4q14 presentation of results

8/9/2019 4Q14 Presentation of Results

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March 11th, 2015

Presentation of 4Q14 and 2014Results


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210.1 207.8 213.0

191.5 191.5181.9

102.4 107.5 105.9

66.779.0

55.645.633.9 33.4

3.211.3

-6.2

48.7% 51.7%49.7%

34.8%

41.3%

30.6%

14.1% 13.8% 12.3%9.4% 9.9%

6.6%

4Q13 1Q14 2Q14 3Q14 3Q14³ 4Q14

Net revenue EBITDA Net earnings EBITDA margin (%) ROIC²

2

Financial Performance 1

¹ Reclassifiedexcluding the Industrial Services business unit, for comparison

² ROIC: Return on Invested Capital.

³ Excluding non-recurring items of R$ 21.7 million of net earnings and R$ 14.5 million of EBITDA in 2014, of which R$ 12.3 million in 3Q14

Presentation of 4Q14 Results – 03/11/2015

In R$ million

4Q14/4Q13 4Q14/3Q14³ 2014³/2013 CAGR 11-14³

Net revenue -13% -5% -5% 20%

EBITDA -46% -30% -13% 17%

Net earnings -114% -155% -53% -4%

462.8

665.5

832.3794.2 794.2

217.4

339.0

403.1

335.7 350.2

92.2

151.5 172.6

64.3 81.7

47.0% 50.9%48.4%

42.3%44.1%

12.3%14.7% 14.1%

7.0% 7.0%

2011 2012 2013 2014 2014³


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Rental82%

Technicalassistence

1%

Sales10% Others

7%

Per service type

HeavyConstruction

29%

Real Estate25%

Rental46%

Per business unit

3

Net revenue totaled R$ 181.9 million in 4Q14



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We have a broad client base

4 Presentation of 4Q14 Results – 03/11/2015

Indicators HeavyConstruction Real Estate Rental Mills

% 2014 Revenue 29% 25% 46% 100%

# Clients 377 2,065 4,083 5,798

Top 10 Clients (% revenue) 38% 20% 12% 16%


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5

EBITDA reduction of R$ 11 million qoq

79

3.68.4

0.3 4.68.9

1.1 2.3 3

55.6

0

10

20

30

4050

60

70

80

90

In R$ millionChange in EBITDA



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4.2%

6

Historical level of Mills’ ADD represented 2.3% of net revenue

0.3%

1.7%

2.1% 2.0%

5.3%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

2010 2011 2012 2013 2014

2010-2014 Average

As % of Revenues

Changes in allowance for doubtful debts (ADD)


Excluding creditdowngrade


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Positive cash flow of R$ 116 million in 2014, of which R$ 119million was in the second half of 2014

7

(340)

(219)

(31)

(154)

(13)

11

7445

116

(400)

(300)

(200)

(100)

-

100

200

2010 2011 2012 2013 1Q14 2Q14 3Q14 4Q14 2014

Free cash flow 1

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



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7447 51

106

48

104

185

60

90

19

131

163

161

267

105

15

18

20

36

27

324

413

292

499

199

2010 2011 2012 2013 2014

Rental

Real Estate

Heavy Construction

In R$ millionCapex ¹

Mills invested R$ 172 million in rental equipment in 2014, of which R$ 17 million in 4Q14

8¹ Reclassified excluding Industrial Services business unit, for comparison.



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72 57 34 38 31 27

134 174150

106 106

38

194206

231

184

144 137

65

Cashposition

2015 2016 2017 2018 2019 2020

Interest Principal

Debt profile

Debt amortization schedule 1in R$ million

9

Credit lines available¹ ,2

Used R$ 64.5 million

Not used R$ 505.6 million

¹As of December 31st ,20142 Unsecured overdraft account+ Secured bank credit lines

745

194552

Gross debt Cash position Net debt

Debt 1in R$ million



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Debt indicators

10

Net Debt/EBITDA

Debentures Covenants :(1) EBITDA/net financial results higher than or equal to two; and(2) Net Debt/EBITDA less than or equal to three.

8.9x

8.0x

7.1x

6.1x

5.2x

4Q13 1Q14 2Q14 3Q14 4Q14

EBITDA/Net fincancial results

1.5x 1.5x 1.5x 1.5x1.6x

4Q13 1Q14 2Q14 3Q14 4Q14



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The new organizational structure aims to improve operationalefficiency and synergy from the Heavy Construction and RealEstate business units

Apresentação de Resultados 4T14 – 11/03/2015

CEO

HeavyConstructionCommercial

Real EstateCommercial Operations Engineering

Projects

Field Operation

Rental

11

New Organizational Structure

Maintenance

Inventoryhandling and

control


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Actions to mitigate risks with companies under ongoinginvestigations

• Diversify new rental contracts, regarding clients and projects• To prioritize projects with lower risk of paralization

• To reduce or maintain current customer credit risks exposure

• To diversify our client base

• Strengthen relationship with medium-size companies from the infrastructure

market

• Increase Rental’s market share in the non -construction market

• Preserve cash and expenses reduction where there is no impact on

operations



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97.2 97.3 98.691.0

83.9

56.0 58.4 55.150.0

33.2

57.7%60.1%

55.8% 54.9%

39.6%

18.2% 17.8%16.2% 14.5%

11.5%

4Q13 1Q14 2Q14 3Q14 4Q14

Net revenue EBITDA EBITDA margin (%) ROIC¹

Rental – Financial Performance

13

1 ROIC: Return on Invested Capital.

In R$ million

4Q14/4Q13 4Q14/3Q14 2014/2013 CAGR 11-14

Net revenue -14% -8% 4% 28%

EBITDA -41% -34% -2% 28%


175.4

253.5

357.3 370.8

93.6

141.2

201.2 196.7

53.4% 55.7% 56.3%

53.0%

16.5%18.2% 18.2%

11.5%

2011 2012 2013 2014


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Utilization rate increased to the detriment of price in 4Q14

14

Changes in revenuein R$ million

Fonte: Mills

91

3.8 11.7

0.8

83.9

0

10

20

30

40

50

60

70

80

90

100

3Q14Revenues

RentedVolume

Price andmix

OthersRevenues

4Q14Revenues

Utilization RateIn %

0%

20%

40%

60%

80%

100%

2014 Average = 63%



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Appreciation of our work: Nominated again to IAPA Awards

2015: Among the three finalists for

“Powered Access Pioneer”

2014: We were awarded in “IPAF TrainingCenter of the Year” category

2012: We were awarded in “Access Rental

Company of the Year”



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Revenues per type of use

64% 67%73%

45%63%

19% 16%16%

51% 17%

17% 17% 11%4%

20%

Brazilian market Mills United Rentals(pre-merger

RSC)

United Rentals(post-merger

RSC)

Ramirent

Others

Spot

Industry

Construction

Construction sector is the major user of motorized access inBrazil

16Source: Brazilian Market – 2014, estimated by Mills Mills – 2014, United Rental - 2014 and Ramirent - 2014



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8

11

16

21

30

34

38%

45%

31%

43%

13%

0%

10%20%

30%

40%

50%

60%

70%

80%

90%

100%

0

5

10

15

20

25

30

35

40

2009 2010 2011 2012 2013 2014

# Machines YoY (%)

17

Motorized acess equipment fleet

In thousands of units

Source: Mills

4,000 motorized access units came onto the Brazilianmarket in 2014



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Safety - Growth driver in the motorized access equipmentmarket

Source: (1) EUA: Osha – data of 2010 and (2) Brazil : BOLETIM SIRENA – Accidents in workanalysis -N

°

2 - January to December, 2010, data of 2010

Leading causes of fatal accidents in construction work

4%

8%

10%

35%

8%

5%

12%

19%

Crushing

Collision

Electric shock

Falls

Brazil

USA



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1,889

403

277 233

72

Mobile ladders Vehicles with lifttables, dock

levellers, ramps andflying tables

Fixed scaffolding Mobile scaffolding Aerial platform

19

Number of accidents by type of access equipmentEUA – 2010-2011

Source: HSE HandS-On Statistics Data Tool

Safety - Growth driver in the motorized access equipmentmarket



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Productivity - Growth driver in the motorized accessequipment market

Preparation: scaffolding assembly last 2 dayswith 8 peopleOperation: fixed structure makes it difficult toaccess certain points

Preparation: it reaches working heights inone and half minutesOperation: flexible, easy to operate andmaneuver



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Evolution in Rental’s number of units

Geographic expansion - Growth driver in the motorizedaccess equipment market


4 4

14

16 17

26

30

2008 2009 2010 2011 2012 2013 2014


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58.6

51.055.5

51.9 52.5

29.325.6 25.6

21.4

16.3

49.9%50.2%

46.2%41.2%

31.0%

19.2% 17.9%16.3%

13.3%9.9%

4Q13 1Q14 2Q14 3Q14 4Q14Net revenue EBITDA EBITDA margin (%) ROIC¹

In R$ million

Heavy Construction – Financial Performance

22

1 ROIC: Return on Invested Capital.

4Q14/4Q13 4Q14/3Q14 2014/2013 CAGR 11-14

Net revenue -10% 1% -3% 17%

EBITDA -44% -24% -18% 15%


131.6

174.1

217.0211.0

57.8

84.3

108.1

88.9

43.9%48.5% 49.8%

42.1%

12.1% 17.2%

19.2%

9.9%

2011 2012 2013 2014


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Utilization rate decrease qoq was partially offset by thepositive effect of price and mix

23

Change in revenuein R$ million

Source: Mills

51.9

2.61.6 1.6

52.5

0

10

20

30

40

50

60

3Q14Revenues

RentedVolume

Price andmix

OthersRevenues

4Q14Revenues

Utilization RateIn %

0%

20%

40%

60%

80%

100%

2014 Average = 68%



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24

Characteristics of 2015 backlog 1


Public40%

Private46%

PPP13%

Source of funds

Industry32%

Heavy Construction

55%

Others13%

Per sector

1Revenues expected in 2015 for signed contracts of December 31st., 2014


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Source: Credit Suisse report about infraestructure in Brazil “ The Brazilian Infraestructure: It’s ‘now or never ’ ” from July 2013 and Inter.B (2013)

2.031.48

0.63 0.620.90 1.1

0.80

0.43

0.73 0.640.50 0.5

2.13

1.47

0.760.67

0.74 0.8

0.46

0.24

0.150.19

0.21 0.21

5,4

3,6

2,3 2,22.4 2.5

0.0

1.0

2.0

3.0

4.0

5.0

6.0

1971-80 1981-89 1990-2000 2001-10 2011-12 2013

Sewage and sanitation

Energy

Telecom

Logistics

Infrastructure investmentsin % of GDP

Infrastructure investments varied from 2.0 to 2.5% of BrazilGDP in the last 25 years, below the estimated % required totheir maintainance


Infrastructure investments are priority in Brazil However


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1,509

1,772

1,013

598

830

643

BNDES - 2015-2018

Sobratema - 2014 - 2019

Exame - Balance 2014/2015Infrastructure

Total

Infrastructure investments are priority in Brazil. However,there are major uncertainties regarding its execution.

Expected investments in Brazilin R$ billion

Source: BNDES – December 2014, Sobratema – 5ª Edição – 2014, Anuário Exame 2014-2015, datafrom 1,565 construction works.



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54.2

59.5 58.8

48.6 48.645.4

17.1

23.5 25.2

-4.7

7.7 6.1

31.5%

39.4%42.8%

-9.6%

15.7% 13.5%8.1% 6.7% 6.5%

2.1% 3.8% 0.4%

4Q13 1Q14 2Q14 3Q14 3Q14¹ 4Q14

Net revenue EBITDA EBITDA margin (%) ROIC²

Real Estate – Financial Performance

27

¹ Excluding non-recurring effects of R$ 14.5 million in 2014, of which R$ 12.3 million was in 3Q14.

² ROIC: Return on Invested Capital.

In R$ million

4Q14/4Q13 4Q14/3Q14¹ 2014/2013 CAGR 11-14

Net Revenue -16% -6% -18% 11%

EBITDA -64% -20% -47% -9%


155.8

238.0

258.0

212.4 212.4

66.0

113.493.8

50.164.6

42.4%

47.7%

36.4%

23.6%

30.4%

14.3% 15.7%

8.1%

0.4%2.5%

2011 2012 2013 2014 2014¹


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Utilization rate continued to decrease in 4Q14, partially offsetby a positive effect of price and mix

28

Change in revenuein R$ million

Fonte: Mills

48.6

4.81.7 0.1

45.4

0

10

20

30

40

50

60

3Q14Revenues

RentedVolume

Price andmix

OthersRevenues

4Q14Revenues

Utilization rateIn %

0%

20%

40%

60%

80%

100%

2014 average = 60%



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29

29.8

32.1

21.3

23.4

19.1

7.6%

-33.7%

10.1%

-18.6%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

0

5

10

15

20

25

30

35

2010 2011 2012 2013 2014

V a r .

( % )

L a u n c h e s

( i n

R $ m i

l l i o n

)

1 Cyrela, Direcional, Even, Eztech, Gafisa, Helbor, MRV, Tecnisa, Rodobens, and PDG

Source: Operational reports from companies and Mills

Total launches 1in R$ billion

Launches and sales declined in 2014, with possible negativeimpact on 2015 construction activities

26.627.9

22.7

25.0

20.0

4.7%

-18.4%

9.8%

-19.9%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

0

5

10

15

20

25

30

2010 2011 2012 2013 2014

V a r .

( % )

S al e

s ( i nR

$ mi l l i on

)

Total sales 1in R$ billion



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In 2015, civil construction GDP should present reductionsimilar to the previous year

-10%

-5%

0%

5%

10%

15%

2009 2010 2011 2012 2013 2014* 2015*

Total GDP Civil construction GDP

Source: Bacen and estimative from Ibre-FGV for both periods

GDPYoy variation (%)



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Stages of industrialization of the construction process

31

1 Approximately 800 m 2

Source: Téchne Magazine. June 2012 and Mills

System Traditional with wood Traditional with steel Deck type Flying table

Cycle betweenconcreting activities 15 days 7-10 days 6-8 days 4-7 days

Labor required 1 30 people 20 people 12 people 10 people



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Mills - Investor Relations

Tel.: +55 21 2123-3700

E-mail: [email protected]

www.mills.com.br/ri

4q14 presentation of results

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