Conference Call 4Q13

33
Cargo do Apresentador EARNINGS RESULTS 4 th QUARTER & FY 2013 February 26, 2014

Transcript of Conference Call 4Q13

Page 1: Conference Call 4Q13

Cargo do ApresentadorEARNINGS RESULTS

4th QUARTER & FY 2013

February 26, 2014

Page 2: Conference Call 4Q13

Forward Looking StatementThis 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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Financial Highlights

The Company met its 2013 outlook for Net Revenues, Margins and Aircraft Deliveries.

Total firm order backlog reached US$ 18.2 billion, its highest level in five years.

Net Revenues reached US$ 6,235 million in 2013 and US$ 2,304 million in 4Q13, representing the highest ever quarterly revenues for the Company.

2013 EBIT and EBIT Margin were US$ 713 million and 11.4%.

2013 EBITDA and EBITDA Margin were US$ 1,004 million and 16.1%.

Free Cash Flow was US$ 213 million and Net Cash reached US$ 429 million in 2013.

As part of Embraer’s ongoing liability management, the Company completed an exchange offer of Notes extending their maturity until 2023.

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Corporate Highlights

Embraer listed for the 4th consecutive year on the Dow Jones Sustainability Index and also on the ISE in Brazil.

Embraer was awarded and recognized by many renowned publications and institutions as one of the best companies in Brazil and abroad in several categories.

Embraer joined the World Economic Forum Partnering Against Corruption Initiative (PACI), a global, multi-industry, multi-stakeholder anti-corruption initiative.

Page 5: Conference Call 4Q13

Delivery of 90 E-Jets in 2013 of which 32 were in 4Q13.

349 new E-Jets (E1&E2) were sold in 2013, reaching 1,427 aircraft and a customer base of 65 airlines in 45 countries.

Highlights

Embraer launched the E-Jets E2 Program which to date have reached 200 firm orders plus 200 options.

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Highlights

Delivery of the 1,000th E-Jet production aircraft to Republic Airlines, which is being operated on behalf of American Eagle.

Embraer received American Airlines’ order for up to 150 E175 jets (60 firm plus 90 options).

Saratov Airlines became the first Russian E-Jet operator with two E195.

Air Costa (India) placed a firm order for 50 E-Jets E2 plus 50 options of the E190-E2 and E195-E2 models. (1Q14)

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Delivery of 119 executive jets in 2013 (90 light jets and 29 large jets). 53 jets delivered in 4Q13.

Phenom family surpassed 470 aircraft deliveries to 29 countries.

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Highlights

Legacy 450 first flight in December 2013. EIS expected in 2015.

Legacy 500 reached more than 1,100 hours in flight test campaign. EIS is scheduled for first half of 2014.

Phenom 300 was the most delivered executive jet in the industry in 2013.

Page 8: Conference Call 4Q13

Expansion of authorized service center network with six new facilities added in 2013, totaling six wholly-owned and 70 authorized service centers.

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Highlights

Embraer Executive Jets won the second place ranking for the second consecutive year in the product support survey from Aviation International News (AIN).

Launch of the new Lineage 1000E.

First China-assembled Legacy 650 was delivered to first client.

Page 9: Conference Call 4Q13

In 2013, Bradar delivered seven Saber M60 low altitude surveillance radars to the Brazilian Armed Forces which now has 22 in operation. It also signed a contract to supply one Sentir M20 radar to the Brazilian Army.

In the air traffic segment, Atech signed a contract to implement the SAGITARIO system in several regions of Brazil.

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Highlights

Defense & Security revenues grew 15% in 2013 and reached US$ 1.2 billion.

Visiona signed contract for the Geostationary Defense and Strategic Communication Satellite.

Page 10: Conference Call 4Q13

Embraer Defense & Security finished adapting the hangar of the Jacksonville, Florida plant to start production of the Super Tucano. First delivery for the USAF LAS Program scheduled for mid 2014.

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Highlights

Embraer Defense & Security delivered the second modernized A-1 (A-1M) fighter jet to the Brazilian Air Force and performed the first flight of the two-seater prototype.

KC-390 development program ongoing with the beginning of production of parts for assembly of the first prototype, which will fly for the first time in late 2014.

Delivery of the final three Super Tucanoaircraft to the National Air Force of Angola.

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21 19 16

77

90

22 29

98

126

83

2009 2010 2011 2012 2013

125

101 105 10690

2009 2010 2011 2012 2013

Aircraft Deliveries

Large Jets - Legacy & Lineage

Light Jets - Phenom

Commercial Jets Executive Jets

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2013 deliveries estimates • 90 - 95 commercial jets• 25 - 30 executive large jets• 80 - 90 executive light jets

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67%13%

20%

12.5 13.3

17.1 17.8 18.2

4Q12 1Q13 2Q13 3Q13 4Q13

Firm Order Backlog

12

US$ Billion

Commercial Aviation

Defense & Security

Executive Aviation

Page 13: Conference Call 4Q13

5,498 5,3645,791 6,167 6,235

2009 2010 2011 2012 2013

Net Revenues

13

2013 Outlook: US$ 5.9 – 6.4 Billion

US$ Million

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Revenues Breakdown

14

20% 24% 29%

25%31% 22%

17%

14% 21%11% 3%

8%11% 14%6%

9% 5% 9%7% 9% 5%

2011 2012 2013

65% 61%53%

19% 21%27%

15% 17% 19%

1% 1% 1%

2011 2012 2013

Net Revenues by Segment Net Revenues by Region

Commercial Aviation

Executive Aviation Others

Defense & Security

Revenues US$ Billion 5.79 6.18 6.24

Revenues US$ Billion5.79 6.18 6.24

North America Brazil

Europe

Asia Pacific

South &

Central America

Africa &

Middle East

China

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Net Revenues

Net Revenues - US$ Million Net Revenues - R$ Million

2013: 6,235 2013: 13,636

3,913

2,157

3,240 2,944

5,296

4Q12 1Q13 2Q13 3Q13 4Q13

1,898

1,086

1,5571,288

2,304

4Q12 1Q13 2Q13 3Q13 4Q13

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305374 419

480

191

198

261

279

454

211

9%11% 12% 12%

11%

2009 2010 2011 2012 2013

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Expenses / Net Revenues

US$ Million

Selling ExpensesG&A Expenses

SG&A Expenses

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295

215250 256

154

106

111 117

258

120

4Q12 1Q13 2Q13 3Q13 4Q13

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SG&A Expenses

SG&A Expenses - US$ Million SG&A Expenses - R$ Million

378

449

321373361

2013: 1,433

Selling ExpensesG&A Expenses

2013: 664

143

108121 112

75

5354

51

113

52

4Q12 1Q13 2Q13 3Q13 4Q13

165

218

161 163175

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392318

612

713

379

11.4%9.9%

5.5%7.3%6.9%

2009 2010 2011 2012 2013

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EBIT: US$ 530 – 610 Million

EBIT Margin: 9.0% – 9.5%2013 Outlook:

Income from OperationsUS$ Million

9.1%

566

EBIT EBIT MarginExcluding AMR effect

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40135

76

228

463

12.0%

3.6%

8.7%5.9%

20.1%

4Q12 1Q13 2Q13 3Q13 4Q13

79285

173

469

1,068

12.0%

3.7%

8.8%5.9%

20.2%

4Q12 1Q13 2Q13 3Q13 4Q13

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Income from Operations

Income from Operations - US$ Million Income from Operations - R$ Million

2013: 713 / 11.4% 2013: 1,606 / 11.8%

316 723

13.7% 13.7%

EBIT EBIT MarginExcluding AMR effect

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611 557

891

609

1,004

11.1% 11.4%9.6%

14.4%16.1%

2009 2010 2011 2012 2013

13.8%

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EBITDA: US$ 770 – 900 Million

EBITDA Margin: 13.0% – 14.0% 2013 Outlook:

US$ Million

EBITDA

857

EBITDA EBITDA MarginExcluding AMR effect

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638

201

427 359

1,253

16.3%

9.3%

13.2%12.2%

23.7%

4Q12 1Q13 2Q13 3Q13 4Q13

310

100204

156

544

16.3%

9.2%

13.1% 12.1%

23.6%

4Q12 1Q13 2Q13 3Q13 4Q13

17.3%17.2%

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EBITDA

EBITDA - US$ Million EBITDA - R$ Million

2013: 1,004 / 16.1% 2013: 2,239 / 16.4%

397 909

EBITDA EBITDA MarginExcluding AMR effect

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330

112

348

465

342

8.5% 6.2%

1.9%

5.6% 5.5%

2009 2010 2011 2012 2013

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Net MarginNet Income

Net IncomeUS$ Million

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254

62

(10)

119

607

6.5%

2.9%

-0.3%

4.0%

11.5%

4Q12 1Q13 2Q13 3Q13 4Q13

123

30

(5)

53

265

6.5%

2.8%

-0.3%

4.1%

11.5%

4Q12 1Q13 2Q13 3Q13 4Q13

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Net Income

Net Income - US$ Million Net Income - R$ Million

2013: 342 / 5.5% 2013: 778 / 5.7%

Net MarginNet Income

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2.57

1.83

0.62

1.92 1.88

26%34%

116%

26%26%

2009 2010 2011 2012 2013

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EPADS and Pay Out

EPADS Pay Out

US$

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2,445

2,1982,288

2,1572,287

2009 2010 2011 2012 2013

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InventoriesUS$ Million

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4Q12 1Q13 2Q13 3Q13 4Q13 2013

Net cash generated (used) by operating activities* 438 (83) 186 102 761 967

Additions to property, plant and equipment (163) (50) (125) (106) (156) (438)

Additions to intangible assets (75) (68) (60) (80) (109) (317)

Free Cash Flow 201 (201) 2 (84) 496 213

(50)(125) (106)

438

(83)

186102

761

(163) (156)

(75)(68) (60) (80)

(109)

201

(201)

2

(84)

496

4Q12 1Q13 2Q13 3Q13 4Q13

Free Cash Flow

26

2013: 213

* Net of Financial assets adjustment

US$ Million

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265

193

100

300

180

75

RESEARCH DEVELOPMENT CAPEX

Investments

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2013 Outlook: US$ 580 Million

2013 Outlook2013

US$ Million Total Investments

534 580

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94% 96%

16% 15%

84% 85%96%

6% 4% 4%

5.8

5.1 5.4

6.3 6.2

4Q12 1Q13 2Q13 3Q13 4Q13

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Indebtedness Profile / Net Cash

Indebtedness Maturity Net Cash/Debt - US$ Million

Long-term Short-termLoans Average Maturity (Years)

US$ 2.19 BillionTotal Debt 4Q13 Total Cash 4Q13 US$ 2.62 Billion

309

9858

(20)

429

4Q12 1Q13 2Q13 3Q13 4Q13

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2014 OUTLOOK

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EBITDA Margin 13.0% – 14.0%

2014 Consolidated Outlook

Net Revenues

EBITDA

US$ 6.0 – 6.5 Billion

US$ 780 – 910 Million

EBIT Margin 9.0% – 9.5%

EBIT US$ 540 – 620 Million

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Free Cash Flow Positive Low Double Digits

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Net Revenues

Net Revenues US$ 3.20 – 3.40 Billion

Deliveries: 92 to 97 E-jets

Other Revenues US$ 100 Million

US$ 1.50 – 1.70 Billion

Net Revenues US$ 1.20 – 1.30 Billion

2014 Business Units Outlook

80 to 90 light jets 25 to 30 large jets

Deliveries:

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2014 Investment Outlook

TOTAL INVESTMENTS: US$ 650 Million

Research US$ 80 Million

Development US$ 320 Million

CAPEX US$ 250 Million

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Page 33: Conference Call 4Q13

Investor Relations

Phone: +55 12 3927 [email protected]

www.embraer.com