Phone: +55 12 3927 4404 | investor.relations@embraer.com.br | www.embraer.com

Nov/13

Job Position
Corporate and Business Strategy
• Organic growth.
• Margins enhancement through the P3E.
• Business and revenues diversifi...
Aircraft Deliveries
Commercial Jets

Executive Jets

126
98

165

83

125
101

105

106

2
58

2008

2009

2010

2011

201...
Net Revenues
US$ Million

6,335
5,498

5,364

5,803

6,178

3,931

2008

2009

2010

2011

2012

2013 Outlook: US$ 5.9 – 6...
Revenues Breakdown
Net Revenues by Segment
Revenues
US$ Billion

Net Revenues by Region
Revenues
US$ Billion

1%
15%

23%
...
Firm Order Backlog
US$ Billion

17.1
12.4

4Q12

1Q13

2Q13

3Q13

13.3

3Q12

6

12.5

17.8
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...
E-Jets Customer Base Evolution
1,360+

1,360+

2011-3Q2013

Source: Embraer (Sep/2013 - Scheduled Airlines and Leasing Co....
E-Jets Family Order Book – 3Q13

E-JETS

Deliveries

Firm Backlog

E170

192

186

6

E175

315

175

140

E190

560

482
...
Worldwide Distribution
Commercial Jets – Net Orders Market Share
60-120 Seats Jets

E-Jets Customer Base by Business Model...
E-Jets Deployment
helping airlines to be more efficient

13
Embraer Market Forecast (2012-2031)
•
•
•
•

Scope Clauses relaxation allowing 80-seater aircraft as a natural growth of R...
Competitive Scenario 61-120 Seats

15
Right Capacities to Match Market Demand

130

118 Seats DC

+3 rows
120

E195-E2 132 Seats SC
20%

110

same
97 Seats DC

...
E2 New Features – Not Just a Re-engine
E175-E2
New Wing
More efficient, high aspect
ratio metallic wing. Raked
wing tip.

...
Range
E175-E2
E190-E2
E195-E2

Range (NM)
Full PAX (SC), LRC, typical
reserves, 100 nm alternate

19

E175

E175-E2

1, 92...
E-Jets & E-Jets E2 Pilot Commonality

 Highest Commonality among
E-Jets E2 models (AAA)

 Fewer than 3 days transition
t...
Main Suppliers

Flaps and Slats Actuation
Systems; AMS

New Generation
Power Plant

Improved Avionics
Aft fuselage segment...
Fuel Burn Improvements
Fuel Burn per Seat
E175-E2 (80 seats)
vs. E175 (76 seats)

E190-E2 (97 seats)
vs. E190 (97 seats)

...
New Competitive Scenario
Capacity
(Single Class)

180+
737-8MAX

160

A320neo

140
CS300

A319neo

737-7 MAX

E195-E2

120...
Applications & Market Size
20-Year Market Forecast (70 to 130-seat Jets) - 6,400 Deliveries*

E175-E2

 Most efficient “h...
Program Investment
 Embraer investment on research, development and CAPEX for the
E-Jets E2 family will be US$ 1.7 billio...
List Prices (US$ Million)
Better Fuel Consumption Gain
• E175 E2: US$ 4.8M
• E190 E2: US$ 7.0M
• E195 E2: US$ 6.5M

Seat C...
E2 Entry into Service
150 Firm Orders

E190-E2 EIS | 1H 2018

50 Options
100 Purchase Rights
LOIs for 65 Orders

E195-E2 E...
Embraer Executive Jets

MORE THAN 630 AIRCRAFT IN-SERVICE WORLDWIDE
29
Product Portfolio
Aircraft

Seats / Range

Phenom 100

up to 8 occupants/
1,178 nm

• Cessna - Mustang/M2
• HondaJet

Phen...
Market Share
Revenues share (US$ - based on B&CA list prices)

Embraer

Bombardier
Cessna

Deliveries share (units)

Dassa...
Economic Indicators

Worldwide HNWI Population

U.S. Corporate Profits

Million people

North America

7,0

7,2

Europe

7...
Business Jets Pre-Owned Market Inventory
3500

28%
Fleet older than 10 yrs
Fleet up to 5 yrs

Positions

Fleet up to 5 yrs...
Market Recovery in Slow Motion
US Corporate profits at record levels

MILD GROWTH

HNWI at record levels
World GDP growth ...
2014-2023 Market Forecast
Units

Deliveries Forecast (units)

1200

US$

225

17,3

1345

1000
Ultra Large

800

82,2

167...
2014-2023 Market Forecast by Region
Europe, Middle East & Africa
2,330 a/c (25%)
US$ 70 Bi (28%)

North America
4,530 a/c ...
Service Center Network

Embraer Service Center
Authorized Service Center
New Embraer Service Center in São Paulo - Brazil
...
Embraer Defense & Security

OVER 52 ARMED FORCES IN 50 COUNTRIES
39
Embraer Defense & Security Integrated Portfolio

UAV’s

40

Radar

Satellite

Land Systems
Partnerships

Command
and Control
Systems
Air Traffic
Management
Control
Systems of
Systems

UAVs

MRO

Simulators

Aero
S...
Embraer Defense & Security Results
Revenues Evolution

(US$ Million)

CAGR 29%

EBIT Evolution

(%)

Backlog Evolution

Nã...
Super Tucano
• Firm orders: more than 210 aircraft
Brazil: 99

• More than 170 aircraft delivered

Colombia: 25
Dominican ...
EMBRAER KC-390

Brazil Colombia Argentina Chile
(28)
(12)
(6)
(6)

Portugal Czech Rep.
(6)
(2)

• A new tactical military ...
Modernization Programs
F-5M

A1-M

Addressable Market Forecast 2025
(US$ million)

Long-term

505
Medium-term

567

Short-...
Brazilian Army Priorities

SISFRON
Integrated Borders Monitoring System
First phase: US$ 420 Million
Total estimate: US$ 4...
Revenues Breakdown Evolution
2020

2012

New Business
• SisGAAz

(“Blue Amazon” Integrated Management System)

• Security ...
2013 Outlook
2013 Consolidated Outlook

Net Revenues

EBIT

US$ 530 – 610 Million

EBIT margin

49

US$ 5.9 – 6.4 Billion

9.0% – 9.5%
...
2013 Business Units Outlook
Deliveries: 90 to 95 E-jets
Net Revenues

US$ 3.20 – 3.35 Billion

Deliveries: 80 to 90 light ...
2013 Investment Outlook
Research

US$ 100 Million

Development

US$ 300 Million

CAPEX

US$ 180 Million

TOTAL INVESTMENTS...
Net Revenues / SG&A Expenses
Net Revenues - US$ Million

SG&A Expenses - US$ Million
2013 YTD: 499

2013 YTD: 3,931
218
17...
Income from Operations / EBITDA
Income from Operations - US$ Million

EBITDA - US$ Million
2013 YTD: 460 / 11.7%

2013 YTD...
Net Income / Free Cash Flow
Net Income - US$ Million

Free Cash Flow - US$ Million

2013 YTD: 78 / 2.0%

2013 YTD: (283)

...
Indebtedness Profile / Net Cash/Debt
Indebtedness Maturity

17%
6.0

83%

16%

15%
5.1

5.8

84%

85%

6%

Net Cash/Debt -...
Inventories
US$ Million

2,780
2,585

2,510

2,523

1Q13

2Q13

2,157

3Q12

57

4Q12

3Q13
Investments
2013 YTD: 389

US$ Million

49

300
183

180
145

100
61
RESEARCH

DEVELOPMENT

2013 YTD

CAPEX

2013 Outlook
...
EPADS and Pay Out
US$
116%
52%
34%

26%

26%

2.57
2.14

1.92

1.83
0.62

2008

2009

2010

EPADS
2008: USGAAP
2009-2012: ...
Ownership Structure - 2Q13
729,783,443 Voting Shares

International
Shareholders
72%

NYSE
50%
Local
Shareholders
28%

60
...
Sustainability Initiatives
ISO 14001 and OHSAS
18001 Certifications

Brazilian Alliance for Bio-fuel

1st ethanol powered
...
P3E - Lean Results
E-Jets Final Assembly Line Transformation
Performance Indicators

2008
2009
2012
(15 ac/month) (10 ac/m...
P3E Results

Kaizen - E-Jets Cycle Reduction

40%

40% reduction on the production cycle

64

Cost of Non Quality Reductio...
“Boa Ideia” Program Evolution

Cost: US$ 21.4 mi
Benefit: US$ 200.7 mi

65
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
circumstanc...
IR Institutional Presentation - November 2013
IR Institutional Presentation - November 2013
IR Institutional Presentation - November 2013
IR Institutional Presentation - November 2013
IR Institutional Presentation - November 2013
IR Institutional Presentation - November 2013
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IR Institutional Presentation - November 2013

  1. 1. Phone: +55 12 3927 4404 | investor.relations@embraer.com.br | www.embraer.com Nov/13 Job Position
  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 98 165 83 125 101 105 106 2 58 2008 2009 2010 2011 2012 77 9M13 37 2008 52 21 19 16 22 14 2009 2010 2011 2012 9M13 Light Jets - Phenom 2013 deliveries estimates • 90 - 95 commercial jets • 25 - 30 executive large jets • 80 - 90 executive light jets 3 Large Jets - Legacy & Lineage
  4. 4. Net Revenues US$ Million 6,335 5,498 5,364 5,803 6,178 3,931 2008 2009 2010 2011 2012 2013 Outlook: US$ 5.9 – 6.4 Billion 2008: USGAAP 2009-2012: IFRS 4 9M2013
  5. 5. Revenues Breakdown Net Revenues by Segment Revenues US$ Billion Net Revenues by Region Revenues US$ Billion 1% 15% 23% 19% 12% 5% 9% 21% 7% 9% 11% 11% 9% 5% 14% 3% 14% 17% 33% 1% 17% 6.18 25% 13% 1% 15% 5.80 13% 6.18 5.36 15% 5.36 5.80 20% 24% 2011 2012 31% 61% 2010 65% 2011 Commercial Aviation Executive Aviation 5 61% 2012 Defense & Security Others 2010 North America Brazil Europe South & Central America China Asia Pacific Africa & Middle East
  6. 6. Firm Order Backlog US$ Billion 17.1 12.4 4Q12 1Q13 2Q13 3Q13 13.3 3Q12 6 12.5 17.8
  7. 7. Embraer Commercial Aviation OVER 80 AIRLINES IN MORE THAN 50 COUNTRIES 8
  8. 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) 9 capacity: 37 seats range: 1,750 nm (3,250 Km) capacity: 44 seats range: 1,650 nm (3,050 Km) capacity: 50 seats range: 1,550 nm (2,900 Km) capacity: 50 seats range: 2,000 nm (3,700 Km)
  9. 9. E-Jets Customer Base Evolution 1,360+ 1,360+ 2011-3Q2013 Source: Embraer (Sep/2013 - Scheduled Airlines and Leasing Co.) 10
  10. 10. E-Jets Family Order Book – 3Q13 E-JETS Deliveries Firm Backlog E170 192 186 6 E175 315 175 140 E190 560 482 78 E195 145 123 22 E175-E2 100 - 100 E190-E2 25 - 25 E195-E2 25 - 25 Total 11 Firm orders 1,362 966 396
  11. 11. Worldwide Distribution Commercial Jets – Net Orders Market Share 60-120 Seats Jets E-Jets Customer Base by Business Model (% of E-Jets Fleet+Backlog) 18% 54% 28% Firm Orders Low Cost Carriers Regional Airlines Network Airlines Backlog 7% 13% 5% 48% 4% 10% 8% 20% 71% 14% Considering Accumulated Net Orders Europe & CIS Middle East & Africa Latin America 12 North America Asia Pacific & China
  12. 12. E-Jets Deployment helping airlines to be more efficient 13
  13. 13. 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 America America Projected Deliveries- Jets Market – MarketSegment 20102019 Segment 2012–2031 (Seats) Deliveries (Seats) Deliveries 445 155 1,460 580 7% 6% 22% 2,195 840 China China 32% Africa 210 80 30-60 405 60 61-90 2,625 1,015 91-120 3,765 1,550 Latin Latin America America 30 - 120 30 120 6,795 2,625 315 670 10% 12% Middle East 305 105 3% 4% 1,005 340 15% 13% Asia Pacific 505 210 7% 8% Around 6,795 jet deliveries (30-120 seats) in the next 20 years (US$ 315 bi) 14
  14. 14. Competitive Scenario 61-120 Seats 15
  15. 15. Right Capacities to Match Market Demand 130 118 Seats DC +3 rows 120 E195-E2 132 Seats SC 20% 110 same 97 Seats DC 100 20% 90 80 70 17 +1 row E190-E2 106 Seats SC 80 Seats DC E175-E2 88 Seats SC
  16. 16. E2 New Features – Not Just a Re-engine E175-E2 New Wing More efficient, high aspect ratio metallic wing. Raked wing tip. Main Landing Gear Enabling larger engines. Gear doors for improved fuel efficiency E190-E2 & E195-E2 Improved Avionics 4 larger 13”x10” displays and touchscreen controls New Engines Larger fan diameter and improved fuel efficiency Optimized Wing/Engine Different wing and engine combinations for E175-E2 and E190/195-E2 18
  17. 17. Range E175-E2 E190-E2 E195-E2 Range (NM) Full PAX (SC), LRC, typical reserves, 100 nm alternate 19 E175 E175-E2 1, 920 1,920 E190 E190-E2 E195 E195-E2 2,350 2,800 2,000 2,000 >>
  18. 18. 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 HighLevel Flight Training Device Not required 20
  19. 19. Main Suppliers Flaps and Slats Actuation Systems; AMS New Generation Power Plant Improved Avionics Aft fuselage segments, rudder and elevators Vertical and horizontal stabilizers Horizontal Stabilizer Actuation System 21 Ailerons and Spoilers Wheels & Brakes; APU; Electrical System Fly-by-wire Primary Flight Controls
  20. 20. Fuel Burn Improvements Fuel Burn per Seat E175-E2 (80 seats) vs. E175 (76 seats) E190-E2 (97 seats) vs. E190 (97 seats) -16% -16% E195-E2 (118 seats) vs. E195 (106 seats) 0% -5% -10% -15% -20% -25% Target values for 600 nm sector; Dual Class configuration; 22 -23%
  21. 21. New Competitive Scenario Capacity (Single Class) 180+ 737-8MAX 160 A320neo 140 CS300 A319neo 737-7 MAX E195-E2 120 CS100 100 E190-E2 CRJ1000 80 CRJ900 CRJ700 23 SSJ95/100 MRJ90 ARJ21 E175-E2
  22. 22. Applications & Market Size 20-Year Market Forecast (70 to 130-seat Jets) - 6,400 Deliveries* E175-E2  Most efficient “hub feeder”  Lower cost-per-seat than current Turboprops E190-E2  Efficient complement to narrowbody operations  New market developer E195-E2  Capacity growth for current E-Jet operators  Similar cost-per-seat to A320neo and 737-8 Max  Low Cost operation in mid-density markets * Embraer market forecast 24
  23. 23. Program Investment  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
  24. 24. List Prices (US$ Million) Better Fuel Consumption Gain • E175 E2: US$ 4.8M • E190 E2: US$ 7.0M • E195 E2: US$ 6.5M Seat Capacity Increase Gain • E175 E2: US$ 1.6M (4 seats) • E195 E2: US$ 4.8M (12 seats) Maintenance Cost Reduction Gain • US$ 1.0~1.5M E175 AR (8E5): 42.9 E175-E2 46.8 delta: 3.9 M E190 AR (10E5):47.4 E190-E2 53.6 delta: 6.2 M E195 AR (10E5): 50.1 E-Jets Preliminary Information as of January, 2013 -- 26 E195-E2 60.4 delta: 10.3 M E-Jets E2 US$ 3.3/USGal, 10 years NPV @ 9% rate
  25. 25. E2 Entry into Service 150 Firm Orders E190-E2 EIS | 1H 2018 50 Options 100 Purchase Rights LOIs for 65 Orders E195-E2 EIS | 2019 E175-E2 EIS | 2020 27
  26. 26. Embraer Executive Jets MORE THAN 630 AIRCRAFT IN-SERVICE WORLDWIDE 29
  27. 27. Product Portfolio Aircraft Seats / Range Phenom 100 up to 8 occupants/ 1,178 nm • Cessna - Mustang/M2 • HondaJet Phenom 300 up to 11 occupants/ 1,971 nm • Cessna - CJ2+/CJ3/CJ4 • Bombardier - Learjet 40XR/70 Legacy 450 7 to 9 passengers/ 2,300 nm • Bombardier - Learjet 45XR/75 • Cessna - XLS+/Latitude Legacy 500 Entry Model 8 to 12 passengers/ 3,000 nm • Bombardier - Learjet 85 • Cessna - Sovereign • Gulfstream – G150 Certified: 2008 Light Competitors Certified: 2009 Mid-light Under development Mid-size Legacy 600 Super mid-size 13 to 14 passengers/ 3,400 nm Certified: 2001 Large Legacy 650 13 to 14 passengers/ 3,900 nm Lineage 1000 13 to 19 passengers/ 4,500 nm Certified: 2010 Ultra-long range Ultra-large Certified: 2008 30 • • • • Bombardier - CL300/CL850 Cessna – X/Longitude Dassault - Falcon 2000S Gulfstream - G280 • Bombardier - CL605/GL5000 • Dassault – Falcon2000LXS/ 900LX • Gulfstream - G350/G450 • Bombardier - GL6000/GL7000/ GL8000 • Gulfstream – G500/G550/G650 • Dassault – Falcon 7X • Airbus - ACJ 318/319/320 • Boeing – BBJ/BBJ2/BBJ3
  28. 28. Market Share Revenues share (US$ - based on B&CA list prices) Embraer Bombardier Cessna Deliveries share (units) Dassault Gulfstream Hawker-Beech Others Market Revenues 2012: US$ 17.7 billion Embraer Revenues: US$ 1.3 billion 31 Market Deliveries 2012: 663 units Embraer Deliveries: 99 units
  29. 29. Economic Indicators Worldwide HNWI Population U.S. Corporate Profits Million people North America 7,0 7,2 Europe 7,7 8,2 Asia-Pacific 8,8 Latin america 9,6 10,1 10,1 Middle East 10,8 11,0 Africa 11,9 8,6 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 New record levels 32
  30. 30. Business Jets Pre-Owned Market Inventory 3500 28% Fleet older than 10 yrs Fleet up to 5 yrs Positions Fleet up to 5 yrs and positions 3000 Fleet from 6 to 10 yrs Total fleet % for sale 12.9% 2483 jets 8.3% 672 jets 24% Up to 10 yrs % for sale 2000 16% 12% 1000 8% 500 4% 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 Q2 Q3 2000 2001 2002 2003 Source: Jetnet and Embraer Analysis, September 2013. 33 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 0% % of active fleet 20% 1500 Units 2500
  31. 31. Market Recovery in Slow Motion US Corporate profits at record levels MILD GROWTH HNWI at record levels World GDP growth is moderate Used market inventory leveled off but prices are still an issue Traffic recovery on track but slower than expected European markets still at risk; emerging countries slowing down  Lack of confidence is holding the bizjet market turnaround  USA market dictates the speed of recovery
  32. 32. 2014-2023 Market Forecast Units Deliveries Forecast (units) 1200 US$ 225 17,3 1345 1000 Ultra Large 800 82,2 1670 Ultra Long Range Large 1270 Supermid 920 Midsize 1140 600 400 64,7 31,1 Midlight 200 1780 900 Light 2023 2022 2021 2020 2019 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 0 2018 Entry 17,8 17,3 15,8 Deliveries Revenues 9,250 jets and US$ 250 Bi in the next 10 years N10YF 4,2
  33. 33. 2014-2023 Market Forecast by Region Europe, Middle East & Africa 2,330 a/c (25%) US$ 70 Bi (28%) North America 4,530 a/c (49%) US$ 117 Bi (47%) China 805 a/c (9%) US$ 29 Bi (11%) Asia Pacific 725 a/c (8%) US$ 21 Bi (8%) Latin America 860 a/c (9%) US$ 15 Bi (6%) 36 Worldwide 9,250 units US$ 250 Bi
  34. 34. Service Center Network Embraer Service Center Authorized Service Center New Embraer Service Center in São Paulo - Brazil Nearly 70 service centers worldwide. 37
  35. 35. Embraer Defense & Security OVER 52 ARMED FORCES IN 50 COUNTRIES 39
  36. 36. Embraer Defense & Security Integrated Portfolio UAV’s 40 Radar Satellite Land Systems
  37. 37. Partnerships Command and Control Systems Air Traffic Management Control Systems of Systems UAVs MRO Simulators Aero Structures Modernization of Avionics Systems Remote Sensing Land Defense Systems integration Aerial Surveillance Radar SISFRON implementation 90% 100% Satellite Geostationary of Defense and Communications (SGDC) C4I 100% 51% 65% 51%
  38. 38. Embraer Defense & Security Results Revenues Evolution (US$ Million) CAGR 29% EBIT Evolution (%) Backlog Evolution Não contabiliza as receitas provenientes da OGMA nos anos de 2006 a 2010. 42 (US$ Billion)
  39. 39. Super Tucano • Firm orders: more than 210 aircraft Brazil: 99 • More than 170 aircraft delivered Colombia: 25 Dominican Republic: 8 Addressable Market Forecast 2020 Chile: 12 (US$ million) Ecuador: 18 Indonesia: 16 Greystone (TacAir): 1 Long-term Medium-term 2.000 700 Short-term 800 Mauritania: 2 Burkina Faso: 3 Angola: 6 USA: 20 Total Market Forecast: 300 aircraft / US$ 3.5 billion Partnership with Boeing to provide weapons integration, increasing capabilities of the aircraft. 43
  40. 40. EMBRAER KC-390 Brazil Colombia Argentina Chile (28) (12) (6) (6) Portugal Czech Rep. (6) (2) • 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 Critical Design Review in the first quarter of 2013. Ref. April13 44 Total Market Forecast 2025: 700 aircraft / US$ 50+ bi
  41. 41. Modernization Programs F-5M A1-M Addressable Market Forecast 2025 (US$ million) Long-term 505 Medium-term 567 Short-term 437 Brazilian Navy A-4 12 aircraft 2 prototypes at GPX-CS Brazilian Air Force A-1M 43 aircraft 18 received by Embraer for the modernization Brazilian Air Force F-5M Total Market Forecast: 228 aircraft / US$ 1.5 billion 46 a/c + 11 a/c (2nd batch) 46 delivered Brazilian Air Force E-99 5 a/c aircraft EMB 145 AEW&C Ref. dec/12 45 A-4
  42. 42. 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% Sensors 59% UAV 12% Satellite Estimate: US$ 400 Million SW 20% Ref. dec/12 46 Participation in the first Brazilian Geostationary Satellite
  43. 43. Revenues Breakdown Evolution 2020 2012 New Business • SisGAAz (“Blue Amazon” Integrated Management System) • Security of Critical Infrastructure • Public Security (sporting events, cities, states) 47
  44. 44. 2013 Outlook
  45. 45. 2013 Consolidated Outlook Net Revenues EBIT US$ 530 – 610 Million EBIT margin 49 US$ 5.9 – 6.4 Billion 9.0% – 9.5% EBITDA US$ 770 – 900 Million EBITDA margin 13.0% – 14.0%
  46. 46. 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 50 US$ 50 – 100 Million
  47. 47. 2013 Investment Outlook Research US$ 100 Million Development US$ 300 Million CAPEX US$ 180 Million TOTAL INVESTMENTS: US$ 580 Million 51
  48. 48. Net Revenues / SG&A Expenses Net Revenues - US$ Million SG&A Expenses - US$ Million 2013 YTD: 499 2013 YTD: 3,931 218 170 75 161 175 54 59 53 163 51 1,898 1,557 1,402 1,288 1,086 3Q12 4Q12 1Q13 143 111 2Q13 3Q13 108 3Q12 4Q12 G&A Expenses 53 1Q13 121 112 2Q13 3Q13 Selling Expenses
  49. 49. Income from Operations / EBITDA Income from Operations - US$ Million EBITDA - US$ Million 2013 YTD: 460 / 11.7% 2013 YTD: 251 / 6.4% 12.0% 16.3% 13.1% 12.0% 8.7% 7.2% 12.1% 9.2% 5.9% 3.6% 310 228 135 101 204 168 156 76 100 40 3Q12 4Q12 EBIT 54 1Q13 2Q13 EBIT Margin 3Q13 3Q12 4Q12 EBITDA 1Q13 2Q13 3Q13 EBITDA Margin
  50. 50. Net Income / Free Cash Flow Net Income - US$ Million Free Cash Flow - US$ Million 2013 YTD: 78 / 2.0% 2013 YTD: (283) 6.5% 4.7% 439 4.1% 2.8% 202 186 -0.3% 102 123 2 53 30 (163) (138) 65 (30) (50) (58) (75) (83) 4Q12 Net Income 1Q13 2Q13 Net Margin 3Q13 3Q12 4Q12 1Q13 (84) (60) (80) 2Q13 3Q13 Free cash flow Net cash generated (used) by operating activities* Additions to PP&E * Net of Financial assets adjustment 55 (106) (201) (5) 3Q12 (50) (68) (125) Additions to Intangible
  51. 51. Indebtedness Profile / Net Cash/Debt Indebtedness Maturity 17% 6.0 83% 16% 15% 5.1 5.8 84% 85% 6% Net Cash/Debt - US$ Million 4% 6.3 5.4 94% 309 96% 123 98 58 (20) 3Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q13 Long-term Short-term Loans Average Maturity (Years) Total Debt 3Q13 56 US$ 2.19 Billion Total Cash 3Q13 US$ 2.17 Billion
  52. 52. Inventories US$ Million 2,780 2,585 2,510 2,523 1Q13 2Q13 2,157 3Q12 57 4Q12 3Q13
  53. 53. Investments 2013 YTD: 389 US$ Million 49 300 183 180 145 100 61 RESEARCH DEVELOPMENT 2013 YTD CAPEX 2013 Outlook Contracted CAPEX (mainly for Defense & Security Programs) 2013 Outlook: US$ 580 Million 58
  54. 54. EPADS and Pay Out US$ 116% 52% 34% 26% 26% 2.57 2.14 1.92 1.83 0.62 2008 2009 2010 EPADS 2008: USGAAP 2009-2012: IFRS 59 2011 Pay Out 2012
  55. 55. Ownership Structure - 2Q13 729,783,443 Voting Shares International Shareholders 72% NYSE 50% Local Shareholders 28% 60 BM&F BOVESPA 50%
  56. 56. Sustainability Initiatives ISO 14001 and OHSAS 18001 Certifications Brazilian Alliance for Bio-fuel 1st ethanol powered aircraft in the World Social Activities Reforestation Projects Recycling Corporate Values Greener Technology 62 Ipanema
  57. 57. P3E - Lean Results E-Jets Final Assembly Line Transformation Performance Indicators 2008 2009 2012 (15 ac/month) (10 ac/month) (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 nonconformity per a/c 32 1.7 0.76 Overtime (% of work hours) 10 1.5 0 E-Jets Wing Junction Line Transformation 63
  58. 58. P3E Results Kaizen - E-Jets Cycle Reduction 40% 40% reduction on the production cycle 64 Cost of Non Quality Reduction 57% 44% reduction on CNQ
  59. 59. “Boa Ideia” Program Evolution Cost: US$ 21.4 mi Benefit: US$ 200.7 mi 65
  60. 60. Investor Relations Phone: +55 12 3927 4404 investor.relations@embraer.com.br www.embraer.com
  61. 61. 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. 67

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