Banco Bradesco Sa · BMFBOVESPA:BBDC3
Banco Bradesco Sa — Bank Bradesco — Merger or Acquisition (August 2019)
98 slides from Banco Bradesco Sa's merger presentation, Aug 7, 2019
Slide 1: Excellence and trust
Excellence and trust pwe
Slide 2: Proposal letter to Banco Bradesco
- pwe July 17th, 2019 Attention: To Banco Bradesco S.A. ‘Osasco- SP Dear Sirs, Following our recent discussions, PricewaterhouseCoopers Servicos Profissionais Ltda. (‘PwC" — a company located at Avenida Francisco Matarazzo, 1.400, Torre Torini, Agua Branca, inscrita no CNP./MF sob o n® 02.646.397/00
Slide 3: Content
Content Background Scope, Objective and Approach Timeline Team Fees and Expenses Terms & Conditions 13 15
Slide 4: 1. Background
Slide 5: Background
Background Bradesco is a Brazilian bank founded on March 10, 1943 in the city of Marilia, So Paulo, and is considered one of the largest banking and financial institutions in Brazil. It is headquartered in the city of Osasco, in the metropolitan region of Sao Paulo, at Companhia Cidade de Deus. Brad
Slide 6: Scope, Objective and Approach
i> | 2. Scope, Objective and Approach m= \
Slide 7: Scope, Objective and Approach
Scope, Objective and Approach In this context, management of Bradesco ("Management") has, requested PwC proposal to assist in the scope presented in this session ‘Our work includes the following activities: Item I: Relevance of the purchase price calculation, pursuant to Article 247 of Law 6404/76 (
Slide 8: 3. Timeline
Slide 9: Timeline
Timeline The starting date of our work will be defined in conjunction with Client and in accordance to our availabilty at the date of the approval of this ‘engagement letter. Based on our experience, we estimate the time to complete the activities previously described to be approximately 2 weeks, as
Slide 10: 4. Team
Slide 11: Team
Team The assignment will be conducted by a team of valuation specialists in Brazil, under the overall leadership of a partner or director. Staff will be allocated based on the fit of the professionals to the assignment and on the availability of personnel at the date of approval of this proposal, ob
Slide 12: 5. Fees and Expenses
Slide 13: Fees and Expenses
Fees and Expenses Our fees are estimated based on the time expected to be incurred to perform the proposed work. Based on our previous experience, we estimate our fees to be RS 80.000,00 (eighty thousand Reais) The fees presented are net of taxes and, therefore, the applicable taxes (PIS, Cofins and
Slide 14: 6. Terms & Conditions
Slide 15: Terms & Conditions
Terms & Conditions Use of the Report, Respon: sand Indemnifications Our report will be issued for the exclusive use by Management in connection with the aforementioned objective described in sections “Background” and “Scope and Objective”. Therefore, (i) our work (including analysis, results, conclu
Slide 16: Limitation of responsibility
We do not assume any responsibilty for losses to the Company, their subsidiaries or related entities, their shareholders (direct or indirect), officers, directors, employees or to any other party as a consequence of (i) our use of the information provided to us by Management or obtained from other s
Slide 17: Confidentiality
Confident lity Due to the nature of our engagement, and as agreed upon herein, PwC and Client, by themselves and by their representatives, undertake not to disclose, reveal, copy, use or bring to the attention of third parties that are alien to this engagement, holding in strictest confidence during
Slide 18: Social responsibility
Social responsibility ‘The parties of this Proposal commit: (a) not to exploit any kind of direct child labor and to avoid, in all possible ways, the contracting and/or acquisition of products andlor services of individuals or businesses ‘which exploit, directly or indirectly, child labor in any man
Slide 19: Other conditions
Other conditions The Client authorizes PwC to subcontract part of the services under its only and exclusive responsibility. PwC shall be liable for the burden that may result from a possible subcontracting, including, but not limited to, compliance with the levels of services, quality of the service
Slide 20: Terms and termination
Provided that the legal and professional standards related to the non- disclosure of information are complied with, by accepting the terms and conditions hereby stated, you are also authorizing PwC (i) to make reference to your name as a client of PricewaterhouseCoopers and (ii) to make reference, i
Slide 21: PwC Brazil Offices
PwC Brazil Offices Sao Paulo - SP Av. Francisco Matarazzo, 1400 Torre Torino, Agua Branca ‘So Paulo, SP, 05001-903, T: #55 (11) 3674 2000 Barueri - SP Al. Mamoré, 989, 21°, 22° ¢ 23° Cond. Edificio Crystal Tower Barueri, SP, 06454-040 T: #55 (11) 3674 2000 Belo Horizonte - MG Rua dos Inconfidentes,
Slide 22: PwC network notice
Bhecoas orcas! QB orrcons [J prc test G3 Puce In this document, “PwC” refers to PricewaterhouseCoopers Servicos Profissionais Ltda., which is a member firm of the PricewaterhouseCoopers network or, as the context requires, to the network itself. Each member firm is a separate and independent legal e
Slide 23: July 2019
July 2019 Strictly Private and Confidential
Slide 24: Report cover letter
Contents | Introduction | Company | Article 256 | Final Considerations | Appendix. pwe PricewaterhouseCoopers Servicos Profissionais Ltda. Avenida Francisco Matarazzo, 1400, Torre Torino ‘So Paulo - SP - Brasil CEP: 05001-100 T: #55 (11) 3674-2000 F: +55 (11) 3674-2000 To Banco Bradesco S.A. Osasco
Slide 25: Contents
Contents| rroduton | Company | Arie 256 | Final Considerations | Appentx I . Contents eee ‘The Company ‘Appendix Banco Bradesco S.A. Strictly private and confidential July 2019 PwC 3
Slide 26: Introduction
Contents | notion | Company | Arie 256 | Final Considerations | Appendix | Introduction Banco Bradesco S.A. Strictly private and confidential July 2019 Pwe 4
Slide 27: Introduction: Background
Contents | inosucton | Company | Article 255 | Final Considerations | Appendix Introduction Background Bradesco is a Brazilian bank founded on March 10, 1943 in the city of Marilia, S40 Paulo, and is considered one of the largest banking and financial institutions in Brazil. It is headquartered in t
Slide 28: Introduction (cont.): Terms and Conditions
Contents | inosucton | Company | Article 255 | Final Considerations | Appendix Introduction (cont.) Terms and Conditions Use of the Report Our work was developed exclusively in connection with the aforementioned objective described in sections “Background” and “Scope and Objective”. Therefore, (i) o
Slide 29: The Company
Contents| rroduton | Company | Arce 256 | Final Considerations | Appenx The Company Banco Bradesco S.A. Strictly private and confidential July 2019 Pwc 7
Slide 30: BAC's General Description
Contents | Introduction | Company | Article 256 | Final Considerations | Appendix The Company BAC’s General Description BAC is headquartered in Miami, FL, where it has been active for over 45 years in the American banking sector, with roughly 10 thousand clients. The bank's focus lies on the provisi
Slide 31: Highlights from 2018 operations
Contents | Invoduction | Company | Atle 256 | Final Considerations | Appendix Company Context Highlights from 2018 operations Total Assets Shareholders’ Equity 13,2% + Basel Index (%) US$ 2,2 billion US$ 206 million —_ 1] el 15,3% + ROAE (%) Deposits Net Income US$ 1,8 billion US$ 29 million 1,4% +
Slide 32: Analyses — Article 256 of Law 6.404/76
Contents| Introduction | Company | Article 256 | Final Considerations | Appendix I Analyses — Article 256 of Law 6.404/76 Banco Bradesco S.A. Strictly private and confidential July 2019 Pwc 10
Slide 33: Technical procedures
Contents | Introduction | Company | Article 256 | Final Considerations | Appendix. Analyses — Article 256 of Law 6.404/76 Technical procedures (free translation of the law) Art. 256 defines that “The purchase by a publioly held corporation of the control of any commercial firm shall be subject to th
Slide 34: Item I - Application
Contents | Invodution | Company | Arce 255 | Final Considerations | Appendix Analyses — Article 256 of Law 6.404/76 Item I - Application Art. 247 Item a) The acquisition value is relevant if it exceeds 10% of the buyers’ Shareholders’ Equity ("BV"). Bradesco BV BAC US$ 32,2 Investment billion’ US$ 5
Slide 35: Item II - Application
Contents | Introduction | Company | Article 256 | Final Considerations | Appendix. Analyses — Article 256 of Law 6.404/76 Item II - Application Item b) - BV at Market value For the application of item b) of Art. 256, fair value adjustment on assets and liabilities were obtained from note 14 (‘Fair V
Slide 36: Final Considerations
Contents| itoduction | Company | Atte 255 | Final Considerations | Appendix I Final Considerations Banco Bradesco S.A. Strictly private and confidential July 2019 Pwc 14
Slide 37: Final Considerations
Contents | Invodueton | Company | Article 255 | Final Considerations | Appendix Final Considerations Based on the activities performed and information provided by Management, we present below our main considerations regarding the results obtained from the application of the parameters of Art. 256: i
Slide 38: Appendix
Contents| rroduton | Company | Arce 256 | Final Considerations | Appendix | Appendix Banco Bradesco S.A. Strictly private and confidential July 2019 Pwo 16
Slide 39: Appendix 1: Shareholders' Equity
Contents | Introduction | Company | Article 256 | Final Considerations | Append Appendix 1 Shareholders’ Equity! BAC Balance Sheet at fair value: uss Assets 2018 Fair Value Fair Value (adjusts) Cash 298.368.191 ~ 298,358.191 Securities 469.764.339 (609.319) 159.255.020 Credit Operations 1.714.485.02
Slide 40: PwC notice
Ek pwe © 2019 PricewaterhouseCoopers Servicos Profissionais Ltda. All rights reserved. In this document, PwC refers to PricewaterhouseCoopers Servicos Profissionais Ltda. a Brazilian member firm of the PricewaterhouseCoopers network, and may sometimes refer to the PwC network. Each member firm is a
Slide 41: Excellence and trust
Excellence and trust pwe
Slide 42: Proposal letter to Banco Bradesco
a pwe July 17th, 2019 Attention: To Banco Bradesco S.A. Osasco- SP Dear Sirs, Following our recent discussions, PricewaterhouseCoopers Servicos Profissionais Ltda. (‘PwC" — a company located at Avenida Francisco Matarazzo, 1.400, Torre Torini, Agua Branca, inscrita no CNPJ/MF sob o n® 02.646.397/000
Slide 43: Content
Content Background 4 Scope and Objective 6 Methodology and Approach 8 Timeline 10 Team 12) Fees and expenses 14 Terms & Conditions 16
Slide 44: 1. Background
Slide 45: Background
Background Bradesco is a Brazilian bank founded on March 10, 1943 in the city of Marilia, So Paulo, and is considered one of the largest banking and financial institutions in Brazil. Itis headquartered in the city of Osasco, in the metropolitan region of Sao Paulo, at Companhia Cidade de Deus. Brade
Slide 46: Scope and Objective
Scope and Objective ) 3S _
Slide 47: Scope and Objective
Scope and Objective In this context, management of Bradesco ("Management") has requested PwC proposal to assist in the scope presented in this session, Management, pursuant to article 256 of Law 6,404/76 (“Art. 256°) is ‘submitting the Transaction to the Shareholders’ General Meeting for its conside
Slide 48: Methodology and Approach
Methodology and Approach
Slide 49: Methodology and Approach
Methodology and Approach Valuation Methods ‘The economic valuation of the Company will be mainly based on the future earnings method using the discounted cash flow ("DCF") approach. The discounted cash flow is widely used worldwide and is especially recommended for companies with positive operationa
Slide 50: 4. Timeline
Slide 51: Timeline
Timeline The starting date of our work will be defined in conjunction with Client and in accordance to our availabilty at the date of the approval of this engagement letter. Based on our experience, we estimate the time to complete the activities previously described to be approximately 4 weeks, as
Slide 52: 5. Team
Slide 53: Team
Team The assignment will be conducted by a team of valuation specialists in Brazil, under the overall leadership of a partner or director. Staff will be allocated based on the fit of the professionals to the assignment and on the availability of personnel at the date of approval of this proposal, ob
Slide 54: 6. Fees and Expenses
Slide 55: Fees and Expenses
Fees and Expenses Our fees are estimated based on the time expected to be incurred to perform the proposed work. Based on our previous experience, we estimate our fees to be RS 250.000,00 (two hundred and fifty thousand Reais) The fees presented are net of taxes and, therefore, the applicable taxes
Slide 56: 7. Terms & Conditions
Slide 57: Terms & Conditions
Terms & Conditions Use of the Report, Responsibilities and Indemnifications Our report will be issued for the exclusive use by Management in connection with the aforementioned objective described in sections “Background” and “Scope and Objective”. Therefore, (i) our work (including analysis, results
Slide 58: Limitation of responsibility
Should we become aware, at any time, of any fact or information that had not been supplied to us before the issuance of our final report; we reserve the right to review the calculations, the results and our conclusions. We do not assume any responsibility to update our report due to the occurrence o
Slide 59: Scope Limitations
Scope Limitations ‘We would like to point out that our economic valuation is only one of the several factors to be considered in arriving at a final value of a company or asset, which is only determinable by free negotiation between a willing buyer and a wiling seller, in an open and unrestricted ma
Slide 60: Confidentiality
Confidentiality Due to the nature of our engagement, and as agreed upon herein, PwC and Client, by themselves and by their representatives, undertake not to disclose, reveal, copy, use or bring to the attention of third parties that are alien to this engagement, holding in strictest confidence durin
Slide 61: Social responsibility
Social responsibility The parties of this Proposal commit: (a) not to exploit any kind of direct child labor and to avoid, in all possible ways, the contracting and/or ‘acquisition of products andlor services of individuals or businesses which exploit, directly or indirectly, child labor in any mann
Slide 62: Other conditions
Other conditions The Client authorizes PwC to subcontract part of the services under its only and exclusive responsibilty. PwC shall be liable for the burden that ‘may result from a possible subcontracting, including, but not limited to, compliance with the levels of services, quality of the service
Slide 63: Terms and termination
Provided that the legal and professional standards related to the non- disclosure of information are complied with, by accepting the terms and conditions hereby stated, you are also authorizing PwC (i) to make reference to your name as a client of PricewaterhouseCoopers and (ii) to make reference, i
Slide 64: PwC Brazil Offices
PwC Brazil Offices Sao Paulo - SP Av. Francisco Matarazzo, 1400 Torre Torino, Agua Branca ‘So Paulo, SP, 05001-903, T: #55 (11) 3674 2000 Barueri - SP Al. Mamoré, 989, 21°, 22° ¢ 23° Cond. Edificio Crystal Tower Barueri, SP, 06454-040 T: #55 (11) 3674 2000 Belo Horizonte - MG Rua dos Inconfidentes,
Slide 65: PwC network notice
Bheicoss orcas! QB orrcons [J prc test E3 ruc te In this document, nC” refers to PricewaterhouseCoopers Servicos Profissionais Ltda., which is a member firm of the PricewaterhouseCoopers network or, as the context requires, to the network itself. Each member firm is a separate and independent legal
Slide 66: July 2019
July 2019 Strictly private and nfidential
Slide 67: Report cover letter
Content |iioducson | Company Context | Projection Parameters | Mutiple | Resuts | Appendix pwe PricewaterhouseCoopers Servicos Profissionais Ltda. Avenida Francisco Matarazzo, 1400, Torre Torino ‘So Paulo - SP — Brasil CEP: 05001-100 T: #55 (11) 3674-2000 F: +55 (11) 3674-2000 To Banco Bradesco S.A.
Slide 68: Content
Content | ieducson | Company Context | Projection Parameters | Mutiple | Resuts | Appencx I Tmtrodetion ooo cemee eee cee eeee ee veeeeeeeteeseteititetititetetetieesee A Content Got cmt 7 Projection Paramete: Multiple 23 Results 25 Banco Bradesco S.A. Strictly private and confidential July 2019 Pwc
Slide 69: Introduction
Content | intouction | Company Context | Projection Parameters | Mutiple | Resuts | Appendix | Introduction Banco Bradesco S.A. Strictly private and confidential July 2019 Pwc 4
Slide 70: Introduction: Background
Content | introduction | Company Context | Projection Parameters | Multiple | Results | Appendix Introduction Background Bradesco is a Brazilian bank founded on March 10, 1943 in the city of Marilia, S40 Paulo, and is considered one of the largest banking and financial institutions in Brazil. It is
Slide 71: Introduction (cont.): Valuation Methods
Content | Introduction | Company Context | Projection Parameters | Multiple | Resuits | Appendix Introduction (cont.) Valuation Methods ‘The economic value analysis of the Company was carried out using the Discounted Cash Flow ("DCF") method, based on future profitability. This method estimates the
Slide 72: Introduction (cont.): Terms and Conditions
Content |inrosucton | Company Context | Projection Parameters | Mutiple | Resuts | Appendix Introduction (cont.) Terms and Conditions Use of the Report Our work was developed exclusively in connection with the aforementioned objective described in sections “Background” and “Scope and Objective”. The
Slide 73: Introduction (cont.): Scope Limitations
Content |inrosucton | Company Context | Projection Parameters | Mutiple | Resuts | Appendix i} Introduction (cont.) Terms and Conditions Scope Limitations Our economic valuation is only one of the several factors to be considered in arriving at a final value of a company or asset, which is only dete
Slide 74: Company Context
Content | introduction | Company Context | Projection Parameters | Multiple | Results | Appendix | Company Context Banco Bradesco S.A. Strictly private and confidential July 2019 PwC 9
Slide 75: BAC's General Description
Content | introduction | Company Context | Projection Parameters | Multiple | Results | Appendix Company Context BAC’s General Description BAC is headquartered in Miami, FL, where it has been active for over 45 years in the American banking sector, with roughly 10 thousand clients. The bank's focus
Slide 76: Highlights from 2018 operations
Content | iioducson | Company Cont | Projection Parameters | Mutiple | Resuts | Appendix i} Company Context Highlights from 2018 operations Total Assets Shareholders’ Equity 13,2% + Basel Index (%) US$ 2,2 billion US$ 206 million 15,3% + ROAE (%) Net Income US$ 29 million 1,4% + ROAA (%) Banco Brade
Slide 77: Projection Parameters
Content |iioducson | Company Context | Projection Parameters | Mutiple | Resuts | Appendix i} Projection Parameters Banco Bradesco S.A. Strictly private and confidential July 2019 Pwo 2
Slide 78: Projection Parameters: General Assumptions
Content | Introduction | Company Context | Projection Parameters | Multiple | Resuits | Appendix: Projection Parameters Discounted Cash Flows General Assumptions Projections were based on assumptions defined by Management and reflect its best expectation of BAC’s future results, including its subsid
Slide 79: Projection Parameters (cont.): Deposits Projection
Content | introduction | Company Context | Projection Parameters | Mutiple | Resuts | Appendix Projection Parameters (cont.) Discounted Cash Flows Deposits Projection ‘The graphs aside show the evolution of the customer base and total deposits. These projections consider the following assumptions: =
Slide 80: Projection Parameters (cont.): Credit Portfolio
Content |iiaducson | Company Context | Projection Parameters | Mutiple | Resuts | Appendix Projection Parameters (cont.) Discounted Cash Flows Credit Portfolio US$ mn. Credit Operation Revenue Projection ram Bom 8% ‘The credit portfolio projection was developed considering the following two Bia 22 c
Slide 81: Projection Parameters (cont.): Management Fee Revenue Projection
Slide 82: Projection Parameters (cont.): Securities Revenue
Slide 83: Projection Parameters (cont.): Expenses and Operating Profit
Slide 84: Projection Parameters (cont.): Assets, Taxes, Dividends
Slide 85: Projection Parameters (cont.): Basel Index
Slide 86: Projection Parameters (cont.): Discount Rate
Slide 87: Projection Parameters (cont.): Discounted Dividend Flows
Slide 88: Multiple
Slide 89: Multiples: Transaction Multiples
Slide 90: Results
Slide 91: Results: Economic Value Results
Slide 92: Appendix
Slide 93: Appendix I: Macroeconomic premises
Slide 94: Appendix II: Beta calculation companies
Slide 95: Appendix III: Historical Consolidated Balance Sheet
Slide 96: Appendix IV: Projected Consolidated Balance Sheet
Slide 97: Appendix V: Statement of Projected Results
Slide 98: Signatures
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: August 7, 2019 BANCO BRADESCO S.A. By: /S/Leandro de Miranda Araujo Leandro de Miranda Araujo Exe