Q4 2024 Embraer SA Earnings Call
Good morning, ladies and gentlemen, thanks for standing by.
Conference call will be conducted in English.
Speaker Change: Please let me stay affordable Portuguese speakers.
Speaker Change: With that I had is not what is in our reaching bleach, although vela featherstone equal to gauge Chris said it was so we could pick up.
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Speaker Change: I mean quite advantaged basically selling litigation Creek remains as such Nevada Waldo regional.
Speaker Change: Amazon.
Speaker Change: My name is <unk> and I'm, the head of Investor Relations and M&A for Embraer I want to welcome yield Florida border in 2074 full year earnings Conference call.
Speaker Change: The numbers in this presentation contains non-GAAP financial information to help investors reconcile <unk> financial information in GAAP standards to Embraer.
Speaker Change: F R S.
Speaker Change: Remind you will eaves results will be discussed out of the company's conference call in March.
Speaker Change: It is important to mention that all numbers are presented in U S dollars as it is our functional currency.
Speaker Change: This conference call May include statements about future events based on <unk> expectations and financial market trends such statements are subject to uncertainties that may cause actual results to differ from those expressed or implied in this conference call.
Speaker Change: Except in accordance with the applicable rules the company assumes no obligation to publicly update any forward looking statements for a detailed financial information the company encourages revealing colocation filed by the company with a Brazilian company Stonewall orders will be the audis or C. P M.
Speaker Change: At this time all participants are in a listen only mode.
Speaker Change: He will give instructions later on purpose to patients and the two Q&A sessions as a reminder, this conference is being recorded.
Speaker Change: Participants on today's conference call are Francisco Gomes, Neto, President and CEO of Embraer.
Speaker Change: <unk> Carlos Garcia, Chief Financial Officer, Lewis Parrish, some corporate communications director and myself.
Speaker Change: This conference call will how big parts in the first part top management will present, the company's Q4 and 2034 full year results in the second part we will host a Q&A session only for investors and last but ethylene a lease in the third part will wholesale dedicated Q&A session only for the press.
Speaker Change: It is my pleasure now I'll turn the conference call Clark President and CEO Francisco Gomes. Please go ahead since fiscal <unk>.
Speaker Change: Thank you <unk> and good morning, and good afternoon to all welcome to the <unk> Q4, 2024 results conference call.
Francisco Gomes: Before I start my presentation about 'twenty 'twenty four I am pleased to share with you that a N. A nipple airlines purchase 50 192 Jets this week.
Speaker Change: Options for additional five aircrafts.
Speaker Change: This is the first sale of our <unk> two family in Japan, and this EUR 92 aircraft, we will join the other 47, <unk> <unk>, which has been successfully operating the country's cc 2009.
Speaker Change: Now I'll come back to 'twenty to 'twenty four 'twenty 'twenty four was a historic year for Embraer with a remarkable results that show the company's successful growth path.
Speaker Change: Richard or exceeded our modified and original 2024 guidance for both financial and operational indicators showing our capacity to face the challenges still present in the supply chain.
Speaker Change: We achieved record revenue of $6 4 billion, our highest level in our history.
Speaker Change: Our focus on sales resulted in all time backlog record of $26 3 billion. We have made further progress in financial deleveraging.
Speaker Change: Our net debt is now close to zero.
Speaker Change: And brand now has the accounting conditions to start paying dividends subject to approval by <unk> shareholders.
Speaker Change: For this year, we are committed to sustainable growth and our 2025 guidance reflects the same successful formula of the past few years double digit growth.
Speaker Change: Talking about sales, we had a remarkable year with positive highlights.
Speaker Change: All areas.
Speaker Change: An impressive company wide two two book to Bill ratio.
Speaker Change: We announced that our largest order in executive aviation.
Speaker Change: 7 billion contract with 182 firm orders and third options from <unk>.
Speaker Change: The Phenom 300 remains the most delivered light jet for the 13th consecutive year and the most delivered twin engine jet for the fifth consecutive year the.
Speaker Change: The Division finished 2024 with a record seven 4 billion backlog.
Speaker Change: And industry, leading to seven book to Bill ratio.
Speaker Change: Defense and security ended the year with the best sales performance in its history.
Speaker Change: In 2024, Austria, Czech Republic, the Netherlands, and disclose it clients acquired 13, <unk> hundred 90 <unk>.
Speaker Change: Sweden, and Slovakia also selected the aircraft.
The 8090 Super Tucano also did very well and received a 29, new orders from Paraguay core to go Uruguay and two undisclosed with clients.
Speaker Change: The backlog rose to $4 2 billion with a record share more than 60% from global clients to.
Speaker Change: The business unit recorded a superb three three book to Bill ratio.
Speaker Change: In commercial aviation, we announced that a firm contract with America lines 490, <unk> 75, aircrafts plus 43 options.
Speaker Change: Now E jet family with signing contracts with <unk> Mexicana, English, Australia, 30, aircrafts and welcomed lot Polish with three aircrafts via lessors.
Speaker Change: The division finished the year with a $10 2 billion backlog and a strong one six book to Bill ratio.
Speaker Change: Serves as support also showed solid growth expanding its own MRO centers in the U S and announcing new long term contracts with Flexjet and several commercial airlines.
Speaker Change: The division backlog rose to $4 6 billion, a new all time high supported by long term contracts and the business unit finished the period with a solid one nine book to Bill ratio.
Speaker Change: The business unit, our storage induct the engines for repair in our new product recently GTS engine operation at argument Portugal.
Speaker Change: Supply chain is still an important issue, but we are working very hard to address it is related challenges in 2024, we focused on our strategic initiatives to better balance production in 2025 and over the coming years, ensuring more linearity.
Speaker Change: We are also improving collaboration with our suppliers reinforce it in the supply chain are restructure digitize it processes and invested in the AI tools to anticipate potential issues to monitor and manage activities in real time.
Speaker Change: I will now move on the operational results by segment over the next few slides.
Speaker Change: In commercial aviation revenues increased 20% in 2024.
Speaker Change: Adjusted EBIT for the full year was $55 million or 182% higher than in 2023.
Speaker Change: Supported by a two 5% EBIT margin, reaching by customer mix and operating leverage.
Speaker Change: And as active aviation revenues expanded 25% in 2024.
Speaker Change: The division adjusted EBIT reached at $205 million.
Speaker Change: Or 62% higher than in 2023 helped by an 11, 7% EBIT margin because of operating leverage in.
Speaker Change: In defense and security topline grew 40% in 2024 Digest EBIT was $45 million or 57% higher than in 2023 supported by a six 2% EBIT margin because of <unk> customer mix and high.
Speaker Change: <unk> 8090 volumes moving now to servicing support rep.
Speaker Change: <unk> revenues increased 15% in 2024.
Speaker Change: <unk> EBIT reached at $270 million or 25% higher than in 2023, driven by a 16, 5% EBIT margin supported by higher volumes and the division finally, EBIT continues to make progress with its EBITA development in testing phase.
Speaker Change: In 2024, if achieving important program milestones as the final assembly of its first full scale prototype, which is currently being evaluated during the ground testing can bang and is scheduled to make the first flight in 2025.
Speaker Change: I will now hand, it over to Brian to give you further details about the financial results and then I'll be back with closing remarks.
Brian: Thank you good morning, and good afternoon to everyone.
Speaker Change: Remarkable results from fee for just presented are also reflected in our financial numbers, which show sustainable and solid growth in all key Q4 indicators, let's now moving to slide 11, and you start with deliveries Embraer delivered 75 aircrafts in the last quarter.
Speaker Change: Equal to the number in the same period of the previous year.
Speaker Change: Meanwhile, the company delivered a total of 206 aircrafts in 2024, including three KC $390 million.
Speaker Change: A 14% increase compared to 181 aircrafts in 2023 executive Aviation delivered 44 Jets in Q4, and a total of 130 for the year at the midpoint of the original guidance for 2024.
Speaker Change: And a 14 year high the meat and Super meat category represent half of the segment deliveries during the quarter supported by the solid towards forward of our upgrade their fab. It is important to highlight the progress observed and the companys production level initiatives.
Speaker Change: We managed to reduce the share of Q4 deliveries in the year by 10% points.
Speaker Change: <unk> 2023, Meanwhile, commercial aviation delivered 31 aircrafts in the last quarter of 2024 and 73 in the year.
Speaker Change: The sealing off our revised this revised estimates of 70 to 73 and is still within the original estimates of 72 to 80 for the periods for the year, our HOS family represented 65% of deliveries and the one the balance of 35% in slide 12.
Speaker Change: As already mentioned by <unk>, our backlog expanded more than 40% year on year in Q4, giving more details the backlog for executive aviation increased 70% year on year supported by the contract reflects yet.
Speaker Change: The backlog for our service and support sort of more than 65% Y O for defense and security increased 50% supported by new orders from KC 390 million, new and named 29 Super Tucano the backlog for commercial aviation increased a solid 15% year.
Speaker Change: One year move onshore revenues.
Speaker Change: We will have a 17% increase year on year on year in Q4 to more than $2 3 billion, our topline of $6 4 billion in 2024 right at the high end of our guidance.
Speaker Change: And an increase more than 20% when compared to 2023, our business performed well throughout the year, especially defense and security and is active aviation.
Speaker Change: Revenues increased 40% and 25% a year on year, respectively. Together. These two segments represent more than 40% of the company's total revenue in 2024 next slide please.
Speaker Change: We generated 388 million in adjusted EBITDA. During Q4, we saw a 14% margin.
Speaker Change: And $922 million in the year.
Speaker Change: I remind you there is the boiler arbitration impact of $150 million in the results of the year that increased.
Speaker Change: The margins are up 230 basis points from 12, one to $14 before moving to the next slide adjusted EBIT for the quarter was $265 million, we from 11, 5% margin for the year, we generated $780 million, We fund 11.
Speaker Change: 1% Mark.
Speaker Change: Surpassing the upper end of our previously revised it up 10% guidance for 2000 <unk>. If you look at the results for the year ex buying agreement the EBIT margin improved 210 basis points year on year from $6, 6% to 87%.
Speaker Change: <unk> by high profitability and now business unit, driven by efficiency and operating leverage, Ontario, Slide 15, now piece in Q4, we generated $996 million and adjusted free cash flow because of higher numbers of aircraft deliveries and a strong per pharmacy sales.
Speaker Change: Including significant adverse in customer payments in defense, which is going to negatively impact 2008 to 85.
Speaker Change: For 2024, we generated $676 million.
Speaker Change: Adjusted free cash flow and a strong $540 million without <unk> help.
Helped by significant defense prepayments compared to $380 million in 2023.
Speaker Change: We did better than our $300 million guidance.
Speaker Change: Because of the improvement in ROIC and capital moving to investments without <unk>.
Speaker Change: We spent $64 million in research and development during the quarter 56 million Capex and a net of $10 million in the pole program for a total of $130 million in Q4 compared to 142 million a year ago on a yearly basis <unk> Standalone invested a total of.
Speaker Change: $428 million in 2024 compared to $440 million in 2008 to 83.
Speaker Change: Our our capital location continues to be geared towards <unk>.
Speaker Change: Segment with higher returns such as executive Aviation services works, mainly in U S.
Speaker Change: We continue to see our Capex run rate at close to 400 million per year in the near future is slide 16.
Speaker Change: Our adjusted net income was positive $173 million for the quarter supported by a seven five profit adjusted margin. Meanwhile, we ended the year with $462 million and the adjusted net income for the adjusted margin of seven 2%.
Speaker Change: If you exclude the Boeing agreement, our adjusted net income was $363 million for a five 7% margin compared to $80 million and 1.5% Marty and year ago Slide 17. Please.
Speaker Change: I'd like to start the highlights that upper right corner of the slide Embraer.
Speaker Change: Embraer finished 280 to 84 with a net debit position without the eve of only $111 million.
Speaker Change: <unk> 0.1 times net debt to EBITDA ratio.
Speaker Change: Compared to 781 million and one four times at the end of 2023 for a significant year on year decrease last year. I mentioned, we were taking all necessary steps to recover our investment grade status I am happy to announce in 'twenty 'twenty four we became investment grade.
Speaker Change: By all three main <unk> engines.
Speaker Change: And we see room for additional potential improvements in our ratings in 2025 and 2026 as part of our liability management plan. We are focused on generating cash extended the duration and reduce the cost of our debt.
Speaker Change: Last month, we successfully issued a new bond of $650 million set to mature in 2035.
Speaker Change: This issuance is intended to be leverage neutral.
Speaker Change: As we plan to retire $522 million in depth.
Speaker Change: Due to mature in 2027 and $150 million in 2008.
Speaker Change: As a result of this transaction our debt duration for 2024 has increased from three <unk> to over six five years, which is b will be effective in the first quarter of 2025 and to conclude my presentation. Let me go over the details of our 2025.
Speaker Change: The guidance.
Speaker Change: In terms of operation, we forecast commercial aviation should deliver between 77, and the 85 aircrafts for an increase of 10% at year on year.
Speaker Change: The midpoint of the range.
Speaker Change: Meanwhile for executive Aviation.
We forecast a $145 to 155 jets for an increase of 15% at year on year.
Speaker Change: If we move to financials.
Speaker Change: We estimate.
Speaker Change: Topline two set of between seven to seven $5 billion with.
Speaker Change: The midpoint of the range.
Speaker Change: 13% higher than what we generated last year.
Speaker Change: We forecast EBIT margin between seven five and eight 3% for the year.
Speaker Change: Which would imply around $575 million.
Speaker Change: At the midpoint of the range and 10% higher than adjusted $520 million EBIT ex <unk> and ex DVA items generated in 2024.
Speaker Change: Finally, if.
Speaker Change: If you move to free cash flow generation.
We estimate 200 meter or higher for the year.
Remember our goal is to convert 50% of our EBITDA and free cash flow.
Speaker Change: It is important to highlight.
Speaker Change: It's difficult to predict the dynamic and timing of prepayments mainly in defense business for instance, we received.
Speaker Change: A sizable breakdown payment in Q4, which had originally expected for 2025.
Speaker Change: Thus.
Speaker Change: If you we look 2024 and 2025 together, we should generate $875 million or a margin free cash flow, which is 50% of circa $1 75 billion implied EBITDA by our 'twenty to 'twenty four actors.
Speaker Change: Our 2025 guidance.
Speaker Change: We will update.
Speaker Change: Our hatorade, our 'twenty <unk> guidance on a quarterly basis as the year goes by.
Speaker Change: With that I conclude my presentation and hand, it back to <unk> for his final remarks, Thank you very much.
Speaker Change: Thank you Antonio.
Speaker Change: First I'd like to express my sincere appreciation and thank you to our partners suppliers and our more than 20000 people that are part of our <unk> family for your trust last year. Your continuous support is a critical part of our success.
Speaker Change: <unk> growth.
Speaker Change: For 2025, we remain committed to our ongoing effort to manage our business with efficient financial discipline.
Speaker Change: Vision all areas of the company and is strengthening our supply chain management.
Speaker Change: And of course, we will maintain our steady focus on sales to achieve even better results no business units in 2025 and years ahead.
Speaker Change: The finish we expect 20 to 25 to be even better than 2024 and.
Speaker Change: <unk> has shown it is stronger than ever and well positioned for sustainable growth and ready to capture its full potential in the coming years. We continue to work hard always embracing the foundation of our culture safety and quality.
Speaker Change: Let's now move to the Q&A section of the call.
Speaker Change: Thank you.
Speaker Change: We will now start the question and answer session. Please.
Speaker Change: Please hold a minute while we poll for questions.
Speaker Change: Yeah.
Speaker Change: The first part of the Q&A session will be exclusively for equity research analysts and investors. The second part of the Q&A will be only for <unk>.
Yes, we had Atlanta can this conference call is being conducted in English with translation to Portuguese.
Speaker Change: Please let me finish for announcement from Portuguese speakers.
Speaker Change: <unk> I don't see that type of signpost to gas discernible down onto Curtis Stone <unk> Leigh German Portuguese.
Speaker Change: Boston is sent out of Germany, but don't indicate SaaS click it on the Internet to battle our decision on a block of pharma fundamental adequate at the edge of the transitioning Portuguese.
Speaker Change: We request participants interested in asking questions to press Star then line and the phone at any time our press the raise the hand button on the platform. When your name is announced press Star then six conference call or make sure. Your microphone is on and start your question.
Speaker Change: We will also answer questions sent.
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Speaker Change: If you need assistance. Please use the Q&A button on the platform.
Speaker Change: To give everyone a chance to participate we request to ask just one question for Paul.
Zack: The first question comes from Seaton, Mr. Zack <unk> with Bradesco <unk> BPI. Please go ahead.
Speaker Change: Alright, okay.
Speaker Change: Good morning, and congrats port or the border.
Speaker Change: I have a quick question here about the guidance for 10 five.
Speaker Change: This EBIT margin guidance, I'll put seven and a half to eight 3%.
Speaker Change: If you think about this eight 3% this is me.
Speaker Change: I'd say kind of a conservative or may be.
Speaker Change: Youre talking about.
Speaker Change: <unk> delivers.
Speaker Change: Commercial deliveries, maybe if you think about I mean.
Speaker Change: Their clients that we've got the plans do you see your may.
Speaker Change: Maybe to put some pressure on margins from the 10 five but then this means that <unk> done it in the states, where you see a big margin program.
Speaker Change: So.
Speaker Change: Color can give all our EBIT margin guidance.
Speaker Change: It would be very helpful. Thank you.
Got it.
Speaker Change: We know better than I know you are a lot of volatility you guys check exchange rate that you guys see inflation doesn't dividend is in our message internally here, our recording a P D without boingo adults tax credit the other good guys that haven't implanted $3 47 six.
Speaker Change: Why is the guidance between seven and a half two and eight three in our view, it's showing a rather than the midpoint the paper thin increase in value.
Speaker Change: And if you read through the top line, probably is going to be better but at least today we.
Speaker Change: We are not the guidance we have a follows.
Speaker Change: The operational sides and please do not forget to have defense rabbit.
Speaker Change: Service and support that we do not show the guidance I'd say is a combination of effects.
Speaker Change: Yeah.
Speaker Change: What is important that we were able to compensate.
Speaker Change: The positive.
Speaker Change: We have from arbitration doesn't isn't Disney all our numbers.
Speaker Change: And I would say I'd say mixed feeling for the time being.
Speaker Change: Let me I want to quote complement anything.
Speaker Change: Thank you I highlight the main points.
Speaker Change: Okay.
Speaker Change: Okay. Thank you.
Speaker Change: The next question comes from.
Speaker Change: Danielle <unk> with E Mail DPA. Please go ahead.
Yeah.
Speaker Change: The next question comes from Danielle <unk> with <unk>.
Speaker Change: Ill deviate. Please go ahead.
Speaker Change: Thank you very much good morning.
Speaker Change: I apologize for the issues here is the microphone.
Speaker Change: So my question I will firstly would just like to confirm more temporary just said he said that the recurring ear and beach margin of the company for Latches for beauty and also for the credits was 7.6 that was the first question just to confirm that and the second one would be regarding commercial aviation just to get a view of how you guys are seeing the evolution of the backlog.
Speaker Change: In terms of pricing we are seeing brisk.
Speaker Change: We're seeing a better price environment for the market right now and what is your expectation for transplant five please.
Danielle: Hey, Danielle good morning <unk>.
Speaker Change: And just to clarify then there.
Speaker Change: There were some extraordinary extraordinary items in 'twenty four right the point on settling once one of them. We have tax credits and we also had some sort of extraordinary suppliers credits.
Speaker Change: To help us through the results into 2024, so as I mentioned, if you look at what we believe to be the recurring habits are for 2020 for the margin was at seven six now on assets along and Salvi can.
Speaker Change: Some comments on the second part of your question.
Speaker Change: Danielle.
Speaker Change: Thanks for your question. So first of all we are happening and you guys talked to is more or less.
Speaker Change: Every month about the famous Viagra commercial aviation and we always said we are underway to mid single digit and moving forward.
Speaker Change: So the 586% in meat dairy milk.
Speaker Change: Having already did Joanna Hopkins, a nice improvements compared with previous year. That's one point that sure and that's our backlog is somehow improve in who we are I would say we were able to capture some potential levers I'd say the new ordinary are getting is accurate even for a mid single duty mid.
Speaker Change: Term.
Speaker Change: I would say we have some tough campaign he adds but I would say on average.
Speaker Change: Our new backlog is operating for a mid single digit.
Francisco Gomes: And I don't know Francisco, you want to comment about the momentum phase incremental commercial vehicle right now and this is important for the audience here absolutely. Thank you Rick and thanks for the question Danielle.
Francisco Gomes: We have a good year in terms of sales as I said before in commercial aviation.
Francisco Gomes: You want now that be order from.
Chrome American Airlines 99, plus 43.
The Jets allows me to I think considering the market in 2020 before we did it very well we saw the 30 view educe opening new customers and place. It another three year 95 at a lot Polish and we have a several campaigns ongoing.
Francisco Gomes: And then here we are.
Francisco Gomes: And this year, we just announce it.
Francisco Gomes: E N a decision or 15, plus five where are you in 92. So we are very optimistic with the commercial aviation sales in 2025.
Francisco Gomes: Okay. Thank you guys. Thank you very much for the call virtually for the resort.
Francisco Gomes: Thank you Lord outcome when you. Thank you.
Francisco Gomes: Yes.
Luca: The next question comes from Luca <unk> with BTG Pactual. Please go ahead.
Luca: Hey, guys. Good morning. Thank you for the call Yeah. Let me just go back to this EBIT margin topic, because I think this is kind of a newborn right enough.
Luca: When we think about I mean, the mix for 2025.
Luca: Now we are assuming probably commercialization still running below historical averages.
Luca: And most likely a diluting somehow the growth.
Luca: From his equity than services and support maybe this is this is the somehow implicit on your margin for 2025, it would be a nice at least to have some color on what our Europe, maybe best thoughts on.
Luca: Margins for each segment, if you guys could of course right.
Speaker Change: There'll be there'll be helpful. Greg. Thanks, Thanks, a lot.
Luca: Yes.
Speaker Change: Lucas. Thanks for your question. Good morning, now you know why you are not taking parts of our coffers.
Luca: And I hope you like it.
Luca: That we were not taking part by seeing the results I would say the margin profile for <unk>.
Luca: For next year.
Luca: You have already released there is more or less and the same in line.
Luca: For the first way to train five you'll have in the release you could read.
Luca: We were even at peak better and serve central quite in 'twenty to infer that normalize a little bit easier part of Duane Duane five commercial the same defensive tries mall girlfriend them as active in the same level.
Luca: He's really reflects.
Luca: Quantities.
Without a what it just helps you Daniel here from a veto.
Luca: A recording margin without the good guys, we have last year.
Luca: Hey.
I would say is accurate data with our backlog view for operations.
Luca: Can look a little bit I would say modest for you guys, but.
Luca: The way to the air goes by that we do have a lot of volatility in the market. That's why we prefer to not disappoint you at the end of the year.
Luca: Okay. Thank God I don't think you guys have a nice day.
Scott: Thank you Scott.
Speaker Change: The next question comes from Hal Popinac when Goldman Sachs. Please go ahead.
Hal Popinac: Hey can you hear me.
Speaker Change: Yes, Noah how are you.
Great. Thanks, so much for taking my questions.
Speaker Change: I wanted to ask you about the Flexjet order and if you could help me better understand.
How much of that is incremental to.
Speaker Change: Existing deliveries versus how much of that is.
Speaker Change: Was sort of already in your delivery stream an executive.
Speaker Change: Okay.
Speaker Change: Sure. Thanks for the question I mean, all the order is incremental.
Speaker Change: Fresh order for us that are linked to our backlog.
Speaker Change: And show are sustainable.
Speaker Change: Has been our executive business, so again, 100% of the order is incremental.
So I'll try to 0.6 2013 the deliveries.
Speaker Change: It's more or less.
Speaker Change: Guillaume at between 32 to four aircrafts in New York.
Speaker Change: Okay. That's helpful. I appreciate that and then.
Speaker Change: I wanted to ask about cash flow guidance.
Speaker Change: Can you maybe just walk through why free cash flow would be down.
Speaker Change: Good bit from the last few years, where were your conversion from from net income or EBITDA has has been has been pretty sharp.
Speaker Change: Thanks for the question I was prepared to answer you and by the way Mike comment than that.
Speaker Change: When in the speech was direct to because we always discuss about 60% may be T D.
Speaker Change: Conversion and if you sum up 'twenty 'twenty four 'twenty five we are there 50% of the implied a.
<unk>, though we are turning into cash.
Speaker Change: What we are facing a lot of <unk>.
Speaker Change: Says or not it's especially that we are growing all business unit, but mainly defense is really hard to predict.
Speaker Change: When you get new and Youll get the new are done at the dynamic of the deal we forget a nice PDP or not I would say.
Speaker Change: On average we are there in the 50%, but who have ups and downs use you saw 20 planes for all around 700 million them.
Speaker Change: When we do the math here for dessert calculating progress payment more or less the same level, we need more working capital for.
Speaker Change: Delivered <unk> billion, a rabbit on that's why I would say sounds modest, but beginning of the year, let's see how the SaaS campaign evolved during this year, probably will have a as always upsides. That's why you always guided 200, plus and by the way last year, we changed the guidance.
Speaker Change: C Q3 also going up.
Speaker Change: And there's more or less the dynamic we have and the cash flow to me.
Speaker Change: Okay, Great Super helpful. Thank you.
Angela: Thank you Angela.
Speaker Change: The next question comes from the telephone number and 6840. Please go ahead.
Speaker Change: Yeah.
Myles Walton: Good morning, It's Myles Walton from Wolfe research.
Speaker Change: Hello Myles.
Francisco Gomes: Hello, Hello, Francisco could you speak to some of the supply chain constraints that are still governing how quickly you can grow.
Speaker Change: Perhaps by segment.
Speaker Change: Segment, if you could and then also just to clarify that precision cats precision castparts higher for fasteners.
Speaker Change: Just want to make sure that you don't have any idiosyncratic exposure to them.
Speaker Change: Okay. Thanks, Thanks for the question <unk>.
Speaker Change: And it is through that supply chain has been one of the big issues. We have had in the past years.
Speaker Change: We have done a lot to improve.
Speaker Change: Our our internal process and our relationship there. We always report we identify we anticipate critical issues in the way we support.
Speaker Change: Our suppliers too to come with us and deliver the parts we need to first why do we lease it was two to prepare a production plan and I'll review is very realistic considering all the limitations in risk we have.
Speaker Change: Honestly speaking, we could we could deliver even more aircrafts commercial executive and Navy defense in 'twenty identified but we decided to be you know it'll more conservative taking into consideration the limitation to in the in the supply chain.
Speaker Change: The bottlenecks no. It's an interesting the bottlenecks moose from one critical supplier to another but we are we believe we are very well prepared in 2025 to two bringing the parts we need and this is in combination with this initiative as we put in place already.
Speaker Change: Back in 2023 that we call production leveling or production linearity and the ideas to better distribute the production and deliveries throughout the year, which would be.
Speaker Change: Healthier for our efficiency productivity and Cassia and cash generation. This is actually with you with what we are doing.
Speaker Change: We are even closer to our suppliers we are bright.
Speaker Change: <unk> digital and.
Speaker Change: I a tooth to monitor.
Speaker Change: The the risks of our supply chain and put in place in our initiatives as a rescue teams lean teams to help our suppliers to eliminate bottlenecks. He machine your quality or efficiency is outgrowing, what we are doing and we expect another difficult year, but we are prepared to face.
Speaker Change: The challenges.
Speaker Change: <unk>.
Speaker Change: And just to clarify anything specific on precision Castparts fasteners, and then Francisco is it fair to think then that the success you've had in the quarterly seasonality of of deliveries you can do as good or even better going forward.
Speaker Change: Yes, exactly we have as I said at the Broadcom Acura movies from one <unk>.
Speaker Change: Supplier or once sub supplier to another every year and this is one of the the risk because we are managing but we do believe that.
Speaker Change: Our our production and delivery band for this year is is realistic.
Speaker Change: Okay alright, thank you.
Thanks, Michael.
Speaker Change: The next question comes from Marcelo Motta with Jpmorgan. Please go ahead.
Marcelo Motta: Hi, everyone. Good morning, just a question regarding the topline I mean, we know the numbers from our executive and also the commercial based on the delivers four just wanted to see if you guys can comment a bolton on what is the outlook for service than defense defense given that that is the.
The percentage of completion on the KC you know.
Marcelo Motta: Can you tell us how many aircrafts are you having production. The theory. These member could accelerate if some orders are far more in order to understand what are the upside recent term bulk of defense, especially all on services and on defense. Thank you.
Speaker Change: Hi, good morning, and thanks for the question I mean in defense, we delivered basically Miami last year, and we had five of them are running through our minds in our Concord and the plc methodology.
Speaker Change: And our objective is to be at close to 10, Panama attract microcosm authorities. So we are going to see a gradual increase in the next few years stores that level I think that's the if you just forecasts, Italy and leaner increased stores.
Speaker Change: The 10 birds might be end of the decade, I think youre going to be.
Speaker Change: Right on spot.
Speaker Change: Thank you and.
Speaker Change: On sort of them support and Augie My ramp up you know anything different than that double digit growth. The company has been commenting.
Speaker Change: No I mean, we continue to see the a bench of chess and shop ramping up to about 250 million in 2026, and the full ramp of 500 million top line in 2028.
Speaker Change: We continue to kind of try to get more high value added work to the shop and then actually year. So there is some upside there.
Speaker Change: Able to kind of obtained those contracts but are.
Speaker Change: You know the rest of the business continues to do well with Dean Brown related business growing close to double digits, San Diego market part.
Speaker Change: <unk> of course.
Speaker Change: Low to mid single digits.
Speaker Change: And Marcelo just to complement and are we.
Marcelo Motta: We agreed to that.
Marcelo Motta: I N Duane Duane for and against the high end for our guidance in 'twenty to 'twenty five we know is a.
Marcelo Motta: I think better than what you guys are few can.
Marcelo Motta: Assuming what Francis said, then that we could even could deliver more than what we put in the guidance that I would say we are I would say at least today.
Very committed then.
Marcelo Motta: And then also.
Positive jaws reach also.
Marcelo Motta: The high end of our topline lets see how the year evolves.
Marcelo Motta: A lot of volatility, but so I'd say.
Marcelo Motta: We are equipment to the high end.
Speaker Change: Super clear thank you very much.
Marcella: Thanks Marcella.
Speaker Change: The next question comes from the telephone number ending 7519. Please go ahead.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Sure.
Speaker Change: Okay.
Speaker Change: Yeah I'm sorry, good morning can you hear me okay.
Speaker Change: Yeah the coherency.
Speaker Change: Oh great.
Speaker Change: Thank you very much and Tony Good morning, Steve Trent from Citi. Most of my questions have been answered and I will stick to your request for just one question.
Speaker Change: I was curious when kind of a follow up on miles question earlier, when you look at supply chain.
You guys have done.
Speaker Change: Great job with our.
Speaker Change: Doing a lot of the stuff in house, but is there any sort of.
Speaker Change: Pain points specific pain point of the supply chain that.
Speaker Change: You think is really going to take a while back clean up for the whole industry.
Speaker Change: And is this maybe.
Speaker Change: The engine side or is there something else that's.
Speaker Change: Specific area. That's that's that's really stubborn in terms of the.
Speaker Change: The effect of trying to fix thank you.
Francisco Gomes: Our absolutely Francisco speaking.
Francisco Gomes: Well EV with engines, we have seen some improvement, but still have specific engines that are hurting our production schedule, but also is structural suppliers and fasteners.
Francisco Gomes: Becoming a big challenge for us.
Francisco Gomes: In in 2025 as the Oems continues to ramping now ramping up their production and pressure in the supply chain, but again, we have summer as I said it before summer.
Francisco Gomes: Bottlenecks aware are working on but we made our production plan and guidance based on the limitation, we see from the markets.
Speaker Change: Very helpful. Thank you very much Francisco.
Francisco Gomes: You're very welcome. Thank you. Thank you for the question.
Speaker Change: You bet.
Speaker Change: The next question comes from Lucas of Stephens. Please go ahead.
Lucas: Good morning, guys, well congratulations again for outstanding results.
Lucas: Just a quick question here does your arm guided volumes for 2025 imply any change in product mix to justify those margins.
Lucas: Okay.
Speaker Change: Yes, Oh, Okay Lucas thanks for the question.
Lucas: I thank them.
Speaker Change: The product mix.
Speaker Change: He is not changing too much for 'twenty to 'twenty five.
Speaker Change: We are we are seeing growth in all the products, we have now either business yet.
Speaker Change: Rachel Jets and defense defense, we have more Super Tucano, that's true we.
Speaker Change: We had share will help us in terms of our results, but the other products, we see growth in.
Speaker Change: Almost all of them in 2025.
Speaker Change: For commercialization angle do you foresee any change in in new tools anyone mix.
Speaker Change: We see we see a little more you once in 2025 because of the new contracts, we closed last year.
Speaker Change: I think this is this is the change we see with more you once in 2025, that's great Francisco.
Speaker Change: Luka just be careful award quarter, the new Qantas, not only new called replicate that still have to deliver the one and they get then I would say the main changes the Super Tucano My opinion that we will have almost not now.
Speaker Change: <unk> seen the last few years I'm, saying, that's going to change that would be a little bit the profile for a defense that docomo should boost profitability Red Vernon.
Speaker Change: That's more or less what the whole brokers.
Speaker Change: Yeah.
Speaker Change: Thanks, guys.
Speaker Change: Thanks for the question.
Speaker Change: Okay.
Speaker Change: The next question comes from Lucas Lucky win XP investments. Please go ahead.
Speaker Change: Good morning, everyone. Thank you for the question and congratulations on the results I have some follow up some follow up questions on profitability.
Speaker Change: Just I'm getting some more color on the executive Division and Defense Division.
Speaker Change: Big Executive Division, where we saw profitability of 10% EBIT margin just wanted to to know and if you could give us more details if already reflects the structural makes for file following very strong order activity with great operators that he was soft throughout 2024 and in the defense Division I mean on the orders.
Speaker Change: And we saw very strong profitability level enforced you just trying to understand what was.
Speaker Change: The main driver for this profitability improvement and how much of it should be recurring considering your profitability guidance for 2025.
Speaker Change: Thank you guys.
Lucas: And Lucas.
Lucas: Nice to talk to you by the way, we expected folks who they are.
Lucas: And I am going to answer and congrats to the active aviation and pressure and Youll see Q3.
Lucas: Q4, 'twenty three we reported 16%.
Lucas: In Q4 than even that the division itself has performed.
Lucas: <unk> much better than I had gone through the year and is basically very simple.
Lucas: In Q3 have a huge concentration of deliveries in Q4.
Lucas: This year, we were able to soften a little bit, especially as active aviation because of the the production laterally means we are going to see even this year much more balanced results for executive aviation because of it.
Lucas: I would say the main difference on the executive aviation.
Lucas: And also the we have also some.
Lucas: Positive guys off in Q, <unk> Q4, 2003 that all play out.
Lucas: The equation here.
Lucas: And the same for defense and now we are assuming that we'll have a dip all can we close on quantities in Q4 that we were able to you.
Lucas: I would say monetize at some point do you have any inventory that's also let's say bush.
Lucas: The results.
Lucas: Dave in Q3, but.
Lucas: I'd say I would prefer to see their fans in a yearly basis, we judge that form 5.5, 23 up to $6 two in 'twenty to 'twenty four is more or less what the Italian and the three then you'll notice the fastest moving for mid single digit on the way too.
Lucas: I, a single day Star Lorde Kings, but tomorrow that process than we are today and we are going to.
Lucas: You can see it in 2025 as well.
Antonio: Perfect very clear thank you Antonio.
Lucas: Thank you.
Amit <unk>: The next question comes from Amit <unk> with UBS. Please go ahead.
Speaker Change: Good morning, <unk> Torno Francisco and congrats for the outstanding trend training for our results.
Speaker Change: My question is regarding training trained fives are have two on my side to try to meet the free cash flow on the guidance you guys considering how much your book to bill rates close to one and.
Speaker Change: And my second one it's about maximum capacity on your planes.
Speaker Change: I was having in mind that our.
Speaker Change: Executive Jets was up about 144, 100, cheap T I would like to Genoese this maximum capacity.
Speaker Change: Correct all each draw a red hubs is capacity that you delivered for the zero or Youtube needs to do any additional capex to <unk>. The capex for the business that does your and just as a recap of I have here a maximum capacity of 120 commercials 140 Fortune 100 are cheap seed business Jets and then.
Speaker Change: Casey's for one year. Thank you very much and congrats again for the year.
Speaker Change: Hey, thanks for.
Francisco Gomes: For the question so let's split it up Francisco will address the capacity of the company then we start with the free cash flow.
Francisco Gomes: Just to recap what <unk> mentioned before I mean, we our goal is to convert about 60% of the benign to free cash flow in the long run.
Speaker Change: We have a very strong PDP as in defense.
Speaker Change: In the fourth quarter of 24 that help us generate more than $600 million in free cash flow.
Speaker Change: S here and obviously there will be a payback in 25 because of that so when we kind of look at the two years combined.
Speaker Change: You know when we deliver last year with the implied by our guidance. We think we are very close to that 50% conversion of EBITDA and now.
Speaker Change: Let me pass it to Tom Francisco. So he can go over the personal side. That's a complete they'll give first Alberta is a pleasure to talk to you.
Speaker Change: And you are realizing our backlog is moving up up up and there is always a point that we should be careful and I like the.
Speaker Change: I would say are our parameters for 25 years, our book to Bill of one to one in order to keep I would say the the substance who have.
Speaker Change: In our accruals the 'twenty 'twenty four does not mean that generally continue to world you'll see here.
Speaker Change: Again, a nice girl for 2025, and we could also foresee the same 426.
Speaker Change: And capacity are going to pester Francisco.
Speaker Change: Thank you Gil Thank you weren't garner and thank you Roberto for the question.
The actual clear Albert we are ramping up production in all the divisions.
Speaker Change: Alright.
Speaker Change: Visitors commercial and defense and also support and service as well.
Speaker Change: And we are.
Speaker Change: Increasing our capacity so production capacity year after year, but in line with our backlog our backlog.
Speaker Change: But as I said before we.
Speaker Change: We are very diligent divisions about our financial discipline to approve investments. So before we approve investments to increase capacity, we look carefully at the opportunities we have to increase the productivity to work with it with suppliers in order to make sure.
Or that or the investments we will have a good return for us in the four years, but yet we still have the capacity to grow in order units in commercial aviation. We had this year the guidance. It goes up to 85 for Jess we expect to be at the three digits in the next two or three years.
Speaker Change: And inquiries you know up to Ana to anthro, even more if the investments justify their return the same is valid for business Jets. We are growing this year, we had advanced to where we are investing in new painting booth in lieu of flight preparation area production area to increase production 20 Friday in the years ahead.
Speaker Change: But always when I.
Speaker Change: On the vision or the eye on the Keds right to me is the investment has to prove his return and the same for defense and then the services report.
Speaker Change: So again, we announced the last year 77 million investments in expanding our MRO servicing Dallas, because we see a very good return on that project. So that's why we are we are doing.
Speaker Change: Thank you very much G, Anthony and Francis and congrats again.
Speaker Change: You're welcome.
Ronald Epstein: Next question comes from Ronald Epstein. Please go ahead.
Speaker Change: Okay.
Ronald Epstein: Hey, guys can you hear me okay.
Speaker Change: Yeah. We can hear you are missing your own hey, good morning.
Speaker Change: So just a couple of a couple of questions.
Speaker Change:
Speaker Change: Maybe turn one of the questions around a little bit how long do you think you can harvest for.
Speaker Change: Before you need to make an investment in a new <unk>.
Speaker Change: That form either in business aviation or commercial.
Speaker Change: Well wrong I I was expecting your question honestly.
Speaker Change: It is actually a very good one wrong I mean, the answer remains the same we are making.
Speaker Change: A lot of studies in <unk>.
Speaker Change: Those air, France, and our commercial and is effective in.
Speaker Change: Sure.
Speaker Change: Is that what we are doing we are focused on delivering the results in our plan from now to 'twenty Dirty to make sure we will have a.
Speaker Change: A very healthy cash generation to support our.
Speaker Change: A potential next move.
Speaker Change: We are investing a lot in your technologists I think this year is <unk>.
Speaker Change: One of the highest investments we are making in new technologies to guarantee our technology readiness.
Speaker Change: For in case, we decide to go in a new program, but until 2030, we have a where you focus a lot on the products that we have.
Speaker Change: Have a great plan you saw greater results 24 that we had a growing now almost a 20%, 18% and 25 and we have a plan to grow you know.
Speaker Change: To be you know a company beyond $10 billion.
Speaker Change: At the end of this decade without ease and we are investing a lot of niche.
Speaker Change: Try to develop these new near new aircrafts with Eve will be even higher. So again this is our plan.
Speaker Change: Considering the existing and potential new products or own.
Speaker Change: I just saw complex you added to your comments Francis squirrel.
Speaker Change: We are I would say are we likely to harvest, that's becoming a sustainable growth view and this gave them.
Speaker Change: If you see we are let's say the two is varian brand new Casey's brand New now we are continuing to harvest the Super Tucano, that's nothing new.
Speaker Change: And then also we are even a I would say put ourselves to make things brewing mains in our <unk> platform in order to extend the lifetime of.
Speaker Change: The aircraft and we are in doing that and also ran some improvement in Directv aviation part apartments eight.
Speaker Change: Coordination for ever fan, let's see what the future of reserves to us, but even though with the current portfolio of doing improvements as well.
Speaker Change: And then and then Antonio if we think about the outlook for.
Speaker Change: 2025, and if you can answer that you might not be able to which is okay.
Speaker Change: Much conservatism is built into it.
Speaker Change:
Speaker Change: Is a is a great question I would say.
Speaker Change: If you're asking me today I I like at the high end of our guidance for ABB.
Speaker Change: I like that.
Speaker Change: But I would say, let's wait a little bit out of the euro nibbles around because is a lot of volatility would never know about that.
Speaker Change: The impact that Doosan, doosan definitely quite volatile, but I would say.
Speaker Change: We know each other out for a long time, and we always try to hit the guidance and that's our commitment here.
Speaker Change: We hope that will continue to.
Speaker Change: I would say surprise you end up positively.
Speaker Change: Yes.
Garners for allow me to complement this wrong I I'll, not say conservative by I would say realistic.
Speaker Change: In the past year Cc 221, whether it be delivery on our promise to the market.
Speaker Change: We have been able to eliminate the hockey stick effect effect from our lives. So I mean, the Arctic effective know ranked the first year of our beds by the future you'll be Brian so it won't be delivering our promise year after year and this is what do we want to do we want to show again to the market that we will deliver our promise.
Speaker Change: Our promise that has be ambitious year after year.
Speaker Change: We see double digit growth year after year from $6 4 billion last year to almost <unk> seven to seven 5 billion. This year and I said half a point to be beyond 10 billion until the end of the decade. So again, we see it as a win win situation for us.
Speaker Change: And for the OE vessels as well, so again not the conservative borealis stick.
Speaker Change: Got you and then maybe one last one if I can.
Speaker Change: On the KC 390, given the.
Speaker Change: Changing trends in Atlantic relationship with the U S have you seen any pickup in demand for the airplane out of NATO.
Speaker Change: Rail Army Casey.
Speaker Change: Ah.
Speaker Change: It's a great product developed.
Speaker Change: On the right time.
Speaker Change: Right for that proper form up 226 times, we believe we have the best product in the market.
Speaker Change: And we have seen this 60% of our.
Speaker Change: Or theres now.
Speaker Change: Uh huh.
Speaker Change: It's coming from our global global clients.
Speaker Change: And we are working in a lot of our new campaigns campaigns in Europe campaigns in Asia campaigning in South America and of course, North America is our.
Speaker Change: Maybe my therapies.
Speaker Change: And it said the biggest defense budgets in the world.
Speaker Change: And we do believe the KC will help use us to increase substantially the productivity with this kind of aircrafts.
Speaker Change: With the volume of the potential volume of this is going to be it is a product made in U S. So we see it is a great opportunity for us.
Speaker Change: You know Andrew we did with the U S. Our expectation.
Speaker Change: Our expectation of the new government right.
Speaker Change: Gotcha, Alright, thanks, guys have a good day.
Ron: Thank you Ron.
Speaker Change: Okay.
Speaker Change: The next question comes from Victor <unk> with Bradesco <unk>. Please go ahead.
Speaker Change: Hi, Thanks for take my my question again, Jeff.
Speaker Change: Just a quick one here I mean, the bunker reports of burgers water rights with a robust cash flow generation.
Speaker Change: We're talking about net debt of only $111 million.
Speaker Change: And.
Speaker Change: Why do you take a look on your audit financial statements in BR GAAP.
Speaker Change: Your barcode zero the net losses in and then I'll go to like a ball.
Speaker Change: <unk> reserve.
Speaker Change: So my question here.
Speaker Change: And a follow up on <unk> question on both the Harvest Bureau.
Speaker Change: So.
One embraer expects to start or rhythm deepening distribution.
Speaker Change: If you start any kind of plan to set up kind of dividend policy. Thank you.
Speaker Change: Thanks for the question Victor we.
Speaker Change: We exhausted the accumulated losses accounting wise in Q3 means.
Speaker Change: We are qualified to restart to being Q4 for sure has to be approved by the board in has to be approved by the shareholders meeting that's going to happen end of April okay.
Speaker Change: And we have already Oh or.
Speaker Change: Our dividend policy, we'd save we paid the lasers SCR is 25% of net profit for the year and thereafter converting invest investment in working capital reserves, that's more or less what is always is the thought and there is at least today no b.
Speaker Change: More than this corner here.
Speaker Change: The only issue that the Max does not know how you pay dividends because the last one wealth EG 1080, and now we are I would say getting familiar even though our sell via zelle to come back to this activity. The only reason, but we have already started this policy or we paid what is basically.
Speaker Change: Said by the lasers us yes.
Speaker Change: Great. Thank you.
Speaker Change: Thanks Peter.
Speaker Change: This concludes the question and answer session for equity research analysts and investors.
Speaker Change: Now we'll start the Q&A session dedicated to the press.
Speaker Change: First.
Speaker Change: We'll answer questions in English and then we'll answer questions. Unfortunately.
Speaker Change: Well also answer your question sad to see an impact from chat.
Speaker Change: Please let me say a short announcement.
Speaker Change: <unk> speakers.
Speaker Change: Ethical fitting it does Andrew how does that then what is your domenici Inglis I don't see that type of thing put against Chris turnover down.
Speaker Change: From the about the pharma, Italy, Gianni <unk> put together.
Speaker Change: We ask participants interested in asking questions depressed raise a hand button on the platform. When your name is announced please make sure your microphone it on and start your question.
Speaker Change: If you need assistance. Please use the Q&A button on the platform.
Speaker Change: To give everyone a chance to participate we request to ask just one question.
Speaker Change: Please hold volleyball for questions.
Glenn: Sure Glenn.
Speaker Change: The first question comes from.
Speaker Change: Charles Uncork with AI and media group.
Speaker Change: Which regions of the World do you expect to see the strongest growth in demand for executive Jets are you concerned about access to the U S market and tariffs are introduced.
Speaker Change: We're out there the Charles Thanks for the question the first part.
Speaker Change: <unk>.
Speaker Change: U S represents more than 60% of our market for business jet. So it's natural that we expect these markets to continuing growing with we all we are also selling this is jesse ignore their micro as well South America was a great market in terms of sales last year.
Speaker Change: Europe and even our sales we had two other regions like that like.
Speaker Change: The middle East and in Asia, but I do believe that they may Mark do we will continue to be for many years U S. The second processing I I didn't get to this equity Blanco for aggressive could you repeat please.
Speaker Change: Sure just a second.
Speaker Change: Are you concerned about the access to the U S market if tariffs are introduced.
Well I mean.
Speaker Change: We cannot anticipate.
Speaker Change: Movements are decision BT by the U S governments, but at this point of time, we do not anticipate any big issue is imran.
<unk>.
Speaker Change: Very well balanced.
Speaker Change: Trades.
Speaker Change: With the U S. We have a production plant in the U S. We added more than 2500 employees in the U S, where we have be the U S for 45 years.
Speaker Change: Our aircrafts you know Gary a lot of a very high U S content in terms of our equipments are we you want E 175, you're one is it.
Speaker Change: Basically the only option for regional aviation the U S. So.
Speaker Change: Anyway because of this.
Speaker Change: Long term collaboration.
Speaker Change: Of the U S. We see that.
Speaker Change: This is a win win business and we believe that that at all.
Speaker Change: This situation should not change, but at the enemy is something changes we will see what we do whether at this point of time, we don't anticipate any any issue or difficult to introduce our products in the U S is because we have a good basis, there and as I said it before they can see through 90 as a as a potential product to be a semblance.
Speaker Change: In the country.
Speaker Change: Thank you.
Speaker Change: <unk> question is also from Charles Alcott.
Speaker Change: And he's asking how much has emperor invested in Es.
Speaker Change: <unk> need to raise further funding to complete development of the Ito aircrafts.
Speaker Change: Thanks for the question Louise.
Speaker Change: We already invested something like 300 million cannot rock.
Speaker Change: Net fees.
Speaker Change: Yes.
Speaker Change: We have equity in.
Speaker Change: Depth to our credit lines with the bankers to go to the.
Speaker Change: Certification at least today.
Speaker Change: If you see any possibility for a newly vessel. We we have new investor Gummy want you also to take part I'd say, maybe is it going to happen.
Speaker Change: We are not closing our eyes for that I'd say I do not see a risk for the project to date is much more interest for these to reach today than even before.
Speaker Change: The momentum we are seeing for <unk> right now.
Thank you.
Speaker Change: Next question comes from Andrea <unk> with a P S.
Speaker Change: He's an aviation journalists.
Speaker Change: Y E 175 inches are not breaching Chris level in the markets. The issue of E 175, he choose reman.
Speaker Change: Romance close associated with the ongoing U S. Mainline is called class discussion with the pilot unions are there no honor international.
Speaker Change: Markets around to place the aircraft for the smaller 76 seater segment.
Speaker Change: Yeah. Thanks for the question, but the answer for the question number one is your question number two.
Speaker Change: The U S. 75 is very simple we are postponing because a we don't see signs of changing in the scoop Cros and the <unk> hundred 70 Friday, two despite be much more efficient than the.
Speaker Change: For generation.
Speaker Change: He said he is.
Speaker Change: His weight is not compliant with the scope clause, that's why we decided to postpone another four years, but on the other hand, we are.
Speaker Change: We are investing in improving our EUR 75, you once.
Speaker Change: With new seats with new luggage beings with new connectivity and we are occupying that monitor for regional aviation with the EUR 75.
Speaker Change: You once.
Speaker Change: Not the only U S principal.
Speaker Change: I'll tell you ascertain the window, where we could have opportunities to sell you on a 75 E twos in other markets, but the main markets. The main target market for that aircraft is U S. So it does not make sense for us to develop a product for small volumes market.
Speaker Change: Right.
Speaker Change: Behind the high volume of markets and as Antonio said, yes, we are selling nuance in a much more volume, but in other markets or other markets as well.
Speaker Change: Thank you.
Speaker Change: The next question comes from Richard Shannon.
Speaker Change: As a freelance at aviation reporter.
Richard Shannon: Can you specify where are your priorities are in your R&D spending what specific technologies slash. Our aircraft technologies are you studying right now.
Richard Shannon: Well Richard Thank you for your question.
Richard Shannon: In order to optimize our investments in new technologies, we have defined it serving we cross selling innovation verticals.
Richard Shannon: And among them I can say I can tell you for example autonomous slides.
Richard Shannon: I can tell you alternative propulsion system.
Richard Shannon: I can tell you are.
Richard Shannon: Airframe and competitiveness.
Richard Shannon: Can tell you our passenger experience.
Richard Shannon: <unk>.
Richard Shannon: And many orders I mean industry 4.0, artificial intelligence cyber security so than we are with those seven verticals that we are counting on those set of events. Because we are concentrating our investments to be prepared to develop new products and some of them are being a bias already exist.
Richard Shannon: New products like the EBITA for example, right if it always 100% electric vehicle. So it's a good example of alternative propulsion systems that are can be use of the new products as well. So again. This is why where we are.
Richard Shannon: Putting our money in terms of new technologists.
Richard Shannon: Yeah.
Speaker Change: Thank you. The second question is also from Greg Church Sherman.
Speaker Change: And he's asking Airbus said it has delayed the launch of its hydrogen aircrafts by five to 10 years because of delays in the hydrogen ecosystem. What's your view on this.
Speaker Change: Embraer Air I mean in line with this investment in New technology is Embraer has developed or it has been working into a new aircraft concepts recall in era's year family.
Speaker Change: One is a hybrid electric noise small one up to 19 seats and the other one is a hydro gene hybrid whether we also see this technology is now being mature.
Speaker Change: We're in 50 years 10 to 15 years from now so in the hydrogen is even more complex because it's not just the aircraft, but the infrastructure in the airports as well. So again, we see these are we are working on back to you know to acquiring knowledge technology breadth.
Speaker Change: We don't see.
Speaker Change: 83 into service in the short term this would be our going on.
Speaker Change: 50 years or more from now.
Okay.
Speaker Change: Thank you. The next question is from Carl Schwartz.
Speaker Change: How much more money is needed for <unk> to a certain certification in the U S.
Speaker Change: Yeah. Thanks for the question, we the the way to go is around 400 million around partake vacation.
Speaker Change: <unk> all seen this organization.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Thank you so much please hold while we poll for questions.
Speaker Change: Once again, please hold while we collect the questions.
Speaker Change: This concludes the question and answer session in English for the press.
Speaker Change: This Q&A section is not being conducted in Portuguese to switch to English placed presta interpretation button on the platform and then select English.
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