embraer investors conference - june 18, 2013

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Page 1: Embraer Investors Conference - June 18, 2013

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Page 2: Embraer Investors Conference - June 18, 2013

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Embraer Investors

Conference

Luís Carlos Affonso Chief Operating Officer Commercial Aviation

Page 3: Embraer Investors Conference - June 18, 2013

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Customers on Every Continent

E-Jets | 65+ Airlines. 47+ Countries. 950+ in Service.

Page 4: Embraer Investors Conference - June 18, 2013

Leadership in the 60 to 120-Seat Segment

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Share - Net Orders

Comac

Sukhoi

Others

Bombardier

E-Jets

42%

26%

13%

12% 7%

Source: EMBRAER and OEMs (as of May 2013)

Share - Deliveries Others

Bombardier

E-Jets

61% 33%

6%

Page 5: Embraer Investors Conference - June 18, 2013

Wide Range of Applications

>> Source: Embraer (% of E-Jets Fleet+Backlog as of May/2013)

Regional

Full-Service

LCC

20%

48% 32%

Page 6: Embraer Investors Conference - June 18, 2013

>> Source: Embraer (as of May 2013)

A Global Market Success 1,200+ firm E-Jet orders

950+ deliveries

1999 2001 2003 2005 2007 2009 2011 2013

60 112

245

440

764

862

1,051

Net Orders

46

118

334

605

802

Deliveries

1,200 +

950+

Page 7: Embraer Investors Conference - June 18, 2013

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E-Jets | Continually Evolving

New Avionics

Functionalities

Interior

Improvements

SHM / PHM

2015

2012

Noise

Improvement

Package

2011

Steep

Climb 2008

ETOPS 120’ E190

Electronic Flight Bag

2013/2014

Maintenance

Improvements

Fuel Burn

Reduction

2009 Steep

Approach

ADSB-out

> > > > > >

Page 8: Embraer Investors Conference - June 18, 2013

2013 YTD

396 Firm & Options

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E-Jet Orders

Page 9: Embraer Investors Conference - June 18, 2013

30 E-Jets 5 x E175 – firm orders

10 x E190 – firm orders

15 x E-Jets – purchase rights

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Page 10: Embraer Investors Conference - June 18, 2013

94 E-Jets 47 x E175 – firm orders

47 x E175 – options

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Page 11: Embraer Investors Conference - June 18, 2013

70 E-Jets 30 x E175 – firm orders

40 x E175 – options

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Page 12: Embraer Investors Conference - June 18, 2013

2 E-Jets 2 x E190 – firm orders

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Page 13: Embraer Investors Conference - June 18, 2013

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200 E-Jets 40 x E175 – firm orders

60* x E175 – firm reconfirmable

100 x E175 – options

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* reconfirmable orders subject to CPA agreement

Page 14: Embraer Investors Conference - June 18, 2013

Today’s E-Jets Announcements

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7 x E190 for Conviasa

4 x E170 for JAL (previously

undisclosed)

1 x E190 for Air Costa (previously

undisclosed), plus

2 x E170 pre-owned leased from

ECC

1 x E175 for Air Lituanica pre-owned

leased from ECC

Page 15: Embraer Investors Conference - June 18, 2013

E-Jets | The Future

Availability of new, efficient

engines

Interaction with our

customer base

Opportunities for

maintenance cost reduction

Airbus and Boeing re-engine

E-Jets 2nd

Generation E-Jets

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Page 16: Embraer Investors Conference - June 18, 2013

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Page 17: Embraer Investors Conference - June 18, 2013

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Introducing the E-Jets E2

Page 18: Embraer Investors Conference - June 18, 2013

Right Capacities to Match Market Demand

70

80

90

100

110

120

130

+1 row

same

+3 rows

>>

20%

20%

97 Seats DC

106 Seats SC E190-E2

118 Seats DC 132 Seats SC

E195-E2

80 Seats DC 88 Seats SC E175-E2

Page 19: Embraer Investors Conference - June 18, 2013

E2 New Features | Not Just a Re-engine

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E175-E2 E190-E2 & E195-E2

New Wing

More efficient, high aspect ratio

metallic wing. Raked wing tip.

Improved Avionics

4 larger 13”x10” displays

and touchscreen controls

Main Landing Gear

Enabling larger engines. Gear

doors for improved fuel efficiency

Optimized Wing/Engine

Different wing and engine combinations for E175-E2 and E190/195-E2

New Engines

Larger fan diameter and

improved fuel efficiency

Page 20: Embraer Investors Conference - June 18, 2013

4th Gen Full Fly-by-Wire

digital closed-loop control

to improve flying qualities

and boost fuel efficiency

New Interior

nicer PAX experience

and more overhead

bin volume New Stabilizers

lower drag & weight

Evolution of other systems: Flight Controls, Hydraulics, Steering, Bleed and Ice Protection

E2 New Features | Not Just a Re-engine

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APU

with higher starting/operating

altitude and air inlet door

for reduced drag Air Conditioning

higher capacity and improved control

Page 21: Embraer Investors Conference - June 18, 2013

Developed in partnership with

>>

Outstanding 4 abreast cross-section

New “Look and Feel”

“Wheels first” & bigger overhead bins

Connectivity and wireless IFE

Environmentally-friendly materials

Easy reconfiguration modularity

Interior Design

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Page 22: Embraer Investors Conference - June 18, 2013

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Na:

Range

E190-E2

E195-E2

E175-E2

Range (NM)

Full PAX (SC), LRC, typical

reserves, 100 nm alternate 1, 920 1,920

E175 E175-E2

2,350 2,800

E190 E190-E2

2,000 2,000

E195 E195-E2

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Page 23: Embraer Investors Conference - June 18, 2013

The right data available at the right place and at the right time.

E-Jets E2 | an “e-Enabled” Aircraft

Operations Maintenance

Passenger

Experience

On Ground and Inflight :

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Page 24: Embraer Investors Conference - June 18, 2013

E-Jets & E-Jets E2 Pilot Commonality

Highest Commonality among

E-Jets E2 models (AAA)

Fewer than 3 days transition training

between the two E-Jet generations

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Full Flight Simulator or High- Level

Flight Training Device Not required

Page 25: Embraer Investors Conference - June 18, 2013

Avionics | Honeywell Primus Epic 2

Touchscreen Controls

Four Larger 13”x10” Displays

Graphical Flight Planning

Next Generation FMS

Cockpit Display of Traffic Information (CDTI)

SmartRunway™ and SmartLanding™ Synthetic Vision

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Page 26: Embraer Investors Conference - June 18, 2013

Engines | PW1700G and PW1900G Total system design for maximum efficiency. Much more than just the gear.

Composite

fan case

Very high bypass

light-weight fan

Fan Drive

Gear System

(FDGS)

High efficiency advanced HPT

Advanced aerodynamics;

durability technologies

3-stage

high-speed LPT

2/3-stage

high-speed

LPC

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Page 27: Embraer Investors Conference - June 18, 2013

Main Systems Suppliers

New Generation

Power Plant

Improved Avionics Flaps and Slats Actuation

Systems; AMS

Horizontal Stabilizer

Actuation System

Wheels & Brakes;

APU; Electrical System Fly-by-wire

Primary Flight Controls

>>

Page 28: Embraer Investors Conference - June 18, 2013

Main Structures Suppliers

Ailerons and Spoilers

Aft fuselage segments,

rudder and elevators

Vertical and horizontal

stabilizers

>>

Page 29: Embraer Investors Conference - June 18, 2013

A Quiet Family

Up to 3% additional reduction in aircraft cash operating cost via lower noise fees,

direct flight tracks and curfew extensions

65% Reduction in Noise Contour, Paris - Charles De Gaulle Airport

>> E190-E2 equipped with PW1900G

E190-E2

Page 30: Embraer Investors Conference - June 18, 2013

* E-Jets baseline - 2,600FH/year; 1.5FH/FC; 10 years DMC; NPV(9%,10years)

Savings of $1M to $1.5M* per aircraft over 10 years

Maintenance Cost Advantage 15% Lower Maintenance Cost

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Increased systems reliability Reduction of spare parts cost

Improved corrosion protection

Structural robustness at EIS

Longer intervals (850FH / 8,500FH)

Advanced health monitoring system

Competitive comprehensive service

portfolio

Page 31: Embraer Investors Conference - June 18, 2013

Fuel Burn Improvements Fuel Burn per Seat

E175-E2 (80 seats) vs. E175 (76 seats)

E190-E2 (97 seats) vs. E190 (97 seats)

E195-E2 (118 seats) vs. E195 (106 seats)

-16%

-23%

-16%

0%

-5%

-10%

-15%

-20%

-25%

>> >> Target values for 600 nm sector; Dual Class configuration;

Page 32: Embraer Investors Conference - June 18, 2013

2Sh

ow

© 2

01

3

Competitive Scenario

180+

160

140

120

100

80

SSJ95/100

MRJ90 ARJ21

CRJ900

CRJ1000

CRJ700

Capacity

(Single Class)

737-7 MAX A319neo

A320neo

737-8MAX

CS100

CS300

E175-E2

E190-E2

E195-E2

Page 33: Embraer Investors Conference - June 18, 2013

Applications & Market Size

20-Year Market Forecast (70 to 130-seat Jets) - 6,400 Deliveries *

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Most efficient “hub feeder”

Lower cost-per-seat than current Turboprops

Efficient complement to narrowbody operations

New market developer

Capacity growth for current E-Jet operators

Similar cost-per-seat to A320neo and 737-8 Max

Low Cost operation in mid-density markets

E190-E2

E195-E2

E175-E2

* Embraer market forecast

Page 34: Embraer Investors Conference - June 18, 2013

Program Investment

Embraer investment on research, development and CAPEX for the E-Jets E2 family

will be US$ 1.7 billion

Investment will be supported by Embraer’s cash generation and debt.

Investments span from 2013 to 2020 with more concentration in 2014 - 2017

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Page 35: Embraer Investors Conference - June 18, 2013

2Sh

ow

© 2

01

3

Industrial Architecture Use of current instalations with minimised CAPEX impact

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Flight

Preparation

Final

Assembly

Delivery

Structural Assembly,

Fuselage Junction

Wing to Fuselage

Junction and

Pre-equipping

EGM

BOT

ELEB

Evora

External Suppliers

Painting

Components and

Structures

Aircraft

Page 36: Embraer Investors Conference - June 18, 2013

Manufacturing Strategy Design for automation, minimizing labor costs and improving quality

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Page 37: Embraer Investors Conference - June 18, 2013

List Prices (US$ million)

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Preliminary Information as of January, 2013 -- US$ 3.3/USGal, 10 years NPV @ 9% rate

Better Fuel Consumption Gain

• E175 E2: US$ 4.8M

• E190 E2: US$ 7.0M

• E195 E2: US$ 6.5M

Maintenance Cost Reduction Gain

• US$ 1.0~1.5M

E175 AR (8E5): 42.9

E190 AR (10E5):47.4

E195 AR (10E5): 50.1

E-Jets

E175-E2 46.8

E190-E2 53.6

E195-E2 60.4

delta: 3.9 M

delta: 6.2 M

delta: 10.3 M

E-Jets E2

Seat Capacity Increase Gain

• E175 E2: US$ 1.6M (4 seats)

• E195 E2: US$ 4.8M (12 seats)

Page 38: Embraer Investors Conference - June 18, 2013

Entry into Service

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E195-E2 EIS | 2019

E190-E2 EIS | 1H 2018

E175-E2 EIS | 2020

Page 39: Embraer Investors Conference - June 18, 2013

E-Jets E2 are designed to maximize ease of Services & Support

High Standard of Global Services & Support

e-solutions Technical Support Field Support Flight Operations

Training Maintenance Material Aircraft Modification

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Page 40: Embraer Investors Conference - June 18, 2013

Maintenance Services Segmentation

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26% 54%

20%

14%

47% 39%

Operators with mixed models

Operators with own maintenance

Operators contracting maintenance

Upside potential for E-Jets E2 maintenance services

E-Jets E-Jets E2 Projection

Page 41: Embraer Investors Conference - June 18, 2013

E-Jets E2 | a Generational Leap led by New Technology

Page 42: Embraer Investors Conference - June 18, 2013

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E2 Launch Customers

Page 43: Embraer Investors Conference - June 18, 2013

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Launch Customers SkyWest Inc. 200 E-Jets E2 100 x E175-E2 – firm orders 100 x E175-E2 – purchase rights

>> >> >>

Page 44: Embraer Investors Conference - June 18, 2013

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Launch Customers - LOI ILFC 100 E-Jets E2 25 x E190-E2 and 25 x E195-E2 – orders 25 x E190-E2 and 25 x E195-E2 – options

>> >> >>

Page 45: Embraer Investors Conference - June 18, 2013

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Undisclosed Customers with LOIs

5 Airlines from Europe; Latin America; Africa & Asia 65 orders

Page 46: Embraer Investors Conference - June 18, 2013

365

>>

65

200 100 100 Firm Orders plus 100 Purchase Rights + LOIs for 115 Orders plus 50 Options