3Q10 Results3Q10 Results

October 10October 10thth, 2010, 2010

SCHEDULESCHEDULE

HIGHLIGHTSHIGHLIGHTS

RESULTSRESULTSRESULTSRESULTS

OUTLOOKOUTLOOK

2

Providência USA

HIGHLIGHTS

Stability in polypropylene resin prices, our main raw-material, contributing to an

improvement in our margins during the quarter;

Contracting of pre-shipment export finance from the BNDES – National Economic and

Social Development Bank under the BNDES-Exim Pre-Shipment Program in the amount

of R$ 150 million, at an annual fixed interest rate of 7.0% and a maturity of 18 months.

The Company will use the funds from this financing in export operations. Funds were

drawn down in October;

3

drawn down in October;

The Board of Directors approved the payout of dividends equivalent to 100% of

adjusted net income for the period ending June 30 2010 totaling R$ 11.1 million and

corresponding to approximately R$ 0.14 per share. Payment will be effected on

November 26 2011 and the Company’s shares will trade ex-dividend from November 19

2010;

HIGHLIGHTSHIGHLIGHTS

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OUTLOOKOUTLOOK

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

17,7 18,7 18,1

1,4 1,3 1,6

19,1 20,0 19,7

Growth of 2.4% in sales volume of

nonwovens when compared with

3Q09 and a reduction of 3.2% against

2Q10;

5

17,7 18,7 18,1

3Q09 2Q10 3Q10

Nonwovens Others

We continue operating at full

capacity, approximately 20 thousand

tons per quarter.

NET REVENUE NET REVENUE

NONWOVENS NONWOVENS (in (in millionsmillions ofof Reais)Reais)

114,8 114,1

Compared with 3Q09, we posted an

increase of R$ 13.4 million, equivalent to

13.3%. The major factors driving the

increase in net operating income were

sales volume, realignment of prices and

currency exchange rate impact;

6

100,7

114,8 114,1

3Q09 2Q10 3Q10

currency exchange rate impact;

In relation to 2Q10, we reported

stability, despite the oscillations in the

currency exchange rate during this

period.

COGS (COGS (CostCost ofof GoodsGoods SoldSold))

NONWOVENSNONWOVENS

67,1

76,4 72,1

R$ 3,51 R$ 3,82

R$ 3,66

The reduction in absolute figures of 5.6%

when compared with 2Q10 is largely due to

a decline in polypropylene prices in this last

quarter;

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R$ 3,51 R$ 3,82

R$ 3,66

3Q09 2Q10 3Q10

COGS (R$ thousand) Unitary COGS (R$)

Throughout 3Q10, polypropylene prices

reported stability;

Note: 3Q09 COGS was adjusted for comparability purposes. During 3Q09, accumulated depreciation was readjusted up

to the month of September 2009 (CPC 13 - Brazilian Accounting Pronouncements Committee), this readjustment being

booked in full through a revision of the useful life of fixed assets in the form of property, plant and equipment. As a

result, COGS would be R$ 56.0 million.

EBITDA (R$ EBITDA (R$ million) million)

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

26,1 24,9

30,1

25,1% 25,8%

3Q10 EBITDA reported growth of

21.1% or R$ 5.2 million against 2Q10

and 15.6% higher that the same

period in 2009;

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21,4%

3Q09 2Q10 3Q10

Ebitda Ebitda Margin (%)

EBITDA Margin reached 25.8% for

this quarter, representing an increase

of 4.4 p.p compared with 2Q10 and

0.8 p.p. against 3Q09.

NET INCOME (RNET INCOME (R$ $ million) million)

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

10,7

7,2

14,2

12,2%

15,0%

25,0%

35,0%

During the quarter, net income

reported growth of 98.3% compared

with 2Q10 and 33.1% compared with

3Q09. These results reflect recovery

9

10,3%

6,2%

12,2%

-

5,0%

3Q09 2Q10 3Q10

Net Income Net Margin (%)

of margins and lower financial

expenses.

Note: 3Q09 Net Income was adjusted for comparability purposes. During 3Q09, accumulated depreciation was

readjusted up to the month of September 2009 (CPC 13 - Brazilian Accounting Pronouncements Committee), this

readjustment being booked in full through a revision of the useful life of fixed assets in the form of property, plant and

equipment. As a result Net Income would be R$ 18.0 million.

CASH AND CASH EQUIVALENTS

(R$ million)

272,0

The Company’s cash position fell 14.4% or

R$ 39.1 million compared with 3Q09, mainly

due to payment of dividends, debt interest

and principal;

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272,0 225,8 233,0

3Q09 2Q10 3Q10

When compared with 2Q10, the cash

position increased 3.2%, equivalent to R$

7.2 million, operating cash generation being

particularly worthy of note.

NET DEBT

(R$ million)

Company Net Debt posted an increase of

R$ 38.0 million compared with 3Q10, with

the most important funding raised being

destined for financing the new production

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161,2 192,5

230,5

3Q09 2Q10 3Q10

line in the USA;

62% of debt is local currency denominated

and 38% in foreign currency.

DEBT / CASHDEBT / CASH

ConsolidatedConsolidated Net Net DebtDebt

R$ (MM) 09/30/2009 09/30/2010Var 3Q10 /

3Q09

Total Debt

Short Term 60.8 145.3 139.1%

Long Term 372.5 318.1 -14.6%

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Long Term 372.5 318.1 -14.6%

Total 433.2 463.4 7.0%

Cash 272.0 233.0 -14.4%

Net Debt 161.2 230.5 43.0%

Net Debt / Adjusted EBITDA 1.4 2.5 78.6%

Shareholders' Equity 508.0 521.0 2.6%

HIGHLIGHTSHIGHLIGHTS

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OUTLOOKOUTLOOK

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A very favorable 4th quarter outlook for operations to continue at full capacity is

supported by the existing order book;

Forecasted price stability for our principal raw material, polypropylene, should

contribute to margins remaining at the same level in the final quarter of the year;

OUTLOOKOUTLOOK

The Company’s major investment project this year, the plant in the United States, is

proceeding according to plan both from the operational as well as the financial point

of view. All main scheduled shipments have already been concluded and plant

assembly is progressing apace.

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CEO: Hermínio V. S. de Freitas

CFO: Eduardo Feldmann CostaCFO: Eduardo Feldmann Costa

IR : Gizele Rigoni

Tel: +55 (41) 3381-8673

Fax: +55 (41) 3283-5909

São José dos Pinhais – PR

www.providencia.com.br/ir

www.twitter.com/providencia_ri

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