Mills IC

(Outperform) Mills ON
Initiation of Coverage
Transportation, Industrials and Logistics
June 1, 2010
Scaffolding Brazil’s Infrastructure

Investment Thesis
Brazil is expected to see an unprecedented period of investment in infrastructure, Ticker (local) MILS3
real estate and industry over the next few years. Most of these investments can be Fair Value (10) 15.0
explained by i) the need to improve the current logistics system, ii) the housing Ticker (ADR) n/a
shortage, iii) high investment from the oil and gas industry and iv) the hosting of Fair Value (10) n/a
the World Cup (in 2014) and the Olympic Games (in 2016).
Mills is one of the country’s leading providers of specialty and construction services, Stock Data
offering high value-added engineering solutions, specialized labor and critical Current price R$ 11.9
Upside (YE10) % 26.1
equipment for infrastructure projects, real estate projects and industrial
52 Week high/low R$ 11.9/10.3
construction and maintenance.
Share outstanding th 124,611
Market capitalization R$m 1,483
Due to the strong market position of its four divisions (Heavy Construction; Jahu, 3-mth avg daily vol. R$m n/a
the residential and commercial construction division; Industrial Services; and Performance (%) 1m 12m
Equipment Rental), Mills, in our view, is in a unique position to benefit from the Absolute 0.08 n/a
Vs. Ibovespa 4.46 n/a
multiple growth opportunities and investment flow in Brazil in the coming years.
Valuation
We are initiating coverage on Mills with an outperform recommendation, with a
YE10 fair value of R$15.0/share, which implies a 26,1% upside potential. The
company is currently trading at an EV/EBITDA of 7.6x and 5.3x and a P/E of 17.2x
and 11.2x for 2010 and 2011, respectively. These multiples are attractive
compared to other industrial companies, especially considering growth and ROIC.
Momentum
We expect Mills’ revenue to grow rapidly over the next few years, given the positive
environment and its geographic expansion.
Risks
The main risks for Mills are: i) the macroeconomic scenario in Brazil; ii) the cost of
steel and aluminum, which are the main materials used in Mills’ products; and iii)
the FX rate, as the equipment in the company’s Rental division is imported.
Estimates and Valuation

Years 2008a 2009e 2010e 2011e 2012e 2013e
Net revenues (R$m) 299 404 498 682 888 1.093
EBITDA (R$m) 90 158 188 289 384 481
Net income (R$m) 31 68 86 133 159 193
Net Debt (R$m) 188 182 -60 62 202 286
EPS 0.2 0.5 0.7 1.1 1.3 1.5
FCFE (R$m) 3 8 292 111 -100 -36
EV/EBITDA 18.7 10.6 7.6 5.3 4.4 3.7 Industrials Team
P/E 48.5 21.7 17.2 11.2 9.3 7.7
Renata Faber, CNPI
FCFE yield 0.2 0.5 19.7 7.5 -6.7 -2.5 +55-11-3073-3017
DPS (R$) 0.0 0.1 0.2 0.3 0.3 0.4 renata.faber@itausecurities.com
Dividend yield 0.2 0.5 1.8 2.2 2.7 3.2
Fernando Abdalla, CNPI
P/BV 13.5 8.6 2.3 2.0 1.7 1.5
+55-11-3073-3019
Machine Power fernando.abdalla@itausecurities.com
Please refer to page 25 of this report for important disclosures, analyst certifications and additional information. Itaú
Corretora does and seeks to do business with Companies covered in this research report. As a result, investors
should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.
Investors should not consider this report as the single factor in making their investment decision.
Itaú Corretora de Valores S.A. is the securities arm of Itaú Unibanco Group. Itaú Securities is a brand name of Itaú Corretora de Valores S.A.
Mills – June 1, 2010
TABLE OF CONTENTS
SECTION 1 INVESTMENT THESIS ............................................................... 3
SECTION 2 VALUATION AND PEERS ............................................................ 8
SECTION 3 ROIC ......................................................................................... 9
SECTION 4 WHAT IS MILLS? ..................................................................... 10
SECTION 5 HISTORICAL GROWTH ............................................................ 16
SECTION 6 MANAGEMENT AND CORPORATE STRUCTURE.......................... 17
SECTION 7 RISKS ..................................................................................... 19
SECTION 8 FINANCIAL SUMMARY............................................................. 20
APPENDIX 1 PICTURES OF MILLS’ BUSINESS UNITS ................................... 22
Itaú Securities
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SECTION 1 INVESTMENT THESIS

Brazil is expected to see an unprecedented period of investment in infrastructure, real
estate and industry over the next few years. Most of these investments can be explained
by i) the need to improve the current logistics system, ii) the housing shortage, iii) high
investment from the oil and gas industry and iv) the hosting of the World Cup (in 2014)
and the Olympic Games (in 2016).
Mills is one of the country’s leading providers of specialty and construction services,
offering high-value-added engineering solutions, specialized labor and critical equipment
for infrastructure projects, real estate projects and industrial construction and
maintenance.
Due to the strong market position of its four divisions (Heavy Construction; Jahu, the
residential and commercial construction division; Industrial Services; and Equipment
Rental), Mills is in a unique position to benefit from the multiple growth opportunities and
investment flow in Brazil in the coming years.
Reasons We Like the Investment Case for Mills
Brazil is expected to see an unprecedented cycle of investment in

infrastructure, real estate and its industrial base over the next few years,
explained by: i) large upcoming investments in infrastructure (the government’s PAC
infrastructure initiative, the 2014 World Cup, the 2016 Olympics); ii) the housing
shortage and the “Minha Casa, Minha Vida” affordable housing program; and iii) large
investments in the oil and gas sector. Mills is well positioned to benefit from these
investments, given its wide exposure to construction, real estate and industrials.
Leading market position and geographic expansion. Mills is among the market
leaders in Brazil in providing engineering solutions and equipment (such as formwork,
shoring and scaffolding) for heavy, commercial and residential construction. To
maintain its rapid growth rate and reinforce its leadership, Mills is expanding
geographically. It is worth noting that for the Jahu division the geographic expansion
is a natural consequence of the expansion of its clients, which reduces the execution
risk of new business units.
Strong relationship with clients. Although essential, Mills’ services represent less
than 3%, on average, of the total cost of a construction project, and clients typically
value quality, punctuality and safety over price (although, given its scale, Mills is very
competitive in price as well). In the Heavy Construction segment, Mills has been
operating with large construction contractors since its founding in 1952 and has a
track record of safety and reliability. In 2009 Mills acquired Jahu, a well-established
company, which brought to Mills’ residential and commercial segments the same high-
quality track record that the company already had in the Heavy Construction business.
Well positioned to continue growing and maintain leadership. Mills’ technical

expertise, track record of reliability and broad geographical presence are the
company’s main competitive advantages and the main barriers for new entrants.
Strong growth, expanding margins and ROIC. At the same time that revenue is
expected to grow, the company’s margins will also likely increase due to
i) replacement of rented equipment with the company’s own equipment, and
ii) economies of scale. However, in the case of Mills, we have always to pay attention
to the company's ROIC, as margins might increase in a way to reflect the higher
capex. The interesting point on Mills is that, even considering the high capex in the
next years, ROIC is expected to remain at attractive levels, due to the high utilization
rate of the equipment.
Novo Mercado listing, which promotes high corporate governance standards.
Attractive valuation, based on strong growth prospects and high ROIC.
Itaú Securities
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Brazilian Infrastructure Sector — Main Peers
Fair Value Market Cap EV/EBITDA P/E EBITDA CAGR Earnings CAGR
Company Upside
(R$) (R$M) 2010E 2011E 2010E 2011E 2009-2011E 2009-2011E
Mills 15.0 26.1% 1,483 7.6 5.3 17.2 11.2 35.5% 39.2%
CCR 43.0 19.4% 15,890 7.9 6.7 16.0 13.2 19.3% 37.6%
Duratex 19.5 30.4% 6,853 8.7 7.3 16.6 14.4 68.4% 120.5%
Ecorodovias 12.5 33.7% 5,224 7.0 5.9 14.4 12.2 18.6% 49.5%
Iochpe 20.0 29.0% 1,470 6.4 5.4 11.0 9.4 54.7% 68.8%
Marcopolo 10.0 21.2% 1,851 6.7 5.8 11.3 9.5 32.7% 19.2%
OHL 50.0 26.1% 2,732 5.8 5.6 10.0 9.0 22.6% 31.0%
Randon 12.0 26.4% 2,314 5.9 4.7 13.6 10.2 39.3% 27.7%
Romi 16.0 46.8% 815 11.4 6.5 26.3 12.4 132.4% 126.4%
WEG 22.0 31.0% 10,376 10.4 7.9 18.1 13.8 22.5% 16.6%
Average 7.8 6.1 15.5 11.5 44.6% 53.6%

Source: Itaú Securities
ROIC vs. EV/EBITDA
30%
25%
20%
ROIC
15%
10%
5%
5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5
EV/EBITDA
Iochpe Randon Marcopolo ROMI
WEG Duratex Localiza Mills
Points Supporting Our Investment Thesis
Unprecedented Cycle of Investment
Brazil is expected to see an unprecedented cycle of investment in infrastructure, real

estate and its industrial base in the coming years, due to i) large upcoming investments
in infrastructure (the government’s PAC infrastructure initiative, the 2014 World Cup, the
2016 Olympics), ii) the housing shortage and the “Minha Casa, Minha Vida” affordable
housing program, and iii) large investments in the oil and gas sector.
PAC is the Brazilian government’s initiative to accelerate economic growth and

improve the country’s poor infrastructure. The program includes over R$500 billion in
investments in projects related to roads, airports, housing, power generation, water
treatment and other infrastructure needs.
Brazil will host the 2014 World Cup, and Rio de Janeiro will host the 2016 Olympic
Games. Related investments in urban infrastructure (railroads, urban trains, roads,
sanitation, etc.) are expected to reach R$86 billion, and the country will also have to
invest R$4.6 billion to upgrade stadiums and R$5.0 billion to upgrade airports. In
addition to the World Cup, Rio de Janeiro will have to invest R$29 billion to prepare
the city for the Olympic Games.
Itaú Securities
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Brazil still has a housing shortage of at least 7 million houses. To address this
problem, in 2009 the government launched the “Minha Casa, Minha Vida” program.
This is a R$34 billion plan that will provide subsidized financing to low-income buyers
and construction companies.
Petrobras’s business plan includes a capex program of approximately US$200-220

billion between 2010 and 2014, mostly for oil exploration in the pre-salt blocks.
All these scenarios benefit Mills’ four business lines. The Heavy Construction division will
have opportunities in large construction, the “Minha Casa, Minha Vida” program is
positive for Jahu, and the company’s Industrial Services segment will find opportunities in
industrial investment as a whole (but the Petrochemical industry is especially interesting,
as it requires more surface treatment and insulation).
Investment in Infrastructure in Brazil (R$ in billions) Investment in Infrastructure in Brazil (2010–2013)
274 Ports
5.1%
Road
200 12.0%
Electric
utilities
33.6%
Rail 10.6%
92
68 66 67
39 33
22 29 23
16 14
5 Sewage
14.2% Telecom
Electric Telecom Sewage Rail Road Ports Total
24.5%
utilities
2005 - 2008 2010 - 2013
Source: BNDES Source: BNDES
Growth Perspectives for the Rental Division
In addition to its geographic expansion, Mills’ rental division benefits from the increasing
penetration of motorized access equipment in Brazil as well as the increasing use of rental
equipment in preference to purchased equipment. Companies are sharpening their focus
on safety, prompted by the new labor regulation BNP-18, which requires suitable
equipment to be used for any kind of elevator. Furthermore, the use of motorized
equipment also increases efficiency, as it reduces work time.
Construction and industrial companies are also renting equipment instead of buying.
When a company invests in motorized access equipment for its own use, it cannot ensure
that this equipment will reach a utilization rate that justifies the higher acquisition cost
compared with renting. The rental company achieves a higher utilization of the
equipment, given its large number of clients (Mills has an optimal 75% utilization rate,
but this figure peaked at 82% in 2009).When a company calculates the IRR of the
acquisition of the equipment, renting becomes more attractive.
The use of telehandlers and aerial work platforms (AWP) is relatively new in Brazil, and
Mills expects the volume of equipment in the country to triple over the next five years.
During this period, the company expects its total equipment to increase from 723 units in
2009 to 6,068 units in 2014.
As this market matures, yields are also expected to fall. While in 2009 the average yield
(monthly rental gross revenue over average capital invested) was 6.9% (down from 7.7%
in 2008), we expect this figure to drop to 5% in the long run. In the United States the
normalized yield for such equipment is 4.5%, although during the recent crises yields
declined to 2.5%–3.0%.
Itaú Securities
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Geographic Expansion
Mills is seeing the opportunity to expand geographically in its Industrial services, Jahu
and Rental divisions. The company intends to increase its presence in the northeast and
to enter the north and center-west regions of Brazil.
In our view, the execution risk in this expansion is low, as Mills only decides to open a
new branch when there is demand from clients. Most of the time, the company’s
geographic expansion follows the expansion of its clients, reducing the risk.
Division Locations
Roraima
Amapá
Amazonas Pará Maranhão

Ceará Rio Grande
do Norte
Paraiba
Piauí
Pernambuco
Acre
Alagoas
Tocantins Sergipe
Rondônia
Bahia
Mato Grosso
Goiás
Minas
Gerais
Mills Divisional Locations Espírito
Mato Grosso
2008A 2009A 2010E 2011E do Sul Santo
Jahu 5 1 3 2
Heavy Constr. 1 Rio de
São Paulo
Janeiro (HQ)
Equipment Rental 4 6 4 Paraná
Industrial Services 1 2 1
New Branches 10 2 11 7 Santa Heavy Construction1
Catarina
Total Branches 18 20 31 38
Rio Grande Jahu1
do Sul
Equipment Rental1
Industrial Services1
Source: Company and Itaú Securities
1
Map considers 2010 and 2011 new locations
Yellow states correspond to Mills’ planned expansion in 2011
Solid Results
Given the length of the contracts, Mills has reasonable visibility into its revenues, which is
a positive point for the company. According to Mills’ management, the existing backlog
represents between 50% and 60% of the expected revenue for the Heavy Construction
and Industrial Services divisions in the next 12 months.
We expect margins in the Jahu and Rental divisions to shrink in 2010 because of
geographic expansion and a ramp-up of margins in the new branches. However, we
expect margin in the Heavy Construction division to expand in the coming years, mostly
because Mills is currently renting some equipment, and this equipment will be replaced by
the company’s own equipment.
At the same time that investment in new equipment has a positive effect on margins, we
have to look at ROIC to see the real impact of these investments.
We expect Mills’ ROIC to fall in 2010, given its big investments and the ramp-up from
these investments. One point to bear in mind is that, even in 2010, the company’s ROIC
will be higher than its WACC (15.1% ROIC, compared with 14.0% WACC).
Itaú Securities
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Investments in Construction-Related Industries
Investment in construction-related activities in 2008 reached R$258.6 billion,

representing 43% of all investments in Brazil that year. Between 2005 and 2008, these
investments grew at an annual rate of 13.5%. Around 5% of Brazilians work in the
construction industry.
Given the strong growth over the last few years and the positive prospects for the
industry, securing a qualified workforce has become an issue for the construction
companies. Among the changes we see as a consequence of the rapid growth are:
i) construction companies looking for partners that can facilitate their geographic
expansion; ii) companies trying to shorten the construction cycle; and iii) given the lack
of equipment and materials, companies looking for well-known, reliable suppliers and
partners.
This environment presents many opportunities for Mills. The company has access to
capital and is expanding geographically. In addition, there are synergies between the
company’s four businesses related to their geographic expansion: the company can use
the same storage for equipment from all of its business segments, for example, reducing
both capex and cost.
Itaú Securities
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SECTION 2 VALUATION AND PEERS

Valuation
We have estimated Mills’ potential value using a 10-year DCF analysis, which we believe
to be the appropriate tool to fully incorporate the continuous strong growth and
increasing profitability that this segment is likely to see in the coming years. We are
assuming a 4% perpetuity growth rate.
Please refer to pages 20 and 21 for a summary of our forecasts.
Fair Value Calculation
UNIT 2010e
WACC (R$) % 11.6%
Perpetuity growth (R$) % 4.0%
Total firm value R$ million 1,812.5
Net debt R$ million (60.3)
Fair equity value R$ million 1,872.8
Fair value (YE 2010) R$/share 15.0
Current price/share R$ 11.9

Upside potential % 26.1%
Total return % 27.9%
Recommendation Outperform
Peer Multiples
Infrastructure Sector — Domestic Peers
Fair Value Market Cap EV/EBITDA P/E EBITDA CAGR Earnings CAGR
Company Upside
(R$) (R$M) 2010E 2011E 2010E 2011E 2009-2011E 2009-2011E
Mills 15.0 26.1% 1,483 7.6 5.3 17.2 11.2 35.5% 39.2%
CCR 43.0 19.4% 15,890 7.9 6.7 16.0 13.2 19.3% 37.6%
Duratex 19.5 30.4% 6,853 8.7 7.3 16.6 14.4 68.4% 120.5%
Ecorodovias 12.5 33.7% 5,224 7.0 5.9 14.4 12.2 18.6% 49.5%
Iochpe 20.0 29.0% 1,470 6.4 5.4 11.0 9.4 54.7% 68.8%
Marcopolo 10.0 21.2% 1,851 6.7 5.8 11.3 9.5 32.7% 19.2%
OHL 50.0 26.1% 2,732 5.8 5.6 10.0 9.0 22.6% 31.0%
Randon 12.0 26.4% 2,314 5.9 4.7 13.6 10.2 39.3% 27.7%
Romi 16.0 46.8% 815 11.4 6.5 26.3 12.4 132.4% 126.4%
WEG 22.0 31.0% 10,376 10.4 7.9 18.1 13.8 22.5% 16.6%
Average 7.8 6.1 15.5 11.5 44.6% 53.6%

Infrastructure Sector — International Peers
Market Cap EV/EBITDA P/E EBITDA CAGR Earnings CAGR

Company
(US$M) 2010E 2011E 2010E 2011E 2009-2011E 2009-2011E
Rental 8.6 7.3 32.8 17.5 1.8% 30.0%
Ramirent Oyj 958 8.1 6.6 42.1 18.0 0.2% 50.2%
Mobile Mini Inc 575 10.8 9.3 23.6 15.0 1.3% 9.8%
Cramo Oyj 459 6.9 5.9 n/a 19.4 4.0% n/a
US/Europe E&C and Industrial
8.1 7.0 19.6 15.0 16.4% 29.0%
Services
Quanta Services, Inc 4,261 7.9 6.5 20.3 16.2 28.8% 33.3%
Bilfinger Berger AG 2,569 8.3 8.3 9.8 9.0 12.1% 27.9%
Mistras Group 308 8.7 7.2 31.4 22.1 23.1% 52.9%
Team, Inc 265 7.4 5.9 16.8 12.6 1.6% 1.8%
Asia E&C Services 14.8 12.4 22.3 18.1 24.2% 28.8%
IVRCL Infrastructures & Projects 918 13.4 10.6 19.4 15.7 24.0% 17.8%
Hindustan Construction Limited 698 16.8 14.6 27.4 22.3 25.2% 38.3%
Nagarjuna Construction Company 943 14.0 11.9 20.2 16.3 23.4% 30.2%
Source: Itaú Securities and Bloomberg consensus estimates
Itaú Securities
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SECTION 3 ROIC
We believe that one of the best ways to evaluate Mills’ profitability is through the
company’s Return on Invested Capital (ROIC), given that Mills is a capital-intensive
company. By tracking ROIC, we can measure how well Mills generates cash flow relative
to the capital it invests in its four businesses.
One of the main reasons why ROIC is an interesting measure for the company is related
to its dependence on steel and aluminum prices, which are the basic materials of the
scaffolding, formwork and shoring solutions. Although an increase in steel and aluminum
prices would likely lead to a decrease on ROIC, no effect on the company’s result is
expected. In conclusion, Mills would have to raise prices, improving its margins in order to
sustain ROIC level in a basic material incising prices scenario.
Therefore, when looking to Mills’ profitability, we believe it’s appropriate to analyze not
only the operating results and margins, but also the return on invested capital.
In the next five years, we expect Mills’ EBIT and invested capital to increase, reflecting
the expected growth in infrastructure, real estate and the oil and gas industry. According
to our estimates, Mills’ ROIC reaches 20.0% in 2015, which is higher than the company’s
average WACC of 12.5%, therefore generating value for shareholders.
Nonetheless, from 2016 on, we expect that Mills’ capex will be only maintenance, in line
with the company’s depreciation. At the same time, given that Mills will likely face the
competition of new players and given that we expect a declining interest rate scenario in
Brazil in the long term, the company’s yields will likely go down, therefore impacting its
ROIC.
However, although we expect ROIC to decline from 2016 on, it’s important to highlight
that ROIC will continue at high levels and still above than the company’s WACC,
as we can see in the chart below.
ROIC vs. WACC
25%
20% 7.9
7.6 7.4 7.6
15%
5.1
10%
3.7
3.3
5%
1.1
0%
2010e 2011e 2012e 2013e 2014e 2015e 2016e 2017e
ROIC WAC C Spread (pp)

Itaú Securities
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SECTION 4 WHAT IS MILLS?

Mills, a Brazilian company, is one of the country’s leading providers of specialty and
construction services, offering high-value-added engineering solutions, specialized labor
and critical equipment for infrastructure projects, real estate projects and industrial
construction and maintenance. Its products and services include formwork, scaffolding
and shoring solutions (Heavy Construction and Jahu divisions); access, protective
painting, insulation and other maintenance services (Industrial Services division); and
motorized access equipment rental (e.g., aerial platforms).
Founded in 1952, Mills is currently located in nine Brazilian states and has more than
3,000 employees. In its 58-year history, Mills has established an impressive track record
of providing services to some of the largest and most important infrastructure projects in
Brazil, such as the construction of Brasilia, the Rio de Janeiro-Niteroi bridge, the Itaipú
hydroelectric plant, the RodoAnel, subway systems and airports, and other major
projects.
By consistently providing timely, dependable and high-quality work under strict safety
standards, Mills has earned a solid reputation as one of the foremost specialty
engineering services providers in Brazil.
Business Segments
Business description Clients Competitors
■ Provides engineering solutions and equipment, ■ Large construction contractors: ■ Ranks #1 amongst
such as formwork, shoring and scaffolding, for competitors1;
Heavy the construction of concrete structures; - Odebrecht, Camargo
Construction Correa, Queiroz Galvão, ■ Rohr, SH, Doka,
division ■ The division supplies planning, design, Andrade Gutierrez, OAS, Peri.
technical supervision, equipment and related among others.
services to large infrastructure contractors.
■ Provides engineering solutions and equipment, ■ Large homebuilders: ■ Ranks #1 amongst

such as formwork, shoring and scaffolding, competitors1;
Jahu
together with planning, design, and technical - Cyrela, Gafisa, Goldfarb,
division supervision to construction companies in the MRV, Brookfield, Homex, ■ Mecan, SH, Ulma,
residential and commercial construction sector. among others. Doka, Peri, Estub.
■ Supplies structures than enables access for ■ Large industrial companies and ■ Ranks #3 amongst
personnel and materials in and around large construction contractors: competitors1;
Industrial industrial plants to perform services during
Services construction and maintenance; - Petrobras, Braskem, Fibria, ■ RIP, NM, Blasting,
division Arcelor Mittal, Vale, DOW, Rohr, Isobrasil,
■ The division also provides industrial painting, Odebrecht, among others. Calorisol, Isolenge.
surface treatments and insulation.
■ Provides motorized access equipment, ■ Large industrial companies and ■ Ranks #3 amongst
particularly supplying aerial work platforms and construction contractors: competitors1;
Equipment
telescopic handlers that lift people and move
Rental cargo to considerable heights in a safe, fast, - Petrobras, Braskem, Fibria, ■ Solaris, Bilden,
division versatile and precise way. Odebrecht, Vale, CSN, GM, Trimak, Brasif.
Ford, among others.
1
Source: Company and Itaú Securities. In terms of revenues.
Itaú Securities
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Contracts and Revenues – Key Characteristics
Typical contract description # Active contracts Top 10 clients
■ Services and equipment on time and material ■ 231 ■ 67% of the

Heavy basis under Mills on-site supervision; revenues of the
Construction division.
■ 6 to 24-month typical contract term;
division
■ Recurring client base.
■ Services and equipment on time and material ■ 1,914 ■ 24% of the

basis under Mills on-site supervision on large revenues of the
Jahu projects; division.
division
■ Typical contract term of 4 months.
■ Contracts (including access, painting, ■ 150 ■ 56% of the

insulation, among others) based on unit revenues of the
Industrial pricing, global prices and/or man hour basis; division.
Services
division ■ 12 to 36-month typical contract term;
■ Recurring contracts.
■ Rental contracts usually on a monthly basis; ■ 370 ■ 27% of the

Equipment revenues of the
■ Customers usually contract the equipment for division.
Rental an average of 2-3 months;
division
■ Typical contract term of 5 months.
As some of Mills’s segments are dominated by a few players, client concentration is natural.
Heavy Construction Division
Mills’ Heavy Construction division provides specialty engineering solutions and equipment,
such as formwork, shoring and scaffolding, for the construction of major concrete
structures. In addition, the division supplies planning, design, technical supervision,
equipment and related services to Brazil’s largest infrastructure contractors.
The company’s expertise, agility, reliability, quality and safety standards, and ability to
provide equipment on a large scale all contribute to holding down overall project
durations and costs, which represents Mills’ main competitive advantage.
Its track record includes working on several of the largest and most important
infrastructure projects in Brazil. Typical contract terms for this division range from six to
24 months, as the services provided by Mills are critical during an extended phase of
major civil construction projects.
We believe that the favorable long-term macroeconomic fundamentals in Brazil and the
need for large infrastructure construction investments (the PAC, the 2014 World Cup and
the 2016 Olympics) present a major opportunity for future growth.
Net Revenues (R$ in millions) EBITDA (R$ in millions) and EBITDA Margin
230 50.4%
CAGR: 37.9% 49.4%
45.0% 45.9%
171 35.4% CAGR: 49.9% 114

146
110 79
74
50
64
23
2007A 2008A 2009A 2010E 2011E 2007A 2008A 2009A 2010E 2011E
Source: Company and Itaú Securities Source: Company and Itaú Securities
Itaú Securities
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Jahu Division
With its acquisition of Jahu in June 2008, Mills started providing specialty engineering
solutions and equipment, such as formwork, shoring and scaffolding, to civil construction
companies focused on the residential and commercial construction sector. In addition, this
division supplies planning, design, technical supervision, equipment and related services.
The residential and commercial sector in Brazil is fragmented. Projects are generally
dispersed within cities, and they are smaller in size and have shorter durations (average
contract term of 4.5 months) than heavy construction projects. Mills’ main competitive
advantage in this sector is its extensive presence at several residential and commercial
worksites, which enables it to supply services and equipment according to demand.
Currently, Mills serves clients from seven branches (Rio de Janeiro, São Paulo, Belo
Horizonte, Brasilia, Curitiba, Salvador and Porto Alegre) with over 1,900 simultaneous
contracts, many of which are from long-standing, recurring clients.
We believe that the long-term outlook for the Jahu division remains strong as a result of:
i) the projected growth of the real estate industry in Brazil; ii) the expansion of mortgage
financing; and iii) large public-housing expenditure programs (such as “Minha Casa,
Minha Vida”).
51.2% 50.2%
45.1% 45.2%
140
CAGR: 78.4%
70
CAGR: 85.0%
95
43
62
32
25
11
2008A 2009A 2010E 2011E 2008A 2009A 2010E 2011E
Industrial Services Division
Mills’ Industrial Services division supplies structures designed to provide access for
construction personnel and materials and for carrying out preventive and corrective
maintenance at large industrial sites. This division also performs industrial painting,
surface treatments and insulation.
Unlike the other businesses units, the Industrial Services division works on a contract
basis, using its own personnel, and is generally paid according to units of completed
service. Given Mills’ consistent quality and safety performance, the client renewal rate is
particularly high in this segment (90% in 2009), allowing the company to develop long-
lasting relationships with clients (up to 15 years).
The main sectors served by this division are oil and gas, steel, pulp and paper, mining,
naval and petrochemicals. Main clients include some of the largest companies in Brazil,
such as Petrobras, Vale, CSN, Gerdau and Braskem.
One interesting point is that this division enjoys significant synergies with the Heavy
Construction division. After the completion of concrete structures in large industrial
projects (plants or refineries), clients often engage the Industrial Services division to
support the industrial construction of the plant and then to provide preventive and
corrective maintenance.
In our view, the long-term outlook for this division remains strong as a result of the
positive macroeconomic fundamentals, which are leading to several capacity-expansion
projects.
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CAGR: 15.0%
191
15.9% 16.9%
160 14.1% 14.7%
141
135
7.9% CAGR: 39.2%
109 32
25
21
19
2007A 2008A 2009A 2010E 2011E 2007A 2008A 2009A 2010E 2011E
Equipment Rental Division
Mills’ Equipment Rental division provides motorized access equipment in Brazil, supplying
aerial platforms and telescopic handlers that lift people and move cargo to considerable
heights. This equipment enables precise and fast access to heights ranging from two to
43 meters.
Additionally, this equipment allows materials weighing up to 4,536 kg to be lifted,

transported and delivered to heights of over 12 meters within a job site or industrial
plant.
The Equipment Rental division serves the same sectors as the other divisions – heavy
residential and commercial construction and industrial construction and maintenance, as
well as the automotive, retail and logistics sectors, among others. Generally, equipment is
rented on a monthly basis, and the average contract length is two to three months.
Mills started the Equipment Rental division in 2008 in anticipation of significant growth in
motorized access equipment rentals, based on their previous underutilization and the
consequent relatively small installed base for this type of equipment in Brazil. Just as a
comparison, Mills’ management estimates that in 2008 there were only 7,500 aerial work
platforms and 400 telescopic handlers in Brazil, compared with 524,000 aerial work
platforms and 161,000 telescopic handlers in the United States.
We believe that the long-term outlook for this division is strong as a result of the
favorable macroeconomic conditions in Brazil, including infrastructure investments, the
federal government’s low-income housing program and the multitude of other projects
that will require safe working conditions at elevated heights.
57.6% 60.6%
57.1%
120 45.0%
CAGR: 67.8%
73
CAGR: 85.4%
71
40
54
31
25
11
2008A 2009A 2010E 2011E 2008A 2009A 2010E 2011E
According to our estimates, the highest-growth segments among Mill’s business units are
commercial and residential construction services and motorized access equipment rentals.
We expect these two divisions to supply 49.5% of the company’s EBITDA in 2011,
compared with 40% in 2009.
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Net Revenues Breakdown – 2009 EBITDA Breakdown – 2009
Equipment Equipment
rental 13.5% rental 19.9%
Heavy
co nstructio n
36.2%
Heavy
Industrial co nstructio n
services 35.0% Industrial 46.7%
services 13.2%
Jahu 15.4% Jahu 20.2%

Net Revenues Breakdown – 2011E EBITDA Breakdown – 2011E
Equipment
rental 17.7% Heavy Equipment
co nstructio n rental 25.2%
33.8% Heavy
co nstructio n
39.3%
Industrial Industrial
services services 11.1%
28.0%
Jahu 24.3%
Jahu 20.6%
Key Client Relationships
Client relationships and a track record of reliability and service quality are determining
factors that win business, particularly in large and complex projects.
In the Heavy Construction division, Mills’ clients are the main construction contractors in
Brazil. The Jahu division’s main clients are the large Brazilian homebuilders, while in the
Industrial Services and Equipment Rental divisions, the main clients are large industrial
companies and construction contractors, operating mainly in the oil and gas, steel, pulp
and paper, mining, naval and petrochemical sectors.
Mills’ Main Clients
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Health and Safety
The Industrial Services division follows safety practices and procedures that meet
international standards; it holds ISO 9001, ISO 14000 and OHSAS 18001 certificates. It’s
important to highlight that safety standards and track record are extremely important
decision factors for clients.
As a result, Mills is in the process of rolling out these same safety standards to other
divisions of the company through a centralized Health and Safety Group. As shown below,
Mills has received numerous awards and certificates for its health and safety standards.
Awards
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SECTION 5 HISTORICAL GROWTH

Mills has an impressive track record of revenue and EBITDA growth (CAGR 07-09 of
45.0% and 130.6%, respectively). Mills’ business units have also been posting a notable
ROE: it was close to 40% in 2009.
In recent years, Mills has been able to grow through the successful execution of its
business plan. The impressive EBITDA CAGR reflects not only strong organic growth
fueled by the expansion of the civil construction and industrial sectors in Brazil, but also
new product development and acquisitions.
In June 2008, Mills acquired Jahu and started providing engineering solutions to civil
constructions companies focused on the residential and commercial construction sectors.
During the last six months of 2008, Jahu added R$11.1 million to Mills’ EBITDA, which
jumped to R$31.8 million in 2009. The main factors behind Jahu’s performance
improvement were the company’s ability to increase equipment inventory and an increase
in its client base, capitalizing on the brand names of both Jahu and Mills.
Also in 2008, Mills started the Equipment Rental division and began offering motorized
access equipment, such as aerial work platforms and telescopic handlers. The Equipment
Rental division contributed R$11.4 million and R$31.3 million to Mills’ EBITDA in 2008 and
2009, respectively. The strong growth in this business unit is a result of Mills’ scale,
specific industrial-sector expertise, reliability and safety record.
Net Revenue (R$ in millions) and EBITDA Margin ROE
39.6%
- Startup Equipment Rental 404
- Acquisition of Jahu
- Enter IP and Axxon 27.9%

299
- Divested Events 39.0%
19.2%
192 29.9%
155
129
109
15.8%
11.8% 11.5%
10.2%
2004A 2005A 2006A 2007A 2008A 2009A 2007A 2008A 2009A

EBITDA Net Revenues EBITDA Margin
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SECTION 6 MANAGEMENT AND CORPORATE STRUCTURE

Mills was founded in 1952 by the Nacht family. It began as a scaffolding and shoring
company that provided services to the civil construction industry. Since that time, Mills
has grown considerably, mainly on the back of a significant expansion in the civil
construction and industrial sectors in Brazil.
In 2007, two private equity funds, Axxon and Investidor Profissional, acquired 27.4% of
Mills (13.7% each). With private equity funds as shareholders, Mills had better access to
capital and was able to increase equipment capacity to support strong demand while
reducing expensive third-party equipment rentals.
In addition, the better access to capital also enabled Mills to make fundamental changes
in its business portfolio, including the acquisition of Jahu, the start-up of the Equipment
Rental division and the discontinuation of the Events division.
Shareholder Structure
Leblon Nacht Jeroboam

Others Management
Equities Participações S.A. Investments LLC.
3.3% 3.1% 52.0% 33.6% 8.0%
Investidor Profissional Participações e

Capital Group
Gestão de Recursos Ltda. Empreendimentos Natipriv Global LLC
International, Inc
(Península FIP) Staldzene S.A.
Others Management
46.0%
42.1% 3.1% 5.6% Mills Estruturas e 3.1% 0.1%

Serviços de
Engenharia S.A.
Mills’ executive management consists of Ramon Vazquez, who has been CEO since 2008
and has worked in the industry for 30 years; Erik Wright Barstad, director of the Jahu and
Heavy Construction divisions since 1998, with 29 years of experience in this segment;
Roberto Carmelo de Oliveira, director of the Industrial Services division, who has been
working at the company since 1981; Sérgio Kariya, director of the Equipment Rental
division, who worked as a manager at OTIS/UTX for 14 years; Frederico Átila Silva Neves,
director of finance and administration since 1999, who previously worked in large
multinational companies in the industrial and financial segments; and Cristina Rebelo, a
former human resources director at Ediouro with 21 years of experience in HR.
Executive Management
Years of experience
Name Position
Mills Industry
Ramon Vazquez President and CEO 25 30
Director - Jahu and Heavy Construction
Erik Wright Barstad 29 29
Divisions
Roberto Carmelo de Oliveira Director - Industrial Services Division 29 29
Sérgio Kariya Director - Equipment Rental Division 5 19
Frederico Átila Silva Neves Director - Finance and Administration 12 12
Cristina Rebelo Director - Human Resources 1 1
The board of directors is composed of seven members, with Andres Cristian Nacht as
chairman. Mr. Nacht, a member of the management team since 1969, worked as Mills’
CEO from 1978 until 1998, when he became chairman of the board.
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Board of Directors
Name Position
Andres Cristian Nacht Chairman
Diego Jorge Bush Board Member
Elio Demier Board Member
Nicolas Wollak Board Member
Gustavo Felizzola Board Member
Pedro Malan Board Member
Pedro Chermont Board Member
Mills is listed on the Novo Mercado segment of the Bovespa, which for investors means
that the company pledges to adhere to the highest standards of corporate governance.
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SECTION 7 RISKS
Below we outline what we consider to be the most significant risks to our investment
thesis for Mills.
Macroeconomic scenario in Brazil. The company’s operations are leveraged on the

domestic economy, as higher interest rates negatively affect the construction and
industrial sectors. Jahu’s operations are also affected by personal income growth.
Cost of commodities. Steel and aluminum are the main commodities that Mills uses
in its equipment. An eventual increase in the price of steel and aluminum would
increase the price of the equipment, translating into higher capex for Mills. If the
company is not able to pass on the cost of higher capex, its ROIC will be negatively
affected.
Foreign exchange rate. All the equipment in the Rental division is imported. An
eventual depreciation of the Brazilian real would increase the cost of this equipment,
translating into higher capex for Mills. If the company were not able to pass on the
cost of the higher capex, its ROIC would be negatively affected.
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SECTION 8 FINANCIAL SUMMARY

MACROECONOMIC ASSUMPTIONS UNIT 08a 09a 10e 11e 12e 13e 14e 15e
IGP-M inflation index % 9.8% -1.7% 9.5% 6.3% 5.5% 4.3% 4.2% 4.0%
IPCA inflation index % 5.9% 4.3% 5.3% 5.3% 4.7% 4.3% 4.2% 4.0%
Real GDP growth % 5.1% -0.2% 6.5% 4.6% 4.4% 4.9% 5.0% 4.9%
Selic interest rate - e-o-p % 13.8% 8.8% 11.8% 13.0% 12.0% 10.0% 9.5% 9.0%
Selic interest rate - average % 12.5% 9.9% 10.4% 13.0% 12.0% 10.0% 9.5% 9.0%
R$/US$ exchange rate - e-o-p % 2.31 1.74 1.78 1.81 1.85 1.87 1.90 1.95
R$/US$ exchange rate - average % 2.28 2.00 1.79 1.80 1.83 1.86 1.86 1.93
INCOME STATEMENT UNIT 08a 09a 10e 11e 12e 13e 14e 15e
Gross revenue R$ million 338 442 583 799 1,040 1,281 1,536 1,649
Heavy construction R$ million 123 158 201 270 332 398 468 498
Jahu R$ million 27 67 112 164 229 290 366 400
Industrial services R$ million 155 157 188 223 266 323 380 408
Equipment rental R$ million 29 59 83 141 213 270 321 343
Events R$ million 4 0 0 0 0 0 0 0
Deduction R$ million (38) (37) (86) (117) (153) (188) (225) (242)
Net revenue R$ million 299 404 498 682 888 1,093 1,310 1,407
Costs and operating expenses R$ million (229) (278) (360) (475) (619) (765) (915) (988)
COGS R$ million (144) (170) (211) (280) (366) (457) (542) (586)
Heavy construction R$ million (26) (33) (43) (52) (65) (78) (92) (98)
Jahu R$ million 0 (2) (4) (6) (9) (11) (14) (15)
Industrial services R$ million (93) (97) (108) (127) (157) (190) (224) (240)
Equipment rental R$ million (3) (7) (9) (15) (23) (29) (35) (37)
Events R$ million (4) 0 0 0 0 0 0 0
Depreciation R$ million (18) (30) (48) (80) (112) (148) (177) (195)
Gross profit R$ million 156 235 286 402 522 637 769 821
SG&A R$ million (85) (108) (148) (195) (253) (308) (373) (402)
Heavy construction R$ million (34) (39) (50) (65) (79) (93) (109) (116)
Jahu R$ million (14) (28) (48) (64) (88) (111) (140) (153)
Industrial services R$ million (23) (24) (27) (31) (35) (40) (47) (51)
Equipment rental R$ million (11) (16) (21) (32) (48) (60) (71) (76)
Events R$ million (2) 0 0 0 0 0 0 0
Depreciation R$ million (1) (1) (2) (3) (4) (5) (6) (7)
Depreciation & amortization R$ million (19) (31) (50) (83) (116) (153) (183) (202)
EBITDA R$ million 90 158 188 289 384 481 579 621
EBIT R$ million 71 126 138 206 269 328 395 419

Financial result R$ million (22) (25) (7) (6) (27) (36) (34) (16)
EBT R$ million 48 101 131 201 242 292 361 403
Non-operating result R$ million 0 0 0 0 0 0 0 0
Income taxes and social contribution R$ million (18) (33) (44) (68) (82) (99) (123) (137)
Profit sharing R$ million 0 0 0 0 0 0 0 0
Minority interest R$ million 0 0 0 0 0 0 0 0
Net earnings R$ million 31 68 86 133 159 193 238 266
EPS R$/share 0.25 0.55 0.69 1.06 1.28 1.55 1.91 2.13
Gross margin % 52.0% 58.1% 57.5% 58.9% 58.8% 58.2% 58.7% 58.4%
EBITDA margin % 29.9% 39.0% 37.7% 42.4% 43.3% 44.0% 44.2% 44.2%
Net margin % 10.2% 16.9% 17.4% 19.5% 18.0% 17.6% 18.2% 18.9%
Growth
Net revenue % 56% 35% 23% 37% 30% 23% 20% 7%
EBITDA % 195% 76% 19% 54% 33% 25% 20% 7%
EBT % 304% 110% 29% 54% 20% 21% 24% 11%
Net earnings % 190% 124% 26% 53% 20% 21% 24% 11%
BALANCE SHEET UNIT 08a 09a 10e 11e 12e 13e 14e 15e
Current assets R$ million 63 104 388 512 405 363 582 799
Cash and equivalents R$ million 2 2 267 344 205 120 300 513
Accounts receivable R$ million 52 72 98 144 175 217 255 259
Inventories R$ million 0 1 3 3 4 5 6 6
Deferred and recoverable taxes R$ million 7 26 15 15 15 15 15 15
Other R$ million 3 4 6 6 6 6 6 6
Long term assets R$ million 22 21 20 20 20 20 20 20
Permanent assets R$ million 286 315 589 813 1,076 1,307 1,311 1,313
Investment R$ million 0 0 0 0 0 0 0 0
PP&E R$ million 247 276 549 774 1,037 1,267 1,272 1,274
Deferred assets R$ million 0 0 0 0 0 0 0 0
Intangible assets R$ million 39 39 39 39 39 39 39 39
Total assets R$ million 372 440 997 1,346 1,501 1,690 1,914 2,133
Current liabilities R$ million 97 119 186 293 328 373 418 437
Loans and financing R$ million 47 57 59 116 116 116 116 116
Suppliers R$ million 14 12 28 38 48 61 69 73
Taxes and contribution R$ million 3 0 15 21 25 30 35 34
Dividends payable R$ million 7 16 16 16 16 16 16 16
Provisions R$ million 0 0 0 0 0 0 0 0
Salaries and benefits R$ million 13 15 24 33 41 51 60 62
Other R$ million 12 21 43 67 81 98 122 136
Long term liabilities R$ million 165 148 169 312 312 312 312 312
Loans and financing R$ million 142 127 147 290 290 290 290 290
Provisions R$ million 22 9 9 9 9 9 9 9
Other R$ million 1 12 13 13 13 13 13 13
Deferred income R$ million 0 0 0 0 0 0 0 0
Minority interest R$ million 0 0 0 0 0 0 0 0
Shareholders' equity R$ million 110 173 642 741 861 1,005 1,184 1,383
Capital stock R$ million 81 81 507 507 507 507 507 507
Reserves R$ million 29 92 70 70 70 70 70 70
Retained earnings R$ million 0 0 59 159 278 423 602 801
Treasury shares R$ million 0 0 0 0 0 0 0 0
Adjustments to asset valuation R$ million 0 0 6 6 6 6 6 6
Total liabilities R$ million 372 440 996 1,345 1,500 1,689 1,913 2,132
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DEBT UNIT 08a 09a 10e 11e 12e 13e 14e 15e
Debt R$ million 189 184 206 406 406 406 406 406
Short-term R$ million 47 57 59 116 116 116 116 116
Long-term R$ million 142 127 147 290 290 290 290 290
Cash and equivalents R$ million 2 2 267 344 205 120 300 513
Net debt R$ million 188 182 (60) 62 202 286 106 (106)
Net debt/equity % 171% 106% n/a 8% 23% 28% 9% n/a

Net debt/total capital % 63% 51% n/a 8% 19% 22% 8% n/a
Net debt/EBITDA x 2.1 1.2 n/a 0.2 0.5 0.6 0.2 n/a
Interest coverage x 4.0 6.4 25.1 52.4 14.1 13.3 17.0 38.2
CASH FLOW STATEMENT UNIT 08a 09a 10e 11e 12e 13e 14e 15e
Free cash flow to firm R$ million (176) 12 (160) (85) (82) (13) 262 289
EBITDA R$ million 90 158 188 289 384 481 579 621
(+) Non-operating result (other) R$ million 0 0 0 0 0 0 0 0
(-) Income taxes and social contribution R$ million (18) (33) (36) (46) (78) (94) (111) (128)
(-) Profit sharing R$ million 0 0 0 0 0 0 0 0
(-) Minority interest R$ million 0 0 0 0 0 0 0 0
(-) CAPEX R$ million (235) (76) (326) (308) (378) (384) (188) (204)
(-) Change in working capital R$ million (12) (37) 14 (21) (10) (15) (18) 1
Dividends provisioned R$ million 3 8 27 33 40 48 60 66
MARKET MULTIPLES UNIT 08a 09a 10e 11e 12e 13e 14e 15e
Share price R$ 11.9 11.9 11.9 11.9 11.9 11.9 11.9 11.9
Number of shares million 125 125 125 125 125 125 125 125
Market value R$ million 1,483 1,483 1,483 1,483 1,483 1,483 1,483 1,483
EV/EBITDA x 18.7 10.6 7.6 5.3 4.4 3.7 2.7 2.2
P/E x 48.5 21.7 17.2 11.2 9.3 7.7 6.2 5.6
P/CE x 5.4 4.6 1.8 1.4 1.3 1.1 1.0 0.9
P/BV x 13.5 8.6 2.3 2.0 1.7 1.5 1.3 1.1
FCFE yield x 0.2% 0.5% 19.7% 7.5% -6.7% -2.5% 16.2% 18.8%
Dividend yield x 0.2% 0.5% 1.8% 2.2% 2.7% 3.2% 4.0% 4.5%
FAIR EQUITY VALUE CALCULATION UNIT 10e

WACC (R$) % 11.6%
Perpetuity growth (R$) % 4.0%
Total firm value R$ million 1,813
Net debt R$ million (60)
Fair equity value R$ million 1,873
Fair value (YE 2010) R$/share 15.0
Current price/share R$ 11.9

Upside potential % 26.1%
Total return % 27.9%
Recommendation Outperform
MULTIPLES AT FAIR VALUE UNIT 08a 09a 10e 11e 12e 13e 14e 15e
Equity value R$ million 1,873 1,873 1,873 1,873 1,873 1,873 1,873 1,873
Enterprise value R$ million 2,061 2,055 1,813 1,935 2,074 2,159 1,979 1,766
EV/EBITDA x 23.0 13.0 9.7 6.7 5.4 4.5 3.4 2.8
P/E x 61.2 27.4 21.7 14.1 11.7 9.7 7.9 7.0
P/CE x 6.8 5.8 2.3 1.8 1.6 1.4 1.3 1.1
P/BV x 17.1 10.8 2.9 2.5 2.2 1.9 1.6 1.4
FCFE yield % 0.2% 0.4% 15.6% 5.9% -5.3% -1.9% 12.8% 14.9%
Dividend yield % 0.2% 0.4% 1.4% 1.8% 2.1% 2.6% 3.2% 3.5%
PROFITABILITY RATIOS UNIT 08a 09a 10e 11e 12e 13e 14e 15e
ROE % 27.9% 39.6% 13.5% 17.9% 18.5% 19.2% 20.1% 19.2%
ROIC % 17.2% 25.8% 15.1% 15.9% 16.4% 16.5% 19.3% 20.0%
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APPENDIX 1 PICTURES OF MILLS’ BUSINESS UNITS

Heavy Construction and Jahu Divisions
Formwork Solutions
Temporary moulds into which concrete or similar material are poured in order to support
a structure.
Source: Company
Shoring Solutions
Provides support for a structure under construction in order to prevent collapse and
enable construction to proceed.
Source: Company
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Scaffolding Solutions
Temporary structures used to support workers and materials in the construction and/or
repair of building and large infrastructure projects.
Source: Company
Industrial Services Division
Painting / Surface Treatment
Painting and surface treatments for industrial plants and large construction projects.
Source: Company
Insulation
Insulation solutions for large flow-process industries.
Source: Company
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Access Solutions
Structures that enable transit for people and equipment in areas with difficult access,
usually for implementation and maintenance projects at large industrial plants.
Source: Company
Equipment Rental Division
Telehandlers
Vehicle designed to move loads to and from places unreachable by a conventional forklift.
Source: Company
Aerial Work Platforms (AWP)
Provides access for people or equipment to inaccessibly high areas.
Source: Company
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DISCLAIMER
Itaú Securities is a brand name of Itaú Corretora de Valores S.A.
Ratings: Definitions, Dispersion and Banking Relationships (3)
Banking
(1) (2) (3)
Ratings Definition Coverage Relationship
(4)
The analyst expects the stock to perform

Outperform 34% 22%
better than the market average.
The analyst expects the stock to perform in

Market Perform 50% 32%
line with the market average.
The analyst expects the stock to perform

Underperform 16% 10%
below the market average.
1. Ratings reflect the analyst’s assessment of the stock price performance in the medium term compared
with the market average. Recommendations will be valid until the analyst changes the rating, which
may happen as a result of news or simply due to a change in the stock price (there is not a defined
time horizon).
2. Companies are grouped, according to their similarities, into sectors. The sectors are: (i) Banking &
Financial Services, (ii) Consumer Goods & Retail + Food & Beverage, (iii) Healthcare + Education, (iv)
Steel & Mining + Pulp & Paper, (v) Oil, Gas & Petrochemicals + Agribusiness, (vi) Real Estate, (vii)
Telecommunications, Media and Technology, (viii) Transportation, Industrials and Logistics, (ix)
Utilities (x) Equity Strategy.
3. Percentage of companies under coverage by Itaú Corretora de Valores S.A. within this rating category.
The ratings used herein (Outperform, Market Perform and Underperform) for purposes of the ratings
distribution disclosure requirements of FINRA and the NYSE, correspond most closely, respectively, to
Buy, Hold and Sell.
4. Percentage of companies within this rating category for which Itaú Unibanco S.A. or any of its affiliated
companies provided investment banking services within the past 12 (twelve) months, or may provide
investment banking services during the next 3 (three) months.
Relevant Information
1. This report has been produced by Itaú Corretora de Valores S.A (“Itaú Corretora”), a subsidiary of
Itaú Unibanco S.A. and distributed by Itaú Corretora or one of its affiliates (altogether, “Itaú
Unibanco Group”).
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nor is this report intended to be a complete statement or summary of the investment strategies,
markets or developments referred to herein. Opinions, estimates, and projections expressed herein
constitute the current judgment of the analyst responsible for the substance of this report as of the
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accordingly, except when terminating coverage of the issuer of the securities discussed in this
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expressed herein accurately and exclusively reflect his or her personal views and
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therefore, may not be subject to Rule 2711 restrictions on communications with a
subject company, public appearances and trading securities held by a research analyst
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Neither the analyst nor any member of the analyst’s household serves as an officer, director or
Itaú Securities
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advisory board member of the companies analyzed in this report. Itau Unibanco Group and the
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- 26 -
Equities
Christian Egan - CEO
Research
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Mills IC

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(Outperform) Mills ON

Scaffolding Brazil’s Infrastructure

Estimates and Valuation

SECTION 1 INVESTMENT THESIS ............................................................... 3

SECTION 2 VALUATION AND PEERS ............................................................ 8

SECTION 3 ROIC ......................................................................................... 9

SECTION 4 WHAT IS MILLS? ..................................................................... 10

SECTION 5 HISTORICAL GROWTH ............................................................ 16

SECTION 6 MANAGEMENT AND CORPORATE STRUCTURE.......................... 17

SECTION 7 RISKS ..................................................................................... 19

SECTION 8 FINANCIAL SUMMARY............................................................. 20

APPENDIX 1 PICTURES OF MILLS’ BUSINESS UNITS ................................... 22

SECTION 1 INVESTMENT THESIS

Reasons We Like the Investment Case for Mills

 Brazil is expected to see an unprecedented cycle of investment in

 Well positioned to continue growing and maintain leadership. Mills’ technical

 Novo Mercado listing, which promotes high corporate governance standards.

 Attractive valuation, based on strong growth prospects and high ROIC.

Brazilian Infrastructure Sector — Main Peers

Average 7.8 6.1 15.5 11.5 44.6% 53.6%

ROIC vs. EV/EBITDA

Points Supporting Our Investment Thesis

Unprecedented Cycle of Investment

Brazil is expected to see an unprecedented cycle of investment in infrastructure, real

 PAC is the Brazilian government’s initiative to accelerate economic growth and

 Petrobras’s business plan includes a capex program of approximately US$200-220

Investment in Infrastructure in Brazil (R$ in billions) Investment in Infrastructure in Brazil (2010–2013)

Growth Perspectives for the Rental Division

Amazonas Pará Maranhão

Investments in Construction-Related Industries

Investment in construction-related activities in 2008 reached R$258.6 billion,

SECTION 2 VALUATION AND PEERS

Please refer to pages 20 and 21 for a summary of our forecasts.

Fair Value Calculation

Current price/share R$ 11.9

Infrastructure Sector — Domestic Peers

Average 7.8 6.1 15.5 11.5 44.6% 53.6%

Infrastructure Sector — International Peers

Market Cap EV/EBITDA P/E EBITDA CAGR Earnings CAGR

ROIC vs. WACC

ROIC WAC C Spread (pp)

SECTION 4 WHAT IS MILLS?

Business description Clients Competitors

■ Provides engineering solutions and equipment, ■ Large homebuilders: ■ Ranks #1 amongst

Contracts and Revenues – Key Characteristics

Typical contract description # Active contracts Top 10 clients

■ Services and equipment on time and material ■ 231 ■ 67% of the

■ Services and equipment on time and material ■ 1,914 ■ 24% of the

■ Contracts (including access, painting, ■ 150 ■ 56% of the

■ Rental contracts usually on a monthly basis; ■ 370 ■ 27% of the

Heavy Construction Division

171 35.4% CAGR: 49.9% 114

2008A 2009A 2010E 2011E 2008A 2009A 2010E 2011E

Industrial Services Division

Equipment Rental Division

Additionally, this equipment allows materials weighing up to 4,536 kg to be lifted,

2008A 2009A 2010E 2011E 2008A 2009A 2010E 2011E

Net Revenues Breakdown – 2009 EBITDA Breakdown – 2009

Jahu 15.4% Jahu 20.2%

Net Revenues Breakdown – 2011E EBITDA Breakdown – 2011E

Key Client Relationships

Mills’ Main Clients

Brazil is expected to see an unprecedented cycle of investment in

Well positioned to continue growing and maintain leadership. Mills’ technical

Novo Mercado listing, which promotes high corporate governance standards.

Attractive valuation, based on strong growth prospects and high ROIC.

PAC is the Brazilian government’s initiative to accelerate economic growth and

Petrobras’s business plan includes a capex program of approximately US$200-220

Macroeconomic scenario in Brazil. The company’s operations are leveraged on the