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CORPORATEJETINVESTORThe state of thebusiness jet market:2015-2050Marco Tulio PellegriniPresident & CEOEmbraer Executive Jets1
CORPORATEJETINVESTORMarket and industry trendsCurrent market scenarioN10Y market forecast2
CORPORATEForward looking statementJETINVESTORThis presentation includes forward-looking statements or statements about events or circumstances which have not occurred. Wehave based these forward-looking statements largely on our current expectations and projections about future events and financialtrends 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 Braziland in our market.The words “believes,” “may,” “will,” “estimates,” “continues,” “anticipates,” “intends,” “expects” and similar words are intended toidentify forward-looking statements. We undertake no obligations to update publicly or revise any forward-looking statementsbecause of new information, future events or other factors. In light of these risks and uncertainties, the forward-looking events andcircumstances discussed in this presentation might not occur. Our actual results could differ substantially from those anticipated inour forward-looking statements.3
CORPORATEMACRO ND OWNERSTECHNOLOGYSource: Embraer analysis.4
ECONOMY:UNBALANCEDRECOVERYCORPORATEJETINVESTORGO EASTSource: Embraer analysis5
ENGES &OPPORTUNITIESSource: Embraer analysis.6
Several empoweredCORPORATEcustomersJETINVESTORGlobal rsexpecting more choicesmore customizationmore personalizationActive SeniorsGlobal ClansSource: Future Traveler Tribes 2020 report (Amadeus and Henley Centre HeadlightVision).7
CORPORATEThe corporations drivenby empowered consumersJETINVESTORThe sustainability effectOperational &ownership costsPre-owned and financedvalues as major concernsAircraft productivity:availability and cabin featuresSource: Embraer proprietary analysis8
World integration ofCORPORATEsupply & demand also for bizavJETINVESTORON-LINE BIZAV BROKERSAircraftownersAircraftmanagementFlight /seatavailabilityFlight /seatdemandPassengersAircraftoperators Bizav accessibilityAircraft managementCharter commoditizationReduced ownership costsSource: Embraer proprietary analysis and companies websites.9
Technology trends: CORPORATEpassenger experienceJETINVESTOR Fast and reliable connectivity Personalized entertainment systems Privacy and comfort Hands-free commands Cabin micro environments Cabin connectivity Cabin air quality and medical care Self-cleaning and anti-bacteria materialsSource: Embraer proprietary analysis10
Technology trends: CORPORATEoperational efficiencyJETINVESTORAircraft Health Management Accelerated diagnosis Systems Prognostics Structural health monitoringFleet Management System Advanced decision making system Spare parts managementSource: Embraer proprietary analysis11
CORPORATE philosophyLeading to a smart integrationJETINVESTORCENTRAL STORAGE HEALTH MONITORINGFLIGHT OPERATIONSSource: Embraer proprietary analysisDATA EXCHANGE INTERCONNECTED FLEETINTEGRATED FLEET MANAGEMENT CENTER12
CORPORATELeading to innovationand constant rethinkingJETINVESTOR Clean sheet design Technology available in larger jets only Digital flight controls Full Fly-By-Wire HUD, EVS and future vision Air Data System – SmartProbeTM Low noise and emissionsCabinDesignCabinDesignIDEA BrazilDesign AwardInnovatorof the YearFBW Innovationof the YearMost innovativeaviation brand2015 Aircraftof the Year13
Bizav’s future will relyon several issues other than just the aircraft CORPORATEJETINVESTORFligh Ops.Aircraft iesFuel OEM sGovernmentGround ServiceOPERATORSDuty FreePassport roductivityFBOsSatellite Comm.STCWeb TicketsProvidersWeb Infrastructure GDSEngineeringLogistic ProviderFundingUniversitiesSource: Embraer proprietary analysis.14
CORPORATEJETINVESTORCurrent market scenario15
Current ScenarioCORPORATEJETINVESTORUS 2015 GDP growth expected at 2.5%US Corporate profits and HNWI at record levelsNew products entering into serviceTraffic recovery on track in US but slower than expected in EuropeNew and pre-owned pricing pressureEuropean markets continue at riskSoftening emerging markets demandImproved economic environment in US is driving demandSource: Embraer proprietary analysis16
CORPORATE2015 World GDP growthrates per bove world averageBelow or equal world averageNegative India2.6%World4.5%Asia PacificAn unbalanced world economic recoverySource: IHS Global Insight, September 2015. *Note: Europe includes Western, Central and Eastern countries and excludes CIS.17
CORPORATEFlight activity in 702009145Thousand of flightsThousand of flights220552007502014454020152009353025120Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec2015: 1.6% higher than 2014 (Jan-Jul)Source: FAA Aug 2015 and Eurocontrol Sep 2015.Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec2015: 2.5% lower than 2014 (Jan-Aug)18
Exchange ratesCORPORATEJETINVESTORLocal currency value versus US 5Depreciation of local currencies: reducing purchase power in emerging marketsSource: www.oanda.com - Sep 2015.19
CORPORATEPre-owned prices andinventoryJETINVESTOR50%Avg. market depreciation (%)Fleet for sale (jets)280045%260040%240035%220030%Avg. Market depreciation3000Fleet for ed aircraft prices still pressuring new aircraft salesSource: Jetnet and Embraer Analysis – Sep 2015.20
CORPORATEevolution (units)Regional markets: 143Q1552%45%51%53%55%20092010201120122013USOther regions of the worldUS share has grown 28% since 2009Source: JetNet ; Embraer analysis. Oct 2015.21
Historic deliveries CORPORATEJETINVESTOR1200Deliveries (units)1000800Av: 785 jets/yearUltra LargeUltra-long tEntry02000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20142015 volume expected to be similar to 2014Source: GAMA.22
CORPORATEJETINVESTORN10Y Market forecast snapshot23
CORPORATE2015-2024 deliveriesforecastJETINVESTOR1200Deliveries Forecast (units)Ultra Long 00Ultra Large1000US evenuesN10YF9,250 jets and US 265 Bi over the next 10 yearsSource: Embraer proprietary analysis.24
CORPORATEForecasted growth ratesJETINVESTORDeliveriesSource: Embraer proprietary analysis.RevenueJet light14%8%16%10%Midsize18%10%21%12%Super Midsize4%4%4%4%Large6%4%7%4%Ultra-long Range1%1%2%2%Ultra-large10%6%9%5%Total6%4%5%4%25
CORPORATE2015-2024 Market forecastby regionJETINVESTOREMEA2,360 a/c (26%)US 77 Bi (29%)North America4,620 a/c (50%)US 120 Bi (45%)China835 a/c (9%)US 33 Bi (12%)Asia PacificLatin America850 a/c (9%)US 16 Bi (6%)570 a/c (6%)US 19 Bi (7%)Worldwide9,250 unitsUS 265 BiNote: Sum of regional numbers might differ from total numbers due to rounding. Source: Embraer proprietary analysis.26
CORPORATESummary: key forcesand drivers shaping bizavJETINVESTORShort-mediumterm:A slow growth global market, US centricEmerging markets slower demand: political & economical uncertainties, mainlyNew aircraft versus pre-owned gap (prices and inventory) continuedInnovative aircraft modelsLong term:Empowered, connected and more demanding usersUnbalanced and shorter cycles in global economiesSustainability pressure: individuals and corporationsTechnology-driven innovations encompassing OEMs, operators and passengersSource: Embraer proprietary analysis27
Oct 01, 2015 · The state of the business jet market: 2015-2050 Marco Tulio Pellegrini President & CEO Embraer Executive Jets. CORPORATE . Charter commoditization Reduced ownership costs . Pre-owned aircraft prices still pressuring new aircraft sales Pre-o
