.95 to 0.80, following the announced 200mn rights issue and assuming that it is 100% subscribed, i.e., 400mn new shares issued. Recommendation remains a Buy (high risk) as the upside is 49%. We have not considered the impacts of the profitability of the cash proceeds as it is a relatively small amount. Calendar: o Ex-rights: 16 July o Trading period of subscription rights: from 19 July until 30 July (OTC until 3 August) o New shares subscription period: from 19 July until 15pm of 3 August o Announcement of results of the rights offering subscription: 7 August o Financial settlement: 8 August o Expected date for commencement of trading of the new shares on Euronext Lisbon: 13 August (For further details, please refer to our snapshot out today) Page 6 of 16

7 MEDIA Media Sector Media Sector Update - Postponing RTP privatization? An aspirin for media João Flores; sector We updated our Media valuations (Impresa, Media Capital and Cofina) following changes in market estimates and updated WACC. Furthermore, we updated our Media scenario: i) postponing some months a possible RTP privatization (2H13?), which has embedded 12 min adv/hour (increasing probable that one of RTP channels will not be private-owned from the beginning of 2013, thus impact on 2013 is reduced); ii) expects a less aggressive new private player; since FTA TV business model is becoming less attractive. Overall, Impresa and Media Capital benefited from postponing a possible RTP privatization while Cofina (portfolio limited to press) was penalized by an increasing tough scenario in press. We highlight Cofina will start next year a cable TV channel which will be potentially positive to Cofina`s valuation. Although Cofina has a Buy recommendation and the highest upside among our Media recommendations (which would be strengthened by Cofina`s Cable TV channel), we note that the latest newsflow increased substantially the likelihood of indefinitely suspend RTP privatization, meaning Impresa would be the most benefited from such a scenario (TV weights 77% in Impresa`s EV). Impresa price target was revised upwards from 0.31 YE12 to 0.35 YE12, Reduce recommendation, High Risk. Fine-tune in estimates (+ 0.12) reflected upwards revisions in revenues / margins (benefiting from a more favorable media scenario via a less aggressive RTP competitor) while changes in WACC had a 0.08 negative impact on px target. We revised upwards Media Capital price target from 2.10 YE12 to 2.15 YE12 (keeping no recommendation, given low free-float: 0.26%). Fine-tune in estimates (+ 0.15) reflected upwards revisions in estimated revenues, while changes in WACC had a 0.10 negative effect. Our Cofina`s price target was revised downwards to 0.43 from 0.49 (Buy recommendation, High Risk). Fine-tune in estimates ( 0.01 decrease) reflected a tough scenario in press while changes in WACC had a 0.05 negative effect. We highlight estimated new cable TV business unit valuation would increase Cofina`s SoTP by 5mn), therefore Cofina`s valuation would rise by 0.05 to We fine-tuned our Media Market advertising growth estimates in Portugal (2012 from -9% to - 10%, penalized by downwards revision in FTA TV from -11% to -13%) while kept unchanged other numbers. Recall we estimate a 2.2% CAGR (small recovery in %). Overall, we expect Media players keep facing a very tough environment: i) top line is under pressure (2 digits decline in advertising market); ii) no major alternatives to revenues from Portugal (difficult to enter Brazilian market; low scale business in Portuguese spoken countries, Angola, Mozambique) and iii) alternative revenues from Internet are still low scale business. On costs side, we believe Media companies will have to keep strong costs control policies, given major downside risks on revenues (worsening macro-economic scenario and consumer s reaction from austerity measures). (For further details, please refer to our sector report out this week) Page 7 of 16

8 UTILITIES Utilities Sector Vanda Mesquita, Utilities Spanish tariff deficit According to the economic press, the new package to tackle the Spanish tariff deficit should be approved by the end of July. There have been several rumors about the likely measures to be adopted. Initially, there were rumors that a tax over petrol could be created (3 or 4 cents per litter) and that a tax over all generation (approximately 5 per MWh) could be applied. The latest rumors in the economic press point to a tax of 10 per MWh over nuclear generation and 15 per MWh over hydro generation. In addition, it is also rumored that the useful life of nuclear and hydro plants could be extended for an additional period of 10 years and 20 years, respectively. Regarding wind energy, there are rumors that a 11% tax over sales will be created. Bearing the recent aforesaid rumors in mind, we calculated the impact for Iberdrola, EDP Renováveis and EDP. Iberdrola is the most affected one (-45 cents, i.e. 10% of our price target), as the weight of those technologies is higher. In the case of EDPR, if we were to apply a 11% tax over sales throughout our valuation, the impact would be 22 cents in terms of our price target (4% of our price target). Regarding EDP, as the weight of nuclear and hydropower in Spain is not very meaningful and taking the effect of EDPR s valuation in mind, the impact would be 8 cents (3% in our price target). Iberdrola Buy Low Risk (Target YE12: 4.95) Vanda Mesquita, Iberdrola - 2Q12 operational data IBE disclosed its 2Q12 operational data this week. This quarter, we would like to highlight the increase in energy distributed by the Group (+3.5%) and also the increase in production of renewable energy (due to a good wind resource in Spain). Energy produced dropped by 12.6% YoY, mainly due to a 17% decline in production in Spain and a 31.9% decrease in the UK. In the other countries/regions, there was an increase of energy generated, namely in the US (+8.1% YoY) and in the Rest of the World (+25.3%). By technology, this quarter there was a substantial drop in the hydro production (-35.8% YoY), mainly due to the lower hydro energy produced in Spain (due to the lack of rainfall). Regarding renewable energy, there was an 11.7% YoY increase, helped by the very positive evolution in Spain (+35% YoY due to a good wind resource in the second quarter). The volumes of energy distributed rose by 3.5% YoY, with the US and Latin America being the only countries/ regions in which energy distributed rose (+1.2% YoY in the former case and +18.7% in the latter case). In Spain, the energy distributed dropped by 0.7% and in the UK volumes dropped by almost 2% YoY. Installed capacity rose to MW from MW at YE11. The Group has only been deploying renewable energy, as expected. IBE will disclose its 2Q12 results on July, 25th before the market opens. This quarter, we expect EBITDA to post an increase of 1% YoY. By activity, we expect EBITDA from liberalized activities to increase by approximately 6% YoY, EBITDA from regulated activities to drop by 2% YoY and EBITDA from renewable to remain stable YoY (please refer to our Company Update Iberdrola Deleverage is the key theme released on June, 15 th ). EDP Buy Low Risk (Target YE12: 2.85) Vanda Mesquita, Management transaction EDP announced that Fernando Masaveu Herrero, a member of EDP General and Supervisory Board on February, through Masaveu Internacional SL (in which he is the chairman) acquired shares Page 8 of 16

9 between July, 2 nd and July, 6 th. The same entity had bought shares last June. Following this operation, Fernando Masaveu Herrero now owns shares (approximately 1% of EDP s share capital). This member was elected on February, 20 th 2012 and currently, under the EDP Group, is advisor at Hidrocantábrico, chairman of Audit Committee at Hidrocantrábico and Advisor at Naturgas Energia. This reinforcement shows his commitment to EDP. EDP Renováveis Buy Low Risk (Target YE12: 5.30) 2Q12 Operating Data Comment - Good 2Q12 production figures, albeit weak deployments Vanda Mesquita, EDPR disclosed its 2Q12 operational data this week. All in all, we would like to highlight the good production numbers that came out much better than our estimates for this quarter (10% above) mainly due to an excellent load factor in Europe (27% load factor, +4pp YoY) that helped to offset a lower wind resource in the US (34% load factor, -2 pp YoY). Deployments in the 1H12 amounted to 19MW, meaning that the company only achieved 3.8% of its annual target (500MW). At the beginning of the year, the company said that 90% of deployments would be concentrated in the second half of the year. However, the weak amount of deployments casts doubts on whether EDPR will achieve its YE12 target. In our valuation, we consider that the company will deploy 485MW (broadly in line with the company s target). This quarter, wind electricity generated (GWh) rose by 8% YoY to 4.705GWh, 10% above our estimates. By country, figures came out better in all countries/geographies. Overall wind 2Q12 load factor remained stable at 31%. By country, load factors came out much better in the Spain (+3 pp YoY), in Portugal (+7pp YoY), in the Rest of Europe (+4pp YoY) and worse in the US (-4 pp YoY). 2Q12 full results will be released on July, 25th before market opens. (For further details, please refer to our snapshot out this week) MOTORWAYS Brisa Restricted António Seladas, CFA; Tagus Holdings revises upwards, the offering price, to 2.76 Tagus Holdings, the consortium formed by the two major shareholders of Brisa, Jose de Mello and Arcus, that last April launched a takeover bid at 2.66; announced yesterday evening that reviewed upwards to 2.76, Brisa s offering price. We should highlight that this process has been delayed and is pending the supervisor approval, who said roughly one month ago that the process was being analyzed and a final answer would be provided in a period as short as possible. According to today s specialized press, Brisa s board has to provide an opinion regarding this offer as was the case in the prior bid. Still according to the press, Brisa s board should have an answer tomorrow and the Supervisor would register the offer on Monday, 16 of July. In a recent case, Cimpor s offering, the time between the offer s registration and the completion of the deal, were roughly 3 weeks, however Brisa s offer has been more complex. Brisa Board s opinion on the revision of the takeover bid announced by Tagus Brisa s board released a couple of hours ago its opinion on the revision of the takeover bid announced yesterday before. Overall the conclusions were kept vs. the first report, however the Board highlighted that the new offer price, 2.76, continues to be within a reasonable range for the intrinsic value of the company despite considering positive the upwards revision, taking in consideration the convergence of the interests of the shareholders. Regarding the conditions of the takeover termination, the Board also considered positive the clarification about the fact that the withdrawal of the offer supported on specific assumptions, should be previously scrutinized by the Regulator. Last but not least, the clarification of the Page 9 of 16

10 dividend policy, namely that Brisa should resumes the distribution of dividends insofar as possible, was also considered positive by the board. Summing up the Board s opinion is positive on the items mentioned before, however the Board advices the shareholders to read the main report and this reports should be considered as a Supplementary report. So at this moment, apparently the conditions to register the operation are gathered. However this has been an extremely complex operation and the behavior of the third main shareholder, Abertis, who according to the specialized press was not able to attend the Board meeting due to technical problems (was not able to do the phone call), increases the complexity of the deal. CONGLOMERATE Sonae Buy Medium Risk (Target YE12: 0.87) João Flores; Vobis stores rebranded as Worten stores Equity Analy t According to Sonae, company will rebrand Vobis stores (retail chain specialized on consumer`s electronics) as Worten stores (leading white goods, consumer electronics and entertainment chain in Portugal). We highlight electronic sales are facing strong declines, thus it`s a positive step in an depressing market, since it reduces marketing/logistics costs. Recall Vobis has currently 6 stores (from 21 in 2007) while Worten has 135 stores in Portugal (1Q12), which shows Sonae was already divesting from Vobis and decision its not a surprise. OIL & GAS Galp Energia Buy High Risk (Target YE12: 18.30) Vanda Mesquita, 2Q12 Operating Data Comment Good figures Galp disclosed its 2Q12 operating data today before market opening. We consider this a good set of figures, with E&P production rising (driven by more production from Brazil) and Galp s benchmark refining margin recovering to a positive level. E&P: Average net entitlement production (figures after the effect of production share agreements) went up 36.7% YoY and up 13.7% QoQ to 18.8 kboepd, above our estimates of 17 kboepd. This increase YoY and QoQ was already expected, as Galp had mentioned that it was forecasting higher production figures this quarter due to the connection of the fourth production well in Lula field and also to the production from the extended well test in Iracema South. Regarding prices, average Brent price went down 7.8% YoY to $108.2/bbl vis-à-vis $117.4/bbl in the in the same period of the previous year. R&M: Crude processed came out 5.6% above our estimates, up 2.7% YoY and up 5.9% QoQ. Galp s benchmark recovered to a positive level, standing at $2.3 per barrel. The company had already mentioned that it was expecting better refining margins this quarter. However, it also said that refining margins are subject to volatility and that they are likely to remain under pressure, meaning that this recovery seems to be seasonal. In terms of oil marketing business, sales to direct clients went down 6.6% YoY and down 5.8% QoQ. Volumes in the marketing business have been under pressure mainly due to the depressed economic environment in Iberia that is leading to shrinkage of disposable income. G&P: Volumes of natural gas supplied went up 26.4% YoY. We believe that the increase in volumes is mainly justified by higher demand from emerging markets. As for 2Q12 earnings, we believe that Exploration & Production (E&P) should be the main driver of results mainly due to higher production coming from Brazil. Refining earnings should recover on the back of higher refining margins and higher crude processed. Galp will release its 2Q12 results on July, 27th before the market opens. Page 10 of 16

11 (For further details, please refer to our snapshot out today) Galp Interview to the head of BG s Brazil unit In an interview, the head of BG s Brazil unit, said that the first FPSO in the Lula field (Galp participates 10% in this consortium) is producing more than initially expected and with less producing wells connected than initially planned. BG had already made some similar comments in June 2011, when it reported that peak production would occur earlier than expected, fewer wells connected to FPSO would be necessary and that production performance would be more sustainable. In our opinion, these comments are not materially relevant and are broadly in line with the statements that consortium companies have been making so far. Our valuation includes higher levels of production and also a level of capex broadly in line with Galp s investment plan. SECTOR PERFORMANCE Sector Performance -1 Week (%) Sector Performance - YTD (%) PSI PSI Motorways 14.8 Motorways 7.1 Oil & Gas 5.2 Retail * 6.4 Telecoms 2.9 Oil & Gas -1.1 Electric Utilities 2.0 Telecoms Retail * -0.2 Financials Financials -0.6 Electric Utilities Industrials & Other -1.6 Industrials & Other * includes Jeronimo Martins and Sonae This week, the PSI20 went up 2.1%. The best performing sector was Motorways with a 14.8% growth and the worst was Industrials & Other with a 1.6% fall. On a Ytd basis, the PSI20 went down 12%. The best performing sector was Motorways with a 7.1% growth and the worst was Industrials & Other with a 39.1% fall. AGGRESSIVE PORTFOLIO This week, Mib Aggressive Portfolio went down 1.61%, underperforming the PSI20 by 3.71pp. 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 up 1.28%, underperforming the PSI20 by 0.81pp. Excluding BPI and Galp Energia, 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 11 of 16

12 300 Return since inception (27Jul04) 270 Po rtfo lio PSI /07/04 17/11/05 14/03/07 08/07/08 02/11/09 27/02/11 23/06/12 Mib AGGRESSIVE PORTFOLIO Portfolio weekly return Company Risk Market Price Upside Weekly Performance Rating Price ( ) Target ( ) Potential Return Contribution Deviation Sonae Industria High % -5.4% -1.07pp -1.49pp Novabase High % -1.1% -0.22pp -0.64pp Indra High % -2.1% -0.42pp -0.84pp Sonae Medium % -0.2% -0.05pp -0.40pp EDP Renováveis Low % 0.7% 0.15pp -0.21pp Po rtfolio -1.61% PSI % Gain/loss -3.71pp Explained by the portfolio -3.58pp Explained by being underweight in the remaining PSI20 stocks -0.12pp Ytd Return Por tfo lio PSI /12/11 31/01/12 03/03/12 04/04/12 06/05/12 07/06/12 09/07/12 Next week Portfolio Changes in Portfolio Company Risk Market Price Upside Rating Price ( ) Target ( ) Potential In Out Sonae Industria High % - - Indra High % Novabase High % Sonae Medium % EDP Renováveis Low % Return vs. PSI YTD 1 Month 1 Week Portfolio -2.4% -43.6% 71.9% -7.30% -36.6% -5.8% 7.7% -1.6% PSI % -51.3% 33.5% % -27.6% -11.9% 6.0% 2.1% Gain/loss -18.7pp 7.7pp 38.5pp 3.0pp -9.0p p 6.1pp 1.7pp -3.7pp 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 Ytd Return (since inception) Por tfolio PSI /12/11 31/01/12 03/03/12 04/04/12 06/05/12 07/06/12 09/07/12 Mib LIQUIDITY PORTFOLIO Portfolio weekly return Company Risk Upside Weekly Performance Rating Market Price ( ) Price Target ( ) Potential Return Contribution Deviation Indra High % -2.1% -0.42pp -0.84pp Sonae Medium % -0.2% -0.05pp -0.40pp EDP Renováveis Low % 0.7% 0.15pp -0.21pp BPI High % 2.9% 0.57pp 0.15pp Galp Energia High % 5.2% 1.03pp 0.15pp Po rtfolio 1.28% PSI % Gain/loss -0.81pp Explained by the portfolio -3.58pp Explained by being underweight in the remaining PSI20 stocks 2.77pp Next week Portfolio Changes in Portfolio Company Risk Rating Market Price ( ) Price Upside Target ( ) Potential In Out Indra High % Telefónica BPI Sonae Medium % EDP Renováveis Low % Telefónica Medium % Galp Energia High % 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. Return vs. PSI YTD 1 Month 1 Week Portfolio % 6.1% 1.3% PSI % -11.9% 6.0% 2.1% Gain/loss p p 0.1pp -0.8pp Page 13 of 16

14 2012/07/13 Latest Pr ( ) Target YE12 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 4, , Financials , Banco Popular % Buy High , % 5.0% 0.3 Bankinter % Buy High , % 1.5% 0.5 BCP (1) BES % Buy High , loss % 0.0% 0.3 BPI % Buy High loss % 0.0% 0.3 Telecoms , % 12.4% 2.0 Telefónica % Buy Medium , % 13.1% 2.1 Portugal Telecom % Buy Medium , % 8.8% 1.3 Zon Multimedia % Buy Medium % 8.0% 3.2 Sonaecom % Buy High % 5.5% 0.4 Media loss % 6.4% 0.5 Impresa % Neutral High loss 54.9 loss % 0.0% - Media Capital (2) % % 13.2% - Cofina % Buy High % 5.1% 1.9 Technology Indra % Buy High , % 8.8% 0.9 Novabase % Buy High % 4.8% 0.6 Utilities , % 8.1% 0.7 Iberdrola % Buy Low , % 10.7% 0.6 EDP % Buy Low , % 10.2% 0.8 EDP Renováveis % Buy Low , % 1.2% 0.4 REN % Buy Low , % 8.9% 1.0 Motorways Brisa (3) , % - - Conglomerates , Sonae % Buy Medium % 7.8% 0.6 Semapa % Buy High % 4.9% 0.5 Sonae Capital % Buy High loss loss loss loss loss 0.0% 0.0% 0.1 Retail Jerónimo Martins % Buy Medium , % 7.0% 6.2 Industrials , % - - Sonae Industria % Buy High loss loss loss % 0.0% 0.4 Altri % Sell High % 1.8% 1.3 Portucel % Buy Medium , % 8.6% 1.0 Cimpor (4) , % - - Construction Mota-Engil % Buy High % 10.2% 0.5 Oil & Gas Galp Energia % Buy High , % 2.2% 3.1 (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) Restricted; (4) 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 6 and 18 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 Jun-12 Mar-12 Dec-11 Sep-11 Jun-11 Mar-11 Dec-10 Jun-10 Jan-10 Dec-09 Dec-08 Dec-07 Dec-06 Dec-05 Dec-04 Buy 78% 72% 68% 93% 76% 79% 79% 77% 78% 63% 54% 41% 37% 30% 63% Neutral 4% 7% 11% 0% 14% 14% 7% 7% 4% 15% 4% 27% 11% 40% 6% Reduce 0% 3% 0% 0% 0% 0% 0% 0% 7% 7% 0% 0% 21% 5% 6% Sell 7% 3% 7% 0% 0% 4% 4% 3% 0% 4% 0% 14% 16% 5% 0% Unrated/Under Revision 11% 14% 14% 7% 10% 4% 11% 13% 11% 11% 42% 18% 16% 20% 25% Performance -15% 1% -7% -20% -6% 2% 7% -11% -6% 33% -51% 16% 30% 13% na PSI 20 4,698 5,557 5,494 5,891 7,324 7,753 7,588 7,066 7,927 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) João Flores (Media and Retail) João Mateus (Industrials and Utilities) Rita Silva (Banks) Vanda Mesquita (Utilities and Oil&Gas) Market Analysis Ramiro Loureiro Sónia Martins Telma Santos Publishing Sónia Primo Prime Brokerage Vitor Almeida (Head) Hugo Ferreira Pinto Paula Val Institutional Equity Sales Karsten Sommer (Head) Manuel Lança Lopes Rodrigo Roque Pinho Equity Trading Paulo Cruz (Head) Diogo Palma Gonçalo Lima Jorge Caldeira Nuno Sousa Paulo Sousa Pedro Ferreira Cruz Pedro Gonçalves Pedro Lalanda Equity Derivatives Jorge Pina (Head) Ana Lagarelhos Diogo Justino Marco Barata Maria Cardoso Baptista, CFA