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Embraer Day BR 2014 Executive Jets
This document contains information from Embraer about its executive jets business. It provides data on Embraer's fleet evolution and market share from 2002-2013. It also outlines Embraer's global manufacturing and service center network. Finally, it summarizes the business jet market outlook for 2014-2023, forecasting 9,250 jet deliveries and $250 billion in revenues over the next decade. The market is expected to see steady mild growth, led by North America, as the pre-owned market and corporate profits continue improving.
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Embraer Day BR 2014 Executive Jets
- 1. Embraer Executive Jets MarcoTulio Pellegrini President & CEO – Embraer Executive Jets This information is the property of Embraer and cannot be used or reproduced without written consent.
- 2. Embraer Executive Jetsfleet evolution 800 739 Number of aircraft 700 620 600 521 500 422 400 277 300 200 81 117 155 8 21 34 54 13 2003 13 2004 20 27 36 38 2002 100 2005 2006 2007 2008 Deliveries Source: GAMA, October 2012 and analysis Embraer This information is the property of Embraer and cannot be used or reproduced without written consent. 122 145 2009 2010 EEJ fleet (accum) 99 99 119 2011 2012 2013
- 3. Executive Aviation -Revenue evolution Embraer revenue per segment 2005 1,645 2013 7% CAGR = 22% 27% 1,292 1,210 Executive Jets 1,119 838 P100 EIS P300 & L1000 EIS L650 EIS 937 874 ´07 ´08 ´09 ´10 582 145 175 246 278 ´04 ´05 L600 EIS Net Revenue (US$ MM) Commercial and Defense ´02 ´03 ´06 This information is the property of Embraer and cannot be used or reproduced without written consent. ´11 ´12 ´13
- 4. Phenom 300 -Market share evolution Phenom 300 (All bizjet market) 37th 11th 5th 2nd 1st 1% Phenom 300 24% 30% 39% CJ4 34% 47% 17% 20% 18% 34% CJ2+ 31% 26% 16% 15% 12% 10% 5% 11% 11% 2% 2009 15% 12% 11% 8% 2% 13% 2% 6% 12% 2011 2012 2013 Source: GAMA, Feb 2014 and Embraer analysis This information is the property of Embraer and cannot be used or reproduced without written consent. Premier IA Learjet 40/70 15% 1% 2010 CJ3 4% H 400XP SJ-30-2
- 5. EEJ market shareevolution since EIS (units) 40% Market share 30% 22% 21% 20% 10% 16% 9% 5% 0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 22% accumulated since EIS, within the markets EEJ competes Source: Jetnet and Embraer analysis – February 2014 This information is the property of Embraer and cannot be used or reproduced without written consent. 5
- 6. EEJ market share(New aircraft delivery revenues) $21.8Bi $17.3Bi $18.2Bi $18.1Bi $17.7Bi $21.2Bi Total revenue Source: GAMA and Embraer analysis This information is the property of Embraer and cannot be used or reproduced without written consent. 6
- 7. Embraer Executive Jetsat a glance This information is the property of Embraer and cannot be used or reproduced without written consent. 7
- 8. Embraer product portfolio Ultra-large EIS2009 Ultra-Long Range Large EIS 2010 Super Mid-Size EIS 2002 Mid-size EIS 2014 Mid-light EIS 2015 Light EIS 2009 Entry EIS 2008 This information is the property of Embraer and cannot be used or reproduced without written consent.
- 9. Owners utilization profile(average FH/year) EMBRAER Owners Owners OEM Hawker Cessna Bombardier Dassault Gulfstream 350 372 393 440 445 Owners class 616 Large Jets Medium Jets Small jets 433 393 344 0 200 400 600 Embraer owners tend to have a better annual utilization leading their businesses to higher productivity Source: Jetnet IQ 2Q13 report proprietary data. This information is the property of Embraer and cannot be used or reproduced without written consent. 800
- 10. High utilization andreliability Total operation (Y/Y% - 3M) Source: BofA Merrill Lynch Research , January 2014 Y/Y % change in 3M rolling average This information is the property of Embraer and cannot be used or reproduced without written consent.
- 11. Top 10 best“liquidity” performers Rank Models Days on market Active fleet Fleet for sale Fleet for sale (%) 1st GULFSTREAM G-650 37 49 1 2.0% 2nd EMBRAER LEGACY 650 51 52 1 1.9% 3rd EMBRAER PHENOM 300 82 177 5 2.8% 4th GULFSTREAM G-550 119 428 12 2.8% 5th AIRBUS ACJ319 148 68 2 2.9% 6th CITATION CJ4 160 140 5 3.5% 7th CHALLENGER 300 207 428 25 5.8% 8th GULFSTREAM G-450 234 279 22 7.8% 9th CITATION CJ3 245 405 23 5.6% 10th EMBRAER PHENOM 100 262 294 20 6.8% . Source: Jetnet, January 2014. Considers only currently in production jets, with an active fleet of 30 or more aircraft This information is the property of Embraer and cannot be used or reproduced without written consent.
- 12. EEJ manufacturing plants:global distribution USA | Melbourne Phenom 100 & 300 Legacy 450 & 500 Brazil | São J. Campos Phenom 100 & 300 Legacy 450 & 500 Legacy 650 Lineage 1000 This information is the property of Embraer and cannot be used or reproduced without written consent. China | Harbin Legacy 650
- 13. Legacy 500 programstatus Four prototypes in flight test 1,100+ flight hours 21,000+ systems test hours performed On track for EIS in 1H 2014 This information is the property of Embraer and cannot be used or reproduced without written consent.
- 14. Legacy 450 successfulfirst flight on Dec, 28th This information is the property of Embraer and cannot be used or reproduced without written consent. 14
- 15. Customer Support andServices This information is the property of Embraer and cannot be used or reproduced without written consent. 15
- 16. Service Center network EmbraerService Center Authorized Service Center New Embraer Service Center in São Paulo - Brazil Nearly 70 service centers worldwide This information is the property of Embraer and cannot be used or reproduced without written consent.
- 17. New Service Centerin São Paulo, Brazil Sorocaba Service Center MRO since November 2013 FBO start-up: March 2014 200,000 SQFT and US$ 25 MM investment This information is the property of Embraer and cannot be used or reproduced without written consent.
- 18. Customer satisfaction: 2ndposition maintained “Embraer is creeping even closer to the top spot, up 0.1 to 8.2 from last year’s 8.1” This information is the property of Embraer and cannot be used or reproduced without written consent. 18
- 19. Market overview This informationis the property of Embraer and cannot be used or reproduced without written consent. 19
- 20. Market recovery dependson many factors Willingness to invest Stock Markets Pre-owned Market Wealthy Population Business Aviation Traffic Corporate Profits Exchange Rates Regulatory Environment Airport Infrastructure Sales of New Business Jets Source: Embraer Analysis This information is the property of Embraer and cannot be used or reproduced without written consent. Finance conditions (for small jets, and Asia mainly)
- 21. U.S. corporate profits USCorporate Profits (US$ Bi) 2.500 2.000 2.288 +43% +129% 1.500 1.000 500 0 Q3 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: BEA – Bureau of Economic Analysis and Embraer estimates, January 2014. Seasonally adjusted at annual rates This information is the property of Embraer and cannot be used or reproduced without written consent.
- 22. Worldwide HNWIs population 10.1 11.0 2010 2011 8.6 Population(mi) 7.7 8.8 8.2 10.1 9.6 10.8 11.9 2003 2004 2005 North America Europe 2006 2007 Asia-Pacific Source: World Wealth Report 2013 edition This information is the property of Embraer and cannot be used or reproduced without written consent. 2008 2009 Latin America Middle East 2012 Africa
- 23. Business Jet Traffic– United States 220 Thousand of Flights 2007 190 2012 160 130 2013 2009 100 Jan Feb Mar Apr May Source: FAA – February 2014 This information is the property of Embraer and cannot be used or reproduced without written consent. Jun Jul Aug Sep Oct Nov Dec
- 24. Business jets pre-ownedmarket inventory 3.500 Fleet older than 10 yrs Total fleet % for sale 3.000 28% Up to 10 yrs & positions Up to 10 yrs % for sale 11.8% 2316 jets 7.4% 600 jets 24% 20% 2.000 16% 1.500 12% 1.000 8% 500 4% 0 0% ´00 ´01 ´02 ´03 ´04 ´05 ´06 Source: Jetnet and Embraer Analysis, February 14th 2014 This information is the property of Embraer and cannot be used or reproduced without written consent. ´07 ´08 ´09 ´10 ´11 ´12 ´13 ´14 TD % of active fleet (Lines) Units (Bars) 2.500
- 25. Pre-owned asking prices 3.200 #Total Fleet for sale 50% Market Depreciation 3.000 45% 2.800 40% 2.600 35% 2.400 30% 2.200 2.000 May-09 25% Jan-10 Sep-10 May-11 Jan-12 Sep-12 May-13 Recovery will depend on an improvement in pre-owned prices. Owners are postponing substitutions. Source: Jetnet and Embraer Analysis, January 2014 This information is the property of Embraer and cannot be used or reproduced without written consent. Jan-14
- 26. Market Forecast 2014-2023 Thisinformation is the property of Embraer and cannot be used or reproduced without written consent. 26
- 27. Market Recovery inslow 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 This information is the property of Embraer and cannot be used or reproduced without written consent.
- 28. 2014-2023 market forecast DeliveriesForecast (units) 1200 Units 225 1345 Ultra Large Ultra Long Range 800 Large 17,3 1670 1000 US$ 82,2 1270 600 Supermid Midsize 400 920 1140 64,7 31,1 Midlight 200 1780 900 Light 2023 2022 2021 2020 2019 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2018 Entry 0 17,8 17,3 15,8 Deliveries Revenues N10YF 9,250 jets and US$ 250 Bi in the next 10 years This information is the property of Embraer and cannot be used or reproduced without written consent. 4,2
- 29. 2014-2023 market forecastby region North America 4,530 a/c (49%) US$ 117 Bi (47%) EMEA 2,330 a/c (25%) US$ 70 Bi (28%) 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%) Source: Embraer 2013. This information is the property of Embraer and cannot be used or reproduced without written consent. Worldwide 9,250 units US$ 250 Bi
- 30. Embraer Executive JetsGlobal Presence Legacy 600/650: 210+ Phenom 100: 290+ Phenom 300: 170+ Lineage 1000: 15+ 700+ executive jets in service in more than 50 countries This information is the property of Embraer and cannot be used or reproduced without written consent.