GE Power JP Morgan Aviation, Transportation & Industrials Conference Power_JPM... · 2003. 9....
Transcript of GE Power JP Morgan Aviation, Transportation & Industrials Conference Power_JPM... · 2003. 9....
Imagination at work
GE Power JP Morgan Aviation, Transportation & Industrials Conference 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 to be materially different than those expressed in our forward-looking statements, see http://www.ge.com/investor-relations/disclaimer-caution-concerning-forward-
looking-statements as well as our annual reports on Form 10-K and quarterly reports on Form 10-Q. We do not undertake to update our forward-looking statements. This document also includes certain forward-
looking projected financial information that is based on current estimates and forecasts. Actual results could differ materially.
GE’s Investor Relations website at www.ge.com/investor and our corporate blog at www.gereports.com, as well as GE’s Facebook page and Twitter accounts, contain a significant amount of information about
GE, including financial and other information for investors. GE encourages investors to visit these websites from time to time, as information is updated and new information is posted.
Steve Bolze
March 9th, 2016
© 2016, General Electric Company. All Rights Reserved.
GE POWER We’ll never be satisfied until the entire world has power.
© 2016, General Electric Company. All Rights Reserved.
Largest installed base in the world
50% world’s land-based gas
~65k+ digital connected assets
GE Power ~62,000 employees >150 countries
Powering everyone 3
© 2016, General Electric Company. All Rights Reserved.
A DIGITAL INDUSTRIAL COMPANY 333,000 people operating in ~180 countries
POWER ENERGY CONNECT.
RENEW. OIL & GAS AVIATION TRANS. HEALTH
CARE APPL.
& LIGHT
© 2016, General Electric Company. All Rights Reserved.
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THE NEW GE POWER ~$30B Revenue/~62,000 employees/>150 countries
GAS POWER SYSTEMS
POWER SERVICES
STEAM POWER SYSTEMS
DISTRIBUTED POWER
Schenectady, NY, USA
Baden, Switzerland
Baden, Switzerland
Jenbach, Austria
GE HITACHI NUCLEAR
Wilmington, NC, USA
WATER & PROCESS
TECHNOLOGY
Trevose, PA, USA
FUNCTIONAL EXPERTISE
OPERATIONAL EXCELLENCE
DIGITAL CAPABILITY
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6 JRI GLM 01-04-16
ENERGY CONNECTIONS
Electrification, controls & power
conversion technology
POWER Combustion
science & services, installed
base AVIATION Advanced materials,
manufacturing, & engineering productivity
TRANSPORTATION Engine
technology & localization in
growth regions
APPLIANCES AND LIGHTING
LED is gateway to energy efficiency
OIL & GAS Services &
technology— a first-mover in growth regions
HEALTHCARE Diagnostics
technology - a first-mover &
anchor in growth markets
GLOBAL RESEARCH
CENTER
SOFTWARE CENTER OF
EXCELLENCE
CULTURE & SIMPLIFI-CATION
GLOBAL GROWTH ORG
RENEWABLE ENERGY
Sustainable power systems & storages
Driving competitive advantage across our businesses
POWER ENHANCED BY THE GE STORE
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Largest deal in GE’s history
7 © 2016, General Electric Company. All Rights Reserved.
Transformational investment … Positioning for the next decade
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Wind
Coal Nuclear
Solar
Hydro
Gas Turbines
Central Power Equipment Orders*
Gas
Engines
10 Year Power Demand
*Excludes 700 GW of non-grid connected capacity additions
Other
© 2016, General Electric Company. All Rights Reserved.
ENVIRONMENT
Opportunity to differentiate 8
Slow growth, volatile world …
Pockets of growth, localization wins
Energy demand ~2-3% …
1.2B people without power
Majority still centralized power …
Coal/Steam systems key role
Services & analytics …
New offerings, more productivity
Industry in transition …
COP21 positioning, diverse technology required
POWER INDUSTRY TRANSFORMATION
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More affordable, reliable & sustainable
Digitization of power grid
Energy access for everyone
Upgrade aging infrastructure
CERAWeek
© 2016, General Electric Company. All Rights Reserved.
GE technology, breadth & scale … well positioned to lead the transformation
Balanced portfolio of fuels & tech wins
Software, connected devices, data & cyber security
1B+ people no access, 2B+ unreliable access
Distributed generation & infrastructure investment
OUR STRATEGIC FOCUS
DIFFERENTIATED Products & Services
DIGITAL Capability
GLOBAL Presence/Talent
Improving our competitiveness … adding value for our customers
© 2016, General Electric Company. All Rights Reserved.
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TECHNOLOGY SERVICES DIGITAL ALSTOM COST
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EDF Bouchain
EDF first fire validating success ... unofficial world record +420MW GT SC output
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© 2016, General Electric Company. All Rights Reserved.
Continues to exceed expectations … new orders for 2017+ in backlog with improving margin rates
Today vs. Launch
✔
✔
Validation Testing
9HA.01 ✔
7HA.01
7HA.02
✔
~24 unit shipments
~$2B revenue
TY positive margin
Quarterly profile
Margin dilutive
2016 Execution
HA PROGRAM ON TRACK
Investment
Volume
Equip. CM
Services CM
IRR
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GE
CONTRIBUTIONS
Alstom
GAS TURBINE
GAS TURBINE GENERATOR
GRID SOLUTIONS
STEAM TURBINE
STEAM TURBINE GENERATOR
HEAT RECOVERY STEAM GENERATOR
BEST INTEGRATED GAS POWER SYSTEMS
Increasing GE scope 20% 60% of combined cycle power plant … improved performance
14 © 2016, General Electric Company. All Rights Reserved.
© 2016, General Electric Company. All Rights Reserved.
POWER SERVICES
Largest installed base
Expanded steam & BOP capability
Other OEM as growth opportunity
Installed base
~1,500GW
Gas & Steam
~1,000
~500
~$50B+ backlog
Technology for growth
$0.2B
$0.1B
$0.1B
$0.1B
2020F Alstom revenue* impact
$0.5B
Upgrades HGT + Other
Software solutions
Steam tail capture
Other OEM
AGP MXL2
DLN F2F
Continued investment for customer productivity Broad, diversified offering for continued growth
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*Revenue impact to achieve growth synergy target of $0.1B by 2020
Product cost savings SG&A savings
Simplified features & material selection
Should-cost & cross-functional COEs
Multi-platform component strategy
~$500MM+ cost out over last 4 years
Consolidate structure, functional cost
Opportunity with Alstom
(% of sales) 7HA.02 Heavy Duty GT
Start lower
kW pivots
kW pivots
$/k
W
Time
1st unit cost
10%
30%
$/kw
vs. 7F.05 launch
© 2016, General Electric Company. All Rights Reserved.
COST COMPETITIVENESS
16
12%
9%
'11 '15
Alstom
FastWorks and Simplification enabling reinvestment
10%
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POWER DIGITAL
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• ~$2B digital revenue growing
double digit in ‘16
• 50%+ software orders growth
Significant value from the marriage of digital and industrial
Great , high-return global Power business
Clear competitive advantages − Technology leadership
− Globalization … world-class & flexible supply chain
− Strong services business … large installed base
− Simplification for speed & cost
Smart investing in a dynamic environment
Positioning GE for long-term shareholder value
$21.5 ++
'15 '16E
++
$4.5B
Revenue
Op profit
ex Alstom
+
+
OP% 20.9% - ex Alstom 22.3%
-
Ad
v. M
fg.
Fa
stW
ork
s M
ete
m
Dig
ita
l S
erv
ice
s A
lsto
m
HA
BUILDING A NEW GE POWER BUSINESS
Alstom
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GE POWER We’ll never be satisfied until the entire world has power.
© 2016, General Electric Company. All Rights Reserved.