Emb day executive aviation oct2013 (2)

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Emb day executive aviation oct2013 (2)

  1. 1. Embraer Day Marco Tulio Pellegrini - COO Executive Aviation Oct. 31st, 2013 This information is the property of Embraer and cannot be used or reproduced without written consent.
  2. 2. Market recovery depends on many factors Willingness to invest Stock Markets Pre-owned Market Wealthy Population Business Aviation Traffic Corporate Profits Exchange Rates Sales of New Business Jets This information is the property of Embraer and cannot be used or reproduced without written consent. Source: Embraer Analysis Finance conditions (for small jets, and Asia mainly)
  3. 3. U.S. corporate profits US Corporate Profits (US$ Bi) 2.500 2.000 2.249 +41% +125% 1.500 1.000 500 0 Q2 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: BEA – Bureau of Economic Analysis and Embraer estimates, September 2013 Seasonally adjusted at annual rates This information is the property of Embraer and cannot be used or reproduced without written consent.
  4. 4. Worldwide HNWIs population 11.9 10.1 9.6 8.8 11.0 2010 2011 8.6 Population (mi) 7.7 8.2 10.1 10.8 2003 2004 North America 2005 Europe 2006 2007 Asia-Pacific Source: World Wealth Report 2013 edition This information is the property of Embraer and cannot be used or reproduced without written consent. 2008 2009 Latin America Middle East 2012 Africa
  5. 5. Business Jet Traffic – United States 220 Movements X 1000 2007 190 2013 160 2012 130 2009 100 Jan Feb Mar Apr May Source: FAA – September 27th, 2013 This information is the property of Embraer and cannot be used or reproduced without written consent. Jun Jul Aug Sep Oct Nov Dec
  6. 6. World GDP growth rates Source: EIU, September 2013 This information is the property of Embraer and cannot be used or reproduced without written consent.
  7. 7. Business jets pre-owned market inventory 12.9% 2483 jets 3.500 Fleet older than 10 yrs 28% 24% Up to 10 yrs & positions Total fleet % for sale 2.500 20% 16% 1.500 12% 1.000 8% 500 4% 0 Units (Bars) 2.000 0% '00 '01 '02 '03 '04 '05 '06 Source: Jetnet and Embraer Analysis, September 2013 This information is the property of Embraer and cannot be used or reproduced without written consent. '07 '08 '09 '10 '11 '12 '13 TD % of active fleet (Lines) 3.000 8.3% 672 jets
  8. 8. EEJ Fleet for sale 50% 100 % of active fleet 45% # of Embraer a/c for sale 90 40% 85 35% 80 30% 75 25% 70 20% 12% 65 15% Jul-13 Apr-13 Jan-13 Oct-12 Jul-12 Apr-12 Jan-12 Oct-11 Jul-11 Apr-11 Jan-11 Oct-10 Jul-10 0% Apr-10 50 Jan-10 5% Oct-09 55 Jul-09 10% Apr-09 60 for sale as % of active fleet EMBRAER Total fleet for sale 95 Despite a large amount of small jets in fleet, Embraer fleet for sale is currently below the world average of 12.3%. Source: Jetnet and Embraer Analysis, October 2013 This information is the property of Embraer and cannot be used or reproduced without written consent.
  9. 9. Pre-owned asking prices # Total Fleet for sale Average discount 3200 ↑ 141% since peak 100% 2800 ↓ 18.5% since peak 50% 2400 0% 2000 May-09 Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12 May-13 Recovery will depend on an improvement in pre-owned prices. Owners are postponing substitutions. Source: Jetnet and Embraer Analysis, October 2013 This information is the property of Embraer and cannot be used or reproduced without written consent. # Total Fleet for sale Av. discount (Relative to May 2009) 150%
  10. 10. Top 5 business jets in residual value performance Retail / Avg Equipped* 100% 90% 80% 70% 60% 50% 40% 30% 2013 2012 2011 2010 2009 2008 2007 2006 Year of Manufacture Phenom 300 Citation CJ4 * Average equipped price in 2013 economic conditions for all years. Source: Aircraft Bluebook, October 2013 This information is the property of Embraer and cannot be used or reproduced without written consent. G550 Lineage 1000 7X
  11. 11. Top 10 best “liquidity” performers MODELS Rank DAYS ON MARKET DAY ON MARKET (US) ACTIVE FLEET FLEET FOR SALE FLEET FOR SALE (%) 1st EMBRAER PHENOM 300 125 102 139 4 3% 2nd CITATION CJ4 149 238 130 3 2% 3rd GULFSTREAM G-350 157 N.A. 11 2 18% 4th GULFSTREAM G-550 169 120 411 12 3% 5th LEARJET 40XR 179 215 91 5 5% 6th CITATION XLS+ 191 131 143 10 7% 7th GULFSTREAM G-450 230 130 271 19 7% 8th EMBRAER PHENOM 100 234 256 285 19 7% 9th 237 304 414 22 5% 237 83 123 6 5% CHALLENGER 300 10th FALCON 2000LX Source: Jetnet, October 2013. This information is the property of Embraer and cannot be used or reproduced without written consent.
  12. 12. Fractional market consolidation: control duopoly Active fractional shares - market share 11% Directional Aviation Control 73% 12% 1% NetJets Flight Options Flexjet 3% CitationAir Others Directional Aviation will more than double its participation (from 11% to 23%). Source: Embraer analysis based on Jetnet database. October 2013. This information is the property of Embraer and cannot be used or reproduced without written consent.
  13. 13. Phenom 300 in fractional operators FLIGHT OPTIONS NETJETS 25 aircraft delivered to date 10 aircraft delivered to date Flight Options also operates 6 Legacy 600 Source: Jetnet and Embraer Analysis, October2013 This information is the property of Embraer and cannot be used or reproduced without written consent.
  14. 14. Owners utilization profile (average FH/year) EMBRAER Owners Owners OEM Hawker Cessna Bombardier Dassault Gulfstream 350 372 393 440 445 Owners class 616 Large Jets Medium Jets Small jets 433 393 344 0 200 400 600 800 Embraer owners tend to have a better annual utilization leading their businesses to higher productivity. Good option for management prospects. Source: Jetnet IQ 2Q13 report proprietary data. This information is the property of Embraer and cannot be used or reproduced without written consent. 1000
  15. 15. Next 10 years Bizjet Forecast This information is the property of Embraer and cannot be used or reproduced without written consent.
  16. 16. Market Recovery in slow motion US Corporate profits at record levels MILD GROWTH HNWI at record levels World GDP growth is moderate Used market inventory leveled off but prices are still an issue Traffic recovery on track but slower than expected European markets still at risk; emerging countries slowing down Lack of confidence is holding the bizjet market turnaround USA market dictates the speed of recovery This information is the property of Embraer and cannot be used or reproduced without written consent.
  17. 17. 2014-2023 market forecast Deliveries Forecast (units) Units US$ 225 1200 17,3 1345 1000 Ultra Large 800 Large 1270 600 Supermid 920 Midsize 400 82,2 1670 Ultra Long Range 1140 64,7 31,1 Midlight 200 1780 900 Light 2023 2022 2021 2020 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2019 Entry 0 17,8 17,3 15,8 Deliveries Revenues N10YF 9,250 jets and US$ 250 Bi in the next 10 years This information is the property of Embraer and cannot be used or reproduced without written consent. 4,2
  18. 18. 2014-2023 market forecast by region North America 4,530 a/c (49%) US$ 117 Bi (47%) EMEA 2,330 a/c (25%) US$ 70 Bi (28%) China 805 a/c (9%) US$ 29 Bi (11%) Asia Pacific 725 a/c (8%) US$ 21 Bi (8%) Latin America 860 a/c (9%) US$ 15 Bi (6%) Source: Embraer 2013. This information is the property of Embraer and cannot be used or reproduced without written consent. Worldwide 9,250 units US$ 250 Bi
  19. 19. THE BUSINESS TODAY This information is the property of Embraer and cannot be used or reproduced without written consent.
  20. 20. Embraer product portfolio Ultra-large EIS 2009 Ultra-Long Range Large EIS 2010 Super Mid-Size EIS 2002 Mid-size EIS 2014 Mid-light EIS 2015 Light EIS 2009 Entry EIS 2008 This information is the property of Embraer and cannot be used or reproduced without written consent.
  21. 21. Executive Aviation - Revenue evolution (US$ million) 1210 838 874 2008 2009 1119 937 2007 1292 582 145 2002 CAGR 175 2003 246 278 2004 2005 2006 24.4% This information is the property of Embraer and cannot be used or reproduced without written consent. 2010 2011 2012
  22. 22. EEJ market share evolution since EIS (units) 45% 40% Market share 35% 30% 25% 20% 15% 10% 5% 0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 22% accumulated since EIS, within the markets EEJ competes Source: Jetnet and Embraer analysis – July, 2013 This information is the property of Embraer and cannot be used or reproduced without written consent.
  23. 23. EEJ market share (revenues) % OEM Share – Total Revenues US$ 21.8 17.3 5% 8% 4,2% 6% 8% 6,4% 23% 12% 19% 21% 18.2 18.1 17.7 10% 6% 6,9% 7% 4% 5,9% 5% 3% 7,3% 21% 27% Total Revenues (in US$) Others 25% Hawker-Beech Embraer 18% 13% 17% Gulfstream 9% 22% 15% 10% Dassault 7% Cessna Bombardier 29% 28% 27% 33% 33% 2008 2009 2010 2011 2012 Source: GAMA and Embraer analysis – July, 2013 This information is the property of Embraer and cannot be used or reproduced without written consent.
  24. 24. Backlog evolution (US$ million) 7200 5500 4900 4700 4400 3200 2800 1800 500 2002 CAGR 500 2003 100 300 2004 2005 2006 2007 2008 17% This information is the property of Embraer and cannot be used or reproduced without written consent. 2009 2010 2011 2012 2013TD
  25. 25. Embraer Executive Jets: Final assemblies USA - Melbourne Phenom 100 & 300 Legacy 450 & 500 Brazil – São José dos Campos Phenom 100 & 300 Legacy 450 & 500 Legacy 650 Lineage 1000 This information is the property of Embraer and cannot be used or reproduced without written consent. China - Harbin Legacy 650
  26. 26. 400th Phenom 100/300 delivery in SJK Phenoms delivered June ’13 This information is the property of Embraer and cannot be used or reproduced without written consent.
  27. 27. Phenom 100 – 2014 edition New Multi-Function Spoiler and Interior Improvements New Standard Items New Interior Options • Multi-function spoilers • 11 new interior collections • Refreshment center • Stowage space • Premium seats This information is the property of Embraer and cannot be used or reproduced without written consent.
  28. 28. Phenom 300 – Prodigy touch Based on Garmin 3000 First to certify this touchscreen Garmin platform ANAC, FAA and EASA approved Now available as an option This information is the property of Embraer and cannot be used or reproduced without written consent.
  29. 29. Extended Range - 200 nm Enhanced Interior Entertainment to the latest generation Enhanced cockpit options – E2VS and Autoland External look refreshed This information is the property of Embraer and cannot be used or reproduced without written consent.
  30. 30. Three prototypes in flight test 700+ flight hours Over 16,000 systems test hours performed On track for EIS in 1H 2014 First appearance at NBAA This information is the property of Embraer and cannot be used or reproduced without written consent. All Preliminary Data Legacy 500 program update
  31. 31. Legacy 450 - Range increase FROM All Preliminary Data Range TO 2,300 nm 2,500 nm Better performance and more flexibility This information is the property of Embraer and cannot be used or reproduced without written consent.
  32. 32. Legacy 450 - Cabin comfort improvement 46” 4” additional leg room This information is the property of Embraer and cannot be used or reproduced without written consent.
  33. 33. New Interior Design unveiled at NBAA
  34. 34. Legacy 450 program update First flight expected for 2H13 This information is the property of Embraer and cannot be used or reproduced without written consent.
  35. 35. SERVICES AND SUPPORT UPDATE This information is the property of Embraer and cannot be used or reproduced without written consent.
  36. 36. Service Center network Embraer Service Center Authorized Service Center New Embraer Service Center in São Paulo - Brazil Nearly 70 service centers worldwide. This information is the property of Embraer and cannot be used or reproduced without written consent.
  37. 37. New Service Center in São Paulo, Brazil MRO start-up: October 2013 200,000 SQFT FBO start-up: March 2014 US$ 25 million investment This information is the property of Embraer and cannot be used or reproduced without written consent.
  38. 38. Customer satisfaction: 2nd position maintained “Embraer is creeping even closer to the top spot, up 0.1 to 8.2 from last year’s 8.1” This information is the property of Embraer and cannot be used or reproduced without written consent. 38
  39. 39. Embraer Executive Jets Global Presence Phenom 100: 280+ Legacy 600/650: 200+ Phenom 300: 140+ Lineage 1000: 10+ 630+ executive jets in service in more than 50 countries This information is the property of Embraer and cannot be used or reproduced without written consent.
  40. 40. This information is the property of Embraer and cannot be used or reproduced without written consent.
  41. 41. This presentation is the property of Embraer S.A. ("Embraer") and shall not be copied, in whole or in part, or used in any manner, except with Embraer´s prior written consent. Embraer reserves the right to revise this document whenever occasioned by product improvements, governmental regulations or other good cause. All images: figures, finishing materials and colors are for illustration purpose only, and may not represent the real and final product accurately. Some features are optional items not included in the baseline aircraft and are subject to price increase and lead-time analysis. All data presented shall not be used as guarantee. Guaranteed specifications are listed in the technical description and represent the only binding guarantee. In the event of any conflict between this presentation and the technical description, the technical description shall govern. This information is the property of Embraer and cannot be used or reproduced without written consent.

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