Embraer S.A. Q4 FY2025 earnings call

• 2025 was remarkable with meeting deliveries guidance and outperforming financial expectations, 2 digits revenue growth over past 3 years despite supply chain challenges. • E2 program had strong sales across continents, consolidating as benchmark in small narrow-body segment. • Made progress in production chain with supplier collaboration, digitalization, AI tools. • Strategic partnerships in India (Mahindra, Adani) and U.S. (Northrop Group) to reinforce position. • Commercial Aviation had new orders from TrueNoord, Helvetic Airways, Cote d'Ivoire; Executive Aviation had record revenues of ~$750 million with 53 business jets delivered; Defense & Security had Sweden's order for 4 KC-390 plus options and Portugal's 6 aircraft order plus options; Service and Support had E195-E2 pool program and maintenance service extension. • Full year 2025: Commercial Aviation 157 E2 new orders plus 140 options, 64 E1 new orders plus 68 options, backlog $14.5 billion; Executive Aviation sales ~$2.3 billion, backlog $7.6 billion; Defense & Security 5 KC-390 sold plus options and 10 A-29 sold; Service and Support added ~75 aircraft and 37 Executive Care contracts.

Commercial Aviation: Revenues increased by 7%, accounting for 37% of revenue. Executive Aviation: Revenues increased significantly by 25%, approximately 30% of revenue. Defense & Security: Revenues grew 36%, 13% of revenue. Service and Support: Revenues rose 18%, around 20% of revenue. Commercial Aviation had 157 E2 new orders plus 140 options in 2025, backlog at $14.5 billion with 2.8:1 book-to-bill ratio. Executive Aviation total sales ~$2.3 billion, backlog $7.6 billion with 1.1:1 book-to-bill ratio. Defense & Security had 5 KC-390 aircraft sold plus options and 10 A-29 Super Tucanos sold, backlog $4.6 billion with 1.4:1 book-to-bill ratio. Service and Support had ~75 aircraft added and 37 new Executive Care contracts, backlog $4.9 billion with 1.2:1 book-to-bill ratio.

• 2026 operations: Commercial Aviation forecast to deliver 80-85 aircraft; Executive Aviation forecast 160-170 jets. • Financials: Top line forecast $8.2-$8.5 billion, midpoint 10% higher than 2025. EBIT margin forecast 8.7%-9.3%. Adjusted free cash flow without Eve $200 million or higher. Midterm goal to convert 50% of EBITDA to free cash flow. Guidance reflects assessment prior to Feb '20 U.S. import tariff changes, conservative approach due to policy uncertainty, will update quarterly.

• Supply chain challenges, although improving but still some bottlenecks. • Tariff uncertainty, although exempt now but geopolitical situation volatile. • Geopolitical risks affecting defense and other segments, such as war in certain regions impacting operations and deliveries.

Q: Regarding strategic partnerships in India and U.S., update on stage.

A: In India, working on MTA with India Air Force and partnership with Mahindra, expecting RFP this year; in U.S., partnership with Northrop Grumman on KC-390 boom capability, no time frame defined but working hard.

Q: Follow-up on Northrop Grumman partnership, detail on structure and competitiveness.

A: MOU with Northrop Grumman for KC-390 boom capability integration, not competing with KC-46, intention to assemble in U.S. if order received, no clear time frame or size of opportunity.

Q: Supply chain environment, constraints and improvements.

A: Supply chain improving but still some bottlenecks, more proactive this year than last, positive for 2026.

Q: Margin outlook by segment, impact of tariffs.

A: Adjust for tariffs, expecting 75-100 basis points unwind over time, Service and Support and Executive Aviation have strong margin profiles, working to improve Commercial Aviation margin.

Q: Cash flow performance in Q4, drivers.

A: Lots of deliveries concentrated in Q4, some advanced payments from defense customers, nice sales campaign in Executive Aviation.

Q: Delivery projections, commercial and executive.

A: Commercial Aviation mid to high end of guidance, preparing to reach 100 aircraft by 2027; Executive Aviation expanding capacity and improving efficiency, aiming for higher production.

Q: Service division margin, drivers and outlook.

A: Q4 margin strong due to various factors, moving towards higher margin but not assuming rapid pace yet.

Q: Tariff situation, exemption and upside.

A: Embraer aircraft exempt from 10% tariffs since Feb '24, inventory impact to be unwound, expecting upside from tariff exemption.

Q: Supply chain dispute between Airbus and Pratt, impact on commercial delivery.

A: Working closely with suppliers, confident in delivering planned aircraft in 2026 with no big issues with Pratt.

Q: Defense in India, competitive dynamics.

A: Excited about India's 60 military aircraft bid, believe KC-390 has best value proposition, working with Mahindra for Made In India compliance.

Q: Defense and Eve, acceleration of defense applications.

A: Eve focused on certification of EV 100, currently no plans to accelerate defense applications for Eve.

Q: Buyback program, capital allocation.

A: Buyback to hedge long-term incentive plan, company invests in businesses with higher ROIC like Executive Aviation and services.

Q: India military deal, competitive dynamics and differentiation.

A: KC-390 is competitive, working hard to win business, has best value proposition for India.

Q: Services division margin outlook and tariff impact upside.

A: Margin around 15-16% for now, tariff exemption expected to unwind inventory impact, providing upside.

Q: Supply chain Airbus-Pratt dispute, impact on commercial delivery outlook.

A: Confident in delivering planned aircraft in 2026, working closely with suppliers, no big issues with Pratt.

Q: Joint venture with Adani in India and E175 production.

A: No joint venture yet, focus on E175 E1 with Adani, no plan to migrate to E2 yet.

Q: Executive Aviation tariff impact.

A: ~80-85% of $54 million tariffs in 2025 in Executive Aviation, now back to 0 tariffs.

Q: Embraer and Gripen agreement in Colombia.

A: No established contracts, good collaboration with Saab, working on potential assembly in Gaviao Peixoto.

Q: Raw material supply for aviation.

A: 2026 better than 2025 in raw material supply, comfortable with inventory, monitoring parts supply.

Q: Embraer and tariffs with Brazilian Foreign Relations Office.

A: Did not directly participate in event, tried to facilitate, monitoring situation.

Q: U.S. tariff constitutionality and potential recovery.

A: Monitoring situation, peers' actions, already paid $80 million in tariffs.

Q: Defense equipment development for worldwide need.

A: Focus on selling existing equipment like KC and Super Tucano, no new equipment development at moment.

Q: RFP deadline for India's 60 jets.

A: Clients set deadlines, expect RFP this year, competitors include Lockheed Martin and Airbus.

Q: Paid tariffs breakdown by segment.

A: $80 million total, 85% for Executive Aviation, rest for service and support.

Q: War in Iran impact on Embraer.

A: Monitoring situation, no critical issues compromising deliveries yet.