Embraer Day Marco Tulio Pellegrini - COO Executive Aviation
Oct. 31 st , 2013
This information is the property of Embraer and cannot be used or reproduced without written consent. Market recovery depends on many factors
Willingness to invest Stock Markets Business Pre-owned Aviation Wealthy Market Traffic Population
Corporate Profits Finance Exchange conditions Rates Sales of New (for small jets, and Asia Business mainly) Jets
This information is the property of Embraer and cannot be used or reproduced without written consent. Source: Embraer Analysis U.S. corporate profits
2.500 2.249
2.000 +41% +125%
1.500
1.000
US Corporate Profits (US$ (US$ Bi) Profits US Corporate 500
0 Q2 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: BEA – Bureau of Economic Analysis and Embraer estimates, September 2013 Seasonally adjusted at annual rates
This information is the property of Embraer and cannot be used or reproduced without written consent. Worldwide HNWIs population
11.9 10.8 11.0 10.1 10.1 9.6 8.8 8.2 8.6 7.7 Population (mi) Population
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
North America Europe Asia-Pacific Latin America Middle East Africa
Source: World Wealth Report 2013 edition
This information is the property of Embraer and cannot be used or reproduced without written consent. Business Jet Traffic – United States
220 2007 190 2013 160 2012
Movements X 1000 X Movements 130 2009
100 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: FAA – September 27 th , 2013
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Source: EIU, September 2013
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12.9% 8.3% 3.500 28% 2483 jets 672 jets Fleet older than 10 yrs 3.000 Up to 10 yrs & positions 24% Total fleet % for sale 2.500 20%
2.000 16%
1.500 12%
1.000 8% Units (Bars) Units
500 4% % of active fleet (Lines) fleet active of%
0 0%
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 TD
Source: Jetnet and Embraer Analysis, September 2013
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100 50% % of active fleet 95 EMBRAER Total fleet for sale 45% 90 40% 85 35% 80 30% 75 25% 70 20% 12% 65 15% 60 10%
#sale fora/c ofEmbraer 55 5% for sale as % of active fleet active of % as sale for 50 0% Jul-09 Jul-10 Jul-11 Jul-12 Jul-13 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13 Jan-10 Jan-11 Jan-12 Jan-13 Oct-09 Oct-10 Oct-11 Oct-12 Despite a large amount of small jets in fleet, Embraer fleet for sale is currently below the world average of 12.3%.
Source: Jetnet and Embraer Analysis, October 2013
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# Total Fleet for sale Average discount 150% 3200 ↑ 141% since peak
100% 2800
↓ 18.5% since peak
50% 2400 # Total Fleet for sale for Fleet Total # Av. discount (Relative to May 2009) May to (Relative discount Av. 0% 2000 May-09 Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12 May-13
Recovery will depend on an improvement in pre-owned prices. Owners are postponing substitutions.
Source: Jetnet and Embraer Analysis, October 2013
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Retail / Avg Equipped* 100%
90%
80%
70%
60%
50%
40%
30% 2013 2012 2011 2010 2009 2008 2007 2006 Year of Manufacture
Phenom 300 Citation CJ4 G550 Lineage 1000 7X
* Average equipped price in 2013 economic conditions for all years. Source: Aircraft Bluebook, October 2013
This information is the property of Embraer and cannot be used or reproduced without written consent. Top 10 best “liquidity” performers
DAYS ON DAY ON ACTIVE FLEET FLEET Rank MODELS MARKET MARKET (US) FLEET FOR SALE FOR SALE (%)
1st EMBRAER PHENOM 300 125 102 139 4 3%
2nd CITATION CJ4 149 238 130 3 2% 3rd GULFSTREAM G-350 157 N.A. 11 2 18% 4th GULFSTREAM G-550 169 120 411 12 3% 5th LEARJET 40XR 179 215 91 5 5% 6th CITATION XLS+ 191 131 143 10 7% 7th GULFSTREAM G-450 230 130 271 19 7% 8th EMBRAER PHENOM 100 234 256 285 19 7% 9th CHALLENGER 300 237 304 414 22 5% 10 th FALCON 2000LX 237 83 123 6 5%
Source: Jetnet, October 2013.
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Active fractional shares - market share
11%
73% Directional Aviation Control 12%
3% 1%
NetJets Flight Options Flexjet CitationAir Others
Directional Aviation will more than double its participation (from 11% to 23%).
Source: Embraer analysis based on Jetnet database. October 2013.
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FLIGHT OPTIONS NETJETS
25 aircraft delivered to date 10 aircraft delivered to date
Flight Options also operates 6 Legacy 600
Source: Jetnet and Embraer Analysis, October2013
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EMBRAER Owners 616
Hawker 350 Cessna 372 Bombardier 393 Dassault 440 Gulfstream 445
Large Jets 433 Medium Jets 393 class Owners OEM
Owners Small jets 344 0 200 400 600 800 1000
Embraer owners tend to have a better annual utilization leading their businesses to higher productivity. Good option for management prospects.
Source: Jetnet IQ 2Q13 report proprietary data.
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This information is the property of Embraer and cannot be used or reproduced without written consent. Market Recovery in slow motion
US Corporate profits at record levels MILD GROWTH
HNWI at record levels
World GDP growth is moderate
Used market inventory leveled off but prices are still an issue
Traffic recovery on track but slower than expected
European markets still at risk; emerging countries slowing down
Lack of confidence is holding the bizjet market turnaround
USA market dictates the speed of recovery
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1200 Deliveries Forecast (units) Units US$ 225 17,3 1000 1345 Ultra Large 82,2 800 Ultra Long Range 1670
Large 1270 600 Supermid 920 64,7
400 Midsize 1140 Midlight 31,1 1780 17,8 200 Light 17,3 Entry 900 15,8 4,2 0 Deliveries Revenues 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 N10YF 9,250 jets and US$ 250 Bi in the next 10 years
This information is the property of Embraer and cannot be used or reproduced without written consent. 2014-2023 market forecast by region
EMEA North America 2,330 a/c (25%) 4,530 a/c (49%) US$ 70 Bi (28%) US$ 117 Bi (47%)
China 805 a/c (9%) US$ 29 Bi (11%) Asia Pacific 725 a/c (8%) US$ 21 Bi (8%)
Latin America Worldwide 860 a/c (9%) 9,250 units US$ 15 Bi (6%) US$ 250 Bi
Source: Embraer 2013.
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Ultra-large EIS 2009
Ultra-Long Range
Large EIS 2010
Super Mid-Size EIS 2002
Mid-size EIS 2014
Mid-light EIS 2015
Light EIS 2009
Entry EIS 2008
This information is the property of Embraer and cannot be used or reproduced without written consent. Executive Aviation - Revenue evolution (US$ million)
1292 1210 1119 937 838 874
582
246 278 145 175
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
CAGR 24.4%
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45% 40% 35%
30% 25% 20%
Market share Market 15% 10%
5%
0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
22% accumulated since EIS, within the markets EEJ competes
Source: Jetnet and Embraer analysis – July, 2013
This information is the property of Embraer and cannot be used or reproduced without written consent. EEJ market share (revenues)
21.8 17.3 18.2 18.1 17.7 Total Revenues (in US$) 5% 6% 10% 7% 5% 8% 4% 3% 8% 6% 7,3% 4,2% 5,9% 6,4% 6,9% Others 23% 25% 21% 21% 27% Hawker-Beech Embraer 12% 18% 15% 17% Gulfstream 22% 19% 9% 10% Dassault 13% 7% Cessna Bombardier 33% 33%
% OEM Share – Share US$ OEM Revenues % Total 29% 28% 27%
2008 2009 2010 2011 2012 Source: GAMA and Embraer analysis – July, 2013
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7200
5500 4900 4700 4400
3200 2800
1800
500 500 100 300
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013TD CAGR 17%
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China - Harbin USA - Melbourne Legacy 650 Phenom 100 & 300 Legacy 450 & 500
Brazil – São José dos Campos Phenom 100 & 300 Legacy 450 & 500 Legacy 650 Lineage 1000
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Phenoms delivered June ’13
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New Multi-Function Spoiler and Interior Improvements
New • Multi-function spoilers Standard • 11 new interior collections Items
• Refreshment center New Interior • Stowage space Options • Premium seats
This information is the property of Embraer and cannot be used or reproduced without written consent. Phenom 300 – Prodigy touch
Based on Garmin 3000
First to certify this touchscreen Garmin platform
ANAC, FAA and EASA approved
Now available as an option
This information is the property of Embraer and cannot be used or reproduced without written consent. Extended Range - 200 nm Enhanced Interior Entertainment to the latest generation
Enhanced cockpit options – E2VS and Autoland
External look refreshed
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Three prototypes in flight test
700+ flight hours Data All Preliminary Over 16,000 systems test hours performed On track for EIS in 1H 2014
First appearance at NBAA
This information is the property of Embraer and cannot be used or reproduced without written consent. Legacy 450 - Range increase
FROM TO
Range 2,300 nm 2,500 nm
Better performance and more flexibility
All Preliminary Data PreliminaryAll This information is the property of Embraer and cannot be used or reproduced without written consent. Legacy 450 - Cabin comfort improvement
46”
This information is the property of Embraer and cannot be used or reproduced without written4” consent. additional leg room New Interior Design unveiled at NBAA Legacy 450 program update
First flight expected for 2H13
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Embraer Service Center Authorized Service Center New Embraer Service Center in São Paulo - Brazil
Nearly 70 service centers worldwide.
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MRO start-up: October 2013 200,000 SQFT
FBO start-up: March 2014 US$ 25 million investment
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“Embraer is creeping even closer to the top spot, up 0.1 to 8.2 from last year’s 8.1”
This information is the property of Embraer and cannot be used or reproduced without written consent. 38 Embraer Executive Jets Global Presence
Phenom 100: 280+ Legacy 600/650: 200+
Phenom 300: 140+ Lineage 1000: 10+ 630+ executive jets in service in more than 50 countries
This information is the property of Embraer and cannot be used or reproduced without written consent. This information is the property of Embraer and cannot be used or reproduced without written consent. This presentation is the property of Embraer S.A. ("Embraer") and shall not be copied, in whole or in part, or used in any manner, except with Embraer ´s prior written consent.
Embraer reserves the right to revise this document whenever occasioned by product improvements, governmental regulations or other good cause.
All images: figures, finishing materials and colors are for illustration purpose only, and may not represent the real and final product accurately.
Some features are optional items not included in the baseline aircraft and are subject to price increase and lead-time analysis.
All data presented shall not be used as guarantee. Guaranteed specifications are listed in the technical description and represent the only binding guarantee.
In the event of any conflict between this presentation and the technical description, the technical description shall govern.
This information is the property of Embraer and cannot be used or reproduced without written consent.