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22
Company Highlights
3
HighlightsHighlights
Investment Grade rating by Moody’s and S&P.
Strong Balance sheet with solid Net cash position.
Comp...
4
Global BusinessGlobal Business
Operations in Brazil, USA, Europe and Asia
Dual listed in Brazil’s Bovespa (1989) and NYS...
5
60
160 161
131
101
148 141 130
169
204
244
96
32
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
5
Airc...
6
5,250
764
1,354
1,837
2,762 2,927
2,526
2,144
3,441
3,830 3,760
5,245
6,335
5,466
1997 1998 1999 2000 2001 2002 2003 200...
7
7
Firm Order BacklogFirm Order Backlog
2010
4.1
6.4
11.4 10.7
9.0
10.6 10.1 10.4
14.8
18.8
16.6
15.3
20.9
15.2
2.2 2.3
3...
8
RevenueRevenue
Net Revenue
US$ Billion 2.76 3.83 5.47 3.39
Commercial aviation Executive aviation Aviation services and ...
99
10
Product PortfolioProduct Portfolio
capacity: 70 to 80 seats
range: 2,100 nm (3,900 Km)
capacity: 78 to 88 seats
range: ...
11
Commercial AviationCommercial Aviation
Order Book 3Q10Order Book 3Q10
Firm OrdersFirm Orders OptionsOptions TotalTotal ...
12
Worldwide DistributionWorldwide Distribution
Diversified Customers Across 5 Continents
Asia Pacific /
China
14%
Middle ...
13
EE--Jets DeploymentJets Deployment
World
8%
21%
8%
21%
21%
Natural
Growth
29%
6%
29%
6%
20%20% 7%
8%
7%
8%
5%5%
7%
32%
...
14
Around 6,875 jet deliveries (30-120 seats) in the next 20 years (US$ 200 bi)
Embraer MarketEmbraer Market
Forecast (201...
15
B717-200
B737-200
B737-500
F70 F28
F100
DC-9
Bae 146
TU-134
YAK-42
0
50
100
150
200
250
300
350
5 15 25 35
NumberofAirc...
16
17
Product PortfolioProduct Portfolio
Large
Aircraft Model
Phenom 100
Phenom 300
Legacy 450
Legacy 500
Legacy 600
Lineage ...
18
Product PortfolioProduct Portfolio
19
25% 24% 22% 21% 20%
33% 35% 37% 40%
33%
7% 7% 7% 6%
9%
12% 13% 13% 14%
11%
2.7% 3.1% 3.5% 3.3%
14.0%
19% 16% 16% 14% 11...
Industry Deliveries (units)
20112011--20 Market Forecast20 Market Forecast
World DeliveriesWorld Deliveries
0
40
80
120
16...
21
Business Jets TrafficBusiness Jets Traffic
2005
2006
2007
2008
2009
2010
20,000
30,000
40,000
50,000
60,000
Jan Feb Mar...
22
Pre Owned MarketPre Owned Market
Fleet for SaleFleet for Sale
0
500
1000
1500
2000
2500
3000
3500
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q...
23
24
Defense ProductsDefense Products
and Servicesand Services
Advanced Training and
Light Attack
Transport of AuthoritiesIS...
• Firm orders: 172 aircraft
• Brazil: 99
• Colombia: 25
• Dominican Republic: 8
• Chile: 12
• Ecuador: 18
• Undisclosed: 1...
26
• Currently in the “Initial Definition Phase”
• Market Forecast 2025: 700 aircraft / US$ 50+ bi
• New tactical military...
27
Financial Results
2828
Business HighlightsBusiness Highlights
Legacy 650 certified by ANAC and EASA. Deliveries in 4Q10.
Argentina’s Austral...
2929
Financial HighlightsFinancial Highlights
Stable net cash position of US$ 623.8 million.
EBIT of US$ 63 million and EB...
30
DeliveriesDeliveries
30
30 28
21
29
22
55
17
39
22
5 8 3 1 2
20
3Q09 4Q09 1Q10 2Q10 3Q10
2010 projected deliveries
• 90...
3131
RevenueRevenue
66%
44%
53%
61% 58%
16%
26% 12%
14% 19%
6%
16%
19%
13% 7%
12% 14% 16% 12% 16%
3Q09 4Q09 1Q10 2Q10 3Q10...
3232
Net Revenues andNet Revenues and
Gross MarginGross Margin
US Gaap - US$ Million
Net Revenues Gross Margin
IFRS - US$ ...
3333
Income from OperationsIncome from Operations
US Gaap - US$ Million
Income from Operations Operating Margin
IFRS - US$...
3434
EBITDAEBITDA
US Gaap - US$ Million
EBITDA EBITDA Margin
IFRS - US$ Million
90 89 80
139
80
5.6%
8.1%
10.2%
7.7%
7.2%
...
3535
Net IncomeNet Income
Net Income Net Margin
US Gaap - US$ Million IFRS - US$ Million
99
70
35
146
58
9.4%
5.2%
3.6%
9....
3636
Free Cash FlowFree Cash Flow
US Gaap - US$ Million IFRS - US$ Million
6
383
(57)
220
(60)
3Q09 4Q09 1Q10 2Q10 3Q10
23...
3737
Indebtedness ProfileIndebtedness Profile
Net CashNet Cash (USGAAP)(USGAAP)
Total Debt 3Q10: US$ 1.43 Billion
Long-ter...
3838
2010 Guidance
Revision
3939
2010 Guidance and2010 Guidance and
OutlookOutlook
7.25%
Current GuidanceCurrent Guidance -- 2Q102Q10 New GuidanceNew ...
40
4141
Forward Looking StatementForward Looking Statement
This presentation includes forward-looking statements or statement...
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Embraer november 2010 redburn

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Transcript of "Embraer november 2010 redburn"

  1. 1. 11
  2. 2. 22 Company Highlights
  3. 3. 3 HighlightsHighlights Investment Grade rating by Moody’s and S&P. Strong Balance sheet with solid Net cash position. Company established in 1969, with business in four segments. Privatized in 1994 and listed in USA in 2000. Broad customer base in commercial, executive and defense aviation segments. Global footprint. Highly experienced management team.
  4. 4. 4 Global BusinessGlobal Business Operations in Brazil, USA, Europe and Asia Dual listed in Brazil’s Bovespa (1989) and NYSE (2000) Melbourne* Fort Lauderdale Nashville USA Taubaté Botucatu Gavião Peixoto São José dos Campos Brazil Évora* Alverca Portugal Le Bourget Villepinte France Harbin Beijing China Singapore Singapore Countries of Operation Factories Offices Service Centers Contracted/ Planned Authorized Network* Under construction One of Brazil’s largest exporters of manufactured goods Diversified customer-base across five continents Mesa Widson Locks São Paulo Spare Parts Distribution Centers Louisville Minneapolis
  5. 5. 5 60 160 161 131 101 148 141 130 169 204 244 96 32 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 5 Aircraft DeliveriesAircraft Deliveries * Phenom Jets *2 *98 Through 3Q10 YTD: 154 aircraft delivered
  6. 6. 6 5,250 764 1,354 1,837 2,762 2,927 2,526 2,144 3,441 3,830 3,760 5,245 6,335 5,466 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010* 6 Net RevenueNet Revenue (US GAAP)(US GAAP) US$ Million * Estimated Guidance 2010: Net Revenue - US$ 5.25 billion
  7. 7. 7 7 Firm Order BacklogFirm Order Backlog 2010 4.1 6.4 11.4 10.7 9.0 10.6 10.1 10.4 14.8 18.8 16.6 15.3 20.9 15.2 2.2 2.3 3.9 4.2 4.2 3.1 2.6 2.8 2.8 3.0 3.8 3.3 3.0 3.0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2Q10 3Q10 US$ Billion Firm Order Backlog Backlog/Revenue (Years)
  8. 8. 8 RevenueRevenue Net Revenue US$ Billion 2.76 3.83 5.47 3.39 Commercial aviation Executive aviation Aviation services and othersDefense 88% 71% 62% 58% 1% 7% 16% 15% 11% 9% 13% 7% 11% 13% 14%4% 2000 2005 2009 YTD10
  9. 9. 99
  10. 10. 10 Product PortfolioProduct Portfolio capacity: 70 to 80 seats range: 2,100 nm (3,900 Km) capacity: 78 to 88 seats range: 2,000 nm (3,700 Km) capacity: 98 to 114 seats range: 2,400 nm (4,500 Km) capacity: 108 to 122 seats range: 2,200 nm (4,100 Km) capacity: 37 seats range: 1,750 nm (3,250 Km) capacity: 50 seats range: 1,550 nm (2,900 Km) capacity: 50 seats range: 2,000 nm (3,700 Km) capacity: 44 seats range: 1,650 nm (3,050 Km)
  11. 11. 11 Commercial AviationCommercial Aviation Order Book 3Q10Order Book 3Q10 Firm OrdersFirm Orders OptionsOptions TotalTotal DeliveriesDeliveries FirmFirm BacklogBacklog ERJ 145 Family 890 - 890 886 4 EMBRAER 170 191 47 238 180 11 EMBRAER 175 173 278 451 130 43 EMBRAER 190 457 356 813 301 156 EMBRAER 195 95 66 161 60 35 TOTAL ETOTAL E--JETSJETS 916916 747747 1.6631.663 671671 245245 TOTALTOTAL 1.8061.806 747747 2.5532.553 1.5571.557 249249
  12. 12. 12 Worldwide DistributionWorldwide Distribution Diversified Customers Across 5 Continents Asia Pacific / China 14% Middle East / Africa 21% Europe / CIS 33% Latin America 17% North America 15% Firm Orders Asia Pacific / China 14% Middle East / Africa 9% Europe / CIS 21% North America 44% Latin America 12% Embraer Bombardier Sukhoi Boeing Airbus Antonov Comac Mitsubishi Commercial Jets Market Share Evolution Worldwide 0% 15% 30% 45% 60% 75% 1995 1998 2001 2004 2007 2010 Considering Accumulated Firm Orders: 30-120 Seats Jets 44% 43% 4% 2% 3% 3% 1% 0%
  13. 13. 13 EE--Jets DeploymentJets Deployment World 8% 21% 8% 21% 21% Natural Growth 29% 6% 29% 6% 20%20% 7% 8% 7% 8% 5%5% 7% 32% 7% 32% 11%11% 50% Right-sizing North America 57% 8% North America 57% 8% Europe 40% Europe 40% Latin America 49% Latin America 49% Africa 52% Africa 52% Middle East 62% 5% Middle East 62% 5% China 12% China 12% Asia Pacific 50% 11% Asia Pacific 50% 11%8%8% 14%14% New Markets 6%6% 20% 31%20% 31% 5% 33% 5% 33% 49%49% 39%39% 20% 8%8% Replacement of old Jets 25%25% 33% 7% 33% 7% 7%7% 9%
  14. 14. 14 Around 6,875 jet deliveries (30-120 seats) in the next 20 years (US$ 200 bi) Embraer MarketEmbraer Market Forecast (2010Forecast (2010--2029)2029) North America 840 32% North America 2,400 35% Latin America 315 12% Latin America 575 8% Europe 580 22% Europe 1,510 22% Russia / CIS 155 6% Russia / CIS 405 6% Africa 80 3% Africa 220 3% Middle East 105 4% Middle East 240 4% Asia Pacific 210 8% Asia Pacific 575 8% China 340 13% China 950 14%Projected Deliveries - Jets Market Segment (Seats) 2010 – 2019 Deliveries 30-60 60 61-90 1,015 91-120 1,550 30-120 2,625 Market Segment (Seats) 2010 – 2029 Deliveries 30-60 475 61-90 2,515 91-120 3,885 30-120 6,875
  15. 15. 15 B717-200 B737-200 B737-500 F70 F28 F100 DC-9 Bae 146 TU-134 YAK-42 0 50 100 150 200 250 300 350 5 15 25 35 NumberofAircraft Average Age (years) Nearly 1,000 aircraft with more than 15 years old (Jets 61-120 seats) World ReplacementWorld Replacement OpportunitiesOpportunities
  16. 16. 16
  17. 17. 17 Product PortfolioProduct Portfolio Large Aircraft Model Phenom 100 Phenom 300 Legacy 450 Legacy 500 Legacy 600 Lineage 1000 Seats / Range 4 / 1,160 nm 6 / 1,800 nm 4 to 8 / 2,200 to 2,300 nm 4 to 8 / 2,800 to 3,200 nm 10 to 14 / 3,250 nm 13 to 19 / 4,400 to 4,500 nm Entry Light Mid-light Mid-size Ultra-large Super Mid-Size Certified: 2008 Certified: 2009 Expected Certification: 2013 Certified: 2001 Certified: 2008 Expected Certification: 2012 Ultra-Long Range Competitors • Cessna - Mustang CJ1+ • Cessna - CJ3 • Hawker - H400XP • Bombardier - Lear 60XR • Cessna - XLS+ • Cessna - Sovereign • Hawker - H900XP • Bombardier - Challenger 300/605 • Dassault – Falcon 2000EX/LX • Airbus - A318 Elite Legacy 650 10 to 14 / 3,900 nm Certified: 2010 • Bombardier – Global XRS • Gulfstream – G550
  18. 18. 18 Product PortfolioProduct Portfolio
  19. 19. 19 25% 24% 22% 21% 20% 33% 35% 37% 40% 33% 7% 7% 7% 6% 9% 12% 13% 13% 14% 11% 2.7% 3.1% 3.5% 3.3% 14.0% 19% 16% 16% 14% 11% 2% 3% 2% 1% 2% 2005 2006 2007 2008 2009 %OEMShare–Totalunits Total 749 885 1,040 1,154 870 Market ShareMarket Share Others Hawker-BeechEmbraer Gulfstream Dassault Cessna Bombardier Deliveries share (units)Revenue share (US$ - based on B&CA list prices) Market Forecast 2010: 750 units. Embraer Forecast: 137 units. Market Forecast 2010: $16.2 Bi. Embraer Guidance: $1.1 Bi. 30% 29% 28% 29% 28% 16% 16% 17% 18% 12% 11% 11% 12% 12% 18% 23% 23% 23% 24% 21% 3.5% 3.9% 4.7% 4.2% 6.5% 10% 9% 8% 8% 8% 5% 8% 6% 5% 6% 2005 2006 2007 2008 2009 %OEMShare–TotalRevenuesUS$ $12.9Bi $16.4Bi $19.0Bi $21.9Bi $17.0Bi
  20. 20. Industry Deliveries (units) 20112011--20 Market Forecast20 Market Forecast World DeliveriesWorld Deliveries 0 40 80 120 160 200 240 2000-10 2011-20 US$ 169.6 Bi (9,029 jets) US$ 210 Bi (10,000 jets) Historic Forecast Industry Revenues More than 10,000 jets: US$ 210 billion over the next 10 years
  21. 21. 21 Business Jets TrafficBusiness Jets Traffic 2005 2006 2007 2008 2009 2010 20,000 30,000 40,000 50,000 60,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec European Bizjet Flight Activity 2005 2006 2007 2008 2009 2010 100,000 130,000 160,000 190,000 220,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec US/FAA Bizjet FlightActivity
  22. 22. 22 Pre Owned MarketPre Owned Market Fleet for SaleFleet for Sale 0 500 1000 1500 2000 2500 3000 3500 Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4 9 9 0 0 0 1 0 2 0 3 0 4 0 5 0 6 0 7 0 8 0 9 10 Units 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% 24% 26% 28% %ofactivefleet % for sale (per total fleet in operation) Business Jets For Sale Source: Embraer analysis – October 2010 fleet older than 10 yrs fleet from 6 to 10 yrs fleet up to 5 yrs and positions % for sale (per total fleet in operation) up to 10 yrs % for sale fleet up to 5 yrs positions 15.0% / 10.5% 2647 jets / 896 jets 2008: Net increase of 1,100 a/c 2009: Net increase of 33 a/c 2010TD: Net decrease of 157 a/c
  23. 23. 23
  24. 24. 24 Defense ProductsDefense Products and Servicesand Services Advanced Training and Light Attack Transport of AuthoritiesISR (Intelligence, Surveillance and Reconnaissance) Modernization Programs Command and Control Systems Military Tactical Transport Services
  25. 25. • Firm orders: 172 aircraft • Brazil: 99 • Colombia: 25 • Dominican Republic: 8 • Chile: 12 • Ecuador: 18 • Undisclosed: 10 Deliveries: 146 aircraft • To be delivered: 26 aircraft • Prospects: • South East Asia • Africa • Americas Ref.: September 2010 • Training and COIN aircraft Market Forecast 2020 • 700 aircraft / US$ 8 bi Super TucanoSuper Tucano
  26. 26. 26 • Currently in the “Initial Definition Phase” • Market Forecast 2025: 700 aircraft / US$ 50+ bi • New tactical military transport aircraft • Payload: 23 ton / Range: 1400 nm • Contract signed with Brazilian Air Force in April 2009 Length: 33.81 m (110.9 ft) Wingspan: 35.06 m (115.0 ft) Height: 10.26 m (33.7 ft) EMBRAER KCEMBRAER KC--390390
  27. 27. 27 Financial Results
  28. 28. 2828 Business HighlightsBusiness Highlights Legacy 650 certified by ANAC and EASA. Deliveries in 4Q10. Argentina’s Austral received its first EMBRAER 190. Sale of 37 E-Jets at Farnbourogh. Sale of 10 + 5 EMBRAER 190 jets to Air Lease Corp. NetJets buys 50 Phenom 300, plus 75 options at NBAA. Brazil, Chile, Colombia, Portugal, Czech Republic and Argentina signed LOI for up to 60 KC-390 aircraft. Embraer expands its Customer Support in China.
  29. 29. 2929 Financial HighlightsFinancial Highlights Stable net cash position of US$ 623.8 million. EBIT of US$ 63 million and EBIT margin of 6.0%. YTD EBIT margin of 7.3%. Net income totaled US$ 98.5 million. Earnings per ADS of US$ 0.5443. Net revenues of US$ 1.04 billion and gross margin of 22.1%. Firm order backlog remained stable at US$ 15.3 billion.
  30. 30. 30 DeliveriesDeliveries 30 30 28 21 29 22 55 17 39 22 5 8 3 1 2 20 3Q09 4Q09 1Q10 2Q10 3Q10 2010 projected deliveries • 90 commercial jets • 17 Legacy / Lineage • 120 Phenom PhenomCommercial Jets Legacy and Lineage 97 70 43 78 13 6 9M09 9M10
  31. 31. 3131 RevenueRevenue 66% 44% 53% 61% 58% 16% 26% 12% 14% 19% 6% 16% 19% 13% 7% 12% 14% 16% 12% 16% 3Q09 4Q09 1Q10 2Q10 3Q10 Commercial aviation Executive aviation Aviation services and othersDefense 1.04 Net Revenue US$ Billion 1.25 1.61 1.00 1.35
  32. 32. 3232 Net Revenues andNet Revenues and Gross MarginGross Margin US Gaap - US$ Million Net Revenues Gross Margin IFRS - US$ Million 1,246 1,610 990 1,354 1,043 18.8% 20.8% 21.7% 21.4% 22.1% 3Q09 4Q09 1Q10 2Q10 3Q10 1,358 992 1,250 1,614 1,044 20.6%20.8% 20.2% 17.9% 19.7% 3Q09 4Q09 1Q10 2Q10 3Q10
  33. 33. 3333 Income from OperationsIncome from Operations US Gaap - US$ Million Income from Operations Operating Margin IFRS - US$ Million 39 71 122 91 66 9.0% 6.4%7.2% 2.4% 7.3% 3Q09 4Q09 1Q10 2Q10 3Q10 68 66 57 126 63 6,0% 9,3% 5,8% 4,1% 5,5% 3Q09 4Q09 1Q10 2Q10 3Q10
  34. 34. 3434 EBITDAEBITDA US Gaap - US$ Million EBITDA EBITDA Margin IFRS - US$ Million 90 89 80 139 80 5.6% 8.1% 10.2% 7.7% 7.2% 3Q09 4Q09 1Q10 2Q10 3Q10 151 105 117 166 131 12.1% 11.8% 6.5% 12.2% 12.5% 3Q09 4Q09 1Q10 2Q10 3Q10
  35. 35. 3535 Net IncomeNet Income Net Income Net Margin US Gaap - US$ Million IFRS - US$ Million 99 70 35 146 58 9.4% 5.2% 3.6% 9.1% 4.6% 3Q09 4Q09 1Q10 2Q10 3Q10 122 95 24 57 126 2.4% 12.1% 9.8% 4.2% 5.9% 3Q09 4Q09 1Q10 2Q10 3Q10
  36. 36. 3636 Free Cash FlowFree Cash Flow US Gaap - US$ Million IFRS - US$ Million 6 383 (57) 220 (60) 3Q09 4Q09 1Q10 2Q10 3Q10 23 364 (44) 253 (42) 3Q09 4Q09 1Q10 2Q10 3Q10
  37. 37. 3737 Indebtedness ProfileIndebtedness Profile Net CashNet Cash (USGAAP)(USGAAP) Total Debt 3Q10: US$ 1.43 Billion Long-term Short-term Loans Average Maturity (Years) Indebtedness Maturity Total Cash 3Q10: US$ 2.05 Billion Net Cash (USGAAP)(USGAAP) 78% 47% 29% 75% 94% 53% 71% 6% 22%25% 6.15.8 5.0 2.6 4.9 3Q09 4Q09 1Q10 2Q10 3Q10 71 503 459 659 624 3Q09 4Q09 1Q10 2Q10 3Q10
  38. 38. 3838 2010 Guidance Revision
  39. 39. 3939 2010 Guidance and2010 Guidance and OutlookOutlook 7.25% Current GuidanceCurrent Guidance -- 2Q102Q10 New GuidanceNew Guidance US$ 380 million ~12% US$ 340 million Net Revenues EBIT EBIT margin US$ 5.25 billion 6.50% R&D PP&E US$ 160 million US$ 140 million US$ 420 millionEBITDA EBITDA margin 8.0% US$ 100 million~30% 8.75% US$ 460 million ~10% Current OutlookCurrent Outlook New OutlookNew Outlook
  40. 40. 40
  41. 41. 4141 Forward Looking StatementForward 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.
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