CG-LA Infrastructure: July, 2010

CG-LA Infrastructure
July, 2010
Presentation agenda
Executive Summary Market Overview Financials Highlights
Mills at a Glance
Mills is the premier engineering services provider to the Brazilian infrastructure, real estate and industrial sectors Uncontested market leader in providing 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 Excellent track-record of performance, having participated in the Brazilian largest projects over the last 58 years Superior capacity and scale, scope of services and market coverage Strong brand names - Mills and Jahu - associated in reliability
Mills at a Glance
and is uniquely positioned to benefit from the new wave of investments in Brazil
Sectors served by Mills: Infrastructure Real Estate Oil & Gas Petrochemicals, Pulp & Paper, Steel and Others Investments of R$ 1.1 billion in 2010-2013 To enable its geographic expansion in Brazil To attend the growing demand in the Brazilian infrastructure sector
Mills at a Glance
Mills has excellent financial track record with average revenue growth of 45% per year in the last 3 years and EBITDA margin of 39% in 2009. Financial Highlights 2009 Gross revenues: R$ 460 million Revenue CAGR 2007-2009 : 45% 2009 EBITDA: R$ 158 million EBITDA CAGR 2007-2009: 128% 2009 EBITDA Margin: 39% 2009 ROIC: 25%
Industrial Ser vices Residential and Commercial Equipment Rental Heavy Construction
Business Segments
2009 Net Revenues R$ 404 million
Business Segments Heavy Construction

Focus on large and complex infrastructure projects Products: Engineering solutions and equipment rental: formwork, scaffolding and shoring Planning, design, technical supervision, equipment and related services Market leader with estimated market share of 50% Extensive track record with 58 years of experience Critical success factor is reliability Main clients are the Brazilian largest contractors, such as
So Paulos Subway Yellow Line Santo Antonio Hydroelectric Power Plant Dutra Highway Overpass (So Paulo)
Business Segments Residential and Commercial

Focus on residential and commercial construction Products: Engineering solutions and equipment rental: formwork, scaffolding and shoring Sales of formwork Market leader with strong brand name: Jahu Business acquired in 2008 and has recently introduced formwork in its product portfolio Innovative product Aluma form - to serve low income housing construction Strong long-term outlook driven by the increase in housing financing, Minha Casa, Minha Vida program, and wood replacement Main clients are the Brazilian largest real estate companies, such as
Business Segments Industrial Services

Focus on large industrial plants, both on construction and maintenance phases Products offered during construction and maintenance: access structures rental and assembling / disassembling services industrial painting and surface treatments thermal insulation # 3 position in this segment 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
Business Segments Equipment Rental Division

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, to lift people or cargo, respectively # 2 position in this market Business started in 2008 and geographic expansion is planned for the next 3 years Cross-selling with all other Mills divisions Vast underutilization in Brazil compared to developed countries Positive outlook given the more rigid safety regulation and its enforcement Critical success factors are location close to the clients, availability and reliability
Operational Excellence
Widely recognized technical expertise, agility, innovative solutions and reliability granted Mills long-standing relationships with many of Brazils largest and most active companies, creating significant barriers of entry to new players, since these characteristics cannot be easily replicated by any competitor, local or foreign
Reliability
Agility and Matchless Execution Best in Class Solutions
Potential Entrants
National Coverage Complete Product Portfolio Tailor Made Projects
10
Experienced Management Team

Strong company culture reinforced by experienced management team, committed to superior governance practices and fully aligned with shareholders through long-term compensation plans
High Corporate Governance Standards
Committed to the highest corporate governance practices
Name and Position
Experienced Management
Years of Experience Mills Industry
Financials reviewed by top audit companies since 1975 Novo Mercado listing and one independent board members Active Board with Private Equity Funds participation
Frederico Neves CFO Ramon Vazquez CEO
25
30
13
13
Highly Aligned Management
Erik Wright Barstad Director of Heavy Construction and Residential and Commercial Divisions
29
29
Profit sharing programs, equity based incentives and wide opportunities for career development Loyalty, commitment and enthusiasm
Srgio Kariya Director of Equipment Rental Division Roberto Carmelo de Oliveira Director of Industrial Services Division
29
29
19
11
Growth Strategy
Invest in additional equipment to support the strong market demand Focus on providing unique solutions for large and complex projects with leading companies Increase sales to the existing clients and benefit from the cross-selling synergies among the divisions Pursue geographic expansion Investments of R$ 1.1 billion in the next 3 years
Mills Investments 2010- 2013
R$ 1.1 billion
Industrial Services
10%
Heavy Construction Rental
30%
30%
Residential and Commercial
30%
12
Geographical Expansion
We plan to more than double the number of branches in the next three years, reaching 44 branches in 2013 # of branches by division1
as of year end
Branches locations
as of December 31, 2011
42 38
44
Roraima
Amap
Amazonas
31
Par Maranho Cear Rio Grande do Norte Paraiba Piaui Acre Tocantins Rondnia Mato Grosso Distrito Federal Goias Bahia Sergipe Alagoas
Pernambuco
Minas Gerais
Heavy Construction
1 Residential and Commercial
Mato Grosso do Sul
So Paulo
Espirito Santo
Equipment Rental Industrial Services

1
Parana
Rio de Janeiro (HQ)
Mills planned expansion until 2011
Santa Catarina Rio Grande do Sul
Notes: 1 Some of the branches of different divisions share physical space and infrastructure, but were counted as individual branches.
13
IPO rational
Guarantee capital to delivery its growth plan in order to capture potential new demand, while maintaining the companys strong balance sheet Total size: R$ 685 million Net proceeds: R$ 410 million (new issued shares) 1,358 new shareholders Post-IPO free float: 48%
14
Shareholder Structure
% Capital total
Stalszene Shareholder Structure
15
Presentation agenda
Unprecedented Macro Economic Conditions

Brazilian macro economic perspectives are highly encouraging and current infrastructure remains a bottleneck for growth
GDP Growth (%) Investments (as a % of GDP)
20.8% 7.1% 19.2% 6.1%
5.1% 4.4% 4.0%
4.5%
4.6%
19.0% 17.6% 16.7% 16.4%
17.6%
-0.2%
2006
2007
2008
2009
2010E
2011E
2012E
2013E
2006
2007
2008
2009
2010E
2011E
2012E
17
Market outlook - Heavy Construction

Unparalleled infrastructure investments are expected for the next few years reinforced by major world events. Infrastructure investments in Brazil should amount R$ 536 million in the 2009-2012 period, with a growth of 50% compared to the 2004-2007 period Governmental initiative (PAC Programa de Acelerao de Crescimento) to accelerate the economic growth with investments of R$ 2.1 trillion, of which R$ 1.9 trillion is still remaining to be invested Major world events, 2014 World Cup and 2016 Olympic Games, will demand over R$ 171 billion investments in infrastruture - stadia, airports and urban infrastructure
Expected Infrastructure Investments 2010- 2014
R$ billion
PAC Investments 2010- 2014

R$ 1,252 billion
Low income housing 22% Services 2%
959
293 142 29 Olympics World Cup PAC 1 PAC 2

Transport 10% Urbanization 11%
Energy 55%
Source: BNDES report Viso do Desenvolvimento, February 22nd, 2010
18
Market outlook Residential and Commercial

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 Housing Financing is very small compared to developed countries. In 2008, the Brazilian total housing financing/GDP was 3%, compared to 72% in England, 41% in Germany and 18% in Italy. Housing Financing has increased 5x in the last five years, driven by credit availabity, lower inflation and lower interest rate Minha Casa Minha Vida: government program for low income housing Investments of R$ 34 billion and potential increment by R$ 278 billion with PAC2 Increasing focus on cost reduction and shorter construction cycle, reducing competitiveness of less efficient developers
Housing Financing Outstanding (R$ billion)
120 100 80 60 40 20 0 Jan/02
Source: Brazilian Central Bank, ABECIP
Sep/03
May/05
Jan/07
Sep/08
May/10
19
Market outlook Industrial services

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 After the pre-salt discoveries, Brazilian oil & gas proved reserve increase more than 5x, from 15 to 85 billion boe Fixed investments in Brazil is expect to range from 17% to 21% of GDP in the next 3 years Direct Foreign Investment should double to US$ 54 billion in 2012, compared to the 2009 level Total investment in industry in Brazil is expected to be R$ 499 billion in the next 3 years, being oil & gas (59%), mining (10%) and steel (9%) the sectors with higher investments Fixed Investments in the oil & gas industry should reach R$ 295 billion from 2010 to 2012, while in manufacturing should amount R$ 280 billion
Oil & Gas: Fixed Investments (R$ billion)
CAGR 09-12: 14% 96.5
100.0
Manufacturing: Fixed Investments (R$ billion)

112.0 CAGR 09-12: 10% 86.4 76.5 93.0 100.4
86.4 69.1 53.2 35.5 76.5 54.5 58.5 78.1
80.0
60.0
40.0
20.0
2006
2007
2008
2009E
2010E
2011E
2012E
2006
2007
2008
2009E
2010E
2011E
2012E
Source: Banco Central, Ipeadata, BNDES and Ita
20
Market outlook Motorized access equipment

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 (7,400 units versus 685,000 units in 2008) Modest rental penetration of 15% in Brazil. Rental penetration is approximately 40% in the USA, 60% in Japan and 80% in England Recent regulation authorizes 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 22% in the next few years and reach 25,000 units by 2014
Aerial Platforms and Telehandlers Fleet (000 units) 30 25 20
15.7 19.7
CAGR 08-14: 22%
24.9
15
10.1
12.6 7.4 8.0
Telehandlers Aerial Platforms
10 5 0
2008 Source: Terex
2009E 2010E 2011E 2012E 2013E 2014E
21
Presentation agenda
Strong and Solid Financial Performance

Net Revenues (R$ million) EBITDA (R$ million) and EBITDA Margin (%)
CAGR 07-09: 45%
CAGR 07-09: 128%
EBITDA Margin
Acquisition of Jahu Start-up Equipment Rental Division Sales of Events Division
437 404
16%
30%
39%
39% 169
158
Entrance of PE Funds
299
192
90
30
2007
2008
2009
1Q10 LTM
2007
2008
2009
1Q10 LTM
1Q10 LTM = Last 12 months as of March 31, 2010
23

Net Earnings (R$ million) Return on Invested Capital (%)1
CAGR 07-09: 155%
24% 75 68 22%
25% 23%
31
11
2007
2008
2009
1Q10 LTM
2007
2008
2009
1Q10
Notes: 1 Calculated as [EBIT * (1-tax)] / [Average Debt + Shareholders Equity]
1Q10 LTM = Last 12 months as of March 31, 2010
24

Capex (R$ million) Net Debt (R$ million) and Net Debt/EBITDA
235
2.1x
60
Jahus acquisition 1.1x 1.0x
1.2x 204.4
126
187.7
182.4
175 55
76
31.3
2007
2008
2009
1Q10 LTM
2007
2008
2009
1Q10
25
Mills: The Best Way to Invest in Brazilian Infrastructure Sector

A strategic asset uniquely positioned in the core of Brazilian growth
Strong Barriers to Entry
Experienced Management Team
Unprecedented Macro Economic Conditions
Attractive Industry Dynamics in Each Business
Unique Business Model with Solid Competitive Advantages
26

CG-LA Infrastructure: July, 2010

Uploaded by

Copyright:

Available Formats

CG-LA Infrastructure: July, 2010

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

CG-LA Infrastructure: July, 2010

Uploaded by

Copyright:

Available Formats

CG-LA Infrastructure

Executive Summary Market Overview Financials Highlights

Business Segments Heavy Construction

Business Segments Residential and Commercial

Business Segments Industrial Services

Business Segments Equipment Rental Division

Experienced Management Team

Highly Aligned Management

Residential and Commercial

Mato Grosso do Sul

Equipment Rental Industrial Services

Rio de Janeiro (HQ)

Mills planned expansion until 2011

Santa Catarina Rio Grande do Sul

Stalszene Shareholder Structure

Executive Summary Market Overview Financials Highlights

Unprecedented Macro Economic Conditions

5.1% 4.4% 4.0%

19.0% 17.6% 16.7% 16.4%

Market outlook - Heavy Construction

PAC Investments 2010- 2014

293 142 29 Olympics World Cup PAC 1 PAC 2

Source: BNDES report Viso do Desenvolvimento, February 22nd, 2010

Market outlook Residential and Commercial

Market outlook Industrial services

Manufacturing: Fixed Investments (R$ billion)

86.4 69.1 53.2 35.5 76.5 54.5 58.5 78.1

Source: Banco Central, Ipeadata, BNDES and Ita

Market outlook Motorized access equipment

12.6 7.4 8.0

Telehandlers Aerial Platforms

2008 Source: Terex

2009E 2010E 2011E 2012E 2013E 2014E

Executive Summary Market Overview Financials Highlights

Strong and Solid Financial Performance

CAGR 07-09: 45%

CAGR 07-09: 128%

1Q10 LTM = Last 12 months as of March 31, 2010

Strong and Solid Financial Performance

CAGR 07-09: 155%

Notes: 1 Calculated as [EBIT * (1-tax)] / [Average Debt + Shareholders Equity]

1Q10 LTM = Last 12 months as of March 31, 2010

Strong and Solid Financial Performance

Jahus acquisition 1.1x 1.0x

Mills: The Best Way to Invest in Brazilian Infrastructure Sector

Strong and Solid Financial Performance

Strong Barriers to Entry

Experienced Management Team

Unprecedented Macro Economic Conditions

Attractive Industry Dynamics in Each Business

Unique Business Model with Solid Competitive Advantages

You might also like

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.