Ge Healthcare Technologies Inc. · NASDAQ:GEHC
Ge Healthcare Technologies — Q3 2023 Earnings Presentation
34 slides from Ge Healthcare Technologies's earnings presentation, Oct 31, 2023
Slide 1: 3Q 2023 Earnings Presentation
3Q 2023 Earnings Presentation October 31, 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 3Q'23
Strong Performance in 3Q’23 • 6% Organic revenue* growth driven by volume and price • Book-to-bill** of 1.03x with Organic orders growth** of 1%; backlog remains robust • Margin performance driven by progress with productivity and pricing, while investing in future innovation • Optimized capital all
Slide 4: 3Q'23 Consolidated Performance Summary
3Q’23 Consolidated Performance Summary Revenues Organic orders Adjusted EBIT* and Adjusted EPS* Free cash flow* growth** Adjusted EBIT margin* $4.8B 1% YoY $744M $0.99 $570M 6% Organic growth*(1) Book-to-Bill** 15.4% margin (18)% YoY Up $22M YoY 1.03x Up 10bps YoY Up 120 bps vs prior year Up 14% vs
Slide 5: 3Q'23 Revenue Performance
3Q’23 Revenue Performance Business Segment Products & Services** Organic revenue growth* +6%(1) Reported revenue growth +5% Ultrasound $815M, (1)%*(1) Services $1.6B, +5% 34% Products $3.2B, +6% Imaging Total Revenue Total Revenue $4.8B PCS $4.8B $2.6B, +5%*(1) $764M, +9%*(1) 66% PDx $589M, +12%*(1)
Slide 6: Progress on Margin Expansion
Progress on Margin Expansion Adjusted Gross Profit Margin* +90 bps Commercial Execution • Pricing and enhancing execution 41.0% 40.1% Innovation • Improving volumes and higher margin NPIs TY'2022 3Q'2023 YTD Optimization Standalone Adjusted EBIT Margin* • Improving logistics costs and services produ
Slide 7: 3Q'23 Imaging Results
3Q’23 Imaging Results 3Q’23 3Q’22 YoY Revenues $2,635M $2,516M 5%*(1) Segment EBIT $318M $267M 19% Segment EBIT margin 12.1% 10.6% 150 bps Highlights • Organic revenue growth* driven by MI/CT and MR due to supply chain fulfillment improvements, price, and new product introductions • EBIT margin rate
Slide 8: 3Q'23 Ultrasound Results
3Q’23 Ultrasound Results 3Q’23 3Q’22 YoY Revenues $815M $823M (1)%*(1) Segment EBIT $179M $211M (15)% Segment EBIT margin 22.0% 25.6% (360) bps Highlights • Organic revenue* declined following double-digit growth in the prior period • EBIT margin decreased YoY due to planned investments(2) including
Slide 9: 3Q'23 Patient Care Solutions Results
3Q’23 Patient Care Solutions Results 3Q’23 3Q’22 YoY Revenues $764M $701M 9%*(1) Segment EBIT $80M $65M 23% Segment EBIT margin 10.5% 9.3% 120 bps Highlights • Strong Organic revenue growth* from volume, due to supply chain fulfillment improvements and progress on price • EBIT margin up YoY driven b
Slide 10: 3Q'23 Pharmaceutical Diagnostics Results
3Q’23 Pharmaceutical Diagnostics Results 3Q’23 3Q’22 YoY Revenues $589M $522M 12%*(1) Segment EBIT $166M $159M 4% Segment EBIT margin 28.2% 30.5% (230) bps Highlights • Strong Organic revenue growth* driven by pricing actions and continued volume growth • EBIT margin improved sequentially, but decli
Slide 11: 3Q'23 Free Cash Flow
3Q’23 Free Cash Flow* Focused on strong cash generation in 2H'23 • FCF* up YoY while absorbing standalone interest and incremental post-retirement benefit payments • Inventory improved YoY as we leverage lean to $548M $570M improve lead times and drive faster inventory turns • Capex spend from capac
Slide 12: 2023 Outlook
2023 Outlook 2022 Previous 2023E Updated 2023E Organic Revenue Growth*(1) 7% 6% to 8% reaffirmed Adjusted EBIT Margin* 14.5% (2) 15.0% - 15.5% reaffirmed Standalone Adjusted ETR* 23% 23% - 25% reaffirmed Adjusted EPS* $3.38 (2) $3.70 - $3.85 $3.75 - $3.85 Standalone Growth of 9%-14% Growth of 11%-14
Slide 13: Investing in Future Growth
Investing in Future Growth Imaging Ultrasound PDx Stanford Medicine to assess potential GE HealthCare and Novo Nordisk Illustrative example of cancer associated clinical benefits, by scanning human collaborate to advance potential, non- fibroblasts (CAFs). GE HealthCare is in-licensing subjects on o
Slide 14: Atrial Fibrillation Care Pathway and GE HealthCare's Role
Atrial Fibrillation Care Pathway and GE HealthCare’s Role Cardiology care pathway strategy focused on solving diseases and driving growth Early Detection Diagnose Planning Intervention Monitoring Emergency Holter ECG Patient monitoring Cardiology + MUSE Cardiovascular CT Electrophysiology Interventi
Slide 15: Summary
Summary • Strong 3Q'23 revenue, Adjusted EBIT*, Adjusted EPS*, and cash performance • Investment to drive innovation in high- growth areas • Continued focus on margin expansion and Free cash flow* generation • Remain confident in 2023 outlook GE HealthCare shares key focus areas and future goals in
Slide 16: Q&A
Q&A © 2023 GE HealthCare. GE is a trademark of General Electric Company used under trademark license.
Slide 17: Thank You
Upcoming Events RSNA IR Meetings November 28-29, 2023 Mizuho Medical Device & Healthcare Services Summit December 6, 2023 JP Morgan Healthcare Conference January 9-10, 2024 Thank You © 2023 GE HealthCare. GE is a trademark of General Electric Company used under trademark license.
Slide 18: Appendix
Appendix © 2023 GE HealthCare. GE is a trademark of General Electric Company used under trademark license.
Slide 19: Total Revenues to Organic Revenue
Total Revenues to Organic Revenue* ($ in millions) For the three months ended September 30 For the nine months ended September 30 Unaudited 2023 2022 % change 2023 2022 % change Total revenues $ 4,822 $ 4,576 5% $ 14,346 $ 13,403 7% Less: Acquisitions(1) — — — — Less: Dispositions(2) — — — — Less: F
Slide 20: Segment Revenues to Organic Revenue
Segment Revenues to Organic Revenue* ($ in millions) For the three months ended September 30 For the nine months ended September 30 Unaudited 2023 2022 % change 2023 2022 % change Imaging revenues $ 2,635 $ 2,516 5%$ 7,751 $ 7,276 7% Less: Acquisitions(1) — — — — Less: Dispositions(2) — — — — Less:
Slide 21: Net Income to Adjusted EBIT and Standalone Adjusted EBIT
Net Income to Adjusted EBIT* and Standalone Adjusted EBIT* (estimated) ($ in millions) For the three months ended September 30 For the nine months ended September 30 Unaudited 2023 2022 % change 2023 2022 % change Net income attributable to GE HealthCare $ 375 $ 487 (23)% $ 1,165 $ 1,362 (14)% Add:
Slide 22: Net Income to Adjusted Net Income and Standalone Adjusted Net Income
Net Income to Adjusted Net Income* and Standalone Adjusted Net Income* (estimated) ($ in millions) For the three months ended September 30 For the nine months ended September 30 Unaudited 2023 2022 % change 2023 2022 % change Net income attributable to GE HealthCare $ 375 $ 487 (23)% $ 1,165 $ 1,362
Slide 23: Diluted EPS to Adjusted EPS and Standalone Adjusted EPS
Diluted EPS to Adjusted EPS* and Standalone Adjusted EPS* (estimated) (In dollars, except shares outstanding presented in millions) For the three months ended September 30 For the nine months ended September 30 Unaudited 2023 2022 $ change 2023 2022 $ change Diluted earnings per share – continuing o
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 September 30 For the nine months ended September 30 Unaudited 2023 2022 % change 2023 2022 % change Cash from (used for) operating activities – continuing operations $ 650 $ 622 5% $ 1,051 $ 1,071 (2)% Add:
Slide 25: Non-GAAP P&L Reconciliations - 3Q 2023
Non-GAAP P&L Reconciliations - 3Q 2023 ($ in millions) Amortization Acquisition, Non- Income (loss) (Gain) loss of of disposition Spin-Off and Investment Operating Tax Effect of from GAAP Restructuring business and acquisition- Certain Tax related separation revaluation benefit Reconciling Adjustmen
Slide 26: Non-GAAP P&L Reconciliations - 3Q 2023 YTD
Non-GAAP P&L Reconciliations - 3Q 2023 YTD ($ in millions) Acquisition, Amortization Investment Non- Income (Gain) loss of of disposition Spin-Off and acquisition- revaluation Operating Tax Effect of (loss) from GAAP Restructuring business and Certain Tax discontinued Non-GAAP related separation rel
Slide 27: Non-GAAP P&L Reconciliations - FY 2022
Non-GAAP P&L Reconciliations - FY 2022 ($ in millions) Amortization Acquisition, Non- Income (loss) (Gain) loss of of disposition Spin-Off and Investment Operating Tax Effect of from GAAP Restructuring business and acquisition- Certain Tax related separation revaluation benefit Reconciling Adjustmen
Slide 28: FY 2022 Standalone Adjusted EBIT (estimated)
FY 2022 Standalone Adjusted EBIT* (estimated) ($ in millions) Year ended December 31 Unaudited 2022 Net income attributable to GE HealthCare $ 1,916 Add: Interest and other financial charges - net 77 Add: Non-operating benefit (income) costs (5) Less: Benefit (provision) for income taxes (563) Less:
Slide 29: Supplemental Financial Estimates for 2023
Supplemental Financial Estimates for 2023 Revenue • Organic revenue growth*(1) in the range of 6% to 8% year-over-year Price • 2% to 3% price accretion for 2023 Expense • Recurring standalone costs estimated at $200M • Adjusted EBIT margin* in the range of 15.0% to 15.5%, reflecting an expansion of
Slide 30: Acronyms
Acronyms AI Artificial Intelligence CT Computed Tomography FCF Free Cash Flow G&A General & Administrative MI/CT Molecular Imaging and Computed Tomography MR Magnetic Resonance NPIs New Product Introductions R&D Research and Development TSA Transition Services Agreement YoY Year-over-Year YTD Year t
Slide 31: Definitions
Definitions Book-to-Bill Total orders divided by total revenues 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 f
Slide 32: 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 We believe Adjusted gross profit, Adjusted gross profit margin, Adjusted EBIT, Adjusted EBIT margin, Standalone Adjusted EBIT, and liquidity tha
Slide 33: 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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