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Results Presentation 4Q08
Results Presentation 4Q08
Results Presentation 4Q08
Results Presentation 4Q08
Results Presentation 4Q08
Results Presentation 4Q08
Results Presentation 4Q08
Results Presentation 4Q08
Results Presentation 4Q08
Results Presentation 4Q08
Results Presentation 4Q08
Results Presentation 4Q08
Results Presentation 4Q08
Results Presentation 4Q08
Results Presentation 4Q08
Results Presentation 4Q08
Results Presentation 4Q08
Results Presentation 4Q08
Results Presentation 4Q08
Results Presentation 4Q08
Results Presentation 4Q08
Results Presentation 4Q08
Results Presentation 4Q08
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Results Presentation 4Q08

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  • 1. 4Q08 Results March 31, 2009
  • 2. Agenda • The Company • The Nonwovens Sector • Highlights • 4Q08 Results • Outlook 2
  • 3. Shareholders’ Composition Block of Control Espírito Santo Treasury and AIG Group Asas Fund G&G Group others 19.0% 18.3% 19.0% 10.2% 6.1% 27.4% Total: 82.5 million Shares
  • 4. Overview Major Nonwovens Key Customers End-uses  #1 manufacturer of nonwovens in Latin America  Diapers  51% market share in  Feminine hygiene Brazil*  Furniture & bedding  34% market share in Latin  Medical disposables America, except Brazil* *Hygiene Products Since October 1st, 2008, Providência operates its nonwovens division only, with approximately 700 employees; our Pipes and Fittings Division was sold in October 2008. The Company focused in the nonwovens business, that present better margins and lower operational costs.
  • 5. Our Nonwovens Focus: Consumer Goods Industry Providência is focused on high value-added nonwoven products with high growth potential (hygiene and medical disposables) Product Mix (% of Nonwovens Net Revenues) Market Segmentation Outlook Value-added Operating Market Expected Medical products margin size growth 3% Medical Double Durable 23% Disposables*  High Small digit Hygiene / Double Consumer  Medium Large digit Hygiene Goods* 74% Single Durables  Low Medium digit * Also exported to the USA and to Latin America 5
  • 6. Agenda • The Company • The Nonwovens Sector • Highlights • 4Q08 Results • Outlook 6
  • 7. Market Share & Diapers Market Market Share Brazil Market Share South America except Brazil (2008 in tons) (2008 in tons) Fitesa Polystar 15.420 4.800 Providencia; 7% PGI ( 23.700 PGI; 22% importação) 35,4% 28.200 6.840 42,2% 10% Outros 7.200 Providencia Fitesa; Softbond; 10% 35.340 7.500 7.500 51% 11,2% 11,2% Evolution of Baby Diaper Penetration in Brazil 38% 35% 20% 15% 1995 2000 2005 2008* *Estimated
  • 8. Agenda • The Company • The Nonwovens Sector • Highlights • 4Q08 Results • Outlook 8
  • 9. Highlights  Sale of the Pipes and Fittings Division - Provinil:  Focus in nonwovens: Company core business, with higher margins compared to the Pipes Division;  Sold to an Alixis subsidiary in October/08;  R$82 million, equivalent to 7.5x the Ebitda generated by this Division in the past 12 months.  Debentures issued in Dec/07:  Annual rating review;  Rating maintained at a brA level, despite the world crisis;  Síntese Analítica released by Standard & Poor’s on October 28,2008. 9
  • 10. Highlights  SAP system stable since 4Q08.  Stability of tax credits in the acquisition of raw material for exported products:  Government benefit stop the tax credits growth.  2nd Share Buyback Program started on November 26, 2008:  Totaling 2.4 million shares that represented, in November 2008, 10% of the Company free float;  Until the beginning of our quiet period, in March 12, 2009, we had acquired 85% of the Program. 10
  • 11. Agenda • The Company • The Nonwovens Sector • Highlights • 4Q08 Results • Outlook 11
  • 12. Sales Volume  The Nonwovens sales increased 0.8 by 11.9% in 4Q08 compared with 1.1 5.9 4Q07 mainly due to the start up of 5.6 1.6 KAMI9, in April/2008, that reached its full capacity of 15,000 tons/year in the second half 2008; 17.7 17.3  Compared to the 3Q08 our sales 15.5 volume was stable. 4Q07 3Q08 4Q08 Nonwovens Pipes and Fittings Others In thousand tons 12
  • 13. Net Revenues – Nonwovens Division  Net revenues of the Nonwovens totaled R$ 124.4 million in 4Q08, an increase of 34.1% y-o-y mainly due 124.4 to the increase of 11.9% in volumes, 104.9 92.7 and to the better exchange rates that helped our exports, that accounted for 50.5% of our gross revenues in the 4Q08. 4Q07 3Q08 4Q08 In millions of Reais 13
  • 14. Variable Costs – Nonwovens Division Unit Variable Costs (R$ - raw material, comissions and shipping)  The unit variable cost increased 23.8% in 4Q08 in relation to the 4Q07, mainly due to the 4.58 increase of 25.7% in the exports volume, that 4.07 presents higher logistic costs and to the 3.70 stronger US dollar against the Real . In relation to the 3Q08 the increase was 12.5%. 4Q07 3Q08 4Q08 14
  • 15. Costs – Cia Providência Cost of Goods Sold (R$ million)  The cost of goods sold reached R$ 84.5 million in the 4Q08, an increase of 0.3% compared to the R$ 84.3 million in the 4Q07. 90.4 84.3 84.5  The unit COGS increased 17.1% due to the costs of the Pipes and Fittings Division in the 4Q07, that was lower than the unitary COGS of the Nonwovens Division. Because of this 4.46 3.81 3.70 3.66 3.92 3.87 the unitary COGS of both divisions were smaller in 4Q07 and 3Q08. 4Q07 3Q08 4Q08 Unitary COGS Unitary COGS 15
  • 16. Fixed Costs – Nonwovens Division Fixed Costs (R$ million) In addition to the collective wage agreement in 4Q08, increases are directly related to the sale of the Pipes and Fittings Division. On a unit 11.6 basis there was an increase in certain fixed 9.8 9.0 costs, previously also prorated to the PVC 25.6 Division but fully absorbed by the Nonwovens Division alone in 4Q08, examples being wages 0.63 0.67 0.51 and corporate departmental overheads. 4Q07 3Q08 4Q08 4Q07 3Q08 4Q08 Unitary Fixed Costs 16
  • 17. EBITDA (R$ million) and EBITDA Margin (%) – Nonwovens Division Ebitda (R$ million) and Ebitda Margin (%)  Ebitda of the Nonwovens Division 33.3 reached R$ 33.3 million, with a 26.8% 25.6 margin, na increase of 30.0% in 24.0 relation to the 4Q07. 27.6% 22.9% 26.8%  In relation to 3Q08 there was a 38.7% increase. 4Q07 3Q08 4Q08 EBITDA Margin% 17
  • 18. Net Earnings (R$ million) And Net Margin (%)  Net earnings in 4Q08 19.0 reached R$ 19.0 million 15.0% (positive 15.0% margin) 6.2% against R$ 7.2 million in 4Q07. -1.7% 7.2 (2.2) 4Q07 3Q08 4Q08 Net Margin 18
  • 19. Debt Consolidated Net Debt (R$ Million) 09/30/08 12/31/08 Total Debt Short term loans 18.0 38.4 Long term loans 441.6 454.3 Total 459.6 492.7 170.6 235.4 Cash and equivalents 289.0 257.3 Net debt
  • 20. Debt  In 4Q08 we had a huge cash increase mainly due to the sale of the Pipes and Fittings Division among others;  The increase in net debt between 4Q07 and 4Q08 amounted to R$ 81.2 million, R$ 71.5 million (US$ 30.0 million) reflects additional funding of US$ for the US plant, restatement of the debt (FX variation and interest) of about R$ 75.1 million and payment of interest on debt and principal of R$ 65.5 million;  Financial expenses reached R$ 64.2 million in 4Q08 without cash disbursements in the short term;  On December 31, 2008 we had two interest swap agreements, due to loans and financing, being one CDI vs. US$ totalling US$11.3 million maturing in December 2012 and another fixed rate Libor vs. Libor totalling US$50 million maturing in June 2013, as well as US$ 15 million in currency hedge operations.
  • 21. Agenda • The Company • The Nonwovens Sector • Highlights • 4Q08 Results • Outlook 21
  • 22. Outlook Expansion in production of specialty disposable hygiene articles, to be concluded in 1Q09, output to reach 1,200 tons/month from 2Q09 when the investment program is complete; Expansion in output of high performance disposable medical products with greater value added, the Company’s goal being that this line should reach 10% of our total volume in the long term; Focus on operations with the stabilization of the SAP software. 22
  • 23. CFO: Eduardo Feldmann Costa IR Manager: Gabriela Las Casas Phone: +55 (41) 3381-7600 Fax: +55 (41) 3283-5909 São José dos Pinhais – PR - Brazil www.providencia.com.br/ir The words “believe”, “anticipate”, “expect”, “estimate”, “will”, “plan”, “may”, “intend”, “foresee”, “project” and other similar expressions indicate forward-looking statements. These forward-looking statements involve uncertainties, risks and assumptions, since they include information related to our potential or assumed future operating results, business strategy, financing plans, competitive position in the market, industry environment, potential growth opportunities and the effects of future regulations 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 future performance. Providência is under no obligation to update this 23 presentation with new information and/or future events .

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