Ita? 7th Annual LatAm Conference

8/10/2019 Ita? 7th Annual LatAm Conference

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November 2014

Corporate Presentation


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Executive Summary


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Heavy

Cons

truc

tion

Market leader, extensive trackrecord, with more than 60 yearsof experience

Focus on: large and complexinfrastructure projects

Products: engineeringsolutions and rental offormwork and shoring

Services: planning, design,technical supervision,

equipment and related services

Main clients:

Rea

lEs

tate

Market leader; acquired in 2008

Focus on: residential and

commercial constructions

Products: engineering solutionsand rental of formwork, shoringand suspended access

Services: planning. design.technical supervision. equipmentand related services

Clients: real estate companies.such as:

Ren

tal

Market leader; started in2008

Focus on: civil construction.Industry, retail e others

Products:rental and sale ofmotorized accessequipment, such as aerialwork platforms andtelescopic handlers

Cross-selling with all otherMills business units

Elected "Best Company forAccess of the Year" by theInternational Awards forPowered Access (IAPA

Awards) for the year of 2011

Mills - Business Units

2
http://www.pdgrealty.com.br/pdg/Capa.aspx


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3

Mills3Q14LTM Financial highlights per business unit

Excluding the Industrial Services business unit.

In R$ million

384.0

219.5

221.2

61.1

217.1

101.9

822.3

382.4

Receita Lquida EBITDA

Heavy Construction

Real Estate

Rental

27%

47%

27%

16%

57%

26%

EBITDA margin ROIC

46.9% 13.3%

27.6% 2.1%

57.2% 14.5%

46.5% 9.4%


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Estamos presentes em 16 estados no Brasil com 56 unidades

Geographic Presence

4

Branches locationAs of September 30. 2014

MinasGerais

Rio Grandedo Sul

Santa Catarina

So Paulo

Mato Grosso

do Sul

Rio deJaneiro

(headquarters)

EspiritoSanto

Bahia

DistritoFederal

Goias

Sergipe

Paraiba

Rio GrandeCear

Piaui

Maranho

Tocantins

Par

Rondnia

Acre

Roraima Amap

Amazonas

Mato Grosso

Parana

Alagoas

States with Mills' presence

Pernambuco

do Norte

Rental

Heavy Construction

Real Estate


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5Source: The Conference Board Total Economy Database, January 2014

Brazil presents a low level of productivity compared to otherdeveloping countries

17.2%

34.0%

8.1%

17.1%

28.2%

34.5%

31.4%

Brazil Russia India China South Africa Chile Mexico

GDP per person employed. % of U.S. 2013

Productivity growth is essential for higher sustainable GDP growth


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The potential penetration of our services for increasingproductivity enables us to grow more than the overalleconomy

60%

35%

31%

44%

25%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

2009 2010 2011 2012 2013

Mills GDP Industrial GDP Civil Construction GDP

Source: Mills and Bacen

Mills revenue1versus GDPyoy variation (%)

6 Excluding the Industrial Services business.


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354.5

462.8

665.5

832.3 822.3 822.3

168.4217.4

339.0

403.1382.4 394.8

103.3 92.2

151.5172.6

116.1 124.1

47.5% 47.0%50.9%

48.4%46.5%

48.0%

21.0%

12.3%

14.7%14.1%

9.4% 9.9%

2010 2011 2012 2013 LTM3Q14 LTM3Q14

188.4

211.8222.0

210.1 207.8 213.0

191.5 191.5

95.7 98.9106.1 102.4 107.5 105.9

66.779.0

39.348.1

39.6 45.6 33.9 33.4

3.211.3

50.8%

46.7% 47.8% 48.7%51.7%

49.7%

34.8%

41.3%

14.7% 14.8% 14.4% 14.1% 13.8% 12.3%9.4% 9.9%

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 3Q14

Net revenue EBITDA Net earnings EBITDA margin (%) ROIC

7

Financial Performance3

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 atheoretical 30% income tax rate.

Reclassified excluding the Industrial Services business unit, for comparison

In R$ million

3Q14/3Q13 3Q14/2Q14 LTM3Q14/LTM3Q13 CAGR 10-13

Net revenue -14% -10% 2% 33%

EBITDA -26% -25% 3% 34%

Net earnings -72% -66% -26% 19%


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7447 51

106

35

104

185

60

90

15

131

163

161

267

105

15

18

20

36

21

324

413

292

499

177

2010 2011 2012 2013 9M14

Rental

Real Estate

HeavyConstruction

In R$ million

Capex

Realized 9M14 /2014 Capexbudget (%)

96%

60%

62%

Mills invested R$ 155.3 million in rental equipment in 9M14, ofwhich R$ 13.8 million in 3Q14

8 Reclassified excluding Industrial Services business unit, for comparison.

Total 76%

Rental equipment


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Positive cash flow of R$ 74 million in 3Q14

9

(340)

(219)

(31)

(154)

(13)

11

74

(400)

(350)

(300)

(250)

(200)

(150)

(100)

(50)

-

50

100

2010 2011 2012 2013 1Q14 2Q14 3Q14

Free cash flow1

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


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Business Units


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Castelo stadiumFortaleza. CE

Rental


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Growth drivers in the motorized access equipment market:safety and productivity

Source: Mills

Market penetrationthroughsubstitution of lesssecure andefficient access

methods

Recent safety standards (NR-18 and NR-35) oblige the use of aerial platforms to lift people,

increasing safety and productivity in the work site


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Modest rental penetration of 15% in Brazil. Rental penetration is approximately 50% in the USA,

60% in Japan and 80% in England.

Rental penetration in the USA increased to approximately 50% in 2014 from 5% in 1993: 20

years of continuous penetration growth.

Growth drivers in the motorized access equipment market:low penetration

13Source: Goldman Sachs and United Rentals

20%

35%

40%43%

50%

-20%

0%

20%

40%

60%

1993 1998 2004 2009 2011 2014E

Rental penetration in the USA


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21%

13%

28%

24%

0%

5%

10%

15%

20%

25%

30%

2010 2011 2012 2013

Penetration of use has enabled the branches opened prior to the IPO to have an average annual

growth of 22% in the last four years.

Growth drivers in the motorized access equipment market:low penetration


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Revenue Breakdown

69%

42%38% 31%

31%

58% 62%

69%

2009 2010 2011 2012 2013

New branches

Established branches

Growth drivers in the motorized access equipment market:geographic expansion

151Branches opened since January 2010


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Revenues per type of use

Construction sector is the major user of motorized access inBrazil

16Source: Mills2013. United Rental2011 and Ramirent1Q14

58%69% 73%

60% 63%

25%

23% 16%35%

19%

17%8% 11%

5%18%

Brazilian Market Mills United Rentals(pre-merger RSC)

United Rentals(post-merger RSC)

Ramirent

Others

Spot

Industry

Construction


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RentalFinancial Performance

17

1ROIC: 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 atheoretical 30% income tax rate.

In R$ million

3Q14/3Q13 3Q14/2Q14 LTM3Q14/LMT3Q13 CAGR 10-13

Net revenue -3% -8% 15% 55%

EBITDA -4% -9% 21% 58%

95.1

175.4

253.5

357.3384.0

51.0

93.6

141.2

201.2219.5

53.6% 53.4%55.7%

56.3%

57.2%

19.2%16.5% 18.2%

18.2%

14.5%

2010 2011 2012 2013 LMT3Q14

76.1

90.193.9

97.2 97.3 98.6

91.0

43.649.3

52.356.0 58.4 55.1

50.0

57.3%54.7% 55.7%

57.7%60.1%

55.8%54.9%

18.0%18.5% 18.1% 18.2% 17.8% 16.2% 14.5%

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14

Net revenue EBITDA EBITDA margin (%) ROIC


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Heavy Construction

Cinta costeira - Panam


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1.00

0.33

0.36

0.48

0.62

- 0,50 1,00

USA

Brazil

Russia

India

China

Infrastructure

0.50 1.00

Infrastructure quality ranking for BRIC countries (2011-12)

Index EUA = 1.0

1.00

0.11

0.38

0.51

0.73

- 0,50 1,00

USA

Brazil

Russia

India

China

Ports

0.50 1.00

1.00

0.42

0.93

0.97

0.99

- 0,50 1,00

USA

Brazil

Russia

India

China

Railways

0.50 1.00

1.00

0.33

0.36

0.48

0.62

- 0,50 1,00

USA

Brazil

Russia

India

China

Highways

0.50 1.00

Brazil is behind other BRIC countries quality of infrastructure

Source: World Economic Forum. The Global Competitiveness Report 2012-2013

19

Investments in infrastructure and industry in Brazil should


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Investments in infrastructure and industry in Brazil shouldamount R$ 1.7 trillion in the 2014-2017 period, with 32%growth compared to the 2009-2012 period

20

318

50 38 21 18

435

880

17695

49 55 29 15 7

106

426488

5416 26 26

543

1.153

192123

89 63 57 41 10

171

575

Oilan

dG

as

Min

ing

Stee

l

Chem

ica

l

Pu

lpan

dPa

per

Oth

ers

To

talIndus

try

Eletricity

Te

lec

om

San

itation

Roa

ds

Ra

ilways

Ports

Airo

irts

To

talLogis

tics

To

talInfras

truct

ure

2009-2012

2014-2017

Investiment per sector

In 2013 R$ billion

2014-2017 / 2009-2012 Growth rate(%)

53% 8% -58% 24% 44% 25% 31% 9% 29% 82% 15% 97% 173% 43% 61% 35%

Source: BNDESMay 2014

1

1Logistics is the sum of roads. Railways, ports and airports


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New logistic investment program

21

18.5

23.5

- 20 40 60

Up to 20 years

In the first 5 years

HighwaysIn R$ billion

53.5

133.7

- 30 60 90 120 150

Up to 20 years

In the first 5years

TotalIn R$ billion

Total: R$ 42 billion(7,500 km)

Total: R$ 91 billion(10,000 km)

Total: R$ 187 billion

54.2

- 20 40 60

Colunas2

Colunas3

PortsIn R$ billion

Total: R$ 54 billion

Source: Programa de investimento em Logstica,August 2012 and O Globo newspaper

35.0

56.0

- 20 40 60

Colunas3

Colunas2

RailwaysIn R$ billion

Concessions should invest R$ 300 billion from 2015 to 2017


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Source: Valornewspaper, June 24.2014, using data from BNDES, ministries and public agencies. Do not

include railways that are part of the Programa de Investimentos em Logstica (Logistic Investment Program).

Concessions should invest R$ 300 billion from 2015 to 2017,of which R$ 92 billion in logistics and R$ 88 billion in powergeneration

2011-2017CAGR (%)

Total

27.0%

9.0%

5.6%

11.5%

7.813.0 15.6

22.827.6 31.3

32.823.5

30.831.8

35.636.4

40.3 39.5

22.8

25.826.6

28.2

29.3

30.5 31.7

54.1

69.6

74.0

86.6

93.3

102.1 104.0

-

20,0

40,0

60,0

80,0

100,0

120,0

2011 2012 2013 2014 2015 2016 2017

Telecom

Energy

Logistics

Infrastructure investments from concessionsin R$ billlion

22


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Of the R$ 104 billion investments planned, approximately R$74 billion have been successfully auctioned

23

Lucas do Rio Verde railroad

Curitiba subway

Ports - 2th stage - 18 contracts

Ports - 1th stage - 31 contracts

BR 262 (MG/ES)

BR 116 (MG)

BR 101 (BA)

Tamoios highway

So Paulo subway line 18

BR 153 (GO/TO)

BR 040 (DF-MG)

BR 163/267/262 (MS)

BR 060/153/262 (DF/GO/MG)

BR 163 (MT)

Goinia VLT

Confins airport

Galeo airport

So Paulo subway line 6

BR 262 (MG/ES)

BR 050 (MG/GO)

Salvador subway line 2

InvestimentsIn R$ billlion

2013

2014

Source: Mills, Goldman Sachs and Credit Suisse

Presentation of 3Q14 Results11/06/2014


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Cafezalmountain

Tamoioshighwayoutline

Fortaleza subway

Jo Elevated roadduplication - RJ

Comperjrefinery*

Transocenica

highway - BA

Sanitation projectsCE

BR-040 highway MG/MT/GO

BR- 163 highwayMT

Gerdau expansionMG

BR-381 highway

duplicationMGEv

olution

ofrevenue

generation

(Bas

is100=

Max

imum

mon

thlyrevenuein

the

lifeo

fcons

truc

tion

)

Length of time of Mills participation in the construction workaverage cycle is 24 months

Belo Montehydroelectric powerplant

Jirau hydroelectricpower plant*

ValesS11D project

Transnordestina

railroad

Oeste-Lesterailroad

North beltway

Subway line 5SP

Salvador subwayOlympic Park

Reduc-ComperjPipeline

Silver monorail line -SP

Colder andTeles Pireshydroelectric power plants

ComperjrefineryCompanhia Siderrgica doPecmsteel mill

Norte-Sulrailroad

Transposition of the SoFrancisco river

Vale projects

Gold monorail line- SP

Subway line 4RJ

Olympic Park

Subway line 4SP

Cuiab light rail

Paraguaushipyard

Jirau hydroelectric power plant

Viracopos airport.

Goinia airport.

BRT Transcarioca

Metropolitan ArchRJ

Vale projects

Pulp mill expansion- RS

Newcontracts*

Contracts with growingvolume of equipment

Contracts with high volumeof equipment

Contracts in the process ofdemobilization

* New stretches

Important contracts per stage1in the evolution of monthlyrevenue from projects

24

1In 3Q14

Presentation of 3Q14 Results11/06/2014


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1

in 3Q14

25

Characteristics of the major projects in progress

Private54%

PPP15%

Public31%

Source of funds

Industry36%

Infrastructure56%

Others8%

Per sector


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47.5

55.1 55.7 55.758.6

51.0

55.551.9

24.3 25.1

29.4 28.2 29.325.6 25.6

21.4

51.3%

45.5%

52.8% 50.6%

49.9%50.2%

46.2%41.2%

17.8% 17.7%18.1% 18.1% 19.2% 17.9%

16.3% 13.3%

1Q13 2Q13 3Q13 3Q13* 4Q13 1Q14 2Q14 3Q14

Net Revenue EBITDA EBITDA Margin (%) ROIC

In R$ million

3Q14/3Q13 3Q14/2Q14 LTM3Q14/LTM3Q13 CAGR 10-13

Net Revenues -7% -7% 0% +12%

EBITDA -27% -17% -6% +14%

Heavy Construction Financial Performance

26

* Excluding the positive effect of tax reversal in the amount of R$ 1.5 million in 3Q13.

1ROIC: 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 atheoretical 30% income tax rate.

154.3

131.6

174.1

217.0 217.1

73.6

57.8

84.3

108.1101.9

47.7%

43.9%

48.5% 49.8%46.9%

19.2%

13.3%

2010 2011 2012 2013 LTM3Q14


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Real Estate

Mast climbing platform


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Growth drivers of the residential market: housing financing

28

2.6%

3.5%

7.4%

11.5%

14.4%

24.0%

45.3%

76.1%

83.7%

Russia

India

Brazil

Chile

China

South Africa

Germany

USA

UK

Housing financing relative to GDP (%)

3.1%

4.1%

5.4%

6.8%

7.4%

2009 2010 2011 2012 2013

Housing financing relative to GDP (%)in Brazil

In 2011; In 2010; In 2013.

Source: Valor EconmicoNewspaper, with data from Abecip and Secovi


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The major challenge for the sector: labor

30Source: Sondagem Especial Construo Civil. April 2011. CBIC. CNI. and Mills

89% of companies from the construction industry stated that

lack of qualified labor is a problem for the company

94% of companies from the construction industry facing

shortages of skilled manpower have difficulty finding workers

for basic construction activities, such as bricklayers and

laborers

Solution:Industrialization of the construction process

Only 7% of companies from the construction industry plan to

deal with the shortage of skilled labor by changing the

building process to an industrial assembly model


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Stages of industrialization of the construction process

31

1Approximately 800 m2

Source: Tchne 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 required1 30 people 20 people 12 people 10 people


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32

17.9

21.6

13.8 13.813.1

20.2%

-36.0%

0.2%

-5.4%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

0

5

10

15

20

25

9M10 9M11 9M12 9M13 9M14

Var.

(%)

Lauunc

hes

(In

R$m

illion

1 1 PDG, Cyrela, MRV, EVEN, Helbor, Eztec, Direcional, Rodobens, Gafisa and Tecnisa

Source: Operational reports from companies and Mills

Total launches1

in R$ billion

Launches and sales declined 5.4% and 13.9% respectively in9M14

18.2

19.9

16.7 16.8

14.5

9.3%

-15.8%

0.7%

-13.9%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

0

5

10

15

20

25

9M10 9M11 9M12 9M13 9M14

Var.

(%)

Sa

les

(In

R$m

illion)

Total sales1

in R$ billion


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Merge of Real Estate and Heavy Construction maintenanceactivitivities

Sale of used equipment

Transfer of equipment to Heavy Construction

Expand presence in markets less exploited. such as the lightindustrial and sanitation markets

Actions to improve Real Estate result

33


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MillsInvestor Relations

Tel.: +55 21 2123-3700

E-mail: [email protected]

www.mills.com.br/ri

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Ita? 7th Annual LatAm Conference