Embraer S.A.

My name is Gui Paiva and I'm the head of investor relations and M&A for Embraer. I want to welcome you to our first quarter earnings conference call of 2025. The numbers in this presentation contain non-GAAP financial information to help investors reconcile EVE's financial information in GAAP standards to Embraer's IFRS. We remind you EVE's results will be discussed at the company's conference call. It is important to mention that our own numbers are presented in US dollars as it is our functional currency. This conference call may include statements about future events based on Embraer expectations and financial market trends. Such statements are subject to uncertainties that may cause actual results to differ from those expressed or implied in this conference call. Except in accordance with the applicable rules, the company assumes no obligation to publicly update any forward-looking statements. For detailed financial information, the company encourages reviewing publications filed by the company with the Brazilian Comissão de Valores Mobiliários or CVM. At this time, all participants are in a listen-only mode. We'll give you instructions later on for participation in the question and answer sessions. As a reminder, this conference is being recorded. Participants on today's conference call are Francisco Gomes Neto, President and CEO of Embraer, Antonio Carlos Garcia, Chief Financial Officer, Luis Harrison, Corporate Communications Director, and myself. This conference call will have three parts. In the first part, top management will present the company's Q1 results. In the second part, we will host a Q&A session only for investors. And last, but definitely not least, in the third part, we will host a dedicated Q&A session only for the press. It is my pleasure to now turn the conference call to our President and CEO, Francisco Gomes. Please go ahead, Francisco.

Thank

you, Yogi.

Good morning and good afternoon to all. Welcome to Embraer's first quarter 2025 Results Conference Call. We delivered the highest first quarter revenue of the past 90 years at a significant 1.1 billion. We also registered the highest first quarter adjusted EBITDA margin of the past five years at almost 10 percent. Embraer ended the period with a 26.4 billion backlog marginally higher than the previous all-time record printed in the last quarter. Aircraft deliveries were up almost 30 percent higher year on year, evidence of our continuous focus on operational efficiency. Embraer will from now onwards resume payment regular dividends and interest on equity for its shareholders. To conclude this part, we reiterate our 2025 guidance, which implies double-digit growth in our aircraft deliveries and revenue growth. Let's go over the main highlights for the company during the quarter. Executive aviation delivered a solid performance, reflected in sales, deliveries, and backlog. The division also reached the highest first quarter revenue since 2014 in a record backlog of 7.6 billion. In defense and security, Sweden and Slovakia confirmed the selection of the KC-390 Millennial, while Uruguay converted its A-29 Super Tucano options into firm orders, and Panama selected the aircraft. The division ended the quarter with a stable 4.2 billion backlog. In commercial aviation, the Japanese ANA placed an order for 15 E-192E2 that should be included in the 10 billion division backlog in the second half of the year. The E-195E2 from Helvetica Airways became the largest jet flying into London City Airport ever. Service and support kept its solid growth pace with the start of the next industrialization stage of the prior to it an engine shop at Ogima in Portugal. The division backlog remained stable at 4.6 billion. Embraer has been working on a production leveling plan since 2023. Our main objective is to create stability and have a more linear production pace throughout the year. The plan will allow us to increase efficiency, productivity, and improve catch flow. This year, we have already seen the first results of the project and from 2026 onwards, we can expect a more stable production over the year. We also continue to work very close with our suppliers to support our more linear production plan. We can see improvements in several operational KPIs for all our family of products, such as an increase in aircraft production, a reduction of travel work, reduction in assembling cycle, and increase in productivity. Here, for instance, we share improvements in the Praetor production line. Let us now touch upon a topic we have all dealt with over the past two months, US tariffs. First of all, it is important to highlight that first quarter results were not impacted by them. Second, our initial analysis points towards limited impact, so we remain confident and reiterate our 2025 guidance. Third, Embraer has a substantial amount of US content in its aircraft, which mitigates partially our exposure. And last, and more importantly, we are working on initiatives to minimize the impact of US tariffs on our business, and we are argued for zero tariffs the globalized aerospace production chain, as it has been the case for many decades. I will now move on to operational results by segment over the next few slides. All figures are based on -on-year comps. In commercial aviation, revenues were stable, and we noted a relevant improvement in the adjusted EBIT margin, driven by product and customer mix. In executive aviation, revenues expanded 35% because of higher volumes and product mix. The adjusted EBIT margin increased because of operating leverage and cost containment initiatives. In defense and security, top line grew 72% because of stronger KC390 revenues recognition, customer mix, and product stage. The better adjusted EBIT margin was driven by higher volumes, lower expenses, and negative extraordinary items a year ago. Moving to services and support, revenues increased 16%, mainly because of the Ogma GTF ramp-up. The adjusted EBIT margin decreased because of product mix and the start of North American executive maroon ramp-up, partially compensated for positive one-time items. Finally, 2025 could be a decisive year for EVE, as the company should complete the first flight of its full-scale prototype, and should receive its first firm orders, opening a brand new path of long-term growth. I will now hand it over to Antonio to give you further details about the financial results, and then I will be back with the closing remarks.

Thank you Francisco. Good morning and good afternoon to everyone. I will present now our first quarter financial results, and all of my comments will be based on -on-year comps, unless noted. Let's move to slide 13 and start with delivers. Embraer delivered 30 aircrafts in commercial and executive aviation combined within the quarter or 20% higher. In executive aviation, delivers were 23 guts, of which 14 were in the light segment and 9 in the mid-size one. The numbers of delivery was 28% higher and, more important, 15% of the midpoint of the company's full-year guidance. Moderately above 11%, first quarter average for the past five years. In commercial aviation, delivers were seven aircrafts, the same numbers last year, and represented 9% of the midpoint of the company's full-year guidance. I should highlight we were unable to deliver two additional aircrafts during the quarter because of commercial issues. In slide 14, our backlog reached an all-new all-time high, 26.4 billion, marginally up and sequentially and 25% higher versus a year ago. Talking about each division, the backlog for defense and security soared 73%, while for executive aviation increased more than 65%, supported by new -300-9, Millenium and 829 Super Tucano sales and the Marquis contract with Flexjet, respectively. The backlog for service and support increased almost 50%, while for commercial aviation decreased 10%. However, it is important to remember the ANA org has not been yet included in our numbers. Moving on to revenues, our top line reached $1.1 billion in the first quarter. The best first quarter results of the past nine years and 23% higher. Our service and support in executive aviation divisions together represented almost 70% of the company's total revenue in the quarter. Moving to slide 15, we generated $109 million in adjusted EBITDA in the first quarter with a .8% margin. Now, adjusted EBITDA for the quarter was $62 million with a .6% margin, a significant increase compared to the previous 7 million and .8% margin marks from last year. This is great results, was supported by executive aviation higher volumes, which ties back to Francisco's comments about production leveling, product mixing, lower costs and expenses. A quick word on US tariffs and their potential impact. Our initial estimate is that it could negatively impact our EBITDA margin by 90 basis points for 2025. However, the company is taking several steps to mitigate these effects, like additional cost reduction measures. And for now, we remain confident we can deliver our guidance 2025. Now let's move to the next slide 16. In the first quarter, we consumed $386 million in adjusted free cash flow because of high working capital needs, mainly in inventory, in preparation for higher numbers of aircraft deliveries and the next three quarters. Moving to investments, it is important to highlight where capital allocation remains focused on segments with higher returns, such as executive aviation and servicing support, mainly in the US. First quarter, without EVE, we allocated $38 million for research and development, of which $11 million were expensive. We invested another $37 million in CAPEX and $30 million in the PUL program to support new contracts, totalling $88 million for the quarter. To finish this slide, let's talk about our adjusted netting results. We ended the quarter with a negative $74 million for an adjusted minus .7% margin compared to $30 million comp. However, reported net income was positive $73 million for a .7% margin positive. If we consider $124 million in deferred taxes because of stronger Brazilian foreign exchange rate and $23 million from EVE results. Slide 17, please. As always, I would like to start this slide by highlighting the top right corner. Royer was able to reduce both its net and gross debt positions without EVE by $508 million to $608 million over the past 12 months. Thus, the company was able to lower its net debt to a BTDA from 1.8 times to 0.5 times during the quarter. The negative $285 million free cash flow generation for the embedded standalone during the quarter helps to expand the recent increase in financial leverage. As I mentioned on our last call, as part of our liability management plan, we are focused on extending the duration and reducing the cost of our debt. In our most recent liability management step, we issued a $650 million 10-year bond at 158 basis points over US treasure in Q1. And we repurchased $522 million in 2027 bonds, fully retired, and $150 million in 2028 bonds. With the deal, we extended our debt duration to 6.3 years compared to 3.8 years in Q4 last year. Slide 18, and to conclude my part, let me talk about shareholder remuneration. For the fiscal year 2024, we approved $51 million in re-icing dividends for 7 Brazilian cents per share to be paid on May 23 to ME3 holders. ERG holders should receive the monies in a few days later, but you can find more information with our US depository bank soon. For the fiscal year 2025 and beyond, the company tends to analyze the potential fiscal benefits from these international equity declarations. This value will be added with, if required, a top-up dividend to comply with the minimum 25% of net income payments established by the Brazilian corporate law. The company will then pay this money in a single payment after shareholder's meeting in the next year. With that, let me stop here, and I hand it back to Francisco for his final remarks. Thank you very much.

Thank you, Antonio. The first quarter was marked by significantly stronger results, which provides us with a solid outlook ahead for sustainable growth. In 2025, we started to see the first immaterial results of our production leveling initiatives. We will continue to take steps to make the most of our installed capacity to achieve even higher output, optimizing the use of our assets. And we will keep focused on sales in all business units to guarantee our successful growth trajectory. Let me now take the opportunity to say domo arigato and yokoso to ANA, as it becomes the first E2 operator in Japan. To finish, US tariffs so far should have limited impact on our company. And we join other companies in calling the return of zero-tariff policy for the aviation sector, as has been the case for several decades, reducing complexity and costs for a highly globalized industry. We continue to work hard, always embracing the foundation of our culture, safety first and quality always. Let's now move to the Q&A session of the call.

Please hold for the Q&A session. We will now start the Q&A session. The first part of the question and answer session will be exclusively for equity research analysts and investors. The second part of the Q&A will be only for the press. We highlight again this conference call is being conducted in English with translation to Portuguese. Please let me say a short announcement for Portuguese speakers. We request participants interested in asking questions to press start the 9 and the phone at the same time or press the raise the hand button on the platform. When your name is announced, please press start then 6 on the phone or make sure your microphone is on and start your question. We will also answer questions sent via the platform chat. If you need assistance, please use the Q&A button on the platform. To give everyone a chance to participate, we request just one question per call. The first question comes from Marcelo Mota with JP Morgan. Please go ahead. Please hold a second.

Perfect. Hi everyone. Thanks for taking my question. The first one is on the commercial. If the company can comment about what they mentioned on the release, the potential one-time impact from supplier credit, if they could try to quantify what was the this impact, please. Thank you.

By the way, it was 30 basis points Marcelo. Sorry. Or 3 percentage points or 30 basis points. Sorry for that.

Thank you.

Thank you. The next question is from Miles Walton with Wolf. Please go ahead.

Thanks. Good morning. I was hoping on the tariff front you could give a little bit more color. I think the 90 basis points is probably related to your cost within executives, but maybe Francisco or Antonio, is there any hesitation on US airlines accepting the 175s in the nearer term given the tariff on imports? Are they choosing to maybe wait a little bit longer to see if they're negotiated away?

Thanks. Thanks, Miles. Great question. We still don't know everything. That's why we set our first estimate. I would say we have, as you know, impacting our executive aviation. That's first place and then also in our service division. At least we have read the first misplay. In fact, what you are pursuing is who is responsible for the importation process beyond the cost of tariffs. We do not have at least today a setback on commercial, but it's too early to confirm 100%. But I would say if I would split the 90 basis points, I think we are highly concentrated in new executive aviation and service and support. We as a company who has a lot of US content in our records, we always deduct the US content in order to, I would say, pay the taxes. That's why we are still confident we could continue to run our business here, even with this bad negative impact. Francisco, you want to complement maybe this? I hope I answered your question, Miles. That's

perfect. Thanks, Antonio.

Thank

you.

The next question is from Christine Lihuaq with Morgan Stanley.

Please go ahead. Hey, good morning, everyone. Francisco, Antonio, and Guy. First of all, congratulations on the record high company backlog, but the market always wants more orders. So with that, on the KC 390, can you provide an update on where you are with India, Saudi Arabia, and Poland? And also, we've seen bundling as very successful in aerospace. We've seen this with Airbus and their success with selling the A220 with the A320. Can you talk about bundling opportunities for the KC 390 and the E2s?

Hello, Christine. Thanks for your question. You're bringing a good idea. It might be an opportunity, but anyway, we are working in several campaigns for both for KC 390 and the E2s. The India project is moving. We are talking to the customer. We are getting more questions about the product and we are working the next steps. We expect to have some more improvements within the next one, two years in India. But India is a big program, as you know, from 40 to opportunity from 40 to 80 aircraft. We are also working in other campaigns with the C390, other customers that we cannot disclose at this point of time, but we expect some results during the year as well. The E2 is not different. We are working in several campaigns. Yeah, competition is not easy in both sides, you know, with the KC or the E2s, but we believe we have good chances in many campaigns. So also in commercial aviation, we expect to bring some good news during the year.

Just a compliment for the KC. What you are seeing is that some, especially the NATO countries, they are using the same contract, which makes the procurement process much faster than before.

Yeah, but bundling between KC and E2, we don't have any example yet. Not yet.

So that sounds very optimistic. So we hope to see that kind of bundling soon. Well,

I mean, it's not a bundling, but in case of Poland, as you brought Poland as an example, we said, well, if we are working the two fronts, opportunities with the E2s in Poland, you know that, and with Lock Polish and KC as well. And if we succeed in both, we can bring a lot of initiatives, a lot of products and services to be done in Poland. This is a kind of, not a direct bundling, but an opportunity for the country.

Super helpful. And if I could add a second question, the geopolitical environment today, even with the US tariff discussions, right? It shows that we're kind of re-centering back into regional powers. And there's a reminder that, look, you know, the larger aircraft transport industry is still a duopoly, you know, Boeing and Airbus. And so at this point, when you talk to different customers, are there, how has the conversation regarding a larger Ember aircraft evolved in the past few months? And, you know, I know Francisco, Antonio, you guys have talked about this over the years, and, you know, there's been varying concerns and opportunities. But how has that conversation evolved today? Because strategically, historically, Boeing was the tip of the trade spear for the US and all this tariff stuff is a reminder that, you know, this is an important exporting industry for the US. But for the other countries that don't have aerospace, you know, this is a strategic weakness in their industries. So how should we think about this opportunity? Where is the most recent thinking about this program? And how has that evolved in this dynamic environment?

Well, Cristina, this is also a good question, not easy to answer specifically. But yes, I mean, customers, they have asked us about our plans to go bigger. But actually, we are very focused on selling the A2s. And we are working and investing in new technologies to be prepared for new products and new technologies. In the future, that can be, you know, a bigger executive jet or a bigger commercial jet or even in defense. So we are making studies in all fronts. We don't have a decision. But what we're doing in a concrete way is investing in new technologies, you know, technology about more autonomous flight, technology about new fuselage, new wings, cockpit and so on. That's what we are doing. But we don't have any concrete decision to go this way or that way.

Great, thank you.

You're welcome, Cristina.

The next question comes from the telephone number ending 7519. Please go ahead.

Good morning, Steve Trent from Citi. And thanks very much for taking my questions. Francisco, Antonio, Luis and Guy. I was curious in terms of the supply chain, I believe last time you mentioned, for example, that the fasteners for the aircraft was kind of a bit of a bothersome area to be able to get to the airport. And I'm wondering if that's improved a little bit or if the pressure point maybe has shifted over to another area of the supply. Thank you.

Thank you. Thank you for your question. You know, since three years ago, we have put in place a more structured a new structure in our supply chain area, you know, to deal with this all supply chain issues. So in general, we have seen improvements, but bottlenecks are moving from one product to another. But even then, we are we are progressing as a we mentioned in my opening, we are progressing in bringing the parts we need to, you know, to level our production, which is our main target at the end of the day. We still have some issues more with fuselage parts that we are still struggling. This year, we have some types of engines that are still delaying to deliver the parts on time to us. But I think we are working very close to the suppliers. And at this point of time, we see we don't see big issues to deliver our guidance. That's why we are reaffirming our guidance in terms of deliveries between 70, 75 commercial jets and 145 to 155 executive jets. So again, bottlenecks are still there moving from one part to another. But with the structure we have put in place, we have been able to manage these issues and keep our production running as planned.

Okay, really appreciate it. And I'll stick to your request of just one question. Thank you, James.

You're welcome. Thanks, Steve.

The next question comes from André Ferreira with Bradesco PPI. Please go ahead.

Hi, good morning. I have a question, but first I just wanted to clarify the first answer because I think there was some technical issues with the call. Is it 0.3 percentage points in the commercial a bit margin or the consolidated a bit margin? But my real question is actually about the past two reversals in the service margins. How much was the impact of this in the service a bit margin or in the consolidated a bit margin? Thank you.

There is Antonio speaking here. The 3% was just supplier credits for the quarter inside the commercial aviation. And I would say the we we were on average for service and support around 15%. We report a little bit lower. But for us, it was five base points or 50 base points less than average, I would say. But in our view is just a temporary effect that will be compensated throughout the years. Okay. It was really something that Mix as Francisco said, untimely effects with customers and this and this and this. I would say putting all together, we perform five, five percent less a bit margin the quarter, but we are not seeing we are not worried about the whole year. Just to make it clear for sure that we have an impact and consolidation. But I would say we are talking about the last 20 billion that would bring us even to a higher margin almost 6, 6 and a half to 7%. It was the effect in the consolidated basis, more or less.

Okay, so Commercial is

3% for the quarter.

Okay. All right. Thank you.

Okay.

The next question comes from Jordan Leoni with Bank of America. Please go ahead.

Mr. Leoni

Hi, sorry. Can you hear me now? Yep. Yes, yes,

we can.

Great. Good morning. Thank you for taking the question. Could you guys talk about how you're thinking about the Pratt strike in any impact or how you're managing through that for services or for actual engine deliveries?

It's track at Pratt, Whitney, Francisco. We talked today.

Well, I mean, actually, Jordan, we are still trying to get more information about this and this point of time we don't have enough information to measure potential impact in our business.

Got it. Okay. Thank you so much. Thank you, Jordan.

Thank you. The next question comes from Lucas Macchiori with BTG Pactual. Please go ahead.

Thanks guys. Thanks for the call. Good morning. My question is more on coming back to the topic of US tariffs, if you could provide some clarity on some of these initiatives you guys mentioned you have on mitigating the impacts. I'm assuming there's at least some impacts, right? Coming especially from executives, maybe commercial. So what's the workaround plan around there? I mean, if you're relocating production to some other facilities outside of Brazil, or maybe passing through prices, how does your contracts work with this changing law environment? I mean, just kind of giving some color on the measures to mitigate tariffs. It would be nice guys. Thanks.

Lucas, good morning. It's Anthony speaking here. Let's walk through a little bit the story. When we set the guidance for 2025, I remember some of you said, Antonio, it seems too modest, the guidance you guys are placing. And we said at the time, we see a lot of volatility. At one point, we were first seeing some volatility. I would say I was more in the idea of inflation than tariffs, but you have the tariffs in front of your nose. And I would say we have two options. Either we stop and start to bleeding or we do something against it. And since the beginning of the year, the company already decided to wait and see what's going to happen. Don't do crazy things. Don't invest further. Don't I would say this type of stability. That's one point. And the other point is how to measure, how to manage the tariffs impact because just to give an example, Brazil has to pay 10%. But if you take out the US content as a temporary importation, that goes, depends on the aircraft. Between six and five or six and a half depends on the aircraft. You know, that's more or less if you put all together. That's the number we comment to all of you. Nineteen basis point. You are able to margin for the next three quarters. Okay. Not a near effect. And we are not waiting. As a Brazilian company, we have crisis every year. We need to be able to find a way to compensate. But we don't know all effects. That's a very premature effect that we are seeing right now. That's why I would say if you see something different in Q2 or Q3, we are going to place new numbers. But at least today in your view, we are confident to keep the margin. Francisco, you want to comment anything else?

Nothing from my side.

I hope that answers your question, Lucas.

It does. Thanks, guys. Have a good day. Thank you.

The next question comes from Daniel Gasparici with Itaú BBA. Please go ahead. Mr. Gasparici, you're muted. We cannot hear you.

Sorry. Thank you very much. Can you hear me right now?

Yes. Thank you.

So guys, thank you very much for the opportunity. My first question will be related to the suspension of point deliveries in China. I would like to get your view. If there's any kind of opportunity arising for you guys coming from that region, that will be the first question. And the second one will be related to the comment that António did related to the cost reduction initiatives on the executive side. I would just like to explore more about it. It was already considered in your guidance and how do you see that playing along during the rest of the year. Thank you very much.

Thank you, Daniel. I'll start with the China. And António will help with the cost reduction that he mentioned before. Well, things in China for us have not changed. Both of our aircraft, the E198 and E195, are certified by the Chinese authorities. And we have been working with potential customers in China to introduce our new generation of E2 that in our opinion, they do not compete with the Chinese aircraft. We go just in the middle. And recently we delivered two aircraft to Honu, a Mongolian company, and they will fly to important Chinese cities. They will showcase how they do first time in China. And then you see how nice, how good and how efficient is our aircraft. So again, nothing new at this point of time. We continue working in opportunities to introduce our E2 jets in China.

So that's just to make it clear. The biggest impact on services related to executive aviation. And we as a company, we are one company with four divisions. And as a one team, when you have an issue, we all reduce costs. It's not only related to executive aviation. We implement additional cost reduction measures in order to try to reduce offset part of this cost increase driven by tariffs. That's the, you could take all possible measures. And you just see the RSCG&A cost already, Q1, was much lower than previous year. It's more or less what you are doing in order to absorb and try to find a way to not jeopardize our numbers.

Great. Thank you very much, Francisco, Antonio. Have a nice day. Thank you. That's very good.

The next question comes from Lucas Lagi with XP Investments. Please go ahead.

Good morning, everyone. Good morning, Francisco and Antonio. I'd like to follow up on potential new order announcements, especially on the C390. I mean, we have been seeing several efforts from Embraer to sell the aircraft in the United States, right? I think you're guys in the conference in the country to showcase the aircraft. Could you please remind us the strategy that you guys are playing to enter this market? I mean, do you plan to sign new partnerships such as the previous one with L3 Harris, for example? Do you plan to build a production facility in the US to produce the C390 there? And how do you see Trump tariffs in this context for your decision rational to enter this market in a more significant pace going forward? Thank you,

guys. Thank you, Lucas, for your question. Yes, absolutely. I mean, besides India that I mentioned before, we see the US as a great opportunity for the KC390. And recently, last week, we have one C390 in the US right now. Last week, the aircraft was showcasing in Las Vegas in an event there. So we are now presenting. We participate in an important panel in that event. We are presenting the C390 as a good alternative for a tanker, but also as a multi-mission aircraft that can revolutionize the US Air Force in terms of productivity. This week, the aircraft went to Tampa, and this Friday, the aircraft will be in Washington also to showcase the product. So again, and we are working, yes, with a consultant in the US to finalize our strategy on how to approach the market. And answer your last question. Yes, with a sizable order, the KC390 will be assembled in the US. The aircraft has already, Lucas, 57% of US content. And with an important order, if you secure an order from US Air Force, yes, these aircraft will be assembled in the US. Absolutely. So again, we see it as a great opportunity for us and for the US Air Force as well by introducing the KC390 in its fleet.

Thank you, Francisco. Very clear.

You're very welcome. Thank you for the question, Lucas.

Thank you. This concludes the question and answer session for equity research analysts and investors. Now, we'll start the Q&A session dedicated to the press. First, we'll answer questions in English, and then we'll answer questions in Portuguese. We'll also answer questions sent via the platform chat. Please let me say a short announcement for Portuguese speakers. This conference is being held originally in English. To listen to the translation in Portuguese, press the platform's interpretation button and select the Portuguese language. Also click on Disable Original Audio on the Zoom platform to improve the quality of the transmission in Portuguese. We ask participants interested in asking questions to press the raise a hand button on the platform. When your name is announced, please make sure your microphone is on and start your question. If you need assistance, please use the Q&A button on the platform. To give everyone a chance to participate, we request to ask just one question. The first question comes from Christian Favre with Valor Econômico. Please go ahead.

Guys, it's just a follow-up question. Antonio, I think you mentioned that during the first quarter, the company was not capable of delivering two aircrafts in the commercial segment due to commercial issues. Can you clarify what happened? Just that one, I'm curious actually. Thank you very much.

Yes, Christian. Bom dia. Às vezes você tem questões contratuais em aberto. Sometimes

you have pending contractual issues, sometimes you don't have the documentation. Switching to Portuguese now. We

do not have all paperwork in order to deliver the aircraft towards the customer or the lessors. And that's why sometimes it takes one or two weeks to ship the aircraft. It was just a tiny matter for two aircrafts. But in regards to output, which is really important for us, we were able to finish those aircraft. But the commercial invoice and contract to the customer took two weeks more than we were expecting. Just that. Not a big issue, but it's just bureaucracy sometimes. It does not help us.

No, no. Thank you very much. All questions have been answered by the audience. Bye. Thank you.

Thank you, Christian.

Thank you. The next question comes from Jonathan Hammerdinger with Flightglobal. Please go ahead.

Hello there. I hope, I think you can hear me. Francisco, we've heard in the last several months, maybe it was last year, that Embraer was taking its time and trying to figure out new technology before moving forward with new development plans. You also sort of discussed or rolled out or talked about a new wing project, wing development project earlier this year. And Boeing has said they're studying a new wing and Airbus is also. I'm wondering if you can give me any update on what development is looking like, what technologies look most promising, and if wing work is maybe central or increasingly central to what you're looking at. Thank you.

Hello, Jonathan. Thank you for your question. I mean, as I said before, our engineering team is working in the different technologies and different fronts in order to allow us to decide about a new product in the future. At this point of time, we are really focused on selling the aircraft we have that are modern and competitive. And we see a lot of opportunities and we have the highest backlog ever of orders in the company. And there's no other progress that I have to report to you in terms of wings or fuselage or other parts. We are just working, investing in those new technologies, you know, to, as I said before, to be prepared to make a decision in a point of time in the future.

Thank you very much. Oh, I think follow up or no, maybe I'll pass it along. I think you said one question, so thank you.

Thank you, Jonathan.

Thank you. The next question comes from Gabriel Araujo with Embraer. Please go ahead. Mr. Araujo, you are muted. Mr. Araujo. Apparently he has left. So the next question comes from the chat and it's from Victoria Moores. Can you give us an idea of what we might expect from Embraer commercial aviation at the Paris Air Show?

Good question. It's too soon for us to disclose what we're going to do in the air show. We are preparing ourselves for the show as we do every year, but we don't have any news to share with you at this point of time.

Thank you. Please hold a second. The next question comes from Jonathan Hammerdier with Flyer. Please go ahead.

While I'm back, I raise my hand again to Francisco or the rest of the team. Can you tell me or give us any update on the state of the GTF engine issues, the availability of the engines and your happiness or how you feel about how Pratt has been handling the issues as of late and supplying parts and equipment as needed?

Thanks for the question, Jonathan. We have been working very closely with Pratt and Whitney for the last two or three years. We see improvement in both fronts in the engine deliveries to our assembly lines. This year, I hope this strike will not disturb this process, but so far they are doing well in terms of GTF deliveries. And also the new engines we are receiving are coming with a lot of improvements already, which will help a lot the wings to stay longer under the wings. So again, I think they are improving. And yes, we are happy with the development. Yes, we'd like to do even faster, but we understand all the complexity of the issues and we see improvement and have been working very closely to them. I've met with them three times a year, three or four times a year, just to discuss all the critical points related to deliveries, related to fuel the issues related to MROs, etc. But we see we have seen progress. Jonathan.

Thank you, Francisco.

Thank you. The next question comes from Gabriel Araujo with Reuters. Please go ahead.

Thanks, folks. Good morning. Sorry about my failed attempt earlier to make a question. Hi, Francisco and Antonio. I'd like to ask about the Latin American market. If you have any updates on this specific market, we know you had conversations in the past with Gol, Latan about introducing the issues in Brazil for those companies, in addition to to Azul. And about the Mexican market, you have deliveries coming up for the EU in Mexico. I'd like to know if you see room for for the C390 to to also enter that country in the future and if they to negotiations and the purchase by by Mexico and I would help the C390 market. Thank you.

Hi, Gabriel. Thanks. Thanks for for the question. In Latin America, starting with Brazil, I mean, we don't have any news to share with you. We have been in contact with potential customers going Latan, but we don't have any any progress to report to you at this point of time. And Azul is our customer. We keep delivering E2s to Azul with with helps with the showcasing the showcase with aircraft in Brazil in the region. Mexico, we are working hard to deliver the first United to Mexicana by end of July. The aircraft is already in our final assembly line. And this will be also a great opportunity to showcase the aircraft. Not only in Mexico, because we have other potential customer in Mexico for that aircraft, but also in North America. Then we have Porter in the north of North America and we have Mexicana in the south of North America. Well, Mexico is another potential customer for the C390, but we don't have any any combination between the two or C390 for that market. We are working in both fronts in Mexico. In Mexico, we now we are delivering the aircraft already and we will do the best we can to make the Mexican operation a great success, which will be very important for the for our for our E2. And in the C390 the same. We are working with them with an opportunity to introduce the C390 in Mexico as well.

That's a great thing.

Thank you. This concludes the question and answer session in English for the press. This Q&A section is going to be conducted in Portuguese. To switch to English, please press the interpretation button on the platform and then select English. Now we will start the Q&A session in Portuguese. We ask the journalists interested in asking questions to press the hand-pull button at any time. And when you have your name announced, activate your microphone and ask your question. We will also answer the questions sent through the platform's chat. If there is any need for assistance, please ask via the Q&A button on the platform. For everyone to have the chance to participate, we ask that you ask only one question at a time. The first question comes from the chat and is from Ricardo Meyer. First

question from Ricardo Meyer from the Airway site.

Could

you please talk about the recent decisions from Airbus to postpone the development of hydrogen-powered aircraft and also Boeing and NASA to do more research on the PDW as opposed to an Axe 6.6 prototype? Would that be an indication that this new generation of commercial aircraft will be more conventional than expected? Does Embraer agree

that

any commercial jet could be a development and not a revolution from now on?

Thank you for your question,

Ricardo. This is Francisco. Apologies, but we won't comment on decisions made by Boeing and Airbus. Those are their decisions. I can only speak for Embraer. As I've said previously in my previous answers, Embraer has been investing in new technologies in fuselage, wings, cockpits, and because we want to be ready to launch new products in the future, whether it be executive jets, commercial or defence aircraft. That's what I can share with you for the time being.

Thank you.

Next question is also from the chat by Nelson Durin from Defesa Net. What is the scope of the agreement signed with Turkey at the last LAAD in April? Does it include any military developments? Thanks for the question, Nelson. The scope of that MOU we signed with Turkey at LAAD is for technological cooperation to develop parts jointly.

Our intention

is to expand our production capacity of E2 aircraft, and Turkey has a highly developed aeronautical industry, and we would like to introduce E2 in that market, which would also

be

in favour of that partnership. Now, the two fronts that are parts of the scope of that MOU is to develop

parts

for commercial aviation and to do joint work to introduce Embraer aircraft in that country.

Thank you.

The next question is from Rafael Coracini from Inteligencia Finocera. Please go ahead, Mr. Coracini. Hi, can you hear me?

Yes, we can.

Yes, we can. Rafael, please go ahead. Thank you for taking my question,

which

is about cost control. Does that include changing suppliers? Is there a possibility that Embraer will be switching American suppliers because of US tariffs

to

suppliers from other locations, and if so, in which segments?

I'll take your question, Rafael. In

the airspace industry, you can't switch suppliers overnight. So, these are internal measures to cut down on costs to fight the effects of those tariffs. It's nothing extraordinary. We're just

buckling up

for that stage. To switch suppliers in the aerospace industry, it takes years. So, we're not going to a different location. We're just working on our current structure. Again, we have four divisions, and they all work based on the same principle. They apply to everything. Great, thank you. You're welcome. The next question is from Rodrigo Rott from Aeroflap. Please go ahead, Mr. Rott.

Mr. Rott?

Your microphone is on mute. Can you hear me now? Yes.

I

have a question about the cargo version of the E2. What are Embraer's plans? You have a cargo version. Do you have any plans to do that? Will you be going into that cargo version? What are your plans? Hi, Rodrigo. Thank you for your question.

We have

developed the cargo version for the E190E1. The plan now is to introduce that product

into

the market. That's what we're focusing on. There are no additional plans other than that. If it all goes well, then we may take a step towards the E195. But right now, we're focusing on introducing the E190E1 cargo aircraft. Thank you. You're welcome. Thank you. This concludes Embraer's Q&A session and the conference for today. Thank you for joining us and have a great day.