3Q15 Presentation of Results

8/20/2019 3Q15 Presentation of Results

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November 5th, 2015

Presentation of 3Q15 Results


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• Since 3Q14, organizational structure was resized, with annualized personnel

savings estimated at R$ 24 million per year¹

• Non-recurring layoff costs of R$ 3.1 million in 3Q15

Ricardo GusmãoCommercial Officer

for Construction

Avelino GarzoniEngineering and

OperationsOfficer

Marcelo YamaneRental Officer

Frederico NevesCFO and IRO

Deise VieiraHuman Resources

Officer

Sérgio KariyaCEO

Changes in the organization structure

¹Excluding costs with layoffs

Organization structure as of September 2015:

Construction

Presentation of 3Q15 Results – 11/05/2015


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3 Presentation of 3Q15 Results – 11/05/2015

• Market leader with more than 60 years ofexperience

• Focus on: infrastructure projects, industrial,residential and commercial construction works.

• Products: engineering solutions and rental offormworks and shoring

• Services: planning, designing, technicalsupervision, equipment and related services

• Clients:

Construction

• Market leader; started in 2008

• Focus on: civil construction. Industry, retail eothers

• Products: rental and sale of motorized accessequipment, such as aerial work platforms andtelescopic handlers

• Elected "Best Company for Access of the Year"by the International Awards for Powered

Access (IAPA Awards) for the year of 2011

Rental

Adjustments aiming to increase synergies between HeavyConstruction and Real Estate operations and markets

The consolidation of the two business units have generated the “Construction” business unit


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¹ Reclassified excluding the Industrial Services business unit for comparison. It does not exclude non recurring items.

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Financial Performance1


In R$ million

3Q15/3Q14 3Q15/2Q15 LTM3Q15/2014 CAGR 12-14

Net revenue -29% -8% -21% 9%

EBITDA -47% -33% -41% 0%

Net earnings n.a. 110% n.a. -35%

191.5181.9

163.9

147.9136.5

66.7

55.6 47.4 52.1

35.1

3.2

-6.2-14.5

-8.2-17.2

34.8%

30.6%28.9%

35.3%

25.7%

9.4%

6.6%

4.0%2.0%

0.8%

3Q14 4Q14 1Q15 2Q15 3Q15

Net revenue EBITDA Net earnings EBITDA margin (%) ROIC

665.5

832.3794.2

630.1

339.0

403.1

335.7

190.3151.5

172.6

64.3

-46.1

50.9%

48.4%

42.3%

30.2%

14.7%

14.1%6.6%

0.8%

2012 2013 2014 LTM3Q15


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91.074.5 68.7

51.9

41.8 41.2

48.6

31.626.5

191.5

147.9136.5

3Q14 2Q15 3Q15

Per business unit

R$ Million

Rental Heavy Construction Real Estate

Net Revenue Breakdown


161.4125.9 116.0

19.1

12.310.2

11.0

9.610.3

191.5

147.9136.5

3Q14 2Q15 3Q15

Per service type

R$ Million

Rental Sales Technical assistance and Others

3Q15/3Q14 3Q15/2Q15

Rental -28.1% -7.9%

Sales -46.7% -17.5%

Technical assistance and others -6.8% 6.6%

Total -28.7% -7.7%

3Q15/3Q14 3Q15/2Q15

Rental -24.5% -7.7%

Heavy Construction -20.6% -1.5%

Real Estate -45.4% -16.0%

Total -28.7% -7.7%


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Sales of semi-new equipment totaled R$ 20.5 million in 9M15

0

5

10

15

20

25

30

1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15

Sales of semi-new equipment Sales of new equipment

In R$ million

Equipment sales



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35.6

0.4 1.8

33.425.0

0.7 1.4

22.9

65.3

2.6 8.1

59.8

2Q15 Volume Priceand Mix

3Q15 2Q15 Volume Priceand Mix

3Q15 2Q15 Volume Priceand Mix

3Q15

Evolution in Net Revenue per business unit


Net Revenue Evolution

In R$ million

HeavyConstruction

Real Estate Rental


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Rental

0%

20%

40%

60%

80%

100%

0%

20%

40%

60%

80%

100% Construction

LTM 3Q15 average = 61.6%LTM 3Q15 average = 52.3%


Utilization rate dropped in Construction and increased inRental


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Heavy Construction - Rental revenue breakdown in 3Q15

Industry12%

Infrastructure75%

Others13%

Per sector

R$ 33.4 million


Public47.8%

Private36,8%

PPP15.4%

Source of funds

R$ 33.4 million


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Central West and South

BR 163 highway -MT

São Manoel Hydroelectric powerplant

Colíder Hydroelectric powerplant

10

Important construction Works with Mills participation


States wtih Mills’ presence

North e Northeast

Vale’s S11D project

Votorantim’s cement factory

Transposition of São Francisco river

Companhia Siderúrgica do Pecém

steel mill

Transnordestina Railroad

Beira-Mar set Salvador subway

Southeast

Jirau Hydroelectric

power plant Gold Monorail Line

North Beltway

Subway line 5 – SP

Olympic Park

Subway line 4 - RJ

Galeão Airport

Joá Elevated road

duplication - RJ CSN project

Gerdau project

Duplication of BR 381

Rio Manso watertreatment center


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Residential49%

Commercial39%

Others12%

Rental revenue per segment

R$ 22.9 million

Real Estate - Rental revenue breakdown in 3Q15



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4.6

5.2

4.03.7

2.9

2.611.9%

-22.6%

-7.6%

-21.1%

-12.7%

-65%

-45%

-25%

-5%

15%

35%

55%

75%

95%

-

1.0

2.0

3.0

4.0

5.0

6.0

3Q10 3Q11 3Q12 3Q13 3Q14 3Q15

V a r . ( % )

L a u n c h e s ( i n R $ b i l l i o n )

1 Cyrela, Direcional, Even, Gafisa, Helbor, MRV and Rodobens.

Source: Operational reports from companies and Mills

Total launches1

in R$ billion

Launches and sales continued to decline in 3Q15

4.1

4.54.4

4.2

3.4 3.3

9.2%

-2.0% -4.0%

-19.9%

-2.2%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

-

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

3Q10 3Q11 3Q12 3Q13 3Q14 3Q15

V a r . ( % )

L a u n c h e s ( i n R $ b i l l i o n )

Total sales1

in R$ billion



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Construction sector remains the main user of Mills’

motorized access equipment

13

Construction72%

Industry19%

Spot9%

Rental revenue by useIn 3Q15

Rental85%

Technical Assitance

2%

Sales7%

Others6%

Net revenues per type of serviceIn 3Q15



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25.513.2 14.5 15.6 11.4 9.8

38.2

38.2 37.1 31.5 37.1 39.4

63.6

51.4 51.547.1 48.5 49.2

3Q14 3Q14¹ 4Q14 1Q15 2Q15 3Q15

Execution of works and warehouseSales and write-off of assets

3Q15/3Q14 3Q15/3Q14* 3Q15/2Q15

Sales and write-off of assets -61,4% -25,4% -13,8%

Execution of works and warehouse 3,2% 3,2% 6,1%

COGS total, ex-depreciation -22,7% -4,3% 1,4%

1 Excluding non-recurring effects of R$ 12.3 million

Personnel41%

Material25%

Sales14%

Write-offof Assets

6%

Freights8%

Others6%

3Q15

Evolution of COGS, ex-depreciation


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20.5

0.4 1.2 0.7

22.1

COGS, exdepreciation

2Q15

Sales and Assetwrite-offs

Maintenance Freight COGS, exdepreciation

3Q15

28.0

1.2 0.3 1.0 1.2 0.2

27.1

CPV, exdepreciação

2T15

Vendas ebaixas de

ativos

Pessoal Manutenção Fretes Outros CPV, exdepreciação

3T15

COGS, ex-depreciationR$ million


Evolution of COGS, ex-depreciation, per business unit

Construction

Rental


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41.3 37.7 34.4 31.5 31.2

9.89.9

10.010.9 11.3

1.4 5.03.7 2.9 1.7

52.5 52.648.2

45.3 44.3

3Q14 4Q14 1Q15 2Q15 3Q15

Changes in G&A , ex-depreciation and ADD

Commercial, Operating and Administrative General Services Other Expenses

Commercial, Operating and Administrative G&A were 25%lower yoy.

3Q15/3Q14 3Q15/2Q15

Commercial, Operating e Administrative -24.3% -0.7%

General Services 15.6% 3.5%

Other Expenses 20.1% -41.4%

SG&A total, ex-depreciation and ADD -15.6% -2.3%

1 G&A corresponds to the sum of Rental and Construction business units


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ADD reached 5.9% of net revenue in 3Q15

17

0.3%

1.7% 2.1%2.0%

5.3%

12.8%

1.2%

5.9%

-1.0%

1.0%

3.0%

5.0%

7.0%

9.0%

11.0%

13.0%

15.0%

2010 2011 2012 2013 2014 1Q15 2Q15 3Q15

2010-2014 average = 2.3%

As % of net revenues

Changes in allowance for doubtful debts

(ADD)

6,8%

Ex clients under investigation

4,2%5,9%

-0,8%



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18

EBITDA impacted by non-recurring effects of R$ 3.4 million

52.1

1.5 11.3

1.5 0.2 1.8 6.0

1.6

35.1

0

10

20

30

40

50

60In R$ million

Changes in EBITDA



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Construction – Financial Performance¹

19

3Q15/3Q14 3Q15/2Q15 LTM3Q15/2014 CAGR 12-14

Net revenue -33% -8% -24% 1%

EBITDA -48% -32% -59% -18%


¹ It does not exclude non recurring items.

100.598.0

84.3

73.467.7

16.7 22.413.0 12.7

8.716.6%

22.9% 15.4%17.3%

12.8%

4.4%1.2%

-2.2% -3.1%

3Q14 4Q14 1Q15 2Q15 3Q15

Net revenue EBITDA EBITDA margin (%) ROIC

412.0

474.9

423.4

323.4

197.7 201.9

139.0

56.8

48.0%

42.5%

32.8%

17.6%

4.4%

-3.1%

2012 2013 2014 LTM3Q15


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Rental – Financial Performance¹

20

In R$ million

3Q15/3Q14 3Q15/2Q15 LTM3Q15/2014 CAGR 12-14

Net revenue -24% -8% -17% 21%

EBITDA -47% -33% -32% 18%


¹ It does not exclude non recurring items.

91.0

83.979.6

74.5

68.7

50.0

33.2 34.439.4

26.4

54.9%

39.6%

43.3%

53.0%

38.4%

14.5%

11.5% 8.8%7.4%

5.2%

3Q14 4Q14 1Q15 2Q15 3Q15

Net revenue EBITDA EBITDA margin (%) ROIC¹

253.5

357.3370.8

306.7

140.8

207.0196.7

133.5

55.6%57.9%

53.0%

43.5%

18.2% 18.2%

11.5%

5.2%

2012 2013 2014 LTM3Q15


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159

199

296

384 373

310

79102 105

86 9268 65

-209

-357

-31

-154

116

207

-13

11

7445

7037 55

Adjusted¹ operational cash flow and free² cash flow

R$ million

Adjusted¹ operational cash flow Free² cash flow

Cash generation

21

¹ Before the interest paid and increased by the receipts from asset and intangible sales.

² Net cash generated by the operating activities minus net cash applied in investment activities



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193

174 150

106 106

38

Cashposition

2016 2017 2018 2019 2020

Principal amortization scheduleIn R$ million

57447 193

428

Principal Interests CashPosition

Net Debt

Debt, as of September 30, 2015In R$ million

Debt profile

22

Credit lines avaiable¹,2

Used R$ 15.9 million

Unused R$ 328.8 million

¹As of September 30, 20152 Unsecured overdraft account+ Secured bank credit lines



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Debt indicators

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.

EBITDA/Net financial results

23

1Excluding R$ 40.1 million of non-recurring effects from 1Q15 , R$ 44.9 million from 2Q15 and R$ 34.6 million from 3Q15


1.51.7

1.8

1.6

2.2

1.8

2.3

1.9

3Q14 4Q14 1Q15 1Q15¹ 2Q15 2Q15¹ 3Q15 3Q15¹

5.9

4.9

3.9

4.5

3.3

4.0

2.9

3.5

3Q14 4Q14 1Q15 1Q15¹ 2Q15 2Q15¹ 3Q15 3Q15¹


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Mills - Investor Relations

Tel.: +55 21 2123-3700

E-mail: [email protected]

www.mills.com.br/ri

Documents

3Q15 Presentation of Results