Dear all

In the first newsletter of 2013 we would like to share with you the 2012 results as well as the goals and challenges ahead for this year.

As you all know, in 2012 we felt a strong economic downturn of our home market with effects in the investment scale of our main clients, REN, EDP and REFER from Portugal. This has reduced the weight of the Portuguese market for Automation business to about 10% of total turnover, an historical minimum.

Worldwide Automation has closed 2012 with 62M€ of Orders and 58M€ of Sales. This means that comparing to 2011, orders have suffered a reduction of 12% and the sales volume has increased 7.4%. Despite the huge effort searching for alternative markets to face the domestic market downturn and the strengthening of our presence in the strategic markets of Efacec, it wasn’t possible to reach the order volume of the previous year.

Although there’s a rebound of orders, we can considerer 2012 as a positive year once EBITDA is in line with forecasts.

An important question now stands: Will we be able to resume the activity growth already this year, keeping the business profitability levels?

The downturn context of European and Portuguese markets represents a significant challenge for 2013, one which we will tackle by enhancing the competence transfer to the strategic market units. We believe we will achieve our target 73M€ Orders and 71M€ Sales.

Simultaneously, with the expected reduction of profit margins we must be even more careful in assigning resources and fully conscientious of all waste. International markets are revealing more difficult, more competitive and with lower margins.

In 2012 we kept a high level of R&D investment, in line with the approval of several QREN and FP7 projects. This investment surely represents new profit potential, but the market for advanced Smart Grid projects has been slower than expected due to the financing difficulties.

In line with our development strategy, we are driving the Portfolio Integration initiative, also a major challenge for 2013 and one that will enable us to boost the competitiveness of our worldwide offer. The bases were already launched for the project development, through the definition of first six important axis, to be carried out by multidisciplinary teams from Portugal and the United States.

Despite the uncertainties, we strongly believe that we are able to sustain the trust and loyalty of our clients. We will continue to be competitive, innovative and customer-focused, and we will find new opportunities towards sustained growth in the global markets.

Thus, everyone in Efacec Automation is devoted to meet the challenges with more dedication, commitment and professionalism with a strong focus in all internationalization opportunities. As a team, we will certainly reach our goals for 2013 with a sense of accomplishment.