Presentation of 1Q15 Results

May 7th. 2015

Financial Performance1
In R$ million
832.3

213.0

207.8

794.2

50.9%
191.5

191.5

181.9

49.7%

48.7%

750.2

48.4%
44.1%

665.5

163.9

794.2

42.3%
36.7%

41.3%
34.8%

107.5

105.9

30.6%

403.1
28.9%

339.0

79.0

335.7

350.2
275.6

66.7
12.3%
33.4

33.9

55.6
9.9%

9.4%

6.6%
11.3

3.2
1Q14

2Q14
Net revenue

3Q14

3Q14
EBITDA

4Q14
-6.2

14.7%
14.1% 172.6
151.5

47.4
4.0%

2012

1Q15
-14.5

Net earnings

2013

EBITDA margin (%)

6.6%
64.3

6.6%
81.7

2014

2014

4.0%
23.0
LTM1Q15

ROIC

1Q15/1Q14

1Q15/4Q14

LTM1Q15/2014

CAGR 11-14

Net revenue

-21%

-10%

-6%

20%

EBITDA

-56%

-15%

-21%

17%

Net earnings

-143%

133%

-72%

-4%

Reclassified excluding the Industrial Services business unit. for comparison

ROIC: Return on Invested Capital.
Excluding non-recurring items of R$ 21.7 million of net earnings and R$ 14.5 million of EBITDA in 2014. of which R$ 12.3 million in 3Q14

Presentation of 1Q15 Results 05/07/2015

Net revenue totaled R$ 163.9 million in 1Q15

Per business unit

Per service type

Heavy
Construction
31%

Others
7%

Technical
assistance
1%

Rental
49%

Real Estate
20%

Sales
11%

Presentation of 1Q15 Results 05/07/2015

Rental
81%

EBITDA reduction of R$ 8 million qoq

Change in EBITDA
In R$ million

60
50

55.6

8.2
4.7

8.7
1.1

40
30
20
10
0

Presentation of 1Q15 Results 05/07/2015

2.1

0.9

6.0

2.1
47.4

G&A dropped 8.9% qoq, corresponding to an annualized

change of R$ 14 million

Change in G&A1
In R$ million

60
52

1.6

50

1.0

1.1

48.5

Travel

Others

G&A 1Q15

40

30

20

10

0
G&A 4Q14

Third parties

Personnel

1Excluding

Presentation of 1Q15 Results 05/07/2015

depreciation and allowance for doubtful debt

ADD reached 12.8% of net revenue in 1Q15

Changes in allowance for doubtful debts (ADD)

15.0%

As % of Revenues

13.0%

12.8%

11.0%
6.8%
9.0%
Ex-clients under
investigation

7.0%
5.3%

5.0%

4.2%
3.0%
1.7%
1.0%

-1.0%

2.1%

0.3%

2010

2011

Presentation of 1Q15 Results 05/07/2015

2012

2010-2014 average = 2.3%

2.0%

2013

2014

1Q15

Positive cash flow of R$ 70 million in 1Q15, reaching R$ 200

million in the last twelve months

Free cash flow1

200
116
100

74

45

70

11
2010

2011

2012

2013

2014

1Q14

2Q14

3Q14

4Q14

1Q15

(13)

(31)
(100)
(154)

(200)
(219)
(300)
(340)
(400)

1 Net

Presentation of 1Q15 Results 05/07/2015

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

Free cash flow enabled reduction of 10% of net debt qoq

800

745.4

41.2

7.8

700
600
500
400
300
200
100

Presentation of 1Q15 Results 05/07/2015

712.0

193.7
41.2

8.8

49.3

21.1

498.0

Debt indicators
EBITDA/Net financial results

Net Debt/EBITDA

8.0x
1.8x
7.1x
1.6x
6.1x

1.5x

1.5x

1.5x

1Q14

2Q14

3Q14

1.6x

5.2x
4.5x
4.0x

1Q14

2Q14

3Q14

4Q14

1Q15

1Q15

4Q14

1Q15

Debentures Covenants :
(1) EBITDA/net financial results higher than or equal to two; and
(2) Net Debt/EBITDA less than or equal to three.
1Excluding

Presentation of 1Q15 Results 05/07/2015

R$ 40.1 million of non-recurring items from LTM EBITDA.

1Q15 1

Rental Financial Performance

In R$ million
55.7%

56.3%
357.3

370.8
53.0%

353.1

60.1%
98.6

97.3

55.8%

54.9%

48.9%

91.0

83.9
39.6%

253.5

79.6 43.3%

201.2
58.4
17.8%

172.7

55.1
16.2%

50.0
14.5%

11.5%
33.2

1Q14

2Q14

3Q14

4Q14

Net revenue

196.7

141.2
18.2%

34.4
8.8%

18.2%
11.5%

2012

1Q15
EBITDA

2013

EBITDA margin (%)

2014

8.8%

LTM1Q15

ROIC

1Q15/1Q14

1Q15/4Q14

LTM1Q15/2014

CAGR 11-14

Net revenue

-18%

-5%

-5%

28%

EBITDA

-41%

4%

-12%

28%

ROIC: Return on Invested Capital.

10

Presentation of 1Q15 Results 05/07/2015

Utilization rate dropped in 1Q15 with the slowdown in the Oil

and Gas sector

Utilization Rate

Changes in revenue

In %

in R$ million
90

3.1

0.7

100%

1.9

80
80%
70
60

60%

50

83.9

40

79.6

40%

LTM 1Q15 average = 61%

30
20%

20
10

0%
0

4Q14
Revenues

Rented
volume

Price and
Other
1Q15
mix
revenues Revenues
Source: Mills

11

Presentation of 1Q15 Results 05/07/2015

Construction sector remains the main user of Mills

motorized access equipment

Rental revenue by use

Net revenues per type of service

In 1Q15

In 1Q15
Sales of
semi-new
Others
equipment
3%
Sales of new 5%
equipment
5%

Spot
19%

Industry
15%

Construction
66%
Rental
87%

12

Presentation of 1Q15 Results 05/07/2015

Heavy Construction Financial Performance

In R$ million

55.5
52.5

51.9

51.0 50.2%

51.1

217.0
49.8%

48.5%

46.2%
41.2%

211.1

211.0
42.1%

174.1

36.1%
31.0%
25.6

25.6
17.9%

108.1

25.3%

21.4
16.3%

16.3

13.3%

88.9

84.3
17.2%

76.2
19.2%

12.9

9.9%

7.0%

7.0%

1Q14

2Q14

3Q14

4Q14

Net revenue

Net revenue
EBITDA

2012

2013

EBITDA margin (%)

2014

LTM1Q15

ROIC

1Q15/1Q14

1Q15/4Q14

LTM1Q15/2014

CAGR 11-14

0%

-3%

0%

17%

-50%

-21%

-14%

15%

ROIC: Return on Invested Capital.

13

1Q15
EBITDA

Presentation of 1Q15 Results 05/07/2015

Reduction of rental revenues was partially offset by larger sales

revenues. technical assistance and indemnities

Change in revenue

Utilization Rate

in R$ million

100%

In %

60

3.8

5.6
80%

3.2

50

40

60%

30

52.5

51.1

40%

LTM 1Q15 average = 65%

20
20%
10

0%
0

4Q14
Revenues

Rented
volume

Price and
Other
1Q15
mix
revenues Revenues
Source: Mills

14

Presentation of 1Q15 Results 05/07/2015

Breakdown of 1Q15 rental revenue

Source of funds
PPP
9%

Per sector
Others
10%

Public
40%
Private
52%

15

Presentation of 1Q15 Results 05/07/2015

Industry
40%

Heavy Construction
51%

Real Estate Financial Performance

In R$ million

59.5

258.0

47.7%
238.0

58.8
48.6

36.4%

48.6

212.4

45.4

212.4
30.4%

186.1

42.8%
39.4%

23.5

15.7%
113.4

25.2

93.8
8.1%
15.7%

6.7%

7.7

6.5%
2.1%

1Q14

2Q14

3Q14
-4.7
-9.6%

Net revenue
EBITDA

13.5%
6.1

3.8%

0.4%

3Q14

4Q14

50.1
0.4%

64.6
2.5%

41.2

0.2%

-3.3%

0.1
1Q15

2012

2013

2014

2014

LTM1Q15

-3.3%

Net revenue

EBITDA

EBITDA margin (%)

ROIC

1Q15/1Q14

1Q15/4Q14

LTM1Q15/2014

CAGR 11-14

-44%

-27%

-12%

11%

-100%

-99%

-18%

-9%

Excluding non-recurring effects of R$ 14.5 million in 2014. of which R$ 12.3 million was in 3Q14.
ROIC: Return on Invested Capital

16

22.1%

23.6%

33.2

Presentation of 1Q15 Results 05/07/2015

Utilization rate in 1Q15 continued the downward trend, which

began in 4Q13

Change in revenue

Utilization rate

in R$ million

100%

In %

50

4.2

45

3.4
40

80%

4.6

35
60%
30
25

45.4

40%

20

LTM 1Q15 average = 55%

33.2

15

20%
10
5
0%
0

4Q14
revenues

Rented
volume

Price and
Other
1Q15
mix
revenues Revenues
Source: Mills

17

Presentation of 1Q15 Results 05/07/2015

Breakdown Real Estate rental revenues

26% of rental revenues in 1Q15 came from listed companies
Rental revenue per segment
In 1Q15

Others
12.6%

Commercial
34.7%

Residential
52.7%

18

Presentation of 1Q15 Results 05/07/2015

Launches and sales declined in 1Q15, with possible negative

impact on construction activities throughout the year

Total sales1

in R$ billion

in R$ billion

95%

4.4

5.0

100%

4.5

80%

3.9

3.8

75%

3.6

3.5

3.0

2.7

35.3%

26.2%
15%

2.5
18.4%

1.7

-5%

2.0
1.5

3.0
40%

Var. (%)

2.9

Launches (in R$ million)

3.5

3.2
Var. (%)

3.3

60%

55%

35%

4.0

4.0

3.7

4.5

4.2

4.1

2.5
20%

2.0
9.9%

0%

6.9%

-20%

-25%

9.9%

-13.0%

1.5
-21.4%
1.0

1.0

-26.4%

-40%

-45%

0.5

0.5
-61.1%

-65%

1Q10

1Q11

1Q12

Sales (in R$ million)

Total launches1

1Q13

1Q14

1Q15

-60%

1Q10

1Q11

1 Cyrela.

1Q12

1Q13

1Q14

1Q15

Even. Eztech Gafisa. Helbor. MRV. Rodobens and Tecnisa.

Source: Operational reports from companies and Mills

19

Presentation of 1Q15 Results 05/07/2015

Mills - Investor Relations

Tel.: +55 21 2123-3700
E-mail: ri@mills.com.br
www.mills.com.br/ri