2. Corporate and Business Strategy
• Organic growth.
• Margins enhancement through the P3E.
• Business and revenues diversification.
• Product strategy.
• Diversification and expansion of customer base.
• Excellence in Customer Experience (ECE).
• Market share growth.
• Margins improvement.
• Product strategy and customer support focus.
• Establish Embraer as the defense house of Brazil.
• Organic growth and acquisitions.
15. Embraer Market Forecast (2012-2031)
• 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
Russia /
CIS
Europe
North
North 445
155
America
America 1,460
580 7%
6%
22%
Projected Deliveries- Jets 2,195
840 China
China
32%
MarketSegment 20102019
Market –
Segment 2012–2031
(Seats)
Middle 1,005
340
(Seats) Deliveries
Deliveries Africa East
15%
13%
30-60 405
60
210
80 305
105
61-90 2,625
1,015 Asia
Latin
Latin 3% 4%
91-120 3,765
1,550 Pacific
America
America
30 - 120 6,795 210
505
30 -
120 2,625 315
670 7%
8%
10%
12%
Around 6,795 jet deliveries (30-120 seats) in the next 20 years (US$ 315 bi)
24. Business Jets Used Market Inventory
2008: Net increase of 1100 a/c
2009: Net increase of 33 a/c
3500 Fleet older than 10 yrs Fleet from 6 to 10 yrs 2010: Net decrease of 155 a/c 28%
2011: Net decrease of 140 a/c
Fleet up to 5 yrs Positions 2012: Net decrease of 43 a/c
3000 2013: Net decrease of 41 a/c 24%
Fleet up to 5 yrs and positions Total fleet % for sale
Up to 10 yrs % for sale
2500 20%
12.8% 8.5%
% of active fleet
2425 jets 660 jets
2000 16%
Units
1500 12%
1000 8%
500 4%
0 0%
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
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
25. Service Center Network
Over 60 service centers worldwide
12 new centers worldwide since August, 2011
4 more under authorization
On site stocks worldwide in 43 different locations
28. Embraer Defense and Security
Embraer Defense and Security, partners and affiliated companies
29. Embraer Defense and Security Results
Revenues Evolution (US$ Million)
Revenue Participation (%)
GAGR 33% 15%
13%
8% 9%
6% 7%
852
670
505 499
346
227
2006 2007 2008 2009 2010 2011
EBIT Evolution (%) Backlog Evolution (US$ Billion)
13.4% 3.2 3.3 3.3
12.4% 12.2% 12.0%
9.6%
6.3% 1.5
1.1 1.0
2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011
Não contabiliza as receitas provenientes da OGMA nos anos de 2006 a 2010.
30. Super Tucano
Firm orders: 190 aircraft Addressable Market Forecast 2020
(US$ million)
Brazil: 99
Colombia: 25 Long-term
700
Dominican Republic: 8 Medium-term
2,000 Short-term
Chile: 12
800
Ecuador: 18
Indonesia: 16
Greystone (TACAir): 1
Total Market Forecast:
Undisclosed: 11
300 aircraft / US$ 3.5 billion
Deliveries: 172 aircraft
Partnership with Boeing to provide weapons integration, increasing capabilities of the aircraft.
31. EMBRAER KC-390
Brazil Colombia Argentina Chile Portugal Czech Rep. Total Market Forecast 2025:
(28) (12) (6) (6) (6) (2)
700 aircraft / US$ 50+ bi
• A new tactical military transport and tanker aircraft
• First flight in 2014
• Six countries
• Letters of intent totalizing 60 aircraft
• Agreement with Boeing to share technical knowledge and
evaluate markets for joint sales efforts.
• The Brazilian Air Force (FAB) and Embraer concluded the
Preliminary Design Review.
32. Modernization Programs
F-5M A1-M A-4
Addressable Market Forecast 2025
(US$ million) Brazilian Navy A-4
12 aircraft
Long-term 2 prototypes at GPX-CS
567
Medium-term Brazilian Air Force A-1M
505 43 aircraft
Short-term
527 14 received by Embraer for the modernization
Brazilian Air Force F-5M
46 a/c + 11 a/c (2nd batch)
45 already delivered
Total Market Forecast*:
Brazilian Air Force E-99
234 aircraft / US$ 1.6 billion
5 a/c aircraft EMB 145 AEW&C
* Considering the market for F-5 and Tucano modernization
33. 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 Sistemas where Embraer Defense and
Security of Critical
HARPIA Security has a major participation Infrastructure
UAS, simulators and modernization of avionics systems Public Security
(sporting events, cities, states)
Airport Management
Air, ground and sea surveillance radars Systems
Remote sensing SISFRON
SisGAAZ
Engine and Component Maintenance
Overhaul and Modernization
Aerostructure Manufacturing and Assembling
VISIONA Satellite
34. Brazilian Army Priorities
SISFRON
Integrated Borders Monitoring System
First phase: US$ 400 Million
Total estimate: US$ 4 Billion
Comprising radars, communication networks, C4I,
unmanned air vehicles (UAV) and armored vehicles
Comm
9% UAV
12%
Sensors
59%
Satellite
Estimate: US$ 400 Million
SW
20%
Participation in the first Brazilian Geostationary Satellite
35. Revenues Breakdown Evolution
2020 Services
11%
Transport
4%
Sisfron, Satellite
10%
KC-390
34%
2011
KC-390 New Business
Services 19% 14%
10%
Light Attack and
ISR Radar, C4I, UAV, Combat
10% MRO 9%
Modernization 18%
25%
Light Attack
9% New Business
• Airport Management Systems
• SisGAAz (“Blue Amazon” Integrated Management System)
Radar, C4I, UAV,
• Security of Critical Infrastructure
MRO
27% • Public Security (sporting events, cities, states)
37. Future Projects – Brazilian Government
2013 Federal Initial Budget (*)
2013 budget
2013 budget (R$ million)
(R$ million) Army 2.100
Air Force 4.600 SISFRON 200
KC-390 1.200 Combat Readiness 365
Air Traffic Control 1.300 Logistic 353
5 midsize helicopters Aqcuisition & modernization of equip. 212
443
(out of 50) Guarani Vehicles
90
Aqcuisition & modernization of aircraft 596 (48 out of 2.044)
Aircraft Maintenance & Supplies 500 ASTROS 2020 90
Fuel & oil 307 Proteger
44
Combat Readiness 74 Stra tegi c Infra s tructure Protection
2013 budget
(R$ million)
Navy 3.700
PROSUB (submarine) 2.300
Combat Readiness 708
Aqcuisition & modernization of vessels 506
Patrol ship building 73
(*) Investment Budget – Budget sent to congress for discussion
(available at Ministry of Planning website)
39. 2013 Consolidated Outlook
Net Revenues US$ 5.9 – 6.4 Billion
EBIT US$ 530 – 610 Million EBITDA US$ 770 – 900 Million
EBIT margin 9.0% – 9.5% EBITDA margin 13.0% – 14.0%
40. 2013 Business Units Outlook
Deliveries: 90 to 95 E-jets
Net Revenues US$ 3.20 – 3.35 Billion
Deliveries: 80 to 90 light jets
25 to 30 large jets
Net Revenues US$ 1.40 – 1.60 Billion
Net Revenues US$ 1.25 – 1.35 Billion
Other Revenues US$ 50 – 100 Million
41. 2013 Investment Outlook
Research US$ 100 Million
Development US$ 300 Million
CAPEX US$ 180 Million
TOTAL INVESTMENTS: US$ 580 Million
51. Sustainability Initiatives
ISO 14001 and OHSAS
18001 Certifications
Brazilian Alliance for Bio-fuel
1st ethanol powered
aircraft in the World
Social Activities
Reforestation Projects
Ipanema
Recycling
Corporate Values
Greener Technology
52. Lean Results
E-Jets Final Assembly Line Transformation
“Dock” layout - 2008 Assembly Line – 2009 Assembly Line – 2011
Performance indicators May/2008 July/2009 Sep/2009 June/2010 Mar/11 Out/11
(15ac/month) (10ac/month) (10ac/month) (8ac/month) (10ac/month) (12ac/month)
Number of positions 12 6 5 4 4 4
Cycle time (days) 18 12 10 8 8 7
Work in process (US$mi) 212 106 95 89 68 68
Number of non-conformity
per a/c
32 7 1,7 0 0 0
Over time (% of work
hours)
10 1,5 1,5 0,2 0 0
53. P3E Results
Kaizen - E-Jets Cycle Reduction Cost of Non Quality Reduction
Lead Time (E-Jets) Cost of Non Quality
40% 44%
2005 2006 2007 2008 2009 2010 2011 2008 2009 2010
40% reduction on the production cycle 44% reduction on CNQ
56. 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.