IBERIA. Monday Galp Energia s 3Q14 Trading Statement. Best & Worse Performers -1 Week (%) Inditex

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1 EQUITY RESEARCH IBERIA October Top Story Nothing to register WEEKLY Out This Week Price Target / Recommendation Changes EDP, EDP Renováveis, REN, Iberdrola, Galp Energia, BPI, Semapa, Altri, Portucel Week Ahead Monday Galp Energia s 3Q14 Trading Statement Portfolios This week, Mib Aggressive Portfolio went down 6.20%, underperforming the PSI20 by 0.25pp. Sonaecom and Sonae Capital were the contributors for this underperformance (page 5). This week, Mib Liquidity Portfolio went down 6.33%, underperforming the PSI20 by 6.33pp. Portugal Telecom and Indra were the contributors for this underperformance (page 6). Stock Market Last 1W YTD 2013 Daily Vol. ( mn) 1W 1M 6M 2013 PSI 20 5, % % 15.98% PSI IBEX 35 10, % 2.44% 21.42% IBEX 35 3,901 3,117 3,037 2,570 Euro Stoxx 50 2, % -3.77% 17.95% Euro Stoxx 50 10,188 9,275 8,305 7,456 Forex Rates Last 1W YTD 2013 Interest Rates Last 1W Chg YE13 EUR/USD % -8.36% 4.46% Euribor 6m 0.18% 0.18% 0bp 0.38% EUR/GBP % -5.46% 2.49% 10Y Bond PT 2.95% 3.04% -9bp 5.66% EUR/BRL % -6.33% 20.33% 10Y Bond SP 2.07% 2.10% -4bp 3.90% antonio.seladas@millenniumbcp.pt Best & Worse Performers -1 Week (%) ES Saúde 1.9 Iberdrola -2.5 Telefónica -2.5 EDP -2.6 Inditex -3.0 Sonaecom -8.0 Sonae Capital -9.8 BPI Portugal Telecom Portucel Best & Worse Performers - YTD (%) ES Saúde 55.5 EDP Renováveis 33.4 CTT 29.2 EDP 22.3 Iberdrola 19.2 Indra Sonae Capital Sonaecom Jerónimo Martins Portugal Telecom Page 1 of 9 All prices are those of the end of the trading session unless otherwise indicated. For important Disclosure and Disclaimer go to the second last page.

2 Changes Earnings Page 2 of 9

3 Dividends Financials BPI Due to changes in analyst coverage we are placing BPI under review. Utilities Iberdrola Due to changes in analyst coverage we are placing Iberdrola under review. EDP Due to changes in analyst coverage we are placing EDP under review. EDP Renováveis Due to changes in analyst coverage we are placing EDP Renováveis under review. REN Due to changes in analyst coverage we are placing REN under review. Page 3 of 9

4 Oil & Gas Galp Energia Due to changes in analyst coverage we are placing Galp Energia under review. Aggressive Portfolio This week, Mib Aggressive Portfolio went down 6.20%, underperforming the PSI20 by 0.25pp. Sonaecom and Sonae Capital were the 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 down 6.33%, underperforming the PSI20 by 6.33pp. Portugal Telecom and Indra were the 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 4 of 9

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7 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) Week 1M 3M 12M YTD E 2015E E 2015E E 2015E E 2015E E 2014E PSI 20 5, , IBEX 10, , Financials , BCP (1) , BPI (5) , % - - Telecoms , % 6.3% 2.1 Telefónica (4) % Buy Medium , % 6.4% 2.2 Portugal Telecom (4) % Buy Medium , % 7.2% 0.8 NOS % Buy Medium , % 5.0% 2.2 Sonaecom % Buy High % 6.1% 0.4 Media % - - Impresa (2) % - - Media Capital (2) % - - Cofina (2) % - - Technology Indra % Buy High , % 3.6% 1.4 Novabase % Buy High % 6.7% 0.8 Utilities , % Iberdrola (5) , % - - EDP (5) , % - - EDP Renováveis (5) , % - - REN (5) , % - - Conglomerates , Sonae (4) % Buy Medium , % 3.4% 1.3 Semapa % Reduce High , % 2.8% 1.3 Sonae Capital % Buy High loss loss % 0.0% 0.2 Retail , % 2.4% 6.0 Inditex (4) % Buy Medium , % 2.3% 6.4 Jerónimo Martins (4) % Buy Medium , % 3.2% 3.3 Industrials , CTT (4) % Buy Medium , % 3.7 Sonae Industria (3) loss % - - Altri % Reduce High % 2.0% 1.7 Portucel % Reduce Medium , % 7.6% 1.5 Construction Mota-Engil (3) % - - Oil & Gas. Galp Energia (5) , % - - HealthCare ES Saúde (4) % Reduce High (1) We do not have a recommendation on BCP, as Mib is a registered trademark of BCP; (2) Not Covered; (3) Restricted; (4) Target YE15; (5) Page 7 of 9

8 Disclosures 1) This report has been prepared on behalf of Millennium investment banking (Mib), a registered trademark of Banco Comercial Português, S.A. (Millennium BCP). 2) Millennium BCP is regulated and supervised by Comissão do Mercado de Valores Mobiliários (CMVM). 3) 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. 4) Unless otherwise specified, the time frame for price targets included in this report is current year-end or next year-end. 5) Risk is defined by the analyst s view in a qualitative way (High, Medium, Low). 6) Usually we update our models and price targets in between 3 and 9 months. 7) Millennium BCP prohibits its analysts and members of their households to own any shares of the companies covered by them. 8) BCP group may have business relationships with the companies mentioned in this report. 9) Millennium BCP expects to receive or intends to seek compensations for investment banking services from the companies mentioned in this report. 10) 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. This report did not have any specific recipient. 11) Millennium BCP Analysts do not participate in meetings to prepare BCP s involvement in placing or assisting in public offers of securities issued by the company that is subject of the recommendation, except when disclosed in the report. 12) Analysts are paid in part based on the profitability of BCP group, which includes investment banking revenues. 13) BCP group has more than 2% of EDP. 14) BCP group was chosen to evaluate EDP regarding the 8th stage of the privatization process. 15) BCP group was chosen to evaluate REN regarding the 2nd stage of the privatization process. 16) 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. 17) 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). 18) Banco Comercial Português, S.A. (also known as Millennium BCP) was chosen as a Co-leader of the Initial Public Offering of CTT that took place on December ) The Board of directors of Mota Engil has appointed Banco Comercial Português as joint-book runner concerning the offering of ordinary shares of Mota Engil through an accelerated book building according to the announcement released on 25th of February ) Banco Comercial Português, S.A. (also known as Millennium BCP) was chosen as a Co-leader of the Initial Public Offering of ES Saúde, that took place on February ) Millennium investment banking acted as Joint Bookrunner in the private offering, launched by José de Mello SA, through an accelerated bookbuilding, concerning the sale of EDP shares, according to the announcement released on the 3rd of April ) According to the announcement released on the 8th April 2014, Millennium BCP acted as Joint Bookrunner in the Eurobond EDP Finance BV 5-year in the total amount of 650,000, ) Millennium BCP is involved in Sonae Industria capital increase announced at the beginning of May ) Millennium investment banking a registered trademark of Banco Comercial Português, S.A. was chosen as Joint Bookrunner of the Preferential Offer and Co-Lead Manager of the Institutional Offer of Mota-Engil Africa that is taking place. 25) Banco Comercial Português, S.A. (also known as Millennium BCP) was chosen as a Co-leader of the Public Offering of REN that took place in June ) Banco Comercial Português, S.A. (also known as Millennium BCP) was chosen as one of the Bookrunners & Mandated Lead Arrangers on the 5-year revolving credit facility in the amount of 3,150,000,000 that was granted to EDP-Energias de Portugal (June 2014). 27) Banco Comercial Português, S.A. (also known as Millennium BCP) was chosen as one of the Joint-Bookrunners on the issuance of Euro Medium Term amounting to 500,000,000 (maturing in January 2021) by Galp Energia (July 2014). 28) Banco Comercial Português, S.A. (also known as Millennium BCP) was chosen as one of the Joint-Bookrunners on the 7-year Eurobond in the amount of 1,000,000,000 that was issued by EDP Finance, fully owned by EDP-Energias de Portugal (September 2014). 29) Recommendations on Millennium BCP covered companies (%) Recommendation Sep-14 Jun-14 Mar-14 Dec-13 Sep-13 Jun-13 Dec-12 Dec-11 Dec-10 Dec-09 Dec-08 Dec-07 Dec-06 Dec-05 Dec-04 Buy 62% 50% 25% 55% 59% 77% 77% 68% 79% 63% 54% 41% 37% 30% 63% Neutral 10% 32% 13% 23% 9% 9% 12% 11% 7% 15% 4% 27% 11% 40% 6% Reduce 10% 0% 33% 18% 18% 14% 4% 0% 0% 7% 0% 0% 21% 5% 6% Sell 19% 18% 29% 5% 14% 0% 4% 7% 4% 4% 0% 14% 16% 5% 0% Unrated/ 0% 0% 0% 0% 0% 0% 4% 14% 11% 11% 42% 18% 16% 20% 25% Performance -15.6% -10.6% 16.0% 10.2% 7.1% -1.7% 2.9% -28% -10% 33% -51% 16% 30% 13% na PSI 20 5,741 6,802 7,608 6,559 5,954 5,557 5,655 5,494 7,588 8,464 6,341 13,019 11,198 8,619 7,600 30) 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 8 of 9

9 OFFICE LOCATIONS Millennium investment banking Av. Prof. Dr. Cavaco Silva (Tagus Park) Edif 2 - Piso 2 B Porto Salvo Porto Salvo Portugal Telephone Equity Team Luis Feria - Head of Equities Equity Research 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