2q14 presentation of results

8/12/2019 2Q14 Presentation of Results

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August 7, 2014

Presentation of 2Q14 Results

Ramon Vazquez


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Succession Plan


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Resultado do 2T14

New organizational structure

Chief OperatingOfficer

Sergio Kariya

CommercialRogerio Bregaglio

Heavy Construction

Real Estate

Operations EngineeringRental

Gabriel Esteves

Presentation of 2Q14 Results 08/07/20142


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2Q14 Results


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4

Mills - Financial Performance


In R$ millions

Reclassifiedexcluding the Industrial Services business unit, for comparison.

ROIC: Return on Invested Capital. Until 2010, ROIC was calculated considering the effective income tax rate for the period, while from 2011 onwards ROIC was calculated considering atheoretical 30% income tax rate.

* Excluding non-recurring items related to the former Industrial Services business unit

2Q14/2Q13 2Q14/1Q14 LTM2Q14/LTM2Q13 CAGR 10-13Net Revenue +1% 2% 12% 33%

EBITDA +7% -1% 13% 34%

Net Earnings -31% -1% -9% 19%

188.4

211.8222.0

210.1 207.8 213.0 213.0

95.7 98.9 106.1 102.4 107.5 105.9 105.9

39.348.1

39.6 45.6 33.9 33.4 37.6

50.8%

46.7% 47.8% 48.7%51.7%

49.7% 49.7%

14.9% 14.2% 13.9% 13.4%11.5%

9.2%10.4%

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 2Q14*

Net Revenue EBITDA Net Earnings EBITDA Margin (%) ROIC

354.5

462.8

665.5

832.3 852.8

168.4217.4

339.0

403.1 421.9

103.3 92.2

151.5 172.6 152.5

47.5% 47.0%50.9% 48.4% 49.5%

21.0%

12.3%

14.7% 14.1% 13.0%

2010 2011 2012 2013 LTM2Q14


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Rental83%

Technicalsupportservices

1%

Sales12%

Others4%

By service category

HeavyConstruction

26%

Real Estate28%

Rental46%

By business unit

5

Net revenues totaled R$ 213 million in 2Q14



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We carried out the 3rd issue of debentures, extending thedebt term and reducing its average cost

Total amount: R$ 200 million Rate: 108.75% CDI

6

Debt Amortization Schedule, including principal and

interest, after 3rd Issuein R$ million

Source: Mills

Debt Profile after 3rd Issue

Gross debt: R$ 749 million

Average cost: CDI + 0.79% Average maturity: 2.9 years

0

50

100

150

200

250

2014 2015 2016 2017 2018 2019 2020 2021

Short-term23%

Long-term77%



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Cash flow becomes positive

7

(340)

(219)

(31)

(154)

(13)

11

(400)

(350) (300)

(250)

(200)

(150)

(100)

(50)

-

50

2010 2011 2012 2013 1T14 2T14

Free cash flow

1 Net cash generated by operating activities less net cash used in investment activities



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In R$ million

Heavy Construction Financial Performance

8

* Excluding the positive effect of tax reversal in the amount of R$ 1.5 million in 3Q13.

1 ROIC: Return on Invested Capital. Until 2010, ROIC was calculated considering the effective income tax rate for the period, while from 2011 onwards ROIC was calculated considering atheoretical 30% income tax rate.


2Q14/2Q13 2Q14/1Q14 LTM2Q14/LTM2Q13 CAGR 10-13

Net Revenues +1% +9% +13% +12%

EBITDA +2% 0% +17% +14%

47.5

55.1 55.7 55.758.6

51.055.5

24.3 25.129.4 28.2 29.3

25.6 25.6

51.3%

45.5%

52.8%50.6%

49.9%50.2%

46.2%

18.6% 17.8%20.9% 19.7% 19.1%

14.0%12.5%

1Q13 2Q13 3Q13 3Q13* 4Q13 1Q14 2Q14Net Revenue EBITDA EBITDA Margin (%) ROIC

154.3

131.6

174.1

217.0 220.9

73.6 57.8

84.3

108.1 109.9

47.7%43.9%

48.5% 49.8% 49.8%

24.1%

12.1%

17.2%

19.2%

16.3%

2010 2011 2012 2013 LTM2Q14


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0%

5%

10%

15%

20%

25%

0.0

2.0

4.0

6.0

8.0

10.0

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14Personnel Material Total maintenance/Net rental revenue

Maintenance cost registered growth between quarters, but inline with historical amounts



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Transposition of theSo Francisco river* Belo Montehydroelectric powerplant* North beltway* Subway line 5 SP* Transnordestina

railroad* Oeste-Leste railroad* Paraguau shipyard* Silver monorail line -SP* Gold monorail line-SP* Reduc-Comperj Pipeline

Belo Monte hydroelectricpower plant Jirau hydroelectric power plant* Vales S11D project Oeste-Leste railroad Norte-Sul railroad North beltway Subway line 5 SP Companhia Siderrgicado Pecm steel mill Salvador subway Olympic Park

Colder and Teles Pireshydroelectric power plants Comperj refinery Transposition of the SoFrancisco river Vale projects Gold monorail line- SP Subway line 4 RJ Subway line 4 SP Cuiab light rail

Goinia airport Pulp mill expansion- RS Paraguau shipyard

Jirau hydroelectric power plant Viracopos and Guarulhosairports Braslia airport BRT Transcarioca Metropolitan Arch RJ East beltway- SP Jacu-Pssego highway

Important contracts per stage 1 in the evolution of monthlyrevenue from projects

10

Newcontracts*

Contracts with growingvolume of equipment

Contracts with high volumeof equipment

Contracts in thedemobilization process

E v o

l u t i o n o

f r e v e n u e g e

n e r a

t i o n

( B a s

i s 1 0 0 =

M a x

i m u m

m o n

t h l y r e v e n u e

i n t h e

l i f e o

f c o n s t r u c

t i o n

)

Length of time of Mills participation in the construction work average cycle is 24 months

* New stretches

1 In 2Q14



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Important construction work already started, which we are hired

11

Construction work Investiment Conclusion % formworkand shoring*

Vales S11D project US$ 20 billion 2H18 0.4% 1

Belo Monte hydroelectric power plant R$ 26 billion 2019 0.6% 2

Companhia Siderrgica do Pecm

steel mill

US$ 5 billion 2H15 0.4% 1

Subway line 4 - RJ R$ 8.5 billion 2016 2.0% 3

Transnordestina railroad R$ 7.4 billion 2016 0.5% 4

Subway line 5 - SP R$ 7.4 billion 2016 2.0% 3

North beltway R$ 6.5 billion 2016 2.2%5

Guaba expansion R$ 5 billion 2015 0.4% 1

Salvador subway R$ 3.9 billion 2017 2.0% 3

Norte-Sul railroad, southern stretch R$ 4 billion 2H15 0.4% 6


*In similar construction jobs: 1) CSN plant; 2) Jirau hydroelectric power plant ; 3) Subway line 4 SP;4) stretch of Transnordestina railroad; 5) South beltway SP; 6) stretchof Norte-Sul railroad.


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Characteristics of the major projects in progress

Average term: 18 months


Public-PrivatePartnership

20%

Public21%

Private59%

Source of Funds

Industry33%

Infrastructure62%

Others5%

Per sector

1 In 2Q14

C i h ld i $ 300 billi f 20 20


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Source: Valor newspaper, June 24,2014, using data from BNDES, ministries and public agencies. Do notinclude railways that are part of the Programa de Investimentos em Logstica (Logistic Investment Program).

Concessions should invest R$ 300 billion from 2015 to 2017,of which R$ 92 billion in logistics and R$ 88 billion in powergeneration


2011-2017CAGR (%)

Total

27.0%

9.0%

5.6%

11.5%

7.8 13.015.6

22.8 27.6 31.3 32.823.5

30.831.8

35.636.4

40.3 39.5

22.8

25.826.6

28.229.3

30.5 31.7

54.1

69.674.0

86.6

93.3

102.1 104.0

-

20.0

40.0

60.0

80.0

100.0

120.0

2011 2012 2013 2014 2015 2016 2017

Telecom

Energy

Logistics

Infrastructure investments from concessionsin R$ billlion


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Source: BNDES, data from the last 12 months ended April 30, 2014.

BNDES disbursements for the infrastructure sector increased28% in last 12 months

14 Presentation of 2Q14 Results 08/07/2014

DisbursementVar (%)

Total

28%

-8%

13%

11%

84.7 71.6 69.1

97.2

87.5

53.5

65.1

56.4

55.0

16.8

17.3

17.2

-

50.0

100.0

150.0

200.0

250.0

300.0

Consulting Approval Disbursement

Agriculture

Commercial and services

Industry

Infrastructure

BNDES activities per sector in R$ billion

15%

263,8

232,8

194,9


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Real Estate Financial Performance

15

In R$ million




Net Revenue -12% -1% -5% +35%

EBITDA +2% +7% -20% +29%

64.9 66.5

72.4

54.259.5 58.8

27.724.6 24.4

17.123.5

25.2

42.8%

37.0%33.7%

31.5%

39.4%

42.8%

12.8%9.3% 8.2%

3.2%

6.6% 7.9%

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14Net Revenue EBITDA EBITDA Margin(%) ROIC

105.1

155.8

238.0258.0

245.0

43.9

66.0

113.493.8

90.1

41.7% 42.4% 47.7%

36.4% 36.8%

23.5%

14.3% 15.7%

8.1% 6.5%

2010 2011 2012 2013 LTM2Q14


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The use of our flying table enables a reduction up to 50% ofthe labor work

Residential project, with23 towers of 21 floorswith 600m each.

Execution of each floor in five days, a reductionup to 50% of the labor

work compared to theconventional system.



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Global Park - 218thousand squaremeters withcommercial,residential andhotel buildings, andshopping center

Products: shoring,formworks andflying tables

We have recently signed a contract to rent equipment for theconstruction of Global Park, in So Paulo



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Rental Financial Performance

19

In R$ million




Net Revenue +9% +1% +26% 55%

EBITDA +12% -6% +32% 58%

76.1

90.1 93.9

97.2 97.3 98.6

43.649.3 52.3

56.0 58.4 55.1

57.3% 54.7% 55.7% 57.7%60.1%

55.8%

19.1% 18.5% 18.1% 17.5% 17.1%13.2%

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

Net Revenue EBITDA EBITDA Margin (%) ROIC

95.1

175.4

253.5

357.3387.0

51.0

93.6

141.2

201.2221.8

53.6% 53.4%55.7%

56.3%

57.3%

19.2% 16.5% 18.2% 18.1% 16.2%

2010 2011 2012 2013 LTM2Q14


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Revenues per type of use

Construction sector is the major user of motorized access inBrazil

20Source: Mills 2013, United Rental 2011 and Ramirent 1Q14


58%69% 73%

60% 63%

25%

23% 16% 35%19%

17%8% 11% 5% 18%

Brazilian Market Mills United Rentals(pre-merger RSC)

United Rentals(post-merger RSC)

Ramirent

Others

Spot

Industry

Construction


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8

11

16

21

30

33

0

5

10

15

20

25

30

35

2009 2010 2011 2012 2013 1H14

In the first half of this year 3,000 motorized access unitscame onto the Brazilian market

21

+11%


Motorized access equipment fleet

In thousands of units

Source: Mills


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Growth Plan


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7447 51

106

26

104185

60

90

13

131

163

161

267

102

15

18

20

36

16

324

413

292

499

157

2010 2011 2012 2013 1H14

Rental

Real Estate

Heavy Construction

In R$ millionCapex

Realized 1H14 /2014 CapexBudget (%)

71%

53%

60%

Mills invested R$ 142 million in rental equipment in 1H14, of which R$ 49 million in 2Q14

23

Total 61%

Rental equipment

Reclassified excluding the Industrial Services business unit, for comparison.



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5 6 6 6 6 68 8

5 6

14 15 1617 17

4 4

1416

17

26 28

5

15 16

3437

39

5153

2007 2008 2009 2010 2011 2012 2013 1H14

Rental

Real Estate

Heavy Construction

Evolution of the number of branches

24

+2

Presentation of 2Q14 Results 08/07/2014 Excluding the Industrial Services business unit branches, for comparison.


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The majority of our investments in 2014 are in technologicalinnovation

25

30%

90%

50%

100%

2013 2014E

% New technology / Total investment

Heavy Construction

Real Estate



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Mills - Investor Relations

Tel.: +55 21 2123-3700

E-mail: [email protected]

www.mills.com.br/ri

2q14 presentation of results

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