2. Corporate and Business Strategy
• Product strategy.
• Diversification and expansion of customer base.
• Excellence in Customer Experience (ECE).
• Market share growth.
• Margins improvement.
• Product strategy and customer support focus.
• Organic growth.
• Margins enhancement through the P3E.
• Business and revenues diversification.
• Establish Embraer as the defense house of Brazil.
• Organic growth and acquisitions.
2
14. Embraer Market Forecast (2012-2031)
North
America
840
32%
North
America
2,195
32%
Latin
America
315
12%
Latin
America
670
10%
Europe
580
22%
Europe
1,460
22%
Russia /
CIS
155
6%
Russia /
CIS
445
7%
Africa
80
3%
Africa
210
3%
Middle
East
105
4%
Middle
East
305
4%
Asia
Pacific
210
8%
Asia
Pacific
505
7%
China
340
13%
China
1,005
15%
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)
2012–2031
Deliveries
30-60 405
61-90 2,625
91-120 3,765
30 - 120 6,795
• 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
Around 6,795 jet deliveries (30-120 seats) in the next 20 years (US$ 315 bi)
14
17. 17
Right Capacities to Match Market Demand
70
80
90
100
110
120
130
+1 row
same
+3 rows
20%
20%
97 Seats DC
106 Seats SCE190-E2
118 Seats DC
132 Seats SCE195-E2
80 Seats DC
88 Seats SCE175-E2
18. 18
E2 New Features – Not Just a Re-engine
E175-E2 E190-E2 & E195-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
20. 20
E-Jets & E-Jets E2 Pilot Commonality
Highest Commonality among
E-Jets E2 models (AAA)
Fewer than 3 days transition
training between the two E-Jet
generations
Full Flight Simulator or High-
Level Flight Training Device
Not required
21. 21
Main Suppliers
New Generation
Power Plant
Improved AvionicsFlaps and Slats Actuation
Systems; AMS
Horizontal Stabilizer
Actuation System
Wheels & Brakes;
APU; Electrical System
Fly-by-wire
Primary Flight Controls
Aft fuselage segments,
rudder and elevators
Vertical and horizontal
stabilizers
Ailerons and Spoilers
22. 22
Fuel Burn Improvements
Fuel Burn per Seat
E175-E2 (80 seats)
vs. E175 (76 seats)
E190-E2 (97 seats)
vs. E190 (97 seats)
E195-E2 (118 seats)
vs. E195 (106 seats)
-16%
-23%
-16%
0%
-5%
-10%
-15%
-20%
-25%
Target values for 600 nm sector; Dual Class configuration;
24. 24
Applications & Market Size
20-Year Market Forecast (70 to 130-seat Jets) - 6,400 Deliveries*
Most efficient “hub feeder”
Lower cost-per-seat than current Turboprops
Efficient complement to narrowbody operations
New market developer
Capacity growth for current E-Jet operators
Similar cost-per-seat to A320neo and 737-8 Max
Low Cost operation in mid-density markets
E190-E2
E195-E2
E175-E2
* Embraer market forecast
25. 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
25
Program Investment
26. 26
List Prices (US$ Million)
Preliminary Information as of January, 2013 -- US$ 3.3/USGal, 10 years NPV @ 9% rate
Better Fuel Consumption Gain
• E175 E2: US$ 4.8M
• E190 E2: US$ 7.0M
• E195 E2: US$ 6.5M
Maintenance Cost Reduction Gain
• US$ 1.0~1.5M
E175
AR (8E5): 42.9
E190
AR (10E5):47.4
E195
AR (10E5): 50.1
E-Jets
E175-E2
46.8
E190-E2
53.6
E195-E2
60.4
delta: 3.9 M
delta: 6.2 M
delta: 10.3 M
E-Jets E2
Seat Capacity Increase Gain
• E175 E2: US$ 1.6M (4 seats)
• E195 E2: US$ 4.8M (12 seats)
32. 2.260
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(billionofdollars)
Economic Indicators
32
U.S. Corporate Profits Worldwide HNWI Population
New record levels
7,0 7,2 7,7 8,2
8,8
9,6 10,1
8,6
10,1
10,8 11,0
11,9
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Millionpeople
North America Europe Asia-Pacific Latin america Middle East Africa
33. 0
5
10
15
20
25
30
35
2000 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023
2014-2023 Market Forecast – New Jets
33
8,350 ~ 9,244 jets US$ 218 ~ 250 billion over the next 10 years
Source: Embraer
2014-2023 Forecast
Another Downturn
8,350 units
US$ 218 billion
E.C.2013,US$Bi
Mild Growth
9,244 units
US$ 250 billion
34. 34
North America
4,530 a/c (49%)
US$ 117 Bi (47%)
Europe, Middle East & Africa
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%)
2014-2023 Market Forecast – New Jets
35. Business Jets Pre-Owned Market Inventory
35
Source: Jetnet and Embraer Analysis, September 2013.
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
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
%ofactivefleet
Units
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
2008: Net increase of 1100 a/c
2009: Net increase of 33 a/c
2010: Net decrease of 155 a/c
2011: Net decrease of 140 a/c
2012: Net decrease of 43 a/c
2013: Net increase of 1 a/c
12.8%
2467 jets
8.2%
664 jets
38. OVER 52 ARMED FORCES IN 50 COUNTRIES
Embraer Defense & Security
38
39. Embraer Defense & Security, partners and affiliated companies
Embraer Defense & Security
UAV’s Satellite Land SystemsRadar
39
40. Embraer Defense & Security Results
Não contabiliza as receitas provenientes da OGMA nos anos de 2006 a 2010.
Revenues Evolution (US$ Million)
EBIT Evolution (%) Backlog Evolution (US$ Billion)
CAGR 29%
40
41. Brazil: 99
Colombia: 25
Dominican Republic: 8
Chile: 12
Ecuador: 18
Indonesia: 16
Greystone (TacAir): 1
Mauritania: undisclosed
Burkina Faso: 3
Angola: 6
USA: 20
Guatemala: 6
Super Tucano
Total Market Forecast:
344 aircraft / US$ 4.1 billion
1,700
840
1,600
Medium-term
Long-term
Short-term
Addressable Market Forecast 2025
(US$ million)
Partnership with Boeing to provide weapons integration, increasing capabilities of the aircraft.
41
• Firm orders: more than 210 aircraft
• More than 170 aircraft delivered
42. EMBRAER KC-390
• A new tactical military transport and tanker aircraft
• First flight in 2014
• Six countries letters of intent, totalizing 60 aircraft
• Partnership with Boeing to share technical knowledge and to
market and sell the KC-390 in certain markets
• The Brazilian Air Force (FAB) and Embraer concluded the
Preliminary Design Review (Set/12) and the Critical Design
Review (Mar/13)
Brazil
(28)
Colombia
(12)
Argentina
(6)
Chile
(6)
Portugal
(6)
Czech Rep.
(2)
Total Market Forecast 2025:
728 aircraft / US$ 50+ bi
Ref. April13
42
43. A1-MF-5M A-4
Brazilian Navy A-4
12 aircraft
2 prototypes at GPX-CS
Brazilian Air Force A-1M
43 aircraft
16 received by Embraer for the modernization
Brazilian Air Force F-5M
46 a/c + 11 a/c (2nd batch)
45 already delivered
Brazilian Air Force E-99
5 a/c aircraft EMB 145 AEW&C
* Considering the market for Tucano modernization
Modernization Programs
Addressable Market Forecast 2025
(US$ million)
Total Market Forecast*:
228 aircraft / US$ 1.5 billion
437
567
505
Medium-term
Long-term
Short-term
Ref. dec/12
43
44. SISFRON implementation
Embraer Defense & Security has 100% of participation
New Portfolio
Command and Control Systems
Onboard Systems
Simulation Systems
Electronic Warfare Systems
Intelligence Systems
Air Traffic Management and Control Systems
JV with Elbit/AEL Systems where Embraer Defense &
Security has a major participation
UAS, simulators and modernization of avionics systems
Air, ground and sea surveillance radars
Remote sensing
Engine and Component Maintenance
Overhaul and Modernization
Aerostructure Manufacturing and Assembling
JV between Embraer Defense & Security (51%) and
Telebras
Satellite
Security of Critical
Infrastructure
Public Security
(sporting events, cities, states)
Systems
SISFRON
SisGAAZ
44
45. 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
Brazilian Army Priorities
Comm
9% UAV
12%
SW
20%
Sensors
59%
Satellite
Estimate: US$ 400 Million
Participation in the first Brazilian Geostationary Satellite
Ref. dec/12
45
46. New Business
•SisGAAz (“Blue Amazon” Integrated Management
System)
•Security of Critical Infrastructure
•Public Security (sporting events, cities, states)
2020
Revenues Breakdown Evolution
2012
46
48. 2013 Consolidated Outlook
Net Revenues
EBIT EBITDAUS$ 530 – 610 Million
US$ 5.9 – 6.4 Billion
US$ 770 – 900 Million
EBITDA margin 13.0% – 14.0%EBIT margin 9.0% – 9.5%
48
49. 49
Deliveries: 80 to 90 light jets
25 to 30 large jets
Net Revenues
Deliveries: 90 to 95 E-jets
Net Revenues US$ 3.20 – 3.35 Billion
Other Revenues US$ 50 – 100 Million
US$ 1.40 – 1.60 Billion
Net Revenues US$ 1.25 – 1.35 Billion
2013 Business Units Outlook
50. 2013 Investment Outlook
TOTAL INVESTMENTS: US$ 580 Million
Research US$ 100 Million
Development US$ 300 Million
CAPEX US$ 180 Million
50
61. Sustainability Initiatives
Brazilian Alliance for Bio-fuel
Reforestation Projects
ISO 14001 and OHSAS
18001 Certifications
1st ethanol powered
aircraft in the World
Ipanema
Recycling
Corporate Values
Greener Technology
Social Activities
61
62. P3E - Lean Results
62
E-Jets Final Assembly Line Transformation
E-Jets Wing Junction Line Transformation
Performance Indicators 2008
(15 ac/month)
2009
(10 ac/month)
2012
(10 ac/month)
Number of positions 12 5 4
Cycle time (days) 18 10 8
Work in Process
(US$ Mi)
212 95 68
Number of non-
conformity per a/c
32 1.7 0.76
Overtime
(% of work hours)
10 1.5 0
63. P3E Results
Kaizen - E-Jets Cycle Reduction Cost of Non Quality Reduction
57%
63
40% reduction on the production cycle
40%
44% reduction on CNQ
64. Cost: US$ 21.4 mi
Benefit: US$ 200.7 mi
“Boa Ideia” Program Evolution
64
66. Forward 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.
66