Presentation of 3Q14 Results

November 6th, 2014

Financial Performance3
In R$ million
222.0
211.8
46.7%

50.8%
188.4

47.8%

213.0

210.1

207.8

48.7%

51.7%

191.5

49.7%

191.5
41.3%

47.5%

50.9%
47.0%

832.3

822.3

822.3

48.4%

46.5%

48.0%

665.5

34.8%
98.9

95.7

106.1

107.5

102.4

462.8

105.9

403.1
79.0

14.8%

14.7%

48.1

39.3

14.4%
39.6

14.1%
45.6

13.8%
33.9

66.7
12.3%
33.4

9.9%

9.4%

2Q13

3Q13

Net revenue

4Q13

1Q14

2Q14

EBITDA

3Q14

168.4
103.3

382.4

394.8

9.4%
116.1

9.9%

339.0
217.4
12.3%

14.7%
151.5

14.1%
172.6

92.2

124.1

11.3

3.2
1Q13

354.5
21.0%

3Q14

Net earnings

2010

2011

2012

EBITDA margin (%)

2013

LTM3Q14 LTM3Q14

ROIC

3Q14/3Q13

3Q14/2Q14

LTM3T14/LTM3T13

CAGR 10-13

Net revenue

-14%

-10%

2%

33%

EBITDA

-26%

-25%

3%

34%

Net earnings

-72%

-66%

-26%

19%

Excluding Easy Set effect.

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 a
theoretical 30% income tax rate.
Reclassified excluding the Industrial Services business unit, for comparison

Presentation of 3Q14 Results 11/06/2014

Net revenue totaled R$ 191.5 million in 3Q14

Per business unit

Per service type

Heavy
Construction
27%

Sales
10%

Others
5%

Technical
assistence
1%

Rental
48%

Real Estate
25%

Presentation of 3Q14 Results 11/06/2014

Locao
84%

EBITDA reduction of R$ 27 million qoq

EBITDA Evolution
In R$ million

120
10
100

4.4

3.9

3.8

3.1

80

1.5

60
105.9
40

79.0

20

0
EBITDA
2Q14

Rented
volume

Presentation of 3Q14 Results 11/06/2014

Price and Sales volume

mix

PDD

Maintenance

Layoffs

EBITDA
3Q14

Historical level of Mills ADD represented 1.9% of net revenue

Allowance for doubtful debts (ADD) evolution

4.5%

In R$ million

4.0%
3.5%
3.0%

Heavy Construction
2.5%

Real Estate
2.0%

Rental

1.5%

2010-9M14 Average

Mills

1.0%
0.5%

0.0%
2010

2011

Presentation of 3Q14 Results 11/06/2014

2012

2013

9M14

Positive cash flow of R$ 74 million

Free cash flow1

100

74

50

11

2010

2011

(50)

2012

2013

1Q14

2Q14

3Q14

(13)

(31)

(100)
(150)
(154)
(200)
(219)

(250)
(300)
(350)

(340)

(400)

1 Net

Presentation of 3Q14 Results 11/06/2014

cash generated by the operating activities minus net cash applied in investment activities

Mills invested R$ 155.3 million in rental equipment in 9M14, of

which R$ 13.8 million in 3Q14
Capex
In R$ million

499
36

Rental equipment

413

Realized 9M14 /
2014 Capex
budget (%)

18
Rental
324
15

163

292
20
Real Estate

131

90

185

60%

177

161

104

62%

267

21

105

Heavy
Construction

96%

Total

76%

60
106
74
2010

47

51

2011

2012

15
35

2013

9M14

Reclassified excluding Industrial Services business unit, for comparison.

Presentation of 3Q14 Results 11/06/2014

Heavy Construction Financial Performance

In R$ million

52.8%

51.3%

55.7
55.1
45.5%

50.6%
55.7

58.6
49.9%

47.7%

50.2%
51.0

47.5

217.0
49.8%

48.5%

55.5
46.2% 51.9
41.2%

217.1
46.9%

43.9%
174.1
154.3
131.6

29.4

24.3
17.8%

25.1
17.7%

18.1%

28.2

19.2%

18.1%

108.1

24.1%

29.3
25.6
17.9%

25.6
16.3%

84.3
21.4

73.6

101.9

19.2%

17.2%
13.3%

57.8

13.3%

12.1%

1Q13

2Q13

3Q13

3Q13*

4Q13

Net revenue

Net revenue

EBITDA

1Q14

2Q14

EBITDA

3Q14

2010

2011

EBITDA margin (%)

2012

2013

LTM3Q14

ROIC

3Q14/3Q13

3Q14/2Q14

LTM3T14/LTM3T13

CAGR 10-13

-7%

-7%

0%

12%

-27%

-17%

-6%

14%

* 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 a
theoretical 30% income tax rate.

Presentation of 3Q14 Results 11/06/2014

Evolution of revenue generation

(Basis 100= Maximum monthly revenue in the life of construction)

Important contracts per stage1 in the evolution of monthly

revenue from projects
New
contracts*

Contracts with growing

volume of equipment

Cafezal mountain

Belo Monte
hydroelectric power
plant

Tamoios highway
outline
Fortaleza subway
Jo Elevated road
duplication - RJ
Comperj refinery*
Transocenica
highway - BA
Sanitation projects
CE

Contracts with high volume

of equipment

Jirau hydroelectric power plant

Viracopos airport.

Jirau hydroelectric
power plant*

Goinia airport.

Vales S11D project

Metropolitan Arch RJ

Transnordestina
railroad

BRT Transcarioca

Oeste-Leste railroad

Colder and Teles Pires

hydroelectric power plants

North beltway

Comperj refinery

Vale projects
Pulp mill expansion- RS

Companhia Siderrgica do
Pecm steel mill

BR-040 highway
MG/MT/GO

Norte-Sul railroad

BR- 163 highway

MT

Transposition of the So
Francisco river

Gerdau expansion
MG

Vale projects

BR-381 highway
duplication MG

Contracts in the process of

demobilization

Subway line 5 SP
Salvador subway
Olympic Park
Reduc-Comperj
Pipeline
Silver monorail line SP

Gold monorail line- SP

Subway line 4 RJ
Olympic Park
Subway line 4 SP
Cuiab light rail

Paraguau shipyard

Length of time of Mills participation in the construction work average cycle is 24 months
1 In 3Q14
* New stretches

Presentation of 3Q14 Results 11/06/2014

Characteristics of the major projects in progress

Source of funds

Per sector
Others
8%

Public
31%

Industry
36%
Private
54%
Infrastructure

56%
PPP
15%

Presentation of 3Q14 Results 11/06/2014

in 3Q14

Of the R$ 104 billion investments planned, approximately R$

74 billion have been successfully auctioned
Investiments
In R$ billlion
Salvador subway line 2
BR 050 (MG/GO)
BR 262 (MG/ES)

So Paulo subway line 6

Confins airport

Goinia VLT
BR 163 (MT)

BR 060/153/262 (DF/GO/MG)
BR 163/267/262 (MS)
BR 040 (DF-MG)
BR 153 (GO/TO)
So Paulo subway line 18

Tamoios highway

2013

Galeo airport

BR 101 (BA)
BR 262 (MG/ES)

2014

BR 116 (MG)
Ports - 1th stage - 31 contracts
Ports - 2th stage - 18 contracts
Curitiba subway
Lucas do Rio Verde railroad

Source: Mills, Goldman Sachs and Credit Suisse

10

Presentation of 3Q14 Results 11/06/2014

Real Estate Financial Performance

In R$ million

72.4
64.9

66.5

59.5

258.0

58.8

238.0
47.7%

54.2
48.6

48.6

41.7%

42.8%

42.8%

221.2

42.4%
36.4%

39.4%
37.0%

33.7%

15.0%

13.4%

33.2%
155.8
27.6%

31.5%

27.7
24.6

24.4

23.5

23.5%
105.1

25.2

17.1
10.6%

8.1%

6.7%

6.5%

2Q13

3Q13

4Q13

1Q14

Net revenue

2Q14

3Q14
-4.7
-9.6%

7.7
3.8%

3Q14

EBITDA

113.4
14.3%
66.0

15.8%

2.1%
1Q13

221.2

15.7%

93.8

8.1%

43.9

2.1%
2010

73.4

61.1

2011

2012

EBITDA margin (%)

2013

3.8%

LTM3Q14 LTM3Q14

ROIC

3Q14/3Q13

3Q14/2Q14

LTM3T14/LMT3T13

CAGR 10-13

Receita Lquida

-33%

-17%

-18%

35%

EBITDA

-69%

-70%

-29%

29%

Excluding Easy Set effect.

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 a
theoretical 30% income tax rate.

11

Presentation of 3Q14 Results 11/06/2014

Easy Set: revenues reached R$ 102 million, with operating

profit of 12.4%, since its release
Easy Set performance
R$ million

35.0

32.5

32.0

30.0

25.0
20.0

18.0
15.6

14.5

13.5

15.0
10.0

6.2
3.5

5.0

0.6
2010

2011

2012

2013

2014

-5.0
-10.0

-11.2
-15.0
Net revenues

12

Presentation of 3Q14 Results 11/06/2014

marginal operating profit

EBITDA reduction of R$ 18 million qoq, of which R$ 6 million

are non-recurring items

30
25.2

4.3

25
3.8
20
1.1

Non-recurrent items

1.8
0.8

15

13.4

4.8

10

0.9
7.7

0
EBITDA
2Q14

13

Rented Price and Sales

volume
mix
volume

Presentation of 3Q14 Results 11/06/2014

ADD

Others

EBITDA Bonus
3Q14* reversal

Layoffs

EBITDA
3Q14

Actions to improve Real Estate result

Merge of Real Estate and Heavy Construction maintenance

activities
Sale of used equipment
Transfer of equipment to Heavy Construction
Expand presence in markets less exploited, such as the light
industrial and sanitation markets

14

Presentation of 3Q14 Results 11/06/2014

Rental Financial Performance

In R$ million

57.3%

54.7%
90.1

93.9

60.1%

57.7%

55.7%

55.8%
97.3

97.2

54.9%

98.6
91.0

53.6%

53.4%

55.7%

384.0
57.2%

357.3
56.3%

76.1
253.5

49.3
18.5%

43.6
18.0%

52.3
18.1%

58.4

56.0
18.2%

17.8%

219.5

55.1

201.2

50.0
16.2%

175.4

14.5%
19.2%
95.1

16.5%
93.6

141.2
18.2%

18.2%
14.5%

51.0

1Q13

2Q13

3Q13

4Q13

1Q14

Net revenue

2Q14

3Q14

EBITDA

2010

2011

2012

EBITDA margin (%)

2013

LMT3Q14

ROIC

3Q14/3Q13

3Q14/2Q14

LTM3Q14/LMT3Q13

CAGR 10-13

Net revenue

-3%

-8%

15%

55%

EBITDA

-4%

-9%

21%

58%

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 a
theoretical 30% income tax rate.

15

Presentation of 3Q14 Results 11/06/2014

In the first 9 months of this year 4,000 motorized access units

came onto the Brazilian market
Motorized acess equipment fleet
In thousands of units

40
35

+13%

34

30

30
25

21

20
16
15
11
10

5
0
2009

2010

2011

2012

2013

9M14
Source: Mills

16

Presentation of 3Q14 Results 11/06/2014

Mills - Investor Relations

Tel.: +55 21 2123-3700
E-mail: ri@mills.com.br
www.mills.com.br/ri