conference call 2q13
TRANSCRIPT
Job Position EARNINGS RESULTS
2nd QUARTER 2013
July 26, 2013
Forward-Looking Statements
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.
2
• Embraer launches the E-Jets E2 Program
during the Paris Air Show in June.
Embraer awards and recognitions:
• “Company of the Year” by the Brazilian magazine Exame;
• “One of the best companies to work for in Latin America” by Great Place to Work;
• “National Innovation Award” by the Brazilian National Industry Conference.
3
Corporate Highlights
• Standard & Poor’s upgraded Embraer’s credit
rating to “BBB” from “BBB-”.
• Delivery of 22 E-Jets in 2Q13 reaching 947 total deliveries since EIS.
4
Highlights
• Air Costa (India) and JAL (Japan)
disclosed their firm orders for five E-Jets .
• Embraer signed a firm order for seven E190s with Venezuela’s Conviasa.
• SkyWest signed a firm order for 40 E175 jets
plus 60 reconfirmable and another 100 options.
• E-Jets E2 Program reached 100 firm orders plus 100
options from SkyWest, 50 firm orders plus 50
options from ILFC and LOIs for another 65 aircraft.
• United Airlines ordered 30 E175 jets
with options for an additional 40.
• Delivery of the 400th Phenom jet and first Phenom 300 sold to China.
• Embraer’s Melbourne, FL facility received FAA certification to assemble the Phenom 300.
• Delivery of 29 executive jets in 2Q13 (23 light jets and 6 large jets).
• NetJets received its first Phenom 300, entitled “Signature
SeriesTM”, of a contract that may reach up to 125 aircraft.
5
Highlights
• Lineage 1000 reached 10,000 flown hours.
• Legacy 500 completed 45% of its test campaign
with more than 450 flight hours with 3 prototypes.
• Phenom 100 & 300 awarded as the “Best of the Best” by
Robb Report magazine for the third consecutive year.
• Embraer and Boeing signed a partnership to market
and sell the KC-390 in certain markets.
6
Highlights
• Brazilian Air Force signed a contract for logistical support
and services for 92 A-29 Super Tucano aircraft.
• Visiona advanced in the Geostationary Defense and
Strategic Communication Satellite program with the
short list of the satellite supplier.
• Savis completed the selection of the main suppliers for
Sisfron (Brazilian Integrated Border Monitoring System).
3
1611 8
23
2 4 6
17
37
2Q12 3Q12 4Q12 1Q13 2Q13
35
2723
1722
2Q12 3Q12 4Q12 1Q13 2Q13
Aircraft Deliveries
Large Jets - Legacy & Lineage
Light Jets - Phenom
Commercial Jets Executive Jets
7
2013 deliveries estimates • 90 - 95 commercial jets
• 25 - 30 executive large jets
• 80 - 90 executive light jets
12.9 12.4 12.5 13.3
17.1
2Q12 3Q12 4Q12 1Q13 2Q13
US$ Billion
8
Firm Order Backlog
309264 257 297 252
2Q12 3Q12 4Q12 1Q13 2Q13
8601,176
956 864640
2Q12 3Q12 4Q12 1Q13 2Q13
370261
167
712
175
2Q12 3Q12 4Q12 1Q13 2Q13
1,5571,7151,402
1,898
1,086
2Q12 3Q12 4Q12 1Q13 2Q13
Net Revenues by Segment – 2013 Outlook
9
Commercial Aviation: US$ 3.20 – 3.35 Billion
Executive Aviation: US$ 1.40 – 1.60 Billion Defense & Security: US$ 1.25 – 1.35 Billion
EMBRAER: US$ 5.90 – 6.40 Billion
2013 YTD: 2,643 2013 YTD: 1,500
2013 YTD: 545 2013 YTD: 561
Net Revenues
10
2013 YTD: 2,643 2013 YTD: 5,397
US$ Million R$ Million
3,3802,845
3,913
2,157
3,240
2Q12 3Q12 4Q12 1Q13 2Q13
1,715
1,402
1,898
1,086
1,557
2Q12 3Q12 4Q12 1Q13 2Q13
2013 Outlook: US$ 5.9 – 6.4 Billion
118 111
143
108
75
59
75
53
121
54
2Q12 3Q12 4Q12 1Q13 2Q13
233 224
295
215
147120
154
106
250
111
2Q12 3Q12 4Q12 1Q13 2Q13
11
SG&A Expenses
344
449
170
218
161
193
321
380
Selling Expenses G&A Expenses
175 361
US$ Million R$ Million
2013 YTD: 336 2013 YTD: 682
Income from Operations
EBIT EBIT Margin
12
2013 YTD: 175 / 6.6% 2013 YTD: 365 / 6.8%
US$ Million R$ Million
EBIT: US$ 530 – 610 Million
EBIT Margin: 9.0% – 9.5% 2013 Outlook:
205
469
79
390
285
11.5%
7.2%
12.0%
3.7%
8.8%
2Q12 3Q12 4Q12 1Q13 2Q13
101
228
40
197
135
11.5%
7.2%
12.0%
3.6%
8.7%
2Q12 3Q12 4Q12 1Q13 2Q13
EBITDA
EBITDA EBITDA Margin
13
US$ Million R$ Million
2013 YTD: 304 / 11.5% 2013 YTD: 628 / 11.6%
EBITDA: US$ 770 – 900 Million
EBITDA Margin: 13.0% – 14.0% 2013 Outlook:
265
168
310
100
204
15.5%
12.0%
16.3%
9.2%
13.1%
2Q12 3Q12 4Q12 1Q13 2Q13
524
340
638
201
427
15.5%
12.0%
16.3%
9.3%
13.2%
2Q12 3Q12 4Q12 1Q13 2Q13
5.9%
92
5.9%
192
Adjusted Net Income, excluding Deferred Income Taxes
Net Margin
Net Income
Net Income
14
2013 YTD: 25 / 0.9% 2013 YTD: 52 / 1.0%
US$ Million
124 133
254
62
(10)
3.7%4.6%
6.5%
2.9%
-0.3%
2Q12 3Q12 4Q12 1Q13 2Q13
5565
123
30
(5)
3.2%
4.7%6.5%
2.8%
-0.3%
2Q12 3Q12 4Q12 1Q13 2Q13
2,530 2,585
2,157
2,510 2,523
2Q12 3Q12 4Q12 1Q13 2Q13
Inventories
15
US$ Million
(50)(163)
(50)
157
(30)
439
(83)
186
(75)
(125)(55) (58)
(75)(68) (60)
27
(138)
202
(201)
2
2Q12 3Q12 4Q12 1Q13 2Q13
Free Cash Flow
16
2013 YTD: (199) US$ Million
* Net of Financial assets adjustment
Net cash generated (used) by operating activities* 157 (30) 439 (83) 186 103
Additions to property, plant and equipment (75) (50) (163) (50) (125) (175)
Additions to intangible assets (55) (58) (75) (68) (60) (127)
Free Cash Flow 27 (138) 202 (201) 2 (199)
2Q13 YTD132Q12 3Q12 4Q12 1Q13
127 118100
300
180
52
RESEARCH DEVELOPMENT CAPEX
2013 Outlook: US$ 580 Million
Investments
2013 Outlook 2013 YTD
US$ Million
17
2013 YTD: 297
Indebtedness Profile / Net Cash
Long-term Short-term Loans Average Maturity (Years)
Indebtedness Maturity Net Cash – US$ Million
18
US$ 2.22 Billion Total Debt 2Q13 Total Cash 2Q13 US$ 2.28 Billion
84% 85%
22% 17%
78% 83%94%
16% 15%6%
6.1 6.05.8
5.15.4
2Q12 3Q12 4Q12 1Q13 2Q13
290
123
309
9858
2Q12 3Q12 4Q12 1Q13 2Q13