Embraer S.A. - Publicly-Held Company - Material Fact

Rhea-AI Summary

Embraer has updated its 2021 guidance, anticipating continued recovery amid the ongoing Covid-19 pandemic. Key projections include 45 commercial aviation deliveries and 90 executive aviation deliveries. The company expects consolidated revenues of $4.0 billion to $4.5 billion with an adjusted EBIT margin of 3.0% to 4.0%. Despite ongoing uncertainty, Embraer is confident in its Defense & Security segment's future demand. However, free cash flow is projected at a usage of $150 million, highlighting the need for improved working capital efficiency.

Positive

• 45 commercial aviation deliveries projected for 2021
• 90 executive aviation deliveries expected, signaling market recovery
• Consolidated revenue forecast of $4.0 billion to $4.5 billion
• Adjusted EBIT margin expected between 3.0% and 4.0%
• Improvement in services & support segment back to pre-pandemic levels

Negative

• Free cash flow projected at a usage of $150 million
• Ongoing uncertainty due to Covid-19 and strained customer budgets in Defense segment

SÃO JOSÉ DOS CAMPOS, Brasil , Aug. 13, 2021 /PRNewswire/ -- Embraer S.A. ("Embraer" or "Company") (B3: EMBR3, NYSE: ERJ), in accordance with CVM Instruction No. 358, of January 3, 2002, informs its shareholders and the market in general of its projections for the year 2021.

Embraer continues to operate in an environment of greater uncertainty than normal due to the impact of the Covid-19 pandemic on several of the markets in which the Company operates. Uneven rates of vaccination access, distribution, and application, combined with new strains of the virus, cause levels of risk and uncertainty to remain high at present. However, vaccination progress in many areas of the world have led to lower case counts and lower severe cases, improving confidence among consumers to travel, particularly shorter-haul leisure travel.

Embraer Commercial Aviation aircraft are among the leaders in service utilization, in comparison with the aircraft of our competitors, as the industry recovers from the pandemic, and our aircraft offer airlines increased flexibility in this uncertain environment. Also, during the pandemic, increasing numbers of high net worth individuals have migrated to using executive aviation, due to airline capacity reductions as well as a desire for a safer and more hygienic means of travel, allowing the customer to avoid large crowds and control who will travel in the same aircraft.

Small and medium-sized business jets have performed well in the recovery, with an increase in its sales, and Embraer is well-positioned with its portfolio of Phenoms and Praetors. Embraer's Services & Support segment has also steadily improved from pandemic lows as commercial and executive traffic improve, with the revenue run rate back to pre-pandemic levels. The Defense & Security segment did not experience the immediate impact of the pandemic on results, though there are signs that budgets of some important customers have become strained following spending to fight the pandemic and its economic impacts. However, the Company remains confident that its portfolio of products in the Defense & Security segment will see improved worldwide demand over the coming years.

Given results over the first six months of 2021, better than the initial expectations, and improved visibility across business segments, Embraer is issuing financial and deliveries guidance for 2021.

2021 GUIDANCE
Commercial Aviation deliveries	45	-	50
Executive Aviation deliveries	90	-	95
Consolidated Revenues (US$ blns)	$4.0	-	$4.5
Adjusted EBIT margin	3.0%	-	4.0%
Adjusted EBITDA margin	8.5%	-	9.5%
Free Cash Flow (US$ mlns)	($150)	-	$0

 

Embraer expects free cash flow usage in 2021 to be considerably better than in 2020 as the Company sees improvement in revenues as well as profitability, on achieved and ongoing cost efficiencies. In addition, projects to improve working capital efficiency, combined with lower capex and development spending needs, will also contribute to lower free cash usage in the year. The Company expects 2021 free cash flow to be a usage of US$ 150 million to breakeven for the year. It is important to note that the free cash flow guidance does not include any potential cash inflows from non-core asset sales or any strategic partnerships that may close during the year.

Antonio Carlos Garcia
Executive Vice-President, Finance &
Investor Relations

 

View original content:https://www.prnewswire.com/news-releases/embraer-sa---publicly-held-company---material-fact-301354968.html

SOURCE Embraer S.A.

FAQ

What is Embraer's projected revenue for 2021?

Embraer projects consolidated revenues between $4.0 billion and $4.5 billion for 2021.

How many commercial aircraft does Embraer plan to deliver in 2021?

Embraer anticipates delivering 45 commercial aviation aircraft in 2021.

What are the expected executive aviation deliveries for Embraer in 2021?

The company expects to deliver 90 executive aviation aircraft in 2021.

What is the expected free cash flow for Embraer in 2021?

Embraer anticipates a free cash flow usage of $150 million in 2021.

How has Covid-19 impacted Embraer's business outlook?

Ongoing uncertainty due to Covid-19 continues to affect markets and may strain customer budgets in certain segments.