Presentation of 2Q16 Results

August 4, 2016

Disclaimer

This presentation may contain statements that present expectations of the Management of Mills Estruturas e Servios 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 information to which Mills currently has access. All statements, when based on future expectations, and not on historical
facts, involve various risks and uncertainties, and are not performance guarantees. Mills and employees cannot guarantee that such
statements will prove to be correct. Such risks and uncertainties include factors relating to the Brazilian economy, the capital markets, the
infrastructure, real estate, and oil and gas sectors, competitive pressures, among others, and governmental rules that are subject to
change without notice. For additional information on the factors that may give rise to results different from those estimated by Mills, please
consult the reports filed with the Comisso de Valores Mobilirios CVM.

Presentation of results for 2Q16 08/04/2016

Consolidated - Financial Performance

In R$ million

Costs and Expenses

Net Revenue per Business Unit

-19.0%

-28.8%
147.9

-4.4%

130.1

105.4

-9.3%

95.9

101.1

1.8

9.1

45.5

37.7

48.5

54.4

2Q15

1Q16

91.7

6.3
74.5

76.4
31.6

21.9

17.9

41.8

31.8

33.1

2Q15

1Q16

2Q16

Heavy Construction

43.2

54.4

Real Estate

COGS

Rental

42.2
2Q16

SG&A

ADD

Net (Loss) Earnings

Ebitda and Ebitda Margin

-73.7%

-52.8%

120. 0

90. 0%

100. 0

80. 0

60. 0

52.0
45.3%

29.0

13.7

37.5%

1Q16

2Q16

70. 0%

50. 0%

-8.2

23.3%

35.2%

2Q15

30. 0%

40. 0

54.0
0. 0

22.3%

10. 0%

13.0%

22.7

20. 0

-2.0
2T15

6.3
1T16

-17.8

- 10. 0%

18.5
-4.8

-20.9

- 30. 0%

2T16

- 20. 0

- 50. 0%

Result/Provision of sales of semi new equipment and non-recurring items

Ebitda

Ebitda Margin

Excluding result/provision of sales

of semi new equipment and nonrecurring items.

Ebitda Margin

Presentation of 2Q16 Results 08/04/2016

-155.9%

-17.6%

Consolidated Highlights
In R$ million

Changes in Net Revenue

Net Revenue per type

-28.8%

-19.0%
130.1

147.9

Construction

105.4

Rental
2.7

49.9
9.6
6.8
5.5

39.7

9.0
29.2
2.1

89.6

11.8
5.7
2.8
85.0

1Q16

2Q16

125.9

2Q15

1Q16

2.3

0.0

47.2

37.8

0.4

Rented Price and

Volume
Mix

2Q16

1Q16

Rented Price and

Volume
Mix

2Q16

Rental Sales of new equipment Sales of semi new equipment Others

ROIC (LTM)

Utilization Rate (Volume)

1, 800. 0

61.6%

60.6%

60.9%

2.0%

0.8%

5. 0%

-0.3%

-1.0%

-2.9%

1, 600. 0

1, 400. 0

507.9

496.1

1, 200. 0

485.1

59.7%

0. 0%

- 5. 0%

466.6

1, 000. 0

449.7
- 10. 0%

59.0%
57.0%

55.4%

800. 0
- 15. 0%

600. 0

1,109.9

1,066.5

1,020.7

400. 0

972.9

924.3

- 20. 0%

- 25. 0%

50.2%

200. 0

46.1%

47.9%

- 30. 0%

2Q15
2Q15

44.1%

42.7%

1Q16

2Q16

3Q15

4Q15

1Q16

2Q16

Average invested Capital Net Rental PP&E

Average Invested Capital - others

Construction

Rental

LTM Construction

LTM Rental

ROIC

Excluding impairment of R$57,1 million in 4Q15 of NOPAT

Presentation of 2Q16 Results 08/04/2016

Consolidated - EBITDA Amounted R$ 13.7 million

Variation
In R$ million

-0.3

Sale of Scrap Results

Stock Option Plan, Profit-sharing
Program, etc

-0.9

Personal Expenses

-1.2

Consulting, Utilities and Freight

Ebitda Evolution

35. 0

30. 0

-1.1

29.0

6.3

25. 0

22.7

1.9

0.0

1.5
3.5

20. 0

2.7

18.5

4.8
13.7

15. 0

10. 0

5. 0

Ebitda 1Q16 Result/Provision Ebitda 1Q16 ex. Rental Net

Result of sales COGS excluding SG&A ex-ADD,
of sales of semi result/provision Revenue and
of new
costs of sales
provision of
new equipment of sales of semi
Others
equipment
sales and nonand nonnew equipment
recurring items
recurring items
and nonrecurring items

ADD

Ebitda 2Q16 ex. Result/Provision

result/provision of sales of semi
of sales of
new equipment
seminew
and nonequipment and recurring items
non-recurring
items

Ebitda 2Q16

Non-recurring items are considered expenses with closing branches and expenses related to the Industrial Services business unit,
sold in 2013. In 1Q16, there was R$ 1.5 million related to closing branches and R$ 1.9 million of expenses related to Industrial
Services business unit. In 2Q16, the expenses were R$ 2.5 million and $ 1.4 million, respectively.

Presentation of 2Q16 Results 08/04/2016

ADD Percentage equal to 6.0% of net revenue in 2Q16

Allowance for Doubtful Debts (ADD) Evolution
In % of net revenue
15. 0%

12.8%
13. 0%

11. 0%

9. 0%

7.0%
5.9%

7. 0%

5.3%

6.0%

5.8%

5. 0%

3. 0%

1.7%

2.1%

2.0%

1.2%

0.3%

Average 2010-2014 = 2.3%

1. 0%

2010
- 1. 0%

2011

2012

2013

2014

1Q15

2Q15

3Q15

4Q15

1Q16

2Q16

Delinquency Evolution
72.9%
68.2%

65.0%

72.0%

60.7%

56.9%
48.6%

2Q15

Presentation of 2Q16 Results 08/04/2016

62.3%

51.8%

3Q15

4Q15

ADD Balance/Total Trade Receivables

60.1%

1Q16

2Q16

Total Past Due/Total Trade Receivables

Consolidated - Free Cash Flow

In R$ million

Even on an adverse scenario, the Company remains generating free cash flow.

Cash Flow

383.7

372.7

295.5

288.3 281.9

198.9
158.9
116.1
80.8

2010

2011

2012

2013

2014

2015

79.5

1Q16

50.1 48.6

2Q16

-31.2
-154.3
-208.9

-356.5
Adjusted Operating Cash Flow

Adjusted Free Cash Flow

Before interests paid referring to debentures, finame and investment in equipment rental.
Before interests paid referring to debentures and finame.
Includes R$ 8.5 million of revenue from sales of new and semi new equipment in 2Q16 and R$ 31.4 million in 1Q16. In 2015 the revenue of sales was R$ 53.9 million.

Presentation of 2Q16 Results 08/04/2016

Construction
Heavy
Construction

Real Estate

Construction - Financial Performance

In R$ million

Costs and Expenses

Net Revenue per Segment

-30,5%
-15,9%
-5,1%

53.7

73.4

2,9%

60.7

51.0

49.6

51.0

6.1

3.6

21.6

25.3

28.0

21.9

22.1

2Q15

1Q16

2Q16

3.7

31.6
21.9

41.8

2Q15

31.8

33.1

1Q16

2Q16

Heavy Construction

29.0

17.9

Real Estate

COGS

-100%
4.1

20. 0

25. 00%

0.0

19.3%

900. 0

-2.2%

-3.0%

17.3%

600. 0

0. 0%

-8.6%

800. 0
20. 00%
700. 0

15. 0

ADD

ROIC (LTM)

Ebitda and Ebitda Margin

-100%
12.7

SG&A

236.7

15. 00%

225.9

214.2

500. 0

200.4

-11.5%
191.3

- 5. 0%

- 10. 0%

- 15. 0%

7.7%

1.4

-9.8%

10. 00%

400. 0

300. 0
10. 0

5. 00%

200. 0

539.7

521.3

502.4

- 20. 0%

481.3

459.7
- 25. 0%

100. 0

5. 0

11.3

0.0%

-0.9%

-3.2%

0. 00%

- 30. 0%

2Q15

3Q15

4Q15

1Q16

2Q16

- 5. 00%

4.4
1.1

0. 0

1Q16 -0.3

2Q15
- 5. 0

2Q16 -1.1

Results of sales of semi new equipment

- 10. 00%

- 15. 00%

- 20. 00%

Average invested Capital Net Rental PP&E

Average Invested Capital - others
ROIC

Ebitda Margin ex sales of semi new equipment

Ebitda Margin

Excluding impairment of R$ 30.9 million in 4Q15 of NOPAT, ROIC would be -8.2% in 2Q16

Presentation of 2Q16 Results 08/04/2016

Construction - Rental Revenue Breakdown

In R$ million

Heavy Construction Per Source of Resources

R$ 23.4 million

Heavy Construction - Per sector

R$ 23.4 million
Others
15%

PPP
17.7%

Public
35.4%

Railways
9%
Airports
12%

Industrial
11%
Highways
15%

Sanitation
8%
Private
46.9%

Public: resources from the government

Private: resources from the private sector.
PPP (publicprivate partnership) : resources from the government and the private sector

Subway/Train/BRT
30%

Real Estate - Per sector

R$ 14.5 million

Others
19%

Commercial
28%

10

Presentation of 2Q16 Results 08/04/2016

Residential
53%

Construction - main Works with Mills Participation

In R$ million

North and Northeast

March 29th Avenue BA

Canal Alagoano - AL
Rail Extension PA
Court of Justice BA

Central-west and South

Papuda Penitenciary DF
Guaba Bridge RS
Powerplant So Manoel MT

Southeast
Confins Airport Expansion
MG
Botafogo Arena - RJ
Deodoro Arena RJ
Consortium So Loureno
SP
Duplication BR-381 MG
Subway Line 5 SP

Subway Line 6 SP
Subway CCRB - RJ
Monorail Gold Line SP
Olympic Park RJ
Nova Tamoios Highway
SP
Rodoanel SP
Transbrasil RJ

States with Mills presence

11

Presentation of 2Q16 Results 08/04/2016

Rental

Rental - Financial Performance

In R$ million

Net Revenue per type

Costs and expenses

Spot
10.3%

-27.0%

-28.8%

74.5

76.4

2.5

2.1

2.2

22.6

4.5

NonConstruction
31.9%

54.4

12.2%

-20.8%

35.0

49.6
3.0

1.9

16.5

2.5

32.5

20.5

47.2

20.1

-1.8

2Q15

Rental

1Q16

1Q16
COGS

-43.7%
26.8

800. 0

15.1

70. 00%

59.2%

65. 0

53.0%

55. 0

60. 00%

39.9%

7.4%

5.3%

5.5%

5.1%

130.6

136.4

140.8

700. 0

600. 0

126.7

142.3

400. 0

1.4

25. 0

33.1%

35.0%

38.0

5.3
21.4

300. 0

2Q15

1Q16

570.2

545.2

518.3

200. 0

491.6

- 10. 0%

- 15. 0%
100. 0

17.1
-2.0
2Q16

10. 00%
-

- 20. 0%

2Q15

3Q15

4Q15

1Q16

- 10. 00%

Average invested Capital Net Rental PP&E

Ebitda ex. result/provision of sales of semi new equipment
Result/Provision of sales of semi new equipment
Ebitda Margin ex result/provision of sales of semi new equipment
Ebitda Margin

Presentation of 2Q16 Results 08/04/2016

464.6

20. 00%

0. 00%

- 5. 0

0. 0%

- 5. 0%

40. 00%

27.7%

5. 0

13

10. 0%

2.8%
5. 0%

500. 0

30. 00%

15. 0

ADD

50. 00%

45. 0

35. 0

SG&A

ROIC (LTM)

Ebitda and Ebitda Margin

-61.8%

2Q16

2Q16

Sales of new equipment Sales of semi new equipment Others

39.4

2.7

16.3

2.7

49.9

2Q15

39.3

14.1

1.8
65.3

Construction
57.8%

Average Invested Capital - others

ROIC

2Q16

Consolidated - Indebtedness

Consolidated - Indebtedness
In R$ million

The weighted average maturity of our debt is 2.7 years at a cost of CDI+0.31%.
Gross Debt Profile

Principal Amortization Schedule

356.8

31.3%
150.3
106.2

82.0

106.2
38.9

68.7%
Cash
position
Short Term

Long Term

We do not have foreign currency exposure.

2016

2017

2019

Indebtedness on 06/30/2016

537.8

356.8

483.5

22.7%

75.1%

TJLP

CDI

181.0

IPCA
Principal

15

2020+

2nd emission of Debentures - CDI + 0,88%

2nd emission of Debentures - IPCA +5,5%
3rd emission of Debentures - 108,8% CDI
Finame

54.3

2.2%

2018

Presentation of 2Q16 Results 08/04/2016

Interests

Gross Debt

Cash

Net Debt

Consolidated - Debt Indicators

In R$ million

Ebitda* / Financial Income

Net Debt / Ebitda*

3.8
3.5
3.0

3.0

2.8
2.5

1.9

1.9

2.1

2.0

2Q15

3Q15

4Q15

1Q16

2Q16

1.3

2Q15

3Q15

4Q15

1Q16

1.5

2Q16

Debentures Covenants:
(1)

EBITDA*/financial income >= 2.0; and

(2)

Net Debt/EBITDA* <= 3.0.

* Excluding

16

Presentation of 2Q16 Results 08/04/2016

extraordinary items from LTM EBITDA. Are considered extraordinary items:

R$10.4 million related to restructuring costs.
R$ 3.3 million related to Industrial Services business unit sold in 2013.
R$ 57.1 million from Impairment.

Final Considerations

Financial Summary
In R$ million

(1) Excludes Industrial Services as a business unit, sold in 2013

(2) Excludes easy set formwork cost adjustments of R$14.6 million in 2014
(3) Excludes Construction impairment of R$ 30.9 million and Rohr impairment of R$ 26.2 million in 2015
* LTM Ebitda excluding extraordinary items

18

Presentation of 2Q16 Results 08/04/2016

Mills Investor Relations

Phone: +55 (21) 3924-8768
E-mail: ri@mills.com.br
www.mills.com.br/ri