Morgan Stanley - LatAm Mid-Cap Corporate Access Day

7/27/2019 Morgan Stanley - LatAm Mid-Cap Corporate Access Day

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Corporate PresentationOctober 2013


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Disclaimer

2

This presentation 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 governmental rules, that are

subject to change without prior notice. To obtain further information on factors that

may give rise to results different from those forecast by Mills, please consult the

reports filed with the Brazilian Comisso de Valores Mobilirios (CVM).


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Agenda

Executive Summary

Mills business segments

Growth plan

3


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Mills at a Glance

Mills is a Brazilian engineering service company for the construction and industrial sectors

Uncontested market leader in providing temporary concrete formwork and tubular structures and

motorized access equipment in the Brazilian market

Long-term relationship with the major companies in the sector

Superior capacity and scale, scope of services and market coverage

Business units:

HeavyConstruction Jahu Rental

4


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195

94

258

112

308

168

761

374

0

100

200

300

400

500

600

700

800

Net Revenues EBITDA

Rental

Jahu - Residential andCommercial

Heavy Construction

5

Mills Financial performance per business segment

R$ million

2Q13LTM Financial highlights per business segment

2Q13 LTM Last twelve months ended June 30, 2013.

47.9% 17.7%

43.5% 13.4%

54.5% 18.5%

EBITDA Margin (%) ROIC (%)

Pro forma result, excluding figures for the Industrial Services business unit

Total 49.1% 15.5%

% Total

% Total

40%

34%

26%

45%

25%

30%


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156.3

173.4 173.4

187.5 188.4

211.8

79.7

95.990.3

83.3

95.7 98.9

39.2 38.0 34.741.6 39.3

48.1

51.0%

55.3%

52.1%

44.4%

50.8%

46.7%

14.8%

18.3%

14.5% 14.6% 15.4% 14.0%

0%

10%

20%

30%

40%

50%

60%

00

50

100

150

200

250

2Q12 3Q12 3Q12* 4Q12 1Q13 2Q13

Net Revenue EBITDA Net Earnings EBITDA Margin ROIC

6

MillsFinancial performance2

1 ROIC: Return on Invested Capital. Until 4Q10, ROIC was calculated considering the effective income tax rate for the period, while in 1Q11 onwards ROIC was calculated consideringa theoretical 30% income tax rate.

* Excluding the positive impact of the provisions reversal in the amount of R$ 6.8 million in 3Q12

2 Pro forma result, excluding figures for the Industrial Services business unit

In R$ millions

2Q13/2Q12

2Q13/1Q13

CAGR 10-12

+ 35.5%

+ 12.4%

+ 37.0%

+ 24.1%

+ 3.4%

+ 41.9%

+ 22.5%

+ 22.4%

+ 21.1%

- 430 bps

- 410 bps

- 80 bps

- 140 bps

354.5

462.8

665.5

168.4

217.4

339.0

103.3 92.2

151.5

47.5% 47.0%

50.9%

22.0%

13.2%

15.9%

0%

10%

20%

30%

40%

50%

60%

00

100

200

300

400

500

600

700

2010 2011 2012


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7

We entered into an agreement in July to sell our Industrial Services business unit

Objective:

To focus on businesses in which Mills competencies are able to add higher value to its

shareholders and clients.

Price:

R$ 102 million; implicit EV/EBITDA ratio= 5.2x

Form of payment:

R$ 25 million - advance payment on the date of the sale agreement

R$ 17 million on the closing of the sale

R$ 60 million in four equal annual installments, adjusted by the CDI rate

Financial results of Industrail Services1:

Net revenue: R$ 214 million

EBITDA: R$ 19.5 million, which represents 5.3% of Mills EBITDA1Last twelve months ended March 31, 2013.


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Agenda

Executive Summary


Growth plan

8


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Heavy Construction

BRT Transcarioca - RJ


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Heavy Construction Financial performance

10

In R$ million

1 ROIC: Return on Invested Capital. Until 4Q10, ROIC was calculated considering the effective income tax rate for the period, while in 1Q11 onwards ROIC was calculated considering atheoretical 30% income tax rate.

* Excluding the positive impact of the provisions reversal in the amount of R$ 1.5 million in 3Q12

41,9

45,5 45,547,3 47,5

55,1

21,2

24,122,8

20,2

24,3 25,1

50,6%52,9%

50,2%

42,7%

51,3%

45,5%

17,8%19,7%

18,3%14,8%

18,6%

17,8%

0%

10%

20%

30%

40%

50%

60%

0,0

10,0

20,0

30,0

40,0

50,0

60,0

2Q12 3Q12 3Q12* 4Q12 1Q13 2Q13

Net Revenue EBITDA EBITDA Margin ROIC

154,3

131,6

174,1

73,6

57,8

84,3

47,7%

43,9%

48,5%

24,1%

12,1%

17,2%

0%

10%

20%

30%

40%

50%

60%

0,0

20,0

40,0

60,0

80,0

100,0

120,0

140,0

160,0

180,0

200,0

2010 2011 2012

2Q13/2Q12

2Q13/1Q13

CAGR 10-12

+ 31.5%

+ 16.2%

+ 6.2%

+ 18.2%

+ 2.9%

+ 7.1%

- 510 bps

- 580 bps

+ 0 bps

- 80 bps


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-

20

40

60

80

100

120

140

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33

11

Important contracts per stage in the evolution of monthly revenue from the heavy

construction projectsNew

contracts*Contracts with

growing volume ofequipment

Contracts with highvolume of equipment

Contracts in thedemobilization process

Source: Mills

Time

RevenueIndex

(Basis100=Maximumm

onthlyrevenuein

thelifeofconstruction)

Newcontracts*

New phases ofBelo Monte hydroeletric powerplant New stretches of the Guarulhos airport New stretches of Subway lines 4 and 5 SP SP-055 highway

New phase of the transposition of the So Francisco river Duplication ofTamoios and Bandeirantes highwaysLibras terminal

Cuiab airportCais das ArtesCompanhia Siderrgica do Pecm steel mill Minas-Rio ore pipeline

North beltway SP Cable-stayed bridge in Laguna Manaus thermoelectric unit

Belo Monte hydroelectricpowerplantOeste Leste railway Monorail line Gold SP BRT Belo Horizonte BRT Sul DF East beltway - SP Companhia Siderrgica doPecm steel mill Paraguau shipyard Braslia airport Fortaleza airport Natal airport

Colder, Jirau and Teles Pireshydroelectric powerplantsComperjrefinery Abreu e Lima refineryNorte-SulrailwayMonorail line Silver SP

Transnordestina railway

BRT Transcarioca Metropolitan arch RJVales mine and railway Viracopos airport Guarulhos airport

Porto Maravilha Pantanalarena Beira-Rio stadium Natal stadium Cuiab light rail

Subway line 2 - SP CSN steel plantParanaenses arena BR-448 Manaus airport


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The construction work related to World Cup and Olympic events represented 31%

of the Heavy Construction business segments 2Q13 revenue

12

Industry

26%

Infrastructure

33%

Others

10%

Airports

10,3%

Urban mobility

10,2%

Stadiums

10,2%

World Cup and

Olympics

31%

2Q13 Revenue

R$ 55.1 million

4,2

1,50,7

0,3

2,97,5

6,1

0,4

Stadiums Urban mobility Airports Ports

In Progress

Executed

1 In July 2013Source: 4th 2014 World Cup Report, Portal da Transparncia and Mills


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Oil and Gas405

Mining57

Steel28

Chemical30

Pulp and Paper30

Others483

Industry investments 2013-2016R$ 1,033 billion

13

Investments in infrastructure and industry in Brazil should amount R$ 1.5 trillion in the 2013-2016period

Energy166

Telecom102

Sanitation42

Railways

77

Roads69

Ports24

Airports9

Infrastructure investments 2013-2016R$ 489 billion

Source: BNDES February 2013

Growth compared to the 2008-2011 period (%)

22% 36%

Heavy Construction market outlook


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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

New logistic investment program

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


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Timetable of concession auctions: approximately R$ 70 billion within 4 months

15BR 163 (MT)

BR 163/267/262 (MS)

BR 116 (MG)

BR 040 (DF-MG)

BR 153 (GO/TO)

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

Ports - 1st round - 31 contracts

Galeo airport

Confins airport

Railway - Aailndia - V. do Conde strech

BR 101 (BA)

BR 262 (MG/ES)

BR 050 (MG/GO)

Salvador subway line 2

InvestimentsR$ billion

Dec-13

Nov-13

Oct-13

Set-13


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6,5

5,1

3,2

3,2

1,4

2010 2012 2014 2016 2018 2020

North Beltway

Tamoios Highway

East Beltway

Extension of theSo Sebastio Port

Connection betweenSantos and Guaruj

16

Investments in So Paulos transport are estimated in R$ 56.5 billion

Source: Investments and development in the state of So Paulo

4,0 3,81,7

5,6

4,0 3,8

1,4

13,0

8,17,5

3,0

18,5

Subway Line 6(Orange Line)

Subway Line 20(Pink Line)

Monorail Line 18(Bronze Line)

Intercity Trains

Urban MobilityIn R$ billion

Public Funding

Private Funding

Total: R$ 37.1 billionTotal: R$ 19.4 billion

15.3 km 12.3 km 14.3 km 416 km


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Heavy Construction Market outlook

17

- Current backlog indicates a very good perspective for the next two years

- Concession program

- Scenario 1 low probability

Complete failure maintenance of current level of market growth

- Scenario 2 more likelyPartial Success substantial change of investment level

- Scenario 3 low probability

Total success focus on the major construction jobs

J h R id ti l d C i l


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18

Jahu - Residential and Commercial

Reserva do Paiva Pernambuco


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Jahu Financial performance

19

In R$ millions

1 ROIC: Return on Invested Capital. Until 4Q10, ROIC was calculated considering the effective income tax rate for the period, while in 1Q11 onwards ROICwas calculated considering a theoretical 30% income tax rate.

* Excluding the positive effect of R$ 5.3 million of tax contingency reversal in 3Q12

58,960,5 60,5

66,0 64,966,5

27,2

33,8

29,4

26,127,7

24,6

46,1%

55,9%

48,6%

39,6%

42,8%

37,0%

14,8%

20,2%

16,9%

12,6% 12,8%

9,3%

0%

10%

20%

30%

40%

50%

60%

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

2Q12 3Q12 3Q12* 4Q12 1Q13 2Q13


105,1

155,8

238,0

43,9

66,0

113,4

41,7% 42,4%

47,7%

23,5%

14,3%

15,7%

0%

10%

20%

30%

40%

50%

60%

0,0

50,0

100,0

150,0

200,0

250,0

2010 2011 2012

2Q13/2Q12

2Q13/1Q13

CAGR 10-12

+ 12.8%

+ 2.5%

+ 50.4%

- 9.5%

- 11.4%

+ 60.8%

- 910 bps

- 580 bps

- 550 bps

- 350 bps


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20

Commercial projects contributed 36% of 2Q13 equipment rental revenues

In R$ million

12%17%

7%

18% 19%

45% 36%

43%

32% 31%

34%34% 36% 37% 36%

3%2%

1%1%

2%

6%11% 13% 12% 12%

48,5 49,2 49,9 53,3 52,0

2Q12 3Q12 4Q12 1Q13 2Q13

Others

Industrial

Commercial

Residential - others

Residential - listedcompanies

Residential57 %

Residential53 %

Residential50%

Residential50%

Residential50%


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21

Jahu Revenue Breakdown

100%

85%

61%

49%

15%

39%

51%

2009 2010 2011 2012

New branches

Established branches

1 Branches opened since November 2009

Growth drivers in the residential market: geographic expansion

1


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-

50.000

100.000

150.000

200.000

250.000

300.000

350.000

22Source: BACEN and FGV

Housing FinancingIn R$ million

Growth drivers of the residential market: housing financing


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10,7 6,8 3,6

38,2

28,0

20,1

37,0

49,7

58,4

8,1 9,8 11,7

6,0 5,7 6,2

2002 2009 2014E

Class A

Class B

Class C

Class D

Class E

Higher purchasing power of the Brazilian population

23

31,729,1

27,2

60,4

1,4

5,9

2007 2030E

< R$ 1,000

>= R$ 1,000 and

R$ 8,000

-0.4%

+3.9%

+7.1%

In million families

+33.2 millionfamilies with income

betweenR$ 1,000 to 8,000

Growth rate(%, p.a.)

Source: IBGE and FGV

Growth drivers of the residential market: higher purchasing power


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24Source: Sondagem Especial Construo Civil, April 2011, CBIC , CNI, Tchne Magazine, June 2012 and Mills

The major challenge for the sector: labor

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

System Traditionalwith wood

Deck Type FlyingTable

Cycle betweenconcreting activities

15 days 6-8 days 4-7 days

Growth drivers of the residential market: industrialization of the construction process

Rental Motorized Access Equipment


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Rental Motorized Access Equipment

Castelo Stadium Fortaleza, CE


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Rental Financial Performance

26

In R$ million

1 ROIC: Return on Invested Capital. Until 4Q10, ROIC was calculated considering the effective income tax rate for the period, while in 1Q11 onwards ROICwas calculated considering a theoretical 30% income tax rate.

55,4

67,4

74,2

76,1

90,1

31,4

38,0 36,9

43,6

49,3

56,6% 56,5%

49,8%

57,3%

54,7%

16,3% 16,3% 16,9%19,1% 18,5%

0%

10%

20%

30%

40%

50%

60%

70%

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

90,0

100,0

2Q12 3Q12 4Q12 1Q13 2Q13


95,1

175,4

253,5

51,0

93,6

141,2

53,6% 53,4%55,7%

19,2% 16,5% 18,2%

0%

10%

20%

30%

40%

50%

60%

0,0

50,0

100,0

150,0

200,0

250,0

300,0

2010 2011 2012

2Q13/2Q12

2Q13/1Q13

CAGR 10-12

+ 62.6%

+ 18.5%

+ 63.3%

+ 57.1%

+ 13.1%

+ 66.5%

- 190 bps

- 260 bps

+ 220 bps

- 60 bps


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Rental Awards

27

2012 IDF Award (ndice de Desempenho Fornecedor- SupplierPerformance Index) from Vale: best material supplier for Vale in

Brazil.

2011 Best Company for Access of the Year" by the

International Awards for Powered Access (IAPA Awards)

Mills is one of the top 5 access rentalcompanies with largest fleet growth in 2012

5th

30th

Fleet size ranking, atthe end of 2012

Largest fleet growth ranking, in 2012

Source: Access International


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28

Rental Revenue Breakdown

69%

42% 38%

31%

58% 62%

2009 2010 2011 2012

New branches

Established branches

1 Branches opened since January 2010

Growth drivers in the motorized access equipment market: geographic expansion

1


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Motorized Access Equipment Rental market outlook

29

Current underutilization of motorized access equipment in Brazil and favorable regulationindicate significant growth potential in this market.

The Brazilian aerial platforms and telehandler fleet is very small compared to the US fleet; less than

3%

Modest rental penetration of 15% in Brazil. Rental penetration is approximately 40% in the USA,

60% in Japan and 80% in England

Recent regulation obliges the use of aerial platforms to lift people, increasing safety and productivity

in the work site

Brazilian fleet should increase at average annual rate of 14% in the next few years and reach

40,000 units by 2017

Source: Mills


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In 2012, the Brazilian fleet of motorized access equipment grew 32.1% compared to 2011

30Source: Mills and Yengst Associates

Aerial workplatforms

89%

Telescopichandlers

11%

Fleet profile

Brazil - 2012Total: 21,000

Aerial workplatforms

78%

Telescopichandlers

22%

USA - 2011Total: 785,000

8

11

16

21

40

0

5

10

15

20

25

30

35

40

45

2009 2010 2011 2012 ... 2017E

Motorized access equipment fleet

In thousands of units

+34.9%

+46.2%

+32.1%

+13.9% p.a.


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Agenda

Executive Summary


Growth plan

31


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32

in R$ million

Capex

7447 51 51

89

104185

60 70

112

25

17

5 1

6

131

163

161 143

27415

18

2116

49

349

430

297279

530

0

100

200

300

400

500

600

2010 2011 2012 1H13 2013 Capex Budget

Rental

Industrial Services

Jahu - Residential andCommercial

Heavy Construction

Our 2013 capex budget for rental equipment was revised upward to R$ 481 million

Realized /2013 Budget (%)

57%

63%

8%

52%


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-0,3x

0,0x

0,7x

1,0x

1,6x 1,6x

1,4x

1,3x1,2x 1,2x 1,2x

1,4x

-0,5

0,0

0,5

1,0

1,5

2,0

3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

Net Debt/LTM EBITDA

33

Target = 1.0x

Capturing opportunities maintaining the commitment to low leverage


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5 6 6 6 6 68

0

5 6

14 1516

17

4

44

66

7

7

0

4 4

1416

17

23

9

19 20

40

43

46

55

2007 2008 2009 2010 2011 2012 2Q13

Rental

Industrial Services

Jahu - Residential and

Commercial

Heavy Construction

34

Evolution of the number of branches

+9


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35

We are present in 16 states of Brazil with 55 branches

Branch locationsAs of June 30, 2013

Minas

Gerais

Rio Grande

do Sul

Santa Catarina

So Paulo

Mato Grosso

do Sul

Rio deJaneiro

(sede)

EspiritoSanto

Bahia

Distrito

Federal

Goias

Sergipe

Paraiba

Rio GrandeCear

Piaui

Maranho

Tocantins

Par

Rondnia

Acre

Roraima Amap

Amazonas

Mato Grosso

Parana

Alagoas

States with Mills Presence

Rental

Heavy Construction

Industrial Services

Jahu

Pernambuco

do Norte


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Mills Investor Relations

Tel.: + 55 21 2123-3700E-mail: [email protected]

www.mills.com.br/ri
mailto:[email protected]:[email protected]

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