Q1 2025 Embraer SA Earnings Call

May 6, 2025

Speaker Change: Join the meeting as an attendee and we'll be muted throughout the meeting. Thank you.

Luis Harrison: A gente vai começar um pouquinho depois do inglês pra dar tempo de chegar o português. Uns 10, 15 segundos, tá? A gente vai aguardar aqui antes de começar a tocar o áudio em inglês.

we'll wait one second before starting the audio

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[Company Representative] (Embraer): Oi, pessoal, algum motivo do atraso, hein?

Hey guys, is there any reason for the delay, huh?

Luis Harrison: I'm not hearing anything here, just so you know.

Speaker Change: We started the Portuguese a little earlier, because it has a 20-second difference. So, the English will start soon.

Operator: This meeting is being recorded.

Operator: Good morning, ladies and gentlemen, and thanks for standing by. This conference call will be conducted in English, but please let me say a short announcement for Portuguese speakers.

Good morning, ladies and gentlemen, and thanks for standing by.

Guilherme Paiva: Good morning, ladies and gentlemen, and thanks for standing by. This conference call will be conducted in English, but please let me say a short announcement for Portuguese speakers. My name is Guilherme Paiva, and I'm the head of Investor Relations and M&A for Embraer. I want to welcome you to our Q1 2025 Earnings Conference Call. The numbers in this presentation contain non-GAAP financial information to help investors reconcile Eve's financial information in GAAP standards to Embraer's IFRS. We remind you Eve's results will be discussed at the company's conference call. It is important to mention that our own numbers are presented in US dollars as it is our functional currency. This conference call may include statements about future events based on Embraer expectations and financial market trends.

Speaker Change: Disconference call will be conducted in English, but please let me say a short announcement for Portuguese speakers. Thank you very much.

Speaker Change: This conference will originally be held in English. To listen to the translation in Portuguese, press the Interpretation button on the platform and select the desired language. To improve the quality of the Portuguese transmission, also click on Mute Original Audio on the Zoom platform.

Gui Paiva: [Foreign language]

Gui Paiva: My name is Guilherme Paiva, and I'm the head of Investor Relations and M&A for Embraer. I want to welcome you to our Q1 2025 Earnings Conference Call. The numbers in this presentation contain non-GAAP financial information to help investors reconcile Eve's financial information in GAAP standards to Embraer's IFRS. We remind you Eve's results will be discussed at the company's conference call. It is important to mention that our own numbers are presented in US dollars as it is our functional currency. This conference call may include statements about future events based on Embraer expectations and financial market trends.

Speaker Change: My name is Gipayla, and I'm the head of investor relations and M&A for Embraer. I want to welcome you to our first Order Ernie's conference call of 2025.

Speaker Change: The numbers in this presentation contain non-GAAP financial information to help investors reconcile eaves financial information in gap standards to Embraer's IFRS. We remind you, eaves results will be discussed at the company's conference call.

Speaker Change: It is important to mention that our numbers are presented in US dollars as it is our functional currency.

Speaker Change: This conference call may include statements about future events based on Embraer expectations and financial market trends.

Guilherme Paiva: Such statements are subject to uncertainties that may cause actual results to differ from those expressed or implied in this conference call. Except in accordance with the applicable rules, the company assumes no obligation to publicly update any forward-looking statements. For detailed financial information, the company encourages reviewing publications filed by the company with the Brazilian Comissão de Valores Mobiliários, or CVM. At this time, all participants are in a listen-only mode. We'll give you instructions later on for participation in the two question and answer sessions. As a reminder, this conference is being recorded. Participants on today's conference call are Francisco Gomes Neto, President and CEO of Embraer, Antonio Carlos Garcia, Chief Financial Officer, Luis Harrison, Corporate Communications Director, and myself. This conference call will have three parts. In the first part, top management will present the company's Q1 results.

Gui Paiva: Such statements are subject to uncertainties that may cause actual results to differ from those expressed or implied in this conference call. Except in accordance with the applicable rules, the company assumes no obligation to publicly update any forward-looking statements. For detailed financial information, the company encourages reviewing publications filed by the company with the Brazilian Comissão de Valores Mobiliários, or CVM. At this time, all participants are in a listen-only mode. We'll give you instructions later on for participation in the two question and answer sessions. As a reminder, this conference is being recorded. Participants on today's conference call are Francisco Gomes Neto, President and CEO of Embraer, Antonio Carlos Garcia, Chief Financial Officer, Luis Harrison, Corporate Communications Director, and myself. This conference call will have three parts. In the first part, top management will present the company's Q1 results.

Speaker Change: Such statements are subject to uncertainties that may cause actual results to differ from those expressed or implied in this conference call.

Speaker Change: For detailed financial information, the company encourages reviewing publications filed by the company with the Brazilian Commissioned Developers Mobiliarios or CVM. At this time, all participants are in a listen only mode. And all participants are in a listen mode. And all participants are in a listen mode.

Speaker Change: We will give you instructions later on, or participation in the two question and answer sessions.

Speaker Change: As a reminder, this conference is being recorded. Participants on today's conference call are Francisco Gomez Neto, president CEO of Embraer, Antonio Carlos Garcia, Chief Financial Officer, Luis Harrison, Corporate Communication Director, and myself.

Speaker Change: This conference call will have three parts. In the first part, top management will present the company's key one results.

Guilherme Paiva: In the second part, we will host a Q&A session only for investors. Last but definitely not least, in the third part, we will host a dedicated Q&A session only for the press. It is my pleasure to now turn the conference call to our President and CEO, Francisco Gomes Neto. Please go ahead, Francisco.

Gui Paiva: In the second part, we will host a Q&A session only for investors. Last but definitely not least, in the third part, we will host a dedicated Q&A session only for the press. It is my pleasure to now turn the conference call to our President and CEO, Francisco Gomes Neto. Please go ahead, Francisco.

Speaker Change: In the second part, we will host a Q&A session only for investors and less but definitely not least. In the third part, we will host a dedicated Q&A session only for the press. It is my pleasure to now turn the conference call to our president CEO Francisco Glamis. We will host a dedicated Q&A session only for the press

Please, go ahead, Francisco.

Francisco Gomes Neto: Thank you, Gui. Good morning and good afternoon to all. Welcome to Embraer's Q1 2025 Results Conference Call. We delivered the highest first quarter revenue of the past nine years at a significant $1.1 billion. We also registered the highest first quarter adjusted EBITDA margin of the past five years at almost 10%. Embraer ended the period with a $26.4 billion backlog, marginally higher than the previous all-time record printed in the last quarter. Aircraft deliveries were up almost 30% year-on-year, evidence of our continuous focus on operational efficiency. Embraer will from now onwards resume payment regular dividends and interest on equity for its shareholders. To conclude this part, we reiterate our 2025 guidance, which implies double-digit growth in our aircraft deliveries and revenue growth. Let's go over the main highlights for the company during the quarter.

Francisco Gómez: Thank you, Ugi. Good morning and good afternoon to all. Welcome to Embraer's first quarter 2025 results conference call.

Francisco Gómez: We've delivered the highest first quarter revenue of the past nine years at a significant 1.1 billion.

Francisco Gómez: We also registered the highest first quarter adjusted empty damaging of the past five years at almost ten percent.

Francisco Gómez: Embraer ended the period with a 26.4 billion backlog, marginally higher than the previous all-time record printed in the last quarter.

Francisco Gómez: Aircraft deliveries were up almost 30% higher year-on-year, evidence of our continuous focus on operational efficiency.

Francisco Gómez: Embraer will, from now onwards, resume payment regular dividends and interest on equity for its shareholders.

Francisco Gómez: To conclude this part, we reiterate our 2025 guidance, which implies double-digit growth in our air-crafted delivery and revenue growth.

Francisco Gómez: Let's go over the main highlights for the company during the quarter.

Francisco Gomes Neto: Executive aviation delivered a solid performance reflected in sales, deliveries, and backlog. The division also reached the highest Q1 revenue since 2014 in a record backlog of $7.6 billion. In defense and security, Sweden and Slovakia confirmed the selection of the KC-390 Millennium, while Uruguay converted its A-29 Super Tucano options into firm orders, and Panama selected the aircraft. The division ended the quarter with a stable $4.2 billion backlog. In commercial aviation, the Japanese ANA placed an order for 15 E190-E2 that should be included in the $10 billion division backlog in the second half of the year. The E195-E2 from Helvetic Airways became the largest jet flying to London City Airport ever. Service & Support kept its solid growth pace with the start of the next industrialization stage of the Pratt & Whitney engine shop at OGMA in Portugal.

Francisco Gómez: Executive Aviation Deliverate is solid performance, reflected in sales, deliverance and backlog.

Francisco Gómez: The division also reached it the highest first quarter revenue since 2014 in a record backlog of 7.6 billion.

Francisco Gómez: In defense and security, Sweden and Slovakia confirmed the selection of the KC-19 millennium, while Euro-Y converted its 829 Super-2-Cano options into firm orders, and Panama selected the aircraft. [inaudible]

Francisco Gómez: The division ended the quarter with a stable 4.2 billion backlog. The division ended the quarter with a stable 4.2 billion backlog.

Francisco Gómez: In commercial aviation, the Japanese ANA placed in an order for 15 E192 that should be included in the 10 billion division backlog in the second half of the year.

Francisco Gómez: The 1952, from Helvetic Airways, became the largest jet flying to London City Airport ever.

Francisco Gómez: Service and support kept its solid growth pace with the start of the next industrialization stage of the pride between an engine shop at Ogima in Portugal. The division backlog remained stable at 4.6 billion.

Francisco Gomes Neto: The division backlog remained stable at $4.6 billion. Embraer has been working on a production leveling plan since 2023. Our main objective is to create stability and have a more linear production pace throughout the year. The plan will allow us to increase efficiency, productivity, and improve cash flow. This year, we have already seen the first results of the project, and from 2026 onwards, we can expect a more stable production over the year. We also continue to work very closely with our suppliers to support our more linear production plan. We can see improvements in several operational KPIs for all our family of products, such as an increase in aircraft production, a reduction of travel work, reduction in assembly cycle, and increase in productivity. Here, for instance, we share improvements in the Praetor production line.

Francisco Gómez: Embraer has been working on a production leveling plan since the 2023. Our main objective is to create stability and have a more linear production pace throughout the year.

Francisco Gómez: The panel will allow us to increase efficiency, productivity and improve cash flow. This year we have already seen the first results of the project and from 2026 onwards we can expect a more stable production over the year.

Francisco Gómez: We also continue to work very close with our suppliers to support our more linear production plan.

Francisco Gómez: We can see improvements in several operational KPIs for all our family of products, such as an increasing net craft production, a reduction of travel work, reduction in the sampling cycle, and increase in productivity.

Francisco Gómez: Here, for instance, we share improvements in the Prater Production Line.

Francisco Gomes Neto: Let's now touch upon a topic we have all dealt with over the past two months, US tariffs. First of all, it is important to highlight Q1 results were not impacted by them. Second, our initial analysis points towards limited impact, so we remain confident and reiterate our 2025 guidance. Third, Embraer has a substantial amount of US content in its aircraft, which mitigates partially our exposure. Last and more importantly, we are working on initiatives to minimize the impact of US tariffs on our business. We have argued for zero tariffs to globalize the aerospace production chain, as it has been the case for many decades. I will now move on to operational results by segments over the next few slides. All figures are based on year-on-year comps.

Francisco Gómez: Let's not touch upon a topic we have all the alternatives over the past two months.

U.S. Terrific

Francisco Gómez: First of all, it is important to highlight first quarter results were not impacted by them.

Francisco Gómez: Second, our initial analysis points towards the limited impact, so we remain confident and reiterate our 2025 guidance.

Francisco Gómez: Third, Embraer has a substantial amount of US content in its aircraft, which mitigates partially our exposure.

Francisco Gómez: And last, and more importantly, we are working on initiatives to minimize the impact of US tariffs on our business. And we are argued for zero tariffs to globalize the aerospace production chain, as it has been the case for many decades.

Francisco Gómez: I will now move on to operational results by segments over the next few slides.

All figures are based on ear on ear pumps. [inaudible]

Francisco Gomes Neto: In commercial aviation, revenues were stable, and we noted a relevant improvement in the adjusted EBIT margin, driven by product and customer mix. In executive aviation, revenues expanded 35% because of higher volumes and product mix. The adjusted EBIT margin increased because of operating leverage and cost containment initiatives. In defense and security, top line grew 72% because of stronger KC-390 revenue recognition, customer mix, and product stage. The better adjusted EBIT margin was driven by higher volumes, lower expenses, and negative extraordinary items a year ago. Moving to Service & Support, revenues increased 16%, mainly because of the OGMA GTF ramp-up. The adjusted EBIT margin decreased because of product mix and the start of North American executive MRO ramp-up, partially compensated for positive one-time items.

Francisco Gómez: In commercial aviation, revenues were stable, and we noted a relevant improvement in the adjusted ebit margin,

Francisco Gómez: In his active aviation, revenues expanded 35% because of higher volumes and product mix. The adjusted EBIT margin increases because of operating leverage and cost containment initiatives.

Francisco Gómez: In defense insecurity, top line grew 72% because of stronger KC-390 revenues recognition, customer

Francisco Gómez: The better adjusted EBIT margin was driven by higher volumes, lower expenses in negative extraordinary items a year ago.

Francisco Gómez: Moving to serfs and supports, revenues increase at 16%, mainly because of the Ogma GKF runpuff. [inaudible]

Francisco Gomes Neto: Finally, 2025 could be a decisive year for Eve, as the company should complete the first flight of its full-scale prototype and should receive its first firm orders, opening a brand new path of long-term growth. I will now hand it over to Antonio to give you further details about the financial results, and then I will be back with closing remarks.

Francisco Gómez: Finally, 2025, could it be a this is the year for Eve, as the company should complete the first flight of its full-scale prototype, and should receive its first firm orders, opening a brand new path of long-term growth.

Francisco Gómez: I am now headed over to Antonio to give you further details about the financial results and then I will be back with the closing remarks.

Antonio Carlos Garcia: Thank you, Francisco. Good morning and good afternoon to everyone. I will present now our Q1 financial results. All of my comments will be based on year-on-year comps, unless noted. Let's move to slide 13 and start with deliveries. Embraer delivered 30 aircraft in commercial and executive aviation combined during the quarter, 20% higher. In executive aviation, deliveries were 23 jets, of which 14 were in the light segment and 9 in the midsize one. The number of deliveries was 28% higher and, more important, 15% of the midpoint of the company's full year guidance, moderately above 11% first quarter average for the past five years. In commercial aviation, deliveries were 7 aircraft, the same number as last year, and represented 9% of the midpoint of the company's full year guidance.

Antonio: Thank you, Francisco. Good morning and good afternoon to everyone. I will present now our first quarter financial results. And all of my comments will be based on year-on-year comments, and let's note it.

Antonio: Let's move which is like the 13th and start with deliveries Embraer delivered 30th aircrafts in commercial and executive aviation combined during the quarter or 20% higher

Antonio: Nizictive Aviation, Deliver's word 23 gets, of which 14 were in the light segment and 9 in the mid-size one.

Antonio: The numbers of the liver was 28% higher and more important, 15% of the midpoint of the company's full-year guidance.

Antonio: Moderately, above 11%, first quarter average for the past five years. [inaudible]

Antonio: In commercial aviation, believers were seven aircraft, the same numbers last year, and represented 9% of the midpoint of the company's full year guides.

Antonio Carlos Garcia: I should highlight we were unable to deliver 2 additional aircraft during the quarter because of commercial issues. In slide 14, our backlog reached a new all-time high, $26.4 billion, marginally up sequentially, and 25% higher versus a year ago. Talking about each division, the backlog for defense and security soared 73%, while for executive aviation increased more than 65%. Supported by new KC-390 Millennium and A-29 Super Tucano sales, and the marquee contract with Flexjet respectively. The backlog for service and support increased almost 50%, while for commercial aviation decreased 10%. However, it is important to remember the ANA order has not yet been included in our numbers. Move on to revenues. Our top line reached $1.1 billion in Q1. The best Q1 results of the past 9 years and 22% higher.

Antonio: I shoot highlights, we were unable to deliver two additional aircrafts during the requirement because of commercial issues.

Antonio: Talk about each division, the backlog for defense and security towards 73% [inaudible]

Lio for Executive Aviation, increased more than 65% [inaudible]

Antonio: supported by new KC-390 milenio and 829 Super Two Cannes sales, and the marquee contract reflects yet respectively.

The backlog for self-support increased almost 60% [inaudible]

while for commercial aviation decreased 10%.

Speaker Change: However, it is important to remember, the Ana Orga has not been yet, including our numbers.

Speaker Change: Boovo on Treveness, our top line reached at $1.1 billion in the first quarter. The best first quarter results off the past nine years, and 22% higher.

Antonio Carlos Garcia: Our Service & Support and Executive Aviation divisions together represented almost 70% of the company's total revenue in the quarter. Moving to slide 15. We generated $109 million in adjusted EBITDA in Q1 with a 9.8% margin. Now, adjusted EBIT for the quarter was $62 million with a 5.6% margin. A significant increase compared to the previous $7 million and 0.8% margin marked from last year. This great results was supported by Executive Aviation higher volumes, which ties back to Francisco's comments about production leveling, product mix, and lower costs and expenses. A quick word on U.S. tariffs and their potential impact. Our initial estimate is that could negatively impact our EBIT margin by 90 basis points for 2025.

Speaker Change: Our service and support in executive aviation visions together represented almost 70% of the company's total revenue in the course.

Speaker Change: Moving to Evelage 15, we generated 190, in adjusted a bit down the first quarter with a 9.8% mark.

Speaker Change: Now, I just ate it for the quad was 62 million with a 5.6% margin. [inaudible]

Speaker Change: A significant increase compared to the previous 7 million and 0.8% market from last year.

Speaker Change: This is great results. It was supported by executive aviation, higher volumes.

Speaker Change: which ties back to Francisco comments about production leveling, brother to mix in the workhorse and expenses.

A quick word on US stars and their potential impact.

Speaker Change: Our initial estimate is that could negatively impact our abit margin by 90 basis points for 20, 20 spires.

Antonio Carlos Garcia: However, the company is taking several steps to mitigate these effects, like additional cost reduction measures. For now, we remain confident we can deliver our guidance 2025. Now let's move to the next slide, 16. In Q1, we consumed $386 million in adjusted free cash flow because of high working capital needs, mainly in inventory, in preparation for higher numbers of aircraft deliveries in the next three quarters. Moving to investments, it is important to highlight our capital allocation remains focused on segments with high return, such as executive aviation and Service & Support, mainly in the US. In Q1, without IFRS, we allocated $38 million for research and development, of which $11 million were expensed. We invested another $37 million in CapEx and $13 million in the pool program to support new contracts, totaling $88 million for the quarter.

However, the company is taking several steps

Speaker Change: to mitigate these effects, like additional quasi-reduction measures. And for now, we remain confident, we can that you were our guidance plan to plan to fight.

Now let's move to the next slide, 16.

Speaker Change: In first quarter, we consumed 386 medium in adjusted free cash flow because of high working kept on its maiden inventory, in preparation for higher members of aircraft delivers and in the next three quarters.

Speaker Change: Moving to investments, it is important to highlight, where a capital location remains focused on segments we try to return such as executive aviation and serve since support, may in the US.

Speaker Change: Fred Squareton, we dot ease, we allocated 38 million for research and development of which 11 million were expensive.

Speaker Change: We invest in another 37 million in topics and 13 million in the pool program to support the new conflict, totaling 88 million for the poor too.

Antonio Carlos Garcia: To finish this slide, let's talk about our adjusted net results. We ended the quarter with a negative $74 million, for an adjusted -6.7% margin compared to $13 million comps. However, reported net income was positive $73 million for a 6.7% margin positive. If we consider $124 million in deferred taxes because of stronger Brazilian foreign exchange rate and $23 million from IFRS results. Slide seventeen, please. As always, I would like to start this slide by highlighting the top right corner. Embraer was able to reduce both its net and gross debt positions without IFRS by $508 million to $608 million over the past twelve months. Thus, the company was able to lower its net debt to EBITDA from 1.8x to 0.5x during the periods.

Speaker Change: To finish this light, let's talk about our just an added results.

Speaker Change: We ended the quarter if a negative 70 for a million for now, and adjusted minus 6.7% of money compared to 30 million quamps.

Speaker Change: However, report that net income was positive to 73 million for a 6.7% margin positive. [inaudible]

Speaker Change: If we consider 100 points for a medium in the Fred Texas because I'm stronger Brazilian.

for the next change rate, and 23 million from Eve with lots.

Slide 17, please.

Speaker Change: As always, I would like to start this live by highlighting the top right corner.

Speaker Change: Breuer was able to reduce both its net and gross depth positions without ease by 580,680 million over the past 12 months.

Speaker Change: Thus, the company was able to draw its net depth to a BTA from 1.8 times to 0.5 times during the periods.

Antonio Carlos Garcia: The negative $385 million free cash flow generation for Embraer standalone during the quarter helps to explain the recent increase in financial leverage. As I mentioned on our last call, as part of our liability management plan, we are focused on extending the duration and reduce the cost of our debt. In our most recent liability management step, we issued a $650 million 10-year bond at 158 basis points over US Treasury in Q1, and we repurchased $522 million in 2027 bonds, fully retired, and $150 million in 2028 bonds. With the deal, we extended our debt duration to 6.3 years compared to 3 to 3.8 years in Q4 last year. Slide 18. To conclude my part, let me talk about shareholder remuneration.

Speaker Change: The negative 285 million pre cash flow generation for Embraer standalone during the quarter helps to expand their recent increase in financial leverage.

Speaker Change: As I mentioned, our last quote, as part of our public management plan, we are focused on extending the duration and reduce the cost of our debt.

in our most recent liability management step. [inaudible]

Speaker Change: 10 years bonds at 158 base points over U.S. Treasury in Q1, and we repurchase 522 million in 2027 bonds fully retired and 150 million in 2028 bonds [inaudible]

Speaker Change: With the deal, we extended our debt duration to 6.3 years, compared to 3 to 3.8 years in queue for our last year.

Speaker Change: Zlydating, and to conclude my part, let me talk about several of the remuneration.

Antonio Carlos Garcia: For the fiscal year 2024, we approved BRL 51 million in dividends, or 7 Brazilian cents per share to be paid on 23 May to EMBR3 holders. ERJ holders should receive the monies a few days later, but you can find more information with our US depository bank soon. For the fiscal year 2025 and beyond, the company intends to analyze the potential fiscal benefits from these interest and equity declarations. This value will be added with, if required, a top-up dividend to comply with the minimum 25% of net income payment established by the Brazilian corporate law. The company will then pay this money in a single payment after shareholders meeting in the next year. With that, let me stop here, and I hand it back to Francisco for his final remarks. Thank you very much.

Speaker Change: For the fiscal year of 2024, we approved 51 mineral-reising dividends.

Bar Seven, Brazilians,

San Spasher, Peter,

Chubbipade, on May 23, to Emmett Three Holders. [inaudible]

Speaker Change: Ear J. Holders should receive the money in a few days later. [inaudible]

Speaker Change: But you can find more information with our US Depository Bank soon.

Speaker Change: for the fiscal year 2025 and beyond, the company tends to analyze the potential fiscal benefits for these the interest and equity decorations.

Speaker Change: This value will be added with, if required, a top-up dividend to comply with the minimum 25% of net income payments established by the Brazilian corporate world.

Speaker Change: The company will then pay this money in a single payment after shareholders meeting in the next year.

Francisco Gómez: With that, let me stop here and I'll hand it back to Francisco for a final remarks.

Thank you very much.

Francisco Gomes Neto: Thank you, Antonio. The Q1 was marked by significantly stronger results, which provides us with a solid outlook ahead for sustainable growth. In 2025, we started to see the first material results of our production leveling initiatives. We will continue to take steps to make the most of our installed capacity to achieve even higher output, optimizing the use of our assets. We'll keep focused on sales in all business units to guarantee our successful growth trajectory. Let me now take the opportunity to say, as it becomes the first E2 operator in Japan. To finish, US tariffs so far should have limited impact on our company. We join other companies in calling the return of zero tariff policy for the aviation sector, as has been the case for several decades, reducing complexity and costs for a highly globalized industry.

Francisco Gómez: Thank you, Antonio. The first quarter was marketed by significantly stronger results, which provides us with a solid outlook ahead for sustainable growth.

Francisco Gómez: In 2025, we started to see the first material results of our production-level initiatives.

Francisco Gómez: We will continue to take steps to make the most of our install the capacity to achieve even higher output, optimizing the use of our assets.

Francisco Gómez: And we will keep focused on sails in our business units to guarantee our successful growth trajectory.

Francisco Gómez: Let me now take the opportunity to say, Domu Aligato and Yokosuo to ANA, as it becomes the first E2 operator in Japan, to finish U.S. therapists so far should have limited impact on our company.

Francisco Gómez: and we join all the companies in calling the Return of Zero Tarship Policy for the Aviation Sector.

Francisco Gómez: S has been the case for several decades, reducing complexity and causes for a highly globalized industry.

Francisco Gomes Neto: We continue to work hard, always embracing the foundation for our culture, safety first and quality always. Let's now move to the Q&A session of the call.

Francisco Gómez: We continue to work hard, always embracing the foundation for our culture, safety first and quality always.

Let's now move to the Q&A session of the call.

Operator: Please hold for the Q&A session. We will now start the Q&A session. The first part of the question and answer session will be exclusively for equity research analysts and investors. The second part of the Q&A will be only for the press. We highlight again, this conference call is being conducted in English with translation to Portuguese. Please let me say a short announcement for Portuguese speakers.

Please hold for the Q&A session.

Francisco Gómez: We will now start the Q&A session. The first part of the question and answer session will be exclusively for equity research analysts and investors.

Francisco Gómez: The second part of the Q&A will be only for the press.

conducted in English with translation to Portuguese. [inaudible]

Please, let me say a short announcement for Portuguese speakers.

Operator: [Foreign language]

Antonio Carlos Garcia: By the way, it was 30 basis points, Marcelo. Sorry. Or 3% of your points or 30 basis points. Sorry for that.

Francisco Gómez: This conference is originally being held in English. To listen to the translation in Portuguese, press the Interpretation button on the Zoom platform and select the Portuguese language.

Francisco Gómez: After selecting the language in the Interpretation button, also click on Mute Original Audio on the platform to improve the quality of the transmission in Portuguese.

Francisco Gómez: We request participants interested in asking questions to press star-to-nine and the phone at any time or press the raise-a-hand button on the platform.

Francisco Gómez: When your name is announced, please press star then six on the phone or make sure your microphone is on and start your question.

We will also answer a question since via the platform chat.

Francisco Gómez: If you need assistance, please use the Q&A button on the platform.

Francisco Gómez: to give everyone a chance to participate we request just one question per call. [inaudible]

Francisco Gómez: The first question comes from Marcelo Motta with JP Morgan. Please go ahead.

Francisco Gomes Neto: Perfect. Thank you, Antonio.

Antonio Carlos Garcia: Thank you.

Operator: Thank you. The next question is from Myles Walton with Wolfe. Please go ahead. Please hold a second.

Francisco Gomes Neto: Perfect. Thank you, Antonio.

Antonio Carlos Garcia: Thank you.

Operator: Thank you. The next question is from Myles Walton with Wolfe. Please go ahead. Please hold a second.

Grace Hota II

Marcelo Motta: Perfect. Hi, everyone. Thanks for taking my question. The first one is on the commercial. If the company can comment about what they mentioned on the release, you know, the potential one-time impact from supplier credit, if they could try to quantify what this impact was, please. Thank you.

Perfect.

Speaker Change: Hi, everyone. Thanks for taking my question. The first one is on the commercial. If the company can comment about what they mentioned on the release, you know, the potential one time impact from supplier credit, if they could try to quantify what was the impact please. Thank you. Thank you.

Antonio Carlos Garcia: By the way, it was 30 basis points, Marcelo. Sorry. Or 3% of your points or 30 basis points. Sorry for that.

Speaker Change: First of all, it was 30 basis points for Marcelo, sorry, or 3% of 0%, 30 points of 30 basis points, sorry for that.

Marcelo Motta: Perfect. Thanks, Antonio.

Antonio Carlos Garcia: Thank you.

Operator: Thank you. The next question is from Myles Walton with Wolfe. Please go ahead.

Thank you.

Miles Walton: The next question is from Myles Walton with Wolves. Please go ahead.

Myles Walton: Good morning. I was hoping on the tariff front you could give a little bit more color. I think the 90 basis points is probably related to your cost within Executive, but maybe Francisco or Antonio, is there any hesitation on US airlines accepting the E175s in the near term, given the tariff on imports? Are they choosing to maybe wait a little bit longer to see if they're negotiated away? Thanks.

Speaker Change: I think the 90 based points is probably related to your cost within executives, but maybe Francisco Antonio, is there any hesitation on US airlines accepting the 175s?

Speaker Change: In the near term, given the tariffs on imports, are they choosing to maybe wait a little bit longer to see if they're negotiated away. Thanks.

Antonio Carlos Garcia: Thanks, Milo. Great question. We still don't know everything. That's why we said our first estimate. I would say we have, as you know, impact in our executive aviation in first place, and then also in our service division. We have already the first aircraft being taken in Brazil, and the US customer is paying is bearing the cost for that tariff. In fact, what we are pursuing is who is responsible for the importation process bear the cost of tariffs. We do not have, at least today, a setback on commercial, but it's too early to confirm 100%. Okay. Let's say, if I would split the 90 basis points, it's highly concentrated in the new executive aviation and service and support.

Speaker Change: Thanks, my great question and we still don't know everything, that's why we said our first estimate.

Speaker Change: I would say we have, as you know, impacting our executive division. Let's first place them also in our starts with division.

Speaker Change: and at least we have arrived the first circuit being taken in Brazil.

Speaker Change: and the U.S. Cosmi Spain is being the cause for the terrorist. [inaudible]

Speaker Change: In fact, what you are pursuing is Luis's Responsible for the Importation Profit. [inaudible]

Speaker Change: Beer, The Cross of Terrorists. We do not have at least today assessing back on commercial, but-

Speaker Change: It's too early to confirm 100%. But, I'd say, if I would split it at 90 base point is...

Speaker Change: Highly concentrated new executive aviation and service and support, and we as a company who has a lot of US content in our aircraft.

Antonio Carlos Garcia: We, as a company who has a lot of US content in our aircraft, we always deduct the US content in order to, I would say, pay the taxes. That's why we are still confident we could continue to run our business here, even with this bad negative impact. Francisco, you want to complement maybe this?

Speaker Change: We always did the US quantity order to, I would say, pay the taxes. That's why we are so confident we could continue to run our business here, even with the bad negative impact. Francisco, you want to complement maybe this? [inaudible]

Francisco Gomes Neto: No.

Antonio Carlos Garcia: On the tariff side.

Francisco Gomes Neto: It's enough.

Well, want me to turn off the light? Turn off.

Antonio Carlos Garcia: I hope I answered your question, Myles Walton.

Myles Walton: That's perfect. Thanks, Antonio.

Antonio: I hope I answer your question, Myles. That's perfect. Thanks, Antonio.

Antonio Carlos Garcia: Thank you.

Thank you.

Operator: The next question is from Kristine Liwag with Morgan Stanley. Please go ahead.

Speaker Change: The next question is from Christine Liwag with Morgan Stanley . Please go ahead.

Kristine Liwag: Hey, good morning, everyone. Francisco, Antonio, and Gui. I mean, first of all, congratulations on the record high company backlog, but the market always wants more orders. With that, I mean, on the KC-390, can you provide an update on where you are with India, Saudi Arabia, and Poland? And also we've seen bundling as very successful in aerospace. We've seen this with Airbus and their success with selling the A220 with the A320. Can you talk about bundling opportunities for the KC-390 and the E2s?

Christine Liwag: Hey, good morning, everyone, Francisco, Antonio, and Guy. I mean, first of all, congratulations on the record-high company backlog.

Christine Liwag: but the market always wants more orders. So with that, I mean, on the KC-390, can you provide an update on where you are with India, Saudi Arabia and Poland?

Christine Liwag: And also, we've seen bundling as very successful in aerospace, we've seen this with Airbus, and their success with selling the A220 with the A320. Can you talk about bundling opportunities for the KC390 and the E2?

Francisco Gomes Neto: Hello, Kristine. Thanks for your question. Well, you're bringing a good idea, eh? It might be an opportunity. Anyway, we are working in several campaigns for both, for KC-390 and E2s. The India project is moving. We are talking to the customer. We are getting more questions about the product, and we are working the next steps. We expect to have some more improvements within the next, you know, 1, 2 years in India. India is a big program, as you know, opportunity from 40 to 80 AC aircraft. We are also working in other campaigns with the C-390, other customers that we cannot disclose at this point of time. We expect some results during the year as well. E2, we are not...

Hello, Christina, thanks for your question.

Speaker Change: You're being a good idea, it might be an opportunity, but anyway, we are working in several campaigns for both.

Speaker Change: for KC 2019, and Ehtos, the India project is moving, we are talking to the customer, we are getting more questions about the products.

and we are working the next step.

Speaker Change: We expect to have some more improvements to within the next, you know, one, two years in India, but in India is a big program, as you know, from 42 opportunities from 40 to 80 aircraft. [inaudible]

Speaker Change: We are also working in other campaigns with the Citroenites, other customers that we cannot disclose at this point of time, but we expect

Speaker Change: Some results during the year as well. E2, E2 is not different. We are working in several campaigns.

Francisco Gomes Neto: The E2 is not different. We are working in several campaigns. Yeah. The competition is not easy on both sides, you know, with the KC or the E2s. We believe we have good chances in many campaigns. Also in commercial aviation, we expect to bring some good news during the year.

Francisco Gomes Neto: We are working in several campaigns. Yeah. The competition is not easy on both sides, you know, with the KC or the E2s. We believe we have good chances in many campaigns. Also in commercial aviation, we expect to bring some good news during the year.

Speaker Change: at competitions of the year in both sides, with the KC or the E2s, but we believe we have good chances in many campaigns.

Speaker Change: So also in commercial aviation, we expect to bring some good news during the year. [inaudible]

Antonio Carlos Garcia: Francisco, just to complement. For the KC, what we are seeing as a bundle is that some, especially the NATO countries, they are using the same contract, you know, which makes the procurement process much faster than before.

Speaker Change: The President just complimented him for the KC. What he has seen is a bundle that some, especially the NATO countries, they are using the same contract and which makes the procurement process much faster than before. [inaudible]

Francisco Gomes Neto: Yeah. Bundling between KC and E2, we don't have any example.

Speaker Change: Yeah, but a bundling between KC and E2, we don't have any, any, an example, yes, we've seen, not yet. Not yet, so that's not their optimistic, so we hope to see that kind of bundling soon.

Antonio Carlos Garcia: Not yet.

Francisco Gomes Neto: We've seen.

Antonio Carlos Garcia: Not yet.

Kristine Liwag: Not yet. That sounds very optimistic. We hope to see that kind of bundling soon.

Francisco Gomes Neto: Well, I mean, it's not a bundling, but in case of Poland, as you brought Poland as an example, we said, well, if we are working the two fronts, opportunities with the E2s in Poland, you know that, and with LOT Polish and KC as well. If we succeed in both, we can bring a lot of initiatives, lot of products and service to be done in Poland. This is a kind of, not a bundling, direct bundling, but an opportunity for the country.

Speaker Change: Well, I mean, it's not abandoning, but in case of Poland, as you brought Poland as an example, we said well.

Speaker Change: If we are working the two fronts, opportunities with the tools in Poland, you know that, and with last Polish ten, KT as well, and if we set seed it in both, we can bring a lot of fun. [inaudible]

Speaker Change: Lot of initiatives, lot of products and service to be done in Poland. This is a kind of not a bundling direct bundling but an opportunity for the country. [inaudible]

Kristine Liwag: It's super helpful. If I could add a second question. The geopolitical environment today, even with the US tariff discussions, right? It shows that we're kind of recentering back into regional powers. There's a reminder that, look, you know, the larger aircraft transport industry is still a duopoly, you know, Boeing and Airbus. At this point, when you talk to different customers, how has the conversation regarding a larger Embraer aircraft evolved in the past few months? You know, I know Francisco, Antonio, you guys have talked about this over the years and, you know, there's been varying concerns and opportunities, but how has that conversation evolved today?

Speaker Change: Super helpful. And if I can add a second question, the geopolitical environment today, even with the US tariff discussions, right? It shows that we're kind of recentering back into regional powers. And there's a reminder that, look, you know, the larger aircraft transport industry is still a de-wapoli, you know, Boeing and Airbus. And so, at this point, when you talk to different customers,

Are there? [inaudible]

How is the conversation regarding a larger Embraer aircraft? [inaudible]

Speaker Change: in the past few months. And you know, I know Francisco and Antonio you guys have talked about this over the years and you know there's this varying concerns and opportunities. Thank you very much.

Kristine Liwag: Because strategically, historically, Boeing was the tip of the trade spear for the US, and all this tariff stuff is a reminder that, you know, this is a net exporting industry for the US. For the other countries that don't have aerospace, you know, this is a strategic weakness in their industries. How should we think about this opportunity? Where is the most recent thinking about this program, and how has that evolved in this dynamic environment?

But, how is that conversation involved today because strategically historically... [inaudible]

Speaker Change: Boeing was the tip of the trade spear for the US, and all this tariff stuff is a reminder that, you know, this is an important exporting industry for the US, but for the other countries that don't have aerospace. Thank you, please.

Speaker Change: You know, this is a strategic weakness in their industries. So how should we think about this opportunity? Where is the most recent thinking about this program and how is that evolved in this dynamic environment? [inaudible]

Francisco Gomes Neto: Well, Kristine Liwag, this is also a good question, not easy to answer specifically. Yes, I mean, customers they have asked us about our plans to go bigger. Actually, we are very focused on selling the E2s, and we are working and investing in new technologies to be prepared for new products in the future. That can be, you know, a bigger executive jet or a bigger commercial jet or even in defense. We are making studies on all fronts. We don't have a decision, but what we're doing in a concrete way is investing in new technologies. You know, technology about more autonomous flights, technology about fuselage, new fuselage, new wings, the cockpit and so on. That's what we are doing.

Speaker Change: Well, Christine, this is also a good question, a good question, not easy to answer.

and we are working in new working and investing in new technologies.

to be prepared for new projects. [inaudible]

In the future, that can be a bigger...

Speaker Change: Executive Jet, or a bigger commercial jet, or even a defense? [inaudible]

So we are making studies in all fronts.

Speaker Change: We don't have a decision, but what we're doing in a concrete way is infesting in new technologies, you know, technology about more autonomous lights, technology about fuselage, new fuselage, new wings, caught pit and so on. That's what we are doing. But we don't have...

Francisco Gomes Neto: We don't have any concrete decision to go this way or that way.

Speaker Change: Any concrete decision to go this way or that way? [inaudible]

Kristine Liwag: Great. Thank you.

Great, thank you.

Francisco Gomes Neto: You are welcome, Kristine.

You're welcome, Christine.

Operator: The next question comes from the telephone number ending 7519. Please go ahead.

Speaker Change: The next question comes from the telephone number, ending 7519. Please, go ahead.

Steve Trent: Good morning. It's Steve Trent from Citi, and thanks very much for taking my questions, Francisco, Antonio, Luis, and Guy. I was curious in terms of the supply chain. I believe last time you mentioned, for example, that the fasteners for the aircraft was kind of a bit of a bothersome area. I'm wondering if that's improved a little bit or if the pressure point maybe has shifted over to another area of the supply. Thank you.

Speaker Change: Good morning, Steve Trent from City, and thanks very much for taking my questions, Francisco and Antonio, Luis and Guy. I was curious, in terms of the supply chain, I believe last time you mentioned, for example, that. [inaudible]

The Fast Millage for the Aircraft. .

Speaker Change: was kind of a bit of a bothersome area. And I'm wondering if that's improved a little bit, or if the pressure point maybe has shifted over to another area of the supply. Thank you.

Francisco Gomes Neto: Thank you. Thank you for your question. You know, since two years ago, we have put in place a new structure in our supply chain area, you know, to deal with this, our supply chain issues. In general, we have seen improvements, but bottlenecks are moving from one product to another. Even then, we are progressing. As I mentioned in my opening, we are progressing in bringing the parts we need to, you know, to level our production, which is our main target at the end of the day. We still have some issues, more with fuselage parts that we are still struggling. This year, some types of engines that are still delaying to deliver the parts on time to us.

Speaker Change: Thank you. Thank you for your question. You know, since three years ago, we had to put in place...

Speaker Change: A new structure in our supply chain area, to deal with all supply chain issues. So, in general, we have seen improvements.

but the bottlenecks are moving from one product to another.

But even then, we are progressing as a...

We have mentioned in my...

Hoping we are progressing and bringing the parts we need.

Speaker Change: to level our production, which is our main target at the end of the day. We still have some issues, more with fuselage parts.

Speaker Change: that we are still struggling. This year, some types of engines that are still...

Elaine, to deliver the parts on time it was. [inaudible]

Francisco Gomes Neto: I think we are working very close to the suppliers, and at this point of time, we don't see big issues to deliver our guidance. That's why we are reaffirming our guidance in terms of deliveries between 70 to 75-85 commercial jets and 145 to 155 executive jets. Again, bottlenecks are still there, moving from one part to another, but with the structure we have put in place, we have been able to manage these issues and keep our production running as planned.

Speaker Change: But I think we are working very close to the suppliers.

Speaker Change: And at this point of time, we don't see big issues to delivery our guidance. That's why we are affirming.

Speaker Change: Zepkin Jets. So, again, Walton X, I still am moving from one part to another, but with the structure we have put in place, we have been able to manage these issues and keep our production from running as fast as possible.

Steve Trent: Okay. Really appreciate it. I'll stick to your request of just one question. Thank you, gents.

Jim: OK, really appreciate it and I'll stick to your request of just one question. Thank you, Jim.

Francisco Gomes Neto: You are welcome.

Antonio Carlos Garcia: Thanks, Steve.

You are welcome. Thanks, Steve.

Operator: The next question comes from Andre Ferreira with Bradesco BBI. Please go ahead.

Speaker Change: The next question comes from Andre Saneda with Pradesco PPI. Please go ahead.

Andre Ferreira: Hi. Good morning. I have a question, but first I just wanted to clarify the first answer because I think there was some technical issues with the call. Is it 0.3 percentage points in the commercial EBIT margin or the consolidated EBIT margin? But my real question is actually about the past two reversals in the service margins. How much was the impact of this in the service EBIT margin or in the consolidated EBIT margin? Thank you.

Andrea Ferreira: Good morning. I have a question but first I just wanted to clarify the first answer because I think there was some technical wishes with the call. Is it 0.3 percentage points in the commercial a bit margin or the consolidated a bit margin? 0.3 percentage points in the commercial a bit margin or the consolidated a bit margin or the consolidated

Andrea Ferreira: But my real question is actually about the past two reversals in the service margins, how much was the impact of this in the service of the margin or in the consolidated EBIT margin. Thank you.

Antonio Carlos Garcia: Andre, it's Antonio speaking here. The 3% was just supplier credits for the quarter inside the commercial aviation. Okay? I would say we were on average for Service & Support around 15%. We report a little bit lower. What for us is, it was 5 basis points or 50 basis points less than average, I would say. In our view, it's just a temporary effect that will be compensated throughout the years. Okay? It was really something that mix, as Francisco said, one-time effect with customers and this and this and this. I would say put it all together, we perform 5% less EBIT margin in the quarter, but we are not worried about the whole year. Just to make it clear.

Andrea Ferreira: Dresantoni speaking here, the 3% was just a supply credit for the quarter inside the commercial

Andrea Ferreira: and, I would say, we went on average for Samsung support around 15%, we report a little bit lower.

Andrea Ferreira: But for us, it was a five-base point, or 50-base point less than average, I would say, but in our view, it's just a temporary effect that will be compensated throughout the years, okay? [inaudible]

It was really something that...

Mixed as Francisco said, untime effect. [inaudible]

Speaker Change: with customers in this and this and this, I would say put the whole together, we perform five percent less ABAT margin in the quarter but we are not seeing, we are not worried about the whole year. [inaudible]

Antonio Carlos Garcia: For sure, we have an impact in consolidation, but I would say we are talking about the last $20 million that would bring us even to a higher margin of almost 6.5 to 7%. That was the effect on the consolidated base, more or less.

Speaker Change: just to make it clear. For sure, we have an impact on consolidation, but...

Speaker Change: Okay, we are talking about the last 20 million that would bring us even to a higher margin, almost six, six and a half to seven percent. It was the effect and the consolidated makes more or less. [inaudible]

Andre Ferreira: Okay.

Antonio Carlos Garcia: Commercial is 3% for the quarter on.

Okay, so I don't know

Speaker Change: who may show his three percent for the quarter. Okay, all right, thank you.

Daniel Gasparete: Okay. All right. Thank you.

Andre Ferreira: Okay. All right. Thank you.

Antonio Carlos Garcia: Welcome.

Operator: The next question comes from Jordan Leone with Bank of America. Please go ahead. Mr. Leone?

Jordan Leone: The next question comes from Jordan Leoni, with Bank of America, please go ahead.

Operator: Jordan?

Mr. Leonel.

Jordan Leone: Hi. Sorry. Can you hear me now?

Jordan Lyonnais: Hi. Sorry. Can you hear me now?

All right, sorry, can you hear me now? [inaudible]

Antonio Carlos Garcia: Yep. Yes. Yes, we can.

Speaker Change: Good morning. Thank you for taking the question. Could you guys talk about how you're thinking about the Pratt Strike and any impact for how you're managing through that for services or for actual

Jordan Leone: Great. Good morning. Thank you for taking the question. Could you guys talk about how you're thinking about the Pratt & Whitney strike, and any impact or how you're managing through that for services or for actual engine deliveries?

Jordan Lyonnais: Great. Good morning. Thank you for taking the question. Could you guys talk about how you're thinking about the Pratt & Whitney strike, and any impact or how you're managing through that for services or for actual engine deliveries?

Antonio Carlos Garcia: The strike at Pratt & Whitney, Francisco. We talked today.

This track is prepared with an impressive good talk today.

Francisco Gomes Neto: Well, I mean, actually, Jordan, we are still trying to get more information about this. At this point of time, we don't have enough information to measure potential impact in our business.

Speaker Change: Well, I mean, actually, Jordan, we are still trying to get more information about this and at this point of time we don't have enough information to measure potentially back in our business.

Jordan Leone: Got it. Okay. Thank you so much.

Jordan Lyonnais: Got it. Okay. Thank you so much.

Okay, thank you so much.

Antonio Carlos Garcia: Thank you, Jordan.

Operator: Thank you. The next question comes from Lucas Marquiori with BTG Pactual. Please go ahead.

Thank you. The next question comes from Lucas Marquiori.

with BTG-Pactual, please go ahead.

Lucas Marquiori: Thanks, guys. Thanks for the call. Good morning. My question is more on coming back to the topic of US tariffs. If you could provide some clarity on some of these initiatives you guys mentioned you have on mitigating the impacts. I'm assuming there's at least some impacts, right, coming especially from executive, maybe commercial. So what's the workaround plan around there? I mean, if it, maybe you are relocating production to some other facilities outside of Brazil or maybe passing through prices. How does your contracts work with this changing law environment? I mean, just to kind of giving some color on the measures to mitigate tariffs, it would be nice, guys. Thanks.

Speaker Change: Thank you guys, Steve Fertical, morning. My question is more on coming back to the topic of US Air, so if you could provide some clarity on...

Measures, to mitigate errors, it would be nice, guys, thanks.

Antonio Carlos Garcia: Lucas, good morning. It's Antonio speaking here. Let's walk through a little bit the story. Now, when we set the guidance for 2025, I remember some of you said, "Antonio, it seems too modest, the guidance you guys are placing." We said at the time, we see a lot of volatility. At one point, we were first seeing some volatility. I would say I was more in the idea of inflation than tariffs, but you have the tariffs in front of your nose. I would say we have two options, either we stop and start the bleeding or we do something against it. Since beginning of the year, the company already decided to wait and see what's going to happen, don't do crazy things, don't invest further, don't grow the capacity without having a clear vision.

Speaker Change: Lucas, good morning, Zanconi, speaking here, let's walk through a little bit the story. When we set the guidance for 2020-25, I remember Sonoff, you said, Antonio.

Speaker Change: It seems too modest, the guys that you guys are playing. [inaudible]

Speaker Change: and we said that at the time we see a lot of volatility. That's one point. We were first seeing some volatility, I would say. I was more than the idea of inflation than tires, but we have the tires in front of your nose.

Speaker Change: I would say we have two options, either we stop and start to bleeding or we do something against it.

Speaker Change: And since the beginning of the year, the company already decided to...

Speaker Change: Wait and see what's going to happen, don't do crazy things, don't invest further, don't grow the capacity without having a clear vision, don't say. If you put all together we are talking about internal cost measures. [inaudible]

Antonio Carlos Garcia: Let's say, if you put all together, we are talking about cost, internal cost measures in our planning that we were already foreseeing, I would say, this type of stability. That's one point. The other point is how to manage the tariffs impact because, just to give an example, Brazil has to pay 10%. But if you take out the US content as a temporary importation, that goes, depends on the aircraft. Between 6 and 5 or 6 and a half, depends on the aircraft. You know, that's more or less if you put all together. That's the number we commit to all of you, 19 basis points in our EBIT margin for the next three quarters, okay? Not a year effect. We are not waiting.

Speaker Change: and our planning, that we were a red-first seeing, I would say this type of stability, that's one point.

and the other boys in how to measure. Thank you.

Altio Manage Detire Sympax, because...

Just to give an example, Brazil has to pay 10% [inaudible]

Speaker Change: But if you take out the U.S. content as a temporary importation, that goes...

Depends on the aircraft. The aircraft.

Speaker Change: between six and five or six and a half depends on the aircraft. You know, that's more or less if you put all together. That's the number we comment to all of you, 19 basis points, you are able to margin for the next three quarters, okay? Not a near effect.

Antonio Carlos Garcia: As a Brazilian company, we have crisis every year and we need to be able to find a way to compensate. We don't know all effects. Now, that's a very premature effect that we are seeing right now. That's why I would say if you see something different in Q2 or Q3, we are going to place new numbers. At least today, in our view, we are confident to keep the margin. Francisco, you want to comment anything else?

Speaker Change: and we are not waiting. As a Brazilian company, we had crisis every year. We need to be able to to find a way to compensate the birth.

Speaker Change: We don't know all effects, that's very premature effect that we are seeing right now.

Speaker Change: That's why, I would say, if you see something different in Q2 or Q3, we are going to place new numbers, but at least today in your view, we are confident to keep them large.

Francisco Gomes Neto: Nothing from my side.

Antonio Carlos Garcia: I hope I answered your question, Lucas.

Patrick,

I hope that it's your custom Lucas.

Lucas Marquiori: It does. Thanks, guys. Have a good day.

Ida, thanks guys, have a good day. Thank you.

Antonio Carlos Garcia: Thank you.

Francisco Gomes Neto: You as well.

You as well.

Operator: The next question comes from Daniel Gasparete with Itaú BBA. Please go ahead. Mr. Gasparete, you're muted. We cannot hear you.

Speaker Change: The next question comes from Daniel Gasparete with Itaú BDA. Please go ahead.

Mr. Gasparete, you're muted. We cannot bore you.

Daniel Gasparete: Sorry. Thank you very much. Can you hear me right now?

Operator: Yes.

Speaker Change: Laurie, thank you very much. Can you hear me right now? Yes. Thank you very much.

Daniel Gasparete: Thank you very much. Guys, thank you very much for the opportunity. My first question would be related to the suspension of Boeing deliveries in China. Would like to get your view if there's any kind of opportunity arising for you guys coming from that region. That'll be the first question. The second one would be related to the comment that Antonio did related to the cost reduction initiatives on the executive side. I would just like to explore more about it, if it was already considered in your guidance, and how do you see that playing along during the rest of the year. Thank you very much.

Speaker Change: So guys, thank you very much for the opportunity. My first question would be related to the suspension of point believers in China. I would like to catch your view.

Speaker Change: if there's any kind of opportunity or rising for you guys coming from that region.

Speaker Change: that will be the first question. And the second one will be related to the comment that Antonio did related to the cost of reduction initiatives on this active site. I would just like to explore more about it. It was already considered in your guidance and how do you see that plan along the way in the rest of the year. Thank you very much. Thank you very much.

Francisco Gomes Neto: Thank you, Daniel. I will start with the comments about China, and Antonio will help with the cost reduction that he mentioned before. Things in China for us, I mean, have not changed. I mean, both of our aircraft, E190 and E195 are certified by the Chinese authorities. We have been working with potential customers in China to introduce our new generation of E2 that, in our opinion, they do not compete with the Chinese aircraft, right? We go just in the middle. Recently, we delivered 2 aircraft to Hunnu, a Mongolian company, and they will fly to important Chinese cities. They will showcase how they do first time in China, and they see how nice, how good, and how efficient is our aircraft. Again, nothing new at this point of time.

Thank you, Danielle. I just talked to Paul Chyman.

and Antonio Rios.

Speaker Change: Alpoida, got through a lecture that they had mentioned before. Well, things in China for us, I mean, have not changed it.

Both of our aircraft, E190 and E195, are certified.

Speaker Change: by the Chinese authorities. You know, have been working with with potential customers.

in China, to introduce... [inaudible]

our

Speaker Change: New Generation of E2, that in our opinion, they do not compete with the Chinese Aircraft, right? We go just in the middle. And recently, we delivered the two Aircraft to the new Anungolian company, and they will fly.

Speaker Change: First time in China, you see how nice, how good, and how efficient is our aircraft. So again, nothing new at this point of time, we continue working in opportunists to introduce our eJets, e2Jets in China.

Francisco Gomes Neto: We continue working on opportunities to introduce our E-Jets E2 jets in China.

Antonio Carlos Garcia: To make it clear, the biggest impact on tariffs is related to executive aviation. We as a company are one company with four divisions. As one team, when we have an issue, we all reduce costs. It's not only related to executive aviation. We implement additional cost reduction measures in order to try to reduce offset part of this cost increase driven by tariffs. You could take all possible measures. You just see our SG&A costs. Already Q1 was much lower than previous year. That's more or less what we are doing in order to absorb and try to find a way to not jeopardize our numbers.

So...

Let's put it just to...

Speaker Change: to make it clear, the biggest impact on services related to executive aviation. And we as a company, we are one company with...

four divisions and

As a one-team, when you have an issue, we all...

Redo Squad, it's not only religious activity aviation.

Speaker Change: We implement additional costs of reduction measures in order to try to reduce offset parts of this cost increase during the by-tares. That's the...

Daniel Gasparete: Great. Thank you very much, Francisco, Antonio. Have a nice day.

Speaker Change: Great, thank you very much Francisco, Antonio. Have a nice day.

Antonio Carlos Garcia: Thank you. Have a good one.

Francisco Gomes Neto: Thank you. Bye-bye.

Thank you, have a great day.

Operator: The next question comes from Lucas Laghi with XP Investimentos. Please go ahead.

Speaker Change: The next question comes from Lucas Laghi with XP Investments. Please go ahead.

and Guilherme Paiva. Thank you.

Lucas Laghi: Good morning, everyone. Good morning, Francisco, Antonio, Gui. I'd like to follow up on potential new order announcements, especially on the C-390. I mean, we have been seeing several efforts from Embraer to sell the aircraft in the United States, right? I think you guys in the third conference in the country to showcase the aircraft. Could you please remind us the strategy that you guys are playing to enter this market? I mean, do you plan to sign new partnerships such as the previous one with L3Harris, for example? Do you plan to build a production facility in the US to produce the C-390 there? And how do you see like Trump tariffs in this context for your decision rationale to enter this market in a more significant pace going forward? Thank you, guys.

Speaker Change: Good morning everyone, good morning from Francisco and Antonio Gui. I'd like to follow up on potential new order announcements, especially on the C-390. I mean you have been seen several efforts from Embraer to sell the aircraft in the United States, right? I think you're guys in the third conference in the country to showcase the aircraft.

Speaker Change: Could you please remind us this strategy that you guys are playing to enter this market? I mean, do you plan to sign new partnerships such as the previous one with Altrue Harris, for example? Do you plan to build a production facility in the US? Yes.

Speaker Change: to produce the 390 there. And how do you see like Trump terrorists in this context for the decision rational to enter these markets in a more significant pace going forward? Thank you guys.

Francisco Gomes Neto: Thank you, Lucas, for your question. Yes, absolutely. I mean, besides India that I mentioned before, we see US as a great opportunity for the KC-390. You know, recently last week, Well, we have one C-390 in the US right now. Last week, the aircraft was showcasing in Las Vegas in an event there. So we are now presenting. We participate in an important panel in that event. We are presenting the C-390 as a good alternative for a tanker, but also as a multi-mission aircraft that can revolutionize the US Air Force in terms of productivity. This week, the aircraft went to Tampa, and this Friday, the aircraft will be in Washington also to showcase the product. So again.

Speaker Change: Thank you, Lucas, for your question. Yes, absolutely. I mean, besides India, that I mentioned before, we see US as a great opportunity for the KC-290.

and recently last week the...

Well, we have one featuring acting in the US right now. [inaudible]

Last week the aircraft was showcasing in the large wagons. [inaudible]

Speaker Change: in an event there. So, we are now presenting, we participate in an important panel, in that event we are...

Speaker Change: Presenting the situation in 1990 as a good alternative for it dental but also as a multi-mission aircraft that can revolutionize the US Air Force in terms of productivity. P.D.P.

Speaker Change: This week the aircraft went to Tampa and next this Friday the aircraft will be in Washington also to showcase the product so again and we are working yes with

Francisco Gomes Neto: We are working, yes, with a consulting in the US now to finalize our strategy on how to approach the market. Answer your last question, yes, with a sizable order, the KC-390 will be assembled in the US. The aircraft has already, Lucas, 57% of US content. With an important order, if you secure an order from US Air Force, yes, this aircraft will be assembled in the US. Absolutely. We see as a great opportunity for us and for the US Air Force as well by introducing the KC-390 in its fleet.

Peter,

with a consulting in the US. [inaudible]

Speaker Change: Noah, to finalize our strategy on how to approach the market. And answer your last question, yes.

Speaker Change: with a sizable water, the Kissi to 90 will be assembled in the US. Their crafty has already been completed at Lucas.

57% off the US content.

Speaker Change: and with an important order, if you secure an order from US Air Force, yes, this aircraft will be assembled in the US.

Speaker Change: Absolutely. So again, we see as a great opportunity for us and for the U.S. Air Force as well by introducing the KC-19

Lucas Laghi: Thank you, Francisco. Very clear.

Thank you, Francisco Verkier.

Francisco Gomes Neto: You are welcome. Thank you for the question, Lucas.

You are welcome. Thank you for the question, Lucas.

Operator: Thank you. This concludes the question and answer session for equity research analysts and investors. Now we'll start the Q&A session dedicated to the press. First, we will answer questions in English, and then we'll answer questions in Portuguese. We'll also answer questions sent via the platform chat. Please let me say a short announcement for Portuguese speakers. We ask participants interested in asking questions to press the Raise a Hand button on the platform. When your name is announced, please make sure your microphone is on and start your question. If you need assistance, please use the Q&A button on the platform. To give everyone a chance to participate, we request to ask just one question. The first question comes from Cristian Favaro with Valor Econômico. Please go ahead.

Thank you.

Speaker Change: Thank you. 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. First, we'll answer questions in English, and then we'll answer questions in Portuguese. We'll also answer questions sent via the platform chat. Please let me say a short announcement for Portuguese speakers.

Speaker Change: This conference is originally being held in English. To listen to the translation in Portuguese, press the Interpretation button on the Platform and select the Portuguese language. Also, click on mute original audio on the Zoom platform to improve the quality of the Portuguese transmission.

Speaker Change: We ask participants interested in asking questions to press the raise the hand button on the platform. When your name is announced, please make sure your microphone is on and start your question. If you need assistance, please use the Q&A button on the platform. 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.

The first question comes from Gritian Favre, with Valour, economic.

Please go ahead.

Cristian Favaro: Guys, it's just a follow-up questions. Antonio, I think you mentioned that during Q1, the company was not capable of delivering 2 aircraft in the commercial segment due to conversion issues. Can you clarify what happened? Just I wonder. I'm curious, actually. Thank you very much.

Cristian Favaro: It's just a follow-up questions, Antonio, I think you're a message that during the first quarter...

Speaker Change: The company was not capable of delivering two aircrafts in the commercial segments due to commercial issues. Can you clarify what happened? Just a one-and-a-one gear reduction. Thank you very much.

Francisco Gomes Neto: Yes, Cristian. Bon dia. As you said, you have questions contract wise in aberto or you said not in finalizado documentation. In English, sorry. Sometimes you have the contract not finished or do not have all paperwork in order to deliver the aircraft towards the customer or the lessors. That's why sometimes take more 1 or 2 weeks then we ship the aircraft. It was just a timing matter for 2 aircraft. In regards to output, which is really important for us, we were able to finish those aircraft, but the commercial invoicing and contract to the customer took 2 weeks more than we were expecting. Just that. Not a big issue, but it's just bureaucracy sometimes. It does not help us.

It's just a question.

Speaker Change: Good morning, do you sometimes have open contractual issues or have you not yet finalized the documentation?

Anglici, sorry.

Speaker Change: Sometimes you have the content not finished or you do not have all the paperwork in order to deliver the aircraft towards the customer on the left source.

Speaker Change: And that's why sometimes take one or two weeks, then we shift the aircraft. It's just was a tiny matter for two aircraft. But if you guys are all to put, which is...

Speaker Change: It's really important for us, we were able to finish those aircraft, but the commercial avoid, seeing and contact to the Cosmet took two weeks more than we were expected. Just that, not a big issue, but it's just bureaucracy, sometimes there's no troubles. [inaudible]

Cristian Favaro: No, no. Okay, thank you very much. My questions have been answered by the others. Bye. Thank you.

Speaker Change: Okay, thank you very much. All questions have been answered by the audience.

Francisco Gomes Neto: Thank you, Cristian.

Thank you.

Thank you, Chris.

Operator: Thank you. The next question comes from Jonathan Hemmerdinger with FlightGlobal. Please go ahead.

Thank you. Thank you.

Speaker Change: Thank you. The next question comes from Jonathan Hammerdinger with Flight Global. Please go ahead.

Jonathan Hemmerdinger: Hello there. I hope I think you can hear me. Francisco, we've heard in the last several months, maybe it was last year, that Embraer was taking its time and trying to figure out new technology before moving forward with new development plans. You also sort of discussed or rolled out or talked about a new wing project, wing development project earlier this year. Boeing has said they're studying a new wing and Airbus is also. I'm wondering if you can give me any update on what development is looking like, what technologies look most promising, and if wing work is maybe central or increasingly central to what you're looking at. Thank you.

Speaker Change: Hello there, I hope, I think you can hear me, Francisco, we've heard in the last several months, maybe, maybe it was last year that Embraer was taking its time and trying to figure out new technology before moving forward with new development plans.

Speaker Change: You also sort of discussed or rolled out or talked about a new wing project, wing development project earlier this year, and following has said they're studying a new wing and Airbus is also a wonder if you can give me any update on. [inaudible]

Speaker Change: on what development is looking like, what technologies look most promising, and if wing work is maybe central or increasingly central to what you're looking at. Thank you.

Francisco Gomes Neto: Hello, Jonathan. Thank you for your question. I mean, as I said before, our engineering team is working in the different technologies in different fronts in order to allow us to decide about a new product in the future, right? At this point of time, we are really focused on selling the aircraft we have that are modern and competitive. We see a lot of opportunities. I mean, we have the highest backlog ever of orders in the company. There's no other progress that I have to report to you in terms of wings or fuselage or other parts.

Speaker Change: Jonathan, thank you for your question. I mean, as I said before, our engineering team is working in different technologies in different fronts in order to

Speaker Change: followers to decide about a new product in the future, right? [inaudible]

At this point of time, we are really...

Focus on selling the...

the aircraft we have that are more than in competitors. Thank you very much.

Speaker Change: in the company. And there's no other progress that I have to report to you in terms of wings or fuselage or other parts. We are just working investing in those new technologies. Thank you very much.

Francisco Gomes Neto: We are just working, investing in those new technologies, you know, as I said before, to be prepared to make a decision in a point of time in the future.

Speaker Change: to be prepared to make a decision in a point of time in the future. Thank you.

Jonathan Hemmerdinger: Thank you very much. I think follow-up or no? Maybe I'll pass it along. I think you said one question, so. Thank you.

Thank you very much. Oh, I think. Thank God.

Speaker Change: Follow-up or no, maybe I'll pass it along, I think you said one question. [inaudible]

Francisco Gomes Neto: Thank you, Jonathan.

Thank you.

Operator: Thank you. The next question comes from Gabriel Araujo with Embraer. Please go ahead.

Speaker Change: Thank you. The next question comes from Gabriel Araújo with Embraer. Please go ahead.

Francisco Gomes Neto: Hello.

Operator: Mr. Araujo, you are muted. Mr. Araujo? Apparently, he has left. The next question comes from the chat, and it's from Victoria Moore. Can you give us an idea of what we might expect from Embraer Commercial Aviation at the Paris Air Show?

In this era of the UJU?

Be safe.

Apparently, he has left. [inaudible]

Speaker Change: So the next question comes from the chat, and it's from Victorium Wars. Can you give us an idea of what we might expect from Embraer's commercial aviation at the Paris Air Show?

Francisco Gomes Neto: Yeah, good question. It's too soon for us to disclose what we're going to do in the air show. We are preparing ourselves for the show as we do every year, but we don't have any news to share with you at this point of time.

Yeah.

Speaker Change: Good question. It's too soon for us to disclose what we're going to do in the air show. We are preparing ourselves for the show as we do every year, but we don't have any news to share with you at this point of time.

Operator: Thank you. Please hold a second. The next question comes from Jonathan Hemmerdinger with FlightGlobal. Please go ahead.

Thank you. Please hold a second.

Speaker Change: The next question comes from Jonathan Hammard, a year with Flight Global. Please go ahead.

Jonathan Hemmerdinger: Well, I'm back. I raised my hand again. Francisco, or the rest of the team, could you tell me or give us any update on the state of the GTF engine issues, the availability of the engines, and your happiness or how you feel about how Pratt & Whitney has been handling the issues as of late and supplying parts and equipment as needed?

Speaker Change: Ron Back, I raised my hand again, Francisco, or the rest of the team, can you tell me or give us any update on the state of the GTF?

Speaker Change: Engine Issues, the availability of the engines and your happiness or how you feel about how Pratt has been handling the issues as of late and supplying parts and equipment as needed. Good.

Francisco Gomes Neto: Oh, thanks for the question, Jonathan. Well, we have been working, I mean, very close with Pratt & Whitney for, you know, for the last 2 or 3 years. We see improvement in both fronts in the engine deliveries to our assembly line. I hope this strike will not disturb this process, but so far they are doing well in terms of GTF deliveries. The new engines we are receiving, I mean, are coming with a lot of improvements already, which will help a lot the wings to stay longer under the wings. I think they are improving and yes, we are happy with the development. Yes, we'd like to.

Speaker Change: Well, thanks for the question, Jonathan. Well, we have been working very, very closely with Pratt and Whitney for a long time.

Speaker Change: for the last two or three years, and we see improvement. [inaudible]

in both fronts,

Speaker Change: in the engine deliveries to our assembly line. This year we, they are...

I hope this is straight to a concern.

Disturbed this process by so far.

Speaker Change: they are doing well in terms of GTS deliveries and also the new engines we are receiving I mean are coming with a lot of improvements already. Thank you very much.

Speaker Change: which we will help a lot, the wings to stay longer under the wings. [inaudible]

So again...

I think they are poori.

Speaker Change: And, yes, we are happy we did development, yes, we would like to.

Francisco Gomes Neto: them to do even faster, but we understand all the complexity of the issues, and we see improvement and I have been working very close to them. Even myself, I meet with them 3 times a year, 3, 4 times a year, just to discuss all the critical points, I mean, related to deliveries, related to a few of the issues, related to MROs and et cetera. We have seen progress, Jonathan.

Speaker Change: and to do even faster, but we understand all the complex of the issues.

Speaker Change: And we seem to have been working very closely with them. Me and myself, I met them three times a year, three or four times a year just to discuss all the critical points and they are related to delivery, related to a few of the issues related to them or those and etc. But we see you have some progress.

Francisco Gomes Neto: Even myself, I meet with them 3 times a year, 3, 4 times a year, just to discuss all the critical points, I mean, related to deliveries, related to a few of the issues, related to MROs and et cetera. We have seen progress, Jonathan.

Jonathan Hemmerdinger: Thank you, Francisco.

Jonathan

Luis Harrison: Thank you. The next question comes from Gabriel Araujo with Reuters. Please go ahead.

Jonathan Hemmerdinger: Thank you. The next question comes from Gabriel Araujo with Reuters. Please go ahead.

Speaker Change: Thank you. The next question comes from Gabriel Araujo with Writers. Please go ahead.

Gabriel Araujo: Hey, folks. Good morning. Sorry about my failed attempt earlier to make a question. Hi Francisco and Antonio. I'd like to ask about the Latin American market, if you have any updates on the specific market. We know you had conversations in the past with GOL, LATAM about introducing the E2s in Brazil for those companies in addition to Azul. About the Mexican market, you have deliveries coming up for the E2 in Mexico. I'd like to know if you see room for the C-390 to also enter that country in the future, and if the E2 negotiations and the purchase by Mexicana would help the C-390 in that market. Thank you.

Speaker Change: About the Mexican market, you have believers coming up for the H.U. in Mexico. I'd like to know if you see room for the C-392 to also enter that country in the future and if they choose negotiations and the purchase by Mexico and I would help the C-392 net market. [inaudible]

Francisco Gomes Neto: Hi, Gabriel. Thanks for the question. In Latin America, starting with Brazil, I mean, we don't have any news to share with you. We have been in contact with potential customers, GOL and LATAM, but we don't have any progress to report to you at this point of time. Azul is our customer. We keep delivering E2s to Azul, which helps with the showcasing, the showcase with the aircraft in Brazil, in the region. Mexico, we are working hard to deliver the first E190 to Mexicana by end of July.

Thank you.

Agabriel, thanks for the question.

Speaker Change: In Latin America, starting with Brazil, I mean, we don't have any news to share with you, we have been in contact with...

Speaker Change: Tua Zhu, with the showcase with the aircraft in Brazil, in the region. [inaudible]

Speaker Change: Mexico, we are working hard to deliver the first UNID to Mexico by end of July . Their craft is already now our final assembly line and this will be also a great opportunity to showcase the aircraft

Francisco Gomes Neto: The aircraft is already in our final assembly line, and this will be also a great opportunity to showcase the aircraft, not only in Mexico, because we have other potential customer in Mexico for that aircraft, but also in North America, right? There we have Porter in the north of North America, and we have Mexicana in the south of North America. Mexico is another potential customer for the C-390, but we don't have any combination between the E2 or C-390, for that market. We are working in both fronts, in Mexico. In Mexicana, now we are delivering the aircraft already, and we'll do the best we can to make the Mexicana operation a great success, which will be very important for our E2.

Speaker Change: Not only in Mexico, because we have other potential customers in Mexico for that aircraft, but also in North America, right? There we have Porter, in the North, in the North America, and in the United States, we have Mexican and in the South, of North America.

Speaker Change: Well, Mexico is another potential customer for the C219, but we don't have any combination between the E2 or C219 for that market. We are working in both fronts.

Speaker Change: in Mexico. In Mexico now we are delivering their props already, and we do the best we can to make the Mexican operation a great success.

Speaker Change: which will be very important for our E2. And in the City United thing, we are working with them with an opportunity to introduce the City United in Mexico as well. Thank you very much.

Francisco Gomes Neto: The C-390, the same. We are working with them, an opportunity to introduce the C-390 in Mexico as well.

Gabriel Araujo: That's great. Thank you.

That's a great day.

Thank you.

Luis Harrison: Thank you. This concludes the question and answer session in English for the press. This Q&A section is going to be conducted in Portuguese. To switch to English, please press the interpretation button on the platform and then select English. Agora, nós vamos iniciar a sessão de perguntas e respostas em português. Pedimos aos jornalistas interessados em fazer perguntas que pressionem a qualquer momento o botão levantar a mão, e quando tiverem seu nome anunciado, ativem seu microfone e façam a sua pergunta. Responderemos também as perguntas enviadas, as perguntas escritas enviadas através do chat da plataforma. Se houver necessidade de assistência, por favor, solicite via botão Q&A na plataforma. Para que todos tenham a chance de participar, pedimos que façam apenas uma pergunta por vez. A primeira pergunta vem do chat, e é do Ricardo Meier do site Airway.

Operator: Thank you. This concludes the question and answer session in English for the press. This Q&A section is going to be conducted in Portuguese. To switch to English, please press the interpretation button on the platform and then select English.

This concludes the question-announcer, session, and English for the press.

This Q&A faction is going to be conducted in Portuguese. [inaudible]

Speaker Change: to switch to English, please press the interpretation button on the platform and then select English.

Speaker Change: Now, we will begin the Q&A session in Portuguese. We ask journalists interested in asking questions to press the Raise Hand button at any time, and when their name is announced, activate their microphone and ask their question.

Speaker Change: We will also respond to written questions sent through the platform's chat.

Speaker Change: If you need assistance, please call on the Q&A button on the platform.

Speaker Change: So that everyone has a chance to participate, we ask that you ask only one question at a time.

Speaker Change: The first question comes from the chat and is from Ricardo Meier, from the Airway site.

Operator: [Foreign language]

Luis Harrison: Poderiam comentar sobre as recentes decisões da Airbus de postergar o desenvolvimento de aeronaves movidas a hidrogênio e da Boeing e da NASA de aprofundarem estudos no contexto TBW, em vez de concluírem o protótipo X-66? Seria um indício de que uma nova geração de aeronaves comerciais será mais convencional do que imaginava? A Embraer concorda que qualquer novo jato comercial poderá ser uma evolução e não uma revolução?

Operator: [Foreign language]

Ricardo Mayer: Could you comment on Airbus's recent decisions to postpone development

Ricardo Mayer: of hydrogen-powered aircraft and of Boeing and NASA deepening studies in the TBW context instead of completing the X66 prototype.

Ricardo Mayer: Would it be an indication that a new generation of commercial aircraft will be more conventional than imagined? Embraer agrees that...

Qualquer só um segundo.

Ricardo Mayer: That any new commercial jet may be an evolution and not a revolution?

Francisco Gomes Neto: Ricardo, obrigado pela sua pergunta, é o Francisco aqui. Desculpe, mas a gente não vai comentar nada sobre decisões da Boeing ou da Airbus, são decisões deles. O que eu posso falar é sobre a Embraer, né? A Embraer, como eu já disse antes, em outras respostas, a gente vem investindo em novas tecnologias, né? Sejam elas relativas à fuselagem, às asas, ao cockpit, etc. Pra nos preparar aí pro lançamento de um novo produto no futuro, né? Seja ele um avião executivo, um avião comercial ou um de defesa. É isso que eu posso dividir com você, nesse momento.

[Analyst]: [Foreign language]

Francisco Gómez: Ricardo, thank you for your question. It's Francisco here. Sorry, but we don't...

Ricardo Mayer: I will not comment on Boeing and Airbus decisions, those are their decisions, what I can talk about is Embraer. Embraer, as I have said before, in other responses, we have been investing in new technologies.

Ricardo Mayer: etc, and to prepare us for the launch of a new product in the future, whether it is an executive aircraft, a commercial aircraft, or a defense one, and that's what I can share with you at this moment.

Luis Harrison: Muito obrigada. A próxima pergunta também é do chat e vem do Nelson During, do DefesaNet: qual o âmbito e o escopo do acordo assinado com a Turquia na última LAAD, em abril? Inclui desenvolvimentos militares?

Operator: [Foreign language]

Ricardo Mayer: Thank you very much. The next question is also from the chat and comes from Nelson Durin, from Defesa Net. What is the scope and extent of the agreement signed with Turkey at the last HALAD in April ? Does it include military developments?

Francisco Gomes Neto: Oi, Nelson, obrigado pela pergunta. O escopo do acordo MoU que assinamos lá com a Turquia na LAAD é pra uma cooperação tecnológica, né? Desenvolvimento de partes e peças conjuntamente. Nós temos intenção de expandir a nossa capacidade de produção dos aviões E2 e a Turquia tem uma indústria aeronáutica desenvolvida. Ao mesmo tempo, nós temos interesse de introduzir o E2 naquele mercado, o que beneficiaria também essa parceria. Basicamente, as duas frentes que tão previstas nesse escopo é desenvolver partes e peças para aviação comercial e um trabalho conjunto pra introdução dos aviões da Embraer naquele país.

Francisco Gomes Neto: [Foreign language]

Speaker Change: O Nelson, thank you for the question. The scope of the agreement, the MOU, that we signed there with Turkey, is for technological cooperation.

Development of parts.

Speaker Change: and parts together, we intend to expand our production capacity of E-2 aircraft and Turkey has a developed aerospace industry. And, at the same time, we are interested in introducing the E-2 into that market.

Speaker Change: which would also benefit this partnership. These are basically the two fronts that are planned in this scope, developing parts and pieces.

Luis Harrison: Muito obrigada. A próxima pergunta vem de Rafael Coraccini, com Inteligência Financeira. Por favor, pode prosseguir.

Operator: [Foreign language]

Speaker Change: The next question comes from Rafael Coracine, with financial intelligence. Please, go ahead.

Rafael Coraccini: Vocês me ouvem?

Raphael Coraccini: [Foreign language]

Hey, what's taking you all the way?

Francisco Gomes Neto: Sim, estamos ouvindo, Rafael, pode seguir.

Francisco Gomes Neto: [Foreign language]

Yes, we can hear you, Rafael. Go ahead.

Rafael Coraccini: Legal, obrigado por me atender. A pergunta é ainda sobre a questão do controle de custos. Eu queria entender se isso envolve mudança de fornecedores, se existe a possibilidade de a Embraer trocar fornecedores americanos por conta da questão das tarifas, trocar por outros, de outras localidades, e em quais segmentos exatamente.

Raphael Coraccini: [Foreign language]

Speaker Change: Cool. Thank you for assisting me. The question is still about cost control. I wanted to understand if this involves changing suppliers.

Speaker Change: Is there a possibility for Embraer to switch American suppliers, due to the issue of tariffs, and replace them with others from different locations, in which segments exactly?

Antonio Carlos Garcia: Bom, vou responder. Essa não, na indústria aeroespacial, você não consegue trocar fornecedores do dia para noite. Então, são medidas realmente de corte de orçamento interno para tentar combater o aumento dos custos de tarifa. Não, nada muito especial, assim. É apertar o cinto mesmo e passar essa fase, tá? Não tem para trocar de fornecedor na aeroespacial, você precisa de anos para fazer isso. Então, não tem nenhuma relocação de produção, nada disso. É trabalhar na estrutura que temos hoje. De novo, né, nós temos quatro divisões, todas elas trabalham dentro do mesmo princípio, o que vale é o todo.

Antonio Carlos Garcia: [Foreign language]

Speaker Change: Nothing too special, it's really about tightening the belt and getting through this phase. To switch suppliers in Aerospace, it takes years to do so, so there's no production relocation, nothing like that. It's about working with the structure we have today.

Speaker Change: And, again, we have four divisions, all of them working under the same principle, which applies to the whole.

Rafael Coraccini: Maravilha, obrigado.

Raphael Coraccini: [Foreign language]

Antonio Carlos Garcia: De nada.

Antonio Carlos Garcia: [Foreign language]

Maravilha. Obrigado.

I don't know.

Luis Harrison: A próxima pergunta vem de Rodrigo Rott, com Aeroflap. Por favor, pode prosseguir. Senhor Rott, você tá mutado. Não conseguimos te ouvir.

Operator: [Foreign language]

Speaker Change: The next question comes from Rodrigo Roth with Aeroflaps. Please, go ahead.

Mr. Roth, you are muted.

Rodrigo Rott: Vocês estão me ouvindo?

Rodrigo Rott: [Foreign language]

Luis Harrison: Agora sim, obrigada.

Operator: [Foreign language]

We couldn't, sir. Can you hear me? Now, yes. Thank you. Now, yes.

Francisco Gomes Neto: Estamos agora.

Francisco Gomes Neto: [Foreign language]

Rodrigo Rott: Eu gostaria de fazer uma pergunta sobre o E2 versão cargueira. Qual é que é os planos da Embraer pra, vamos dizer, pra fazer uma frente na versão cargueira? Vocês têm algum plano? Vocês vão dizer assim, entrar pesado na, nessa versão cargueira? Ou como, qual é que é os planos da Embraer?

Rodrigo Rott: [Foreign language]

Speaker Change: I would like to ask a question about the E2 cargo version.

Speaker Change: What are Embraer's plans, let's say, to make a move in the cargo version? Do you have any plans? Are you going to say, enter heavily into this cargo version? What are Embraer's plans?

Francisco Gomes Neto: Oi, Rodrigo, obrigado aí pela pergunta. Nesse momento, nós desenvolvemos a versão cargueira pro E190. Os nossos planos é agora introduzir este produto no mercado. É nisso que nós tamo focado. Não tem nenhum outro plano adicional além desse. Se tudo funcionar muito bem, nós podemos pensar em dar um outro passo pra o E195. Mas neste momento, vamos focar é na venda, na introdução do cargueiro E190.

Francisco Gomes Neto: [Foreign language]

Speaker Change: And if everything works very well, we can think about taking another step towards the E195, but at this moment, let's focus on the sale, on the introduction of the E190-E1 freighter.

Rodrigo Rott: OK, obrigado.

Rodrigo Rott: [Foreign language]

Okay, but you got [inaudible]

Francisco Gomes Neto: Por nada.

Francisco Gomes Neto: [Foreign language]

Luis Harrison: Muito obrigada. Com isso concluímos as sessões de perguntas e respostas e a conferência de resultados da Embraer. Muito obrigada pela sua participação e tenham todos um bom dia.

Operator: [Foreign language]

Bueno.

Operator: Goodbye

Operator: Goodbye.

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