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4 Q03 4 Q03 Presentation Transcript

  • 4Q03 and Full Year of 2003 Earnings Results EMBRAER Maurício Botelho President & CEO March 18th, 2003
  • Forward Looking Statement This presentation includes forward-looking statements or statements about events or circumstances which have not occurred. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting our business and our future financial performance. These forward-looking statements are subject to risks, uncertainties and assumptions, including, among other things: general economic, political and business conditions, both in Brazil and in our market. The words “believes,” “may,” “will,” “estimates,” “continues,” “anticipates,” “intends,” “expects” and similar words are intended to identify forward-looking statements. We undertake no obligations to update publicly or revise any forward-looking statements because of new information, future events or other factors. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this presentation might not occur. Our actual results could differ substantially from those anticipated in our forward-looking statements.
  • 2003 Highlights
  • Environmental Highlights Worldwide Aviation Industry continued to experience great difficulties in 2003. Combined with the after effect of the war in Iraq and the SARS, caused full recovery of world airline traffic to be further postponed; Commercial Aviation experienced its greatest crisis, with major airlines accumulating losses the worldwide; High risk rating for the industry, led to a lack of funds available for structuring sales financing.
  • Environmental Highlights “Low-fare, low-cost” and regional airlines stood out in this adverse scenario, with their consistent and profitable growth; Several companies are considering including new 50- to 100- seat commercial jet aircraft in their plans for recovery and modernization.
  • Highlights Backlog Firm backlog increased from 10,7 10,6 US$ 9.0 billion to US$ 10.6 billion; 9,0 2001 2002 2003 Net Cash US$ 136 million net income and US$2,144 million in sales 222 104 Net cash doubled, reaching US$222 (22) million; 2001 2002 2003 AR Short term accounts receivable decreased 48%, reaching US$ 356 million. 597 736 356 2001 2002 2003
  • Commercial Aviation - Highlights The Mexican airline Aerolitoral placed five firm orders and 25 options for the ERJ 145, with first deliveries projected for 2004; Firm order for 85 EMBRAER 170s and 50 options by US Airways; Firm order for 100 EMBRAER 190 aircraft and 100 options by JetBlue;
  • Commercial Aviation - Highlights Others agreements in 2003 with LOT Polish Airlines, with the German Cirrus and with an undisclosed customer, involving a total of 17 firm orders and 22 options for the EMBRAER 170; Air Canada signed a proposal for the purchase of 45 EMBRAER 190 aircraft and options for an additional 45 units. Embraer’s Market Share: 30 to 60 seats 45 % 61 to 90 seats 33 % 91 to 120 seats 23 %
  • Commercial Aviation - Highlights Postponement of ERJ 145 XR deliveries to ExpressJet (Continental Express), a decrease to 36 units from 48 in 2003; SWISS deferred the EMBRAER 170 deliveries for one year and reduced the total number of aircraft on order to 30 firm orders from 60 (15 EMBRAER 170 and 15 EMBRAER 195), and to 20 options from 100; The EMBRAER 170 type certification postponement by the Brazilian, US, and European regulators forced Embraer to readjust its delivery schedules;
  • Corporate Aviation - Highlights Legacy was certified in a modular interior concept; New Legacy executive version range is 3,250 nautical miles.
  • Corporate Aviation - Highlights The first aircraft sale to a Swiss company and the first sale to a fractional ownership company, Flight Options; The American company Indigo cancelled its contract in May for 23 firm orders and 50 options for the shuttle version of the Legacy;
  • Defense - Highlights The first EMB 145 AEW&C aircraft ordered by the Mexican government introduced to the Mexican authorities and performed its first flight The delivery of the first EMB 145 AEW&C to the Greek air force’s European subcontractor; Delivered the three remaining ISR aircraft to the Brazilian SIVAM Program;
  • Defense - Highlights Announced intention to open an industrial plant in Jacksonville, Florida for the assembly of aircraft for the United States defense and national securities markets; Joined the Lockheed Martin team for its proposal to supply the U.S. Army with a next-generation of Aerial Common Sensor (ACS); Sale of five especial version Legacy Aircraft to the Indian Government A contract was executed in December for the sale of two ERJ 145 aircraft to SATENA, a Colombian state-owned airline;
  • Industrial Highlights Two EMBRAER 175 Prototypes flew in 2003; The first EMBRAER 190 completed fuselage assembly in October; The first ERJ 145 aircraft produced by Harbin Embraer Aircraft Industry Company Ltd – HEAI, was rolled out and took its maiden flight;
  • Industrial Highlights The serial production of the ALX Super Tucano aircraft ordered by the Brazilian Air Force began at the Gavião Peixoto industrial plant; Delivered to Alitalia Express the 700th aircraft of the ERJ 145 family; EMBRAER 170 receives provisional type certificate from CTA and FAA; The ERJ 135 was certified to operate at London City airport in England;
  • Financial - Highlights Concluded a EETC Continental transaction in the U.S. Capital Markets envolving its receivables guaranteed by the ERJ 145 XR. US$414.6 million total amount - four times over subscribed. US$200 million 7-year term syndicated loan, with commercial and political risks guaranteed NEXI, the Japanese export credit agency; Accounts Receivables decreased 52%, from US$736 million in 2002 to US$356 million in 2003. Result achieved mainly due to the BNDES support in financing a significant part of Embraer’s exports.
  • Results & Performance
  • Delivery of jets 160 161 131 101 96 59 32 4 1996 1997 1998 1999 2000 2001 2002 2003
  • Net Revenues and Gross Margin US$ million 39.6% 39.4% 32,0% 37.7% 32,0% 28,3% 2,927.0 2,762.2 2,525.8 2,143.5 1,837.3 1,353.5 1998 1999 2000 2001 2002 2003 77% 36% 50% 6% -14% -15% Annual Variation
  • Net Revenue per Segment and Market REVENUES PER SEGMENT GEOGRAPHIC BREAKDOWN FY2003 FY 2003 Brazil 5% Customer Commercial Services and Aviation other related 69% business 8% Executive Aviation Exports 11% 95% Defense Aviation 12%
  • Income from Operations US$ million 22.3% 20.0% 18.6% 16.7% 651.4 12.7% 462.1 469.6 12.8% 368.0 274.9 171.7 1998 1999 2000 2001 2002 2003 Annual 250% 114% 26% 41% -28% -41% Variation
  • Net Income US$ million 12.8% 11.6% 11.2% 10.7% 320.7 328.4 8.8% 234.5 222.6 6.3% 145.3 136.0 1998 1999 2000 2001 2002 2003 Annual Variation 4,618% 61% 37% 2% -32% -39%
  • Debt Total Debt of US$1,043.7 million Brazilian Currency 24% Foreign Currency 76% Considering Currency Swaps: Average cost in R$ = 16.7% pa (76.5% CDI) Average cost in US$ = 4.6 % pa
  • Debt Maturity In US$ million Short Term Long Term 50% 50% 517 101 1044 105 115 206 Total Short Term 2005 2006 2007 2008 on Loan Average Maturity: 2 years and 2 months
  • Net Cash (Debt) Position US$ million 733 222 104 43 -22 (212) (178) -333 -415 1998 1999 2000 2001 2002 Mar.31, June Sep.31, Dec.31, 2003 31,2003 2003 2003
  • Short-term Trade Accounts Receivable US$ million 981 913 790 736 597 356 160 117 1999 2000 2001 2002 Mar.31,2003 June 30, Sep. 30, Dec. 31, 2003 2003 2003
  • Inventories US$ million 1127 1173 1038 1021 1029 880 773 616 1999 2000 2001 2002 Mar. 31, June 30, Sep. 30, Dec. 31, 2003 2003 2003 2003
  • Customers and Orderbook
  • ERJ145 Family Orderbook Firm Firm Options Total Deliveries Orders Backlog ERJ 135 122 7 129 105 17 ERJ 140 94 20 114 74 20 ERJ 145 675 475 1150 531 144 Total 891 502 1393 710 181 December / 2003
  • EMBRAER 170/190 Family Orderbook Firm Orders Options Total EMBRAER 170 120 125 245 EMBRAER 190 110 150 260 EMBRAER 195 15 30 45 Total 245 305 550 It doesn’t include Air Canada order December / 2003
  • Backlog US$ billion 28.1 Options 24.1 23.4 Firm Orders 22.2 17.7 17.5 12.7 12.7 13.2 11.3 4.1 11.4 10.7 10.6 3.0 9.0 1.2 6.4 3.0 4.1 1.2 1996 1997 1998 1999 2000 2001 2002 2003
  • Capex and Productivity
  • PP&E & R&D US$ million 173.2 PP&E 158.5 143.8 R&D 114.2 113.7 111.0 69.6 64.8 60.1 18.8 1999 2000 2001 2002 2003
  • Production Cycle In Months 8.0 6.0 6.0 5.5 4.9 5.0 3.7 3.4 1996 1997 1998 1999 2000 2001 2002 2003
  • Planned Investments US$ million 2004 2005 R&D Total 174 119 - Commercial Aviation 139 72 - Corporate Aviation 16 27 - Others 19 20 Defence 42 54 Productivity and PP&E 64 81 TOTAL 280 254 Defence Investments are funded by their contracts and are not included in the R&D expenses, but in Cost of Sales and Services.
  • Jet Deliveries 170 160 161 160 131 96 101 59 32 4 1996 1997 1998 1999 2000 2001 2002 2003 2004 E 2005 E
  • Deliveries Forecast 160 expected deliveries for 2004 and 170 for 2005 12% 15% 35% 37% 53% 48% 2004 2005 ERJ 145 Family EMBRAER 170 Family Corporate
  • Investor Relations Phone: 5512 3927-1216 investor.relations@embraer.com.br www.embraer.com.br