ir institutional presentation - november 2013

Job Position Phone: +55 12 3927 4404 | investor.relations@embraer.com.br | www.embraer.com

Nov/13

Corporate and Business Strategy

• Product strategy.

• Diversification and expansion of customer base.

• Excellence in Customer Experience (ECE).

• Market share growth.

• Margins improvement.

• Product strategy and customer support focus.

• Organic growth.

• Margins enhancement through the P3E.

• Business and revenues diversification.

• Establish Embraer as the defense house of Brazil.

• Organic growth and acquisitions.

2

Aircraft Deliveries

Large Jets - Legacy & Lineage

Light Jets - Phenom

Commercial Jets Executive Jets

3

2013 deliveries estimates • 90 - 95 commercial jets

• 25 - 30 executive large jets

• 80 - 90 executive light jets

3721 19

83 77

16 22 14

2

98126

52

2008 2009 2010 2011 2012 9M13

165

125101 105

58

106

2008 2009 2010 2011 2012 9M13

Net Revenues

US$ Million

2008: USGAAP 2009-2012: IFRS

4

2013 Outlook: US$ 5.9 – 6.4 Billion

6,3355,498 5,364

5,803 6,178

3,931

2008 2009 2010 2011 2012 9M2013

Revenues Breakdown

5

61% 65% 61%

23% 19% 21%

15% 15% 17%

1% 1% 1%

2010 2011 2012

Net Revenues by Segment Net Revenues by Region

Commercial Aviation

Executive Aviation Others

Defense & Security

Revenues US$ Billion 5.80 6.18 5.36

Revenues US$ Billion 5.80 6.18 5.36

13%20% 24%

33% 25%31%

13% 17%

14%15% 11% 3%

9% 11% 14%5% 9% 5%

12% 7% 9%

2010 2011 2012

North America Brazil

Europe

Asia Pacific

South &

Central America

Africa &

Middle East

China

Firm Order Backlog

6

US$ Billion

12.4 12.5 13.3

17.1 17.8

3Q12 4Q12 1Q13 2Q13 3Q13

Embraer Commercial Aviation

OVER 80 AIRLINES IN MORE THAN 50 COUNTRIES

8

Product Portfolio

capacity: 70 to 80 seats

range: 2,100 nm (3,900 Km)

capacity: 78 to 88 seats

range: 2,000 nm (3,700 Km)

capacity: 98 to 114 seats

range: 2,400 nm (4,500 Km)

capacity: 108 to 122 seats

range: 2,200 nm (4,100 Km)

capacity: 37 seats

range: 1,750 nm (3,250 Km)

capacity: 50 seats

range: 1,550 nm (2,900 Km)

capacity: 50 seats

range: 2,000 nm (3,700 Km)

capacity: 44 seats

range: 1,650 nm (3,050 Km)

9

E-Jets Customer Base Evolution

10

1,360+

1,360+

2011-3Q2013

Source: Embraer (Sep/2013 - Scheduled Airlines and Leasing Co.)

11

E-Jets Family Order Book – 3Q13

E-JETS Firm orders Deliveries Firm Backlog

E170 192 186 6

E175 315 175 140

E190 560 482 78

E195 145 123 22

E175-E2 100 - 100

E190-E2 25 - 25

E195-E2 25 - 25

Total 1,362 966 396

Worldwide Distribution

12

E-Jets Customer Base by Business Model

(% of E-Jets Fleet+Backlog)

Firm Orders

Commercial Jets – Net Orders Market Share

Considering Accumulated Net Orders

60-120 Seats Jets

Backlog

Europe & CIS

Middle East & Africa

Latin America

North America

Asia Pacific & China

Low Cost Carriers

Regional Airlines

Network Airlines

18%

28%54%

13%

5%

20%

14%

48%

7%4%

10%

8%

71%

E-Jets Deployment helping airlines to be more efficient

13

Embraer Market Forecast (2012-2031)

North

America

840 32%

North

America

2,195 32%

Latin

America

315 12%

Latin

America

670 10%

Europe

580 22%

Europe

1,460 22%

Russia /

CIS

155 6%

Russia /

CIS

445 7%

Africa

80 3%

Africa

210 3%

Middle

East

105 4%

Middle

East

305 4%

Asia

Pacific

210 8%

Asia

Pacific

505 7%

China

340 13%

China

1,005 15%

Projected Deliveries - Jets

Market Segment (Seats)

2010 – 2019 Deliveries

30 - 60 60

61 - 90 1,015

91 - 120 1,550

30 - 120 2,625

Market Segment

(Seats) 2012 – 2031

Deliveries

30 - 60 405

61 - 90 2,625

91 - 120 3,765

30 - 120 6,795

• Scope Clauses relaxation allowing 80-seater aircraft as a natural growth of RJ50s in the US

• Right-sizing of narrow-body operations

• Regional aviation development in Emerging Markets

• Acceleration of replacement of old & inefficient jets

Around 6,795 jet deliveries (30-120 seats) in the next 20 years (US$ 315 bi)

14

Competitive Scenario 61-120 Seats

15

17

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

18

E2 New Features – Not Just a Re-engine

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

19 >>

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

>>

20

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

Full Flight Simulator or High-

Level Flight Training Device

Not required

21

Main 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

Aft fuselage segments,

rudder and elevators

Vertical and horizontal

stabilizers

Ailerons and Spoilers

22

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;

23

New 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

24

Applications & Market Size

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

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

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 - 2020 with more concentration in 2014 -

2017

25

Program Investment

26

List Prices (US$ Million)

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)

27

E2 Entry into Service

E195-E2 EIS | 2019

E190-E2 EIS | 1H 2018

E175-E2 EIS | 2020

150 Firm Orders

50 Options

100 Purchase Rights

LOIs for 65 Orders

Embraer Executive Jets

MORE THAN 630 AIRCRAFT IN-SERVICE WORLDWIDE

29

Product Portfolio

30

Large

Aircraft Model

Phenom 100

Phenom 300

Legacy 450

Legacy 500

Legacy 600

Lineage 1000

Seats / Range

up to 8 occupants/

1,178 nm

up to 11 occupants/

1,971 nm

7 to 9 passengers/

2,300 nm

8 to 12 passengers/

3,000 nm

13 to 14 passengers/

3,400 nm

13 to 19 passengers/

4,500 nm

Entry

Light

Mid-light

Mid-size

Ultra-large

Super mid-size

Certified: 2008

Certified: 2009

Under development

Certified: 2001

Certified: 2008

Ultra-long range

Competitors

• Cessna - Mustang/M2

• HondaJet

• Cessna - CJ2+/CJ3/CJ4

• Bombardier - Learjet 40XR/70

• Bombardier - Learjet 45XR/75

• Cessna - XLS+/Latitude

• Bombardier - Learjet 85

• Cessna - Sovereign

• Gulfstream – G150

• Bombardier - CL605/GL5000

• Dassault – Falcon2000LXS/

900LX

• Gulfstream - G350/G450

• Airbus - ACJ 318/319/320

• Boeing – BBJ/BBJ2/BBJ3

Legacy 650 13 to 14 passengers/

3,900 nm Certified: 2010

• Bombardier - GL6000/GL7000/

GL8000

• Gulfstream – G500/G550/G650

• Dassault – Falcon 7X

• Bombardier - CL300/CL850

• Cessna – X/Longitude

• Dassault - Falcon 2000S

• Gulfstream - G280

Market Share

Others Hawker-Beech Embraer

Gulfstream Dassault

Cessna Bombardier

Deliveries share (units) Revenues share (US$ - based on B&CA list prices)

Market Revenues 2012: US$ 17.7 billion

Embraer Revenues: US$ 1.3 billion

Market Deliveries 2012: 663 units

Embraer Deliveries: 99 units

31

Economic Indicators

32

U.S. Corporate Profits Worldwide HNWI Population

New record levels

7,0 7,2 7,7 8,2 8,8

9,6 10,1

8,6

10,1 10,8 11,0

11,9

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012M

illio

n p

eop

le

North America Europe Asia-Pacific Latin america Middle East Africa

Business Jets Pre-Owned Market Inventory

33

Source: Jetnet and Embraer Analysis, September 2013.

0%

4%

8%

12%

16%

20%

24%

28%

0

500

1000

1500

2000

2500

3000

3500

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

% o

f ac

tive

fle

et

Un

its

Fleet older than 10 yrs Fleet from 6 to 10 yrs

Fleet up to 5 yrs Positions

Fleet up to 5 yrs and positions Total fleet % for sale

Up to 10 yrs % for sale

12.9% 2483 jets

8.3% 672 jets

US Corporate profits at record levels

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

Market Recovery in Slow Motion

Lack of confidence is holding the bizjet market turnaround

USA market dictates the speed of recovery

MILD GROWTH

0

200

400

600

800

1000

1200

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

Deliveries Forecast (units)

9,250 jets and US$ 250 Bi in the next 10 years

Units US$

2014-2023 Market Forecast

900 4,2

1780

15,8

1140

17,3

920

17,8

1270

31,1

1670

64,7

1345

82,2

225 17,3

Deliveries Revenues

N10YF

Ultra Large

Ultra Long Range

Large

Supermid

Midsize

Midlight

Light

Entry

36

North America 4,530 a/c (49%)

US$ 117 Bi (47%)

Europe, Middle East & Africa 2,330 a/c (25%)

US$ 70 Bi (28%)

Asia Pacific 725 a/c (8%)

US$ 21 Bi (8%)

Latin America 860 a/c (9%)

US$ 15 Bi (6%)

China 805 a/c (9%)

US$ 29 Bi (11%)

2014-2023 Market Forecast by Region

Worldwide 9,250 units

US$ 250 Bi

Service Center Network

37

Embraer Service Center

Authorized Service Center

New Embraer Service Center in São Paulo - Brazil

Nearly 70 service centers worldwide.

OVER 52 ARMED FORCES IN 50 COUNTRIES

Embraer Defense & Security

39

Embraer Defense & Security Integrated Portfolio

Land Systems Radar Satellite

40

UAV’s

Partnerships

Command and Control

Systems

Air Traffic

Management

Control

Systems of Systems

C4I

UAVs

Simulators

Modernization of Avionics

Systems

Land Defense Systems

integration

SISFRON

implementation

MRO

Aero

Structures

Remote

Sensing

Aerial

Surveillance

Radar

Satellite

Geostationary of

Defense and

Communications

(SGDC)

100% 51% 65% 90% 100% 51%

Embraer Defense & Security Results

Não contabiliza as receitas provenientes da OGMA nos anos de 2006 a 2010.

Revenues Evolution (US$ Million)

EBIT Evolution (%) Backlog Evolution (US$ Billion)

CAGR 29%

42

Brazil: 99

Colombia: 25

Dominican Republic: 8

Chile: 12

Ecuador: 18

Indonesia: 16

Greystone (TacAir): 1

Mauritania: 2

Burkina Faso: 3

Angola: 6

USA: 20

Super Tucano

Total Market Forecast:

300 aircraft / US$ 3.5 billion

800

2.000

700Medium-term

Long-term

Short-term

Addressable Market Forecast 2020 (US$ million)

Partnership with Boeing to provide weapons integration, increasing capabilities of the aircraft.

43

• Firm orders: more than 210 aircraft

• More than 170 aircraft delivered

EMBRAER KC-390

• A new tactical military transport and tanker aircraft

• First flight in 2014

• Six countries letters of intent, totalizing 60 aircraft

• Partnership with Boeing to share technical knowledge and to

market and sell the KC-390 in certain markets

• The Brazilian Air Force (FAB) and Embraer concluded the

Critical Design Review in the first quarter of 2013.

Brazil

(28)

Colombia

(12)

Argentina

(6)

Chile

(6)

Portugal

(6)

Czech Rep.

(2)

Total Market Forecast 2025:

700 aircraft / US$ 50+ bi

Ref. April13

44

A1-M F-5M A-4

Brazilian Navy A-4

12 aircraft

2 prototypes at GPX-CS

Brazilian Air Force A-1M

43 aircraft

18 received by Embraer for the modernization

Brazilian Air Force F-5M

46 a/c + 11 a/c (2nd batch)

46 delivered

Brazilian Air Force E-99

5 a/c aircraft EMB 145 AEW&C

Modernization Programs

Addressable Market Forecast 2025 (US$ million)

Total Market Forecast:

228 aircraft / US$ 1.5 billion

437

567

505Medium-term

Long-term

Short-term

Ref. dec/12

45

SISFRON Integrated Borders Monitoring System

First phase: US$ 420 Million

Total estimate: US$ 4 Billion

Comprising radars, communication networks, C4I,

unmanned air vehicles (UAV) and armored vehicles

Brazilian Army Priorities

Comm9% UAV

12%

SW20%

Sensors59%

Satellite Estimate: US$ 400 Million

Participation in the first Brazilian Geostationary Satellite

Ref. dec/12

46

New Business

• SisGAAz (“Blue Amazon” Integrated Management System)

• Security of Critical Infrastructure

• Public Security (sporting events, cities, states)

2020

Revenues Breakdown Evolution

2012

47

2013 Outlook

2013 Consolidated Outlook

Net Revenues

EBIT EBITDA US$ 530 – 610 Million

US$ 5.9 – 6.4 Billion

US$ 770 – 900 Million

EBITDA margin 13.0% – 14.0% EBIT margin 9.0% – 9.5%

49

50

Deliveries: 80 to 90 light jets 25 to 30 large jets

Net Revenues

Deliveries: 90 to 95 E-jets

Net Revenues US$ 3.20 – 3.35 Billion

Other Revenues US$ 50 – 100 Million

US$ 1.40 – 1.60 Billion

Net Revenues US$ 1.25 – 1.35 Billion

2013 Business Units Outlook

2013 Investment Outlook

TOTAL INVESTMENTS: US$ 580 Million

Research US$ 100 Million

Development US$ 300 Million

CAPEX US$ 180 Million

51

Net Revenues / SG&A Expenses

Net Revenues - US$ Million SG&A Expenses - US$ Million

Selling Expenses G&A Expenses

53

2013 YTD: 3,931

1,402

1,898

1,086

1,5571,288

3Q12 4Q12 1Q13 2Q13 3Q13

170

218

161 163 175

2013 YTD: 499

111

143

108121

59

75

5354

112

51

3Q12 4Q12 1Q13 2Q13 3Q13

Income from Operations / EBITDA

Income from Operations - US$ Million EBITDA - US$ Million

EBIT EBIT Margin EBITDA EBITDA Margin

54

2013 YTD: 251 / 6.4%

228

40

135101

76

7.2%

12.0%

3.6%

8.7%

5.9%

3Q12 4Q12 1Q13 2Q13 3Q13

2013 YTD: 460 / 11.7%

168

310

100

204156

12.0%16.3%

9.2%

13.1%12.1%

3Q12 4Q12 1Q13 2Q13 3Q13

Net Income / Free Cash Flow

Net Income - US$ Million Free Cash Flow - US$ Million

Net Margin Net Income Free cash flow

Additions to PP&E

Net cash generated (used) by operating activities*

Additions to Intangible

55

* Net of Financial assets adjustment

2013 YTD: 78 / 2.0%

65

123

30

(5)

53

4.7%6.5%

2.8%

-0.3%

4.1%

3Q12 4Q12 1Q13 2Q13 3Q13

(163)(50)

(30)

439

(83)

186

102

(50) (125)(106)

(58)

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

(138)

202

(201)

2

(84)

3Q12 4Q12 1Q13 2Q13 3Q13

2013 YTD: (283)

Indebtedness Profile / Net Cash/Debt

Indebtedness Maturity Net Cash/Debt - US$ Million

Long-term Short-term

Loans Average Maturity (Years)

56

85%94%

17% 16%

83% 84%96%

15%6%

4%

6.05.8

5.15.4

6.3

3Q12 4Q12 1Q13 2Q13 3Q13

123

309

9858

(20)

3Q12 4Q12 1Q13 2Q13 3Q13

US$ 2.19 Billion Total Debt 3Q13 Total Cash 3Q13 US$ 2.17 Billion

Inventories

57

US$ Million

2,585

2,157

2,510 2,523

2,780

3Q12 4Q12 1Q13 2Q13 3Q13

Investments

58

49

2013 Outlook: US$ 580 Million

2013 Outlook 2013 YTD

US$ Million 2013 YTD: 389

Contracted CAPEX (mainly for Defense & Security Programs)

183145

100

300

180

61

RESEARCH DEVELOPMENT CAPEX

EPADS and Pay Out

59

2.142.57

1.83

0.62

1.92

52%

26%34%

116%

26%

2008 2009 2010 2011 2012

EPADS Pay Out

2008: USGAAP 2009-2012: IFRS

US$

Local

Shareholders

28%

International

Shareholders

72%

729,783,443 Voting Shares

Ownership Structure - 2Q13

60

NYSE

50%

BM&F

BOVESPA

50%

Sustainability Initiatives

Brazilian Alliance for Bio-fuel

Reforestation Projects

ISO 14001 and OHSAS

18001 Certifications

1st ethanol powered

aircraft in the World

Ipanema Recycling

Corporate Values Greener Technology

Social Activities

62

P3E - Lean Results

63

E-Jets Final Assembly Line Transformation

E-Jets Wing Junction Line Transformation

Performance Indicators2008

(15 ac/month)

2009

(10 ac/month)

2012

(10 ac/month)

Number of positions 12 5 4

Cycle time (days) 18 10 8

Work in Process

(US$ Mi)212 95 68

Number of non-

conformity per a/c32 1.7 0.76

Overtime

(% of work hours)10 1.5 0

P3E Results

Kaizen - E-Jets Cycle Reduction Cost of Non Quality Reduction

57%

64

40% reduction on the production cycle

40%

44% reduction on CNQ

Cost: US$ 21.4 mi

Benefit: US$ 200.7 mi

“Boa Ideia” Program Evolution

65

Investor Relations

Phone: +55 12 3927 4404 investor.relations@embraer.com.br

www.embraer.com

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.

67