You are on page 1of 15

1Q16 earnings release

Investor Relations

BM&FBOVESPA: MILS3 and OTC-US: MILTY

Rio de Janeiro, May 5, 2016 - Mills Estruturas e Servios de Engenharia S.A. ( Mills) presents its results for 1Q16.

Highlights
Conference Call
and Webcast
Date: May 6, 2016.

Free cash flow before interests w as R$ 79.5 million in the first quarter of 2016 (1Q16).

Net revenue of R$ 130.1 million in 1Q16.

Revenue from sales of semi new equipment of R$ 29.2 million, 239.6% higher than in the
fourth quarter of 2015 (4Q15).

Decrease of R$ 20.3 million in rental revenues, being R$ 10.5 million in the Construction
business unit and R$ 9.8 million in the Rental business unit.

Time: 10:00 am New York


time
11:00 pm Rio de
Janeiro time
3:00 pm London time
Phone: +1 888 700-0802
(USA/toll free)
+1 786 924-6977
(Other countries)

1Q16, compared to 5.8% in 4Q15.

Webcast: www.mills.com.br/ri

Expenses, net of depreciation, provision for doubtful debts w ere R$ 37.7 million in 1Q16, a
reduction of 18.7% w hen compared to 4Q15*, resulting from the measures of restructuring
of the Company.

Nonrecurring expenses of R$ 3.4 million in 1Q16, of w hich R$ 1.5 million w ere expenses
w ith closing of branches and R$ 1.9 million resulting from liabilities of the Industrial
Services business unit sold in 2013.

Code: Mills
Replay: +55 11 3193-1012
or +55 11 2820-4012
Code: 6984100#

Expenses w ith provision for doubtful debts w as equivalent to 7.0% of the net revenue in

EBITDA, excluding nonrecurring items, of R$ 32.4 million, w ith EBITDA margin of 24.9%.
Decrease of EBITDA Margin influenced by the increase in volume of sales.

Net loss of R$ 17.8 million in 1Q16.

The Board of Directors ratified, on April 19, 2016, the capital increase already paid

in,

through private subscription at the maximum amount of R$ 125 million.


1Q15

4Q15

1Q16

(C)/(A)

(C)/(B)

(A)

(B)

(C)

Net revenue

163.9

127.9

130.1

-20.6%

1.7%

EBITDA

47.3

-30.1

29.0

-38.8%

-196.4%

28.9%

-23.5%

22.3%
-44.4%

-2.2%

22.9%

-11.9%

In R$ Million

EBITDA margin (%)


EBITDA ex-non recurring items

58.2

33.1

32.4

35.5%

25.9%

24.9%

Net earnings (Loss) - ajusted

-14.5

-20.2

-17.8

ROIC LTM (%) - ajusted

4.0%

-0.3%

-1.1%

6.4

2.6

1.3

-79.7%

-50.6%

70.3

61.5

79.5

13.0%

29.1%

EBITDA margin ex-non recurring items (%)

Capex (accrual basis)


Free cash f low before interest

*Excluding the impact of impairment

The financial and operational information contained in this press release, except as otherwise indicated, is in accordance with the accounting
policies adopted in Brazil, which are in compliance with the International Financial Reporting Standards - IFRS.

Business perspective
The uncertainties in the economy and in politics continue to impact the markets in w hich w e operate, w ith consequent reduction of
investments, suspension of projects and reduction of the pace of w orks conducted by our customers. In view of this scenario, the
ICEI - Industrial Bus iness men Confidence Index (ndice de Confiana do Empresrio Industrial), according to research conducted
by the National Confederation of Industries ( CNI), reached 35.5 in April 2016, against 39.2 in the same period of 2015. The
consequence of the lack of confidence in the market is the paralysis of the economy w ith consequent delay of investments. With
the resolution of the political crisis, in accordance w ith market perceptions, there is a perspective that investments w ill resume in
the medium ter m.
According to survey conducted by CNI, the main problems faced by the construction industry are: high interest rates, insufficient
internal demand and default by customers, further reinforcing concerns w ith the financial conditions of companies.
With the deterioration of the budgetary situation of the Government in all spheres, the country is facing the most severe scenario of
lack of new public w orks in recent years. The economic and political crisis reduced investments made by States by approximately
47% in the first tw o months of this year w hen compared to the same period in the previous year. This lack of investment generated
a scenario of interrupted w orks throughout Brazil w ithout a forecast for conclusion, w orks being perfor med at a slow er pace, and
innumerable essential w orks that have no forecast to progress from the phase of design and intention. There are very few
construction w orks in mobilization phase.
Disbursements by the Brazilian Development Bank (BNDES) reached R$ 18.1 billion in 1Q16, declining 46% in comparison w ith
the same period of 2015, 32% being allocated to the infrastructure sector. Inquir ies, in a total amount of R$ 23.5 billion, decreased
by 7%, show ing a slow dow n in the pace of reduction.
The Federal Court of Audit (TCU) authorized, on April 20, 2016, the government to hold an auction for concession of the airports of
Florianpolis, Porto Alegre, Fortaleza and Salvador. These concessions are part of the Program for Investment in Logis tics
launched by the Government in June 2015, w ith planned investments of R$ 198.4 billion, of w hich R$ 69,2 billion until 2018, and
the rest from 2019 onw ards.
1

In the real estate market, the 1st quarter of 2016 ended w ith 57.7 thousand units introduced in the market , a reduction of 26% in
relation to the same per iod of 2015. In compar ison w ith the 1st quarter of 2014 the decrease is even stronger, approximately 43%
few er units introduced in the mar ket.

Revenue
Net revenue w as R$ 130.1 million in 1Q16, 1.7% higher than in the previous quarter. Revenue from rentals contributed w ith 68.9%
of the total net revenue of the Company. The fall in prices, mix and rented volume of the tw o business units w ere responsible for
the 18.5% decrease in revenue from rental betw een quarters. Revenue from sales of semi new equipment of the Company w as R$
29.2 million. In the Construction segment, w e sold R$ 6.7 million and in the Rental segment R$ 22.6 million, of w hich R$ 12.8
million w ere sold under the contract for sale of equipment of EUR 8 million closed in August 2015. R$ 18.3 million have already
been recognized from this contract. We continue our sale efforts in order to reduce our net assets in Construction, mainly
equipment intended for the real estate mar ket.

COGS Breakdown
R$ million

Mills' Results in 1Q16


www.mills.com.br/ri

Per business unit

Per type

R$ million

R$ million

Rental Net Revenue Evolution


R$ million

Construction

Rental

The use rate for the last tw elve months to March 31, 2016 w as 47.9% in Construction, and 61.6% in Rental.

Utilization Rate Evolution


R$ million

Construction

Rental

100%

100%

90%

90%

80%

80%

70%

70%

60%

60%

50%

50%

40%

40%

30%

Average LTM 1Q16 = 47.9%

20%
10%

Average LTM 1Q16 =


6.,6%

30%
20%
10%

0%

0%
1T10 3T10 1T11 3T11 1T12 3T12 1T13 3T13 1T14 3T14 1T15 3T15 1T16

1T10 3T10 1T11 3T11 1T12 3T12 1T13 3T13 1T14 3T14 1T15 3T15 1T16

Costs
Mills' Results in 1Q16
www.mills.com.br/ri

COGS ( Cost of Goods Sold), excluding depreciation, w ere R$ 54.4 million in 1Q16, 15.5% higher than in 4Q15 due to higher cost
to sell semi new equipment in the Construction and Rental units, resulting from the 239.6% increase in revenue from sales of used
items.
Mills' COGS are detailed in the table below :

In R$ Million

Costs of job execution/Equipment storage (g), (h)

1Q15

4Q15

1Q16

(C)/(A)

(C)/(B)

(A)

(B)

(C)

31.5

36.4

30.3

-3.8%

-16.9%

Costs of sale of new equipment

7.9

3.1

1.5

-81.3%

-53.2%

Costs of sale of semi-new equipment

3.0

5.6

19.5

547.0%

245.9%

Costs of asset write-offs

4.7

1.9

3.1

-34.2%

63.4%

COGS total, ex-depreciation

47.1

47.1

54.4

15.5%

15.5%

We illustrate in the graphs below the detailing of COGS. In the first graph w e present costs directly connected w ith revenue from
sales of new equipment, used equipment and compensation. In the second graph w e present the breakdow n of w orks performed
and deposit per group of expenses, in w hich w e can observe a reduction of 16.9% influenced mainly by the reduction of personnel.

COGS Breakdown
R$ million

Expenses
As a result of actions taken in 2015, the SG&A, excluding depreciation, provision for doubtful accounts and impair ment of
Construction, had a 18.7% reduction compared to 4Q15. Ex penses w ith personnel represent 45.3% of the SG&A. We are
constantly seeking the reduction of these expenses through renegotiations of rental contracts, cleaning and expenses w ith third
parties.
In this quarter w e closed the branch office in Itabora of the Rental business unit and w e are in the process of closing other six
branch offices, one of the Rental business unit, in Sorocaba, and five of the Construction business unit, that serve the Buildings
market. As a consequence of the closing of these branches w e incurred R$ 1.5 million of expenses, mainly due to expenses w ith
freight for demobilization of the materials.

SG&A, ex ADD Breakdown


R$ million

Mills' Results in 1Q16


www.mills.com.br/ri

Allowance for doubtful debts


In 1Q16 the accumulated provision for doubtful accounts w as R$ 9.1 million, 7.0% of the net revenue, impacted mainly by
customers w ho entered court-supervised reorganization. In these cases 100% of the invoices issued are allocated to provision for
doubtful accounts. The balance of accounts receivable is R$ 228.2, 23.2% of w hich related to customers involved in the
investigations in course. The balance of accounts receivable net of provision for doubtful accounts in 1Q16 w as R$ 91.6, R$ 14.6
million of w hich related to customers involved in the investigations in course. Excluding customers involved in the investigations in
course, expenses w ith provision for doubtful accounts w ould have been 3.3% of the net revenue in 1Q16. We continue seeking to
reduce the balance of outstanding accounts receivable.

In R$ Million
Heavy Construction
% Net Revenue
Real Estate
% Net Revenue
Rental
% Net Revenue
Total ADD
% Net Revenue

1Q15

4Q15

1Q16

(C)/(A)

(C)/(B)

(A)

(B)

(C)

8.8

5.1

4.8

-45.6%

-5.3%

17.3%

16.1%

15.1%

4.0

1.5

1.2

-68.8%

-16.9%

12.01%

5.78%

5.68%
-63.7%

264.7%

-57.1%

22.6%

8.3

0.8

3.0

10.5%

1.2%

4.0%

21.2

7.4

9.1

12.9%

5.8%

7.0%

Changes in allowance for doubtful debts (ADD)


As % of net revenues

EBITDA
Mills' Results in 1Q16
www.mills.com.br/ri

The generation of cash, measured by EBITDA, reached R$ 29.0 million in 1Q16. Disregarding nonrecurring costs of R$ 3.4 million
1Q16, of w hich R$ 1.5 million related to expenses to close branch offices and R$ 1.9 million related to expenses resulting from
liabilities of the Industrial Services business unit, EBITDA w ould be R$ 32,2, 2.2% low er than the adjusted EBITDA presented in
4Q15. The reduction of EBITDA betw een quarters w as the effect of higher expenses w ith provision for doubtful accounts ( PDD)
and of decrease in revenue from rentals, offset by low er SG&A expenses, and revenue from sales.

EBITDA
R$ million

Cost s and Expenses

The EBITDA margin w as 22.3% in 1Q16, and the adjusted EBITDA margin w as 24.9%, compared to 25.9% in 4Q15. The increase
in volume of sales causes a reduction in the EBITDA margin due to the costs of sales.

Financial income
In R$ Million

1Q15

4Q15

1Q16

(C)/(A)

(C)/(B)

(A)

(B)

(C)

Financial Income

7.6

13.5

12.6

64.2%

-6.7%

Financial Expense

-26.0

-26.9

-25.2

-3.3%

-6.6%

Financial Result

-18.4

-13.5

-12.6

-31.3%

-6.4%

Financial income w as negative R$ 12.6 million in 1Q16, compared to negative R$ 13.5 million in 4Q15. The reduction in financial
revenue occurred by virtue of the recognition of interests on ow n capital of the investment in Rohr of R$ 1.8 million in 4Q15. The
capital increase started to be paid up in mid- March.

Net income
In 1Q16 Mills had a net loss of R$ 17.8 million, compared to a net loss of R$ 57.9 in 4Q15.

ROIC
Mills' Results in 1Q16
www.mills.com.br/ri

ROIC w as -3.9% in 1Q16, compared to -2.9% in 4Q15, impacted, mainly, by low er average prices of the volume rented in the
period.

ROIC Decomposition

Initiatives

R$ million

Capital Increase
On April 19, 2016 the Board of Directors approved the ratification of the Capital Increase, w ith the issuance of 47,528,517 new
common shares, in the total amount of R$ 124,999,999.71. After the capital increase, the capital stock of the Company is now R$
688,318,462.91, divided into 175,586,442 common shares.
On March 31, 2016 the Company had already allocated R$ 124.6 million to its cash.

Debt and indebtedness indicators


Mills' gross debt on March 31, 2016 w as R$ 631.1 million. We ended the quarter w ith a net debt position of R$ 207.5 million,
compared to R$ 388.8 in the end of 4Q15.
The Company's debt is composed of 31% of short term debt and 69% of long ter m debt, w ith average ter m of 2.5 years and
average cost of CDI+0.6%. In ter ms of currency, the entire debt is in Reais.
In 1Q16, the leverage, measured as net debt/LTM EBITDA w as 1.3x excluding nonrecurring items of the period. The LTM
EBITDA/Financial income ratio, in turn, w as 2.8x in the same per iod also excluding nonrecurring items of the period.
Our schedule for amortization of debt covers pay ment of R$ 174 million of principal in 2016, of w hich R$ 90.0 million of
amortization have already been paid in April, w ithout roll over, thus reducing our gross debt.
Due to the uncertainties as to the developments of the investigations in course, and the economic and political scenario of the
Country, w e are being cautious; reducing expenses and preserving cash.
Even in a negative scenario, the Company does not see liquidity risk, hav ing the capacity to honor its financial obligations and to
keep its indebtedness ratios w ithin the contractual parameters.

Mills' Results in 1Q16


www.mills.com.br/ri

Principal Amortization Schedule


R$ million

Cash flow
The operating cash flow , before interests paid and acquis ition of rental goods w as R$ 80.8 million, 25.8% higher than 4Q15. Free
cash flow , measured by operating cash flow and investment activ ities, w as positive R$ 67.7 million in 1Q16 influenced by the
working capital of R$ 51.8 million.

Cash flow
R$ million

Mills' Results in 1Q16


www.mills.com.br/ri

Tables
Table 1 Net revenue per type

In R$ Million

1Q15

4Q15

1Q16

(C)/(A)

(C)/(B)

(A)

(B)

(C)

132.4

110.0

89.6

-32.3%

-18.5%

Technical support serv ices

1.7

1.8

1.4

-15.3%

-22.4%

Sales of new equipment

11.3

4.9

2.1

-81.0%

-56.3%

Sales of semi-new equipment

6.7

8.6

29.2

339.7%

239.6%

Others

11.9

2.5

7.6

-35.8%

199.9%

163.9

127.9

130.1

-20.6%

1.7%

1Q15

4Q15

1Q16

Heavy construction

51.1

31.2%

31.6

24.7%

31.8

24.4%

Real estate

33.2

20.3%

25.9

20.3%

21.9

16.8%

Rental

79.6

48.6%

70.3

55.0%

76.4

58.7%

163.9

100.0%

127.9

100.0%

130.1

100.0%

Rental

Total net revenue


Table 2 Net revenue per market
In R$ Million

Total net revenue

Table 3 Cost of goods and services sold (COGS) and general, administrat ive and operating expenses (G&A), ex-depreciation
In R$ Million

1Q15

4Q15

1Q16

Costs of job execution/Equipment storage (g), (h)

31.5

27.0%

36.4

23.0%

30.3

29.9%

Costs of sale of new equipment

7.9

6.7%

3.1

2.0%

1.5

1.5%

Costs of sale of semi-new equipment

3.0

2.6%

5.6

3.6%

19.5

19.3%

Costs of asset write-offs

4.7

4.1%

1.9

1.2%

3.1

3.1%

COGS total, ex-depreciation

47.1

40.4%

47.1

29.8%

54.4

53.8%

Commercial, Operational and Administrative

34.4

29.6%

28.4

18.0%

22.0

21.8%

General services

10.0

8.6%

10.7

6.8%

8.7

8.6%

Others expenses

4.0

3.4%

64.4

40.8%

7.0

6.9%

G&A, ex-depreciation and ADD

48.5

41.6%

103.5

65.5%

37.7

37.3%

ADD

21.0

18.0%

7.4

4.7%

9.1

9.0%

116.5

100.0%

157.9

100.0%

101.1

100.0%

Total COGS + G&A


Table 4 EBITDA per business unit and EBITDA margin
In R$ million

1Q15

4Q15

1Q16

Construction

13.0

27.4%

-33.0

109.9%

4.1

14.2%

Rental

34.4

72.8%

32.3

-107.5%

26.8

92.3%

47.3

100.0%

-30.1

100.0%

29.0

100.0%

EBITDA Total
EBITDA margin (%)

28.9%

-23.5%

22.3%

Table 5 ROIC LTM

In R$ Million
Inv ested Capital

1Q15

4Q15

1Q16

(C)/(A)

(C)/(B)

(A)

(B)

(C)

1661,8

1505,8

1439,5

-13.4%

-4.4%

Rental net PP&E

1144,0

1020,7

972,9

-15.0%

-4.7%

Others

517,8

485,1

466,6

-9.9%

-3.8%

-183.0%

24.5%

(C)/(A)

(C)/(B)

NOPAT

66,5

-44,4

-55,2

ROIC LTM (%)

4.0%

-2.9%

-3.8%

1Q15

4Q15

1Q16

Table 6 Reconciliation of EBITDA


In R$ Million

Mills' Results in 1Q16


www.mills.com.br/ri

(A)

(B)

(C)

Results of continuing operations

-14.5

-57.9

Financial result

-18.4

-13.5

-0.1

Operational Results before Financial Result


Depreciation
EBITDA
Expenses (revenues) related to the Industrial services former
business unit

Income tax and social contribution expenses

-17.8

22.9%

-69.3%

-12.6

-31.3%

-6.4%

26.6

6.3

-6808.1%

-76.2%

4.0

-71.1

-11.5

-388.3%

-83.8%

43.4

41.0

40.5

-6.6%

-1.3%

47.3

-30.1

29.0

-38.8%

-196.4%

0.1

3.1

1.9

1900.9%

-38.6%

Impairment

57.1

Non recurring items*

10.8

2.9

1.5

-86.1%

-48.5%

EBITDA ex- non recurring items

58.2

33.1

32.4

-44.4%

-2.1%

Table 7 Investment per business unit


Actual
In R$ Million

1Q15

4Q15

1Q16

(C)/(A)

(C)/(B)

(A)

(B)

(C)

Contruction

1.0

1.1

0.1

-88.7%

-89.6%

Rental

0.0

0.0

0.0

-100.0%

Rental equipment

1.1

1.1

0.1

-89.5%

-89.6%

Corporate and use goods

5.3

1.5

1.2

-77.6%

-22.3%

Capex Total

6.4

2.6

1.3

-79.7%

-50.6%

1Q15

4Q15

1Q16

(C)/(A)

(C)/(B)

(A)

(B)

(C)

63.1

50.3

39.7

-37.0%

-20.9%

Heavy Construction

36.5

29.1

23.9

-34.3%

-17.8%

Real Estate

26.7

21.1

15.8

-40.8%

-25.2%

21.2

7.3

14.0

-34.0%

92.0%

Heavy Construction

14.6

2.5

7.9

-46.3%

217.2%

Real Estate

6.6

4.8

6.1

-6.8%

27.5%

Total net revenue

84.3

57.5

53.7

-36.3%

-6.7%

COGS, ex-depreciation

26.5

25.3

21.9

-17.4%

-13.3%
-63.2%
-7.9%

Rental equipment

Table 8 Construction f inancial indicators

In R$ Million
Net revenue
Rental

Technical support serv ices, sales and others

G&A, ex-depreciation and ADD

32.0

58.7

21.6

-32.3%

ADD

12.8

6.6

6.1

-52.8%

Heavy Construction

8.8

5.1

4.8

-45.6%

-5.3%

Real Estate

4.0

1.5

1.2

-68.8%

-16.9%

13.0

-33.0

4.1

-68.3%

-112.5%

EBITDA margin (%)

15.4%

-57.4%

7.7%

ROIC (%)

1.2%

-8.6%

-9.8%

1.1

1.8

0.4

-63.5%

-77.1%

801.5

716.6

681.7

-14.9%

-4.9%

Rental net PP&E

555.8

502.4

481.3

-13.4%

-4.2%

Others

245.7

214.2

200.4

-18.4%

-6.4%

22.5

22.0

21.8

-3.3%

-1.3%

EBITDA

Capex
Inv ested Capital

Depreciation

Mills' Results in 1Q16


www.mills.com.br/ri

10

Table 9 Rental financial indicators


1Q15

4Q15

1Q16

(C)/(A)

(C)/(B)

(A)

(B)

(C)

Rental

69.3

59.7

49.9

-28.0%

-16.4%

Technical support serv ices, sales and others

10.3

10.6

26.5

157.3%

149.1%

Total net revenue

79.6

70.3

76.4

-4.0%

8.6%

COGS, ex-depreciation

20.6

21.8

32.5

57.9%

48.8%

G&A, ex-depreciation and ADD

16.2

15.4

14.1

-13.0%

-8.2%

ADD

8.3

0.8

3.0

-63.7%

264.7%

EBITDA

34.4

32.3

26.8

-22.3%

-17.2%

EBITDA margin (%)

43.3%

45.9%

35.0%

ROIC (%)

8.8%

5.5%

5.1%

0.0

0.0

0.0

-100.0%

In R$ Million

Net revenue

Capex
Inv ested Capital

712.4

654.7

632.5

-11.2%

-3.4%

Rental net PP&E

588.2

518.3

491.6

-16.4%

-5.1%

Others

124.2

136.4

140.8

13.4%

3.3%

20.9

20.8

18.7

-10.2%

-9.8%

Depreciation

Mills' Results in 1Q16


www.mills.com.br/ri

11

INCOME STATEMENT
In R$ Million
Net revenue from sales and services

1Q15
163.9

4Q15
127.9

1Q16
130.1

(86.1)

(83.6)

(90.5)

77.8

44.3

39.6

(73.8)

(115.3)

(51.1)

4.0

(71.1)

(11.5)

(26.0)

(26.9)

(25.2)

Financial income

7.6

13.5

12.6

Financial result

(18.4)

(13.5)

(12.6)

Profit before taxation

(14.4)

(84.6)

(24.1)

(0.1)

26.6

6.3

Results of continuing operations

(14.5)

(57.9)

(17.8)

Net incom e (Loss)

(14.5)

(57.9)

(17.8)

128.058

128.058

128.058

(0.11)

(0.45)

(0.14)

Cost of products sold and services rendered


Gross profit
General and administrative expenses
Operating profit

Financial expense

Income tax and social contribution expenses

Number of shares at the end of the per iod ( in thousands)


Net income ( R$ per shares)

Mills' Results in 1Q16


www.mills.com.br/ri

12

Balance Sheet
In R$ Million
Assets

1Q15

Current Assets
Cash and cash equivalents
Trade receivables
Inventories
Recoverable taxes
Advances to suppliers
Other receivables- Sale of investee
Other current asset s
Current Assets held for sale

4Q15

1Q16

214.0

232.0

423.5

126.4
19.9
28.6
0.1
18.0
6.6

99.7
18.4
39.4
0.2
19.8
5.3
20.7

91.6
18.2
33.5
0.1
20.4
6.9
11.9

413.7

435.5

606.2

1.2
35.9
26.8
27.1
10.9
101.9

12.3
47.2
11.0
19.8
90.4

8.3
53.6
10.6
20.4
92.9

87.4
1.154.4
76.5
1.318.4

61.2
1.004.1
46.8
1.112.0

61.2
949.2
46.2
1.056.6

Total Non-Current Asset s

1.420.3

1.202.4

1.149.4

Total Assets

1.833.9

1.638.0

1.755.7

Total Current Assets


Non-Current Asset s
Trade receivables
Recoverable taxes
Deferred taxes
Deposits in court
Other trade receivables

Investment
Property. plant and equipment
Intangible assets

In R$ Million
Liabilities

1Q15

4Q15

1Q16

Current Liabilities
Suppliers
Borrowings and financings
Debentures
Salaries and payroll charges
Income tax and social contribution
Tax refinancing program (REFIS)
Taxes payable
Profit sharing payable
Dividends and interest on equity payable
Advances on assets held for sale
Other current liabilities

14.9
3.2
114.3
20.0
1.0
2.9
21.8
1.2

6.8
3.2
186.6
18.2
1.2
2.7
0.2

6.8
3.2
193.5
16.7
1.2
1.3
0.0
0.6

Total Current Liabilities

179.4

218.9

223.3

Non-Current Liabilities
Borrowings and financings
Debentures
Provision for tax. civil and labor risks
Tax refinancing program (REFIS)

14.3
580.3
9.0
-

11.9
419.1
16.61
9.2

11.1
423.2
18.45
9.2

Total Non-Current Liabilities

616.0

456.8

462.0

Total Liabilities

795.3

675.7

685.3

Stockholders' Equity
Capital
Earnings reserve s
Capital reserves

563.3
2.5
487.0

563.3
389.2
9.7

563.3
389.2
135.6

Retained earnings

(14.5)

(17.8)

Total Stockholders' Equity

1.038.6

962.2

1.070.4

Total Liabilities and Stockholders' Equity

1.833.9

1.638.0

1.755.7

Mills' Results in 1Q16


www.mills.com.br/ri

13

Cash Flow
In R$ Million

1Q15

4Q15

1Q16

Cash from operations activities


(14.4)

(84.6)

(24.1)

Depreciation and amortization

43.4

41.0

40.5

Prov ision f or tax. civil and labor risks

(0.5)

3.7

1.3

Accrued expenses on stock options

2.5

3.7

1.4

Net income before taxition


Adjustments

Gain on sale of property. plant and equipment and intangible assets


Interest. monetary and exchange rate variation on loans. contingencies and deposits in court
Allowance f or doubtful debts

(14.4)
22.9
21.0

(10.3)

24.9

12.6

7.4

9.1

57.1

Slow turnov er inventory provisions


Others

(0.8)

1.9

(7.0)

0.0

76.8

129.8

54.5

4.3

15.2

3.8

Changes in assets and liabilities


Trade receivables
Gain on sale of equipment

27.5

Purchases of rental equipment

(1.1)
0.0

(1.1)
7.1

7.2

3.6

Deposits in court

(0.4)

1.8

0.6

Other assets

(1.0)

2.4

(0.4)

Suppliers

(1.7)

Inv entories
Recov erable taxes

Salaries and payroll charges


Income tax and social contribution

0.6
(1.1)

29.9

(5.8)
(5.0)
0.6

(0.1)
8.8
10.1

(0.1)
(1.5)
(1.4)

0.2

(0.5)

0.4

34.6

18.2

50.2

(0.0)

(0.4)

(15.0)

(21.3)

Prof it sharing paid

(6.3)

0.0

Net cash generated by operating activities

75.6

41.8

68.9

(1.6)

(1.2)

(1.6)

(1.2)

Other liabilities

Cash from operations


Lawsuits settled
Interest paid

(11.7)

Cash flow from investment activities


Purchases of property. plant and intangible assets

(2.5)

Proceeds f rom sale of SI business unit


Proceeds f rom sale of property. plant and equipment and intangible assets
Net cash applied in investment activities

(2.5)

Cash flow from financing activities


124.6

Shares in treasury
Div idends and interest on capital invested paid

(8.8)

Repayment of borrowings
(0.8)

(0.8)

(50.0)

(0.8)

123.8

20.4

39.5

191.5

Cash and cash equivalents at the beginning of the period

193.7

192.5

232.0

Cash and cash equivalents at the end of the period

214.0

232.0

423.5

Borrowings/Debentures raised

(41.2)

Ingressos de emprstimos
Net cash generated by (used in) financing activities
Increase (decrease) in cash and cash equivalents

Mills' Results in 1Q16


www.mills.com.br/ri

14

Glossary
(a) EBIT DA EBITDA is a non-accounting measurement w hich w e prepare and w hich is reconciled w ith our financial statement in
accordance w ith CVM Instruction 01/2007, w hen applicable. We have calculated our EBITDA (usually defined as earnings
before interest, tax, depreciation and amortization) as net earnings before financial results, the effect of depreciation of assets
and equipment used for rental, and the amortization of intangible assets. EBITDA is not a measure recognized under BR
GAAP, IFRS or US GAAP. It is not significantly standardized and cannot be compared to measurements w ith similar names
provided by other companies. We have reported EBITDA because w e use it to measure our perfor mance. EBITDA should not
be considered in isolation or as a substitute for "net income" or "operating income" as indicators of operational performance or
cash flow , or for the measurement of liquidity or debt repay ment capacity.
(b) ROIC - ( Return on Invested Capital) - Calculated as Operating Income before financial resu lts and after the pay ment of income
tax and social contr ibution (theoretical 30% income tax rate) on this income, divided by average Invested Capital, as defined
below . ROIC is not a measure recognized under BR GAA P, and it is not significantly standardized and cannot be compared to
measurements w ith similar names prov ided by other companies.
ROIC LTM : ((Net earnings in the last tw elve months (30% IR) + (firms remuneration in w hich possess minor ity shareholding)/
(Average Invested Capital in the last thirteen months))
(c) Capex (Capital Expenditure) Acquisition of goods and intangibles for per manent assets.
(d) Net cash flow - Net cash generated by operating activ ities minus net cash used in investing activities.
(e) Net Debt Gross debt less cash holdings.
(f) Enterprise value (EV) Company value at the end of the period. It is calculated by multiply ing the number of outstanding
shares by the closing price per share, and adding the net debt.
(g) Job execution costs Job execution costs include: (a) labor costs from cons truction jobs supervision and technical
assistance; (b) labor costs for erection and dis mantling of the equipment rented to our clients, w hen such tasks are carried out
by the Mills w orkforce; (b) equipment freight costs, w hen under Mills responsibility; (d) cost of materials used in the
maintenance of the equipment, w hen it is returned to our w arehouse; and (e) cost of equipment rented from third -parties.
(h) Warehouse costs Warehouse costs includes expenses directly related to the w arehouse management, storage, repair and
maintenance of equipment to be rented and to be sold, including labor costs, PPEs used in the w arehouse activities (handling,
storage and maintenance), materials needed (forklift fuel, gases for w elding, plyw ood, paints, timber battens, among others)
and machines and equipment maintenance (forklifts, w elding machines, w ater-blasting hoists and tools in general).
(i) Invested Capital For the Company, invested capital is defined as the sum of its ow n capital (net equity or shareholders
equity) and capital from third parties (total loans and other liabilities that carry interest, from banks or not), both being average
capital from the beginning to the end of the period considered. By business segment, it is the average of the capital investe d by
the company w eighted by the average assets of each business segment (net liquid assets plus PPE Property, Plant and
Equipment). The quarter asset base is calculated as the average of the asset base of the last four months and the annual asse t
base is calculated as the average of the last thirteen months.
This press release may include declarations about Mills expectations regarding future ev ents or results. All declarations based upon future expectations. rather than
historical facts. are subject to v arious risks and uncertainties. Mills cannot guarantee that such declarations will prov e 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 government rules that are
subject to change without previous notice. To obtain further inf ormation on f actors that may giv e rise to results different f rom those f orecasted by Mills. please consult the
reports filed with the Brazilian Comisso de Valores Mobilirios (CVM. equiv alent to U.S. SEC).

Mills' Results in 1Q16


www.mills.com.br/ri

15