Strong cash generation and low leverage were key factors that generated a positive forecast; Fitch and Moody's also improved their ratings

São Paulo, Brazil, February 7, 2024 – S&P Global Ratings raised Embraer's (NYSE: ERJ; B3: EMBR3) rating from “BB+” to “BBB-” and maintained a stable outlook. According to S&P, Embraer’s strong cash generation allied with higher aircraft deliveries, cost reduction and efficiency measures led to free cash flow in 2023 that was considerably stronger than the company’s guidance to the market.

In a statement to clients, S&P highlighted Embraer’s continued focus on lean operations combined with its robust backlog should support solid cash flows in coming years. The stable outlook considers Embraer will keep signing new contracts in all business segments, supporting its solid backlog and cash flows, while maintaining its low financial leverage over the next few years.

“The S&P upgrade is an important recognition of the focus and discipline with which the company's financial management has been carried out in recent years. The turnaround of our business is complete, and we are on the right track to deliver more sustainable growth with higher financial profitability from now onwards”, said Antonio Carlos Garcia, CFO of Embraer.

Other two main rating agencies in the financial market have also revised their forecasts for Embraer in a positive fashion, improving their rating notes. Fitch Ratings revised the company’s BB+ with a positive outlook, while Moody’s raised to Ba1 the rating and maintained a stable outlook.