Profitable Growth Through Technology Leadership

Transcription

1 GE Healthcare Profitable Growth Through Technology Leadership Omar Ishrak July 26, 2006 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 which could adversely or positively affect our future results include: the behavior of financial markets, including fluctuations in interest rates and commodity prices; strategic actions, including dispositions; future integration of acquired businesses; future financial performance of major industries which we serve, including, without limitation, the air and rail transportation, energy generation, media, real estate and healthcare industries; unanticipated loss development in our insurance businesses; and numerous other matters of national, regional and global scale, including those of a political, economic, business, competitive and regulatory nature. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.

2 Clinical systems GE Ultrasound ($B) ~$1.7 14% AAGR Monitoring Solutions Life Support Solutions Ultrasound Rev $0.8 ~$0.4 26% AAGR $0.1 Margin Diagnostic Cardiology Maternal Infant Care Bone Densitometry Clinical systems: $3.7B Revenue High patient touch Diverse portfolio of leading brands Broad footprint in hospital and non-hospital segments International growth Services 00 06E Keys to success Value creation Product breadth Cost management Balanced investment 2

3 Break through strategy driven by technology leadership + Software applications Hardware platforms = Customer value Clinically relevant breakthroughs 8X clinical applications 10X image quality Annual rhythm Hardware software System performance Ergonomics Miniaturization 5-year cycle Sustained leadership Customer credibility Industry partnership Fetal heart at 13 weeks Fetal profile at 30 weeks Delivers customer value 3

4 Life cycle performance enhancement and sustained cost reduction Product cost Product performance Mid-range Console $20K Product life cycle $15K $13K Tied to annual breakthrough releases $8K NPI NPI NPI NPI NPI NPI NPI NPI NPI NPI Sourcing New Platform Optimization Value Engineering New Platform Enhanced Performance Process Cost out targets... 10% Drive commonality of components Balance short & long term development 50% cost reduction Annual breakthroughs deliver better product 4

5 Vivid 7 cardiovascular ultrasound Sustained cost reduction Revenue 25% +10 pts. Share Price Index Multi-slice 4D IMT Sales Margin Rate 70% 73% '04 '06 Premium echocardiography Advanced 4D imaging and diagnostics Multi-slice imaging Contrast-enhanced imaging Clinical confidence Annual BTs Created value for customer and GE 5

6 Balanced technology investment R&D $s never enough Consistent R&D investment as % of sales Five-year big swing cycle Short vs. long-term balance Voice of customer Competitive dynamics R&D for Growth Market trends GE Ultrasound R&D (% Sales) Constant focus and Re-balancing R&D New platforms NPI Value engineering Installed base 6

7 Leveraging global R&D capability R&D 5% of sales R&D 7% of sales Phoenix Milwaukee Nice Horten Zipf Haifa Seoul Bangalore R&D 2% of sales Wuxi Hino R&D 7% of sales Product COE Mission Global product accountability Clinical expertise Customer proximity Quality/cost metrics Rapid innovation Market coverage Cost mgmt. 7

8 Product breadth Through global technology migration Vivid Radiology/emerging OB/Gyn Cardiovascular LOGIQ 9 LOGIQ 7 LOGIQ S6 LOGIQ P5 LOGIQ 5 LOGIQ i LOGIQ e Voluson 730E Voluson 730P Voluson 730PV Voluson i Vivid 7 Vivid 4 Vivid 3 Vivid i Vivid e LOGIQ 3 06 new platform 7 new platforms in

9 Case in point: compact ultrasound LOGIQ lbs. Customer value creation Value for traditional and new customers Product breadth Software-based platform Clinical applications Cost management Global COE Annual ICV targets Balanced investment Miniaturization big swing platform ($ MM) GE Compact Ultrasound Series Sales Sales Margin (SM) $180 $ Revenue $250 Margin ~75+% LOGIQ e 10 lbs. $5 $ E Start-up to $200M in 3 years a 75% SM business

10 What s next GE Clinical Systems ($B) ~10%+ $ Dynamics Revenue 10%+ OM 20%+ Share Rev $3.3 $0.5 ~20% $0.6 Driving annual breakthroughs OM Mkt Share 05 06E +1 Pt of market share Cost reductions Globalization Applying ultrasound success & learning to clinical system markets 10

11 Growth & Margin Expansion Analyst Meeting July 26, 2006