Embraer Presentation (Nov.11)
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2
Company HighlightsCompany Highlights
Investment grade rating by Moody’s and S&P.Investment grade rating by Moody’s and S&P.
Strong balance sheet with solid net cash position.Strong balance sheet with solid net cash position.
Company established in 1969, privatized in 1994 and listed in USA in 2000.Company established in 1969, privatized in 1994 and listed in USA in 2000.
Sector leader in the Dow Jones Sustainability Index 2011/2012.Sector leader in the Dow Jones Sustainability Index 2011/2012.
Broad customer base in commercial and executive aviation, defense and
security segments.
Broad customer base in commercial and executive aviation, defense and
security segments.
Global footprint. Global footprint.
Highly experienced management team.Highly experienced management team.
3
Global BusinessGlobal Business
Operations in Brazil, USA, Europe and Asia Dual listed in Brazil’s Bovespa (1989) and NYSE (2000)
Melbourne*
Fort Lauderdale
Nashville
USA
Taubaté
Botucatu
Gavião Peixoto
São José dos Campos
Brazil
Évora*
Alverca
Portugal
Le Bourget
Villepinte
France
Harbin
Beijing
China
Singapore
Singapore
Countries of Operation Factories Offices Service Centers Contracted/ Planned Authorized Network* Under construction
One of Brazil’s largest exporters of manufactured goods Diversified customer-base across five continents
Mesa
Windsor Locks
São Paulo
Spare Parts Distribution Centers
Louisville
Minneapolis
103
133
165
125
73
27 36 3721 19 6
98126
101
243
2006 2007 2008 2009 2010 9M2011
4
Executive Large JetsExecutive Large Jets
Aircraft DeliveriesAircraft Deliveries
Executive Light JetsExecutive Light JetsCommercial JetsCommercial JetsPhenomPhenom
**
102+*102+*
18*18*
100*100*
2011 deliveries estimates2011 deliveries estimates
Legacy e LineageLegacy e Lineage
5
RevenuesRevenues
Guidance 2011: Net Revenues (US$ 5.6 – 5.8 billion)
Guidance 2011: Net Revenues (US$ 5.6 – 5.8 billion)
2006-2008: US GAAP2009-2010: IFRS2006-2008: US GAAP2009-2010: IFRS**
**** 2011: YTD Guidance
2011: YTD Guidance
US$ Million
55%
20% 11%
14%
Executive aviationExecutive aviationCommercial aviationCommercial aviation
Aviation services/othersAviation services/othersDefense and securityDefense and security
3.760
5.2456.335
5.498 5.364
3.778
2006 2007 2008 2009* 2010* 2011**
89%71%
62%53%
7%16%
21%
11% 9% 13%
7% 11% 13% 13%1% 4%
2000 2005 2009 2010
6
Revenues by SegmentRevenues by Segment
Commercial aviationCommercial aviation
Executive aviationExecutive aviation Aviation services/othersAviation services/others
Defense and securityDefense and security
Net Revenues
US$ Billion*3.833.83 5.505.50 5.365.362.732.73
2009-2010: IFRS2009-2010: IFRS**
46% 43%
22%13%
24%18%
33%
33%
12%
10%7%
15%
4%
4%11% 13%
6%18% 21% 22%
8% 7% 6% 4%
2007 2008 2009 2010
7
Revenues by RegionRevenues by Region
Latin AmericaLatin America
OthersOthers
North AmericaNorth America
BrazilBrazil Asia PacificAsia Pacific
EuropeEurope
2009-2010: IFRS2009-2010: IFRS**
Net Revenues
US$ Billion*6.336.33 5.505.50 5.365.365.245.24
8
Firm BacklogFirm Backlog
US$ Billion
14.818.8
20.916.6 16.015.6
2006 2007 2008 2009 2010 3Q2011
E-Jets: 60 Airlines from 40 Countries
9
10
Product PortfolioProduct Portfolio
capacity: 70 to 80 seatsrange: 2,100 nm (3,900 Km)
capacity: 78 to 88 seatsrange: 2,000 nm (3,700 Km)
capacity: 98 to 114 seatsrange: 2,400 nm (4,500 Km)
capacity: 108 to 122 seatsrange: 2,200 nm (4,100 Km)
capacity: 37 seatsrange: 1,750 nm (3,250 Km)
capacity: 50 seatsrange: 1,550 nm (2,900 Km)
capacity: 50 seatsrange: 2,000 nm (3,700 Km)
capacity: 44 seatsrange: 1,650 nm (3,050 Km)
11
Commercial Aviation - Order Book 3Q11Commercial Aviation - Order Book 3Q11
Firm Firm OrdersOrders OptionsOptions TotalTotal DeliveriesDeliveries Firm Firm
BacklogBacklog
ERJ 145 Family 890 - 890 890 -
EMBRAER 170 188 34 222 182 6
EMBRAER 175 189 290 479 136 53
EMBRAER 190 531 293 824 371 160
EMBRAER 195 110 36 146 81 29
TOTAL E-JETSTOTAL E-JETS 1.0181.018 653653 1.6711.671 770770 248248
TOTALTOTAL 1.9081.908 653653 2.5612.561 1.6601.660 248248
12
E-Jets Customer Base EvolutionE-Jets Customer Base Evolution
Source: Embraer (Scheduled Airlines and Leasing Co.) DeliveriesDeliveries
1 2 3 4 9 14 19 28 42 60Customers/Operators
60110 112 118
245
343
440
619
764
1003
0
200
400
600
800
1000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008-11
Acc
um
ula
ted
Fir
m O
rder
s
13
Worldwide DistributionWorldwide Distribution
Diversified Customers Across 5 Continents
Firm Orders
Commercial Jets Market Share Evolution Worldwide
Considering Accumulated Net Orders
60-120 Seats Jets
15%
18%
35%
17%
15%
12%
6%
26%
12%
44%
16%
8%
30%13%
33%
Backlog
Europe & CISMiddle East & AfricaLatin America
North AmericaAsia Pacific & China
North AmericaAsia Pacific & China
43%43%
30%30%
3%3%
7%7%5%5%
14
E-Jets DeploymentE-Jets Deployment
World
Right-sizing New Markets Replacement of old Jets
NaturalGrowth
15
Nearly 1,000 aircraft with more than 15 years old
World Replacement OpportunitiesWorld Replacement Opportunities
B717-200B737-200
B737-500
F70 F28
F100
DC-9Bae 146 TU-134
YAK-42
737-600
0
50
100
150
200
250
300
350
5 15 25 35 45
Nu
mb
er o
f Air
craf
t
Average Age (years)
(Jets 61-120 seats)
Around 7,225 jet deliveries (30-120 seats) in the next 20 years (US$ 320 bi)
16
Embraer Market Forecast (2011-2030)Embraer Market Forecast (2011-2030)
North
America
84032%
NorthAmerica
2,35033%
Latin
America
31512%
LatinAmerica
6709%
Europe
58022%
Europe
1,67523%
Russia / CIS
1556%
Russia / CIS
4356%
Africa
803%
Africa
1953%
Middle East
1054%
Middle East
3104% Asia
Pacific
2108%
Asia Pacific
6159%
China
34013%
China
97513%
Projected Deliveries - Jets
Market Segment
(Seats)
2010 – 2019
Deliveries
30-60 60
61-90 1,015
91-120 1,550
30-120 2,625
Market Segment
(Seats)
2011 – 2030
Deliveries
30-60 430
61-90 2,670
91-120 4,125
30-120 7,225
• 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
MRJ70
MRJ90ARJ21
E195
E190
E175
E170
SSJ100/95
CS100
CRJ900
CRJ700
60
70
80
90
100
110
120
1600 1800 2000 2200 2400 2600 2800 3000
Range Nominal
Cap
acit
y 32
'' p
itch
17
110 Seats110 Seats
Competitive LandscapeCompetitive Landscape
70-90 Seats70-90 Seats
100 Seats100 Seats
More than 400 executive jets in operation.
18
19
Product PortfolioProduct Portfolio
Large
Aircraft Model
Phenom 100
Phenom 300
Legacy 450
Legacy 500
Legacy 600
Lineage 1000
Seats / Range
up to 8 occupants/ 1,178 nm
up to 11 occupants/ 1,971 nm
7 to 9 passengers/ 2,300 nm
8 to 12 passengers/ 3,000 nm
13 to 14 passengers/ 3,400 nm
13 to 19 passengers/ 4,500 nm
Entry
Light
Mid-light
Mid-size
Ultra-large
Super Mid-Size
Certified: 2008
Certified: 2009
Under development
Certified: 2001
Certified: 2008
Ultra-Long Range
Competitors
• Cessna - Mustang CJ1+/M2• HondaJet
• Cessna - CJ2+/CJ3/CJ4• Hawker - PremierIA/400XP• Bombardier - Learjet 40XR• SyberJet - SJ30
• Bombardier - Learjet 45XR• Cessna - XLS+/Latitude• Hawker 750
• Bombardier - Learjet 60XR/85• Cessna - Sovereign• Hawker - H900XP• Gulfstream – G150
• Bombardier - CL605/GL5000• Dassault - Falcon 2000/900LX• Gulfstream - G350/G450
• Airbus - ACJ 318/319/320• Boeing – BBJ/BBJ2/BBJ3• SSJ VIP/ ARJ21B / An-148VIP
Legacy 650 13 to 14 passengers/ 3,900 nmCertified: 2010
• Bombardier - GL XRS• Gulfstream – G500/G550/G650• Dassault – Falcon 7X
• Bombardier - CL300/CL850• Cessna - X/Ten• Dassault - Falcon 2000S• Gulfstream - G200/G280• Hawker - H4000
20
25% 24% 22% 21% 20%
33% 35% 37% 40%33%
7% 7% 7% 6%9%
12% 13% 13% 14%11%
2.7% 3.1% 3.5% 3.3% 14%19% 16% 16% 14% 11%2% 3% 2% 1% 2%
2005 2006 2007 2008 2009%
OEM
Sha
re –
Tot
al u
nits
749 885 1,040 1,154 870
Market ShareMarket Share
OthersHawker-BeechEmbraer Gulfstream
DassaultCessnaBombardier
Deliveries share (units)Revenues share (US$ - based on B&CA list prices)
Market Deliveries 2010: 763 units.
Embraer Deliveries: 145 units.
Market Revenues 2010: $18.2 Bi.
Embraer Revenues: $1.1 Bi.
Market Revenues 2010: $18.2 Bi.
Embraer Revenues: $1.1 Bi.
30% 29% 28% 29% 28%
16% 16% 17% 18% 12%
11% 11% 12% 12% 18%
23% 23% 23% 24% 21%
3.5% 3.9% 4.7% 4.2% 6.4%10% 9% 8% 8% 8%5% 8% 6% 5% 6%
2005 2006 2007 2008 2009
% O
EM S
hare
– T
otal
Rev
enue
s U
S$
$13.2Bi $16.6Bi $19.3Bi $22.2Bi $17.2Bi
2010
763
6.9%
2010
$18.2Bi
19%
27%
7%
22%
21%
6%10%
20%
23%
12%
13%
10%3%
0
200
400
600
800
1.000
1.200
1.400
1.600
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
New Jets Deliveries Values (Units)2012-2021 Forecast
Sustained Growth2012-2021 11,275 units
Downturn2012-2021 9,125 units
2012-21 Market Forecast World Deliveries2012-21 Market Forecast World Deliveries
9,125 ~ 11,275 jets US$ 210 ~ 260 billion over the next 10 years21
22
Forecast
-
200
400
600
800
1.000
1.200
1.400
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
ULTRA LARGE
ULTRA-LONG RANGE
LARGE
SUPER MID-SIZE
MID-SIZE
MID-LIGHT
LIGHT
ENTRY*
New bizjet deliveries (Units)
2012-21 Market Forecast World Deliveries2012-21 Market Forecast World Deliveries
11,275 jets US$ 260 billion over the next 10 years
North AmericaEMB >170 a/c EMEA
EMB >150 a/c
Asia PacificEMB ~20 a/c
BrazilEMB 90 a/c
Latin AmericaEMB ~100 a/c
2012-21 Market Forecast and2012-21 Market Forecast andEmbraer Actual Fleet DistributionEmbraer Actual Fleet Distribution
23
5,265 a/c (47%) US$ 109 Bi (42%)
905 a/c (8%)US$ 16 Bi (6%) 550 a/c (5%)
US$ 8 Bi (3%)
3,415 a/c (30%)US$ 88 Bi (34%)
1,690 a/c (15%)US$ 48 Bi (18%)
2010
24
Business Jets TrafficBusiness Jets Traffic
US/FAA Bizjet Flight ActivityUS/FAA Bizjet Flight Activity
European Bizjet Flight ActivityEuropean Bizjet Flight Activity
20052007
20062004
20082009
2010
130
140
150
160
170
180
190
200
210
220
230
Jan
Feb Mar Apr
May Ju
nJu
lAug
Sep OctNov
Dec
2011
2005
2007
2006
2004
20082009
25
30
35
40
45
50
55
60
Jan
Feb Mar Apr
May Ju
nJu
lAug
Sep OctNov
Dec
2011
25
Pre-owned Inventory: RecoveringPre-owned Inventory: Recovering
Business Jets For Sale
Angola
Belgium
Brazil
Niger
France
Gabon
India
Paraguay
Mexico
Peru
Chile
Colombia
Honduras
Uruguay
Argentina
Greece
Italy
Nigeria
EcuadorEquatorial Guinea
Pakistan
Thailand
Dominican Rep.
Panama
United States United Kingdom¹
Kuwait¹
Mauritania
Kenya¹
Togo
Germany
Portugal
Spain
Sweden
Luxembourg
Chad
Libya
Egypt
Tunisia
Canada
Switzerland
Venezuela
Indonesia
Presence in more than 40 countries.
26
27
Defense and Security PortfolioDefense and Security Portfolio
Advanced Training and Light Attack
Transport of AuthoritiesISR (Intelligence, Surveillance and Reconnaissance)
Modernization Programs Command and Control Systems
Military Tactical Transport
Services
Super TucanoSuper Tucano
28
• Firm orders: 180 aircraft
• Brazil: 99
• Colombia: 25
• Dominican Republic: 8
• Chile: 12
• Ecuador: 18
• Indonesia: 8
• XE Aviation: 1
• Undisclosed: 9
• Deliveries: 156 aircraft
• To be delivered: 24 aircraft
• Prospects:
• Latin America
• South East Asia
• USA
• Africa
•Entering the “Joint Definition Phase”
•Market Forecast 2025: 700 aircraft / US$ 50+ bi
• New tactical military transport aircraft
• Payload: 23 ton / Range: 1400 nm
• Brazil, Chile, Colombia, Portugal, Czech Republic and Argentina signed LOI for up to 60 KC-390 aircraft.
Length: 33.81 m (110.9 ft)
Wingspan: 35.06 m (115.0 ft)
Height: 10.26 m (33.7 ft)
EMBRAER KC-390EMBRAER KC-390
29
30
EMBRAER KC-390 Main Partners SelectedEMBRAER KC-390 Main Partners Selected
Rockwell Collins: Pro Line Fusion avionics.
DRS Defense: cargo handling and aerial delivery system (CHS/ADS).
ELEB: landing gears.
Liebherr-Aerospace: environmental and cabin pressure control systems.
Esterline: autothrottle system.
Messier-Bugatti-Dowty: wheels, brakes, landing gear extension and retraction system, and nose wheel
steering manifold.
IAE: V2500 engine.
BAE Systems: fly-by-wire flight control systems (computers and electronics).
Goodrich: primary flight control system (electro-hydrostatic actuators, electro-backup hydrostatic
actuators, actuator electronics, and electrical controls).
Acquisition of Atech Negócios em Tecnologias S.A. (50%)
C4I Systems
Commercial Agreement
Small UAV
Acquisition of OrbiSat da Amazônia S.A radar´s division
Remote sensing and surveillance radars (ground, air and maritime)
Elbit /AEL joint-venture to form a new company with Embraer Defense and Security majority participation
UAS, simulators and modernization of avionics systemsHarpia
Acquisitions and PartnershipsAcquisitions and Partnerships
31
32
Brazilian Army PrioritiesBrazilian Army Priorities
SISFRONIntegrated Borders Monitoring System
Estimate: US$ 4 Billion
Comprising radars, communication networks, C4I, unmanned air vehicles (UAV) and armored vehicles
Comm9% UAV
12%
SW20%
Sensors59%
Revenues by Region - 2010Revenues by Region - 2010
Developed Market
19%
Emerging Market
81%
Europe 16%
North América 3%
Latin America 33% Asia Pacific/ Africa 21%
Brazil 27%
33
34
OutlookOutlook
2011 Outlook2011 Outlook
US$ 465 millionUS$ 465 million
Net RevenuesNet Revenues
EBITEBIT
EBIT marginEBIT margin
US$ 5.6 – 5.8 billionUS$ 5.6 – 5.8 billion
8.0% - 8.3%8.0% - 8.3%
US$ 700 millionUS$ 700 millionEBITDAEBITDA
EBITDA marginEBITDA margin 12.0% - 12.5%12.0% - 12.5%
35
ResearchResearch
DevelopmentDevelopment
US$ 90 million US$ 90 million
US$ 160 millionUS$ 160 million
CAPEXCAPEX US$ 200 millionUS$ 200 million
36
2011 Outlook2011 Outlook
OutlookOutlook
US$ Million
YTD Outlook
59 72109
90
160200
Research Development CAPEX
Financial Results Financial Results
IFRSIFRS
37
38
Net Revenues / SG&A ExpensesNet Revenues / SG&A Expenses
Net Revenues - US$ Million
Net RevenuesNet Revenues Gross MarginGross Margin
SG&A Expenses - US$ Million
Selling ExpensesSelling Expenses G&A ExpensesG&A Expenses
Guidance 2011 - Net Revenues: US$ 5.6 - 5.8 billionGuidance 2011 - Net Revenues: US$ 5.6 - 5.8 billion
1,044
1,970
1,0561,359 1,364
21.2%22.4%
24.3%
16.8%20.5%
3Q10 4Q10 1Q11 2Q11 3Q11
89106 94
109
53
6157
64 69
103
3Q10 4Q10 1Q11 2Q11 3Q11
142142
167167 173173 172172
151151
39
Income from Operations / EBITDAIncome from Operations / EBITDA
EBITEBIT EBIT MarginEBIT Margin
Income from Operations - US$ Million
EBITDAEBITDA EBITDA MarginEBITDA Margin
EBITDA - US$ Million
EBIT: US$ 465 million EBIT Margin: 8.0% - 8.3%
EBIT: US$ 465 million EBIT Margin: 8.0% - 8.3%2011 Outlook -2011 Outlook -
EBITDA: US$ 700 million EBITDA Margin: 12.0% -
12.5%
EBITDA: US$ 700 million EBITDA Margin: 12.0% -
12.5%2011 Outlook -2011 Outlook -
132
94106
124
66
9.1%
7.8%8.9%6.7%
6.4%
3Q10 4Q10 1Q11 2Q11 3Q11
131
197156 153
188
12.5% 10.0%14.8%
11.3%
13.8%
3Q10 4Q10 1Q11 2Q11 3Q11
40
Net Income / Free Cash FlowNet Income / Free Cash Flow
Net Income - US$ Million Free Cash Flow - US$ Million
Net IncomeNet Income Net MarginNet Margin
126 123105 96
2
12.1%
6.2%
10.0%
7.1%
0.1%
3Q10 4Q10 1Q11 2Q11 3Q11
(112)
(38)
(126)
193
(66)
3Q10 4Q10 1Q11 2Q11 3Q11
41
Indebtedness Profile / Net CashIndebtedness Profile / Net Cash
Indebtedness Maturity Net Cash - US$ Million
Long-termLong-term Short-termShort-term
Loans Average Maturity (Years)Loans Average Maturity (Years)
90% 87%
6% 5%
74%95%
94%
26%13%10%
4.55.0
5.76.36.1
3Q10 4Q10 1Q11 2Q11 3Q11
Total Debt 3Q11: US$ 1.8 BillionTotal Debt 3Q11: US$ 1.8 Billion Total Cash 3Q11: US$ 2.0 BillionTotal Cash 3Q11: US$ 2.0 Billion
618692
505406
193
3Q10 4Q10 1Q11 2Q11 3Q11
10th anniversaries: NYSE Euronext listing.
Presence in China, Singapore and GPX.
10th anniversaries: NYSE Euronext listing.
Presence in China, Singapore and GPX.
43
Embraer elected for the 3rd consecutive year, one
of the best companies to work for in Brazil.
Embraer elected for the 3rd consecutive year, one
of the best companies to work for in Brazil.
2010 Accomplishments2010 Accomplishments
Embraer selected as Gold Class
on the DJSI and also on the ISE.
Embraer selected as Gold Class
on the DJSI and also on the ISE.
44
Lean Results: E-Jets Final Assembly Lean Results: E-Jets Final Assembly Line TransformationLine Transformation
“Dock” layout - 2008 Assembly Line – 2009 Assembly Line – 2011
0
0
68
8
4
Mar/11 (10ac/month)
00,21,51,510Over time (% of work hours)
001,7732Number of non-conformity per a/c
688995106212Work in process (US$mi)
78101218Cycle time (days)
445612Number of positions
Out/11 (12ac/month)
June/2010 (8ac/month)
Sep/2009 (10ac/month)
July/2009 (10ac/month)
May/2008 (15ac/month)
Performance indicators
0
0
68
8
4
Mar/11 (10ac/month)
00,21,51,510Over time (% of work hours)
001,7732Number of non-conformity per a/c
688995106212Work in process (US$mi)
78101218Cycle time (days)
445612Number of positions
Out/11 (12ac/month)
June/2010 (8ac/month)
Sep/2009 (10ac/month)
July/2009 (10ac/month)
May/2008 (15ac/month)
Performance indicators
45
Automation Initiatives 2010Automation Initiatives 2010
Automation initiatives continues in 2011…
46
Sustainability InitiativesSustainability Initiatives
Brazilian Alliance for Bio-fuel
Reforestation Projects
ISO 14001 and OHSAS 18001 Certifications
Sustainability InitiativesSustainability Initiatives
1st ethanol powered aircraft in the World
IpanemaIpanemaRecycling
Corporate ValuesGreener Technology
Social Activities
47
723,665,044 Voting Shares723,665,044 Voting Shares
Ownership StructureOwnership Structure
September, 2011
PREVI10.6%
BNDESPAR5.5%
BM&FBOVESPA OTHERS24.3%
BLACK ROCK5.1%
THORNBURG INVESTMENT
6.8%
OPPENHEIMER FUND'S8.7%
NYSE OTHERS32.9%
GRUPO BOZANO
6.0%
NYSE53.5%
BM&F BOVESPA
46.5%
48
Investors’ ReturnInvestors’ Return
Pay OutPay OutEPADSEPADS
2006-2008: US GAAP2009-2010: IFRS2006-2008: US GAAP2009-2010: IFRS**
2.11 2.64
2.14 2.57
1.83
53% 68% 52%
26% 34%
2006 2007 2008 2009* 2010*
EPADS and Pay Out Dividend Yield (%)
2.012.91
4.34
3.28
2.23
2006 2007 2008 2009 2010
Forward Looking StatementForward 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.