Embraer(US:ERJ)2020-03-26 20:00Financial Data and Key Metrics Changes - Embraer reported a total revenue of $5.4 billion for 2019, representing a growth of approximately 22% compared to 2018 [33] - The adjusted net loss for 2019 was $218 million, resulting in a negative net margin of 12% [38] - The company generated $739 million in free cash flow in Q4 2019, finishing the year with a total free cash flow usage of $182 million, within the previously announced range [40][41] Business Line Data and Key Metrics Changes - In commercial aviation, Embraer delivered 89 E-Jets in 2019, including 14 jets from the E2 family, and ended the year with a backlog of 153 firm orders for E-Jets E2 [15][16] - The executive aviation segment delivered 109 jets in 2019, with a strong performance in sales activity, marking the highest in the past five years [18][19] - The defense and security business transitioned to service production, delivering two KC-390 aircraft to the Brazilian Air Force in 2019 [22] Market Data and Key Metrics Changes - The commercial aviation segment represented 41% of total revenue, while executive jets accounted for 26%, service and support for 19%, and defense and security for 13% [33] - The backlog reached $16.8 billion at the end of 2019, with commercial aviation being the largest contributor at 53% [29][30] Company Strategy and Development Direction - The company is focused on increasing financial discipline and cost management, with a strong emphasis on shareholder value [7] - Embraer is working on the strategic partnership with Boeing, which requires antitrust approval in Europe [48][49] - The company is committed to preserving liquidity and maintaining solid financials during the COVID-19 pandemic [10][46] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertainty caused by the COVID-19 pandemic, which is affecting global aviation and the company's operations [8][44] - The company has established a crisis committee to monitor the situation and has implemented measures to protect employee health and preserve liquidity [12][45] - Despite the challenges, management remains confident in the company's ability to weather the crisis and emerge stronger [50] Other Important Information - The company has a strong liquidity position with $2.8 billion in cash and equivalents, and an additional $600 million raised in March 2020 [8][41] - Embraer has implemented cost-saving measures, including production adjustments and expense reductions, to preserve cash [9] Q&A Session Summary Question: How are conversations going with your customers in the commercial business? - Management indicated that discussions are ongoing regarding deferrals of deliveries from 2020 to 2021, with no cancellations reported so far [51][72] Question: What is the latest on the Boeing deal and the European Commission's focus? - Management confirmed that they are working with Boeing to obtain antitrust approval in Europe and are providing necessary documentation [57] Question: Is there any support package from Brazil similar to the U.S. support package? - Management stated that it is too early to determine the extent of support from Brazil, but they are exploring additional sources of liquidity [62] Question: What is the expected delivery profile for the KC-390 aircraft this year? - Management confirmed that two KC-390 aircraft are expected to be delivered this year, with supply chain alignment being a current focus [54] Question: What is the expected mix of E2 and E1 deliveries for 2020? - Management anticipates a delivery mix similar to the previous two years, around 90 to 100 units, excluding COVID-19 effects [70]