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2Q 2014 Results Companhia Providência August 12, 2014.

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Presentation on theme: "2Q 2014 Results Companhia Providência August 12, 2014."— Presentation transcript:

1 2Q 2014 Results Companhia Providência August 12, 2014

2 The second quarter was one of the most challenging quarters of Providencia’s history; During the quarter, our operational performance was significantly impacted by the partial shutdown of some production lines at the São José dos Pinhais facility that started on April 1 st, 2014, until the Company reached full compliance with NR 12 (Regulatory Standard – Machinery and Equipment) by the Ministry of Labor. The lines were gradually restarted until July 4, 2014; Sales Volume amounted to 22.6 thousand tons, a reduction of 25.9% compared with the same period in 2013. The shutdown is estimated to have impacted the quarter by over 6,000 tons; results are expected be normalized for the second half of 2014; As a result of the lines shutdown the Company reported net revenues of R$ 163.8 million, 15.2% less than 2Q13; Additionally, Polymer Group Inc. (PGI) concluded the acquisition of Companhia Providência control on June 11 th, 2014 which shall contribute to the continuity of our success in the market. HIGHLIGHTS 2T14

3 SALES VOLUME (in millions of tons) During the quarter, the Company posted a year-on-year reduction in total sales volume of 25.9%. Sales of nonwovens alone posted a reduction of 23.9% compared with 2Q13. 25.9% Accumulated nonwovens sales volume increased 20.0% from the first half 2012 to the same period in 2013. However, there has been a 6.3% reduction from 1H13 to 1H14. 20.0%(6.3%)

4 NET REVENUE (in millions of Reais) The Company reported net revenue of R$ 163.8 million in 2Q14, a decrease of 15.2% when compared to 2Q13 and again, largely a reflection of lower sales volume in the period. 15.2% When compared, net revenues for the first half of 2012, 2013 and 2014 were significantly increased.

5 COGS - COST OF GOODS SOLD (in millions of Reais) Cost of goods sold (COGS) totaled R$ 135.8 million in 2Q14, 4.4% down when compared with R$ 142.0 million reported in 2Q13 and 15.4% less in relation to the R$ 160.6 million in 1Q14. This decline is principally due to lower sales volume.

6 EBITDA (in millions of Reais) and EBITDA MARGIN (%) Adjusted EBITDA in 2Q14 totaled R$ 7.2 million, a reduction of 77.5% if compared with the R$ 32.1 million registered in 2Q13. Quarter-on-quarter, the reduction was 74.9%. The reduction is also a reflect of lower sales volume, due to the shutdown of some production lines during the 2Q14.

7 NET RESULT (in millions of Reais) and NET MARGIN (%) The Company posted a loss of R$ 45.4 million in the quarter, mainly due to lower sales volume and nonrecurring expenses involving consultancy fees – R$ 19.7 million - related to the sale of the Company's control, according to the Material Fact published on June 11, 2014.

8 DEBT (in millions of Reais) Total debt decreased 5.0% compared with 2Q13, while USD devaluated 0.6% on the same period. Comparing 2Q14 x 1Q14, total debt had a 1.0% reduction, and USD devaluated 2.7%.; Net debt increased 5.6% when compared with 2Q13 mainly due to the decrease of cash and derivative financial instruments in the quarter. Net Debt increased by 3.0% in relation to 1Q14.

9 STATUS – SALE OF THE COMPANY`S CONTROL TO PGI On June 11, 2014, the closing of the transaction of the controlling stock took place, according to the Material Fact filed on the same date. On July 14, 2014 there was an Extraordinary General Meeting where the following resolutions were taken: The exit of the Company from Novo Mercado of BM&FBOVESPA was approved by majority of the present shareholders; Also approved by majority of the present shareholders representing the outstanding shares, with the absence of the controlling shareholder present, the selection of BANCO J. SAFRA S.A., as the financial institution responsible for the drafting of the appraisal report on the economic valuation of the Company’s stock, for the purposes of the Delisting Tender Offer and the Tender Offer for the Exit of the Company from Novo Mercado.

10 CEO/CFO: Hermínio Vicente Smania de Freitas IR : Gabriela Las Casas Danielle Cabrini Tel: +55 (41) 3381-8673 Fax: +55 (41) 3381-7656 São José dos Pinhais – PR www.providencia.com.br/ri www.twitter.com/providencia_riCONTACTS 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.


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