IR Institutional Presentation - May 2013
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    IR Institutional Presentation - May 2013 IR Institutional Presentation - May 2013 Presentation Transcript

    • Job PositionEMBRAER INVESTOR RELATIONSPhone: +55 12 3927 4404 | investor.relations@embraer.com.br | www.embraer.comMay/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
    • 3721 1983 7716 22429812682008 2009 2010 2011 2012 1Q13165125101 105171062008 2009 2010 2011 2012 1Q13Aircraft DeliveriesLarge Jets - Legacy & LineageLight Jets - PhenomCommercial Jets Executive Jets32013 deliveries estimates• 90 - 95 commercial jets• 25 - 30 executive large jets• 80 - 90 executive light jets
    • 6,3355,498 5,364 5,8031,0866,1782008 2009 2010 2011 2012 2013 YTDNet RevenuesUS$ Million2008: USGAAP2009-2012: IFRS42013 Outlook: US$ 5.9 – 6.4 Billion
    • Revenues Breakdown561% 65% 61%23% 19% 21%15% 15% 17%1% 1% 1%2010 2011 2012Net Revenues by Segment Net Revenues by RegionCommercial AviationExecutive Aviation OthersDefense & SecurityRevenuesUS$ Billion 5.80 6.185.36RevenuesUS$ Billion5.80 6.185.3613% 20% 24%33% 25%31%13% 17%14%15% 11% 3%9% 11% 14%5% 9% 5%12% 7% 9%2010 2011 2012North America BrazilEuropeAsia PacificSouth &Central AmericaAfrica &Middle EastChina
    • Firm Order Backlog6US$ Billion14.712.9 12.4 12.5 13.31Q12 2Q12 3Q12 4Q12 1Q13
    • 7
    • Embraer Commercial AviationOVER 80 AIRLINES IN MORE THAN 50 COUNTRIES8
    • Product Portfoliocapacity: 70 to 80 seatsrange: 2,100 nm (3,900 Km)capacity: 78 to 88 seatsrange: 2,000 nm (3,700 Km)capacity: 98 to 114 seatsrange: 2,400 nm (4,500 Km)capacity: 108 to 122 seatsrange: 2,200 nm (4,100 Km)capacity: 37 seatsrange: 1,750 nm (3,250 Km)capacity: 50 seatsrange: 1,550 nm (2,900 Km)capacity: 50 seatsrange: 2,000 nm (3,700 Km)capacity: 44 seatsrange: 1,650 nm (3,050 Km)9
    • E-Jets Customer Base Evolution10
    • 11E-Jets Family Order Book – 1Q13E-JETS Firm orders Deliveries Firm BacklogEMBRAER 170 193 184 9EMBRAER 175 245 165 80EMBRAER 190 556 459 97EMBRAER 195 142 117 25Total 1,136 925 211
    • Worldwide Distribution120%10%20%30%40%50%2000200120022003200420052006200720082009201020112012E-Jets Customer Base by Business Model(% of E-Jets Fleet+Backlog)Firm OrdersCommercial Jets – Net Orders Market ShareConsidering Accumulated Net Orders70-120 Seats Jets23%35%42%BacklogEurope & CISMiddle East & AfricaLatin AmericaNorth AmericaAsia Pacific & China40%29%4%10%6%Low Cost CarriersRegional AirlinesNetwork Airlines7%14%7%26%16%37%7%17%32%20%24%
    • E-Jets Deploymenthelping airlines to be more efficient13
    • Embraer Market Forecast (2012-2031)NorthAmerica84032%NorthAmerica2,19532%LatinAmerica31512%LatinAmerica67010%Europe58022%Europe1,46022%Russia /CIS1556%Russia /CIS4457%Africa803%Africa2103%MiddleEast1054%MiddleEast3054%AsiaPacific2108%AsiaPacific5057%China34013%China1,00515%Projected Deliveries- JetsMarket Segment(Seats)2010–2019Deliveries30-60 6061-90 1,01591-120 1,55030-120 2,625Market Segment(Seats)2012–2031Deliveries30-60 40561-90 2,62591-120 3,76530 - 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 jetsAround 6,795 jet deliveries (30-120 seats) in the next 20 years (US$ 315 bi)14
    • Competition 61-120 seats – New Scenario15
    • Embraer Executive JetsMORE THAN 600 AIRCRAFT IN-SERVICE WORLDWIDE17
    • Product Portfolio18LargeAircraft ModelPhenom 100Phenom 300Legacy 450Legacy 500Legacy 600Lineage 1000Seats / Rangeup to 8 occupants/1,178 nmup to 11 occupants/1,971 nm7 to 9 passengers/2,300 nm8 to 12 passengers/3,000 nm13 to 14 passengers/3,400 nm13 to 19 passengers/4,500 nmEntryLightMid-lightMid-sizeUltra-largeSuper mid-sizeCertified: 2008Certified: 2009Under developmentCertified: 2001Certified: 2008Ultra-long rangeCompetitors• 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/BBJ3Legacy 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 ShareOthersHawker-BeechEmbraerGulfstreamDassaultCessnaBombardierDeliveries share (units)Revenues share (US$ - based on B&CA list prices)Market Revenues 2012: US$ 17.7 billionEmbraer Revenues: US$ 1.3 billionMarket Deliveries 2012: 663 unitsEmbraer Deliveries: 99 units19
    • Economic Indicators202.189-5001.0001.5002.0002.500Q32001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012USCorporateProfits(Billionsofdollars)U.S. Corporate Profits5,97,0 7,2 7,0 7,27,78,28,89,610,18,610,110,8 11,01998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011MillionNorth America Europe Asia-Pacific Latin america Middle East AfricaWorldwide HNWI PopulationNew record levels
    • 2013-22 Market Forecast - World DeliveriesPrevious forecast21
    • 2013-22 Market Forecast22
    • Business Jets Pre-owned Market Inventory23Source: Jetnet and Embraer Analysis, January 2013.0%4%8%12%16%20%24%28%0500100015002000250030003500Q1 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 Q12000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013%ofactivefleetUnitsFleet older than 10 yrs Fleet from 6 to 10 yrsFleet up to 5 yrs PositionsFleet up to 5 yrs and positions Total fleet % for saleUp to 10 yrs % for sale12.8%2425 jets8.5%660 jets2008: Net increase of 1100 a/c2009: Net increase of 33 a/c2010: Net decrease of 155 a/c2011: Net decrease of 140 a/c2012: Net decrease of 43 a/c2013: Net decrease of 41 a/c
    • Service Center Network24Embraer Service Center (5)Authorized Service Center (62)12 new centers worldwide in 2012
    • OVER 52 ARMED FORCES IN 50 COUNTRIESEmbraer Defense & Security26
    • Embraer Defense & Security, partners and affiliated companiesEmbraer Defense & SecurityUAV’s Satellite Land SystemsRadar27
    • Embraer Defense & Security ResultsNão 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
    • Brazil: 99Colombia: 25Dominican Republic: 8Chile: 12Ecuador: 18Indonesia: 16Greystone (TacAir): 1Mauritania: undisclosedBurkina Faso: 3Angola: 6USA: 20Guatemala: 6Super TucanoTotal Market Forecast:344 aircraft / US$ 4.1 billion1,7008401,600Medium-termLong-termShort-termAddressable 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
    • 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 andevaluate markets for joint sales efforts.• The Brazilian Air Force (FAB) and Embraer concluded theCritical Design Review.Brazil(28)Colombia(12)Argentina(6)Chile(6)Portugal(6)Czech Rep.(2)Total Market Forecast 2025:700 aircraft / US$ 50+ biRef. dec/1230
    • A1-MF-5M A-4Brazilian Navy A-412 aircraft2 prototypes at GPX-CSBrazilian Air Force A-1M43 aircraft16 received by Embraer for the modernizationBrazilian Air Force F-5M46 a/c + 11 a/c (2nd batch)45 already deliveredBrazilian Air Force E-995 a/c aircraft EMB 145 AEW&C* Considering the market for Tucano modernizationModernization ProgramsAddressable Market Forecast 2025(US$ million)Total Market Forecast*:228 aircraft / US$ 1.5 billion437567505Medium-termLong-termShort-termRef. dec/1231
    • SISFRON implementationEmbraer Defense & Security has 100% of participationNew PortfolioCommand and Control SystemsOnboard SystemsSimulation SystemsElectronic Warfare SystemsIntelligence SystemsAir Traffic Management and Control SystemsJV with Elbit/AEL Systems where Embraer Defense &Security has a major participationUAS, simulators and modernization of avionics systemsAir, ground and sea surveillance radarsRemote sensingEngine and Component MaintenanceOverhaul and ModernizationAerostructure Manufacturing and AssemblingJV between Embraer Defense & Security (51%) andTelebrasSatelliteSecurity of CriticalInfrastructurePublic Security(sporting events, cities, states)SystemsSISFRONSisGAAZ32
    • SISFRONIntegrated Borders Monitoring SystemFirst phase: US$ 420 MillionTotal estimate: US$ 4 BillionComprising radars, communication networks, C4I,unmanned air vehicles (UAV) and armored vehiclesBrazilian Army PrioritiesComm9% UAV12%SW20%Sensors59%SatelliteEstimate: US$ 400 MillionParticipation in the first Brazilian Geostationary SatelliteRef. dec/1233
    • New Business•SisGAAz (“Blue Amazon” Integrated ManagementSystem)•Security of Critical Infrastructure•Public Security (sporting events, cities, states)2020Revenues Breakdown Evolution201234
    • 2013 Outlook
    • 2013 Consolidated OutlookNet RevenuesEBIT EBITDAUS$ 530 – 610 MillionUS$ 5.9 – 6.4 BillionUS$ 770 – 900 MillionEBITDA margin 13.0% – 14.0%EBIT margin 9.0% – 9.5%36
    • 37Deliveries: 80 to 90 light jets25 to 30 large jetsNet RevenuesDeliveries: 90 to 95 E-jetsNet Revenues US$ 3.20 – 3.35 BillionOther Revenues US$ 50 – 100 MillionUS$ 1.40 – 1.60 BillionNet Revenues US$ 1.25 – 1.35 Billion2013 Business Units Outlook
    • 2013 Investment OutlookTOTAL INVESTMENTS: US$ 580 MillionResearch US$ 100 MillionDevelopment US$ 300 MillionCAPEX US$ 180 Million38
    • Net Revenues / SG&A ExpensesNet Revenues - US$ Million SG&A Expenses - US$ MillionSelling ExpensesG&A Expenses402013 YTD: 1,0861,1521,7151,4021,8981,0861Q12 2Q12 3Q12 4Q12 1Q13108 118 11114371755975108531Q12 2Q12 3Q12 4Q12 1Q131702181791931612013 YTD: 161
    • Income from Operations / EBITDAIncome from Operations - US$ Million EBITDA - US$ MillionEBIT EBIT Margin EBITDA EBITDA Margin412013 YTD: 40 / 3.6%86197101228407.4%11.5%7.2%12.0%3.6%1Q12 2Q12 3Q12 4Q12 1Q132013 YTD: 100 / 9.2%14826516831010012.8%15.5%12.0%16.3%9.2%1Q12 2Q12 3Q12 4Q12 1Q13
    • (76) (50)(163)(50)(69)157(30)439(83)(40)(65)(55) (58)(75)(68)(174)27(138)202(201)1Q12 2Q12 3Q12 4Q12 1Q13Net Income / Free Cash FlowNet Income - US$ Million Free Cash Flow - US$ MillionNet MarginNet IncomeFree cash flowAdditions to PP&ENet cash generated (used) by operating activities*Additions to Intangible42* Net of Financial assets adjustment2013 YTD: (201)2013 YTD: 30 / 2.8%10563 58123309.1%3.6% 4.1%6.5%2.8%1Q12 2Q12 3Q12 4Q12 1Q13
    • 74% 78% 83% 84% 85%26% 22% 17% 16% 15%4.26.1 6.0 5.85.11Q12 2Q12 3Q12 4Q12 1Q13Indebtedness Profile / Net CashIndebtedness Maturity Net Cash - US$ MillionLong-term Short-termLoans Average Maturity (Years)43US$ 2.46 BillionTotal Debt 1Q13 Total Cash 1Q13 US$ 2.56 Billion301 290123309981Q12 2Q12 3Q12 4Q12 1Q13
    • 2,6522,530 2,5852,1572,5101Q12 2Q12 3Q12 4Q12 1Q13Inventories44US$ Million2008: USGAAP2009-2012: IFRS
    • Investments45216845100300180RESEARCH DEVELOPMENT CAPEX2013 Outlook: US$ 580 Million2013 Outlook2013 YTDUS$ Million 2013 YTD: 134
    • EPADS and Pay Out462.142.571.830.621.9252%26%34%116%26%2008 2009 2010 2011 2012EPADS Pay Out2008: USGAAP2009-2012: IFRSUS$
    • LocalShareholders28%InternationalShareholders72%727,204,643 Voting SharesOwnership Structure4731/12/2012NYSE50%BM&FBOVESPA50%
    • Sustainability InitiativesBrazilian Alliance for Bio-fuelReforestation ProjectsISO 14001 and OHSAS18001 Certifications1st ethanol poweredaircraft in the WorldIpanemaRecyclingCorporate ValuesGreener TechnologySocial Activities49
    • P3E - Lean Results50E-Jets Final Assembly Line TransformationE-Jets Wing Junction Line TransformationPerformance Indicators 2008(15 ac/month)2009(10 ac/month)2012(10 ac/month)Number of positions 12 5 4Cycle time (days) 18 10 8Work in Process(US$ Mi)212 95 68Number of non-conformity per a/c32 1.7 0.76Overtime(% of work hours)10 1.5 0
    • P3E ResultsKaizen - E-Jets Cycle Reduction Cost of Non Quality Reduction57%5140% reduction on the production cycle40%44% reduction on CNQ
    • Cost: US$ 21.4 miBenefit: US$ 200.7 mi“Boa Ideia” Program Evolution52
    • Investor RelationsPhone: +55 12 3927 4404investor.relations@embraer.com.brwww.embraer.com
    • 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.54