Mills Presentation
Disclaimer
“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 previous 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 Comissão de Valores Mobiliários (CVM).”
2
Agenda
Who we are
Mills’ Divisions
Growth Plan
3
Mills at a Glance
Uncontested market leader in providing temporary concrete formwork and tubular structures in
the Brazilian market
One of the major players in the industrial services and motorized access equipment
Long-term relationship with the major companies in the sector
Superior capacity and scale, scope of services and market coverage
4 divisions:
Heavy
Construction
Jahu
Industrial
Services
Rental
4
Mills – Important Projects
Excellent track-record of performance, having participated in the Brazilian largest projects over the last 59 years
Rio – Niterói bridge
Itaipu
Octávio Frias de
Oliveira bridge
Brasília
City of Arts
5
Mills – Financial performance
Mills has excellent financial track record with average revenue growth of 37% per year and average
EBITDA growth of 68% per year in the last four years.
Net Revenues (R$ million)
EBITDA (R$ million) and EBITDA Margin (%)
CAGR 07-11: 68%
CAGR 07-11: 37%
678
16%
30%
39%
35%
35%
238
550
Acquisition of Jahu
Start-up Equipment
Rental Division
Sales of Events Division
195
404
158
Entrance of
PE Funds
299
90
192
30
2007
2008
2009
2010
2011
2007
2008
2009
2010
2011
6
Mills – Financial performance
Net earnings had an average annual growth of 72% p.a. in the last five years.
Net earnings (R$ millions)
Net debt (R$ millions) and Net debt/EBITDA
103.3
Net debt/EBITDA
1.0x
CAGR 07-11: 72%
2.1x
1.2x
-0.1x
1.6x
92.2
375.8
68.4
187.7
182.4
30.6
10.5
31.3
-9.7
2007
2008
2009
2010
2011
2007
2008
2009
2010
2011
7
Mills – Financial performance per division
2011 Financial highlights per division
R$ million
800
% Total
EBITDA
Margin (%)
ROIC (%)
Rental
53.4%
16.5%
Industrial Services
9.7%
5.9%
Jahu - Residential and
Commercial
42.4%
14.3%
Heavy Construction
43.9%
12.1%
35.1%
12.3%
678
700
600
26%
175
500
400
215
32%
% Total
300
200
238
156
23%
100
132
19%
94
39%
21
9%
66
28%
58
24%
0
Net Revenue
Total
EBITDA
8
Mills – Desempenho da ação
Ticker: MILS3
On March 30, 2012, Market Cap = R$ 2.9 billions
Nov30,10
3.1
Apr15,10
1.4
Mills
IBOVESPA
Small Cap
IMOB
*Updated until March 30, 2012.
Var. since Apr15,10 (IPO)*
+ 102.6 %
- 8.5 %
+ 24.3 %
- 6.8 %
9
Mills – Shareholder Structure
Position: 28/02/2012
10
Mills – Main produtos
Project
11
Mills – Main produtos
Concrete Forms
12
Mills – Main produtos
Shoring
13
Mills – Main produtos
Access
14
Mills – Main produtos
Motorized Access Equipment
15
Mills – Competitive Advantage
Widely recognized technical expertise, agility, innovative solutions and reliability granted Mills longstanding relationships with many of Brazil’s major companies in the sector
Reliability
Agility and
Machless
Execution
Creative
Solutions
National
Coverage
Tailor Made
Projects
Complete
Product
Portfolio
16
Mills – Growth Drivers
Exposure to the following drivers:
Brazilian infrastructure investments, including PAC
Brazilian real estate investments
Brazilian industry investments, including oil & gas
Investments to enable world events – 2014 World Cup and 2016 Olympic Games
17
Agenda
Who we are
Mills’ Divisions
Growth Plan
18
Heavy Construction Division
Mané Garrincha Stadium – Brasília, DF
Heavy Construction division
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 leader
Extensive track record with 59 years of experience
Critical success factor is reliability
Main clients are the Brazilian largest contractors, such as
São Paulo’s Subway – Yellow Line
Santo Antonio Hydroelectric Power Plant
Dutra Highway Overpass (São Paulo)
20
Heavy Construction – market outlook
Unparalleled infrastructure investments are expected for the next few years reinforced by major world
events.
Investments in Brazil should amount R$ 3.3 trillion in the 2011-2014 period
Industry: R$ 1.0 trillion, growth of 170% compared to the 2006-2009 period
Infrastructure: R$ 401 billion, growth of 62% compared to the 2006-2009 period
Other sectors: R$ 1.9 trillion
Industry investments 2011-2014
R$ 1,047 billion
Infrastructure investments 2011-2014
R$ 401 billion
Oil & Gas
378
Ports
18
Others
493
Roads
51
Mining
72
Pulp & Paper Chemical
28
40
Steel
36
Source: BNDES - “Visão do Desenvolvimento” Report No 95, June 20, 2011
Others
20
Energy
139
Railroads
60
Sanitation
41
Telecom
72
21
12 cities will host the 2014 World Cup in Brazil, demanding investments in urban mobility,
airports and stadiums
Planned investment for World cup
In R$ billion
Source: Mills, Ministry of Sports and Veja
22
Large project pipeline remains robust
2005
In R$ Billion
0,2
0,3
Curitiba Stadium
Porto Alegre Stadium
Natal Stadium
Fortaleza Stadium
Cuiabá Stadium
Recife Stadium
Amazônia Stadium
Salvador Stadium
Brasília Stadium
Transoeste
Belo Horizonte Stadium
São Paulo Stadium
Rio de Janeiro Stadium
Highway Arch - RJ
Transcarioca Highway
Transolímpica Highway
Monorail Line 17 Gold - SP
Açu Superport
Beltway - Eastern Section
Subway Line 4 - RJ
Carajás Railroad
West-East Railroad
Transordestina Railroad
Beltway - Northern Section
North - South Railroad
Subway Line 5 - SP
Hydroelectric Powerplant Jirau
Hydroelectric Powerplant Santo Antônio
Premium 2 Ceará Refinery
Abreu e Lima Refinery - PE
Hydroelectric Powerplant Belo Monte
COMPERJ Refinery - RJ
Premium 1 Maranhão Refinery
0,4
0,5
0,5
0,5
0,5
0,6
0,7
0,7
0,7
0,9
0,9
1,2
1,3
2,2
2,9
Mills’ presence
3,4
4,0
4,0
4,5
5,3
5,4
6,1
6,7
6,9
13,1
16,0
22,0
25,7
26,2
29,2
40,2
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Scheduled dates for start and end of construction jobs
Source: Anuário Exame 2011-2012 - Infraestrutura
23
Jahu - Residential and Commercial Division
Via construction project – Brasília, DF
24
Jahu – Residential and Commercial division
Focus on residential and commercial construction
Products:
Engineering solutions and equipment sales and rental: formwork, scaffolding and shoring
Market leader with strong brand name: Jahu
Business acquired in 2008
Innovative product - Easy-Set aluminum formwork - to serve low income housing construction
Main clients are the Brazilian largest real estate companies, such as
25
Residential and Commercial – market outlook
Governmental programs and the increasing penetration of real estate financing indicate solid
growth potential for the residential and commercial real estate segment
Brazilian housing deficit is of at least 7.2 million houses
New 700,000 units per year are required to couple with the demographic growth of the Brazilian families
Housing financing has increased 5x in the last five years, driven by credit availability, lower inflation and
lower interest rate
Housing financing is very small compared to other countries. In 2009, the Brazilian total housing
financing/GDP was 3%, compared to 77% in England, 68% in USA, 28% in France and 20% in Chile.
In 2010, the Brazilian total housing financing/GDP was 4% and it is expected to reach 11% by 2014.
Government program for low income housing, “Minha Casa Minha Vida”, targets investments of R$ 278
billion in the 2011-2014 period.
Lack of labor, higher labor costs and need to shorten construction cycle will demand more industrialized
processes in the Brazilian residential and commercial construction market.
Source: Brazilian Central Bank , ABECIP Associação Brasileira das Entidades de Crédito Imobiliário e Poupança and PAC2 Report
26
The use of industrialized building processes in construction projects is still limited
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
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
Company facing lack of skilled labor?
no
11
yes
89
Source: Sondagem Especial Construção Civil, April 2011, CBIC and CNI
1
The percentages do not sum 100% because each entrepreneur could choose up to three options
27
Real estate launches showed growth of 10% in relation to 2010, indicating continuous strong
demand in the residential and commercial construction market in 2011
10%
Source: reports from 13 public real estate companies and Mills analysis
6%
28
Industrial Services Division
Paul Wolff Plataform, Estaleiro Mauá (shipyard) – Niterói, RJ
29
Industrial Services division
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 division
Recurring and less volatile revenue base
Labor intensive, instead of capital intensive, as the other divisions
Industries served: oil & gas, petrochemicals, pulp & paper, steel, among others
Unique exposure to Brazilian industrial capacity growth and oil & gas industry
30
Industrial Services – market outlook
Recent oil field discoveries have taken Brazil into a new level within the Oil & Gas scenario, while
other basic industries are also due to receive significant new investments
Driven by the recent pre-salt discoveries, Brazil oil & gas reserves have the potential to increase by more
than 3x, from 15 to 51 billion boe, transforming Brazil into the world’s 9th hydrocarbons reserves holder
Total investment in Oil & Gas in Brazil is expected to be R$ 378 billion in the period 2011-2014, of which
R$ 303 billion, or 80%, from Petrobras
Total investment in the Brazilian industry should amount R$ 1.0 trillion in the period 2011-2014
Fixed investments in Brazil is expect to range from 19% to 22% of GDP in the next 3 years
Source: Department of Energy of the US, Petrobras, ANP and BNDES
31
Petrobras has announced its 2011-2015 business plan with investments totaling US$ 224.7
billion in this period
Petrobras total investment plan for 2011-2015 period: US$ 224.7 billion
Petrobras pre-salt investment plan for 2011-2015 period: US$ 53.4 billion
US$ 117.7 billion will be invested in E&P in Brazil, with the aim of increasing domestic oil production from
2.1 million bpd in 2010 to 3.1 million bpd in 2015, with 0.5 million bpd related to pre-salt
Critical resources needed up till 2013:
26 drilling rigs
53 production platforms
465 special support vessels
US$ 70.6 billion will be invested in refining, of which 50% to expand the refining facilities, the major
refinery projects being Abreu e Lima (PE), Comperj (RJ) and Premium I (MA)
Source: Petrobras – 2010-2014 Business Plan and 2011-2015 Business Plan
32
Rental Division – Motorized Access Equipment
Energia Eólica de Praia Formosa – Camocim, CE
Rental division - Motorized Access Equipment Rental
Serves all Mills’ divisions 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
telescopic handlers, to lift people or cargo, respectively
Market leader
Business started in 2008
Cross-selling with all other Mills’ divisions
34
Motorized Access Equipment Rental – market outlook
Current underutilization of motorized access equipment in Brazil and favorable regulation
indicate significant growth potential in this market.
The Brazilian aerial platforms and telehandler fleet is very small compared to the US fleet;
less than 2%
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 17% in the next few years and reach
25,000 units by 2014
Source: Terex and Mills
35
In 2011, the Brazilian fleet of motorized access equipment grew 46.2% compared to 2010
Motorized access equipment fleet
Fleet profile
in thousand of units
Brazil - 2011
Total: 15,777
30
25
+16.6% p.a.
25
Telescopic
handlers
12%
20
Aerial work
platforms
88%
+46.2%
15
16
+34.9%
10
USA - 2010
Total: 789,000
11
8
Telescopic
handlers
22%
5
0
2009
2010
Source: Mills and Terex
2011
Colunas1
2014E
Aerial work
platforms
78%
36
Agenda
Who we are
Mills’ Divisions
Growth Plan
37
We invested R$ 430.4 million in organic growth in 2011
Capex
in R$ million
2012 Capex
(%)
430
349
42%
6%
127
22%
17%
38
We are present in 13 states of Brazil with 43 branches
Branch locations
As of December 31, 2011
Amapá
Roraima
Amazonas
Pará
Ceará
Maranhão
Rio Grande
do Norte
Paraiba
Piaui
Pernambuco
Acre
Alagoas
Tocantins
Rondônia
Bahia
Sergipe
Mato Grosso
Distrito
Federal
Heavy Construction
Goias
Jahu
Minas
Gerais
Industrial Services
Rental
States with Mills’ Presence
Mato Grosso
do Sul
Espirito
Santo
São Paulo
Parana
Rio de
Janeiro
(sede)
Santa Catarina
Rio Grande
do Sul
39
Mills: The Best Way to Invest in Brazilian Infrastructure Sector
Forte e Sólido
Desempenho
Strong
and Solid
Financeiro
Financial
Performance
Fortes Barreiras
Strong
De Entrada
Barriers to Entry
Condições
Unprecedented
Macroeconômicas
Macro
Economic
Incomparáveis
Conditions
Equipe de Gestão
Experienced
Experiente
Management
Team
Modelo
de Negócio
Business
AttractiveSetorialUnique
Dinâmica
Único
com
fortes
Solid
Industry
Atraente
em todosModel with
Vantagens
Competitive
Dynamics
in
os Segmentos
competitivas
Advantages
Each Business
40
Mills – Investor Relations
Tel.: + 55 21 2123-3700
E-mail: [email protected]
www.mills.com.br/ri