Corporate Presentation March 2013

Transcription

1 Corporate Presentation March 2013

2 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 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 Comissão de Valores Mobiliários (CVM). 2

3 Agenda Executive Summary Mills business segments Financial performance Growth plan 3

4 Mills at a Glance One of the largest specialty engineering services company in Brazil 60 years of market leadership 4 business segments: Heavy Construction Rental Jahu Industrial Services 4

5 Mills Financial performance per business segment R$ million 2012 Financial highlights per business segment % Total EBITDA Margin (%) ROIC (%) % Rental 55.7% 18.2% 600 Industrial Services 9.1% 4.6% % % Total Jahu - Residential and Commercial 47.7% 15,7% % % 5% Heavy Construction 48.5% 17.2% Net Revenue 20% EBITDA 32% 24% Total 40.8% 14.7% 5

6 Mills Shareholder Structure % Total Capital Nacht family 1 36% Free float 61% Management 3% Position: December 31, includes Snow Petrel 6

7 Agenda Executive Summary Mills business segments Financial performance Growth plan 7

8 Heavy Construction Transnordestina Railway

9 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 leader Extensive 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 São Paulo s Subway Yellow Line Santo Antonio Hydroelectric Power Plant Dutra Highway Overpass (São Paulo) 9

10 Heavy Construction market outlook Investments in infrastructure and industry in Brazil should amount R$ 1.5 trillion in the period Industry investments R$ 1,033 billion Infrastructure investments R$ 489 billion Others 483 Oil and Gas 405 Roads 69 Ports 24 Airports 9 Energy 166 Pulp and Paper 30 Mining 57 Chemical Steel Railways 77 Sanitation 42 Telecom 102 Growth compared to the period (%) 22% 36% Source: BNDES February

11 New logistic investment program Highways In R$ billion Railways In R$ billion Ports In R$ billion Total In R$ billion In the first 5 years 23.5 Colunas2 Colunas In the first years Up to 20 years 18.5 Colunas Colunas2 Up to 20 years Total: R$ 42 billion (7,500 km) Total: R$ 91 billion (10,000 km) Total: R$ 54 billion Total: R$ 187 billion Source: Programa de investimento em Logística, August 2012 and O Globo newspaper 11

12 Infrastructure Market Outlook 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 Roads Railways Déficit em infraestrutura USA Index = average Ports Infrastructure China 0.71 China 0.85 China 0.75 China 0.68 India 0.53 India 0.94 India 0.61 India 0.54 Russia 0.41 Russia 0.81 Russia 0.61 Russia 0.56 Brazil 0.47 Brazil 0.38 Brazil 0.46 Brazil 0.58 USA 1.00 USA 1.00 USA 1.00 USA Source: 2009 World Economic Forum

13 The construction work related to World Cup and Olympic events represented 22% of the Heavy Construction business segment s 4Q12 revenue Investments for the 2014 World Cup by project stage Total: R$ 27 billion Others 14% 4Q12 Revenue R$ 47.3 million World Cup and Olympics 22% Infrastructure 39% Industry 25% Concluded Under construction work Wating for the construction work to start On studying stage or licensing process Stadiums Urban Mobility Airports Ports Source: 3º Balanço das ações do Governo Brasileiro para a Copa Report on April 2012 and Mills 13

14 Sport events: the cherry of the cake 12 stadiums (R$ 6.7 billion) = 5 highways 1 = 1 railroad 2 = 0.4 hydroelectric powerplant 3 1 Considering the average investment of the Bus Rapid Transit (BRT): Transcarioca (R$ 1.3 billion), Transolímpica (R$ 2.2 billion) and Transoeste (R$ 0.7 billion) 2 Investiment in the Norte-Sul railway (R$ 6.7 billon) 3 Investment in the Santo Antônio hydroelectric powerplant (R$ 16.0 billion) 14

15 Revenue Index (Basis 100= Maximum monthly revenue in the life of construction) Important contracts per stage in the evolution of monthly revenue from the heavy construction projects New contracts* Contracts with growing volume of equipment Belo Monte hydroelectric powerplant Monorail line Gold Subway line 5 SP Subway line 4 RJ Açu port Verdão stadium Light rail Cuiabá Norte-Sul railway New phases of Ponta da Madeira port Contracts with high volume of equipment Jirau, Colíder and Teles Pires hydroelectric powerplants Abreu e Lima refinery Paranaenses arena Monorail line Silver - SP Transordestina railway BR-448 Comperj refinery Manaus airport BRT Transcarioca Porto Maravilha Aratu Port Metropolitan arch RJ Carajás railway BRT Belém Contracts in the demobilization process Subway line 2 - SP Maracanã stadium Mané Garrincha stadium Sudeste port Ponta da Madeira port Serra Leste mine New contracts* Source: Mills New phases of Belo Monte hydroeletric powerplant New stretches of subway lines 4 and 5 New stretches of Monorail line Gold BRT Fortaleza Guarulhos airport Fortaleza airport Natal airport Viracopos airport Brasília airport Surroundings of the Maracanã stadium Surroundings of the Corinthians Arena Bridge over the Araguaia River Expansion of Carajás mine Paraguaçu shipyard Time 15

16 Characteristics of the major projects in progress Source of Funds Public- Private Partnership 29% Public 32% Private 39% 16

17 Construction Applied technological innovation Automatic Climbing Formwork SM Mills Alumills 17

18 Heavy Construction Financial performance In R$ million 52.2% 51.9% % 28.5% 25.5% 24.4% % 18.8% % % 46.2% % 54.0% % % % % 16.6% 12.0% % % % % 17.8% % % % % 60% 50% 40% 30% 20% 10% - 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 3Q11* 4Q11 1Q12 2Q12 3Q12 3Q12* 4Q12 0% Net Revenue EBITDA EBITDA Margin ROIC¹ 4Q12/4Q11 4Q12/3Q12* +31.2% +3.6% - 1,130 bps bps +3.9% % bps bps * 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 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 a theoretical 30% income tax rate. 18

19 Jahu - Residential and Commercial Reserva do Paiva Pernambuco 19

20 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

21 Growth drivers of the residential market: housing financing Housing Financing In R$ million Source: BACEN and FGV 21

22 Growth drivers of the residential market: higher purchasing power Higher purchasing power of the Brazilian population In million families Class A Class B Class C million families with income between R$ 1,000 to 8, < R$ 1,000 Growth rate (%, p.a.) -0.4% 38.2 Class D >= R$ 1,000 and <= R$ 8, % Class E > R$ 8, % E E Source: IBGE and FGV 22

23 Growth drivers of the residential market: industrialization of the construction process 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 System Cycle between concreting activities Traditional with wood Deck Type Flying Table 15 days 6-8 days 4-7 days 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 Source: Sondagem Especial Construção Civil, April 2011, CBIC, CNI, Téchne Magazine, June 2012 and Mills 23

24 Great penetration of concrete wall for the Minha Casa, Minha Vida program Use of concrete wall should reach 40% of the properties of the Minha Casa, Minha Vida program in 2014/ /11 3% 2012/ /15 15% 40% 60% 97% 85% 30,000 HU 150,000 HU 400,000 HU Concrete wall construction Construction using other systems Source: Criative 24

25 Applied technological innovation: reduction in labor and construction cycle Mills Deck Light Alumalight SL-2000 Easy set Alumills Mast Climbing Platform 25

26 Growth drivers in the residential market: geographic expansion Jahu Revenue Breakdown 15% 39% 51% New branches 1 100% 85% 61% 49% Established branches Branches opened since November

27 Jahu Financial performance In R$ millions % 46.0% 42.8% 42.0% 35.5% 29.2% % 21.3% % 15.2% % 46.1% % 45.5% 38.8% % 15.6% 14.8% 13.0% 12.5% % % % % % % 60% 50% 40% 30% 20% 10% - 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 3Q12* 4Q12 Net Revenue EBITDA EBITDA Margin ROIC¹ 0% 4Q12/4Q11 4Q12/3Q12* % + 9.5% bps bps + 9.1% % bps bps * Excluding the positive effect of R$ 5.3 million of tax contingency reversal in 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 a theoretical 30% income tax rate. 27

28 Rental Motorized Access Equipment Castelão Stadium Fortaleza, CE

29 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 telescopic handlers, 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 (IAPA Awards) for the year of 2011 Number of contracts: 1,597 at the end of

30 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 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 30

31 In 2012, the Brazilian fleet of motorized access equipment grew 32.1% compared to Motorized access equipment fleet In thousands of units Fleet profile Brazil Total: 21, Telescopic handlers 11% % p.a % +46.2% % E 21 Telescopic handlers 22% USA Total: 785,000 Aerial work platforms 89% Aerial work platforms 78% Source: Mills and Yengst Associates 31

32 Growth drivers in the motorized access equipment market: geographic expansion Rental Revenue Breakdown 31% 58% 62% New branches 1 69% 42% 38% Established branches Branches opened since January

33 Rental Financial Performance In R$ million % % 55.8% 56.6% 47.6% 56.0% 54.1% 47.6% 54.8% 56.0% % % 56.5% % 60% 50% % % 17.3% 19.6% 17.3% % % 12.9% % % % 16.3% 16.9% 40% 30% 20% 10% - 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 3Q11* 4Q11 1Q12 2Q12 3Q12 4Q12 Net Revenue EBITDA EBITDA Margin ROIC¹ 0% 4Q12/4Q11 4Q12/3Q % % bps bps % - 2.9% bps + 60 bps * Excluding the positive effect of R$ 5.3 million of tax contingency reversal in 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 a theoretical 30% income tax rate. 33

34 Industrial Services Rental Financial performance In R$ millions % 61.8% % 55.8% 56.6% 47.6% 56.0% 54.1% 54.8% 47.6% % % % 50.40% 60% 50% % % % 18.7% % % 12.9% % % % % 16.3% 17.20% 40% 30% 20% 10% - 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 3Q11* 4Q11 1Q12 2Q12 3Q12 4Q12 Net Revenue EBITDA EBITDA Margin ROIC¹ 0% 4Q12/4Q11 4Q12/3Q % +21.6% bps bps % +1.8% bps +83 bps * Excluding the negative effect of R$ 3.3 million of Allowance for Doubtful Debt (ADD) in 3Q11 Ocean Star Platform Angra dos Reis, RJ 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 a theoretical 30% income tax rate. 34

35 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

36 Petrobras has announced its Business Plan with investments totaling US$ billion in this period Petrobras total investment plan for period: US$ billion Petrobras pre-salt investment plan for period: US$ 49.7 billion US$ 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 # Petrobras Plataforms CAGR 10-20: +7.9% 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 Business Plan and Revista Exame (6/27/2012). 36

37 Industrial Services Financial performance In R$ millions % 15.8% % 14.9% % 14.9% % % 10.3% 9.6% % 14.2% 7.2% % 8.5% % 13.3% 20% 15% 10% % 4.7% 7.5% 3.9% 0.2% 5% % 0% % 0.1 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 Net Revenue EBITDA EBITDA Margin ROIC¹ -5% -10% 4Q12/4Q % % +950 bps +1,450 bps 4Q12/3Q % + 7,268.7% + 1,400 bps +1,950 bps 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 a theoretical 30% income tax rate. 37

38 Agenda Executive Summary Mills business segments Financial performance Growth plan 38

39 Mills Financial performance In R$ millions % % 23.1% % 43.2% 45% % 40.0% 40.7% 38.4% 37.6% 36.4% % 40% 35.4% 34.2% % 29.4% 29.0% % % % 20.3% 18.8% 20% % % % 13.6% 15.8% 14.5% 15% 15.1% 14.5% % 10% % % - 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 3Q11* 4Q11 1Q12 2Q12 3Q12 3Q12* 4Q12 Net Revenue EBITDA Net Earnings EBITDA Margin ROIC¹ 0% 4Q12/4Q % +20.0% +41.0% bps +27 bps 4Q12/3Q12* +11.1% +1.4% +19.9% bps +3 bps * 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 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 a theoretical 30% income tax rate. 39

40 Capturing opportunities maintaining the commitment to low leverage 2.5 Net Debt/LTM EBITDA x 1.9x 1.7x x 1.3x 1.2x 1.2x x 0.7x 0.7x 0.8x Target = 1.0x Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 40

41 Agenda Executive Summary Mills business segments Financial performance Growth plan 41

42 We plan to invest R$ 296 million in organic growth in 2013 Capex in R$ million Rental 2013 Capex (%) 42% Industrial Services Jahu - Residential and Commercial 2% 38% Budget Heavy Construction 18% 42

43 We are present in 14 states of Brazil with 46 branches Branch locations As of December 28, 2012 Roraima Amapá Amazonas Acre Rondônia Heavy Construction Mato Grosso Pará Tocantins Distrito Federal Maranhão Piaui Bahia Ceará Rio Grande do Norte Paraiba Sergipe Pernambuco Alagoas Jahu Industrial Services Rental Mato Grosso do Sul Goias São Paulo Minas Gerais Espirito Santo States with Mills Presence Parana Rio de Janeiro (sede) Santa Catarina Rio Grande do Sul 43

44 Mills Investor Relations Tel.: ri@mills.com.br