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Emb day executive aviation oct2013 (2)
This document provides an overview of the business jet market and Embraer's position within it. It discusses factors influencing the market recovery, including corporate profits, wealth levels, and used aircraft prices. Forecasts indicate slow but steady growth over the next decade. Embraer aims to strengthen its presence in light and midsize categories with new models and upgrades. Services are expanding with a new service center in São Paulo.
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Emb day executive aviation oct2013 (2)
- 1. This information isthe property of Embraer and cannot be used or reproduced without written consent. Embraer Day Marco Tulio Pellegrini - COO Executive Aviation Oct. 31st, 2013
- 2. This information isthe property of Embraer and cannot be used or reproduced without written consent. Market recovery depends on many factors Source: Embraer Analysis Sales of New Business Jets Sales of New Business Jets Corporate Profits Corporate Profits Willingness to invest Willingness to invest Finance conditions (for small jets, and Asia mainly) Finance conditions (for small jets, and Asia mainly) Pre-owned Market Pre-owned Market Business Aviation Traffic Business Aviation TrafficWealthy Population Wealthy Population Exchange Rates Stock Markets
- 3. This information isthe property of Embraer and cannot be used or reproduced without written consent. U.S. corporate profits Source: BEA – Bureau of Economic Analysis and Embraer estimates, September 2013 Seasonally adjusted at annual rates 2.249 0 500 1.000 1.500 2.000 2.500 Q2 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 USCorporateProfits(US$Bi) +41% +125%
- 4. This information isthe property of Embraer and cannot be used or reproduced without written consent. Worldwide HNWIs population Source: World Wealth Report 2013 edition 7.7 8.2 8.8 9.6 10.1 8.6 10.1 10.8 11.0 11.9 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Population(mi) North America Europe Asia-Pacific LatinAmerica MiddleEast Africa
- 5. This information isthe property of Embraer and cannot be used or reproduced without written consent. Source: FAA – September 27th, 2013 Business Jet Traffic – United States 100 130 160 190 220 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec MovementsX1000 2007 2009 2012 2013
- 6. This information isthe property of Embraer and cannot be used or reproduced without written consent. World GDP growth rates Source: EIU, September 2013
- 7. This information isthe property of Embraer and cannot be used or reproduced without written consent. Business jets pre-owned market inventory Source: Jetnet and Embraer Analysis, September 2013 0% 4% 8% 12% 16% 20% 24% 28% 0 500 1.000 1.500 2.000 2.500 3.000 3.500 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 TD %ofactivefleet(Lines) Units(Bars) Fleet older than 10 yrs Up to 10 yrs & positions Total fleet % for sale 12.9% 2483 jets 8.3% 672 jets
- 8. This information isthe property of Embraer and cannot be used or reproduced without written consent. EEJ Fleet for sale Despite a large amount of small jets in fleet, Embraer fleet for sale is currently below the world average of 12.3%. Despite a large amount of small jets in fleet, Embraer fleet for sale is currently below the world average of 12.3%. 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 50 55 60 65 70 75 80 85 90 95 100 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 forsaleas%ofactivefleet #ofEmbraera/cforsale EMBRAER Total fleet for sale % of active fleet Source: Jetnet and Embraer Analysis, October 2013 12%
- 9. This information isthe property of Embraer and cannot be used or reproduced without written consent. Pre-owned asking prices Recovery will depend on an improvement in pre-owned prices. Owners are postponing substitutions. Recovery will depend on an improvement in pre-owned prices. Owners are postponing substitutions. 2000 2400 2800 3200 0% 50% 100% 150% May-09 Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12 May-13 #TotalFleetforsale Av.discount(RelativetoMay2009) # Total Fleet for sale Average discount ↓ 18.5% since peak Source: Jetnet and Embraer Analysis, October 2013 ↑ 141% since peak
- 10. This information isthe property of Embraer and cannot be used or reproduced without written consent. Top 5 business jets in residual value performance * Average equipped price in 2013 economic conditions for all years. Source: Aircraft Bluebook, October 2013 30% 40% 50% 60% 70% 80% 90% 100% 2013 2012 2011 2010 2009 2008 2007 2006 Retail / Avg Equipped* Phenom 300 Citation CJ4 G550 Lineage 1000 7X Year of Manufacture
- 11. This information isthe property of Embraer and cannot be used or reproduced without written consent. Top 10 best “liquidity” performers Source: Jetnet, October 2013. Rank MODELS DAYS ON MARKET DAY ON MARKET (US) ACTIVE FLEET FLEET FOR SALE FLEET FOR SALE (%) 1st EMBRAER PHENOM 300 125 102 139 4 3% 2nd CITATION CJ4 149 238 130 3 2% 3rd GULFSTREAM G-350 157 N.A. 11 2 18% 4th GULFSTREAM G-550 169 120 411 12 3% 5th LEARJET 40XR 179 215 91 5 5% 6th CITATION XLS+ 191 131 143 10 7% 7th GULFSTREAM G-450 230 130 271 19 7% 8th EMBRAER PHENOM 100 234 256 285 19 7% 9th CHALLENGER 300 237 304 414 22 5% 10th FALCON 2000LX 237 83 123 6 5%
- 12. This information isthe property of Embraer and cannot be used or reproduced without written consent. Fractional market consolidation: control duopoly Source: Embraer analysis based on Jetnet database. October 2013. Active fractional shares - market share 73% 11% 12% 3% 1% NetJets Flight Options Flexjet CitationAir Others Directional Aviation Control Directional Aviation will more than double its participation (from 11% to 23%).Directional Aviation will more than double its participation (from 11% to 23%).
- 13. This information isthe property of Embraer and cannot be used or reproduced without written consent. Phenom 300 in fractional operators Source: Jetnet and Embraer Analysis, October2013 FLIGHT OPTIONSFLIGHT OPTIONS NETJETSNETJETS 25 aircraft delivered to date25 aircraft delivered to date 10 aircraft delivered to date10 aircraft delivered to date Flight Options also operates 6 Legacy 600
- 14. This information isthe property of Embraer and cannot be used or reproduced without written consent. Owners utilization profile (average FH/year) Source: Jetnet IQ 2Q13 report proprietary data. Embraer owners tend to have a better annual utilization leading their businesses to higher productivity. Good option for management prospects. Embraer owners tend to have a better annual utilization leading their businesses to higher productivity. Good option for management prospects. 344 393 433 445 440 393 372 350 616 0 200 400 600 800 1000 Small jets Medium Jets Large Jets Gulfstream Dassault Bombardier Cessna Hawker EMBRAER Owners Owners classOwnersOEM
- 15. This information isthe property of Embraer and cannot be used or reproduced without written consent. Next 10 years Bizjet Forecast
- 16. This information isthe property of Embraer and cannot be used or reproduced without written consent. US Corporate profits at record levels 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 Market Recovery in slow motion Lack of confidence is holding the bizjet market turnaround USA market dictates the speed of recovery MILD GROWTH
- 17. This information isthe property of Embraer and cannot be used or reproduced without written consent. Deliveries Forecast (units) 0 200 400 600 800 1000 1200 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 9,250 jets and US$ 250 Bi in the next 10 years Units US$ 2014-2023 market forecast 900 4,2 1780 15,8 1140 17,3 920 17,8 1270 31,1 1670 64,7 1345 82,2 225 17,3 Deliveries Revenues N10YF Ultra Large Ultra Long Range Large Supermid Midsize Midlight Light Entry
- 18. This information isthe property of Embraer and cannot be used or reproduced without written consent. 2014-2023 market forecast by region Source: Embraer 2013. North America 4,530 a/c (49%) US$ 117 Bi (47%) EMEA 2,330 a/c (25%) US$ 70 Bi (28%) Asia Pacific 725 a/c (8%) US$ 21 Bi (8%) Latin America 860 a/c (9%) US$ 15 Bi (6%) China 805 a/c (9%) US$ 29 Bi (11%) Worldwide 9,250 units US$ 250 Bi
- 19. This information isthe property of Embraer and cannot be used or reproduced without written consent. THE BUSINESS TODAY
- 20. This information isthe property of Embraer and cannot be used or reproduced without written consent. EntryEntry LightLight Mid-lightMid-light Mid-sizeMid-size Super Mid-SizeSuper Mid-Size LargeLarge Ultra-Long RangeUltra-Long Range Ultra-largeUltra-large EIS 2009 EIS 2010 EIS 2002 EIS 2009 EIS 2008 EIS 2014 EIS 2015 Embraer product portfolio
- 21. This information isthe property of Embraer and cannot be used or reproduced without written consent. Executive Aviation - Revenue evolution (US$ million) 145 175 246 278 582 838 874 937 1210 1119 1292 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 CAGR 24.4%
- 22. This information isthe property of Embraer and cannot be used or reproduced without written consent. EEJ market share evolution since EIS (units) 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: Jetnet and Embraer analysis – July, 2013 Marketshare 22% accumulated since EIS, within the markets EEJ competes22% accumulated since EIS, within the markets EEJ competes
- 23. This information isthe property of Embraer and cannot be used or reproduced without written consent. 29% 28% 27% 33% 33% 19% 13% 7% 9% 10% 12% 18% 22% 15% 17% 23% 21% 21% 27% 25% 4,2% 6,4% 6,9% 5,9% 7,3% 8% 8% 6% 4% 3% 5% 6% 10% 7% 5% 21.8 17.3 18.2 18.1 17.7 %OEMShare–TotalRevenuesUS$ 2008 2009 2010 2011 2012 Others Hawker-Beech Embraer Gulfstream Dassault Cessna Bombardier Total Revenues (in US$) Source: GAMA and Embraer analysis – July, 2013 EEJ market share (revenues)
- 24. This information isthe property of Embraer and cannot be used or reproduced without written consent. Backlog evolution (US$ million) CAGR 17% 500 500 100 300 1800 4900 7200 5500 4700 4400 3200 2800 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013TD
- 25. This information isthe property of Embraer and cannot be used or reproduced without written consent. Brazil – São José dos Campos Phenom 100 & 300 Legacy 450 & 500 Legacy 650 Lineage 1000 Embraer Executive Jets: Final assemblies USA - Melbourne Phenom 100 & 300 Legacy 450 & 500 China - Harbin Legacy 650
- 26. This information isthe property of Embraer and cannot be used or reproduced without written consent. 400th Phenom 100/300 delivery in SJK Phenoms delivered June ’13
- 27. This information isthe property of Embraer and cannot be used or reproduced without written consent. Phenom 100 – 2014 edition New Multi-Function Spoiler and Interior Improvements • Multi-function spoilers • 11 new interior collections New Standard Items • Multi-function spoilers • 11 new interior collections New Standard Items • Refreshment center • Stowage space • Premium seats New Interior Options • Refreshment center • Stowage space • Premium seats New Interior Options
- 28. This information isthe property of Embraer and cannot be used or reproduced without written consent. Based on Garmin 3000 First to certify this touchscreen Garmin platform ANAC, FAA and EASA approved Now available as an option Phenom 300 – Prodigy touch
- 29. This information isthe property of Embraer and cannot be used or reproduced without written consent. Extended Range - 200 nm Enhanced Interior Entertainment to the latest generation Enhanced cockpit options – E2VS and Autoland External look refreshed
- 30. This information isthe property of Embraer and cannot be used or reproduced without written consent. Legacy 500 program update AllPreliminaryData Three prototypes in flight test 700+ flight hours Over 16,000 systems test hours performed On track for EIS in 1H 2014 First appearance at NBAA
- 31. This information isthe property of Embraer and cannot be used or reproduced without written consent. Range 2,300 nm FROM TO 2,500 nm Better performance and more flexibility AllPreliminaryData Legacy 450 - Range increase
- 32. This information isthe property of Embraer and cannot be used or reproduced without written consent. 46” 4” additional leg room Legacy 450 - Cabin comfort improvement
- 33. New Interior Designunveiled at NBAANew Interior Design unveiled at NBAA
- 34. This information isthe property of Embraer and cannot be used or reproduced without written consent. Legacy 450 program update First flight expected for 2H13First flight expected for 2H13
- 35. This information isthe property of Embraer and cannot be used or reproduced without written consent. SERVICES AND SUPPORT UPDATE
- 36. This information isthe property of Embraer and cannot be used or reproduced without written consent. Embraer Service Center Authorized Service Center New Embraer Service Center in São Paulo - Brazil Service Center network Nearly 70 service centers worldwide.Nearly 70 service centers worldwide.
- 37. This information isthe property of Embraer and cannot be used or reproduced without written consent. New Service Center in São Paulo, Brazil MRO start-up: October 2013 FBO start-up: March 2014 200,000 SQFT US$ 25 million investment
- 38. This information isthe property of Embraer and cannot be used or reproduced without written consent. Customer satisfaction: 2nd position maintained 38 “Embraer is creeping even closer to the top spot, up 0.1 to 8.2 from last year’s 8.1”
- 39. This information isthe property of Embraer and cannot be used or reproduced without written consent. Phenom 100: 280+ Phenom 300: 140+ Legacy 600/650: 200+ Lineage 1000: 10+ Embraer Executive Jets Global Presence 630+ executive jets in service in more than 50 countries630+ executive jets in service in more than 50 countries
- 40. This information isthe property of Embraer and cannot be used or reproduced without written consent.
- 41. This information isthe property of Embraer and cannot be used or reproduced without written consent. This presentation is the property of Embraer S.A. ("Embraer") and shall not be copied, in whole or in part, or used in any manner, except with Embraer´s prior written consent. Embraer reserves the right to revise this document whenever occasioned by product improvements, governmental regulations or other good cause. All images: figures, finishing materials and colors are for illustration purpose only, and may not represent the real and final product accurately. Some features are optional items not included in the baseline aircraft and are subject to price increase and lead-time analysis. All data presented shall not be used as guarantee. Guaranteed specifications are listed in the technical description and represent the only binding guarantee. In the event of any conflict between this presentation and the technical description, the technical description shall govern.