HIGHLIGHTS

- 1Q according to management expectations in line with Company plan.  

- Embraer delivered 15 jets in the first quarter, of which 7 commercial aircraft and 8 executive jets (6 light and 2 mid-size).

- Firm order backlog ended 1Q23 at US$ 17.4 billion stable quarter over quarter, higher in Executive Jets and Services & Support.

- Revenues reached US$ 717 million in the quarter (19% higher than 1Q22), in line with Company forecast.

- Adjusted Free Cash Flow w/o EVE (FCF) in 1Q23, with cash consumption of US$ 399 million, due to seasonality and in preparation for higher deliveries in the coming quarters.

- Operational and financial guidance for 2023 unchanged.

São Paulo, Brazil, May 04, 2023 - (B3: EMBR3, NYSE: ERJ). The Company's operating and financial information is presented, except where otherwise stated, on a consolidated basis in United States dollars (US$) in accordance with IFRS. The financial data presented in this document as of and for the quarters ended March 31, 2023 (1Q23), December 31, 2022 (4Q22), and March 31, 2022 (1Q22), are derived from the unaudited financial statements, except annual financial data and where otherwise stated.

REVENUE AND GROSS MARGIN

Consolidated revenue of US$ 717 million in 1Q23 represented an increase of 19% y-o-y due to better commercial mix, strong growth in Defense & Security (+56% y-o-y) and Services & Support (+20% y-o-y). The Company’s total revenue closed the quarter as planned.

Commercial Aviation reported revenue growth of 17.5% y-o-y to US$ 198.8 million due to one additional delivery in 1Q23 and more deliveries of E2 and less deliveries of the smaller 175E1. Reported gross margin of 0.1% versus 11.3% reported in 1Q22 shows a decrease due to one-time benefits occurred in 1Q22 and product mix, including learning curve and new configurations development.

Executive Jets revenues were US$ 87.1 million, 3% lower than the same period last year due to changes in the mix of light jet deliveries. 1st quarter Gross Margin was -0.5% compared to 18.7% in the 1st quarter of 2022 due to aircraft mix and non-recurrence of one-time benefits from last year.

Defense & Security revenue of US$ 97.7 million, 56.3% higher y-o-y due to better C-390 revenue recognition in 1Q23. Reported gross margin of 24.8% versus 12.1% reported in 1Q22 due to better commercial agreements replacing old ones.

Services & Support reported revenues of US$ 326.2 million, representing a y-o-y growth of 20.3% due to increase in sales within Company growth plans. Reported gross margin of 27.1% higher than 26.5% reported in 1Q22 due to enterprise efficiency and MRO performance.

EBIT AND ADJUSTED EBIT

In 1Q23, the Company’s reported results are summarized in the table below.

Excluding the above special items, 1Q23 Adjusted EBIT was US$ (31.6) million and the period’s Adjusted EBIT margin was -4.4%, flat in comparison with 1Q22.

NET INCOME (Loss)

Net income (loss) attributable to Embraer shareholders and income (loss) per ADS for 1Q23 were US$ (70.8) million and US$ (0.3855) per share, respectively, compared to US$ (31.7) million in net loss attributable to Embraer shareholders and US$ (0.1726) in income per ADS in 1Q22.

DEBT & LIABILITY MANAGEMENT

Embraer ended 1Q23 with a net debt position of US$ 1,432.1 million (without EVE), compared to US$ 1,032.5 million q-o-q and US$ 1,465.7 million y-o-y. The increase in the Company’s net debt position q-o-q resulted from Embraer’s negative free cash flow generated in 1Q23, as explained below.

The average loan maturity of 1Q23 was 3.5 years. The term structure of loans is 91% in the long-term and 9% in the short-term. The cost of Dollar-denominated loans in 1Q23 was 5.74% p.a., while the cost of Brazilian Real denominated loans was 10.04% p.a. in 1Q23.

FREE CASH FLOW

Adjusted free cash flow for first quarter 2023 was US$ (399.0) million, negative outflow due to preparation for larger deliveries in the second half, with a strong influence on the increase in inventories of US$ 474 million during 1Q23.

CAPEX

Net additions to total PP&E for 1Q23 were US$ 41.4 million, versus US$ 18.1 million in net additions reported in 1Q22. Of the total 1Q23 additions to PP&E, CAPEX amounted to US$ 17.3 million, and additions of pool program spare parts represented US$ 24.4 million of the additions, partially offset by US$ (0.3) million of proceeds from the sale of PP&E. The increase in PP&E in 1Q23 versus 1Q22 is related to P2F conversion and service and support expansion. The increase of US$ 14.4 MM in research in 1Q23 versus 1Q22 is almost 90% related to EVE’s program.

WORKING CAPITAL

In order to meet greater production and delivery guidance for 2023, inventories of mainly work-in-progress to fulfill deliveries in the coming quarters, affecting the quarter's reported Free Cash Flow.

TOTAL BACKLOG

Firm order backlog ended 1Q23 at US$ 17.4 billion stable quarter over quarter, driven by evolution in Executive Jets and Services & Support.

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