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Providência - Presentation 2Q Financial Results
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2Q11 Results
August 12th, 2011
SCHEDULESCHEDULE
HIGHLIGHTSHIGHLIGHTS
RESULTSRESULTS
Providência USAProvidência USA
RESULTSRESULTS
OUTLOOKOUTLOOK
2
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.
3
HIGHLIGHTSHIGHLIGHTS
RESULTSRESULTS
SCHEDULESCHEDULE
Providência USA
RESULTSRESULTS
OUTLOOKOUTLOOK
4
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$$
1818..11 millionmillion, a reduction of 18.3% when
compared with 1Q11. In relation to
2Q10, there was a decline of 27.2%;
24,9 22,2
18,1
-100,0%
-50,0%
2Q10 1Q11 2Q11
Ebitda Ebitda Margin (%)
8
These reductions are directly related
to:
•The increase in the prices of our main
raw material, polypropylene. According
to Chemical Data Index (CDI), the
increase was of 38% in the first half
2011;
• The startup and adjustments in the US
production line.
6,5
9,5
3,0%3,9%
-5,0%
0,0%
5,0%
10,0%
3,0
4,0
5,0
6,0
7,0
8,0
9,0
10,0
11,0
12,0
13,0
14,0
12,0
13,0
14,0 Lucro Líquio
NET INCOME NET INCOME ((in millions of Reais) in millions of Reais)
and NET MARGIN (%)and NET MARGIN (%)
The net income for the quarter amounted
to RR$$ 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%
12
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.
14
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 .