Citi - 21st Annual Latin America Conference*

7/29/2019 Citi - 21st Annual Latin America Conference*

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Corporate PresentationMarch 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

Financial performance

Growth plan

3


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Mills at a Glance

One of the largest specialty engineering services company in Brazil

60 years of market leadership

4 business segments:

4

Heavy Construction

Jahu

Rental

Industrial

Services


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174

84

238

113

214

19

253

141

0

100

200

300

400

500

600

700

800

900

1000

Net Revenue EBITDA

Rental

Industrial Services

Jahu - Residential andCommercial

Heavy Construction

5

29%

24%

27%

20%

% Total

2012 Financial highlights per business segment

879.3

358.4

Mills Financial performance per business segment

R$ million

39%

5%

32%

24%

% Total

Total

55.7%

9.1%

47.7%

48.5%

40.8%

EBITDAMargin (%) ROIC (%)

18.2%

4.6%

15,7%

17.2%

14.7%


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6

Nacht family136%

Management3%

Free float61%

% Total Capital

Position: December 31, 20121 includes Snow Petrel

Mills Shareholder Structure


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Agenda

Executive Summary



Growth plan

7


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Heavy Construction

Transnordestina Railway


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So Paulos Subway Yellow Line Santo Antonio Hydroelectric Power Plant Dutra Highway Overpass (So Paulo)

Heavy Construction

Focus on large and complex infrastructure projects

Products:

Engineering solutions and equipment rental: formwork and shoring

Planning, design, technical supervision, equipment and related services

Market leaderExtensive track record with 60 years of experience

Critical success factor is reliability

Main clients are the Brazilian largest contractors, such as

Number of contracts: 288 at the end of 2012


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Oil and Gas405

Mining57

Steel28

Chemical30

Pulp and Paper30

Others483

Industry investments 2013-2016R$ 1,033 billion

10

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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1.00

0.58

0.56

0.54

0.68

- 0.50 1.00

USA

Brazil

Russia

India

China

Infrastructure

Infrastructure Market Outlook

12

To ensure its competitive edge in the global scenario and to keep its growth rates at a sustainable pace,Brazil will have to invest heavily in the infrastructure sector in the coming years

Source: 2009 World Economic Forum

Dficit em infraestruturaUSA Index = 1.0 - 2008-2009 average

1.00

0.46

0.61

0.61

0.75

- 0.50 1.00

USA

Brazil

Russia

India

China

Ports

1.00

0.38

0.81

0.94

0.85

- 0.50 1.00

USA

Brazil

Russia

India

China

Railways

1.00

0.47

0.41

0.53

0.71

- 0.50 1.00

USA

Brazil

Russia

India

China

Roads


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The construction work related to World Cup and Olympic events represented 22% of the

Heavy Construction business segments 4Q12 revenue

13Source: 3 Balano das aes do Governo Brasileiro para a Copa Report on April 2012 and Mills

4Q12 RevenueR$ 47.3 million

6.8

7.3

2.3 2.40.3

2.6

4.5

0.3

0.6

0.3

16.9

2.3

7.6

Concluded Under constructionwork

Wating for theconstruction work to

start

On studying stage orlicensing process

Investments for the 2014 World Cup by project stageTotal: R$ 27 billion

Stadiums Urban Mobility Airports Ports

World Cup andOlympics

22%

Industry

25%

Infrastructure39%

Others14%


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Sport events: the cherry of the cake

14

= = =12 stadiums(R$ 6.7 billion)

5 highways10.4 hydroelectric

powerplant31 railroad2

1 Considering the average investment of the Bus Rapid Transit (BRT): Transcarioca(R$ 1.3 billion), Transolmpica(R$ 2.2 billion) and Transoeste(R$ 0.7 billion)2 Investiment in the Norte-Sulrailway (R$ 6.7 billon)3 Investment in the Santo Antniohydroelectric powerplant (R$ 16.0 billion)


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Belo MontehydroelectricpowerplantMonorail line Gold Subway line 5 SP Subway line 4 RJ

Auport VerdostadiumLight rail CuiabNorte-Sulrailway New phases of Ponta da Madeiraport

Jirau, Colderand Teles Pireshydroelectric powerplants Abreu e Limarefinery Paranaensesarena Monorail line Silver - SP

Transordestinarailway BR-448Comperjrefinery Manaus airport BRT Transcarioca Porto Maravilha

AratuPort Metropolitan arch RJ Carajsrailway BRT Belm

Subway line 2 - SP MaracanstadiumMan Garrinchastadium Sudesteport Ponta da Madeiraport

Serra Lestemine

Viracopos airport Braslia airport Surroundings of the Maracanstadium Surroundings of the CorinthiansArena

Bridge over the Araguaia River Expansion of Carajs mine Paraguau shipyard

New phases of Belo Montehydroeletric powerplant New stretches of subway lines 4 and 5 New stretches of Monorail line Gold BRT Fortaleza

Guarulhos airport Fortaleza airport Natal airport

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*


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16

Characteristics of the major projects in progress

Public32%

Private39%

Public-Private

Partnership29%

Source of Funds


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Construction Applied technological innovation

17

Alumills

AutomaticClimbingFormwork

SM Mills


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35.7

41.742.7

34.2

31.830.6

33.2 33.2

36.1

39.3

41.9

45.545.5

47.3

16.4

21.6 22.3

13.3

15.614.1

8.6

14.4

19.5 18.9

21.2

24.122.8

20.2

45.9%

51.9%52.2%

38.8%

48.9%46.2%

26.0%

43.5%

54.0%

48.0%50.6%

52.9%

50.2%

42.7%

24.4%

28.5% 25.5%

18.8%

14.4%12.1%

4.5%

12.0%

17.5% 16.6%17.8%

19.7%18.3%

14.8%

0%

10%

20%

30%

40%

50%

60%

-

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 3Q11* 4Q11 1Q12 2Q12 3Q12 3Q12* 4Q12

Net Revenue EBITDA EBITDA Margin ROIC

Heavy Construction Financial performance

18

+31.2% +3.6% - 1,130 bps - 270 bps

+3.9% - 11.6% - 750 bps - 350 bps

In R$ million

4Q12/4Q11

4Q12/3Q12*

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 negative impact of R$ 5.8 million of Allowance for Doubtful Debts (ADD) in 3Q11 and the positive impact of the provisions reversal in the amount of R$ 1.5 million in 3Q12

J h R id ti l d C i l


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19

Jahu - Residential and Commercial

Reserva do Paiva Pernambuco


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Jahu Residential and Commercial

Focus on residential and commercial construction

Products:

Engineering solutions and equipment sales and rental: formwork, scaffolding and shoring

Market leader

Innovative product - Easy-Set aluminum formwork - to serve low income housing construction

Clients are the Brazilian real estate companies, such as

Number of contracts: 4,361 at the end of 2012

20
http://www.pdgrealty.com.br/pdg/Capa.aspx


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21Source: 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

22

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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23Source: 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


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24

Great penetration of concrete wall for the Minha Casa, Minha Vidaprogram

Use of concrete wall should reach 40% of the properties of the Minha Casa, Minha Vidaprogram in2014/15

3%

97%

2010/11

15%

85%

2012/13

40%

60%

2014/15

30,000 HU 150,000 HU 400,000 HU

Concrete wall construction Construction using other systems

Source: Criative


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25

Applied technological innovation: reduction in labor and construction cycle

Easy set

Mills Deck Light Alumalight

Alumills Mast Climbing Platform

SL-2000


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26

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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22.7 21.8

27.9

32.8

29.2

34.7

39.4

52.5 52.5

58.960.5 60.5

66.0

10.3 10.011.9 11.6 12.3

13.516.4

23.926.3 27.2

33.8

29.4

26.1

45.3% 46.0%

42.8%

35.5%

42.0%38.8%

41.6% 45.5%

50.1%46.1%

55.9%

48.6%

39.6%

29.2%

23.6% 21.3%

22.3% 15.2%13.0% 12.5%

16.3% 15.6% 14.8%

20.2%

16.9%

12.6%

0%

10%

20%

30%

40%

50%

60%

-

10.0

20.0

30.0

40.0

50.0

60.0

70.0

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 3Q12* 4Q12


Jahu Financial performance

27

4Q12/4Q11

4Q12/3Q12*

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

+ 25.9% + 9.5% - 590 bps - 370 bps

+ 9.1% - 11.2% - 900 bps - 430 bps

Rental Motorized Access Equipment


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Rental Motorized Access Equipment

Castelo Stadium Fortaleza, CE


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Rental - Motorized Access Equipment Rental

Serves all Mills business segments as well as the automotive, retail and logistics sectors, among others

Products:

Rental and sale of motorized access equipment, such as aerial work platforms and telescopichandlers, to lift people or cargo, respectively

Market leader

Cross-selling with all other Mills business segments

Elected "Best Company for Access of the Year" by the International Awards for Powered Access (IAPAAwards) for the year of 2011

Number of contracts: 1,597 at the end of 2012

29


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Motorized Access Equipment Rental market outlook

30

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

31Source: 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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32

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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17.2

21.3

25.8

30.833.7

41.2

45.6 45.6

54.956.5 55.4

67.4

74.2

9.811.9

14.6 14.7

18.922.3 21.7

25.0

30.734.9

31.4

38.036.9

57.0% 55.8% 56.6%

47.6%

56.0%54.1%

47.6%

54.8% 56.0%

61.8%56.6% 56.5%

49.8%

23.5%

19.6%17.3%18.7% 17.3%

17.1%

12.9%16.0%

18.6%

20.3%

16.3% 16.3% 16.9%

0%

10%

20%

30%

40%

50%

60%

70%

-

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 3Q11* 4Q11 1Q12 2Q12 3Q12 4Q12


Rental Financial Performance

33

In R$ million


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

+ 35.3% + 20.2% - 620 bps - 170 bps

+ 10.2% - 2.9% - 670 bps + 60 bps

4Q12/4Q11

4Q12/3Q12

I d i l S i


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Rental Financial performance

34

17.2

21.3

25.8

30.833.7

41.2

45.6 45.6

54.956.5

55.4

67.4

9.811.9

14.6 14.7

18.922.3 21.7

25.0

30.7

34.9

31.4

38.0 37.4

57.0% 55.8% 56.6%

47.6%

56.0%54.1%

47.6%

54.8%56.0%

61.8%

56.6% 56.5%

50.40%

23.5%

19.6%17.3% 18.7% 17.3%

17.1% 12.9%

16.0%18.6%

20.3%

16.3% 16.3% 17.20%

0%

10%

20%

30%

40%

50%

60%

70%

-

10.0

20.0

30.0

40.0

50.0

60.0

70.0

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 3Q11* 4Q11 1Q12 2Q12 3Q12 4Q12



In R$ millions

* Excluding the negative effect of R$ 3.3 million of Allowance for Doubtful Debt (ADD) in 3Q11

+35.3% +21.6% - 566 bps - 148 bps

+ 10.2% +1.8% - 610 bps +83 bps

4Q12/4Q11

4Q12/3Q12

Industrial Services

Ocean Star Platform Angra dos Reis, RJ


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Industrial Services

Focus on large industrial plants, both on construction and maintenance phases

Products offered during construction and maintenance:

access structures rental and erection/dismantling services

industrial painting and surface treatments

thermal insulation

Cross-selling with Heavy Construction business segment

Recurring and less volatile revenue base

Labor intensive, instead of capital intensive, as the other business segments

Industries served: oil & gas, petrochemicals, pulp & paper, steel, among others

Number of contracts: 114 at the end of 2012

35


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Petrobras total investment plan for 2012-2016 period: US$ 236.5 billion

Petrobras pre-salt investment plan for 2012-2016 period: US$ 49.7 billion

US$ 131.6 billion will be invested in E&P in Brazil, with the aim of increasing domestic oil production from

2.0 million bpd (Mbpd) in 2011 to 2.5 Mbpd in 2016, with 0.8 Mbpd related to pre-salt

Critical resources needed up till 2020:

65 drilling rigs

68 platform-vessels

361 special support vessels

US$ 51.7 billion will be invested in refining, of which 48% to expand the refining facilities, the major

refinery projects being Abreu e Lima (PE) and Comperj (RJ).Source: Petrobras 2012-2016 Business Plan and Revista Exame (6/27/2012).

Petrobras has announced its 2012 - 2016 Business Plan with investments totaling US$236.5 billion in this period

36

44

61

94

2010 2015 2020

# Petrobras Plataforms

CAGR10-20: +7.9%


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Industrial Services Financial performance

37

40.0

46.5

52.5

56.4

50.2

57.5 56.9

50.2 50.9

54.8

48.8

59.3

6.3 6.9 7.0

5.8 6.1

8.1

4.1 2.3 6.2 4.7

0.1

8.4

15.8% 14.9% 13.4%

10.3%

12.2%

14.2%

7.2%

4.7%

12.1%

8.5%

0.2%

14.2%

17.7%17.3%

14.9%

14.8%

9.6%

14.2%

3.2%

-1.2%

7.5%3.9%

-6.2%

13.3%

-10%

-5%

0%

5%

10%

15%

20%

-

10.0

20.0

30.0

40.0

50.0

60.0

70.0

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


In R$ millions


+ 18.2% + 259.6% +950 bps +1,450 bps

+ 21.5% + 7,268.7% + 1,400 bps +1,950 bps

4Q12/4Q11

4Q12/3Q12


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Agenda

Executive Summary



Growth plan

38


39/44

115.5

131.3148.9 154.2 145.0

164.0175.1

175.1

193.5 199.1211.1

222.2 222.2

246.8

42.850.5 55.9 45.4

52.8 58.0 50.859.9

76.4 86.2 84.496.1 90.4 91.7

18.726.1 28.5 30.1 22.2 22.6 17.8 23.8

29.5 32.739.2 38.0 34.7

41.6

37.0%38.4% 37.6%

29.4%

36.4%35.4%

29.0%

34.2%

39.5%

43.3%

40.0%

43.2%

40.7%

37.1%

23.1%23.0% 20.3%

18.8%

13.8%12.7%

8.6%11.1%

14.2% 15.1%13.6% 15.8% 14.5%

14.5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

-

50.0

100.0

150.0

200.0

250.0

300.0

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 3Q11* 4Q11 1Q12 2Q12 3Q12 3Q12* 4Q12

Net Revenue EBITDA Net Earnings EBITDA Margin ROIC

39

MillsFinancial performance

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 ROIC was calculated consideringa theoretical 30% income tax rate.

* Excluding the negative impact of R$ 9.1 million of Allowance for Doubtful Debts (ADD) in 3Q11 and the positive impact of the provisions reversal in the amount of R$ 6.8 million in 3Q12

4Q12/4Q11 +27.5%| +20.0% - 234 bps +27 bps+41.0%

4Q12/3Q12* +11.1% +1.4% - 354 bps +3 bps+19.9%


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40

1.0x

0.7x0.7x

0.8x

1.9x 1.9x

1.7x

1.5x

1.3x

1.2x 1.2x

0.0

0.5

1.0

1.5

2.0

2.5

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

Net Debt/LTM EBITDA

Target = 1.0x

Capturing opportunities maintaining the commitment to low leverage


41/44

Agenda

Executive Summary



Growth plan

41


42/44

42

We plan to invest R$ 296 million in organic growth in 2013

2013 Capex(%)

18%

38%

2%

42%

in R$ million

Capex

7447 51 54

104185

60

112

25

17

5

6

161

163

161

124

15

18

21

0

50

100

150

200

250

300

350

400

450

2010 2011 2012 2013 Budget

Rental

Industrial Services

Jahu - Residential andCommercial

Heavy Construction

298 296

430

349


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43

We are present in 14 states of Brazil with 46 branches

Branch locationsAs of December 28, 2012

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 Grandedo Norte

Cear

Piaui

Maranho

Tocantins

Par

Rondnia

Acre

Roraima Amap

Amazonas

Mato Grosso

Parana

Alagoas

States with Mills Presence

Rental

Heavy Construction

Industrial Services

Jahu

Pernambuco


44/44

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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Citi - 21st Annual Latin America Conference*