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EMBRAER INVESTOR RELATIONS              Phone: +55 12 3927 4404             investor.relations@embraer.com.br             ...
Corporate and Business Strategy                     • Organic growth.                     • Margins enhancement through th...
Aircraft Deliveries           Commercial Jets                    Executive Jets                                           ...
Net Revenues                      US$ Million                          6,335                               6,178          ...
Revenues Breakdown         Net Revenues by Segment                                   Net Revenues by RegionRevenues       ...
Firm Order Backlog     US$ Billion                                               Executive Defense &         15.4      14....
7
Embraer Commercial Aviation           OVER 80 AIRLINES IN MORE THAN 50 COUNTRIES8
Product Portfolio                                               capacity: 37 seats                  capacity: 70 to 80 sea...
E-Jets Customer Base Evolution10
E-Jets Family Order Book – 4Q12             E-JETS      Firm orders   Deliveries   Firm Backlog           EMBRAER 170     ...
Worldwide Distribution          Commercial Jets – Net Orders Market Share                                                 ...
E-Jets Deployment                         helping airlines to be more efficient13
Embraer Market Forecast (2012-2031)      •   Scope Clauses relaxation allowing 80-seater aircraft as a natural growth of R...
Competition 61-120 seats – New Scenario15
Embraer Executive Jets           MORE THAN 600 AIRCRAFT IN-SERVICE WORLDWIDE17
Product Portfolio                             Aircraft             Model       Seats / Range                   Competitors...
Market Share Revenues share (US$ - based on B&CA list prices)                 Deliveries share (units)                    ...
Economic Indicators                                                                          U.S. Corporate Profits       ...
2013-22 Market Forecast - World Deliveries               Previous forecast21
2013-22 Market Forecast22
Business Jets Pre-owned Market Inventory                                                                                  ...
Service Center Network                            Embraer Service Center (5)                            Authorized Service...
Embraer Defense and Security              OVER 52 ARMED FORCES IN 50 COUNTRIES26
Embraer Defense and Security        Embraer Defense and Security, partners and affiliated companies                       ...
Embraer Defense and Security Results                            Revenues Evolution                      (US$ Million)     ...
Super Tucano     Firm orders: 190 aircraft                                                                       Addressab...
EMBRAER KC-390     Brazil Colombia Argentina Chile         Portugal Czech Rep.   Total Market Forecast 2025:      (28)    ...
Modernization Programs                     F-5M                                                  A1-M                     ...
New Portfolio          Command and Control Systems          Onboard Systems          Simulation Systems          Electroni...
Brazilian Army Priorities                      SISFRON      Integrated Borders Monitoring System               First phase...
Revenues Breakdown Evolution                          2020            2012                                              Ne...
2013 Outlook
2013 Consolidated Outlook             Net Revenues      US$ 5.9 – 6.4 Billion      EBIT    US$ 530 – 610 Million       EBI...
2013 Business Units Outlook                                Deliveries: 90 to 95 E-jets                       Net Revenues ...
2013 Investment Outlook                Research       US$ 100 Million             Development       US$ 300 Million       ...
Net Revenues / SG&A Expenses             Net Revenues - US$ Million                    SG&A Expenses - US$ Million        ...
Income from Operations / EBITDA     Income from Operations - US$ Million                  EBITDA - US$ Million            ...
Net Income / Free Cash Flow             Net Income - US$ Million                          Free Cash Flow - US$ Million    ...
Indebtedness Profile / Net Cash              Indebtedness Maturity                      Net Cash - US$ Million     15%    ...
Inventories                   US$ Million                       2,837                                 2,445               ...
Investments         US$ Million                                             350                                      251  ...
EPADS and Pay Out                   US$                                                          116%                     ...
Ownership Structure                  724,040,044 Voting Shares47
Sustainability Initiatives                                                                                              IS...
P3E - Lean Results               E-Jets Final Assembly Line Transformation                E-Jets Wing Junction Line Transf...
P3E Results      Kaizen - E-Jets Cycle Reduction        Cost of Non Quality Reduction                                     ...
“Boa Ideia” Program Evolution        Cost: US$ 21.4 mi        Benefit: US$ 200.7 mi52
Investor RelationsPhone: +55 12 3927 4404investor.relations@embraer.com.brwww.embraer.com
Forward Looking Statement     This presentation includes forward-looking statements or statements about events or     circ...
IR Institucional Presentation - March 2013
IR Institucional Presentation - March 2013
IR Institucional Presentation - March 2013
IR Institucional Presentation - March 2013
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IR Institucional Presentation - March 2013

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Transcript of "IR Institucional Presentation - March 2013"

  1. 1. EMBRAER INVESTOR RELATIONS Phone: +55 12 3927 4404 investor.relations@embraer.com.br www.embraer.com Job PositionMar/13
  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. • Organic growth and acquisitions.2
  3. 3. Aircraft Deliveries Commercial Jets Executive Jets 126 165 98 83 77 125 101 105 106 2 37 21 19 16 22 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 Light Jets - Phenom Large Jets - Legacy & Lineage3
  4. 4. Net Revenues US$ Million 6,335 6,178 5,498 5,364 5,803 2008 2009 2010 2011 2012 2012 Outlook: US$ 5.8 – 6.2 Billion 2008: USGAAP 2009-2012: IFRS4
  5. 5. Revenues Breakdown Net Revenues by Segment Net Revenues by RegionRevenues RevenuesUS$ Billion 5.36 5.80 6.18 US$ Billion 5.36 5.80 6.18 1% 1% 1% 4% 4% 6% 15% 15% 17% 22% 23% 22% 23% 19% 21% 13% 17% 14% 15% 3% 11% 31% 61% 65% 61% 25% 33% 20% 24% 13% 2010 2011 2012 2010 2011 2012 Commercial Aviation Defense and Security North America Europe Latin America Executive Aviation Others Brazil Asia Pacific Others5
  6. 6. Firm Order Backlog US$ Billion Executive Defense & 15.4 14.7 Aviation Security 12.9 12.4 12.5 26% 28% Commercial Aviation 46% 4Q11 1Q12 2Q12 3Q12 4Q126
  7. 7. 7
  8. 8. Embraer Commercial Aviation OVER 80 AIRLINES IN MORE THAN 50 COUNTRIES8
  9. 9. 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)9
  10. 10. E-Jets Customer Base Evolution10
  11. 11. E-Jets Family Order Book – 4Q12 E-JETS Firm orders Deliveries Firm Backlog EMBRAER 170 193 183 10 EMBRAER 175 198 163 35 EMBRAER 190 560 451 109 EMBRAER 195 142 111 31 Total 1,093 908 18511
  12. 12. Worldwide Distribution Commercial Jets – Net Orders Market Share E-Jets Customer Base by Business Model 70-120 Seats Jets (% of E-Jets Fleet+Backlog) 50% 23% 42% Low Cost Carriers 40% Regional Airlines 40% 35% Network Airlines 30% 29% 20% Firm Orders Backlog 10% 10% 14% 7% 7% 24% 6% 7% 17% 37% 0% 4% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 26% 20% 32% 16% Considering Accumulated Net Orders Europe & CIS North America Middle East & Africa Asia Pacific & China Latin America12
  13. 13. E-Jets Deployment helping airlines to be more efficient13
  14. 14. 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 32%MarketSegment 20102019 Market –2031 Segment 2012– (Seats) Middle 1,005 340 (Seats) Deliveries 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 6,795 505 210 30 20 - 1 2,625 315 670 7% 8% 10% 12% Around 6,795 jet deliveries (30-120 seats) in the next 20 years (US$ 315 bi)14
  15. 15. Competition 61-120 seats – New Scenario15
  16. 16. Embraer Executive Jets MORE THAN 600 AIRCRAFT IN-SERVICE WORLDWIDE17
  17. 17. Product Portfolio Aircraft Model Seats / Range Competitors Entry up to 8 occupants/ • Cessna - Mustang/M2 Phenom 100 1,178 nm Certified: 2008 • HondaJet Phenom 300 up to 11 occupants/ • Cessna - CJ2+/CJ3/CJ4 Light 1,971 nm • Bombardier - Learjet 40XR/70 Certified: 2009 Under development • Bombardier - Learjet 45XR/75 Legacy 450 7 to 9 passengers/ Mid-light 2,300 nm • Cessna - XLS+/Latitude • Bombardier - Learjet 85 Mid-size 8 to 12 passengers/ • Cessna - Sovereign Legacy 500 3,000 nm • Gulfstream – G150 • Bombardier - CL300/CL850 13 to 14 passengers/ • Cessna – X/Longitude Super mid-size Legacy 600 • Dassault - Falcon 2000S 3,400 nm Certified: 2001 • Gulfstream - G280 • Bombardier - CL605/GL5000 Large 13 to 14 passengers/ • Dassault – Falcon2000LXS/ Legacy 650 900LX Certified: 2010 3,900 nm • Gulfstream - G350/G450 • Bombardier - GL6000/GL7000/ Ultra-long range GL8000 • Gulfstream – G500/G550/G650 • Dassault – Falcon 7X Ultra-large Lineage 1000 13 to 19 passengers/ • Airbus - ACJ 318/319/320 4,500 nm • Boeing – BBJ/BBJ2/BBJ3 Certified: 200818
  18. 18. Market Share Revenues share (US$ - based on B&CA list prices) Deliveries share (units) Bombardier Dassault Hawker-Beech Embraer Cessna Gulfstream Others Market Revenues 2012: US$17.7 billion Market Deliveries 2012: 663 units Embraer Revenues: US$1.3 billion Embraer Deliveries: 99 units19
  19. 19. Economic Indicators U.S. Corporate Profits Worldwide HNWI Population 2.500 2.189US Corporate Profits (Billions of dollars) North America Europe Asia-Pacific Latin america Middle East Africa 2.000 10,8 11,0 10,1 10,1 9,6 1.500 8,8 8,6 8,2 7,7 7,0 7,2 7,0 7,2 5,9 Million 1.000 500 - Q3 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 New record levels20
  20. 20. 2013-22 Market Forecast - World Deliveries Previous forecast21
  21. 21. 2013-22 Market Forecast22
  22. 22. Business Jets Pre-owned Market Inventory 2008: Net increase of 1100 a/c 2009: Net increase of 33 a/c 3500 Fleet older than 10 yrs Fleet from 6 to 10 yrs 2010: Net decrease of 155 a/c 28% 2011: Net decrease of 140 a/c Fleet up to 5 yrs Positions 2012: Net decrease of 43 a/c 3000 2013: Net decrease of 41 a/c 24% Fleet up to 5 yrs and positions Total fleet % for sale 2500 Up to 10 yrs % for sale 20% 12.8% 8.5% % of active fleet 2000 2425 jets 660 jets 16%Units 1500 12% 1000 8% 500 4% 0 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Jetnet and Embraer Analysis, January 2013.23
  23. 23. Service Center Network Embraer Service Center (5) Authorized Service Center (60) 12 new centers worldwide in the last 12 months24
  24. 24. Embraer Defense and Security OVER 52 ARMED FORCES IN 50 COUNTRIES26
  25. 25. Embraer Defense and Security Embraer Defense and Security, partners and affiliated companies UAV’s Radar Satellite Land Systems27
  26. 26. Embraer Defense and Security Results Revenues Evolution (US$ Million) CAGR 29% EBIT Evolution (%) Backlog Evolution (US$ Billion) Não contabiliza as receitas provenientes da OGMA nos anos de 2006 a 2010.28
  27. 27. Super Tucano Firm orders: 190 aircraft Addressable Market Forecast 2025 Brazil: 99 (US$ million) Colombia: 25 Long-term Dominican Republic: 8 1,600 Medium-term Chile: 12 840 Short-term Ecuador: 18 1,700 Indonesia: 16 Greystone (TACAir): 1 Undisclosed: 11 Total Market Forecast: Deliveries: 172 aircraft 344 aircraft / US$ 4.1 billion Ref: dec/12 Partnership with Boeing to provide weapons integration, increasing capabilities of the aircraft.29
  28. 28. EMBRAER KC-390 Brazil 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. • The Brazilian Air Force (FAB) and Embraer concluded the Preliminary Design Review. Ref. dec/1230
  29. 29. Modernization Programs F-5M A1-M A-4 Addressable Market Forecast 2025 (US$ million) Brazilian Navy A-4 12 aircraft 2 prototypes at GPX-CS Long-term 505 Brazilian Air Force A-1M Medium-term 567 43 aircraft Short-term 16 received by Embraer for the modernization 437 Brazilian Air Force F-5M 46 a/c + 11 a/c (2nd batch) 45 already delivered Total Market Forecast*: Brazilian Air Force E-99 228 aircraft / US$ 1.5 billion 5 a/c aircraft EMB 145 AEW&C * Considering the market for Tucano modernization Ref. dec/1231
  30. 30. 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 has a major participation UAS, simulators and modernization of avionics systems Security of Critical Infrastructure SISFRON implementation Public Security Embraer Defense and Security has 100% of participation (sporting events, cities, states) Systems Air, ground and sea surveillance radars SISFRON Remote sensing SisGAAZ Engine and Component Maintenance Overhaul and Modernization Aerostructure Manufacturing and Assembling JV between Embraer Defense and Security (51%) and Telebras Satellite32
  31. 31. Brazilian Army Priorities 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 Comm 9% UAV 12% Sensors 59% Satellite Estimate: US$ 400 Million SW 20% Participation in the first Brazilian Geostationary Satellite Ref. dec/1233
  32. 32. Revenues Breakdown Evolution 2020 2012 New Business • SisGAAz (“Blue Amazon” Integrated Management System) • Security of Critical Infrastructure • Public Security (sporting events, cities, states)34
  33. 33. 2013 Outlook
  34. 34. 2013 Consolidated Outlook Net Revenues US$ 5.9 – 6.4 Billion EBIT US$ 530 – 610 Million EBITDA US$ 770 – 900 Million EBIT margin 9.0% – 9.5% EBITDA margin 13.0% – 14.0%36
  35. 35. 2013 Business Units Outlook Deliveries: 90 to 95 E-jets Net Revenues US$ 3.20 – 3.35 Billion Deliveries: 80 to 90 light jets 25 to 30 large jets Net Revenues US$ 1.40 – 1.60 Billion Net Revenues US$ 1.25 – 1.35 Billion Other Revenues US$ 50 – 100 Million37
  36. 36. 2013 Investment Outlook Research US$ 100 Million Development US$ 300 Million CAPEX US$ 180 Million TOTAL INVESTMENTS: US$ 580 Million38
  37. 37. Net Revenues / SG&A Expenses Net Revenues - US$ Million SG&A Expenses - US$ Million Total 2012: 6,178 Total 2012: 763 219 194 186 180 170 75 72 75 71 59 2,025 1,900 1,717 1,405 144 1,156 114 109 119 111 4Q11 1Q12 2Q12 3Q12 4Q12 4Q11 1Q12 2Q12 3Q12 4Q12 G&A Expenses Selling Expenses40
  38. 38. Income from Operations / EBITDA Income from Operations - US$ Million EBITDA - US$ Million Total 2012: 612 / 9.9% Total 2012: 891 / 14.4% 16.4% 12.0% 15.4% 11.5% 12.8% 11.8% 7.4% 7.2% 312 -0.3% 228 265 197 2.9% 148 166 86 101 59 (6) 4Q11 1Q12 2Q12 3Q12 4Q12 4Q11 1Q12 2Q12 3Q12 4Q12 EBIT EBIT Margin EBITDA EBITDA Margin41
  39. 39. Net Income / Free Cash Flow Net Income - US$ Million Free Cash Flow - US$ Million Total 2012: 348 / 5.6% Total 2012: (81) 9.1% 6.5% 277 4.6% 206 3.2% 414 105 123 444 55 65 155 25 (30) (77) (70) (76) (50) -4.5% (40) (163) (60) (55) (58) (65) (92) (138) (76) (174) 4Q11 1Q12 2Q12 3Q12 4Q12 4Q11 1Q12 2Q12 3Q12 4Q12 Free cash flow Net Income Net Margin Net cash generated (used) by operating activities* Additions to PP&E Additions to Intangible * Net of Financial assets adjustment42
  40. 40. Indebtedness Profile / Net Cash Indebtedness Maturity Net Cash - US$ Million 15% 22% 17% 16% 26% 6,1 6,0 4,8 5,8 4,2 446 85% 78% 83% 84% 74% 302 290 313 123 4Q11 1Q12 2Q12 3Q12 4Q12 4Q11 1Q12 2Q12 3Q12 4Q12 Long-term Short-term Loans Average Maturity (Years) Total Debt 4Q12 US$ 2.07 Billion Total Cash 4Q12 US$ 2.38 Billion43
  41. 41. Inventories US$ Million 2,837 2,445 2,198 2,288 2,155 2008 2009 2010 2011 2012 2008: USGAAP 2009-2012: IFRS44
  42. 42. Investments US$ Million 350 251 211 200 77 100 RESEARCH DEVELOPMENT CAPEX 2012 Total 2012 Outlook 2012 Outlook: US$ 650 Million Total Investment 2012: US$ 539 Million45
  43. 43. EPADS and Pay Out US$ 116% 52% 34% 26% 26% 2.57 2.14 1.83 1.92 0.62 2008 2009 2010 2011 2012 EPADS Pay Out 2008: USGAAP 2009-2012: IFRS46
  44. 44. Ownership Structure 724,040,044 Voting Shares47
  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 Corporate Values Greener Technology49
  46. 46. P3E - Lean Results E-Jets Final Assembly Line Transformation E-Jets Wing Junction Line Transformation50
  47. 47. P3E Results Kaizen - E-Jets Cycle Reduction Cost of Non Quality Reduction 40% 57% 40% reduction on the production cycle 44% reduction on CNQ51
  48. 48. “Boa Ideia” Program Evolution Cost: US$ 21.4 mi Benefit: US$ 200.7 mi52
  49. 49. Investor RelationsPhone: +55 12 3927 4404investor.relations@embraer.com.brwww.embraer.com
  50. 50. 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.54
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