IBERIA. Best & Worse Performers -1 Week (%) 7.2 Sonae Industria Sonae

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1 EQUITY RESEARCH TOP STORY IBERIA April WEEKLY Banks in Portugal continue to outperform, BES and BPI went up 7.2% and 5.8% in the week. The main reason is clearly related with the strong performance of Portuguese bond yields, OT s 10 years yields went down by 19bp in the week and are now at the lowest spread from German bunds (230bp) since the crisis started in May Despite understanding the strong performance of the banking sector, there are several issues regarding very low interest rates that have a negative impact on the net interest margins. Usually the process of low interest rates is offset by a large portfolio of Government bonds, however because of the Government crisis in the Euro area and Basel III banks were advised to avoid having large portfolio of Government bonds. This is extremely negative in term of NIM and because the Portuguese Republic is indebted it needs to go to banking customers placing directly public debt, this way the deposit margin will be kept under pressure simultaneously and due to low growth rates, the loans demand is scarce, forcing banks to reduce spreads also impacting negatively the margins. OUT THIS WEEK Earnings Comment Mota-Engil, Retail Sector Price Target / Recommendation Changes Sonae, Sonae Capital, Inditex Other News Retail Sector, Sonaecom, Jerónimo Martins, Portugal Telecom, BPI WEEK AHEAD Nothing to register PORTFOLIOS This week, Mib Aggressive Portfolio went up 0.41%, underperforming the PSI20 by 0.85pp. Jerónimo Martins and Sonaecom were the main contributors for this underperformance (page 11). This week, Mib Liquidity Portfolio went up 0.41%, underperforming the PSI20 by 0.85pp. Jerónimo Martins and Sonaecom were the main contributors for this underperformance (page 12). Stock Market Last 1W YTD 2013 Daily Vol. ( mn) 1W 1M 6M 2013 PSI 20 7, % 16.95% 15.98% PSI IBEX 35 10, % 7.67% 21.42% IBEX 35 2,737 2,807 2,947 2,570 Euro Stoxx 50 3, % 3.90% 17.95% Euro Stoxx 50 8,225 9,040 8,097 7,456 Forex Rates Last 1W YTD 2013 Interest Rates Last 1W Chg YE13 EUR/USD % -0.66% 4.46% Euribor 6m 0.43% 0.41% 1bp 0.38% EUR/GBP % -0.84% 2.49% 10Y Bond PT 3.85% 4.04% -19bp 5.66% EUR/BRL % -5.73% 20.33% 10Y Bond SP 3.16% 3.24% -8bp 3.90% António Seladas, CFA antonio.seladas@millenniumbcp.pt Best & Worse Performers -1 Week (%) BES 7.2 Sonae Industria 5.9 BPI 5.8 Sonae Capital 4.2 Sonae 4.0 Altri -2.1 Mota-Engil -2.3 Zon Optimus -2.5 Jerónimo Martins -3.0 EDP Best & Worse Performers - YTD (%) BPI 62.3 Sonae Capital 51.5 Novabase 49.4 CTT 44.8 BES 39.5 Zon Optimus 0.8 Telefónica -1.4 Inditex -5.2 Sonaecom Jerónimo Martins Page 1 of 15 All prices are those of the end of the trading session unless otherwise indicated. For important Disclosure and Disclaimer go to the second last page.

2 CHANGES New Previous Rating Target Rating Target Motive Sonae Reduce 1.35 Neutral 1.35 Price Performance Sonae Capital Reduce 0.48 Neutral 0.48 Price Performance Inditex Reduce Neutral Price Performance EARNINGS Page 2 of 15

3 DIVIDENDS FINANCIALS BPI Sell High Risk (Target YE14: 1.50) Vanda Mesquita BPI sold public debt and CET1 drops BPI announced the sale of 50% of the position held in medium and long term government bonds. The sale was done by the end of last month and were sold 850Mn and 487.5Mn, nominal value, of Portuguese and Italian debt respectively (by the end of the year the Irish debt was completely sold). The Page 3 of 15

4 announcement also mentioned that the two main reasons that justified the sale were: (1) the new European directive CRD IV, which transposes the Basel III regulatory standards, meaning that the unrealized losses will be at each moment fully reflected in the Common Equity Tier 1 ratio (CET1) and (2) the recommendations from the supervisory and community authorities, which have been advising a reduction of the link between the sovereign risk and the banking sector risk. The press release also inform that the sale of the bonds and the closing of the coverage positions generated a loss after taxes of 102Mn. The same press release also mentioned that the sale of the public debt, the improvement of the public debt prices, the reimbursement of 500Mn of Coco s and the sale of 86Mn of subordinated debt had a negative impact on CET1 fully implemented of 150bp, proforma as of 31 December 2013, so the CET1 would be reduced from 11.2% to 9.7%, however still an excess of capital of 482Mn vs. the minimum level demanded of 7%. The press release also informed that the public exchange offer of preferential and subordinated debt for BPI shares to occur in May if accepted in 75% would increase the CET1 by 50bp to 10.2% and the excess capital could increase to 575Mn, so above the 420Mn of Coco s held by the Portuguese state. The recommendation to sell public debt have several negative implications in terms of NIM, namely banks are not allowed to benefit from the traditional positive steepening of the yield curve and obliges the issuer, meaning the State, to go directly to investors, forcing banks to overpaid to keep the deposits from customers. Last but not least and despite the minimum level be 7% banks will eed to have higher level, probably more close to 10% to overcome without problems the stress tests. Just to remember that the recent stress tests done in the US, would eliminated 390bp from the aggregated tier 1 common capital ratio. TELECOMS Portugal Telecom Buy Medium Risk (Target YE14: 3.80) Oi Board approves number of shares of initial offer; banking syndicate does not underwrite R$5 bn Alexandra Delgado, CFA Oi has disclosed that its Board of Directors approved the number of shares that may be issued in the primary offering of common and preferred shares of Oi, whose request for registration is being analysed by the CVM. Oi said it will initially offer 1,917 mn common shares and 3,834 mn preferred shares, totalling 5,751 mn shares. The number of shares initially offered may be increased, at the option of the lead coordinator, by up to 15% (c. 862 mn shares) to fulfil extra demand (over-allotment option). Finally, the number of shares initially offered, not considering the exercise of the over-allotment option aforementioned, may be increased, at Oi s discretion, and in agreement with the global coordinators and other underwriters, by up to 20% (c.1,150 mn shares). We remind Oi will launch a capital increase between R$12.7 bn (minimum) and R$13.7 bn (target, but not maximum). Portugal Telecom will participate in the capital increase through the contribution of company s assets (excluding stakes in Oi and Contax), valued at R$ 5.7 bn. The remaining amount, between R$7 bn and R$8 bn will be a cash capital increase. As previously disclosed, R$2 bn were underwritten by current shareholders of Telemar Participações and Banco BTG Pactual. If the company wants to issue a minimum of R$12.7 bn with 5,751 mn shares, then Oi new ordinary shares have to be offered at least at R$2.33 (preferred shares are priced at 92.11% of ordinary shares), which stands for a 26% discount vs. yesterday s closing price (R$3.15). Oi disclosed yesterday that as a result of recent interactions between the company, the underwriters and the CVM, Oi and the underwriting syndicate decided to modify the firm commitment structure of the offering, which will occur with a firm commitment for the settlement of the offering, but without a firm commitment for the placement (subscription) of the shares. So, the remainder of the cash capital increase (R$5 bn R$ 6 bn, exc. R$2 bn secured by TmarPart & BTG Pactual) is not underwritten. Page 4 of 15

5 The pricing of Oi s capital increase will be announced on April 28th, 2014 and Oi s capital increase should be closed on May 5th, The offer will be presented to investors in a roadshow. Bookbuilding occurs between April 10 th and 24 th. Zon Optimus Neutral Medium Risk (Target YE14: 5.65) Alexandra Delgado, CFA Zon Optimus extends quadruple play offering to satellite Zon Optimus has extended its quadruple play offer to satellite. The new bundle includes 81 TV channels, broadband up to 40Mb, unlimited fixed calls and mobile voice (two mobile cards) for a monthly fee of 79.99, same price as the offer for cable areas. The broadband service at home is provided through mobile. Improving the company s offering in the satellite areas was one of the objectives announced in the company s Strategy Day and is one example of how the merger creates value. Optimus mobile network allows the company to provide broadband in areas where Zon does not own fixed infrastructure, thereby eliminating Zon s structural disadvantage in areas served by satellite. We highlight Zon Optimus (aggregate indicators: Zon + Optimus) has lost 94k Pay TV customers from 1Q12 to 4Q13, 70% of each were satellite/dth customers (65k). Sonaecom Buy High Risk (Target YE14: 2.80) Sonaecom reduces number of Board members and doesn t pay Alexandra Delgado; CFA dividend in 2014 Sonaecom called shareholders to an annual general meeting to be held on April 24 th. Sonaecom proposes to reduce the number of Board members from eleven to three, following the resignations of several members including Paulo Azevedo and Miguel Almeida (current Zon Optimus CEO). From the Board elected to serve until the end of 2015, the only that remain are: Ângelo Paupério (CEO), António Lobo Xavier and Cláudia Azevedo (CEO of Software Information Systems and Media businesses). The Board has proposed that the net results are fully transferred to reserves, so there won t be a dividend payment this year. We remind that as a result of merger of Optimus with Zon, Sonaecom ended up with a significant net cash position: 162 million by the end of The proposals submitted to shareholders should be approved since Sonae SGPS controls close to 90% of voting rights. Sonae has been acquiring Sonaecom shares since the tender over minorities (mid February). It currently holds million Sonaecom shares which stands for 89.40% of voting rights (excluding 5.6 million own shares held by Sonaecom). Sonae needs to buy 1.84 million shares in order to reach the 90% threshold. We remind that in order for Sonae to be able to delist Sonaecom it needs shareholders representing more than 90% of capital to approve that resolution in a shareholders meeting. The expectation that Sonae wants to delist Sonaecom rapidly, paying between 2.35 (average price in the last 6 months) and 2.45 (price of the tender over minorities) for each share has supported the performance of the stock during most of March. Performance has been weak in the last week though, with investors possibly anticipating that delisting might take longer than expected. RETAIL Retail Sector João Flores, Retail Sales Feb14 - Positive numbers Overall, 2014 economic indicators in Portugal (Retail Sales, Economic climate indicator and Page 5 of 15

6 Consumer Confidence) kept recovery mood, which is potentially positive to Retail Sector. Jerónimo Martins (Rating: Buy; Target YE14: 16.85, Medium Risk); Sonae (Rating Neutral; Target YE14: 1.35; Medium Risk); Inditex (Rating Neutral; Target YE14: ; Medium Risk). Portuguese retail sales (disclosed on March 31st) rose +1.8% YoY in February from +2.2% YoY in January. On a monthly basis, sales were down -1.2% YoY (+6.4% YoY in January). We highlight Food Retail sales slowdown to +2.0% YoY in February (+3.6% YoY in January). Non-food Retail rose +1.6% YoY in February (+1.2% YoY in January). According to ACAP (Portuguese Automobile Trade Association) light-vehicle sales rose 40.2% YoY in February ( vehicles), following a 31.8% YoY increase in January. Sales also rose 36.2% in 2014 (went up 11.1% in 2013). We believe strong numbers reflected: i) increasing consumer`s confidence and economic recovery: ii) favorable comparison basis (sales accelerated recovery from June 2013); Spanish retail sales (disclosed on March 28th) dropped 0.4% YoY in February, the sharpest drop since October. Retail sales rose 0.6% YoY in January while kept unchanged a month earlier. Retail sales had been falling every month for three years until September, when they rose due to residual effects from the impact of a rise in value-added tax (VAT) in September 2012 and tentative signs of a recovering economy. We highlight Non-food retail sales decline slowdown to -0.1% in February, following a -0.4% YoY decline in January. Polish retail-sales (disclosed on March 25th) rose 7.0% YoY on an annual basis in February (above 6.1% YoY consensus), higher than the 4.8% YoY increase seen in January. On a monthly basis, retail sales declined 0.6% MoM (-1.5% MoM consensus), following a 21.3% MoM decline in January. There was a 6.9% YoY increase in Food retail sales (from 7.5% YoY in January). We highlight Unemployment rate declined to 13.9% in February from 14.0% in January (14.1% estimated). Recall new car sales in Poland rose 33.5% YoY in February to registrations, following a 8.2% YoY increase in January 2014 (benefited from strong numbers from cars registered for business use). This brings the year-to-date total to units, up 20.2% on (For further details, please refer to our snapshot out this week) March new car sales in Iberia: Strong numbers in Portugal Overall, numbers are potentially positive to our retail valuations, suggesting March retail sales will show encouraging numbers. Portugal light-vehicle sales rose 47.0% in March Source: Company data and Millennium investment banking Page 6 of 15

7 According to ACAP (Portuguese Automobile Trade Association) light-vehicles sales rose 47.0% YoY in March (14,149 vehicles), following a 40.2% YoY increase in February. Sales from French manufacturer Renault led sales while German premium brands kept showing strong numbers. Sales also rose 40.5% Ytd (+36.2% Ytd-February), benefiting from strong 1Q14 sales numbers. Recall car sales in Portugal will have a favorable comparison basis in 1H14, since sales recovery started from June Spain: Car sales rose 10.0% YoY in March Source: Company data and Millennium investment banking Spanish new car sales rose 10.0% YoY in March ( vehicles) following a 17.8% increase in February. Sales also rose 11.8% Ytd (+13.1% Ytd-February). Positive numbers from car sales to families benefited from PIVE Plan 5 (Incentive Program Efficient Vehicle). Retail Calendar: April 30 th : JM`s 1Q14 Earnings Page 7 of 15

8 Jerónimo Martins Buy Medium Risk (Target YE14: 16.85) João Flores, Retail: New car sales in Poland rose 39.4% YoY in March Source: Company data and Millennium investment banking New car sales in Poland rose 39.4% YoY in March to registrations, following a 33.5% YoY increase in February. Sales also rose 26.6% Ytd (+20.2% Ytd-February), benefiting from strong 1Q14 sales numbers. Overall, numbers from Poland car are potentially positive news for Biedronka/JM, since numbers suggests Polish retail sales numbers will keep positive trend in March. We highlight Poland's manufacturing growth slowed in March to a three-month low, yet remained robust. The HSBC Manufacturing Purchasing Managers' Index (PMI) fell to 54 from a 38-month high of 55.9 in February. Economists had forecast a score of The latest decline was only the second downward movement in the PMI in the past 11 months, and the lowest reading since December. Weaker new order growth was the main reason behind the fall in the headline PMI in March. New orders growth eased from February's near-10-year high. The decline in new business growth was mainly due to the poor demand from abroad (export orders increased at the slowest rate since June 2013, partly due to the uncertainty linked to the Ukraine crisis). Retail Calendar: April 29th: JM`s 1Q14 Earnings Page 8 of 15

9 CONSTRUCTION Mota-Engil Sell High Risk (TargetYE14: 3.20) António Seladas, CFA 4Q13 Earnings Comment Africa is shining! ME released, 4Q13 earnings this week. Figures were slightly lower than our estimates at EBITDA level, 92Mn vs. 99Mn expected, mainly due to a poor performance in Europe Construction (Mg was negative apparently related with Poland s problematic contracts, that, according to the press release are now concluded) and Latin America ( 9Mn vs. 14Mn expected). However Africa, surprised on the upside, revenues were 303Mn and Ebitda was 81.3 (26.8% mg), the best quarter ever vs. our estimates of 280Mn and 70Mn, respectively. All in all Ebitda went up by 72%YoY. Below the operating line figures were pretty much as expected, however higher tax and lower minority interest almost offset each other, even so Net Income was 12.7Mn minus 18%YoY; Regarding net debt as we measure, it was 1.238Bn vs Bn estimated and as far as we understand it was mainly related with 2 acquisitions in Angola for a total of roughly 48M; Concerning backlog, probably the key indicator currently, it was 3.870Bn more or less in line with our estimate. By regions Latin America surprised on the upside, 1.34Bn; while Africa, 1.62Bn was as expected; There were no news concerning ME Africa s IPO, however more information should be released in a couple of weeks. Nevertheless, as we mentioned before backlog in Africa would be closely monitored as Nacala s project is going fast, so the pressure to be replaced is mounting; Summing up Africa was again better than our estimates, problems in Poland seem to be close to an end, Portugal could surprise on the upside, while Latin America is probably tougher than management expected, despite a good backlog and last but not least debt nominal reduction is not definitely on ME s ADN. (For further details, please refer to our snapshot out this week) Mota Engil reduces its stake in the Ports concession business Mota Engil reduced its stake in TTP, the holding that aggregates ports concessions interests in Iberian Peninsula, namely Liscont, Sotagus, Sadoport, Tersado by selling %. The amount was 59Mn and would have occurred over the 2H13, as the information was just released with the 2013 report. We should highlight that this business was acquired by the end of 2006, when Tertir was bought which the valuation was 80Mn and the most relevant concessions stakes were: Liscont 51.7%;TCL 67.4% and Sotagus 50%. The transaction valuates the business at 160Mn, which is an important figure, however since debt information is not available we cannot comment on the deal. Having said that the sale is clearly a surprise as this business was and supposedly is a strategic business, so by selling minority interests and taking in consideration that the stakes were already owned partially, after the deal the most important ports concessions are now owned between 30% and 40%, so clearly a not relevant stakes and probably the equity consolidation would be more appropriated. Page 9 of 15

10 SECTOR PERFORMANCE Sector Performance -1 Week (%) PSI Financials Media Oil & Gas Industrials & Other Telecoms & IT Retail * Electric Utilities PSI20 Financials Media Industrials & Other Electric Utilities Oil & Gas Telecoms & IT Retail * Sector Performance - YTD (%) * includes Jeronimo Martins and Sonae This week, the PSI20 went up 1.3%. The best performing sector was Financials, plus 5.5% and the worst was Electric Utilities, minus 2.5%. On a Ytd basis, the PSI20 went up 17.0%. The best performing sector was Financials, plus 37.6% and the worst was Retail, minus 3.4%. AGGRESSIVE PORTFOLIO This week, Mib Aggressive Portfolio went up 0.41%, underperforming the PSI20 by 0.85pp. Jerónimo Martins and Sonaecom were the main contributors 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 0.41%, underperforming the PSI20 by 0.85pp. Jerónimo Martins and Sonaecom were the main contributors 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 10 of 15

11 Return since inception (30th July 2004) Portfolio PSI Jul 05-Mar 16-Oct 28-May 08-Jan 20-Aug 02-Apr Mib AGGRESSIVE PORTFOLIO Portfolio weekly return Company Risk Market Price Upside Weekly Performance Rating Price ( ) Target ( ) Potential Return Contribution Deviation Jerónimo Martins Medium % -3.0% -0.60pp -0.85pp Galp Energia High % 2.2% 0.44pp 0.07pp Sonaecom High % -0.5% -0.09pp -0.34pp Telefónica Medium % 1.7% 0.35pp 0.10pp Portugal Telecom Medium % 1.6% 0.32pp 0.04pp Portfolio 0.41% PSI % Gain/loss -0.85pp Explained by the portfolio -0.99pp Explained by being underweight in the remaining PSI20 stocks 0.14pp Ytd Return Portfolio PSI Dec 31-Jan 03-Mar 03-Apr Next week Portfolio Changes in Portfolio Company Risk Market Price Upside Rating Price ( ) Target ( ) Potential In Out Jerónimo Martins Medium % - - Sonaecom High % Galp Energia High % Telefónica Medium % Portugal Telecom Medium % Return vs. PSI YTD 1 Month 1 Week Portfolio -43.6% 71.9% -7.30% -36.6% 22.1% 47.1% 13.2% 1.1% 0.4% PSI % 33.5% % -27.6% 2.9% 16.0% 17.0% 2.6% 1.3% Gain/loss 7.7pp 38.5pp 3.0pp -9.0pp 19.2pp 31.1pp -3.7pp -1.6pp -0.9pp Source: Bloomberg; Millennium investment banking "Mib Aggressive Portfolio" is composed by the five stocks with a higher upside potential of our coverage universe. "Mib Aggressive Portfolio" is equal-weighted and its composition changes at the end of the last trading day of each week. The portfolio YTD return was recalculated on the week of March 15. Page 11 of 15

12 Return since inception (31th December 2011) Portfolio PSI Dec 15-May 29-Sep 13-Feb 30-Jun 14-Nov 31-Mar Mib LIQUIDITY PORTFOLIO Portfolio weekly return Company Risk Upside Weekly Performance Rating Market Price ( ) Price Target ( ) Potential Return Contribution Deviation Jerónimo Martins Medium % -3.0% -0.60pp -0.85pp Galp Energia High % 2.2% 0.44pp 0.07pp Sonaecom High % -0.5% -0.09pp -0.34pp Telefónica Medium % 1.7% 0.35pp 0.10pp Portugal Telecom Medium % 1.6% 0.32pp 0.04pp Portfolio 0.41% PSI % Gain/loss -0.85pp Explained by the portfolio -0.99pp Explained by being underweight in the remaining PSI20 stocks 0.14pp Ytd Return Portfolio PSI Dec 31-Jan 03-Mar 03-Apr Next week Portfolio Changes in Portfolio Company Risk Rating Market Price ( ) Price Upside Target ( ) Potential In Out Jerónimo Martins Medium % - - Sonaecom High % Galp Energia High % Telefónica Medium % Portugal Telecom Medium % Return vs. PSI YTD 1 Month 1 Week Portfolio % 41.2% 6.5% 1.1% 0.4% PSI20-2.9% 16.0% 17.0% 2.6% 1.3% Gain/loss pp 25.2pp -10.4pp -1.6pp -0.9pp Source: Bloomberg; Millennium investment banking "Mib Liquidity Portfolio" is composed by the five stocks with a higher upside potential, excluding less liquid stocks. "Mib Liquidity Portfolio" is equal-weighted and its composition changes at the end of the last trading day of each week. The portfolio YTD return was recalculated on the week of March 15. Page 12 of 15

13 Latest Pr ( ) Target YE14 Upsd Rating Risk Trnvr ( mn) M Cap Change (%) EPS P / E EV / Sales EV / EBITDA Div Yield P/BV Rating 3m 6m ( mn)o Week 1M 3M 12M YTD E 2014E E 2014E E 2014E E 2014E E 2013E PSI 20 7, , IBEX 10, , Financials , BCP (1) , BES % Sell High , loss % 0.0% 0.6 BPI % Sell High , % 0.0% 0.9 Telecoms , % 6.0% 2.0 Telefónica % Buy Medium , % 6.4% 2.1 Portugal Telecom % Buy Medium , % 3.1% 0.9 Zon Optimus % Neutral Medium , % 3.5% 2.6 Sonaecom % Buy High % 3.1% 0.9 Media % - - Impresa (2) % - - Media Capital (2) % - - Cofina (2) % - - Technology Indra % Reduce High , % 2.3% 1.7 Novabase % Neutral High % 1.9% 0.9 Utilities , % 4.0% 0.8 Iberdrola % Reduce Low , % 5.9% 0.8 EDP % Reduce Low , % 5.8% 1.1 EDP Renováveis % Buy Low , % 0.9% 0.6 REN % Reduce Low , % 6.0% 1.1 Conglomerates , Sonae % Reduce Medium , % 2.4% 1.3 Semapa % Sell High , % 2.3% 1.1 Sonae Capital % Reduce High loss loss loss loss % 0.0% 0.3 Retail , % 1.9% 7.7 Inditex % Reduce Medium , % 1.9% 7.9 Jerónimo Martins % Buy Medium , % 2.5% 6.5 Industrials , CTT % Sell Medium 6.3-1, % 2.9 Sonae Industria % Reduce High loss loss loss % 0.0% 1.2 Altri % Sell High % 1.0% 2.0 Portucel % Sell Medium , % 7.7% 1.5 Construction , Mota-Engil % Sell High , % 2.0% 1.8 Oil & Gas Galp Energia % Buy High , % 2.3% 1.8 HealthCare ES Saúde % Neutral High (1) We do not have a recommendation on BCP, as Mib is a registered trademark of BCP; (2) Not Covered Page 13 of 15

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

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