Mills Locacao Servicos e Logistica S.A. · BMFBOVESPA:MILS3
Mills Locacao Servicos e Logistica — Q3 2016 Earnings Presentation
36 slides from Mills Locacao Servicos e Logistica's earnings presentation, November 2016
Slide 1: Corporate Presentation and 3Q16 Results
Corporate Presentation and 3Q16 Results
Slide 2: Corporate Presentation and 3Q16 Results
Corporate Presentation and 3Q16 Results 1. Market Overview 2. Company Overview 3. Business Units 4. Financial Profile 2 Corporate Presentation and 3Q16 Results
Slide 3: Investments in infrastructure
Investments in infrastructure It is known that investment in infrastructure is historically low in Brazil and still far from the levels seen in developing countries. Investment in Infrastructure Investment in Infrastructure in Brazil (% GDP) (% GDP) China (2010) 5.4 0.5 Índia 2.0 3.6 13.4 (2013- Chi
Slide 4: Brazil lags behind other BRIC countries in quality of infrastructure
Brazil lags behind other BRIC countries in quality of infrastructure There is a significant demand for better infrastructure in Brazil, which can reduce the country’s growth bottleneck. The quality of Brazil’s highways, railways, ports and air transport are very poor, increasing the cost of Brazil.
Slide 5: PPI: Infrastructure will play a major role in the Federal Government's plan
PPI: Infrastructure will play a major role in the Federal Government’s plan The Temer Government announced a new package for concessions – a great portion of the projects was already included in the Investment Program in Logistics (PIL) Investment prospects in the infrastructure sector Number of con
Slide 6: Infrastructure: Length of time to impact Mills' revenue
Infrastructure: Length of time to impact Mill’s revenue Even for projects executed effectively, it takes a long time between the publication of the bidding documents and the effective beginning of the construction work. Bidding Concession Contract Beginning of Length of time to documents Auction ann
Slide 7: Real Estate: Length of time to impact Mills' revenue
Real Estate: Length of time to impact Mill’s revenue The equipment rental evolves in average 24 months after the construction launch. Typical deadlines of real estate projects Impact on Mills’ revenue Land purchase Real Estate 24 months market 12 months Planning 2H 2018: Rock bottom Start/Launch Mil
Slide 8: Revenue Drivers and its Relevance for 2017
Revenue Drivers and its Relevance for 2017 2017-18 2019-20 2021 onwards Backlog Continuity of works in progress - Resumption of suspended - works Delays on works - Pipeline New construction works Renewal of existing concessions Crescer Program Less relevant Relevant Very relevant 8 Corporate Present
Slide 9: Corporate Presentation and 3Q16 Results
Corporate Presentation and 3Q16 Results 1. Market Overview 2. Company Overview 3. Business Units 4. Financial Profile 9 Corporate Presentation and 3Q16 Results
Slide 10: Our Company Highlights & Shareholder Structure
Our Company Complete in engineering products and services, in Brazil for more than 60 years. With ability to plan, integrate services and products for the construction and industry sectors. We invest in the expertise of our team of professionals, which, allied to our diversified experience, allows u
Slide 11: Company History
Company History First Brazilian manufacture of formwork by license Sells Events Unit agreement with NOE- Acquired Jahu Ltda Schaltechnik from Initiates its Rental Unit Founded on 1952. Germany 50`s 90`s Catedral da Sé Ferrovia do Aço hydroelectric power plant Lajeado Paiva construction work Maracanã
Slide 12: 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
Slide 13: Business Units: market leader in equipment rental
Business Units Mills is the national market leader in equipment rental for both business Units. Construction equipment¹: 2015 Net Revenues (R$ million) Arial work platforms²: 2015 Net Revenues (R$ million) Mills 283 Mills 293 SH 110 144 Solaris 140-160 216 Ulma 94 141 Locar 120 304 Not listed Not li
Slide 14: What We Do?
What We Do? Formwork Special systems Shoring Access 14 Corporate Presentation and 3Q16 Results
Slide 15: Presence on all Construction Phases
Presence on all Construction Phases Our work starts on preliminary economic and technical viability studies and go until the end of the projects. Thus, we ensure the use of the best engeneering solutions. Implementation Executive Viability Studies (Construction Foundation Structure Finishing Project
Slide 16: Strengths and Competitive Advantages
Strengths and Competitive Advantages Know-how to work in complex projects, such as bridges, subways and hydroelectric “Best-in-class” power plants; engineering and technical Recognition of its differentiated services and reliability; capabilities and SLA Market leader in its core business unit
Slide 17: Organizational Structure from B.U. to clients oriented
Organizational Structure from B.U. to clients oriented Sérgio Kariya CEO Ricardo Gusmão Daniel Brugioni Sergio Kariya Avelino Garzoni Gustavo Zeno Fernanda Pinheiro Strategic Clients Commercial and Operations Officer Engineering and New CFO and IRO People and Management Officer Marketing Executive (
Slide 18: Corporate Presentation and 3Q16 Results
Corporate Presentation and 3Q16 Results 1. Market Overview 2. Company Overview 3. Business Units 4. Financial Profile 18 Corporate Presentation and 3Q16 Results
Slide 19: Construction: Strong Background
Construction: Strong Background Projects Viaduct – Rodovia Dutra (São Paulo) Subway – Line 4 (São Paulo) Cable-stayed bridge – BRT Transcarioca (Rio de Janeiro) 19 Corporate Presentation and 3Q16 Results
Slide 20: Construction: Strong Background
Construction: Strong Background Balanced Cantilevers and Trusses Concrete Formworks Shoring Systems 20 Corporate Presentation and 3Q16 Results
Slide 21: Construction: Main Works with Mills Participation
Construction: Main Works with Mills Participation North and Northeast North VLT Fortaleza - CE Canal Alagoano - AL Rail Extension – PA Shopping Olinda - PE Central-west and South Trevo Triagem Norte – DF Papuda Penitenciary – DF South Southeast Guaíba Bridge – RS Monorail Line Gold –
Slide 22: Commercial Initiatives
Commercial Initiatives Commercial Strategy Commercial Focus 2017 Fighting blind spots Customer Construction company and new customers loyalty entrants Medium-sized construction companies New and rescue Share of wallet Readjustment of the of lost customers equipment mix to meet the non construction m
Slide 23: Rental: Main Products
Rental: Main Products Equipment rental in Brazil has significant potential for penetration increase, beyond the recovery cycle. Aerial Work Platforms Telescopic Handlers 23 Corporate Presentation and 3Q16 Results
Slide 24: Rental
Rental In addition to the recovery in the cycle, leasing platforms in Brazil has significant potential to increase penetration Platform fleet / Industrial GDP Platform fleet / habitant In USD Billion In 100.000 habitants 3x more aerial work platforms per US$ Industrial GDP in the USA ~12x more aeria
Slide 25: Rental: Market Perspective
Rental: Market Perspective The market of aerial platform gained traction in 2007 with the revision of the Regulatory Safety Labor Norm 18 (NR18), which establishes that workers must be lifted with the use of motorized access equipment and economic growth. The current volume in Brazil is around 34,00
Slide 26: Corporate Presentation and 3Q16 Results
Corporate Presentation and 3Q16 Results 1. Market Overview 2. Company Overview 3. Business Units 4. Financial Profile 26 Corporate Presentation and 3Q16 Results
Slide 27: Summary Financials
Summary Financials In R$ million Net Revenue Costs and Expenses 900.0 354.5 462.8 665.5 832.3 794.2 576.1 449.5 900 402 516 424 560 622 585 529 800.0 56.8 800 50.4 700.0 101.3 80.5 700 39.9 600.0 64.1 37.8 600 42 16 38 26 500.0 53.9 500 11 27.6 8.3 232 36.8 164 14 209 203 181 400.0 30.1 59.6 400 2 6
Slide 28: Rental Revenue Breakdown for 3Q16
Rental Revenue Breakdown for 3Q16 In R$ million Construction Business Unit Heavy Construction: Heavy Construction: Real Estate: Per Source of Resources Per sector R$ 27.0 million Per Type R$ 15.7 million R$ 27.0 million Sanitation 11.2% Others PPP 17.4% 15.6% Industrial Subway/Train/BRT 10.6% 27.4%
Slide 29: Utilization Rate and Net Revenue
Utilization Rate and Net Revenue In R$ million Volume Utilization Rate Net Revenue 100% Construction 90% 80% 70% 37.8 2.6 0.9 34.3 60% 50% 40% Average LTM 3Q16 = 43.7% 30% 20% 10% 0% 2Q16 Rented Volume Price and Mix 3Q16 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16 100% Rent
Slide 30: ADD Percentage Equal to 3.2% of Net Revenue in 3Q16
ADD Percentage Equal to 3.2% of Net Revenue in 3Q16 Allowance for Doubtful Debts (ADD) Evolution In % of net revenue 12.8% 7.0% 5.9% 5.8% 6.0% 5.30% 3.2% 2010-2014 Average: 2.10% 2.0% 2.3% 1.70% 1.2% 0.30% 2010 2011 2012 2013 2014 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 Delinquency Evolution 72.9% 75.2%
Slide 31: Free Cash Flow
Free Cash Flow In R$ million Even on an adverse scenario, the Company remains generating free cash flow Cash Flow³ 383.7 372.7 295.5 288.3 281.9 198.9 158.9 116.1 80.8 79.5 50.1 48.6 46.4 67.1 2010 2011 2012 2013 2014 2015 1Q16 2Q16 3Q16 -31.2 -154.3 -208.9 -356.5 Adjusted Operating Cash Flow Free C
Slide 32: Consolidated: Financial Performance
Consolidated: Financial Performance In R$ million Due to the reduction of the investments and assets sales, the average capital invested tends to fall, since it illustrates the average of the period. Average Invested Capital ROIC Breakdown Net Revenue 1,800.0 5.0% 449.5 1,617.7 1,600.0 1,562.5 COGS
Slide 33: Summary Financials
Summary Financials In R$ million 2010¹ 2011¹ 2012¹ 2013¹ 2014² 2015³ LTM 3Q16³ % Part Net Revenues Consolidated 354.5 462.8 665.5 832.3 794.2 576.1 449.5 100.0% Construction 259.4 287.4 412.0 474.9 423.4 283.0 205.0 45.6% Rental 95.1 175.4 253.5 357.3 370.8 293.2 244.5 54.4% Ebitda Consolidated 168.
Slide 34: Indebtedness
Indebtedness In R$ million The weighted average maturity of our debt is 2.8 years at a cost of CDI+0.17%. Gross Debt Profile Principal Amortization Schedule 322.6 35.9% 150.3 106.2 106.2 64.1% 38.9 0.8 Caixa 2016 2017 2018 2019 2020+ Short Term Long Term Finame 3rd Emission of Debentures - 108,8% CD
Slide 35: Key Takeaways
Key Takeaways Infrastructure investment needs to be substantially increased to meet social needs and support economic growth; Largest footprint: present in 19 States and Federal District in 32 locations; Largest fleet in Brazil in all business units; AWP: Immature market with low penetration
Slide 36: 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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