Vale

BBI Equity Research Monday, December 9, 2013

UPDATE

Focusing on Strong Operational Drivers as Uncertainty Fades

The settlement of Vales multi-billion tax dispute is a major milestone. We are, therefore, updating our TP to R$49/share (from R$54/share) to reflect not only this updated liability, but also the strengthening of Vales balance sheet after VLI and Norsk Hydro asset sales. Furthermore, despite previous concerns regarding the deceleration of the Chinese market, the iron ore market surpassed expectations and daily Chinese output has remained at an elevated level. Consequently, iron ore prices sustained an average of US$135/t for 2013 (our estimate was US$122/t) thus leading us to calibrate the curve to reflect the upward shift. Lastly, Vale did an outstanding job in trimming costs in a sustainable way and it is adhering to a conservative capex approach (justifying the incorporation of the strategies into our models). Given the clearer skies ahead and Vales above-average multiple discount versus its global peers, we are currently more positive about the company and keeping our Outperform rating. Iron ore inventories at Chinese ports are increasing, but still below the level that led to the price collapse in Aug. 2012. The price scenario remains favorable as the winter usually curbs Chinese production (year-end) and imports accelerate. Meanwhile, daily Chinese steel output remains above 2mn tons per day while rebar prices recently traded above US$585/t (an eight-month high) supported by a low inventory level (three-year low). Our iron ore price forecast for 2014 was updated to US$120/t from US$110/t. Vale announced its capex plan for 2014 (US$14.8bn), which was the third consecutive decrease of its annual budget. The company expects to deploy US$9.8bn to develop projects, with an intense focus on major projects, such as: Carajas (35%), Moatize/Nacala (28%), Itabiritos (11.5%), a distribution network (5%) and Salobo II (4%). Meanwhile, sustaining capex was further reduced to US$4.5bn (from US$4.8bn) and there is room for a further contraction of US$107mn (a non-recurrent ERP implementation cost). Settling the tax liability was an important achievement and the decision removed a major source of uncertainty. The substantial discount (axing 50% from R$45bn, equaling R$22.3bn) was a positive surprise, and translates into a NPV liability of R$14.4bn (above our previous provision of R$7.5bn). Despite the negative impact of the upward adjustment, we believe this settlement removes a significant burden. Vale successfully delivered key projects in 2013, such as Carajas 40, CLN150, Conceicao Itabiritos, Teluk Rubiah (distribution center), Long Harbour and Totten. Despite concluding the works at CLN150, the railway capacity will be limited to 128mtpy due to changes in planning and this will curtail the upside of Carajas 40 for the short term. When Teluk Rubiah starts up in 4Q13, Vale will be able to optimize its logistics infrastructure by using Valemax ships and cargo redistribution techniques. Overall, Vales current valuation is attractive as favorable operational drivers (resilient iron ore prices and a depreciated BRL) are combining with focused growth prospects. The settlement of its tax liability removes the most important uncertainty, while the only remaining non-operational risk is the mining code (and the possible inclusion of a special participation tax). Nevertheless, the new mining code should only be voted upon after 2014s elections so this will not have an impact in the short run.
(BRL mn) EPS (R$) Net earnings EBITDA Shareholders' equity ROE% P/E EV/EBITDA P/BV Dividend yield 2012A 4.14 21,126 36,048 166,101 12.72% 7.96 6.37 1.01 6.84%
th

VALE (VALE5, VALE US) Mining Outperform

Target Price: R$49.00, US$20.00 Upside: +49%, +31%
120 115 110 105 100 95 90 85 80 75 70 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Ibovespa Vale PNA

Alan Glezer, CFA - 55 11 2178 5466 alanglezer@bradescobbi.com.br Arthur Suelotto, CFA - 55 11 2178 6104 arthur.suelotto@bradescobbi.com.br

COMPANY REPORT

2013E 4.81 24,530 48,764 169,694 14.46% 6.85 4.71 0.99 7.95%

2014E 6.51 33,234 52,930 191,296 17.37% 5.06 4.34 0.88 6.85%

2015E 6.01 30,645 56,322 211,216 14.51% 5.49 4.07 0.80 6.32%

Key Figures Local price ADR Price range - 52 weeks (BRL) Shares outstanding (mn) 3-month ADTV (R$mn) Market cap (R$mn) EV (R$mn) 1 Net debt (R$mn) Net debt/EBITDA (LTM)

6-Dec-13 32.95 15.25 25.52-43.09 5,102.90 481.2 168,140 229,470 50,015 1.16

Bradesco Corretora Av. Paulista, 1.450 7 floor Sao Paulo Brazil 55 11 3556-3001
Bradesco S.A. Corretora de Ttulos e Valores Mobilirios (Bradesco Corretora) does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that Bradesco Corretora and its affiliates may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For full disclaimer and definitions, please refer to the end of this report.

COMPANY REPORT BBI Equity Research Monday, December 9, 2013

Iron Ore Market: Healthier Price Outlook and Lower Volatility

Despite increasing fears of a more accentuated deceleration in Chinese growth, iron ore prices are showing an astonishing degree of resilience. Currently trading just slightly below US$140/t, the price trajectory has been a positive surprise that is surpassing previous expectations for 2013. For instance, our estimate was US$122/t, while the actual average has been around US$135/t (11% above the forecast). Rebar prices currently lack the support to go above US$585/t as the winter in China typically curbs the demand at the end of the year and thus caps prices. Meanwhile, rebar inventories held by Chinese traders have reached a three-year low at 5.18mn tons (Mysteel data), thus limiting the potential downside. Even though current rebar prices are still considerably below last years average (US$628/t), the daily steel output has been reasonably strong at above 2.1mn tons per day and the latest data still shows strong momentum (Novembers average came in at 2.14mn tons per day).
Figure 1: Iron Ore Prices vs. Rebar Prices (US$/ton)
200 850 800 180 750 160 700 140 650 600 120 550 100

Iron Ore (Platts, US$/ton) - lhs Rebar (US$/ton) - lhs

500 450
Jun/10 Jun/12 Aug/10 Aug/12 Jun/13 May/10 May/12 May/13 Aug/13 Jul/10 Jul/12 Jan/11 Jun/11 Sep/11 Nov/11 Aug/11 Dec/11 Feb/10 Feb/12 Nov/10 Dec/10 Nov/12 Dec/12 Feb/13 Jan/10 Apr/11 Jan/12 Feb/11 Jan/13 Mar/11 Jul/13 Jul/11 Nov/13
Dec/13

80
May/11 Dec/13 Sep/10 Sep/12 Sep/13
Oct/13

Oct/10

Oct/12

Apr/10

Apr/12

Mar/10

Mar/12

Source: Bloomberg

Chinese steelmakers remain reluctant to accept higher iron ore prices for imported ore (above US$135/t), but it seems inevitable considering the limited domestic iron ore production during the winter season. The inventory of iron ore at Chinese ports is still rising and reached 87.4mn in the last week of November. Nevertheless, stocks are considerably below the 100mn tons seen in September 2012 before the collapse of iron ore prices when it traded below US$90/t.
Figure 2: Iron Ore Price - Volatility
40% 35%

Iron Ore Price Volatility - (Daily, Rolling 3M)

30%

25%

20%

15%

10%

5%
Jun/10 Jun/12 Jun/13 Jul/10 Jul/12 Jan/11 Aug/10 Jun/11 Aug/12 Jul/13 May/10 May/12 May/13 Aug/13 Aug/11 Sep/11 Jul/11 Nov/11 Dec/11 Jan/10 Jan/12 Feb/10 Feb/12 Jan/13 Apr/11 Sep/10 Sep/12 Feb/13 Mar/11 Sep/13 Nov/10 Dec/10 Nov/12 Dec/12 May/11 Nov/13 Feb/11 Oct/10 Apr/10 Apr/12 Oct/12 Mar/10 Mar/12 Mar/13 Apr/13 Oct/11

Source: Bloomberg

Iron ore price volatility continues to be on a downtrend as the addition of new low cash-cost supplies limit the room for price hikes, while cost inflation and deterioration of Chinese mines clearly creates a solid floor for prices. We believe that this is indeed a favorable scenario, and there is room for further price improvement ahead of the Chinese New Year in 2014. At the beginning of December, the Chinese government is expected to discuss urbanization plans that could include a new target of a 60% rate for 2020 (from the current 52%).
2

Mar/13

Apr/13

Oct/13

Oct/11

COMPANY REPORT BBI Equity Research Monday, December 9, 2013

Figure 3: Iron Ore Historical Prices and Our Forecasts

200 300

(Supply - Demand) in mn tons (rhs)

180

Iron Ore Price Forecast - adjusted by inflation (US$/ton, CIF China - lhs) Iron Ore Price Forecast - nominal (US$/ton, CIF China - lhs)

250 200 150

160

140

140 120 120 112 110 109 105 106 100 103 95

100 50 0 -50 -100

120

100

80

Source: Bloomberg, Bradesco Corretora

Figure 4: Iron Ore Prices Our Forecasts Old vs. New

Year Iron Ore Price Forecast - US$/ton OLD NEW Variation (% )
135 120 110 105 100 100 90 90 +13% +9% +10% +11% +9% +11% +3% +3%
140 130 120 110 100 90 80 2013 2014 2015 2016 2017 2018 2019 2020

OLD

NEW

120 2013 110 2014 100 2015 95 2016 92 2017 90 2018 88 2019 88 2020 Source: Bloomberg

In light of the new developments, we are revisiting our iron ore price curve forecast. While we remain skeptical about the supply/demand balance in a scenario where there is a more accentuated deceleration in Chinese iron ore demand, we believe that this shock will not occur in the near future. Considering the strength of the Chinese daily steel output and the iron ore price dynamic in 2013, we are applying an upward shift in the iron ore price curve. For instance, we have updated our iron ore price for 2014 to US$120/t in this revision (from US$110/t).
Figure 5: Iron Ore Price in BRL/ton
350 330 310 290 270 250

Iron Ore Price Forecast - adjusted by inflation (R$/ton, CIF China - lhs)
230 210 190 170 2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Source: Bloomberg, Bradesco Corretora

Settlement of Tax Disputes: The End of the Imbroglio

Vale decided to participate in the federal tax settlement program (REFIS) to pay amounts related to Brazilian corporate income tax (IR) and social contributions (CSLL) on net income from its foreign subsidiaries for 2003-2012. The total amount was estimated at R$45bn, a value composed of the principal of R$17.1bn; R$9.8bn in penalties; R$12.0bn of interest and interest on penalties, as well as R$6.1bn in statutory fees. Out of the options provided by REFIS, Vale selected to pay the principal taxes upfront for 2003, 2004 and 2006, and to pay in installments (principal, penalties and interest) for the remaining years 2005 and from 2007 through 2012. This decision resulted in an estimated NPV of R$14.425bn and a face value for payments of R$22.235bn (including a principal of R$16.286bn, R$1.565bn in penalties, and R$4.474bn in interest and interest on penalties). Vale paid ~R$6bn at the end of November and now has another ~R$16.4bn to be paid in 179 monthly installments that will be adjusted based on the Selic interest rate. The company highlighted that payments
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COMPANY REPORT BBI Equity Research Monday, December 9, 2013

will be funded by operating cash flow, without requiring any additional debt. It is important to highlight that we had a provision of R$7.5bn in our model for this tax dispute settlement, and now adjusted it to reflect the current amount of R$14.4bn. Furthermore, we emphasize that Vale adequately prepared its balance sheet for this kind of settlement after selling VLI (35.9% for R$2.7bn) and its Norsk Hydro position (for R$4.2bn).
Figure 6: Tax Settlement Discount Details and Actual vs. Provisioned
50 45 40 35 30 25 20 15 10 5 0 Total After Discounts Principal, R$ 17.1 bn Penalties/Fees , R$ 15.9 bn Interest, R$ 4.5 bn Penalties/Fees , R$ 1.6 bn Principal, R$ 16.3 bn Interest, R$ 12.0 bn
16.00 14.00 12.00 R$ 6.9 bn 10.00 8.00 6.00 4.00 2.00 0.00 Settlement NPV Provision in the Model Increase in provision R$ 7.5 bn R$ 7.5 bn R$ 14.4 bn

Source: Company

New Capex Plan: Further Reduction to US$14.8bn in 2014

Vales Board of Directors has approved its investment budget for 2014. This was reduced for the third time in a row to a total amount of US$14.8bn (versus US$15.5bn in 2013e), after peaking at US$18bn in 2011. The company reiterated its focus on capital efficiency through the creation of a smaller portfolio of projects with high risk-adjusted expected returns. Such a strategy is justified by the fact that more than 80% of the budget for project execution, which totals R$9.3bn, is dedicated to core projects such as expanding the iron ore production and distribution network (Carajs/Itabiritos), developing the integrated mine-plant-railway-port coal operations in Mozambique (Moatize/Nacala), and the Salobo copper project.
Figure 7: Evolution of Capex Breakdown and Project Budget Division
25

R&D
20

Sustaining

Projects
0.9

Logistics 5%

Moatize II/Nacala 28% Salobo II 4% Others 17% Carajs Expansion 35%

1.7 15 4.6

1.5 0.9 4.6 4.8 0.9 4.5

4.5

0.9 4.5

Itabiritos 11%

10 11.7 11.6 13.6 9.8 9.3 10.4

0 2011
Source: Company

2012

2013E

2014E

2015E

2016E

The sustaining capex budget was reduced to US$4.5bn for 2014 from US$4.8bn in 2013, which represents 4.7% of the asset base, lower than the average ratio of 4.9% during the last three years. Sustaining capex basically provides funding for five classes of initiatives: operations, made up of mainly equipment replacements; building and expanding waste dumps and tailings dams; health & safety issues; corporate social responsibility (CSR); administration and others. There is the potential for a further reduction going forward, as the abovementioned total considers a non-recurring expense of US$107mn related to an ERP implementation project.
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COMPANY REPORT BBI Equity Research Monday, December 9, 2013

Figure 8: Sustaining Capex Breakdown and Evolution

Operations 3,500 3,000 2,500 2,000 1,500 1,000 500 0
Source: Company

Waste

Health/Safety

CSR

Adm./Others

US$ 2,897mn 424 174 365 507 US$ 1,023mn 1,427 140 644 Ferrous Minerals Base Metals Fertilizers Coal US$ 399mn US$ 179mn

R&D expenses should remain broadly stable in 2014 compared to the expected final standing of 2013 of US$0.9bn. Nevertheless, a reduction in R&D can be observed since 2012, especially due to decreasing feasibility studies expenses, a downtrend that is a direct result of the companys increased focus on its key projects. The budget for 2014 is comprised of US$384mn to be used for mineral exploration, US$356mn for feasibility studies, and US$163mn to be invested in technological innovation and adaptation.
Figure 9: R&D Expenses Breakdown and Evolution
1800 1600 1400 1200 1000 800 600 400 200 0 210 731 548 140 2013* 356 163 2014E 592 426 384 Mineral Exploration Feasibility Studies Technological Innovation

2012 * Rolling 12M ending in September 30, 2013. Source: Reuters

Revisiting Supply/Demand Balance: Delaying Oversupply

Although concerns about the Chinese growth deceleration could have sparked a sequence of project cancelations, it appears that such fears are fading away. We continue to believe that a substantial amount of projects will reach the market in the coming years, although delays have been more significant than previous expectations. According to our estimates, supply could grow to 1.6bn tons in 2020 (from the 1.2bn tons currently), considering an annual depletion rate of 50mn tons each year. Furthermore, it is important to notice that a substantial amount of new projects are located in Brazil or Australia, and in either the first or second quartiles of the cash-cost curve.
Figure 10: Iron Ore Supply Forecast
Iron Ore Miners (supply study) VALE Rio Tinto Other BHP Billiton Fortescue Arcelor Kumba CSN MMX Gerdau Usiminas Anglo American Bamin Supply before Depletion Depletion Supply Forecast Current Capacity 322 259 196 186 100 54 53 28 7 7 1 2013 until 2020 160 205 177 9 55 27 17 55 22 12 21 27 20 806 806 Supply Forecast (mn tons) 482 464 373 195 155 81 70 83 29 18 21 27 20 2,018 -400 1,618

200 180 160 140 120 100 80 60 40 20 0 5 105 205 305 405 505 605 705 805 905 Bradesco: Iron Ore Price Forecast 2020 Cost Curve: Iron Ore CFR - China 2013

Cost Curve: Iron Ore CFR - China 2020

Excess supply of 300 mn tons in 2020, putting pressure on prices 1005 1105 1205 1305 1405 1505

1,212 1,212

Source: Companies and Bradesco Corretora

COMPANY REPORT BBI Equity Research Monday, December 9, 2013

Demand growth has been healthy this year, and Chinese iron ore imports expanded 10% YoY when comparing the data up until October 2013. The demand adjustment related to the rebalancing of the Chinese economy - from investment-driven to consumption-driven growth - seems further away and we have therefore postponed the demand contraction to 2017-18 (from in 2016 previously). The delay in oversupply expectations is behind our upward adjustment of the iron ore price curve (+8% higher on average). Indeed, by incorporating the above-mentioned details, even if we accept that demand should increase by 100mtpy, this might be insufficient to absorb the supply expansion of more than 400mtpy (ex-depletion).
Figure 11: Iron Ore Demand Forecast
Demand (mn tons) China 804 844 886 904 859 773 792 Asia (Jpn, SK and Twn) Europe 300 120 306 121 312 122 318 124 325 125 331 126 338 127 Others TOTAL 53 1,277 55 1,327 58 1,379 61 1,407 64 1,372 67 1,297 70 1,328 Demand Growth YoY (% ) Asia China SK and Europe Others TOTAL 2014 2015 2016 2017 2018 2019 +5 % +5 % +2 % -5 % -10 % +2 % +2 % +2 % +2 % +2 % +2 % +2 % +1 % +1 % +1 % +1 % +1 % +1 % +5 % +5 % +5 % +5 % +5 % +5 % +4 % +4 % +2 % -2 % -5 % +2 %

2013e 2014e 2015e 2016e 2017e 2018e 2019e

Source: Reuters

Pending Disputes: Only the New Mining Code Remains

After a resolution of the tax dispute, the main pending issue that could impact Vale will be the resolution of the new mining code. The Brazilian government prepared a first draft of the new rules to be applied in the market that was disclosed and sent to the Brazilian Congress in June. This initial version contained the following points that raised some worries among market players: i) royalties should increase to 4% from 2% and this should be charged on gross instead of net revenues (as is currently done); ii) changes in methodology for concessions, with the implementation of an auction process, similar to what exists in the oil & gas sector; iii) more regulations regarding the development of concession (time limit); and iv) inclusion of a special participation tax (between 2% and 10%) to be charged on top of an EBITDA proxy of highly-profitable mines.
Figure 12: Mining Codes in Various Countries
Iron Ore Australia Brazil 2% 355 New code: increase royalties to 4%-6% Canada 2%-13% 50 S. Africa 0.5% - 7% 40 India 10% 35 Imposes export tax of 30% on iron ore Ukraine ~1% 20 Russia 4.80% 10 China 2% 0

Royalties 3% to 7.5% Exports 495

Extra

Source: Bradesco Corretora

Due to some of the aforementioned points, Congressman Leonardo Quinto, the projects sponsor in the Brazilian lower house, proposed a friendlier alternative code that was presented in November. In terms of the main differences, this second version excludes the implementation of the auction process, restoring the first-come preferentiality, and defines Royalties as a fixed ratio, instead of a variable one. The mining code was supposed to be voted upon by Congress on December 10, however, since the executive disagreed with the amended points, and an accord with the Deputies has not yet been reached, voting on the mining code has been delayed. With the elections coming in 2014, we believe it is likely that voting on the new mining code will only occur in 2015.

COMPANY REPORT BBI Equity Research Monday, December 9, 2013

Caves: Mitigating Risks

The cave issues have always represented a burden on the Brazilian mining industry. Caves were considered to be property of the Union in the 1988 Federal Constitution and exploring of any these sites has been restricted ever since. After pledges from the mining sector and more than 20 years of unclear legislation, it was declared that the caves could be declassified according to their environmental and cultural importance, from maximum to high, medium and minimum relevance. Those with maximum importance will never be explored by miners, while the others may be only explored after compensation is paid.
Figure 13: Caves Regulation Milestones
Caves legal regulation milestones Year Publication Details

1988 1990 2008 2009 2012

Federal Constitution 99.556/1990 Federal Decree 6.640/2008 Federal Decree Environmental Agency Instruction Environmental Agency Instruction

Natural caves are property of the Union Natural caves and areas of influence are national heritage site Criteria, restrictions and compesation for irreversible impacts on caves Cave classification criteria Compensation procedures for regular and high relevance caves

Source: Company and Bradesco Corretora

This classification process is usually a complicated one as it has to be extended for at least a one-year period (both dry and wet seasons have to be considered). Vale has over 200 caves yet to be classified. The process is usually simpler for new projects and S11D represents a successful example. Vale obtained the environmental permit for S11D that was already complying with existing cave legislation, and therefore not representing an unplanned risk for the project. A total of 137 caves were preserved.

Base Metals: Copper Time to Reap Rewards

During 2013, Vale managed to successfully ramp up the Salobo projects phase 1 and production should reach 69k tons. Furthermore, the second phase is expected to start in mid-2014 and should double production when the expansion is concluded. Considering Salobos cash cost of US$0.95/lb (first quartile), it assures the profitability even with a challenging price outlook. Prices have remained above US$3/lb since 2010, thus we believe it is fair to assume that Vale could reach an EBITDA margin of between 40% and 50%. Given these assumptions, Vale should generate EBITDA of almost US$1bn once the operation is running at its full capacity utilization.
Figure 14: Copper Historical Prices
5.00

4.50

Copper (US$/lb)
4.00

3.50

3.00

2.50

Source: Reuters

COMPANY REPORT BBI Equity Research Monday, December 9, 2013

Valuation: Time to Price Operational Drivers instead of Disputes

To arrive at our final TP of R$49/share for VALE5 (US$20/share for VALE US), we have evenly blended our multiple-based valuation of R$51.40/share with a DCFbased valuation that points to a reasonably attractive TP of R$46.90/share. We believe the market is exaggerating the current discount between Vale and its comparable peers, such as Rio Tinto and BHP Billiton. Vale has historically traded at an average discount of 6% to the Australian miners, a number that has been stretched to the current value of 22%. Even though Vale struggled for a long time with uncertainties brought up by the REFIS and still faces potential risks evolving the new mining code, we acknowledge that there is room for this comparable discount to shrink back to normal levels. Combining both methodologies, we believe it is fair to reiterate our Outperform rating for Vale.
Figure 15: Vales Multiple vs. Peers
11 10 EV/EBITDA (VALE) 9 8 7 6 5 4 3 EV/EBITDA (BHP) EV/EBITDA (RIO)

Source: Bloomberg

Although we have assumed a historical multiple of 6.0x, by looking at the current stock price we can see that it is trading at below the target multiple. It is worth adding that we have adjusted the provision for the tax dispute from the previous US$7.5bn, to the project net present value of US$14.4bn. Also, we incorporated the impact of the Norsk Hydro sale of R$4.2bn.
Figure 16: New vs. Old Estimates
Estimates New vs. Old Net Revenues COGS EBITDA EBITDA Margin CAPEX Old 106,486 51,142 50,446 47.37% 34,694 2013 New % 104,416 -1.9% 55,174 7.9% 48,764 -3.3% 46.70% -0.67 p.p. 32,458 -6.4% Old 108,476 56,144 48,195 44.43% 33,454 2014 New % 114,541 5.6% 60,428 7.6% 52,921 9.8% 46.20% 1.77 p.p. 34,235 2.3% Old 113,300 66,653 45,087 39.79% 34,043 2015 New % 127,652 12.7% 71,791 7.7% 57,609 27.8% 45.13% 5.34 p.p. 47,026 38.1% Old 130,983 77,957 52,246 39.89% 34,870 2016 New % 147,013 12.2% 89,952 15.4% 59,746 14.4% 40.64% 0.75 p.p. 43,364 24.4%

Source: Bradesco Corretora estimates

Our DCF-based valuation uses a WACC of 11.5% and long-term growth of 6%. We are assuming iron ore prices at US$100/t from 2017 onwards. We assume Iron ore and pellet capacities should increase to 446mtpy in 2018, and Moatize and Salobo rampups should enter primarily in 2015-2016.
Figure 17: Estimates for Sales Volumes
Sales Iron Ore (mn tons) Pellets (mn tons) Copper (k tons) Coal (mn tons) Nickel (k tons) Fertilizers (mn tons) 2013 265 40 356 8 250 9 2014 302 44 429 12 276 9 +37 +4 +74 +4 +26 +0 2015 312 44 543 19 304 9 +10 +0 +114 +7 +28 +0 2016 327 44 615 29 347 9 +15 +0 +72 +11 +43 +0 2017 342 44 635 33 360 9 +15 +0 +20 +4 +13 +0 2018 402 44 635 37 360 9 +60 +0 +0 +4 +0 +0 Total +137 +4 +279 +29 +110 +0

Source: Bradesco Corretora estimates

COMPANY REPORT BBI Equity Research Monday, December 9, 2013

Key Figures - VALE

Inco me St at ement BRL million Gr o ss R evenues Taxes and discount s N et R evenues Cost of goods/services sold Gr o ss Pr o f i t Sales and Administrative expenses Other expenses EB IT EB IT D A Equit y income Financial income/expense Op er at i ng i nco me Non-operating result Pr et ax inco me Income t ax M inority Interest N et ear ni ng s EB IT D A ( A d just ed ) N et ear ni ng s ( A d j ust ed ) A d just ment s i n EB I T D A f o r U S GA A P EB IT D A in U SGA A P ( U S$mn) YE FX Op er at i ng M ar g i ns Gross M argin EBIT M argin EBITDA M argin Income t ax rate Net margin Adjust ed Net M argin Adjust ed EBITDA M argin 2 0 12 47% 20% 29% 5% 13% 13% 40% 2 0 13 47% 37% 46% -19% 23% 23% 47% 2 0 14 47% 37% 45% -20% 29% 29% 46% 2 0 15 43% 33% 44% -25% 24% 24% 44% 2 0 16 39% 30% 40% -25% 21% 21% 41% 2 0 17 39% 30% 42% -25% 21% 21% 43% 2 0 18 35% 27% 40% -25% 20% 20% 40% 2 0 12 9 0 , 9 53 -2,065 8 8 ,8 8 8 -47,374 4 1, 514 -4,383 -19,372 17,759 2 6 , 157 1,240 -8,405 10 ,59 4 0 10 ,59 4 509 402 11, 50 6 3 5, 56 5 11, 50 6 1, 14 3 17,0 6 1 1.95 2 0 13 10 6 ,556 -2,140 10 4 ,4 16 -55,174 4 9 ,2 4 2 -2,852 -7,878 3 8 , 511 4 7, 59 5 1,031 -9,496 3 0 ,0 4 7 0 3 0 ,0 4 7 -5,811 294 2 4 , 53 0 4 8 , 76 4 2 4 , 53 0 1, 16 3 2 1, 3 8 0 2.16 2 0 14 116 , 8 74 -2,348 114 , 52 6 -60,404 54 ,12 2 -3,055 -8,396 4 2 , 6 71 52 ,10 2 1,031 -2,160 4 1, 54 3 0 4 1, 54 3 -8,309 0 3 3 ,2 3 4 52 , 9 3 0 3 3 ,2 3 4 1, 12 8 2 1, 6 70 2.32 2 0 15 13 0 , 0 9 1 -2,613 12 7,4 78 -72,905 54 ,573 -3,227 -8,816 4 2 ,53 0 55, 4 9 4 1,031 -2,701 4 0 ,8 6 0 0 4 0 ,8 6 0 -10,215 0 3 0 ,6 4 5 56 , 3 2 2 3 0 ,6 4 5 1, 10 0 2 1, 6 0 6 2.48 2 0 16 14 7,3 0 5 -2,959 14 4 ,3 4 6 -88,076 56 ,2 70 -3,415 -9,257 4 3 ,59 8 58 , 13 5 1,031 -3,337 4 1, 2 9 3 0 4 1, 2 9 3 -10,323 0 3 0 ,9 6 9 58 , 9 6 4 3 0 ,9 6 9 1, 0 76 2 2 ,115 2.54 2 0 17 156 , 6 2 3 -3,146 153 ,4 77 -94,335 59 , 14 2 -3,576 -9,673 4 5, 8 9 3 6 4 , 4 59 1,031 -3,626 4 3 ,2 9 9 0 4 3 ,2 9 9 -10,825 0 3 2 , 4 74 6 5, 2 8 7 3 2 , 4 74 1, 0 6 6 2 4 , 6 13 2.54 2 0 18 175, 53 6 -3,526 172 , 0 10 -111,398 6 0 , 6 12 -3,767 -10,109 4 6 , 73 7 6 8 ,6 8 0 1,031 -2,006 4 5, 76 3 0 4 5, 76 3 -11,441 0 3 4 ,3 2 2 6 9 , 50 8 3 4 ,3 2 2 1, 0 3 5 2 6 ,3 0 4 2.54

B al ance Sheet BRL million C ur r ent + lo ng t er m asset s Cash + short term invest ment Net receivables Invent ories Other Per manent asset s T o t al asset s C ur r ent + lo ng t er m l i ab il it ies Account s payable Dif erred LT debt Tot al debt ST + LT Taxes Other M i no r i t y I nt er est Shar eho l d er s' eq ui t y T o t al l iab i li t i es C ash f l o w BRL million EB IT Depreciation EB IT D A Changes in working capit al Income t ax Capex F r ee cash f l o w t o t he f ir m Key Ind i cat o r s EPS P/ E P/ BV P/ Free cash f low Free cash f low yield Net earnings - CAGR PEG EV/EBITDA EBITDA - CAGR EV/Sales Sales - CAGR EVG ROE (f inal)

2 0 12 6 1,6 0 2 12,999 13,885 10,320 24,398 2 0 5,3 2 1 2 6 6 ,9 2 3 110 ,9 6 3 9,255 0 61,856 664 39,188 3 ,2 4 5 152 ,3 8 8 2 6 6 ,59 6

2 0 13 56 , 9 2 7 15,770 15,730 13,807 11,621 2 2 2 ,8 6 5 2 79 ,79 2 10 7, 9 6 5 10,219 1,059 54,799 2,031 39,857 3 , 19 2 16 9 , 6 9 4 2 8 0 , 8 51

2 0 14 6 0 , 18 9 15,408 17,253 15,144 12,384 2 54 , 0 0 8 3 14 , 19 7 12 0 , 6 0 4 11,187 1,105 56,811 5,811 45,690 3 ,4 0 2 19 1, 2 9 6 3 15, 3 0 2

2 0 15 6 4 ,4 4 6 15,383 19,204 16,856 13,003 2 9 3 ,2 12 3 57,6 58 14 4 ,0 0 4 13,503 1,133 70,059 8,309 51,000 3 ,572 2 11,2 16 3 58 , 79 1

2 0 16 71,16 5 16,679 21,745 19,087 13,654 3 2 7, 4 3 7 3 9 8 ,6 0 2 16 4 ,6 6 7 16,313 1,162 81,203 10,215 55,775 3 , 751 2 3 1,3 4 6 3 9 9 , 76 4

2 0 17 9 5, 9 17 38,235 23,120 20,294 14,268 3 3 5, 59 2 4 3 1,50 9 176 ,3 2 7 17,472 1,191 85,594 10,323 61,747 3 , 9 19 2 52 , 4 54 4 3 2 ,70 1

2 0 18 12 5, 6 58 62,090 25,912 22,745 14,910 3 4 4 , 10 2 4 6 9 , 759 19 2 , 118 20,632 1,218 90,896 10,825 68,548 4 ,0 9 6 2 74 , 76 3 4 70 , 9 78

2 0 12 17,759 8,398 2 6 , 157 -3,144 509 -33,374 - 9 ,8 52

2 0 13 3 8 , 511 9,083 4 7, 59 5 0 -5,811 -32,458 9 ,3 2 6

2 0 14 4 2 , 6 71 9,431 52 ,10 2 -1,889 -8,309 -34,235 7, 6 70

2 0 15 4 2 ,53 0 12,964 55, 4 9 4 0 -10,215 -47,026 - 1, 74 7

2 0 16 4 3 ,59 8 14,537 58 , 13 5 0 -10,323 -43,364 4 ,4 4 9

2 0 17 4 5, 8 9 3 18,566 6 4 , 4 59 0 -10,825 -21,619 3 2 , 0 15

2 0 18 4 6 , 73 7 21,943 6 8 ,6 8 0 0 -11,441 -25,122 3 2 , 117

2 0 12 2.2 18.4 1.4 -21.4 -5% 7% 263.7 7.4 28% 3.0 22% 26.05 8%

2 0 13 4.8 8.6 1.2 22.7 4% -7% -128.9 5.4 7% 2.5 8% 78.51 14%

2 0 14 6.4 6.4 1.1 27.5 4% -6% -100.0 5.0 7% 2.3 4% 17%

2 0 15 5.9 6.9 1.0 -120.9 -1% 39% 17.9 4.7 7% 2.1 13% 15%

2 0 16 6.0 6.8 0.9 47.5 2% 8% 84.4 4.5 3% 1.8 11% 13%

2 0 17 6.3 6.5 0.8 6.6 15% 2% 333.5 4.0 3% 1.7 6% 13%

2 0 18 6.7 6.2 0.8 6.6 15% n.a. n.a. 3.8 n.a. 1.5 n.a. 12%

COMPANY REPORT BBI Equity Research Monday, December 9, 2013

Analyst Certification
Each analyst responsible for the preparation and content of this report hereby certifies, pursuant to SEC Regulation AC and applicable law s and regulations of other jurisdictions, that: (i) (ii) the view s expressed herein accurately and exclusively reflect his or her personal view s and opinions about the subject company(ies) and its or their securities; no part of his or her compensation w as, is, or w ill be paid directly or indirectly, related to the specific recommendation or view s expressed by that analyst in this report; and pursuant to Brazilian securities exchange commission (Comisso de Valores Mobilirios CVM) Instruction 483/10: the recommendations indicated in this report solely and exclusively reflect his or her personal opinions, and w ere prepared independently and autonomously, including in relation to Bradesco Corretora and its affiliates ; his or her compensation is based on the profitability of Bradesco Corretora and its affiliates, w hich includes investment banking revenues;

(i) (ii)

Company disclosures pursuant to Brazilian securities exchange commission (Comisso de Valores Mobilirios CVM) Instruction 483/10: (i) Banco Bradesco S.A. beneficially ow ns 5% or more of equity securities issued by Cielo S.A.. Bradseg Participaes Ltda., a subsidiary of Banco Bradesco, indirectly ow ns 5% or more of equity securities issued by Fleury S.A.. BRADESPAR S.A., w hose controlling group is comprised of the same shareholders that control Banco Bradesco S.A., indirectly ow ns 5% or more of equity securities issued by VALE S.A. (ii) gora, Bradesco Corretora, Bradesco BBI and Bradesco Group companies have relevant financial and commercial interests in relation to the subject company(ies) or the subject security(ies). (iii) Bradesco BBI S.A. is acting as an underw riter in a public offering of equity securities of Unidas S.A. and Via Varejo S.A.. gora and Bradesco Corretora are participating in a public offering of equity securities of CVC Brasil Operadora e Agncia de Viagens S.A., of Certificates of Real Estate Receivables of Brazilian Securities Companhia de Securitizao. (iv) Bradesco BBI have managed or co-managed a public offering of equity and/or debt securities for the follow ing companies w ithin the past 12 months: Abril Educao, Aliansce, Banco BTG Pactual, Banco do Brasil, BB Progressivo II - FII, BB Seguridade, Biosev, BHG, BNDESPAR, BR Malls, Bradespar, Brasil Telecom, CART, CEDAE, Chemical VII, Chemical VIII, Colinas, Comgs, CPFL Energias Renovveis, Daycoval, EcoRodovias, Ecovias, Embratel, Equatorial, Estcio, FII BTG Pactual Corporate Office Fund, Fleury, Gafisa, Gvea Crdito Estruturado (FIDC), Iguatemi, JBS, Marfrig, MPX, Multiplan, OAS, OI, Petropar, Razen Energia, Restoque (Le Lis Blanc), Rodobens, Sabesp, Smiles, Vale and Vix Logstica. BBI also acted as a financial advisor for Alpargatas in the deal w ith Osklen. (v) gora and/or Bradesco Corretora participated in the public offering of equity and/or debt securities for the follow ing companies w ithin the past 12 months: Abril Educao, Aliansce, Alupar, Autoban, BNDESPAR, Banco BTG Pactual, BB Progressivo II - FII, BB Seguridade, Biosev, BHG, Comgs, CPFL Energias Renovveis, Equatorial, Estcio, Fator IFIX - FII, FII BTG Pactual Corporate Office Fund, FII - General Shopping Ativo e Renda, Fator Verit FII, Fibria, FII Brasil Plural Absoluto Fundo de Fundos, FII TB Office, FII TRX, Iguatemi, Iochpe Maxion, GAEC Educao, Linx, Marfrig, Minerva, Multiplan, Rio Bravo Crdito Imobilirio II - FII, Rodovias do Tiet, Santander Agncias FII, Senior Solution, SDI Logstica Rio - FII, Ser Educacional, Smiles, SP Dow ntow n - FII, Tringulo do Sol, Tupy and XP Corporate Maca - FII. (vi) Bradesco Corretora receives compensation for making a market in the equity securities of Alpargatas (ALPA4) and Odontoprev (ODPV3). Bradesco receives compensation for making a market in the in the fixed income securities of BNDESPAR and USIMINAS, and shares of Fundo Imobilirio BB Progressivo II.

Important Disclosures Company-specific regulatory disclosures

1 X 2 Bradesco Corretora and/or its affiliates beneficially ow n one percent or more of any class of common equity securities of the subject company(ies). This position reflects information available as of the business day prior to the date of this report; Bradesco Corretora and/or its affiliates have managed or co-managed a public or Rule 144A offering of the subject companys(ies) securities in the tw elve months preceding the date of this report; Bradesco Corretora and/or its affiliates have received compensation for investment banking services from the subject company(ies) in the tw elve months preceding the date of publication of the research report and/or expects to receive or intends to seek compensation for investment banking services from the subject company(ies) in the three months follow ing the date of this report; Bradesco Corretora and/or its affiliates w ere making a market in the subject companys(ies) equity securities at the date of this report; Any other actual material conflict of interest of Bradesco Corretora and/or its affiliates know n at the date of this report.

4 5 X

Bradesco Corretora research ratings distribution

Rating Outperform Market Perform Underperform Under Review Restricted (1) (2) Definition Expected to outperform the Ibovespa by more than 10%. Expected to perform in the range of 10% above or below the Ibovespa. Expected to underperform the Ibovespa more than 10%. This indicates that both the target price and the rating are currently being revised. The analyst cannot express his/her view s on the company. Coverage 49% 43% 1% 6% 2% BR 96% 100% 100% 86% 100%

Percentage of companies under coverage globally w ithin this rating category. As of 12/09/13 Bradesco Corretora had 117 companies under coverage globally. Percentage of companies w ithin this rating category for w hich [investment banking] services w ere provided w ithin the past 12 months.

Bradesco Corretora ratings

Bradesco Corretora ratings are constantly revised and any temporary inconsistencies betw een the upside potential that gave rise to any such rating and the upside potential in connection w ith the target price are at all times deliberate. The official rating shall prevail. Any differences betw een the rating and the target price may occur especially due to the analysts expectations to the effect that any short/medium term factors that cannot be priced-in yet might lead to inconsistencies betw een Bradeco Corretora valuation and the stock behavior. The factors Bradeco Corretora considered include, but are not limited to: Any expectations in connection w ith quarterly results, market conditions, ow nership issues and any expectations involving mergers and acquisitions. The ratings reflect only the analysts expectation on the future performance of the relevant stock. A Outperform rating does not necessarily represent that the analyst approves of the company and its management w hilst a Underperform rating does not necessarily means that the analyst has a negative view on the company. Within Bradeco Corretora coverage universe there are sound companies, w ith good fundamentals as per the market consensus, and fair priced stock, and w ould not be Bradeco Corretora investment pick.

Price target and rating history

Price target, rating history chart(s), valuation/method used to determine price target, and our policy for managing conflicts of interest in connection w ith investment research are available upon request. You may obtain this information by contacting your representative or by sending an email to bradescocorretora@infobradesco.com.br.

10

COMPANY REPORT BBI Equity Research Monday, December 9, 2013

Additional Disclosures
With the exception of investment company funds, Bradesco Corretoras internal policy prohibits ow nership of securities in their respective area of coverage to analysts as w ell as to the associates reporting to the analysts. Analysts are paid in part based on the profitability of Bradesco Corretora and its affiliates, w hich includes investment banking revenues. Bradesco Corretora policy prohibits its analysts and associates reporting to the analysts from serving as an officer or director, advisory board member or employee of any company in the analysts area of coverage. The follow ing disclosures are required under or based on the law s of the jurisdiction indicated, except to the extent already made above w ith respect to United States law s and regulations. Brazil: This report is distributed in Brazil by Bradesco Corretora. Any investor in Brazil w ho receives this report and w ishes to conduct transactions w ith stocks analyzed herein should contact and request execution of orders through Bradesco Corretora at (55 11) 3556-3001. United Kingdom and European Econom ic Area: In the United Kingdom and elsew here in the European Economic Area, this report may be made or communicated by Bradesco Securities UK Limited ("Bradesco UK"). Bradesco UK is authorized and regulated by the Financial Services Authority and its registered office is at: 20-22 Bedford Row , London, WC1R 4JS. This report is for distribution only to persons w ho: (i) (ii) (iii) (iv) (v) are persons that are eligible counterparties and professional clients of Bradesco UK; have professional experience in matters relating to investments falling w ithin Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the "Financial Promotion Order"); are persons falling w ithin Article 49 (2) (a) to (d) ("high net w orth companies, unincorporated associations etc") of the Financial Promotion Order; are outside the United Kingdom, or are persons to w hom an invitation or inducement to engage in investment activity (w ithin the meaning of section 21 of the Financial Services and Markets Act 2000) in connection w ith the issue or sale of any securities to w hich this report relates may otherw ise law fully be communicated or caused to be communicated (all such persons together being referred to as "relevant persons").

This report is directed only at relevant persons and must not be acted on or relied on by persons w ho are not relevant persons. Any investment or investment activity to w hich this report relates is available only to relevant persons and w ill be engaged in only w ith relevant persons. No public offer of any securities to w hich this report relates is being made by Bradesco UK or Bradesco Corretora in the United Kingdom or elsew here in the European Economic Area. United States: This report is distributed in the United States by Bradesco Securities Inc. Bradesco Securities Inc., a U.S. registered broker-dealer and a w holly-ow ned subsidiary of Banco Bradesco S.A., is a member of FINRA/SIPC. All U.S. recipients of this report w ishing to effect transactions in securities discussed should contact and place orders through Bradesco Securities Inc. at (212) 888-9141. Bradesco Corretora has no officers (or persons performing similar functions) or employees in common w ith Bradesco Securities, Inc. In addition, Bradesco Securities, Inc. maintains and enforces w ritten procedures reasonably designed to prevent Bradesco Securities, Inc., any controlling persons, officers (or persons performing similar functions), and employees of Bradesco Securities, Inc. from influencing the activities of the analyst w ho prepared this research report and the content of this research report prepared by said analyst. The non-US research analysts are not associated persons of Bradesco Securities, Inc. and therefore may not be subject to the NASD Rule 2711 and NYSE Rule 472 restrictions on communications w ith a subject company, public appearances and trading securities held by a research analyst account. Hong Kong: In Hong Kong, this report may be distributed by Bradesco Securities Hong Kong Limited (Bradesco HK). Bradesco HK is licensed by the Securities and Future Commission (SFC) to carry on Type 1 and Type 4 regulated activities as defined in the Securities and Future Ordinance (Cap. 571 of the Law s of Hong Kong) (SFO) in Hong Kong, subject to conditions published on the w ebsite of the SFC from time to time. Except for Bradesco HK, none of its affiliates, including Bradesco Corretora, carry out or is licensed/authorized to carry out any regulated activities as defined in the SFO in Hong Kong and each of these affiliates is prohibited from carrying on any regulated activities, including but not limited to dealing in securities and advising in securities (as defined in the SFO), in Hong Kong. This report is directed to you by Bradesco HK based on your interest and preference in the relevant underlying securities that you have previously communicated to Bradesco HK. You agree that this report is not intended for the promotion of any services or products of any of Bradesco HKs affiliates in Bradesco group, including those of Bradesco Corretora. All Hong Kong recipients of this report w ishing to effect transactions in securities discussed should contact and place orders through Bradesco HK at (852) 22518716 or (852) 22518718. This report is intended for distribution only to non-Hong Kong residents or professional investors as defined in the SFO. It is provided solely for inf ormational purposes and do not constitute an offer to buy or sell or a solicitation of an offer to buy or sell any security, product, service or investment to the public w ithin the meaning of the Companies Ordinance (Cap. 32 of the Law s of Hong Kong) or to professional investors w ithin the meaning of the SFO. It has not been review ed by the SFC or any regulatory authority in Hong Kong. Other Countries: This report, and the securities discussed herein, may not be eligible for distribution or sale in all countries or to certain categories of investors. In general, this report may be distributed only to professional and institutional investors.

General Disclosures
1) This report has been prepared solely by Bradesco Corretora and is being provided exclusively for informational purposes. The information, opinions, estimates and projections constitute the judgment of the author as of the current date and are subject to modifications w ithout prior notice. Bradesco Corretora has no obligation to update, modify or amend this report and inform the reader accordingly, except w hen terminating coverage of the issuer of the securities discussed in this report. This report, including the estimates and calculations of Bradesco Corretora, is based on publicly available information that it consider reliable, but it do not represent it is accurate or complete, and should not be relied upon as such. This report is not an offer or a solicitation for the purchase or sale of any financial instrument. It is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation and the particular needs of any specific person w ho may receive this report. Investors should seek financial advice regarding the appropriateness of investing in any securities, other investment or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Investors should note that income from securities or other investments, if any, referred to in this report may fluctuate and that price or value of such securities and investments may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance. Bradesco Corretora and its affiliates do not accept responsibility for any direct or indirect loss arising due to use of this report. Investors should consider w hether any advice or recommendation in this research is suitable for their particular circumstances and, if appropriate, seek professional advice, including tax advice. Exchange rate movements could have adverse effects on the value or price of, or income derived from, certain investments. Bradesco Corretoras and its affiliates salespeople, traders and other professionals may provide oral or w ritten market commentary or trading strategies to their clients and their proprietary trading desks that reflect opinions that are contrary to the opinion expressed in this report. Such market commentary or trading strategies reflect the different time frames, assumptions, view s and analytical methods of the persons w ho prepared them, and Bradesco Corretora and its affiliates are under no obligation to ensure that such market commentary or trading strategies are brought to the attention of any recipient of this report. From time to time, Bradesco Corretora or its affiliates and officers, directors and employees, not including its analysts may, to the extent permitted by law , hold long or short positions, or otherw ise be interested in transactions in assets directly or indirectly related to this report. Non-US research analysts w ho have prepared this report are not registered or qualified as research analysts w ith FINRA but instead have satisfied the registration and qualification requirements or other research-related standards of a non-US jurisdiction. Any additional information may be obtained by contacting your representative or by sending an email to bradescocorretora@infobradesco.com.br

2) 3)

4)

5)

6) 7)

No portion of this docum ent m ay be (i) copied, photocopied or duplicated in any form , or by any m eans, or (ii) redistributed w ithout prior consent from Bradesco Corretora.

11

Bradesco Corretora Research Team

Econom ics & Research Director Dalton Gardim am 55 1 121 78 4275
(Chief Eco no mist) dalto n@bradesco bbi.co m.br

Denis Blum
(Senio r Eco no mist)

55 1 121 78 4224

denis@bradesco bbi.co m.br

Tarik Migliorini Head of Equity Research Carlos Firetti, CFA 55 1 121 78 5363 Banking and Insurance Carlos Firetti, CFA Bruno Chemmer, CFA Rafael Frade, CFA Financial Services Rafael Frade, CFA Gabriel Gusan, CFA Carlos Firetti, CFA Healthcare Rafael Frade, CFA Raquel Erzinian

55 1 121 78 4230

tarik.miglio rini@bradesco bbi.co m.br

carlo sfiretti@bradesco bbi.co m.br

Telecom , Media and Technology Luis Azevedo 55 1 121 78 5321 Tales Freire 55 1 121 78 4527 Education Luis Azevedo Tales Freire

luis.azevedo @bradesco bbi.co m.br tales@bradesco bbi.co m.br

55 1 121 78 5363 55 1 121 78 4903 55 1 121 78 4056

carlo sfiretti@bradesco bbi.co m.br bruno .chemmer@bradesco bbi.co m.br rafaelf@bradesco bbi.co m.br

55 1 121 78 5321 55 1 121 78 4527

luis.azevedo @bradesco bbi.co m.br tales@bradesco bbi.co m.br

55 1 121 78 4056 55 1 121 78 5329 55 1 121 78 5363

rafaelf@bradesco bbi.co m.br gabriel.gusan@bradesco bbi.co m.br carlo sfiretti@bradesco bbi.co m.br

Consum er Goods and Retail Ricardo Boiati Pedro Bueno

55 1 121 78 5326 55 1 121 78 4272

rbo iati@bradesco bbi.co m.br pedro .bueno @bradesco bbi.co m.br

55 1 121 78 4056 55 1 121 78 531 9

rafaelf@bradesco bbi.co m.br raquel@bradesco bbi.co m.br

Oil & Gas, Petrochem icals and Sugar & Ethanol Auro Rozenbaum 55 1 121 78 531 5 auro @bradesco bbi.co m.br Marcos Dong 55 1 121 78 5469 marco s.do ng@bradesco bbi.co m.br Bruno Arruda 55 1 121 78 531 0 bruno .arruda@bradesco bbi.co m.br Fixed Incom e Altair Pereira Caio Lombardi Andr Sonnervig

Steel, Mining, Pulp & Paper Alan Glezer, CFA 55 1 121 78 5466 Arthur Suelotto, CFA 55 1 121 78 61 04

alanglezer@bradesco bbi.co m.br arthur.suelo tto @bradesco bbi.co m.br

55 1 121 78 4279 55 1 121 78 4225 55 1 121 78 531 8

altair@bradesco bbi.co m.br lo mbardi@bradesco bbi.co m.br andrek@bradesco bbi.co m.br

Transportation, Logistics, Malls and Com m ercial Properties Edigim ar Maxim iliano Jr. 55 112178 5327 maximiliano @bradesco bbi.co m.br Luiz Peanha 55 1 121 78 5324 pecanha@bradesco bbi.co m.br Andr Mazini 55 1 121 78 51 09 andre.mazini@bradesco bbi.co m.br Leandro Fontanesi 55 1 121 78 4274 leandro .fo ntanesi@bradesco bbi.co m.br Hom ebuilding Luiz Mauricio Garcia Alain Nicolau

Electric Utilities, Water & Sew age Renata Cristovo 55 1 121 78 4273

renata.cristo vao @bradesco bbi.co m.br

55 1 121 78 4223 55 1 121 78 531 6

lmgarcia@bradesco bbi.co m.br alain@bradesco bbi.co m.br

Food & Beverage Gabriel Lim a Rodrigo Coelho

55 1 121 78 531 3 55 1 121 78 531 7

gabriel.lima@bradesco bbi.co m.br ro drigo .co elho @bradesco bbi.co m.br

Each analyst w hose nam e is in bold print is the principal analyst responsible for the content of reports on the respective sector, as w ell as fulfillm ent of the provisions of Art. 16 of CVM Instruction 483/10.

Bradesco Corretora CTVM S.A. | So Paulo

Sales - 55 11 3556 3001 Juvenal Neves Tiago Valent Gustavo Paiva Catherine Menezes Sales - Fixed Incom e - 55 11 2178 6959 Fernanda Weber Bratz Lucila Sakakura Sales - Local Fixed Incom e - 55 11 3556 3005 Rogrio Queiroz Dauro Zaltman Denise Chicuta Patricia Cruz Bilezikjian, CFA Traders Agnaldo Ishikava Douglas Vieira Corazza Eduardo Tosin Bueno Joao Batista Tamassia Santos Junior Marcelo Matias Boneri Paulo Silva do Carmo Pedro Fonseca de Souza Sandoval Marcos Iorio Sales Trading - 55 11 3556 3001 Head of Trading Orlando Cardoso

juvenal@bradesco bbi.co m.br tiago valent@bradesco bbi.co m.br gustavo .paiva@bradesco bbi.co m.br catherine@bradesco bbi.co m.br

o rlando cardo so @bradesco bbi.co m.br

fernanda@bradesco bbi.co m.br lucila@bradesco bbi.co m.br

ro gerio @bradesco bbi.co m.br dauro @bradesco bbi.co m.br denise.chicuta@bradesco bbi.co m.br patricia.bile@bradesco bbi.co m.br

Traders Cssio Garcia Fbio Brisola Gustavo Ize Ingrid Amorim Julio Cesar Rossi Mauricio Sanchez Peter Gil Silene Zinhani Stock Loans Desk - 55 11 3556 3001 Marcio Aguiar Wilson Pereira

cssio @bradesco bbi.co m.br fabio @bradesco bbi.co m.br gustavo pereira@bradesco bbi.co m.br ingrid@bradesco bbi.co m.br cesarro ssi@bradesco bbi.co m.br mauricio @bradesco bbi.co m.br peter@bradesco bbi.co m.br silene@bradesco bbi.co m.br

agnaldo @bradesco bbi.co m.br do uglas.co razza@bradesco bbi.co m.br eduardo .bueno @bradesco bbi.co m.br jo o .batista@bradesco bbi.co m.br bo neri@bradesco bbi.co m.br paulo .carmo @bradesco bbi.co m.br pedro .fo nseca@bradesco bbi.co m.br sando val@bradesco bbi.co m.br

marcio @bradesco bbi.co m.br wilso n@bradesco bbi.co m.br

BM&F Trading Desk - 55 11 3556 3350 Jos Lzaro Ferreira - Head Lilian Osti - Commercial Manager

lazaro @bradesco bbi.co m.br lilian.o sti@bradesco bbi.co m.br

Institutional Sales Team - USA, UK & HK

Bradesco Securities, Inc. | New York (FINRA/SIPC Member)
Sales 01 212 888 9141 Marcelo Cabral Juan Briano Randall Smalley DeWayne Shaw Sales - Fixed Incom e 01 212 888 9141 Shinichiro Fukui Brent Matson Sales Trading 01 212 888 9141 Robert Vespa Christopher Barresi Sean Harte

Bradesco Securities Hong Kong Ltd.

Sales (852)2251 8716 or (852) 2251 8718 Luiz Fernando Silva Joo Paulo Loyola

mcabral@bradesco securities.co m jbriano @bradesco securities.co m rsmalley@bradesco securities.co m dewayne@bradesco securities.co m

luiz@bradesco securities.co m jplo yo la@bradesco securities.co m

shin@bradesco securities.co m brent@bradesco securities.co m

Bradesco Securities UK, Ltd Sales 44 207 382 0070 Robert Hulme Roland Campbell

rhulme@bradesco securities.co m ro land@bradesco securities.co m

ro bert@bradesco securities.co m cbarresi@bradesco securities.co m sean@bradesco securities.co m

Sales - Fixed Incom e 44 207 382 0074 Zraick Guilherme Fernanda Jordan

gzraick@bradesco securities.co m fjo rdan@bradesco securities.co m

Av. Paulista, 1450 7 andar CEP: 01310-917 So Paulo SP