Presentation of Results 2013 SEMAPA Sociedade de Investimento e - - PDF document

Presentation of Results 2013

SEMAPA – Sociedade de Investimento e Gestão, SGPS, S.A Public Company

• Av. Fontes Pereira de Melo, nº 14,10º, 1050-121 Lisboa

Companies Registry and Corporate Person no: 502 593 130 Share Capital: € 118,332,445

Presentation of 2013 Results

Page 2

PRIVILEGED INFORMATION 2013 RESULTS LEADING BUSINESS INDICATORS – comparison with figures for 2012: Turnover: 1,990.5 million euros

• 1.9%

Total EBITDA: 422.1 million euros

• 14.7%

Recurrent EBITDA: 420.6 million euros

• 5.9%

Pre-tax profits: 151.7 million euros

• 37.2%

Net income: 146.1 million euros

• 15.5%

Net debt: 1,324.8 million euros

• 128.2 million euros (in relation to Dec. 2012)

Net debt/EBITDA: 3.14x in Dec. 2013 vs 2.94x in Dec. de 2012

Despite the difficult business environment, the Semapa Group recorded turnover of 1,990.5 million euros, recurrent EBITDA of 420.6 million euros and Net Income of 125.9 million euros, representing growth of 15.5% in relation to 2012.

Presentation of 2013 Results

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Leading Business Indicators

Notes:

• Total EBITDA = operating profit + depreciation and impairment losses + provisions – reversal of provisions
• Cash flow = retained earnings + depreciation and impairment losses + provisions – reversal of provisions
• Net debt = non-current interest bearing debt (net of loan issue charges) + current interest-bearing debt (including debts to

shareholders) – cash and cash equivalents – market value of own shares and other listed securities held by the Group Comparability is affected in 2013 by the inclusion of Secil on a full consolidation basis in 2013, as opposed to a 51% proportional basis during the 1st quarter of 2012 and full consolidation during the rest of 2012 IFRS - accrued amounts (million euros) 2013 2012

• Var. (%)

Turnover 1,990.5 1,952.6 1.9% Other income 52.0 96.5

• 46.1%

Costs and losses (1,620.4) (1,554.3)

• 4.3%

Total EBITDA 422.1 494.8

• 14.7%

Recurrent EBITDA 420.6 447.1

• 5.9%

Depreciation and impairment losses (169.4) (199.8) 15.2% Provisions (increases and reversals) (14.1) 9.5

• 248.4%

EBIT 238.6 304.5

• 21.6%

Net financial profit (86.9) (63.0)

• 37.8%

Pre-tax profit 151.7 241.5

• 37.2%

Tax on profits 39.4 (70.9) 155.6% Retained profits for the period 191.1 170.6 12.1% Attributable to Semapa equity holders 146.1 126.5 15.5% Attributable to minority interests 45.0 44.0 2.2% Cash-flow 374.7 360.9 3.8% EBITDA margin (% Sales) 21.2% 25.3%

• 4.1 p.p.

EBIT margin (% Sales) 12.0% 15.6%

• 3.6 p.p.

31-12-2013 31-12-2012 Dec13 vs. Dec12 Equity (before MI) 880.7 795.9 10.7% Net debt 1,324.8 1,453.0

• 8.8%

Presentation of 2013 Results

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Segment Reporting (IFRS)

Notes:

• Figures for business segment indicators may differ from those presented individually by each Group, as a result of

consolidation adjustments

• The Cement segment in 2013 includes 100% of the Secil Group (as opposed to 51% of results in the 1st quarter of 2012 and

100% during the rest of 2012) + 50% of the Supremo Group IFRS-accrued amounts (million euros) Paper and Pulp Cement Environment Holdings Consolidated Sales 1,530.6 430.8 29.1

• 1,990.5

Total EBITDA 350.4 64.1 6.5 1.2 422.1 Recurrent EBITDA 349.3 63.6 6.5 1.2 420.6 Depreciation and impairment losses (118.1) (48.5) (2.5) (0.3) (169.4) Provisions (increases and reversals) (14.0) (3.8) (0.3) 3.9 (14.1) EBIT 218.3 11.9 3.7 4.8 238.6 Net financial profit (14.0) (24.2) (1.1) (47.6) (86.9) Pre-tax profits 204.3 (12.4) 2.6 (42.8) 151.7 Tax on profits 1.8 6.3 (0.1) 31.4 39.4 Retained profits for the period 206.1 (6.1) 2.6 (11.4) 191.1 Attributable to Semapa equity holders 166.9 (11.9) 2.5 (11.4) 146.1 Attributable to minority interests 39.2 5.8 0.1

• 45.0

Cash-flow 338.1 46.1 5.3 (14.9) 374.7 EBITDA margin (% Sales) 22.9% 14.9% 22.2%

• 21.2%

EBIT margin (% Sales) 14.3% 2.8% 12.7%

• 12.0%

Net debt 162.6 264.4 19.6 878.2 1,324.8

Presentation of 2013 Results

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1 Main Developments

• Acquisition by the Portucel Group from EDP of the remaining 82% stake in Soporgen.
• Portucel placed a bond issue on the international market (High - Yield), aimed at institutional

investors, with a total value of 350 million euros, maturing in 2020. This operation permitted the Portucel Group to improve its liquidity, diversify its sources of finance and to extend significantly the average maturity of its borrowing.

• Portucel was elected European Business of the Year 2012 at the European Business Awards (EBA).

The EBAs are amongst Europe's most coveted business awards, which seek to reward and promote excellence, good practice and innovation in Europe's business community. The 2012 awards attracted entries from more than 15 thousand organizations from different sectors in 30 countries.

• Portucel distributed a total of 201.4 million euros to its shareholders, by way of a dividend of 0.16

euros/share paid in June, and distribution of reserves of 0.12 euros/share, paid in November.

• Semapa SGPS distributed free reserves with a total value of 28.8 million euros, corresponding to

0.255 euros / share.

• In April 2013, ITS, the ETSA Group subsidiary operating in the collection and transport for

destruction of 1 and 2 by-products, regarded as presenting the highest biological risk, signed an up to three-year contract, in the capacity of leader of a consortium, with the Directorate-General of Food and Veterinary Services relating to the new procedure for providing integrated collection and forwarding services for the destruction of animal carcasses (SIRCA). The services under this new contract started up on 9 September.

Presentation of 2013 Results

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2 Consolidated Turnover: 1,990.5 million euros

• 1.9%

Evolution

Figures in million euros

Breakdown by Business Area

Consolidated turnover increased by 1.9% in relation to 2012, due essentially to inclusion of an additional 49% of Secil in the consolidated accounts as from the 2nd quarter of 2012 and to the increase in Portucel’s

• turnover. The contribution by business area was as follows:

Paper and Pulp: 1,530.6 million euros

• 1.9%

The Portucel Group's consolidated sales in 2013 totalled 1,530.6 million euros in 2013, approximately 29 million euros up from the figure recorded in 2012. This increase was due partly to the positive contribution made by pulp business, and also to performance in the energy sector. It should nonetheless be noted that energy sales in 2013 were boosted by the full consolidation of Soporgen, the company that operates the natural gas co-generation plant at the Figueira da Foz Industrial Complex. In the BEKP pulp segment, excellent performance in output at the mills and growing consumption in the market enabled the Group to record growth of around 13% in sales volume. Output was up by approximately 4% on the previous year, due essentially to increased availability of pulp from the Group's mills, in particular the Cacia mill, where no maintenance stoppage was required and significant efficiency gains were achieved, with a consequent increase in output. Despite a rise of around 2% in the PIX benchmark index, FOEX BHKP in euros, the Group's average sales price was lower than in 2012, due to fiercer competition on the international market and an increase in sales denominated in USD to markets outside Europe. In UWF paper business, the Group recorded growth of 0.2% in its sales volume and a reduction in its average sales price. It is important to note the harsh environment in the paper market over the year, with the poor economic situation and continued high rates of unemployment in Europe holding down consumption. As

1 ,. 530.6 1, .990.5 430.8 29.1 0.0 0,0 Paper and Pulp Cement Environment Holdings Total

• 2012

2013 1. 9%

Presentation of 2013 Results

Page 7 a result, despite good performance in sales volumes, paper sales were down by 4% in value in relation to

• 2012. The drop in the average price can be explained by three main factors: the deterioration of the

benchmark price in the European market (the PIX index was down by 1.9% on the previous year), adverse variations in exchange rates and the growing importance of non-European markets in the Group's sales mix. In the energy sector, gross power output stood at 2,300 MWh, representing an increase of over 25%. As stated above, this figure is not comparable with the previous year, as it includes output from Soporgen. Power sales were also boosted by full consolidation of Soporgen, and totalled approximately 2,100 MWh.

Cement1: 463.0 million euros

• 6.7%

Appropriated by Semapa:2430.8 million euros

• 3.7%

Figures in million euros

In the financial year of 2013, turnover in the Cement business area stood at 463.0 million euros, down by 6.7% on 2012, reflecting poorer performance in sales in most sectors of the Portuguese market.

The Semapa Group appropriated 430.8 million euros, up by 3.7% on the previous year, due to differences in

the application of consolidation criteria in relation to 20122. Growth in sales to foreign markets by the cement business unit in Portugal and in operations in Lebanon and Tunisia failed to offset the decline in sales on the home market by the cement business unit in Portugal and in sales by the cement business unit in Angola.

1 Includes 100% of the Secil Group +100% of the Supremo Group 2 Includes 100% of the Secil Group + 50% of the Supremo Group after consolidation adjustments in 2013, as compared to 51% of the Secil in the 1st quarter and 100% of the Secil Group + 50% of the Supremo Group in the 2nd, 3rd and 4th quarters, in 2012 260.8 67.1 28.5 5.8 88.0 46.1 496.4 224.7 67.2 23.9 5.4 90.4 51.5 463.0 Portugal Tunisia Angola Cape Verde Lebanon Brazil Total 2012 2013

• 13.9%

0.2%

• 16.3%
• 6.9%

11.6% 2.7%

• 6.7%

Presentation of 2013 Results

Page 8 In Portugal, business in the construction sector remains depressed, and according to AECOPS (Association

• f Construction, Public Works and Services Companies), the sector is facing an unprecedented reduction in
• utput, with a widespread dearth of building work and no prospects of any rapid change in the situation.

However, although the construction remains in decline, the latest figures published by FEPICOP (the Portuguese Construction and Public Works Industry Federation), referring to November 2013, show a trend for recovery in the indexes based on the opinions of building industry players. In terms of demand for cement, figures from CEMAPRE (Centre for Applied Mathematics and Economics) point to a continued reduction, with a year-on-year drop of 20% for 2013, which is nonetheless lower than the decrease in demand recorded in 2012 (- 28.6%). In this particularly harsh environment, turnover for overall operations in Portugal in 2013 was down by 13.9%

• n the previous year, at approximately 224.7 million euros, as detailed below.

Cement business in Portugal recorded turnover of 161.4 million euros, down by 8.9% in relation to figures for 2012, as a result of a reduction in the sales volume on the domestic market (down by 20.0%). Export business (included in overall operations in Portugal) showed an increase in turnover of 6.5%, accounting for 55.4% of total turnover in 2013. In the other business segments with operations based in Portugal (concrete, aggregates, mortars, pre-cast and other), turnover in 2013 stood at approximately 63.3 million euros, down by 24.4% in relation to the previous year. In Tunisia, 2013 witnessed increasing political and social instability, with structural reforms being implemented more slowly than initially envisaged. This situation, combined with the worsening economic situation in Tunisia's main trading partners, has had a negative impact on the economic recovery, with the latest IMF figures pointing to growth down from 2012 (3.0%, as compared to 3.6%). Despite the difficult economic situation, cement consumption grew by 2.5% for the country as a whole and 3.0% in the southern region, which is the natural market for the Secil Group's operations. Combined turnover for operations in Tunisia in 2013 was largely unchanged from the previous year, edging up by 0.2% to 67.2 million euros. In cement business, turnover totalled around 59.3 million euros, up by 0.4% on the figures recorded in 2012, thanks to a significant increase in the volume of export sales. It should be noted that turnover expressed in local currency grew by 8%, but this was largely cancelled out by the drop in value of the Tunisian dinar. In Lebanon, the economy was hit by the negative effects of the current situation in the Middle East, and in Syria in particular. Even so, cement consumption grew by 10% in relation to 2012, standing at 5.9 million tons, despite initial expectations that the market would stabilize after the boom years of 2003 to 2011.

Presentation of 2013 Results

Page 9 Turnover from combined operations in Lebanon stood at approximately 90.4 million euros, representing an increase of 2.7% over the previous year, due essentially to an increase of 7.7% in sales volumes in 2013. The cement business unit recorded turnover in 2013 of 81.3 million euros, 1.8% up on that recorded in the previous year. In Angola, the construction industry is expected to maintain rapid growth, fuelled by implementation of a large-scale public spending programme for infrastructure and housing projects. In this context, cement consumption in 2013 stood at approximately 5.5 million tons, up by 5.5% on the figure recorded in the previous year. The Group's business operations contracted in relation to the previous year, partly due to the start-up during 2012 of a new cement mill in the Benguela region, and also to continued imports of cheap cement, which has put pressure on operating margins. As a result, the cement business unit in Angola recorded performance down by 16.3% on the financial year

• f 2012, with turnover of approximately 23.9 million euros, due essentially to a reduction in cement sales in

quantity (down by 5.5%) and in average sales prices (down by 9.0%). In Brazil, the cement market grew over the year by 2.4% for the country as a whole and by 3.8% in the southern region (where the Supremo Group operates). Supremo Group’s operations generated turnover of 51.5 million euros, 11.6% up on the previous year, with the Semapa Group appropriating 25.7 million euros.

Environment: 29.1 million euros

• 18.2%

The ETSA Group recorded turnover of 29.1 million euros in 2013, down by around 18.2% on the financial year of 2012. This reduction in business was due essentially to the combined effect of: (i) a reduction in sales volumes and average sales prices for low acidity fats, (ii) a reduction in the average value of contracts for collecting animal by-products from hypermarkets and (iii) a reduction in business in collection, transport and destruction of animal carcasses, in comparison with the same period in 2012, caused by a reduction in the quantities collected and in the average unit price for collection.

Presentation of 2013 Results

Page 10

3 Total Consolidated EBITDA: 422.1 million euros

• 14.7%

Consolidated Recurrent EBITDA: 420.6 million euros

• 5.9%

Consolidated EBITDA Margin: 21.1%

• 4.2 p.p.

Evolution

Figures in million euros

Breakdonw by Business Area

Although total EBITDA was down by 14.7%, it should be stressed that recurrent EBITDA fell less steeply (5.9%), due to the recording in the previous period of various non-recurrent items with a value of 26.3 million euros at the holding level.

Paper and Pulp: 350.5 million euros

• 9.1%

As stated above, the Portucel Group recorded an increase of 1.9% in its consolidated sales in 2013, due to growth in sales volumes for paper and pulp, despite the drop in the respective prices, and to increased energy sales, thanks to the inclusion of Soporgen in the Group's accounts on a full consolidation basis. Production costs were hit by rising wood prices and by the prices at which the Group purchased electricity. Full consolidation of Soporgen in the Group's accounts also had a substantial impact on costs, which rose

• verall, especially in relation to natural gas.

In this context, consolidated EBITDA in 2013 stood at 350.5 million euros, which represents a reduction of 9.1% in relation to 2012 and results in an EBITDA margin of 22.9%, down 2.8 percentage points on the margin recorded in the previous year.

Cement3: 66.5 million euros

• 10.9%

Appropriated by Semapa:464.1 million euros

• 3.7%

3 Includes 100% of the Secil Group +100% of the Supremo Group 350.4 422.1 64.1 6.5 1.2 Paper and Pulp Cement Environment Holdings Total

494.8 422.1

2012 2013

• 14.7%

Presentation of 2013 Results

Page 11 EBITDA in the cement business area stood at 66.5 million euros, down by 10.9% on the previous year. The Semapa Group appropriated 64.1 million euros, down by only 3.7% on the previous year, due to differences in the application of consolidation criteria in relation to 20124. Despite the performance achieved in operations in Lebanon, the overall balance for 2013 was negative, due essentially to deteriorating performance by business segments located in Portugal. EBITDA for 2013 was also brought down by the recording of impairments on inventories and accounts receivable, the value of which increased by approximately 3 million euros in relation to 2012. The EBITDA margin stood at 14.4% for the period in question, 0.7 p.p. down from the margin recorded in the previous year. In Portugal, EBITDA for total operations was down, year-on-year, by 38.6%, at 21.9 million euros. The cement business unit in Portugal recorded EBITDA of 26.1 million euros, down by 35.9% on the figure recorded in 2012. CO2 sales were significantly lower in 2013 than in the previous year (1.0 million euros, as compared to 9.2 million euros). This means that, eliminating the effect of revenues from CO2 sales, the reduction in EBITDA in relation to 2012 would have been 20.0% (25.0 million euros, as compared to 31.4 million euros). The reduction in operating costs, including personnel costs, achieved through the process of reorganization and streamlining of operations initiated in 2012, has made it possible to cushion the impact of the drop in business on the domestic market.

4 Includes 100% of the Secil Group + 50% of the Supremo Group after consolidation adjustments in 2013, as compared to 51% of the Secil in the 1st quarter and 100% of the Secil Group + 50% of the Supremo Group in the 2nd, 3rd and 4th quarters, in 2012 35.6 9.3 2.9 0.1 23.7 3.1 74.7 21.9 8.0 0.3 0.2 31.2 4.9 66.5 Portugal Tunisia Angola Cape Verde Lebanon Brazil Total 2012 2013

• 38.6%
• 88.2%

140.8% 57.8%

• 13.7%

31.7%

• 10.9%

Presentation of 2013 Results

Page 12 The Group has also increased the use of industrial waste as thermal fuel. Overall, the rate of use of alternative thermal fuels rose from 41% in 2012 to 44% in 2013. The ready-mixed and pre-cast business units also recorded performance well down on that recorded in 2012, as the direct result of the depression in the construction market. The aggregates and mortars business units recorded growth in EBITDA in relation to 2012, thanks to an increase in average sales prices resulting from changes in the sales mix and to savings on personnel costs. In Tunisia, EBITDA from business operations in 2013 stood at 8.0 million euros, representing a reduction of 13.7% in relation to the same period in the previous year. The poorer performance recorded by this business unit was due to lengthy stoppages caused by technical problems in the kilns. In order to respond to market demands, the company was obliged to buy in sizeable quantities of clinker, with a consequent loss of margin. However, growth in export sales of cement partially

• ffset this effect.

In Lebanon, EBITDA from total operations in 2013 stood at 31.2 million euros, which represented growth of 31.7% in relation to 2012, thanks to i) improved performance in sales which boosted turnover, ii) the fact that results for 2012 had been brought down by additional cost of purchasing clinker and cement, due to a number of problems which have since been resolved, iii) improvement in the indicators for thermal energy consumption and iv) a reduction in the clinker incorporation rate, which helped to cut production costs. In Angola, EBITDA from operations shrank by 88.2% to stand at 343 thousand euros, due to a reduction in the sales volume and the average sales price in comparison with 2012 and to the recording of impairments

• n inventories. Capital projects were implemented in 2013 in relation to the mills, making it possible to cut

the clinker incorporation rate and consequently to bring down variable production costs. The impact of this will only be visible in 2014, as the work was concluded close to the end of 2013. Operations in Brazil generated EBITDA of 4.9 million euros, up by 57.8% on the previous year, with the Semapa Group appropriating 2.4 million euros.

Environment: 6.5 million euros

• 28.1%

EBITDA for the ETSA Group totalled 6.5 million euros, representing a reduction of 28.1% in relation to 2012. This is explained fundamentally by (i) the reduction in turnover, as described above, (ii) widespread increases in the average purchase price of by-products, due to the depressed business environment,

• vercapacity in the sector and extremely fierce competition, iii) a significant increase in animal by-products

Presentation of 2013 Results

Page 13 business, but with falling revenue from fixed contracts, resulting in higher logistical, personnel and processing costs. Other factors which had a positive impact on performance in the period included the reduction in the cost of goods sold per ton of raw material processed, as a result of (i) the planned reduction in commercial collection operations in Spain, and (ii) the lower cost of thermal fuels used during the industrial conversion process, thanks to capital projects implemented by the subsidiaries SEBOL and ITS. The EBITDA margin stood at 22.2%, down by around 3.1 p.p on the margin for 2012.

Holdings (Semapa SGPS and instrumental sub-holdings)

EBITDA from the holding companies made a contribution of 1.2 million euros, comparing unfavourably with the figure of 33.8 million euros recorded in the previous year, due essentially to the inclusion in the accounts in this period of non-recurrent items.

4 Consolidated Net Debt: 1,324.8 million euros

• 128.2 million euros

Consolidated Net Debt Evolution

At 31 December 2013, consolidated net debt totalled 1,324.8 million euros, down by 128.2 million euros from the figure recorded at year-end 2012, pointing to the Group's capacity for generating cash flow after payment

• f dividends and capital projects.

31-12-2013 31-12-2012 Var Pulp and Paper 162.6 255.6

• 93.0

Cement 264.4 304.3

• 39.9

Environment 19.6 20.6

• 1.0

Holdings 878.2 872.6 5.7 Total 1,324.8 1,453.0

• 128.2

Million Euros

• Consolidated

31-12- 2012 Pulp and Paper Cement Environment Holdings Consolidated 31-12- 2013

Presentation of 2013 Results

Page 14

5 Financial results: -86.9 million euros

• 37.8%

In 2013, financial results worsened by 23.8 million euros in relation to the previous year, standing at a negative figure of 86.9 million euros. This is explained essentially by: i) an increase in the gross debt of the Portucel Group in order to assure financial flexibility and high levels of liquidity, ii) higher average interest rates paid on borrowing, iii) losses on currency hedges contracted by the Group and iv) a reduction in the rate of interest earned on surplus

• liquidity. In the case of Portucel, financial results were improved by 8.7 million euros thanks to the writing off
• f interest under the programme for settlement of outstanding tax debts.

6 Consolidated Net Income: 146.1 million euros

• 15.5%

Accrued consolidated net income for 2013 totalled 146.1 million euros, representing an increase of 15.5% in relation to the previous year. This improvement was due essentially to the following factors: A drop in total EBITDA of approximately 72.7 million euros; A reduction in depreciation and impairment losses of 30.4 million euros; An increase in provisions of 14.1 million euros in 2013, as compared to reversal of provisions worth 9.5 million euros in 2012; A worsening of financial results by 23.8 million euros in relation to the same period in the previous year; A positive effect of 39.4 million euros under taxes in 2013.

7

Performance of Semapa Shares on Euronext Lisbon in 2013 The financial year of 2013 proved to be fairly positive for the capital markets, with most stock exchanges recording significant gains. In a low interest rate environment, with some signs of an economic recovery, investors were hungry for yields and were again attracted to higher risk assets. The main indexes, both in Europe and the United States, presented sizeable gains, including the FT30 (up 27.5%), the Dow Jones Industrial (up 26.5%) and the Frankfurt index, Xetra Dax (up 25.5%). The Ibex 35 index, which had recorded an overall loss in 2012, closed the year up 21.4%.

Presentation of 2013 Results

Page 15

Note: Closing prices

In this context, the value of Semapa shares rose impressively. Up by 43.1%, the share price clearly

• utperformed the PSI20, which itself presented a gain for the year of 16.0%.

8 Outlook

The economic prospects in more developed markets are now more encouraging, although some factors of uncertainty remain, meaning it is too early to consider that the troubles and imbalances experienced by the world economy in recent years are definitively over. The emerging markets should benefit from this trend, despite the continuing existence of weak points in these economies which could limit their development, as demonstrated in recent days by the turbulence experienced by some of these countries on the foreign exchanges. In the Euro Zone, the frail economic recovery observed in recent months is expected to continue, albeit in a limited way, unevenly spread between periphery and centre, thanks to the process of adjusting public and private borrowing. In the United States, the recovery is stronger and more sustained, due to growth in domestic demand, supported by productivity gains, highly competitive energy prices and a less restrictive fiscal policy. The biggest question mark is over the impact on the economy of the reduction in monetary incentives already announced by the US Federal Reserve. In China, the economy is expected to remain strong, despite the limiting effects of more restrictive credit and investment policies, which should result in a slight slowdown in economic growth.

Dez-12 Jan-13 Fev-13 Mar-13 Abr-13 Mai-13 Jun-13 Jul-13 Ago-13 Set-13 Out-13 Nov-13 Dez-13

66,738 shares PSI 20

• Period

16.0% 43.1% Min: € 5.82 02 Jan Max: € 8.331 20 Dec Semapa

• Period

Share Price 02 Jan 13 - € 5.82 31 Dec 13 - € 8.143

Basis 100 31/12/2012

Average daily turnover Dec-12 Feb-13 Aug-13 Sep-13 May-13 Apr-13 Oct-13 Dec-13

Presentation of 2013 Results

Page 16 In Portugal, forecasts published by the IMF point to growth of 0.8% in gross domestic product in 2014, up from the negative growth of -1.8% estimated for 2013 (World Economic Outlook, IMF, January 2014). The latest Bank of Portugal projections also point to growth in GDP of 0.8% in 2014, after a drop estimated at 1.5% in 2013 (Winter Economic Bulletin - January 2014), assuming a gradual recovery in internal demand and a moderate upturn in the economy in 2014-2015.

Paper and Pulp

In this context, the BEKP pulp market has proven fairly resilient, with growth in overall demand, and continued robust demand from China. In the near future, the market should continue to be supported by a significant increase in production capacity for tissue papers and the closure and conversion of pulp mills, in particular in China. However, a degree of uncertainty as to the future of the paper market, the start-up of new pulp capacity planned for 2014 and 2015 and the evolution of the Euro/dollar exchange rate are all factors which may have an impact on supply and demand in this market. In the UWF paper market, the business environment is expected to remain difficult in 2014, although less acutely so than in previous years, with the possibility that consumption may stabilize to an extent. Office paper, in particular, which has proved to be remarkably resilient, may record more positive performance. The coming year is therefore expected to be more positive, supported by improving order books in the paper industry. Strong pressure will continue to be felt from Asian manufacturers, and the tendency observed recently for quality downgrading is expected to increase. The Group will continue to expand and consolidate its market, repositioning its product mix on its traditional markets.

Cement

In Portugal, the Secil Group's main market, the economic outlook for 2014 is generally less pessimistic, in comparison with the severe contraction experienced in recent years. Activity in the European construction industry is expected to stabilize in 2014 and show a modest recovery in

• 2015. According to figures from Euroconstruct, 2013 may have been the last year of the severe crisis that

has gripped the construction sector in Europe. For Portugal, the forecasts point to a further decline in construction business in 2014, albeit less drastic that in recent years (Euroconstruct figures point to a reduction of around 3% in construction business in 2014). In 2014, the Group's operations in Portugal will continue to be influenced by the situation in the construction sector, and priority will be given to pressing ahead with measures to improve operational efficiency in all areas of activity (both in operations and at head office), in order to assure better results as soon as the market recovers.

Presentation of 2013 Results

Page 17 For Tunisia, the latest IMF figures point to expectations that the economy will grow in 2014 by 3.7%, up from the figure of 3.0% estimated for 2013 (World Economic Outlook, IMF, January 2014), despite the continued uncertainty as regards political and social stability in the country. In line with expectations for the economy as a whole, the construction and cement sector is also expected to record stronger growth than in 2013. The prospects for the Tunisian market are therefore positive, all the more so because prices were deregulated in early 2014. Economic growth in Lebanon is forecast to stand at 1.5% in 2014, similar to that expected for 2013 (World Economic Outlook, IMF January 2014). Recent changes in the Middle East region have not made it easy to maintain economic stability, and so the growth forecast for Lebanon is well below the country's potential. The cement market is expected to stabilize, after the boom years of 2003 to 2011. With regard to Angola, the latest forecasts published by the IMF point to continued economic growth, with estimates that gross domestic product will increase by 6.3% in 2014, up from the figure of 5.6% estimated for 2013 (World Economic Outlook, IMF, January 2014). In this context, the Angolan cement market is expected to enjoy robust growth in 2014. The Secil Group's operations should benefit from the capital projects implemented in 2013, bringing down production costs and offering the prospect of improved results. The investment in acquiring Supremo Cimentos and building a new mill in Brazil is resulting in increased debt, which will bring down financial results and consequently the Group's net income until the new plant starts operation.

Environment

Considering the current economic and financial environment, no improvements are envisaged in the short term in the sector operated by the ETSA Group, insofar as falling consumption of foodstuffs (due simply to changes in the average shopping basket, or other factors) results directly in a reduction in the animal slaughter rate, and consequently in the volume of by-products generated. In view of overcapacity in by- product processing, competition between operators is set to remain fierce, leading to a more aggressive search for raw materials, which will be increasingly scarce and therefore more expensive, eroding commercial margins. The ETSA Group has a legitimate expectation that the Portuguese State will settle all outstanding payments for SIRCA services, representing a total of 5.5 million euros, including interest for late payment, during the 1st half of 2014. The ETSA Group’s prime objectives in the short term include: (i) concentrating on horizontal expansion of its markets (with estimates suggesting that exports accounted for around 43% of total turnover in 2013); and (ii)

Presentation of 2013 Results

Page 18 identifying fresh opportunities for vertical growth, channelling investment to improving operational efficiency, extracting maximum value from the channels operated and retaining the loyalty of the main conventional and alternative collection centres. The ETSA Group has successfully concluded a number of capital projects, primarily geared to converting industrial consumption and setting up new business units to boost value adding. Lisbon, 12 February 2014 The Directors