5. Corporate governance structure
Companhia Providência (PRVI3) is listed on the Novo Mercado segment at BM&F Bovespa, the
highest Corporate Governance standards. Among the main practices are:
General Shareholders` Meeting
Fiscal Council
Board of Directors
Board of Executive Officers
Independent extern auditors
6. Organizational chart
CCEEOO
CFO/ IR
Finance
Commercial Office
Sales
Operations, Engineering and Technology Office
Operations
USA
Administrative
Human Resources Quality Assurance
Controller
I.R.
I.T.
Legal
Customer Service
Product
Development
Purchasing
Maintenance
Engineering
Logistics
Quality Processes
and
Manufacture
Employees in September, 2014
Total: 887
675
131
9%
81
76%
15%
São Jose dos Pinhais Pouso Alegre United States
7. Corporate structure
Companhia Providência Indústria e Comércio
ProvidenciaUSA Inc.
1963 | 1970 | 1980 | 1990 | 2000 | 2007 | 2008 | 2011 | 2012 || 22001133 || 22001144
Founded in 1963, became a pioneer in the manufacture of plastics in the South of Brazil;
Started the production of nonwovens;
IPO and acquisition of Isofilme, a nonwovens company located in Pouso Alegre (MG);
Focus on nonwovens: Sale of the division of pipes and fittings;
Start up of the first overseas factory in Statesville, North Carolina - USA;
Sale of Control to PGI Brazil and merger of Isofilme into Companhia Providência.
8. SSStttaaattteeesssvvviiilllllleee ––– NNNCCC
Plants
Installed Capacity:
40 thousand ton/year - 2 Production Lines
Area:
16.3 thousand m2 of built area on
land of 174 thousand m2
Installed Capacity : Pouso Alegre – MG
30 thousand ton/year – 2 Production Lines
Area:
São José dos Pinhais – PR
25 thousand m² of built area on
land of 210 thousand m²
Installed Capacity :
70 thousand ton/year – 9 Production Lines
Area:
72 thousand m² m² of built area on
land of 189 thousand m²
9. Most recent expansion
KAMI 13: Second line in Statesville. Doubled the capacity in the
USA.
Capacity: 20 thousand ton/year of nonwovens
Investment: USD 63 million
Additional Employees: 40
Inaugurated in March, 2013.
KAMI12: : Second line in Pouso Alegre/MG
Capacity: 20 thousand ton/year of nonwovens
Investment: USD 60 million
Additional Employees: 40
Inaugurated in June, 2012.
São José dos Pinhais – PR
In thousands of tons of nonwovens
10. Agenda
The Company
Sector
Highlights
3Q14 Results
Sale of the Company’s control
11. Uses
NNoonnwwoovveennss MMaaiinn uusseess MMaaiinn CCuussttoommeerrss
Hygienic
Baby diapers
Incontinence
Largest manufacturer
of nonwovens in
Latin America Durable
Medical
sanitary pads
Furniture and mattresses
agricultural roofing
Packaging
Surgical disposable
Medical disposable aprons
Active base of around
1,000 customers
12. B2B focus on consumer industries
Durable
SSaalleess vvoolluummee 22001133
Hygienic
GGrroossss
RReevveennuuee
20%
GGrroossss
RReevveennuuee
Medical
75%
5%
16. Hygienic Market in Brazil (2013 volume)
SShhaarree – BBaabbyy DDiiaappeerrss SShhaarree – SSaanniittaarryy ppaaddss
PG
30%
KC
26%
Hyper
16%
Other
28%
PG
28%
KC
24%
Johnson
Johnson
33%
Other
15%
SShhaarree – IInnccoonnttiinneennccee
KC
10%
Hyper
33%
Other
57%
Source : Euromonitor International
17. Penetration of baby diapers in the World
25
20
15
10
21
19
10
8 8
5
3 3
29
20
10
7 8
5
3 3
Million
5
-
China USA Brazil Japan Mexico Russia United Kingdom Germany
Source: Euromonitor International
Effective consumption Expected Average 2014 - 2018
18. Hygienic Market - USA – Global (USA – 2013)
SShhaarree – BBaabbyy DDiiaappeerrss
Private
Label
20%
PG
36%
KC
37%
Other
7%
SShhaarree – SSaanniittaarryy ppaaddss SShhaarree - IInnccoonnttiinneennccee
Private
Label
17%
PG
46%
KC
14%
Other
12%
Johnson
Johnson
11%
Other
2%
Private Label
SCA
10%
KC 31%
56%
IInn 22001133 tthheerree wwaass aann oovveerraallll ggrroowwtthh ooff 33%% iinn tthhee ssaanniittaarryy iinndduussttrryy,, aabboouutt UUSS$$22..77 bbiilllliioonn oovveerr tthhee
previous year, mainly due to emerging countries beyond the forecast average growth of 4% by 2018;
The incontinence market had the strongest growth among all categories of hygienic, 6% (2012 – 2013),
mainly in developed countries;
Brazil also excelled in the incontinence market and grew by 12% (2013 x 2012). In the same period the
United States grew by only 5%. According to the IBGE in 2012 the population over 60 years accounted
for 12%, this percentage should reach 18% by 2030;
In Latin America there will probably happen the strongest growth prospects for wipes of
6% compared to 2% at a global level. This variation is mainly due to the increase in
consumption and baby wipes and make-up removal.
Fonte: Euromonitor International
19. Agenda
The Company
Sector
Highlights
3Q14 Results
Sale of the Company’s control
20. Highlights
The third quarter saw resumption in production from machines and equipment that had been
shutdown on Ministry of Labor orders on April 1, 2014 and gradually brought back on stream
by the first week in July 2014;
During the course of the quarter, our financial performance continued to be affected by the
stoppage and reallocation of production as well as a 2.8% increase in fixed costs;
Sales Volume amounted to 29.2 thousand tons, down 7.1% ccoommppaarreedd ttoo 33QQ1133 dduuee ttoo
inefficiencies associated with the resumption of operations with certain machines and
equipment at the São José dos Pinhais plant after the lines were shut down on the orders of the
Ministry of Labor during 2Q14;
The Company posted Net Revenues of R$ 202.6 million, 4.0% less than in 3Q13, this
also reflecting the impact of lower output from manufacturing operations;
Cost of goods sold were higher by R$4.4 million due to start-up
costs and higher maintenance expense during the quarter.
21. Agenda
The Company
Sector
Highlights
3Q14 Results
Sale of the Company’s control
22. YTD Sales Volume
88.9 81.2
7.4 5.2
SSaalleess VVoolluummee ((iinn mmiilllliioonnss ooff ttoonnss))
During the quarter, the Company posted a year-on-year reduction in total sales volume of 7.1%.
Sales volume of nonwovens posted a fall of 7.3% compared with 3Q13.
Sales Volume / Quarter
31.4
22.6
29.2
2.2
2.1
81.5 76.0
YTD13 YTD14
Others Nonwovens
29.2
1.3
21.3
27.1
3Q13 2Q14 3Q14
Nonwovens Others
In relation to the 2Q14 the nonwovens volume increased 5.8 thousand tons
– 27.1% - a result of the sales recover after the machines shutdown during
the 2Q14.
23. NNeett RReevveennuuee ((iinn mmiilllliioonnss ooff RReeaaiiss))
The Company reported total net revenue of R$ 202.6 million in 3Q14, a decrease of 4.0% when
compared with 3Q13 reflecting the impact of lower output from manufacturing operations.
Net Revenue / Quarter Net Revenue YTD
577.2
R$ 6.35
R$ 7.11
R$ 6.72
R$ 7.21
R$ 6.94
564.8
YTD13 YTD14
Net Revenue
211.1
162.9
202.6
3Q13 2Q14 3Q14
Net Revenue Unitary Net Revenue Unitary Net Revenue
Increased export sales volume in 3Q14 caused a reduction in unitary
sales net revenue by 3.7% against 2Q14;
Unitary net revenues are up by 12% YTD 14 x 13.
24. Cost of Goods Sold (COGS) amounted to R$ 161.3 million in 3Q14, 2.8% higher when
Unitary COGS are 7.4% lower than 2Q14, as consequence of an increased sales volume of 5.8
COGS YTD
CCOOGGSS - CCoosstt ooff GGooooddss SSoolldd ((iinn mmiilllliioonnss ooff RReeaaiiss))
R$ 4.66
R$ 5.62
compared to the R$ 156.9 million reported in 3Q13;
COGS / Quarter
R$ 4.99
R$ 5.97
R$ 5.53
thousand tons.
413.9
456.8
YTD13 YTD14
COGS Unitary COGS (R$)
156.9
135.0
161.3
3Q13 2Q14 3Q14
COGS Unitary COGS (R$)
25. 98.0
EBITDA YTD
40.1
EBITDA / Quarter
16.9%
5.5%
EEBBIITTDDAA ((iinn mmiilllliioonn ooff RReeaaiiss)) aanndd EEBBIITTDDAA MMaarrggiinn((%%))
EBITDA in 3Q14 amounted to R$ 15.8 million, a reduction of 60.6% when compared to the R$
40.1 million registered in 3Q13. For the same item in 2Q14 there was an increase of R$ 8.6
million.
.19.0%
4.4%
7.8%
51.9
YTD13 YTD14
EBITDA
7.2
15.8
3Q13 2Q14 3Q14
EBITDA EBITDA Margin (%) Ebitda Margin (%)
3Q14 EBITDA was still impacted by production inefficiencies post-NR12 and
by certain costs recognized during the quarter that are not expected to
continue.
26. NNeett LLoossss (in millions of Reais) and NNeett MMaarrggiinn ((%%))
The Company reported a net loss of R$ 7.9 million, principally due to the lower comparative
output and sales volumes, combined with the higher costs.
Net Income (Loss) / Quarter
10.0
4.7%
-27.9%
-3.9%
(45.4)
(7.9)
3Q13 2Q14 3Q14
Net income Net Margin (%)
27. NNeett DDeebbtt ((iinn mmiilllliioonn ooff RReeaaiiss)
Consolidated Net Debt
In R$ (MM) 3Q13 2Q14 3Q14 Ch. 3Q14 / 3Q13
Short Term 51,4 1 14,6 1 41,6 175,2%
Long Term 523,6 4 49,2 4 69,0 -10,4%
Total 575,0 563,8 6 10,5 6,2%
Cash and liquid hedge instruments 80,7 41,1 29,5 -63,5%
Net Debt 494,3 522,7 5 81,1 17,6%
Shareholders' Equity 662,1 619,2 610,2 -7,8%
Net Debt / Adjusted EBITDA 3,86 4 ,72 5 ,95 54,1%
Total Debt increased 6.2% in 3Q14 when compared with 3Q13 mainly due to the valuation of US
Dollar against Real, of 9.9% in the period.
Net Debt increased by 17.6% compared with 3Q13, largely due to a reduction in cash and cash
equivalents during the last two quarters. The increase was caused by lower operating performance
and incremental CAPEX mainly in 2Q14.
Net Debt %
8%
92%
Local currency Foreign currency
28. MMaarrkkeett VVaalluuee RRaattiiooss
The book value of the Company shares increased
9.2% compared to 2T14 and 3.5% over the same
period last year.
PRVI3 Book Value / Quarter
0.96 0.97
1.06
3Q13 2Q14 3Q14
Share Price / Book Value per share
Change 3Q14 / 3Q13
3.5%
3.4%
PRVI3
IBOVESPA
R$ 7.92 R$ 7.89
Share Value - IBOVESPA
R$ 8.05
R$ 7.51
R$ 8.20
R$ 9
R$ 8
R$ 7
Sep-13 Dec-13 Mar-14 Jun-14 Sep-14
30. Environmental rreessppoonnssiibbiilliittyy
Providência holds 19 000 m2, including the
permanent preservation, with some
species of native vegetation;
The Company has 4 extruders type
machines for recycling part of the
nonwoven chips generated during the
manufacturing process;
Waste, recovered materials and leftovers are
referred for treatment only in companies
duly licensed by the responsible
environmental agency.
PPrreesseerrvvaattiioonn ooff ggrreeeenn aarreeaass aanndd
pprrootteeccttiioonn ooff rriivveerrss
IInntteerrnnaall rreeccyycclliinngg pprrooggrraamm ooff mmaatteerriiaallss WWaassttee mmaannaaggeemmeenntt pprrooggrraamm
Woods – Unit São José dos Pinhais/PR
31. Environmental rreessppoonnssiibbiilliittyy
CCoommmmiissssiioonn ttoo aannaallyyssiiss tthhee eenneerrggyy ccoonnssuummppttiioonn WWaatteerr - MMoonniittoorriinngg ccoonnssuummeerr aanndd cclloosseedd cciirrccuuiitt
Providência monitors the power consumption and acts
to reduce it. Employees are instructed on the importance
of avoiding waste;
All water used for heating and cooling equipment is again
stored in tanks, and then reused for the same purpose.
32. Awards aanndd aacckknnoowwlleeddggeemmeennttss
76th position in the ranking prepared by Revista Amanhã, which defines the best
companies in southern Brazil in 2014, climbed seven places from the previous year.
Also 32nd position among the best companies of Paraná, which was 37th in 2013. We
stand out among the 50 largest net Equity and Gross Revenue, occupying the 27th
and 43rd positions respectively;
We were one of the highlights of the 2013 Brazilian Transnationality Ranking
developed by Fundação Dom Cabral. We are among the 10+ in the revenues
bellow R$ 1 billion category, at the 8th position. In the overall ranking, we are in
23rd place with an index of 0.143 points of transnationality;
Cia Providência is the 89th among the top Brazilian 250
companies, and among the 10 companies highlighted in
Southern Brazil, according to Época Negócios 360º ranking.
33. Agenda
The Company
Sector
Highlights
3Q14 Results
Sale of the Company’s control
34. SSttaattuuss – SSaallee ooff tthhee CCoommppaannyy’’ss ccoonnttrrooll ttoo PPGGII
On July 14, 2014 there was an Extraordinary General Meeting where the following
resolutions were taken:
The exit of the Company from Novo Mercado of BMFBOVESPA was approved by
majority of the present shareholders;
Also approved by majority of eligible voting shareholders representing the
oouuttssttaannddiinngg sshhaarreess,, tthhee sseelleeccttiioonn ooff BBAANNCCOO JJ.. SSAAFFRRAA SS..AA..,, aass tthhee ffiinnaanncciiaall iinnssttiittuuttiioonn
responsible for the drafting of the appraisal report on the economic valuation of the
Company’s stock, for the purposes of the Delisting Tender Offer and the Tender Offer
for the Exit of the Company from Novo Mercado;
On November 7, 2014 the draft of the Tender Offer Notice and the adjusted
appraisal report were published at Itaú BBA and Company website.
35. CCoonnttaaccttss
CEO/CFO: Hermínio Vicente Smania de Freitas
IR : Gabriela Las Casas
Danielle Cabrini
Tel: +55 (41) 3381-8673
Fax: +55 (41) 3381-7656
São José dos Pinhais – PR
www.providencia.com.br/ri
www.twitter.com/providencia_ri
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 presentation with new information and/or
future events.
