General Motors Company · NYSE:GM
General Motors — Q1 2016 Earnings Presentation
37 slides from General Motors's earnings presentation, Apr 21, 2016
Slide 1: General Motors Company Q1 2016 Results
General Motors Company Q1 2016 Results pril 21, 2016 —~Oowr wo ee OW ® GENERAL MOTORS
Slide 2: Forward looking statements reference
This presentation is governed by the forward looking statements language on slide 2 2
Slide 3: GM is a compelling investment opportunity
• GM is a compelling investment opportunity • Earnings grew in 2014 and 2015 and we are off to a great start in 2016 • We have a best in industry capital allocation framework • Underpinned by transparency, disciplined capital spending and our commitment to return all excess free cash flow to our own
Slide 4: Q1 summary: deliveries, revenue, EBIT-Adjusted, EPS
• Q1 Global deliveries were down 2.5% primarily due to macroeconomic challenges in South America. The volume decrease in South America was partially offset by growth in Europe • Market share decreased 20 bps year-over-year in Q1; driven primarily by reduced volumes in South America as well as our st
Slide 5: First Quarter 2016 Highlights
First Quarter 2016 Highlights Earn Customers For Life Buick, GMC and Chevrolet brands ranked 3%, 5'" and 6'" respectively in the 2016 U.S. J.D. Power Vehicle Dependability Study (VDS) Opel Astra named 2016 European "Car of the Year" Retail deliveries in the United States grew 7% for a share increase
Slide 6: First Quarter 2016 Highlights (Cont.)
First Quarter 2016 Highlights (Cont.) Lead in Technology and Innovation + Announced the Chevrolet Bolt EV - The first all-electric vehicle with a range of more than 200 miles, for around $30K + Announced our strategic partnership with Lyft to create an integrated network of on-demand autonomous vehi
Slide 7: Net revenue and operating results
• Net Revenue was $37.3 billion, up $1.6 billion year-over-year; holding FX constant, Net Revenue would have been up $2.9 billion • Operating income of $2.0 billion was up approximately $1.2 billion year-over-year, driven by strong operating performance • Q1 records for EBIT-Adjusted and EBIT-Adjust
Slide 8: Net revenue drivers
Consolidated Q1 2016 Net Revenue was up $1.6 billion, key drivers included: • Volume – $0.9 billion favorable primarily due to wholesale volume increases in North America (45K) and Europe (25K) more than offsetting weakness in GMSA and GMIO (ex China) • Mix – improved $0.6 billion driven primarily b
Slide 9: EPS-Diluted-Adjusted
• EPS-Diluted-Adjusted was a Q1 record $1.26/share, up 47% year-over-year • Special items had a net after-tax unfavorable impact on Net Income to Common Stockholders of $37 million or $0.02/share. • Special item related to charges for various legal matters related to ignition switch recall • Q1 2016
Slide 10: Consolidated EBIT-Adjusted record
• Consolidated EBIT-Adjusted improved to a Q1 record $2.7 billion and Consolidated EBIT- Adjusted margin improved to a Q1 record 7.1%, up 130 bps vs. Q1 a year ago. This is our 3rd consecutive record EBIT- Adjusted quarter • Consolidated wholesales for Q1 increased 20K units, on the strength of full
Slide 11: EBIT-Adjusted key drivers
• Consolidated Q1 2016 EBIT-Adjusted increased approximately $0.6 billion year-over- year, key drivers included: • Volume – positive impact from increased wholesales in North America and Europe, partially offset by reductions in South America and GMIO (ex. China) • Mix – relatively flat across all r
Slide 12: Segment results overview
• All segments posted improved year-over-year results • GMNA achieved Q1 record performance for EBIT-Adjusted • GME posted breakeven results • GMIO performance improved year-over-year with continued strong results in China (see slide 18) • GMSA performance improved by over $0.1 billion for the quart
Slide 13: U.S. market share and incentives
• Market share in the U.S. was 16.4%, while retail share was 16.6% in Q1 • Retail market share increased approximately 110 bps vs. Q1 2015 led by strong demand for full-size pickups, large SUVs and mid-size cars • Overall share was down 50 bps as the increase in retail share was offset by a planned
Slide 14: GMNA Q1 results
• Q1 GMNA EBIT-Adjusted achieved a Q1 record of $2.3 billion • Q1 Net Revenue was also a strong $26.5 billion, up $1.8 billion year-over-year driven by increased retail demand for full-size pickups, full-size SUVs and mid-size cars • Q1 EBIT-Adjusted margin was 8.7%, down 10 bps from Q1 2015 primari
Slide 15: GMNA EBIT-Adjusted drivers
• GMNA’s EBIT-Adjusted improved $0.1 billion: • Volume – favorable volume related to increased demand for full-size pickups, full-size SUVs and mid-size cars. Wholesale volume impacted by strategic decision to reduce daily rental volume • Price - favorable price due to the all new Malibu and the rec
Slide 16: GME breakeven results
• GME reported breakeven results in Q1 • Revenue is up $0.2 billon due to increased wholesales of 25K units. The wholesale increase is primarily due to strong performance of the all new Astra • European share was flat including the impact of the Russia exit. Market share improved in 15 markets and w
Slide 17: GME EBIT-Adjusted drivers
• GME Q1 EBIT-Adjusted increased approximately $0.2 billion year-over-year, to breakeven: • Volume – 25K additional wholesales helped by a strengthening European market and key product launches like the Astra • Cost – favorable carryover material performance and fixed cost savings contributed to a s
Slide 18: GMIO Q1 results
• GMIO Q1 EBIT-Adjusted was flat year-over-year • China equity income was flat at $0.5 billion with strength in our SUVs (Envision/Baojun) and luxury vehicles being offset by lower demand for smaller passenger vehicles. Material cost performance continued to be favorable, offset by carryover price r
Slide 19: GMIO EBIT-Adjusted drivers
• GMIO EBIT-Adjusted was flat year-over-year, key drivers included: • Volume – Wholesales in the region decreased 14K units, driven primarily by Egypt, India, and South Africa • Cost – positive impact primarily related to material and logistics cost savings 19
Slide 20: GMSA EBIT-Adjusted improvement
• GMSA EBIT-Adjusted improved $0.1 billion despite more challenging macroeconomic conditions • Market share decreased to 15.6% in Q1 ’16 from 16.7% in Q1 2015 • Aggressive actions taken in 2015 to mitigate the challenges are paying off in 2016 • Labor cost reduction of 20% • Production cuts of appro
Slide 21: GMSA EBIT-Adjusted drivers
• GMSA Q1 EBIT-Adjusted improved $0.1 billion year-over-year, key drivers included: • Volume – wholesales decreased 37K units, primarily in Brazil, partially offset by increases in Argentina • Price – positive impact driven by price increases to offset inflationary and foreign exchange pressures, pr
Slide 22: GM Financial results
• GMF continues to execute on its captive strategy with penetration in North America increased to 37% in Q1 2016 • Net revenue increased to a record $2.1 billion in Q1 2016 • EBT-Adjusted increased to a Q1 record $225 million • Experienced stable credit performance in both the North America and Inte
Slide 23: Automotive Adjusted Free Cash Flow
• Automotive Adjusted Free Cash Flow improved $0.2 billion to a net outflow of $1.5 billion in Q1 • Automotive net cash provided by operating activities was an outflow of $0.7 billion in Q1 2016 and $0.7 billion unfavorable compared to Q1 2015. This included a $1.5 billion discretionary contribution
Slide 24: Automotive liquidity
• Quarter-end automotive liquidity remains solid at $30.6 billion • Change in automotive liquidity compared to YE 2015 relates to the following: • Automotive Adjusted FCF ($1.5) billion • Discretionary Pension Contribution ($1.5) billion • Net debt draws $2.0 billion • Share repurchases $(0.3) billi
Slide 25: 2016 outlook and guidance
• Q1 was a very strong start to the year. Record Q1 EPS-Diluted-Adjusted, Consolidated EBIT-Adjusted, EBIT-Adjusted margin and ROIC • We are on the path to another record setting year • For full year 2016 we continue to expect improved total company EBIT-Adjusted, EBIT- Adjusted margins, EPS-Adjuste
Slide 26: GM is a compelling investment opportunity
• GM is a compelling investment opportunity • Earnings grew in 2014 and 2015 and we are off to a great start in 2016 • We have a best in industry capital allocation framework • Underpinned by transparency, disciplined capital spending and our commitment to return all excess free cash flow to our own
Slide 27: Select Supplemental Financial Information
General Motors Company Select Supplemental Financial Information GENERAL MOTORS 27
Slide 28: Non-GAAP Measures
Non-GAAP Measures Management uses earnings before interest and taxes (EBIT)-adjusted to review the operating results of our automotive segments because it excludes interest income, interest expense and income taxes as well as certain additional adjustments. GM Financial uses income before income tax
Slide 29: Global Deliveries
Global Deliveries (000's) Q12015 = Q22015 = 32015 = 42015 | Q12016 North America 790 965 931 927 799 Us 684 822 794 783 684 Europe 292 319 288 275 311 UK. 86 7 80 68 85 Germany 55 66 61 6t 62 International Operations 1,137 1,022 1,005 1,359 1,131 Chinat 939 823 814 1,154 976 Memo: China Retail Deliv
Slide 30: Global Market Share
Global Market Share Q12015 = Q22015 = 32015 = Q4 2015 | Q12016 North America 16.4% 17.1% 16.6% 16.9% 15.9% us. 16.9% 17.6% 17.1% 17.3% 16.4% Europe 6.1% 6.3% 6.3% 5.7% 6.1% UK. 10.2% 10.3% 9.6% 10.7% 9.6% Germany 6.6% 7.0% 7.1% 6.9% 7.1% International Operations 10.0% 9.8% 10.0% 10.7% 9.8% Chinat 15
Slide 31: Reconciliation of EBIT-Adjusted
Reconciliation of EBIT-Adjusted {$B) Net income attributable to stockholders Subtract: Automotive Interest Expense Automotive Interest Income Income Tax Benefit (Expense) Add Back Special items": Russia Exit Costs Legal Related Matters? EBIT-Adjusted Q12016 | Q12015 2.0 0.9 (0.1) (0.1) (0.6) (0.5) —
Slide 32: Aggregate Impact of Special Items on GAAP
Aggregate Impact of Special Items on GAAP Reported Earnings ($B) Q1 2016 Q1 2015 Special Adjusted Special Adjusted Net sales and revenue Reported Items (Non-GAAP) Reported Items (Non-GAAP) Total net sales and revenues 37.3 - 37.3 35.7 - 35.7 Costs and expenses Automotive cost of sales 30.6 - 30.6 30
Slide 33: Calculation of ROIC
Calculation of ROIC Four Quarters Ended ($B) Q1 2016 Q1 2015 Numerator: EBIT-Adjusted 11.4 8.1 Denominator: Average Equity 38.1 39.7 Add: Average automotive debt and interest liabilities (excluding capital leases) 8.6 7.3 Add: Average automotive net pension & OPEB liability 27.4 27.4 Less: Average f
Slide 34: Effective Tax Rate-Adjusted
Effective Tax Rate-Adjusted ($M) EBIT-Adjusted Less: Noncontrolling Interests Less: Net Interest Expense EBT-Adjusted Tax Expense (Benefit) Impact of special items Tax Expense-Adjusted Effective Tax Rate-Adjusted GM expects 2016 full year Effective Tax Rate-Adjustedto be in the mid Q12016 | @Q12015
Slide 35: Restructuring (not included in special items)
Restructuring (not included in special items) ($B) Q1 2016 Q1 2015 GMNA (0.2) (0.0) GME (0.0) (0.0) Gmlo (0.0) (0.0) GMSA (0.0) (0.0) Total Restructuring (0.3) (0.1) GM expects CY 2016 restructuring to be ~$0.7 billion GENERAL MOTORS Note: Results may not sum due to rounding sé 35
Slide 36: GM Financial - Key Metrics
GM Financial - Key Metrics Receivables program SExcludes retail finance receivables in repossession ($M) Q1 2016 Q1 2015 Earnings Before Tax-Adjusted 225 214 Total Loan and Lease Originations 10,895 7,102 GM as % of GM Financial Loan and Lease Originations 89% 77% Commercial Finance Receivables’ 8,9
Slide 37: For additional information please visit
For additional information please visit: GENERAL MOTORS http://www.gm.com/investors investorrelations@gm.com su | GM FINANCIAL https://www.gmfinancial.com/investors-information.aspx investors@gmfinancial.com “= @ ar eS @ © DW’ & GENERAL MOTORS 37
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