General Motors Company · NYSE:GM
General Motors — Merger or Acquisition (March 2017)
23 slides from General Motors's merger presentation, Mar 6, 2017
Slide 1: GM Announces Sale of Opel/Vauxhall
GM ANNOUNCES SALE OF O P E L / VAUX H A L L MARCH 6, 2017
Slide 2: Today's Announcement
TO DAY ’ S ANNOUNCEMENT Sale of Opel/Vauxhall to PSA Group for ~$2.2B Builds on success of prior alliance Collaboration between GM and PSA Group to continue Allows GM to focus resources on higher-return opportunities Accelerates returns to owners 2
Slide 3: We Are Redefining the Future of Personal Mobility
W E A R E R E D E F I N I N G TH E FUTU R E O F P E R S O N A L M O B I L I T Y OW N TH E C U STOM E R R E L ATI O N S H I P B EYO N D TH E C A R Technology & Innovation CORE BUSINESS AND GROWTH FOUNDATION 3
Slide 4: Win-Win Combination: Benefiting All Parties
W I N -W I N COM B I N ATI O N : B E N E F I TI N G A L L PA RTI E S De-risks enterprise Creates a leading franchise in Europe Access to local scale Participation in upside Complementary brands & distribution Operating independence preserved Unlocks cash for distribution $1.8B of annual run-rate syn
Slide 5: Operations to be Divested
O P E R ATI O N S TO B E D I V E STE D Opel and Vauxhall brands ~$19B revenue (AutoCo + FinCo) 6 assembly/5 component facilities 1 engineering center FinCo operation ~$10B asset base 40k employees Headquarters Components Assembly Engineering Massive scope of transaction 5
Slide 6: Transaction Summary
TR A N SACTI O N S U M M A RY AutoCo cash consideration ~$0.9B Warrants ~$0.7B Pension de-risking premium ~($0.4B)* AutoCo consideration ~$1.2B ~4x 2016 EBITDA FinCo cash consideration ~$1.0B 0.8x book value Total consideration ~$2.2B * Approximately half is risk premium, the remainder due to differ
Slide 7: GME Has Been Executing to Drive Plan
G M E H A S B E E N E X E C UTI N G TO D R I V E 2 0 2 2 P L A N Opel/Vauxhall market share GME EBIT-adj.* $ billions $0.0 9.0% 8.7% 8.6% ($0.2) 8.5% ($0.5) ($0.4) ($0.3) 8.1% 8.1% 8.0% 7.8% ($1.0) ($0.9) ($0.8) ($0.9) ($0.8) 7.6% ($1.0) ($1.1) 7.5% 7.2% ($1.5) ($1.4) ($1.4) 7.1% ($1.5) ($1.7) 7.0%
Slide 8: However Future Risks Outweigh Opportunities
H OW EV E R FUTU R E R I S KS O UT W E I G H O P P O RTU N I TI E S Opportunities Risks • Subscale at #8 market position • New launches in new segments • Brexit/other geopolitical • Technology leadership (OnStar, • Long-term industry growth Ampera-E) • Regulatory divergence • Cost performance – Near
Slide 9: GM Business Portfolio
G M B U S I N E S S P O RTF O L I O Profit potential and GM franchise strength is key to strong returns 9
Slide 10: Consolidated Results to Improve Significantly
CO N S O L I DATE D R E S U LTS TO I M P ROV E S I G N I F I C A N TLY 2016 2016 amended Revenue $166.4B ~$149B EPS-diluted-adj. $6.12 $6.401 EBIT-adj. $12.5B ~$12.8B EBIT-adj. margin 7.5% ~8.6% Capex $9.4B ~$8.3B Adj. Automotive FCF $6.9B ~$7.8B Target auto cash ~$20B ~$18B Auto debt + pensions ~$2
Slide 11: Minimal Impact to GMF Results
M I N I M A L I M PACT TO G M F R E S U LTS 2016 2016 amended EBT $0.9B $0.8B1 Ending earning assets $78.6B $68.6B Tangible net worth $7.5B $6.5B Leverage ratio2 ~10.4 ~10.4 ROE % ~12.5% ~12.5% 1 EBT reduced by $0.1B associated with European operations 2 Calculated consistent with GM/GMF Support Agr
Slide 12: Sources and Uses of Cash
S O U RC E S A N D U S E S O F CA S H Sources Uses AutoCo cash consideration $0.9B GME Debt1 $0.4B Reduction in target cash balance $2.0B Share buyback following closing $2.0B Debt issuance for pensions $2.8B Pension funding $3.2B FinCo dividend to AutoCo $0.5B Available for future share buybacks $0
Slide 13: Pension Liability Mechanics
PENSION LIABILITY MECHANICS Retained Transferred & funded At 12/31/16 At 12/31/16 Assets: ~$0.2B Assets: ~$3.3B Liabilities: ~$3.0B Retained European Liabilities: ~$9.8B Transferred European Net underfunded: ~$2.8B pensions Net underfunded: ~$6.5B pensions Funding: ~$3.2B Premium: ~$0.4B Note: Based
Slide 14: The PSA Group Warrants
TH E P SA G RO U P WA R R A N TS Economic value: ~$700M Strike price: €1 per share Number of warrants: 39.7M, equivalent to 4.2% of shares post closing Provides opportunity to participate in future synergies Maturity: 9 years Exercisable: Commencing 5 years post close Voting Rights: None 14
Slide 15: Special Charge
S P E C I A L C H A RG E Unrealizable deferred tax assets ~($2.7B) Previously deferred pension losses ~($1.2B) Pension de-risking premium ~($0.4B) Net gain/loss on sale ~$0.0B Total special charge ($4.0-$4.5B) Primarily non-cash special charge of $4.0-$4.5B 15
Slide 16: Unlocking Significant Capital for Shareholders
U N LO C K I N G S I G N I F I CA N T C A P I TA L F O R De-risking reduces minimum cash requirement from ~$20B to ~$18B SHAREHOLDERS Liquidity remains strong - $32B in cash and available credit lines Raise ~$3B of debt to fund transferred pension plans De-risks overall business Incremental debt bal
Slide 17: GM Is a Compelling Investment Opportunity
G M I S A COM P E L L I N G I N V E STM E N T O P P O RTU N I T Y Earnings Disciplined Capital Robust Downside Growth Allocation Protection Continued EPS Disciplined reinvestment Enables sustained growth trajectory and returning cash performance through expected to shareholders the cycle Reduces req
Slide 18: Forward Looking Statements
F O RWA R D LO O K I N G STAT E M E N TS In this presentation and in reports we subsequently file and have previously filed with the SEC on Forms 10-K and 10-Q and file or furnish on Form 8-K, and in related comments by our management, we use words like “anticipate,” “appears,” “approximately,” “bel
Slide 19: Select Supplemental Financial Information
SELECT SUPPLEMENTAL FI NANCIAL I N FORMATION 19
Slide 20: Non-GAAP Measures
N O N - GA A P M E A S U R E S See our Form 10-K and Form 10-Q reports filed with the U.S. Securities and Exchange Commission for a description of certain non-GAAP measures used by GM, including EBIT-adjusted, EPS-diluted- adjusted, ROIC-adjusted and adjusted automotive free cash flow, along with a
Slide 21: Reconciliations: 2016 Amended Financials
R E CO N C I L I ATI O N S 2016 amended financials 2016 Amended ($B) ($B) Financials Net income attributable to stockholders 1 9.4 Net automotive cash provided by operating activities 1 14.3 Auto FCF- Revenue EBIT-adj. adj. 2016 reported1 166.4 12.5 6.9 O/V brands exited2 (18.8) 0.5 1.2 Exports from
Slide 22: Reconciliations: 2016 Amended Financials
R E CO N C I L I ATI O N S 2016 amended financials ($B) Net assets 2016 reported (average) 43.3 Auto entities sold1 (0.3) FinCo entities sold1 (0.2) Consideration received, pension premium & share buyback 2 (1.2) 2016 amended3 41.5 Net assets EBIT-adj. ROIC-adj. 2016 reported (average) 43.3 12.5 28.
Slide 23: For Additional Information Please Visit
FOR ADDITIONAL I N F O R M AT I O N P L E A S E V I S I T: Cadillac Escala Concept http://www.gm.com/investors https://www.gmfinancial.com/investors-information.aspx investorrelations@gm.com investors@gmfinancial.com GM’s Investor Relations website contains a significant amount of information about
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