GE HealthCare Technologies Inc. · NASDAQ:GEHC
GE HealthCare Technologies — Q2 2023 Earnings Presentation
32 slides from GE HealthCare Technologies's earnings presentation, Jul 25, 2023
Slide 1: 2Q 2023 Earnings Presentation
2Q 2023 Earnings Presentation July 25, 2023 © 2023 GE HealthCare. GE is a trademark of General Electric Company used under trademark license.
Slide 2: Forward-looking Statements
Forward-looking Statements This presentation contains forward-looking statements. These forward-looking statements might be identified by words, and variations of words, such as “will,” “expect,” “may,” “would,” “could,” “plan,” “believe,” “anticipate,” “intend,” “estimate,” “potential,” “position,”
Slide 3: Strong Performance in 2Q'23
Strong Performance in 2Q’23 • 9% Organic revenue* growth driven by volume and strength in new products • 6% Organic orders growth** demonstrates ongoing strong global demand • Continued progress on operating priorities while investing in future innovation • Balanced capital allocation strategy with
Slide 4: 2Q'23 Consolidated Performance Summary
2Q’23 Consolidated Performance Summary Revenues Organic orders Adjusted EBIT* Adjusted EPS* Free cash flow* growth** & Adjusted EBIT margin* $4.8B 6% YoY $711M $0.92 $(136)M Book-to-Bill** 14.8% margin (20)% YoY $(58)M YoY 9% Organic growth*-a) 1.04x (120)bps YoY (10) bps vs prior year Up 12% vs pri
Slide 5: 2Q'23 Revenue Performance
2Q’23 Revenue Performance Business Segment Products & Services** Organic revenue growth* +9%-a) Reported revenue growth +7% Ultrasound $839M, +3%*-a) Services $1.6B, +1% 33% Products $3.2B, +11% Imaging Total Revenue Total Revenue $4.8B PCS $4.8B $2.6B, +9%*-a) $770M, +9%*-a) 67% PDx $568M, +20%*-a)
Slide 6: Ongoing Progress to Drive Margin Expansion
Ongoing Progress to Drive Margin Expansion Operational Separation Volume and Commercial Execution • ~100 TSAs exited year to date: • Volume increased YoY in all regions and segments with improved delivery in 2Q'23 • Including ~10 early exits • Rationalizing IT services and • Positive sales price in
Slide 7: 2Q'23 Imaging Results
2Q’23 Imaging Results 2Q’23 2Q’22 YoY Revenues $2,620M $2,449M 9%*-a) Segment EBIT $278M $306M (9)% Segment EBIT margin 10.6% 12.5% (190) bps Highlights • Strong Organic revenue growth* driven by MI/CT and MR due to supply chain improvements, stable demand in the past few quarters, NPIs, and price •
Slide 8: 2Q'23 Ultrasound Results
2Q’23 Ultrasound Results 2Q’23 2Q’22 YoY Revenues $839M $828M 3%*-a) Segment EBIT $191M $220M (13)% Segment EBIT margin 22.8% 26.6% (380) bps Highlights • Organic revenue growth* led by Cardiovascular and Women’s Health NPIs with AI capabilities that drive improved efficiency and patient outcomes •
Slide 9: 2Q'23 Patient Care Solutions Results
2Q’23 Patient Care Solutions Results 2Q’23 2Q’22 YoY Revenues $770M $713M 9%*-a) Segment EBIT $84M $81M 4% Segment EBIT margin 10.9% 11.4% (50) bps Highlights • Strong Organic revenue growth* with progress on price and volume as we were able to fulfill more backlog • EBIT margin dilution YoY driven
Slide 10: 2Q'23 Pharmaceutical Diagnostics Results
2Q’23 Pharmaceutical Diagnostics Results 2Q’23 2Q’22 YoY Revenues $568M $478M 20%*-a) Segment EBIT $152M $115M 32% Segment EBIT margin 26.8% 24.1% 270 bps Highlights • Strong Organic revenue growth* with improving volumes that benefited from a favorable comparison vs 2Q'22 as well as strategic prici
Slide 11: 2Q'23 Free Cash Flow
2Q’23 Free Cash Flow* Cash impacted by seasonality and new post-spin items • Working capital improved YoY driven by better inventory management 2Q’23 2Q’22 • Capex spend from capacity expansion and continued investment on NPI $(136)M $(78)M • FCF* up YoY excluding standalone interest and incremental
Slide 12: 2023 Outlook
2023 Outlook 2022 2023E Updated 2023E Organic Revenue 7% 5% to 7% 6% to 8% Growth*-a) Adjusted EBIT Margin* 14.5% -b) 15.0% - 15.5% reaffirmed Standalone Adjusted ETR* 23% 23% - 25% reaffirmed Adjusted EPS* $3.38 -b) $3.60 - $3.75 $3.70 - $3.85 Standalone Growth of 7%-11% Growth of 9%-14% FCF Conver
Slide 13: Investing in Future Growth
Investing in Future Growth Imaging Ultrasound Patient Care Solutions PDx and Imaging FDA 510(k) clearance of Precision DL on Innovative mini 3D TEE probe is GE HealthCare patient monitoring FES PET is now included in the NCCN PET/CT, deep learning-based image world's first and most compact - solutio
Slide 14: GE HealthCare is well positioned to deliver for Alzheimer's patients
GE HealthCare is well positioned to deliver for Alzheimer's patients Care pathway focus at GE HealthCare enables growth opportunities Note: Not all products and features are available in all markets. © 2023 GE HealthCare. GE is a trademark of General Electric Company used under trademark license. 14
Slide 15: Summary
Summary • Strong 2Q'23 performance driven by global Amyloid Plaque Scan Visualizes Alzheimer's demand and improved commercial execution • Expect improving 2H'23 Adjusted EBIT margin* performance through higher volume, productivity, and NPIs • Allocating our R&D spend into high-growth areas to drive
Slide 16: Q&A
Q&A © 2023 GE HealthCare. GE is a trademark of General Electric Company used under trademark license.
Slide 17: Thank You
Upcoming Events Wells Fargo Healthcare Conference September 2023 Morgan Stanley Healthcare Conference September 2023 3Q 2023 Earnings Conference Call October 31, 2023 Thank You © 2023 GE HealthCare. GE is a trademark of General Electric Company used under trademark license.
Slide 18: Appendix
Appendix © 2023 GE HealthCare. GE is a trademark of General Electric Company used under trademark license.
Slide 19: Total Revenues to Organic Revenue
Total Revenues to Organic Revenue* ($ in millions) For the three months ended June 30 For the six months ended June 30 Unaudited 2023 2022 % change 2023 2022 % change Total revenues $ 4,817 $ 4,484 7% $ 9,524 $ 8,827 8% Less: Acquisitions(a) — — — — Less: Dispositions(b) — — — — Less: Foreign curren
Slide 20: Segment Revenues to Organic Revenue
Segment Revenues to Organic Revenue* ($ in millions) For the three months ended June 30 For the six months ended June 30 Unaudited 2023 2022 % change 2023 2022 % change Imaging revenues $ 2,620 $ 2,449 7%$ 5,116 $ 4,760 7% Less: Acquisitions(a) — — — — Less: Dispositions(b) — — — — Less: Foreign cur
Slide 21: Net Income to Adjusted EBIT and Standalone Adjusted EBIT
Net Income to Adjusted EBIT* and Standalone Adjusted EBIT* (estimate) ($ in millions) For the three months ended June 30 For the six months ended June 30 (Unaudited) 2023 2022 % change 2023 2022 % change Net income attributable to GE HealthCare $ 418 $ 485 (14)% $ 790 $ 874 (10)% Add: Interest and o
Slide 22: Net Income to Adjusted Net Income and Standalone Adjusted Net Income
Net Income to Adjusted Net Income* and Standalone Adjusted Net Income* (estimate) ($ in millions) For the three months ended June 30 For the six months ended June 30 (Unaudited) 2023 2022 % change 2023 2022 % change Net income attributable to GE HealthCare $ 418 $ 485 (14)% $ 790 $ 874 (10)% Add: No
Slide 23: Diluted EPS to Adjusted EPS and Standalone Adjusted EPS
Diluted EPS to Adjusted EPS* and Standalone Adjusted EPS* (estimate) (In dollars, except shares outstanding presented in millions) For the three months ended June 30 For the six months ended June 30 (Unaudited) 2023 2022 $ change 2023 2022 $ change Diluted earnings per share – continuing operations
Slide 24: Cash from Operating Activities to Free Cash Flow
Cash from Operating Activities to Free Cash Flow* ($ in millions) For the three months ended June 30 For the six months ended June 30 Unaudited 2023 2022 % change 2023 2022 % change Cash from (used for) operating activities – continuing operations $ (67) $ (19) U $ 401 $ 449 (11)% Add: Additions to
Slide 25: Non-GAAP P&L Reconciliations - 2Q 2023
Non-GAAP P&L Reconciliations - 2Q 2023 ($ in millions) Amortization Non- Acquisition, Gain/loss of Spin off and of acquisition Investment Operating Tax Effect of GAAP Restructuring disposition business and Certain Tax Non-GAAP separation related revaluation benefit Reconciling Adjustments(f) Reporte
Slide 26: Organic Orders Growth
Organic Orders Growth** 2020 2021 1Q'22 2Q'22 3Q'22 4Q'22 2022 1Q'23 2Q'23 (Unaudited) Organic orders growth 0% 10% 8% 1% 4% 5% 4% 3% 6% **See appendix for Organic Orders Growth KPI definition. © 2023 GE HealthCare. GE is a trademark of General Electric Company used under trademark license. 26
Slide 27: Supplemental Financial Estimates for 2023
Supplemental Financial Estimates for 2023 • Organic revenue growth*-a) in the range of 6% to 8% year-over-year Revenue • Expect revenue growth in 2H'23 to be in line with our medium-term growth target of mid-single-digits • Our current view is a foreign exchange headwind of less than one percentage
Slide 28: Acronyms
Acronyms CT Computed Tomography FCF Free Cash Flow FES Fluoroestradiol F18 mAb Monoclonal antibodies MI/CT Molecular Imaging and Computed Tomography MR Magnetic Resonance NPIs New Product Introductions PET Positron Emission Tomography PET/CT Positron Emission Tomography / Computed Tomography PET/MR
Slide 29: Definitions
Definitions Book-to-Bill Total orders divided by total sales within a given financial period (e.g., quarter or FY) Free cash flow conversion* Free cash flow* / Adjusted net income* Rate of change period-over-period of contractual commitments with customers to provide specified goods or services for
Slide 30: Non-GAAP Financial Measures
Non-GAAP Financial Measures The non-GAAP financial measures presented in this presentation are supplemental measures of GE HealthCare’s performance and its Adjusted net income: Net income attributable to GE HealthCare excluding (1) Non-operating benefit costs; (2) liquidity that the Company believes
Slide 31: Non-GAAP Financial Measures in Outlook
Non-GAAP Financial Measures in Outlook GE HealthCare calculates forward-looking non-GAAP financial measures, including Organic revenue growth, Adjusted EBIT margin, Adjusted ETR, Adjusted EPS, and Free cash flow conversion based on internal forecasts that omit certain amounts that would be included
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