GE Healthcare. Bank of America Analyst Meeting September 20, 2005

Transcription

1 GE Healthcare Bank of America Analyst Meeting This document contains forward-looking statements that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as expects, anticipates, intends, plans, believes, seeks, or will. Forward looking statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties arise from the behavior of financial markets, including fluctuations in interest rates and commodity prices; from future integration of acquired businesses; from future financial performance of major industries which we serve including, without limitation, the air and rail transportation, energy generation and healthcare industries; from unanticipated loss development in our insurance businesses; and from numerous other matters of national, regional and global scale, including those of political, economic, business, competitive or regulatory nature. These uncertainties may cause our actual future results to be materially different that those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements. This presentation includes certain non-gaap measures as defined by SEC rules. As required by SEC rules, we have provided a reconciliation of those measures to the most directly comparable GAAP measures, which is available in our Supplemental Information file on our investor relations website at

2 Key messages for today On track to deliver in 2005 A great vision built on a strong foundation Physics + biology = new age of diagnostics GE Healthcare can improve industry efficiency and efficacy 2

3 Healthcare 2005 delivering results Total year ~15% $~15B 20+% $~2.8B Revenue Op profit VCT huge success 430 orders since launch MedDx continues upward trend 15% Emerging markets encouraging China, India, MEA strong double-digits Japan growth back on track 15+% Acquisition synergies cross selling, cost out $250MM 3

4 Our vision We strive to see life more clearly. We help predict,diagnose, inform and treat so that every individual can live life to the fullest From Late disease Physician-centric Symptom based Average therapies To Early health Patient-centric Broad-based diagnostics Specific therapies Requires us to deliver clinical efficacy and healthcare system efficiency 4

5 Molecular medicine: the right next step Sensitivity & specificity Molecular imaging (2000+) Biology, Nanotech, CAD Efficiency Digital (80 s to 90 s) CT, MR, PACS Analog 00 to 80 s Xray & Paper Clinical certainty 5

6 Breast cancer Source: American Cancer Society, 2004 Cancer cases in U.S. women (2004) 32% Breast 12% Lung & bronchus 11% Colon & rectum 6% Uterine corpus 4% Ovary 4% Non-Hodgkin 4% Melanoma 3% Thyroid 2% Pancreas 2% Urinary bladder 20% All other sites All cancers = 668,470 *3MM recall 3MM symptomatic Breast care workflow today 70MM potential pop 30 MM screened 6 MM flagged* 1.3 MM biopsied 250K treated 42,000 deaths 35% of cancers missed 70% in dense breasts 90% of recalls negative low specificity Delay in screen to diagnosis; intervention to confirm 3wks to biopsy result ~80% neg & costly Inadequate info to decide treatment Late stage=higher cost, lower survival Non-specific treatment ineffective 6

7 The opportunity Healthcare costs Enormous spend on healthcare $1.8T in U.S. Admin costs = $300B / 24% - Shrinking population of doctors - System cannot handle excess capacity - Chronic care = 70% of cost Playing in huge markets $100B $500B $4T Clinical efficacy 50% of heart failure = death 265,000 people / year* 3% of healthcare costs spent on strokes 0.27% of GDP ($32B in US)* Adverse Drug Events (ADE) 770,000 U.S. deaths or injuries/year** Hospital efficiency 9 people / 100 unintended infection $30B Traditional Diagnostic Imaging Broader Diagnostics Opportunity Pharma Global Healthcare Spend Need for quality improvement *American Heart Association, 2004 **Reducing and Preventing Adverse Drug Events To Decrease Hospital Costs. Research in Action, Issue 1. AHRQ Publication Number , March Agency for Healthcare Research and Quality, Rockville, MD 7

8 The big picture One cardiac patient. 10-day hospital stay. Six departments. 105 healthcare professionals. $3.5B Business Body Comp EKG Echo/Contrast Cath Lab Anesthesia Monitoring Ventilation Predict Diagnose Inform Treat LIFE magazine From screening to therapy, Clinical Systems can make a difference in William Webb s care. 8

9 Biology + physics = new age of diagnostics Parkinson s & DaTSCAN* Parkinson s often misdiagnosed as essential tremors DaTSCAN images dopamine transporters in brain sensitivity differentiates diagnosis DaTSCAN results in fewer patients treated with inappropriate therapy DaTSCAN growth in Europe $20MM in 2 years Neurology 2004 Weekly DaTSCAN Sales in Belgium Report published Normal Patient Late stage PS Cathlab $1500 cost ~2% death rate ~30% diagnosis rate Cardiology VCT Scan $500 cost $500MM market 100% non-invasive GE total package VCT & Visipaque* For the first time, physicians are able to noninvasively diagnose heart disease in at-risk patients. - Stanley Katz Chief of Cardiology North Shore University Hospital, NY *Source: Health Economic Research Project, An assessment of the cost-effectiveness of DaTSCAN SPECT for the diagnosis of patients with clinically uncertain Parkinsonism. Approved in EU only. * Combination claim not FDA approved

10 Growing healthcare services DI HCIT Life Sciences/Pharma Bio Medical Other Services offerings across GE Healthcare 10 15% Growth CAGR $~7B Perf Sol n Refurb >25+% 10+% Key Growth Drivers Digital services = uptime + growth $~6B Contract 5-10% Performance solutions = Lean + Six Sigma Core contract enhancement = broadband + real-time IB & SW IT 10-15% 10-15% IB + software advancements across portfolio Clinical services PACS, EHR

11 Clinical enterprise Healthcare IT: the path to better healthcare CIS Advanced clinical Clinical data repository CPOE, interdisciplinary doc Advanced decision support Knowledge management Clinical data repository Results reporting Segment $4.3B Systems penetration 2 5% 50-60% Departmental Departmental clinical Ancillary clinical PACS, cardiology Perinatal Periop, anesthesia Lab Pharmacy Radiology IS $2.8B 5 80% 90% Administrative enterprise HIS Physician office Patient management Financial system EMR Practice management = Electronic Health Record Patient registration Patient accounting A/P, A/R, materials mgmt General ledger, reporting Payroll, personnel Electronic Medical Record Decision support Scheduling Billing $7.3B $1.8B * * U.S. Only 100% 100% 10-20% 100% 11

12 Enterprise Pharmaceutical enterprise Developing AND combining existing diagnostics and therapeutics in tandem Co-marketing & pipeline productivity Diagnostic-Therapeutic Intersection Addressing Pharma s bottleneck s with Advanced Imaging, IT & Pharmacogenomics $80B R&D spend Therapy Monitoring Alzheimer s Complementary Channels Advanced Imaging PIB Clinical IT Existing Expanded reach GE breadth of sales, service, support, financing, marketing & IT to any Pharma customer Leadership Products & Services 12

13 Key components of our vision today Predict Diagnose Inform Treat Discovery Systems - Speeds prediction of breakthrough medicines Molecular Technologies - Predicts likelihood person develops disease before symptoms appear Lightspeed VCT - Five beat heart scan High-Definition MR - World s first system Visipaque -X-ray & CT media Vivid i - Bedside scanning EMR - Critical information anytime, anyplace Carestations - Information cockpit tailors life-support decisions Instatrak - 3D visualization + precise surgical orientation MR Guided Focused Ultrasound - Non-invasive fibroid tumor treatment Protein Separations - Purifying 90+% of all bio-pharmaceuticals PET/CT - Functional + anatomic imaging to guide treatment 13

14 Uniquely positioned for sustainable growth ~$15 Underlying favorable demographics Information technology Rev Strong services capabilities + large installed base + customer workflow ~$2.8 OP New age of molecular medicine Partnering with Pharma to transform industry 05 Strong global growth in developing markets 14