1Q11 Results

May 10th, 2011

SCHEDULESCHEDULE

HIGHLIGHTSHIGHLIGHTS

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Providência USAProvidência USA

RESULTSRESULTS

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Providência USA

HIGHLIGHTS

Sales Volume amounted to 20.0 thousand tons in the quarter, a growth of 7.1% in

relation to the same period in 2010;

Our first production line in the United States, inaugurated last January, has already

contributed 492 tons sold in 1Q11, in line with the Company’s forecasts for ramping up

production, expected to be operating at full capacity by the beginning of the third quarter

of 2011;

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The signing of the debt agreement with the Bank HSBC, guaranteed by Hermes,

comprising the two new lines that will start up in 2012. The US$ 85 million loan has a

term of 10 years with 2 year grace period, Libor to dollar-based interest rates;

The Annual and Extraordinary General Meeting of April 27 2011 approved an additional

dividend payout of R$ 21.8 million, totaling 100% of the adjusted dividend calculation

base in 2010. The share will become ex-dividend on May 17 2011 and payout will take

place on May 25 2011.

HIGHLIGHTSHIGHLIGHTS

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Providência USA

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

0,9

1,2 1,4 18,7

20,2 20,0

During the quarter, the Company posted an

increase in sales volume of 7.1% compared

with the same period in 2010;

Sales of nonwovens reported a growth of

5

17,8 19,0 18,6

1Q10 4Q10 1Q11

Others Total

4.8% when compared with 1Q10;

Our first production line in the United

States, inaugurated last January, has already

contributed 492 tons sold in 1Q11, in line

with the Company’s forecasts for ramping up

production.

NET REVENUE NET REVENUE

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

Net revenue reached R$ 115.1 million in

1Q11, a growth of 10.2% in relation to 1Q10,

while in relation to 4Q10 there was a small

decline of 0.7%;

104,5 116,0 115,1

1Q10 4Q10 1Q11

6

The increase is preponderantly due to an

increase in the sales volume in the domestic

market and the production start-up of the

new machine in the United States.

70,8

75,9 79,1

R$ 5,00

R$ 6,00

R$ 7,00

R$ 8,00

40,0

50,0

60,0

70,0

80,0

90,0

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

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

Cost of goods sold (COGS) totaled a growth

of 11.7% when compared with 1Q10;

Compared with 4Q10, growth was 4.2%;

R$ 3,79 R$ 3,76 R$ 3,96

R$ 2,00

R$ 3,00

R$ 4,00

-

10,0

20,0

30,0

40,0

1Q10 4Q10 1Q11

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

7

The increase in relation to 1Q10 is largely

linked to:

• The greater sales volume in 1Q11;

• Higher polypropylene prices.

22,7

28,4

22,2 35,0%

45,0%

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

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

The Adjusted Ebitda reached R$ 22.2

million in 1Q11, corresponding to a 2.7%

decline compared with 1Q10. In relation to

4Q10, there was a decline of 22.1%;

This reduction reflected:

21,8%

24,5%

19,2%

15,0%

25,0%

1Q10 4Q10 1Q11

Ebitda Ebitda Margin (%)

8

This reduction reflected:

• The start up of the USA production

line, including all the required

operational adjusts;

• The 22% increase in the prices of our

principal raw material, polypropylene,

according to Chemical Data (CDI).

5,6

7,1

4,8%

6,2%

4,0

5,0

6,0

7,0

8,0

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

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

In this quarter, Company net income rose

279.5% reaching R$ 7.1 million against R$

1.9 million in 1Q10;

Net income increased 26,8% in relation to

1,9

1,8%

0,0%(1,0)

-

1,0

2,0

3,0

1Q10 4Q10 1Q11

Net Earnings Net Margin (%)

9

5,3%

Net income increased 26,8% in relation to

4Q10;

Adjusted base for calculating dividends

for the quarter (Retained Earnings) totaled

R$ 9.7 million, since realization of deemed

costs in the quarter is added in net of tax.

CASH AND CASH EQUIVALENTS

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

The Company reported an increase in its

cash position of 8,6% or R$ 21.5 million at

the end of the period reflecting its

operational, investment and financing

activities during 1Q11.

264,0

249,1

270,6

1Q10 4Q10 1Q11

10

NET DEBT

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

The company’s net debt increased 31.6%

compared with 1Q10 due in large part to

additional funding for financing capex for

expansion of the US plant and a new

production line which will go into operation

62% of its debt in local currency while the

remaining 38% was foreign currency

denominated.

170,5

243,9 224,3

1Q10 4Q10 1Q11

11

production line which will go into operation

in Brazil next year;

Compared with 4Q10, net debt fell by

8.0%. This reduction is due to the greater

generation of cash reported for the

quarter;

Colunas1 03/31/2010 03/31/2011Ch. 1Q11 /

1Q10

Total Debt

Short Term 132,9 266,1 100,3%

Long Term 301,6 228,8 -24,1%

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

Consolidated Net DebtConsolidated Net Debt

Long Term 301,6 228,8 -24,1%

Total 434,5 494,9 13,9%

Cash 264,0 270,6 2,5%

Net Debt 170,5 224,3 31,6%

Net Debt / Adjusted EBITDA 1,8 2,6 44,4%

Shareholders' Equity 511,5 704,3 37,7%12

HIGHLIGHTSHIGHLIGHTS

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SCHEDULESCHEDULE

Providência USA

RESULTSRESULTS

OUTLOOKOUTLOOK

Forecast for 2011 is for an increase in sales volume and for full capacity utilization of

Providência’s US production line by early second half of the year, and keep current

production levels in Brazil;

The signing of the debt agreement with the Bank HSBC, guaranteed by Hermes,

comprising the two new lines that will start up in 2012. The US$ 85 million loan has a

term of 10 years with 2 year grace period, Libor to dollar-based interest rates. The first

tranche is estimated by early second half of the year;

OUTLOOKOUTLOOK

The Company’s principal investment projects are in line with its expansion plans and

during the 1Q11 we effected the down payments for two new production lines. The start

up of both lines will be in 2012 and their investment will total approximately US$ 123

million and will increase our installed capacity by 40% approximately, i.e., additional 40

thousand tons/year of nonwovens.

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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) 3283-5909

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Fax: +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 .