Embraer 4Q09 Results

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Transcript of Embraer 4Q09 Results

Page 1: Embraer 4Q09 Results

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Forward Looking StatementForward 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.

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Highlights 2009

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Solid net cash position of US$ 500 million.

Successful US$ 500 million, ten-year bond issued at attractive rates.

Company Highlights 2009Company Highlights 2009

Fifth consecutive year listed in the BM&FBOVESPA Sustainability Index (ISE).

All operational targets achieved.

In 2009, Embraer completed 40 years of existence with more than 5 thousand aircraft produced and operating in 78 countries.

Effective restructuring preserving Company’s operational, economical and financial solidness.

20% reduction of SG&A. Significant inventory reduction of US$ 0.5 billion.

Reduction in Capex but preserving strategic investments.

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Company Highlights 2009Company Highlights 2009

Landmark development contract for KC390 aircraft.

Solid progress of P3E and technological development.

Phenom 300 was certified on schedule (December 2009), meeting or surpassing all of its performance goals.

Embraer’s market share in the bizjet market increased from 3% to 14% (deliveries) and 4% to 6.5% (revenues).

Successful ramp up of Phenom 100 and Lineage 1000.

Financing secured for all commercial jet deliveries.

First flight of Legacy 650.

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7641,354

1,837

2,762 2,9272,526

2,144

3,4413,830 3,760

5,245

6,335

5,466

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

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Net Revenue Net Revenue (US GAAP)(US GAAP)

US$ Million

Guidance Delivered

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160 161131

101

148 141 130

169

204

244

96

32

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

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Aircraft DeliveriesAircraft Deliveries

* Phenom Jets

*2

*98

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Firm Order BacklogFirm Order Backlog

US$ Billion

3.0 4.16.4

11.4 10.79.0

10.6 10.1 10.4

14.8

20.9

16.618.8

2.2 2.2 2.3

3.94.2 4.2

3.12.6 2.8 2.8 3.0

3.8

3.3

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Firm Order Backlog Backlog/Revenue (Years)

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Revenue BreakdownRevenue Breakdown

Revenue by Segment Revenue by Region

64% 67% 62%

7%8%

9%

16%14%

16%

10% 9% 11%3% 2%2%

2007 2008 2009

46% 43%

23%

24%18%

32%

12%

10%7%

4%

4%11%

6%18% 21%

8% 7% 6%

2007 2008 2009

Commercial aviationExecutive aviation

OthersAviation services

Defense North America

Brazil

EuropeAsia Pacific

Latin AmericaOthers

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Financial Results

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Net Revenues and Net Revenues and Gross MarginGross Margin

US Gaap - US$ Million

Net Revenues Gross Margin

5,2456,335

5,466

20.4%

21.2%22.0%

2007 2008 2009

BR Gaap - R$ Million

9,99410,813

11,747

19.2%

20.5%20.5%

2007 2008 2009

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731603

425

376

2008 2009

393305

232

191

2008 2009

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SG&A ExpensesSG&A Expenses

625

496

Selling Expenses General and Adm. Expenses

1,156

979

US Gaap - US$ Million BR Gaap - R$ Million

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537

374

8.5%

7.1%6.1%

2007 2008 2009

275

66

4.1%

15.1%

4Q08 4Q09

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Income from Operations Income from Operations (US GAAP)(US GAAP)

US Gaap - US$ Million US Gaap - US$ Million

Income from Operations Operating Margin

103

8.0%

103

10.5%

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732

1,113938

9.5%9.4%

6.8%

2007 2008 2009

436

60

2.2%

10.5%

4Q08 4Q09

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Income from Operations Income from Operations (BR GAAP)(BR GAAP)

179

8.4% 8.6%

179

BR Gaap - R$ Million BR Gaap - R$ Million

Income from Operations Operating Margin

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1,3221,500

1,157

10.7%

12.8%13.2%

2007 2008 2009

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EBITDAEBITDA

US Gaap - US$ Million BR Gaap - R$ Million

EBITDA EBITDA Margin

433

608

422

7.7%

9.6%

8.3%

2007 2008 2009

103

9.6%

179

12.3%

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389

489

9.3%

4.5%

6.1%

2007 2008 2009

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Net Income Net Income (US GAAP)(US GAAP)

Net Income Net Margin

US Gaap - US$ Million US Gaap - US$ Million

112

146

9,1%

6,1%

4Q08 4Q09

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Net Income Net Income (BR GAAP)(BR GAAP)

Net Income Net Margin

BR Gaap - R$ Million

895

429

1,185

8.3%

3.6%

11.9%

2007 2008 2009

BR Gaap - R$ Million

(41)

168

6,0%

-1,0%

4Q08 4Q09

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InventoriesInventories

US Gaap - US$ Million

2,340

2,837

2,491

2007 2008 2009

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Indebtedness ProfileIndebtedness Profile

Total Debt 4Q09: US$ 2,043 Million

52% 53%

29% 27%

71%71% 73%

29%47%48%

4.9

2.62.1

3.53.3

4Q08 1Q09 2Q09 3Q09 4Q09

Long-term Short-term Loans Average Maturity (Years)

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Operating Cash Flow Operating Cash Flow InvestmentsInvestments

US Gaap - US$ Million

(244)

(64)

404

40

1Q09 2Q09 3Q09 4Q09

Investments - US$ 247 million:

• R&D: US$ 144 million;

• PP&E: US$ 103 million.

Below

Budget

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Net CashNet Cash

US Gaap - US$ Million

376

12252 71

503

4Q08 1Q09 2Q09 3Q09 4Q09

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2010 Outlook

and Guidance

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2010 Outlook2010 Outlook

Commercial aviation: some hope on the horizon, but structural concerns still.

Business aviation: some indicators showing positive trend.

Embraer growing its market share.

Defense business resilient.

Embraer benefiting from Brazil’s growth / global insertion.

Company’s operations, productivity, quality and employee moral in good

shape and improving – P3E in full force.

Investments in technological development producing concrete results and

paving the future.

Embraer with increasingly solid strategic positioning.

Readiness to leverage results when markets rebound.

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2010 Guidance2010 Guidance

Net revenues - US$ 5.0 billion

• Commercial aviation: US$ 2.6 billion

• Executive aviation: US$ 1.1 billion

• Defense: US$ 650 million

• Services and others: US$ 650 million

EBIT - US$ 300 million

EBIT margin - 6.0%

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Other Relevant EstimatesOther Relevant Estimates

2010 projected deliveries

• 90 commercial jets

• 137 business jets

• 17 Legacy / Lineage

• 120 Phenom

Investments - Budget US$ 300 million

• R&D: US$ 160 million

• PP&E: US$ 140 million

EBITDA - US$ 375 million

EBITDA margin - 7,5%

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