2Q11 Results

August 12th, 2011

SCHEDULESCHEDULE

HIGHLIGHTSHIGHLIGHTS

RESULTSRESULTS

Providência USAProvidência USA

RESULTSRESULTS

OUTLOOKOUTLOOK

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Providência USA

Sales Volume amounted to 22.0 thousand tons22.0 thousand tons in the quarter, a growth of 10.1%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 2020,,000000 tons/yeartons/year of

nonwovens;

HIGHLIGHTS

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 22,,563563 tonstons, in line with the plans for ramping up

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 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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HIGHLIGHTSHIGHLIGHTS

RESULTSRESULTS

SCHEDULESCHEDULE

Providência USA

RESULTSRESULTS

OUTLOOKOUTLOOK

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38,5

2,2

3,5 38,7

42,0

During the quarter, the Company posted

growth in sales volume of 1010..11%% compared with

the same period in 2010 and also in comparison

with 1Q11;

SALES VOLUMESALES VOLUME((in thousands of tonsin thousands of tons))

36,5 38,5

1H10 1H11

Our first production line in the US has already

contributed 22,,563563 tonstons inin salessales in 1H11, in line

with the Company’s forecast for ramping up

production.

18,7 18,6 19,9

1,3 1,4

2,1 20,0 20,0 22,0

2Q10 1Q11 2Q11

5

160,0

180,0

200,0

220,0

240,0

260,0

NET REVENUE NET REVENUE

NONWOVENS NONWOVENS (in millions of Reais)(in millions of Reais)

Net revenue reached RR$$ 126126..88 millionmillion inin 22QQ1111, a growth of 1010..11%% in relation to 1Q11 and

against 1H10, the increase was 99..66%% reaching RR$$ 241241..99 millionmillion ;

220,8 241,9

-

20,0

40,0

60,0

80,0

100,0

120,0

140,0

160,0

1H10 1H11

116,3 115,1 126,8

2Q10 1Q11 2Q11

6

The increase is due to the realignment of prices and to the startup of the new

production line in the United States.

151,1

173,6

R$ 3,90 R$ 4,13

-R$ 40,00

-R$ 30,00

-R$ 20,00

-R$ 10,00

R$ -

R$ 10,00

80,0

100,0

120,0

140,0

160,0

180,0

200,0

R$ 4,29 R$ 5,00

R$ 6,00

R$ 7,00

R$ 8,00

R$ 9,00

R$ 10,00

120,0

140,0

160,0

180,0

200,0

COGS (COGS (Cost of Goods Sold)Cost of Goods Sold)

NONWOVENSNONWOVENS ((in millions of Reaisin millions of Reais))

Cost of goods sold (COGS) totaled 9494..55

millionmillion in 2Q11, a rise of 1717..88%% when

compared with 2Q10 and 1919..55%% in

comparison with 1Q11;

The increase is largely linked to:

• The higher sales volume in 2Q11;

•The significant hike in polypropylene

prices.

-R$ 80,00

-R$ 70,00

-R$ 60,00

-R$ 50,00

-

20,0

40,0

60,0

1H10 1H1180,2 79,1

94,5

R$ 4,01 R$ 3,96 R$ 4,29

-R$ 2,00

-R$ 1,00

R$ -

R$ 1,00

R$ 2,00

R$ 3,00

R$ 4,00

R$ 5,00

-

20,0

40,0

60,0

80,0

100,0

2Q10 1Q11 2Q11

7

21,4% 19,2%14,3%

0,0%

50,0%

100,0%

EBITDA EBITDA ((in millions of Reaisin millions of Reais) )

and EBITDA Margin (%) and EBITDA Margin (%)

Adjusted Ebitda in 2Q11 reached RR$$

1818..11 millionmillion, a reduction of 18.3% when

compared with 1Q11. In relation to

2Q10, there was a decline of 27.2%;

24,9 22,2

18,1

-100,0%

-50,0%

2Q10 1Q11 2Q11

Ebitda Ebitda Margin (%)

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These reductions are directly related

to:

•The increase in the prices of our main

raw material, polypropylene. According

to Chemical Data Index (CDI), the

increase was of 38% in the first half

2011;

• The startup and adjustments in the US

production line.

6,5

9,5

3,0%3,9%

-5,0%

0,0%

5,0%

10,0%

3,0

4,0

5,0

6,0

7,0

8,0

9,0

10,0

11,0

12,0

13,0

14,0

12,0

13,0

14,0 Lucro Líquio

NET INCOME NET INCOME ((in millions of Reais) in millions of Reais)

and NET MARGIN (%)and NET MARGIN (%)

The net income for the quarter amounted

to RR$$ 22..33 millionmillion and RR$$ 99..55 millionmillion in the first

six months of the year. It represents a 4545..11%%

increase in relation to 1H10.

6,5

-15,0%

-10,0%

-

1,0

2,0

3,0

1H10 1H11

11,1

14,6

-

1,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

9,0

10,0

11,0

12,0

1H10 1H11

For the quarter (Retained Earnings) totaled RR$$ 1414..66

millionmillion, since realization of deemed costs in the quarter is

added in net of tax.

It represents a 3131..55%% increase in relation to the R$ 11.1

million of dividends distributed regarding to the 1H10.9

150,0

200,0

250,0

The Company reported a decrease in its

cash position of 33..11%% or RR$$ 66..99 millionmillion in

relation to the same period in 2010;

This reduction is directly related to the

CASH AND CASH EQUIVALENTS

((in millions of Reaisin millions of Reais) )

225,8

270,6

218,8

-

50,0

100,0

150,0

2Q10 1Q11 2Q11

This reduction is directly related to the

down payment effected for the two lines

that will startup in 2012; a large part of this

amount will be reimbursed with the input

of funds already raised;

In the 2Q11 we also paid dividends of R$

21.8 million.

10

200,0

250,0

NET DEBT

((in millions of Reais)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;

192,5

224,3

258,3

-

50,0

100,0

150,0

2Q10 1Q11 2Q11

At the end of the quarter, the Company held 6161%% of its debt in local currency while the

remaining 3939%% was foreign currency denominated.11

R$ (MM) 06/30/2010 06/30/2011Ch. 2Q11 /

2Q10

Total Debt

Short Term 126,7 260,0 105,2%

Long Term 291,6 217,1 -25,5%

DEBT / CASH DEBT / CASH ((in millions of Reais)in millions of Reais)

Consolidated Net DebtConsolidated Net Debt

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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HIGHLIGHTSHIGHLIGHTS

RESULTSRESULTS

SCHEDULESCHEDULE

Providência USA

RESULTSRESULTS

OUTLOOKOUTLOOK

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 increasedincreased salessales volumevolume. Since all startup

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

OUTLOOKOUTLOOK

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 4040,,000000 tonstons to our current installed capacity, that is, a 40% increase;

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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CEO: Hermínio V. S. de Freitas

CFO: Eduardo Feldmann Costa

IR : Gabriela Las Casas

Beatriz Tokarski

Tel: +55 (41) 3381-8673

Fax: +55 (41) 3283-5909Fax: +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 .