2002* 2002 farnborough air show five pillars of aerospace business
TRANSCRIPT
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FarnborourghAir Show
2002
Maurício BotelhoMaurício BotelhoPresident & CEOPresident & CEO
July 24, 2002July 24, 2002
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Foward LookingFoward Looking
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.
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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EmbraerBusiness
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Embraer Business
The aerospace businessis supported by 5 pillars High Technology
Qualified People
Global Business
Flexibility
Cash Intensiveness
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HighTechnology
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High Technology
The Virtual Reality Center
Provides visualization of the aircraft structure and systems during the project phase, using 3D electronic models.
Reduces the development cycle.
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Digital Mock-Up EMBRAER 170
High Technology
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High Technology
Digital Mock-Up ERJ 145
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QualifiedPeople
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High School64,5%
PhD0,2% Graduate
29,3%
Post Graduate4,7%
Master1,3%
Qualified People
Educational Levels
25% of the 11,048 employees, are engineers
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Qualified People
More than US$ 60 million invested in training and qualification in the last 3 years.
21 2518
1999 2000 2001
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GlobalBusiness
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Global Business
Civil & Defense Aircraft flying in 58 countries in 5 continents.
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Global Business
Current Fleet of Regional Aircraft
Latin America& Caribbean260 aircraft85 customers
Africa & Middle East55 aircraft10 customers
AsiaPacific60 aircraft20 customers
Europe285 aircraft40 customers
North America920 aircraft35 customers
Turboprop Operators
ERJ Operators
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Global Business
Operations in Brazil, United States, Europe, Asia and Australia
BrazilGavião Peixoto
BotucatuSão José dos Campos
Eugênio de Melo
USADallas
NashvilleAtlanta
Palm Beach Fort Lauderdale
FranceLe Bourget
UKWeybridge
ChinaBeijing
AustraliaMelbourne
SingaporeSingapore
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CashIntensiveness
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Cash Intensiveness
In the last 5 years the Company invested almost US$ 1 billion in research & development and productivity.
10481
122147
213
296
1996 1997 1998 1999 2000 2001
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US$ 1.3 Billion Investments in the Next 5 Years
Cash Intensiveness
1,283227224239262331TOTAL
34951505971118PP&E
36527
50141
272
1398
342
1308
612
1098
1056
728
1381551
9
Comercial
Corporate
Defense
Others
934176174180191213Research &Development
2002-200620062005200420032002US$ millions
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Cash intensiveness
Family launched in July 1999Roll out in October 2001First Flight in February 2002
32 months from launchto first flight
Risk Sharing concept with partners allows the decrease in development cycle and investment risk
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Cash Intensiveness
In 2000 Embraer increased its global presence with a US$ 446 million Primary & Secondary Global Offering:
Funds of US$ 240 million in a Primary offering for the EMBRAER 170/190 program
Company positioned in the international capital markets.
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Cash Intensiveness
Nearly two-thirds of the EMBRAER 170/190 program development costs borne by Risk-Sharing Partners
Development cost for the new EMBRAER 170 family program:
Cash Contribution from Risk Sharing Partners $ 260Net Proceeds from IPO $ 240Funds From Cash Flow $ 60
$ 560
Risk Sharing Partner Development Cost $ 290
Total Cost of the EMBRAER 170/190 Program $ 850
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Flexibility
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Flexibility
Embraer has the agility and flexibility to adjust its production in accordance with market demand.
ERJ 135/145Deliveries
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Flexibility
Delivery Forecast
4
32
59
96
160 161
135145
1996 1997 1998 1999 2000 2001 2002 2003
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Flexibility
To cope with the new scenario, Embraer adjusted its total labor force and laid off 14% (1,800) of its employees.
6,087
4,319 3,8494,494
6,737
8,302
10,33411,048
1994 1995 1996 1997 1998 1999 2000 2001
Total of Employees
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Flexibility
Flexibility incorporated into the production line allowed an increase in efficiency and decrease in production lead time
Lead Time in Months
8,0
6,0 6,05,5
4,9 5,04,5
1996 1997 1998 1999 2000 2001 1Q02
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Flexibility
Embraer presents one of the highest "revenue per employee" in the industry.
101
172
242 247
307
254
1996 1997 1998 1999 2000 2001
Revenue per employeeUS$ thousand