FOURTH QUARTER & FY 2012 EARNINGS RESULTS March 13, 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 forwardlooking 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
3 Corporate Highlights Operational performance surpassed 2012 outlook. Embraer was elected for the 4 th consecutive year as one of the best companies to work for and the best company in people management in Brazil. Embraer wins FINEP Innovation Award for the 2 nd consecutive year. Embraer was chosen again as one of the most transparent companies in Brazil in 2012.
Corporate Highlights Embraer listed for the 3 rd consecutive year on the Dow Jones Sustainability Index. Embraer opened two new Centers of Excellence in Évora, Portugal. Embraer opened an Engineering Center in Belo Horizonte and broke ground for another in Melbourne, Florida. Embraer Education and Research Institute inaugurated in the city of Botucatu, a new unit of the Embraer High School. 4
5 Highlights Delivery of 106 E-Jets in 2012 (23 in 4Q12), reaching 908 total deliveries since EIS. Embraer welcomed seven new E-Jets operators in 2012: Bulgaria Air, Estonian, Belavia, Conviasa, Myanma Airways, TUI Travel Jetairfly and FLYNONSTOP. 56 new E-Jets were sold in 2012, reaching 1,093 aircraft and a customer base of 62 airlines in 42 countries.
6 Highlights Republic Airways signed a contract for 47 E175 Jets + 47 options. Aldus Aviation also signed a contract for 20 E-Jets + 15 options. Delivery of the 900 th E-Jet to Kenya Airways. E-Jets Second Generation suppliers selection: Pratt & Whitney s PurePower engines and Honeywell avionics.
7 Highlights Delivery of 99 executive jets in 2012 (77 light jets and 22 large jets). 53 jets delivered in 4Q12. Phenom 300 program reached two milestones: 100 th delivery and first flight of U.S.A. manufactured aircraft. Delivery of 200 th Legacy600/650 jet to China s Minsheng Financial Leasing. Legacy 500 first flight.
8 Highlights Embraer Executive Jets launched Legacy 450 fabrication. Embraer Executive Jets wins acclaim for product support from Aviation International News (AIN) and Professional Pilot magazines. HEAI started the Legacy 600/650 production in Harbin, China and ICBC Leasing ordered 10 aircraft to be made in this unit. Expansion of authorized service center network with 12 new facilities added in 2012.
9 Highlights Defense & Security revenues grew 24% in 2012 and surpassed the historical level of US$ 1.0 billion. Brazilian Army signed contract for Sisfron, Phase I. Visiona, a joint venture between Embraer and Telebras, was created to participate in the Brazilian Geostationary Satellite program. KC-390 development program ongoing and on schedule.
10 Highlights Two of the three EMB 145 AEW&C were delivered to the Indian Government. Delivery of the first four A-29 Super Tucano to Indonesian Air Force, the first one to Mauritania and first three to the National Air Force of Angola. The U.S. Air Force selected the Super Tucano for the LAS program. Contract signed for EMB 145 AEW&C surveillance aircraft modernization for the Brazilian Air Force.
11 Aircraft Deliveries Commercial Jets Executive Jets 165 125 101 105 106 2 98 126 83 77 37 21 19 16 22 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 Light Jets - Phenom Large Jets - Legacy & Lineage
12 Firm Order Backlog US$ Billion 15.4 14.7 12.9 12.4 12.5 Executive Defense & Aviation Security 26% 28% Commercial Aviation 46% 4Q11 1Q12 2Q12 3Q12 4Q12
13 Net Revenues US$ Million 6,335 5,498 5,364 5,803 6,178 2008 2009 2010 2011 2012 2012 Outlook: US$ 5.8 6.2 Billion 2008: USGAAP 2009-2012: IFRS
14 Net Revenues Breakdown Net Revenues by Segment Net Revenues by Region Revenues 1% 1% 1% 15% 15% 17% 23% 19% 21% Revenues US$ Billion 5.36 5.80 6.18 US$ Billion 5.36 5.80 6.18 4% 4% 6% 22% 23% 22% 13% 17% 14% 15% 11% 3% 61% 65% 61% 33% 25% 31% 13% 20% 24% 2010 2011 2012 2010 2011 2012 Commercial Aviation Executive Aviation Defense and Security Others North America Brazil Europe Asia Pacific Latin America Others
15 Net Revenues US$ Million R$ Million Total 2012: 6,178 Total 2012: 12,202 2,025 1,156 1,717 1,405 1,900 3,667 2,049 3,385 2,850 3,918 4Q11 1Q12 2Q12 3Q12 4Q12 4Q11 1Q12 2Q12 3Q12 4Q12
SG&A Expenses US$ Million 10% 9% 11% 12% 12% 232 191 198 262 280 393 302 374 420 483 2008 2009 2010 2011 2012 G&A Expenses Selling Expenses Expenses / Net Revenues 16 2008: USGAAP 2009-2012: IFRS
Income from Operations US$ Million 8.5% 6.9% 7.3% 5.5% 9.9% 537 612 379 392 318 2008 2009 2010 2011 2012 EBIT EBIT Margin 17 2008: USGAAP 2009-2012: IFRS 2012 Outlook: EBIT: US$ 520 590 Million EBIT Margin: 9.0% 9.5%
18 Income from Operations US$ Million R$ Million Total 2012: 612 / 9.9% Total 2012: 1,218 / 10.0% 11.5% 12.0% 11.5% 12.0% 7.4% 7.2% 7.5% 7.2% -0.3% 197 228-0.4% 390 469 86 101 153 205 (6) 4Q11 1Q12 2Q12 3Q12 4Q12 (15) 4Q11 1Q12 2Q12 3Q12 4Q12 EBIT EBIT Margin
EBITDA US$ Million 14.4% 9.6% 11.1% 11.4% 9.6% 891 608 609 611 557 2008 2009 2010 2011 2012 EBITDA EBITDA Margin 19 2008: USGAAP 2009-2012: IFRS 2012 Outlook: EBITDA: US$ 720 840 Million EBITDA Margin: 12.5% 13.5%
EBITDA US$ Million R$ Million Total 2012: 891 / 14.4% Total 2012: 1,766 / 14.5% 15.4% 16.4% 15.5% 16.4% 12.8% 11.8% 12.9% 11.8% 2.9% 265 312 2.8% 524 641 148 166 264 337 59 101 4Q11 1Q12 2Q12 3Q12 4Q12 4Q11 1Q12 2Q12 3Q12 4Q12 EBITDA EBITDA Margin 20
21 Net Income US$ Million 8.5% 6.1% 6.2% 5.6% 1.9% 389 465 330 348 112 2008 2009 2010 2011 2012 Net Income Net Margin 2008: USGAAP 2009-2012: IFRS
22 Net Income US$ Million R$ Million Total 2012: 348 / 5.6% Total 2012: 698 / 5.7% 9.1% 6.5% 9.2% 6.5% 105 3.2% 4.6% 55 65 123 188 3.7% 4.6% 124 133 254-4.5% (92) -4.7% (172) 4Q11 1Q12 2Q12 3Q12 4Q12 4Q11 1Q12 2Q12 3Q12 4Q12 Net Income Net Margin
23 EPADS and Pay Out US$ 116% 52% 26% 34% 26% 2.14 2.57 1.83 1.92 0.62 2008 2009 2010 2011 2012 EPADS Pay Out 2008: USGAAP 2009-2012: IFRS
24 Inventories US$ Million 2,837 2,445 2,198 2,288 2,155 2008 2009 2010 2011 2012 2008: USGAAP 2009-2012: IFRS
25 Free Cash Flow Total 2012: (81) US$ Million 277 414 (77) (60) (70) (40) (65) (174) 155 25 (76) (55) (30) (50) (58) (138) 206 444 (163) (76) 4Q11 1Q12 2Q12 3Q12 4Q12 Free cash flow Net cash generated (used) by operating activities* * Net of Financial assets adjustment Additions to PP&E Additions to Intangible
Investments US$ Million 350 251 211 200 77 100 RESEARCH DEVELOPMENT CAPEX 2012 Total 2012 Outlook 2012 Outlook: US$ 650 Million Total Investment 2012: US$ 539 Million 26
27 Indebtedness Profile / Net Cash Indebtedness Maturity Net Cash US$ Million 15% 26% 22% 17% 16% 4,8 85% 4,2 74% 6,1 6,0 5,8 78% 83% 84% 446 302 290 313 123 4Q11 1Q12 2Q12 3Q12 4Q12 4Q11 1Q12 2Q12 3Q12 4Q12 Long-term Short-term Loans Average Maturity (Years) US$ 2.07 Billion Total Debt 4Q12 Total Cash 4Q12 US$ 2.38 Billion
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