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Disclaimer
This presentation may contain statements that present expectations of the Management of Mills Estruturas e Servios de Engenharia S/A
(Mills) about future events or results. Such statements are based on beliefs and assumptions of our Management taken with our best
knowledge and information to which Mills currently has access. All statement,. when based on future expectations, and not on historical
facts, involve various risks and uncertainties, and are not performance guarantees. Mills and employees cannot guarantee that such
statements will prove to be correct. Such risks and uncertainties include factors relating to the Brazilian economy, the capital markets, the
infrastructure, real estate, and oil and gas sectors, competitive pressures, among others, and governmental rules that are subject to
change without notice. For additional information on the factors that may give rise to results different from those estimated by Mills, please
consult the reports filed with the Securities and Exchange Commission - SEC.
1. Industry Overview
2. Company Overview
3. Business Units
4. Financial Profile
The uncertainties in the economic and political environments continue to impact the markets in which we operate. The
deterioration of the fiscal situation of the Government and the lack of confidence in the market resulted in the paralysis
of the economy. There is a hope that the new government can carry out reforms and foster infrastructure investments.
Inflation
GDP Growth
7,5%
10,6%
2,7%
5,9%
2,5%
6,5%
5,8%
5,9%
6,4%
1,0%
0,1%
-3,8%
BNDES Disbursements
Interest Rates
R$ billion
190,4
14,25%
187,8
168,4
12,25%
11,00%
10,00%
156,0
138,9
135,9
8,75%
7,25%
18,1
Brazilian Outlook
" The vice president, Michel Temer (PMDB ), defined three main axes for the formation of its eventual government:
economy, infrastructure and social area.
04/19/2016 . Estado de So Paulo
" Meirelles argued that the solution to the economic crisis facing Brazil depends on federal government investments in
infrastructure and loans to private companies.
O Globo. 04/29/2016
First, restore confidence in macroeconomics. In the second stage, take care of microeconomics, which are
investments in infrastructure, judicial issues of companies, a broad growth agenda .
O Globo. 04/29/2016
" ( ... ) The PMDB preaches transfer to the private sector all that is possible in the field of infrastructure. ( ... ) The plan
also says the government needs to establish a new model of relations with the private sector, including modifying the
current law on bidding .
04/29/2016 Folha de So Paulo
On May 12. 2016 the new acting President Michel Temer announced a provisory measure to create the program
Programa de Parcerias de Investimento PPI (Investment Partnership Program), focused on job creations. with the goal
to expand investment oportunities. employment and stimulate technological development. The program wants to ensure
expansion with quality" of infrastructure, with adequate rates and prices, strengthening the regulatory role of the State
and the autonomy of the regulatory agencies.
5
Railways
Highways
China
China
0,7
India
0,6
India
0,6
Russia
Russia
Brazil
0,4
Brazil
0,8
China
0,6
0,4
USA
0,7
India
Russia
USA
Air Transport
Ports
0,2
Brazil
0,7
USA
China
0,6
India
0,6
Russia
0,6
Brazil
0,4
0,8
USA
0,7
0,6
0,6
0,5
0,9
Investment in Infrastructure
(% GDP)
(% GDP)
Thailand (2009) = 15.6
Thailand (2003) = 15.4
China (2010) = 13.4
China (2003) = 7.3
16%
14%
5,4
0,5
2,0
12%
10%
3,6
0,2
0,8
8%
1,5
2,3
0,2
0,6
0,4
2,1
0,2
0,7
2,3
0,2
0,6
0,9
0,7
0,5
2,1
1,5
0,8
0,6
0,7
1971/80
1981/89
1990/2000
2001/10
2011/14
Electricity
Telecom
Transportation
Total (% GDP)
6%
4%
5-7%
Brazil (2011-14) = 2.3
Brazil (2007) = 1.8
Peru (2001-6) = 1.5
4-6%
2%
0%
Level of investment Level of investment
necessary to
in infrastucture
maintain the capital necessary to reach
stock per capita the current levels of
South Korea and
other industrialized
countries of East
Asia
Estimated investments
in R$ billion
Airports
8,5
Ports
Railroads
7.500
37,4
Highways
Highways
7.000
66,1
Railroads
86,4
until 2018
69,2
35%
Total
198,4
After 2018
129,2
65%
PIL - 2015
Source: www.logisticabrasil.com.br
1. Industry Overview
2. Company Overview
3. Business Units
4. Financial Profile
Our Company
Complete in engineering products and services. in Brazil for more than 60 years.
With ability to plan, integrate services and products for the construction and industry
sectors. We invested in the professional qualification, together with diversified expertise,
to deliver fast, smart and reliable responses that increase the productivity of the
works and the results of our client.
National Coverage:17 States and Federal District in 32 locations
Rental:
10
Company History
First Brazilian
manufacture of
formwork by license
agreement with NOESchaltechnik from
Germany
Founded on 1952.
50`s
90`s
Ferrovia do Ao
Catedral da S
80`s
2013
Sale of the
Industrial Services
business unit
Maracan Stadium
2010
11
Mills IPO
What We Do?
12
Formwork
Access
Shoring
Special systems
Diversified revenue
streams
Diversified revenue base serves several segments through its business units;
Rental: Construction 48% and Non-construction 37%
Heavy Construction: Urban Mobility 29%, Logistics 38%, Industrial 16%,
Others 17%
Real Estate: 57% Residential, 25% Commercial and Others 17%
Corporate Governance
Listed on Bovespa at the highest corporate level (Novo Mercado) since 2010;
Audited by Big Four Companies and currently by KPMG;
Professional Management
13
Ricardo Gusmo
Commercial Officer
for Construction
Marcelo Yamane
Rental Executive
Avelino Garzoni
Engineering and
Operations Officer
Gustavo Zeno
CFO and IRO
T.B.N
Human Resources
Executive
Construction
Shareholder Breakdown
Headcount as of December 31
Board of
Directors and
Executive
Officers 0,4%
4501
4135
4263
Shares in
Treasury 1,3%
Nacht Family
34,5%
2008
1795
1558
2010
14
2011
2012
2013
2014
2015
Free Float
63,8%
1. Industry Overview
2. Company Overview
3. Business Units
4. Financial Profile
15
Strategy
infrastructure
Huge potential investment in infrastructure in Brazil
for upcoming years
Significant investment from basic industries
Increasing technical expertise requirements
Increasing penetration of industrialized formwork
Growing demand for full service solutions as
provided by Mills
Underdeveloped country in infrastructure
Mills equipment volume: approximately 114,000
tons
International
Market:
establishment
of
new
representatives
Latin America.
16
differentiated services
Southeast
Nova Tamoios Highway
Transbrasil
Sorocaba and So Jos
dos Campos Hospital
Galvani Mining Company
Cofins Airport Duplication
Sanitation project
Metropolitan Line 5 and
Line 6
Monorail Linha Ouro
Imigrantes Viaduct
Beltway
17
Mills
owns
approximately
6,100
A measure of market maturity is to assess the ratio: MEWP rental fleet versus country
population
165
174
8616
Potential Market
64
5866
4983
4567
3218
2950
1540
14
1
Europe
US
CAN
CHN
80
BRA
630
720
425
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: Mills
MEWP: Mobile Elevating Work Platform
18
Strategy
19
1. Industry Overview
2. Company Overview
3. Business Units
4. Financial Profile
20
Summary Financials
In R$ million
Net Revenue
832.3
794.2
665.5
576.1
542.3
462.8
354.5
2010
2011
2012
Rental
2013
Sales
2014
1000,0
900,0
800,0
700,0
600,0
500,0
400,0
300,0
200,0
100,0
0,0
42,3
16,2
11,3
1,5
125,4
275,5
2015
LTM
1Q16
Technical assistance and others
2010
163,9
13,9
340,4
400,0
47,5%
47,0%
350,0
2011
200,0
334,9
347,9
343,8
360,3
2012
2013
2014
2015
LTM1Q16
2015
LTM
1Q16
-60,1
-63,4
SG&A
ADD
60,0%
166,8
42,9%
217,4
40,0%
28,0%
168,4
151,5
50,0%
340,7
300,0
250,0
161,2
150,0
103,3
92,2
75,7
26,3%
142,8
30,0%
20,0%
100,0
10,0%
2010
2011
2012
2013
2014
50,0
0,0
0,0%
2010
2011
2012
Ebitda
21
2013
108,3
Net profit
50,4%
339,0
31,5
202,6
238,2
COGS
419,3
50,9%
231,5
171,6
209,1
38,2
2014
Ebitda Margin
2015
LTM1Q16
Net Revenue
Construction
90%
80%
50,3
70%
4,2
6,3
60%
39,7
50%
Average LTM 1Q16 = 47.9%
40%
30%
20%
10%
0%
1T10 3T10
1T13
3T13
1T14
3T14
1T151Q15
3T153Q15
1T161Q16
1Q10
3Q10 1T11
1Q11 3T11
3Q111T12
1Q123T12
3Q12
1Q13
3Q13
1Q14
3Q14
100%
4T15
4Q15
Volume
Volume
Preoand
e Mix
Price
Mix
1T16
1Q16
Rental
90%
59,7
80%
5,8
4,0
49,9
70%
60%
Average LTM 1Q16 = 6..6%
50%
40%
30%
20%
10%
0%
1T10 3T10
3T13
1T14
3T14
1T151Q15
3T153Q15
1T161Q16
1Q16
4T15
Preoand
e Mix
1T16
Price
Mix
1Q10
3Q10 1T11
1Q11 3T11
3Q111T12
1Q123T12
3Q121T13
1Q13
3Q13
1Q14
3Q14
Volume
4Q15
(*) Non segmentation of the utilization rate in the business unit Construction because the inventory of the equipment used in real estate and Infrastructure are shared
Volume: variation of the revenue due to the rented volume in tons (Construction) and quantity of machines(Rental) Price and Mix: variation of the revenue due to the variation of prices and
products mix.
22
Even on an adverse scenario. the Company remains generating free cash flow
Cash Flow
383,7
372,7
295,5
288,3
281,9
198,9
158,9
116,1
2010
2011
2012
-31,2
2013
2014
80,8
2015
79,5
2016
-154,3
-208,9
-356,5
Adjusted
Operating
Cash
Flow
Adjusted
Operating
Cash
Flow
Adjusted
AdjustedFree
FreeCash
CashFlow
Flow2
23
Per sector
R$ 23.9 million
Power
4.6%
Railways
12.7%
Others
7.0%
PPP
13.0%
Public
39.7%
Industrial
16.2%
Private
47.3%
Highways
21.1%
Sanitation
5.1%
Urban Mobility
28.8%
24
Others
17%
Commercial
25%
Residential
57%
25
Technical
Others Assistance
1%
2%
Sales
2%
Spot
15%
NonConstruction
37%
used equip.
sales
30%
Rental
65%
26
Construction
48%
Due to the reduction of the investments and assets sales. the average capital invested tends to fall. since it illustrates the
average in the period.
ROIC (LTM)
1.900,0
1.700,0
1.661,8
4,0%
2,0%
1.500,0
517,8
1.300,0
1.100,0
6,0%
1.617,7
507,9
1.562,5
4,0%
1.505,8
1.109,9
900,0
2,0%
485,1
0,8%
1.144,0
1.439,5
496,1
0,0%
466,6
-2,9%
1.066,5
1.020,7
700,0
-2,0%
-3,8%
-4,0%
972,9
-6,0%
500,0
300,0
-8,0%
100,0
-10,0%
-100,0
1Q15
1T15
2T15
2Q15
Capital
- imobilizado
de PP&E
locao lquido
Averageinvestido
investedmdio
Capital
Net Rental
3T15
3Q15
4T15
4Q15
Capital
- outros
Averageinvestido
Investedmdio
Capital
- others
-12,0%
1T16
1Q16
ROIC
Invested Capital: is defined as the sum of the equity plus third parties capital (including all onerous. bank and nonbank debts) being both the average amounts in the last thirteen months.
27
Main Initiatives
In R$ million
Initiatives
ROIC Decomposition
Net Revenue
542.3
COGS
(199.2)
NOPAT
(55.2)
(15.3)
SG&A
(257.4)
(200.3)
Depreciation:
(166.8)
ROIC LTM
-3.8%
Adjusted -1.0%
Construction: -5.3%
Rental: 5.1%
Rental unit
Continuous search for operational efficiency
and cost reduction
Closing of five branches of the Construction
unit in progress
28
Summary Financials
In R$ million
2010
Mills
Construction
Rental
354.5
259.4
95.1
Mills
Construction
Rental
Others
168.4
117.4
51.0
Mills
Construction
Rental
47.5%
45.3%
53.6%
Mills
Construction
Rental
308.9
178.3
130.6
2011
2012
2013
Net Revenues
462.8
665.5
287.4
412.0
175.4
253.5
Ebitda
217.4
339.0
123.8
197.8
93.6
141.2
2014
2015
LTM 1Q16
832.3
474.9
357.3
794.2
423.4
370.8
576.1
283.0
293.2
542.3
252.4
289.9
419.3
212.3
207.0
340.7
153.5
196.7
-9.5
161.2
32.2
132.6
-3.7
142.8
23.4
124.9
-5.5
42.9%
36.3%
53.0%
28.0%
11.4%
45.2%
26.3%
9.3%
43.1%
166.5
62.4
104.2
11.6
11.6
0.0
10.7
10.7
0.0
Ebitda Margin
47.0%
50.9%
50.4%
43.1%
48.0%
44.7%
53.4%
55.7%
57.9%
Equipment Rental CAPEX
395.1
271.2
463.6
232.3
110.3
196.4
162.8
160.9
267.2
Covenants
7,5
9,1
9,0
5,4
3,0
1.6
1.2
1.4
1.5
2.1
2.4
1.5
29
Indebtedness
In R$ million
31,2%
17.1%
31.0%
21.9%
21.9%
106
106
8.0%
R$ 90 million already
paid in April/16
424
68,8%
173
Short Term
150
39
Long Term
Cash position
2016
2017
2018
2019
2020+
2.3%
Indebtedness on 03/31/2016
23,4%
56.8
631.1
423.5
574.3
74,3%
207.5
IPCA
CDI
TJLP
Principal
30
Interests
Gross Debt
Cash
Net Debt