2Q13
Results

August 8, 2013
SCHEDULE

Providência USA

HIGHLIGHTS

RESULTS

OUTLOOK

Providência USA

2
HIGHLIGHTS 2Q13

The principal highlight in the quarter was the pace at which production from our 13th
nonwovens line was ramped up and exceeding expectations. This line is our second at the
Statesville plant in North Carolina, adding a further 20 thousand tons to the Company’s
annual installed capacity to make a total of 140 thousand tons;

In May, the Company concluded the payout of an additional R$ 33.8 million in dividends,
approved by the E/AGM of April 1, 2013, amounting to 100% of the adjusted dividend
calculation base for 2012;
Sales Volume totaled 30.5 thousand tons, a growth of 24.1% compared with the same
period in 2012. Quarter-on-quarter growth was 13.0%;
Net Income in the period amounted to R$ 8.2 million, 5.0% more than 2Q12 and 63.0%
higher than 1Q13.
SCHEDULE

HIGHLIGHTS

RESULTS

OUTLOOK

4
SALES VOLUME
(in thousands of tons)
During the quarter, Sales Volume totaled

, a growth of 24.1%

compared with the same period in 2012;

30.5
24.6
2.3

27.0
2.5

2,6

22.3

24.4

28.0

2Q12

1Q13

2Q13

Nonwovens

Other

The increase was mainly due to the 2nd production line at the Pouso Alegre (MG) facility,
that started up in June/2012 and to our 2 nd machine in Statesville/USA, that started up in
March/2013.
NET REVENUE
(in millions of Reais)
Net Revenue for 2Q13 amounted to

, an increase of 27.9% compared

with 2Q12. When compared with 1Q13, growth was 20.2%;

R$ 6.33

R$ 6.15
R$ 5.95

193.1
151.0

160.6

2Q12

1Q13
Net Revenue

2Q13
Unitary Net Revenue

The increase is largely due to the higher sales volume.
6
COGS (Cost of Goods Sold)
(in millions of Reais)
The COGS totaled

in 2Q13, a growth of 31.4% against the R$ 108.1

million recorded in 2Q12 and an increase of 23.6% compared with the R$ 114.9 million in
1Q13;

R$ 4.66
R$ 4.40

R$ 4.26

142.0
108.1

114.9

2Q12

1Q13

2Q13

COGS (R$ thousand)

Unitary COGS (R$)

This performance is largely the result of higher sales volume and the increased costs of raw
material.

7
EBITDA (in millions of Reais)
and EBITDA MARGIN (%)
Adjusted EBITDA in 2Q13 reached
, corresponding to a 24.4% improvement
compared with 1Q13 and 13.7% more than 2Q12. Adjusted EBITDA margin was 16.6%, a slight
rise of 0.5 p.a. compared with 1Q13.
18.7%
16.1%

16.6%

32.1
28.2

25.8

2Q12
Ebitda

1Q13
2Q13
Ebitda Margin (%)
25,0

NET INCOME (in millions of Reais)
and NET MARGIN(%)
Net Income in the period amounted to

, 5.0% more than 2Q12 and 63.0%

higher than 1Q13;
5.2%
4.3%
3.1%

8.2

7.8
5.1

-

0,0%

2Q12

1Q13
Net Income

2Q13
Net Margin

The adjusted dividend calculation base for the quarter was R$ 10.9 million, the difference
representing the realization of the deemed cost for the quarter, net of tax.

9
NET DEBT
(in millions of Reais)
Net Debt increased 24.9% when compared
with 2Q12 due to an increase in Gross Debt of
R$ 126.7 million against a growth of R$ 28.1
million in cash and liquid hedge instruments. Net
Debt increased 8.5% in relation to 1Q13;

456.2

495.1

396.5

The foreign currency named debt was mainly
borrowed in the USA with a natural hedge in the
form of Providência’s revenue flows and assets
in that country.
Local
Currency

28%
2Q12

1Q13

2Q13

72%
Foreign
Currency
DEBT / CASH
(in millions of Reais)

Consolidated Net Debt
R$ (MM)
Total Debt
Short Term
Long Term
Total

6/30/2012 3/31/2013 6/30/2013

Ch. 2Q13 /
2Q12

117.7
349.2
466.8

114.5
475.5
590.0

67.4
526.2
593.5

-42.8%
50.7%
27.1%

70.4

133.8

98.4

39.7%

Net Debt

396.5

456.2

495.1

24.9%

Shareholders' Equity

678.7

696.1

670.0

-1.3%

3.35

3.70

3.95

17.9%

2.33

2.24

2.63

12.9%

Cash and liquid hedge instruments

Net Debt / Adjusted EBITDA
Net Debt / Adjusted EBITDA
without the Preoperational lines Debt*

11
25,0

DIVIDENDS
(in millions of Reais)
The Company concluded the payout of an additional R$ 33.8 million in dividends, approved
by the E/AGM of April 1, 2013, amounting to 100% of the adjusted dividend calculation base for
2012.
0.66
0,60

0.49

0,50

This calculation base corresponds to:

0.41

0,40

33.8
25.4
21.7

14.1

11.1

19.3

Net Income for the financial year in 2012
(-) Legal Reserve (5%)
0,30
(+) Realization of the deemed cost:
Dividend Calculation Base
0,20

R$ 45.1 million
R$ 2.2 million
R$ 10.2 million
R$ 53.1 million

0,10

0,00

2010
1° Half

2011
2º Half

2012
Dividends/Share

12
25,0

MARKET VALUE RATIOS
PRVI3

Ch.2Q13/2Q12

R$10
R$9
R$8
R$7
R$6
R$5
Jun-12

Sep-12

Dec-12

Mar-13

Jun-13
1,40

Dividend Yield*

1,20

Share Price / Book Value per Share

1,00

8,06%

0,80

7,37%
0,60

1.00

5,54%

0,40

0.99

1Q13

2Q13
13

0.74

0,20

-

2010

2011

2012

* Dividend per Share / Share price at the end of the period.

2Q12
SCHEDULE

HIGHLIGHTS

RESULTS

OUTLOOK
OUTLOOK
With the unveiling in 1Q13 of the second production line in Statesville – the Company’s 13th
- and the conclusion to the respective ramping up of output, Providência’s objective is now to
increase the use of installed capacity with a consequent growth in sales as well as an enhanced

product mix;
By the year-end, Companhia Providência’s installed capacity will have reached 140 thousand
tons/year, consolidating the Company’s ranking as one of the largest and most modern players
in the global nonwovens industry.

K12

K13

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/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 .

16

Results 2 q13

  • 1.
  • 2.
  • 3.
    HIGHLIGHTS 2Q13 The principalhighlight in the quarter was the pace at which production from our 13th nonwovens line was ramped up and exceeding expectations. This line is our second at the Statesville plant in North Carolina, adding a further 20 thousand tons to the Company’s annual installed capacity to make a total of 140 thousand tons; In May, the Company concluded the payout of an additional R$ 33.8 million in dividends, approved by the E/AGM of April 1, 2013, amounting to 100% of the adjusted dividend calculation base for 2012; Sales Volume totaled 30.5 thousand tons, a growth of 24.1% compared with the same period in 2012. Quarter-on-quarter growth was 13.0%; Net Income in the period amounted to R$ 8.2 million, 5.0% more than 2Q12 and 63.0% higher than 1Q13.
  • 4.
  • 5.
    SALES VOLUME (in thousandsof tons) During the quarter, Sales Volume totaled , a growth of 24.1% compared with the same period in 2012; 30.5 24.6 2.3 27.0 2.5 2,6 22.3 24.4 28.0 2Q12 1Q13 2Q13 Nonwovens Other The increase was mainly due to the 2nd production line at the Pouso Alegre (MG) facility, that started up in June/2012 and to our 2 nd machine in Statesville/USA, that started up in March/2013.
  • 6.
    NET REVENUE (in millionsof Reais) Net Revenue for 2Q13 amounted to , an increase of 27.9% compared with 2Q12. When compared with 1Q13, growth was 20.2%; R$ 6.33 R$ 6.15 R$ 5.95 193.1 151.0 160.6 2Q12 1Q13 Net Revenue 2Q13 Unitary Net Revenue The increase is largely due to the higher sales volume. 6
  • 7.
    COGS (Cost ofGoods Sold) (in millions of Reais) The COGS totaled in 2Q13, a growth of 31.4% against the R$ 108.1 million recorded in 2Q12 and an increase of 23.6% compared with the R$ 114.9 million in 1Q13; R$ 4.66 R$ 4.40 R$ 4.26 142.0 108.1 114.9 2Q12 1Q13 2Q13 COGS (R$ thousand) Unitary COGS (R$) This performance is largely the result of higher sales volume and the increased costs of raw material. 7
  • 8.
    EBITDA (in millionsof Reais) and EBITDA MARGIN (%) Adjusted EBITDA in 2Q13 reached , corresponding to a 24.4% improvement compared with 1Q13 and 13.7% more than 2Q12. Adjusted EBITDA margin was 16.6%, a slight rise of 0.5 p.a. compared with 1Q13. 18.7% 16.1% 16.6% 32.1 28.2 25.8 2Q12 Ebitda 1Q13 2Q13 Ebitda Margin (%)
  • 9.
    25,0 NET INCOME (inmillions of Reais) and NET MARGIN(%) Net Income in the period amounted to , 5.0% more than 2Q12 and 63.0% higher than 1Q13; 5.2% 4.3% 3.1% 8.2 7.8 5.1 - 0,0% 2Q12 1Q13 Net Income 2Q13 Net Margin The adjusted dividend calculation base for the quarter was R$ 10.9 million, the difference representing the realization of the deemed cost for the quarter, net of tax. 9
  • 10.
    NET DEBT (in millionsof Reais) Net Debt increased 24.9% when compared with 2Q12 due to an increase in Gross Debt of R$ 126.7 million against a growth of R$ 28.1 million in cash and liquid hedge instruments. Net Debt increased 8.5% in relation to 1Q13; 456.2 495.1 396.5 The foreign currency named debt was mainly borrowed in the USA with a natural hedge in the form of Providência’s revenue flows and assets in that country. Local Currency 28% 2Q12 1Q13 2Q13 72% Foreign Currency
  • 11.
    DEBT / CASH (inmillions of Reais) Consolidated Net Debt R$ (MM) Total Debt Short Term Long Term Total 6/30/2012 3/31/2013 6/30/2013 Ch. 2Q13 / 2Q12 117.7 349.2 466.8 114.5 475.5 590.0 67.4 526.2 593.5 -42.8% 50.7% 27.1% 70.4 133.8 98.4 39.7% Net Debt 396.5 456.2 495.1 24.9% Shareholders' Equity 678.7 696.1 670.0 -1.3% 3.35 3.70 3.95 17.9% 2.33 2.24 2.63 12.9% Cash and liquid hedge instruments Net Debt / Adjusted EBITDA Net Debt / Adjusted EBITDA without the Preoperational lines Debt* 11
  • 12.
    25,0 DIVIDENDS (in millions ofReais) The Company concluded the payout of an additional R$ 33.8 million in dividends, approved by the E/AGM of April 1, 2013, amounting to 100% of the adjusted dividend calculation base for 2012. 0.66 0,60 0.49 0,50 This calculation base corresponds to: 0.41 0,40 33.8 25.4 21.7 14.1 11.1 19.3 Net Income for the financial year in 2012 (-) Legal Reserve (5%) 0,30 (+) Realization of the deemed cost: Dividend Calculation Base 0,20 R$ 45.1 million R$ 2.2 million R$ 10.2 million R$ 53.1 million 0,10 0,00 2010 1° Half 2011 2º Half 2012 Dividends/Share 12
  • 13.
    25,0 MARKET VALUE RATIOS PRVI3 Ch.2Q13/2Q12 R$10 R$9 R$8 R$7 R$6 R$5 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 1,40 DividendYield* 1,20 Share Price / Book Value per Share 1,00 8,06% 0,80 7,37% 0,60 1.00 5,54% 0,40 0.99 1Q13 2Q13 13 0.74 0,20 - 2010 2011 2012 * Dividend per Share / Share price at the end of the period. 2Q12
  • 14.
  • 15.
    OUTLOOK With the unveilingin 1Q13 of the second production line in Statesville – the Company’s 13th - and the conclusion to the respective ramping up of output, Providência’s objective is now to increase the use of installed capacity with a consequent growth in sales as well as an enhanced product mix; By the year-end, Companhia Providência’s installed capacity will have reached 140 thousand tons/year, consolidating the Company’s ranking as one of the largest and most modern players in the global nonwovens industry. K12 K13 15
  • 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/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 . 16