3Q11 Results




        November 9th, 2011
SCHEDULE




                                     Providência USA
  HIGHLIGHTS


   RESULTS


   OUTLOOK
                   Providência USA




               2
HIGHLIGHTS 3Q11

  Sales Volume amounted to 22.7 thousand tons in the quarter, a growth of 15.3% in relation to the
same period in 2010 and 3.2% as compared with 2Q11;
  Adjusted 3Q11 EBITDA was R$ 32.8 million, an increase of 9.0% compared to 3Q10, and 81.4% in
relation to 2Q11;

  Evolution of the Company’s production at the first plant in the US. From January to September
2011, sales volume reached 5,530 tons. In 3Q11 this plant generated a positive EBITDA and Net
Income;

   Approval was given on September 20 and took place on October 31 the full prepayment of the
Company’s 15,000 debentures trading in the market. The outstanding principal balance totals R$
100.5 million;

  The Company contracted an export pre-payment line amounting to USD 52.5 million with a
prefixed rate of interest of 4.85% plus restatement at the foreign exchange variation and a 7-year
maturity. A Swap Operation was also contracted, the asset side of the transaction being set under the
same conditions of this financing and the liability side at CDI plus 1.7%;

  The start of the 3ʳᵈ Share Buyback Program of up to 2,260,000 shares for holding as treasury stock
or cancelation meets the interests of Providência in view of the price at which its shares are trading
on BM&FBOVESPA.
                                                                                       3
SCHEDULE




                   Providência USA
  HIGHLIGHTS


   RESULTS


   OUTLOOK




               4
SALES VOLUME
          (in thousands of tons)
                           tons)

  During the 3Q11, the Company posted growth in                                           64,7

                                                                                          5,1
Sales Volume of 15.3% compared with 3Q10 and
                15.                                   60,0                  58,4
                                                                            3,8
3.2% over 2Q11;
                                                      50,0




                                                      40,0




                                                      Título do Eixo
                                                      30,0                                59,6
                                        22,8                                54,6
                     22,0
   19,7
                     2,1               1,6
                                                      20,0
    1,6


                     19,9              21,2           10,0
   18,1


                                                                       -
   3Q10              2Q11              3Q11                                YTD 10        YTD 11


                                                    Our first production line in the US has already
                                                  reached 5,530 tons in sales volume, in line with the
                                                                              volume
                                                  Company’s forecast for ramping up production,
                                                  contributing to the 10.8% increase.
                                                                      10.
NET REVENUE
                        (in millions of Reais)

          Net Revenue reached R$ 142.7 million in 3Q11 a growth of 22.4% in relation to 3Q10. Against 2Q11,
                                 142.               11,            22.
     the increase was 12.5%;
                      12.
                                                              380,0

380,00                                                        360,0

360,00                                                        340,0
340,00                                                        320,0
320,00                                                        300,0
300,00                                                        280,0
280,00                                                        260,0
260,00                                                        240,0
240,00                                                        220,0
220,00
                                                              200,0
200,00                                                                                             384,6
                                                              180,0
180,00                                                                      337,4
                                                              160,0
160,00
                                                              140,0
140,00
                                                              120,0
120,00
                                                              100,0
100,00
 80,00                                                         80,0
                                                    142,7
 60,00           116,6               126,8                     60,0
 40,00                                                         40,0
 20,00                                                         20,0
  0,00                                                           -
                 3Q10                2Q11            3Q11                   YTD 10                 YTD 11



           The increase is due to the realignment of prices and to the startup of the new production line in
         the United States.
                                                                                               6
R$ 10,00
            260,0


         COGS (Cost of Goods Sold)
              (Cost
            240,0
                                                                                            R$ 9,00



         (in millions of Reais)
            220,0                                                                           R$ 8,00


            200,0
                                                                                            R$ 7,00

 Cost of Goods Sold (COGS) totaled a rise of 26.0% when compared with 3Q10 and 1.3% in
           180,0                             26.
                                                                                            R$ 6,00
comparison with 2Q11;
            160,0

                                                                                            R$ 5,00
            140,0                                  R$ 4,29                        R$ 4,21
                          R$ 3,85
            120,0                                                                           R$ 4,00


            100,0                                                                           R$ 3,00


             80,0
                                                                                            R$ 2,00

             60,0

                                                    94,5                           95,7     R$ 1,00
             40,0          76,0
                                                                                            R$ -
             20,0


               -                                                                            -R$ 1,00
                          3Q10                     2Q11                           3Q11


                                      COGS (R$ thousand)      Unitary COGS (R$)




                                                             • The higher Sales Volume in 3Q11;

        The increase is largely linked to:                   •The significant hike in polypropylene prices.
                                                                                                       7
EBITDA (in millions of Reais)
               and EBITDA Margin (%)
         60,0


                                                                                        70,0%
   Adjusted EBITDA in this quarter R$ 32.8 million, a 9.0% improvement when compared with 3Q10. In
                                        32. million
relation to 2Q11, there was a rise of 81.4%;
                                      81.

         40,0
                       25.8%                                              23.0%
                                                 14.3%                                  20,0%




         20,0
                                                                                        -30,0%
                                                                          32,8
                        30,1

                                                 18,1


           -                                                                            -80,0%
                       3Q10                      2Q11                     3Q11

                                   Ebitda           Ebitda Margin (%)


                                                                 •Increase in sales volume;
      These increases are directly related to:                   •Recover of margins;
                                                                 •Foreign exchange translation impact.
                                                                                                 8
NET INCOME (in millions of Reais)
                    and NET MARGIN (%)
        Net Income was R$ 15.4 million in 3Q11, 31.4% up
                          15.                   31.                   27,0
                                                                      26,0
                                                                                     5,4%                6,5%         10,0%


                                                                      25,0
27,0   on 3Q10, and 560.7% higher than 2Q11;
                    560.                                                 40,0%
                                                                      24,0                                            0,0%
26,0                                                                  23,0
25,0
                                                                      22,0
24,0                                                                     30,0%                                        -10,0%
                                                                      21,0
23,0
22,0                                                                  20,0
21,0                                                                  19,0
                                                                         20,0%                                        -20,0%
20,0                                                                  18,0
19,0        10.0%                                             10.8%   17,0
18,0                                  1.8%                               10,0%
                                                                      16,0                                            -30,0%
17,0                                                                  15,0
16,0
                                                                      14,0
15,0                                                                     0,0%                                         -40,0%
                                                                      13,0
14,0                                                                                                     24,8
13,0                                                                  12,0
12,0                                                                  11,0
                                                                         -10,0%                                       -50,0%
11,0                                                                  10,0
10,0                                                                   9,0           18,2
 9,0                                                                     -20,0%
                                                                       8,0                                            -60,0%
 8,0
                                                              15,4     7,0
 7,0
                                                                       6,0
 6,0         11,7                                                        -30,0%
                                                                       5,0
                                                                                                                      -70,0%
 5,0
 4,0                                                                   4,0
 3,0                                                                   3,0
                                                                         -40,0%                                       -80,0%
 2,0                                                                   2,0
 1,0                                   2,3                             1,0
  -                                                                     --50,0%                                       -90,0%
            3Q10                      2Q11                    3Q11                YTD 10                YTD 11
                       Net Earnings          Net Margin (%)
                                                                             Compared with the same period from
                                                                         the previous year, net proft has increased
                                                                         by 36.3%.
                                                                            36.                     9
CASH AND CASH EQUIVALENTS
           (in millions of Reais)

 Company reported an increase in its Cash position of 47.6% in relation to 2Q11 and 38.6% when
                                                      47.                           38.
compared to the same period in 2010;

                   350,0


                   300,0


                   250,0


                   200,0

                                                                    323,0
                   150,0

                               233,0              218,8
                   100,0


                    50,0


                      -
                               3Q10               2Q11              3Q11




  This increase is directly related to the entry of the export pre-payment line amounting to USD 52.5
                                                                                                 52.
million;
million;
                                                                                     10
NET DEBT
             (in millions of Reais)

  Net Debt posted an increase of 32.1%, in relation to 3Q10 due to additional funding for plant expansion
                                 32.
in the United States and for a new production line which will go into operation in Brazil next year.
Compared with 2Q11, there was a 17.9% increase
                                17.


                 350,0


                 300,0


                 250,0


                 200,0


                 150,0                                               304,5
                                                  258,3
                              230,5
                 100,0


                  50,0


                    -
                              3Q10               2Q11                3Q11

  At the end of the quarter, the Company held 47% of its debt in local currency while the remaining
                                              47%
53% was foreign currency denominated.
53%                                                                                    11
DEBT / CASH (in millions of Reais)

                        Consolidated Net Debt

                                                          Ch. 3Q11 /
R$ (MM)                           09/30/2010 09/30/2011
                                                            3Q10
 Total Debt
  Short Term                            145,3    312,8        115,3%
  Long Term                             318,1    314,7         -1,1%
 Total                                  463,4    627,5         35,4%

 Cash                                   233,0    323,0            38,6%

 Net Debt                               230,5    304,5            32,1%

 Shareholders' Equity                   702,5    698,9            -0,5%



                                                             12
DIVIDENDS
                 (in millions of Reais)

 Notice was given of payout of Dividends at 100% of the adjusted net profit calculation base for the period
                                            100%
ending June 30 2011 in the amount of R$ 14.1 million, equivalent to approximately an earnings per share
                                        14. million
of R$ 0.18 Payout will take place on 11/25/2011, the share trading ex-dividend as of 10/31/2011.
        18.
  In 2009 and 2010 the payout corresponded, respectively, to R$ 48.4 million and R$ 32.9 million, an
earnings per share of R$ 0.30 and R$ 0.41.
          16,0                                                              R$ 0,18    R$ 0,20
                           R$ 0,13                      R$ 0,13

          14,0                                                                         R$ 0,10

          12,0
                                                                                       R$ -

          10,0
                                                                                       R$ (0,10)
           8,0
                                                                             14,1      R$ (0,20)
                                                         11,1
           6,0
                            10,5
                                                                                       R$ (0,30)
           4,0


           2,0                                                                         R$ (0,40)


           0,0                                                                         R$ (0,50)
                           1st Half                     1st Half            1st Half
                            2009                         2010                2011
                                                                                                   13
                                      Dividends paid (R$ million)   Dividend/share
SCHEDULE




               Providência USA
  HIGHLIGHTS


   RESULTS


   OUTLOOK
OUTLOOK

    Payout of dividends at 100% of the adjusted net profit calculation base for the period ending June 30
                             100%
   2011 in the amount of R$ 14.1 million, equivalent to approximately an earnings per share of R$ 0.18
                              14. million                                                             18.
   Payout will take place on November 25 2011, the share trading ex-dividend as of October 31;

    On 4Q11, Nonwovens Sales Volume around 21 thousand tons, same level of 3Q11;

     The two production lines that will start up in 2012 – Pouso Alegre, MG, Brazil in the first half, and
                                                                 Alegre, MG Brazil,
   Statesville, NC, USA, in the second half, are the Company’s main investment projects totaling a USD
                    USA
   123 million investment They are in execution according to schedule and will add 40,000 tons to our
                investment.                                                          40,
   current installed capacity, that is, a 40% increase.
                                          40%




                                                    KAMI 12 – Pouso Alegre/MG

                                                                                          15
KAMI 13 – Statesville/NC
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 .

Presentation 3Q11 eng

  • 1.
    3Q11 Results November 9th, 2011
  • 2.
    SCHEDULE Providência USA HIGHLIGHTS RESULTS OUTLOOK Providência USA 2
  • 3.
    HIGHLIGHTS 3Q11 Sales Volume amounted to 22.7 thousand tons in the quarter, a growth of 15.3% in relation to the same period in 2010 and 3.2% as compared with 2Q11; Adjusted 3Q11 EBITDA was R$ 32.8 million, an increase of 9.0% compared to 3Q10, and 81.4% in relation to 2Q11; Evolution of the Company’s production at the first plant in the US. From January to September 2011, sales volume reached 5,530 tons. In 3Q11 this plant generated a positive EBITDA and Net Income; Approval was given on September 20 and took place on October 31 the full prepayment of the Company’s 15,000 debentures trading in the market. The outstanding principal balance totals R$ 100.5 million; The Company contracted an export pre-payment line amounting to USD 52.5 million with a prefixed rate of interest of 4.85% plus restatement at the foreign exchange variation and a 7-year maturity. A Swap Operation was also contracted, the asset side of the transaction being set under the same conditions of this financing and the liability side at CDI plus 1.7%; The start of the 3ʳᵈ Share Buyback Program of up to 2,260,000 shares for holding as treasury stock or cancelation meets the interests of Providência in view of the price at which its shares are trading on BM&FBOVESPA. 3
  • 4.
    SCHEDULE Providência USA HIGHLIGHTS RESULTS OUTLOOK 4
  • 5.
    SALES VOLUME (in thousands of tons) tons) During the 3Q11, the Company posted growth in 64,7 5,1 Sales Volume of 15.3% compared with 3Q10 and 15. 60,0 58,4 3,8 3.2% over 2Q11; 50,0 40,0 Título do Eixo 30,0 59,6 22,8 54,6 22,0 19,7 2,1 1,6 20,0 1,6 19,9 21,2 10,0 18,1 - 3Q10 2Q11 3Q11 YTD 10 YTD 11 Our first production line in the US has already reached 5,530 tons in sales volume, in line with the volume Company’s forecast for ramping up production, contributing to the 10.8% increase. 10.
  • 6.
    NET REVENUE (in millions of Reais) Net Revenue reached R$ 142.7 million in 3Q11 a growth of 22.4% in relation to 3Q10. Against 2Q11, 142. 11, 22. the increase was 12.5%; 12. 380,0 380,00 360,0 360,00 340,0 340,00 320,0 320,00 300,0 300,00 280,0 280,00 260,0 260,00 240,0 240,00 220,0 220,00 200,0 200,00 384,6 180,0 180,00 337,4 160,0 160,00 140,0 140,00 120,0 120,00 100,0 100,00 80,00 80,0 142,7 60,00 116,6 126,8 60,0 40,00 40,0 20,00 20,0 0,00 - 3Q10 2Q11 3Q11 YTD 10 YTD 11 The increase is due to the realignment of prices and to the startup of the new production line in the United States. 6
  • 7.
    R$ 10,00 260,0 COGS (Cost of Goods Sold) (Cost 240,0 R$ 9,00 (in millions of Reais) 220,0 R$ 8,00 200,0 R$ 7,00 Cost of Goods Sold (COGS) totaled a rise of 26.0% when compared with 3Q10 and 1.3% in 180,0 26. R$ 6,00 comparison with 2Q11; 160,0 R$ 5,00 140,0 R$ 4,29 R$ 4,21 R$ 3,85 120,0 R$ 4,00 100,0 R$ 3,00 80,0 R$ 2,00 60,0 94,5 95,7 R$ 1,00 40,0 76,0 R$ - 20,0 - -R$ 1,00 3Q10 2Q11 3Q11 COGS (R$ thousand) Unitary COGS (R$) • The higher Sales Volume in 3Q11; The increase is largely linked to: •The significant hike in polypropylene prices. 7
  • 8.
    EBITDA (in millionsof Reais) and EBITDA Margin (%) 60,0 70,0% Adjusted EBITDA in this quarter R$ 32.8 million, a 9.0% improvement when compared with 3Q10. In 32. million relation to 2Q11, there was a rise of 81.4%; 81. 40,0 25.8% 23.0% 14.3% 20,0% 20,0 -30,0% 32,8 30,1 18,1 - -80,0% 3Q10 2Q11 3Q11 Ebitda Ebitda Margin (%) •Increase in sales volume; These increases are directly related to: •Recover of margins; •Foreign exchange translation impact. 8
  • 9.
    NET INCOME (inmillions of Reais) and NET MARGIN (%) Net Income was R$ 15.4 million in 3Q11, 31.4% up 15. 31. 27,0 26,0 5,4% 6,5% 10,0% 25,0 27,0 on 3Q10, and 560.7% higher than 2Q11; 560. 40,0% 24,0 0,0% 26,0 23,0 25,0 22,0 24,0 30,0% -10,0% 21,0 23,0 22,0 20,0 21,0 19,0 20,0% -20,0% 20,0 18,0 19,0 10.0% 10.8% 17,0 18,0 1.8% 10,0% 16,0 -30,0% 17,0 15,0 16,0 14,0 15,0 0,0% -40,0% 13,0 14,0 24,8 13,0 12,0 12,0 11,0 -10,0% -50,0% 11,0 10,0 10,0 9,0 18,2 9,0 -20,0% 8,0 -60,0% 8,0 15,4 7,0 7,0 6,0 6,0 11,7 -30,0% 5,0 -70,0% 5,0 4,0 4,0 3,0 3,0 -40,0% -80,0% 2,0 2,0 1,0 2,3 1,0 - --50,0% -90,0% 3Q10 2Q11 3Q11 YTD 10 YTD 11 Net Earnings Net Margin (%) Compared with the same period from the previous year, net proft has increased by 36.3%. 36. 9
  • 10.
    CASH AND CASHEQUIVALENTS (in millions of Reais) Company reported an increase in its Cash position of 47.6% in relation to 2Q11 and 38.6% when 47. 38. compared to the same period in 2010; 350,0 300,0 250,0 200,0 323,0 150,0 233,0 218,8 100,0 50,0 - 3Q10 2Q11 3Q11 This increase is directly related to the entry of the export pre-payment line amounting to USD 52.5 52. million; million; 10
  • 11.
    NET DEBT (in millions of Reais) Net Debt posted an increase of 32.1%, in relation to 3Q10 due to additional funding for plant expansion 32. in the United States and for a new production line which will go into operation in Brazil next year. Compared with 2Q11, there was a 17.9% increase 17. 350,0 300,0 250,0 200,0 150,0 304,5 258,3 230,5 100,0 50,0 - 3Q10 2Q11 3Q11 At the end of the quarter, the Company held 47% of its debt in local currency while the remaining 47% 53% was foreign currency denominated. 53% 11
  • 12.
    DEBT / CASH(in millions of Reais) Consolidated Net Debt Ch. 3Q11 / R$ (MM) 09/30/2010 09/30/2011 3Q10 Total Debt Short Term 145,3 312,8 115,3% Long Term 318,1 314,7 -1,1% Total 463,4 627,5 35,4% Cash 233,0 323,0 38,6% Net Debt 230,5 304,5 32,1% Shareholders' Equity 702,5 698,9 -0,5% 12
  • 13.
    DIVIDENDS (in millions of Reais) Notice was given of payout of Dividends at 100% of the adjusted net profit calculation base for the period 100% ending June 30 2011 in the amount of R$ 14.1 million, equivalent to approximately an earnings per share 14. million of R$ 0.18 Payout will take place on 11/25/2011, the share trading ex-dividend as of 10/31/2011. 18. In 2009 and 2010 the payout corresponded, respectively, to R$ 48.4 million and R$ 32.9 million, an earnings per share of R$ 0.30 and R$ 0.41. 16,0 R$ 0,18 R$ 0,20 R$ 0,13 R$ 0,13 14,0 R$ 0,10 12,0 R$ - 10,0 R$ (0,10) 8,0 14,1 R$ (0,20) 11,1 6,0 10,5 R$ (0,30) 4,0 2,0 R$ (0,40) 0,0 R$ (0,50) 1st Half 1st Half 1st Half 2009 2010 2011 13 Dividends paid (R$ million) Dividend/share
  • 14.
    SCHEDULE Providência USA HIGHLIGHTS RESULTS OUTLOOK
  • 15.
    OUTLOOK Payout of dividends at 100% of the adjusted net profit calculation base for the period ending June 30 100% 2011 in the amount of R$ 14.1 million, equivalent to approximately an earnings per share of R$ 0.18 14. million 18. Payout will take place on November 25 2011, the share trading ex-dividend as of October 31; On 4Q11, Nonwovens Sales Volume around 21 thousand tons, same level of 3Q11; The two production lines that will start up in 2012 – Pouso Alegre, MG, Brazil in the first half, and Alegre, MG Brazil, Statesville, NC, USA, in the second half, are the Company’s main investment projects totaling a USD USA 123 million investment They are in execution according to schedule and will add 40,000 tons to our investment. 40, current installed capacity, that is, a 40% increase. 40% KAMI 12 – Pouso Alegre/MG 15 KAMI 13 – Statesville/NC
  • 16.
    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 .