Ge Aerospace · NYSE:GE
Ge Aerospace — General Electric Company — Investor Day (March 2023)
121 slides from Ge Aerospace's investor day presentation, Mar 9, 2023
Slide 1: 2023 GE Investor Conference, Cincinnati
March 9, 2023 | Cincinnati, Ohio
Slide 2: Caution concerning forward-looking statements
Caution concerning forward-looking statements: This document contains "forward-looking statements" – that is, statements related to future events that by their nature address matters that are, to different degrees, uncertain. For details on the uncertainties that may cause our actual future results
Slide 3: GE 2023 Investor Conference agenda
GE 2023 Investor Conference agenda 7:00AM Breakfast 7:30AM Welcome Steve Winoker Safety moment Jenna Fillmore GE Overview Larry Culp GE Aerospace, followed by Q&A Larry Culp & team 9:45AM Break 10:00AM GE Vernova, followed by Q&A Scott Strazik & team Wrap, followed by Q&A Larry Culp & team 11:30AM L
Slide 4: Safety Moment
GE Investor Conference I March 9, 2023 Safety Moment Jenna Fillmore | Senior Health & Safety Manager, GE Aerospace 2023 GE INVESTOR CONFERENCE 4
Slide 5: Safety moment
Safety moment Today at GE Aerospace: • In case of emergency, use closest exit ↓ • In case of a tornado, seek safe shelter in designated room 18.8 % • Utilize appropriate Personal Protective Equipment during site tours in injuries at GE Aerospace from 2021 to 2022 • If you see unsafe behavior, please
Slide 6: GE Overview
GE INVESTOR CONFERENCE | March 9, 2023 GE Overview Larry Culp Chairman & CEO, GE CEO, GE Aerospace 2023 GE INVESTOR CONFERENCE 6
Slide 7: Propelling GE forward
Propelling GE forward Angela Foli working on a LEAP turbine center Thomas Riggs working on a generator stator Mark Honigman on GEnx test cell (Peebles, OH) GE Aerospace ... GE Vernova ... New era at GE ... a global leader uniquely positioned continuing to create value defining flight for industry le
Slide 8: Operating from a stronger foundation
Operating from a stronger foundation Team Acting with humility, transparency & focus to drive lasting culture change Lean & decentralization Continuous improvement & moving closer to the customer Innovation Significant investment to define future of flight & lead the energy transition Michael Whalen
Slide 9: Two innovative, service-focused industry leaders
Two innovative, service-focused industry leaders Aerospace Renewable Power Energy 2022 backlog $353B $33B $74B Services % of backlog 89% 39% 82% 2022 revenue $26B $13B $16B Services % of revenue 70% 21% 71% 2022 profit margin % 18.3% (17.3)% 7.5% ~40,900 commercial-a) ~54,000 ~7,000 Global installed
Slide 10: FY 2023 Guidance
FY 2023 Guidance Total company 2022 2023E • Mid-to-high teens organic revenue growth* • $5.3B-$5.7B operating profit Revenue growth*-b) +6% +HSD • FCF* up year-over-year -a) Adjusted EPS* $0.77 $1.60-$2.00 • LSD to MSD organic revenue growth* • $(0.6)B-$(0.2)B operating profit Free cash flow* $3.1B
Slide 11: More than doubling adjusted EPS in 2023
More than doubling adjusted EPS* in 2023 2022 to 2023 dynamics $1.60-$2.00 • HSD volume growth from backlog, services ... negative mix from LEAP & Offshore Wind growth $0.77 • Price mitigating inflation headwinds • Cost-out from productivity, quality, restructuring & sourcing • R&D & productivity in
Slide 12: Significant FCF growth continues into 2023
Significant FCF* growth continues into 2023 2022 to 2023 dynamics • Earnings significant FCF* driver • Slight tailwind from working capital $3.4-4.2B … DSO & inventory improvement, $3.1B progress flow smaller in ‘23 • Increased AD&A outflows on aircraft deliveries • Interest reduction offset by high
Slide 13: Preparing to stand up two independent companies
Preparing to stand up two independent companies Update Next steps • 95% of employees focused on day-to-day • Working on operational separation ... business performance systems, legal entities, finance, IT & more • Dedicated Separation Management Office driving workstreams across GE Aerospace, GE Ver
Slide 14: GE ... creating value now & ahead
GE ... creating value now & ahead GE Aerospace ... defining flight for today, tomorrow & the future Global leader in attractive, growing commercial & defense sectors Differentiated technology & service for customers Running the business with greater focus GE Vernova ... electrifying & decarbonizing
Slide 15: GE Aerospace
GE Investor Conference I March 9, 2023 GE Aerospace Larry Culp I CEO, GE Aerospace Russell Stokes I Commercial Engines & Services Mohamed Ali I Engineering Amy Gowder I Defense & Systems Rahul Ghai I CFO 2023 G E I N V E S T O R C O N F E R E N C E 15
Slide 16: Video: Aerospace Opening
Video: Aerospace Opening 2023 G E I N V E S T O R C O N F E R E N C E 16
Slide 17: GE Aerospace – inventing the future of flight
GE Aerospace – inventing the future of flight, lifting people up & bringing them home safely Global aerospace leader in attractive, growing commercial & defense sectors Defining flight for today, tomorrow & the future with differentiated technology & service Running the business with greater focus t
Slide 18: A global leader with large, growing businesses
A global leader with large, growing businesses Commercial Propulsion Defense & Systems Sector size 2022-a) ~$50B ~$35B Sector CAGR 2022-2025-a) Low-teens MSD-HSD GE 2022 revenue $18.7B $7.4B-b) % services ~70% >70%-c) • Fleet renewal & expansion • Strong U.S. & international demand Key demand driver
Slide 19: Strength & reach by the numbers
Strength & reach by the numbers Passengers flew People flying at any ~3B with GE technology-a) under wing in 2022 70% Services % of 2022 revenue ~650K given time on GE or JV-a) powered aircraft Every A GE or JV-a) Commercial & 2 powered aircraft takes off $350B+ Total backlog ~67K defense engines in
Slide 20: Demand is strong in attractive, growing sectors
Demand is strong in attractive, growing sectors Commercial air travel demand Global defense spending-b) Revenue passenger kilometers-a) % of 2019 levels ($ in trillions) 120 5-year CAGR: 25% 1.8 100 3-year CAGR: LSD 1.7 80 1.6 60 1.5 40 20 1.4 - 1.3 '19 2019 '20 2020 '21 2021 '22 2022 '23 2023E '24
Slide 21: Uniquely positioned products & services to serve strong demand
Uniquely positioned products & services to serve strong demand Installed base # of engines in service (thousands) Commercial Defense ~65 Largest & youngest fleet Diverse & growing portfolio ~41K engines ~26K engines ~50–a) Others Most complete value prop ... Rotorcraft & combat engine efficiency, re
Slide 22: Executing on GE Aerospace's priorities
Executing on GE Aerospace’s priorities Empower people through lean & decentralization Safety, quality, delivery, cost improvements & investing in the team Exceed customers’ expectations Supporting customers on ramp & being the partner of choice Pioneer flight technology of today & tomorrow Developin
Slide 23: How we are defining flight
How we are defining flight Today Tomorrow Future Commercial Keep the installed Grow & optimize Develop, certify & scale Engines & fleet flying LEAP & GE9X fleet next gen technology Services Defense & Lead with next gen Recover delivery Deliver on growth Systems technology 2023 G E I N V E S T O R C
Slide 24: GE Aerospace: 2025 financial outlook
GE Aerospace: 2025 financial outlook Revenue growth*-a) Profit margin FCF conversion*-b) Low double-digits to mid-teens ~20% 100%+ Long-term outlook-a): MSD to HSD revenue growth, continued margin expansion, FCF* in line with NI * Non-GAAP Financial Measure; reported on current GE basis, not standal
Slide 25: Commercial Engines & Services
Commercial Engines & Services Russell Stokes | CEO 2023 G E I N V E S T O R C O N F E R E N C E 25
Slide 26: GE Aerospace is differentiated by products, technologies, service & support
GE Aerospace is differentiated by its products, technologies, service & customer support Product breadth & quality Open services network Customer support CFM LEAP GE9X GE Aerospace customer support provides 24/7 CF34 Passport 20 LEAP services network service with centers across the globe • Industry’
Slide 27: Powering the world's most successful aircraft
Powering the world’s most successful aircraft (illustrative) Engine program lifecycle revenue-a) Boeing 777 Legacy GE90 Airbus A330 widebodies Airbus A380 GE CF6 CF6 GP7200 Boeing 787 GEnx Widebody Aircraft Boeing 777X GE9X Parts & services New engines 40+ Years Narrowbody Regional & Boeing 737Max A
Slide 28: Serving customers across engine lifecycle
Serving customers across engine lifecycle (illustrative) Engine workscope Quick turns-c) Performance restoration shop visit (PRSV) Avg. revenue SV1 SV2 SV3+ Compressor per shop visit Workscope Fan LPT–a) variations-b) Typical content NB NB WB NB WB NB WB Combustor & HPT-a) Shop visit Typically early
Slide 29: Return to flight drives departure growth & services demand
Return to flight drives departure growth & strong demand for Services across the portfolio GE/CFM departures Internal shop visit forecast-a) (% of 2019) 140 % 3,000 120 Widebody freight MDD CAGR 100 Total 2019 levels 2,000 80 60 Widebody Pax 40 Narrowbody 1,000 20 ’22-’25 CAGR: HSD to LDD 0 0 Dec'19
Slide 30: New engine demand driven by airframer build rates
New engine demand driven by airframer build rates, underpinned by long-term industry health Aircraft production-a) Total engine shipments-a) 2,000 Mid-teens CAGR Mid-20s CAGR 4,000 1,500 3,000 1,000 2,000 500 1,000 0 0 2022 2023E 2024F 2025F 2022 2023E 2024F 2025F Airbus Boeing Embraer Bombardier To
Slide 31: Managing product lifecycle to enable customer success
Managing product lifecycle to enable customer success, while sustainably growing free cash flow Today Tomorrow Future Commercial Keep the Grow & optimize Develop, certify & scale Engines & installed fleet flying LEAP & GE9X fleet next gen technology Services • Build on world-class safety • Meet prod
Slide 32: Largest global fleet in service with growth from LEAP & 9X
Largest global fleet in service with incremental growth coming from LEAP & 9X GE /JV engine fleet in service-a) 45,000 GE9X LEAP 30,000 GP7000 GEnx GE90 CF6 CF34 15,000 CFM56 0 2022 E 2023F 2024F 2025F Programs with >50% services mix-b) LEAP & 9X (a – Includes equipment made by CFM & Engine Alliance
Slide 33: CFM56 fleet poised for continued strong performance
CFM56 fleet poised for continued strong performance Total shop visit forecast-a) Fleet demographics-b) Aircraft retirements 600 2,000 500 SV2 400 300 1,000 No SV 200 100 SV1 0 0 2022 2025F 2028F 2022 2025F 2028F Internal External SV '21 Fcst '22 Fcst • Extending asset life with configurable • ~23,00
Slide 34: Video: Lean at Component Repair Technologies
Video: Lean at Component Repair Technologies 2023 G E I N V E S T O R C O N F E R E N C E 34
Slide 35: Delivering on the LEAP ramp to drive growth
Delivering on the LEAP ramp to drive growth LEAP engine production ramp Lean case study LEAP Turbine Center Frame in Terre Haute 40 100 Monthly Output 30 75 Delinquency 2,000+ 20 50 ~1,700 1,736 1,136 10 25 845 815 0 0 1Q'22 2Q'22 3Q'22 4Q'22 1Q’23E 1Q'23 2019 2020 2021 2022 2023E 2024F 2025F Monthl
Slide 36: Profitable LEAP growth requires focus on shop visits, durability & cost
Profitable LEAP growth requires focus on shop visit volume, durability & cost Durability & cost-a) Internal shop visit growth-b) Time on wing (TOW) indexed to technical requirement (Mean TOW, cycles) 400 Customer expectation at maturity 1.00 0.80 LEAP-1A CFM56-5B 0.60 200 0.40 Better TOW v. CFM56 at
Slide 37: GE engines well-positioned to serve widebody operator needs
GE engines are well-positioned to serve broad range of widebody operator needs Multi-platform position allows GE to meet customer needs across lifecycles & applications Internal shop visit forecast-b) % Services-a) Demand driver GE strategic positioning (GE90, CF6, GEnx, GP7000) 787 ... the most ver
Slide 38: GE9X imperatives through 2025
GE9X imperatives through 2025 Program Support 777X certification (GE9X certified in Sep. 2020) efforts through continued flight tests Commercial Partner with Boeing on commercial campaigns to fulfill demand & continue growing backlog Technical Use pre-entry into service period to proactively improve
Slide 39: Improving the Services network through lean & technology
Improving the Services network through lean & differentiated technology investments Lean case study Technology CFM56 HPC Vane Repair Turnaround Time in Singapore -a) Leveraging AI & robotics to improve performance 52 days 40% reduction 36 days 31 days 3Q’22 Q3 4Q’22 Q4 Today GEnx HPT blade inspectio
Slide 40: Technology leadership for the next generation
Technology leadership for the next generation CFM RISE open fan Hybrid electric Alternative fuels Integrated hybrid electric powertrain to demonstrate CFM RISE open fan demo flight readiness for single-aisle aircraft Illustrative hydrogen combustor • Targeting 20% fuel efficiency • Developing capabi
Slide 41: Video: United Airlines
Video: United Airlines 2023 GE INVESTOR CONFERENCE 41
Slide 42: The industry's largest engine portfolio
The industry’s largest engine portfolio, powering the world’s most successful aircraft platforms Capitalizing on cyclical & secular tailwinds to grow well above GDP for foreseeable future Large fleet in service supports global customer base & free cash flow generation for GE Using lean & technology
Slide 43: Technology & Innovation
Technology & Innovation Mohamed Ali | VP, Engineering 2023 G E I N V E S T O R C O N F E R E N C E 43
Slide 44: World-class engineering expertise across the product lifecycle
World-class engineering expertise integrated throughout the product lifecycle Design & materials Supply chain Services LEAP CMC shroud with cross-section Ultrasound cycle time & safety improvement tooling Robots apply thermal coating, extending TOW Develop differentiated product portfolio Optimize m
Slide 45: LEAP performing better than CFM56 at comparable age
LEAP performing better than CFM56 at comparable age & at/above expectations across most criteria Reliability Utilization Engine removal rate since EIS Days flown ratio 12-month rolling average % days with at least 1 flight flown LEAP strengths 100% LEAP Engine Basic Removals / 1000 Effective flight
Slide 46: Proven roadmap for continuous durability improvements
Proven roadmap for continuous durability improvements over the product lifecycle GE90-115B durability improvement Mean TOW in cycles indexed to Customer expectation customer expectation at maturity at maturity Year 2-6 Year 7-12 Years since EIS 2 improvements 6 improvements 12 P10/15/16 shroud, P06/
Slide 47: Achieving mature LEAP durability is top priority
Achieving mature LEAP durability is top priority LEAP durability improvements Actioning durability improvements Shroud Fuel Nozzle • Shop visit removal rates & maintenance burden below 2018 2023-2024 expectations relative to mature CFM56 … but better RDS-a) HPT Blade & at comparable point in lifecyc
Slide 48: Breakthrough technologies to invent future & secure installed fleet
Breakthrough technologies to invent future & secure installed fleet Electrification Advanced architecture • World’s 1st … tested • Super-computing power for complete electric system up to performance & noise innovation 45,000 feet-a) • Airbus flight test partnership for • NASA & Boeing flight progra
Slide 49: Defense & Systems
Defense & Systems Amy Gowder | CEO 2023 GE INVESTOR CONFERENCE 2023 G E I N V E S T O R C O N F E R E N C E 49
Slide 50: Threat environment driving strong budgets
Threat environment driving strong budgets US Department of Defense budget-a) International defense budget-b) LSD CAGR anticipated in President’s Budget 2024+ LSD CAGR +9.8% in 2023 744 817 2022 2023E 2024F 2025F 2019 2020 2021 2022 2023E 2024F 2025F • Great power competition ... U.S. is focused on t
Slide 51: Powering a wide range of defense aircraft globally
Powering a wide range of defense aircraft globally (illustrative) Engine program lifecycle revenue-a) Apache/Black Hawk F-16 T700 Legacy combat F110 Various USMC CH-53K Air Force F-15EX T408 F110 Future P-8/E-7 U.S. platforms Vertical Lift CFM56 T901 F/A-18 F404/F414 Air Force T-7A Next Gen F404 Par
Slide 52: Delivering growth & innovating technology for future of combat
Delivering growth & innovating technology for the future of combat Today Tomorrow Future Defense & Lead with next gen Recover delivery Deliver on growth Systems technology • Lean improvements in • Execute new product • Lead in adaptive cycle components & assembly introduction in rotorcraft engine te
Slide 53: Delivering improved operational performance
Delivering improved operational performance Investing in improved quality Lean impact in flow improving delivery • Detailed part-to-print program on T700 to implement • Lean operating system is driving results: sustainable improvements o F110 Compressor Case: delivery output rate up >2x o >16,000 ch
Slide 54: Growing through differentiation
Growing through differentiation Engine unit outlook Positioned on numerous U.S. & international platforms Demand driver Platform selections & campaigns 1250 HSD CAGR Engine of choice for Selected: Air Force T-7A, Turkey Hurjet, U.S. & international Korea T-50 & FA-50 trainers & light fighters Campai
Slide 55: Leading in adaptive cycle engine technology
Leading in adaptive cycle engine technology Adaptive is a generational change in propulsion Technology is mature & tested $2B of tech Performance testing High bypass efficiency + Performance on demand maturation by Air Force customer 25% better fuel efficiency 30% range increase & While offering cus
Slide 56: Innovating for the future in Edison Works
Innovating for the future in Edison Works New capabilities are Developing future of combat technology entering the combat fleet $7,000.00 $6,000.00 • Awarded significant classified programs, $5,000.00 $4,000.00 competing on multiple additional classified programs $3,000.00 $2,000.00 $1,000.00 • Inve
Slide 57: Defense: growing in strong & resilient sector
Defense: growing in strong & resilient sector Focused on driving a step change in performance today Growing in both core & next generation products tomorrow Technology shared across civil & defense products 2023 G E I N V E S T O R C O N F E R E N C E 57
Slide 58: Financials
Financials Rahul Ghai | CFO 2023 G E I N V E S T O R C O N F E R E N C E 58
Slide 59: GE Aerospace, a global leader operating at scale
GE Aerospace, a global leader operating at scale 2022 revenue split Installed base-a) growth 70% ~60% services 67K 51K 42K $26B 30% equipment 2000 2010 2022 Higher-margin services revenue fueled by growing fleet in service & higher utilization (a – Number of commercial & military engines in-service;
Slide 60: Consistent long-term growth ... recovery continues
Consistent long-term growth … recovery continues ($ in billions) +MSD CAGR Growth drivers 32.9 26.0 Revenue 19.3 17.6 • Strong recovery after downturns 10.8 10.9 • Resilience driven by services & strong positions on key platforms +HSD CAGR 6.8 • Entering major platform renewal cycle 4.8 3.7 3.3 Prof
Slide 61: Continued profit growth in 2023
Continued profit growth in 2023 Profit bridge 2023 dynamics • Services: high-teens to 20% revenue growth*-a); internal SV up ~20%, largely driven by WB $5.3-$5.7B • OE: ~20% revenue growth*-a) ... LEAP units $4.8B +50% … spare engine mix consistent with 2022 • Incremental LEAP mix impact ~(1) point,
Slide 62: Strong cash generation in 2023
Strong cash generation in 2023 FCF* bridge 2023 dynamics • Earnings & working capital driving free cash flow* growth Up $4.9B • Working capital improvement from higher $4.4B-a) Services billings & reduced days sales outstanding 5.2 • AD&A $(0.5)B; aligns to airframer delivery schedules • FCF convers
Slide 63: GE Aerospace: 2025 financial outlook
GE Aerospace: 2025 financial outlook Revenue growth*-a) Profit margin FCF conversion*-b) Low double-digits to mid-teens: ~20% 100%+ • Commercial: Mid-teens • Defense-c): MSD-HSD Strong top line driving high-teens profit growth & continued FCF* generation * Non-GAAP Financial Measure; reported on cur
Slide 64: Path to ~20% margin in 2025
Path to ~20% margin in 2025 Profit bridge 2023 to 2025 dynamics • Volume continues to offset platform mix $7.6-$8.0B pressure • Expecting LEAP program & OE $5.3-$5.7B breakeven by mid-decade • Price contributing, offsetting inflation and continued growth investments • Continued lean deployment & foc
Slide 65: Driving a leaner, more efficient cost base
Driving a leaner, more efficient cost base 2023 to 2025 Productivity-a) SG&A % of revenue Material Labor & 2-3 pts. 9% overhead per year 7% 7% 2019 2020 2023E 2025F • Product cost reduction ... learning curve, loss/scrap • SG&A% slightly lower than pre-COVID levels in 2023 reduction & leveraging the
Slide 66: Opportunities supporting mid-term FCF growth
Opportunities supporting mid-term FCF* growth CapEx/revenue ratio Days sales outstanding (DSO) Inventory turns 2019 2021 2023E 2025F 2019 2021 2023E 2025F 2019 2021 2023E 2025F • Controlled spending while • 2022 DSO better than pre-COVID • Reduce peak inventory levels by supporting LEAP shop visit r
Slide 67: Attractive financial profile
Attractive financial profile Strong revenue trajectory fueled by growing installed base & higher utilization Expanding margins to ~20% in 2025 through price, productivity & growth Higher FCF* driven by working capital opportunities & disciplined investments Long-term outlook*: MSD to HSD revenue gro
Slide 68: Wrap
Wrap Larry Culp | CEO, GE Aerospace 2023 G E I N V E S T O R C O N F E R E N C E 68
Slide 69: GE Aerospace ... creating value now & ahead
GE Aerospace ... creating value now & ahead Global aerospace leader in attractive, growing commercial & defense sectors Most competitive value proposition for propulsion Best commercial & defense platforms Large installed base Defining flight for today, tomorrow & the future with differentiated tech
Slide 70: Q&A
Q&A 2023 G E I N V E S T O R C O N F E R E N C E 70
Slide 71: Break
GE INVESTOR CONFERENCE | March 9, 2023 Break 2023 G E I N V E S T O R C O N F E R E N C E 71
Slide 72: Video: Vernova Opening
Video: Vernova Opening 2023 G E I N V E S T O R C O N F E R E N C E 72
Slide 73: GE Vernova
GE Vernova Scott Strazik I CEO, GE Vernova Eric Gray I Gas Power Philippe Piron I Grid Solutions & Power Conversion Vic Abate I Onshore Wind 2023 G E I N V E S T O R C O N F E R E N C E 73
Slide 74: GE Vernova – March 2023 vs. March 2022
GE Vernova – March 2023 vs. March 2022 External developments Internal progress • Inflation Reduction Act (IRA) a “game changer” for • Solidifying the leadership team … supporting our U.S. customers stand-up of a new public company ✓ ONW tax credit extension (10+ years) improves ✓ Internal promotions
Slide 75: GE Vernova – the energy to change the world
GE Vernova – the energy to change the world Industry leader uniquely positioned to support customers through the energy transition Power delivering strong, long-term FCF* generation from vast services installed base Renewable Energy transforming now … secular tailwinds to drive long-term profitable
Slide 76: Strength & reach by the numbers
Strength & reach by the numbers World’s electricity Global utilities generated with Services ~30% the help of our ~50% revenue-b) 30% served by our software technology Gas turbines 8M Hydrogen- 7K installed … world’s largest fleet $107B Backlog-b) hours blended output on 100+ turbines Small Modular
Slide 77: Delivering what the energy system needs
Delivering what the energy system needs Conventional Power Wind Electrification Gas, Steam, Onshore & Grid, Power Conversion, Global sectors Nuclear & Hydro Offshore Digital & Hybrids Sector size 2022-a) ~$110B ~$80B ~$75B Sector CAGR 2022-2030-a) LSD HSD MSD/HSD GE 2022 revenue-b) ~$16B ~$9B ~$5B-c
Slide 78: Driving the energy transition forward
Driving the energy transition forward Electrifying ... meeting the Decarbonizing … decreasing CO2 world’s growing electricity needs • Transitioning to low-carbon fuels like hydrogen & capturing carbon • Growing low & zero-carbon generating capacity • Increasing capacity factors & utilization of low
Slide 79: Solid revenue growth from secular demand tailwinds
Solid revenue growth from secular demand tailwinds Key drivers 2022 2023E 2024F • Entering 2023 with strong backlog … ~80% revenue in hand • Gas Power growing MSD* … services, turbine deliveries Revenue growth*-a) $29B LSD/MSD MSD • Steam as a service … smaller revenue base ~$1B in 2024+ Power $16.3
Slide 80: Power profit grows, Renewable Energy improves
Power profit grows, Renewable Energy improves 2022 2023E 2024F Key drivers • Power achieving LDD margins in 2024 ... Gas LDD margins Profit-a) $(1.0)B $(0.6)-(0.2)B Profitable in 2023+, Steam a higher margin services business in 2024 Profit margin-a) (3.5)% Better MSD • ONW better in 2023 from price
Slide 81: Approaching significant FCF inflection point
Approaching significant FCF* inflection point Power up with Flat to slightly Renewable Energy Key drivers improving approaching B/E Power remains Powera … strong FCF* strong generator FCF generator • HAearnings • Gas Power & Aeroderivative growth &sales increasing services billings • Steam as a serv
Slide 82: GE Vernova: long-term outlook
GE Vernova: long-term outlook Revenue growth*-a) Profit margin FCF conversion*-b) MSD HSD 90-110% Improving margins & delivering higher FCF* across GE Vernova * Non-GAAP Financial Measure; note: reported on current GE basis & not stand-alone basis (a – organic basis (b – FCF conversion*: segment FCF
Slide 83: Uniquely positioned industry leader supporting customers through energy transition
Uniquely positioned industry leader to support customers through the energy transition Secular demand Lean driving Existing & new tailwinds productivity products • Public policy, corporate • More margin expansion • Near-term: more frameworks means opportunities at Gas efficient HA + higher investmen
Slide 84: Gas Power
Gas Power Eric Gray | CEO, Gas Power 2023 G E I N V E S T O R C O N F E R E N C E 84
Slide 85: Gas Power delivering strong margin & FCF
Gas Power delivering strong margin & FCF* HDGT LTSA backlog provides HA services billings growing Fulfilling rising ~$45B revenue source to ~$1B/year by mid-20s Aeroderivative demand • Expect LSD growth in global gas-based • Customer’s investing in latest baseload • Proving more important in renewab
Slide 86: Lean continues to drive value
Lean continues to drive value Services Supply chain 7F Live Outage Cycle Transformation Moving manufacturing hours onto ‘lean lines’ ↓ 6x Injuries 49 Shifts ↓ 3x Quality escapes Shifts to 38 33% ↓ 50% Lead time complete Shifts X 36 ↓ 30% Cost Shifts 2021 2022 2023E 10 106 152 >2M hours saved of capa
Slide 87: Gas Power profit growth continues ahead
Gas Power profit growth continues ahead Profit margin trajectory Key drivers LDD • Continued services growth on higher outage HSD volume • Aeroderivative units favorable to equipment & service volume & margin • Improvement opportunities remain with lean, including moving down HA cost curve • Product
Slide 88: Video: Lean at GE Vietnam factory
Video: Lean at GE Vietnam factory 2023 G E I N V E S T O R C O N F E R E N C E 88
Slide 89: Electrification
Electrification Philippe Piron | CEO, Grid Solutions & CEO, Power Conversion 2023 G E I N V E S T O R C O N F E R E N C E 89
Slide 90: Grid Solutions turnaround accelerating
Grid Solutions turnaround accelerating Profitable growth trajectory +MSD* +MSD* $3.2 $3.1 Grid Systems Grid Power Grid Revenue Integration Transmission Automation 2021 2022 2023E -a) 2024F -a) Profitable growth Improved execution Profit Modestly (11)% (3)% MSD% • Market to grow HSD … ~$75B by 2025 •
Slide 91: Grid is the backbone of the energy transition
Grid is the backbone of the energy transition HVDC: a key enabler for grid expansion, HVDC case study interconnection & renewable integration HVDC market HVDC -a) size-a) $22B +35% $9B annual growth $1B-b) HVDC system: leveraging full Grid Solutions product range (% of total project cost} 2022 2025F
Slide 92: Video: NextEra Energy
Video: NextEra Energy 2023 G E I N V E S T O R C O N F E R E N C E 92
Slide 93: Onshore Wind
Onshore Wind Vic Abate | CTO, GE and CEO, Onshore Wind 2023 G E I N V E S T O R C O N F E R E N C E 93
Slide 94: Driving profitability by focusing on our core markets
Driving profitability by focusing on our core markets IRA driving U.S. growth Demand visibility improving Favorable mix shift U.S. Onshore Wind installations (GW) % planned U.S. units in agreement % of opening backlog (GE forecast) with customers-a) 11% CAGR Entering 2022 Entering 2023 100% 1 rest o
Slide 95: Onshore Wind strategic priorities
Onshore Wind strategic priorities Lead with quality Workhorse products Simplify Reduce product variants Best project economics Focus & lean Better delivered cost in 80% of U.S. zip codes 2021 2025F vs 2021 Scalable by 2x with limited investment Rotors 15 4 Countries bid 50% Nacelles 9 4 Design hubs
Slide 96: Importance of leading with quality
Importance of leading with quality Energy transition success will require CO2 Taking actions to deliver that free energy, decade after decade-a) promise every day • Fleet Performance Management team … 200 Wind tWhrs 12,300 engineers dedicated as eyes & ears of the fleet % Total generation ~25% ~2,00
Slide 97: Improving Onshore Wind profit margin performance
Improving Onshore Wind profit margin performance Profit margin trajectory Key levers firmly in our control • Proactive fleet mitigation & fewer variants LSD+ • Focused footprint & prioritized spend • Regional shift toward U.S. with IRA • Price actions with better 2022 Quality Cost-out U.S. Price/cos
Slide 98: Wrap
Wrap Scott Strazik | CEO, GE Vernova 2023 G E I N V E S T O R C O N F E R E N C E 98
Slide 99: Offshore Wind: key priorities to achieve profitability
Offshore Wind: key priorities to achieve profitability Progressing through challenging backlog Disciplined underwriting in a growth market Haliade-X existing backlog ($B) Global OFW installs (GW)-a) 181 27% $3B 22% 60 2022 2023E 2024F 2025F 34 Product 45% Margin ~ B/E 2022 2025F 2030F CAGR ’25-’30 W
Slide 100: New nuclear key to the energy transition
New nuclear key to the energy transition Nuclear important Taking disciplined approach today & tomorrow for introducing SMR • Provides zero emission, reliable baseload power ... • Investing smartly in a long-term nuclear NPI ~18% of TWh’s in the U.S. & ~10% globally-a) ✓ Developed new BWRX-300 small
Slide 101: Innovating to support customers through energy transition
Innovating to support customers through energy transition Sustainable Affordable Resilient Secure workhorse product Onshore Wind positioned to ramp investing for higher availability pairing with storage for increased dispatch 14 MW turbine investing to scale Offshore Wind commissioned in ‘23 with cu
Slide 102: GE Vernova: long-term outlook
GE Vernova: long-term outlook Revenue growth*-a) Profit margin FCF conversion*-b) MSD HSD 90-110% Improving margins & delivering higher FCF* across GE Vernova * Non-GAAP Financial Measure; note: reported on current GE basis & not stand-alone basis (a – organic basis (b – FCF conversion*: segment FCF
Slide 103: GE Vernova ... positioned to create value
GE Vernova … positioned to create value Gas Power a strong franchise, leading Power to LDD margins & >100% FCF conversion*-a) in 2024+ Onshore Wind orders & profit visibility increasing now, focused on improving Offshore Wind Grid Solutions modestly profitable in 2023, demand accelerating & facing c
Slide 104: Q&A
Q&A 2023 G E I N V E S T O R C O N F E R E N C E 104
Slide 105: Wrap
GE INVESTOR CONFERENCE | March 9, 2023 Wrap Larry Culp Chairman & CEO, GE CEO, GE Aerospace 2023 G E I N V E S T O R C O N F E R E N C E 105
Slide 106: GE Vernova
GE Vernova • Industry leader uniquely positioned to support customers through the energy transition • Power delivering strong, long-term FCF* generation from vast services installed base • Renewable Energy transforming now … secular 3.0-3.4 MW Sierra onshore wind turbine tailwinds to drive long-term
Slide 107: GE Aerospace
GE Aerospace • Global leader in attractive, growing commercial & defense sectors • Defining flight for today, tomorrow & the future with differentiated technology & service • Running the business with greater focus to drive F110 powering F-15EX long-term profitable growth GE9X engine on wing Long-te
Slide 108: Future is bright ... a new era at GE
Future is bright ... a new era at GE GE Aerospace GE Vernova is defining flight for is electrifying & today, tomorrow & decarbonizing the the future world Continuing to create value for customers, employees & shareholders 2023 G E I N V E S T O R C O N F E R E N C E 108
Slide 109: Q&A
Q&A 2023 G E I N V E S T O R C O N F E R E N C E 109
Slide 110: Tour logistics
GE INVESTOR CONFERENCE | March 9, 2023 Tour logistics 2023 G E I N V E S T O R C O N F E R E N C E 110
Slide 111: Directions for after lunch
Directions for after lunch Tour groups: Luggage: Departure: Please check your badge to You will pick up your luggage All buses will be departing for determine your tour group. when you depart CTEC for the the airport by 3:00pm ET. If you do not have a number, last time. A small luggage van please le
Slide 112: March 9, 2023 | Cincinnati, Ohio
March 9, 2023 | Cincinnati, Ohio
Slide 113: Appendix & non-GAAP reconciliations
GE INVESTOR CONFERENCE | March 9, 2023 Appendix & non-GAAP reconciliations 2023 G E I N V E S T O R C O N F E R E N C E 113
Slide 114: Other 2023 guidance items
Other 2023 guidance items Interest ~$(1)B expense & cash Taxes* Adjusted tax rate* mid-20s; adjusted cash taxes roughly aligned Adj. corporate costs* ~Flat vs. 2022 Separation costs Expecting ~$1B of remaining separation costs, excluding tax costs, cash lagging expense Non-op. benefit costs Positive
Slide 115: Organic revenues, profit (loss) & profit margin by segment
Organic revenues, profit (loss) & profit margin by segment Excludes GE HealthCare results ORGANIC REVENUES, PROFIT (LOSS) AND PROFIT MARGIN BY SEGMENT (NON-GAAP) REVENUES PROFIT (LOSS) PROFIT MARGIN (Dollars in millions) 2022 2021 V% 2022 2021 V% 2022 2021 V pts Aerospace (GAAP) $ 26,050 $ 21,310 22
Slide 116: Organic revenues
Organic revenues Excludes GE HealthCare results ORGANIC REVENUES (NON-GAAP) (Dollars in millions) 2022 2021 V% Total revenues (GAAP) $ 58,096 $ 56,474 3% Less: Insurance revenues 2,954 3,106 Adjusted revenues (Non-GAAP) $ 55,143 $ 53,368 3% Less: acquisitions 2 (55) Less: business dispositions — 158
Slide 117: Adjusted profit & profit margin
Adjusted profit & profit margin Excludes GE HealthCare results ADJUSTED PROFIT AND PROFIT MARGIN (EXCLUDING CERTAIN ITEMS) (NON-GAAP) (Dollars in millions) 2022 Total revenues (GAAP) $ 58,096 Less: Insurance revenues 2,954 Adjusted revenues (Non-GAAP) $ 55,143 Total costs and expenses (GAAP) $ 60,21
Slide 118: Adjusted earnings (loss) & adjusted earnings per share
Adjusted earnings (loss) & adjusted earnings (loss) per share Excludes GE HealthCare results ADJUSTED EARNINGS (LOSS) (NON-GAAP) 2022 (Dollars in millions, per-share amounts in dollars) Earnings EPS Earnings (loss) from continuing operations (GAAP) $ (1,211) (1.11) Insurance earnings (loss) (pre-tax
Slide 119: Free cash flows (FCF) by quarter
Free cash flows (FCF) by quarter Excludes GE HealthCare results FREE CASH FLOWS (FCF) (NON-GAAP) (Dollars in millions) 1Q'22 2Q'22 3Q'22 4Q'22 2022 CFOA (GAAP) $ (924) $ 490 $ 813 $ 3,644 $ 4,023 Less: CFOA from insurance (15) 70 (7) 88 136 CFOA excluding Insurance (Non-GAAP) $ (909) $ 420 $ 820 $ 3
Slide 120: Free cash flows (FCF) by segment
Free cash flows (FCF) by segment Excludes GE HealthCare results 2022 FREE CASH FLOWS (FCF) (Non-GAAP) (Dollars in millions) Aerospace Renewables Power Corporate Total Company CFOA (GAAP) $ 5,514 $ (1,759) $ 2,078 $ (1,810) $ 4,023 Less: Insurance CFOA — — — 136 136 CFOA excluding Insurance (Non-GAAP
Slide 121: 2023 adjusted EPS and free cash flows (non-GAAP)
2023 adjusted EPS (non-GAAP) We cannot provide a reconciliation of the differences between the non-GAAP expectations and corresponding GAAP measure for Adjusted EPS* in 2023 without unreasonable effort due to the uncertainty of timing of any gains or losses related to acquisitions & dispositions, th