Results Presentation 3Q08

3Q08 ResultsNovember 13, 2008

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Agenda

• 3Q08 Operational/ Administrative Highlights

• 3Q08 Results

• Outlook

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Operational and

Administrative Highlights

Sell of the Pipes and Fittings division - Provinil:

Focus in the nonwovens: our core business, presenting margins of 23.6% versus

9.6% of the Pipes and Fittings Division;

Share Purchase Agreement signed with Aliaxis on September 18, 2008;

R$82 million, equivalent to 7.5x the Ebitda generated in the last 12 months;

Deal expected to be closed during the 4Q08.

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Debentures issued on December/2007:

Rating annual review;

Rating maintained at a brA level, despite the world crisis;

Síntese Analítica released by Standard & Poor’s on October 28,2008.

Operational and


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Specialty hygienic and medical:

Investments in progress in laminated

and printed hygienic disposable

production lines, at full capacity at the

1Q09.

Laminated and printed will account for

up to 18% of our production capacity.

We started on 3Q08 the sales of high

performance medical disposables, made

at KAMI9, reaching 145 tons in the

quarter.

Volume, in tons, of laminated, printed

and medical disposables

Price premium of specialties versus

commodity disposables

Operational and


3Q07 2Q08 3Q08

1,671

2,084

1,923

Volume

17%

19%

16%

PMU

6

Others:

Conclusion of the Share Buyback Program, totaling 3.1 million shares, in August/

2008. The total cost was R$ 22.3 million, and the average price was R$ 7.09/share;

Implementation (go live) of SAP system on July 1st, 2008.

Operational and


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Agenda


• 3Q08 Results

• Outlook

8

Sales Volume

In thousand tons

3Q07 2Q08 3Q08

13.8

17.9 17.7

5.7

5.7 5.9 0.5

0.6

0.5 0.8

Sales Volume(thousand tons)

Others Packaging Pipes and Fittings Nonwovens

Increase of 28.8% in relation to

the 3Q07 mainly due to the

nonwovens division that growth

28.5% in the same comparison

because of Isofilme volume that

started from the 3Q07, and begin of

KAMI9 operations last April;

In relation to the previous quarter

there was a 200 tons decrease in

nonwovens due to shipment delays

caused by SAP go live.

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Gross Revenues

Increase of 16.6% in relation to

the 3Q07, and of 2.7% comparing

to the 2Q08;

In the export market our

revenues increased 23.5% in

relation to the 3Q07 and 7.1% in

relation to the 2Q08, even with the

appreciation of the real against the

dollar;

In the domestic market our

gross revenues increased 13.6%

in relation to the 3Q07 and 0.7%

comparing to the 2Q08, also due

to shipment delays caused by SAP

go live.In thousand Reais

3Q07 2Q08 3Q08

91.8 103.6 104.3

39.5

45.5 48.7

Gross Revenue

Domestic Market Export Market

131.3

149.1153.0

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EBITDA (R$ million) and EBITDA Margin (%)

Adjusted EBITDA reached R$ 26.4

million (20.1% margin), 7.7% less than

in the 3Q07;

EBITDA adjusted by operational

hedge* totaled R$ 27.1 million (20.7%

margin), 8.8% bellow the same period

in 2007;

In relation to the 2Q08 there was a

decrease of 14.6% due to smaller

volumes because of the SAP go live

and because of the increase in raw

material prices.3Q07 2Q08 3Q08

28.6

30.9

26.4

1.1

0.5

0.7

Adjusted Ebitda (R$ million) and

Ebitda Margin (Hedge) (%)

Operational Hedge Adjusted Ebitda

25.5%24.2%

20.1%

26.5%

24.6%

20.7%

Adjusted Ebitda Margin % Adjusted Ebitda Margin (Hedge) %

Operational hedge*: The result of exchange-rate lock forward contracts

on accounts receivables from the export market.

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Net Result (R$ million) and Net Margin (%)

3Q07 2Q08 3Q08

(2.5)

13.8

(2.2)

Net Income (R$ million) and

Net Income Margin (%)

-2.2%

10.8%

-1.7%

Net Margin

Our net result was negative

in R$ 2.2 million with negative

net margin of 1.7% due to a

negative financial result of R$

16.4 millions, mainly due to

variations in the exchange

rates regarding our debt of R$

20.4 millions, without cash

effect.

3Q07 2Q08 3Q08

13.8

17.9 17.7

Volume(thousand tonnes)

3Q07 2Q08 3Q08

85.5

103.7 104.9

Net Revenue(R$ million)

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Nonwovens Division

Net revenues of R$ 104.9 millions, 22.7%

above the 3Q07 and 1.2% above the 2Q08

The increase in the 3Q08 in relation to the

2Q08 was due to a 2.3% increase in the

average price of sales.

Volume reached 17,700 tons, 28.5%

above the 3Q07. In the domestic market

the increase was 42.9% (mainly Isofilme)

comparing to the 3Q07, and in the export

market it was at around 30.8% due to

KAMI9;

Comparing to the 2Q08 there was a

decrease of 1.1%.

3Q07 2Q08 3Q08

9.1

10.1

9.0

Fixed Costs(R$ million)

0.66 0.57 0.51

Unitary Fixed Costs

133Q07 2Q08 3Q08

3.82

3.66

4.06

Unitary Variable Costs(R$ - raw material, comissions and shipping)

Nonwovens Division

There was an increase of 6.4% in relation to

the 3Q07, and of 10.9% in relation to the 2Q08

due to the increase in raw-material prices.

Unitary fixed cost 22.7% lower than in

the 3Q07;

In relation to the 2Q08 there was a

decrease of 10.5% due to efficiency and

scale gains.

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3Q07 2Q08 3Q08

23.9

27.9

24.0

Ebita (R$ million)

and Ebitda Margin

28.0% 26.9%22.9%

Ebitda Margin%

3Q07 2Q08 3Q08

25.0

28.4

24.8

Ajusted Ebitda (Hedge)(R$ million)

29.2% 27.4% 23.6%

Ajusted Ebitda Margin (Hedge) %

Nonwovens Division

Ebitda of R$ 24.0 millions, with 22.9% margin,

0.4% above the 3Q07;

In relation to the 2Q08 there was a decrease

of 14.0% due to the increase in variable costs.

Ebitda adjusted by operational hedge*

was R$ 24.8 millions (23.6% margin),

0.8% bellow the 3Q07.

Operational hedge*: The result of exchange-rate lock forward contracts on accounts receivable from the export market.

3Q07 2Q08 3Q08

21.8 22.8

24.3

Net Revenue(R$ million)

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Pipes and Fittings Division

3Q07 2Q08 3Q08

5.7 5.7 5.9

Volume(thousand tonnes)

The volume was 5,900 tons in the 3Q08,

3.5% higher than in the 2Q08 and in the

3Q07.

Net revenues of R$ 24.3 millions, an

increase of 11.3% in relation to the 3Q07

and of 6.6% in relation to the 2Q08.

In relation to the 2Q08 the unitary

average price was 3.0% higher.

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3Q07 2Q08 3Q08

2.66 2.92

3.24

Unitary Variable Costs(R$ - raw material, comissions and shipping)

3Q07 2Q08 3Q08

3.0

3.2

2.7

Fixed Costs and Unitary Costs(R$ million)

0.52 0.55 0.46

Unitary Fixed Costs


Increase of 21.7% in relation to the

3Q07 and of 11.0% in relation to the

2Q08;

There was a price increase in raw-

materials in relation to the 2Q08.

Decrease in fixed costs of 12.0% in relation

to the 3Q07;

Comparing to the 2Q08 there was a 17.3%

decrease.

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3Q07 2Q08 3Q08

3.6

2.9

2.3

Ebitda (R$ million) and

Ebitda Margin (%)

16.6%12.9%

9.6%

Ebitda Margin %


EBITDA of R$ 2.3 millions,

with a 9.6% margin, a decrease

of 35.9% in relation to the 3Q07

and of 21.2% in relation to the

2Q08.

Consolidated Net Debt

Debt

6.7

377.7

384.4

175.5

208.9

18.0

441.6

459.6

170.6

289.0

Total Debt

Short term

Long term

Total

Cash and equivalents

Net debt

(R$ Million) 06/30/08 09/30/08

Debt

The increase in the net debt was mainly due to financings and loans at an amount of R$

48.0 millions, and to interests and restatements.

In the quarter we accounted for R$43.9 million in financial expenses, 96% without cash

outlay.

Currency variation represented R$20.4 million in our financial result, due to the 20% impact

on our debt from the depreciation of the real against the dollar.

On September 30, 2008 we had two interest swap agreements, due to loans and financing,

one CDI vs. US$ totaling US$20 million maturing in December 2012 and another fixed rate

Libor vs. Libor totaling US$50,000 maturing in June 2013, as well as US$22,000 in currency

hedge operations. As a result, third-quarter net income was a negative R$2.2 million.

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Agenda


• 3Q08 Results

• Outlook

Outlook

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Increase in the production capacity of specialty hygienic disposables,

from 700 tons/month in the 3Q08 to 1,200 tons/month when the

investments are concluded and operational in the first quarter 2009;

Development and expansion of the production of high performance

medical disposable, with higher added-value, to reach 300 tons/month in

2009;

Focus in the operations through stabilizing SAP;

Drawback verde e amarelo to acquire raw-material in products for

export.

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CFO: Eduardo Feldmann CostaIR Manager: Gabriela Las CasasPhone: +55 (41) 3381-7600 Fax: +55 (41) 3283-5909São José dos Pinhais – PR - Brazilwww.providencia.com.br/ir

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 .

http://www.providencia.com.br/ir

Technology

Results Presentation 3Q08