Providência - Presentation 2Q Financial Results

1. 2Q11 Results
August 12th, 2011

2. SCHEDULE
Providência USA
HIGHLIGHTS
RESULTS
OUTLOOK
Providência USA
2

3. HIGHLIGHTS
Sales Volume amounted to 22.0 thousand tons in the quarter, a growth of 10.1% in
relation to the same period in 2010 and also as compared with 1Q11;
The beginning of work at the site of the new plant which will begin operations in 2012
in Pouso Alegre, state of Minas Gerais, with a capacity of 20,000 tons/year of
20,
nonwovens;
The evolution of production of the Company’s first plant in the United States, with a
production line of 20,000 tons/year of installed nonwovens capacity. In this first half we
have already reached a sales volume of 2,563 tons, in line with the plans for ramping up
tons
volume. The plant is expected to be operating at full capacity by the end of the third
quarter of 2011;
The payout in May of a further R$ 21.8 million in dividends, approved at the O/EGM of
April 27 2011, totaled 100% of the calculation base for adjusted dividends in 2010.
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4. SCHEDULE
Providência USA
HIGHLIGHTS
RESULTS
OUTLOOK
4

5. SALES VOLUME
(in thousands of tons)
tons)
42,0
38,7 3,5
During the quarter, the Company posted 2,2
growth in sales volume of 10.1% compared with
10.
the same period in 2010 and also in comparison
with 1Q11;
38,5
36,5
22,0
20,0 20,0 2,1
1,3 1,4
18,7 18,6 19,9
1H10 1H11
Our first production line in the US has already
2Q10 1Q11 2Q11
contributed 2,563 tons in sales in 1H11, in line
with the Company’s forecast for ramping up
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production.

6. NET REVENUE
NONWOVENS (in millions of Reais)
Net revenue reached R$ 126.8 million in 2Q11 a growth of 10.1% in relation to 1Q11 and
126. 11, 10.
against 1H10, the increase was 9.6% reaching R$ 241.9 million ;
241.
260,0
240,0
220,0
200,0
180,0
160,0
140,0
120,0 241,9
220,8
100,0
80,0
126,8
116,3 115,1 60,0
40,0
20,0
-
2Q10 1Q11 2Q11 1H10 1H11
The increase is due to the realignment of prices and to the startup of the new
production line in the United States.
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7. COGS (Cost of Goods Sold)
(Cost
NONWOVENS (in millions of Reais)
200,0 R$ 10,00
R$ 3,90 R$ 4,13
Cost of goods sold (COGS) totaled 94.5
94. 180,0 R$ -
200,0 R$ 10,00
million in 2Q11, a rise of 17.8% when
17. 160,0
-R$ 10,00
R$ 9,00
180,0
140,0
compared with 2Q10 and 19.5%
19. in
R$ 8,00
-R$ 20,00
160,0
120,0
comparison with 1Q11; R$ 7,00 -R$ 30,00
140,0 100,0
R$ 6,00
-R$ 40,00
173,6
80,0
120,0 151,1
R$ 5,00
R$ 4,29 -R$ 50,00
R$ 4,01 R$ 3,96 60,0
100,0 R$ 4,00
-R$ 60,00
40,0
R$ 3,00
80,0
20,0 -R$ 70,00
R$ 2,00
60,0
- -R$ 80,00
R$ 1,00
94,5 1H10 1H11
40,0 80,2 79,1
R$ -
The increase is largely linked to:
20,0
-R$ 1,00
• The higher sales volume in 2Q11;
- -R$ 2,00
2Q10 1Q11 2Q11
•The significant hike in polypropylene
prices.
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8. EBITDA (in millions of Reais)
and EBITDA Margin (%)
100,0%
Adjusted Ebitda in 2Q11 reached R$
18.1 million, a reduction of 18.3% when
18. million
compared with 1Q11. In relation to
50,0%
21,4%
2Q10, there was a decline of 27.2%;
19,2%
14,3%
0,0%
These reductions are directly related
to:
-50,0%
24,9
22,2 •The increase in the prices of our main
18,1
raw material, polypropylene. According
to Chemical Data Index (CDI), the
-100,0%
2Q10 1Q11 2Q11
increase was of 38% in the first half
2011;
Ebitda Ebitda Margin (%)
• The startup and adjustments in the US
production line.
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9. 14,0
10,0%
13,0 NET INCOME (in millions of Reais)
12,0
and NET MARGIN (%)
11,0
3,9% 5,0%
3,0%
10,0
9,0
The net income for the quarter amounted
8,0 0,0% to R$ 2.3 million and R$ 9.5 million in the first
7,0
six months of the year. It represents a 45.1%
45.
6,0
5,0
-5,0%
increase in relation to 1H10.
9,5 Lucro Líquio
14,0
4,0
13,0
3,0
6,5
12,0
-10,0%
11,0
2,0
10,0
1,0
9,0
- -15,0% 8,0
14,6
1H10 1H11 7,0
6,0
11,1
5,0
For the quarter (Retained Earnings) totaled R$ 14.6 14. 4,0
million,
million since realization of deemed costs in the quarter is 3,0
2,0
added in net of tax. 1,0
-
It represents a 31.5% increase in relation to the R$ 11.1
31. 1H10 1H11
million of dividends distributed regarding to the 1H10. 9

10. CASH AND CASH EQUIVALENTS
(in millions of Reais)
The Company reported a decrease in its
cash position of 3.1% or R$ 6.9 million in
250,0
relation to the same period in 2010;
200,0
This reduction is directly related to the 150,0
270,6
down payment effected for the two lines 225,8 218,8
100,0
that will startup in 2012; a large part of this
50,0
amount will be reimbursed with the input
of funds already raised; -
2Q10 1Q11 2Q11
In the 2Q11 we also paid dividends of R$
21.8 million.
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11. NET DEBT
(in millions of Reais)
The company’s net debt increased 34.2% compared with 2Q10 due in large part to funding
for financing capex for the US plant;
250,0
200,0
150,0
258,3
224,3
100,0 192,5
50,0
-
2Q10 1Q11 2Q11
At the end of the quarter, the Company held 61% of its debt in local currency while the
61%
remaining 39% was foreign currency denominated.
39%
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12. DEBT / CASH (in millions of Reais)
Consolidated Net Debt
Ch. 2Q11 /
R$ (MM) 06/30/2010 06/30/2011
2Q10
Total Debt
Short Term 126,7 260,0 105,2%
Long Term 291,6 217,1 -25,5%
Total 418,4 477,2 14,1%
Cash 225,8 218,8 -3,1%
Net Debt 192,5 258,3 34,2%
Net Debt / Adjusted EBITDA 2,19 3,04 38,8%
Shareholders' Equity 690,6 685,1 -0,8%
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13. SCHEDULE
Providência USA
HIGHLIGHTS
RESULTS
OUTLOOK

14. OUTLOOK
We expect our margins to recover to Company’s historical margins, due to the
realignment of sales prices after the high cost pressure we faced during the 1H11;
In the second half of 2011, we expect to see increased sales volume. Since all startup
volume
adjustments have been concluded and sales order book is full, the US production line
should be operating at full capacity from 3Q11;
The two production lines that will start up in 2012 – Pouso Alegre, MG, Brazil, in the first
half, and Statesville, NC, USA, in the second half, are the Company’s main investment
projects totaling a USD 123 million investment. They are in execution according to schedule
and will add 40,000 tons to our current installed capacity, that is, a 40% increase;
40,
In August/2011 we received the first tranche of HSBC/Hermes financing, relative to the
down payment of the abovementioned investments. From now on, the financing tranches
are aligned to the disbursements.
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15. 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_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 .