Company updates medium-term framework with progress toward
financial goals; increases quarterly cash dividend by approximately
17%
GE HealthCare (Nasdaq: GEHC) will host its Investor Day today at
Nasdaq MarketSite in New York, NY. The event begins at 8:00 am ET /
7:00 am CT and can be viewed virtually here. Registration is
required for in-person attendance.
The event will feature presentations from GE HealthCare
President and CEO Peter Arduini, GE HealthCare Vice President and
CFO Jay Saccaro, and other members of the management team, who will
discuss the company’s vision and precision care strategy, progress
since its spin-off from General Electric Company in 2023, and key
growth areas. A technology showcase will follow the presentations
for in-person attendees.
GE HealthCare President and CEO Peter Arduini said, “We are
confident in our progress since spin and our path to accelerate
growth driven by an exciting innovation pipeline. We look forward
to continuing to execute on our growth strategy to help clinicians
provide more precise, personalized care for patients, delivering on
our purpose to create a world where healthcare has no limits.”
GE HealthCare Vice President and CFO Jay Saccaro said, “Our
resilient business model positions us well on our medium-term
trajectory. In particular, we have made excellent progress
expanding our margins with clear line of sight to delivering
additional upside in the future. We are also delighted to announce
that we are increasing our quarterly dividend by approximately 17%,
which reflects confidence in our business.”
Members of the GE HealthCare leadership team will discuss how
the company plans to drive growth and deliver on its precision care
strategy, including:
- Financial and operational progress since spin
- Growth opportunities across the Imaging, Advanced Visualization
Solutions, Patient Care Solutions, and Pharmaceutical Diagnostics
segments
- A robust pipeline of innovation driven by significant research
and development investments, with a focus on disease states to
address key healthcare challenges
- Advancements in its cloud-first, AI and digital strategy
focused on AI on device, at the department level, and across the
enterprise
- Radiopharmaceutical growth opportunities with proprietary
molecules and deep engineering expertise across PET CT and MR to
deliver high-quality imaging
- Strength in its differentiated commercial strategy focused on
strategic, long-term enterprise partnerships
- Optimizing lean initiatives to drive efficiencies, deliver
solid margin expansion, and generate strong cash flow
- Disciplined capital allocation strategy that includes organic
investment, strategic M&A, and returning value to
shareholders
Financial framework
Today, GE HealthCare reiterated its 2024 outlook as follows:
2024 Outlook
Organic revenue growth*
1% - 2%
trending toward the lower end of
range
Adjusted EBIT margin*
15.8% - 16.0% 70 - 90 bps
growth
Adjusted ETR*
23% - 25% trending toward the
lower end of range
Adjusted EPS*
$4.25 - $4.35
8% - 11% growth
Free cash flow*
Approximately $1.8 billion
During today’s event, GE HealthCare will present its medium-term
financial targets as follows:
Medium-term 2026-2028
targets
Organic revenue growth*
Mid-single digit (4% - 6%)
Adjusted EBIT margin*
High-teens to 20%+
Adjusted EPS growth*
High-single digit to low-double
digit
Free cash flow conversion*
90%+
*Non-GAAP financial measure.
The company provides its outlook on a non-GAAP basis. Refer to
the Non-GAAP financial measures in outlook section below for more
details.
Cash dividend increase for fourth quarter 2024
The Board of Directors of the company today declared a cash
dividend of $0.035 per share of Common Stock for the fourth quarter
of 2024, an increase of 17% from the previous quarter. The dividend
will be payable on February 14, 2025 to all shareholders of record
as of January 14, 2025.
About GE HealthCare Technologies Inc.
GE HealthCare is a leading global medical technology,
pharmaceutical diagnostics, and digital solutions innovator,
dedicated to providing integrated solutions, services, and data
analytics to make hospitals more efficient, clinicians more
effective, therapies more precise, and patients healthier and
happier. Serving patients and providers for more than 125 years, GE
HealthCare is advancing personalized, connected, and compassionate
care, while simplifying the patient’s journey across the care
pathway. Together our Imaging, Advanced Visualization Solutions,
Patient Care Solutions, and Pharmaceutical Diagnostics businesses
help improve patient care from diagnosis, to therapy, to
monitoring. We are a $19.6 billion business with approximately
51,000 colleagues working to create a world where healthcare has no
limits.
Follow us on LinkedIn, X, Facebook, Instagram, and Insights for
the latest news, or visit our website https://www.gehealthcare.com
for more information.
Event webcast
GE HealthCare will broadcast the event live via webcast today
starting at 8:00 am ET/7:00 am CT and it is expected to last
approximately 3.5 hours. The webcast and accompanying slide
presentation containing financial information can be accessed by
visiting the Events and Reports page on GE HealthCare’s Investor
Relations website at:
https://investor.gehealthcare.com/events/event-details/ge-healthcare-investor-day-0.
An archived version of the webcast will be available on the website
after the call.
Non-GAAP financial measures in financial framework
The non-GAAP financial measures presented in this press release
are supplemental measures of GE HealthCare’s performance and its
liquidity that the company believes will help investors understand
its financial condition, cash flows, and operating results, and
assess its future prospects. When read in conjunction with the
company’s U.S. GAAP results, these non-GAAP financial measures
provide a baseline for analyzing trends in GE HealthCare’s
underlying businesses and can be used by management as one basis
for making financial, operational, and planning decisions.
Descriptions of the reported non-GAAP measures are included
below.
The company reports Organic revenue and Organic revenue growth
rate to provide management and investors with additional
understanding and visibility into the underlying revenue trends of
the company’s established, ongoing operations, as well as provide
insights into overall demand for its products and services. To
calculate these measures, the company excludes the effect of
acquisitions, dispositions, and foreign currency rate
fluctuations.
The company reports earnings before interest and taxes (“EBIT”),
Adjusted EBIT, Adjusted EBIT margin, Adjusted net income, Adjusted
net income margin, Adjusted earnings per share (“Adjusted EPS”),
and Adjusted EPS growth rate to provide management and investors
with additional understanding of its business by highlighting the
results from ongoing operations and the underlying profitability
factors, on a normalized basis. To calculate these measures the
company excludes, the following adjustments as applicable: Interest
and other financial charges - net, Net (income) loss attributable
to noncontrolling interests, Non-operating benefit (income) costs,
Benefit (provision) for income taxes and certain tax related
adjustments, and certain non-recurring and/or non-cash items. GE
HealthCare may from time to time consider excluding other
non-recurring items to enhance comparability between periods.
Adjusted EBIT margin and Adjusted net income margin are calculated
by taking Adjusted EBIT, or Adjusted net income, divided by Total
revenues for the same period.
The company reports Adjusted tax expense and Adjusted effective
tax rate (“Adjusted ETR”) to provide investors with a better
understanding of the normalized tax rate applicable to the business
and provide more consistent comparability across periods. Adjusted
tax expense excludes the income tax related to the pre-tax income
adjustments included as part of Adjusted net income and certain
income tax adjustments, such as adjustments to deferred tax assets
or liabilities. The company may from time to time consider
excluding other non-recurring tax items to enhance comparability
between periods. Adjusted ETR is Adjusted tax expense divided by
income before income taxes less the pre-tax income adjustments
referenced above.
The company reports Free cash flow and Free cash flow conversion
to provide management and investors with an important measure of
the ability to generate cash on a normalized basis and provide
insight into the company’s flexibility to allocate capital. Free
cash flow is Cash from (used for) operating activities - continuing
operations, including cash flows related to the additions and
dispositions of property, plant, and equipment (“PP&E”) and
additions of internal-use software. Free cash flow does not
represent residual cash flows available for discretionary
expenditures, due to the fact that the measure does not deduct the
capital required for debt repayments. Free cash flow conversion is
calculated by taking Free cash flow divided by Adjusted net
income.
Management recognizes that these non-GAAP financial measures
have limitations, including that they may be calculated differently
by other companies or may be used under different circumstances or
for different purposes. In order to compensate for the discussed
limitations, management does not consider these measures in
isolation from or as alternatives to the comparable financial
measures determined in accordance with U.S. GAAP. No single
financial measure should be relied on to evaluate our business.
Non-GAAP financial measures in outlook
GE HealthCare calculates forward-looking non-GAAP financial
measures, including Organic revenue growth, Adjusted EBIT margin,
Adjusted ETR, Adjusted EPS, Adjusted EPS growth, Free cash flow,
and Free cash flow conversion based on internal forecasts that omit
certain amounts that would be included in GAAP financial measures.
GE HealthCare does not provide reconciliations of these
forward-looking non-GAAP financial measures to the respective GAAP
metrics as it is unable to predict with reasonable certainty and
without unreasonable effort certain items such as the impact of
changes in currency exchange rates, impacts associated with
business acquisitions or dispositions, timing and magnitude of
restructuring activities, and revaluation of strategic investments,
amongst other items. The timing and amounts of these items are
uncertain and could have a substantial impact on GE HealthCare’s
results in accordance with GAAP.
Forward-looking statements
This release contains forward-looking statements. These
forward-looking statements might be identified by words, and
variations of words, such as “will,” “expect,” “may,” “would,”
“could,” “plan,” “believe,” “anticipate,” “intend,” “estimate,”
“potential,” “position,” “forecast,” “target,” “guidance,”
“outlook,” and similar expressions. These forward-looking
statements may include, but are not limited to, statements about
our business and expected financial performance, financial
condition, and results of operations, including revenue, revenue
growth, profit, taxes, earnings per share, and cash flows, and the
company’s outlook and medium-term financial targets; and the
company’s strategy, innovation, initiatives, and investments. These
forward-looking statements involve risks and uncertainties, many of
which are beyond the company’s control. Factors that could cause
the company’s actual results to differ materially from those
described in its forward-looking statements include, but are not
limited to, operating in highly competitive markets; the company’s
ability to successfully complete strategic transactions; the
actions or inactions of third parties with whom the company
partners and the various collaboration, licensing, and other
partnerships and alliances the company has with third parties;
demand for the company’s products, services, or solutions and
factors that affect that demand; management of the company’s supply
chain and the company’s ability to cost-effectively secure the
materials it needs to operate its business; disruptions in the
company’s operations; changes in third-party and government
reimbursement processes, rates, contractual relationships, and mix
of public and private payers, including related to government
shutdowns; the delayed China stimulus and the ongoing
anti-corruption campaign; the company’s ability to attract and/or
retain key personnel and qualified employees; global geopolitical
and economic instability, including as a result of the conflict
between Ukraine and Russia, the conflict in the Middle East, and
the actions in the Red Sea region; public health crises, epidemics,
and pandemics and their effects on the company’s business;
maintenance and protection of the company’s intellectual property
rights, as well as maintenance of successful research and
development efforts with respect to commercially successful
products and technologies; the impact of potential information
technology, cybersecurity or data security breaches; compliance
with the various legal, regulatory, tax, privacy, and other laws to
which the company is subject, such as the Foreign Corrupt Practices
Act and similar anti-corruption and anti-bribery laws globally, and
related changes, claims, inquiries, investigations, or actions; the
company’s ability to control increases in healthcare costs and any
subsequent effect on demand for the company’s products, services,
or solutions; the impacts related to the company’s increasing focus
on and investment in cloud, edge, artificial intelligence, and
software offerings; the impact of potential product liability
claims; environmental, social, and governance matters; the
company’s ability to operate effectively as an independent,
publicly-traded company; and the company’s level of indebtedness,
as well as its general ability to comply with covenants under its
debt instruments and any related effect on the company’s business.
Please also see the “Risk Factors” section of the company’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2023
filed with the U.S. Securities and Exchange Commission and any
updates or amendments it makes in future filings. There may be
other factors not presently known to the company or which it
currently considers to be immaterial that could cause the company’s
actual results to differ materially from those projected in any
forward-looking statements the company makes. The company does not
undertake any obligation to update or revise its forward-looking
statements except as required by applicable law or regulation.
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version on businesswire.com: https://www.businesswire.com/news/home/20241120478927/en/
GE HealthCare Investor Contact: Carolynne Borders (631)
662-4317 carolynne.borders@gehealthcare.com GE HealthCare Media
Contact: Jennifer Fox (414) 530-3027
jennifer.r.fox@gehealthcare.com
GE HealthCare Technologies (NASDAQ:GEHC)
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