Embraer deliveries increased 13% in 2023 and backlog reached US$18.7 billion, a US$1.2 billion growth

Rhea-AI Summary

Embraer (ERJ) delivered 75 aircraft in 4Q23, with 49 executive jets, 25 commercial jets, and 1 military C-390 jet. In 2023, the company supplied 181 aircraft, an increase of 13% compared to 2022. The backlog rose to US$18.7 billion, the highest recorded since 1Q18. Executive Aviation continued its sales momentum, with a book-to-bill in excess of 1.3:1 and a US$4.3 billion backlog, a US$400 million growth YoY. South Korea selected the C-390 Millennium in the Large Transport Aircraft II public tender, reinforcing the company's sales momentum.

Positive

• Embraer delivered 181 aircraft in 2023, marking a 13% increase from 2022
• The backlog reached US$18.7 billion, the highest since 1Q18
• Executive Aviation had a book-to-bill in excess of 1.3:1 and a US$4.3 billion backlog, with sustained demand and strong customer acceptance
• South Korea selected the C-390 Millennium in the Large Transport Aircraft II public tender, reinforcing the company's sales momentum

Negative

• None.

Market Research Analyst

The latest delivery figures from Embraer indicate a robust demand for executive jets, with a 13% year-over-year increase in aircraft supply. This growth is significant, considering the ongoing supply chain delays that have impacted the aerospace industry. The book-to-bill ratio exceeding 1:1 suggests a healthy order intake relative to deliveries, which is a positive sign for future revenue. The increase in the Services & Support backlog to a record $3.1 billion underscores the growing importance of after-sales services in generating stable, recurring revenue.

The defense segment is also noteworthy, with the C-390 Millennium's selection by South Korea marking a strategic expansion into the Asian market. This could pave the way for additional orders from the region, enhancing Embraer's global footprint in the military aviation market. The backlog increase across all segments, especially the 19% jump in Services & Support, indicates a solidified customer commitment and potential for sustained earnings.

Financial Analyst

Embraer's financial performance can be extrapolated from the reported delivery volumes and backlog growth. The backlog of $18.7 billion, the highest since Q1 2018, represents future revenues and provides visibility into the company's financial trajectory. The 10% YoY growth in the executive aviation backlog and the double-digit growth in light and medium jet deliveries reflect strong market positioning and the ability to capitalize on the growing demand for private aviation post-pandemic.

Investors should note the strategic significance of the South Korean C-390 Millennium order, as it not only contributes to the backlog but also enhances Embraer's credibility in international defense markets. The company's performance in the commercial segment, with more than double E2 deliveries, is indicative of its competitive edge in the regional jet market despite a slight shortfall from the upper end of the guidance range.

Aerospace Industry Analyst

Embraer's achievement in delivering the largest volume of executive jets in seven years is a testament to the resilience and adaptability of the company in the face of industry-wide supply chain challenges. The doubling of E2 deliveries is particularly significant as it reflects the market's positive reception to Embraer's new generation of fuel-efficient regional jets, which are critical for airlines' fleet modernization strategies in a period of heightened environmental concerns.

The defense sector's expansion into Asia with the C-390 Millennium is a strategic move that diversifies Embraer's defense portfolio and reduces reliance on traditional markets. The aircraft's selection by multiple European countries within a year signals a strong market acceptance and potentially increases Embraer's leverage in future international defense contracts.

• Executive Aviation posted the largest delivery volume in 7 years
• C-390 was selected by South Korea, which reinforced sales momentum
• E2 deliveries more than doubled to 39 jets in 2023
• Executive and Commercial Aviation book-to-bill in excess of 1:1
• Services & Support backlog reached US$3.1 billion - the highest ever recorded

SÃO JOSÉ DOS CAMPOS, Brazil, Jan. 30, 2024 /PRNewswire/ -- Embraer (NYSE: ERJ; B3: EMBR3) delivered 75 aircraft in 4Q23, with 49 executive jets (30 light and 19 medium), 25 commercial jets and 1 military C-390 jet. In 2023, Embraer supplied 181 aircraft, an increase of 13% compared to 2022 when the company delivered 160. The company continues to face supply chain delays which have affected 2023 deliveries.

Deliveries by Segment	4Q22	4Q23	2022	2023	2023 Guidance
Executive Aviation	50	49	102	115	120-130
Phenom 100	2	6	7	11
Phenom 300	31	24	59	63
Light Jets	33	30	66	74
Praetor 500	6	10	15	20
Praetor 600	11	9	21	21
Medium Jets	17	19	36	41
Defense & Security	-	1	1	2
C-390	-	1	1	2
Commercial Aviation	30	25	57	64	65-70
E195-E2	12	17	18	38
E190-E2	1	1	1	1
E175	14	7	35	25
E190	3	-	3	-
Total	80	75	160	181	185-200*
*Excludes C-390 deliveries

The company's backlog rose by US$1.2 billion YoY, reaching a total of US$18.7 billion in 2023 - the highest number recorded since 1Q18.

Backlog by Segment - US$bn	2022	2023	YoY
Executive Aviation	3.9	4.3	10 %
Defense & Security	2.4	2.5	4 %
Commercial Aviation	8.6	8.8	2 %
Services & Support	2.6	3.1	19 %
Total	17.5	18.7	7 %

Executive Aviation continued its sales momentum with sustained demand across its entire product portfolio and strong customer acceptance in both retail and fleet markets. The business unit ended the year with a book-to-bill in excess of 1.3:1 and a US$4.3 billion backlog, a US$400 million growth YoY. The 74 deliveries of light jets in 2023 were 12% higher YoY and the largest volume in 7 years. Moreover, the 41 deliveries of medium jets also posted double-digit annual growth at 14%.

In Defense & Security, South Korea was in the spotlight with the victory of the C-390 Millennium in the Large Transport Aircraft (LTA) II public tender to provide the new military transport aircraft. The country is the C-390 Millennium's first customer in Asia. Furthermore, late last year, the first NATO-configured KC-390 Millenium entered into service for the Portuguese Air Force.

The aircraft was also selected by Austria and Czech Republic in 2023, and by the Netherlands in 2022. Negotiations about the 11 aircraft have not yet been incorporated into Embraer Defense & Security's backlog, which represents a significant potential for the coming quarters. In 4Q23, the business' unit backlog is US$2.5 billion, a US$100 million growth YoY.

In Commercial Aviation, E-Jets family deliveries increased 12% YoY from 57 jets in 2022 to 64 in 2023, supported by a book-to-bill in excess of 1.1:1. The highlight was the E2 group whose deliveries more than doubled from 19 aircraft in 2022 to 39 in 2023. The business unit backlog reached 298 aircraft in 4Q23 for a total of US$8.8 billion, a US$200 million growth YoY.

Porter Airlines exercised its purchase rights and placed a firm order for 25 Embraer E195-E2 passenger jets, adding to their existing 50 aircraft firm orders. The Canadian airline now has a total of 46 firm orders to be delivered and 25 remaining purchase rights. Furthermore, the backlog now includes 4 E175s previously signed by American Airlines and 2 additional aircraft ordered in December.

Backlog - Commercial Aviation 2023
Aircraft Type	Firm Orders	Deliveries	Firm Order Backlog
E195-E2	271	89	182
E190-E2	35	19	16
E175	853	753	100
Total	1,159	861	298

Services & Support ended 2023 with a backlog of US$3.1 billion, a US$400 million growth YoY - the highest level ever recorded. The backlog includes renewed contracts of integrated logistical support services and comprehensive airframe maintenance programs, such as the Pool Program for Commercial Aviation and Embraer Executive Care for Executive Aviation. These long-term contracts in the backlog cover mainly pool contracts and other services as spare parts, repair, maintenance, and technical services.

The growth momentum in the business unit accelerated further when it announced a deal which has doubled its maintenance service capacity for executive jets in the United States. The expansion will support the continued growth of its customer base through the addition of 3 Executive Aviation Maintenance, Repair and Overhaul (MRO) facilities in Dallas Love Field, TX, Cleveland, OH, and Sanford, FL.

View original content:https://www.prnewswire.com/news-releases/embraer-deliveries-increased-13-in-2023-and-backlog-reached-us18-7-billion-a-us1-2-billion-growth-302048603.html

SOURCE Embraer S.A.

How many aircraft did Embraer deliver in 4Q23?

Embraer delivered 75 aircraft in 4Q23, including 49 executive jets, 25 commercial jets, and 1 military C-390 jet.

What was the increase in aircraft supply in 2023 compared to 2022?

In 2023, Embraer supplied 181 aircraft, marking a 13% increase from 2022.

What was the backlog amount in 2023?

The backlog reached US$18.7 billion in 2023, the highest recorded since 1Q18.

What was the book-to-bill ratio for Executive Aviation in 2023?

Executive Aviation had a book-to-bill in excess of 1.3:1 in 2023.

Which country selected the C-390 Millennium in a public tender in 2023?

South Korea selected the C-390 Millennium in the Large Transport Aircraft II public tender in 2023.