4Q10 Results

1March 22nd, 2011

SCHEDULESCHEDULE

HIGHLIGHTSHIGHLIGHTS

RESULTSRESULTS

Providência USAProvidência USA

RESULTSRESULTS

OUTLOOKOUTLOOK

2

Providência USA

Startup of the Company’s first plant in the United States with a production line of 20 thousand tons/year of installed

capacity for nonwovens. Investments will total US$ 80 million including machinery and other related assets such as land and

necessary installations. The production line began operations in January 2011;

Decision and start of expansion investment projects of two new production lines totaling 40 thousand tons/year, one in

Brazil and another in the United States;

Payment on November 29 2010 of interim dividends of R$ 11.1 million, equivalent to 100% of the net adjusted income

HIGHLIGHTS

Payment on November 29 2010 of interim dividends of R$ 11.1 million, equivalent to 100% of the net adjusted income

for the first half of 2010. We will also propose, subject to resolution of the Company’s Annual General Meeting –AGM, the

payment of 100% of the adjusted base for calculating the dividends, totaling an additional R$ 21.8 million payment;

In October, the Company received pre-export finance resources through the BNDES for R$ 150 million at a fixed annual

rate of interest of 7.0% and a maturity of 18 months;

We have concluded the adjustments for the convergence to IFRS in the consolidated financial statements of Companhia

Providência for fiscal year ending December 31 2010 and its respective quarters. The main impact was the registration of

Attributed Cost, which reduced the net income for the year. However, this reduction WILL NOT affect the potential for

dividend distribution.3

HIGHLIGHTSHIGHLIGHTS

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SCHEDULESCHEDULE

Providência USA

RESULTSRESULTS

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4

471,6506,9

670,8 696,0

Jan 2009 Dec 2009

Shareholders´ Equity

ADJUSTMENTS TO IFRS (International Financial ADJUSTMENTS TO IFRS (International Financial

Reporting Standards)Reporting Standards)

Pursuant to CPC 27 and ICPC 10, the Company adopted the

attributed cost to determine the fair value of its plant, property

and equipment.

The valuation of the plant, property and equipment determined

the fair value of R$ 492.8 million, an increase of R$ 302.2 million

in relation to the value according to the previous BR GAAP

accounting practices, directly impacting the Company’sPrevious Practice Current Practice (IFRS)

51,0

34,0

40,8

23,8

2009 2010

Net Income

Previous Practice * Current Practice (IFRS)

5

Shareholders’ Equity.

Attributed Cost in the Reconciliation of Net Income: Cost of

Sales + Income Tax and Social Contribution.

Cost of Sales : The depreciation on the adjustments to fair value

in 2009 and 2010 was R$ 15.5 million for each year. This will NOT

affect the potential for dividend distribution.

Income Tax and Social Contribution : Attributed cost of R$ 5.2

million with an accounting effect only. The Company does not

pay the registered Income Tax, without Cash effect.* Net Income for the year + registration of Attributed Cost

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

During the quarter, the Company posted an increase in sales volume of 1.2%

compared with the same period in 2009;

Growth of 10.2% in sales volume of nonwovens in 2010 when compared with 2009.

We operated close to full capacity, approximately 20 thousand tons per quarter.

5,0 71,3

78,6

6

18,7 18,1 19,0

1,2 1,6 1,2

19,9 19,7 20,2

4Q09 3Q10 4Q10

66,5 73,6

4,8

5,0 71,3

2009 2010

Nonwovens Others

Compared with 2009, we posted an increase of R$ 40.5 million, equivalent to 9.8%. The

major factor driving the increase in net operating income was sales volume.

We registered a growth of 1.6% in 4Q10 when compared with 4Q09, also reflecting the

increase in sales volume.

NET REVENUE NET REVENUE

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

114,1

116,5 116,0

4Q09 3Q10 4Q10

412,8 453,3

2009 2010

7

COGS (COGS (CostCost ofof GoodsGoods SoldSold))

NONWOVENSNONWOVENS ((in in millionsmillions ofof ReaisReais))

302,9

R$ 8,00 350,0

For fiscal year 2010, we recorded a growth of 15.7% comparing with 2009. In 4Q10 the

COGS increased 1.9% when compared with 4Q09.

This growth reflects principally the increase in sales volume and in polypropylene

prices, the last one mainly in the first half 2010.

8

74,4 75,9 75,9

R$ 3,74 R$ 3,85 R$ 3,78

R$ 2,00

R$ 3,00

R$ 4,00

R$ 5,00

R$ 6,00

R$ 7,00

R$ 8,00

-

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

90,0

4Q09 3Q10 4Q10

261,9

302,9

R$ 3,67 R$ 3,86

R$ 2,00

R$ 3,00

R$ 4,00

R$ 5,00

R$ 6,00

R$ 7,00

-

50,0

100,0

150,0

200,0

250,0

300,0

2009 2010

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

Adjusted Ebitda in 4Q10 registered R$ 28.4 million, a 10.7% reduction when compared

with the R$ 31.8 million reported in 4Q09. Compared with 3Q10, there was a decline of

5.6%.

EBITDA Margin reached 24.5% in 4Q10, representing a reduction of 3.4 p.p. compared

with the same period in 2009.

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

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

31,8 30,1

28,4

27,9%

25,8%24,5%

15,0%

25,0%

35,0%

45,0%

-

5,0

10,0

15,0

20,0

25,0

30,0

35,0

4Q09 3Q10 4Q10

with the same period in 2009.

92008 2009

Ebitda Ebitda Margin (%)

116,5

106,2

28,2%

23,4%

15,0%

25,0%

35,0%

45,0%

-

20,0

40,0

60,0

80,0

100,0

120,0

2009 2010

80,0

100,0

120,0Ebitda

25,0

Net Income in full fiscal year 2010 amounted to R$ 23.8 million, however the adjusted base for

calculating the dividends for the year, totaled R$ 32.9 million for fiscal year 2010. This calculation base

corresponds to the net income for the fiscal year 2010 - R$ 23.8 million, less 5% legal reserve - R$ 1.2

million, plus realization of attributed cost - R$ 10.2 million.

Management also proposed, subject to resolution of the Company’s Annual General Meeting –AGM,

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

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

40,8

23,8

0,0

20,0

40,0

60,0

2009 2010

8,3

11,7

5,6 7,3%10,0%

4,8%

-10,0%

0,0%

10,0%

20,0%

30,0%

40,0%

-5,0

0,0

5,0

10,0

15,0

20,0

4Q09 3Q10 4Q10

Net Income Net Margin (%)

the payment of 100% of the adjusted base for calculating the dividends for the year.

10

9,9%

5,3%

The Company’s cash position dropped R$ 16.1 million, equivalent to 6.1%, when

compared to 2009, mainly due to operating, investing and financing activities during the

period.

When compared to 3Q10, the cash position increased 6.9%, equivalent to R$ 16.2 million.

CASH AND CASH EQUIVALENTS

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

11

265,2

249,1

2009 2010

265,2 233,0 249,1

4Q09 3Q10 4Q10

NET DEBT

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

Company Net Debt posted an increase of R$ 90.7 million, or 59.2%, compared with

2009 and a growth of 5.8% in relation to 3Q10, with the most important funding raised

being destined for financing the new production line in the USA;

61% of debt is based on local currency and 39% is foreign currency denominated.

153,2

230,5 243,9

4Q09 3Q10 4Q10

153,2

243,9

2009 2010

12

Colunas1 12/31/2010 12/31/2009Ch. 2010 /

2009

Total Debt

Short Term 262.207 125.608 108,8%

Long Term 230.844 292.814 -21,2%

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

Consolidated Net DebtConsolidated Net Debt

Long Term 230.844 292.814 -21,2%

Total 493.051 418.422 17,8%

Cash 249.140 265.242 -6,1%

Net Debt 243.911 153.180 59,2%

Net Debt / Adjusted EBITDA 2,86 1,32 1,2

Shareholders' Equity 697.101 695.952 0,2%13

HIGHLIGHTSHIGHLIGHTS

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SCHEDULESCHEDULE

Providência USA

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OUTLOOKOUTLOOK

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Forecasts for 2011 are for an increase in sales volume and for capacity of the US

production line to be fully utilized by early in the second half;

The Company’s principal investment projects in this and next year will amount to

approximately US$ 123 million and will add 40 thousand tons at current installed

capacity, a 40% increase. This investment include:

OUTLOOKOUTLOOK

capacity, a 40% increase. This investment include:

a new production line to be installed in Brazil, startup being scheduled for the

first half of 2012;

Additionally, a further production line is to be built at the Company’s US plant

where operations began in January 2011. The new line is programmed to come on

stream in the second half of 2012.

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CEO: Hermínio V. S. de Freitas

CFO: Eduardo Feldmann Costa

IR : Gabriela Las Casas

Tel: +55 (41) 3381-8673

Fax: +55 (41) 3283-5909

São José dos Pinhais – PR

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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 .