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Segundo Encontro Anual Com Analistas E Investidores ApresentaçãO Financeira

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  • 1. Second Annual Investors & Analyst Meeting Antonio Luiz P. Manso Executive Vice President & CFO
  • 2. Foward Looking Statements 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 markets; management’s expectations and estimates concerning our future financial performance, financing plans and programs, and the effects of competition; successful development and marketing of the ERJ 170/190 regional jet family; our level of debt; anticipated trends in our industry; our expenditure plans; inflation and devaluation; our ability to develop and deliver our products on a timely basis; and existing and future governmental regulation. 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.
  • 3. Capital Structure
  • 4. Capital Structure – Voting Shares 20% European Group 60 % Controlling Shareholders Dassault Aviation 5,67% Bozano,Simonsen Group 20 % Thomson CSF 5,67% SISTEL (Pension Fund) 20 % EADS 5,67% PREVI (Pension Fund) 20 % Snecma 3,00% 1.45 % Brazilian Govt. 18.55 % 242,544,448 Common Shares Others 38.98%
  • 5. Capital Structure – Preferred Shares Cia. Bozano 10% Previ NYSE 12% 44% Sistel 3% BNDESPar Bovespa 14% 17% 379,738,426 Preferred Shares 61.02%
  • 6. Capital Structure – Evolution Brazilian YE00 1Q01 2Q01 3Q01 4Q01 Shares Common 242,544,448 242,544,448 242,544,448 242,544,448 242,544,448 Preferred 300,865,426 300,865,426 378,768,426 378,768,426 379,738,426 TOTAL 543,409,874 543,409,874 621,312,874 621,312,874 622,282,874 ADS Equivalent 135,852,469 135,852,469 155,328,219 155,328,219 155,570,719 Conversion Rights: Stock Option: 14.8 million of options equivalent to 3.7 million of ADSs were granted and not exercised.
  • 7. Capital Structure – Stock Dividends Stock Dividend Announcement: As earnings reserve cannot exceed existing paid in capital. Incorporation of R$ 342 MM earnings reserve to the paid in Capital with the issuance of 88.4 million of preferred shares (equivalent to 22,1 ADSs) to all shareholders. Obejective to increase liquidity of Preferred Shares Share As of % As of % Class Today Total capital Stock Dividend Mrach 02 Total capital Common 242.544.448,00 39% 242.544.448,00 34% Preferred 379.738.426,00 61% 88.430.168,00 468.168.594,00 66% Total Shares Outstanding 622.282.874,00 100% 710.713.042,00 100% ADS Equivalent 155.570.718,50 22.107.542,00 177.678.260,50
  • 8. 3rd Quarter Results Income Statement Corporate Law
  • 9. Jet Deliveries 140 127 120 116 100 80 60 43 44 42 44 41 39 40 34 20 0 1Q00 2Q00 3Q00 9M00 4Q00 1Q01 2Q01 3Q01 9M01
  • 10. Net Revenue US$ Million – Corporate Law 3.000 2,369 2,009 2.000 US$ MM 1.000 766 772 756 838 775 583 651 0 1Q00 2Q00 3Q00 9M00 4Q00 1Q01 2Q01 3Q01 9M01
  • 11. Revenue Breakdown – Sep. 2001 Revenue by Market Brazil 3% Revenue by Segment International 97% Corporate Spare Parts & 2% Services 6% Defense 5% Commercial 87%
  • 12. Revenue by Segment - Forecast 2002 Parts & Services / Others Commercial 7% 71% Defense 12% Corporate 10% 2003 Parts & Services / Commercial Others 7% 69% Defense 12% Corporate 12%
  • 13. Gross Profit US$ Million – Corporate Law 1.500 50% 45.3% 43.3% 39.5% 44.3% 40% 33.9% 1.027 30.9% 31.8% 1.000 29.1% 28.9% Margin % 30% US$ MM 620 20% 500 380 344 260 299 246 10% 170 188 0 0% 1Q00 2Q00 3Q00 9M00 4Q00 1Q01 2Q01 3Q01 9M01
  • 14. EBIT US$ Million – Corporate Law 1.000 31.1% 30.1% 27.6% 30% 31.2% 800 715 23.0% Margin % 600 18.9% 17.8% US$ MM 17.0% 20% 15.6% 379 400 261 242 10% 209 177 200 137 99 102 0 0% 1Q00 2Q00 3Q00 9M00 4Q00 1Q01 2Q01 3Q01 9M01
  • 15. EBITDA US$ Million – Corporate Law 1.000 33.6% 35% 32.7% 30.5% 33.4% 30% 800 26.0% 774 21.9% 25% 20.4% 20.4% Margin % 600 18.3% US$ MM 20% 439 400 15% 282 259 231 10% 199 200 158 119 119 5% 0 0% 1Q00 2Q00 3Q00 9M00 4Q00 1Q01 2Q01 3Q01 9M01
  • 16. Net Income US$ Million – Corporate Law 600 20% 17.6% 16.6% 15.0% 13.5% 12.8% 15% 400 14.3% 354 Margin % 11.0% US$ MM 9.4% 9.5% 10% 222 200 148 128 5% 104 108 99 55 62 0 0% 1Q00 2Q00 3Q00 9M00 4Q00 1Q01 2Q01 3Q01 9M01
  • 17. 3rd Quarter Results Balance Sheet Corporate Law
  • 18. Total Cash US$ Milions 1.400 1.264 1.189 1.169 1.200 1.000 884 800 US$ MM 599 600 513 379 400 200 0 1T00 2T00 3T00 4T00 1T01 2T01 3T01
  • 19. Total Debt US$ Milions 1.000 800 755 586 567 600 549 491 457 US$ MM 420 400 200 0 1T00 2T00 3T00 4T00 1T01 2T01 3T01
  • 20. Debt Breakdown Total Debt US$ 754.9 Million Local Currency - R$ - 5% Long Term 18% Foreign Currency 95% Short Term 82%
  • 21. Net Cash (Debt) US$ Million $800 732 749 696 $600 $400 $200 129 108 $0 (37) ($200) (208) ($400) 1T00 2T00 3T00 4T00 1T01 2T01 3T01
  • 22. Inventories US$ Millions 1.000 842 800 764 703 641 660 600 562 574 US$ MM 400 200 0 1T00 2T00 3T00 4T00 1T01 2T01 3T01
  • 23. Accounts Receivables US$ Millions 1.000 793 800 737 600 563 US$ MM 390 373 400 260 198 200 0 1T00 2T00 3T00 4T00 1T01 2T01 3T01
  • 24. Customers Advances US$ Millions 600 439 443 424 401 400 372 371 376 US$ MM 200 0 1T00 2T00 3T00 4T00 1T01 2T01 3T01
  • 25. Performance Indicators Corporate Law
  • 26. Return on Asset - ROA 50% 40% 30% 19% 20% 15% 15% 8% 10% 0% -10% -3% -12% -20% -30% -25% -40% -50% 95 96 97 98 99 00 9M01
  • 27. Return on Equity - ROE 150% 100% 75% 74% 58% 50% 35% 0% -14% -50% -100% -93% -150% -169% -200% 95 96 97 98 99 00 9M01
  • 28. Investments
  • 29. Investments (US$ Million) 300 250 213 200 147 162 150 122 98 104 81 100 50 0 95 96 97 98 99 00 9M01 40% Product Productivity Efforts Development 60%
  • 30. Revenue per Employee (US$ thousand) 350 307 300 269 242 247 250 200 172 150 101 100 75 40 50 0 94 95 96 97 98 99 00 9M01
  • 31. Employees 15000 12,733 12000 10,334 8,302 9000 6,737 6,087 6000 4,319 4,494 3,849 3000 0 94 95 96 97 98 99 00 Set/01 Brazil: 12,213 USA: 267 Europe: 220 Australia: 9 April 97: 3,200 China: 15 (Minimum Level Reached) Cingapure: 9 Total sept.: 12,733 Growth 2000/1999: 24.5%
  • 32. Production Cycle (months) 20 14 15 12 10 8 6 6 5.5 4.9 4.4 5 0 94 95 96 97 98 99 00 Sep./01
  • 33. Investments Forecast (US$ Millions) 2002 2003 2004 2005 2006 · Products under Development 203 183 171 166 168 Commercial Programs 138 105 61 34 27 Corporate Programs 15 6 2 2 2 Defense Programs 51 72 109 130 139 · Segments 3 2 2 2 2 · Technology Development 6 6 6 6 6 · TOR 2 2 - - - · Property, Plant & Equipment 116 69 59 50 51 TOTAL 329 262 238 224 227
  • 34. US Gaap & Corporate Law Accounting
  • 35. Differences Brazilian Gaap & US Gaap The Company’s accounting policies comply with the Corporate Law & Brazilian Gaap. Corporate Law: Does not recognize the effects of changes in the purchasing power of the Brazilian currency. Used as local reporting policy for taxes purposes and for the Brazilian Exchange Commision – CVM Brazilian Gaap: Recognizes effects of changes in the purchasing power of Brazilian currency due to inflation and is expressed in constant Reais. The Company uses the General Market Price Index (IGPM) which is published by Fudação Getúlio Vargas – FGV. US Gaap: The effects of the price level adjustments are not eliminated in the reconciliation to US Gaap
  • 36. Differences Brazilian Gaap & US Gaap Foreign Currency Translation Brazilian Gaap: Does not recognize a functional currency for a Brazilian Company reporting in Reais. US Gaap: The majority of the Company’s Sales Revenues, Cost of Sales and Financing Costs are denominated in or indexed to US Dollar. Therefore the US Dollar its been used as functional currency.
  • 37. Differences Brazilian Gaap & US Gaap Revaluation of PP&E Brazilian Gaap: Revaluations may be recorded, providing certain formalities are complied with. The revaluation increment is credited to a reserve account in Shareholders’ equity and transferred to retained earnings as the related assets are depreciated or upon disposal. US Gaap: The PP&E are reported as their historical cost less accumulated depreciation; revaluations are not permited.
  • 38. Differences Brazilian Gaap & US Gaap Organizational & Preoperating Costs Brazilian Gaap: Preoperating expenses incurred in the construction or expenasion of a new facility may be deferred until the facility begins commercial operations. All cost related to the start up may also be capitalized. The amount as ajusted for monetary correction, when appropriate, is amortized over a period of five to tem years. US Gaap: The rules are more restrictive. Construction and expensions costs are allocated to PP&E; preoperating and start up costs expenses are charged to operations, and costs of start up activities and organization costs are expensed as incurred.
  • 39. Differences Brazilian Gaap & US Gaap Deferred Charges Brazilian Gaap: R&D for new aircraft types, new production lines or operations are capitalized or deferred for amortization over the period of time from the date the related production benefits or operations begin. US Gaap: R&D divided into two categories: R&D and Additions to Fixed Assets. R&D Costs: is the expense actually associated with the design and development of the aircraft and are expensed as they are incurred. Additions to Fixed Assets: rellate solely to tooling built by the Company and required for the project, and treated as additions to PP&E, depeciated on the straight-line basis over twenty years.
  • 40. Differences Brazilian Gaap & US Gaap Income Tax Brazilian Gaap: Income Tax rate is approximatelly 38.0% based on the Company’s (non consolidated results). Possibilty of recongnising the tax loss carryfoward benefit. US Gaap: As we are a Brazilian Company we pay tax based on our Corporate Law Income. Also, we do not have the tax loss carryfoward benefit.
  • 41. Differences Brazilian Gaap & US Gaap Earnings per Share Brazilian Gaap: Disclousure of earnings per share is computed based on the number of shares outstanding at the end of the period. US Gaap: Because the preferred and common shares have different dividend, voting and liquidation rights basic and diluted earnings per share are caluculated using the “two class method”:
  • 42. Differences Brazilian Gaap & US Gaap Other Differences • Computer Software Obtained for Internal Use • Capitalization of Financing Costs During Construction • Leasing Transactions • Income Taxes • Reversal of Proposaed Dividends • Financial Instruments and Concentration of Credit Risk
  • 43. Financial Presentation Corporate Law Figures were converted into US dollars using the average rate or the final commercial rate for the Income Statement and Balance Sheet respectively, for the corresponding periods. US Gaap The historical US GAAP data were deflated and converted using the U.S. dollar exchange rate at the end of the period presented.
  • 44. Net Sales (US$ Million) 5000 4000 2732 2787 3000 2369 2035 1844 2009 2108 2000 1300 1352 1548 758 764 1000 405 381 0 1996 1997 1998 1999 2000 9M00 9M01 US GAAP Corporate Law 10
  • 45. EBITDA (US$ Million) 1000 774 800 596 600 394 507 439 505 350 400 285 287 128 142 196 200 12 75 0 1996 1997 1998 1999 2000 9M00 9M01 US GAAP Corporate Law 10
  • 46. Net Income (US$ Million) 500 400 353 354 272 222 300 247 227 196 191 200 129 114 100 66 0 (100) (31) (200) (84) (122) (300) 1996 1997 1998 1999 2000 9M00 9M01 US GAAP Corporate Law 10
  • 47. 2Q01 Vs 3Q01 – US Gaap 2Q01 3Q01 Variation (US$ million) Net Sales $751.8 $745.0 (1)% Gross Profit 277.9 292.9 5% Gross Margin 37% 39% EBIT 154.4 175.5 14% EBIT Margin 21% 24% EBITDA 162.5 188.1 16% EBITDA Margin 22% 25% Net Interest (Expense) Income, net (1.9) 0.1 (106)% Monetary & Exchange Variations (20.3) (77.7) 283% Net Income 65.8 66.5 1% Net Margin 9% 9%
  • 48. 9M00 Vs 9M01 – US Gaap 9M00 9M01 Variation (US$ million) Net Sales $1,548.3 $2,108.3 36% Gross Profit 529.4 801.5 51% Gross Margin 34% 38% EBIT 331.2 475.0 43% EBIT Margin 21% 23% EBITDA 350.3 505.4 44% EBITDA Margin 23% 24% Net Interest (Expense) Income, net (38.9) 7.2 (119)% Monetary & Exchange Variations (2.4) (155.5) Net Profit 190.6 195.7 3% Net Margin 12% 9%
  • 49. Backlog & Deliveries Forecast
  • 50. Backlog – US$ Billion US$ 23.4 Billion in Total Backlog, including US$ 10,7 Billion in Firm Backlog 22,9 24,0 23,7 23,5 23,9 23,4 20,8 18,3 12 12,6 12,8 12,8 12,7 12,7 12,2 10,6 10,9 11,4 10,9 10,7 11,2 10,7 7,7 8,6 1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 Firm Options
  • 51. Jet Deliveries - Units 180 160 161 160 145 140 135 120 96 100 80 60 60 40 32 20 4 0 1996 1997 1998 1999 2000 2001 2002E 2003E