embraer november 2015 book ri

This information is property of Embraer and can not be used or reproduced without written permission. NOVEMBER 2015

+55 12 3927 4404 | [email protected] | www.embraer.com

This information is property of Embraer and can not be used or reproduced without written permission.

CORPORATE AND BUSINESS STRATEGY

• ORGANIC GROWTH • MARGINS ENHANCEMENT THROUGH THE P3E • BUSINESS AND REVENUES DIVERSIFICATION

• ORGANIC GROWTH AND ACQUISITIONS • ESTABLISH EMBRAER AS THE DEFENSE HOUSE OF BRAZIL

• PRODUCT STRATEGY • DIVERSIFICATION AND EXPANSION OF CUSTOMER BASE • EXCELLENCE IN CUSTOMER EXPERIENCE (ECE)

• MARKET SHARE GROWTH • MARGINS IMPROVEMENT • PRODUCT STRATEGY AND CUSTOMER SUPPORT FOCUS

2


22.1 20.9 20.422.9 22.8

3Q14 4Q14 1Q15 2Q15 3Q15

FIRM ORDER BACKLOG

3

US$ BILLION


LARGE JETS - LEGACY & LINEAGE LIGHT JETS - PHENOM

AIRCRAFT DELIVERIES

4

95 - 100 E-JETS 35 - 40 EXECUTIVE LARGE JETS 80 - 90 EXECUTIVE LIGHT JETS

95-100

80-90

35-40

* 2015 OUTLOOK:


5,791 6,167 6,235 6,289

2011 2012 2013 2014 2015*

5

NET REVENUES

US$ MILLION 5,800-6,300

54%

15%

2%

* 2015 OUTLOOK: US$ 5.8 – 6.3 BILLION

29%

OTHERS


24% 29%

48%

31% 22%

14%

14% 21%

21%3%8%

3%14%

6%4%5% 9% 4%

9% 5% 6%

2012 2013 2014

61%53% 50%

21%27%

26%

17% 19% 23%

1% 1% 1%

2012 2013 2014

REVENUES BREAKDOWN

NET REVENUES BY SEGMENT NET REVENUES BY REGION

OTHERS

Revenues US$ Billion 6.17 6.24 6.29

Revenues US$ Billion 6.17 6.24 6.29

NORTH AMERICA BRAZIL

EUROPE

ASIA PACIFIC

SOUTH & CENTRAL

AMERICA AFRICA &

MIDDLE EAST

CHINA

6


OVER 90 AIRLINES IN MORE THAN 60 COUNTRIES

8


capacity: 70 - 80 seats range: 2,100nm (3,900Km)




PRODUCT PORTFOLIO

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




9

capacity: 120-136 seats range: 2,000nm (3,700Km)




E-JETS CUSTOMER BASE EVOLUTION

1999-2000 2001-2002 2003-2004 2005-2006 2007-2008 2009-2010 2011-2015YTD

2 4 14 27 50 55 67 Customers/ Operators

110 118

343

619

876

947

1,688

1,688 ACCUMULATED FIRM ORDERS

10

Source: Embraer (Sep/15 – Commercial Airlines and Leasing Co.)


E-JETS Firm orders Deliveries Firm Backlog

E170 193 188 5

E175 477 311 166

E190 586 518 68

E195 165 141 24

E175-E2 100 - 100

E190-E2 77 - 77

E195-E2 90 - 90

Total 1,688 1,158 530

11

E-JETS FAMILY ORDER BOOK – 3Q15


15%

24%61%

Latin America

Asia Pacific & China

E-JETS CUSTOMER BASE BY BUSINESS MODEL

FIRM ORDERS

COMMERCIAL JETS – NET ORDERS MARKET SHARE

Considering Accumulated Net Orders

70-130 SEATS JETS

BACKLOG

North America

Regional Airlines

Network Airlines

Low Cost Carriers

12%7%

25%

19%

37%

17%2%

5%

3%73%

12

WORLDWIDE DISTRIBUTION

(% OF E-JETS FLEET+BACKLOG)

Europe & CIS

Middle East & Africa

This information is property of Embraer and can not be used or reproduced without written permission. 13

COMPETITIVE SCENARIO

180+

160

140

120

100

80

SSJ95/100

MRJ90 ARJ21 CRJ900

CRJ1000

CRJ700

CAPACITY (SINGLE CLASS)

737-7 MAX A319neo

A320neo

737-8MAX

CS100

CS300

E175-E2

E190-E2

E195-E2

E195

E190

E170

E175


• REPLACEMENT OF OLD/INEFFICIENT JETS

• RIGHT-SIZING OF NARROW-BODY OPERATIONS

• HUB FEEDER AND POINT-POINT OPERATION IN LOW AND MID-DENSITY MARKETS

• REGIONAL AVIATION DEVELOPMENT

AROUND 6,350 JET DELIVERIES (70-130 SEATS) IN THE NEXT 20 YEARS (US$ 300 BI)

14

PROJECTED JETS DELIVERIES MARKET SEGMENT

(SEATS) 2015 – 2034

DELIVERIES

70 - 90 2,250

90 - 130 4,100

70 -130 6,350

EMBRAER MARKET FORECAST (2015 – 2034)

NORTH AMERICA

2,060 32%

LATIN AMERICA

720 11%

AFRICA

220 4%

EUROPE

1,160 18%

MIDDLE EAST

240 4%

CIS

380 6%

CHINA

1,020 16%

ASIA PACIFIC

550 9%

For more information: http://www.embraermarketoutlook.com

http://www.embraermarketoutlook.com/

http://www.embraermarketoutlook.com/


E-JETS EVOLUTION

70

80

90

100

110

120

130

+4 SEATS

SAME

+14 SEATS

20%

20% E190-E2

E195-E2

E175-E2

16

capacity: 120-136 seats range: 2,000nm



* FUEL BURN PER SEAT

-16%*

-24%*

-16%*


E175-E2

NEW WING More efficient, high aspect ratio

metallic wing. Raked wing tip.

IMPROVED AVIONICS 4 larger 13”x10” displays and touchscreen controls

MAIN LANDING GEAR Enabling larger engines. Gear doors

for improved fuel efficiency

OPTIMIZED WING/ENGINE DIFFERENT WING AND ENGINE COMBINATIONS FOR E175-E2 AND E190/195-E2

NEW ENGINES Larger fan diameter and improved fuel efficiency

17

E2 NEW FEATURES

E190-E2 & E195-E2


• EMBRAER INVESTMENT ON RESEARCH, DEVELOPMENT AND

CAPEX FOR THE E-JETS E2 FAMILY WILL BE US$ 1.7 BILLION

• INVESTMENT WILL BE SUPPORTED BY EMBRAER’S CASH

GENERATION AND DEBT

• INVESTMENTS SPAN FROM 2013 - 2020 WITH MORE

CONCENTRATION IN 2014 - 2017

18

PROGRAM INVESTMENT


E195-E2 | EIS 2019

E190-E2 | EIS 1H2018

E175-E2 | EIS 2020

267 Firm Orders 373 Commitments

19

E2 ENTRY INTO SERVICE

640 E-JETS E2


NEARLY 930 JETS IN SERVICE IN MORE THAN 60 COUNTRIES

21

This information is property of Embraer and can not be used or reproduced without written permission. 22

PRODUCT PORTFOLIO

LARGE

AIRCRAFT MODEL SEATS /RANGE

up to 8 occupants/ 1,178 nm

up to 11 occupants/ 1,971 nm

7 to 9 passengers/ 2,300 nm




ENTRY

LIGHT

MID-LIGHT

MID-SIZE

ULTRA-LARGE

SUPER MID-SIZE

Certified: 2008

Certified: 2009

Certified: 2001

Certified: 2008

ULTRA-LONG RANGE

COMPETITORS

• Cessna - Mustang/M2 • HondaJet

• Cessna - CJ2+/CJ3/CJ4 • Bombardier - Learjet 40XR/70

• Bombardier - Learjet 45XR/75 • Cessna - XLS+/Latitude

• Bombardier - Learjet 85 • Cessna - Sovereign • Gulfstream - G150

• Bombardier - CL605/GL5000 • Dassault - Falcon 2000LXS/

900LX • Gulfstream - G350/G450

• Airbus - ACJ 318/319/320 • Boeing - BBJ/BBJ2/BBJ3


Certified: 2010

• Bombardier - GL6000/GL7000/ GL8000

• Gulfstream - G500/G550/G650/ 650ER

• Dassault - Falcon 7X/8X

• Bombardier - CL300/CL850 • Cessna - X/Longitude • Dassault - Falcon 2000S • Gulfstream - G280

Certified: 2014

Certified: 2015


DELIVERIES SHARE (UNITS) REVENUES SHARE (US$ BI | B&CA LIST PRICES)

MARKET DELIVERIES 2014: 705 UNITS

EMBRAER DELIVERIES: 116 UNITS

BOMBARDIER

MARKET REVENUES 2014: US$ 21.9 BILLION

EMBRAER REVENUES: US$ 1.6 BILLION

23

MARKET SHARE

HAWKER-BEECH DASSAULT

CESSNA GULFSTREAM OTHERS


0%

4%

8%

12%

16%

20%

24%

28%

0

500

1000

1500

2000

2500

3000

3500

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

% O

F A

CTI

VE

FLEE

T

UN

ITS

Fleet older than 10 yrs Fleet from 6 to 10 yrs

Fleet up to 5 yrs Positions

Fleet up to 5 yrs and positions Total fleet % for sale

Up to 10 yrs % for sale

24

BUSINESS JETS PRE-OWNED MARKET INVENTORY

Source: Jetnet and Embraer analysis, October 2015

10.8% 2,192 jets

7.7% 652 jets


IMPROVED ECONOMIC ENVIRONMENT IN US DRIVING DEMAND

25

MARKET DRIVERS AFFECTING DEMAND

TRAFFIC RECOVERY ON TRACK IN US BUT SLOWER THAN EXPECTED IN EUROPE

NEW AND PRE-OWNED PRICING PRESSURE

US 2015 GDP GROWTH EXPECTED AT 2.5%

US CORPORATE PROFITS AND HNWI AT RECORD LEVELS

NEW PRODUCTS ENTERING INTO SERVICE

SOFTENING EMERGING MARKETS DEMAND


0

200

400

600

800

1000

1200

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

Deliveries Forecast (units)

9,250 JETS AND US$ 265 BI IN THE NEXT 10 YEARS

26

2015-2024 MARKET FORECAST

Units US$

1,057 5

1,688

15

1,000

15

854

18

1,231

32

1,626

66

1,616

101

170 12

Deliveries Revenue

N15YF

Ultra Long Range

Large

Supermid

Midsize

Midlight

Light

Entry

Ultra Large


NORTH AMERICA 4,620 a/c (50%) US$ 120 Bi (45%)

EUROPE, MIDDLE EAST & AFRICA 2,360 a/c (26%) US$ 77 Bi (29%)

ASIA PACIFIC 570 a/c (6%) US$ 19 Bi (7%)

LATIN AMERICA 850 a/c (9%) US$ 16 Bi (6%)

CHINA 835 a/c (9%) US$ 33 Bi (12%)

WORLDWIDE 9,250 units US$ 265 Bi

27

2015-2024 MARKET FORECAST BY REGION

Note: sum of regional numbers might differ from total numbers due to rounding Source: Embraer Analysis


OVER 50 ARMED FORCES

29


SATELLITE

INTEGRATED PORTFOLIO

LIGHT ATTACK AND ADVANCED TRAINING

TACTICAL MILITARY TRANSPORT

ISR (INTELLIGENCE, SURVEILLANCE AND RECONNAISSANCE)

UAVs RADAR C4I LAND SYSTEMS SERVICES

30

TRANSPORT AIRCRAFT MODERNIZATION PROGRAMS

• C2 & C4I SYSTEMS • AIRBORNE SYSTEMS • SIMULATION • CONTROL SYSTEMS • AIR TRAFFIC SYSTEM

• UAVS

• SIMULATORS

• AVIONICS MODERNIZATION

• LAND DEFENSE SYSTEMS INTEGRATION

• SISFRON IMPLEMENTATION

• MRO

• AEROSTRUCTURES

• REMOTE SENSING

• AERIAL SURVEILLANCE RADAR

• SATELLITE GEOSTATIONARY OF DEFENSE AND COMMUNICATIONS (SGDC)

100% 51% 65% 90% 100% 51%

PARTNERSHIPS


REVENUES EVOLUTION (US$ MILLION) BACKLOG EVOLUTION (US$ BILLION)

31

EMBRAER DEFENSE & SECURITY RESULTS

REVENUES PARTICIPATION (%)


BRAZIL: 99

COLOMBIA: 25

DOMINICAN REPUBLIC: 8

CHILE: 12

ECUADOR: 18

INDONESIA: 16

GREYSTONE (TACAIR): 1

MAURITANIA: 2

BURKINA FASO: 3

ANGOLA: 6

USA: 20

MALI: 6

GHANA: 5

TOTAL MARKET FORECAST: 300 AIRCRAFT / US$ 3.5 BILLION

800

2,000700

MEDIUM-TERM

LONG-TERM

SHORT-TERM

ADDRESSABLE MARKET FORECAST 2020 (US$ MILLION)

PARTNERSHIP WITH BOEING TO PROVIDE WEAPONS INTEGRATION, INCREASING CAPABILITIES OF THE AIRCRAFT.

• FIRM ORDERS: MORE THAN 220 AIRCRAFT • OVER 190 AIRCRAFT DELIVERED

32

SUPER TUCANO


• A NEW TACTICAL MILITARY TRANSPORT AND TANKER AIRCRAFT

• PARTNERSHIP WITH BOEING TO SHARE TECHNICAL KNOWLEDGE AND TO MARKET AND SELL THE KC-390 IN CERTAIN MARKETS

• FIVE COUNTRIES LETTERS OF INTENT, TOTALIZING 32 AIRCRAFT

• FAB AND EMBRAER SIGNED THE SERIES PRODUCTION CONTRACT FOR 28 KC-390

• SECOND FLIGHT IN OCTOBER 2015 RESUMING FLIGHT TEST CAMPAIGN

• CERTIFICATION EXPECTED FROM YEAR END 2016 TO 2H2017

• FIRST DELIVERY TO BRAZILIAN AIR FORCE EXPECTED FROM 1H2017 TO 1H2018

TOTAL MARKET FORECAST 2025: 700 AIRCRAFT / US$ 50+ BI

33

EMBRAER KC-390

BRAZIL: 28

COLOMBIA: 12

ARGENTINA: 6

CHILE: 6

PORTUGAL: 6

CZECH REP.: 2


SISFRON INTEGRATED BORDERS MONITORING SYSTEM

FIRST PHASE: US$ 420 MILLION

TOTAL ESTIMATE: US$ 4 BILLION

COMPRISING RADARS, COMMUNICATION NETWORKS, C4I, UNMANNED AIR VEHICLES (UAV) AND ARMORED VEHICLES

SATELLITE ESTIMATE: US$ 400 MILLION

PARTICIPATION IN THE FIRST BRAZILIAN GEOSTATIONARY SATELLITE

34

BRAZILIAN ARMY PRIORITIES


NEW BRAZILIAN FIGHTER (F-39 GRIPEN)

• BRAZILIAN GOVERNMENT CONTRACTED SAAB TO SUPPLY 36 GRIPEN NG FIGHTER JET.

• CONTRACT BETWEEN EMBRAER AND SAAB FINALIZED (EFFECTIVE AND RUNNING).

• FIRST GROUP OF 44 BRAZILIAN ENGINEERS IN SWEDEN SINCE OCTOBER 2015.

35


FINANCIAL RESULTS


99113

86100

78

52

55

43

47

43

3Q14 4Q14 1Q15 2Q15 3Q15

1,240

2,046

1,056

1,5131,285

3Q14 4Q14 1Q15 2Q15 3Q15

NET REVENUES - US$ MILLION SG&A EXPENSES - US$ MILLION

37

NET REVENUES | SG&A EXPENSES

SELLING EXPENSES G&A EXPENSES

2015 OUTLOOK: US$ 5.8 – 6.3 BILLION

YTD: 3,854

151

168

121

147

129

YTD: 397


346 359

213 216 182

3Q14 4Q14 1Q15 2Q15 3Q15

213

690

167

404 402

3Q14 4Q14 1Q15 2Q15 3Q15

661

975

662

883

688

3Q14 4Q14 1Q15 2Q15 3Q15

1,240

2,045

1,056

1,5131,285

3Q14 4Q14 1Q15 2Q15 3Q15

NET REVENUES BY SEGMENT

OUTLOOK: US$ 1.70 – 1.85 BILLION OUTLOOK: US$ 0.80 – 0.95 BILLION

OUTLOOK: US$ 3.20 – 3.40 BILLION OUTLOOK: US$ 5.80 – 6.30 BILLION

38

YTD: 3.85 BILLION YTD: 2.23 BILLION

YTD: 0.97 BILLION YTD: 0.61 BILLION


136

281

149178 158

11.0%

13.8% 14.1%

11.7%12.3%

3Q14 4Q14 1Q15 2Q15 3Q15

68

196

80 102

84

5.5%

9.6%7.5%

6.8% 6.6%

3Q14 4Q14 1Q15 2Q15 3Q15

39

INCOME FROM OPERATIONS (EBIT) | EBITDA

EBIT - US$ MILLION EBITDA - US$ MILLION

EBIT EBIT MARGIN EBITDA EBITDA MARGIN

2015 OUTLOOK: US$ 490 – 560 MILLION | 8.5% – 9.0%

2015 OUTLOOK: US$ 730 – 860 MILLION | 12.6% – 13.6%

YTD: 266 | 6.9% YTD: 485 | 12.6%


49

507

(291)

245

70

(89) (87)

(57)

(74) (76)

(97) (132)

(91)

(98) (110)

(138)

288

(440)

73

(115)

3Q14 4Q14 1Q15 2Q15 3Q15

(11)

91

(62)

129

(110)

-0.9%

4.5%

-5.8%

8.5%

-8.5%

3Q14 4Q14 1Q15 2Q15 3Q15

NET INCOME - US$ MILLION FREE CASH FLOW - US$ MILLION

FREE CASH FLOW

NET ADDITIONS TO PP&E

NET CASH GENERATED (USED) BY OPERATING ACTIVITIES*

ADDITIONS TO INTANGIBLE * Net of Financial assets adjustment

40

NET INCOME | FREE CASH FLOW

NET MARGIN NET INCOME

2015 OUTLOOK: FCF > (US$ 100) MILLION

YTD: (43) | -1.1% YTD: (482)


2,767

2,405

2,696 2,6402,763

3Q14 4Q14 1Q15 2Q15 3Q15

41

INVENTORIES

US$ MILLION


27

164143

50

300 300

RESEARCH DEVELOPMENT CAPEX

42

INVESTMENTS

YTD: 334

2015 OUTLOOK: US$ 650 MILLION

2015 OUTLOOK 2015 YTD

US$ MILLION


(280)

(39)

(535)(465)

(644)

3Q14 4Q14 1Q15 2Q15 3Q15

96% 96%89% 90% 91%

4% 4% 11% 10% 9%

5.65.4 5.3

6.5 6.5

3Q14 4Q14 1Q15 2Q15 3Q15

43

INDEBTEDNESS PROFILE | NET CASH

INDEBTEDNESS MATURITY NET CASH (DEBT) - US$ MILLION

LONG-TERM SHORT-TERM LOANS AVERAGE MATURITY (YEARS)

TOTAL DEBT 3Q15: US$ 3.39 BILLION TOTAL CASH 3Q15: US$ 2.75 BILLION


USD Debt 2,702 80%

BRL Debt 590 17%

EUR Debt 97 3%

864

1,881

40286

40681

66 199 73

546 539

1,122

44

INDEBTEDNESS PRINCIPAL MATURITIES C

ASH

LO

CA

L C

ASH

AB

RO

AD

PRINCIPAL MATURITIES = US$ 3.4 BILLION

2,745


1.83

0.62

1.92 1.88 1.82

34%

116%

26% 26% 27%

2010 2011 2012 2013 2014

45

EPADS AND PAY OUT

EPADS PAY OUT

US$


736,543,801 VOTING SHARES

46

OWNERSHIP STRUCTURE – 3Q15


2015 OUTLOOK


NET REVENUES US$ 5.8 – 6.3 BILLION

48

2015 CONSOLIDATED OUTLOOK

15% OF NET REVENUES

2% OF NET REVENUES

29% OF NET REVENUES

54% OF NET REVENUES

DELIVERIES: 95 TO 100 E-JETS

US$ 100 MILLION

US$ 1.70 – 1.85 BILLION

US$ 0.80 – 0.95 BILLION

OTHER REVENUES

US$ 3.20 – 3.40 BILLION

DELIVERIES: 80 TO 90 LIGHT JETS 35 TO 40 LARGE JETS


EBITDA MARGIN 12.6% – 13.6%

EBITDA US$ 730 – 860 MILLION

EBIT MARGIN 8.5% – 9.0%

EBIT US$ 490 – 560 MILLION

FCF > (US$ 100) MILLION*

49

2015 CONSOLIDATED OUTLOOK

* FCF USE OF LESS THAN US$ 100 MILLION.

RESEARCH US$ 50 MILLION

DEVELOPMENT US$ 300 MILLION

CAPEX US$ 300 MILLION

TOTAL INVESTMENTS: US$ 650 MILLION


BRAZILIAN ALLIANCE FOR BIO-FUEL ISO 14001 AND OHSAS 18001 CERTIFICATIONS

1ST ETHANOL POWERED AIRCRAFT IN THE WORLD

GREENER TECHNOLOGY

SOCIAL ACTIVITIES

50

SUSTAINABILITY INITIATIVES

REFORESTATION PROJECTS

RECYCLING

CORPORATE VALUES

http://www.cdproject.net/index.asp


INVESTOR RELATIONS

PHONE: +55 12 3927 4404 [email protected]

WWW.EMBRAER.COM


This presentation may contain forward-looking statements, projections and estimates regarding circumstances

or events yet to take place, including, but not limited to, those statements relating to guidance. These forward-

looking statements are based largely on current expectations, forecasts of future events and industry and

financial trends that affect Embraer’s businesses. These statements are subject to risks, uncertainties and

assumptions that include, among others: general economic, political and trade conditions, both in Brazil and in

those markets where Embraer does business; management’s expectations and estimates concerning the

company’s future financial performance; plans and objectives of our management; financing plans and

programs, and the effects of competition; industry trends and growth opportunities; inflation and fluctuations

in exchange rates; the company’s investment plans; Embraer’s operating efficiencies and synergies and its

capacity to develop and deliver products on the dates previously agreed upon; results of operation; business

strategies; benefits of new technologies and existing and future governmental regulations. To obtain further

information on factors that may lead to results different from those forecast by Embraer, please consult the

reports Embraer files with the U.S. Securities and Exchange Commission (SEC) and the Brazilian Comissão de

Valores Mobiliários (CVM) and in particular the factors discussed under “Forward-Looking Statements” and

“Risk Factors” in Embraer’s annual report on Form 20−F. The words “believe”, “may”, “will”, “estimate”,

“intend”, “continue”, “anticipate”, “expect” and other similar terms are intended to identify forward-looking

statements. Embraer does not undertake any obligation to publish updates or to revise any forward-looking

statements due to new information, future events or any other factors. In view of the inherent risks and

uncertainties, such estimates, events and circumstances may not occur. The actual results and performance of

Embraer could therefore differ substantially from those anticipated in Embraer's forward-looking statements.

52

FORWARD LOOKING STATEMENT

embraer november 2015 book ri

Business