IR Institutional Presentation - September 2013
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IR Institutional Presentation - September 2013 IR Institutional Presentation - September 2013 Presentation Transcript

  • Job PositionPhone: +55 12 3927 4404 | investor.relations@embraer.com.br | www.embraer.com Set/13
  • Corporate and Business Strategy • Product strategy. • Diversification and expansion of customer base. • Excellence in Customer Experience (ECE). • Market share growth. • Margins improvement. • Product strategy and customer support focus. • Organic growth. • Margins enhancement through the P3E. • Business and revenues diversification. • Establish Embraer as the defense house of Brazil. • Organic growth and acquisitions. 2
  • 37 21 19 83 77 16 22 10 2 98 126 31 2008 2009 2010 2011 2012 1H13 165 125 101 105 39 106 2008 2009 2010 2011 2012 1H13 Aircraft Deliveries Large Jets - Legacy & Lineage Light Jets - Phenom Commercial Jets Executive Jets 3 2013 deliveries estimates • 90 - 95 commercial jets • 25 - 30 executive large jets • 80 - 90 executive light jets
  • Net Revenues US$ Million 2008: USGAAP 2009-2012: IFRS 4 2013 Outlook: US$ 5.9 – 6.4 Billion 6,335 5,498 5,364 5,803 6,178 2,643 2008 2009 2010 2011 2012 2013 YTD
  • Revenues Breakdown 5 61% 65% 61% 23% 19% 21% 15% 15% 17% 1% 1% 1% 2010 2011 2012 Net Revenues by Segment Net Revenues by Region Commercial Aviation Executive Aviation Others Defense & Security Revenues US$ Billion 5.80 6.185.36 Revenues US$ Billion5.80 6.185.36 13% 20% 24% 33% 25% 31% 13% 17% 14% 15% 11% 3% 9% 11% 14% 5% 9% 5% 12% 7% 9% 2010 2011 2012 North America Brazil Europe Asia Pacific South & Central America Africa & Middle East China
  • Firm Order Backlog 6 US$ Billion 12.9 12.4 12.5 13.3 17.1 2Q12 3Q12 4Q12 1Q13 2Q13
  • 7
  • Embraer Commercial Aviation OVER 80 AIRLINES IN MORE THAN 50 COUNTRIES 8
  • Product 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) 9
  • E-Jets Customer Base Evolution 10
  • 11 E-Jets Family Order Book – 2Q13 E-JETS Firm orders Deliveries Firm Backlog E170 193 185 8 E175 315 166 149 E190 563 473 90 E195 142 123 19 E175-E2 100 - 100 Total 1,313 947 366
  • 0% 10% 20% 30% 40% 50% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Worldwide Distribution 12 E-Jets Customer Base by Business Model (% of E-Jets Fleet+Backlog) Firm Orders Commercial Jets – Net Orders Market Share Considering Accumulated Net Orders 60-120 Seats Jets Backlog Europe & CIS Middle East & Africa Latin America North America Asia Pacific & China Low Cost Carriers Regional Airlines Network Airlines 18% 28%54% 13% 5% 20% 14% 48% 7% 4% 10% 8% 71%
  • E-Jets Deployment helping airlines to be more efficient 13
  • Embraer Market Forecast (2012-2031) North America 840 32% North America 2,195 32% Latin America 315 12% Latin America 670 10% Europe 580 22% Europe 1,460 22% Russia / CIS 155 6% Russia / CIS 445 7% Africa 80 3% Africa 210 3% Middle East 105 4% Middle East 305 4% Asia Pacific 210 8% Asia Pacific 505 7% China 340 13% China 1,005 15% 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) 2012–2031 Deliveries 30-60 405 61-90 2,625 91-120 3,765 30 - 120 6,795 • 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 Around 6,795 jet deliveries (30-120 seats) in the next 20 years (US$ 315 bi) 14
  • Competition 61-120 seats – New Scenario 15
  • 17 Right Capacities to Match Market Demand 70 80 90 100 110 120 130 +1 row same +3 rows 20% 20% 97 Seats DC 106 Seats SCE190-E2 118 Seats DC 132 Seats SCE195-E2 80 Seats DC 88 Seats SCE175-E2
  • 18 E2 New Features – Not Just a Re-engine E175-E2 E190-E2 & E195-E2 New Wing More efficient, high aspect ratio metallic wing. Raked wing tip. Improved Avionics 4 larger 13”x10” displays and touchscreen controls Main Landing Gear Enabling larger engines. Gear doors for improved fuel efficiency Optimized Wing/Engine Different wing and engine combinations for E175-E2 and E190/195-E2 New Engines Larger fan diameter and improved fuel efficiency
  • 19 >> Range E190-E2 E195-E2 E175-E2 Range (NM) Full PAX (SC), LRC, typical reserves, 100 nm alternate 1, 920 1,920 E175 E175-E2 2,350 2,800 E190 E190-E2 2,000 2,000 E195 E195-E2 >>
  • 20 E-Jets & E-Jets E2 Pilot Commonality  Highest Commonality among E-Jets E2 models (AAA)  Fewer than 3 days transition training between the two E-Jet generations  Full Flight Simulator or High- Level Flight Training Device Not required
  • 21 Main Suppliers New Generation Power Plant Improved AvionicsFlaps and Slats Actuation Systems; AMS Horizontal Stabilizer Actuation System Wheels & Brakes; APU; Electrical System Fly-by-wire Primary Flight Controls Aft fuselage segments, rudder and elevators Vertical and horizontal stabilizers Ailerons and Spoilers
  • 22 Fuel Burn Improvements Fuel Burn per Seat E175-E2 (80 seats) vs. E175 (76 seats) E190-E2 (97 seats) vs. E190 (97 seats) E195-E2 (118 seats) vs. E195 (106 seats) -16% -23% -16% 0% -5% -10% -15% -20% -25% Target values for 600 nm sector; Dual Class configuration;
  • 23 New Competitive Scenario 180+ 160 140 120 100 80 SSJ95/100 MRJ90 ARJ21 CRJ900 CRJ1000 CRJ700 Capacity (Single Class) 737-7 MAXA319neo A320neo 737-8MAX CS100 CS300 E175-E2 E190-E2 E195-E2
  • 24 Applications & Market Size 20-Year Market Forecast (70 to 130-seat Jets) - 6,400 Deliveries*  Most efficient “hub feeder”  Lower cost-per-seat than current Turboprops  Efficient complement to narrowbody operations  New market developer  Capacity growth for current E-Jet operators  Similar cost-per-seat to A320neo and 737-8 Max  Low Cost operation in mid-density markets E190-E2 E195-E2 E175-E2 * Embraer market forecast
  •  Embraer investment on research, development and CAPEX for the E- Jets E2 family will be US$ 1.7 billion  Investment will be supported by Embraer’s cash generation and debt  Investments span from 2013 - 2020 with more concentration in 2014 - 2017 25 Program Investment
  • 26 List Prices (US$ Million) Preliminary Information as of January, 2013 -- US$ 3.3/USGal, 10 years NPV @ 9% rate Better Fuel Consumption Gain • E175 E2: US$ 4.8M • E190 E2: US$ 7.0M • E195 E2: US$ 6.5M Maintenance Cost Reduction Gain • US$ 1.0~1.5M E175 AR (8E5): 42.9 E190 AR (10E5):47.4 E195 AR (10E5): 50.1 E-Jets E175-E2 46.8 E190-E2 53.6 E195-E2 60.4 delta: 3.9 M delta: 6.2 M delta: 10.3 M E-Jets E2 Seat Capacity Increase Gain • E175 E2: US$ 1.6M (4 seats) • E195 E2: US$ 4.8M (12 seats)
  • 27 Entry into Service E195-E2 EIS | 2019 E190-E2 EIS | 1H 2018 E175-E2 EIS | 2020
  • Embraer Executive Jets MORE THAN 600 AIRCRAFT IN-SERVICE WORLDWIDE 29
  • Product Portfolio 30 Large Aircraft Model Phenom 100 Phenom 300 Legacy 450 Legacy 500 Legacy 600 Lineage 1000 Seats / Range up to 8 occupants/ 1,178 nm up to 11 occupants/ 1,971 nm 7 to 9 passengers/ 2,300 nm 8 to 12 passengers/ 3,000 nm 13 to 14 passengers/ 3,400 nm 13 to 19 passengers/ 4,500 nm Entry Light Mid-light Mid-size Ultra-large Super mid-size Certified: 2008 Certified: 2009 Under development Certified: 2001 Certified: 2008 Ultra-long range Competitors • Cessna - Mustang/M2 • HondaJet • Cessna - CJ2+/CJ3/CJ4 • Bombardier - Learjet 40XR/70 • Bombardier - Learjet 45XR/75 • Cessna - XLS+/Latitude • Bombardier - Learjet 85 • Cessna - Sovereign • Gulfstream – G150 • Bombardier - CL605/GL5000 • Dassault – Falcon2000LXS/ 900LX • Gulfstream - G350/G450 • Airbus - ACJ 318/319/320 • Boeing – BBJ/BBJ2/BBJ3 Legacy 650 13 to 14 passengers/ 3,900 nmCertified: 2010 • Bombardier - GL6000/GL7000/ GL8000 • Gulfstream – G500/G550/G650 • Dassault – Falcon 7X • Bombardier - CL300/CL850 • Cessna – X/Longitude • Dassault - Falcon 2000S • Gulfstream - G280
  • Market Share Others Hawker-BeechEmbraer Gulfstream Dassault Cessna Bombardier Deliveries share (units)Revenues share (US$ - based on B&CA list prices) Market Revenues 2012: US$ 17.7 billion Embraer Revenues: US$ 1.3 billion Market Deliveries 2012: 663 units Embraer Deliveries: 99 units 31
  • 2.260 0 500 1.000 1.500 2.000 2.500 Q2 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 USCorporateProfits(billionofdollars) Economic Indicators 32 U.S. Corporate Profits Worldwide HNWI Population New record levels 7,0 7,2 7,7 8,2 8,8 9,6 10,1 8,6 10,1 10,8 11,0 11,9 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Millionpeople North America Europe Asia-Pacific Latin america Middle East Africa
  • 0 5 10 15 20 25 30 35 2000 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2014-2023 Market Forecast – New Jets 33 8,350 ~ 9,244 jets  US$ 218 ~ 250 billion over the next 10 years Source: Embraer 2014-2023 Forecast Another Downturn 8,350 units US$ 218 billion E.C.2013,US$Bi Mild Growth 9,244 units US$ 250 billion
  • 34 North America 4,530 a/c (49%) US$ 117 Bi (47%) Europe, Middle East & Africa 2,330 a/c (25%) US$ 70 Bi (28%) Asia Pacific 725 a/c (8%) US$ 21 Bi (8%) Latin America 860 a/c (9%) US$ 15 Bi (6%) China 805 a/c (9%) US$ 29 Bi (11%) 2014-2023 Market Forecast – New Jets
  • Business Jets Pre-Owned Market Inventory 35 Source: Jetnet and Embraer Analysis, September 2013. 0% 4% 8% 12% 16% 20% 24% 28% 0 500 1000 1500 2000 2500 3000 3500 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 %ofactivefleet Units Fleet older than 10 yrs Fleet from 6 to 10 yrs Fleet up to 5 yrs Positions Fleet up to 5 yrs and positions Total fleet % for sale Up to 10 yrs % for sale 2008: Net increase of 1100 a/c 2009: Net increase of 33 a/c 2010: Net decrease of 155 a/c 2011: Net decrease of 140 a/c 2012: Net decrease of 43 a/c 2013: Net increase of 1 a/c 12.8% 2467 jets 8.2% 664 jets
  • Service Center Network 36 Embraer Service Center (5) Authorized Service Center (62) 12 new centers worldwide in 2012
  • OVER 52 ARMED FORCES IN 50 COUNTRIES Embraer Defense & Security 38
  • Embraer Defense & Security, partners and affiliated companies Embraer Defense & Security UAV’s Satellite Land SystemsRadar 39
  • Embraer Defense & Security Results Não contabiliza as receitas provenientes da OGMA nos anos de 2006 a 2010. Revenues Evolution (US$ Million) EBIT Evolution (%) Backlog Evolution (US$ Billion) CAGR 29% 40
  • Brazil: 99 Colombia: 25 Dominican Republic: 8 Chile: 12 Ecuador: 18 Indonesia: 16 Greystone (TacAir): 1 Mauritania: undisclosed Burkina Faso: 3 Angola: 6 USA: 20 Guatemala: 6 Super Tucano Total Market Forecast: 344 aircraft / US$ 4.1 billion 1,700 840 1,600 Medium-term Long-term Short-term Addressable Market Forecast 2025 (US$ million) Partnership with Boeing to provide weapons integration, increasing capabilities of the aircraft. 41 • Firm orders: more than 210 aircraft • More than 170 aircraft delivered
  • EMBRAER KC-390 • A new tactical military transport and tanker aircraft • First flight in 2014 • Six countries letters of intent, totalizing 60 aircraft • Partnership with Boeing to share technical knowledge and to market and sell the KC-390 in certain markets • The Brazilian Air Force (FAB) and Embraer concluded the Preliminary Design Review (Set/12) and the Critical Design Review (Mar/13) Brazil (28) Colombia (12) Argentina (6) Chile (6) Portugal (6) Czech Rep. (2) Total Market Forecast 2025: 728 aircraft / US$ 50+ bi Ref. April13 42
  • A1-MF-5M A-4 Brazilian Navy A-4 12 aircraft 2 prototypes at GPX-CS Brazilian Air Force A-1M 43 aircraft 16 received by Embraer for the modernization Brazilian Air Force F-5M 46 a/c + 11 a/c (2nd batch) 45 already delivered Brazilian Air Force E-99 5 a/c aircraft EMB 145 AEW&C * Considering the market for Tucano modernization Modernization Programs Addressable Market Forecast 2025 (US$ million) Total Market Forecast*: 228 aircraft / US$ 1.5 billion 437 567 505 Medium-term Long-term Short-term Ref. dec/12 43
  • SISFRON implementation Embraer Defense & Security has 100% of participation 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 Systems where Embraer Defense & Security has a major participation UAS, simulators and modernization of avionics systems Air, ground and sea surveillance radars Remote sensing Engine and Component Maintenance Overhaul and Modernization Aerostructure Manufacturing and Assembling JV between Embraer Defense & Security (51%) and Telebras Satellite Security of Critical Infrastructure Public Security (sporting events, cities, states) Systems SISFRON SisGAAZ 44
  • SISFRON Integrated Borders Monitoring System First phase: US$ 420 Million Total estimate: US$ 4 Billion Comprising radars, communication networks, C4I, unmanned air vehicles (UAV) and armored vehicles Brazilian Army Priorities Comm 9% UAV 12% SW 20% Sensors 59% Satellite Estimate: US$ 400 Million Participation in the first Brazilian Geostationary Satellite Ref. dec/12 45
  • New Business •SisGAAz (“Blue Amazon” Integrated Management System) •Security of Critical Infrastructure •Public Security (sporting events, cities, states) 2020 Revenues Breakdown Evolution 2012 46
  • 2013 Outlook
  • 2013 Consolidated Outlook Net Revenues EBIT EBITDAUS$ 530 – 610 Million US$ 5.9 – 6.4 Billion US$ 770 – 900 Million EBITDA margin 13.0% – 14.0%EBIT margin 9.0% – 9.5% 48
  • 49 Deliveries: 80 to 90 light jets 25 to 30 large jets Net Revenues Deliveries: 90 to 95 E-jets Net Revenues US$ 3.20 – 3.35 Billion Other Revenues US$ 50 – 100 Million US$ 1.40 – 1.60 Billion Net Revenues US$ 1.25 – 1.35 Billion 2013 Business Units Outlook
  • 2013 Investment Outlook TOTAL INVESTMENTS: US$ 580 Million Research US$ 100 Million Development US$ 300 Million CAPEX US$ 180 Million 50
  • Net Revenues / SG&A Expenses Net Revenues - US$ Million SG&A Expenses - US$ Million Selling ExpensesG&A Expenses 52 2013 YTD: 2,643 1,715 1,402 1,898 1,086 1,557 2Q12 3Q12 4Q12 1Q13 2Q13 118 111 143 108 75 59 75 53 121 54 2Q12 3Q12 4Q12 1Q13 2Q13 170 218 161 193 175 2013 YTD: 336
  • Income from Operations / EBITDA Income from Operations - US$ Million EBITDA - US$ Million EBIT EBIT Margin EBITDA EBITDA Margin 53 2013 YTD: 175 / 6.6% 101 228 40 197 135 11.5% 7.2% 12.0% 3.6% 8.7% 2Q12 3Q12 4Q12 1Q13 2Q13 2013 YTD: 304 / 11.5% 265 168 310 100 204 15.5% 12.0% 16.3% 9.2% 13.1% 2Q12 3Q12 4Q12 1Q13 2Q13
  • (50) (163) (50) 157 (30) 439 (83) 186 (75) (125) (55) (58) (75) (68) (60) 27 (138) 202 (201) 2 2Q12 3Q12 4Q12 1Q13 2Q13 Net Income / Free Cash Flow Net Income - US$ Million Free Cash Flow - US$ Million Net MarginNet Income Free cash flow Additions to PP&E Net cash generated (used) by operating activities* Additions to Intangible 54 * Net of Financial assets adjustment 2013 YTD: (199) Adjusted Net Income, excluding Deferred Income Taxes 5.9% 92 2013 YTD: 25 / 0.9% 55 65 123 30 (5) 3.2% 4.7% 6.5% 2.8% -0.3% 2Q12 3Q12 4Q12 1Q13 2Q13
  • Indebtedness Profile / Net Cash Indebtedness Maturity Net Cash - US$ Million Long-term Short-term Loans Average Maturity (Years) 55 US$ 2.22 BillionTotal Debt 2Q13 Total Cash 2Q13 US$ 2.28 Billion 84% 85% 22% 17% 78% 83% 94% 16% 15% 6% 6.1 6.0 5.8 5.1 5.4 2Q12 3Q12 4Q12 1Q13 2Q13 290 123 309 98 58 2Q12 3Q12 4Q12 1Q13 2Q13
  • Inventories 56 US$ Million 2008: USGAAP 2009-2012: IFRS 2,530 2,585 2,157 2,510 2,523 2Q12 3Q12 4Q12 1Q13 2Q13
  • Investments 57 127 118 100 300 180 52 RESEARCH DEVELOPMENT CAPEX 2013 Outlook: US$ 580 Million 2013 Outlook2013 YTD US$ Million 2013 YTD: 297
  • EPADS and Pay Out 58 2.14 2.57 1.83 0.62 1.92 52% 26% 34% 116% 26% 2008 2009 2010 2011 2012 EPADS Pay Out 2008: USGAAP 2009-2012: IFRS US$
  • Local Shareholders 28% International Shareholders 72% 729,783,443 Voting Shares Ownership Structure - 2Q13 59 NYSE 50% BM&F BOVESPA 50%
  • Sustainability Initiatives Brazilian Alliance for Bio-fuel Reforestation Projects ISO 14001 and OHSAS 18001 Certifications 1st ethanol powered aircraft in the World Ipanema Recycling Corporate Values Greener Technology Social Activities 61
  • P3E - Lean Results 62 E-Jets Final Assembly Line Transformation E-Jets Wing Junction Line Transformation Performance Indicators 2008 (15 ac/month) 2009 (10 ac/month) 2012 (10 ac/month) Number of positions 12 5 4 Cycle time (days) 18 10 8 Work in Process (US$ Mi) 212 95 68 Number of non- conformity per a/c 32 1.7 0.76 Overtime (% of work hours) 10 1.5 0
  • P3E Results Kaizen - E-Jets Cycle Reduction Cost of Non Quality Reduction 57% 63 40% reduction on the production cycle 40% 44% reduction on CNQ
  • Cost: US$ 21.4 mi Benefit: US$ 200.7 mi “Boa Ideia” Program Evolution 64
  • Investor Relations Phone: +55 12 3927 4404 investor.relations@embraer.com.br www.embraer.com
  • 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. 66