General Motors Company · NYSE:GM
General Motors — Investor Presentation (August 2007)
51 slides from General Motors's investor presentation, Aug 9, 2007
Slide 1: Paul Ballew, Executive Director, GM Global Market & Industry Analysis
Paul Ballew Executive Director, GM Global Market & Industry Analysis
Slide 2: Forward Looking Statements
Forward Looking Statements In the following presentation and in related comments by General Motors management, we will use words like "expect," "anticipate," "estimate," "forecast," "goal," "project," "targets" and similar expressions to identify forward looking statements that represent our current
Slide 3: Automotive Industry Continues to Grow and is Very Dynamic
Automotive Industry Continues to Grow and is Very Dynamic $1.2 trillion a year global business and growing at 6-7% a year Significant shift in industry toward a "global" sales footprint Must wins are centered around developed markets and eleven emerging markets Challenges include intense level of co
Slide 4: The Potential of the Industry
The Potential of the Industry Mirroring the economy, global industry continues to set new records and become less volatile Global over-performance in recent years has led to stronger than anticipated volume growth -- despite sluggishness in the U.S. Vast potential exists: China and India (38% of glo
Slide 5: Global Vehicle Sales
Global Vehicle Sales Source: GMIA PDB02_GlobalVehicle Paul Ballew
Slide 6: The Industry - Then & Now
The Industry - Then & Now PDB05_IndustryTable Paul Ballew
Slide 7: Global Industry Revenue Overview
Global Industry Revenue Overview OEM revenue; excludes taxes, dealer gross margins and logistics costs PDB06_GlobalRevenue Paul Ballew
Slide 8: Global Industry Did You Know...
Global Industry Did You Know... Global vehicle sales in 2007 will have increased by over 12 million units and auto revenue will be up $300 billion since CY 2002 China unit sales in CY 2000 were less than half of Japan and equal to Germany -- in 2007 sales in China will exceed Japan by almost 3 milli
Slide 9: Share of Global Sales
Share of Global Sales PDB07_GlobalSales Paul Ballew
Slide 10: China Segment Growth
China Segment Growth China: Low/Upper Mid vs. Mini PDB13_ChinaGrowth Paul Ballew
Slide 11: Against This Backdrop GM Has Aggressively Grown Its Global Business and Become More Diversified
Against This Backdrop GM Has Aggressively Grown Its Global Business and Become More Diversified Sales mix in 1996 was 57% U.S. vs. 43% Non-U.S. -- by 2006 the split was 45% vs. 55% Mix shift has been supported by brisk global growth - -- Non-U.S. sales up 37% since CY 2002 Notable facts GM sales in
Slide 12: GM Global Sales 2000-2007 CY
GM Global Sales 2000-2007 CY PDB14a_GlobalSales Paul Ballew
Slide 13: GM Sales Performance Emerging Markets
GM Sales Performance Emerging 11 Markets GM sales growth has outpaced Industry year-over-year growth since 2003 GM sales this year will have increased over 150% since 2001 Greater than 100% growth in China, India, Russia and Turkey E11 markets will account for 25% of GM global sales in 2007 PDB15a_S
Slide 14: Did You Know...
Did You Know... In 2007 GM will be the first manufacturer to sell over 1 million vehicles in China GM sells more vehicles in Russia than it does in France (sales up 115% through June ’07) GM is selling 100k units a month in its LAAM region Chevrolet global sales exceeded 4 million units and have inc
Slide 15: GMDAT Sales 2003-2007
GMDAT Sales 2003-2007 CYTD 2007 CYTD 2003 2004 2005 2006 (June) NA 11,618 110,861 129,059 121,950 63,210 Europe 133,020 190,409 240,884 293,039 200,122 LAAM 13,914 71,256 135,139 204,628 139,462 AP 176,999 246,929 351,833 480,222 279,540 Global 335,551 619,455 856,915 1,099,839 682,334 Paul Ballew
Slide 16: A Few Points on the U.S.
A Few Points on the U.S. Growth outside the U.S. does not mean you can under-perform in this market -- still the largest and most profitable market Current contraction is a complication and adds to intense competitive pressure Key is to continue to improve the fundamentals and position in order to b
Slide 17: U.S. Scorecard
U.S. Scorecard Industry Sales Mix Key GM Imperatives Stabilize Retail Sales Reduce Incentive Spending Improve/Increase Residual Values Reduce Daily Rental Volumes Improve Advertising Effectiveness/ Advertising Alignment PDB19_USscore Paul Ballew
Slide 18: Summation
Summation Global economic expansion remains healthy despite the headwinds in the U.S. Industry continues to post records and growth has been brisk Competition remains intense -- as reflected in pricing; however, not inhibiting sales or revenue growth GM global expansion plans remain aggressive Focus
Slide 19: Fritz Henderson, Vice Chairman & CFO
Fritz Henderson ~~" == G ———m’ 0, Vice Chairman & CFO 7
Slide 20: Forward Looking Statements
Forward Looking Statements In the following presentation and in related comments by General Motors management, we will use words like "expect," "anticipate," "estimate," "forecast," "goal," "project," "targets" and similar expressions to identify forward looking statements that represent our current
Slide 21: Agenda
Agenda Overview of Financial Results Regional Outlook Key Issues A Look Ahead
Slide 22: H1 2007 Financial Highlights
H1 2007 Financial Highlights Adjusted net income $1.5B of which $0.9B automotive Automotive improvement of $0.6B year-over-year driven by GMNA/GMLAAM/GMAP Improved GAAP net income by $3.7B to $1.0B Adjusted automotive operating cash flow $1.4B -- $2.2B improvement Global market share of 13.1%, down
Slide 23: GMNA - Key Data
GMNA - Key Data H1 ’07 H1 ’06 ’07 O/(U) ’06 1 Sales in Units Thousands Refer to Supplemental Charts in our earnings presentation on GM’s Investor website for reconciliation to GAAP figures Industry Sales1 10,000 10,162 (1.6)% GM Sales1 2,256 2,413 (6.5)% GM Share 22.6% 23.7% (1.1) p.p. GM Revenue ($
Slide 24: GMNA Turnaround Plan
GMNA Turnaround Plan Product excellence Revitalize sales and marketing strategy Significantly reduce cost, improve quality Address health care/legacy cost burden
Slide 25: GMNA Revenue H1 Results - Sales & Marketing Strategy
GMNA Revenue H1 Results - Sales & Marketing Strategy Retail sales SAAR of slightly below 3.0 million, under target due to industry headwinds U.S. retail market share stable Incentives flat, ATPs up year-over-year Residuals improving Top reason for buying GM product changed
Slide 26: Top Reasons to Buy GM Products
Top Reasons to Buy GM Products 2003 2005 2007 Q1 Rebate Value for Exterior Incentives the Money Styling Value for Rebate Value for the Money Incentives the Money Exterior Employee Warranty/ Styling Discount Guarantee Price/Monthly Manufacturer Dependability/ Payments Reputation Reliability Past Manu
Slide 27: GMNA Revenue Looking Forward
GMNA Revenue Looking Forward Target remains 3.0 million retail sales, challenging due to industry underperformance Continuing strong focus on U.S. retail market -- CY rental sales reduction substantial (120-130k) Continued discipline on incentive spending Key launch products and reduced fleet sales
Slide 28: GMNA Material Cost
GMNA Material Cost Material cost performance no longer expected to fully offset steel and commodity cost headwinds Looking forward: Moderating pressures on commodity and steel prices, largely offset by strong performance Savings from reductions to annual $2B price penalty GM pays Delphi More stable
Slide 29: GMNA Structural Cost
GMNA Structural Cost On track for the $9B reduction target Looking forward: Further reductions arising from actions taken, i.e. manufacturing attrition program Negotiations highly focused on further increasing efficiency Need to continue to invest in product development, new technology and brand bui
Slide 30: GMNA - Key Metrics 2007 vs. 2006
GMNA - Key Metrics 2007 vs. 2006 January '07 August '07 U.S. Industry Flat (17.0M) Decrease (16.5/16.6M) U.S. Inventory Flat (1M+) Flat (1M+) GMNA Revenue Increase Flat Product Mix Favorable Favorable Net Pricing Favorable Favorable Material Performance Flat Unfavorable Structural Cost Decrease Decr
Slide 31: Achieving Sustainable GMNA Profitability and Cash Flow
Achieving Sustainable GMNA Profitability and Cash Flow Great products and strong brands are key Strong revenue crucial for turnaround Continue to focus on structural cost management Improve material cost Address Delphi penalty More stable commodity pricing Continued purchasing performance U.S. Labor
Slide 32: GME - Key Data
GME - Key Data H1 '07 H1 '06 '07 O/(U) '06 Industry Sales1 11,759 11,520 +2.1% GM Sales1 1,128 1,071 +5.3% GM Share 9.6% 9.3% +0.3 p.p. GM Revenue ($M) 18,043 16,795 +7.4% Adj. Net Income ($M) 278 274 +1.5% Net Margin 1.5% 1.6% (0.1) p.p. Includes Chevrolet Excludes Chevrolet 1 Sales in Units Thousa
Slide 33: GME - Turnaround Status
GME - Turnaround Status Systematic revenue and contribution margin management Favorable Corsa pricing Rental sales reduction with increase in aggregated contribution margin Substantial restructuring of cost footprint (Antwerp) Multi-brand strategy Growth focused on Russia and Central & Eastern Europ
Slide 34: GME - Emerging Markets (Russia)
GME - Emerging Markets (Russia) Aggressively pursuing growth opportunities in Russian market FAH15_GMEmarkets
Slide 35: GME - Growth Chevrolet in Europe
GME - Growth Chevrolet in Europe FAH16_GMEGrowth
Slide 36: GME - Key Metrics 2007 vs. 2006
GME - Key Metrics 2007 vs. 2006 January '07 August '07 Industry Flat Increase Total Revenue Increase Increase Mix Unfavorable Unfavorable Material Favorable Favorable Performance Structural Cost Flat Decrease
Slide 37: GMLAAM - Key Data
GMLAAM - Key Data H1 '07 H1 '06 '07 O/(U) '06 Industry Sales1 3,345 2,897 +15% GM Sales1 564 475 +19% GM Share 16.9% 16.4% +0.5 p.p. GM Revenue ($M) 7,903 6,990 +13% Adj. Net Income ($M) 414 222 +86% Net Margin 5.2% 3.2% +2.0 p.p. 1 Sales in Units Thousands Refer to Supplemental Charts in our earnin
Slide 38: GMLAAM - Emerging Market Growth
GMLAAM - Emerging Market Growth Taking full advantage of Emerging Markets' demand Leverage GM's global portfolio (including GMDAT, GMNA) Leverage low cost architectures Stretch manufacturing capacity Exploiting LAAM's core strengths Broad manufacturing presence and diversified product portfolio Chev
Slide 39: GMLAAM - Key Metrics 2007 vs. 2006
GMLAAM - Key Metrics 2007 vs. 2006 January '07 August '07 Industry Increase Increase Total Revenue Increase Increase Mix Unfavorable Flat Material Favorable Favorable Performance Structural Cost Flat Increase
Slide 40: GMAP - Key Data
GMAP - Key Data H1 '07 H1 '06 '07 O/(U) '06 Industry Sales1 10,444 9,714 +8% GM Sales1 726 635 +14% GM Share 7.0% 6.5% +0.5 p.p. GM Revenue ($M) 10,005 7,168 +40% Adj. Net Income ($M) 387 261 +48% Net Margin 3.9% 3.6% +0.3 p.p. 1 Sales in Units Thousands Refer to Supplemental Charts in our earnings
Slide 41: China - Key Data
China - Key Data H1 '07 H1 '06 '07 O/(U) '06 Industry Sales1 4,246 3,508 +21% GM Sales1 523 451 +16% GM Share 12.3% 12.9% (0.6) p.p. GM Equity Income2 ($M) 233 157 +48% 1 Sales in Units Thousands 2 Includes GM's share of net income /(loss) in Shanghai General Motors and SAIC-GM-Wuling Automobile JVs
Slide 42: GMAP: GM Brands' Share Almost Doubled from 2000 to 2006
GMAP: GM Brands' Share Almost Doubled from 2000 to 2006 FAH26_GMAPbrands Ballew-Analyst-Title
Slide 43: GMAP Brand Distribution
GMAP Brand Distribution FAH27_GMAPbrandDistri Ballew-Analyst-Title
Slide 44: GMAP - Key Metrics 2007 vs. 2006
GMAP - Key Metrics 2007 vs. 2006 January '07 August '07 Industry Increase Increase Total Revenue Increase Increase Mix Favorable Favorable Material Favorable Favorable Performance Structural Cost Increase Increase Ballew-Analyst-Title
Slide 45: GMAC - Key Data
GMAC - Key Data $ Millions H1 '07 H1 '06 '07 O/(U) '06 Global Automotive Finance 780 323 457 Insurance 274 209 65 Other 99 1 98 Net Income before ResCap 1,153 533 620 ResCap (1,165) 750 (1,915) Consolidated Net Income (12) 1,283 (1,295) ResCap's Q2 2006 included $259M after-tax gain on sale of equit
Slide 46: GMAC Outlook
GMAC Outlook Q2 Results, while still weak, showed marked improvement vs. Q1, despite challenging conditions in U.S. mortgage market Expect continued improvement in ResCap's earnings performance in H2 Current capitalization and liquidity are ample Diverse earnings base coupled with strong origination
Slide 47: Accounting Improvements Underway
Accounting Improvements Underway Strengthening accounting/internal controls top priority Actions already taken: New Controller & Corporate Chief Accounting Officer New Assistant Controller - Corporate Center New Director Accounting Policy & SEC Reporting New functional accounting managers Increased
Slide 48: Delphi Status
Delphi Status MoU between GM and Delphi with the UAW Restructuring provides opportunity to address purchase price premium of about $2B annually New plan framework agreement between Delphi and Appaloosa-led investor group in July GM continues to negotiate GM-Delphi settlement -- remains committed to
Slide 49: Risk Mitigation Initiatives
Risk Mitigation Initiatives Strong liquidity profile retained $27.2B liquidity at end of Q2 2007* $1.4B proceeds convertible securities offer in Q2 Supplemental $4.1B revolving credit facility Allison Transmission sale closed Actions taken to temper long-term balance sheet risk Health care and pensi
Slide 50: 2007 Outlook vs. 2006 - Total Automotive
2007 Outlook vs. 2006 - Total Automotive January '07 August '07 Global Industry Revenue Material Performance Structural Cost Adjusted Earnings Cash Flow Capital Spending Increase Increase Flat Decrease Improve Increase Increase Flat Decrease Improve Improved but Negative Improved but Negative Increa
Slide 51: Summary - 2007 Priorities
Summary - 2007 Priorities Continue to execute GMNA turnaround U.S. Labor negotiations Profitable growth in emerging markets Advanced technology leadership Leveraging our global scale and scope Improved business results Ballew-Analyst-Title