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November 2015
Corporate Presentation
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1
• Since 3Q14, organizational structure was resized, with annualized personnel
savings estimated at R$ 24 million per year¹
• Non-recurring layoff costs of R$ 3.1 million in 3Q15
Ricardo GusmãoCommercial Officer
for Construction
Avelino GarzoniEngineering and
OperationsOfficer
Marcelo YamaneRental Officer CFO and IRO
Deise VieiraHuman Resources
Officer
Sérgio KariyaCEO
Changes in the organization structure
¹Excluding costs with layoffs
Organization structure as of September 2015:
Construction
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• Market leader with more than 60 years ofexperience
• Focus on: infrastructure projects, industrial,residential and commercial construction works.
• Products: engineering solutions and rental offormworks and shoring
• Services: planning, designing, technicalsupervision, equipment and related services
• Clients:
Construction
• Market leader; started in 2008
• Focus on: civil construction. Industry, retail eothers
• Products: rental and sale of motorized accessequipment, such as aerial work platforms andtelescopic handlers
• Elected "Best Company for Access of the Year"by the International Awards for Powered
Access (IAPA Awards) for the year of 2011
Rental
Adjustments aiming to increase synergies between HeavyConstruction and Real Estate operations and markets
The consolidation of the two business units have generated the “Construction” business unit
2
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3
Mills – 3Q15LTM Financial highlights per business unit
In R$ million
EBITDA margin ROIC
17.6% -3.1%
43.5% 5.2%
30.2% 0.8%306.7
133.5
323.3
56.8
Revenue EBITDA
Construction
Rental
51%
30%49%
70%
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¹ Reclassified excluding the Industrial Services business unit for comparison.
² ROIC: Return on Invested Capital.
4
Financial Performance1
In R$ million
3Q15/3Q14 3Q15/2Q15 LTM3Q15/2014 CAGR 12-14
Net revenue -29% -8% -21% 9%
EBITDA -47% -33% -41% 0%
Net earnings n.d. 110% n.d. -35%
191.5181.9
163.9
147.9136.5
66.755.6
47.4 52.135.1
3.2
-6.2-14,5
-8.2-17.2
34.8%
30.6% 28.9%
35.3%
25.7%
9.4%
6.6%4.0%
2.0% 0.8%
3T14 4T14 1T15 2T15 3T15
Receita Líquida EBITDA Lucro Líquido Margem EBITDA (%) ROIC
665.5
832.3794.2
630.1
339.0
403.1
335.7
190.3151.5 172.6
64.3
-46,1
50.9%48.4%
42.3%
30.2%
14.7% 14.1%
6.6%
0.8%
2012 2013 2014 LTM3T15
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ADD reached 5.9% of net revenue in 3Q15
5
0.3%
1.7% 2.1%2.0%
5.3%
12.8%
1.2%
5.9%
-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
2010-2014 average = 2.3%
As % of net revenues
Changes in allowance for doubtful debts
(ADD)
6.8%
Ex clients under investigation
4.2%5.9%
-0.8%
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159
199
296
384 373
310
79102 105
86 9268 65
-209
-357
-31
-154
116
207
-13
11
7445
7037 55
Adjusted¹ operational cash flow and free² cash flow
R$ million
Adjusted¹ operational cash flow Free² cash flow
Cash generation
6
1 Net cash generated by the operating activities minus net cash applied in investment activities
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193174
150
106 106
38
Cash
position
2016 2017 2018 2019 2020
Principal amortization scheduleIn R$ million
57447 193
428
Principal Interests Cash
Position
Net Debt
Debt, as of September 30, 2015In R$ million
Debt profile
7
Credit lines available¹,2
Used R$ 15.9 million
Not used R$ 328.8 million
¹As of September 30, 20152 Unsecured overdraft account+ Secured bank credit lines
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Debt indicators
Net Debt/EBITDA
Debentures Covenants :
(1) EBITDA/net financial results higher than or equal to two; and
(2) Net Debt/EBITDA less than or equal to three.
EBITDA/Net financial results
8
1Excluding R$ 40.1 million of non-recurring effects from 1Q15 , R$ 44.9 million from 2Q15 and R$ 34.6 million from 3Q15
5.9
4.9
3.9
4.5
3.3
4.0
2.9
3.5
3Q14 4Q14 1Q15 1Q15¹ 2Q15 2Q15¹ 3Q15 3Q15¹
1.51.7
1.8
1.6
2.2
1.8
2.3
1.9
3Q14 4Q14 1Q15 1Q15¹ 2Q15 2Q15¹ 3Q15 3Q15¹
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Semi-new equipment sales effort
Rental
• Sales of semi-new equipment totaled R$ 13.8 million in 9M15
• Rental equipment planned sales amount to € 8.0 million for 2H15 and 1Q16;2015 shipments scheduled for October and November; remaining equipment to
be shipped by February 2016
Construction:
• Sales of semi-new equipment totaled R$ 6.7 million in 9M15
• International Market: searching for distribution channels
• Brazilian market: plans to develop local sales partners
8
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Business Units
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Rental
Aerial work platforms
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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) recommend the use of aerial platforms to lift
people, increasing safety and productivity in the work site
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1,889
403
277233
72
Mobile ladders Vehicles with lifttables, dock
levellers, ramps andflying tables
Fixed scaffolding Mobile scaffolding Aerial platform
13
Number of accidents by type of access equipment
EUA –
2010-2011
Source: HSE HandS-On Statistics Data Tool
Safety - Growth driver in the motorized access equipmentmarket
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Productivity - Growth driver in the motorized accessequipment market
Preparation: scaffolding assembly last 2 dayswith 8 peopleOperation: fixed structure makes it difficult toaccess certain points
Preparation: it reaches working heights inone and half minutesOperation: flexible, easy to operate andmaneuver
14
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0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
USA + Canada Latin America Europe Asia Middle East and Africa
Booms Scissor Lift Others
World fleet of motorized access equipment estimated at 1.1million units, being half of it in North America
Estimated annual market for semi-new equipment accounts for 5% of world fleet
Size of motorized access fleet# of machines
Source: IPAF Powered Access Rental Market report, produced by Ducker
15
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Brazil presents low penetration in motorized access market,since it is still an incipient market
0
50
100
150
200
250
Source: IPAF Powered Access Rental Market report, produced by Ducker
Penetration stage in motorized access market# motorized access machines per 100 thousand habitants
16
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Construction sector remains the main user of Mills’
motorized access equipment
17
Construction72%
Industry19%
Spot9%
Rental revenue by useIn 3Q15
Rental85%
Technical Assitance
2%
Sales7%
Others6%
Net revenues per type of serviceIn 3Q15
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Source: Mills
Distribution of Mills fleet by age% Fleet in number of pieces of equipment
70% of Mills fleet is less than 48 months old, and do notrequire rebuilding in next three years
months
18%
52%
26%
4%
0%
10%
20%
30%
40%
50%
60%
< 24 24-48 48-72 72-96
18
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Rental – Financial Performance
19
1 ROIC: Return on Invested Capital.
In R$ million
3Q15/3Q14 3Q15/2Q15 LTM3Q15/2014 CAGR 12-14
Net revenue -24% -8% -17% 21%
EBITDA -47% -33% -32% 18%
91.0
83.979.6
74.5
68.7
50.0
33.2 34.439.4
26.4
54.9%
39.6%
43.3%
53.0%
38.4%
14.5%
11.5% 8.8% 7.4%5.2%
3Q14 4Q14 1Q15 2Q15 3Q15
Net revenue EBITDA EBITDA margin (%) ROIC¹
253.5
357.3370.8
306.7
140.8
207.0196.7
133.5
55.6%57.9%
53.0%
43.5%
18.2% 18.2%
11.5%
5.2%
2012 2013 2014 LTM3Q15
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Construction
Laguna bridge – Santa Catarina
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1,509
1,772
1,013
598
830
643
BNDES - 2015-2018
Sobratema - 2014 - 2019
Exame - Balance 2014/2015Infrastructure
Total
Infrastructure investments are priority in Brazil. However,there are major uncertainties regarding its execution.
Expected investments in Brazil
in R$ billion
Source: BNDES – December 2014, Sobratema – 5ª Edição – 2014, Anuário Exame 2014-2015, datafrom 1,565 construction works.
21
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Logistics investment program (PIL)
66
86
9
37
198
42
91
0
54
187
0 50 100 150 200 250
Highways
Railroads
Airports
Ports
Total
PIL - 2012 PIL - 2015
7,500
10,000
6,974
7,537
0 5000 10000 15000
Highways
Railroads
Estimated investments
in R$ billion
Foreseen expansionin Km
Source: Valor Econômico newspaper, June 10, 2015
22
until 201835%
After201865%
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Of the R$ 66 billion investments planned for highwayconcessions, approximately 75% should be auctioned in2015/16
23
6.3
2.5
2
3.2
1.1
2.1
3.2
3.1
1.9
1.6
4.2
4.5
3.1
4.1
6.6
BR-364 (RO/MT)
BR-262 (MS)
BR-267 (MS)
BR-101/116/290/386 (RS)
BR-101 (SC)
BR-280 (SC)
BR-470/282 (SC)
BR-101/493/465 (RJ/SP)
BR-262/381 (MG)
BR-101 (BA)
BR-101/232 (PE)
BR-476 /153/282/480 (PR/SC)
BR-364 (GO/MG)
BR-364/060 (MT/GO)
BR-163 (MT/PA)
InvestmentsIn R$ billion
2 0 1 5
2 0 1 6
Source: Mills, Valor Setorial –
Infraestrutura, June 2015
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2015 2016
aug sep oct nov dec jan feb mar apr may jun jul aug sep
Signaturesof
contracts
Auction
AuctionPublicNotice
Public
Hearing
Studies Construction
Estimated Schedule of Logistics investment program
Construction jobs should start at the end of 2016, presentingrevenues opportunity for Mills in 2017 onwards
24
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In 2015, civil construction GDP should present largerreduction than the previous year
-10%
-5%
0%
5%
10%
15%
2009 2010 2011 2012 2013 2014 1H15 2015E
Total GDP Civil construction GDP
Source: Bacen (2009-2013), IBGE (2014 e 1H15) and estimatives from Bloomberg and Sinduscon
GDPYoy variation (%)
25
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26
Heavy Construction - Rental revenue breakdown in 3Q15
Industry12%
Infrastructure 75%
Others13%
Per sector
R$ 33.4 million
Public47.8%
Private36,8%
PPP15.4%
Source of funds
R$ 33.4 million
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27
Demand for metallic formworks is more sensitive to cycles,while metallic shoring is more resilient
Source: Criactive
6.2%8.7%
11.4%8.2%
5.4% 4.7% 5.1%
70.2%67.8%
71.2%
76.4%
80.1%83.3% 84.2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
2009 2010 2011 2012 2013 2014 2015
Metallic formwork Metallic shoring
Evolution of use in built-up areas
in %
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28
4.6
5.2
4.0 3.7
2.9
2.611.9%
-22.6%
-7.6%
-21.1%
-12.7%
-65%
-45%
-25%
-5%
15%
35%
55%
75%
95%
-
1.0
2.0
3.0
4.0
5.0
6.0
3Q10 3Q11 3Q12 3Q13 3Q14 3Q15
V a r . ( % )
L a u n c h e s ( i n R $ b i l l i o n )
1 Cyrela, Direcional, Even, Gafisa, Helbor, MRV and Rodobens.
Source: Operational reports from companies and Mills
Total launches1
in R$ billion
Launches and sales continued to decline in 3Q15
4.1
4.54.4
4.2
3.4 3.3
9.2%
-2.0% -4.0%
-19.9%
-2.2%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
-
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
3Q10 3Q11 3Q12 3Q13 3Q14 3Q15
V a r . ( % )
L a u n c h e s ( i n R $ b i l l i o n
)
Total sales1
in R$ billion
Presentation of 3Q15 Results – 11/05/2015
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Stages of industrialization of the construction process
29
1 Approximately 800 m2
Source: Téchne 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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Residential49%
Commercial39%
Others12%
Rental revenue per segment
R$ 22.9 million
Real Estate - Rental revenue breakdown in 3Q15
30 Presentation of 3Q15 Results – 11/05/2015
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31
Construction – Financial Performance¹
3Q15/3Q14 3Q15/2Q15 LTM3Q15/2014 CAGR 12-14
Net revenue -33% -8% -24% 1%
EBITDA -48% -32% -59% -18%
Presentation of 3Q15 Results – 11/05/2015
¹ It does not exclude non recurring items.
100.5 98.0
84.3
73.467.7
16.7 22.413.0 12.7
8.716.6%
22.9% 15.4%17.3%
12.8%
4.4%1.2%
-2.2% -3.1%
3Q14 4Q14 1Q15 2Q15 3Q15
Net revenue EBITDA EBITDA margin (%) ROIC
412.0
474.9
423.4
323.4
197.7 201.9
139.0
56.8
48.0%
42.5%
32.8%
17.6%
4.4%
-3.1%
2012 2013 2014 LTM3Q15
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Mills – Investor Relations
Tel.: +55 21 2123-3700
E-mail: [email protected]
www.mills.com.br/ri