Morgan Stanley 18th Annual Latin America Conference

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    September 2015

    Corporate Presentation

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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 andcommercial constructions

    • Products: engineering solutionsand 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 other

    Mills’ 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

    1

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

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    2

    Mills – 2Q15LTM Financial highlights per business unit

    In R$ million

    EBITDA margin ROIC

    32.0% 4.3%

    1.1% -7.6%

    47.7% 7.4%

    32.4% 2.0%329.0

    157.1

    158.8

    1.8

    197.3

    63.1

    685.1

    221.9

    Net Revenue EBITDA

    Heavy Construction

    Real Estate

    Rental

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    ¹ Reclassifiedexcluding the Industrial Services business unit for comparison

    ² ROIC: Return on Invested Capital.

    ³ 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

    213.0

    191.5 191.5

    181.9163.9

    147.9

    105.9

    66.779.0

    55.647.4 52.1

    33.4

    3.211.3

    -6.2-14.5

    -8.2

    49.7%

    34.8%

    41.3%

    30.6%

    28.9%

    35.3%

    12.3%9.4% 9.9%

    6.6% 4.0%2.0%

    2Q14 3Q14 3Q14³ 4Q14 1Q15 2Q15

    Net revenue EBITDA Net earnings EBITDA margin (%) ROIC²

    3

    Financial Performance1

    In R$ million

    2Q15/2Q14 2Q15/1Q15 LTM2Q15/2014³ CAGR 12-14³

    Net revenue -31% -10% -14% 9%

    EBITDA -51% 10% -37% 2%

    Net earnings n.a. n.a. n.a. n.a.

    665.5

    832.3794.2 794.2

    685.1

    339.0

    403.1

    335.7 350.2

    221.9

    151.5172.6

    64.381.7

    -25.7

    50.9%48.4%

    42.3%44.1%

    32.4%

    14.7%14.1%

    6.6% 6.6%

    2.0%

    2012 2013 2014 2014³ LTM2Q15

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    Positive cash flow of R$ 37 million in 2Q15, reaching R$ 226million in the last twelve months

    4

    (340)

    (219)

    (31)

    (154)

    116

    (13)

    11

    7445

    7037

    (400)

     (300)

     (200)

     (100)

     -

     100

     200

    2010 2011 2012 2013 2014 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15

    Free cash flow1

    In R$ million

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

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    72 57 34 38 31 27

    134 174

    150106 106

    38

    194206

    231

    184

    144 137

    65

    Cashposition

    2015 2016 2017 2018 2019 2020

    Interest Principal

    Debt profile

    Debt amortization schedule1

    in R$ million

    5

    Credit lines available¹,2

    Used R$ 64.5 million

    Not used R$ 505.6 million

    ¹As of December 31st ,20142 Unsecured overdraft account+ Secured bank credit lines

    618

    138 480

    Gross debt Cash position Net debt

    Debt, as of June 30, 2015in R$ million

       A   l  r  e  a

       d  y  p

      a   i   d

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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

    6

    1.5x 1.5x 1.5x1.6x

    1.8x

    1.6x

    2.2x

    1.8x

    1Q14 2Q14 3Q14 4Q14 1Q15 1Q15 2Q15 2Q15

    8.0x

    7.1x

    6.1x

    5.2x

    4.0x

    4.5x

    3.3x

    3.9x

    1Q14 2Q14 3Q14 4Q14 1Q15 1Q15 2Q15 2Q151 1

    1Excluding R$ 40.1 million of non-recurring items from 1Q15 and R$ 44.9 million from 2Q15.

    1 1

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    ADD reached 1.2% of net revenue in 2Q15, positivelyimpacted by reversals of R$ 6.8 million

    0.3%

    1.7% 2.1%2.0%

    5.3%

    12.8%

    1.2%

    7.3%

    -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 1S15

    2010-2014 average = 2.3%

     As % of net revenuesChanges in allowance for doubtful debts (ADD)

    7

    4.2%

    -0.8%

    Ex clients under investigation

    6.8%

    3.2%

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    Planned sales for semi-new equipment have alreadyamounted R$ 40 million

    Target:

    • Sales above R$ 30 million in 2015

    • To reduce 10% of Rental assets in the next three years

    To reduce 20% of Real Estate assets in the next three years

    Ongoing actions:

    • International Market: establishment of new distribution channels and hiring ofcommercial representatives

    • Brazilian market: development of sales partners in the Real Estate market

    • Sales of semi-new equipment totaled R$ 13.5 million in 1H15

    8

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    Collection

    Operations

    Procurement

    Engineering

    Billing

    Centralization timeline

    3Q14 1Q15 2Q15 3Q15 4Q154Q14

     Administrative jobs

    Centralization aims more efficiency and control of processes

    9

    Organizational structure was resized, with annual savings of R$ 14 million

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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) oblige 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 Outros

    World fleet of motorized access equipment estimated at 1.1million units, being half of it in North America

    We estimate that the 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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    Rental

    88%

    Sales of newequipment

    3%

    Sales ofsemi-newequipment

    6%

    Others3%

    Net revenues per type of serviceIn 2Q15

    Construction sector remains the main user of Mills’

    motorized access equipment

    17

    Construction66%

    Industry16%

    Spot18%

    Rental revenue by useIn 2Q15

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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%0%

    10%

    20%

    30%

    40%

    50%

    60%

    < 24 24-48 48-72 72-96 >96

    18

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    98.691.0

    83.979.6

    74.5

    55.150.0

    33.234.4

    39.4

    55.8% 54.9%

    39.6%

    43.3%

    53.0%

    16.2%14.5%

    11.5%8.8%

    7.4%

    2Q14 3Q14 4Q14 1Q15 2Q15

    Net revenue EBITDA EBITDA margin (%) ROIC¹

    Rental – Financial Performance

    19

    1 ROIC: Return on Invested Capital.

    In R$ million

    2Q15/2Q14 2Q15/1Q15 LTM2Q15/2014 CAGR 12-14

    Net revenue -24% -6% -11% 21%

    EBITDA -28% 15% -20% 18%

    253.5

    357.3370.8

    329.0

    140.8

    207.0196.7

    157.1

    55.6%57.9%

    53.0%

    47.7%

    18.2% 18.2%

    11.5%

    7.4%

    2012 2013 2014 LTM2Q15

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    Heavy Construction

    Laguna bridge   – Santa Catarina

    Infrastructure investments are priority in Brazil However

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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 in 2015/16

    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

    C t ti j b h ld t t t th d f 2016 ti

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    2015 2016

    aug sep oct nov dec jan feb mar apr may jun jul aug sep

    Signaturesof 

    contracts

    Auction

    AuctionPublic Notice

    PublicHearing

    Studies Construction

    Estimated Schedule of Logistics investment program

    Construction jobs should start at the end of 2016, presentingrevenues opportunity for Mills in 2007 onwards

    24

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    25

    Rental revenue breakdown in 2Q15

    Public43%Private

    50%

    PPP7%

    Source of funds

    Industry29%

    Infrastructure

    61%

    Others10%

    Per sector 

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    55.5

    51.9 52.5 51.1

    41.8

    25.6

    21.4

    16.312.9 12.5

    46.2%

    41.2%

    31.0%

    25.3%29.8%

    16.3%

    13.3%

    9.9%

    7.0% 4.3%

    2T14 3T14 4T14 1T15 2T15

    Receita Líquida EBITDA Margem EBITDA (%) ROIC¹

    In R$ million

    Heavy Construction – Financial Performance

    26

    1 ROIC: Return on Invested Capital.

    2Q15/2Q14 2Q15/1Q15 LTM2Q15/2014 CAGR 12-14

    Net revenue -25% -18% -6% 10%

    EBITDA -51% -4% -29% 2%

    174.1

    217.0211.0

    197.3

    85.5

    111.4

    88.9

    63.1

    49.1% 51.3%

    42.1%

    32.0%

    17.2%

    19.2%

    9.9%

    4.3%

    2012 2013 2014 LTM2Q15

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    Real Estate

    Flying table

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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 (%)

    28

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    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 areasin %

    29

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    Stages of industrialization of the construction process

    30

    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

    L h d l d li d i 2Q15 ith ibl ti

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    31

    6.5

    7.6

    4.4

    5.2

    4.5

    3.217.6%

    -42.0%

    18.2%

    -13.7%

    -29.1%

    -65%

    -45%

    -25%

    -5%

    15%

    35%

    55%

    75%

    95%

     -

     1.0

     2.0

     3.0

     4.0

     5.0

     6.0

     7.0

     8.0

    2Q10 2Q11 2Q12 2Q13 2Q14 2Q15

       V  a  r .   (   %   )

       L  a  u  n  c

       h  e  s

       (   i  n

       R   $  m

       i   l   l   i  o  n

       )

    1 Cyrela, Direcional, Even, Eztech Gafisa, Helbor, MRV, Rodobens, PDG e Tecnisa.

    Source: Operational reports from companies and Mills

    Total launches1

    in R$ billion

    Launches and sales declined in 2Q15, with possible negativeimpact on construction activities throughout the year 

    6.5

    7.0

    5.5

    6.5

    4.6

    3.3

    8.2%

    -21.7%

    18.6%

    -29.1%-29.0%

    -60%

    -40%

    -20%

    0%

    20%

    40%

    60%

    80%

    100%

     -

     1.0

     2.0

     3.0

     4.0

     5.0

     6.0

     7.0

     8.0

    2Q10 2Q11 2Q12 2Q13 2Q14 2Q15

       V  a  r .   (   %   )

       S  a   l  e  s   (   i  n   R   $  m   i   l   l   i  o  n   )

    Total sales1

    in R$ billion

    Built-up area in square meters in the structure phase may

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    0

    2000

    4000

    6000

    8000

    10000

    12000

    14000

    16000

    18000

    2H09 2H10 2H11 2H12 2H13 2H14 2H15E

    Finishing

    Structure

    Foundation

    Source: Criactive

    p q p ysuffer contraction in 2H15, recovering in the beginning of2016

    Evolution in built-up area by phasein m2

    32

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    Residential50%

    Commercial36%

    Others15%

    Rental revenue per segmentIn 2Q15

    Rental revenues breakdown in 2Q15

    33

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    58.8

    48.6 48.645.4

    33.231.6

    25.2

    -4.7

    7.6 6.1

    0.1 0.2

    42.8%

    -9.6%

    15.7% 13.5%

    0.2% 0.7%

    6.5%2.1% 3.8% 0.4%

    -3.3%

    -7.6%

    2Q14 3Q14 3Q14¹ 4Q14 1Q15 2Q15

    Net revenue EBITDA EBITDA margin (%) ROIC²

    Real Estate – Financial Performance

    34

    ¹ Excluding non-recurring effects of R$ 14.5 million in 2014. of which R$ 12.3 million was in 3Q14.

    ² ROIC: Return on Invested Capital

    In R$ million

    2Q15/2Q14 2Q15/1Q15 LTM2Q15/2014 CAGR 12-14

    Net revenue -46% -5% -25% -6%

    EBITDA -99% 244% -68% -35%

    238.0

    258.0

    212.4 212.4

    158.8

    119.3

    100.9

    50.164.6

    16.2

    50.1%

    39.1%

    23.6%

    30.4%

    10.2%

    15.7%

    8.1%

    0.4%2.5%

    -7.6%

    2012 2013 2014 2014¹ LTM2T15¹

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    Mills – Investor Relations

    Tel.: +55 21 2123-3700

    E-mail: [email protected] 

    www.mills.com.br/ri