4Q15 Presentation of Results

8/19/2019 4Q15 Presentation of Results

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March 11th, 2016

Presentation of 4Q15 and Full Year2015 results


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2

Main actions carried out in 2015: generating greater value tocustomers and shareholders

Presentation of 4Q15 Results – 03/11/2016

Heavy Construction and Real Estate commercial management have been broughttogether in a single business unit;

Single inventory – better management More technical alternatives of projects and a complete product range for the real

estate market

Resource optimization Greater capillarity - more efficient client prospecting

Consolidation of Engineering and operational Officers functions;

Optimization of teams and projects More comprehensive qualification

Focus on the customer –

end of conflicts between operations and logistics

Financial and Investor Relations management were combined in the FinancialDepartment;

Consolidation of departments at all levels

A Human Resources Executive was hired


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3 Presentation of 4Q15 Results – 03/11/2016

Review of scope of utilities

Move of our head office from Barra da Tijuca to our address in Jacarepaguá

Administrative and operational departments are closer - improving the information flow, andsimplifying our decision-making process.

Search for greater austerity, costs and expenses reduction

Renegotiation of contracts of rent of deposits, security and cleaning Operating vehicles fleet analysis

Closing of branches in progress Five branches in Construction:

Low growth perspectiveNegative impact in cash

Three branches in Rental:Branches with longer maturity

Headcount reduction in all departments of backoffice;

Main actions carried out in 2015: generating greater value tocustomers and shareholders


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4

Organization structure as of September 2015

• With new organizational structure , with annualized personnel savings estimated at R$ 22million per year;

• Non recurring effects of R$ 2.8 million in 4Q15.


Ricardo Gusmão

Commercial Officerfor Construction

Avelino Garzoni

Engineering andOperationsOfficer

Marcelo YamaneRental Executive

T.B.N.CFO and IRO

Deise VieiraHuman Resources

Executive

Sérgio Kariya

CEO

Construction


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5

Impairment


This quarter a provision for impairment was required in the amount of R$ 57.1 million:

The recoverable amount of these assets was determined based on economic forecasts fordetermining the market value of the investee, upon a revenue approach, through a 10-year term :discounted cash flow forecast.

Assumptions(i) revenues were forecast based on historical data and growth prospective for the segment and

Brazilian economy;(ii) negative operating loss for 2015, resulting from the reduced activity of the industry;(iii) the corresponding cash flows are discounted at the average discount rate, obtained using a

methodology typically applied by the market, taking into account the weighed average cost ofcapital (WACC);

(iv) a strict working capital evolution control policy, during the forecasted period..

Construction Business Unit: Management estimates that the recoverable amount of theassets of the Construction Business Unit, including the goodwill on acquisiton of Jahu in2008 and of GP Sul, in 2011, is R$ 442.5 million, against R$ 473.4 million on December2014. This way, provision for impairment of this asset in the amount of R$ 30.9 millionwas required.

Investiment in Rohr: Management estimates that the recoverable amount in the investment

in Rohr is R$ 61.2 million, requiring a provision for impairment of this asset in the amount ofR$ 26.2 million.


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1 Reclassified excluding the Industrial Services business unit for comparison .

2 Sum of Rental and Construction business units, excluding Construction imparirment of R$ 30,9 million

6

Financial Performance¹


In R$ million

4Q15/4Q14 4Q15/3Q15 2015/2014 CAGR 12-15

Net revenue -30% -6% -27% -5%

EBITDA -46% -14% -51% -21%

181,9

163,9

147,9136,5

127,9

55,647,4 52,1

35,130,2

-6,2 -7,6 -8,2-17,2

-57,9

30,6% 28,9%

35,3%

25,7%

23,6%

6,6%4,0%

2,0%

0,8%-2,9%

4Q14 1Q15 2Q15 3Q15 4Q15²

Net revenue EBITDA Net earnings EBITDA margin (%) ROIC

665,5

832,3794,2

576,1

339,0

403,1

335,7

164,8151,5 172,6

64,3

-90,9

50,9%48,4%

42,3%

28,6%

14,7%

14,1% 6,6%

-2,9%

2012 2013 2014 2015²


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83,968,7 70,3

52,5

41,2 31,6

45,4

26,525,9

181,9

136,5127,9

4Q14 3Q15 4Q15

Per business unitR$ Million

Rental Heavy Construction Real Estate

Net Revenue Breakdown

7

4Q15/4Q14 4Q15/3Q15

Rental -26.4% -5.2%

Sales -27.2% 33.1%

Technical assistance and others -68.6% -57.3%

Total -29.7% -6.3%

4Q15/4Q14 4Q15/3Q15

Rental -16.2% 2.3%

Heavy Construction -39.8% -23.2%

Real Estate -42.9% -2.2%

Total -29.7% -6.3%


149,4

116,0 110,0

8,0

7,0 8,6

10,6

3,24,9

13,9

10,34,4

181,9

136,5127,9

4Q14 3Q15 4Q15

Per service type

R$ million

Rental Sales of semi-new equipment

Sales of new equipment Technical assistance and Others


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Sales reached R$ 53.9 millions in 2015, of which 54% of semi-new equipment

11,58,7

6,6 8,0 6.7 6,8 7,08,6

5,5

17,1

12,4 10,6 11,3

5,53,2

4,9

17,1

25,8

19,1 18,6 17,9

12,3

10,2

13,5

0,0

5,0

10,0

15,0

20,0

25,0

30,0

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

Sales of semi-new equipment Sales of new equipment

In R$ million

Equipment sales



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Evolution in Rental Net Revenue per business unit


56,2

3,82,2 50,3

3Q15 Volume Price and Mix 4Q15

Construction

59,8 0,1 0,1 59,7

3Q15 Volume Price and Mix 4Q15

Rental


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10

Utilization rate dropped in Construction and increased inRental


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%Construction

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%Rental

LTM 4Q15 average = 61.9%LTM 4Q15 average = 49.9%


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Public51%

Private37%

PPP12%

Source of funds

R$ 29.1 million

11

Heavy Construction -Rental revenue breakdown in 4Q15

Infraestructur e

74%

Industry13%

Others13%

Per sector

R$ 29,1 million



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Central West and South

Papuda`s Penitentiary

Guaíba Bridge - RS

12

Important construction Works with Mills participation

States wtih Mills’ presence

North and Northeast

Parnamirim Bridge

Hydroelectric plant São Manoel

VLT Fortaleza

S11D project from Vale

Transposition of the São FranciscoRiver

CSN factory BA526 e Salvador Subway

Southeast

Velodrome

Sorocaba and SãoJosé dos Camposhospital

Mineradora Galvani

Duplicating Cofins Airport

Sanitation project

Subway lines 4 and 5

Rio Jones Bridge Viaduto Imigrantes



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Residential50%

Commercial42%

Others8%

Rental revenue per segment

R$ 21.1 million

Real Estate -Rental revenue breakdown in 4Q15

13Presentation of 4Q15 Results – 03/11/2016


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Construction sector remains in 4Q15 the main user of Mills’

motorized access equipment

14

Construction57%

Non-construction

31%

Spot12%

Rental revenue by useR$59.7 million

Rental

81%

Technicalassistance

1%

Sales12%

Others6%

Net revenues per type of serviceIn 4Q15



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15

Evolution of sales costs and write-offs


7,9

4,33,0 3,1

3,0

4,03,8

5,6

4,7

3,2

3,0

1,9

15,6

11,4

9,8

10,7

52%57% 55%

67%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

0,0

2,0

4,0

6,0

8,0

10,0

12,0

14,0

16,0

18,0

1Q15 2Q15 3Q15 4Q15

Sales of new equipment costs

Sales of semi-new equipment costs

Write-offs

Sales costs + Asset Write-offs / Sales net revenue + indemnities


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16

Evolution of execution of works and warehouse


17,1 18,4 18,919,7

9,310,6

12,8 9,72,7

4,24,2 4,6

2,33,9

3,5

2,431,4

37,139,4

36,419%

25%

29% 29%

0%

5%

10%

15%

20%

25%

30%

35%

0

10

20

30

40

50

60

70

1Q15 2Q15 3Q15 4Q15

Personnel Material/Maintenance and repair Others Freights % Net revenue


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22,1 21,82,2 0,1 1,9

0,9 0,5

5,0

10,0

15,0

20,0

25,0

30,0

COGS, ex-

depreciation 3Q15

Sales and Asset

write-offs

Personnel Maintenance Freight Others COGS, ex-

depreciation 4Q15

27,125,31,3

0,9 1,1 0,2 0,2

5,0

10,0

15,0

20,0

25,0

30,0

COGS, ex-

depreciation

3Q15

Sales and Asset

write-offs

Personnel Maintenance Freight Others COGS, ex-

depreciation

4Q15

17

Evolution of COGS, ex-depreciation, per business unit

Rental


Construction

COGS, ex – depreciationIn R$ million


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18

Commercial, Operating and Administrative G&A were 18%lower yoy.

4Q15/4Q14 4Q15/3Q15

Commercial, Operating and Administrative -24,6% -9,1%

General Services 8,6% -5,3%

Other Expenses -18,4% 138,9%

SG&A total, ex-depreciation and ADD -17,8% -2,4%

1

G&A corresponds to the sum of Rental and Construction business units, excluding Construction imparirment of R$ 30,9 millionPresentation of 4Q15 Results – 03/11/2016

37,734,4 31,5 31,2 28,4

9,910,0

10,9 11,310,7

5,03,7

2,9 1,74,1

52,6

48,245,3 44,3 43,2

0,0

10,0

20,0

30,0

40,0

50,0

60,0

0,0

10,0

20,0

30,0

40,0

50,0

60,0

4Q14 1Q15 2Q15 3Q15 4Q15

Commercial, Operating and Administrative General Services Other Expenses


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ADD reached 5.8% of net revenue in 4Q15

19

0,3%

1,7% 2,1%2,0%

5,3%

12,8%

1,2%

5,9% 5,8%

-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 4Q15

2010-2014 Average = 2,3%

As % of net revenues

Changesin allowance for doubtful debts(ADD)

6,8%

Ex clients under investigation

4,2%5,9%

-0,8%


6,0%


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ADD Aging


27,0%

35,0%40,0%

45,0% 45,0%51,0%

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

More than 120 days receivables / Accounts receivable total

29,8%

38,5%46,9% 48,6% 51,8%

58,0%

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

ADD balance/ Accounts receivable total


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21

EBITDA totaled R$ 30.2 million in 4Q15

In R$ million

Changes in EBITDA¹

1 EBITDA corresponds to the sum of Rental and Construction business units, excluding Construction imparirment of R$ 30,9 millionPresentation of 4Q15 Results – 03/11/2016

35,1

30,26,1

2,5 2,11,1 0,5

2,9

33,1

5,0

10,0

15,0

20,0

25,0

30,0

35,0

40,0

EBITDA 3Q15 Rented

volume

Sales, Tech

assist and

others

COGS G&A ex-ADD

and

impairment

Change in

ADD

EBITDA 4Q15 Non recurring

items

EBITDA 4Q15

ex-non

recurring

items


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22

EBITDA totaled R$ 164.8 million in 2015, considering R$ 21.9million of non recurring items

In R$ million

Changes inEBITDA¹


1

EBITDA corresponds to the sum of Rental and Construction business units, excluding Construction imparirment of R$ 30,9 million

335,7 178,9

39,2

17,6

25,7 3,9 164,8

21,9 186,7

50,0

100,0

150,0

200,0

250,0

300,0

350,0

400,0

EBTIDA 2014 Rented

volume

Sales, Tech

assist and

others

COGS G&A ex-ADD

and

impairment

Change in

ADD

EBITDA 2015 Non

recurring

items

EBITDA 2015

ex-non

recurring

items


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Construction –Financial Performance¹

23

4Q15/4Q14 4Q15/3Q15 2015/2014 CAGR 12-15

Net revenue -41% -15% -33% -12%

EBITDA -110% -125% -77% -45%

In R$ million

¹ It does not exclude non recurring items, except R$ 30,9 million of impairment in 4Q15Presentation of 4Q15 Results – 03/11/2016

98,0

84,3

73,467,7

57,5

22,409

13,012,7

8,7

-2,134

22,9%

15,4%17,3%

12,8%

-3,7%1,2%-2,2% -3,1%

-8,6%4Q14 1Q15 2Q15 3Q15 4Q15¹

Net revenue EBITDA Margem EBITDA (%) ROIC

412,0

474,9

423,4

283,0

197,7 201,9

139,0

32,2

48,0%

42,5%

32,8%

11,4%

4,4%

-8,6%

2012 2013 2014 2015¹


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Rental –Financial Performance¹

24

In R$ million

4Q15/4Q14 4Q15/3Q15 2015/2014 CAGR 12-15

Net revenue -16% 2% -21% 5%

EBITDA -3% 22% -33% -2%

¹ It does not exclude non recurring itemsPresentation of 4Q15 Results – 03/11/2016

83,9

79,674,5

68,7 70,3

33,2 34,4

39,4

26,4

32,3

39,6%

43,3%

53,0%

38,4%

45,9%

11,5% 8,8% 7,4%5,2% 5,5%

4Q14 1Q15 2Q15 3Q15 4Q15

Net revenue EBITDA EBITDA margin (%) ROIC

253,5

357,3370,8

293,2

141,2

207,0196,7

132,6

55,7%57,9%

53,0%

45,2%

18,2% 18,2%

11,5%

5,5%

2012 2013 2014 2015


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Cash generation

25

¹ Before the interest paid and investiments.

² Net cash generated by the operating activities minus net cash applied in investment activitiesPresentation of 4Q15 Results – 03/11/2016

158,9

198,9

295,5

383,7 372,7

288,3

-340,2

-218,8-190,8

5,3

116,1

202,4

2010 2011 2012 2013 2014 2015

Adjusted Operating cashflow¹ and Free cashflowIn R$ million

Adjusted Operating cashflow¹ Free cashflow


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232

174 150

106 106

38

Cashposition

2016 2017 2018 2019 2020

Principal amortization scheduleIn R$ million

574 47 232

389

Principal Interests CashPosition

Net Debt

Debt, as of December 31, 2015In R$ million

Debt profile

26Presentation of 4Q15 Results – 03/11/2016


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Debt Indicators

Net Debt/EBITDA

Debentures Covenants :(1)EBITDA/net financial results >= 2.0; and(2)Net Debt/EBITDA


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Capital Increase


Private subscription through the issuance of new shares

Preemptive rights to the subscription of the new shares: February 11, 2016 Exercise period of the preemptive rights: 2/15 until 3/15/2016

Established price: R$ 2.63 - average of daily closing prices weighted by thetrading volume in the trading sessions held between November 27th, 2015 andFebruary 4th, 2016

Minimum Subscription: R$ 105.4 million x 40 million shares

Maximum Subscription : R$ 125.0 million x 47 million shares

Reasons for the fundraising:

The resources aims to strengthen the capital structure of the Company, by reinforcing

its cash to meet medium- and long-term needs for development of its activities, allowinginvestment in new technologies, products that increases productivity, or acquisitions atan unstable macroeconomic scenario and in its sector. The strengthening of liquidity atthis point is relevant to assign greater flexibility to the Company to respond to variationsin cash generation and competitive conditions.


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Mills – Investor Relations

Tel.: (21) 3924-8768

E-mail: [email protected]

www.mills.com.br/ri

Documents

4Q15 Presentation of Results