Envisioning the Future of Lighting

Transcription

1 Envisioning the Future of Lighting J.P. Morgan LED General Lighting Symposium Jaime Irick President & CEO GE Lighting Solutions "Results are preliminary and unaudited. 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 financial condition, and often contain words such as expect, anticipate, intend, plan, believe, seek, see, or will. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include: current economic and financial conditions, including volatility in interest and exchange rates, commodity and equity prices and the value of financial assets; the impact of conditions in the financial and credit markets on the availability and cost of General Electric Capital Corporation s (GECC) funding and on our ability to reduce GECC s asset levels as planned; the impact of conditions in the housing market and unemployment rates on the level of commercial and consumer credit defaults; our ability to maintain our current credit rating and the impact on our funding costs and competitive position if we do not do so; the adequacy of our cash flow and earnings and other conditions which may affect our ability to pay our quarterly dividend at the planned level; the level of demand and financial performance of the major industries we serve, including, without limitation, air and rail transportation, energy generation, network television, real estate and healthcare; the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks, including the impact of financial services regulation; strategic actions, including acquisitions and dispositions and our success in integrating acquired businesses; and numerous other matters of national, regional and global scale, including those of a political, economic, business and competitive 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. This document may also contain non-gaap financial information. Management uses this information in its internal analysis of results and believes that this information may be informative to investors in gauging the quality of our financial performance, identifying trends in our results and providing meaningful period-to-period comparisons. For a reconciliation of non-gaap measures presented in this document, see the accompanying supplemental information posted to the investor relations section of our website at Effective January 1, 2010, we reorganized our segments. We have reclassified prior-period amounts to conform to the current-period s presentation. In this document, GE refers to the Industrial businesses of the Company including GECS on an equity basis. GE (ex. GECS) and/or Industrial refer to GE excluding Financial Services. Agenda Lighting Industry Dynamics GE Lighting Overview LED Strategy Q&A 2

2 Lighting Industry Dynamics The Industry is Changing Rapidly Regulation/Standards Energy efficiency / bans Lack of defined standards Buying Dynamics Value chain blurring Applications focus An industry in transition Competition Three traditional industry leaders Hundreds of new entrants Technology Rapid LED adoption Longer life systems 4

3 Lighting Industry Segmentation Lamp Segment Auto/Other 18% Inc/Hal 18% Fixture Segment Retail 7% Other 10% Bal 14% LED 2% HID 12% LFL 17% CFL 19% Industry 9% Office 12% Outdoor 13% Household 49% Significant runway for LED technology in traditional lamp segment GE Channel and brand are aligned to win Sources: Strategies unlimited, NEMA, Datapoint Research, Internet Research and GE Analysis 5 The Value Chain is Blurring Going direct to chip manufacturers & integrating Wafer Chips Materials Packages Components & Modules Lamps LED Fixtures Developing own products and solutions 6

4 LED Industry: The Wild West Disruptive Technology Hundreds of new entrants Thousands of new products Lack of standards and benchmarks Rapid product development LED efficiency accelerating Strategies Unlimited observes: the market is flooded with LED luminaires and replacement lamps of questionable quality. SOURCE: The Market for High-Brightness LEDs in Lighting, Application Analysis and Forecast, 2010, Fourth Edition, March 2010, Strategies Unlimited 7 Potential LED Penetration Rates 32% Best 16% 16% Expected 9% 8% 7% 6% 4% 5% Worst 1% 1% 2% 1% 3% Sources: Strategies Unlimited, Strategy Analytics, Freedonia and Internet Research 8

5 GE Lighting Overview GE Lighting Overview Financial Performance Improving TY 09 1H 10 Strategy Revenue $2.5B Reshaping Manufacturing Footprint $1.2B Commercial Transformation Op Profit Investing in Green Products 10

6 LED Strategy What Customers Tell Us Matters Education and Awareness Help sorting through industry noise Clarity around performance standards Input on Key Buying Criteria Light quality Economics and payback period Environmental considerations Strong Strategic Partners Well resourced and multi-generational product plans Design, application, and project management expertise Past performance excellence and unwavering future viability 12

7 Our LED Strategy Excellence Across Four Key Areas Customer Intimacy Innovation & Speed LED System Optimization Quality & Reliability 13 Recent Customer Success Stories Target will cut system energy use by 60% using GE LED systems to replace fluorescents in refrigerated cases Holiday Inn will save $4 million annually using GE LED signage systems across 3,200 locations Starbucks will reduce energy usage by 7% across 8,000+ stores by installing GE LED PAR lamps Woolworths will slash system energy use by 70% replacing fluorescent signs with GE LEDs in 780 stores across Australia and New Zealand 14

8 GE s Broad LED Product Portfolio Traffic Core Product Segments Signage Display Outdoor Emerging Growth Opportunities Indoor Lamps 15 Industry Recognition of GE Innovation 2008 Best in Class Winner Immersion LED Display Case Lighting 2009 Best in Class Winner Evolve R150 LED Cobrahead Luminaire Street/Roadway Category GE LED Cove Lighting 2008 Recognized Winner Tetra AL10 LED Architectural Lighting 2009 Recognized Winner Undercabinet Task Lighting Category Immersion RV30 LED Refrigerated Display Lighting 2009 Recognized Winner Refrigerated Display Lighting Category Evolve LED Series Area Light 2009 Recognized Winner Parking Lot Lighting Category Evolve LED Contemporary Domed Area Light 2009 Recognized Winner Pedestrian Scale Lighting Category 16

9 LED Systems - Not All Created Equally GE LED System Differentiation Tested at the LED, sub-system, and complete system level (in-house and independently) Life ratings for acceptable light output of designated, real-life applications Backed by 100+ years of lighting experience Designed using Six Sigma methodology 17 Serious About Quality & Reliability New multi-million dollar reliability lab Environmental testing at extreme temps and cycles Six Sigma design links systems integration expertise to applications Testing of LED chips, components, and systems 9 Large Enviro/Chambers 10 Small Enviro/Chambers 10 Year History of Field Results With Systems Integration 2 NVLAP Certified Measurement Spheres Cycling Test 18

10 Summary Summary Industry is Rapidly Evolving GE is a Global LED Leader Customer Intimacy Will be Key to Value Creation GE Will Deliver What Matters Most to Customers 20