HIGHLIGHTS

·  Embraer delivered 43 jets in the third quarter, of which 15 commercial aircraft and 28 executive jets (19 light and 9 mid-size). The total number of deliveries represent an increase of 30% compared to 3Q22 and an increase of 33% Year to Date (YTD) from 105 versus 79 aircraft.

·  Revenues reached US$ 1,284 million in the quarter (38% higher than 3Q22 and equal to 2Q23). YTD revenues represent an increase of 29% compared to the same period last year. All Business Units had higher revenues and volumes Year over Year (YoY) and YTD, with the main highlight being Commercial Aviation representing a strong growth of 68% YoY and 52% YTD.

·  Adjusted EBIT of 7.8% compared to 5.4% in 3Q22 due to higher volumes in all business units.

·  Firm order backlog ended 3Q23 at US$ 17.8 billion, the highest level in one year, driven by higher sales in Commercial Aviation. Commercial Aviation backlog rose from US$ 8 billion to US$ 8.6 billion compared to 2Q23, with 42 aircraft sold in 2023. Services & Support reached US$ 2.8 billion in the quarter, the highest volume ever recorded in the business unit. Executive Aviation strong backlog at US$ 4.3 billion highlights it sustained demand backlog.

·  Adjusted Free Cash Flow w/o EVE (FCF) in 3Q23 of US$ 44.0 million pointing to a strong cash generation in the 4Q23 due to higher deliveries.

·  Successful conclusion of Liability Management, extending the average loan maturity to 4.8 years.

·  Operational and financial guidance for 2023 remains unchanged.

MAIN FINANCIAL INDICATORS]

São Paulo, Brazil, November 6, 2023 – (B3: EMBR3, NYSE: ERJ). The Company’s operating and financial information is presented, except where otherwise stated, on a consolidated basis in United States dollars (US$) in accordance with IFRS. The financial data presented in this document as of and for the quarters ended September 30, 2023 (3Q23), September 30, 2022 (3Q22), and June 30, 2023 (2Q23), are derived from the unaudited financial statements, except annual financial data and where otherwise stated.

REVENUE AND GROSS MARGIN

Consolidated revenue of US$ 1,284 million in 3Q23 represented an increase of 38% YoY mainly explained by Commercial Aviation with 68% increase, while Defense rose by 40%, 25% for Executive and 24% for Services.

Comparing January to September of 2022 to the same period of 2023, total revenue rose 29%. Commercial Aviation represented the most expressive increase with 52% variance, followed by Executive Aviation with 28%, Services & Support and Defense with 16% and 15%, respectively. 

Commercial Aviation reported revenue growth of 68% YoY to US$ 424.9 million due to the higher number of deliveries, with reported gross margin increase from 5.4% in 3Q22 to 6.5% in 3Q23.

Executive Aviation revenues were US$ 339.9 million, 25% higher than 3Q22 with an increase in volumes and deliveries mix. As a result, gross margin increased from 19.7% to 21.8% YoY.

Defense & Security revenue of US$ 133.1 million, 40% higher YoY. Reported gross margin of 16.1% in 3Q22 versus 26.0% in 3Q23 due to baseline adjustments of current contracts and physical progress, according to its percentage of completion evolution.

Services & Support revenue of US$ 365.8 million, registering growth for 2 quarters in a row, representing a YoY increase of 24%. Reported gross margin of 24.9% lower than 31.0% reported in 3Q22 due to different mix of services.

ADJUSTED EBIT

In 3Q23, the Company’s reported results are summarized in the table below.

Excluding the above special items, 3Q23 Adjusted EBIT was US$ 100.1 million and Adjusted EBIT margin was 7.8%. On a YoY basis, 3Q Adjusted EBIT increased due to higher volumes in Commercial and Executive Aviation and better performance on Defense. Adjusted EBIT is trending to a strong performance in 4Q23 due to higher level of deliveries. 

NET INCOME (Loss)

Net income (loss) attributable to Embraer shareholders and income (loss) per ADS for 3Q23 were US$ 61.0 million and US$ 0.3322 per share, respectively, compared to US$ (30.2) million in net loss attributable to Embraer shareholders and US$ (0.1644) in income per ADS in 3Q22. Excluding extraordinary effects, adjusted net income was US$ 32.9 million compared to US$ 24.5 million in 3Q22 representing an increase of 34% YoY. In the 3Q, costs related to the development of EVE began to be capitalized as intangible assets as the program reached sufficient maturity.

Source : Embraer