Investor Presentaiton
SHAREHOLDERS
STRATEGIC PLAN |G4-45|
Embraer conducts its planning with a 15-year
horizon, but attentive to external scenarios,
the company promotes annual review cycles
with all administrative and operational de-
partments. The strategic plan is approved
by the Board of Directors, which evaluates it
based on risk management, growth expecta-
tions and stakeholder demands.
The review process carried out in 2016
considered the economic moment faced
in the aerospace and defense segments,
which resulted in a decrease in the number
of sales in the segment, especially in Exec-
utive Aviation, in relation to the last eight
years. In this scenario, Embraer adjusted
costs, expenses and operations - essen-
tial adjustments to uphold the commitment
to the goals set forth.
During the year, the company announced
the closure of Harpia Sistemas S.A and
Harbin Embraer Aircraft Industry Co. joint
venture (HEAI) and, consequently, the ter-
mination of the manufacturing of the Lega-
cy 650 jets in China. [G4-13|
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Strategic plan guidelines
Commercial Aviation | Solidify Embraer's leader-
ship position in its segment, expanding the cus-
tomer base, perfecting the E-Jets, and pursuing
excellence in the customer support model.
Executive Aviation | Consolidate Embraer's
position as one of the world's most admired
brands of executive jets, with recognition of
customers for the quality of products and service.
Defense & Security | Maintain Embraer's
leading position in the domestic market
and expand its international performance
through the modernization of products and
support services.
Business Diversification | Develop new business
from the core competencies of the company,
accelerating the adoption of new technologies
and business models.
People, sustainability, organization and
processes | Keep advancing as a global
organization committed both to delivering
customer satisfaction and valuing its people;
a company that grows sustainably and serves
as reference in the market for innovation and
corporate excellence.
INTANGIBLE ASSETS
Annually, during the review cycle of the stra-
tegic plan, Embraer identifies and prioritiz-
es its intangible assets in order to guide
its performance as a company that values
people and is committed to customers and
business excellence.
Brand | Monitored by material published in
the press, presence in the sustainability indi-
ces and external acknowledgments referring
to the management of people and the quality
of service and products (see page 22).
Knowledge | Measured through the ma-
turity index of processes implemented in
the company, as well as by the practices of
knowledge management.
Intellectual property | Measured by num-
ber of patents for inventions and for indus-
trial designs.
People Evaluated periodically by compe-
tencies (see page 35). Another indicator is
external recognition related to personnel
management (see page 22).
Leadership | 360° evaluations (see page 35).
ECONOMIC/FINANCIAL
PERFORMANCE |G4-DMA: Economic performance|
The year was challenging for Embraer due to
reduced sales in the Defense & Security and
Executive Aviation, in line with other compa-
nies in these segments. The consolidated
results, however, were positive in light of the
good performance of the Commercial Aviation
segment and the reduction of costs and ex-
penses, mainly for the qualification of sales
and margin improvement in Executive Aviation.
In 2016, the company delivered 240 air-
craft, the same volume as the previous year.
Net revenue was US$6,217.5 million, slight-
ly higher than the estimates for the year.
Operating income
and operating margin
Operating income (EBIT) and operating mar-
gin closed 2016 at R$717.8 million and
3.3%, respectively, slightly down when com-
pared to the previous year (operating income
of R$1,103.1 million and operating margin
of 5.4%) due to non-recurring items, such as
provisions related to the termination of the
investigation of non-compliance with U.S.
authorities, and also related to the payment
of benefits offered in the Voluntary Dismiss-
al Program (PDV, in Portuguese). Excluding
these factors, adjusted EBIT was R$1,700.5
million and adjusted EBIT margin was 7.9%,
in line with the company's annual guidance.
Net income and earnings per share
Adjusted net income, excluding deferred
income and social contribution taxes re-
lated to the impact of exchange variation
on non-monetary assets, and also the
aforementioned provisions, was R$964.9
million. Adjusted earnings per share were
R$1,3179 for the year.
Capital indicators
In 2016, the company had a negative ad-
justed free cash flow of R$1,478.7 million,
lower than the positive free cash flow of
R$1,391.7 million in 2015, mainly due to
lower cash generation from operating activ-
ities, and also due to an increase in invest-
ments in property, plant and equipment as
well as the development of new products.
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