Ge Healthcare Technologies Inc. · NASDAQ:GEHC
Ge Healthcare Technologies — Q2 2024 Earnings Presentation
35 slides from Ge Healthcare Technologies's earnings presentation, Jul 31, 2024
Slide 1: 2Q 2024 Earnings Presentation
2Q 2024 Earnings Presentation July 31, 2024 © 2024 GE HealthCare. GE is a trademark of General Electric Company used under trademark license.
Slide 2: Forward-looking statements and additional information
Forward-looking statements and additional information 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
Slide 3: 2Q 2024 Performance
2Q 2024 Performance • Delivered year-over-year sales growth and margin expansion • Reported improved orders growth, with particular strength in the U.S. • Faced headwinds in China related to timing of stimulus and anti-corruption campaign • Drove productivity through lean culture, enabling margin ex
Slide 4: 2Q 2024 Consolidated performance summary
2Q 2024 Consolidated performance summary Revenues Organic orders Adjusted EBIT* and Adjusted EPS* Free cash flow* growth** Adjusted EBIT margin* $4.8B 3% YoY $742M $1.00 $(182)M 1% Organic growth*(1) Book-to-Bill** 15.3% Margin 9% YoY $(46)M YoY 1.06x 60 bps YoY *Non-GAAP financial measure. See appe
Slide 5: 2Q 2024 Revenue performance
2Q 2024 Revenue performance Business Segment Products and Services** (1) Organic revenue growth* +1% Reported revenue growth —% Ultrasound $823M, (1)%*(1) Services $1.6B, +2% 34% Products $3.2B, —% Imaging Total Revenue Total Revenue $4.8B PCS $4.8B $2.6B, —%*(1) $772M, +1%*(1) 66% PDx $639M, +14%*(
Slide 6: Delivered 2Q and 1H 2024 adjusted margin expansion
Delivered 2Q and 1H 2024 adjusted margin* expansion 2Q 2024 Adjusted Margin* Expansion +110 bps YoY +60 bps YoY Lean efforts driving margin expansion • Executed variable cost productivity initiatives • Introduced higher margin NPIs • Continued to drive sales price accretion in line with the value we
Slide 7: 2Q 2024 Imaging results
2Q 2024 Imaging results 2Q 2024 2Q 2023 YoY change Revenues $2,596M $2,620M —%*(1) Segment EBIT $286M $278M 3% Segment EBIT margin 11.0% 10.6% 40 bps Highlights • Organic revenue* flat following 9% growth in prior year; also impacted by China market headwinds • EBIT margin improvement YoY driven by
Slide 8: 2Q 2024 Ultrasound results
2Q 2024 Ultrasound results 2Q 2024 2Q 2023 YoY change Revenues $823M $839M (1)%*(1) Segment EBIT $178M $191M (7)% Segment EBIT margin 21.6% 22.8% (120) bps Highlights • Organic revenue growth* declined YoY primarily due to China market headwinds • EBIT margin declined YoY with lower sales in China a
Slide 9: 2Q 2024 Patient Care Solutions results
2Q 2024 Patient Care Solutions results 2Q 2024 2Q 2023 YoY change Revenues $772M $770M 1%*(1) Segment EBIT $78M $84M (8)% Segment EBIT margin 10.1% 10.9% (90) bps Highlights • Organic revenue increase* following 9% growth in the prior year • EBIT margin declined due to product mix; productivity acti
Slide 10: 2Q 2024 Pharmaceutical Diagnostics results
2Q 2024 Pharmaceutical Diagnostics results 2Q 2024 2Q 2023 YoY change Revenues $639M $568M 14%*(1) Segment EBIT $200M $152M 31% Segment EBIT margin 31.2% 26.8% 450 bps . Highlights • Strong Organic revenue growth* driven by volume, pricing actions, and new product introductions • EBIT margin increas
Slide 11: 2Q 2024 Cash performance
2Q 2024 Cash performance 2Q 2024 Free Cash Flow* Cash Highlights 2Q 2023 2Q 2024 • Free Cash Flow* of $(182)M due to the normal timing of compensation and interest payments $(136)M $(182)M • Focused efforts on working capital management to improve lead times and inventory turns *Non-GAAP financial m
Slide 12: 2024 Outlook
2024 Outlook Previous 2024E Updated 2024E Organic Revenue Growth*(1) Approximately 4% 1% - 2% Adjusted EBIT Margin* 15.6% - 15.9% 15.7% - 16.0% 50 - 80 bps growth 60 - 90 bps growth Adjusted ETR* 23% - 25% reaffirmed Adjusted EPS* $4.20 - $4.35 reaffirmed 7% - 11% growth Free Cash Flow* ~$1.8 billio
Slide 13: Investing in Imaging for future growth
Investing in Imaging for future growth Advancing neuroscience research Progress on imaging agent reimbursement Expanding access to radioisotope production SIGNA MAGNUS™ is a head-only MR scanner designed CMS’ proposed rule would remove a longstanding MINItrace Magni(1) is a small footprint, cost-eff
Slide 14: Positioned for growth in Ultrasound and IGT: Electrophysiology ecosystem
Positioned for growth in Ultrasound and IGT: Electrophysiology ecosystem 4D ICE NUVISION™ Allia™ IGS 7 Pulse Ultrasound catheter by Vscan Biosense Webster, Inc. Air™ SL CardioLab™ with Prucka™ 3 With CARTO™ 3D navigation & mapping compatibility Vivid™ S70 with Dimension ICE/CARTOSOUND® interface Not
Slide 15: Summary
Summary • Encouraged by customer capital equipment spend, particularly in Imaging and Ultrasound in the U.S. • Diverse funnel of growth and margin expansion opportunities driven by innovation investments and lean culture • Expect to deliver Organic revenue growth*, Adjusted EBIT margin* expansion an
Slide 16: Q&A
Q&A © 2024 GE HealthCare. GE is a trademark of General Electric Company used under trademark license.
Slide 17: Upcoming events
Upcoming events 2024 Wells Fargo Healthcare Conference September 2024 Morgan Stanley 22nd Annual Global Healthcare Conference September 2024 GE HealthCare Investor Day November 21, 2024 © 2024 GE HealthCare. GE is a trademark of General Electric Company used under trademark license.
Slide 18: Appendix
Appendix © 2024 GE HealthCare. GE is a trademark of General Electric Company used under trademark license.
Slide 19: Organic Revenue
Organic Revenue* ($ in millions) For the three months ended June 30 For the six months ended June 30 Unaudited 2024 2023 % change 2024 2023 % change Total revenues $ 4,839 $ 4,817 —% $ 9,489 $ 9,524 —% Less: Acquisitions(1) 13 — 14 — Less: Dispositions(2) — — — — Less: Foreign currency exchange (54)
Slide 20: Segment Organic Revenue
Segment Organic Revenue* ($ in millions) For the three months ended June 30 For the six months ended June 30 Unaudited 2024 2023 % change 2024 2023 % change Imaging revenues $ 2,596 $ 2,620 (1)% $ 5,062 $ 5,116 (1)% Less: Acquisitions(1) 13 — 13 — Less: Dispositions(2) — — — — Less: Foreign currency
Slide 21: Adjusted EBIT
Adjusted EBIT* ($ in millions) For the three months ended June 30 For the six months ended June 30 Unaudited 2024 2023 % change 2024 2023 % change Net income attributable to GE HealthCare $ 428 $ 418 2% $ 802 $ 790 2% Add: Interest and other financial charges – net 131 137 254 273 Add: Non-operating
Slide 22: Adjusted Net Income
Adjusted Net Income* ($ in millions) For the three months ended June 30 For the six months ended June 30 Unaudited 2024 2023 % change 2024 2023 % change Net income attributable to GE HealthCare $ 428 $ 418 2% $ 802 $ 790 2% Add: Non-operating benefit (income) costs (101) (123) (204) (238) Add: Restr
Slide 23: Adjusted Earnings Per Share
Adjusted Earnings Per Share* (In dollars, except shares outstanding presented in millions) For the three months ended June 30 For the six months ended June 30 Unaudited 2024 2023 $ change 2024 2023 $ change Diluted earnings per share $ 0.93 $ 0.91 $ 0.02 $ 1.75 $ 1.33 $ 0.42 Add: Deemed preferred st
Slide 24: Adjusted Tax Expense and Adjusted ETR
Adjusted Tax Expense* and Adjusted ETR* ($ in millions) For the three months ended June 30 For the six months ended June 30 Unaudited 2024 2023 2024 2023 Benefit (provision) for income taxes $ (143) $ (137) $ (267) $ (300) Add: Tax effect of reconciling items (1) (3) (10) 1 Add: Certain tax adjustme
Slide 25: Free Cash Flow
Free Cash Flow* ($ in millions) For the three months ended June 30 For the six months ended June 30 Unaudited 2024 2023 % change 2024 2023 % change Cash from (used for) operating activities $ (119) $ (67) (77)% $ 300 $ 401 (25)% Add: Additions to PP&E and internal-use software (63) (70) (209) (213)
Slide 26: Non-GAAP P&L Reconciliations - 2Q 2024
Non-GAAP P&L Reconciliations - 2Q 2024 ($ in millions) Acquisition Amortization Non- and (Gain) loss on of Investment Operating Spin-Off and Tax Effect of GAAP Restructuring disposition- business and acquisition- revaluation benefit Certain Tax Non-GAAP separation Reconciling Adjustments(6) Reported
Slide 27: Non-GAAP P&L Reconciliations - 2Q 2023
Non-GAAP P&L Reconciliations - 2Q 2023 ($ in millions) Acquisition Amortization Non- and (Gain) loss on of Investment Operating Restructuring disposition- Spin-Off and business and acquisition- Tax Effect of GAAP revaluation Certain Tax Non-GAAP separation benefit Reconciling Adjustments(6) Reported
Slide 28: Non-GAAP P&L Reconciliations - 1H 2024
Non-GAAP P&L Reconciliations - 1H 2024 ($ in millions) Acquisition Amortization Non- and (Gain) loss on of Investment Operating Spin-Off and Tax Effect of GAAP Restructuring disposition- business and acquisition- revaluation benefit Certain Tax Non-GAAP separation Reconciling Adjustments(6) Reported
Slide 29: Non-GAAP P&L Reconciliations - 1H 2023
Non-GAAP P&L Reconciliations - 1H 2023 ($ in millions) Acquisition Amortization Non- and (Gain) loss on of Investment Operating Spin-Off and Tax Effect of GAAP Restructuring disposition- business and acquisition- revaluation benefit Certain Tax Non-GAAP separation Reconciling Adjustments(6) Reported
Slide 30: Acronyms
Acronyms AI Artificial Intelligence bps Basis points CL Curved Linear CMS Centers for Medicare and Medicaid Services CT Computed Tomography DL Deep Learning EBIT Earnings Before Interest and Taxes ECG Electrocardiogram EP Electrophysiology EPS Earnings Per Share ETR Effective Tax Rate FCF Free Cash
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: Product disclaimers
Product disclaimers Product Name Disclaimer 510(k) Pending at FDA. Not Available for Sale in the United States. Not yet CE marked. Cannot be placed on the SIGNA MAGNUS market or put into service until it has been made to comply with CE marking. Not cleared or approved by any global regulator for com
Slide 33: 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 liquidity that the Company believes will help investors understand its financial condition, cash flows, and operating results, and assess its fu
Slide 34: 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 based on internal forecasts that omit certain amounts that would be included in GAAP fin
Slide 35: Slide 35
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