embraer november 2010 redburn

22

Company Highlights

3

HighlightsHighlights

Investment Grade rating by Moody’s and S&P.

Strong Balance sheet with solid Net cash position.

Company established in 1969, with business in four segments.

Privatized in 1994 and listed in USA in 2000.

Broad customer base in commercial, executive and defense aviation segments.

Global footprint.

Highly experienced management team.

4

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

Widson Locks

São Paulo

Spare Parts Distribution Centers

LouisvilleMinneapolis

5

60

160 161131

101

148 141 130

169

204

244

96

32

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

5

Aircraft DeliveriesAircraft Deliveries

* Phenom Jets

*2

*98

Through 3Q10 YTD: 154 aircraft delivered

6

5,250

7641,354

1,837

2,762 2,9272,526

2,144

3,4413,830 3,760

5,245

6,335

5,466

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010*

6

Net Revenue Net Revenue (US GAAP)(US GAAP)

US$ Million

* EstimatedGuidance 2010: Net Revenue - US$ 5.25 billion

7

7

Firm Order BacklogFirm Order Backlog

2010

4.16.4

11.4 10.79.0

10.6 10.1 10.4

14.8

18.816.6

15.3

20.9

15.2

2.2 2.3

3.94.2 4.2

3.1

2.6 2.8 2.8 3.0

3.8

3.33.0 3.0

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2Q10 3Q10

US$ Billion

Firm Order Backlog Backlog/Revenue (Years)

8

RevenueRevenue

Net Revenue US$ Billion 2.76 3.83 5.47 3.39

Commercial aviation Executive aviation Aviation services and othersDefense

88%

71%62% 58%

1%

7%16%

15%

11% 9% 13%

7% 11% 13% 14%4%

2000 2005 2009 YTD10

10

Product PortfolioProduct Portfolio

capacity: 70 to 80 seatsrange: 2,100 nm (3,900 Km)




capacity: 37 seatsrange: 1,750 nm (3,250 Km)




11

Commercial Aviation Commercial Aviation Order Book 3Q10Order Book 3Q10

Firm OrdersFirm Orders OptionsOptions TotalTotal DeliveriesDeliveriesFirm Firm

BacklogBacklog

ERJ 145 Family 890 - 890 886 4

EMBRAER 170 191 47 238 180 11

EMBRAER 175 173 278 451 130 43

EMBRAER 190 457 356 813 301 156

EMBRAER 195 95 66 161 60 35

TOTAL ETOTAL E--JETSJETS 916916 747747 1.6631.663 671671 245245

TOTALTOTAL 1.8061.806 747747 2.5532.553 1.5571.557 249249

12

Worldwide DistributionWorldwide Distribution

Diversified Customers Across 5 Continents

Asia Pacific /China14%

Middle East /Africa21%

Europe / CIS33%

LatinAmerica

17%

NorthAmerica

15%

Firm Orders

Asia Pacific / China14%

Middle East / Africa

9%

Europe / CIS21%

NorthAmerica

44%

Latin America12%

Embraer Bombardier

Sukhoi Boeing Airbus

Antonov

Comac

Mitsubishi

Commercial Jets Market Share Evolution Worldwide

0%

15%

30%

45%

60%

75%

1995 1998 2001 2004 2007 2010

Considering Accumulated Firm Orders:

30-120 Seats Jets

44%

43%

4%

2%3%3%

1%0%

13

EE--Jets DeploymentJets Deployment

World

8%

21%

8%

21%

21%

Natural Growth

29%

6%

29%

6%

20%20% 7%8%7%8%

5%5%

7%

32%

7%

32%

11%11%

50%

Right-sizing

North

America

57%

8%

North

America

57%

8%

Europe

40%

Europe

40%

Latin

America

49%

Latin

America

49%

Africa

52%

Africa

52%

Middle East

62%

5%

Middle East

62%

5%

C hina

12%

C hina

12%

Asia Pacific

50%

11%

Asia Pacific

50%

11%8%8%

14%14%

New Markets

6%6%

20%31%20%31%

5%

33%

5%

33%

49%49%

39%39%

20%

8%8%

Replacementof old Jets

25%25%

33%

7%

33%

7%

7%7%

9%

14

Around 6,875 jet deliveries (30-120 seats) in the next 20 years (US$ 200 bi)

Embraer Market Embraer Market Forecast (2010Forecast (2010--2029)2029)

North

America

84032%

North

America

2,40035%

Latin

America

31512%

Latin

America

5758%

Europe

58022%

Europe

1,51022%

Russia / CIS

1556%

Russia / CIS

4056%

Africa

803%

Africa

2203%

Middle East

1054%

Middle East

2404%

Asia Pacific

2108%

Asia Pacific

5758%

China

34013%

China

95014%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)

2010 – 2029

Deliveries

30-60 475

61-90 2,515

91-120 3,885

30-120 6,875

15

B717-200

B737-200

B737-500

F70 F28

F100DC-9

Bae 146

TU-134

YAK-42

0

50

100

150

200

250

300

350

5 15 25 35

Nu

mb

er o

f A

ircra

ft

Average Age (years)

Nearly 1,000 aircraft with more than 15 years old

(Jets 61-120 seats)

World Replacement World Replacement OpportunitiesOpportunities

17


Large

Aircraft Model

Phenom 100

Phenom 300

Legacy 450

Legacy 500

Legacy 600

Lineage 1000

Seats / Range

4 / 1,160 nm

6 / 1,800 nm

4 to 8 / 2,200 to 2,300 nm

4 to 8 / 2,800 to 3,200 nm

10 to 14 / 3,250 nm

13 to 19 / 4,400 to 4,500 nm

Entry

Light

Mid-light

Mid-size

Ultra-large

Super Mid-Size

Certified: 2008

Certified: 2009

Expected Certification: 2013

Certified: 2001

Certified: 2008

Expected Certification: 2012

Ultra-Long Range

Competitors

• Cessna - Mustang CJ1+

• Cessna - CJ3• Hawker - H400XP

• Bombardier -Lear 60XR

• Cessna - XLS+

• Cessna - Sovereign• Hawker - H900XP

• Bombardier -Challenger 300/605

• Dassault – Falcon 2000EX/LX

• Airbus - A318 Elite

Legacy 650 10 to 14 / 3,900 nmCertified: 2010

• Bombardier –Global XRS

• Gulfstream – G550

18


19

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%14.0%

19% 16% 16% 14% 11%

2% 3% 2% 1% 2%

2005 2006 2007 2008 2009

% O

EM

Sh

are

–T

ota

l u

nit

s

Total 749 885 1,040 1,154 870

Market ShareMarket Share

OthersHawker-BeechEmbraer Gulfstream

Dassault

Cessna

Bombardier

Deliveries share (units)Revenue share (US$ - based on B&CA list prices)

Market Forecast 2010: 750 units.

Embraer Forecast: 137 units.

Market Forecast 2010: $16.2 Bi.

Embraer Guidance: $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% 6.5%10% 9% 8% 8% 8%

5% 8% 6% 5% 6%

2005 2006 2007 2008 2009

% O

EM

Sh

are

–T

ota

l R

ev

en

ue

s U

S$

$12.9Bi $16.4Bi $19.0Bi $21.9Bi $17.0Bi

Industry Deliveries (units)

20112011--20 Market Forecast 20 Market Forecast World DeliveriesWorld Deliveries

0

40

80

120

160

200

240

2000-10 2011-20

US$ 169.6 Bi(9,029 jets)

US$ 210 Bi(10,000 jets)

Historic Forecast

Industry Revenues

More than 10,000 jets: US$ 210 billion over the next 10 years

21

Business Jets TrafficBusiness Jets Traffic

2005

2006

2007

2008

2009

2010

20,000

30,000

40,000

50,000

60,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

European Bizjet Flight Activity

2005

2006

20072008

2009

2010

100,000

130,000

160,000

190,000

220,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

US/FAA Bizjet Flight Activity

22

Pre Owned MarketPre Owned MarketFleet for SaleFleet for Sale

0

500

1000

1500

2000

2500

3000

3500

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4

9 9 0 0 0 1 0 2 0 3 0 4 0 5 0 6 0 7 0 8 0 9 10

Un

its

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

22%

24%

26%

28%

% o

f ac

tive

fle

et

% for sale (per total fleet

in operation)

Business Jets For Sale

Source: Embraer analysis – October 2010

fleet older than 10 yrs

fleet from 6 to 10 yrs

fleet up to 5 yrs and positions

% for sale (per total fleet in operation)

up to 10 yrs % for sale

fleet up to 5 yrs

positions 15.0% / 10.5%

2647 jets / 896 jets

2008: Net increase of 1,100 a/c

2009: Net increase of 33 a/c

2010TD: Net decrease of 157 a/c

24

Defense Products Defense Products and Servicesand Services

Advanced Training and

Light AttackTransport of AuthoritiesISR (Intelligence, Surveillance

and Reconnaissance)

Modernization Programs Command and Control Systems

Military Tactical Transport

Services

• Firm orders: 172 aircraft

• Brazil: 99

• Colombia: 25

• Dominican Republic: 8

• Chile: 12

• Ecuador: 18

• Undisclosed: 10

Deliveries: 146 aircraft

• To be delivered: 26 aircraft

• Prospects:

• South East Asia

• Africa

• Americas

Ref.: September 2010

• Training and COIN aircraft Market Forecast 2020

• 700 aircraft / US$ 8 bi

Super TucanoSuper Tucano

26

• Currently in the “Initial Definition Phase”

• Market Forecast 2025: 700 aircraft / US$ 50+ bi

• New tactical military transport aircraft

• Payload: 23 ton / Range: 1400 nm

• Contract signed with Brazilian Air Force in April 2009

Length: 33.81 m (110.9 ft)

Wingspan: 35.06 m (115.0 ft)

Height: 10.26 m (33.7 ft)

EMBRAER KCEMBRAER KC--390390

27

Financial Results

2828

Business HighlightsBusiness Highlights

Legacy 650 certified by ANAC and EASA. Deliveries in 4Q10.

Argentina’s Austral received its first EMBRAER 190.

Sale of 37 E-Jets at Farnbourogh.

Sale of 10 + 5 EMBRAER 190 jets to Air Lease Corp.

NetJets buys 50 Phenom 300, plus 75 options at NBAA.

Brazil, Chile, Colombia, Portugal, Czech Republic and Argentina signed LOI

for up to 60 KC-390 aircraft.

Embraer expands its Customer Support in China.

2929

Financial HighlightsFinancial Highlights

Stable net cash position of US$ 623.8 million.

EBIT of US$ 63 million and EBIT margin of 6.0%. YTD EBIT margin of 7.3%.

Net income totaled US$ 98.5 million. Earnings per ADS of US$ 0.5443.

Net revenues of US$ 1.04 billion and gross margin of 22.1%.

Firm order backlog remained stable at US$ 15.3 billion.

30

DeliveriesDeliveries

30

30 2821

2922

55

17

39

22

5 8 3 1 2

20

3Q09 4Q09 1Q10 2Q10 3Q10

2010 projected deliveries • 90 commercial jets• 17 Legacy / Lineage• 120 Phenom

PhenomCommercial Jets Legacy and Lineage

97

70

43

78

13 6

9M09 9M10

3131

RevenueRevenue

66%

44%53%

61% 58%

16%

26% 12%

14% 19%

6%16%

19%13% 7%

12% 14% 16% 12% 16%

3Q09 4Q09 1Q10 2Q10 3Q10

Commercial aviation Executive aviation Aviation services and othersDefense

1.04Net Revenue US$ Billion 1.25 1.61 1.00 1.35

3232

Net Revenues and Net Revenues and Gross MarginGross Margin

US Gaap - US$ Million

Net Revenues Gross Margin

IFRS - US$ Million

1,246

1,610

990

1,354

1,043

18.8%

20.8% 21.7% 21.4% 22.1%

3Q09 4Q09 1Q10 2Q10 3Q10

1,358

9921,250

1,614

1,044

20.6%20.8% 20.2%

17.9%

19.7%

3Q09 4Q09 1Q10 2Q10 3Q10

3333

Income from OperationsIncome from Operations


Income from Operations Operating Margin

IFRS - US$ Million

39

71

122

91

66

9.0% 6.4%7.2%

2.4%

7.3%

3Q09 4Q09 1Q10 2Q10 3Q10

68 66 57

126

63

6,0%9,3%

5,8%4,1%

5,5%

3Q09 4Q09 1Q10 2Q10 3Q10

3434

EBITDAEBITDA


EBITDA EBITDA Margin

IFRS - US$ Million

90 8980

139

80

5.6%

8.1%

10.2%

7.7%

7.2%

3Q09 4Q09 1Q10 2Q10 3Q10

151

105117

166

131

12.1%

11.8%

6.5%

12.2% 12.5%

3Q09 4Q09 1Q10 2Q10 3Q10

3535

Net IncomeNet Income

Net Income Net Margin

US Gaap - US$ Million IFRS - US$ Million

9970

35

146

58

9.4%

5.2%

3.6%

9.1%

4.6%

3Q09 4Q09 1Q10 2Q10 3Q10

12295

24

57

126

2.4%

12.1%9.8%

4.2%5.9%

3Q09 4Q09 1Q10 2Q10 3Q10

3636

Free Cash FlowFree Cash Flow

US Gaap - US$ Million IFRS - US$ Million

6

383

(57)

220

(60)

3Q09 4Q09 1Q10 2Q10 3Q10

23

364

(44)

253

(42)

3Q09 4Q09 1Q10 2Q10 3Q10

3737

Indebtedness Profile Indebtedness Profile Net Cash Net Cash (USGAAP)(USGAAP)

Total Debt 3Q10: US$ 1.43 Billion

Long-term Short-term

Loans Average Maturity (Years)

Indebtedness Maturity

Total Cash 3Q10: US$ 2.05 Billion

Net Cash

(USGAAP)(USGAAP)

78%

47%

29%

75%

94%

53%

71%

6%

22%25%

6.15.8

5.0

2.6

4.9

3Q09 4Q09 1Q10 2Q10 3Q10

71

503459

659 624

3Q09 4Q09 1Q10 2Q10 3Q10

3838

2010 Guidance

Revision

3939

2010 Guidance and 2010 Guidance and OutlookOutlook

7.25%

Current Guidance Current Guidance -- 2Q102Q10 New GuidanceNew Guidance

US$ 380 million~12%

US$ 340 million

Net Revenues

EBIT

EBIT margin

US$ 5.25 billion

6.50%

R&D

PP&E

US$ 160 million

US$ 140 million

US$ 420 millionEBITDA

EBITDA margin 8.0%

US$ 100 million~30%

8.75%

US$ 460 million

~10%

Current OutlookCurrent Outlook New OutlookNew Outlook

4141

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.