2006* encontro de investidores em ny apresentação corporativa (ingles)
TRANSCRIPT
April 12, 2006
6th U.S. Analyst and Investor Meeting
Maurício BotelhoPresident & CEO
Forward 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.
Market Vision
Worldwide Defense ProcurementProcurement by Region - 2005-2012
Total 2005 -2012 : US$ 1,5 trillion
0.0
50.0
100.0
150.0
200.0
250.0
2005 2006 2007 2008 2009 2010 2011 2012
US$ b
illion
AustralasiaAsia PacificLatin AmericaAfricaMiddle EastEast EuropeWest EuropeNorth America
Source: Frost & Sullivan 2004
Averagegrowth of 2.6% between2005-2012
US Military expenditures
Source: Congressional Research Service* Iraq and Afghanistan operations not included 2006 US Dollars
FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011Personnel 107.2 108.9 108.6 108.6 108.9 109.1 109.1
Operations & Maintenance 139.9 147.8 150.5 153.4 155.5 155.7 156.2Acquisitions 79.7 78.0 89.7 97.3 98.9 102.4 106.9
Research & Development 70.2 69.4 65.4 63.8 68.0 63.3 53.8Others 12.4 15.2 18.2 17.5 16.5 15.3 17.5Total 409.5 419.3 432.5 440.6 447.8 445.7 443.5
US Department of Defense Budget * (US$ Billion)
US Department of Defense Budget Acquisitions and P&D(US$ billion)
130140150160170
FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011
US ISR Market
US ISR Market Growth Trend (US$ billion)
Source : Frost & Sullivan, 2003
US$ billion
2000 2002 2004 2006 2008 2010 2012 2014
60
50
40
30
20
10
Between 2005 and 2010 ISR systems will increase participation from 22% to 27% of total acquision and R&D spending of the U.S. DoD budget
Defense Market Evolving Scenario
! Restricted Budgetary scenario! Different military threats prompt to warfare
transformation! Changing force structure! Knowledge based, full- spectrum operations! Reduction of human exposure to threat situations
InformationSuperiority
Armed Forces Transformation
Defense Market Trends!Information Superiority
! Shorter reaction times and shorter sensor to shooter cycles.! Network centric approach instead of platform centric.! Expansion of ISTAR (Intelligence, Surveillance, Target Acquisition
and Reconnaissance Systems! Expansion of advanced communication and network based systems
!Armed Forces Transformation! Higher mobility and flexibility! Multi-forces integration! Faster command cycles
ProductLine
Defense Products and Market Segments
Combat
Transport
Training
Intelligence, Surveillance andReconaissance
Systems& Services
Super Tucano
Super Tucano
! High-performance evolution of the proven EMB 312 Tucano
! State-of-the-art systems andadvanced avionics
! Optimized for basic, advancedtraining and operational applications in hostile environments
! Can operate from unprepared runways, during day or night
! The only aircraft in its class capable of employing diversified conventional and smart weapons.
ISRSystems
ISR Systems
EMBRAER offers cost effective solutions for the Intelligence, Surveillance and
Reconnaissance Market
EMB 145 AGS EMB 145 AGS AirborneAirborneGroundGround
SurveillanceSurveillance
EMB 145 MP EMB 145 MP MaritimeMaritime PatrolPatrol
EMB 145 AEW&CEMB 145 AEW&C
ISRIntelligence – Surveillance – Reconnaissance
EMB 145 AEW&C
! The EMB 145 AEW&C (Airborne Early Warning & Control) is the mostadvanced Airborne Early Warning & Control System in operation today.
! It is fitted with an advanced electronic scanning radar capable of detecting airtargets at long distances while controling the airspace
EMB 145 RS/AGS
! An advanced asset capable of providing real-time imagery and electronicintelligence over ground objectives
! It features an advanced Synthetic Aperture Radar (SAR), for day or night, and all-weather radar imagery of the ground over large areas, plus othersophisticated sensors
P-99
! New generation Maritime Patrol and Anti-Submarine Warfare aircraft
! Features maritime and ground surveillance radar, Electro-Optics, Acousticsand Electronic Surveillance sensors
Brazilian Air Force
Amazon Surveillance System
• R-99A - EMB 145 AEW&C - Airborne Early Warning & Control
• R-99B - EMB 145 RS - Remote Sensing and Ground Surveillance.
TransportDerivatives
Transport Derivatives
GreeceBelgium
India Colombia
Brazil
Brazil Ecuador
Nigeria
Embraer New Capital Structure
Main Benefits to the Company
• Financing of the Company’s expansion programs through the equity capital markets and the use of convertible instruments
• The current capital structure does not allow the Company to issue new shares without additional capital injection by the current controlling shareholders which for different reasons is unfeasible , thus limiting the Company’s flexibility for financing its growth in the equity capital markets
• Creation of an acquisition currency for potential expansions in the international markets
• The enhancement of the Company’s valuation multiples and increase in liquidity in both the domestic and international markets would allow for potential expansion through acquisitions
• The increase in liquidity and better market perception of the Company would reflect positively on its share price in the stock exchange
• The improvement in Company’s corporate governance and transparency, in addition to the possible listing in the “Novo Mercado”, could create additional demand for the stock from institutional investors including the local pension funds
MechanismMechanism DescriptionDescription
• The maximum allowed votes per shareholder or group of shareholders acting as one, including brokers acting on behalf of one or more ADS holders, limited to 5% of the total shares of the Company
• The mechanism above will affect only the shareholders’ political rights (e.g., voting rights), not being applicable to economic rights
Number of valid votes per shareholder or group of shareholders acting in a concerted manner limited to 5% of the total shares of the Company
• Shareholders who acquire or become holders of more than 35% of the Company’s capital would be required to launch a delisting tender offer, under conditions established in Embraer´s bylaws, and Brazilian laws
• The tender offer is conditioned upon the Brazilian Government authorization, subject to suspension of voting rights
• Percentage ownership must be disclosed whenever a shareholder reaches a 5% threshold and every 5% increment thereafter
• The total number of foreign votes limited to 40% (forty percent) of total valid votes in each General Shareholders` Meeting, corresponding to 2/3 of total votes of Brazilian Shareholders
• The CFO will monitor the Company’s ownership and the compliance of the shareholders` protection mechanisms to disclose potential violations of the company’s bylaws
Mandatory delisting tender offer
Voting rights limitation to foreign shareholders
Mandatory ownership disclosure
Monitoring Committee to follow changes in ownership
Shareholders Protection Mechanisms
New Capital Structure
738.611.820 Common (Voting) Shares
* Includes Bozano Company and Bozano Holdings
** Includes Dassault Aviation, EADS, Safran and Thales
BOZANO GROUP* 11.1%
PREVI (PENSION FUND) 16.4%
SISTEL (PENSION FUND) 7.4%
BNDESPAR 6.3%
BRAZILIAN GOVERNMENT 0.3%
OTHERS BOVESPA 11.7%
OTHERS NYSE 39.3%
EUROPEAN GROUP** 7.5%