2. 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
14. 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
26. OVER 52 ARMED FORCES IN 50 COUNTRIES
Embraer Defense & Security
26
27. Embraer Defense & Security, partners and affiliated companies
Embraer Defense & Security
UAV’s Satellite Land SystemsRadar
27
28. 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%
28
29. 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.
29
• Firm orders: more than 210 aircraft
• More than 170 aircraft delivered
30. EMBRAER KC-390
• 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 (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
30
31. 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
31
32. 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
32
33. 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
33
34. New Business
•SisGAAz (“Blue Amazon” Integrated Management
System)
•Security of Critical Infrastructure
•Public Security (sporting events, cities, states)
2020
Revenues Breakdown Evolution
2012
34
36. 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%
36
37. 37
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
38. 2013 Investment Outlook
TOTAL INVESTMENTS: US$ 580 Million
Research US$ 100 Million
Development US$ 300 Million
CAPEX US$ 180 Million
38
49. 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
49
50. P3E - Lean Results
50
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
51. P3E Results
Kaizen - E-Jets Cycle Reduction Cost of Non Quality Reduction
57%
51
40% reduction on the production cycle
40%
44% reduction on CNQ
52. Cost: US$ 21.4 mi
Benefit: US$ 200.7 mi
“Boa Ideia” Program Evolution
52
54. 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