results presentation 3 q13

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November 7, 2013 3Q13 Results

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Page 1: Results presentation 3 q13

November 7, 2013

3Q13 Results

Page 2: Results presentation 3 q13

SCHEDULE

HIGHLIGHTS

RESULTS

OUTLOOK

2

Providência USA

Providência USA

Page 3: Results presentation 3 q13

Sales Volume amounted to 31.4 thousand tons, an increase of 20.5% in relation to the same

period in 2012. On a quarter-on-quarter comparative basis there was an increase of 3.0%;

The Company reported Net Revenue of R$ 211.1 million, a 26.6% increase on 3Q12, largely

reflecting increasing sales volume;

Adjusted EBITDA reached R$ 40.1 million, an 11.0% improvement on 3Q12 and 25.0%

compared with 2Q13;

Net Income in the period amounted to R$ 10.0 million, a 21.0 % improvement on 2Q13;

The Company posted an increase in Net Debt of R$ 44.3 million, 9.9% greater than 3Q12, a

consequence of the currency variation on US dollar denominated financing;

Approval was given for the distribution of interim dividends of R$ 17.9 million, totaling 100% of

the adjusted dividend calculation base in the first half of 2013.

HIGHLIGHTS 3Q13

Page 4: Results presentation 3 q13

SCHEDULE

HIGHLIGHTS

RESULTS

OUTLOOK

4

Page 5: Results presentation 3 q13

SALES VOLUME (in thousands of tons)

Sales of nonwovens grew 23.7% compared with 3Q12 due to the full capacity reached by KAMI

13, the 2nd production line in the US, that started up this year.

3Q12 2Q13 3Q13

23.6 28.0 29.2

2.5 2.5 2.5

26.1 30.5 31.4

Nonwovens Others

Sales Volume / Quarter

YTD 2012 YTD 2013

67.2 81.5

6.5

7.4 73.7

88.9

Nonwovens Others

Sales Volume Accumulated

Page 6: Results presentation 3 q13

R$ 6.20 R$ 6.35

Unitary Net Revenue

YTD 2012 YTD 2013

457.2 564.8

Net Revenue

Net revenue Accumulated

R$ 6.40 R$ 6.33 R$ 6.72

Unitary Net Revenue

3Q12 2Q13 3Q13

166.7 193.1 211.1

Net Revenue

Net revenue / Quarter

6

NET REVENUE (in millions of Reais)

The increase is largely due to the higher sales volume.

6

Net revenue from sales for 3Q13 amounted to R$ 211.1 million, an increase of 26.6% compared

with 3Q12. When compared with 2Q13, growth was 9.3%, in large part due to an increase in sales

volume;

Page 7: Results presentation 3 q13

R$ 4.39

R$ 4.66 R$ 4.99

Unitary COGS (R$)

R$ 4.33

R$ 4.66

Total unitary COGS (R$)

YTD 2012 YTD 2013

319.0 413.9

COGS (R$ thousand)

GOGS Accumulated

3Q12 2Q13 3Q13

114.3 142.0

156.9

COGS (R$ thousand)

GOGS / Quarter

The cost of goods sold (COGS) totaled R$ 156.9 million in 3Q13, 37.2% higher against the

R$ 114.3 million recorded in 3Q12 and an increase of 10.5% compared with the R$ 142.0 million in

2Q13.

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

7 7

This performance is largely the result of higher sales volume and increased raw material costs.

Page 8: Results presentation 3 q13

20.4%

17.3%

Ebitda Margin (%)

21.7%

16.6%

19.0%

Ebitda Margin (%)

YTD 2012 YTD 2013

93.2

98.0

EBITDA

EBITDA Accumulated

3Q12 2Q13 3Q13

36.1

32.1

40.1

EBITDA

EBITDA / Quarter

Adjusted EBITDA in 3Q13 reached R$ 40.1 million, an improvement of 11.0% when compared

with the R$36.1 million reported in 3Q12. In relation to 2Q13, adjusted EBITDA increased by 25.0%.

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

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Page 9: Results presentation 3 q13

11.4%

4.3%

4.7%

Net Margin (%)

7.4%

4.1%

Net Margin (%)

3Q12 2Q13 3Q13

18.9

8.2 10.0

Net income

Net Income / Quarter

9

NET INCOME (in millions of Reais)

and NET MARGIN(%)

25,0

9

The adjusted dividend calculation base for the quarter was R$ 12.5 million, the difference

representing the realization of the deemed cost for the quarter, net of tax.

Net income for the quarter amounted to R$ 10.0 million.

YTD 2012 YTD 2013

33.8

23.2

Net income

Net income Accumulated

Page 10: Results presentation 3 q13

A Net Debt increased 12.4% when compared with 3Q12 due to an increase in Gross Debt of R$

19.6 million as well as a reduction in cash and liquid hedge instruments of R$ 34.8 million. Net

Debt fell 0.2% in relation to 2Q13;

NET DEBT (in millions of Reais)

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.

3Q12 2Q13 3Q13

439.9

495.1 494.3

Net Debt

Net Debt / Quarter

27%

73%

Local currency Foreign currency

Total Debt %

Page 11: Results presentation 3 q13

Consolidated Net Debt

DEBT / CASH (in millions of Reais)

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In R$ (MM) 3Q12 2Q13 3Q13Ch. 3Q13 /

3Q12Short Term 127.0 117.7 51.4 -59.5%

Long Term 428.5 349.2 523.6 22.2%

Total 555.4 466.8 575.0 3.5%

Cash and liquid hedge instruments 115.5 70.4 80.7 -30.1%

Net Debit 439.9 396.5 494.3 12.4%

Shareholders' Equity 697.8 678.7 662.1 -5.1%

Net Debt / Adjusted EBITDA 3.68 3.95 3.86 4.9%

Page 12: Results presentation 3 q13

0.18

0.24 0.22

Dividend/Share

The Board of Directors decided at its meeting held on September 17, 2013 on the distribution of

100% of dividends calculated on the data base June 30, 2013, representing R$ 17.9 MM to be payed

on November 25, 2013.

DIVIDENDS (in millions of Reais)

25,0

12

This calculation base corresponds to:

1º Half 2013 Net income 13.3 MM

(-) Legal Reserves legal (5%) 0.7 MM

(+) Realization of deemed cost 2011: 5.1 MM(+) 1 Reversal of plan Stockoptions: 0.2 MM

Dividends payable 17.9 MM

1st Half 2011 1st Half 2012 1st Half 2013

14,1

19,2 17,9

Dividends Paid (R$ MM)

Dividends Payable

Page 13: Results presentation 3 q13

MARKET VALUE RATIOS

25,0

13

3Q12 2Q13 3Q13

0.79 0.99 0.96

Share Price / Asset Value per share

PRVI3 Asset Value / Quarter

2010 2011 2012

5.54%

8.06% 7.37%

Dividend Yield

PRVI3 - Proportion of dividends paid on the share value in the last three years

PRVI3 15,6%

IBOVESPA -11,6%

Change 3T13 / 3T12

R$ 6,85

R$ 8,95 R$ 8,70

R$ 8,25 R$ 7,92

R$ 5

R$ 6

R$ 7

R$ 8

R$ 9

R$ 10

set/12 dez/12 mar/13 jun/13 set/13

Share Value - IBOVESPA

Page 14: Results presentation 3 q13

HIGHLIGHTS

RESULTS

OUTLOOK

SCHEDULE

Page 15: Results presentation 3 q13

OUTLOOK

With the 2nd Statesville nonwovens line now operating at full capacity, the objective is to

improve the mix by increasing the percentage of higher value added products;

Installed capacity will have reached 140 thousand tons/year by year-end, reaffirming the

Company’s ranking as one of the largest and most modern players in the global nonwovens

industry.

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K12 K13

Page 16: Results presentation 3 q13

CEO/CFO: Hermínio V. S. de Freitas RI : Gabriela Las Casas Danielle Cabrini

Tel: +55 (41) 3381-8673 Fax: +55 (41) 3381-7656 São José dos Pinhais – PR www.providencia.com.br/ri www.twiter.com/providencia_ri

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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 .