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3Q08 Results
   November 13, 2008
Agenda



• 3Q08 Operational/ Administrative Highlights

• 3Q08 Results

• Outlook




                                                2
Operational and
          Administrative Highlights


 Sell of the Pipes and Fittings division - Provinil:

     Focus in the nonwovens: our core business, presenting margins of 23.6% versus
        9.6% of the Pipes and Fittings Division;

     Share Purchase Agreement signed with Aliaxis on September 18, 2008;

     R$82 million, equivalent to 7.5x the Ebitda generated in the last 12 months;

     Deal expected to be closed during the 4Q08.




                                                                                      3
Operational and
         Administrative Highlights



 Debentures issued on December/2007:

    Rating annual review;

    Rating maintained at a brA level, despite the world crisis;

    Síntese Analítica released by Standard & Poor’s on October 28,2008.




                                                                           4
Operational and
       Administrative Highlights
 Specialty hygienic and medical:
                                                                 2,084
                                                                                1,923
     Investments in progress in laminated
                                                  1,671
      and     printed   hygienic    disposable
      production lines, at full capacity at the
      1Q09.
                                                                  19%
     Laminated and printed will account for       17%                           16%

      up to 18% of our production capacity.

                                                  3Q07           2Q08            3Q08
     We started on 3Q08 the sales of high
                                                            Volume       PMU
      performance medical disposables, made
      at KAMI9, reaching 145 tons in the
      quarter.
                                                   Volume, in tons, of laminated, printed
                                                        and medical disposables
                                                   Price premium of specialties versus
                                                         commodity disposables       5
Operational and
       Administrative Highlights


 Others:

     Conclusion of the Share Buyback Program, totaling 3.1 million shares, in August/
       2008. The total cost was R$ 22.3 million, and the average price was R$ 7.09/share;

     Implementation (go live) of SAP system on July 1st, 2008.




                                                                                       6
Agenda



• 3Q08 Operational/ Administrative Highlights

• 3Q08 Results

• Outlook




                                                7
Sales Volume
                         Sales Volume
                          (thousand tons)
                                                               Increase of 28.8% in relation to
                               0.5                 0.8
                                                              the 3Q07 mainly due to the
                   0.6         5.7                 5.9
      0.5                                                     nonwovens division that growth
                                                              28.5% in the same comparison
            5.7
                                                              because of Isofilme volume that
                                                              started from the 3Q07, and begin of
                                                              KAMI9 operations last April;
                              17.9                17.7
            13.8
                                                               In relation to the previous quarter
                                                              there was a 200 tons decrease in
                                                              nonwovens due to shipment delays
                                                              caused by SAP go live.
         3Q07                2Q08                  3Q08
       Others Packaging      Pipes and Fittings   Nonwovens
In thousand tons




                                                                                              8
Gross Revenues

                    Gross Revenue
                                                             Increase of 16.6% in relation to
                                                153.0
                                                            the 3Q07, and of 2.7% comparing
                           149.1
                                                            to the 2Q08;
        131.3
                            45.5                    48.7
                                                             In the export market our
         39.5                                               revenues increased 23.5% in
                                                            relation to the 3Q07 and 7.1% in
                                                            relation to the 2Q08, even with the
                                                            appreciation of the real against the
                            103.6                   104.3   dollar;
         91.8


                                                             In the domestic market our
                                                            gross revenues increased 13.6%
                                                            in relation to the 3Q07 and 0.7%
       3Q07                2Q08                     3Q08
                                                            comparing to the 2Q08, also due
                Domestic Market     Export Market
                                                            to shipment delays caused by SAP
In thousand Reais                                           go live.

                                                                                               9
EBITDA (R$ million) and EBITDA Margin (%)
       Adjusted Ebitda (R$ million) and
        Ebitda Margin (Hedge) (%)
                            0.5                                  Adjusted EBITDA reached R$ 26.4
      1.1
                                                                million (20.1% margin), 7.7% less than
                                                                in the 3Q07;
                                                0.7
                           30.9
                                                                 EBITDA adjusted by operational
      28.6                                                      hedge* totaled R$ 27.1 million (20.7%
                                               26.4
                                                                margin), 8.8% bellow the same period
    26.5%
                                                                in 2007;
                           24.6%
    25.5%
                           24.2%                                 In relation to the 2Q08 there was a
                                              20.7%             decrease of 14.6% due to smaller
                                                                volumes because of the SAP go live
                                              20.1%
                                                                and because of the increase in raw
    3Q07                   2Q08                  3Q08           material prices.
             Operational Hedge     Adjusted Ebitda
Adjusted Ebitda Margin %     Adjusted Ebitda Margin (Hedge) %

                                                                Operational hedge*: The result of exchange-rate lock forward contracts
                                                                on accounts receivables from the export market.

                                                                                                                             10
Net Result (R$ million) and Net Margin (%)
         Net Income (R$ million) and
          Net Income Margin (%)
                    13.8

                                                Our net result was negative
                                               in R$ 2.2 million with negative
                                               net margin of 1.7% due to a
                   10.8%                       negative financial result of R$
                                               16.4 millions, mainly due to
 -2.2%                            -1.7%
                                               variations in the exchange
                                               rates regarding our debt of R$
                                               20.4 millions, without cash
                                       (2.2)
                                               effect.
 (2.5)

3Q07                2Q08               3Q08

                   Net Margin




                                                                          11
Nonwovens Division
                  Volume                         Volume reached 17,700 tons, 28.5%
               (thousand tonnes)                above the 3Q07. In the domestic market
                     17.9          17.7         the increase was 42.9% (mainly Isofilme)
                                                comparing to the 3Q07, and in the export
      13.8                                      market it was at around 30.8% due to
                                                KAMI9;

                                                 Comparing to the 2Q08 there was a
                                                decrease of 1.1%.

     3Q07           2Q08           3Q08                     Net Revenue
                                                               (R$ million)
                                                                  103.7        104.9
                                                     85.5
 Net revenues of R$ 104.9 millions, 22.7%
above the 3Q07 and 1.2% above the 2Q08

 The increase in the 3Q08 in relation to the
2Q08 was due to a 2.3% increase in the
average price of sales.
                                                   3Q07           2Q08          3Q08
                                                                                  12
Nonwovens Division
               Fixed Costs
                 (R$ million)                    Unitary fixed cost 22.7% lower than in
                    10.1                         the 3Q07;

                                                  In relation to the 2Q08 there was a
                                                 decrease of 10.5% due to efficiency and
                                                 scale gains.
     9.1
                                      9.0
     0.66            0.57             0.51


                                                         Unitary Variable Costs
                                                   (R$ - raw material, comissions and shipping)

    3Q07            2Q08              3Q08                                                 4.06

                                                  3.82
                Unitary Fixed Costs
                                                                      3.66

 There was an increase of 6.4% in relation to
the 3Q07, and of 10.9% in relation to the 2Q08
due to the increase in raw-material prices.



                                                                                                  13
                                                 3Q07                2Q08                  3Q08
Nonwovens Division
 Ebitda of R$ 24.0 millions, with 22.9% margin,                                                                  Ebita (R$ million)
                                                                                                                 and Ebitda Margin
0.4% above the 3Q07;
                                                                                                                            27.9

 In relation to the 2Q08 there was a decrease                                                      23.9                                  24.0

of 14.0% due to the increase in variable costs.


                                                                                                   28.0%
            Ajusted Ebitda (Hedge)                                                                                         26.9%
                                                                                                                                         22.9%
                      (R$ million)


                          28.4

                                                                                                  3Q07                     2Q08           3Q08

                                                                                                                        Ebitda Margin%


     25.0
                                                  24.8
                                                                                           Ebitda adjusted by operational hedge*
    29.2%                 27.4%                 23.6%
                                                                                          was R$ 24.8 millions (23.6% margin),
                                                                                          0.8% bellow the 3Q07.

    3Q07                 2Q08                     3Q08


              Ajusted Ebitda Margin (Hedge) %

                                                                                                                                             14
             Operational hedge*: The result of exchange-rate lock forward contracts on accounts receivable from the export market.
Pipes and Fittings Division
                 Volume
              (thousand tonnes)
                                             The volume was 5,900 tons in the 3Q08,
                                            3.5% higher than in the 2Q08 and in the
     5.7             5.7          5.9       3Q07.




                                                       Net Revenue
                                                         (R$ million)

                                                                        24.3
                                                            22.8
    3Q07           2Q08           3Q08         21.8



 Net revenues of R$ 24.3 millions, an
increase of 11.3% in relation to the 3Q07
and of 6.6% in relation to the 2Q08.

 In relation to the 2Q08 the unitary
average price was 3.0% higher.                3Q07          2Q08        3Q08




                                                                               15
Pipes and Fittings Division
       Fixed Costs and Unitary Costs
                                             Decrease in fixed costs of 12.0% in relation
                 (R$ million)                to the 3Q07;
                      3.2
                                              Comparing to the 2Q08 there was a 17.3%
       3.0                                   decrease.

                                      2.7

      0.52           0.55
                                      0.46                 Unitary Variable Costs
                                                    (R$ - raw material, comissions and shipping)

                                                                                            3.24
     3Q07           2Q08              3Q08
                                                                       2.92
                                                    2.66
                Unitary Fixed Costs



 Increase of 21.7% in relation to the
3Q07 and of 11.0% in relation to the
2Q08;

 There was a price increase in raw-               3Q07                2Q08                 3Q08

materials in relation to the 2Q08.

                                                                                                   16
Pipes and Fittings Division



          Ebitda (R$ million) and
           Ebitda Margin (%)

   3.6                                      EBITDA of R$ 2.3 millions,
                    2.9                    with a 9.6% margin, a decrease
                                     2.3
                                           of 35.9% in relation to the 3Q07
                                           and of 21.2% in relation to the
  16.6%                                    2Q08.
                   12.9%
                                    9.6%




  3Q07             2Q08             3Q08

                 Ebitda Margin %




                                                                       17
Debt

                         Consolidated Net Debt




 (R$ Million)                      06/30/08      09/30/08
  Total Debt

     Short term                          6.7        18.0

     Long term                         377.7       441.6

     Total                             384.4       459.6

                                       175.5       170.6
  Cash and equivalents
                                       208.9       289.0
  Net debt
Debt

 The increase in the net debt was mainly due to financings and loans at an amount of R$
48.0 millions, and to interests and restatements.


 In the quarter we accounted for R$43.9 million in financial expenses, 96% without cash
outlay.


Currency variation represented R$20.4 million in our financial result, due to the 20% impact
on our debt from the depreciation of the real against the dollar.


On September 30, 2008 we had two interest swap agreements, due to loans and financing,
one CDI vs. US$ totaling US$20 million maturing in December 2012 and another fixed rate
Libor vs. Libor totaling US$50,000 maturing in June 2013, as well as US$22,000 in currency
hedge operations. As a result, third-quarter net income was a negative R$2.2 million.
Agenda



• 3Q08 Operational/ Administrative Highlights

• 3Q08 Results

• Outlook




                                                20
Outlook

 Increase in the production capacity of specialty hygienic disposables,
from 700 tons/month in the 3Q08 to 1,200 tons/month when the
investments are concluded and operational in the first quarter 2009;

 Development and expansion of the production of high performance
medical disposable, with higher added-value, to reach 300 tons/month in
2009;

 Focus in the operations through stabilizing SAP;

 Drawback verde e amarelo to acquire raw-material in products for
export.




                                                                           21
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    22
presentation with new information and/or future events .

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3Q08 Results Highlights

  • 1. 3Q08 Results November 13, 2008
  • 2. Agenda • 3Q08 Operational/ Administrative Highlights • 3Q08 Results • Outlook 2
  • 3. Operational and Administrative Highlights  Sell of the Pipes and Fittings division - Provinil:  Focus in the nonwovens: our core business, presenting margins of 23.6% versus 9.6% of the Pipes and Fittings Division;  Share Purchase Agreement signed with Aliaxis on September 18, 2008;  R$82 million, equivalent to 7.5x the Ebitda generated in the last 12 months;  Deal expected to be closed during the 4Q08. 3
  • 4. Operational and Administrative Highlights  Debentures issued on December/2007:  Rating annual review;  Rating maintained at a brA level, despite the world crisis;  Síntese Analítica released by Standard & Poor’s on October 28,2008. 4
  • 5. Operational and Administrative Highlights  Specialty hygienic and medical: 2,084 1,923  Investments in progress in laminated 1,671 and printed hygienic disposable production lines, at full capacity at the 1Q09. 19%  Laminated and printed will account for 17% 16% up to 18% of our production capacity. 3Q07 2Q08 3Q08  We started on 3Q08 the sales of high Volume PMU performance medical disposables, made at KAMI9, reaching 145 tons in the quarter. Volume, in tons, of laminated, printed and medical disposables Price premium of specialties versus commodity disposables 5
  • 6. Operational and Administrative Highlights  Others:  Conclusion of the Share Buyback Program, totaling 3.1 million shares, in August/ 2008. The total cost was R$ 22.3 million, and the average price was R$ 7.09/share;  Implementation (go live) of SAP system on July 1st, 2008. 6
  • 7. Agenda • 3Q08 Operational/ Administrative Highlights • 3Q08 Results • Outlook 7
  • 8. Sales Volume Sales Volume (thousand tons)  Increase of 28.8% in relation to 0.5 0.8 the 3Q07 mainly due to the 0.6 5.7 5.9 0.5 nonwovens division that growth 28.5% in the same comparison 5.7 because of Isofilme volume that started from the 3Q07, and begin of KAMI9 operations last April; 17.9 17.7 13.8  In relation to the previous quarter there was a 200 tons decrease in nonwovens due to shipment delays caused by SAP go live. 3Q07 2Q08 3Q08 Others Packaging Pipes and Fittings Nonwovens In thousand tons 8
  • 9. Gross Revenues Gross Revenue  Increase of 16.6% in relation to 153.0 the 3Q07, and of 2.7% comparing 149.1 to the 2Q08; 131.3 45.5 48.7  In the export market our 39.5 revenues increased 23.5% in relation to the 3Q07 and 7.1% in relation to the 2Q08, even with the appreciation of the real against the 103.6 104.3 dollar; 91.8  In the domestic market our gross revenues increased 13.6% in relation to the 3Q07 and 0.7% 3Q07 2Q08 3Q08 comparing to the 2Q08, also due Domestic Market Export Market to shipment delays caused by SAP In thousand Reais go live. 9
  • 10. EBITDA (R$ million) and EBITDA Margin (%) Adjusted Ebitda (R$ million) and Ebitda Margin (Hedge) (%) 0.5  Adjusted EBITDA reached R$ 26.4 1.1 million (20.1% margin), 7.7% less than in the 3Q07; 0.7 30.9  EBITDA adjusted by operational 28.6 hedge* totaled R$ 27.1 million (20.7% 26.4 margin), 8.8% bellow the same period 26.5% in 2007; 24.6% 25.5% 24.2%  In relation to the 2Q08 there was a 20.7% decrease of 14.6% due to smaller volumes because of the SAP go live 20.1% and because of the increase in raw 3Q07 2Q08 3Q08 material prices. Operational Hedge Adjusted Ebitda Adjusted Ebitda Margin % Adjusted Ebitda Margin (Hedge) % Operational hedge*: The result of exchange-rate lock forward contracts on accounts receivables from the export market. 10
  • 11. Net Result (R$ million) and Net Margin (%) Net Income (R$ million) and Net Income Margin (%) 13.8  Our net result was negative in R$ 2.2 million with negative net margin of 1.7% due to a 10.8% negative financial result of R$ 16.4 millions, mainly due to -2.2% -1.7% variations in the exchange rates regarding our debt of R$ 20.4 millions, without cash (2.2) effect. (2.5) 3Q07 2Q08 3Q08 Net Margin 11
  • 12. Nonwovens Division Volume  Volume reached 17,700 tons, 28.5% (thousand tonnes) above the 3Q07. In the domestic market 17.9 17.7 the increase was 42.9% (mainly Isofilme) comparing to the 3Q07, and in the export 13.8 market it was at around 30.8% due to KAMI9;  Comparing to the 2Q08 there was a decrease of 1.1%. 3Q07 2Q08 3Q08 Net Revenue (R$ million) 103.7 104.9 85.5  Net revenues of R$ 104.9 millions, 22.7% above the 3Q07 and 1.2% above the 2Q08  The increase in the 3Q08 in relation to the 2Q08 was due to a 2.3% increase in the average price of sales. 3Q07 2Q08 3Q08 12
  • 13. Nonwovens Division Fixed Costs (R$ million) Unitary fixed cost 22.7% lower than in 10.1 the 3Q07;  In relation to the 2Q08 there was a decrease of 10.5% due to efficiency and scale gains. 9.1 9.0 0.66 0.57 0.51 Unitary Variable Costs (R$ - raw material, comissions and shipping) 3Q07 2Q08 3Q08 4.06 3.82 Unitary Fixed Costs 3.66  There was an increase of 6.4% in relation to the 3Q07, and of 10.9% in relation to the 2Q08 due to the increase in raw-material prices. 13 3Q07 2Q08 3Q08
  • 14. Nonwovens Division  Ebitda of R$ 24.0 millions, with 22.9% margin, Ebita (R$ million) and Ebitda Margin 0.4% above the 3Q07; 27.9  In relation to the 2Q08 there was a decrease 23.9 24.0 of 14.0% due to the increase in variable costs. 28.0% Ajusted Ebitda (Hedge) 26.9% 22.9% (R$ million) 28.4 3Q07 2Q08 3Q08 Ebitda Margin% 25.0 24.8  Ebitda adjusted by operational hedge* 29.2% 27.4% 23.6% was R$ 24.8 millions (23.6% margin), 0.8% bellow the 3Q07. 3Q07 2Q08 3Q08 Ajusted Ebitda Margin (Hedge) % 14 Operational hedge*: The result of exchange-rate lock forward contracts on accounts receivable from the export market.
  • 15. Pipes and Fittings Division Volume (thousand tonnes)  The volume was 5,900 tons in the 3Q08, 3.5% higher than in the 2Q08 and in the 5.7 5.7 5.9 3Q07. Net Revenue (R$ million) 24.3 22.8 3Q07 2Q08 3Q08 21.8  Net revenues of R$ 24.3 millions, an increase of 11.3% in relation to the 3Q07 and of 6.6% in relation to the 2Q08.  In relation to the 2Q08 the unitary average price was 3.0% higher. 3Q07 2Q08 3Q08 15
  • 16. Pipes and Fittings Division Fixed Costs and Unitary Costs Decrease in fixed costs of 12.0% in relation (R$ million) to the 3Q07; 3.2  Comparing to the 2Q08 there was a 17.3% 3.0 decrease. 2.7 0.52 0.55 0.46 Unitary Variable Costs (R$ - raw material, comissions and shipping) 3.24 3Q07 2Q08 3Q08 2.92 2.66 Unitary Fixed Costs  Increase of 21.7% in relation to the 3Q07 and of 11.0% in relation to the 2Q08;  There was a price increase in raw- 3Q07 2Q08 3Q08 materials in relation to the 2Q08. 16
  • 17. Pipes and Fittings Division Ebitda (R$ million) and Ebitda Margin (%) 3.6  EBITDA of R$ 2.3 millions, 2.9 with a 9.6% margin, a decrease 2.3 of 35.9% in relation to the 3Q07 and of 21.2% in relation to the 16.6% 2Q08. 12.9% 9.6% 3Q07 2Q08 3Q08 Ebitda Margin % 17
  • 18. Debt Consolidated Net Debt (R$ Million) 06/30/08 09/30/08 Total Debt Short term 6.7 18.0 Long term 377.7 441.6 Total 384.4 459.6 175.5 170.6 Cash and equivalents 208.9 289.0 Net debt
  • 19. Debt  The increase in the net debt was mainly due to financings and loans at an amount of R$ 48.0 millions, and to interests and restatements.  In the quarter we accounted for R$43.9 million in financial expenses, 96% without cash outlay. Currency variation represented R$20.4 million in our financial result, due to the 20% impact on our debt from the depreciation of the real against the dollar. On September 30, 2008 we had two interest swap agreements, due to loans and financing, one CDI vs. US$ totaling US$20 million maturing in December 2012 and another fixed rate Libor vs. Libor totaling US$50,000 maturing in June 2013, as well as US$22,000 in currency hedge operations. As a result, third-quarter net income was a negative R$2.2 million.
  • 20. Agenda • 3Q08 Operational/ Administrative Highlights • 3Q08 Results • Outlook 20
  • 21. Outlook  Increase in the production capacity of specialty hygienic disposables, from 700 tons/month in the 3Q08 to 1,200 tons/month when the investments are concluded and operational in the first quarter 2009;  Development and expansion of the production of high performance medical disposable, with higher added-value, to reach 300 tons/month in 2009;  Focus in the operations through stabilizing SAP;  Drawback verde e amarelo to acquire raw-material in products for export. 21
  • 22. 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 22 presentation with new information and/or future events .