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May 10, 2013 1Q13 Results

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Page 1: Teleconferencia 1 q13

May 10, 2013

1Q13 Results

Page 2: Teleconferencia 1 q13

SCHEDULE

HIGHLIGHTS

RESULTS

OUTLOOK

2

Providência USA

Providência USA

Page 3: Teleconferencia 1 q13

HIGHLIGHTS 1Q13

The unveiling, on March 26, of Kami 13, the company’s thirteenth production line and the second at its North American installations, located at Statesville in North Carolina, USA. With the new machine, Providência add 20 thousand tons of nonwovens/year to local production, doubling plant capacity in order to meet demand for high technology products from the disposal hygiene segment;

The Annual/Ordinary General Meeting of April 1, 2013 approved an additional payout of R$ 33.8

million in dividends, totaling 100% of the 2012 annual adjusted dividend calculation base. The

shares will trade ex-dividend on May 17, 2013 and payout will take place on May 27, 2013.

Page 4: Teleconferencia 1 q13

SCHEDULE

HIGHLIGHTS

RESULTS

OUTLOOK

4

Page 5: Teleconferencia 1 q13

21.3 22.8 24.4

1.8 2.1

2.6 23.1

24.9 27.0

1Q12 4Q12 1Q13

Nonwovens Others

The increase was mainly due to the 2nd

production line at the Pouso Alegre (MG)

facility, that started up in June/2012;

In this quarter our 2nd machine in

Statesville is in line with the Company’s

forecast for ramping up production;

In 1Q13 we did not sell part of the volume

that would be sold to Argentina and

Venezuela due to political and economic

situation in those countries.

SALES VOLUME (in thousands of tons)

Sales Volume amounted to

, a growth of 16.8% in relation to the

same period in 2012;

Page 6: Teleconferencia 1 q13

139.4 152.8 160.6

R$ 6.03 R$ 6.12 R$ 5.95

R$(1,00)

R$-

R$1,00

R$2,00

R$3,00

R$4,00

R$5,00

R$6,00

R$7,00

R$8,00

R$9,00

R$10,00

1Q12 4Q12 1Q13

Net revenue Unitary Net Revenue (R$)

The Company reported Net Revenue

of , 15.2% up on

1Q12;

The increase is largely due to higher

sales volume as well as the intensive use

of available production capacity;

The decrease in unitary net revenues

is mainly due to the sale of the first

products made on the 2nd Statesville

production line.

6

NET REVENUE (in millions of Reais)

Page 7: Teleconferencia 1 q13

COGS (Cost of Goods Sold) (in millions of Reais)

7

96.6 105.4 114.9

R$ 4.18 R$ 4.23 R$ 4.25

R$3,50

R$4,50

-

20,0

40,0

60,0

80,0

100,0

120,0

140,0

160,0

180,0

200,0

220,0

240,0

1Q12 4Q12 1Q13

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

The COGS totaled R$ 114.9 million in 1Q13, a growth of 19.0% against the R$ 96.6 million

recorded in 1Q12 and an increase of 9.1% compared with the R$ 105.4 million in 4Q12. This

performance is largely the result of higher sales volume, the production start-up of KAMI13

and the increased costs of polypropylene.

Page 8: Teleconferencia 1 q13

EBITDA (in millions of Reais) and EBITDA MARGIN (%)

8

28.9 33.8

25.8

20.7%

22.1%

16.1%

-

10,0

20,0

30,0

40,0

1Q12 4Q12 1Q13

Ebitda Ebitda Margin (%)

Adjusted EBITDA in 1Q13 reached

, a 10.8% decline when

compared with 1Q12, mainly due to the

sale of the first products made in KAMI13

and to the added costs on KAMI12 and

KAMI13;

Compared to 4Q12 the lower EBITDA

was due to the product mix and costs

impacted by the startup of KAMI 13.

Page 9: Teleconferencia 1 q13

9

NET INCOME (in millions of Reais)

and NET MARGIN(%)

25,0

7.1

11.3

5.1

5.1%

7.4%

3.1%

-1,0%

1Q12 4Q12 1Q13

Net Income Net Margin

Net Income in the period amounted

to , 28.4% less than

1Q12;

The adjusted dividend calculation

base for the year (retained earnings)

was R$ 7.8 million, the difference

representing the incorporation of the

realization of the deemed cost in the

quarter, net of taxes.

Page 10: Teleconferencia 1 q13

Net Debt reported an increase of R$ 108.9

million, or 30.6%, in relation to 1Q12, this

increase largely reflecting the funding of new

machines in Brazil and the USA;

The foreign currency named debt was

mainly borrowed in the USA with a natural

hedge in the form of Providência’s revenue

flows and assets in that country.

NET DEBT (in millions of Reais)

Local Currency

35%

65%

Foreign Currency

355.3

451.6 464.2

1Q12 4Q12 1Q13

Page 11: Teleconferencia 1 q13

DEBT / CASH (in millions of Reais)

Consolidated Net Debt

11

R$ (MM) 03/31/2012 12/31/2012 03/31/2013 Ch. 1Q13 /

1Q12

Total Debt

Short Term 73,5 112,4 114,5 55,9% Long Term 374,9 423,3 475,5 26,9%

Total 448,3 535,7 590,0 31,6%

Cash 93,0 84,1 125,9 35,3%

Net Debt 355,3 451,6 464,2 30,6%

Shareholders' Equity 671,3 690,0 696,1 3,7% Net Debt/ Adjusted EBITDA 3,6 3,6 3,8 4,7%

Net Debt / Adjusted EBITDA Without the lines that startup in 2012

2,5 2,2 2,3 -7,6%

Page 12: Teleconferencia 1 q13

32.9 39.5

53.1

R$ 0.41 R$ 0.49

R$ 0.66

R$ (0,50)

R$ (0,30)

R$ (0,10)

R$ 0,10

R$ 0,30

R$ 0,50

8,0

2,0

12,0

22,0

32,0

42,0

52,0

2010 2011 2012

Dividends (R$ MM) Dividend/Share

DIVIDENDS (in millions of Reais)

25,0

12

The AGM held on 04/01/2013 approved an additional payout of R$ 33.8 million in dividends,

totaling R$ 53.1 million for the 2012 fiscal year.

This calculation base corresponds to:

Ex-dividend: 05/17/2013 Payout: 05/27/2013

R$ 0.42 per share

Net Income for the financial year in 2012 R$ 45.1 million

(-) Legal Reserve (5%) R$ 2.2 million

(+) Realization of the deemed cost: R$ 10.2 million

Dividend Calculation Base R$ 53.1 million

Page 13: Teleconferencia 1 q13

0.80 1.04 1.00

-

0,20

0,40

0,60

0,80

1,00

1,20

1,40

1Q12 4Q12 1Q13

MARKET VALUE RATIOS

25,0

13

Dividend Yield* Share Price / Book Value per Share

5.54%

8.06% 7.37%

2010 2011 2012

PRVI3 Ch. 1Q13/1Q12

R$ 6.69

R$ 6.30

R$ 6.85

R$ 8.95 R$ 8.70

mar/12 Jun Sep Dec mar/13

* Dividend per Share / Share price at the end of the period.

Page 14: Teleconferencia 1 q13

HIGHLIGHTS

RESULTS

OUTLOOK

SCHEDULE

Page 15: Teleconferencia 1 q13

OUTLOOK

The target is for the 2nd Statesville production line, the Company’s 13th, to reach maximum

capacity until the end of the second quarter of 2013;

During 2Q13 and 3Q13 the United States plant should have a product mix improvement;

During 2Q13 we will redirect to other countries the products we did not sell to Argentina and

Venezuela on 1Q13;

By the year-end, Companhia Providência’s installed capacity will have reached 140 thousand

tons/year, reaffirming the Company’s ranking as one of the largest and most modern players in

the global nonwovens industry.

15

Page 16: Teleconferencia 1 q13

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 São José dos Pinhais – PR www.providencia.com.br/ri www.twitter.com/providencia_ri

16

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 .