3. Shareholders’ Composition
Block of Control
Espírito Santo Treasury and
AIG Group Asas Fund G&G
Group others
19.0% 18.3% 19.0% 10.2% 6.1% 27.4%
Total: 82.5 million
Shares
4. Overview
Major
Nonwovens Key Customers
End-uses
#1 manufacturer of
nonwovens in Latin
America Diapers
51% market share in Feminine hygiene
Brazil* Furniture & bedding
34% market share in Latin Medical disposables
America, except Brazil*
*Hygiene Products
Since October 1st, 2008, Providência operates its nonwovens division only, with
approximately 700 employees; our Pipes and Fittings Division was sold in October
2008.
The Company focused in the nonwovens business, that present better margins and
lower operational costs.
5. Our Nonwovens Focus:
Consumer Goods Industry
Providência is focused on high value-added nonwoven products with high growth potential
(hygiene and medical disposables)
Product Mix (% of Nonwovens Net Revenues) Market Segmentation Outlook
Value-added Operating Market Expected
Medical products margin size growth
3%
Medical Double
Durable
23% Disposables*
High Small
digit
Hygiene / Double
Consumer Medium Large digit
Hygiene
Goods*
74%
Single
Durables Low Medium
digit
* Also exported to the USA and to
Latin America
5
9. Highlights
Sale of the Pipes and Fittings Division - Provinil:
Focus in nonwovens: Company core business, with higher margins compared to the
Pipes Division;
Sold to an Alixis subsidiary in October/08;
R$82 million, equivalent to 7.5x the Ebitda generated by this Division in the past 12
months.
Debentures issued in Dec/07:
Annual rating review;
Rating maintained at a brA level, despite the world crisis;
Síntese Analítica released by Standard & Poor’s on October 28,2008.
9
10. Highlights
SAP system stable since 4Q08.
Stability of tax credits in the acquisition of raw material for exported products:
Government benefit stop the tax credits growth.
2nd Share Buyback Program started on November 26, 2008:
Totaling 2.4 million shares that represented, in November 2008, 10% of the Company
free float;
Until the beginning of our quiet period, in March 12, 2009, we had acquired 85% of
the Program.
10
12. Sales Volume
The Nonwovens sales increased
0.8
by 11.9% in 4Q08 compared with
1.1
5.9 4Q07 mainly due to the start up of
5.6 1.6 KAMI9, in April/2008, that reached
its full capacity of 15,000 tons/year
in the second half 2008;
17.7 17.3
Compared to the 3Q08 our sales
15.5 volume was stable.
4Q07 3Q08 4Q08
Nonwovens Pipes and Fittings Others
In thousand tons
12
13. Net Revenues
– Nonwovens Division
Net revenues of the Nonwovens
totaled R$ 124.4 million in 4Q08, an
increase of 34.1% y-o-y mainly due
124.4
to the increase of 11.9% in volumes,
104.9
92.7 and to the better exchange rates that
helped our exports, that accounted
for 50.5% of our gross revenues in
the 4Q08.
4Q07 3Q08 4Q08
In millions of Reais
13
14. Variable Costs – Nonwovens Division
Unit Variable Costs
(R$ - raw material, comissions and shipping)
The unit variable cost increased 23.8% in
4Q08 in relation to the 4Q07, mainly due to the
4.58 increase of 25.7% in the exports volume, that
4.07
presents higher logistic costs and to the
3.70 stronger US dollar against the Real .
In relation to the 3Q08 the increase was
12.5%.
4Q07 3Q08 4Q08
14
15. Costs – Cia Providência
Cost of Goods Sold
(R$ million)
The cost of goods sold reached R$ 84.5
million in the 4Q08, an increase of 0.3%
compared to the R$ 84.3 million in the 4Q07.
90.4
84.3 84.5
The unit COGS increased 17.1% due to the
costs of the Pipes and Fittings Division in the
4Q07, that was lower than the unitary COGS
of the Nonwovens Division. Because of this
4.46
3.81 3.70 3.66
3.92 3.87 the unitary COGS of both divisions were
smaller in 4Q07 and 3Q08.
4Q07 3Q08 4Q08
Unitary COGS
Unitary COGS
15
16. Fixed Costs – Nonwovens Division
Fixed Costs
(R$ million)
In addition to the collective wage agreement in
4Q08, increases are directly related to the sale
of the Pipes and Fittings Division. On a unit
11.6 basis there was an increase in certain fixed
9.8
9.0
costs, previously also prorated to the PVC
25.6
Division but fully absorbed by the Nonwovens
Division alone in 4Q08, examples being wages
0.63 0.67
0.51 and corporate departmental overheads.
4Q07 3Q08 4Q08
4Q07 3Q08 4Q08
Unitary Fixed Costs
16
17. EBITDA (R$ million)
and EBITDA Margin (%) – Nonwovens Division
Ebitda (R$ million) and
Ebitda Margin (%)
Ebitda of the Nonwovens Division
33.3
reached R$ 33.3 million, with a 26.8%
25.6 margin, na increase of 30.0% in
24.0
relation to the 4Q07.
27.6% 22.9% 26.8% In relation to 3Q08 there was a
38.7% increase.
4Q07 3Q08 4Q08
EBITDA Margin%
17
18. Net Earnings (R$ million)
And Net Margin (%)
Net earnings in 4Q08
19.0
reached R$ 19.0 million
15.0% (positive 15.0% margin)
6.2% against R$ 7.2 million in 4Q07.
-1.7%
7.2
(2.2)
4Q07 3Q08 4Q08
Net Margin
18
19. Debt
Consolidated Net Debt
(R$ Million) 09/30/08 12/31/08
Total Debt
Short term loans 18.0 38.4
Long term loans 441.6 454.3
Total 459.6 492.7
170.6 235.4
Cash and equivalents
289.0 257.3
Net debt
20. Debt
In 4Q08 we had a huge cash increase mainly due to the sale of the Pipes and Fittings
Division among others;
The increase in net debt between 4Q07 and 4Q08 amounted to R$ 81.2 million, R$ 71.5
million (US$ 30.0 million) reflects additional funding of US$ for the US plant, restatement of
the debt (FX variation and interest) of about R$ 75.1 million and payment of interest on debt
and principal of R$ 65.5 million;
Financial expenses reached R$ 64.2 million in 4Q08 without cash disbursements in the
short term;
On December 31, 2008 we had two interest swap agreements, due to loans and financing,
being one CDI vs. US$ totalling US$11.3 million maturing in December 2012 and another
fixed rate Libor vs. Libor totalling US$50 million maturing in June 2013, as well as US$ 15
million in currency hedge operations.
22. Outlook
Expansion in production of specialty disposable hygiene
articles, to be concluded in 1Q09, output to reach 1,200
tons/month from 2Q09 when the investment program is
complete;
Expansion in output of high performance disposable
medical products with greater value added, the Company’s
goal being that this line should reach 10% of our total
volume in the long term;
Focus on operations with the stabilization of the SAP
software.
22
23. 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 23
presentation with new information and/or future events .
