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The Embraer Annual Report 2022 contains the company’s main highlights of the year, including each Business Unit, Innovation, ESG, and financial performance
Embraer
Report
ESG
Business
Innovation
Financial
2022
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Message from the MANAGEMENT Francisco Gomes Neto The year 2022 was marked by overcoming the challenges and uncertainties that have ari- family, as well as in Executive Aviation and the Defense area. Moreover, the diversi昀椀cation sen on several fronts: the war in Ukraine, increased global in昀氀ation, and broad restrictions of business areas helped to compensate for the performance of a speci昀椀c segment. In this on the supply chain. These challenges led us to adjust internal processes throughout the way, the good performance of the Services & Support and Executive Aviation areas, as well year and, thanks to the focus and discipline of the entire team in the accomplishment of our as the increase in deliveries in Commercial Aviation, helped to offset the impact in the strategic plan, we were able to deliver the goals planned for the year. Defense & Security area. Compared to 2021, we increased aircraft delivery by 12.7% – from 141 to 159 Commercial At Commercial Aviation, we announced an additional order for Canada’s Porter Airlines and Executive aircraft in 2022. We also increased revenue by 8.2% to USD 4.5 billion. Ad- for 20 new E195-E2s, in addition to 30 existing 昀椀rm orders. Porter even took delivery of the justed EBIT and EBITDA margin (in USD) exceeded the guidance presented to the market, 昀椀rst E195-E2 jets operating in North America at the end of the year. We also announced an reaching 6.0% and 10.1%. Another highlight was free cash generation without EVE, which order from Azorra, a U.S. aircraft leasing company, for 20 new E2 jets, besides the expansion reached USD 540.1 million, quite above estimates. of our presence in the Middle East, with operator SalamAir from Oman ordering six E2s. The focus on improving business ef昀椀ciency remains a key factor in achieving our goals In addition, the Chinese civil aviation authority has granted certi昀椀cation for our E190-E2, and delivering better margins, even with supply chain constraints. Throughout the year, opening the doors of the relevant Chinese market for the E2 family. we implemented several mitigation measures, such as creating a special team to operate Executive Aviation presented another year with outstanding results, with the delivery of 102 within the main suppliers’ plants, developing alternative logistics routes, and improving aircraft, “book-to-bill2” above 1.8:1, and a higher gross margin than in the previous year. As internal processes to reduce production cycles. Also noteworthy are the efforts for con- a re昀氀ection of the good momentum of the business unit, Phenom 300 was voted for the 11th tinuous improvement of operational ef昀椀ciency, such as inventory turnover management, consecutive year as the world’s best-selling business jet in the industry. restructuring of selection and procurement processes, and ongoing improvement of pro- In Defense, we faced dif昀椀culties such as contract renegotiation and other factors that re- duction processes. sulted in a 25% decrease in segment revenue. However, we are optimistic for 2023 as the The sales growth of our current product portfolio also excites us for the coming years. The current geopolitical scenario continues to in昀氀uence countries around the world to review backlog returned to the pre-pandemic level, reaching USD 17.5 billion. There are several their plans and renew their armed forces. The main highlight of the year was the selection ongoing sales campaigns that are progressing, both in Commercial Aviation, mainly the E2 of C-390 Millennium by the Dutch Ministry of Defense as the only aircraft that meets the
requirements of its “Replacement Capacity Tactical Airlift” project, which provides for the SINCE 2008, EMBRAER IS A SIGNATORY AND REAFFIRMS ITS COMMITMENT “ acquisition of 昀椀ve tactical transport aircraft. Besides this, we announced with L3Harris TO THE UN GLOBAL COMPACT. IN 2022, WE MOVED FORWARD ON OUR JOURNEY Technologies a partnership to develop an “Agile Tanker,” a tactical aerial refueling option to TOWARD A LOW-CARBON ECONOMY AND A MORE DIVERSE COMPANY WHILE meet U.S. Air Force operational guidelines. MAINTAINING THE HIGHEST STANDARD IN CORPORATE GOVERNANCE. The service and support business continues to post positive results, with a growing order Francisco Gomes Neto - President of Embraer ” book and positive gross margin. The growth was based on the expansion of the sale of ma- terials (parts and support for special programs) thanks to a greater use of the Commercial and Executive Aviation aircraft 昀氀eet. The main driver of commercial aviation services were Lastly, it was with great joy that we received the “Great Place to Work” certi昀椀cation in seve- Pool Program contract renewals such as Blue and LOT Polish, as well as new customers, in- ral countries that we operate. For us, it is an important recognition to be celebrated, since cluding Porter Airlines, Sky High Aviation Services, and Western Air, operator of the largest we believe that engaged and passionate people achieve the best results and create a happy 昀氀eet of ERJs in the Caribbean. Another highlight is new contracts for more than 20 Breeze and healthy work environment. and Envoy Air Airframe Maintenance and Repair aircraft. For this year, despite persistent value chain constraints and global macroeconomic risks, In the innovation pillar, we have taken an important step to cement our performance in we see a better outlook in terms of revenue and pro昀椀tability. The aircraft slots on the pro- the start-up urban air mobility industry (UAM), which should represent a great business duction line for deliveries in 2023 and 2024 are almost completely 昀椀lled, for both commer- opportunity in the coming years. In May, we completed Eve’s spin-off by listing the company cial aviation and business jets. on the New York Stock Exchange. With a full portfolio of solutions for the UAM market, an Therefore, adding our focus and discipline in business ef昀椀ciency concerning innovation advanced electric vertical take-off and landing aircraft (eVTOL) design and a comprehen- projects to ongoing sales campaigns in all business units, we are very con昀椀dent in Embra- sive global service and support network, Eve ended 2022 with 26 publicly announced cus- er’s sustainable growth in this and the coming years. tomers, with potential orders for 2,770 vehicles valued at USD 8.3 billion, the industry’s largest backlog. Today we have a very comfortable cash position compared to previous years, a portfolio of Regarding our journey to a low-carbon economy and more sustainable aviation, we announ- top-notch products and services, and highly quali昀椀ed people. We demonstrate commit- ced the advances in the Energia Family program, which consummated the concept aircraft ment and discipline in accomplishing our strategy and resilience to meet the challenges into two models with a capacity of 19 to 30 seats, both with hybrid electric and hydrogen ahead. Besides, we continue to advance strategic partnerships for the business. electric propulsion. Furthermore, alongside Pratt & Whitney, we successfully tested a GTF- I would like to end with a strong thank you to the Embraer team, which once again showed -powered E195-E2 aircraft using 100% sustainable aviation fuel (SAF), the 昀椀rst step in the cer- commitment and dedication to overcome the challenges, always keeping the focus on qua- ti昀椀cation process to maximize emissions reduction with the use of sustainable aviation fuels. lity and safety, and also to our shareholders and customers for their trust in our company. We also project for 2024 our goal of using 100% renewable electricity in our facilities in Brazil, which account for about 70% of our total electricity consumption. In addition, we signed a memorandum of understanding with Raízen, of the Shell/Cosan group, to evaluate the sustainable aviation fuel (SAF) production market in Brazil – contributing not only to our Francisco Gomes Neto - President of Embraer emissions, but to the entire aviation industry in the country. Alexandre Silva - Chairman of the Board of Directors
CLICK TO GO TO THE INTENDED SUBJECT TABLE OF CONTENTS All pages in this 昀椀le are browsable: menus and pagination. About Fit For Growth ESG Business 06 12& FINANCIAL 15COMMITMENT 36INNOVATION 48 EMBRAER PERFORMANCE TO THE FUTURE UNITS 7. Introduction 13. Introduction 16. Introduction 37. Introduction 49. Commercial Aviation 8. Where We 14. Operating 17. Environmental Commitment 38. Awards | Highlights 51. Executive Aviation Are Result 39. Innovation Verticals 56. Defense & Security 21. Social Commitment 9. Our values 32. Commitment to Governance 43. Innovation Culture 61. Services & Support 10. Timeline 45. Embraer-X 65. Agricultural Aviation 46. Beacon 47. Eve Air Mobility Sustainability INDICATORS 67. Technical References, Materiality, Indicators, GRI, SASB, TCFD
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About EMBRAER 6
RELATÓRIO ANUAL / 2022 ABABOUOUTT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSTAINABILITY EMBREMBRAERAER FINANCIAL PERFORMANCE UNIT INDICATORS ONE OF THE Embraer is one of the world’s largest aerospace and defense conglomerates. On average, every 10 seconds an aircraft ma- NET REVENUE LEADERS nufactured by the company takes off from an airport, annually in the aerospace carrying more than 145 million passengers around the world. US$ 4,5 and defense Leader in the segments in which it operates in the Commercial BILLION industry Aviation, Executive Aviation, Defense & Security, Services & Support markets and with more than 8,000 aircraft manufac- GRI 2-1; 2-6 tured and delivered throughout its history, Embraer has been Embraer is the main ex- an exponent of innovation since its inception in 1969, and has porter of high value-added in this strength its critical pillar for sustainable growth. There- goods in Brazil, with in- fore, the company fosters an ecosystem of knowledge genera- dustrial operations, of昀椀- tion and dissemination that stimulates the quality training of ces, service centers, and its collaborators, increases the competitiveness of the aero- parts distribution in the nautical industry, furthers scienti昀椀c development, and positi- Americas, Africa, Asia, and vely impacts the society as a whole. Europe. At the end of 2022, Embraer’s workforce was made up of 18,872 Of total net revenue, Com- collaborators, of which 14,960 in Brazil and 3,912 abroad. The mercial Aviation accounted reported total includes OGMA employees. for 34%, Executive Aviation 27%, Defense & Security 10%, Services & Support 28%, and 1% of other rela- 145 MILLION ted businesses. At the end of the year, the PASSENGERS portfolio of 昀椀rm orders to be delivered reached USD ARE CARRIED ANNUALLY AROUND 17.5 billion. THE PLANET ON OUR AIRCRAFT 7
ABOUT RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSTAINABILITY EMBRAER EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS 6 5 8 7 2 4 11 3 9 10 WHERE 1 we are GRI 2-1 1 2 3 4 5 6 7 8 9 10 11 Brazil United Mexico Portugal United Ireland France Netherlands Arab Singapore China São José dos Campos States Chihuahua Alverca Kingdom Dublin Le Bourget Amsterdam Emirates Singapore Beijing Gavião Peixoto Mesa Subsidiary: Subsidiary: Farnborough Dubai Botucatu Nashville EzAir OGMA Subsidiary: Taubaté Melbourne Interior Embraer Cae Brasília Irwindale Training Services Belo Horizonte Fort Lauderdale São Paulo Davies Rio de Janeiro Jacksonville Sorocaba Memphis Campinas Dallas Subsidiaries: Subsidiaries: Atech Embraer Cae Visiona Training Services Tempest Eve 8
RELATÓRIO ANUAL / 2022 ABABOUOUTT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSTAINABILITY EMBREMBRAERAER FINANCIAL PERFORMANCE UNIT INDICATORS Our VALUES Ethics and integrity Our people are what We are here to serve We strive for company are in everything we do make us 昀氀y our customers excellence From the simplest activities Happy, competent, valued, Winning the loyalty of Corporate action designed for Embraer’s values were built to the greatest achievements. ful昀椀lled people, committed customers by ensuring their simplicity, agility, 昀氀exibility, and collectively, involving collabo- We follow the rules and to what they do. People complete satisfaction, and security, with a constant drive to rators around the world, and question when necessary, who work as a team and act building strong and lasting continual improvement and to bring the deepest and most always in search of what is with integrity, coherence, relationships. Establishing excellence. An entrepreneurial compelling view of what is in right and best for society, respect, and mutual trust. partnerships, based on real attitude based on integrated the company’s business. They for the company and for all. commitment and 昀氀exibility. planning, responsible delegation, form a solid base, founded on and disciplined execution. ethics and integrity, from whi- ch Embraer will always deve- Boldness and innovation Global presence We build a lop science and technology, are our hallmarks is our frontier sustainable future generating value for its cus- The forefront in technology, Global presence and Constantly striving to tomers, shareholders, colla- an organization that learns mindset, acting locally to build the foundation for borators, society, and other continuously, and has the leverage competitiveness, the company’s longevity, stakeholders. capacity for innovation, using the best of each considering stockholders’ for transforming inner location. Vision of a world pro昀椀tability, respect for reality and in昀氀uencing without borders and of quality of life, environment the markets in which it valuing diversity. and society. SENCEoperates. Strategic vision and capacity to overcome challenges, with creativity S and courage. E 9
RELATÓRIO ANUAL / 2022 ABABOUOUTT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSTAINABILITY EMBREMBRAERAER FINANCIAL PERFORMANCE UNIT INDICATORS How did we get here? TIMELINE 1983 1996 1994 1968 1975 1969 1978 1985 1960 1970 1980 1990 1965 – Start of the IPD/PAR-6504 1970 – Start of 昀氀ight testing of 1983 – Presentation and 1st 昀氀ight of 1994 – Privatization of Embraer. project, a light transport aircraft the Ipanema agricultural aircraft. EMB 120 Brasilia, regional turboprop 1996 – First delivery of EMB 145, for military and civilian use, at the 1975 – First export. Uruguay with capacity for 30 passengers. later renamed as ERJ 145. A new Aeronautics Technical Center (CTA), in receives the Bandeirante plane 1985 – Presentation and 1st 昀氀ight family of regional jets emerges. São José dos Campos, State of São Paulo. and the Ipanema agricultural plane. in Brazil of AMX, subsonic 昀椀ghter 1968 – Named Bandeirante, the aircraft developed in partnership with Italy. 1999 – Pre-launch of the performs its 昀椀rst 昀氀ight. 1978 – Brazilian Air Force (FAB) EMBRAER 170/190 program, a hires Embraer to develop the 1989 – Start of the EMB 145 project, new family of business jets between 1969 – Embraer is created to further EMB 312 Tucano, a basic military regional jet aircraft for up to 70 and 120 seats. the development of the Brazilian training aircraft. 50 passengers. aeronautical industry, with the initial activity being the series production of Bandeirante. 1010
RELATÓRIO ANUAL / 2022 ABABOUOUTT FIT FOR GROWTH & ESG INNOVATION BUSINESS SUSTAINABILITY EMBREMBRAERAER FINANCIAL PERFORMANCE UNIT INDICATORS 2021 2017 2018 2001 2004 2018 2019 2022 2005 2000 2010 2020 2001 – Launch of PEE (Specialization Engineering 2017 – Creation of the Services & Support 2020 – Performance of the plan to protect Program), a master’s program in partnership with ITA area, a new organizational structure dedicated people and overcome the global crisis caused (Technological Institute of Aeronautics), as well as to supporting Embraer aircraft operators by the pandemic. the Embraer Institute. and offering agnostic services. 2021 – Embraer strengthens its ESG 2004 – Start of deliveries of jets of the EMBRAER 2018 – Presentation of Praetor 500 and commitment by introducing a group of 170/190 family, recognized worldwide as the E-Jets. Praetor 600 business jets. Start of deliveries sustainable initiatives, with goals of diversity, 2005 – Launch of the Phenom 100 and Phenom of the second generation of E-Jets, the E2. inclusion, governance, and emission reduction. 300 jets. After a successful experience with the 2019 – Delivery of the 昀椀rst KC-390 to FAB. 2022 – IPO of EVE, the 昀椀rst company incubated Legacy jet, Embraer reasserts its commitment to the It is the beginning of the operations of the by Embraer-X, and dedicated to accelerating Executive Aviation market, expands its portfolio, most sophisticated aeronautical project the Urban Air Mobility (UAM) ecosystem. and expands its global customer support network. developed in Brazil. 11 11
Fit for Growth & FINANCIAL PERFORMANCE 12
ABOUT FIT FOR GROWTH & BUSINESS SUSTAINABILITY RELATÓRIO ANUAL / 2022 FIT FOR GROWTH & ESG INNOVATION EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS FINANCIAL PERFORMANCE Fit for Growth & FINANCIAL PERFORMANCE GRI 201-1 In 2022, Embraer exceeded the 昀椀nancial indicator forecasts dis- COMMERCIAL AND EXECUTIVE closed at the beginning of the year: Adjusted EBIT, Adjusted EBI- TDA, and Free Cash Flow. Results that re昀氀ect better operational 159AIRCRAFT ef昀椀ciency compared to previous years. DELIVERED IN 2022 Compared to 2021, the company increased the delivery of Com- mercial and Executive aircraft by 12.7%, from 141 to 159 aircraft in 2022, posting a revenue of 8.2% (in USD) higher. Detailed results of the company’s 昀椀nancial performance are available in the Ma- nagement Report. Learn more: Financial Statements (only in Portuguese) Release of Deliverables and Backlog 1313
ABOUT FIT FOR GROWTH & BUSINESS SUSTAINABILITY RELATÓRIO ANUAL / 2022 FIT FOR GROWTH & ESG INNOVATION EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS FINANCIAL PERFORMANCE OPERATING INCOME TOTAL NET REVENUE In 2022, the adjusted result and operating margin (EBIT) were USD 270.3 million and 6%, US$ 4,5 BILLION respectively. 8.2% higher (USD) than in 2021 The increase of about 13% in the number of de- liveries of Commercial and Executive Aviation, Revenue by Segment Revenue by Region with a consequent increase in its revenues, Net Rev. USD Billion Net Rev. USD Billion the increase in average prices coupled with a 4,2 4,5 4,2 4,5 more favorable product mix and cost control 3% measures largely explain the better pro昀椀tabili- 4% ty posted in 2022 vis-à-vis 2021. 11% 11% 1% 1%2% Embraer’s shares have been listed on the 5% Novo Mercado Listing of the São Paulo Sto- ck Exchange (B3) since 1989 and on the New 19% York Stock Exchange (NYSE), through the level 27% III American Depositary Receipts (ADRs) pro- gram, since 2000. At the end of 2022, Embraer’s shares traded on B3 - EMBR3 – were quoted at BRL 14.31, a 42% 63% Others devaluation compared to BRL 24.82 at the end 52% Brazil of 2021. The American Depositary Shares (ADSs) Services & Support Asia-Paci昀椀c listed on NYSE - ERJ – reached a price of USD Defense & Security Latin America Executive Aviation Europe 10.93, accounting for a devaluation of 38% com- Commercial Aviation North America pared to USD 17.75 in the previous year. 2021 2022 2021 2022 14
Commitment to THE FUTURE 15
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS Embraer maintains its sustainability strategy and planning, announced at the end of 2021, with long-term ESG goals. Focused on decarbonizing aviation through the development of more sustainable products, services, and technologies, as well as strengthening its historical performance E / Environmental in social responsibility, the company advanced and, in 2022, its goals evolved and achieved concrete results on several fronts. S / Social G / Governance GRI 2-22; 3-3; RT-AE-410a.2 Carbon neutral Maintain Maintain Commitment to Provide professional 100% Carbon Products for growth from the Ethics & the highest 50% diversity in quali昀椀cation in electricity neutrality in zero-carbon 2022 Compliance international hiring across all technology for from operations aviation Program, fully standards of gateway programs 1,500 people from renewable until 2040 by 2050 aligned with global governance by 2025 minority groups by sources by standards 2025 through the 2030 Social Tech Program 2022 2025 2030 2040 2050 Continuous training in Maintain the approval of Maintain high product Have 25% of women Have 20% of fety standards Diversity & Inclusion more than 80% of Embraer sa in Embraer’s women in senior Learn more: high school students in and full alignment Master’s Program leadership Sustainability public or private universities with international in Aeronautical positions by 2025 Indicators with a full scholarship requirements Engineering by 2025 16
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS ENVIRONMENTAL Commitment RENEWABLE ENERGY In 2022, the company signed a power purchase agreement that ensures that 100% of the electricity acquired by Embraer in Brazil is from renewable, wind, and solar sources, starting in 2024. With this agreement and the acquisition of Renewable Energy Certi昀椀cates (RECs), Embraer will zero its Scope 2 carbon emissions in Brazil one year earlier than announced in its corporate goal. Electricity consumption in its operations in Brazil accounts for about 70% of the total consumed in all its operations around the globe. In 2022, assessments Learn more: and discussions were also started with the teams in Portugal and the United Sustainability States so that, by 2030, 100% of the electricity consumed by Embraer will be from Indicators renewable sources in all its operations worldwide. 171717
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS CARBON NEUTRALITY Embraer focuses on three main actions to achieve carbon neutrality of its operations by 2040. They are: Energy ef昀椀ciency Use of 100% electricity from Increased use of SAF* on test of its operations renewable sources and demonstration 昀氀ights *Sustainable Aviation Fuel As concerns energy ef昀椀ciency and use of electricity 100% from renewable sources, in 2022 several initiatives were implemented, with special emphasis on: Solar heating installation at the Changes in processes and automation of machines Installation of photovoltaic panels in the Ede unit Gavião Peixoto unit at the Ozires Silva unit The Embraer Equipment Division (EDE), a unit dedicated to the ma- The installation of solar panels at the Gavião Two relevant efforts were implemented at the Ozires nufacture of landing gear in São José dos Campos, São Paulo, recei- Peixoto unit was carried out with a view to Silva unit to reduce electricity consumption: ved the installation of photovoltaic solar panels in one of its adminis- supplying heated water to its restaurant. The trative buildings. This technology is capable of transforming sunlight photothermal solar panel is a highly ef昀椀cient • One of them was dedicated to reviewing the process of into electricity, and estimates are that power thus generated will be and widely used technology in Brazil, capable heat treatment of metal parts manufactured in the com- suf昀椀cient to supply the building, producing around 42 MWh, poten- of converting sunlight, an in昀椀nite and free pany, which occurs in a large air furnace and requires tially avoiding up to ten tons of carbon in the atmosphere per year. source of energy, into heat. Estimates are that large amounts of power, especially when starting the this project will reduce each year approxima- device’s use. At no cost and with a potential reduction Use of biomethane gas in the Gavião Peixoto unit tely 40,000 m3 of natural gas consumption of up to 218 MWh of electricity per year, they represent and avoid the emission of about one hundred around sixteen tons of avoided carbon emissions. In 2022, the company implemented a pilot project to replace tons of carbon (CO2e) into the atmosphere. • And the other consisted in creating a strategy of automa- natural gas (non-renewable source) with biomethane in several tic activation and disconnection of the machining ma- production processes at the Gavião Peixoto unit. Biomethane is a Practices similar to this have already been im- chines. This initiative required a change in the operating renewable source gas, generated in the process of decomposing plemented at the Ozires Silva and Eugênio de logic of the machines and implies a reduction in annual organic matter. Melo units in Brazil, and are strategically linked electricity consumption of up to 145 MWh per year, avoi- Comparative analyses of the performance of equipment and sys- to Embraer’s emission reduction targets. ding the emission of, on average, ten tons of carbon into tems were carried out, with a positive outcome that will serve to the atmosphere. replicate the project in other units and production processes. 18
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS Regarding the use of SAF, the goal is to account for 25% of tot al fuel use by 2040. As the production of SAF in ADVANCES TOWARDS ZERO-CARBON AVIATION Brazil is still zero, Embraer initiated a process for procu- rement of this product in the United States, for Melbour- Embraer plans, for 2026, its fully electric 100% SAF-compliant, this aircraft is destined ne site operations*. and zero emission vertical take-off and to revolutionize the industry, reducing CO2 landing vehicle, the eVTOL, which will emissions by up to 15% compared to others be able to transport passengers through in the industry. In current projections, the Purchase of SAF cargo cities, transforming urban mobility. As for company predicts that the new turboprop In July 2022, Embraer and Raízen (a global bioenergy Commercial Aviation, the company intends will start operating in 2028. company) signed a Letter of Intent with the commit- to make the 昀椀rst 昀氀ight of its hydrogen-elec- By 2045, the 昀椀rst 昀氀ight of Embraer’s hy- ment to further the development of the sustainable tric demonstrator by 2025. drogen-powered turboprop is expected aviation fuel production ecosystem – SAF, thus rea- Another step towards more sustainable to occur. For 2050, the goal is to have E2 f昀椀rming the sustainability agenda of both companies. aviation is the next-generation turboprop powered by hydrogen or similarly sized air- Among all intentions, Embraer seeks to become the program. In early stages of development, and craft soaring to the skies. 昀椀rst company to use this fuel to be produced in Bra- zil, which may be distributed by Raízen. This initiative bene昀椀ts the air transport industry worldwide, and the use of this type of technology is a pivotal part of Embraer’s strategy regarding carbon neutrality in operations until 2040. Learn more: Learn more: Purchase of SAF cargoes eVTOL Energia Family 19
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS E195-E2 IS THE MOST SUSTAINABLE aircraft in its category EMBRAER’S E195-E2 AIRCRAFT IS THE QUIETEST AND MOST EFFICIENT IN THE WORLD Operating on short- and medium-haul routes, E2 has the lowest external noise levels and As the aircraft consumes less fuel, it has greater E195-E2 is the most ef昀椀cient aircraft on the longest maintenance intervals in the single-aisle 昀氀ight range while being 50% quieter and emitting market, and considered the most sustainable in jet category: 10,000 昀氀ight hours for basic checks up to one-third less carbon dioxide. The economy its class, with a 25% lower fuel consumption than and no time limit for typical E-Jets operations. This of E195-E2 coupled with its comfort allows the the previous generation, and 17% lower emissions. means an additional 昀椀fteen days of use over a ten- operator to increase capacity and delight their year period compared to the current generation. customers. Learn more: Aircraft E2 2020
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS SOCIAL Commitment GRI 405; 3-3 Embraer seeks to be a plural and human company that respects the individualities of each collaborator. Valuing characteristics and behaviors, the company praises that every human being is part of a process, and always seeks to offer the necessary support for its collaborators to perform their assignments with a sense of belonging. With a focus on the inclusion and representativeness of all people, and efforts directed at minority or underrepresented groups to be part of the company in a genuine way, Embraer has corporate goals for Diversity & Inclusion and makes this a cornerstone of its culture. Learn more: Sustainability Indicators 212121
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS TALENTS Inspired by all the learning gathered over the critical period of the Covid-19 pandemic, 2022 saw the implementation of new work models, focusing on the hybrid model, in which part of the professionals work in person and part remotely. The company realized the need to support its leaders and collaborator, so that this adaptation was ef昀椀cient, changing new behaviors into new habits. THE FUTURE OF WORK TALENT ATTRACTION AND RETENTION GRI 401-1 In 2022, the company created a global project entitled “Future of For Embraer, attracting and retaining the best talent are primary Work,” managed based on an Agile methodology (based on the goals. In 2022, Embraer had more than two thousand and seven Scrum framework) with weekly sprints, and engaging more than hundred vacancies 昀椀lled. The company carried out an active sear- 50 collaborators, who represented Embraer’s major areas. ch for the best candidates, especially on the LinkedIn platform, in Diagnostics and adjustments were made in different processes addition to being present at fairs and career events at institutions to improve the experience of collaborators, who were working such as ITA (Technological Institute of Aeronautics), POLI USP 100% remotely or hybrid, in addition to guiding their leaders in (Polytechnic School of the University of São Paulo), UFMG (Fede- the management of teams and supporting the business needs in ral University of Minas Gerais), and other relevant universities in the face of changes in the current corporate world. Brazil, thus advancing the selection process with interviews and simultaneous hiring. This selection process model, called selec- The concept of asynchronous communication (non-simultaneous tion sprints, resulted in swift hiring for various positions in pro- communication) has been implemented as a capital point of duction and production support areas. mindset change within the company, being essential for hybrid Alongside the personnel of Talent Acquisition, Information Tech- work, fostering transparency, and avoiding excessive meetings nology, Medical Team, and Payroll and with the support of an ex- and interruptions. ternal partner, the company mapped the journey of the new Em- The project made the company review new work scenarios that, braer collaborator, in order to assess the possibilities of improving connected to the business vision, the pillars of culture and the the hiring process. With this initiative, newly hired collaborators expectations of collaborators, allowed to build an adaptive and and leaders were interviewed with the purpose of better unders- bold work model. tanding customer experience, using Design Thinking techniques for interview and user journey. 22
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS GATEWAYS, INTERNSHIPS, AND YOUNG APPRENTICES GRI 404; 405; 3-3 WORKING MODELS In 2022, Embraer’s Internship Program 昀椀lled 昀椀ve Overall, forty collaborators attended Data Scien- hundred vacancies in two cycles and is expected ces subjects, and 昀椀fty-one collaborators took the to 昀椀ll another three hundred vacancies in the 昀椀rst subjects on Embedded Software. In December ON-SITE: Five days in person half of 2023, with a new cycle of applications 2022, the class was concluded with the approval (productive areas and production for candidates from all over Brazil. In addition, of the thirty-昀椀ve professionals, thirty-three of support) the Summer Internship was also launched, with whom were hired by Embraer. thirty vacancies and a duration of two and a half Embraer’s goal is to draw the new generation of months with opportunities in several areas, and in aviation talent and provide candidates with great HYBRID: On-site + Remote face-to-face, hybrid, or 100% remote work models. convenience and experiences, in a diverse and (up to two days in person) Embraer, in concert with Senai (National Service inclusive environment, so that each professional for Industrial Training) for young apprentices, becomes the main player in their own development opened new classes in 2022, with about two and career. 100% REMOTE: Five days remote hundred participants in the São Paulo cities of Gavião Peixoto, Botucatu, and São José dos Campos. It also maintained the partnership for Based on these three models, the FORMARE, a professional quali昀椀cation program company tested and validated the aimed at young people in situations of economic foundations of Future of Work, such as and social vulnerability, earmarked for logistics updating employment agreements, how students in the city of Gavião Peixoto. to offer infrastructure services such Also in 2022, the 昀椀rst class of the Software as food and transportation, as well as Specialization Program – PES was formed. Held issues of home-of昀椀ce allowance and in partnership with UFPE (Federal University of assistance during the pandemic. Pernambuco), this is a Non-Degree Graduation Program in Embedded Software and Data Science, with subjects taught by professors from UFPE and with the participation of Embraer professionals. 23
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS GPTW CERTIFICATION LEADERSHIP ACADEMY GRI 404; 3-3 Embraer has been In 2022, the company carried out continuous All new company leaders also undergo training, which recognized as one actions for the development of its leaders. Wi- includes understanding all company processes, of the best com- thin the “Leadership Academy”* topics were people management, and culture. In 2022, there panies to work in worked on Culture, People Cycle, Business, Fu- were three classes of new leaders. a survey performed by Gre- ture of Work, and Diversity. For the Future of The portfolio of training performed in 2022 is extensive at Place to Work®, a global Work topic, the company combined efforts to and covered speci昀椀c training on Diversity and Inclusion, consulting 昀椀rm that supports customize a global training on hybrid manage- Culture, Compensation, Con昀椀dential Processes, and organizations to achieve the ment for supervisors and managers. Senior lea- Communication, the latter focusing on “communicate best results through a cultu- ders were also trained to be facilitators of this to lead.” Overall, there were one hundred and re of trust, high performance, topic for new leaders. sixty-six training classes for leaders, totaling and innovation. almost 昀椀ve hundred hours of training. The GPTW Certi昀椀cation was Learn more: * Development program in management, launched in Brazil in 1997 as Talent Management leadership, and innovation. a seal that recognizes organi- zations that develop a work of excellence with their colla- borators. One of the highlights in the sur- EMBRAER CULTURE vey was Embraer’s contribution In 2022, the company made important advances in the evolution of its culture. All to society. Leader of an indus- company’s leaders and collaborators participated in training and a number of enga- try deemed strategic owing to gement and communication efforts, which prompted re昀氀ection and strengthened the the cutting-edge technology it movement of change for an increasingly integrated company, with diversity and inclu- develops, the company gathers sion, focused on results, agile and ef昀椀cient. The leap in this evolution could be quan- talents with high capacity to ti昀椀ed through the engagement survey, carried out in concert with Great Place to Work. generate innovations with po- In just one year, the company had an increase from 72% to 78% in overall favorability sitive impacts on the economy. in relation to the topic, in the perception of more than 8,000 collaborators worldwide. 2424
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS DIVERSITY & INCLUSION GRI 405; 3-3 Embraer values the history and particularities of people, so it always seeks to build diverse teams, with initiatives aimed at the inclusion of underrepresented groups. Wi- thin the company, it is important that all people are represented, both in the staff and especially in leadership positions, regardless of their characteristics. Social Tech GRI 401; 404; 405 reated in 2021 in partnership with the Institute of Management and Information Technology (IGTI) with a view to fostering the professional quali昀椀cation of minority or underrepresented groups. In its 昀椀rst edition, Social Tech had as participants people with disabilities and, in 2022, the program continued, this time aimed at black people, with more than ten thousand candidates for a thousand vacancies. Throughout the course, which provided two hundred and forty-four hours of study, students learned to work with the Python programming language, which has applications in data science, arti昀椀cial intelligence, and automation, through the bootcamp methodology*. Participants make up the talent pool of Embraer and partner companies in future selection processes. Besides being relevant to the market, Social Tech is a program that integrates the company’s af昀椀rmative actions. *Type of immersive training destined for the development of important skills in several areas. Course with 244 HOURS IN PYTHON PROGRAMMING LANGUAGE. 2525
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS EMpower Women GRI 401; 404; 405 In 2022 Embraer has the corporate goal of having 20% of women in the company’s senior leadership by 2025. To pave the way 16% for such achievement, the company created, in 2022, the OF Women’s Training Program with a focus on accelerating the development of their careers. WOMEN This training takes place within the company’s corporate HELD MANAGEMENT training platform, which provides continuous development POSITIONS programs and training for the entire company. The program’s 昀椀rst class will start in February 2023. Learn more: Ecosystem Accelerating Careers Embraer participated in the 33rd Annual Conference of Women in Aviation (WAI) in Nashville, USA, and the 34th Conference of the International Association of Women in Aviation (IAWA) in Lisbon, Portugal. Both events aimed to further, support, discuss, and expand the presence of women and their careers in this mostly male segment, globally. 2626
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE ESG INNOVATION UNIT INDICATORS EMBRACE GRI 404; 405 1ST INTERNATIONAL Embraer’s voluntary, colla- WOMEN’S CONGRESS borator -driven af昀椀nity group ON STEAM or ERG (Employee Resource Embraer participated in the 1st Group) created in 2019 to International Congress of Women welcome underrepresented in STEAM (Science, Technology, groups and diversity, equity, Engineering, Arts, and Mathema- and inclusion agenda in the tics), held at the Technological company. Through actions and Park of São José dos Campos, initiatives structured around São Paulo. The event, organized the commemorative dates for alongside professors from the Te- these groups, throughout the chnological Institute of Aeronau- year, the agendas raised by tics (ITA), aimed to strengthen the Embrace were addressed. connections among scholarship, At Embraer Brasil, the groups industry, and political agents to represented by the program are: internationally further initiatives targeted at Science, Technology, • Women and Innovation (ST&I) that rely on • Persons with Disabilities the performance of women. Du- ring the congress, Embraer and • Black People Embraer-X presented an interac- • LGBTQIA+ people tive exhibition on women working in the company’s innovation, en- gineering, and technology areas. 27
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS WORKER SAFETY AND HEALTH GRI 403; 3-3 SAFE ENVIRONMENT PROGRAM At Embraer, safety always comes 昀椀rst, A new Integrated and Cooperative Sys- Present at Embraer since 2018, the program aims to address whether in the products offered or in tem, which includes Global, Regional, occupational safety with preventive data that can be contri- the operations carried out. The com- and Local Management, was created in buted by anyone, whether collaborators, contractors or visi- pany has a set of prevention practices 2022, aiming at synergies so that all data tors. The insertion of information happens via cell phone or to protect collaborators from occupatio- and information is treated more actively computer through QR Codes spread throughout the company. nal risks and accidents, providing a safe and objectively, integrating the work of all Any and all unsafe situations spotted by any person should be and healthy work environment, with the units of the company around the world. reported through the program, for latter handling and resolu- best conditions for everyone to perform Seeking to increase the well-being of tion in the shortest possible time. their tasks. the team that operates in the company’s In this manner, the company maintains a tracked database Occupational safety indicators are as- operations, Embraer invested in innova- with all reported situations and their resolutions, thus being sessed monthly under the supervision of tion and purchased its 昀椀rst exoskeletons, able to act in the prevention of accidents and incidents, the company’s leaders, both in organiza- robotic equipment that help the human making the environment always safe. tional visibility meetings with the boards body to develop certain tasks, in addition In 2022, the process of unifying platforms of this program be- and in Board of Directors’ meetings. to assisting in human joints. Dressing the gan, making it even more agile and robust. equipment brings support to movements and reduces the need for human stren- gth, collaborating with the team’s safety WELL-BEING PROGRAM GRI 403 and ergonomics. *Environment, Health and Safety. The Well-Being Program contributes to a better quality of life for active collaborators, direct dependents, and interns. In order to reduce health risk factors, the program encou- rages the practice of bene昀椀cial habits and provides facili- tating means in order to introduce a healthier lifestyle into Learn more: daily life. In 2022, twenty-seven thousand people were im- Sustainability Indicators pacted by the vaccine bene昀椀t, including collaborators and their dependents. 28
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS GRI 413 CORPORATE SOCIAL RESPONSIBILITY For more than 20 years the Em- dents in Science & Technology, in braer Institute has supported addition to fostering social inclu- education in Brazil to build a fairer sion through a healthy competi- and more inclusive country, main- tion that generates knowledge. taining two full-time high schools In addition, the schools achieved for students from public schools a remarkable result of students and low-income households in approved in the entrance exam, São José dos Campos and Botu- with 75% of approval in public or catu, in the State of São Paulo. private universities with scholar- To them, a contingent of paying ship. students (20% of the total student body) is added, reaching a total of Another major initiative of the 800 students in 2022. Embraer Institute revolves around The resumption of face-to-face the response to climate emergen- school classes was one of the cies. The Institute joined the cam- high points of the year 2022. With paign to donate necessity goods, this, new programs were laun- integrating into the hall of organi- ched, such as the 1st edition of zations that sent aid for the 昀氀oods the Embraer Institute of Science that struck the state of Pernam- and Technology Olympiad, targe- buco in 2022, serving more than ted at furthering the interest of 1,000 people of the area’s vulne- elementary and high school stu- rable population. 2929
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS GRI 413 VOLUNTEER PROGRAM The Asas do Bem volunteer program mo- DIVERSE SCIENCE bilized collaborators, who presented the The Embraer Institute held factories of São José dos Campos, Bo- the second edition of Ciência tucatu, Eugênio de Melo, and Sorocaba Diversa, a program to encou- to students, contributing to the dissemi- rage the formation of groups nation of aeronautical culture in the re- underrepresented in Science gions where Embraer conducts business. & Technology. In 2022, the In 2022, 440 students visited the com- topic addressed was “Black pany’s production units. People in Science,” with a focus on non-pro昀椀t Civil So- Since the start of operations in 2001: ciety Organizations (CSOs) that develop projects for bla- + ck and mixed-race people. 8 THOUSAND PEOPLE The social action invested IMPACTED BY THE ACTIONS OF BRL 380,000 in two institu- ENGAGEMENT WITH SOCIETY tions that perform activities + aimed to encourage training 4 THOUSAND STUDENTS in STEM areas (Science, Te- GRADUATED FROM EMBRAER SCHOOLS chnology, Engineering, and Mathematics) and that have of a minimum of 60% of black 75% STUDENTS people and aged between 6 APPROVED AT TOP UNIVERSITIES and 24 years among the be- ne昀椀ciaries. The organizations Learn more: chosen will perform the pro- Sustainability Indicators jects in 2023. 3030
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RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS GRI 413 EMBRAER FOUNDATION IN 2022 In order to cement its corporate social responsibility strategy in the United 40 States, Embraer created in 2016 the Embraer Foundation, sister organiza- ORGANIZATIONS tion of the Embraer Institute, which RECEIVED SUPPORT operates on three fronts: volunteering, FROM THE EMBRAER social and environmental partnerships, FOUNDATION and entrepreneurship. TO CARRY OUT The pillars are aligned with the Com- PROJECTS pany’s global social responsibility stra- tegy and respect the particularities of social investment in the United States. In 2022, more than 400 volunteers en- gaged in the social activities developed by the Foundation, totaling about 3,300 hours. In the partnership pillar, 40 orga- nizations received support from the Em- braer Foundation to carry out projects. Learn more: Embraer Foundation 3131
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS Commitment to GOVERNANCE Embraer seeks to ensure the highest level of corporate integrity and ethics in all its businesses. The corporate governance model adopted has a business management focused on sustainable growth, meeting the highest Brazilian and international market standards. RANKING FIRST IN GOVERNANCE In 2022, Embraer S.A. ranked 昀椀rst in corporate governance in the survey of the Época Negócios 360º Yearbook, which aims to identify and disseminate the best business practices in Brazil. Conducted in concert with Fundação Dom Cabral, the ranking recognizes the best in each of the six dimensions of the survey – 昀椀nancial performance, corporate governance, innovation, people, sustainability, and vision for the future. The 2022 edition of the yearbook presented a record number of registrations, with four hundred and twenty participating companies divided into twenty-昀椀ve sectors, and recognized the company’s Corporate Governance practices, which are established to the highest international standards. 323232
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS ETHICS AND COMPLIANCE GRI 3-3; RT-AE-510 COMPLIANCE PROGRAM PILLARS Embraer’s Compliance Program initiatives are based on risk assess- ments, which serve as a starting point for strategic planning applied to • Corporate Governance • Monitoring and assessment the program’s pillars. The purpose of strategic compliance planning is to • Risk Management of compliance risks ensure that all initiatives are aligned and incorporated into the company’s • Compliance in relationships with operations, according to the risk assessment carried out. • Policies and Procedures Third Parties • Training and Communication • Audit and Continuous Improvement • Helpline COMPLIANCE PROGRAM GOALS To foster a culture of ethics and integrity ba- KAIZEN & OFFICE FLOOR MANAGEMENT sed on Embraer’s Values and Code of Ethics 1and Conduct, as well as the anti-corruption The Kaizen philosophy – which means continuous improvement in laws applicable to the company. Japanese – is already adopted by Embraer in its production processes, and is now also part of its Compliance Program. This is the 昀椀rst administrative area of the company to work on a pilot project called To support Embraer’s other Compliance Of昀椀ce Floor Kaizen, which was conducted in three of its departments in preventing main processes: Due Diligence, Know Your Customer, and Hospitality. 2risks, spotting red flags, and improving processes. FLY RIGHT New tool, which had its initial implementation in 2022, and will have the other implementation phases carried out in 2023, and centrali- zes the Compliance processes in a single platform, optimizing the approval 昀氀ows, activity management, monitoring and addressing of risks in the company. 3333
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS TRAINING CARRIED OUT IN 2022 The following trainings were provided by the Compliance area during the 2022 THINK AND RETHINK accounting year: New edition of the Compliance communication Compliance Processes – (refresher): (Hos- • Ethics & Compliance Management Pro- campaign for 100% of collaborators. In 2022, the • main topic revolved around raising awareness on the pitality, Gifts, Events, Due Diligence, Know gram: A Story use of the whistleblowing channel – the Helpline – en- Your Customer, Risk Assessment, Monito- Target audience: the entire leadership of ring, Red Flag & Blocklist, Donations, Spon- Embraer S.A; couraging collaborators to identify the situations in sorship, Helpline, Membership) – Taught to which the use of the channel is recommended. Compliance Of昀椀cers and also Agents, Am- • Bribery and Corruption: A Story About Glo- bassadors, and Requesters, as applicable; bal Bribery • OFAC (Of昀椀ce of Foreign Assets Con- Target audience: the entire leadership of trol) Training – For Compliance Of昀椀cers, Embraer S.A; COMPLIANCE DAY Agents, and Ambassadors; • Con昀氀icts of Interest – Managing and resol- Held on the week of the international anti-corruption • Anti-Corruption Compliance Training – ving con昀氀icts of interest involving gifts and day, December 9, for 100% of collaborators, the event Taught by the law 昀椀rm Maeda Ayres & Saru- gratuities in business was attended by members of Embraer’s Board of bbi to the Compliance team of Embraer S.A. Target audience: the entire leadership of Directors and Executive Board, as well as external and group companies, in addition to the Hel- Embraer S.A; guests, experts in FCPA*, and the Brazilian Anti- pline investigation team; • Compliance Training for the Board of Di- Corruption Law. • Bribery and Corruption: Doing Business in rectors and Executive Board’s members High-Risk Countries –taught by a lawyer specialized in FCPA. The lectures and roundtables highlighted the challen- Target audience: the entire leadership of ges, trends, and future of Compliance both in the ae- Embraer S.A; rospace industry and in other sectors of the economy and facilitated the interaction among collaborators and speakers. * Foreign Corrupt Practices Act - The United States Corrupt Practices Act, which is considered the pioneering anti-corruption law abroad and came into force in 1977. 34
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESESGG INNOVATION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS OPERATIONAL SAFETY AND PRODUCT QUALITY IMPLEMENTATION OF THE SAFETY OGMA SAFETY SUMMIT MANAGEMENT SYSTEM (SMS) The OGMA Safety Summit – Conference on Safety Mana- In 2022, Embraer actively participated in the gement System – gathered in Alverca, Portugal, four ex- review and development of the SM-0001 stan- perts from the areas of Safety and Quality to address topi- dard, focused on operational safety, contribu- cs of Operational Safety. Among professionals, specialists ting to the implementation of SMS* for the en- and the OGMA team, the event had about one hundred tire aeronautical industry around the globe. In participants, from twenty-seven entities of the aeronau- the company, SMS was 昀椀rstly implemented in tical community. all its U.S. maintenance units, and the imple- mentation of SMS for OGMA** maintenance units in Portugal was 昀椀nalized. As a result, all II OPERATIONAL SAFETY the company’s European maintenance units AND QUALITY WEEK 2022 are already able to meet the new regulations of EASA – The European Aviation Safety Agency, For the second year in a row, Embraer which will be mandatory by the end of 2024. joined the themes of Operational Safety In Brazil, the company joined forces with and Quality in a single week dedicated ANAC – National Civil Aviation Agency to devi- to discussing with external experts, the se the Brazilian operational safety regulations senior leadership of the company and for the aeronautical industry. collaborators, success cases, challenges, and trends for these two capital topics for * SMS is a global, systematic, and standardized approach the aeronautical industry. The event was to managing operational safety risks for the aeronautical online and open to 100% of collaborators, industry. and all content is available for reference **Aeronautical Industry of Portugal on the intranet, further af昀椀rming the company’s culture of safety and quality. 3535
INNOVATION 36
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOINOVVAAÇTIONÃO BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS INNOINNOVVAATIONTION Embraer believes that collaborative innovation is the best way to co- -create the future, adding value to all its stakeholders and society. The efforts seek to contribute in a relevant way to the technological advan- ces of Brazil and the markets in which it operates. In practice, Embra- er’s evolution and innovation journey is carried out every day through the commitment of collaborators and networking taking the whole ecosystem into consideration, i.e., partners, government, universities and research institutions, suppliers, startups, and customers. Within this perspective, once again the company’s innovative pro昀椀le stood out on the Brazilian scene. The company was one of the hi- ghlights of the 2021/2022 edition of the National Innovation Award, an initiative of the Business Mobilization for Innovation (MEI), carried out by the National Confederation of Industry (CNI), and the Brazilian Micro and Small Business Support Service (SEBRAE). In the award, held to encourage and recognize the efforts of ins- IN 2022, ABOUT titutions that operate in the Brazilian innovation ecosystem, Em- braer won in the “Product Development” category, “Large Com- panies” modality. 46% In 2022, about 46% of the company’s revenue came from OF THE COMPANY’S innovations that occurred over the last 昀椀ve years. Investment REVENUE CAME FROM in technological development and innovation remained stable, DEVELOPMENTS on the order of 5% of annual revenue. MADE IN THE LAST FIVE YEARS. 373737
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOINNOVVAATIONTION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS AWARDS HIGHLIGHTS NATIONAL INNOVATION AWARD DESIGN SYSTEM PLATFORM [DS] The Brazil’s largest innovation award, conducted to en- Development of a standard library of design, ob- courage and recognize the efforts of institutions opera- jects, colors, text sources, and active components ting in Brazil: 1st place in the product innovation category that allow software development teams to create with the case of Eve Urban Air Mobility. prototypes and solutions with signi昀椀cant time and cost savings, while keeping designs standardized AWARD VALOR INOVAÇÃO BRASIL 2022 with the brand’s visual identity. In its 8th edition, Embraer ranked as the third most in- novative company in Brazil and the 昀椀rst in the Capital INCEPTION OF THE INNOVATION LAB Goods Sector. Place that allows fast execution of tests and proto- BRAZIL 5.0 DIGITAL TRANSFORMATION types, which has methodologies and tools supported AWARD 2022 by the Product Design concept. National highlight with the pro- EMBRAER INNOVATION ject “Leveraging Digital Transfor- ECOSYSTEM PORTAL mation in Products and Talents” organized by Manifesto & Prêmio Launched in 2022, the portal furthers governance, 2022, which furthers the develo- programs, events, content, pages, and news pertaining pment of projects for Innovation to innovation at Embraer, maximizing the company’s and Digital Transformation of Pro- global innovation potential through integration and cesses and Business Models. greater visibility of structuring actions. 38
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOINNOVVAATIONTION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS INNOVATION The Innovation Verticals are Innovation priorities under study by Embraer. In 2022, the highlight is the advance in the Business Verticals agenda of Zero Emission and Autonomous Flight Verticals, especially the direct investment in XMobots by Embraer Ventures. In addition, in 2022 two new Verticals were approved for Incubation: Cybersecurity and Passenger Experience. VERTICAL ZERO EMISSION Embraer and Collins Aerospace are collaborating on the development and testing of an innovative electrothermal heating technology based on carbon nanotubes (CNT) for ice protection systems. This electrothermal CNT technology is more energy-ef昀椀cient, lighter, and uses greener manufacturing processes than current systems, and the company believes it will become the future standard for ice protection – including in more electric aircraft designs. The new solution was successfully installed in the vertical stabilizer of a prototype Phenom 300E*. Collins’ CNT heater and anti-icing system underwent about ten hours of ground testing and “dry air” 昀氀ight. In 2022, the project reached an important milestone by starting a 昀氀ight test campaign at the Gavião Peixoto unit, São Paulo. 3939
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOINNOVVAATIONTION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS ZERO EMISSIONS STARTUP DAY Embraer has concluded its 昀椀rst the Program team, each focusing on Embraer believes that some of the “Start-Up Day” with a view to en- one of four critical areas: electric and technologies needed for aviation HYDROGEN FUEL CELL couraging startups with the most hybrid powertrain, fuel cells, hydrogen have not yet been developed, and DEMONSTRATOR cutting-edge technologies to join storage, and battery technology. that it is essential to harness all the the sustainable 昀氀ight initiative of Embraer is connected and works talent available in the world to 昀椀nd With the 昀椀rst 昀氀ight scheduled the Energia Program. The company’s closely with agile innovators, and answers that work, are accessible for 2025, the company has ad- goal is to select organizations to believes that the growth of the and practical in the real world. vanced the conceptual design partner with the Energia Program, ecosystem of small startups with The quality of interactions and the of the aircraft. Based on the develop technologies with the grea- technology experience has a huge potential capabilities of the tech- Ipanema platform, in 2022 the test potential to address the challen- contribution to make – when the nologies presented drove the com- project made an important ad- ges of the climate crisis, considering opportunity is offered. The event pany to plan more events such as vance in its technical feasibility. that startups have a signi昀椀cant role drew relevant organizations from Start-Up Day, including other areas in overcoming certain challenges. around the world, including France, of interest such as design projects At the 昀椀rst meeting, held in 2022, si- Germany, the Netherlands, South aimed at sustainable cabin, connec- Learn more: xteen organizations from around the Korea, the United Kingdom, and the tivity, ground handling, clean power Energia Program world introduced their technologies to United States. generation and more. 4040
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOINNOVVAATIONTION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS PARTNERSHIPS FOR R&D & INNOVATION CPQD CAMPINAS & EMBRAPII The partnership with CPQD Campinas (Telecommunications Research and Development Center) and EMBRAPII (Brazilian Industrial Resear- WIDERØE E ROLLS-ROYCE ch and Innovation Company) for the research on high-voltage batteries Embraer, Widerøe, and Rolls-Royce have announced plans to stu- applied to aeronautics. The purpose is to allow that Embraer further dy a zero-emission concept regional aircraft. The twelve-month develops batteries applied to the aeronautical production system. cooperative study – in the context of pre-competitive research & development – will address the demands of passengers to stay con- FAPESP nected, in a post-covid-19 world, in a sustainable way, in addition Partnership with FAPESP (São Paulo State Research Foundation) to seeking to accelerate the technological knowledge required for to research recycling and disposal of high-voltage batteries. such transition. New technologies will allow countries to continue to support pas- ITA & FAPESP senger mobility, while reusing most existing infrastructure in a more sustainable fashion. Advances in scienti昀椀c research could Partnership with ITA (Technological Institute of Aeronautics) and make clean, renewable energy a major catalyst of a new era of re- FAPESP (São Paulo State Research Foundations), with a shared in- gional aviation. vestment of BRL 48 million over the next 昀椀ve years in an Enginee- Among other topics, the research will cover a wide array of new pro- ring Research Center (CPE) for the air mobility of the future, based on pulsion technology jobs, to assess various potential solutions – in- three pillars: low carbon aviation, autonomous systems, and advanced cluding all-electric aircraft, hydrogen fuel cell aircraft or hydrogen manufacturing. In 2022, the institutions jointly described the scope of gas turbine-powered aircraft. research and the main activities to accomplish the partnership that proposes innovative technological solutions that will enhance the competitiveness of the global innovation ecosystem. 41
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOINNOVVAATIONTION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS VERTICAL AUTONOMOUS FLIGHT VERTICAL ARTIFICIAL In 2022, Embraer announced the agreement to invest in XMobots, a INTELLIGENCE company located in São Carlos, São Paulo that is the largest drone company The company made signi昀椀cant strides with innovati- in Latin America. The deal aims to accelerate the future of the mid- and large-size ve initiatives in arti昀椀cial intelligence and data scien- autonomous drone market and broaden the collaborative network in research into ce in 2022. A key achievement was the preparation new technologies. and alignment of the corporate data strategy with A series of experimental helicopter 昀氀ights in Rio de Janeiro focused on assessing the vision of making Embraer a company capable of new autonomous system technologies in real 昀氀ight conditions and complex urban yielding more and more value from the information environments were also completed. generated by its systems and processes. To support such a change, improvements pertaining to people and culture were made, including new careers for data professionals. In December, the company ful- 昀椀lled the 昀椀rst class of the Software Specialization Program for training new data scientists. From a technological standpoint, the company laun- ched its research portfolio in arti昀椀cial intelligence, focusing on embedded applications for increased 昀氀ight safety and machine learning algorithms for predictive maintenance, capable of generating great value for customers. Learn more: Experimental Flights Learn more: XMobots Software Specialization Program 42
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOINNOVVAATIONTION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS INNOVATION CULTURE With the challenge of stimulating the generation of new ideas and solutions, as well as fostering the culture of innovation throughout Embraer, the company opens opportunities for the development of innovative projects and calls for Innovation Strategy programs and actions. INNOVA PROGRAM Created to disseminate culture and foster innovation to every collaborator who is willing to seek innovative solutions. Besides, it stimulates the generation of ideas in the company through Innovation Challenges. • Green Light: • Innovation Day: Entrepreneurship program that assesses innovative pro- Initiative to spread culture and foster innovation, bringing posals presented voluntarily by collaborators. The program a collaborative environment and the opportunity for diffe- provides technical and business guidance, leadership en- rent institutions to discuss future trends at a global level. gagement, time and resources for them to realize ideas until In 2022, in its 6th edition, the event was attended by more their technical and economic viability is proven. than 2,800 people and included the launch of Embraer’s 昀椀rst Hackathon, with the development of integrated so- • Innova Challenge: lutions between processes and applications for ten pain points of each of the vice-presidencies, and collection of Internal crowdsourcing mechanism that stimulates ideas to more than 150 kilos of food with the solidarity ticket. Addi- solve problems globally from different departments of the tionally, participants were asked to wear fun t-shirts or cos- company. Its 10th edition in 2022 was marked by the launch play costumes to attend the event. of the Agro Innovation Challenge, focusing on solutions and technologies earmarked for the agricultural industry. 4343
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOINNOVVAATIONTION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS INNOVATION CULTURE CYCLE OF INNOVATION VERTICALS To optimize Embraer’s investments in innovation, priorities were established through the Innovation Verticals. Annually we carry out the Vertical Cycle through the Innovation Forum, bringing together executives from the various areas of the company to follow up the evolution of these prio- rities and decide on the approach in the coming years. To compose the Vertical cycles, the following information is considered: • Emerging Technologies: • Aerospace Industry Trends: • Business Trends: Map of technologies necessary to meet Consolidating the knowledge genera- It considers business trends inside new and future products. ted in the market intelligence areas of and outside the Aerospace, Defense, the different Business Units. and Venture Capital markets. EMBRAER STARTUP PROGRAM With the purpose of gathering several areas of the company to join The democratization of collaboration with startups is one of the backgrounds and efforts to solving problems, Embraer Startup ways to accelerate innovation at Embraer, recognize internal and Program was implemented as a means to recruit startups within external talents, and boost ef昀椀ciency. up to 5 business days. In November 2022, the 昀椀rst edition of the Marathon was held, a The Program brings the potential of external entrepreneurs to the com- competition between startups to solve previously mapped de- pany for challenges and needs of diverse sorts, ranging from technical mands, including a face-to-face event and interaction among product issues to those more of a process or management character. ecosystem players. 4444
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOINNOVVAATIONTION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS Embraer’s disruptive innovation arm is a group Among the news of 2022, Embraer-X strengthened company focused on the future of air mobility, relations with the Netherlands, opening an of昀椀- clean energy, among other topics, with a view to ce at the Aerospace Innovation Hub@TUD, of the fostering and structuring new business opportu- Delft University of Technology (TU Delft). nities. Embraer-X is committed to sustainabili- Embraer-X’s strategic position in the Aerospa- ty principles in the development of its business ce Innovation Hub@TUD will serve as the basis and operations. for continuously connecting to the institution’s In 2022, Embraer-X established itself as a market business ecosystem, which involves startups, accelerator committed to developing solutions test facilities, and spin-offs, facilitating colla- that change life experiences, and dedicated to boration between professionals and researchers collaborating with global innovation communities. from both organizations. WEB SUMMIT LISBOA 2022 Embraer-X also participated for the 昀椀rst time in Web Summit Lisbon 2022, one of the world’s largest technology and innovation events, with two panels at the Apex Brasil Pavilion, where the impacts and new opportunities created by the digital revolution for the mobility segment were discussed. At the event, it presented the journey of adoption of technologies and form of digital work by Embraer, including the decision to create Embraer-X itself, and the incubation of new businesses. 4545
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOINNOVVAATIONTION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS Incubated by Embraer-X, the Beacon is a maintenance nagement software services. This collaboration aims to coordination platform for faster return to operation. In- test a fully integrated solution for managing aeronauti- novative, it is designed to connect and synchronize in- cal maintenance pro昀椀les with a complete Competency dustry, supply chain and aviation service professionals and Compliance check to solve the growing need to 昀椀nd resources in a more agile and ef昀椀cient way to keep air- quali昀椀ed and specialized professionals. craft in operation. This partnership will bring more transparency, security, The platform is primarily focused on providing solutions and trust to the platform, as Beacon wants to empower for unscheduled aircraft maintenance. Through an ea- teams and individuals with tools that can deliver the best sily accessible digital web and mobile application (IOS return to their customers’ operation. and Android), Beacon’s main goal In December 2022, Embraer-X signed a is to connect businesses and pro- contract with Pulse Aviation to use the fessionals in a revolutionary way. Beacon. Headquartered in Florida, Pulse The technology tri最最ers a network is a business aviation company that provi- of accredited suppliers, promp- des maintenance, repairs, and operations. ting real-time collaboration during The company intends to use Beacon to maintenance activities not initia- improve maintenance coordination, sim- ted, accelerating the return to air- plify communication about maintenance craft operation. events for all aircraft models, and increa- In 2022, Beacon formed a working se team collaboration, thereby improving group with ELMS Aviation, a lea- knowledge exchange and streamlining ding provider of Competency Ma- maintenance-related work昀氀ows. 46
RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOINNOVVAATIONTION BUSINESS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNIT INDICATORS An Embraer Group company for eVTOLs (vertical ca. FlyBIS will purchase up to 40 eVTOL vehi- takeoff and landing aircraft), Eve had its shares listed cles from Eve. on the New York Stock Exchange under the symbol The partnership with FlyBIS has made it pos- “EVEX” in 2022. sible to expand the future of air mobility to the In order to go public, Eve merged with Zanite, a spe- Southern Region of Brazil and to other coun- cial-purpose acquisition aviation company (SPAC). tries in South America. Eve also signed a letter of intent with FlyBIS, an ad- FlyBIS vehicles are included in Eve’s market- vanced air mobility startup based in Caxias do Sul, -leading backlog, which currently has an order FLYBIS TO BUY UP TO Rio Grande do Sul, for cooperation in the develop- backlog for up to two thousand seven hundred ment of eVTOL operations in Brazil and South Ameri- and seventy eVTOLs. EVE Learn more: 40eVTOLs Eve Air Mobility 4747
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RELATÓRIO ANUAL / 2022 ABOUT FIT FOR GROWTH & ESG INNOVATION BUBUSINESINESSSS SUSTAINABILITY EMBRAER FINANCIAL PERFORMANCE UNITUNIT INDICATORS COMERCIAL Aviation Embraer’s E2 family of aircraft enables airlines t