General Motors Company · NYSE:GM
General Motors — Q2 2016 Earnings Presentation
38 slides from General Motors's earnings presentation, Jul 21, 2016
Slide 1: General Motors Results
GENERAL MOTORS Results July 21, 2016 — Ome Oe OTWe GENERAL MOTORS
Slide 2: Forward-Looking Statements
Forward-Looking Statements In this presentation and in related comments by management, we use words like “anticipate,” “appears,” “approximately,” “believe,” “continue,” “could,” “designed,” ‘eftect,” “estimate,” “evaluate,” “expect,” “forecast,” “goal,” “initative,” “intend,” “may,” “objective,” “o
Slide 3: GM Is a Compelling Investment
GM Is a Compelling Inve 3 Disciplined Robust Downside Continued EPS Disciplined Enables growth trajectory reinvestment and sustained expected returning cash to performance shareholders through the cycle GENERAL MOTORS 3
Slide 4: Q2 2016 results summary
Q2 global deliveries relatively flat Y-O-Y, driven primarily by challenging conditions in South America and International Operation (excluding China) and the strategic reduction of less profitable daily-rental sales in North America. These volume reductions were partially offset by an 11.8% increase
Slide 5: Second Quarter 2016 Highlights
Second Quarter 2016 Highlights Earn Customers For Life General Motors' brands delivered the most segment awards in B&B the 2016 J.D. Power Vehicle Dependability Study (VDS) aace General Motors received 7 awards in the 2016 J.D. Power Initial a i a Quality Study (IQS) = Sala pre) H1 retail deliveries
Slide 6: Second Quarter 2016 Highlights: Technology and Innovation
Second Quarter 2016 Highlig Lead in Technology and Innovation Road testing autonomous Chevrolet Bolt EV's in San Francisco Announced closure of the Cruise Automation acquisition to add deep software talent and further accelerate our autonomous vehicle technology The GM+Lyft Express Drive program has
Slide 7: Consolidated net revenue increased $4.2 billion
Consolidated net revenue increased $4.2 billion, key drivers include: • Volume - $3.7 billion favorable due to increased wholesales in North America (126,000 units) and Europe (23,000 units). North American wholesales were driven by strong retail demand for full-size trucks and SUVs, new launch prod
Slide 8: EPS-diluted was a Q2 record of $1.81 per share
EPS-diluted was a Q2 record of $1.81 per share. A special item related to charges for various legal matters related to the ignition switch recall had a net after-tax unfavorable impact on reported Net Income to common stockholders of ($0.1) billion or ($0.05) per share during Q2. EPS-diluted-adjuste
Slide 9: Consolidated EBIT-adjusted improved to a record $3.9 billion
Consolidated EBIT-adjusted improved to a record $3.9 billion, up $1.1 billion Y-O-Y. Consolidated EBIT-adjusted margin improved to a record 9.3%, up 180 bps. vs. Q2 2015. Trailing four-quarter consolidated EBIT-adjusted margin of nearly 8%. Consolidated wholesales for Q2 increased 138,000 units, pri
Slide 10: Consolidated EBIT-adjusted drivers
Consolidated EBIT-adjusted increased approximately $1.1 billion Y-O-Y. Key drivers included: • Volume – favorable impact from increased wholesales in North America and Europe. North America wholesales were favorably impacted by strong retail demand for full-size trucks and SUVs, launch products and
Slide 11: Record consolidated EBIT-adjusted with broad-based results
Record consolidated EBIT-adjusted of $3.9 billion with broad-based, strong results. All but one of our regions posted Y-O-Y profit improvement. • GMNA achieved record EBIT-adjusted of $3.6 billion. • GME returned to profitability and recorded its second straight quarter of break-even or better resul
Slide 12: U.S. market share and pricing
Market share in the U.S. was 16.3% during H1, while retail share was 16.4%, an increase of 40 bps. • Retail market share increased on the strength of strong demand for full-size trucks, SUVs and successful launch products such as the Chevrolet Malibu, Cruze and Cadillac XT5. GM’s incentive spending
Slide 13: North America record EBIT-adjusted of $3.6 billion
North America record EBIT-adjusted grew to $3.6 billion for the quarter, up $0.9 billion Y-O- Y, and record EBIT-adjusted margins of 12.1%, up 160 bps Y-O-Y, and in line with our target of sustaining strong 10% margins while investing in the future. • GMNA has averaged EBIT-adjusted margins of 10.7%
Slide 14: Drivers of North America EBIT-adjusted improvement
Drivers of North America EBIT-adjusted improvement include: • Volume – favorable due to 126,000 unit increase in wholesales. The primary drivers are strong retail demand for full-size trucks and SUVs as well as incremental auction sales from the daily-rental channel. • Mix – unfavorable primarily du
Slide 15: GME achieved second straight quarter of break-even or better
GME achieved its second straight quarter of break-even or better results. Q2 was profitable and the region recorded EBIT-adjusted of $0.1 billion for the first half, up over $0.4 billion Y-O-Y. • Wholesales increased 23,000 units, primarily due to successful launch products like the Opel/Vauxhall As
Slide 16: Drivers of GME's EBIT-adjusted improvement
Drivers of GME’s EBIT-adjusted improvement: • Volume – favorable due to 23,000 unit increase in wholesales, a result of the successful launch of the Astra. • Price – favorable pricing, primarily due to the success of the Opel/Vauxhall Astra. • Other – unfavorable due to weakening of the British Poun
Slide 17: GMIO performance down $0.2 billion Y-O-Y
GMIO performance was down $0.2 billion Y-O-Y. • China equity income was flat Y-O-Y at $0.5 billion: • Wholesales were up 24,000 units due to the strength of the Baojun, Buick and Cadillac brands. SUVs and luxury vehicles continued to be strong, offset by weakness in demand for small passenger and mi
Slide 18: Drivers of GMIO's EBIT-adjusted performance
Drivers of GMIO’s EBIT-adjusted performance: • Mix - slightly unfavorable due to selling less full-size trucks and SUVs in the Middle East. • Other - FX continues to put pressure on the region, particularly the Egyptian Pound and Australian Dollar. 18
Slide 19: South America remains challenged
South America remains challenged from macro-economic and political standpoints. • EBIT-adjusted was flat Y-O-Y as our team focuses on cost efficiencies to mitigate macro- economic impacts. • Wholesales decreased about 9,000 units, driven primarily by a decrease in Ecuador. • Market share remains str
Slide 20: Drivers of GMSA's EBIT-adjusted performance
Drivers of GMSA’s EBIT-adjusted performance: • Mix – unfavorable country mix due to economic difficulties in Venezuela and Ecuador. • Price – positive impact driven by price increases to offset inflationary and foreign- exchange pressures, primarily in Argentina and Columbia. • Cost – favorable impa
Slide 21: GMF grew top-line revenue to a record $2.3 billion
GMF grew top-line revenue to a record $2.3 billion as it continues to execute on its full captive strategy. EBT-adjusted was a record $266 million, demonstrating moderate growth, consistent with the growth in our loan portfolio and earning assets. Charge offs remain stable in both the North American
Slide 22: Q2 adjusted automotive free cash flow
Q2 adjusted automotive free cash flow was relatively flat Y-O-Y at $3.2 billion. Excluding the discretionary contribution to the pension plan in Q2 2016, operating cash flows were up Y-O-Y, offset by higher capital expenditures Y-O-Y. We are on track to generate approximately $6 billion in adjusted
Slide 23: Quarter-end available liquidity at $34.1 billion
Quarter-end available liquidity remains strong at $34.1 billion, up $1.6 billion from year- end 2015. • The change in automotive liquidity compared to year-end 2015 relates to the following: ($B) Adjusted Automotive FCF 1.7 Discretionary Pension Contribution (2.0) Issuance of Debt 2.0 Increase in cr
Slide 24: Summary and 2016 Outlook
Summary GM delivered record operating performance in Q2 2016, setting the Company up for another very strong year and meeting our commitments + Record EPS-diluted-adjusted of $1.86, an increase of 44% from Q2 2015 + Record Q2 Consolidated EBIT-adjusted of $3.9 billion and EBIT-adjusted margin of 9.3
Slide 25: Earnings Growth, Disciplined Capital Allocation, Robust Downside Protection
Earnings Growth Disciplined Robust Downside 9 Capital Allocation Protection Continued EPS Disciplined Enables growth trajectory reinvestment and sustained expected returning cash to performance shareholders through the cycle GENERAL MOTORS 25 25
Slide 26: Select Supplemental Financial Information
GENERAL MOTORS Select Supplemental Financial Information GENERAL MOTORS 26
Slide 27: Non-GAAP Measures
Non-GAAP Measures Management uses earings before interest and taxes (EB/T)-adjusted to review our consolidated operating results because it excludes automotive interest income, automotive interest expense and income taxes as well as certain additional adjustments Examples of adjustments to EBIT incl
Slide 28: Global Deliveries
Global Deliveries (000's) Q2 201 Q3 201 Q420 Q2 2016 North America 965 931 927 910 US. 822 794 783 684 755 Europe 319 288 275 311 328 UK. 7 80 68 65 69 Germany 66 61 61 63 73 International Operations 1,022 1,005 1,359 1,132 1,012 Chinat 823 ate 1,154 976 839 Memo: China Retail Delivenes 757 773 1,12
Slide 29: Global Market Share
Global Market Share Q22015 Q32015 42015 Q12016 Q22016 North America 17.1% 16.6% 16.9% 15.9% 15.9% us. 17.6% 17.1% 17.3% 16.4% 16.3% Europe 6.3% 6.3% 5.7% 6.1% 6.0% UK 10.3% 9.6% 10.7% 9.6% 9.1% Germany 7.0% 7.1% 6.9% 7.2% 7.1% International Operations 9.8% 10.0% 10.7% 9.8% 9.3% China? 14.2% 15.2% 15
Slide 30: Reconciliation of EBIT-Adjusted
Reconciliation of EBIT-Adjusted ($B) 2016 2015 2016 2015 Net income attributable to stockholders 2.9 44 48 2.1 Subtract: Automotive Interest Expense (0.1) (0.1) (0.3) (0.2) Automotive Interest Income 0.1 - 0.1 0.1 Income Tax Benefit (Expense) (0.9) (0.6) (1.4) @Ay Add Back Special ltems': Venezuela
Slide 31: Aggregate Impact of Special Items on GAAP Reported Earnings
Aggregate Impact of Special Items on GAAP Reported Earnings Special Adjusted Special Adjusted Reported Items (Non-GAAP)} Reported Items (Non-GAAP) Net sales and revenue Total net sales and revenues 42.4 _ 42.4 38.2 0.12 38.2 Costs and expenses Automotive cost of sales 344 0° — 34.4 32.6 (1.0) 316 GM
Slide 32: Calculation of ROIC
Calculation of ROIC Four Quarters Ended ($B) Q2 2016 Q22015 Numerator: EBIT-Adjusted 12.5 9.6 Denominator: Average Equity 40.2 38.0 Add: Average automotive debt and interest liabilities (excluding capital leases) 9.0 78 Add: Average automotive net pension & OPEB liability 26.3 28.2 Less: Average net
Slide 33: Effective Tax Rate-Adjusted
Effective Tax Rate-Adjusted ($M) H1 2016 Q22016 Q22015 EBIT-Adjusted 6,602 3,947 2,871 Less: Noncontrolling Interests 38 16 (26) Less: Net Interest Expense and other 178 95 67 EBT-Adjusted 6,386 3,836 2,830 Tax Expense 1,430 871 577 Impact of special items 66 43 81 Tax Expense-Adjusted 1,496 914 658
Slide 34: Restructuring (not included in special items)
Restructuring (not included in special items) ($B) Q2 2016 Q2 2015 GMNA (0.0) (0.2)' GME (0.0) (0.0) GMIO (0.0) (0.0) GMSA (0.0) (0.0) Total Restructuring (0.0) (0.3) GM expects CY 2016 restructuring to be ~$0. ‘includes $0.1 billior ion curtailment charges due to previously Note: Results may not su
Slide 35: GM Financial - Key Metrics
GM Financial - Key Metrics ($M) Q2 2016 Q2 20 Earnings Before Tax-Adjusted 266 225 Total Loan and Lease Originations 10,712 9,895 GM as % of GM Financial Loan and Lease Originations 87% 84% Commercial Finance Receivables’ 9,112 7,639 Retail Finance Receivables 30,861 27,330 Ending Earning Assets? 68
Slide 36: Guidance Reconciliation
Guidance Reconciliation EPS-diluted-adjusted $ 5.50-6.00 Adjustments‘ (0.11) Tax effect on adjustments 0.04 Diluted earnings per common share $ 5.43-5.93 ar Ending ($B except where noted) Dec. 31, 2016 Adjusted automotive free cash flow $6 Add: expected capital expenditures 9 Adjustment — discretion
Slide 37: EPS-diluted-adjusted Reconciliation
EPS-diluted-adjusted Reconciliation Q2 H1 ($B except where noted) 2016 20 2016 EPS-diluted-adjusted 1.86 1.29 3.12 2.15 Adjustments* (0.08) (0.67) (0.11) (0.99) Tax effect on adjustments 0.03 0.05 0.04 0.07 131067 [305123 GENERAL MOTORS ‘See slides S4-S5 for operating income impact of special items
Slide 38: For additional information please visit
Co For additional information please visit: GENERAL MOTORS http:/Awww.gm.com/investors investorrelations@gm.com su | | GM FINANCIAL https:/Awww.gmfinancial.com/investors-information.aspx investors@gmfinancial.com — Ooe wo eeTW GENERAL MOTORS 38
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