1Q10 Results1Q10 Results

May 13, 2010May 13, 2010

SCHEDULESCHEDULE

HIGHLIGHTSHIGHLIGHTS

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OUTLOOKOUTLOOK

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HIGHLIGHTS

During the quarter ending on March 31st and April, 2010, there was the refund of tax

credit of IPI of fiscal years of 2006, 2007 e 2008, in the amount of R$ 16.1 million.

The company received R$ 15.9 million regarding the first installment of the loan,

ensured by German agent Euler Hermes Kreditversicherungs AG, which shall be allocated

to financing of the machine to be installed in the United States. The interest rate

contracted is LIBOR + 1.5% per year with biannual payments and the principal has two

grace years and 8 years for payment, with biannual amortizations.grace years and 8 years for payment, with biannual amortizations.

The company totalized net debt of R$ 170.5 million in 1Q10, a reduction of 32.7% in

comparison to that same period in the preceding year. It occurs especially due to

operating generation of cash and management of liabilities.

COGS was impacted by the increase of our main raw material, polypropylene, which

increased by 18.5% in global market. This increase in price of polypropylene arises from

temporary restriction of the offer of its main input, propene, and delay in the

commencement of operation of new petrochemical plants in Asia.

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

20.3% increase in the volume of

nonwoven in comparison to 1Q09, the

latter still influenced by “global

crises”;18,7 17,8

1,2

1,2 0,9

15,9

19,9 18,7

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4.9% reduction in comparison to

4Q09.

14,8 17,8

1Q09 4Q09 1Q10

Nonwovens Others

NET INCOME NET INCOME

NONWOVENS NONWOVENS DIVISION DIVISION (in millions of (in millions of ReaisReais))

In comparison to 1Q09, we registered

an increase by R$ 3.3 millions, equal to

3.3%;

Net Income had a reduction of R$ 7.798,2

109,1 101,5 Net Income had a reduction of R$ 7.7

millions, 7.0% related to the one

registered in 4Q09, arising from exchange

variation and lower volume registered in

1Q10.

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98,2 109,1 101,5

1Q09 4Q09 1Q10

Reduction in absolute terms of 5.2%

in COGS, in comparison to 4Q09, is

due especially to the smaller

registered volume of sales;

In comparison to 4Q09, there was

COGS COGS (Cost Of Goods Sold)(Cost Of Goods Sold)

NONWOVENS NONWOVENS DIVISIONDIVISION

53,6

70,6 67,0

R$ 3,36 R$ 3,55 R$ 3,58

an increase in unit COGS, due to

adjustment of our main raw material

(Polypropylene), which has varied

about 15.0% during the first quarter

of 2010, minimized by direct man-

power, maintenance, electrical power

and other inputs).

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R$ 3,36 R$ 3,55 R$ 3,58

1Q09 4Q09 1Q10

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

EBITDA (R$ millions) EBITDA (R$ millions)

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

27,8% reduction in EBITDA and 9,7

p.p. in EBITDA margin, in 1Q10 x

31,5 31,8

22,8

32,1%

29,2%

1Q09.

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22,4%

1Q09 4Q09 1Q10

Ebitda Ebitda Margin (%)

Net Net Earnings Earnings (R$ millions) (R$ millions)

and Net Margin (%)and Net Margin (%)

Net Earnings in the quarters was

impacted by the raw material price,

exchange variation over exportations,

14,5

10,9

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exchange variation over exportations,

non-recurring items and exchange

variation over financial expenses.

4,5 14,5%

9,5%

4,3%

1Q09 4Q09 1Q10

Net Earnings Net Margin (%)

CASH AND CASH EQUIVALENTS

(in millions of Reais)

Company cash has increased by R$ 17.4

millions, equal to 7.1%, in comparison to

1Q09, especially due to operating cash

generation;

In comparison to 4Q09, cash has

maintained itself stable.

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246,5

265,2 264,0

1Q09 4Q09 1Q10

Net Debt of Company reduced 32.7%,

R$ 82.8 millions reduction, in comparison

to 1Q09, considering as highlights cash

operating generation, management of

taxes and exchange variation;

NET DEBT

(in millions of Reais)

In relation to 4Q09 the debt has

increased 11.3% due to exchange effect

and resources for machine financing in

the United States;

71% of indebtedness is based on local

currency and 29% in foreign currency.

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253,3

153,2 170,5

1Q09 4Q09 1Q10

CASH & DEBTCASH & DEBT

Consolidated Net DebtConsolidated Net Debt

R$ (MM) 03/31/2009 03/31/2010Var 1Q10 /

1Q09

Total Debt

Short Term 41.4 132.9 221.0%

Long Term 458.4 301.6 -34.2%

Total 499.8 434.5 -13.1%

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Total 499.8 434.5 -13.1%

Cash 246.5 264.0 7.1%

Net Debt 253.3 170.5 -32.7%

Net Debt / Adjusted EBITDA 2.3 1.8 -21.7%

Shareholders' Equity 482.7 511.5 6.0%

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The expectation for the next quarters of 2010 shall be of full occupation of

production capacity, with sale orders placed for such;

Company is working to reestablish its prices, and thus we have perspectives of

improvements in our operating margins, having as external pressure factors the raw

material price and R$/Dollar rate;

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The main purpose of investment of the Company this year, the plant in the United

Stated, is being developed within the schedule, in the operating point of view, on-going

works, as well as financing, disbursement of financing with Hermes insurance.

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CEO: Hermínio V. S. de FreitasCEO: Hermínio V. S. de Freitas

CFO: 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

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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 .