LATIN AMERICAN

EQUITY RESEARCH
17 NOVEMBER 2014 COMPANY REPORT | BRAZIL—TRANSPORTATION

ECORODOVIAS BUY
CHEAPER THAN BEFORE, UPGRADE TO BUY CURRENT PRICE: R$9.88
TARGET PRICE: R$12.50
UPGRADING RATING TO BUY FROM UNDERPERFORM
LOWERING YE2015 TARGET PRICE TO R$12.50 FROM R$15.00
Net/Net: In June we downgraded our rating on Ecorodovias to Underperform based on (i) an implied nominal equity IRR of
10.7%, and (ii) anticipation of a potential aggressive bid for the Tamoios highway concession. We are now upgrading our
rating to Buy due to (i) an implied nominal equity IRR of 12.9%, and (ii) the fact that the company did not win Tamoios. We
are reducing our target price by R$2.50 to reflect a more negative traffic estimate.

Pedro Balcão Reis*

 Negative traffic growth: In August and September, consolidated traffic Brazil: Banco Santander S.A.
+5511-3012-5765 | pbalcao@santander.com.br
growth came in at -3% and -2%, respectively. In October there was a
Bruno Amorim*, CFA
slight recovery to +0.2% YoY. We are reducing our estimates for traffic
Brazil: Banco Santander S.A.
growth from 5.1% to 3.3% and from 3.2% to 1.2% for 2014 and 2015, +5511-3012-6016 | bamorim@santander.com.br

respectively. Based on the above, because of the operating leverage,

we are also cutting our EBITDA margin estimates from 57.0% to
52.8% and from 59.9% to 55.1% for 2014 and 2015, respectively. The
net impact of these changes in our estimates is a target price
reduction of R$2.50 per share, or 17%.

 Better capital discipline? We believe Ecorodovias has given several

signs of increased capital discipline:(i) it was unsuccessful in the five Company Statistics
toll roads auctions that took place in Brazil in 2H13, (ii) it sold STP and Bloomberg ECOR3 BZ
paid an extraordinary dividend last April, and (iii) it made an Current Price (11/14/14) R$ 9.88 / US$ 3.79
Target Price (YE 2015) R$ 12.50 / US$ 4.72
unsuccessful bid for Tamoios highway in the state of São Paulo.
52-Week Range (R$) 9.55 - 15.70
All the above, in our view, help dissipate the negative perception Market Capitalization (US$ Mn) 2,116
caused by the bids for the BR101 toll road and Guarulhos airport and Float (%) 36.0
3-Mth Avg. Daily Vol (US$ Mn) 8.0
the acquisition of the Tecondi container terminal at the port of Santos
Shares Outstanding - Mn 559
in 2012.
Price Performance (R$)
 The least expensive of all the Brazilian toll road operators: At ECOR3 BZ IBOVESPA
120
Ecorodovias’s implied nominal equity IRR of 12.9%, after a traffic 110

revision that has implied a reduction of 260 bps in this indicator, we 100

believe Ecorodovias is now the cheapest operator. 90

Estimates & Valuation Ratios 80

70
(R$) 2013A 2014E 2015E 2016E
60
P/E 20.8 18.5 15.7 13.6
50
FV/EBITDA 8.4 6.9 6.1 5.4
N-12 M-13 J-13 N-13 M-14 J-14 N-14
FCF Yield (%) 6.5 (1.2) 2.8 2.8
Sources: FactSet, Santander estimates and company reports.
Div Yield (%) 8.1 5.4 6.4 7.3
Net Debt/EBITDA 2.0 2.6 2.4 2.1
Sources: FactSet, Santander estimates and company reports.
IMPORTANT DISCLOSURES/CERTIFICATIONS ARE IN THE “IMPORTANT DISCLOSURES” SECTION OF THIS REPORT.
U.S. investors’ inquiries should be directed to Santander Investment Securities Inc. at (212) 583-4629 / (212) 350-3918.
* Employed by a non-US affiliate of Santander Investment Securities, Inc. and is not registered/qualified as a research analyst under FINRA rules.
ECORODOVIAS
Financial Highlights: P&L, Balance Sheet and CF Statement, 2013–16E in Millions Company Description
R$ US$ Ecorodovias Infraestrutura e Logística S/A—the
P&L ACCOUNT 2013A 2014E 2015E 2016E 2013A 2014E 2015E 2016E Ecorodovias Group—is a large integrated infrastructure
Total Revenue 2,442 2,453 2,708 2,935 1,132 1,062 1,041 1,087 logistic firm. Currently, the company’s operations include
YoY change (%) 15.7 0.5 10.4 8.4 4.8 (6.2) (1.9) 4.4 six highway concessions: Ecovias dos Imigrantes,
Gross Profit - - - - - - - - Ecopistas, Ecovia, Ecocataratas, Ecosul and ECO101.
YoY change (%) - - - - - - - - The company’s businesses include intermodal logistic
EBITDA 1,317 1,294 1,492 1,685 611 560 574 624 assets. In addition, Ecorodovias holds Ecoporto, a
YoY change (%) 8.2 (1.8) 15.2 13.0 (2.0) (8.3) 2.4 8.8 container terminal in the port of Santos. In March 2010,
As % of Revenue 53.9 52.8 55.1 57.4 53.9 52.8 55.1 57.4 Ecorodovias listed shares in the Novo Mercado, a
Operating Income 970 873 1,017 1,149 450 378 391 426
segment of the Brazilian Stock Exchange with the highest
corporate governance standards.
YoY change (%) 1.8 (10.0) 16.5 13.0 (7.8) (16.0) 3.6 8.8
As % of Revenue 39.7 35.6 37.6 39.1 39.7 35.6 37.6 39.1 Key Personnel: Marco Antonio Cassou (Chairman),
Financial Results (341) (397) (463) (512) (158) (172) (178) (190) Marcelino Rafart de Seras (CEO), Marcelo Guidotti (CFO
Taxes (230) (176) (188) (217) (107) (76) (72) (80) and IR Director)
Net Profit 398 298 351 404 184 129 135 150 Web: www.ecorodovias.com.br
YoY change (%) (5.7) (25.1) 17.7 15.3 (14.6) (30.1) 4.6 11.0
As % of Revenue 16.3 12.1 13.0 13.8 16.3 12.1 13.0 13.8 Traffic Breakdown, 2013
CASH FLOW 2013A 2014E 2015E 2016E 2013A 2014E 2015E 2016E
Depreciation & Amortization (263) (318) (357) (407) (122) (138) (137) (151)
Other Noncash Items - - - - - - - -
Changes in Working Capital 0 0 0 0 0 0 0 0
Operating Cash Flow 959 963 1,106 1,251 444 416 425 463
Capital Expenditures (862) (1,113) (726) (511) (399) (482) (279) (189)
Free Cash Flow 537 (67) 155 152 249 (29) 60 56
Other Invest./(Divestments) - - - - - - - -
Change in Debt 666 348 96 (233) 309 150 37 (86)
Dividends (666) (298) (351) (404) (309) (129) (135) (150)
Capital Increases/Other 0 270 0 0 0 117 0 0

BALANCE SHEET 2013A 2014E 2015E 2016E 2013A 2014E 2015E 2016E
Cash and Equivalents 1,260 981 812 587 538 385 307 213
Current Assets 1,607 1,328 1,159 934 686 521 437 340
Fixed Assets 4,559 5,353 5,723 5,827 1,946 2,099 2,160 2,119 Revenue Breakdown, 2013
Total Assets 6,931 7,378 7,578 7,458 2,958 2,893 2,860 2,712
Current Liabilities 1,332 1,409 1,430 1,379 569 552 539 501
Long-Term Liabilities - - - - - - - -
Shareholders' Equity 2,072 2,158 2,184 2,211 884 846 824 804
Total Financial Debt 3,951 4,298 4,395 4,162 1,686 1,686 1,658 1,513
ST Debt 866 942 963 912 370 370 364 332
LT Debt 3,085 3,356 3,431 3,249 1,317 1,316 1,295 1,182

FINANCIAL RATIOS 2013A 2014E 2015E 2016E 2013A 2014E 2015E 2016E
Net Debt 2,691 3,317 3,582 3,575 1,148 1,301 1,352 1,300
Capital Employed 6,023 6,456 6,579 6,373 2,571 2,532 2,483 2,317
Net Debt/EBITDA 2.0 2.6 2.4 2.1 1.9 2.3 2.4 2.1
Net Debt/Equity 1.3 1.5 1.6 1.6 1.4 1.7 1.6 1.6
Capex/Revenue (%) 35.3 45.4 26.8 17.4 35.3 45.4 26.8 17.4
Int Cover (%) - - - - - - - - Shareholder Structure, Current
Dividend Payout (%) 157.8 74.9 117.7 115.3 142.8 69.8 104.5 115.3
ROCE (%) 22.1 18.7 21.3 24.9 23.6 20.4 21.3 24.9
ROE (%) 19.0 14.1 16.2 18.4 19.3 15.1 16.2 18.4

MARKET RATIOS 2013A 2014E 2015E 2016E 2013A 2014E 2015E 2016E
P/E 20.8 18.5 15.7 13.6 19.0 16.4 15.7 14.1
P/CE 12.5 9.0 7.8 6.8 11.4 7.9 7.8 7.0
FV/EBITDA 8.4 6.9 6.1 5.4 7.7 6.1 6.1 5.5
FV/EBIT 11.4 10.2 9.0 8.0 10.4 9.1 8.9 8.1
FV/Revenue 4.5 3.6 3.4 3.1 4.1 3.2 3.4 3.2
P/BV 4.0 2.6 2.5 2.5 4.0 2.5 2.6 2.6
FCF Yield (%) 6.5 (1.2) 2.8 2.8 7.1 (1.4) 2.8 2.7
Div Yield (%) 8.1 5.4 6.4 7.3 8.8 6.1 6.4 7.1
Sources for all charts and tables: Company reports and Santander
PER SHARE DATA 2013A 2014E 2015E 2016E 2013A 2014E 2015E 2016E estimates.
EPS 0.71 0.53 0.63 0.72 0.33 0.23 0.24 0.27
DPS (1.19) (0.53) (0.63) (0.72) (0.55) (0.23) (0.24) (0.27)
BVPS 3.71 3.86 3.91 3.96 1.58 1.51 1.48 1.44

2
VALUATION
We discount our estimated free cash flows to firm by a WACC of 12.0% in R$. Our DCF yields an EV of
R$10,275 million, which implies an equity value of R$6,895 million, or R$12.50/share

Figure 1. Valuation Assumptions

DCF (R$ millions) WACC Calculation
Enterprise Value 10,275 Cost of Debt (pretax) 11.0%
Net Debt 3,380 Tax Rate 34.0%
Equity Fair Value 6,895 Risk-Free Rate 10.0%
Shares Outstanding - millions 558.7 Risk Premium 5.5%
Equity Fair Value - R$/share 12.50 Beta 0.73
Current Price - R$/share 9.88 Cost of Equity 14.0%
Upside - % 27% Debt/EV 32.9%
WACC 12.0%
Sources: Bloomberg and Santander estimates

With the company’s implied nominal equity IRR of 12.9% (7.8% real) and total-return potential of 32%, we
are upgrading the stock to Buy.

CHANGES TO ESTIMATES
Figure 2 summarizes the main changes to our estimates.

Figure 2. Changes to Estimates (R$ millions)

Current Previous Current vs. Previous
2014E 2015E 2016E 2014E 2015E 2016E 2014E 2015E 2016E
Traffic 262 297 308 272 306 327 -4% -3% -6%
Adj. Net Revenue* 2,453 2,708 2,935 2,577 2,797 3,120 -5% -3% -6%
Adj. EBITDA 1,294 1,492 1,685 1,468 1,676 1,941 -12% -11% -13%
Adj. EBITDA mg. 52.8% 55.1% 57.4% 57.0% 59.9% 62.2% -4.2 p.p. -4.8 p.p. -4.8 p.p.
EBIT 873 1,017 1,149 1,065 1,220 1,408 -18% -17% -18%
EBT 476 554 637 626 722 918 -24% -23% -31%
Net Income 298 351 404 410 462 590 -27% -24% -31%
* Excluding construction revenue and costs. Source: Santander estimates.

Figure 3 summarizes our estimates for each business unit.

3
Figure 3. Income Statement (R$ millions)
2013 1Q14 2Q14 3Q14 4Q14E 2014E 2015E
Net Revenue 2,442 606 574 632 642 2,453 2,708
o.w. Toll roads 1,595 430 413 459 474 1,777 2,029
o.w. Logistics 242 53 55 61 59 227 243
o.w. Ecoporto 551 116 111 117 113 457 457
o.w. STP - Sem Parar/Via Fácil 70 12 - - (0) 12 0
o.w. Others (15) (4) (6) (5) (4) (20) (22)
EBITDA 1,317 334 298 328 335 1,294 1,492
o.w. Toll roads 1,117 300 267 315 319 1,200 1,382
o.w. Logistics 9 4 (1) 2 3 8 17
o.w. Ecoporto 158 34 29 25 25 113 114
o.w. STP - Sem Parar/Via Fácil 38 7 - - (0) 7 0
o.w. Others (4) (10) 4 (15) (12) (33) (22)
Depreciation (263) (76) (79) (80) (83) (318) (357)
Provision for Maintenance (75) (18) (33) (26) (26) (103) (118)
EBIT 972 239 187 219 228 873 1,017
Financial Results (341) (106) (101) (87) (103) (397) (463)
Taxes (231) (45) (34) (51) (46) (176) (188)
Net Income 398 92 52 77 77 298 351

YoY Growth:
Net Revenue 16% 3% -5% 0% 3% 0% 10%
o.w. Toll roads 9% 11% 8% 11% 14% 11% 14%
o.w. Logistics -9% -14% -10% 2% -2% -6% 7%
o.w. Ecoporto 67% -9% -23% -20% -14% -17% 0%
o.w. STP - Sem Parar/Via Fácil 17% -29% - - - -83% NM
o.w. Others 15% 26% 49% 47% 5% 31% 10%
EBITDA 4% 1% -8% -3% 3% -2% 15%
o.w. Toll roads 8% 8% -1% 6% 17% 7% 15%
o.w. Logistics -90% -49% -147% -23% -176% -20% 127%
o.w. Ecoporto 38% -13% -44% -29% -22% -28% 1%
o.w. STP - Sem Parar/Via Fácil 21% -28% - - - -82% NM
o.w. Others -61% 376% -149% 70% -179% 746% -33%
Net Income -5% -18% -40% -30% -13% -25% 18%

Margins:
EBITDA 53.9% 55.0% 52.0% 51.9% 52.1% 52.8% 55.1%
o.w. Toll roads 70.0% 69.6% 64.5% 68.6% 67.2% 67.5% 68.1%
o.w. Logistics 3.9% 7.0% -2.5% 3.8% 5.0% 3.3% 7.0%
o.w. Ecoporto 28.6% 28.9% 26.3% 21.8% 21.9% 24.7% 25.0%
o.w. STP - Sem Parar/Via Fácil 53.6% 56.2% NM NM NM 56.2% NM
o.w. Others 25.5% 227.3% -65.6% 300.0% 266.7% 165.0% 100.0%
EBIT 39.8% 39.4% 32.5% 34.6% 35.6% 35.6% 37.6%

Sources: Company data and Santander estimates.

4
FINANCIAL STATEMENTS
Figure 4. Ecorodovias: Financial Statements, 2013–16E (Millions of Brazilian Reais)
2013A 2014E 2015E 2016E
Income Statement
Net Revenue 2,442 2,453 2,708 2,935
YoY Change (%) 15.7 0.5 10.4 8.4
Cost of Goods Sold - - - -
Gross Profit - - - -
SG&A Expenses - - - -
Operating Profit 970 873 1,017 1,149
YoY Change (%) 1.8 (10.0) 16.5 13.0
Financial Results (341) (397) (463) (512)
Monetary Gain/Loss - - - -
FX Gain/Loss - - - -
Other Financial Gains/Losses - - - -
Other Income/Expenses 0 0 0 0
Equity Income - - - -
Pre-Tax Profit 629 476 554 637
Taxes (230) (176) (188) (217)
Minority Interest (2) (2) (15) (16)
Net Profit 398 298 351 404
YoY Change (%) (5.7) (25.1) 17.7 15.3
Depreciation & Amortization (263) (318) (357) (407)
EBITDA 1,317 1,294 1,492 1,685
YoY Change (%) 8.2 (1.8) 15.2 13.0
Balance Sheet
Total Assets 6,931 7,378 7,578 7,458
Cash and Equivalents 1,260 981 812 587
Accounts Receivable 258 258 258 258
Inventories - - - -
Other Current Assets 89 89 89 89
Property& Plant and Equipment - - - -
Other Long-Term Assets 4,664 5,459 5,829 5,933
Total Liabilities 6,931 7,378 7,578 7,457
Accounts Payable 188 188 188 188
Short-Term Debt 866 942 963 912
Other Current Liabilities 279 279 279 279
Long-Term Debt 3,085 3,356 3,431 3,249
Other Long-Term Liabilities 416 429 507 592
Minority Interest 26 26 26 26
Shareholders' Equity 2,072 2,158 2,184 2,211
Cash Flow
Net Profit 398 298 351 404
Depreciation & Amortization (263) (318) (357) (407)
Other Noncash Items - - - -
Changes in Working Capital 0 0 0 0
Operating Cash Flow 959 963 1,106 1,251
Capital Expenditures (862) (1,113) (726) (511)
Other Investments/(Divestments) - - - -
Change in Debt 666 348 96 (233)
Dividends (666) (298) (351) (404)
Capital Increases/Other 0 270 0 0
Net Cash Flow 285 (279) (169) (225)
Free Cash Flow 537 (67) 155 152
Sources: FactSet, Bloomberg, Santander estimates and company reports.

5
FINANCIAL STATEMENTS
Figure 5. Ecorodovias: Financial Statements, 2013–16E (U.S. Dollars in Millions)
2013A 2014E 2015E 2016E
Income Statement
Net Revenue 1,132 1,062 1,041 1,087
YoY Change (%) 4.8 (6.2) (1.9) 4.4
Cost of Goods Sold - - - -
Gross Profit - - - -
SG&A Expenses - - - -
Operating Profit 450 378 391 426
YoY Change (%) (7.8) (16.0) 3.6 8.8
Financial Results (158) (172) (178) (190)
Monetary Gain/Loss - - - -
FX Gain/Loss - - - -
Other Financial Gains/Losses - - - -
Other Income/Expenses 0 0 0 0
Equity Income - - - -
Pre-Tax Profit 292 206 213 236
Taxes (107) (76) (72) (80)
Minority Interest (1) (1) (6) (6)
Net Profit 184 129 135 150
YoY Change (%) (14.6) (30.1) 4.6 11.0
Depreciation & Amortization (122) (138) (137) (151)
EBITDA 611 560 574 624
YoY Change (%) (2.0) (8.3) 2.4 8.8
Balance Sheet
Total Assets 2,958 2,893 2,860 2,712
Cash and Equivalents 538 385 307 213
Accounts Receivable 110 101 97 94
Inventories - - - -
Other Current Assets 38 35 34 32
Property& Plant and Equipment - - - -
Other Long-Term Assets 1,991 2,141 2,199 2,157
Total Liabilities 2,958 2,893 2,860 2,712
Accounts Payable 80 74 71 68
Short-Term Debt 370 370 364 332
Other Current Liabilities 119 109 105 101
Long-Term Debt 1,317 1,316 1,295 1,182
Other Long-Term Liabilities 178 168 191 215
Minority Interest 11 10 10 9
Shareholders' Equity 884 846 824 804
Cash Flow
Net Profit 184 129 135 150
Depreciation & Amortization (122) (138) (137) (151)
Other Noncash Items - - - -
Changes in Working Capital 0 0 0 0
Operating Cash Flow 444 416 425 463
Capital Expenditures (399) (482) (279) (189)
Other Investments/(Divestments) - - - -
Change in Debt 309 150 37 (86)
Dividends (309) (129) (135) (150)
Capital Increases/Other 0 117 0 0
Net Cash Flow 132 (121) (65) (83)
Free Cash Flow 249 (29) 60 56
Sources: FactSet, Bloomberg, Santander estimates and company reports.

6
Ecorodovias – Three-Year Stock Performance (R$)
B 18.5 H 8.0 H 20.0 H 19.0 H 15.0 H 13.5 UP 15.0
11/14/11 1/23/12 6/28/12 1/3/13 1/9/14 3/21/14 6/10/14
20 28,000

18 26,000

16 24,000

14 22,000

12 20,000

10 18,000

8 16,000
N-11 F-12 M-12 A-12 N-12 F-13 M-13 A-13 N-13 F-14 M-14 A-14 N-14
Ecorodovias (L Axis) IBOVESPA (R Axis)
Sources: FactSet and Santander.

Valuation & Risks

Valuation: Our YE2015 target price is based on a DCF valuation of Ecorodovias, including a
perpetuity value only for the logistics business. We discount the company’s free cash flow by a
WACC of 12.0%, in BRL terms.
Risks include: Low visibility on the premature logistics business, an unfavorable outcome of the
dry port logistics regulatory framework still under development, a macroeconomic downturn,
stepped-up competition, and adverse government interference in the highways concession
sector.

7
 IMPORTANT DISCLOSURES

Key to Investment Codes

% of % of Companies Provided
Companies Investment Banking
Covered with Services in the Past 12
Rating Definition This Rating Months
Buy (B) Expected to outperform the local market benchmark by more than 10%. 50.19 6.32
Hold (H) Expected to perform within a range of 0% to 10% above the local market
37.92 5.58
benchmark.
Underperform Expected to underperform the local market benchmark. 11.15 1.12
Under Review (U/R) 0.74 0.00
The numbers above reflect our Latin American universe as of Friday, November 14, 2014.
For a discussion, if applicable, of the valuation methods used to determine the price targets included in this report and the risks to achieving
these targets, please refer to the latest published research on these stocks. Research is available through your sales representative and other
electronic systems.
Target prices are year-end 2014 unless otherwise specified. Recommendations are based on a total return basis (expected share price
appreciation + prospective dividend yield) unless otherwise specified.
Stock price charts and rating histories for companies discussed in this report are also available by written request to Santander Investment
Securities Inc., 45 East 53rd Street, 17th Floor (Attn: Research Disclosures), New York, NY 10022 USA.
Ratings are established when the firm sets a target price and/or when maintaining or reiterating the rating. Ratings may not coincide with the above
methodology due to price volatility. Management reserves the right to maintain or to modify ratings on any specific stock and will disclose this in the
report when it occurs. Valuation methodologies vary from stock to stock, analyst to analyst, and country to country. Any investment in Latin American
equities is, by its nature, risky. A full discussion of valuation methodology and risks related to achieving the target price of the subject security is included
in the body of this report.
The benchmark used for local market performance is the country risk of each country plus the 1-year U.S. Treasury yield plus 5.5% of equity risk
premium, unless otherwise specified. The benchmark plus the 10.0% differential used to determine the rating is time adjusted to make it comparable
with the total return of the stock over the same period. For additional information about our rating methodology, please call (212) 350 3974.
This research report (“report”) has been prepared by Santander Investment Securities Inc. ("SIS"; SIS is a subsidiary of Santander Investment I, S.A.
which is wholly owned by Banco Santander, S.A. "Santander"]) on behalf of itself and its affiliates (collectively, Grupo Santander) and is provided for
information purposes only. This report must not be considered as an offer to sell or a solicitation of an offer to buy any relevant securities (i.e., securities
mentioned herein or of the same issuer and/or options, warrants, or rights with respect to or interests in any such securities).
Any decision by the recipient to buy or to sell should be based on publicly available information on the related security and, where appropriate, should
take into account the content of the related prospectus filed with and available from the entity governing the related market and the company issuing the
security. This report is issued in Spain by Santander Investment Bolsa, Sociedad de Valores, S.A. (“Santander Investment Bolsa”) and in the United
Kingdom by Banco Santander, S.A., London Branch. Santander London is authorized by the Bank of Spain. This report is not being issued to private
customers. SIS, Santander London and Santander Investment Bolsa are members of Grupo Santander.
The following analysts hereby certify that their views about the companies and their securities discussed in this report are accurately expressed, that
their recommendations reflect solely and exclusively their personal opinions, and that such opinions were prepared in an independent and autonomous
manner, including as regards the institution to which they are linked, and that they have not received and will not receive direct or indirect compensation
in exchange for expressing specific recommendations or views in this report, since their compensation and the compensation system applying to Grupo
Santander and any of its affiliates is not pegged to the pricing of any of the securities issued by the companies evaluated in the report, or to the income
arising from the businesses and financial transactions carried out by Grupo Santander and any of its affiliates: Bruno Amorim*, CFA, and Pedro Balcão
Reis*.
*Employed by a non-US affiliate of Santander Investment Securities Inc. and is not registered/qualified as a research analyst under FINRA rules and is
not an associated person of the member firm, and, therefore, may not be subject to the FINRA Rule 2711 and Incorporated NYSE Rule 472 restrictions
on communications with a subject company, public appearances, and trading securities held by a research analyst account.
As per the requirements of the Brazilian CVM, the following analysts hereby certify that we do not maintain a relationship with any individual working for
the companies whose securities were evaluated in the disclosed report. That we do not own, directly or indirectly, securities issued by the company
evaluated. That we are not involved in the acquisition, disposal and intermediation of such securities on the market: Pedro Balcão Reis and Bruno
Amorim.
Santander or its affiliates and the securities investment clubs, portfolios and funds managed by them do not have any direct or indirect ownership
interest equal to or higher than one percent (1%) of the capital stock of any of the companies whose securities were evaluated in this report and are not
involved in the acquisition, disposal and intermediation of such securities on the market.
The information contained within this report has been compiled from sources believed to be reliable. Although all reasonable care has been taken to
ensure the information contained within these reports is not untrue or misleading, we make no representation that such information is accurate or
complete and it should not be relied upon as such. All opinions and estimates included within this report constitute our judgment as of the date of the
report and are subject to change without notice.
From time to time, Grupo Santander and/or any of its officers or directors may have a long or short position in, or otherwise be directly or indirectly
interested in, the securities, options, rights or warrants of companies mentioned herein.
Any U.S. recipient of this report (other than a registered broker-dealer or a bank acting in a broker-dealer capacity) that would like to effect any
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report and its dissemination in the United States.
© 2014 by Santander Investment Securities Inc. All Rights Reserved.

2014 8