Replica watches
previous arrow
next arrow

Embraer Earning Results 4th Quarter 2021 and Fiscal Year 2021

News actualites aeromorning
  • Embraer delivered 55 jets in the fourth quarter, of which 16 commercial aircraft and 39 executive jets (26 light and 13 mid-size). In 2021, a total of 141 jets were delivered comprised of 48 commercial aircraft and 93 executive jets (62 light and 31 mid-size).
  • Firm order backlog ended 4Q21 at US$ 17.0 billion. This is the highest quarter backlog since 2Q18, driven by solid order activity, particularly in the Executive & Commercial segments. Book to bill in excess 2:1 for Commercial and Executive.
  • Revenues reached US$ 1.3 billion in the quarter and US$ 4.2 billion in 2021, in line with the Company guidance for revenues of US$ 4.0 – US$ 4.5 billion.
  • Adjusted EBIT and EBITDA margins for 2021 reached guidance of 3.0% – 4.0% and 8.5% – 9.5%, respectively driven by enterprise efficiencies, better prices and mix volumes from Commercial, Executive and Services & Support segments.
  • Significant improvement in Free Cash Flow (FCF) in 4Q21, with cash generation of US$ 452.6 million, leading to full year FCF of US$ 292.4 million in 2021, surpassing FCF guidance of US$ 100 million or better.
  • Net Debt/EBITDA ratio decreased from 5.6x in 2019 to 3.5x in 2021, with strong FCF and EBITDA recovery.
  • Guidance for 2022 (without Eve): commercial jet deliveries of 60-70 aircraft, executive jet deliveries of 100-110 aircraft, revenues in a range of US$ 4.5 to US$ 5.0 billion, Adjusted EBIT margin of 3.5% to 4.5%, Adjusted EBITDA margin of 8.0% to 9.0%, and free cash flow of US$ 50 million or better for the year.

Main financial indicators

2 Adjusted Net Income (loss) is a non-GAAP measure, calculated by adding Net Income attributable to Embraer Shareholders plus Deferred income tax and social contribution for the period, in addition to adjusting for non-recurring items. Under IFRS for Embraer’s Income Tax benefits (expenses) the Company is required to record taxes resulting from unrealized gains or losses due to the impact of changes in the Real to US Dollar exchange rate over non-monetary assets (primarily Inventory, Intangibles, and PP&E). The taxes resulting from gains or losses over non-monetary assets are considered deferred taxes and are presented in the consolidated Cash Flow statement, under Deferred income tax and social contribution. Adjusted Net Income (loss) also excludes the net after-tax special items.

São Paulo, Brazil, March 9, 2022 – (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 December 31, 2021 (4Q21), September (3Q21), and December 31, 2020 (4Q20), are derived from the unaudited financial statements, except annual financial data and where otherwise stated.

2022 Guidance (without EVE)


Consolidated revenues of US$ 4.2 billion in 2021 represented an increase of 11% y-o-y. The Company’s total revenue finished the year within the guidance range of 2021 of US$ 4.0 – 4.5 billion.

Commercial Aviation reported revenue growth of 18% y-o-y to US$ 1,316.4 million due to higher E195-E2 deliveries in 2021, as well as higher prices. The E-Jets E2 family (especially the E195 E2) representing 44% of deliveries in 2021, compared to 25% of total deliveries in 2020.

Executive Aviation 2021 revenues were US$ 1,130.1 million, which is 5% higher y-o-y, driven by increased deliveries and higher prices.

Defense & Security reported revenue fall of 9% to US$ 594.4 million, mainly impacted by the agreement reached with the Brazilian Air Force (FAB) for the order of the aircraft KC-390. Thus, the total number of aircraft will be reduced from 28 to 22 units, with deliveries scheduled until 2034. The result of the negotiations generated a reduction in the backlog of US$526 million and a reduction in operating results of US$43 million in 2021, with no immediate effect on cash account.

Services & Support showed solid recovery with reported revenues of US$ 1,132.2 million, representing y-o-y growth of 23%. It continues to show solid recovery as the airlines flight activities are recovering from the pandemic peak in 2020.

Reported 4Q21 consolidated gross margin of 15.0%, including the impact of the Brazilian Air Force agreement, rose relative to the 12.1% reported in 4Q20, with the year over-year improve concentrated in the Executive Aviation and Services & Support segments. Gross margin in Commercial Aviation was still negatively impacted by deliveries level breakeven. For the full year, gross margin of 15.7% in 2021 vs. the 12.7% margin reported in 2020, with gains in all segments, mainly by higher gross margins in Executive Aviation and Services & Support.

For fiscal year 2021, the Company’s reported results include the positive impact of total net special items of US$ 34.3 million, as follows: 1) restructuring expenses of US$ (12.3) million; 2) US$ 39.1 million in positive fair value changes on the Company’s stake in Republic Airways Holdings; 3) impact of loss recognition related to the sale of the Évora facility of US$ (45.1) million; 4) expenses related to Eve’s Business Combination with Zanite Acquisition Corp of US$ (5.3) million; 5) reversal of prior impairment in the Executive Aviation business which positively impacted results by US$ 57.9 million. A summary of the special items follows in the table below.

Excluding these special items, 4Q21 Adjusted EBIT was US$ 56.2 million and the period’s Adjusted EBIT margin was 4.3%, compared to the Adjusted EBIT of US$ 76.6 million and Adjusted EBIT margin of 4.2% in last year’s fourth quarter. The Adjusted EBIT in 4Q21 also includes One Embraer expenses of US$ 8.9 million, which is related to the re-integration of the Company’s Commercial Aviation business and its related services and support in connection with the now-terminated strategic partnership with The Boeing Company.
For fiscal year 2021, Adjusted EBIT excluding special items mentioned above was US$ 167.0 million, and the year’s Adjusted EBIT margin was 4.0%, which compares to 2020 Adjusted EBIT of US$ (100.5) million and Adjusted EBIT margin of -2.7%. The higher Adjusted EBIT in 2021 was driven mainly by the increase in profitability in the Executive Aviation, Services & Support and Commercial Aviation segments, benefited by higher revenues driving enterprise efficiencies, better fixed cost absorption and higher gross margin.
NET INCOME (LOSS) Net income attributable to Embraer shareholders and income per ADS for 4Q21 were US$ 2.1 million and US$ 0.01 per share, respectively, compared to US$ (3.3) million in net loss attributable to Embraer shareholders and US$ (0.02) in Loss per ADS in 4Q20. Over the 2021, net loss attributable to Embraer shareholders was US$ (44.7) million and Loss per ADS was US$ (0.24). 


Embraer ended 4Q21 with a net debt position of US$ 1.4 billion, compared to US$ 1.8 billion q-o-q and US$ 1.7 billion y-o-y. The improvement in the Company’s net debt position q-o-q resulted from Embraer’s significant positive free cash flow generated in 4Q21, as explained below. Liquidity position improved to US$ 2.6 billion, above 3Q21, with payment of short-term debt.
The average loan maturity of 4Q21 was 3.7 years, compared to 3.8 q-o-q. The cost of Dollar-denominated loans in 4Q21 was 5.08% p.a., in line with the 4.99% p.a. cost in 3Q21, while the cost of Brazilian Real denominated loans increased to 5.04% p.a. in 4Q21 compared to 3.44% in 3Q21. The company continue to pursue further liability management and launch a cash tender of USD 300 million to repurchased outstanding bonds, with that loan maturity level already reached above 4 years in February 2022.

Adjusted free cash flow for fiscal year 2021 was US$ 292.4 million, a significant improvement compared to the US$ (990.2) million reported in 2020 due to last year’s severe impacts of the Covid-19 pandemic and this year’s improvement on higher net income and very strong working capital discipline, especially inventories and advanced payments from customers.

Net additions to total PP&E for 4Q21 were US$ 30.0 million, versus US$ 13.2 million in net additions reported in 4Q20. Of the total 4Q21 additions to PP&E, capex amounted to US$ 16.9 million, and additions of pool program spare parts represented US$ 15.2 million of the additions, partially offset by US$ (2.1) million of proceeds from the sale of PP&E. In 4Q21, Embraer invested a total of US$ 69.8 million in product development, principally related to the development of the E-Jets E2 commercial jet program. For the full year, 2021, the Company invested a total of US$ 98.1 million in net additions to PP&E and US$ 209.5 million in R&D.

Working capital had positive variation on cash flow, from inventories at a historically low level and an increase in suppliers due to growth in backlog, which leads to greater contractual liabilities.  The reduction in PP&E is due to the transfer of some businesses in Portugal (Évora) to assets held for sale in the amount of US$187.0 million recorded in Current Assets due to the divestiture occurred in November 2021.

At year end, the backlog breakdown was composed of: Commercial Aviation – US$ 9.0 billion (53%); Executive Aviation – US$ 2.9 billion (17%); Defense & Security – US$ 2.7 billion (16%); and Services & Support – US$ 2.4 billion (14%).

In 4Q21, Embraer delivered 16 commercial jets, as shown below:

Azorra has signed with Embraer for the acquisition of 20 new E2 family aircraft and 30 additional flexible purchase rights for E190-E2 or E195-E2 aircraft. The order, valued at $3.9 billion and signed in December 2021, is expected to start deliveries in early 2023. In Commercial Aviation, Embraer announced, during the Dubai Air Show, a firm order for three new E175, plus three purchase rights for the same aircraft model from Nigeria’s Overland Airways to be delivered from 2023. The deal is worth US$ 300 million, at list price with all purchase rights being exercised. Unit backlog and cumulative deliveries for Commercial Aviation at the end of 4Q21 were as follows:

EXECUTIVE AVIATION Executive Aviation delivered 26 light and 13 mid-size jets, totaling 39 aircraft in 4Q21 and 93 jets in 2021 an 8% y-o-y increase.

Phenom 300E was the most delivered twinjet in 2021 and the most delivered light jet for the 10th consecutive year (or in the last decade).
Embraer and NetJets, Inc. signed an agreement for up to 100 additional Phenom 300Es, in excess of $1.2 billion, with the first delivery scheduled for the second quarter of 2023, signifying Embraer’s continuing ability to deliver the ultimate aviation experience to its customers.

Embraer delivered a new Phenom 300E in Quito, Ecuador and a new Praetor 500 in Canada to AirSprint, both marking the first delivery of each aircraft type in each country.

During 2021, the Brazilian Air Force (FAB) had four C-390 Millennium multi-mission transport aircraft operating in logistical transport operations, moving tons of supplies to fight the pandemic in Brazil, and heavy equipment intended for infrastructure works in the northern region of Brazil.
Tempest broke revenue records, posting 40% growth compared to 2020. This growth was backed by a solid portfolio of cybersecurity products and services, expanding its base to more than 300 customers throughout the year.

Embraer signed several contracts during the quarter. At MRO Europe, a leading aeronautical maintenance event, Embraer announced Pool Program agreements with KLM Cityhopper, the regional subsidiary of KLM Royal Dutch Airlines, Air Montenegro, and the renewal of the Pool Program with TAP express, TAP Air Portugal’s subsidiary. Currently, Embraer’s Pool Program supports more than 50 airlines worldwide.

Efforts were intensified to direct the Company towards low carbon aviation and towards a more just, inclusive and diverse society, especially in the communities where the company operates. The main ESG commitments are linked to:

• Carbon Neutral operations by 2040 – Scope 1+2
• Carbon-Neutral Growth from 2022 (2021 baseline) – Scope 1+2
• 100% Energy from renewable sources by 2030
• Products for zero carbon aviation by 2050 – Scope 3
• Launch zero-emission eVTOL aircraft by 2026

• Diversity & Inclusion training for 100% of employees by 2022.
• 50% diverse hiring in all new entry level employee programs by 2025.
• 25% of women in Master of Science in Aeronautical Engineering by 2025.
• 20% of women in senior leadership positions by 2025.
• Maintain approval rating of +80% students from Embraer schools into public universities
• Launch of Social Tech’ Program focused on selecting 1,500 people from underrepresented groups in technology by 2025.

• Robust Ethics and Compliance program, fully aligned with global standards
• Maintain highest international standards of governance
• Maintain high safety standards of our products and total alignment with international requirements

RECONCILIATION OF IFRS AND “NON-GAAP” INFORMATION We define Free cash flow as operating cash flow less Additions to property, plant and equipment, Additions to intangible assets, Financial investments and Other assets. Free cash flow is not an accounting measure under IFRS. Free cash flow is presented because it is used internally as a measure for evaluating certain aspects of our business. The Company also believes that some investors find it to be a useful tool for measuring Embraer’s cash position. Free cash flow should not be considered as a measure of the Company’s liquidity or as a measure of its cash flow as reported under IFRS. In addition, Free cash flow should not be interpreted as a measure of residual cash flow available to the Company for discretionary expenditures, since the Company may have mandatory debt service requirements or other nondiscretionary expenditures that are not deducted from this measure. Other companies in the industry may calculate Free cash flow differently from Embraer for purposes of their earnings releases, thus limiting its usefulness for comparing Embraer to other companies in the industry.

EBITDA LTM represents earnings before interest, taxation, depreciation and amortization accumulated over a period of the last 12 months. It is not a financial measure of the Company’s financial performance under IFRS. EBIT as mentioned in this press release refers to earnings before interest and taxes, and for purposes of reporting is the same as that reported on the Income Statement as Operating Profit before Financial Income

EBIT and EBITDA are presented because they are used internally as measures to evaluate certain aspects of the business. The Company also believes that some investors find them to be useful tools for measuring a Company’s financial performance. EBIT and EBITDA should not be considered as alternatives to, in isolation from, or as substitutes for, analysis of the Company’s financial condition or results of operations, as reported under IFRS. Other companies in the industry may calculate EBIT and EBITDA differently from Embraer for the purposes of their earnings releases, limiting EBIT and EBITDA’s usefulness as comparative measures. Adjusted EBIT and Adjusted EBITDA are non-GAAP measures, and both exclude the impact of several non-recurring items, as described in the tables bellow. 

Adjusted Net Income is a non-GAAP measure, calculated by adding Net Income attributable to Embraer Shareholders plus Deferred Income tax and social contribution for the period, as well as removing the impact of non-recurring items. Furthermore, under IFRS for purposes of calculating Embraer’s Income Tax benefits (expenses), the Company is required to record taxes resulting from gains or losses due to the impact of the changes in the Real to the US Dollar exchange rate over non-monetary assets (primarily Inventories, Intangibles, and PP&E). It is important to note that taxes resulting from gains or losses over non-monetary assets are considered deferred taxes and are accounted for in the Company’s consolidated Cash Flow statement, under Deferred income tax and social contribution.


(ii) Net cash represents cash and cash equivalents, plus financial investments, minus short and long-term loans and financing.
(iii) Total capitalization represents short and long-term loans and financing, plus shareholders equity (USD billion).
(iv) Financial expense (gross) includes only interest and commissions on loans.
(v) The table at the end of this release sets forth the reconciliation of Net income to Adjusted EBITDA, calculated on the basis of financial information prepared with IFRS data, for the indicated periods (USD million).
(vi) Interest expense (gross) includes only interest and commissions on loans, which are included in Interest income (expense), net presented in the Company’s consolidated Income Statement (USD million).

Be the first to comment on "Embraer Earning Results 4th Quarter 2021 and Fiscal Year 2021"

Leave a comment

Your email address will not be published.