Espírito Santo Saúde

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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. Initiating Coverage Neutral (High Risk) Target YE14 (€): 3.85 Financials Turnover (€ mn) 341.4 373.6 386.6 400.4 EBITDA (€ mn) 38.8 59.0 60.1 64.0 Net Income (€ mn) -2.1 14.0 14.4 18.1 EPS (€) -0.02 0.16 0.15 0.19 CEPS (€) 0.30 0.48 0.44 0.47 Ratios Pre-tax RoIC (%) 2.7 8.8 9.2 10.6 RoE (%) -1.6 9.9 9.7 11.8 Net Debt/EBITDA (x) 6.5 3.6 3.2 2.9 Net Debt/Equity (%) 195.2 146.5 127.0 119.8 Valuation P / E (x) neg 20.2 24.0 19.1 EV / Revenues (%) 170.0 132.3 139.4 132.9 EV / EBITDA (x) 15.0 8.4 9.0 8.3 Dividend Yield (%) 0.3% 0.0% 1.0% 1.3% Source: Millennium investment banking 2015E 2013 2014E 2012 Price: €3.62 Upside: 6.4% Market Cap: €345.9mn Reuters: ESS.LS No. Shares: 95.5mn Bloomberg: ESS PL 98 101 104 107 110 113 116 119 Feb-14 Feb-14 Feb-14 Mar-14 Mar-14 Mar-14 ESS PSI20 Av. Prof. Dr. Cavaco Silva (Tagus Park) Edif 2 - Piso 2 B Porto Salvo 2744-002 Porto Salvo Portugal Telephone +351 21 003 7811 Fax +351 21 003 7819 / 39 We have started the We have started the coverage of ES Saúde, with a YE14 price target of €3.85 per share, with a Neutral (High Risk) recommendation, meaning a 6% Upside. ES Saúde is one of the largest integrated private healthcare service groups by revenues in Portugal. The company ranks first in terms of private network population coverage and private network purchasing power coverage. The Company was established in 2000, and provides healthcare services through 18 facilities (8 private hospitals, 1 hospital that operates under a public-private partnership (“PPP”), 7 private outpatient clinics and 2 senior residences). We believe ES Saúde benefits from a solid strategy (focused in expanding flagship hospitals since international expansion and relevant M&A shows low visibility) an experienced management team (unchanged CEO since Company`s launched in 2000, Board members have more than 10 years experience in the sector) and a stable shareholder structure. Lock-up period to selling shareholders and ESHCI is 270 days (November, 2014) however most of the finance agreements contain “change of control” provisions that require Espírito Santo International, SA to maintain a direct or indirect controlling interest in the Company. Company should benefit from an ageing population (increased spending on health care) to leverage on its current facilities. In 2012, ES Saúde diversified its business into PPP management, with the opening of its first public hospital. Currently company has plans to expand coverage and penetration in Portugal (expand capacity on its flagship hospitals Hospital da Luz and Hospital da Arrábida) while it`s targeting international expansion to Angola (recall our ES Saúde valuation does not include a possible expansion to Angola given low visibility). We believe ES Saúde growth will keep focused on Private Healthcare segment, since we do not believe Government will make new PPP agreements at short term (strategy to reduce Portugal`s debt was partially based on PPP`s renegotiation contracts). Overall, ES Saúde multiples are in line with peer group, thus current stock price shows a limited upside. However, we believe stock will outperform market on economic weakness, becoming an interesting stock to balance a portfolio with a defensive stock. ES Saúde B/S shows no problems (sustainable net debt decline, net/debt EBITDA reached 3.6x in 2013YE in line with peer group) while non-aggressive dividend payout (at least 25%) allows an organic expansion without stress. We are assuming a 3.6% Sales CAGR 13-16, benefiting from Private Healthcare business. We highlight Hospital da Luz increased capacity is expected to happen in 2018. João Flores, Equity Analyst +351 21 003 7830 [email protected] Healthcare PORTUGAL March 26 2014 Espírito Santo Saúde A healthy Company

Transcript of Espírito Santo Saúde

Page 1: Espírito Santo Saúde

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.

Initiating Coverage

Neutral (High Risk) TargetYE14(€): 3.85

Financials

Turnover (€ mn) 341.4 373.6 386.6 400.4EBITDA (€ mn) 38.8 59.0 60.1 64.0Net Income (€ mn) -2.1 14.0 14.4 18.1EPS (€) -0.02 0.16 0.15 0.19CEPS (€) 0.30 0.48 0.44 0.47Ratios

Pre-tax RoIC (%) 2.7 8.8 9.2 10.6RoE (%) -1.6 9.9 9.7 11.8Net Debt/EBITDA (x) 6.5 3.6 3.2 2.9Net Debt/Equity (%) 195.2 146.5 127.0 119.8Valuation

P / E (x) neg 20.2 24.0 19.1EV / Revenues (%) 170.0 132.3 139.4 132.9EV / EBITDA (x) 15.0 8.4 9.0 8.3Dividend Yield (%) 0.3% 0.0% 1.0% 1.3%Source: Millennium investment banking

2015E2013 2014E2012

Price: €3.62 Upside: 6.4%

Market Cap: €345.9mn Reuters: ESS.LS

No. Shares: 95.5mn Bloomberg: ESS PL

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Feb-14 Feb-14 Feb-14 Mar-14 Mar-14 Mar-14

ESS PSI20

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We have started the

� We have started the coverage of ES Saúde, with a YE14 price target of €3.85 per share, with a Neutral (High Risk) recommendation, meaning a 6% Upside.

� ES Saúde is one of the largest integrated private healthcare service groups by revenues in Portugal. The company ranks first in terms of private network population coverage and private network purchasing power coverage. The Company was established in 2000, and provides healthcare services through 18 facilities (8 private hospitals, 1 hospital that operates under a public-private partnership (“PPP”), 7 private outpatient clinics and 2 senior residences).

� We believe ES Saúde benefits from a solid strategy (focused in expanding flagship hospitals since international expansion and relevant M&A shows low visibility) an experienced management team (unchanged CEO since Company`s launched in 2000, Board members have more than 10 years experience in the sector) and a stable shareholder structure. Lock-up period to selling shareholders and ESHCI is 270 days (November, 2014) however most of the finance agreements contain “change of control” provisions that require Espírito Santo International, SA to maintain a direct or indirect controlling interest in the Company.

� Company should benefit from an ageing population (increased spending on health care) to leverage on its current facilities. In 2012, ES Saúde diversified its business into PPP management, with the opening of its first public hospital. Currently company has plans to expand coverage and penetration in Portugal (expand capacity on its flagship hospitals Hospital da Luz and Hospital da Arrábida) while it`s targeting international expansion to Angola (recall our ES Saúde valuation does not include a possible expansion to Angola given low visibility). We believe ES Saúde growth will keep focused on Private Healthcare segment, since we do not believe Government will make new PPP agreements at short term (strategy to reduce Portugal`s debt was partially based on PPP`s renegotiation contracts).

� Overall, ES Saúde multiples are in line with peer group, thus current stock price shows a limited upside. However, we believe stock will outperform market on economic weakness, becoming an interesting stock to balance a portfolio with a defensive stock. ES Saúde B/S shows no problems (sustainable net debt decline, net/debt EBITDA reached 3.6x in 2013YE in line with peer group) while non-aggressive dividend payout (at least 25%) allows an organic expansion without stress. We are assuming a 3.6% Sales CAGR 13-16, benefiting from Private Healthcare business. We highlight Hospital da Luz increased capacity is expected to happen in 2018.

João Flores, Equity Analyst

+351 21 003 7830

[email protected]

Healthcare

PORTUGAL

Mar

ch 2

6 2

014

Espírito Santo Saúde

A healthy Company

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Contents

Executive Summary 3

Portugal Healthcare Overview 4

Busines Model 5

Strategy 7

Business Areas 8

Shareholder Structure 10

Valuation Assumptions 12

KPI 16

DCF 18

Consolidated Estimates 20

Quarter Evolution 21

Annex I – Portugal Health sector overview 22

Annex II – History 25

Annex III - IPO Process 27

Annex IV - Peer multiples 28

Disclosures and Disclaimer 31

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Executive Summary

Company description:

Espírito Santo Saúde (ES Saúde) is one of the largest integrated private healthcare service groups by revenues in the Portuguese growing private healthcare market. The company ranks first in terms of private network population coverage (59% as of 2012) and private network purchasing power coverage (64% as of 2012), according to ES Saúde estimates based on the statistics of the INE.

The Company was established in 2000, and provides healthcare services through 18 facilities, comprising eight private general hospitals, one hospital that operates under a public-private partnership (“PPP”) agreement, seven private outpatient clinics and two senior residences. ES Saúde is present in northern, central and south-central Portugal, and in certain regions, it owns the sole private general hospital in operation. Company has a significant presence in two regions of the country with the highest purchasing power (Lisbon, where operates Hospital da Luz, Portugal`s largest private hospital and greater Oporto, where operates Hospital da Arrábida).

ES Saúde initiated its IPO process on September 2013, which culminated in the Company’s listing on the Lisbon Stock Exchange on February 12th 2014. The final offer price (the “Offer Price”) was set at €3.20 per share (IPO price range €3.20-€3.85 per share). New valuation

We have started the coverage of ES Saúde, with a YE14 price target of €3.85 per share, with a Neutral (High Risk) recommendation, meaning a 6% Upside. Overall, we believe ES Saúde benefits from a solid strategy (focused in expanding flagship hospitals since international expansion and relevant M&A show low visibility) an experienced management team (unchanged CEO since Company`s launched in 2000, Board members have more than 10 years experience in the sector) and a stable shareholder structure. Lock-up period to selling shareholders and ESHCI is 270 days (November, 2014) however most of the finance agreements contain “change of control” provisions that require Espírito Santo International, SA (Luxembourg) to maintain a direct or indirect controlling interest in the Company (or changes must be authorized by the relevant lender).

Company should benefit from an ageing population (increased spending on health care) to leverage on its current facilities. In 2012, ES Saúde diversified its business into PPP management, with the opening of its first public hospital. Currently company has plans to expand coverage and penetration in Portugal (expand capacity on its flagship hospitals Hospital da Luz and Hospital da Arrábida) while it`s targeting international expansion to Angola (recall our ES Saúde valuation does not include a possible expansion to Angola given low visibility).

We believe ES Saúde growth will keep focused on Private Healthcare segment, since we do not believe Government will make new PPP agreements at short term (strategy to reduce Portugal`s debt was partially based on PPP`s renegotiation contracts).

Overall, ES Saúde multiples are in line with peer group (page 28), thus current stock price shows a limited upside. However, we believe stock will outperform market on economic weakness, becoming an interesting stock to balance a portfolio with a defensive stock. We believe ES Saúde B/S shows no problems (sustainable net debt decline, net/debt EBITDA reached 3.6x in 2013YE in line with peer group) while non-aggressive dividend payout (at least 25%) allows an organic expansion without stress.

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Portugal Healthcare Overview

Public healthcare services

In Portugal, all residents have universal access to the National Health System (NHS), which is funded through taxation and co-payments from patients at the time service is provided (so –called “moderation fees”). Since 2007, adverse macroeconomic conditions in Portugal have exacerbated existing Government budgetary problems, which, combined with pressure to reduce costs in the healthcare system, have resulted in reduced Government investment in maintaining and upgrading public health facilities and in reductions in salaries paid to NHS physicians. Although the majority of ES Saúde operations are in its Private Healthcare in its Public Healthcare segment, it is exposed to the NHS because it operates Hospital Beatriz Ângelo (HBA) near Lisbon on the behalf of the NHS in the Public Healthcare segment. Additionally, c.2% of operating revenues was attributable to services provided to the NHS in its private hospitals, mostly related to waiting-list management and continued care services. Furthermore, ES Saúde is exposed to the public sector as a significant portion of its revenues are derived from Government`s employees’ health plans which represented c30% of company revenues. While recent changes have called for state employees to bear a larger share of the cost of their health plan and have reduced Government funding significantly (to 29% in 2013 vs 53.8% in 2012 and 48% in 2011), with minimal impact on the number of employees choosing to retain such plans, it is possible that any substantial future increases in employee’s required contributions could cause them to opt out of such plans and forego private healthcare insurance. On the other hand, ES Saúde believes budgetary cuts and reduced spending by the Government on the NHS could positively affect its results of operations should the Government decrease competition by partially of fully closing hospitals, increase participation for private sector players through PPP arrangements, or if access to NHS services become sufficiently difficult or limited to cause NHS patients to seek treatment in the private sector. Private healthcare services

In the private healthcare sector, revenues have, since 2007, remained resilient in the face of deteriorating economic conditions, difficulties of individuals and corporations in accessing financing, high unemployment levels and reduced discretionary spending. According to INE, during the period 2007-2011, total revenues of private Portuguese healthcare providers (whether from public or private sources) grew on average 5.5% per year, whereas total revenues of public healthcare providers (whether from public or private sources) decreased on average 0.7% per year during the same period. ES Saúde believes there are long-term trends which support further demand from private healthcare services in Portugal:

i) increasing financial constraints on the public healthcare system

ii) An ageing population

iii) a high and increasing disease burden

iv) an increase in health insurance penetration among the population (c. 20% of the population, according to APS, Portuguese Insurance Association)

v) an increase in the numbers of standard medical procedures

vi) technological advances in diagnosis and treatment

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Business model

Leading position in Portugal

ES Saúde is one of the largest providers by revenues of private healthcare in Portugal. The Company has a leading position by revenues in the private healthcare segment and is the second largest private player when combining public (PPPs) and private healthcare revenues, based on management estimates. The Portuguese private healthcare market (with revenues of approximately €5.5bn in 2011, INE Source) showed strong resilience through the crisis, with an average annual growth in revenues on private healthcare of 5.5% according to data from the Portuguese National Institute of Statistics (“INE”) of June 2013 (excluding pharmaceutical products sold in pharmacies and general health administrative expenses) between 2007 and 2011, a period during which the Portuguese economy contracted and public healthcare revenues dropped by approximately 0.7% on average per year. We highlight the public healthcare sector had revenues of c€6.5bn in 2011 (INE Source) which offers significant potential for value-creation by private operators, through the introduction of higher levels of efficiency and increased professionalized management. Broad geographic network of diverse healthcare facilities

The Company operates in northern, central and south-central Portugal, and has one of the broadest geographic footprint amongst private healthcare providers, with a significant presence in both the Lisbon and Oporto areas, the country’s two largest and most affluent regions. The Company operates facilities of different sizes and scopes, including complex, multi-disciplinary general hospitals, community hospitals and outpatient clinics, in addition to senior residences, owning the only private general hospital in Setúbal and Aveiro. ES Saúde network functions as a cohesive whole, with outpatient clinics providing a source of referrals to their hospitals. Experienced management team with a track record of managing growth based on clinical excellence

ES Saúde has increased its operational revenues year-on-year since inception in 2000, while maintaining a commitment to clinical excellence. The Company has been able to improve the profitability of the business units acquired and has exceeded its targets for the private sector greenfield projects completed to date. In 2012, ES Saúde diversified its business into the public health sector, with the opening in 2012 of HBA. Well-invested, modern real estate portfolio

ES Saúde has a substantial real estate hospital portfolio, comprising both the facilities where it operates and the land where the facilities are located, which had a net book value of €206mn as of 30 September 2013. In most cases, the ownership gives ES Saúde a high degree of flexibility to adapt facilities to supply new services or build additional capacity (do not require landlord approval for such changes). We highlight company has only three leased properties (corporate headquarters, IRIO facilities and the facilities of Clipóvoa). The Company’s facilities are amongst the most modern in the Portuguese healthcare sector, with the majority of them having been built or extensively refurbished in the last 10 years.

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Well-established relationships with all major Portuguese healthcare payers

The Company has well-established relationships, based on transparency and integrity, with all of the leading Portuguese private health insurance providers, as well as with all of the main sponsored health plans (public employer and private employer). The Company’s relationship with payers takes advantage of scale of operations, well-located network, proven ability to control medical and operating costs, and track record for delivering high-quality healthcare. Model based on best-in-class services and infrastructure, with qualified and incentivised clinical staff

The Company has been able to attract some of Portugal’s leading physicians, highly regarded in their field, supported by skilled nurses and other highly qualified health technicians, and offering some of the most advanced diagnostic equipment and treatment technology available in the market. The Company believes medical practitioners benefit from the scale and financial performance of ES Saúde, as its scale and financial performance enable the Company to provide some of the country’s most modern facilities and, in some cases, cutting-edge technology. Entry into PPP management within the healthcare sector

The opening in 2012 of HBA, the Company’s first public hospital, has promoted the diversification of the business model. In its first full year of operation, HBA has scored above average on a number of efficiency measures recorded by the Portuguese Healthcare Systems Central Administration (October 2013) and has been ranked amongst the top 10 public hospitals on several other metrics. In addition to these operational achievements, the Company has been able to improve HBA’s financial performance since its opening in the first quarter of 2012, increasing Operating Revenue by 88% in the nine months ended 30 September 2013 compared to the same period in the prior year. ES Saúde is well positioned to follow future growth from the public market due to the ability to offer high quality healthcare services at a lower cost than public operators. Additionally, this movement also brings improvements to ES Saúde competitive position, due to economies of scale and other synergies and ability to attract the best physicians.

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Strategy

Espírito Santo Saúde - SGPS, S.A., Public Company, is responsible for defining and implementing the Espírito Santo Group’s development strategy in the areas of healthcare delivery and senior residences.

The business group to which Espírito Santo Saúde belongs has a long tradition of quality and excellence, which enables it to attract and retain some of the best healthcare professionals and ensure ongoing investment in the most advanced technologies for cutting-edge medical practice, while at the same time ensuring the human aspects of care and respect for each patient’s individuality.

The principal strategic orientations of Espírito Santo Saúde includes:

continued enhancement of core business and commitment to providing healthcare services (increasing mix product mix, maximizing facilities,...)

leverage existing synergies between the Group`s business segments and facilities (continued centralised negotiations with payers and clinical consumables, maximize equipment utilization,...)

expand coverage and penetration in Portugal (i) development of capacity in existing facilities: ES Saúde is considering the expansion of Hospital da Luz and Hospital da Luz – Clínica de Oeiras and it is currently in negotiations to acquire additional space in Arrábida Shopping Center in Gaia for the expansion of Hospital da Arrábida; ii) expansion through acquisitions and Greenfield projects: is currently analysing the opportunity to further develop its presence in greater Oporto; iii) competing for further public market opportunities; iv) developing new business areas: teleradiology, genetics, transplantation programmes,...).

expand services internationally (ES Saúde is targeting expansions that involve a strong local partner: currently is analysing the development of a hospital in Luanda, Angola in partnership with a Teixeira Duarte group company). No agreement has been reached and any arrangements would be subject to relevant licenses and approvals, thus ES Saúde cannot predict with any certainty when construction works may start if an agreement is reached, given the existence of multiple procedural and bureaucratic variables which have not yet been identified or evaluated.

creation of specially designed residences for seniors - senior residences with services.

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Business Areas

ES Saúde operates a diversified business model, organised into three main operating segments:

Private Healthcare,

represented 77% of the Group’s Operating Revenue in 2013 and includes core acute care hospital and outpatient clinics business. This comprises eight general hospital facilities of various sizes, including Portugal’s largest private hospital by revenues in 2012, Hospital da Luz (according to Exame magazine), and seven private outpatient clinics, which offer a wide range of general hospital and clinical services, including intensive care units (“ICUs”), operating rooms, emergency rooms, maternity units and nuclear medicine, as well as specialized facilities in dementia care. Recall Hospital da Luz is ES Saúde flagship hospital (represented c35% of total revenues) while Hospital da Arrábida is the second largest facility in terms of revenues (reference Hospital in the greater Oporto area and northern of Portugal). Private healthcare segment revenues derive primarily from : i) the provision of outpatient hospital medical services, such as medical consultations, emergency room visits, outpatient surgeries, diagnostic exams and treatments; ii) the provision of inpatient hospital services, such as surgeries with hospital stay and intensive care; iii) the supply of clinical materials associated with such medical services, such as prosthetics and implants; iv) pharmaceutical products consumed in connection with medical services provided in the hospital; and v) non-medical services revenues, such as rehabilitation treatments and services provided by nurses, such as wound treatments . Private Healthcare segment revenues are recorded segment revenues are recorded at the time the healthcare services are provided. The private healthcare segment operating revenues totalled €288.8 million, 0.9% above 2012. There are two factors to be considered regarding this growth: i) change in the consolidation perimeter in 2013 due to new accounting rules regarding joint ventures, resulted in Hospital da Misericórdia de Évora being consolidated by the equity method in 2013 while in 2012 was proportionally consolidated, accounting for 1.2 p.p. variation in revenue growth, to 2.1%; and ii) significant reduction of surgery volumes from SIGIC (public hospitals waiting lists management system), which accounts for a 2.1 p.p. revenues growth reduction. Overall, excluding these two effects, private healthcare revenues grew 4.2%. Public Healthcare,

represented 22% of the Group’s Operating Revenue in 2013 and is attributable to the operations at Hospital Beatriz Ângelo (“HBA”), a newly built public hospital opened in January 2012 for which the Company provides clinical and other services under a PPP agreement with the Portuguese Government. The public healthcare segment (HBA) operating revenues reached €82.1 million, growing 57.2% when compared with the previous year. This growth is justified by the fact that 2012 was the first year of Hospital Beatriz Ângelo that gradually opened its clinical services from January 19th up to February 28th followed by an activity ramp-up period until September, which resulted in a lower revenue level. In 2013 the Hospital had its first full year of operation, with higher activity levels Public Healthcare segment revenues are attributable to sales and services provided by HBA, which are stipulated in the PPA agreement and comprise primarily: i) outpatient consultations; ii) the provision of emergency room visits; iii) surgeries (outpatient and inpatient) and deliveries; iv) the provision of non-surgical inpatient services; v) non-surgical outpatient services, such as day case psychiatry service, dialysis and chemotherapy services; and vi) emergency room availability, for which the NHS pays company on terms set out in the agreement. The PP agreement establishes and defines the relationship among SGHL and the

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Government, including each party`s duties and rights and how the services provided by HBA are valued and paid for. The contract provides for an annual negotiation to define HBA`s activity levels in the following year for each type of service. Prices, set out in the contract, are then applied to the negotiated activity levels. Through SGHL- Sociedade Gestora do Hospital de Loures, ES Saúde manages the provision of healthcare services in HBA pursuant to a PPP agreement with the Portuguese State. SGHL is obligated under PPP agreement to render healthcare services on behalf of the NHS through HBA for 10 years, starting from the opening (occurred on January 19, 2012).This term can be successively renewed for new terms that each may not exceed 10 years (however, total terms cannot exceed 30 years from December 31, 2009). Through HL- Sociedade Gestora do Edifício in which ES Saúde has a 10% stake, is also part to the PPP agreement, and is responsible for the construction (now completed) and maintenance, conservation and management of the HBA building and facilities. Portugal`s current budgetary restrictions may create an opportunity for private operators to create value in the € 6.5bn public-healthcare segment (under PPP models, concessions or management contracts), given the need to improve performance and profitability on public`s hospitals. However, we do not believe Government will make new PPP agreements at short term, since the strategy to reduce Portugal`s debt was partially based on PPP renegotiation contracts. Other Businesses,

represented 1% of the Group’s Operating Revenue (excluding inter-segment revenue) in 2013, which comprises two senior residences, aimed at individuals 65 years old and older, designed to offer an integrated residential solution for senior citizens. The other businesses segment (currently composed by the senior care facilities) obtained €3.5 million in operating revenues, a 21.4% growth versus 2012. This evolution was mainly driven by Casas da Cidade and by the development of services for early dementia patients (initiated in 2012), which allowed increasing capacity utilization with a value added product, which takes advantage of ESS extensive know-how in this area. This segment currently comprises revenues sales and services related to ES Saúde two senior residences which offer two primary services: temporary utilization rights (where the resident usually stays for a limited period of time and pays a monthly fee for the hospitality and additional services provided) and lifelong utilization rights, where the resident enters the residence at a certain age (65 and above) and stays until death or until he or she is transferred admission a lump sum amount, the size of which is inversely proportional to the age at entry, for the right of usage, followed by a monthly fee for hospitality and additional services (which is lower than the monthly fee charged to holders of temporary utilization rights). Senor residences revenues derives primarily from: i) monthly fees paid by residents under the temporary or lifelong utilization right model; ii) annual revenue recognition in the accounts of a portion of the upfront lump sums paid for lifelong utilization rights; iii) additional services used by residents, such as consultations with doctors and leisure activities; and iv) special health services, such as neuro-rehabilitation.

Corporate Centre

Encompasses activities of the holding company (ESS) and well as Espírito Santo Saúde – Serviços, a service company that operate healthcare facilities, covering all major hospitals except HBA.

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Shareholder Structure

ES Saúde Shareholder Structure

# SharesEconomic

StakeVoting Rights

*ES Health Care Investments (ESHCI) 48,726,550 51.00% 51.00%

Och-Ziff Capital Management LLC 5,200,000 5.44% 5.44%T. Rowe Price 4,790,000 5.01% 5.01%HSBC Holdings 4,600,000 4.81% 4.81%ESFG 3,228,283 3.38% 3.38%Invesco Limited 2,850,000 2.98% 2.98%Fidelity International Limited 2,800,000 2.93% 2.93%Fidelity Management & Research 2,500,000 2.62% 2.62%Own Shares 0 0.00% 0.00%Stakes below 2% 20,847,421 21.82% 21.82%Total Shares 95,542,254Voting Shares 95,542,254*Espírito Santo Health Care Investments is 55% held by Rio Forte

Rio Forte is 100% held by Espírito Santo International

Espírito Santo International is 56,5% held by Espírito Santo Control Source: Company data and Millennium investment banking

ESFG was expected not to keep any ES Saúde shares following the offer, however Credit Suisse (stabilization agent) exercised the over-allotment call option in respect of 2.881.113 ES Saúde shares (thus, the remaining 3.225.283 shares from total 6.106.396 shares used under stabilization period kept with ESFG).

Recall lock-up period to selling shareholders and ESCHI is 270 days (November, 2014) while to own Company shares is 180 days (August, 2014).

Espírio Santo Control: Shareholder Structure

# SharesEconomic

Stake

Maria do Carmo Moniz Espírito Santo Silva 3,147,463 19.37%José Manuel Espírito Santo Silva 3,011,268 18.53%António Luis Roquette Ricciardi 2,898,339 17.84%*Ricardo Espírito Santo Silva Salgado 2,770,183 17.05%Mário Mosqueira do Amaral (Heirs) 2,529,775 15.57%Others 1,892,136 11.64%

Total Shares 16,249,164Voting Shares 13,719,389*Banco Espírito Santo (BES) CEO Source: Company data and Millennium investment banking

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We highlight most of the finance agreements contain “change of control” provisions that require Espírito Santo International, SA (Luxembourg) to maintain a direct or indirect controlling interest in the Company (or changes must be authorized by the relevant lender). As of 30 September 2013, total debt outstanding under these agreements was €164mn. Whereas certain of these change of control provision are triggered if ESI`s ceasing to hold 51% of the share capital or votes of the Company and/or a change to the Group shareholding structure that leads to the Company ceasing to hold 100% of the relevant subsidiaries share capital.

Following the offer, ESI is expected to hold a controlling ownership interest in the Company through its 100% shareholding in Rio Forte, which will own a 55% interest in Espírito Santo Healthcare Investments (ESHCI), which in turn will own a 51% interest in the Company.

If, in the future, ESI`S direct or indirect ownership interest in the Company falls below the applicable thresholds, these changes of control provision could be triggered. The lenders under the relevant agreements would then have the right to accelerate repayment of these debts by the Company and/or the relevant subsidiary. According to ES Saúde, “(…) we can give no assurance that such provisions will not be triggered in the future (…)”.

ES Saúde Shareholder Structure Evolution

# Shares Economic Stake # Shares Economic Stake

Companhia de Seguros Tranquilidade 2,655,000 3.00% 0 0.00%Espírito Santo Financial Group (ESFG) 13,384,053 15.12% 3,228,283 3.38%

Rio Forte Investments 23,734,397 26.82% 0 0.00%Espírito Santo Health Care (ESHC) 48,726,550 55.06% 48,726,550 51.00%

Others 0 0.00% 43,587,421 45.62%

Total Shares 88,500,000 95,542,254

Imediately prior to the offeringImediately following the exercise of

the over-allotment in full

Source: Company data and Millennium investment banking

Companhia de Seguros Tranquilidade – is a subsidiary of ESFG, and therefore an affiliate of ES Saúde, is one of the largest non-life insurance companies in Portugal

ESFG – is a fully integrated financial services holding company with investments in both banking and insurance and an affiliate of ES Saúde

Rio Forte – is the holding company of the Espírito Santo Group for its non-financial investments and an affiliate of ES Saúde

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Valuation assumptions

� Overall, we believe ES Saúde growth will keep focused on Private Healthcare segment, since we do not believe Government will make new PPP agreements at short term (strategy to reduce Portugal`s debt was partially based on PPP`s renegotiation contracts).

� DCF: We are using a single DCF to valuate ES Saúde. We estimate Private Healthcare business unit will represent 78% of ES Saúde`s revenues (excluding inter-segment revenues) in 2014 while c97% of EBITDA (excluding inter-segment numbers).

� Consolidated Sales: increased by €67.8mn (+25.0% YoY), from €273.6mn for the year 2011 to €341.4mn for the year 2012. This was due to the opening of HBA in 2012, and increased activity levels at Hospital da Luz: i) Private Healthcare: revenues increased by €15.5mn (+5.7% YoY) to €286.3mn in 2012 due to increased activity, +10% medical consultations, +5% ER visits, +4% surgeries and deliveries, +6% imaging exams; ii) Public Healthcare revenues reached €52.2MN in 2012, is first year of operations (the hospital gradually opened services between 19 January and the end of February); iii) Other Businesses: revenues increased by €0.2mn (+5.4% YoY) to €2.9mn in 2012, due to growth in activity of “Casas da Cidade”, as it was able to attract new residents; iv) Corporate Center: revenues increased by €7.5mn (+160% YoY) to €12.2mn in 2012 due to the establishment of ESS-Serviços to provide shared services to certain Group companies for a fee (there was a change in accounting practices which partially explains strong growth rate).

Espírito Santo Saúde payer mix has changed in 2013, mostly because of the activity increase in Hospital Beatriz Ângelo (PPP). To highlight the private healthcare segment, insurance companies and private companies’ employees’ healthcare plans gained share on the segment’s total revenues, from 33.8% to 34.8% and from 7.5% to 8.3%, respectively. Out-of-pocket clients maintained their share of private revenues (15.2%) as well as the State employees’ healthcare plans (ADSE, military, police forces, etc. Which maintained a 38.4% share), while there was a significant decrease on the services provided to public hospitals (from 5.5% to 3.4% of private revenues), due to the reduction in surgical activity provided for waiting lists management systems, as mentioned earlier.

We are assuming a CAGR 13-16 for consolidated sales of 3.6%, benefiting from Private Healthcare business. We highlight Hospital da Luz increased capacity is expected to happen in 2018. Recall we are not including M&A in our estimates neither Angola`s project, given low visibility.

� EBITDA: In consolidated terms, Espírito Santo Saúde’s EBITDA was €59.0 million, representing a growth of 51.8% when compared with 2012. The EBITDA margin increased from 11.4% in 2012 to 15.8% in 2013. This evolution was mainly due to the profitability improvement in the public healthcare segment, resulting from increased levels of activity. On the private healthcare segment, excluding the effect of the impairments accounted in 2012 due to land value decrease in unused real estate (€5.0 million impairment costs), the EBITDA margin increased from 19.8% in 2012 to 20.3% in 2013. This growth was influenced by ESS winning a VAT related lawsuit (€0.6 million) and by a release of trade receivables provisions due to recovery of older outstanding client debt and collections process improvement (€1.4 million).

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Millennium investment banking ES Saúde March 26, 2014

On the public healthcare segment (HBA), the activity increase vis-à-vis 2012 generated a significant increase in operating revenues (57.2% growth), which allowed for the dilution of fixed costs, especially personnel costs, already present since the opening of the Hospital, allowing to reach positive EBITDA already in the second year of activity, the first full year of the Hospital. Consolidated Net Income attributable to shareholders totaled €14.0 million, based on the significant improvement of EBITDA margin and on the financial costs decrease (-16.5% versus 2012) due to lower Euribor rates and improvement of spreads charged by financial institutions.

EBITDA Margins: We estimate consolidated EBITDA margin will decline c.30pb to 15.5%, penalized by new costs (IPO process and increased corporate centre structure). However, EBITDA margin Adj.is expected to slightly increase 20bp to 16.0%.

� The IPO process represented additional costs to ESS (to be reflected in 2014 accounts) of €1.8 million. In addition, the adjustments made at the corporate governance level and in the corporate center structures, in order to respond to needs arising from the fact that ESS is a listed company, will result in up to €1.2 million additional recurrent costs (not present in 2013).

� D&A: numbers increased by €2.1mn (+7.9% YoY), from €26.4mn to €28.5mn for the year 2012. The increase was primarily due to the investment made in order to fully equip HBA, which only began to be depreciated in 2012. Depreciation relates to real estate and equipment (clinical and non-clinical) while amortization relates primarily to intangible assets. D&A expenses level reflect the fact that ES Saúde owns nearly all the facilities where it operates. We estimate D&A will stabilize around 3.4% of sales

� Net Financials: Interest and other financial expenses and losses increased by €1.4 mn (+9.9% YoY), from €14.3mn for the year 2011 to €15.7mn for the year 2012. This was primarily due to higher spreads in new financing and refinancing operations, and was partially offset by the decrease in outstanding debt and the decrease in Euribor levels. The higher spreads were mainly due to external conditions, such as country risk and the weak economic and financial environment in Portugal.

� In connection with the offering, the Company will pay underwriting fees and expenses of c€1.8mn in 1Q14

� Tax Rate: ES Saúde is subject to corporate tax at the Group level, which is currently 25%, of taxable profit per year. In addition, each Group company is also subject to municipal and national surtax charges, which increase effective tax rate at consolidated level. Company expects the corporate tax at the Group level will decline to 23% in 2014 and eventually to 21% in 2015. We estimate Effective tax rate will stabilize around 29.7%

� Capex: Capex reached €23.6mn in 2010 (expansion Capex reached €18.6mn: expanded capacity on Hospital da Arrábida and Cliria-Hospital Privado), €7.5mn in 2011 (expansion Capex: €0.7mn on medical equipment) and €32.5mn in 2012 (expansion Capex €27.6mn: equipments for HBA, expansion of Hospital do Mar and renovation of Cliria-Clínica de Oiã). In 2013 Company continued the expansion efforts of Hospital do Mar, renovation of Cliria-Clínica de Oiã and continued investing in HBA (medical equipments). According to ES Saúde it will keep investing in (very) expensive medical equipments and also expects to undertake certain expansions in its facilities. We estimate Capex will reach c.€14mn in 2014, while it is expected to increase following years, reflecting investment to expand capacity of Hospital da Luz (c.€20mn additional Capex per year in 2015-2017). We decided to increase Capex/Sales ratio in terminal value to 3.9% from current c3% (pro-forma number excluding strong expansion plans) since we believe number will be closer to peer group (currently 5%-7%).

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Millennium investment banking ES Saúde March 26, 2014

� Working capital decreased to €0.8 mn, mainly due to a reduction in clients’ receivables (from 99 days of

revenues from sales and services provided in 2012 to 83 days in 2013), which resulted from extraordinary payments from a few payers in the last quarter and from continuous improvement of the revenue cycle process. There was also a decrease in suppliers’ payables (from 102 days of inventory consumed, costs of services and materials and personnel expenses in 2012 to 94 days in 2013), justified by suppliers offering better conditions in exchange for a reduction in payment days.

We estimate a working capital changes will reduce to c€1mn 2015 onwards, since we believe further gains will be limited. Estimate CF (adjusted from changes in WC) should reflect this effect (CFO is estimated to decline to €46mn in 2014 from €52mn in 2013 (when ES Saúde benefited from extraordinary payments in the last quarter).

� Debt: Net debt decreased consistently year on year, reaching €210mn YE2013. mainly driven by operating cash flow generation from the several Group’s facilities. ES Saúde reduced the net debt while increased EBITDA margins. We expect net debt will decline to c.€191mn by 2014YE, while pace of decline will slowdown in 2015, reflecting investments in Hospital da Luz. Net debt / EBITDA reached 3.6x YE13 vs 6.5x YE12.

On 2013 year close, ES Saúde consolidated financial debt totaled €245million, with €207mn in bank loans and €38mn in financial leases. Bank loans were split across short and medium-long term commercial paper programs (€174mn), medium-long term loans (€28 mn) and short term facilities (€5mn), with an overall average spread over Euribor of 2.7% and an average maturity of 4 years.

� Dividends: The Group`s consolidated net income for the period ended 31 December 2012 was negative. However, the Company`s unconsolidated net income for the same period was positive (€17mn) which resulted in the payment of dividends in 2013. For 2014, ES Saúde does not expect to pay any dividend in respect of the year ended on 31 December 2013 given the capital increase completed in Feb 2014 as part of the Offering in order to reduce the Company`s debt in order to improve its financial position an increase flexibility for future investment. We highlight the Board of Directors expects to propose the payment of a dividend from 2015 onwards (beginning in respect of the financial year ending 31 Dec 2014) representing at least 25% of consolidated net income. Our valuation already considers 25% pay-out 2015 onwards.

� WACC assumptions (please see table in page 18). We kept our WACC approach in order to better capture specific country risks and also to discriminate between temporary shocks and more structural changes. We differentiate between WACC applied to the first half of the explicit period, WACC applied to the interim period and WACC applied to terminal value in order to discriminate between temporary shocks and more structural changes, such as the increase in the Portuguese sovereign yield spread. Cost of equity is calculated as the sum of the risk free rate plus country risk premium and market risk premium, the latter two multiplied by the levered beta. Risk free rate is the German 10-year Government bond yield. Country risk premium results from the difference between the local Sovereign yield and the German 10-year Government bond yield multiplied by a volatility factor (ratio that relates equity with bonds volatility). For country risk premium in perpetuity, we assume that the German and local 10-year sovereign yields will converge to respective last 10-year averages. We assumed an interim period to smooth the convergence process. Market risk premium is set at 5%.

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Millennium investment banking ES Saúde March 26, 2014

� We assume the German 10-year Government yield bond at 2.00% while to the local Sovereign 10-year Government yield, we assume the Portuguese 10-year Government yield bond, at 5%. Changes for both the German 10-year Government yield bond and the local Sovereign 10-year Government yield will occur when rates move respectively 50bps and 100bps upwards or downwards. We are applying a WACC of 11.18% in the first half of the explicit period, 10.07% to the interim period and a WACC of 8.70% to terminal value.

� Stable shareholder`s structure. According to CMVM fillings, Espírito Santo Health Care Investments (ESHCI) has a majority stake on ES Saúde (51%) and it’s expected to keep as a relevant shareholder. Recall if ESHCI reduced its stake, some lenders under the relevant agreements would then have the right to accelerate the repayment of debts.

� Financial Calendar:

AGM: 23th May 2014

1Q14 Earnings: 26th May 2014 (after market closing)

2Q14 Earnings: 25th August 2014 (after market closing)

3Q14 Earnings: 25th November 2014 (after market closing)

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% 2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E

CAGR

13-16

CAGR

16-24Consolidated Sales 249.9 273.6 341.4 373.6 386.6 400.4 415.0 430.1 459.3 476.1 491.6 507.7 522.3 535.2 546.2 3.6% 3.5%

Private Healthcare 247 271 286 289 300 312 325 338 365 379 393 407 419 429 438 4.0% 3.8%Public Healthcare 0 0 52 82 84 85 87 89 91 92 94 96 98 100 102 2.0% 2.0%Other Businesses 3 3 3 3 4 4 4 4 4 5 5 5 5 6 6 5.0% 5.0%Corporate Center 5 5 12 9 8 8 9 9 9 9 9 10 10 10 10 -1.0% 2.0% Adjustments -4 -5 -12 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 -10 0.0% 0.0%Consolidated Sales Growth % 9.5% 24.8% 9.4% 3.5% 3.6% 3.6% 3.6% 6.8% 3.7% 3.3% 3.3% 2.9% 2.5% 2.1%

EBITDA 37.5 46.5 38.8 59.0 60.1 64.0 67.4 70.1 77.4 80.9 83.7 86.6 89.2 91.4 91.0 4.5% 3.8%

EBITDA Growth % 24.0% -16.6% 52.1% 1.8% 6.5% 5.3% 4.0% 10.4% 4.5% 3.5% 3.5% 3.0% 2.5% -0.4%EBITDA Margin 15.0% 17.0% 11.4% 15.8% 15.5% 16.0% 16.2% 16.3% 16.8% 17.0% 17.0% 17.1% 17.1% 17.1% 16.7%

EBITDA Margin Dif 2.0pp -5.6pp 4.4pp -0.2pp 0.4pp 0.3pp 0.1pp 0.6pp 0.1pp 0.0pp 0.0pp 0.0pp 0.0pp -0.4pp

*EBITDA adj. 37.5 46.5 43.8 59.0 61.9 64.0 67.4 70.1 77.4 80.9 83.7 86.6 89.2 91.4 91.0 4.5% 3.8%

*EBITDA Margin adj. 17.0% 12.8% 15.8% 16.0% 16.0% 16.2% 16.3% 16.8% 17.0% 17.0% 17.1% 17.1% 17.1% 16.7%

D&A -26.5 -26.4 -28.5 -28.1 -28.6 -28.0 -27.4 -26.7 -26.6 -25.7 -24.6 -23.4 -21.9 -20.3 -18.6 -0.9% -4.7%

D&A % Sales -10.6% -9.6% -8.3% -7.5% -7.4% -7.0% -6.6% -6.2% -5.8% -5.4% -5.0% -4.6% -4.2% -3.8% -3.4%EBIT 10.9 20.0 10.4 30.9 31.5 35.9 40.0 43.4 50.7 55.2 59.1 63.2 67.2 71.0 72.4 8.9% 7.7%

Net Financials -8 -11 -12 -10 -11 -10 -10 -10 -10 -10 -9 -9 -9 -8 -8 -1.4% -2.7%EBT 2.7 9.0 -2.0 20.5 20.7 25.9 30.0 33.5 40.8 45.5 49.7 54.0 58.4 62.6 64.4 13.5% 10.0%

Taxes -1 -4 0 -7 -6 -8 -9 -10 -12 -13 -15 -16 -17 -19 -19 11.0% 10.0% Effective tax rate (%) -51.9% -47.8% 0.0% -31.7% -29.7% -29.7% -29.7% -29.7% -29.7% -29.7% -29.7% -29.7% -29.7% -29.7% -29.7%EBM 1.3 4.7 -2.0 14.1 14.6 18.2 21.1 23.6 28.7 32.0 34.9 38.0 41.1 44.0 45.3 14.4% 10.0%

Minorities 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 58.9% 6.7%Net Income 1.3 4.9 -2.1 14.0 14.4 18.1 20.9 23.4 28.5 31.8 34.7 37.8 40.8 43.7 45.0 14.2% 10.0%

EPS 0.01 0.06 -0.02 0.16 0.15 0.19 0.22 0.25 0.30 0.33 0.36 0.40 0.43 0.46 0.47 11.3% 10.0%

Capex 24 8 33 13 14 36 37 45 16 17 18 19 20 20 21 43.0% -6.7%

Capex / sales 9.4% 2.7% 9.5% 3.3% 3.5% 9.0% 8.8% 10.5% 3.6% 3.6% 3.7% 3.7% 3.8% 3.8% 3.9%EBITDA - Capex 14 39 6 46 47 28 31 25 61 64 66 68 70 71 70 -12.8% 10.8%(EBITDA - Capex) / sales 6% 14% 2% 12% 12% 7% 7% 6% 13% 13% 13% 13% 13% 13% 13%

Dividend per Share 0.00 0.01 0.01 0.00 0.04 0.05 0.05 0.06 0.07 0.08 0.09 0.10 0.11 0.11 0.12 nm 10.0%

Pay Out ratio 0.0% 18.1% nm 0.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0%Dividend (€/share) 0.00 0.01 0.01 0.00 0.04 0.05 0.05 0.06 0.07 0.08 0.09 0.10 0.11 1.11 2.12 nm 57.9%

# Shares outstanding (mn) 88.5 88.5 88.5 88.5 95.5 95.5 95.5 95.5 95.5 95.5 95.5 95.5 95.5 95.5 95.5 2.6% 0.0%Closing price YE 3.62 3.62 3.62 3.62 3.62 3.62 3.62 3.62 3.62 3.62 3.62 3.62 0.0% 0.0%

Dvd Yield 0.0% 0.3% 0.3% 0.0% 1.0% 1.3% 1.5% 1.7% 2.1% 2.3% 2.5% 2.7% 2.9% 30.8% 58.5%

*Impairment losses in 2012 (€5mn) related to unoccupied land plots, following a decline in its market value*Excluding costs in 1Q14 (€1.8mn) retaled to listing ES Saúde

Source: Company data and Millennium investment banking

KPI

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% 2011 2012 2013 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2024ECAGR

13-16

CAGR

16-24Sales 270.8 286.2 288.8 300.4 312.4 324.9 337.9 364.9 379.5 392.8 437.8 4.0% 3.8%

Sales Growth % 9.7% 5.7% 0.9% 4.0% 4.0% 4.0% 4.0% 8.0% 4.0% 3.5% 2.0%

% of Group`s Revenue 99% 84% 77% 78% 78% 78% 79% 79% 80% 80% 80%

EBITDA 57.5 51.8 58.5 61.3 62.5 65.0 67.6 74.8 77.8 80.5 87.6 3.6% 3.8%

EBITDA Growth % 31.3% -9.9% 12.9% 4.7% 2.0% 4.0% 4.0% 10.7% 4.0% 3.5% -0.5%EBITDA Margin 21.2% 18.1% 20.3% 20.4% 20.0% 20.0% 20.0% 20.5% 20.5% 20.5% 20.0%

% of Group`s EBITDA 124% 134% 99% 102% 98% 96% 96% 97% 96% 96% 96%

EBITDA Margin Dif 3.5pp -3.1pp 2.2pp 0.1pp -0.4pp 0.0pp 0.0pp 0.5pp 0.0pp 0.0pp -0.5pp

excluding change in cosolidation perimeter and reduction in surgery volumes, healthcare revenues grew 4.2% in 2013

Higher growth rate reflects Hospital da Luz expansion

EBITDA margins decline in 2015-17 reflects Hospital da Luz expansion plan

Source: Millennium investment banking

Recall ES Saúde is considering the development of capacity in its existing facilities through the expansion of Hospital da Luz and Hospital da Luz- Clínica dos Poetas, and is currently in negotiations t acquire additional space in the Arrábida Shopping Center in Gaia for the expansion of Hospital da Arrábida.

% 2011 2012 2013 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2024ECAGR

13-16

CAGR

16-24Sales 0.0 52.2 82.1 83.7 85.4 87.1 88.8 90.6 92.4 94.2 102.0 2.0% 2.0%

Sales Growth % nm nm 57.2% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% % of Group`s Revenue 0% 15% 22% 22% 21% 21% 21% 20% 19% 19% 19%

EBITDA -3.5 -11.7 1.1 1.7 2.6 3.5 3.6 3.6 4.2 4.2 4.6 46.8% 3.5%

EBITDA Growth % 775.0% 234.3% -109.4% 52.2% 53.0% 36.0% 2.0% 2.0% 14.8% 2.0% 2.0%EBITDA Margin nm -22.4% 1.3% 2.0% 3.0% 4.0% 4.0% 4.0% 4.5% 4.5% 4.5%

% of Group`s EBITDA -8% -30% 2% 3% 4% 5% 5% 5% 5% 5% 5%

EBITDA Margin Dif nm nm 23.8pp 0.7pp 1.0pp 1.0pp 0.0pp 0.0pp 0.5pp 0.0pp 0.0pp

Source: Millennium investment banking

% 2011 2012 2013 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2024ECAGR

13-16

CAGR

16-24Sales 2.7 2.8 3.5 3.6 3.8 4.0 4.2 4.4 4.6 4.9 5.9 5.0% 5.0%

Sales Growth % 8.0% 3.7% 23.4% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% % of Group`s Revenue 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%

EBITDA -0.5 -0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.3 0.3 0.3 6.1% 3.8%

EBITDA Growth % -60.3% -33.6% -155.4% 8.4% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%EBITDA Margin nm -11.9% 5.3% 5.5% 5.5% 5.5% 5.5% 5.5% 5.5% 5.5% 5.0%

% of Group`s EBITDA -1% -1% 0% 0% 0% 0% 0% 0% 0% 0% 0%

EBITDA Margin Dif nm nm 17.2pp 0.2pp 0.0pp 0.0pp 0.0pp 0.0pp 0.0pp 0.0pp 0.0pp

Source: Millennium investment banking

KPI - Private Healthcare

KPI

- Public Healthcare

KPI - Other Businesses

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Millennium investment banking ES Saúde March 26, 2014

€ million 2012 2013 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2023E 2024ECAGR

13-16

CAGR

16-24EBIT 10 31 31 36 40 43 51 55 59 71 72 8.9% 7.7%Depreciation & Amortisation 29 28 29 28 27 27 27 26 25 20 19 -0.9% -4.7%Cash Flow from Op. Act 39 59 60 64 67 70 77 81 84 91 91 4.5% 3.8%

Income Taxes -3 -8 -8 -10 -11 -12 -13 -15 -16 -19 -19 8.9% 7.7%Capital Expenditure -33 -13 -14 -36 -37 -45 -16 -17 -18 -20 -21 43.0% -6.7%Working Capital Changes 6 11 3 1 1 1 1 1 1 0 0 -61.0% -11.3%Free Cash Flow 10 49 42 19 21 14 49 50 51 53 51 -24.7% 11.8%

Discount Factor 1.00 0.90 0.82 0.74 0.67 0.61 0.56 0.43 0.39Discounted Cash Flow 41.52 17.12 17.06 10.51 33.06 30.50 28.21 22.50 20.09PV of Cash Flows 271

Terminal Value 306

Enterprise Value 577

Source: Millennium investment banking

€ million EV Stake Attrib. Method

ES Saúde 577 100% 577.2 DCF 9.6x EV/EBITDA 14 1.5x EV/SALES 14YE13 Net Debt & Adjustments 209.7 Consolidated Net Debt YE13 209.7 Dividends to be paid out in 2014 0.0Equity Value 367.5Number of Shares (mn) 95.5Price target YE14 (€ / share) 3.85

Implied Multiples

Source: Millennium investment banking

Risk-Free Rate 2.00% 2.00% 2.00%Country Risk Premium 4.00% 3.00% 2.00%Market Premium 5.00% 5.00% 5.00%Unlevered Beta 1.00 1.00 1.00Levered Beta 1.24 1.24 1.24Cost of Equity 13.13% 11.89% 10.66%

Cost of Debt 7.50% 6.50% 4.00%Corporate Tax Rate 29.0% 29.0% 29.0%After-tax Cost of Debt 5.33% 4.62% 2.84%

Leverage 25.00% 25.00% 25.00%WACC 11.18% 10.07% 8.70%

Perpetuity Growth Rate 2.01%

Real Perpetuity growth rate 1.00%LT Inflation 1.00%WACC-g 6.69%

Explicit Period Interim Period Terminal Value

Source: Millennium investment banking

FCF - ES Saúde

DCF - ES Saúde

DCF Assumptions

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Sales Estimates Breakdown

2011 2012 2013 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2024ECAGR

13-16

CAGR

16-24Private Healthcare 271 286 289 300 312 325 338 365 379 393 438 4.0% 3.8%Public Healthcare 0 52 82 84 85 87 89 91 92 94 102 2.0% 2.0%Other Businesses 3 3 3 4 4 4 4 4 5 5 6 5.0% 5.0%Corporate Center 5 12 9 8 8 9 9 9 9 9 10 -1.0% 2.0% Adjustments -5 -12 -10 -10 -10 -10 -10 -10 -10 -10 -10 0.0% 0.0%Total 274 341 374 387 400 415 430 459 476 492 546 3.6% 3.5%

Source: Company data and Millennium investment banking

% 2011 2012 2013 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2024E

Private Healthcare 9.7% 5.7% 0.9% 4.0% 4.0% 4.0% 4.0% 8.0% 4.0% 3.5% 2.0%Public Healthcare nm nm 57.2% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%Other Businesses 8.0% 3.7% 23.4% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%Corporate Center 2.2% 159.6% -26.8% -5.0% 0.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%Total 9.5% 24.8% 9.4% 3.5% 3.6% 3.6% 3.6% 6.8% 3.7% 3.3% 2.1%

Source: Company data and Millennium investment banking

2011 2012 2013 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2024E

Private Healthcare 99.0% 83.8% 77.3% 77.7% 78.0% 78.3% 78.6% 79.4% 79.7% 79.9% 80.1%Public Healthcare 0.0% 15.3% 22.0% 21.7% 21.3% 21.0% 20.6% 19.7% 19.4% 19.2% 18.7%Other Businesses 1.0% 0.8% 0.9% 0.9% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.1%Corporate Center 1.7% 3.6% 2.4% 2.2% 2.1% 2.1% 2.1% 2.0% 1.9% 1.9% 1.9% Adjustments -1.7% -3.5% -2.6% -2.5% -2.4% -2.3% -2.2% -2.1% -2.0% -2.0% -1.8%Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

Source: Company data and Millennium investment banking

EBITDA Estimates Breakdown

2011 2012 2013 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2024ECAGR

13-16

CAGR

15-23Private Healthcare 58 52 59 61 62 65 68 75 78 81 88 3.6% 4.3%Public Healthcare -4 -12 1 2 3 3 4 4 4 4 5 46.8% 7.6%Other Businesses -1 0 0 0 0 0 0 0 0 0 0 6.1% 4.4%Corporate Center -7 -1 -1 -3 -1 -1 -1 -1 -1 -1 -1 17.5% 1.4% Adjustments 0 0 0 0 0 0 0 0 0 0 0 nm nmTotal 47 39 59 60 64 67 70 77 81 84 91 4.5% 4.5%

Source: Company data and Millennium investment banking

% 2011 2012 2013 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2024E

Private Healthcare 21.2% 18.1% 20.3% 20.4% 20.0% 20.0% 20.0% 20.5% 20.5% 20.5% 20.0%Public Healthcare nm -22.4% 1.3% 2.0% 3.0% 4.0% 4.0% 4.0% 4.5% 4.5% 4.5%Other Businesses -18.5% -11.9% 5.3% 5.5% 5.5% 5.5% 5.5% 5.5% 5.5% 5.5% 5.0%Corporate Center -148.9% -8.2% -9.0% -36.2% -15.0% -15.0% -14.5% -14.5% -14.5% -14.0% -14.0%Total 17.0% 11.4% 15.8% 15.5% 16.0% 16.2% 16.3% 16.8% 17.0% 17.0% 16.7%

YoY 2.0pp -5.6pp 4.4pp -0.2pp 0.4pp 0.3pp 0.1pp 0.6pp 0.1pp 0.0pp -0.4pp

Source: Company data and Millennium investment banking

% 2011 2012 2013 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2024E

Private Healthcare 31.3% -9.9% 12.9% 4.7% 2.0% 4.0% 4.0% 10.7% 4.0% 3.5% -0.5%Public Healthcare 775.0% 234.3% -109.4% 52.2% 53.0% 36.0% 2.0% 2.0% 14.8% 2.0% 2.0%Other Businesses 400.0% -33.6% -155.4% 8.4% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%Corporate Center 20.7% -85.7% -20.0% 284.1% -58.6% 2.0% -1.4% 2.0% 2.0% -1.5% 2.0%Total 24.0% -16.6% 52.1% 1.8% 6.5% 5.3% 4.0% 10.4% 4.5% 3.5% -0.4%

Source: Company data and Millennium investment banking

Consolidated Sales

Sales Growth

Sales breakdown

by format %

EBITDA

EBITDA margin

EBITDA

growth %

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Millennium investment banking ES Saúde March 26, 2014

Consolidated estimates

2011 2012 2013 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2024ECAGR

13-16

CAGR

16-24Sales 274 341 374 387 400 415 430 459 476 492 546 3.6% 3.5%

EBITDA 46 39 59 60 64 67 70 77 81 84 91 4.5% 3.8%

Depreciation & Amortisation -26 -29 -28 -29 -28 -27 -27 -27 -26 -25 -19 -0.9% -4.7%EBIT 20 10 31 31 36 40 43 51 55 59 72 8.9% 7.7%

Net Financials -11 -12 -10 -11 -10 -10 -10 -10 -10 -9 -8 -1.4% -2.7%EBT 9 -2 21 21 26 30 34 41 45 50 64 13.5% 10.0%

Taxes -4 0 -7 -6 -8 -9 -10 -12 -13 -15 -19 11.0% 10.0%EBM 5 -2 14 15 18 21 24 29 32 35 45 14.4% 10.0%

Minorities 0 0 0 0 0 0 0 0 0 0 0 58.9% 6.7%Net Income 5 -2 14 14 18 21 23 29 32 35 45 14.2% 10.0%

EBITDA margin (%) 17.0% 11.4% 15.8% 15.5% 16.0% 16.2% 16.3% 16.8% 17.0% 17.0% 16.7%EBIT margin (%) 7.3% 3.0% 8.3% 8.1% 9.0% 9.6% 10.1% 11.0% 11.6% 12.0% 13.3%Effective tax rate (%) 47.8% 0.0% 31.7% 29.7% 29.7% 29.7% 29.7% 29.7% 29.7% 29.7% 29.7%Net margin (%) 1.8% -0.6% 3.8% 3.7% 4.5% 5.0% 5.4% 6.2% 6.7% 7.1% 8.2%

Source: Company data and Millennium investment banking

2011 2012E 2013 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2024E

Sales 9.5% 24.8% 9.4% 3.5% 3.6% 3.6% 3.6% 6.8% 3.7% 3.3% 2.1%

EBITDA 24.1% -16.4% 52.2% 1.8% 6.5% 5.3% 4.0% 10.4% 4.5% 3.5% -0.4%

Depreciation & Amortisation -0.4% 8.0% -1.4% 1.8% -2.0% -2.3% -2.6% -0.1% -3.5% -4.4% -8.7%EBIT 83.5% -48.0% 197.5% 1.7% 14.2% 11.3% 8.6% 16.8% 8.8% 7.2% 2.0%

Net Financials 34.1% 12.7% -16.1% 3.2% -6.1% -1.0% -1.0% 0.0% -1.8% -2.5% -4.9%EBT 233.3% -122.2% -1126.8% 1.0% 24.7% 16.0% 11.7% 21.8% 11.3% 9.2% 2.9%

Taxes 207.1% -100.0% #DIV/0! -5.4% 24.7% 16.0% 11.7% 21.8% 11.3% 9.2% 2.9%EBM 261.5% -142.6% -804.5% 3.5% 24.7% 16.0% 11.7% 21.8% 11.3% 9.2% 2.9%

Minorities #DIV/0! -150.0% -55.0% 287.1% -27.9% 43.7% -3.7% 24.3% 5.5% 8.8% 2.1%Net Income 276.9% -142.9% -768.8% 2.6% 25.4% 15.8% 11.9% 21.8% 11.4% 9.2% 2.9%

Source: Company data and Millennium investment banking

Fixed Assets 368.0 367.6 351.1 336.9 333.4 329.6 325.2 322.2 316.2 308.6 266.5Working Capital 68.9 12.9 1.7 5.1 5.7 6.3 6.9 8.3 9.0 9.6 11.2Invested Capital 436.9 380.5 352.8 341.9 339.1 335.9 332.1 330.6 325.2 318.2 277.7

Net Debt 305.0 251.6 209.7 191.3 184.8 178.7 172.3 165.6 156.9 146.9 95.9Minority Interests 1.4 1.5 1.5 1.6 1.6 1.7 1.7 1.8 1.9 2.0 2.2Equity 130.5 127.4 141.6 149.1 152.7 155.6 158.1 163.2 166.4 169.3 179.6Capital Employed 436.9 380.5 352.8 341.9 339.1 335.9 332.1 330.6 325.2 318.2 277.7

2024E2014E 2015E€ million 2011 2012 2013 2016E 2017E 2018E 2019E 2020E

Source: Company data and Millennium investment banking

Cash Flow from Operations* 41.1 32.8 52.7 46.5 46.8 49.1 50.9 56.8 58.4 60.1 64.1Cash Flow from Investing -7.5 -32.5 -12.5 -13.5 -36.0 -36.5 -45.1 -16.3 -17.1 -17.9 -21.0Cash Flow from Financing -34.2 -54.3 -42.8 -11.5 -10.2 -10.8 -11.7 -6.0 -7.3 -8.1 -11.2EBITDA - Operating Capex 53.9 71.3 71.5 73.6 100.0 103.9 115.1 93.7 98.0 101.7 112.0

2024E2015E2011 2012 2013 2014E€ million 2016E 2017E 2018E 2019E 2020E

Source: Company data and Millennium investment banking

EBITDA 46.4 38.8 59.0 60.1 64.0 67.4 70.1 77.4 80.9 83.7 91.0Capex 7.5 32.5 12.5 13.5 36.0 36.5 45.1 16.3 17.1 17.9 21.0EBITDA-Capex 53.9 71.3 71.5 73.6 100.0 103.9 115.1 93.7 98.0 101.7 112.0Dividends 0.9 0.9 0.0 3.6 4.5 5.2 5.9 7.1 7.9 8.7 11.3Payout Ratio 18% nm 0% 25% 25% 25% 25% 25% 25% 25% 25%EBITDA-Capex-Dividends 53.0 70.4 71.5 70.0 95.5 98.7 109.3 86.5 90.1 93.0 100.8Financial Costs, Net -11.0 -12.4 -10.4 -10.7 -10.1 -10.0 -9.9 -9.9 -9.7 -9.5 -8.0Net Debt 305.0 251.6 209.7 191.3 184.8 178.7 172.3 165.6 156.9 146.9 95.9

Net Debt / EBITDA (x) 6.6 6.5 3.6 3.2 2.9 2.7 2.5 2.1 1.9 1.8 1.1Net Debt / Equity (x) 2.3 2.0 1.5 1.3 1.2 1.1 1.1 1.0 0.9 0.9 0.5Net Debt / Capital Employed (x) 0.7 0.7 0.6 0.6 0.5 0.5 0.5 0.5 0.5 0.5 0.3EBITDA / Financial Costs (x) -4.2 -3.1 -5.7 -5.6 -6.3 -6.8 -7.1 -7.8 -8.3 -8.8 -11.3

2024E2015E€ million 2011 2012 2013 2014E 2016E 2017E 2018E 2019E 2020E

Source: Company data and Millennium investment bank

P & L

Financial Balance Sheet

Cash-flow Statement

Debt Ratio

Growth %

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Millennium investment banking ES Saúde March 26, 2014

Quarterly evolution

€ million 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14E 2Q14E 3Q14E 4Q14E

Revenues 83.2 83.2 83.2 91.8 93.2 93.2 93.2 94.1 96.4 96.4 96.4 97.4

YoY % na na na na 12.0% 12.0% 12.0% 2.5% 3.5% 3.5% 3.5% 3.5%Opex 75.1 75.1 75.1 77.2 78.8 78.8 78.8 78.4 83.4 80.7 80.7 81.6

YoY % na na na na 4.8% 4.8% 4.8% 1.4% 5.9% 2.5% 2.5% 4.1%EBITDA 8.1 8.1 8.1 14.6 14.4 14.4 14.4 15.9 13.0 15.7 15.7 15.8

YoY % nm nm nm nm 78.1% 78.1% 78.1% 9.0% -9.8% 9.0% 9.0% -0.5%Depreciation -7.1 -7.1 -7.1 -7.2 -7.0 -7.0 -7.0 -7.1 -7.1 -7.1 -7.1 -7.2EBIT 1.0 1.0 1.0 7.4 7.4 7.4 7.4 8.8 5.8 8.5 8.5 8.6

Margin 1.2% 1.2% 1.2% 8.0% 7.9% 7.9% 7.9% 9.3% 6.0% 8.8% 8.8% 8.8%Financial Results -3.2 -3.2 -3.2 -2.8 -2.7 -2.7 -2.7 -2.2 -2.8 -2.8 -2.8 -2.3EBT -2.2 -2.2 -2.2 4.6 4.6 4.6 4.6 6.6 3.0 5.7 5.7 6.3

Taxes 0.2 0.2 0.2 -0.6 -1.6 -1.6 -1.6 -1.7 -1.5 -1.5 -1.5 -1.6EBM -2.0 -2.0 -2.0 4.1 3.0 3.0 3.0 5.0 1.5 4.2 4.2 4.7

Minorities 0.0 0.0 0.0 0.1 0.0 0.0 0.0 0.0 0.1 0.1 0.1 0.0Net Income -2.0 -2.0 -2.0 4.0 3.0 3.0 3.0 5.0 1.4 4.1 4.1 4.7

Estimated pro-forma numbers in 1Q,2Q,3Q12 and 1Q,2Q,3Q13.

Source: Company data and Millennium investment banking.

Quarterly preview - YoY

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Millennium investment banking ES Saúde March 26, 2014

Annex - I

Portugal Health sector overview

10.2%

9.3%

0%

2%

4%

6%

8%

10%

12%N

ethe

rland

s

Fran

ce

Ger

man

y

Switz

erla

nd

Den

mar

k

Aust

ria

Belg

ium

Portu

gal

Swed

en UK

Nor

way

Spai

n

OEC

D 3

4

Italy

Gre

ece

Finl

and

Icel

and

Irela

nd

Luxe

mbo

urg

Source: Company data and Millennium investment banking

3322

2619

0

1,000

2,000

3,000

4,000

5,000

6,000

Nor

way

Switz

erla

nd

Net

herla

nds

Aust

ria

Ger

man

y

Den

mar

k

Luxe

mbo

urg

Fran

ce

Belg

ium

Swed

en

Irela

nd UK

Finl

and

OEC

D 3

4

Icel

and

Spai

n

Italy

Portu

gal

Gre

ece

Source: Company data and Millennium investment banking

Total Healthcare expenditure - as a share of GDP, 2011

Healthcare expenditure per capita

- 2011

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Millennium investment banking ES Saúde March 26, 2014

9.3% 9.3% 9.7%10.0%

10.4%10.0% 10.0% 10.2%

10.8% 10.8%

10.2%

0%

2%

4%

6%

8%

10%

12%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Source: Company data and Millennium investment banking

9.4

8.3

7.26.8 6.6 6.4 6.4

3.4 3.4 3.2 3.0 3.0

0

2

4

6

8

10

Rus

sian

Fed.

Ger

man

y

Hun

gary

Cze

ch

Rep

ub.

Pola

nd

Fran

ce

Belg

ium

Italy

Portu

gal

Spai

n

Irela

nd UK

Source: Company data and Millennium investment banking

Total Healthcare expenditure - evolution in Portugal

Hospital beds

- per 1.000 population, 2011

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24

Millennium investment banking ES Saúde March 26, 2014

6.1

5.0

4.14.0 3.8

3.8 3.6 3.33.0 3.0 2.9

2.8 2.7

2.2

0

2

4

6

8

Gre

ece

Rus

sia Italy

Portu

gal

Ger

man

y

Spai

n

Cze

ch …

Fran

ce

Nrth

erla

nds

Hun

gary

Belg

ium UK

Irela

nd

Pola

nd

Source: Company data and Millennium investment banking

15.4

12.211.8 11.4

8.7 8.6 8.3 8.0 8.0

6.3 6.2 6.15.5 5.2

3.3

0

2

4

6

8

10

12

14

16

Belg

ium

Irela

nd

Net

herla

nds

Ger

man

y

Fran

ce UK

Slov

enia

Cze

ch …

Rus

sia (2

006)

Italy

Hun

gary

Portu

gal

Spai

n

Pola

nd

Gre

ece

Source: Company data and Millennium investment banking

Practising doctors - per 1.000 population, 2011

Practising nurses

- per 1.000 population, 2011

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Millennium investment banking ES Saúde March 26, 2014

Annex - II

History

2000

From the time of its founding in 2000, the Espírito Santo Saúde Group has built up of an integrated network that includes hospitals, outpatient clinics and residential healthcare facilities, as well as different types of senior residences. In 2000, Espírito Santo Saúde acquired a majority share in Cliria - Hospital Privado de Aveiro and in Hospital da Arrábida in Vila Nova de Gaia.

2002

In 2002, Espírito Santo Saúde began managing the Hospital da Misericórdia de Évora in partnership with other entities.

2003

In December 2003, the Group began the construction of the Luz Integrated Health Complex, which includes Hospital da Luz and Casas da Cidade - Residências Sénior.

2004

In July 2004, construction began on Hospital do Mar in the municipality of Loures. That same year, Cliria - Centro Médico de Águeda began operating and the Clube de Repouso Casa dos Leões became fully integrated into Espírito Santo Saúde.

2005

In May 2005, construction began on Hospital da Luz - Clínica de Oeiras (formely known as Clínica Parque dos Poetas).

2006

In March 2006, Espírito Santo Saúde acquired 100% of the share capital of Hospor, which included two hospitals - Hospital de Santiago in Setúbal and Clipóvoa - Hospital Privado in Póvoa de Varzim, and three outpatient clinics - Clínica de Cerveira, Clínica de Amarante and Clínica do Porto. Also in 2006, Hospital do Mar opened its doors and Espírito Santo Saúde acquired 100% of the share capital of IRIO - Instituto de Radioterapia.

2007

In 2007, Hospital da Luz in Lisbon and Hospital da Luz - Clínica de Oeiras (formely known as Clínica Parque dos Poetas) began operating.

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Millennium investment banking ES Saúde March 26, 2014

2009

In 2009 the Casas da Cidade - Residências Sénior and Hospital da Luz - Centro Clínico da Amadora opened. Cliria - Clínica de Oiã was also acquired that year. At the end of 2009, a management contract was signed under the Public-Private Partnership programme for Hospital Beatriz Ângelo, located in the Municipality of Loures. The first stone laying ceremony for Hospital Beatriz Ângelo took place in January 2010

2010

The Hospital da Arrábida doubled its capacity in 2010 with new ambulatory surgery and specialised inpatient areas, including a new maternity unit. Cliria - Hospital Privado was also extensively renovated and began operating at its second location, doubling its ambulatory care capacity for outpatient consultations and imaging exams. In Póvoa de Varzim, Clipóvoa - Hospital Privado is still undergoing renovation of its inpatient and maternity areas and operating rooms. Hospital de Santiago has completed a new emergency department.

2011

The year 2011 was marked by Espírito Santo Saúde’s winning the Excellence at Work Award and by the opening of a new outpatient paediatric unit at Hospital da Luz, which also celebrated its 5-year anniversary in 2011. This year was characterised by a heavy focus on preparing for the Hospital Beatriz Ângelo opening, including completion of all the finishing work, structuring of all the hospital processes and recruiting staff.

2012

This process culminated on 19 January 2012 with the opening of Hospital Beatriz Ângelo, the first ES Saúde facility to begin operating under a Public-Private Partnership agreement. The opening process was completed on 27 February 2012, when the Emergency Department started its activity.

2013

In 2013, the expansion process of the Hospital do Mar, to have 46 more beds, was completed. This will allow a response to the growing demand and improve the service provided by the Hospital. The Cliria - Clinic Oiã continued its renewal process, which involved essentially the outpatient area. The renovation of the main entrance and reception area of Hospital de Santiago was also completed. Hospital da Luz received for the third consecutive year the award of Best Company in the Healthcare Sector from Exame 500 Maiores e Melhores Magazine, in partnership with Informa D&B and Delloitte. Additionally the Clínica Parque dos Poetas was rebranded to Hospital da Luz - Clínica de Oeiras.

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Annex - III

IPO Process

Espírito Santo Saúde initiated its IPO process on September 2013, which culminated in the Company’s listing on the Lisbon Stock Exchange on February 12th 2014. The Admission to trading and listing on the regulated market Euronext Lisbon, of the entire share capital of ES Saúde of 95,542,254 shares, including all shares offered in the Combined Offering, occurred on February 12, 2014.

The IPO (price range €3.20-€3.85 per share) comprised an issue of new shares by ES Saúde and a partial sale of existing shares held by some of the Company’s existing shareholders, with a capital increase of approximately €23 million to reduce ESS’ leverage in order to improve its financial position and increase flexibility for future investments. After capital increase (and including over-allotment option), ESS floated 49% of its share capital, with 20% of this allocated through retail offering.

The offering consisted of i) an institutional offering, as well as ii) an offering to retail investors in Portugal, including to ES Saúde’s staff. The final offer price (the “Offer Price”) was set at €3.20 per share in relation to ES Saúde’s initial public offering (“IPO” or the “Combined Offering”) of new and existing ordinary shares, with a nominal value of €1.00 each, which was determined based on the results of a bookbuilding process which took place between 27 January 2014 and 6 February 2014.

The Combined Offering comprised:

i) a public offering to retail investors in Portugal: 7 042 254 new shares issued by ES Saúde, and 2 320 886 existing shares, offered by Rio Forte Investments, S.A. (the “Retail Offering”);

ii) a private placement to certain qualified investors in and outside of Portugal of 3 346 168 shares, offered by Rio Forte Investments, S.A., Espírito Santo Financial Group, S.A. and Companhia de Seguros Tranquilidade, S.A. (together, the “Selling Shareholders”), which may be increased in up to 6,106,396 shares if the over‐allotment option is exercised in full (the “Institutional Offering”).

The gross proceeds from the Combined Offering amount to €130.3 million, of which €22.5 mn is payable to ES Saúde and €107.7 mn is payable to the Selling Shareholders, prior to the exercise of the over‐allotment option. If the over‐allotment option is exercised in full, the gross proceeds of the Combined Offering will amount to €149.8 mn. The demand verified in the Retail Offering allows the full subscription of the share capital increase of ES Saúde from its present amount of €88,500,000.00 to the amount of € 95,542,254.00 through the issuance of 7 042 254 new shares. The proportion of the share capital of ES Saúde held by new investors immediately after the IPO, will be 42.6% prior to any exercise of the over‐allotment option in the Institutional Offering, and 49.0% if the over‐allotment option in the Institutional Offering is exercised in full. The operation was closed at a €3.20 price and the selling shareholders were Rio Forte Investments, Espírito Santo Financial Group and Companhia de Seguros Tranquilidade, leaving, after the IPO, Espírito Santo Healthcare Investments as the major shareholder of the company (51%). The 49% free-float includes six qualifying shareholders: Och-Ziff Management Europe Limited (5.4%); T. Rowe Price Price Associates (5.0%); Espírito Santo Financial Group (3.4%); Invesco Limited (3.0%); Fidelity International Limited (2.9%); and Fidelity Management and Research (2.6%).

Regarding the results of the institutional part of the offering, there were 60 institutional investors participating in the IPO, with the share capital acquired distributed across several geographies (53% in the United Kingdom, 16% in Portugal, 13% in the United States, 12% in Spain and the remainder in the rest of Europe).

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Annex - IV

Peer multiples

Company 2012 2013 2014E 2015E 2012 2013 2014E 2015E 2012 2013 2014E 2015EES Saúde* 1.7 1.5 1.5 1.4 14.9 9.8 9.6 9.0 6.5 3.6 3.2 2.9RHON-KLINIKUM AG 1.4 1.3 1.3 1.2 13.8 12.5 15.3 14.4 2.7 2.5 2.8 2.3Fresenius SE & Co. KGaA 1.6 1.6 1.4 1.3 8.1 8.3 7.8 6.8 2.7 3.1 2.9 2.4Orpea SA 3.0 2.7 2.3 2.1 16.9 14.4 12.5 11.4 7.0 5.9 5.1 4.5Korian SA 1.3 1.2 1.1 1.0 10.7 9.1 8.1 7.3 4.0 3.9 3.4 2.9Medica SA 2.2 2.1 1.6 1.5 13.0 12.5 10.2 9.5 3.8 4.6 3.7 3.3Le Noble Age SA 1.0 1.1 0.8 0.8 11.5 9.7 9.6 8.8 5.4 5.1 5.3 5.1

EUAHCA Holdings, Inc. 1.5 1.5 1.4 1.2 7.8 7.6 7.2 6.5 4.3 4.3 3.9 3.4LifePoint Hospitals, Inc. 1.2 1.1 1.1 1.0 7.6 7.8 7.7 7.2 3.0 3.2 3.3 3.1Universal Health Services, Inc. Class B1.6 1.5 1.3 1.2 9.3 8.5 7.6 6.8 3.1 2.6 2.1 1.7Community Health Systems, Inc. 1.0 1.0 1.1 1.0 6.9 7.2 7.0 6.2 4.7 4.9 5.6 4.9Tenet Healthcare Corporation 1.0 1.3 0.9 0.9 7.3 10.9 7.9 6.9 4.1 8.0 5.8 5.0*Company data, Millennium Investment banking estimates

EV/Sales EV/EBITDA Net Debt /EBITDA

Source: Company data and Millennium investment banking

Company 2012 2013 2014E 2015E 2012 2013 2014E 2015E 2012 2013 2014E 2015EES Saúde* -0.02 0.16 0.15 0.19 neg 20.2 24.0 19.1 0.3% 0.0% 1.0% 1.3%RHON-KLINIKUM AG 0.65 0.71 0.88 1.22 36.1 33.0 26.7 19.2 1.1% 1.3% 1.7% 2.0%Fresenius SE & Co. KGaA5.42 5.83 6.36 7.23 20.2 18.7 17.2 15.1 1.0% 1.1% 1.2% 1.4%Orpea SA 1.83 2.01 2.31 2.63 25.1 22.8 19.8 17.4 1.3% 1.5% 1.7% 1.9%Korian SA 0.75 1.35 1.63 1.89 35.5 19.8 16.4 14.1 2.2% 2.2% 2.2% 2.2%Medica SA 0.97 1.13 1.43 1.49 23.6 20.2 16.0 15.3 2.1% 2.2% 2.4% 2.7%Le Noble Age SA 0.67 1.00 1.14 1.41 23.8 16.0 14.0 11.3 0.0% 0.0% 0.0% 0.0%Generale de Sante SA 0.99 0.60 0.58 0.57 15.1 24.9 25.8 26.2 6.0% 6.0% 6.0% 6.0%

EUAHCA Holdings, Inc. 2.69 2.47 2.67 3.07 13.5 14.7 13.6 11.9 2.1% 0.0% 0.0% 0.0%LifePoint Hospitals, Inc. 2.28 1.94 1.92 2.18 16.8 19.7 19.9 17.5 0.0% 0.0% 0.0% 0.0%Universal Health Services, Inc. Class B3.01 3.30 3.62 4.06 18.2 16.6 15.2 13.5 0.3% 0.3% 0.3% 0.3%Community Health Systems, Inc.2.58 1.74 2.26 2.84 10.2 15.1 11.7 9.3 0.0% 0.0% 0.0% 0.0%Tenet Healthcare Corporation1.23 1.36 1.00 1.69 23.6 21.5 29.2 17.2 0.0% 0.0% 0.0% 0.0%*Company data, Millennium Investment banking estimates

EPS P/E Div. Yield

Source: Company data and Millennium investment banking

Company Country Sector 2010 2011 2012 2013E 2014E 2015E 2016EES Saúde* PORTUGAL Hospital/Nursing Management 15.0% 17.0% 11.4% 15.8% 15.5% 16.0% 16.2%RHON-KLINIKUM AG GERMANY Hospital/Nursing Management 12.0% 13.4% 10.2% 10.6% 8.3% 8.3% 14.7%Fresenius SE & Co. KGaAGERMANY Medical/Nursing Services 19.1% 19.6% 19.6% 19.1% 18.1% 19.0% 19.1%Orpea SA FRANCE Hospital/Nursing Management 17.9% 17.7% 17.9% 18.6% 18.7% 18.6% 18.4%Korian SA FRANCE Medical/Nursing Services 11.8% 12.1% 12.5% 13.1% 13.6% 14.1% 15.5%Medica SA FRANCE Hospital/Nursing Management 17.6% 17.1% 16.5% 16.7% 16.0% 16.1% naLe Noble Age SA FRANCE Hospital/Nursing Management 11.1% 9.5% 8.5% 11.8% 8.6% 9.4% 11.1%

EUAHCA Holdings, Inc. UNITED STATES Hospital/Nursing Management 19.1% 20.4% 19.7% 19.2% 18.9% 19.2% 19.2%LifePoint Hospitals, Inc. UNITED STATES Hospital/Nursing Management 15.3% 17.7% 16.0% 14.7% 14.3% 14.4% 14.4%Universal Health Services, Inc. Class BUNITED STATES Hospital/Nursing Management 13.5% 15.8% 17.2% 17.4% 17.1% 17.5% 17.7%Community Health Systems, Inc.UNITED STATES Hospital/Nursing Management 13.6% 13.5% 14.8% 14.1% 15.0% 15.5% 15.5%Tenet Healthcare CorporationUNITED STATES Hospital/Nursing Management 11.4% 12.9% 13.2% 12.1% 11.7% 12.4% 12.8%*Company data, Millennium Investment banking estimates

Source: Company data and Millennium investment banking

Multiples

Multiples

Peer EBITDA Margins

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29

Millennium investment banking ES Saúde March 26, 2014

Share price charts

Last Country Mkt Cap Price Performance (%)

Price (€ mn) 5d 1m 3m 6m 12m YTD

ESPIRITO SANTO SAUDE SGPS SA 3.62 PO 346 5.85 11.04 na na na na

RHOEN-KLINIKUM AG 23.31 GE 3,221 -0.19 -0.24 8.45 23.80 41.20 9.64FRESENIUS SE & CO KGAA 110.80 GE 23,949 2.03 -0.63 -1.03 20.32 14.57 -0.72ORPEA 47.51 FR 2,635 2.87 5.68 14.66 27.56 47.53 12.46KORIAN 26.50 FR 2,077 0.23 2.67 29.46 10.19 56.80 28.70MEDICA SA 22.80 FR 1,092 na -1.81 20.95 21.60 58.61 20.13LE NOBLE AGE 15.91 FR 136 -0.25 -1.97 8.97 28.62 44.37 7.86GENERALE DE SANTE 14.95 FR 844 -0.80 10.91 20.66 19.60 49.50 15.44HCA HOLDINGS INC 50.34 US 16,203 0.78 -0.28 7.98 18.81 25.26 5.51LIFEPOINT HOSPITALS INC 53.05 US 1,815 1.16 -1.17 2.49 13.55 9.54 0.40UNIVERSAL HEALTH SERVICES-B 78.52 US 5,613 2.14 -4.75 -2.57 5.72 22.99 -3.38COMMUNITY HEALTH SYSTEMS INC 36.74 US 3,023 0.49 -10.80 -5.28 -9.13 -21.11 -6.44TENET HEALTHCARE CORP 41.12 US 2,893 0.10 -7.26 0.69 1.18 -13.56 -2.37

European Markets

PSI20 7,506.72 PO 64,483 -0.08 3.48 13.45 24.30 26.54 14.45

Eurostoxx 319.76 EC 4,297,067 1.35 -0.66 2.94 8.10 19.45 1.73

Eurostoxx 50 3,130.17 EC 2,330,227 1.75 -0.57 1.86 7.09 18.52 0.68

Eurostoxx Industrial 603.89 EC 505,335 2.40 -0.17 0.19 5.90 18.28 -0.67

Source: Bloomberg, Prices as at 26-Mar-2014

9799

101103105107109111113115117119

12/2

/14

15/2

/14

18/2

/14

21/2

/14

24/2

/14

27/2

/14

2/3/

14

5/3/

14

8/3/

14

11/3

/14

14/3

/14

17/3

/14

20/3

/14

23/3

/14

ESS PSI20 Euro Stoxx Stoxx 600 HealthCare

Source: Bloomberg and Millennium investment banking

Peers performance

Relative Performance – Since ES Saúde IPO

Main Indexes

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30

Millennium investment banking ES Saúde March 26, 2014

Income Statements

Operating Revenues 341.4 373.6 386.6 400.4

EBITDA 38.8 59.0 60.1 64.0

Depreciation and Amortisation -28.5 -28.1 -28.6 -28.0Net Financials -12.4 -10.4 -10.7 -10.1Income Taxes 0.0 -6.5 -6.1 -7.7Minority Interests 0.1 0.0 0.2 0.1Net Income -2.1 14.0 14.4 18.1

EBITDA margin (%) 11.4 15.8 15.5 16.0EBIT margin (%) 3.0 8.3 8.1 9.0EBT margin (%) -0.6 5.5 5.4 6.5Effective Tax Rate (%) 0.0 31.7 29.7 29.7Net margin (%) -0.6 3.8 3.7 4.5

Source: Company data and Millennium investment banking

Financial Balance Sheet

Fixed Assets 367.6 351.1 336.9 333.4Working Capital 12.9 1.7 5.1 5.7Invested Capital 380.5 352.8 341.9 339.1

Net Debt 251.6 209.7 191.3 184.8Minority Interests 1.5 1.5 1.6 1.6Equity 127.4 141.6 149.1 152.7Capital Employed 380.5 352.8 341.9 339.1

Source: Company data and Millennium investment banking

Cash-Flow Statements

Cash Flow from Operations* 32.8 52.7 46.5 46.8Cash Flow from Investing -32.5 -12.5 -13.5 -36.0Cash Flow from Financing -54.3 -42.8 -11.5 -10.2EBITDA - Operating Capex 71.3 71.5 73.6 100.0* CFO corresponds to operating results adjusted for changes in WC; includes net interest and excludes div.Source: Millennium investment banking

Leverage Indicators

EBITDA 38.8 59.0 60.1 64.0Capex 32.5 12.5 13.5 36.0EBITDA-Capex 6.3 46.5 46.5 28.0EBITDA-Capex-Dividends 5.4 46.5 42.9 23.4Financial Costs, Net -12.4 -10.4 -10.7 -10.1Net Debt 251.6 209.7 191.3 184.8

Net Debt / EBITDA (x) 6.5 3.6 3.2 2.9Net Debt / Equity (x) 2.0 1.5 1.3 1.2Net Debt / Capital Employed (x) 0.7 0.6 0.6 0.6EBITDA / Financial Costs (x) -3.1 -5.7 -5.6 -6.3

Source: Millennium investment banking

2012

€ million 2012

€ million

2012€ million

2012€ million

2013A 2014E 2015E

2013A 2014E 2015E

2013A 2014E 2015E

2013A 2014E 2015E

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Millennium investment banking ES Saúde March 26, 2014

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).

� This report was not previously shown to the company. Neither the company was aware of the recommendation nor was it

changed;

� 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.

� 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 2014;

� 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 bank revenues

(Unrated)Sell

ReduceNeutral

Buy

3.12

3.21

3.30

3.39

3.49

3.58

3.67

3.76

3.85

Mar

/13

Apr/1

3

May

/13

Jun/

13

Jul/1

3

Aug/

13

Sep/

13

Oct

/13

Nov

/13

Dec

/13

Jan/

14

Feb/

14

Mar

/14

Apr/1

4

ES Saúde

Recommendation Stock Price Price Target

� The Politics of Conflict of Interests Millennium BCP is available at www.millenniumbcp.pt 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 32: Espírito Santo Saúde

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