Global Growth and Infrastructure Spending by GE

3,876 views
3,718 views

Published on

Great charts and forecast of global macroeconomic forecast and infrastructure spending from GE's investor presenation.

Published in: Economy & Finance, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
3,876
On SlideShare
0
From Embeds
0
Number of Embeds
57
Actions
Shares
0
Downloads
126
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Global Growth and Infrastructure Spending by GE

  1. 1. GE Global Growth & OperationsInvestor MeetingMarch 7, 2012Caution Concerning Forward-Looking Statements: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 futurebusiness and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” or “will.” Forward-looking statementsby 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 ourforward-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 asplanned; the impact of conditions in the housing market and unemployment rates on the level of commercial and consumer credit defaults; changes in Japanese consumer behavior that mayaffect our estimates of liability for excess interest refund claims (Grey Zone); potential financial implications from the Japanese natural disaster; our ability to maintain our current credit ratingand 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 ourquarterly 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, energygeneration, real estate and healthcare; the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks, including the impact of financial servicesregulation; strategic actions, including acquisitions, joint ventures and dispositions and our success in completing announced transactions and integrating acquired businesses; and numerousother 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 bematerially 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 toinvestors 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 measurespresented in this document, see the accompanying supplemental information posted to the investor relations section of our website at www.ge.com.”“Effective January 1, 2011, 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.”
  2. 2. Today‟s agenda Overview and strategy John Rice Global footprint – investing in growth markets • Latin America Reinaldo Garcia • China Mark Hutchinson • Australia & New Zealand Steve Sargent • Middle East, North Africa & Turkey Khozema Shipchandler • Sub-Saharan Africa Jay Ireland Summary & total Company update John Rice Q&A 2 GE Global Investor Day March 7, 2012
  3. 3. GE Global Growth & OperationsJohn RiceVice Chairman, GEPresident & CEO, GE Global Growth & Operations
  4. 4. Key messages you‟ll hear today …• We are a local player … in markets for over 80 years• Targeted & focused strategy … investing, building and leading• Optimize global capabilities … a strategic advantage – R&D centers, supply chain excellence, leadership development• Margins in line with global averages• Cost out, redeployment opportunity• Maintaining appropriate risk profile and protecting intellectual property• Right portfolio for today and tomorrow in key growth markets Continued double digit revenue and earnings growth 4 GE Global Investor Day March 7, 2012
  5. 5. Macro perspective …plenty of growth in lotsof places
  6. 6. Changing economies – top 10($ trillion, GDP in current U.S.$) 6 1990 4 2 0 U.S. USA Japan Germany France Italy UK Canada Spain Brazil China 2011 15 10 New entrants 5 0 U.S. USA China Japan Germany France Brazil UK Italy Russia India Markets constantly evolving … growth 6 markets ~50% of GDP by 2025 GE Global Investor Day March 7, 2012
  7. 7. ~$4T+ infrastructure fundings globally RUCIS infrastructure (~$575B) Provincial hospitals “Plan Nord” (~$15B) Energy in China Canada Healthcare (~$25B) FYP (~$180B) China‟s 12th FYP in power Iraq “5-yr” industry plan (~$840B) (~$186B) “Kenya 2030” Saudi 9th India rail & power Development infrastructure (~$60B) Plan (~$385B) (~$500B) World Cup & Olympics (~$66B) Australia Indonesia building Petrobras Brazil “PAC 2” infrastructure program Oil & Gas investment South Africa (~$140B) (~$105B) (~$225B) program Development (~$872B) Plan (~$100B) Global drive to increase standards of living 7 GE Global Investor Day March 7, 2012
  8. 8. Winning in the growth markets KTZ Rail MSA Turkey $0.6B NextEra Energy (5) Wind $1.1B $0.6B Qatar Air UAE Egypt 777 EMAL II Cathay Air China $0.2B B777 B747 Energy (3) $0.7B $0.8B $0.4B $1.4B Emirates SEC Direct Amber Jiangshan CFE 777 Algeria 13 & PP10 Quzhou 6FA Thermal $6.0B Aero TM $0.4B $0.1B $0.1B $0.2B $0.2B Greenko OGX Wind GOL $0.3B India T&M Subsea LCA $0.2B Angola $0.4B $0.8B Garuda Subsea Renova $0.4B Citilink Petrobras Wind $1.0B Thermal $0.2B $0.3B Transnet Locos MPX $0.1B Inpex Thermal O&G $0.1B $1.0B 8 $18B+ of recent wins in the last six months GE Global Investor Day March 7, 2012
  9. 9. Next wave of infrastructure spending Industrial revenues 15-20% ++ growth $0.2B Mongolia $2B <$0.1B Libya $33B S. Sudan Myanmar $100B $7B* 01 11 15F Senegal Cameroon $1B $3B Ethiopia $7B Peru $28B Mozambique $1B Zambia $1B 9 Next phase of growth GE Global Investor Day March 7, 2012 * Transportation FYP
  10. 10. Meeting the world‟s needs … GE opportunity People with no  Distributed power ~1.4B “basics” … healthcare,  Lower cost healthcare electricity, water  Financing solutions ~3.0B New middle class  Improved access to everything by 2030 … demand  Aviation & Transportation increases infrastructure needs ~70B tons Annual resource  Oil & Gas “extraction” growing 2B tons  Mining per year  Biofuels 10 GE Global Investor Day March 7, 2012
  11. 11. GE a leader in globalmarkets
  12. 12. GE today Industrial revenue * Dynamics $62B $73B $93B • “Recentralized” decision making Growth 18% 27% 37% • Executing on game changing, localDeveloped 13% partnerships 24% 22% • Connecting capital to customers USA 69% • Market driven product development 49% 41% • Global supply chain / local fulfillment excellence … efficiency 01 06 11* Excluding NBCU, including GE/GECS elim Building leadership in growth markets … ~50% of revenue within next 10 years 12 GE Global Investor Day March 7, 2012
  13. 13. Global growth ($ in billions – Industrial revenue *) Growth markets Resource Rich Rising Asia Developed $24 $20 $15 $18 $10 $5 „06 „11 „06 „11 „06 „11 A&NZ China Europe Canada Germany LatAm 10% CAGR 12% CAGR 3% CAGR ~3X GDP India ~1.5X GDP ~5X GDP MENAT Japan Russia/CIS SS Africa ASEAN Korea* Excluding NBCU, including GE/GECS elim Growth markets outpacing GDP Doubled revenue in 27 countries in 5 years 13 GE Global Investor Day March 7, 2012
  14. 14. Growth regions … strength in „12 ($ in billions – Industrial revenue*) Growing Growing Resource Rich Rising Asia 10-15% 20-25% ‟12E V% ‟12E V% ‟12E V% Middle East/North ++ Russia/CIS ++ China ++ Africa/Turkey Sub-Saharan ++ LatAm ++ India - Africa Canada ++ A&NZ ++ ASEAN + 1 Win in Resource Rich ... grow share ≥ US 2 Develop Rising Asia for growth & cost ... partnerships, localization 3 Plant new flags ... expand footprint ... grow supply chain 4 Leverage key capabilities ... project finance, innovation 14 GE Global Investor Day* Excluding NBCU, including GE/GECS elim March 7, 2012
  15. 15. Reinvesting for global growth • $20B+ industrial acquisitions since ‟06 • Expanding our footprint … 57% of acquisition revenues global • Acquired ~20K+ employees in the global marketsAcquired: 2007 Acquired: 2007 Acquired: 2008 Acquired: 2006 / 2008Avionics Drilling & production Pressure control equipment Life SciencesGlobal revenue: 32% Global revenue: 87% Global revenue: 68% Global revenue: 65% / 60% Well SupportAcquired: 2011 Acquired: 2011 Acquired: 2011 Acquired: 2011Subsea drilling capability Enhanced oil recovery Compression, flow, M&D Power conversionGlobal revenue: 96% Global revenue: 49% Global revenue: 61% Global revenue: 80% Acquisitions further accelerate global growth 15 GE Global Investor Day March 7, 2012
  16. 16. Our strategy … leading,building, investing
  17. 17. Global growth equation Benefits Approach• See new business earlier • Investing … products, innovation• Faster, more responsive to local needs and localization• Enhance portfolio profitability • Building … compliance, talent and• Connect capital to customers financing capabilities• Simplify the GE cost structure • Leading … brand, partnerships• Create local leadership pipeline and R&D Global Local Catalyst for accelerating global growth 17 GE Global Investor Day March 7, 2012
  18. 18. Investing 18 GE Global Investor Day March 7, 2012
  19. 19. Leveraging global capabilities Oil & Gas Aviation Transportation # of engines % of global revenue ~34,000 +16 pts 41% ~25,900 28% 25% 31% 26% 12,000 30%• Breadth of products across 01 11 NAM 38% 46% sector … D&S, Subsea, M&C, # global 63 270 EUR 34% 39% Turbo, Services Growth 28% locos• Operates in ~100 countries 2000 Today 2016• Localization strategy … Brazil, • ~40% of 2016 secured Angola, Australia, Indonesia • $76B CSA backlog, 75% global • Transnet partnership in South• China: Africa 3X • 80 manufacturing & service $0.7B facilities globally • Expanding services footprint … $0.2B 2011 first Kazakhstan Evo signed Orders • 2,000+ customers in 85 countries • 40 year partnership in Australia „06 „11 CFM is a 50/50 JV between GE & Snema (Engines: ~7,000 in 2000, ~16,000 with United Group Limited (UGL) Employees ~200 ~2,300 today & ~22,000 in 2016) Engine Alliance is a 50/50 JV between GE & Pratt & Whiney (Engines: 0 in 2000, ~120 in today & ~450 in 2016) 19 GE Global Investor Day March 7, 2012
  20. 20. Global innovation TM Vscan FlexAero Oil & Gas R&D spend $1.0B $0.4B „03-‟05 ‟09-‟11• “Stethoscope of the future” • Highest efficiency • 1st subsea compressor• Global design, manufactured – GT: 50MW … +42% efficiency in China – CC: >120MW … +54% efficiency• Pilot in Indonesia w/ mid- • 1st high pressure CO2 wives using credit financing • <5 minute start-up pump• 4,000 sold to date … ~80% • Installation ~65 days revenue outside of U.S. • DLE2.0 technology eliminates• Broad partnerships water requirement • World‟s largest compressor (100MW) United Nations Indonesian Bank 20 GE Global Investor Day March 7, 2012
  21. 21. Healthcare example Investing and … Delivering in growth regions Orders Footprint in Brazil, India, China China 24%V Other 24%V 2010 „05 V% Engineers 1,859 97% 10 11 10 11 Manufacturing team 1,913 81% LatAm 25%V India 23%V Total employees 8,460 120% Factories 10 100% 10 11 10 11 Sourcing buy ($MM) 584 143% ASEAN 41%V ICFC products 32 16X 10 11 Double digits across growth regions 21 GE Global Investor Day March 7, 2012
  22. 22. Global new product developmentValue Ultrasound Deep product 30 years of ultrasound US expertise Austria software knowledge Developed India Engineering Korea supplier talent base MENAT Design & development ASEAN Manufacturing Launch markets Cycle time  50% … costs  35% 22 GE Global Investor Day March 7, 2012
  23. 23. Service / supply chain localization Haiphong, Vietnam 2009: 2010: 2011: 2012: 2013:Break ground Start production Optimize process Maximize cost Expand • World class and ramp up and cost benefit & grow portfolio capability• Phase I • Shipped 400 • Shipped ~2.5x Wind • Ship 50% more • Diversify into investment Wind generators Wind generators Wind electrical • Expand capacity generators components • Added 2 new wind • Expand local components @ 20% sourcing • Phase II for other • Cost savings 20% savings Asia demand Perth, Australia Pune, India ~$3B ~$1B output orders by 2015 … 30% cost out• $100MM multi-biz service facility … Energy, Transp. • $200MM multi–product manufacturing … MCS, O&G• Localization of service & engineering • For local & global distribution• Increases productivity & customer efficiency • Design & process engineering co-located• Skills development • Product showcase site for GE customers Access to growth markets while driving lower cost 23 GE Global Investor Day March 7, 2012
  24. 24. India “in country for country” & beyond Strategy & approach Product funnel 42 launches in 2012 Examples• Products meeting India need … • Multi-fuel biomass Gasifier • Reliable power at grid prices global applicability Gasifier • Clean energy• Going beyond design enhancements • Disruptive rural price point … <$100K • Access to key diagnostic capability … … “grounds up” development true market creation Super Value CT• Engineering & local manufacturing … • ~100GW wind potential • High & low wind alternatives speed & efficiency • Margin expansion … 30% lower costs Wind• “Learn by doing” … customer pilots • Partnering with “East meets West” … NGO with experience in Vietnam Life Care Solutions $40MM investment , $1B revenue opportunity by ‟15 24 GE Global Investor Day March 7, 2012
  25. 25. Global services capability($ in billions) Service backlog 2012 footprint expansion $147 50 $93 U.S. 46 97 Global 47 06 11 “OneGE” approach to footprint strategy % global ~50% 66% … understand needs of all businesses Region Location Repairs Manufacturing Distribution • $147B GE service backlog Russia/CIS Russia   • Industrial installed base (IB) growing 4% year MENAT Saudi   Iraq  • 91 repair/service sites, 38 in growth markets UAE  SSA Angola   • ~50% of IB attached to Monitoring & Diagnostics Nigeria   … software opportunity A&NZ Australia   Latam Brazil   Services provide competitive differentiation 25 GE Global Investor Day March 7, 2012
  26. 26. Building 26 GE Global Investor Day March 7, 2012
  27. 27. Strong GE DNA Global senior leadership 2011 actions • “Recentralizing” decision-making ~1,900 +9% CAGR • 1,700 mid-management roles added in growth regions ... 96% local • Recruitment COE‟s placed in regions ~1,200 • Strong employer brand … global opportunities for employees 06 11 • Leadership training … long term% of total investment into peopleCompany 28% 36% Attracting & retaining 27 GE Global Investor Day March 7, 2012
  28. 28. Bigger leaders in growth markets(adds in last 12 months) China Canada Hutchinson (CEO) Tu (CFO) Liu (Gov‟t) 18 yrs GE 15 yrs GE 8 mo. GE RE, Cap. Mkts Plastics, Energy Microsoft Friesen (CFO) India 17 yrs GE (FMP) CAS, Cap., Rail, Special MENAT Mtls, AE, HBS Bresenham (HC) Agarwala (Energy) 22 yrs GE (EEDP) 3 mo GE Davies (HR) Shipchandler (CFO) Khattab (Growth) Healthcare TATA 4 years Latin America 10 yrs GE AE, HC, Cap. 15 yrs GE (FMP) CAS, Money, AE, 4 yrs GE Oil & Gas Infra. Ind. Sys. Plastics, Corp. Schlumberger Africa Wanchoo (Growth) Modak (CFO) 14 yrs GE 26 yrs GE Garcia (CEO) Garcia (CFO) Fama (HR) Healthcare CAS, Appl. Int‟l, 27 yrs GE (FMP) 15 yrs GE (FMP) 18 yrs GE (HRLP) Cap., Corp CAS, HC, Ind. CAS, Corp., Lighting, Appl., Sys., Lighting Energy O&G, Corp. Ireland (CEO) Oates-Forney (HR) Konditi (CFO) Australia 31 yrs GE (FMP) 13 yrs GE 12 yrs GE CAS, Plastics, Cap., Energy, CAS, Plastics, NBCU, Corp. C&I, Corp, O&G Cap., Corp. Bertoni (BD) Jardim (Legal) D Granados (Growth) Sargent (CEO) Cartledge (CFO) 11 yrs GE 6 yrs GE 11 yrs GE 19 yrs GE 21 yrs GE (FMP) Energy Int‟l HC, Corp., Int‟l Capital CAS, Plastics, Energy, MCS 300+ years GE experience, 28 36% Corporate Audit Staff GE Global Investor Day March 7, 2012
  29. 29. Connecting capital to customers Orders supported with financing Enhancing capabilities ++ • Structured finance expertise • Strong global relationships $6.5B • Asset & industry knowledge • 100+ worldwide experts in 25+ countries • Leverage GE Capital capabilities Mark Kleinman, new S&PF GM − 25 years experience Today Future − Private Equity & Banking − Former Treasurer JP MorganMongolia - 50MW Salkhit wind farm• 1st major renewables project in ECA Capital markets, SWF, Multi-lateral Agency Mongolia Private equity Development BanksKTZ - national railroad in Kazakhstan Project development• Contract for new GE diesel loco kits Int‟l + local banks & coordination with … 196 locos GE Capital Established track record … more to come 29 GE Global Investor Day March 7, 2012
  30. 30. Leading 30 GE Global Investor Day March 7, 2012
  31. 31. Managing risk globally What keeps us out of trouble Locally: a competitive advantage Open reporting … . Robust ombuds 1 mechanism Nigeria • 163MM people • ‟12E GDP: 7% • „12 Gov‟t Spend: ~$8B Orphans … eliminating unnecessary 2 orphans and increasing oversight - 143rd on corruption * perception indexReputation • July „05: GE Energy bids to Nigerian government… “we certify as a condition of our bid that GE shall not authorize, permit or 3 Regulatory excellence … domain expertise and process tolerate any improper payment …” • Sept „05: Order for 18 gas turbines (~$0.4B) • May „09: “Company to Country” MOU - early wins: 25 locomotives with option for 75 Managing third parties/partners … 4 rationalizing & strengthening process; • Feb „12: Immelt with President Jonathan … further cooperation IP protection ++ $0.5B Communicating and responding … 5 constant messages from leadership $0.2B 01 11 16F Reputation for integrity is a 31 GE Global Investor Day global GE advantage March 7, 2012 * Source: Transparency International
  32. 32. Growth through partnerships Building strong relationships Orders & commitments 20-yr partnership, 400 LEAP (CFM) engine order $11B Partnering in O&G, PowerGen & Marine Evo assembly with KTZ in Kazakhstan‟s Astana plant ~$1B Alliance w/ world‟s largest ‟07 ‟11 iron ore producer • People … training & education Investing in Algeria … • Technology … R&D, co-innovation Algesco & Hamma JVs • Localization … in-country capability Playing critical role in global O&G projects • Growth … long-term success Established partnerships lead to growth 32 GE Global Investor Day March 7, 2012
  33. 33. Next wave Key wins/commitments 5x+Russia JVs AVIC Huadian JV $1.3B 11 15F • Government cooperation • Technical leadershipSaudi MOH Transnet Mubadala • Local capabilities • Healthymagination / Ecomagination New relationships accelerating growth 33 GE Global Investor Day March 7, 2012
  34. 34. New Russian partnerships Russia France U.S. China Final assembly Healthcare product Test, Service Healthcare Turbine product engineering & subcomponents engineering subassembly Design & development Manufacturing Sourcing • Energy, Healthcare JVs announced in Sept 2011 • Assemble, sell, & service GT‟s (4.6GW) … local assembly „13 • Production of diagnostic imaging equipment • $0.5B orders booked to date GE technology + strong partnerships 34 $10B - $15B opportunity GE Global Investor Day March 7, 2012
  35. 35. The global research advantage • 5 multi-disciplinary R&D centers … 4 outside of the U.S. • ~3,000 GRC research team, ~1,000 global • ~40,000 GE engineers worldwide, ~22,000 global • Over $5B R&D spend* • Expanding IP coverage … global patent apps +88% since „08 China Technology Park: Shanghai Global Research Europe: Munich • Over 1,200 engineers • Over 170 engineers • Leading ICFC efforts • Located on tech campus (TUM) • Connected to Innovation Centers • Clean, distributed energy focus John F. Welch Technology Center: Bangalore Brazil Technology Center: Rio de Janeiro (2013) • Over 4,200 engineers • Capacity for 400 engineers • First global site … 1999 • O&G, Transportation focus • Growing emerging market focus • Customer & university relations *Includes customer funded Product innovation is everywhere 35 GE Global Investor Day March 7, 2012
  36. 36. Extending the brand Programs offered in 2011 • Regional “Train the Trainer” & local delivery Leadership For • Leadership skills development Customers (LFC) • 55 customers … 5 growth regions • Establish GE as a thought leader Global • Share insights and best practices Customer Summit • 145 customers … 5 growth regions China CEO program • Provides intact leadership teams critical China Leadership “time to think” about growthInnovation Session (LIS) • 14 businesses, 140 customers • 4 day session held in Shanghai • Focus on 21st Century/Future Workplace China CEO Program Leadership • 28 CEO‟s … 2-week session China Leadership Innovation session in Shanghai 15 years … over 4,000 global alumni 36 GE Global Investor Day March 7, 2012
  37. 37. Globalization complexity Evolving landscape “One-GE” strength GE Advantage Lean Six-Sigma Imperatives • Maximize scale • Minimize duplication • Reduce SG&A Focused on simplifying the structure 37 GE Global Investor Day March 7, 2012
  38. 38. Three year roadmap Company strategy Approach & opportunity Goal Targeting 1pt SG&A reduction Ledgers >75% reduction Systems ERPs >20% reduction P&L FewerStructure Span Greater • Continued acquisition integration Layers Down • World class functional alignment Shared services Up • IT consolidation … scale, productivityEnablingprocesses Headcount Down • Redeployment … developed to growth Target $1B over ~3 years 38 GE Global Investor Day March 7, 2012
  39. 39. Driving profitability GE margin Global strategy + • Growth market margins in line with + ~15% global average • Localization of supply chain / manufacturing • High service mix and local products with higher margins 11 12E 13F • Driving simplification ~50 bps/year • Total Company 1pt SG&A, $1B through 2013 improvement over 3 years 39 GE Global Investor Day March 7, 2012
  40. 40. Positioned to win …optimize global andlocal capabilities
  41. 41. Positioned to win Opportunities Regional focus Distributed power Go where the grid will not SS Africa opportunity Distributed power … Aero & Gas Mining / Oil & Gas Scale & significance LatAm mining & biofuels A&NZ O&G services In Angola for companyRural, remote healthcare Access to those in need China rural health Saudi MOH & beyond Winning new markets Transportation For the new middle class South Africa wins LatAm localization China air growth Partnerships Helping customers grow China Wind JV‟s Nigeria CTC Expand partnership 41 Providing solutions globally & locally GE Global Investor Day March 7, 2012
  42. 42. Investing in growth markets Latin America Reinaldo Garcia China Mark Hutchinson Australia & New Zealand Steve Sargent Middle East , North Africa & Turkey Khozema Shipchandler Sub-Saharan Africa Jay Ireland 42 GE Global Investor Day March 7, 2012
  43. 43. Latin AmericaReinaldo Garcia 27 years GE experience US, UK, France, Brazil CAS, H&BS, Energy, Healthcare 43 GE Global Investor Day March 7, 2012
  44. 44. Latin America overview Footprint Industrial revenue * Macroeconomics GE footprint 12% $6.6B ‟12E GDP: $6.4T/3.9% # of industrial sites: 60 CAGR Population: 592MM Employees: ~19,700 $3.7B Gov‟t spend: ~$1T First entered: 1896 X Mexico + CAC X X ‟12E GDP: $2.1T, 3.7% 06 11‟12E GDP: $2.1T, 4.0% Total pop: 197MMTotal pop: 196MM • Sustained economic growth … GDP ~4% driven X Brazil by domestic demand & services X Andean Region X • Outstanding ‟11 GE performance … organic ‟12E GDP: $1.2T, 4.0% Total pop: 131MM X revenues +20% ... all industrial businesses showing double digit growth X X XX • Great „12 outlook … strong pipeline and X opportunities all across the region … different X South Cone strategies & local capabilities ‟12E GDP: $1.0T, 3.9% Total pop: 68MM X • New Global Research Centre in Rio … high-tech solutions for GE & their customers 44 Source: Oxford Economics GE Global Investor Day * Excluding NBCU, including GE/GECS elim March 7, 2012
  45. 45. Macro dynamics drive opportunity Approximate Identified Area/Opportunity Capex/Invest . CY spend GE opportunities (by „15)1 O&G ~$225B $45B Full subsea solution (Petrobras plan)2 Mining ~$155B ~$28B Power, water & productivity solutions3 Kuntur Project $13B+ - Energy plants4 Biofuel ~$26B ~$4B Waste & vinasse treatment & transformation5 Wind ~$16B ~$3B+ Wind turbines … 13 GW6 Mega-events ~$46B ~$9B Infrastructure expansion (World Cup & Olympics) (ex High Speed Rail) Great opportunities in the region 45 … ~$50B for GE GE Global Investor Day March 7, 2012
  46. 46. Oil & Gas momentum Regional dynamics Opportunity $0.8B orders Brazil • Record oil discoveries in „11 • 30% of global deep water drilling • +2.2k employees Acquisitions • 9 new service sites Venezuela • Largest oil reserves Well Support • Broad subsea + Mexico • PEMEX reform • Pressure Control enhanced oil recovery • Electrical Submersible Pumps & shale play Argentina • Shale potential • Logging Services Colombia • 100+ E&P companies active + GRC center in Rio Investments + Capacity expansions O&G production in Brazil - $140MM flexible risers - $32MM services (mboed) 7.6 - $16MM x-mas trees Petrobras OGX Others 4.6 2X + Competitive advantage Outlook 2.6 2.1 ++ + Full product suite $1.7B + Localization $0.8B + Service capability 06 11 15F 20F 10 11 12E 16F Source: Petrobras & OGX business plans Positioned for Oil & Gas super cycle 46 GE Global Investor Day March 7, 2012
  47. 47. Mining in Latin America Latin America opportunity GE solutions • ~27% of global mine exploration $7B+ opportunity through 2015 in mining products/services Iron Copper Nickel Power Supply & reliability in remote areas Copper Silver Nickel Steam turbines Heavy duty gas turbines Coal Copper Aero deriv. turbines Jenbacher engines • Growing capex • Energy consumption and environmental Water Supply & management/reuse concerns increasing Desalination Dust control • Remote operations and sustainability … managing talent constraints and safety Acid mine drainage Mobile water systems of operations Productivity Utilization of capital process improvement OHV drives Locomotives Remote monitoring Automation $7B+ GE opportunity through 2015 47 GE Global Investor Day March 7, 2012
  48. 48. Peru … Kuntur Project • Peru ... strong growing economy Block 58: Block 57: 54% BRASIL • Infrastructure expansion ... mining, energy, 100% 46% ~400MM healthcare Lima PowerGen Separation Gas & liquid pipeline system• Main GE opportunities: +4,000MM Pipeline Compressors, waterPetrochemical ind. complex $400MM treatment plants Compression stations:Gas & liquid pipelines $250MM compressors, pumps, valvesPower Gen. $200MM Gas turbines, generators LNG Plant PowerGen Sea levelGas separation plants $100MM Turbo compressors Fractionation FertilizerFractionation plant $50MM Compressors Petrochemical $1B• Next steps: Kuntur partners Gas certification (June) Project procurement („12-‟15) $13B+ regional spend ... $1B GE opportunity 48 GE Global Investor Day March 7, 2012
  49. 49. Next wave: Biofuel Today Tomorrow Local International • Large players consolidationPlayers Vale Shell Petrobras & Bp • Local … expanding participation, new entrants raízen Codexis Tereos Bunge ETH solazime • International … diversification, new technologiesProduction • Demand … regulatory 47-52 44 mandates & flex-fuel fleet (B liters) 24 28 • Supply constrained … low Demand Supply Demand Supply feed-stock availability 2010 2015 Waste Biogas Waste Bio-electricity Waste Gasification Gas Generators system engineGE Oppty Biogas Bio-electricity Liquid Methane Water Purification Vinasse MBR/EDR Gas P&W water engine treatment Water Bio-electricity 4X more GE content … ~$5B opportunity 49 GE Global Investor Day March 7, 2012
  50. 50. Great products for local needs Locomotives Gas Turbines Healthcare From Brazil to the world Flexibility and efficiency In country, for country• 50 years … 1,300 locomotives • Big installed base (+400 GTs) … • First Brazilian plant in large service platform Contagem (Minas G.)• +50% Brazilian content • Won 18 of 26 GTs bid in LatAm • Initial manufacturing of X-ray,• 2011 production 110 locos, 41% in ‟11 … 100% penetration in CT & mammography of global shipments Brazil & 69% in Mexico a) • Future expansion to PET, MRI &• Distribution into LatAm & Africa • Localization of Aero GTs MS … focus on local needs packaging & services• Brazilian Dev. Bank (BNDES) • ~4x increase in unit volume support … +$0.5B production from „11 to „12 a) As of Q3 2011. Source MC Coy database. 50 GE Global Investor Day March 7, 2012
  51. 51. Financial outlook Industrial revenue * Strategy & approach Strategic GE market • Well diversified … businesses & 36% ++ countries $6.6B • Regional economic growth continues … $4.8B infrastructure focus Sustainable growth • Strong teams in place • Focus on customer “solutions”… mining, 10 11 12E off-shore, biofuel • Expanding GE operations … localization,* Excluding NBCU, including GE/GECS elim key accounts Great „12 and long term outlook 51 GE Global Investor Day March 7, 2012
  52. 52. ChinaMark Hutchinson 18 years GE experience HK, UK, US, Japan, France, China Energy, Capital Markets, Real Estate 52 GE Global Investor Day March 7, 2012
  53. 53. China overview Footprint Industrial revenue * Macroeconomics GE footprint 12% $5.8B CAGR ‟12E GDP: $12.0T/7.7% # of sites: 50+ Population: 1.3B Employees: 17,000+ $0.9 Gov‟t spend: $1.7T First entered: 1906 $3.3B $4.9 $0.1 $3.2 X 06 11 X X • Significant opportunities in infrastructure and healthcare X X • Strategic partnerships with national SOE X X X champions: Avic, State Grid, Shenhua XX Taiwan • Increased localization with IP protection China X ‟12E GDP: $0.8T, 3.7%‟12E GDP: $10.8T, 8.2% Total pop: 23MM • Global and local innovation capabilitiesTotal pop: 1.3B Hong Kong ‟12E GDP: $0.3T, 3.6% • Upgraded key leadership roles Total pop: 7MM Source: Oxford Economics *Excluding NBCU Non-consolidated revenue 53 GE Global Investor Day March 7, 2012
  54. 54. Macro dynamics drive opportunity 12FYP Identified CY GE Area investment spend opportunities Energy Add capacity ~560 GW ~70GW Gas, wind, Jenbacher, 1 Energy saving ~$520B ~$100B aero, digital energy Aviation ~$229B ~$45B Engines, services, 2 avionics systems Healthcare 3 ~$180B ~$28B Equipment, service, IT ~$90B future GE opportunities 54 GE Global Investor Day March 7, 2012
  55. 55. Energy Gas expansion Installed base Positioned for growth Gas supply (BCM) ~180 GE heavy duty GT Revenues $(B) ++ 60% 270 $2.0 170 $0.9 „11 ‟15F „06 „11 ‟16F• Significant gas expansion … • 70 6FA/Bs, 74 9Es and 35 9FAs • Win on gas and flow businesses additional 20,000km gas pipelines ~50% of China‟s gas generation • Partnering with national champions• ~$7B opportunity for gas turbines • ~70% total service coverage … 3x increase in market size • Build competitive cost position • ~$1B orders in 2012 for gas• ~$2B opportunity for turbo- turbines and service • Establish China based businesses machinery and compressor Massive gas opportunities 55 GE Global Investor Day March 7, 2012
  56. 56. Aviation Airline traffic Airline fleet Invest in the future # of engines 4,484 2,188 C919 – China‟s first large aircraft Airports 36% Others 30% 231 45% 175 49% 24% 14% 2010 2015 In Service Orders• Leading traffic growth (8%) • GE & CFM leading in commercial engines • Highest GE engine/avionics content on any aircraft• Investing $229B in Aviation • Won 11/16 recent engine campaigns  Recent wins - Cathay $730MM • Game changing partnership• 31% increase in airports (2 deals), Air China $370MM, CDB with AVIC on Avionics leasing $290MM• 1,000 new airliners (70% • Strong domestic demand & • $9B service backlog; recent wins - Cathay international potential announced); 900 BGA planes $2B, Air China $425MM • Sole source engine position Rapidly growing aviation market … 56 GE an industry leader GE Global Investor Day March 7, 2012 CFM is a 50/50 Joint Venture between GE & Snecma Engine Alliance is a 50/50 joint venture between GE & Pratt & Whitney
  57. 57. Healthcare … localize innovation • 6,400 employees … 95%+ local leadership • 10,000+ accounts first visit by GE • 5 manufacturing, 3 R&D/innovation centers • ~1,300 design engineers Revenues ++ Plants • 166 product family Offices $1.4B • 22,600 installed base $0.6B R&D center 06 11 16F Local design, local manufacturing Logic C-series U/S Starlight X-ray Brivo CT 315/325 • 7% cost reduction • 40% cost reduction • 23% cost reduction • 57% cycle time reduction • 50% cycle time reduction • 25% cycle time reduction • 2% margin increase • Hold margin rate at low price • 9% margin increase 57 GE Global Investor Day March 7, 2012
  58. 58. Strategic partnership Successful partnership Next wave … with national champions Gas Turbine Bundle buy2003 - Largest utilities company - Only civil aircraft maker - 2011 revenue ~$260B - 2011 revenue ~$40B Over 100 Heavy Duty Gas Turbines … all under long term service agreements - Top 5 power gen company - Largest coal company - 2011 revenue ~$20B - 2011 revenue ~$44B Wind Turbine JV We protect our intellectual property … play offense & defense2010 • “Keep what‟s important” (don‟t transfer everything) Shenyang: Jiangsu: • We have known of our partners for a long time Onshore turbines Offshore turbines & Svc • Robust legal structure & process around our IP Expand to new products & new markets • Continuously invest to stay ahead Strong pipeline … >$10B opportunities by 2020 58 GE Global Investor Day March 7, 2012
  59. 59. Financial outlook Industrial revenue * Strategy & approach 1 Strong execution ++ 32% - Win big projects $5.8B - Boost flow deals $4.4B $0.9 $0.6 $4.9 2 China face $3.8 - Strategic partnership - Localization 3 Leadership & talent „10 „11 ‟12E - Local leadership Non-consolidated revenue - Mid-career talent bench* Excluding NBCU, including GE/GECS elim Long cycle businesses driving 59 double digit growth GE Global Investor Day March 7, 2012
  60. 60. Australia & New ZealandSteve Sargent 19 years GE experience US, UK, Japan, Australia Capital 60 GE Global Investor Day March 7, 2012
  61. 61. A&NZ overview Footprint Industrial revenue * Macroeconomics GE footprint 32% $2.9B‟12E GDP: $1.4T/3.0% # of sites: 74 CAGRPopulation: 27MM Employees: 5,700Gov‟t spend: ~$30B Present since: 1896 $0.7B 06 11 Great GE market • 20th consecutive year GDP growth, 2X OECD • Government debt to GDP 11% • Stable/secure source for Asia energy needs Australia • Huge infrastructure investment ~$760B • $38B China FDI … #1 New Zealand • 4th largest fund market … $1.8T under mgt. • #1 market for GE O&G, #2 for GE Capital Source: Oxford Economics * Excluding NBCU, including GE/GECS elim Minerals & energy source for rising Asia 61 GE Global Investor Day March 7, 2012
  62. 62. Significant A&NZ infrastructure investment Growth Approximate Identified CY dynamics Invest/Capex $ spend $ Market opportunity GE opportunity Rising Asia1 urbanization ~$500B ~$100B • Massive long-term mineral & energy • $3B LNG projects won, investment $3B+ to go + services • Largest LNG exporter by ‟17 Environmental2 regulation ~$40B ~$10B • Price on carbon  ETS; 20% • Wind, $16B+ & ~$4B gas renewables by ‟20 & brown coal to gas transition • CSM water treatment • Leading water treatment regulations3 High population ~$220B ~$20B • Population growth #1 in OECD … • Healthcare spend up 200 bp growth +5.8% („08-‟10) to 11% of GDP by ‟15 • 84%  domestic air travel since ‟01 • GENX engines, won • 5% peak increase in energy demand • Major city LED projects Mid market4 financing ~$35B • Well regulated & capitalized market • $10B+ incremental SAS commercial finance market • European banks retracting … mid market opportunity for GE Capital 62 ~$30B opportunity for GE products & services GE Global Investor Day March 7, 2012

×