SCHEDULE Providência USA HIGHLIGHTS RESULTS OUTLOOK Providência USA 2
HIGHLIGHTS Sales Volume amounted to 20.0 thousand tons in the quarter, a growth of 7.1% inrelation to the same period in 2010; Our first production line in the United States, inaugurated last January, has alreadycontributed 492 tons sold in 1Q11, in line with the Company’s forecasts for ramping upproduction, expected to be operating at full capacity by the beginning of the third quarterof 2011; The signing of the debt agreement with the Bank HSBC, guaranteed by Hermes,comprising the two new lines that will start up in 2012. The US$ 85 million loan has aterm of 10 years with 2 year grace period, Libor to dollar-based interest rates; The Annual and Extraordinary General Meeting of April 27 2011 approved an additionaldividend payout of R$ 21.8 million, totaling 100% of the adjusted dividend calculationbase in 2010. The share will become ex-dividend on May 17 2011 and payout will takeplace on May 25 2011. 3
SCHEDULE Providência USA HIGHLIGHTS RESULTS OUTLOOK 4
SALES VOLUME (in thousands of tons) tons) During the quarter, the Company posted an 20,2 20,018,7 increase in sales volume of 7.1% compared 1,2 1,4 0,9 with the same period in 2010; Sales of nonwovens reported a growth of 19,0 18,617,8 4.8% when compared with 1Q10; Our first production line in the United States, inaugurated last January, has already1Q10 4Q10 1Q11 contributed 492 tons sold in 1Q11, in line Others Total with the Company’s forecasts for ramping up production. 5
NET REVENUE NONWOVENS (in millions of Reais) Net revenue reached R$ 115.1 million in 1Q11, a growth of 10.2% in relation to 1Q10, while in relation to 4Q10 there was a small decline of 0.7%; 116,0 115,1104,5 The increase is preponderantly due to an increase in the sales volume in the domestic market and the production start-up of the1Q10 4Q10 1Q11 new machine in the United States. 6
COGS (Cost of Goods Sold) (Cost NONWOVENS (in millions of Reais) Reais) R$ 8,0090,0 Cost of goods sold (COGS) totaled a growth 79,180,0 75,9 of 11.7% when compared with 1Q10; R$ 7,00 70,870,0 R$ 6,0060,0 Compared with 4Q10, growth was 4.2%;50,0 R$ 5,0040,0 R$ 3,79 R$ 3,96 The increase in relation to 1Q10 is largely R$ 3,76 R$ 4,0030,0 linked to:20,0 R$ 3,0010,0 • The greater sales volume in 1Q11; - R$ 2,00 • Higher polypropylene prices. 1Q10 4Q10 1Q11 COGS (R$ thousand) Unitary COGS (R$) 7
EBITDA (in millions of Reais) and EBITDA Margin (%) 45,0% The Adjusted Ebitda reached R$ 22.2 28,4 million in 1Q11, corresponding to a 2.7% decline compared with 1Q10. In relation to22,7 4Q10, there was a decline of 22.1%; 22,2 35,0% This reduction reflected: 24,5% 25,0% • The start up of the USA production21,8% line, including all the required 19,2% operational adjusts; • The 22% increase in the prices of our 15,0% principal raw material, polypropylene,1Q10 4Q10 1Q11 according to Chemical Data (CDI). Ebitda Ebitda Margin (%) 8
NET INCOME (in millions of Reais) and NET MARGIN (%) 8,0 In this quarter, Company net income rose 7,1 7,0 279.5% reaching R$ 7.1 million against R$ 6,0 5,6 6,2% 1.9 million in 1Q10; 5,0 4,0 4,8% Net income increased 26,8% in relation to 3,0 4Q10; 1,9 2,0 1,0 1,8% Adjusted base for calculating dividends - 1Q10 4Q10 1Q11 for the quarter (Retained Earnings) totaled(1,0) 0,0% 5,3% R$ 9.7 million, since realization of deemed Net Earnings Net Margin (%) costs in the quarter is added in net of tax. 9
CASH AND CASH EQUIVALENTS (in millions of Reais) The Company reported an increase in itscash position of 8,6% or R$ 21.5 million atthe end of the period reflecting itsoperational, investment and financingactivities during 1Q11. 270,6 264,0 249,1 1Q10 4Q10 1Q11 10
NET DEBT (in millions of Reais) The company’s net debt increased 31.6%compared with 1Q10 due in large part to 62% of its debt in local currency while theadditional funding for financing capex for remaining 38% was foreign currencyexpansion of the US plant and a new denominated.production line which will go into operationin Brazil next year; Compared with 4Q10, net debt fell by 243,9 224,38.0%. This reduction is due to the greater 170,5generation of cash reported for thequarter; 1Q10 4Q10 1Q11 11
DEBT / CASH (in millions of Reais) (in Consolidated Net Debt Ch. 1Q11 /Colunas1 03/31/2010 03/31/2011 1Q10 Total Debt Short Term 132,9 266,1 100,3% Long Term 301,6 228,8 -24,1% Total 434,5 494,9 13,9% Cash 264,0 270,6 2,5% Net Debt 170,5 224,3 31,6% Net Debt / Adjusted EBITDA 1,8 2,6 44,4% Shareholders Equity 511,5 704,3 37,7% 12
SCHEDULE Providência USA HIGHLIGHTS RESULTS OUTLOOK
OUTLOOK Forecast for 2011 is for an increase in sales volume and for full capacity utilization ofProvidência’s US production line by early second half of the year, and keep currentproduction levels in Brazil; The signing of the debt agreement with the Bank HSBC, guaranteed by Hermes,comprising the two new lines that will start up in 2012. The US$ 85 million loan has aterm of 10 years with 2 year grace period, Libor to dollar-based interest rates. The firsttranche is estimated by early second half of the year; The Company’s principal investment projects are in line with its expansion plans andduring the 1Q11 we effected the down payments for two new production lines. The startup of both lines will be in 2012 and their investment will total approximately US$ 123million and will increase our installed capacity by 40% approximately, i.e., additional 40thousand tons/year of nonwovens. 14
CEO: Hermínio V. S. de Freitas CFO: Eduardo Feldmann Costa IR : Gabriela Las Casas Beatriz Tokarski Tel: +55 (41) 3381-8673 Fax: +55 (41) 3283-5909 São José dos Pinhais – PR www.providencia.com.br/ir www.twitter.com/providencia_riThe words “believe”, “anticipate”, “expect”, “estimate”, “will”, “plan”, “may”, “intend”, “foresee”, “project” and other similar expressions indicate forward-lookingstatements. These forward-looking statements involve uncertainties, risks and assumptions, since they include information related to our potential or assumed futureoperating results, business strategy, financing plans, competitive position in the market, industry environment, potential growth opportunities and the effects of futureregulations and competition. In addition, forward-looking statements refer only to the date on which they were made and should not be taken as a guarantee of futureperformance. Providência is under no obligation to update this presentation with new information and/or future events . 15
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