Mills Locacao Servicos E Logistica S.a. · BMFBOVESPA:MILS3

Mills Locacao Servicos E Logistica — Q3 2017 Earnings Presentation

23 slides from Mills Locacao Servicos E Logistica's earnings presentation, November 2017

  1. Slide 1: Corporate Presentation and 3Q17 Results

    Corporate Presentation and 3Q17 Results

  2. Slide 2: Corporate Presentation and 3Q17 Results

    Corporate Presentation and 3Q17 Results 1 Company Overview 2 Market Outlook 3 Financial Profile 2 Corporate Presentation and 3Q17 Results

  3. Slide 3: Overview of Mills

    Overview of Mills Complete in engineering products and services, in Brazil for more than 65 years. Company Overview Geographic Footprint • Mills is one of Brazil's largest specialty engineering services company and the largest provider of concrete formwork and tubular structures and motorized access

  4. Slide 4: Business Units

    Business Units Construction Rental Focus on Infrastructure, Industrial, Residential and Focus Civil Construction, Industry, Retail and Others. Commercial projects. Sales and rental of concreting and shoring, providing Rental and sale of motorized access equipment, such as engineering solutions, serv

  5. Slide 5: Organizational Structure

    Organizational Structure Sergio Kariya Chief Executive Officer Ricardo Gusmão Daniel Brugioni Sergio Kariya Avelino Garzoni Gustavo Zeno Strategic Clients Commercial and Operations Engineering and Administrative Marketing (Interim) New Financial and IR Technologies Headcount as of December 31 2.054

  6. Slide 6: Construction: Business Unit at a Glance

    Construction: Business Unit at a Glance “Best-in-class” engineering and technical capabilities and SLA Largest footprint and fleet in Brazil in all business units - High capillarity: present in 19 States and Federal District in 32 locations Diversified revenue streams - serves several segments throu

  7. Slide 7: Mills' Strategies

    Mills’ Strategies SHORT / MEDIUM TERM MEDIUM / LONG TERM  Cash flow discipline  Price increase in the Rental business unit  Focus on delinquency reduction  Exploration of new regions in Brazil  Costs reduction in the Construction business unit  Capex with attractive IRR restored  Potential as

  8. Slide 8: Market Outlook

    Corporate Presentation and 3Q17 Results 1 Company Overview 2 Market Outlook 3 Financial Profile 8 Corporate Presentation and 3Q17 Results

  9. Slide 9: Recent economic indicators show the worst may have passed

    Recent economic indicators shows that the worst may have passed for the Rental business unit GDP Growth SELIC (Basic interest rate) In % per year In % Better 13.1 Better Total GDP 2018 (Estimated): 2% 14.1 13.7 8.2 10.9 11.7 7.5 10.7 9.9 3.2 7.1 6.6 6.5 4.0 4.5 3.0 1.9 0.5 -0.2 2010 2011 2012 2013 2

  10. Slide 10: Rental market size hasn't changed much since the crisis began

    From the beginning of the crisis in 2014, the Rental capacity market size hasn’t changed much what can signaled opportunities for the recovery of utilization rates and price Market of Aerial Platforms and Handlers in Brazil 31 31 30 31 27 20 15 9 5 6 Comments/Assumptions • Imports YTD Sep17: 363 equ

  11. Slide 11: Heavy Construction Continues the Downward Trend

    Heavy Construction Continues the Downward Trend Investment Perspective - Projects compiled by BNDES – in R$ billion Forecast - per Realized year 2012 2013 2014 2015 2016 2017-2020 Electrical Energy 71.6 59.1 54.9 52.8 56.9 39.5 Telecommunications 34.3 39.6 37.1 32 27.5 26.7 Highways 19.7 19.5 17.9 1

  12. Slide 12: Financial Profile

    Corporate Presentation and 3Q17 Results 1 Company Overview 2 Market Outlook 3 Financial Profile 12 Corporate Presentation and 3Q17 Results

  13. Slide 13: Financial Context

    Financial Context Recovery driven by Rental Impact Actions to Recovery business unit Net Revenue (1) • Resizing of the company EBITDA - Construction Decrease of 75% • New comercial strategy on rental – 1100,0 1000,0 focus on non-construction segment 900,0 800,0 • Closing of 14 branches: 700,0 600,0

  14. Slide 14: Summary Financials

    Summary Financials In R$ million Net Revenue per Type Net Revenue per Segment 900,0 354.5 462.8 665.5 832.3 794.2 576.1 396.6 293.9 354.5 462.8 665.5 832.3 794.2 576.1 396.6 293.9 800,0 56.8 50.4 700,0 101.3 80.5 39.9 600,0 258.0 37.8 212.4 500,0 64.1 27.6 53.9 238.0 34.5 117.2 400,0 30.1 36.8 217.0

  15. Slide 15: Utilization Rate and Main works

    Utilization Rate and Main works Construction – Utilization Rate Main works in the 3Q17 100% 90% North and Northeast 80%  Salvador’s Subway – BA 70%  Transoceanic – BA 60%  BR-101 – AL 50%  Carajás Railroad 40% Expansion - PA Average LTM 3Q17 = 37.7% 30% 20% 10% 0% 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1

  16. Slide 16: Summary Financials

    Summary Financials In R$ million EBITDA¹ - Mills 51.4% 47.5% 47.0% 48.5% 45.3% 384.7 327.5 343.8 31.8% 217.4 12.9% 168.4 174.1 -0.6% 45.7 (1.5) 2010 2011 2012 2013 2014 2015 2016 LTM3Q17 LTM3T17 EBITDA¹ - Construction Business Unit EBITDA¹ - Rental Business Unit 70,0% 58.3% 58.3% 53.6% 53.4% 53.7% 6

  17. Slide 17: Non-recurring items

    Non-recurring items Non-recurring items = Number of branches evolution: Restructuring Expenses related to Mills Rental Construction Expenses Industrial Services¹ business unit 2014 2015 2016 2017 2014 2015 2016 2017 Branches 32 34 31 30 17 17 14 7 South Region  Expenses with closing and demobilizat

  18. Slide 18: Summary Financials

    Summary Financials In R$ million Costs and Expenses Net Profit (Loss) 900 167 800 622 152 560 585 700 516 515 42 480 103 600 402 424 38 92 11 16 21 6 500 64 2 14 209 232 203 400 164 180 185 300 125 172 200 276 340 335 348 344 314 290 100 238 2010 2011 2012 2013 2014 2015 2016 3Q17LTM 0 2010¹ 2011¹ 2

  19. Slide 19: We remain vulnerable to the macroeconomic scenario and client finances

    We remain vulnerable to the macroeconomic scenario and to the financial situation of our clients Allowance for Doubtful Debts (ADD) Evolution Delinquency Evolution In % of total net revenue Affected by signed and not honored 75.2% 76.4% 74.1% confession of 72.0% 73.9% indebtedness. 70.5% 7.3% 6.6% 7

  20. Slide 20: Indebtedness

    Indebtedness In R$ million  The weighted average maturity of our debt is 2.3 years at a cost of CDI+1.99% on September 30, 2017. Gross Debt Profile Principal Amortization Schedule 209.6 106.2 106.2 42.1% 57.9% 38.9 0.8 Cash/Restricted 2017 2018 2019 2020+ bank deposits Short Term Long Term 2nd issu

  21. Slide 21: Debt Indicators

    Debt Indicators In R$ million Adjusted Operating Cash Flow* / Financial Result Net Debt / Adjusted Operating Cash Flow* 3.0 5.0 4.9 4.2 3.8 3.5 2.0 2.3 2.3 1.4 0.8 0.9 3Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17  Debentures Covenants: (1) LTM Adjusted Operating Cash Flow*/Financial result >=

  22. Slide 22: Financial Summary

    Financial Summary In R$ million 2010¹ 2011¹ 2012¹ 2013¹ 2014² 2015³ 2016 LTM3Q17 % Part Net Revenue Consolidated 354.5 462.8 665.5 832.3 794.2 576.1 396.6 293.9 100.0% Construction 259.4 287.4 412.0 474.9 423.4 283.0 182.3 122.3 41.6% Rental 95.1 175.4 253.5 357.3 370.8 293.2 214.3 171.5 58.4% Adjus

  23. Slide 23: Disclaimer

    Disclaimer This presentation may contain statements that present expectations of the Management of Mills Estruturas e Serviços de Engenharia S/A (“Mills”) about future events or results. Such statements are based on beliefs and assumptions of our Management taken with our best knowledge and informat

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