Lucas Marquiori

Lucas Marquiori, an Associate Partner and Equity Research Analyst at BTG Pactual, sought clarification on one-off impacts to Embraer's margins. Specifically, he inquired about the nature and recurrence of tax credits in commercial aviation and the details of the one-off contract-related adjustment that benefited the Defense & Security segment's margin.

Answer

Gui Paiva, Head of Investor Relations, clarified that the commercial aviation tax credits were related to claims on import parts. For the Defense & Security segment, the one-off adjustment stemmed from reassigning a mid-production aircraft to a different client, which led to a recalculation of revenues and profitability based on the percentage of completion.

Lucas Marquiori sought clarification on one-off items affecting margins, specifically the nature and recurrence of tax credits mentioned in commercial aviation. He also asked for details regarding the 'one-off contract-related adjustment' in the defense segment.

Answer

Head of Investor Relations Gui Paiva explained that the tax credits in commercial aviation were related to import parts, identified through a study, and represented a low single-digit value. For the defense segment, he clarified that the one-off adjustment stemmed from reassigning a plane in production to a different client, leading to a recalculation of revenues and profitability based on the percentage of completion.

Lucas Marquiori of BTG Pactual requested more details on the company's initiatives to mitigate the financial impact of U.S. tariffs.

Answer

CFO Antonio Carlos Garcia explained that mitigation strategies involve internal cost reduction measures across the entire company, not just relocating production. He also noted that the tariff's impact is lessened by deducting the value of U.S. content in the aircraft, and the company remains confident in its 2025 guidance.

Lucas Marquiori of BTG Pactual requested more detail on the 2025 margin guidance, asking for an outlook by business segment and suggesting Commercial Aviation could dilute overall margins.

Answer

CFO Antonio Garcia stated that the margin profile for 2025 is expected to be broadly in line with 2024's recurring levels. He indicated that Services & Support might see some normalization, while Defense would see more growth and Executive would remain at a similar level. He emphasized the guidance is based on the recurring margin and accounts for market volatility.