Embraer 3Q12 Nov 2012 Book

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Embraer 3Q12 Nov 2012 Book

  1. 1. Investor Relations Phone: +55 12 3927 4404 investor.relations@embraer.com.br www.embraer.com 1 Investor RelationsOct/12 This information is property of Embraer and cannot be used or reproduced without written permission.
  2. 2. Corporate and Business Strategy • Organic growth. • Margins enhancement through the P3E. • Business and revenues diversification. • Product strategy. • Diversification and expansion of customer base. • Excellence in Customer Experience (ECE). • Market share growth. • Margins improvement. • Product strategy and customer support focus. • Establish Embraer as the defense house of Brazil. 2 • Organic growth and acquisitions. Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  3. 3. Aircraft Deliveries Commercial Jets Executive Jets 98 126 165133 125 83 101 105 2 83 40 36 37 21 19 16 62007 2008 2009 2010 2011 9M2012 2007 2008 2009 2010 2011 9M2012 Light Jets - Phenom Large Jets - Legacy & Lineage 3 Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  4. 4. Revenues US$ Million 6,335 5,498 5,364 5,803 5,245 4,278 2007 2008 2009 2010 2011 9M2012 2012 Outlook: US$ 5.8 – 6.2 billion 42007-2008: USGAAP2009-2012: IFRS Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  5. 5. Revenues by Segment – 2012 Outlook Embraer: US$ 5.8 – 6.2 Billion Commercial Aviation: US$ 3.70 – 3.85 Billion 2,025 1,176 1,078 996 956 1,717 1,405 760 1,364 1,156 3Q11 4Q11 1Q12 2Q12 3Q12 3Q11 4Q11 1Q12 2Q12 3Q12 Executive Aviation: US$ 1.10 – 1.30 Billion Defense and Security: US$ 900 – 950 Million 603 293 266 259 232 189 261 149 152 167 5 3Q11 4Q11 1Q12 2Q12 3Q12 3Q11 4Q11 1Q12 2Q12 3Q12 Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  6. 6. Revenues Breakdown Revenues by Segment Revenues by RegionRevenues RevenuesUS$ Billion 5.49 5.36 5.80 US$ Billion 5.49 5.36 5.80 2% 1% 2% 4% 12% 6% 4% 15% 15% 21% 22% 23% 17% 23% 19% 11% 13% 17% 7% 15% 11% 69% 33% 61% 64% 25% 33% 22% 20% 13% 2009 2010 2011 2009 2010 2011 Commercial aviation Defense and security North America Europe Latin America Executive aviation Others Brazil Asia Pacific Others 6 Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  7. 7. Firm Order Backlog US$ Billion 16.0 15.4 14.7 12.9 12.4 3Q11 4Q11 1Q12 2Q12 3Q12 7 Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  8. 8. 8 Investor RelationsThis information is property of Embraer and cannot be used or reproduced without written permission.
  9. 9. Embraer Commercial Aviation 9 OVER 80 AIRLINES IN MORE THAN 50 COUNTRIES Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  10. 10. Product Portfolio capacity: 37 seats capacity: 70 to 80 seats range: 1,750 nm (3,250 Km) range: 2,100 nm (3,900 Km) capacity: 44 seats capacity: 78 to 88 seats range: 1,650 nm (3,050 Km) range: 2,000 nm (3,700 Km) capacity: 98 to 114 seats capacity: 50 seats range: 2,400 nm (4,500 Km) range: 1,550 nm (2,900 Km) capacity: 50 seats capacity: 108 to 122 seats range: 2,000 nm (3,700 Km) range: 2,200 nm (4,100 Km) 10 Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  11. 11. E-Jets Customer Base Evolution 11 Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  12. 12. E-Jets Family Order Book – 3Q12 E-JETS Firm orders Deliveries Firm Backlog EMBRAER 170 192 182 10 EMBRAER 175 191 160 31 EMBRAER 190 543 441 102 EMBRAER 195 137 102 35 Total 1,063 885 178 Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  13. 13. Worldwide DistributionCommercial Jets Market Share Evolution Worldwide E-Jets Customer Base by Business Model 60-120 Seats Jets (% of E-Jets Fleet+Backlog) 19% 48% Low Cost Carriers 43% 33% Regional Airlines Network Airlines 30% Firm Orders Backlog 7% 12% 16% 5% 9% 33% 8% 35% 3% 27% 13% 30% 17% Considering Accumulated Net Orders Europe & CIS North America Middle East & Africa Asia Pacific & China 13 Latin America Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  14. 14. E-Jets Deployment helping airlines to be more efficientWorld 14 Right-sizing New Markets Replacement of Natural old Jets Growth Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  15. 15. Embraer Market Forecast (2012-2031) • Scope Clauses relaxation allowing 80-seater aircraft as a natural growth of RJ50s in the US • Right-sizing of narrow-body operations • Regional aviation development in Emerging Markets • Acceleration of replacement of old & inefficient jets Russia / CIS Europe North North 445 155 America America 1,460 580 7% 6% 22% Projected Deliveries- Jets 2,195 840 China China 2012 – 2019 32%Market Segment 2010 2031 Middle 1,005 340 (Seats) Deliveries Africa East 15% 13% 30-60 405 60 210 80 305 105 61-90 2,625 1,015 Asia Latin Latin 3% 4% 91-120 3,765 1,550 Pacific America America 30-120 6,795 2,625 210 505 315 670 7% 8% 10% 12% 15Around 6,795 jet deliveries (30-120 seats) in the next 20 years (US$ 315 bi) Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  16. 16. Competitive Landscape 120 CS100 110 110 Seats E195Capacity 32 pitch CRJ 1000 100 Seats 100 E190 SSJ100/95 90 70-90 Seats ARJ21 MRJ90 CRJ900 E175 80 CRJ700 E170 70 MRJ70 60 1600 1800 2000 2200 2400 2600 2800 3000 16 Range Nominal Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  17. 17. Investor RelationsThis information is property of Embraer and cannot be used or reproduced without written permission.
  18. 18. Embraer Executive Jets Embraer Executive Jet Delivered in Brazil 18 MORE THAN 550 AIRCRAFT DELIVERED IN OVER 40 COUNTRIES Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  19. 19. Product Portfolio Aircraft Model Seats / Range Competitors Entry up to 8 occupants/ • Cessna - Mustang CJ1+/M2 Phenom 100 1,178 nm Certified: 2008 • HondaJet • Cessna - CJ2+/CJ3/CJ4 Phenom 300 up to 11 occupants/ • Hawker - PremierIA/400XP Light 1,971 nm • Bombardier - Learjet 40XR Certified: 2009 • SyberJet - SJ30 Under development • Bombardier - Learjet 45XR Mid-light Legacy 450 7 to 9 passengers/ • Cessna - XLS+/Latitude 2,300 nm • Hawker 750 • Bombardier - Learjet 60XR/85 • Cessna - Sovereign Mid-size 8 to 12 passengers/ • Hawker - H900XP Legacy 500 3,000 nm • Gulfstream – G150 • Bombardier - CL300/CL850 • Cessna - X/Ten Super Mid-Size Legacy 600 13 to 14 passengers/ • Dassault - Falcon 2000S 3,400 nm Certified: 2001 • Gulfstream - G200/G280 • Hawker - H4000 Large • Bombardier - CL605/GL5000 Legacy 650 13 to 14 passengers/ • Dassault - Falcon 2000/900LX 3,900 nm Certified: 2010 • Gulfstream - G350/G450 • Bombardier - GL XRSUltra-Long Range • Gulfstream – G500/G550/G650 • Dassault – Falcon 7X • Airbus - ACJ 318/319/320 19 Lineage 1000 13 to 19 passengers/ Ultra-large • Boeing – BBJ/BBJ2/BBJ3 4,500 nm Certified: 2008 • SSJ VIP/ ARJ21B / An-148VIP Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  20. 20. Market ShareRevenues share (US$ - based on B&CA list prices) Deliveries share (units) $16.6Bi $19.3Bi $22.2Bi $17.2Bi $18.2Bi $18.1Bi 885 1,040 1,154 870 763 703 8% 6% 5% 6% 10% 7% 3% 2% 1% 2% 3% 2%% OEM Share – Total Revenues US$ 8% 8% 8% 4% 10% 7% 9% 6% 6% 16% 16% 14% 11% 4% 5% 4% 6% 7% 3% 14% % OEM Share – Total units 3% 3% 14% 19% 23% 24% 27% 13% 13% 14% 23% 21% 21% 15% 6% 11% 13% 7% 7% 9% 9% 11% 12% 12% 18% 12% 15% 22% 16% 18% 35% 37% 40% 17% 12% 9% 33% 26% 7% 23% 29% 28% 29% 28% 27% 33% 26% 24% 22% 21% 20% 20% 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 Market Revenues 2011: US$18.1 billion Market Deliveries 2011: 703 units Embraer Revenues: US$1.0 billion Embraer Deliveries: 99 units 20 Bombardier Dassault Hawker-Beech Embraer Gulfstream Cessna Others Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  21. 21. 2013-22 Market Forecast - World Deliveries 21 Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  22. 22. 2013-22 Market Forecast 22 Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  23. 23. Business Jets Used Market Inventory 23 Improvement halted Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  24. 24. 24 Investor RelationsThis information is property of Embraer and cannot be used or reproduced without written permission.
  25. 25. Embraer Defense and Security 25 OVER 50 ARMED FORCES IN 48 COUNTRIES Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  26. 26. Embraer Defense and Security Embraer Defense and Security, partners and affiliated companies 26 Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  27. 27. Embraer Defense and Security Results Revenues Evolution (US$ Million) Revenue Participation (%) GAGR 33% 15% 13% 8% 9% 6% 7% 852 670 505 499 346 227 2006 2007 2008 2009 2010 2011 EBIT Evolution (%) Backlog Evolution (US$ Billion) 13.4% 3.2 3.3 3.3 12.4% 12.2% 12.0% 9.6% 6.3% 1.5 1.1 1.0 27 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 Não contabiliza as receitas provenientes da OGMA nos anos de 2006 a 2010. Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  28. 28. Super TucanoFirm orders: 190 aircraft Addressable Market Forecast 2020 (US$ million) Brazil: 99 Colombia: 25 Long-term 700 Dominican Republic: 8 Medium-term 2,000 Short-term Chile: 12 800 Ecuador: 18 Indonesia: 16 Greystone (TACAir): 1 Total Market Forecast: Undisclosed: 11 300 aircraft / US$ 3.5 billionDeliveries: 168 aircraft 28Partnership with Boeing to provide weapons integration, increasing capabilities of the aircraft. Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  29. 29. EMBRAER KC-390Brazil Colombia Argentina Chile Portugal Czech Rep. Total Market Forecast 2025: (28) (12) (6) (6) (6) (2) 700 aircraft / US$ 50+ bi• A new tactical military transport and tanker aircraft• First flight in 2014• Six countries• Letters of intent totalizing 60 aircraft• Agreement with Boeing to share technical knowledge and evaluate markets for joint sales efforts. 29• The Brazilian Air Force (FAB) and Embraer concluded the Preliminary Design Review. Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  30. 30. Modernization Programs F-5M A1-M A-4 Addressable Market Forecast 2025 (US$ million) Brazilian Navy A-4 Long-term 12 aircraft 567 2 prototypes at GPX-CS Medium-term 505 Short-term Brazilian Air Force A-1M 527 43 aircraft 14 received by Embraer for the modernization Total Market Forecast*: Brazilian Air Force F-5M 46 a/c + 11 a/c (2nd batch) 30 234 aircraft / US$ 1.6 billion 45 already delivered * Considering the market for F-5 and Tucano modernization Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  31. 31. New Portfolio Command and Control Systems Onboard Systems Simulation Systems Electronic Warfare Systems Intelligence Systems Air Traffic Management and Control Systems JV with Elbit/AEL Sistemas where Embraer Defense and Security of CriticalHARPIA Security has a major participation Infrastructure UAS, simulators and modernization of avionics systems Public Security (sporting events, cities, states) Airport Management Air, ground and sea surveillance radars Systems Remote sensing SISFRON SisGAAZ Engine and Component Maintenance Overhaul and Modernization Aerostructure Manufacturing and AssemblingVISIONA Satellite 31 Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  32. 32. Brazilian Army Priorities SISFRONIntegrated Borders Monitoring System First phase: US$ 400 Million Total estimate: US$ 4 BillionComprising radars, communication networks, C4I,unmanned air vehicles (UAV) and armored vehicles Comm 9% UAV 12% Sensors 59% Satellite Estimate: US$ 400 Million SW 20% Participation in the first Brazilian Geostationary Satellite 32 Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  33. 33. Revenues Breakdown Evolution 2020 Services 11% Transport 4% Sisfron, Satellite 10% KC-390 34% 2011 KC-390 New Business Services 19% 14% 10% Light Attack and ISR Radar, C4I, UAV, Combat 10% MRO 9%Modernization 18% 25% Light Attack 9% New Business • Airport Management Systems • SisGAAz (“Blue Amazon” Integrated Management System) Radar, C4I, UAV, • Security of Critical Infrastructure MRO 27% 33 • Public Security (sporting events, cities, states) Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  34. 34. 2012 Outlook 34 Investor RelationsThis information is property of Embraer and cannot be used or reproduced without written permission.
  35. 35. 2012 Outlook Commercial aviation Executive aviation Net Revenues US$ 5.8 – 6.2 billion Defense and security Others Outlook in 1Q12 Current Outlook (Revised in 2Q12) EBIT US$ 460 – 530 Million US$ 520 – 590 Million EBIT margin 8.0% – 8.5% 9.0% – 9.5% EBITDA US$ 670 – 780 Million US$ 720 – 840 Million 35 EBITDA margin 11.5% – 12.5% 12.5% – 13.5% Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  36. 36. 2012 Outlook Research US$ 100 million TOTAL Development US$ 350 million US$ 650 CAPEX US$ 200 million million US$ Million CAPEX R&D Investment/Revenue 36 Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  37. 37. Net Revenues / SG&A Expenses Net Revenues - US$ Million SG&A Expenses - US$ Million 25.3% 194 186 180 23.2% 23.6% 172 170 22.5% 21.2% 72 75 69 71 59 2,025 1,717 1,364 1,405 114 109 119 111 1,156 103 3Q11 4Q11 1Q12 2Q12 3Q12 3Q11 4Q11 1Q12 2Q12 3Q12US$ Net Revenues Gross Margin US$ G&A Expenses Selling Expenses2010 5,364 19.1% 2010 198 3742011 5,803 22.5% 2011 262 420 38 Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  38. 38. Income from Operations / EBITDAIncome from Operations - US$ Million EBITDA - US$ Million 13.8% 14.9% 10.2% 15.4% 11.5% 12.8%9.1% 11.8% 7.4% 7.2% 42 42 265 -0.3% 197 2.9% 188 124 148 166 86 101 59 (6) 3Q11 4Q11 1Q12 2Q12 3Q123Q11 4Q11 1Q12 2Q12 3Q12 US$ EBIT EBIT Margin US$ EBITDA EBITDA Margin 2010 392 7.3% 2010 611 11.4% 2011 318 5.5% 2011 557 9.6% 39 Without Chautauqua non-recurring event Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  39. 39. Net Income / Free Cash Flow Net Income - US$ Million Free Cash Flow - US$ Million 9.1% 4.6% 277 3.2% 105 414 0.1% 55 65 155 2 20 25 (73) (30) -4.5% (77) (70) (76) (50) (60) (60) (40) (55) (58) (65) -92 (112) (138) (174) 3Q11 4Q11 1Q12 2Q12 3Q12 3Q11 4Q11 1Q12 * 2Q12* 3Q12 Free cash flow Net cash generated (used) by operating activities* Additions to PP&E Additions to Intangible US$ Net Income Net Margin US$ 2010 330 6.2% 2010 287 2011 112 1.9% 2011 1 40* Reflects re-calculation of Company’s income tax base * Net of Financial assets adjustment Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  40. 40. Indebtedness Profile / Net Cash Indebtedness Maturity Net Cash - US$ Million 15% 17%26% 26% 22% 6.1 6.0 4.84.5 4.2 446 85% 83%74% 74% 78% 302 290 193 1233Q11 4Q11 1Q12 2Q12 3Q12 3Q11 4Q11 1Q12 2Q12 3Q12 Long-term Short-term Loans Average Maturity (Years) Total Debt 3Q12 US$ 2.08 Billion Total Cash 3Q12 US$ 2.21 Billion 41 Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  41. 41. Investments US$ Million 350 200 176 132 100 52 RESEARCH DEVELOPMENT CAPEX 42 YTD 2012 2012 Outlook Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  42. 42. Investors’ Return EPADS and Pay Out Dividend Yield (%) 115% 68% 53% 52% 34% 35% 26% 4.34 2.64 2.57 3.28 2.11 2.14 1.68 2.91 1.83 2.23 2.13 2.01 0.62 2006 2007 2008 2009* 2010* 2011* 2006 2007 2008 2009 2010 2011 EPADS Pay Out 43 2006-2008: US GAAP* 2009-2011: IFRS Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  43. 43. Ownership Structure 724,040,044 Voting Shares 44 June, 2012 Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  44. 44. 45 Investor RelationsThis information is property of Embraer and cannot be used or reproduced without written permission.
  45. 45. Sustainability Initiatives ISO 14001 and OHSAS 18001 Certifications Brazilian Alliance for Bio-fuel 1st ethanol powered aircraft in the World Social Activities Reforestation Projects Ipanema Recycling 46Corporate Values Greener Technology Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  46. 46. Lean ResultsE-Jets Final Assembly Line Transformation“Dock” layout - 2008 Assembly Line – 2009 Assembly Line – 2011 Performance indicators May/2008 July/2009 Sep/2009 June/2010 Mar/11 Out/11 (15ac/month) (10ac/month) (10ac/month) (8ac/month) (10ac/month) (12ac/month) Number of positions 12 6 5 4 4 4 Cycle time (days) 18 12 10 8 8 7 Work in process (US$mi) 212 106 95 89 68 68Number of non-conformityper a/c 32 7 1,7 0 0 0 Over time (% of work 47 hours) 10 1,5 1,5 0,2 0 0 Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  47. 47. P3E Results Kaizen - E-Jets Cycle Reduction Cost of Non Quality Reduction Lead Time (E-Jets) Cost of Non Quality 40% 44% 2005 2006 2007 2008 2009 2010 2011 2008 2009 201040% reduction on the production cycle 44% reduction on CNQ 48 Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  48. 48. “Boa Idéia” Program Evolution 28,3 Cost: US$ 18.9 mi 22,7 24,0 22,7 Benefit: US$ 175.5 mi 14,5 12,7 10,7 10,6 9,1 8,4 7,2 3,5 3,1 1,6 2,5 2,2 2,5 0,9 1,2 1,6 1,30,4 0,5 0,8 49 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.
  49. 49. 50 Investor RelationsThis information is property of Embraer and cannot be used or reproduced without written permission.
  50. 50. Forward Looking StatementThis presentation includes forward-looking statements or statements about events orcircumstances which have not occurred. We have based these forward-looking statementslargely on our current expectations and projections about future events and financial trendsaffecting our business and our future financial performance. These forward-lookingstatements are subject to risks, uncertainties and assumptions, including, among other things:general economic, political and business conditions, both in Brazil and in our market. Thewords “believes,” “may,” “will,” “estimates,” “continues,” “anticipates,” “intends,” “expects” andsimilar words are intended to identify forward-looking statements. We undertake noobligations to update publicly or revise any forward-looking statements because of newinformation, future events or other factors. In light of these risks and uncertainties, theforward-looking events and circumstances discussed in this presentation might not occur. Ouractual results could differ substantially from those anticipated in our forward-lookingstatements. 51 Investor Relations This information is property of Embraer and cannot be used or reproduced without written permission.

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