Encontro de investidores em ny apresentação corporativa (ingles)
6th U.S. Analyst and Investor Meeting Maurício Botelho President & CEOApril 12, 2006
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.
Worldwide Defense Procurement Procurement by Region - 2005-2012 Total 2005 -2012 : US$ 1,5 trillion US$ billion 250.0 Australasia 200.0 Asia Pacific Latin America 150.0 Africa Middle East East EuropeAverage 100.0 West Europegrowth of North America2.6% between 50.02005-2012 0.0 2005 2006 2007 2008 2009 2010 2011 2012 Source: Frost & Sullivan 2004
US Military expenditures US Department of Defense Budget * (US$ Billion) FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 Personnel 107.2 108.9 108.6 108.6 108.9 109.1 109.1Operations & Maintenance 139.9 147.8 150.5 153.4 155.5 155.7 156.2 Acquisitions 79.7 78.0 89.7 97.3 98.9 102.4 106.9 Research & Development 70.2 69.4 65.4 63.8 68.0 63.3 53.8 Others 12.4 15.2 18.2 17.5 16.5 15.3 17.5 Total 409.5 419.3 432.5 440.6 447.8 445.7 443.5 US Department of Defense Budget Acquisitions and P&D (US$ billion) 170 160 150 140 130 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011Source: Congressional Research Service* Iraq and Afghanistan operations not included 2006 US Dollars
US ISR Market US ISR Market Growth Trend (US$ billion) 60 50 40US$ 30billion 20 10 2000 2002 2004 2006 2008 2010 2012 2014 Between 2005 and 2010 ISR systems will increase participation from 22% to 27% of total acquision and R&D spending of the U.S. DoD budget Source : Frost & Sullivan, 2003
Defense Market Evolving Scenario! Restricted Budgetary scenario! Different military threats prompt to warfare Information transformation Superiority! Changing force structure Armed Forces! Knowledge based, full- spectrum operations Transformation! Reduction of human exposure to threat situations
Defense Market Trends!Information Superiority ! Shorter reaction times and shorter sensor to shooter cycles. ! Network centric approach instead of platform centric. ! Expansion of ISTAR (Intelligence, Surveillance, Target Acquisition and Reconnaissance Systems ! Expansion of advanced communication and network based systems!Armed Forces Transformation ! Higher mobility and flexibility ! Multi-forces integration ! Faster command cycles
Super Tucano! High-performance evolution of the proven EMB 312 Tucano! State-of-the-art systems and advanced avionics! Optimized for basic, advanced training and operational applications in hostile environments! Can operate from unprepared runways, during day or night! The only aircraft in its class capable of employing diversified conventional and smart weapons.
EMB 145 AEW&C! The EMB 145 AEW&C (Airborne Early Warning & Control) is the most advanced Airborne Early Warning & Control System in operation today.! It is fitted with an advanced electronic scanning radar capable of detecting air targets at long distances while controling the airspace
EMB 145 RS/AGS! An advanced asset capable of providing real-time imagery and electronic intelligence over ground objectives! It features an advanced Synthetic Aperture Radar (SAR), for day or night, and all-weather radar imagery of the ground over large areas, plus other sophisticated sensors
P-99! New generation Maritime Patrol and Anti-Submarine Warfare aircraft! Features maritime and ground surveillance radar, Electro-Optics, Acoustics and Electronic Surveillance sensors
Brazilian Air Force Amazon Surveillance System• R-99A - EMB 145 AEW&C - Airborne Early Warning & Control• R-99B - EMB 145 RS - Remote Sensing and Ground Surveillance.
Main Benefits to the Company• Financing of the Company’s expansion programs through the equity capital markets and the use of convertible instruments • The current capital structure does not allow the Company to issue new shares without additional capital injection by the current controlling shareholders which for different reasons is unfeasible , thus limiting the Company’s flexibility for financing its growth in the equity capital markets• Creation of an acquisition currency for potential expansions in the international markets • The enhancement of the Company’s valuation multiples and increase in liquidity in both the domestic and international markets would allow for potential expansion through acquisitions• The increase in liquidity and better market perception of the Company would reflect positively on its share price in the stock exchange • The improvement in Company’s corporate governance and transparency, in addition to the possible listing in the “Novo Mercado”, could create additional demand for the stock from institutional investors including the local pension funds
Shareholders Protection Mechanisms Mechanism DescriptionNumber of valid votes per • The maximum allowed votes per shareholder or group of shareholders actingshareholder or group of shareholders as one, including brokers acting on behalf of one or more ADS holders, limitedacting in a concerted manner limited to 5% of the total shares of the Companyto 5% of the total shares of the • The mechanism above will affect only the shareholders’ political rights (e.g.,Company voting rights), not being applicable to economic rightsMandatory delisting tender offer • Shareholders who acquire or become holders of more than 35% of the Company’s capital would be required to launch a delisting tender offer, under conditions established in Embraer´s bylaws, and Brazilian laws • The tender offer is conditioned upon the Brazilian Government authorization, subject to suspension of voting rightsVoting rights limitation to foreign • The total number of foreign votes limited to 40% (forty percent) of total validshareholders votes in each General Shareholders` Meeting, corresponding to 2/3 of total votes of Brazilian ShareholdersMandatory ownership disclosure • Percentage ownership must be disclosed whenever a shareholder reaches a 5% threshold and every 5% increment thereafterMonitoring Committee to follow • The CFO will monitor the Company’s ownership and the compliance of thechanges in ownership shareholders` protection mechanisms to disclose potential violations of the company’s bylaws
New Capital Structure738.611.820 Common (Voting) Shares BOZANO GROUP* 11.1% PREVI (PENSION FUND) OTHERS NYSE 39.3% 16.4% SISTEL (PENSION FUND) 7.4% BNDESPAR 6.3% OTHERS BOVESPA 11.7% EUROPEAN GROUP** 7.5% BRAZILIAN GOVERNMENT 0.3% * Includes Bozano Company and Bozano Holdings ** Includes Dassault Aviation, EADS, Safran and Thales