Mills 3Q13 Result

8/14/2019 Mills 3Q13 Result

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BM&FBOVESPA: MILS3 Mills 3Q13 Results

Investor Relations

Alessandra GadelhaIR Officer Contact: + 55 21 2123 3700

Luiza MartinsIR Coordinator [email protected]

Carolina GonalvesIR Analyst

Mills: Revenue grows 28.0% and EBITDA reaches R$ 106 million

Rio de Janeiro, November 6, 2013 - Mills Estruturas e Servios de Engenharia S.A. (Mills) presented in the third quarter of 2013 (3Q13)

new record revenues and EBITDA, as a result of the strong demand in its markets, the investments made to meet the demand, and its

commitment to maintaining a balance between growth and profitability.

Main highlights of Mills 3Q13 performance:

Net revenue of R$ 222.0 million, 28.0% higher than in the third quarter of 2012 (3Q12)1.

Record revenues in the Heavy Construction, Jahu and Rental business units.

Equipment rental revenue of R$ 170.5 million, with 19.1% year over year (yoy)1growth.

EBITDA(a)

of R$ 106.1 million, 17.5% above 3Q121,2

.

EBITDA margin of 47.8%, versus 52.1% in 3Q121,2

.

Net earnings of R$ 39.6 million, affected by non-recurring events sale of the Industrial Services business unit and tax reversal

with negative net impact of R$ 3.3 million.

Return on invested capital (ROIC)(b)

of 13.9%, or 14.6% ex-nonrecurring events, against 14.5% in 3Q122.

Capex(c)

reached R$ 129.7 million, totaling investments of R$ 408.2 million in the first nine months of 2013 (9M13).

Agreement signed to purchase motorized access equipment, in the total amount of US$ 71 million, with deliveries in 2014.

Table 1 - Main financial indicators, reclassified for comparison

3Q12 3Q12 2Q13 3Q13 (D)/(C) (D)/(A) (D)/(B)

in R$ millions (A) (B) (C) (D) % % %

Net revenue 173.4 173.4 211.8 222.0 4.8% 28.0% 28.0%

EBITDA 95.9 90.3 98.9 106.1 7.3% 10.6% 17.5%

EBITDA margin (%) 55.3% 52.1% 46.7% 47.8%

Profit from continued operations 40.4 34.8 44.6 38.6 -13.3% -4.3% 11.2%

Profit from discontinued operations (2.4) (2.4) 3.5 1.0 -71.4% - -

Net earnings 38.0 32.3 48.1 39.6 -17.5% 4.4% 22.6%

ROIC (%) 15.8% 14.5% 14.2% 13.9%

Capex 79.4 79.4 150.7 129.7 -14.0% 63.3% 63.3%

Invested Capital 1,218.0 1,218.0 1,447.6 1,517.3 4.8% 24.6% 24.6%

The financial and operational information presented in this release. except when otherwise indicated. is in accordance

with accounting policies adopted in Brazil. which are in accordance with international accounting standards (International

Financial Reporting Standards - IFRS)

1Reclassified, excluding the Industrial Services business unit, for comparison.

2Excluding the positive effect of reversal of allowance for doubtful debts and tax contingency in the amount of R$ 6.8 million.


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3Q13 Results

Costs and Expenses

The cost of goods and services sold (COGS), excluding depreciation, totaled R$ 62.0 million in 3Q13, with a 7.1% qoq rise,

mainly because of higher cost of sales and asset write-offs. The latter is related to (i) loss or damage of equipment,

compensated by indemnity, if occuring during its rental period, or (ii) sale of used equipment.

General, administrative and operating expenses (G&A) totaled R$ 53.9 million, remaining stable between quarters.

EBITDA

Cash generation, as measured by EBITDA, reached R$ 106.1 million in 3Q13, with a 7.3% qoq1 expansion. The EBITDA

margin was 47.8%, against 46.7% in 2Q131. The accumulated EBITDA in the last twelve months ended on September 30,

2013, LTM EBITDA, totaled R$ 384.0 million, with an EBITDA margin of 47.4%.

The qoq increment of R$ 7.2 million in EBITDA is explained by the increase of R$ 10.2 million in net revenues and the tax

reversal of R$ 1.5 million, partially offset by the increment of R$ 4.1 million in COGS mainly due to higher cost of sales

and asset write-offs - and R$ 0.4 million in G&A, both excluding depreciation.

Non-recurring events

In this quarter there were non-recurring events with a negative net effect of R$ 3.3 million. We incurred costs for legal and

financial advice in the process of selling the Industrial Services business unit, with negative effect of R$ 4.8 million in the

results of discontinued operations, and we had reversal of tax relating to a date prior to the year 2004, with a positive

effect of R$ 1.5 million in the Heavy Construction business unit.

Net Earnings

Net earnings amounted to R$ 39.6 million in 3Q13. Excluding the non-recurring events effect4, net earnings would be R$

42.4 million. There was an R$ 8.4 million reduction in net earnings, since the expansion of EBITDA (R$ 7.2 million) wasmore than offset by the rise in taxes payable (R$ 10,2 million)

5, depreciation (R$ 2.4 million), negative net financial result

(R$ 0,5 million) and the reduction of the results of discontinued operations (R$ 2.5 million).

The net financial result was a negative R$ 12.3 million in 3Q13, against negative R$ 11.8 million in 2Q13, due to lower cash

level and higher interest rates linked to the CDI rate (Cdula de Crdito Interbancriothe average inter-bank overnight

rate in Brazil) in the last six months.

ROIC

ROIC reached 13.9% in 3Q13, or 14.6% ex-nonrecurring events, against 14.2% in 2Q13, positively impacted by the better

performance of the Heavy Construction business unit.

Debt indicators

Mills total debt was R$ 593.4 million as of September 30, 2013. At the end of 3Q13 our net debt(e)

position was R$ 547.7

million, versus R$ 550.3 million at the end of 2Q13.

Our debt is 21% short-term and 79% long-term, with an average maturity of 2.4 years, at an average cost of CDI+1.18%. In

terms of currency, 100% of Mills debt is in Brazilian reais.

Our leverage, as measured by net debt/LTM EBITDA1, was at 1.4x as of September 30, 2013. The total debt/enterprise

value(f)

was 13.3%, while interest coverage, as measured by LTM EBITDA1/LTM interest payments, was 6.7x.

In meetings held on October 3, 2013, our debenture holders approved the operational process for the sale of the IndustrialServices business unit. As a result of these meetings, Mills paid a total amount of R$ 0.6 million to its debenture holders.

4For further information, refer to the Non-recurring eventssection.

5There was recognition of payment of interest on equity in the 2Q13.


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3Q13 Results

Capex

Mills invested R$ 129.7 million in organic growth in 3Q13, of which R$ 118.8 million in rental equipment. The Rental

business unit was responsible for 57.2% of the investments, Heavy Construction for 20.4% and Jahu for 12.4%.

We have signed agreements to buy motorized access equipment6, in the total amount of US$ 71.3 million, with deliveries

beginning in January, 2014. The cash disbursement will occur as we receive the equipment, according to the established

schedule, with no exchange rate risk, since we have entered into hedge contracts.

Performance of the business units

Heavy Construction

The net revenues of Heavy Construction reached a new quarterly record in 3Q13, R$ 55.7 million, with an increase of 22.4%

yoy. Qoq, net revenues were slightly higher, with an improved utilization rate, although still at normal levels. The higher

volume of rented equipment contributed R$ 4 million to the R$ 1.2 million rental revenue expansion, offsetting the

negative effect of price and mix.

In the last quarter we signed important new contracts, including the mine and railroad from Vales S11Dproject, So Lus

airport and a power plant, in Maranho; new stretches of subway lines 4 and 5, Viracopos and Guarulhos airports and the

North beltway, in So Paulo; new stretches of the transposition of the So Francisco river and of the Companhia Siderrgica

do Pecm steel mill, in the Northeast region; new stretches of the Belo Monte hydroelectric power plant and Norte-Sul

railroad; duplication of the BR-163 and MT-364 highways, in Mato Grosso; expansion of a pulp mill, in Rio Grande do Sul;

urban mobility projects, in Minas Gerais; the Engenhostadium roof and the duplication of the Paraba do Sul river bridge,

in Rio de Janeiro.

The main projects in 3Q13, in terms of revenues, were:

South and Southeastern regions: Comperj refinery, surroundings of the Maracan stadium, BRT Transcarioca, the

Metropolitan Arch and subway line 4, in Rio de Janeiro; Guarulhos and Viracopos airports, Gold and Silver monorail

lines and access to the Corinthiansarena, in So Paulo; Vale and Gerdau projects in Minas Gerais; the Paranaenses

arena, in Paran.

Midwest, North and Northeast regions: the Belo Monte, Colder,Jirau, Teles Pires and Ferreira Gomes hydroelectric

power plants; Norte-Suland Transnordestina railways; Braslia airport, in the Federal District; theAbreu e Limarefinery

and Suape petrochemical plant, in Pernambuco; Natal airport, in Rio Grande do Norte; BRT Belm and Vale projects, in

Par and Maranho; Companhia Siderrgica do Pecm steel mill, Fortaleza light rail and airport, in Cear; and the

Cuiab light rail, in Mato Grosso.

COGS was stable qoq, while G&A reduced, even excluding the non-recurring effect4.

EBITDA reached R$ 29.4 million in 3Q13, with an EBITDA margin of 52.8%. Excluding the non-recurring effect, EBITDA would

have been R$ 28.2 million, a qoq increase of 12.4%, and the EBITDA margin would have been 50.6%, compared to 45.5% in

2Q13. ROIC was 20.9% in 3Q13, or 19.7% excluding the non-recurring effect, against 17.8% in 2Q13.

Jahu

Net revenue for Jahu totaled R$ 72.4 million in 3Q13, a new quarterly record, 19.6% above 3Q12. Qoq growth was 8.8%,

with the expansion of R$ 10.1 million in revenues from sales, technical assistance and others offsetting the R$ 4.2 million

reduction in rental revenue, of which R$ 0.4 million due to lower volume of rented equipment and the remaining due to

6For further information, refer to press release Mills buys US$ 71 million in access equipment, of October 4, 2013.


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3Q13 Results

the effects of price and mix of equipment. The utilization rate was below normal level because we had, besides a slight

reduction in the volume of rented equipment, an increase in equipment inventory in the past months. We expect to return

to normal levels of utilization in the next quarter.

COGS was higher qoq due to increased costs of sales and assets write-off, related to the sale of new and used equipment or

to the loss or damage of equipment, with compensation made if occurred during the rental period. Maintenance and

freight costs declined and G&A remained stable between quarters.

EBITDA reached R$ 24.4 million, with an EBITDA margin of 33.7%, both negatively impacted by higher idle capacity and by

higher revenues from sales, which has a lower margin than rental.

ROIC was 8.2%, against 9.3% in 2Q13, due to a lower utilization rate and the enlargement of the asset base. The Company

expects that the operating margins of this business unit will return to their historical levels in the fourth quarter of 2013

(4Q13) with the normalization of the utilization rate.

Rental

The net revenue for Rental amounted to R$ 93.9 million in 3Q13, a new quarterly record, with growth of 39.4% yoy and

4.2% qoq. Rental revenues reached R$ 80.5 million, with a qoq expansion of R$ 6.7 million, of which R$ 6.6 million coming

from the greater volume of rented equipment, offsetting the lower revenues from sales, technical assistance and others.

Utilization rate remained at normal levels.

We opened a new branch in Bauru, in the state of So Paulo, in 3Q13, completing seven new branches opened this year.

Our goal is to open five more branches and end the year 2013 with 29 branches.

COGS decreased qoq, mainly due to lower volume of sales, while G&A was higher, impacted by the opening of new

branches in the past months. EBITDA totaled R$ 52.3 million, a qoq increase of 6.2%. EBITDA margin was 55.7%, while ROIC

was 18.1%.

Industrial ServicesOn July 10, 2013, we entered into an agreement to sell the Industrial Services business unit for R$ 102 million

7. There was

an advance payment of R$ 25 million on the date of the sale agreement and we will receive the outstanding amount, after

conclusion of the sale, in installments adjusted by the CDI rate, discounting the cash generated by this business for Mills

between June 1st

, 2013 and the closing date. Up to September 30, 2013, this had already amounted to R$ 15.5 million.

This disposal is in line with Mills strategy to focus on the businesses in which its competences are able to add higher value

for its shareholders and clients.

The net revenue from Industrial Services reached R$ 57.2 million in 3Q13, a qoq fall of 4.3%. Excluding the effect of non-

recurring itens4, EBITDA margin would be 14%, in line with the previous quarter, since there was also a decrease in COGS

and G&A.

Teleconference and Webcast

Date: November 7th, 2013. Thursday

Time: 09:00 (New York time), 12:00 (Rio de Janeiro time)and 14:00 (London time)Teleconference: +1 786 924-6977, code: Mills

Replay: +55 11 4688-6312, code: 5405370# or www.mills.com.br/ri

Webcast:www.mills.com.br/ri

7For further information, refer to press release Mills to sell its Industrial Services business unit, of July 11, 2013.
http://www.mills.com.br/rihttp://www.mills.com.br/ri


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3Q13 Results

Tables

Table 3Net revenue per type

3Q12 2Q13 3Q13 (C)/(B) (C)/(A)

in R$ million (A) (B) (C) % %

Rental 143.2 166.9 170.5 2.2% 19.1%

Technical support services 5.4 8.0 4.3 -46.4% -19.8%

Sales 18.9 26.6 35.1 32.0% 85.9%

Others 6.0 10.3 12.1 17.7% 102.1%

Total net revenue 173.4 211.8 222.0 4.8% 28.0%

Table 4Net revenue per business unit

in R$ million 3Q12 % 2Q13 % 3Q13 %

Heavy Construction 45.5 26.2% 55.1 26.0% 55.7 25.1%

Jahu - Residential and Commercial Construction 60.5 34.9% 66.5 31.4% 72.4 32.6%

Rental 67.4 38.8% 90.1 42.6% 93.9 42.3%

Total net revenue 173.4 100.0% 211.8 100.0% 222.0 100.0%

Table 5Cost of goods and services sold (COGS) and general, administrative and operating expenses (G&A)

in R$ million 3Q12 % 3Q12, % 2Q13 % 3Q13 %

Costs of job execution 16.6 21.4% 16.6 20.0% 24.5 21.7% 25.2 21.7%

Costs of sale of equipment 10.9 14.1% 10.9 13.2% 20.9 18.5% 22.1 19.1%Costs of asset write-offs 1.7 2.1% 1.7 2.0% 2.3 2.0% 3.4 3.0%

Equipment storage 8.7 11.3% 8.7 10.5% 10.3 9.1% 11.3 9.8%

COGS, ex-depreciation 37.9 48.9% 37.9 45.6% 57.9 51.3% 62.0 53.5%

G&A 39.5 51.1% 45.2 54.4% 54.9 48.7% 53.9 46.5%

Total COGS, ex-depreciation + G&A 77.5 100.0% 83.1 100.0% 112.9 100.0% 115.9 100.0%

Table 6EBITDA per business unit and EBITDA margin

in R$ million 3Q12 % 3Q12, % 2Q13 % 3Q13 %

Heavy Construction 24.1 25.1% 22.8 25.3% 25.1 25.3% 29.4 27.7%

Jahu - Residential and Commercial Construction 33.8 35.2% 29.4 32.6% 24.6 24.8% 24.4 23.0%

Rental 38.0 39.6% 38.0 42.1% 49.3 49.8% 52.3 49.3%

Total EBITDA 95.9 100.0% 90.3 100.0% 98.9 100.0% 106.1 100.0%

EBITDA margin (%) 55.3% 52.1% 46.7% 47.8%


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3Q13 Results

Table 7Investment per business unit

Realized Revised Budget

3Q12 2Q13 3Q13 9M13 2013 (A)/(B)

in R$ million (A) (B) %

Heavy Construction 11.3 28.8 26.5 77.0 89 86.5%

Jahu - Residential and Commercial Construction 22.8 44.8 16.1 85.9 112 76.7%

Industrial Services 0.2 0.3 2.0 2.4 6 40.6%

Rental 40.3 69.3 74.2 216.8 274 79.1%

Corporate 4.9 7.6 10.9 26.2 49 54.0%

Organic growth 79.4 150.7 129.7 408.2 530 77.1%

Acquisition - - - - - -

Total Capex 79.4 150.7 129.7 408.2 530 77.1%

Table 8Heavy Construction financial indicators

3Q12 3Q12 2Q13 3Q13 3Q138 (D)/(C) (D)/(A) (E)/(C) (E)/(B)

in R$ million (A) (B) (C) (D) (E) % % % %

Net revenue

Rental 37.0 37.0 41.0 42.2 42.2 2.8% 13.9% 2.8% 13.9%

Technical support services, sales and others 8.5 8.5 14.1 13.5 13.5 -4.2% 59.4% -4.2% 59.4%

Total net revenue 45.5 45.5 55.1 55.7 55.7 1.0% 22.4% 1.0% 22.4%

EBITDA 24.1 22.8 25.1 29.4 28.2 17.4% 22.2% 12.4% 23.4%

EBITDA margin (%) 52.9% 50.2% 45.5% 52.8% 50.6%

ROIC (%) 19.7% 18.3% 17.8% 20.9% 19.7%

Capex 11.3 11.3 28.8 26.5 26.5 -8.1% 135.3% -8.1% 135.3%Invested capital 247.7 247.7 281.5 291.0 291.0 3.4% 17.5% 3.4% 17.5%

Depreciation 6.6 6.6 7.2 7.7 7.7 6.7% 15.4% 6.7% 15.4%

Table 9JahuResidential and Commercial Construction financial indicators

3Q12 3Q12 2Q13 3Q13 (D)/(C) (D)/(A) (D)/(B)

in R$ million (A) (B) (C) (D) % % %

Net revenue

Rental 49.2 49.2 52.0 47.8 -8.1% -2.7% -2.7%

Technical support services, sales and others11.4 11.4 14.5 24.5 69.7% 115.8% 115.8%

Total net revenue 60.5 60.5 66.5 72.4 8.8% 19.6% 19.6%

EBITDA 33.8 29.4 24.6 24.4 -0.8% -27.9% -17.2%

EBITDA margin (%) 55.9% 48.6% 37.0% 33.7%

ROIC (%) 20.2% 16.9% 9.3% 8.2%

Capex 22.8 22.8 44.8 16.1 -64.0% -29.2% -29.2%

Invested capital 365.8 365.8 448.2 482.1 7.5% 31.8% 31.8%

Depreciation 7.4 7.4 9.6 10.2 5.9% 38.3% 38.3%

8Excluding the positive effect of tax reversal in the amount of R$ 1.5 million.


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3Q13 Results

Table 10Rental financial indicators

3Q12 2Q13 3Q13 (C)/(B) (C)/(A)


Net revenue

Rental 57.0 73.8 80.5 9.0% 41.2%

Technical support services, sales and others 10.4 16.3 13.4 -17.7% 29.5%

Total net revenue 67.4 90.1 93.9 4.2% 39.4%

EBITDA 38.0 49.3 52.3 6.2% 37.5%

EBITDA margin (%) 56.5% 54.7% 55.7%

ROIC (%) 19.8% 18.5% 18.1%

Capex 40.3 69.3 74.2 7.1% 84.2%

Invested capital 389.7 528.1 564.4 6.9% 44.8%

Depreciation 10.6 14.4 15.8 9.5% 49.9%

Table 11Industrial Services financial indicators

3Q12 2Q13 3Q13 (C)/(B) (C)/(A)


Net revenue

Maintenance 30.3 36.7 32.6 -11.1% 7.5%

New plants 18.5 23.1 24.6 6.5% 33.0%

Total net revenue 48.8 59.8 57.2 -4.3% 17.2%

EBITDA 0.1 8.5 3.3 -61.9% 2748.5%

EBITDA margin (%) 0.2% 14.3% 5.7%

ROIC (%) -6.2% 16.4% 9.5%

Capex 0.2 0.3 2.0 604.8% 895.0%

Invested capital 123.7 99.3 89.6 -9.7% -27.6%

Depreciation9 2.9 2.7 0.2 -92.3% -92.7%

9In accordance with accounting regulations, there is no depreciation in the Industrial Services business unit after the sign of the agreement

on July 10, 2013.


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3Q13 Results

Glossary

(a) EBITDA - EBITDA is a non-accounting measurement prepared by the Company and which is reconciled with our financial

statement in accordance with CVM Instruction 01/2007, when applicable. We have calculated our EBITDA (usually defined

as earnings before interest, tax, depreciation and amortization) as net earnings before financial results, the effect of

depreciation of assets and equipment used for rental, and the amortization of intangible assets. EBITDA is not a measurerecognized under BR GAAP, IFRS or US GAAP. It is not significantly standardized and cannot be compared to measurements

with similar names provided by other companies. We have reported EBITDA because we use it to measure our performance.

EBITDA should not be considered in isolation or as a substitute for "net income" or "operating income" as indicators of

operational performance or cash flow, or for the measurement of liquidity or debt repayment capacity.

(b) ROIC (Return on Invested Capital) - Calculated as Operating Income before financial results and after the payment of

income tax and social contribution (theoretical 30% income tax rate) on this income, divided by average Invested Capital, as

defined below. ROIC is not a measure recognized under BR GAAP, and it is not significantly standardized and cannot be

compared to measurements with similar names provided by other companies.

Quarterly ROIC: ((Quarterly Operational Income(30% Income Tax Rate) + remuneration from affiliates) / Average InvestedCapital of the last four months)*4

Annual ROIC: (Annual Operational Income (30% Income Tax Rate) + remuneration from affiliates) / Average Invested

Capital of the last thirteen months

(c) Capex (Capital Expenditure)Acquisition of goods and intangibles for permanent assets.

(d) Invested Capital For the Company, invested capital is defined as the sum of its own capital (net equity or shareholders

equity) and capital from third parties (total loans and other liabilities that carry interest, from banks or not), both being

average capital from the beginning to the end of the period considered. By business unit, it is the average of the capital

invested by the company weighted by the average assets of each business unit (net liquid assets plus PPE Property, Plantand Equipment). The quarter asset base is calculated as the average of the asset base of the last four months and the annual

asset base is calculated as the average of the last thirteen months.

(e) Net debt - Gross debt less cash holdings.

(f) Enterprise Value(EV)Company value at the end of the period. It is calculated by multiplying the number of outstanding

shares by the closing price per share, and adding the net debt.

(g) Job execution costs - Job execution costs include: (a) labor costs for erection and dismantling of the equipment rented

to our clients, when such tasks are carried out by the Mills workforce; (b) equipment freight costs, when under Mills

responsibility; (c) cost of materials used in the execution of our services, such as individual safety equipment (EPIs),paint, insulation material, wood, among others; (d) cost of materials used in the maintenance of the equipment, when

it is returned to our warehouse; and (e) cost of equipment rented from third-parties.


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3Q13 Results

INCOME STATEMENT

in R$ million 3Q12 2Q13 3Q13

Net revenue from sales and services 173.4 211.8 222.0

Cost of products sold and services rendered (61.7) (87.3) (93.5)

Gross profit 111.8 124.5 128.5

General and administrative expenses (40.3) (56.8) (56.0)

Operating profit 71.5 67.7 72.4

Financial expense (9.8) (16.8) (14.8)

Financial income 1.0 5.0 2.5

Financial result (8.8) (11.8) (12.3)

Profit before taxation 62.6 55.9 60.1

Income tax and social contribution expenses (22.2) (11.3) (21.5)

Results of continued operations 40.4 44.6 38.6

Results of discontinued operations (2.4) 3.5 1.0

Net income 38.0 48.1 39.6

Number of shares at the end of the period (in thousands) 126,314 127,120 127,314

Net income (R$ per shares) 0.30 0.38 0.31


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3Q13 Results

BALANCE SHEET

in R$ million 3Q1210

2Q13 3Q13

Assets

Current Assets

Cash and cash equivalents 299.4 47.3 45.7

Trade receivables 168.1 165.1 174.1

Inventories 21.3 30.9 30.9

Recoverable taxes 27.8 35.8 31.3

Advances to suppliers 6.9 0.7 0.3

Derivative financial instruments 0.0 4.0 0.4

Assets available for sale - 106.7 95.2

Other current assets 4.6 8.6 9.4

Total Current Assets 528.0 399.1 387.4

Non-Current Assets

Trade receivables 2.5 2.1 2.1

Recoverable taxes 29.5 34.8 42.3

Deferred taxes 2.8 - -

Deposits in court 11.5 11.7 9.7

46.3 48.6 54.0

Investment 87.4 87.4 87.4

Property, plant and equipment 978.6 1,124.1 1,189.4

Intangible assets 51.6 59.9 64.2

1,117.6 1,271.4 1,341.0

Total Non-Current Assets 1,163.9 1,319.9 1,395.0

Total Assets 1,691.9 1,719.0 1,782.5

10Not including the pro-forma adjustments regarding the Industrial Services business unit.


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3Q13 Results

in R$ millions 3Q1210

2Q13 3Q13

Liabilities

Current Liabilities

Suppliers 46.1 70.1 61.1

Borrowings and financings 109.1 15.7 14.5

Debentures 13.2 110.6 110.0

Salaries and payroll charges 37.2 23.8 25.9

Income tax and social contribution 4.7 0.8 9.8

Tax refinancing program (REFIS) 0.9 0.9 0.9

Taxes payable 9.9 10.7 7.1

Profit sharing payable 11.8 10.8 15.0

Dividends and interest on equity payable 18.8 20.4 20.4

Advances on assets held for sale - - 25.2

Liabilities associated with assets available for sale - 12.7 14.6

Other current liabilities 6.3 3.1 3.1

Total Current Liabilities 258.0 279.7 307.7

Non-Current Liabilities

Borrowings and financings 40.4 23.5 20.8

Debentures 537.3 447.8 448.0

Provision for tax, civil and labor risks 11.0 10.6 10.4

Deferred taxes - 5.5 1.0

Tax refinancing program (REFIS) 9.9 9.6 9.5

Other Liabilities 0.6 0.2 0.0

Total Non-Current Liabilities 599.2 497.3 489.8

Total Liabilities 857.2 776.9 797.6

Stockholders' Equity

Capital 536.2 548.8 551.9

Earnings reserves 210.9 321.0 321.0

Capital reserves (1.9) 4.7 7.2

Valuation adjustments to equity 0.3 2.9 0.5

Retained earnings 89.2 64.6 104.3Total Stockholders' Equity 834.7 942.1 984.9

Total Liabilities and Stockholders' Equity 1,691.9 1,719.0 1,782.5


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3Q13 Results

CASH FLOW

in R$ millions 3Q1210 2Q13 3Q13

Cash flow from operating activities

Net income before taxation 58.6 60.5 61.8

Adjustments

Depreciation and amortization 27.4 34.0 33.9

Provision for tax, civil and labor risks (4.8) 0.5 0.3

Accrued expenses on stock options 1.9 2.5 2.4

Profit sharing payable 3.9 6.8 4.2

Gain on sale of property, plant and equipment and intangible assets (8.8) (11.5) (16.5)

Interest, monetary and exchange rate variation on loans, contingencies and deposits in court 12.1 14.5 13.4

Allowance for doubtful debts 2.0 2.7 5.2

33.7 49.4 42.9

Changes in assets and liabilities

Trade receivables (13.6) (21.1) (1.0)

Inventories (6.3) (0.9) (0.1)

Recoverable taxes 5.6 (1.4) 14.1

Deposits in court (0.0) 0.1 2.0

Other assets 1.5 (0.7) 3.1

Suppliers (2.4) (2.5) (0.2)

Salaries and payroll charges 5.1 3.3 4.0

Taxes payable 2.5 3.0 (3.6)

Other liabilities 1.8 (7.6) (0.1)

(6.0) (27.8) 18.2

Cash from operations 86.4 82.2 122.9

Interest paid (3.1) (12.8) (14.4)Income tax and social contribution paid (8.4) (17.7) (9.6)

Profit sharing paid - (0.1) -

Lawsuits settled - (0.2) (0.5)

Net cash generated by operating activities 74.9 51.4 98.5

Cash flow from investment activities

Marketable securities - 138.0 -

Advances on assets held for sale - - 25.2

Purchases of property, plant and equipment and intangible assets (78.1) (136.7) (139.6)

Proceeds from sale of property, plant and equipment and intangible assets 8.5 25.3 17.4

Net cash generated by (used in) investing activities (69.6) 26.7 (96.9)

Cash flow from financing activities

Capital contributions 2.6 9.3 3.1

Dividends and interest on capital invested paid - (36.2) (3.0)

Repayment of borrowings (9.7) (28.6) (3.2)

Borrowings raised 272.0 0.1 -

Net cash generated by (used in) financing activities 264.8 (55.4) (3.1)

Increase (decrease) in cash and cash equivalents 270.1 22.8 (1.6)

Cash and cash equivalents at the beginning of the period 29.3 24.5 47.3

Cash and cash equivalents at the end of the period 299.4 47.3 45.7


14/14

3Q13 Results

This press release may include declarations about Mills expectations regarding future events or results. All declarations

based upon future expectations, rather than historical facts, are subject to various risks and uncertainties. Mills cannot

guarantee that such declarations will prove to be correct. These risks and uncertainties include factors related to the

following: the Brazilian economy, capital markets, infrastructure, real estate and oil & gas sectors, among others, and

government rules that are subject to change without previous notice. To obtain further information on factors that may give

rise to results different from those forecasted by Mills, please consult the reports filed with the Brazilian Comisso de Valores

Mobilirios (CVM, equivalent to U.S. SEC).

Documents

Mills 3Q13 Result