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Morgan Stanley 7th Annual Latin America Conference

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    September 2014

    Corporate Presentation

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    Executive Summary

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    H e a v y

    C o n s t r u c t

    i o n

    Market leader, extensive trackrecord, with more than 60 yearsof experience

    Focus on: large and complexinfrastructure projects

    Products: engineeringsolutions and rental offormwork and shoring

    Services: planning, design,technical supervision,

    equipment and related services

    Main clients:

    R e a

    l E s t a

    t e

    Market leader; acquired in 2008

    Focus on: residential and

    commercial constructions Products: engineering solutions

    and rental of formwork, shoringand suspended access

    Services: planning, design,technical supervision, equipmentand related services

    Clients: real estate companies,such as:

    R e n

    t a l

    Market leader; started in2008

    Focus on: civil construction,industry, retail e others

    Products: rental and sale ofmotorized accessequipment, such as aerialwork platforms andtelescopic handlers

    Cross-selling with all otherMills business units

    Elected "Best Company for Access of the Year" by theInternational Awards forPowered Access (IAPA

    Awards) for the year of 2011

    Mills - Business Units

    2

    http://www.pdgrealty.com.br/pdg/Capa.aspx
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    387.0

    221.8

    245.0

    90.1

    220.9

    109.9

    852.8

    421.9

    Net Revenue EBITDA

    Heavy Construction

    Real Estate

    Rental

    3

    Mills 2Q14LTM Financial highlights per business unit

    EBITDAMargin ROIC

    49.8% 16.3%

    36.8% 6.5%

    57.3% 16.2%

    49.5% 13.0%

    26%

    21%

    53%

    26%

    29%

    45%

    Excluding the Industrial Services business unit.

    In R$ million

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    4

    Mills - Financial Performance

    2Q14/2Q13 2Q14/1Q14 LTM2Q14/LTM2Q13 CAGR 10-13Net Revenue +1% 2% 12% 33%

    EBITDA +7% -1% 13% 34%

    Net Earnings -31% -1% -9% 19%

    In R$ millions

    Reclassified excluding the Industrial Services business unit, for comparison.

    ROIC: Return on Invested Capital. Until 2010, ROIC was calculated considering the effective income tax rate for the period, while from 2011 onwards ROIC was calculated considering atheoretical 30% income tax rate.

    * Excluding non-recurring items related to the former Industrial Services business unit

    188.4

    211.8222.0

    210.1 207.8213.0 213.0

    95.7 98.9106.1 102.4 107.5 105.9 105.9

    39.348.1

    39.6 45.6 33.9 33.4 37.6

    50.8%

    46.7% 47.8% 48.7%51.7%

    49.7% 49.7%

    14.9% 14.2% 13.9% 13.4%11.5%

    9.2%10.4%

    1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 2Q14*

    Net Revenue EBITDA Net Earnings EBITDA Margin (%) ROIC

    354.5

    462.8

    665.5

    832.3 852.8

    168.4217.4

    339.0

    403.1 421.9

    103.3 92.2

    151.5 172.6 152.5

    47.5% 47.0%50.9% 48.4% 49.5%

    21.0%

    12.3%

    14.7% 14.1% 13.0%

    2010 2011 2012 2013 LTM2Q14

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    Estamos presentes em 16 estados no Brasil com 56 unidades

    Geographic Presence

    5

    Branches location As of June 30, 2014

    MinasGerais

    Rio Grandedo Sul

    Santa Catarina

    So Paulo

    Mato Grosso

    do Sul

    Rio deJaneiro

    (headquarters)

    EspiritoSanto

    Bahia

    DistritoFederal

    Goias

    Sergipe

    Paraiba

    Rio GrandeCear

    Piaui

    Maranho

    Tocantins

    Par

    Rondnia

    Acre

    Roraima Amap

    Amazonas

    Mato Grosso

    Parana

    Alagoas

    States with Mills' presence

    Pernambuco

    do Norte

    Rental

    Heavy Construction

    Real Estate

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    Business Units

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    Castelo stadium Fortaleza, CE

    Rental

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    Growth drivers in the motorized access equipment market:safety and productivity

    Source: Mills

    Market penetrationthroughsubstitution of lesssecure andefficient accessmethods

    Recent safety standards (NR-18 and NR-35) oblige the use of aerial platforms to lift people,increasing safety and productivity in the work site

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    Aerial workplatforms

    95%

    Telescopichandlers

    5%

    Brazil - 2013Total: 29,500

    Growth drivers in the motorized access equipment market:low penetration

    9Source: Mills and Yengst Associates

    Aerial workplatforms

    78%

    Telescopichandlers

    22%

    USA - 2011Total: 785,000

    Fleet Profile

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

    than 5%.

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    Modest rental penetration of 15% in Brazil. Rental penetration is approximately 50% in the USA,

    60% in Japan and 80% in England.

    Rental penetration in the USA increased to approximately 50% in 2014 from 5% in 1993: 20

    years of continuous penetration growth.

    Growth drivers in the motorized access equipment market:low penetration

    10Source: Goldman Sachs and United Rentals

    20%

    35%

    40%43%

    50%

    0%

    20%

    40%

    60%

    1993 1998 2004 2009 2011 2014E

    Rental penetration in the USA

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    21%

    13%

    28%

    24%

    0%

    5%

    10%

    15%

    20%

    25%

    30%

    2010 2011 2012 2013

    Penetration of use has enabled the branches opened prior to the IPO to have an average annual

    growth of 22% in the last four years.

    Growth drivers in the motorized access equipment market:low penetration

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    Revenue Breakdown

    69%

    42% 38% 31%

    31%

    58% 62%69%

    2009 2010 2011 2012 2013

    New branches

    Established branches

    Growth drivers in the motorized access equipment market:geographic expansion

    121 Branches opened since January 2010

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    Revenues per type of use

    Construction sector is the major user of motorized access inBrazil

    13Source: Mills 2013, United Rental 2011 and Ramirent 1Q14

    58%69% 73%

    60% 63%

    25%

    23% 16% 35%19%

    17%8% 11% 5% 18%

    Brazilian Market Mills United Rentals(pre-merger RSC)

    United Rentals(post-merger RSC)

    Ramirent

    Others

    Spot

    Industry

    Construction

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    2Q14/2Q13 2Q14/1Q14 LTM2Q14/LTM2Q13 CAGR 10-13

    Net Revenue +9% +1% +26% 55%

    EBITDA +12% -6% +32% 58%

    Rental Financial Performance

    14

    In R$ million

    1 ROIC: Return on Invested Capital. Until 2010, ROIC was calculated considering the effective income tax rate for the period, while from 2011 onwards ROIC was calculated considering atheoretical 30% income tax rate.

    76.1

    90.193.9

    97.2 97.3 98.6

    43.649.3 52.3

    56.0 58.4 55.1

    57.3% 54.7% 55.7%57.7% 60.1%

    55.8%

    19.1% 18.5% 18.1% 17.5% 17.1%13.2%

    1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

    Net Revenue EBITDA EBITDA Margin (%) ROIC

    95.1

    175.4

    253.5

    357.3387.0

    51.0

    93.6

    141.2

    201.2221.8

    53.6% 53.4%55.7%

    56.3%

    57.3%

    19.2% 16.5% 18.2% 18.1% 16.2%

    2010 2011 2012 2013 LTM2Q14

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    Heavy ConstructionCinta costeira - Panam

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    Transposition of theSo Francisco river* Belo Montehydroelectric powerplant* North beltway* Subway line 5 SP* Transnordestina

    railroad* Oeste-Leste railroad* Paraguau shipyard* Silver monorail line -SP* Gold monorail line-SP* Reduc-ComperjPipeline

    Belo Monte hydroelectricpower plant Jirau hydroelectric powerplant* Vales S11D project Oeste-Leste railroad Norte-Sul railroad North beltway Subway line 5 SP Companhia Siderrgicado Pecm steel mill Salvador subway Olympic Park

    Colder and Teles Pireshydroelectric power plants Comperj refinery Transposition of the SoFrancisco river Vale projects Gold monorail line- SP Subway line 4 RJ Subway line 4 SP Cuiab light rail Goinia airport Pulp mill expansion- RS Paraguau shipyard

    Jirau hydroelectric power plant Viracopos and Guarulhos airports Braslia airport BRT Transcarioca Metropolitan Arch RJ East beltway- SP Jacu-Pssego highway

    Important contracts per stage 1 in the evolution of monthlyrevenue from projects

    16

    Newcontracts*

    Contracts with growingvolume of equipment

    Contracts with high volumeof equipment

    Contracts in thedemobilization process

    E

    v o

    l u t i o n o

    f r e v e n u e g e n e r a

    t i o n

    ( B a s i s

    1 0 0 =

    M a x i m u m

    m o n

    t h l y r e v e n u e

    i n t h e

    l i f e o

    f c o n s t r u c t

    i o n

    )

    Length of time of Mills participation in the construction work average cycle is 24 months

    * New stretches

    1 In 2Q14

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    Important construction work already started, which we are hired

    17

    Construction work Investiment Conclusion % formworkand shoring*

    Vales S11D project US$ 20 billion 2H18 0.4% 1

    Belo Monte hydroelectric power plant R$ 26 billion 2019 0.6% 2

    Companhia Siderrgica do Pecm

    steel mill

    US$ 5 billion 2H15 0.4% 1

    Subway line 4 - RJ R$ 8.5 billion 2016 2.0% 3

    Transnordestina railroad R$ 7.4 billion 2016 0.5% 4

    Subway line 5 - SP R$ 7.4 billion 2016 2.0% 3

    North beltway R$ 6.5 billion 2016 2.2%5

    Guaba expansion R$ 5 billion 2015 0.4% 1

    Salvador subway R$ 3.9 billion 2017 2.0% 3

    Norte-Sul railroad, southern stretch R$ 4 billion 2H15 0.4% 6

    *In similar construction jobs: 1) CSN plant; 2) Jirau hydroelectric power plant ; 3) Subway line 4 SP;4) stretch of Transnordestina railroad; 5) South beltway SP; 6) stretch of Norte-Sul railroad.

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    Characteristics of the major projects in progress

    Average term: 18 months

    Public-PrivatePartnership

    20%

    Public21%

    Private59%

    Source of Funds

    Industry33%

    Infrastructure62%

    Others5%

    Per sector

    1 In 2Q14

    Of th R$ 104 billi l d i t l R$ 70 billi

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    Of the R$ 104 billion planned, approximately R$ 70 billionhave been successfully auctioned, surpassing the projectsawarded to the private sector in the past ten years

    19

    Campinorte - Lucas do Rio Verde railway

    Curitiba subway

    Ports - 2nd stage - 18 contracts

    Ports - 1st stage - 31 contracts

    BR 262 (MG/ES)

    BR 116 (MG)BR 101 (BA)

    Tamoios

    So Paulo subway line 18

    BR 153 (GO/TO)

    BR 040 (DF-MG)

    BR 163/267/262 (MS)

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

    BR 163 (MT)

    VLT Goinia

    Confins airport

    Galeo airport

    So Paulo subway line 6

    BR 262 (MG/ES)

    BR 050 (MG/GO)

    Salvador subway line 2

    InvestmentsIn R$ billion

    2 0

    1 3

    2 0

    1 4

    Source: Mills, Goldman Sachs, and Credit Suisse

    Concessions should invest R$ 300 billion from 2015 to 2017

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    Source: Valor newspaper, June 24,2014, using data from BNDES, ministries and public agencies. Do notinclude railways that are part of the Programa de Investimentos em Logstica (Logistic Investment Program).

    Concessions should invest R$ 300 billion from 2015 to 2017,of which R$ 92 billion in logistics and R$ 88 billion in powergeneration

    2011-2017CAGR (%)

    Total

    27.0%

    9.0%

    5.6%

    11.5%

    7.8 13.015.6

    22.8 27.631.3 32.823.5

    30.831.8

    35.636.4

    40.3 39.5

    22.8

    25.826.6

    28.2

    29.3

    30.5 31.7

    54.1

    69.674.0

    86.6

    93.3

    102.1 104.0

    -

    20.0

    40.0

    60.0

    80.0

    100.0

    120.0

    2011 2012 2013 2014 2015 2016 2017

    Telecom

    Energy

    Logistics

    Infrastructure investments from concessionsin R$ billlion

    20

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    In R$ million

    2Q14/2Q13 2Q14/1Q14 LTM2Q14/LTM2Q13 CAGR 10-13Net Revenues +1% +9% +13% +12%

    EBITDA +2% 0% +17% +14%

    Heavy Construction Financial Performance

    21

    * Excluding the positive effect of tax reversal in the amount of R$ 1.5 million in 3Q13.

    1 ROIC: Return on Invested Capital. Until 2010, ROIC was calculated considering the effective income tax rate for the period, while from 2011 onwards ROIC was calculated considering atheoretical 30% income tax rate.

    47.5

    55.1 55.7 55.7 58.6

    51.055.5

    24.3 25.129.4 28.2 29.3

    25.6 25.6

    51.3%

    45.5%

    52.8%50.6%

    49.9% 50.2%

    46.2%

    18.6% 17.8%20.9% 19.7% 19.1%

    14.0% 12.5%

    1Q13 2Q13 3Q13 3Q13* 4Q13 1Q14 2Q14Net Revenue EBITDA EBITDA Margin (%) ROIC

    154.3

    131.6

    174.1

    217.0 220.9

    73.657.8

    84.3

    108.1 109.9

    47.7%43.9%

    48.5% 49.8% 49.8%

    24.1%

    12.1%

    17.2%19.2%

    16.3%

    2010 2011 2012 2013 LTM2Q14

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    Real EstateMast climbing platform

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    23

    13.7

    17.0

    10.3 10.210.6

    24.4%

    -39.3%

    -1.7% 4.5%

    -60%

    -40%

    -20%

    0%

    20%

    40%

    60%

    80%

    100%

    -

    2.0

    4.0

    6.0

    8.0

    10.0

    12.0

    14.0

    16.0

    18.0

    1H10 1H11 1H12 1H13 1H14

    Y o

    Y ( % )

    L a u n c h e s

    ( i n

    R $ m

    i l l i o n )

    1 Brookfield, Cyrela, Direcional, Even, Eztec, Gafisa, Helbor, MRV, PDG, Rodobens, Rossi, Tecnisa, Trisul and Viver

    Launches were up 4.5% in the 1H14, while sales declined16.0%

    15.7

    17.0

    14.2 14.3

    12.0

    8.4%

    -16.8%

    1.3%

    -16.0%

    -60%

    -40%

    -20%

    0%

    20%

    40%

    60%

    80%

    100%

    -

    2.0

    4.0

    6.0

    8.0

    10.0

    12.0

    14.0

    16.0

    18.0

    1H10 1H11 1H12 1H13 1H14

    Y o

    Y ( % )

    S a

    l e s

    ( i n

    R $ m

    i l l i o n s )

    Total launches 1in R$ billion

    Total sales 1in R$ billion

    Source: Operational reports from companies and Mills

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    24

    Growth drivers of the residential market

    High housing deficit

    Growing housing financing

    Higher purchasing power

    Lack of labor and higher labor cost

    Industrialization of the construction process

    Geographic expansion

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    The major challenge for the sector: labor

    25Source: Sondagem Especial Construo Civil, April 2011, CBIC, CNI, and Mills

    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

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    Stages of industrialization of the construction process

    26

    1 Approximately 800 m 2Source: Tchne 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 required 1 30 people 20 people 12 people 10 people

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    2Q14/2Q13 2Q14/1Q14 LTM2Q14/LTM2Q13 CAGR 10-13

    Net Revenue -12% -1% -5% +35%

    EBITDA +2% +7% -20% +29%

    Real Estate Financial Performance

    27

    In R$ million

    1 ROIC: Return on Invested Capital. Until 2010, ROIC was calculated considering the effective income tax rate for the period, while from 2011 onwards ROIC was calculated considering atheoretical 30% income tax rate.

    64.9 66.5

    72.4

    54.2

    59.5 58.8

    27.7

    24.6 24.417.1

    23.5 25.2

    42.8%

    37.0%33.7%

    31.5%

    39.4%

    42.8%

    12.8%9.3% 8.2%

    3.2%

    6.6%7.9%

    1Q13 2Q13 3Q13 4Q13 1Q14 2Q14Net Revenue EBITDA EBITDA Margin(%) ROIC

    105.1

    155.8

    238.0258.0

    245.0

    43.9

    66.0

    113.4

    93.8 90.1

    41.7% 42.4%47.7%

    36.4% 36.8%

    23.5%

    14.3% 15.7%

    8.1% 6.5%

    2010 2011 2012 2013 LTM2Q14

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    Growth Plan

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    il l l l f d i i d h

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    30Source: The Conference Board Total Economy Database, January 2014

    Brazil presents a low level of productivity compared to otherdeveloping countries

    17.2%

    34.0%

    8.1%

    17.1%

    28.2%

    34.5%

    31.4%

    Brazil Russia India China South Africa Chile Mexico

    GDP per person employed, % of U.S. 2013

    Productivity growth is essential for higher sustainable GDP growth

    Mill i d R$ 142 illi i l i i 1H14 f

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    7447 51

    106

    26 37

    104185

    60

    90

    1325

    131

    163

    161

    267

    102

    169

    15

    18

    20

    36

    16

    324

    413

    292

    499

    157

    231

    2010 2011 2012 2013 1H14 2014E

    Rental

    Real Estate

    Heavy Construction

    In R$ millionCapex

    Realized 1H14 /2014 CapexBudget (%)

    71%

    53%

    60%

    Mills invested R$ 142 million in rental equipment in 1H14, ofwhich R$ 49 million in 2Q14

    31

    Total 61%

    Rental equipment

    Reclassified excluding the Industrial Services business unit, for comparison.

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    Cash flow becomes positive

    33

    (340)

    (219)

    (31)

    (154)

    (13)

    11

    (400)

    (350)

    (300)

    (250)

    (200)

    (150)

    (100)

    (50)

    -

    50

    2010 2011 2012 2013 1T14 2T14

    Free cash flow

    1 Net cash generated by operating activities less net cash used in investment activities

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    Mills Investor Relations

    Tel.: +55 21 2123-3700

    E-mail: [email protected]

    www.mills.com.br/ri


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