GE Vernova Hosts 2024 Investor Day
- None.
- None.
Insights
The announcement by GE that its subsidiary GE Vernova is ready to spin off into an independent entity is a significant development for shareholders and potential investors. The reiteration of the 2024 financial guidance and the presentation of the 2025 and 2028 outlooks indicate a strong forward-looking statement by the company. The expected mid-single digit organic revenue growth and the goal of achieving a 10% adjusted EBITDA margin by 2028 suggest a robust growth trajectory. Moreover, the projected increase in free cash flow from $0.7-1.1 billion in 2024 to $1.2-1.8 billion in 2025, with a 90-110% conversion rate, highlights the company's confidence in its operational efficiency and profitability.
Investors should note GE Vernova's commitment to maintaining an investment-grade credit rating, which underscores its fiscal responsibility and potential attractiveness to risk-averse investors. The capital allocation framework, which includes organic investments, returning capital to shareholders and maintaining inorganic growth optionality, provides a balanced approach to capital management that could appeal to a broad investor base.
The energy transition market is rapidly expanding and GE Vernova's positioning as a purpose-built company to electrify and decarbonize indicates a strategic alignment with industry trends. The emphasis on multi-decade growth within the Power, Wind and Electrification segments suggests that GE Vernova is targeting long-term market opportunities. The company's focus on delivering sustainable, innovative solutions and leveraging a lean operating system is likely to resonate with stakeholders increasingly concerned with environmental impact and operational efficiency.
The introduction of GE Vernova's sustainability framework, which includes the pillars of electrify, decarbonize, conserve and thrive, aligns with global trends towards sustainable development. This framework, coupled with the company's significant annual investment of $1 billion in R&D, positions GE Vernova as a potential leader in the development of green technologies, which could lead to a competitive advantage in the burgeoning market for sustainable energy solutions.
GE Vernova's strategic focus on the energy transition reflects a broader shift within the energy sector towards renewable and sustainable energy sources. The company's significant backlog and growing recurring revenue from high-margin services indicate a stable and promising business model that could be attractive to investors looking for exposure to the renewable energy sector. The spin-off event itself is anticipated to create a standalone company with a clear focus, which might streamline operations and potentially unlock shareholder value.
However, the energy sector is subject to regulatory risks, technological disruptions and competitive pressures. Investors should consider these factors when evaluating GE Vernova's prospects. Additionally, the company's ability to execute on its strategy, particularly in terms of driving margin expansion and managing its capital allocation effectively, will be critical to its success in the highly competitive and rapidly evolving energy market.
GE Vernova operationally and financially ready to spin off from GE on April 2
- GE Vernova reaffirms 2024 financial guidance, presents its 2025 financial guidance and outlook by 2028
- Building financial momentum with significant adjusted EBITDA* and free cash flow* growth ahead
-
Debuting GE Vernova’s sustainability framework and lean operating system while investing
$1 billion
(Graphic: GE)
GE Chairman and CEO and GE Aerospace CEO H. Lawrence Culp, Jr. said, “Today is a tremendous milestone for GE Vernova, which is ready to stand on its own as an independent, investment-grade company leading the energy transition. Under Scott Strazik’s leadership, GE Vernova is expected to deliver significant free cash flow growth and is well-positioned to lead the industry forward. I am extremely proud and confident in the future of GE Vernova.”
GE Board member and GE Vernova Non-Executive Chair Steve Angel said, “GE Vernova is a purpose-built company serving a wide range of global stakeholders seeking to electrify and decarbonize the world. I am looking forward to partnering with the other board members to drive strong governance while working closely with GE Vernova’s leadership team to advance this crucial mission as a standalone company.”
GE Vernova CEO Scott Strazik said, “The energy transition is the next investment supercycle, and today we are excited to share GE Vernova’s value creation strategy. With a vast installed base, growing recurring revenue from high margin services, and a significant backlog, GE Vernova provides a unique scope and scale of solutions to serve the world’s most impactful electricity providers. I am also proud to introduce GE Vernova’s sustainability framework that will guide our work to create a more sustainable power system, utilizing our lean operating system and investments in innovation.”
The GE Vernova leadership team will present its strategy and financial outlook, including across its three segments - Power, Wind, and Electrification - highlighting how GE Vernova is:
- Purpose-built to electrify and decarbonize, serving the vital energy transition market with multi-decade growth.
- Executing with sustainability, innovation and lean at our core.
- Delivering disciplined growth to drive margin expansion, higher free cash flow*, and effective capital allocation.
Financial Outlook
Today, GE Vernova reaffirms its 2024 guidance and outlines its 2025 guidance and outlook by 2028:
Financial Metric |
2024 Guidance |
2025 Guidance |
Outlook by 2028 |
Revenue |
|
Mid-single digit organic revenue growth* |
Mid-single digit organic revenue growth* |
Adjusted EBITDA Margin* |
Mid-single digit (high-end) |
High-single digit (low-end) |
|
Free cash flow* |
|
|
90 |
Capital Allocation Framework
GE Vernova is committed to maintaining an investment grade credit rating, and its capital allocation framework includes:
- Organic investments
- Capital return to shareholders
- Inorganic growth optionality
Sustainability Framework
GE Vernova’s sustainability framework helps to deliver innovative technologies to create a more sustainable electric power system. It comprises four pillars, outlined on GE Vernova’s new sustainability website: electrify, decarbonize, conserve, and thrive.
Event Webcast
GE Vernova will broadcast the event live via webcast today starting at 8:00am EST and it is expected to last approximately four hours. The webcast and accompanying slide presentation can be accessed by visiting GE Vernova’s Investor Relations website here. An archived version of the webcast will be available on the website after the call.
GE Vernova CEO Scott Strazik will be joined by the following leaders: CFO Ken Parks, CEO of Power Maví Zingoni, CEO of Wind Vic Abate, CEO of Electrification Systems Philippe Piron, CEO of Electrification Software Scott Reese, President Jessica Uhl, Chief Supply Chain Officer Dan Garceau, Chief Commercial Officer Pablo Koziner, Chief Sustainability Officer Roger Martella, VP of Investor Relations Michael Lapides, and Environmental Health & Safety Leader Rob Cummings.
Additional Information
GE Vernova is expected to spin off from GE on April 2, 2024, and list on the New York Stock Exchange under the ticker symbol “GEV.” On February 29, 2024, to effect the separation, GE’s Board of Directors approved a distribution to GE shareholders of all shares of GE Vernova’s common stock. Investors, media, and the general public are invited to learn more about the pending spin-off on GE’s website and on GE Vernova’s Investor Relations website.
Additional Financial Information
Additional financial information can be found on the Company’s website: www.gevernova.com/investors.
The Company website at www.gevernova.com/investors, as well as GE Vernova’s LinkedIn and other social media accounts, contains a significant amount of information about GE Vernova, including financial and other information for investors. GE Vernova encourages investors to visit these websites from time to time, as information is updated, and new information is posted.
Non-GAAP Financial Measures
In this document, the Company sometimes uses information derived from consolidated financial data but not presented in its financial statements prepared in accordance with
2024 AND 2025 GUIDANCE AND 2028 OUTLOOK
Free cash flow (non-GAAP) ($ in millions) |
|
|
|||||
For the years ended December 31, |
2024E |
2025E |
|||||
Cash from (used for) operating activities (GAAP) |
$ |
1,500-1,900 |
$ |
2,000-2,600 |
|||
Add: gross additions to property, plant and equipment and internal-use software |
(800 |
) |
(800 |
) |
|||
Free cash flow (Non-GAAP) |
$ |
700-1,100 |
$ | 1,200-1,800 |
|||
We cannot provide a reconciliation of the differences between the non-GAAP expectations and the corresponding GAAP measure for free cash flow* conversion in the 2028 outlook without unreasonable effort due to the uncertainty of the costs and timing associated with potential restructuring actions and the impacts of depreciation and amortization.
Adjusted EBITDA margin (Non-GAAP)
We cannot provide a reconciliation of the differences between non-GAAP expectations and the corresponding GAAP measure for Adjusted EBITDA margin* in the 2028 outlook without unreasonable effort due to the uncertainty of the costs and timing associated with potential restructuring actions and the impacts of depreciation and amortization.
*Non-GAAP Financial Measure
Forward-looking Statements
This document contains forward-looking statements – that is, statements related to future events that by their nature address matters that are, to different degrees, uncertain. These forward-looking statements often address GE Vernova’s (Company) expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” “estimate,” “forecast,” “target,” “preliminary,” or “range.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about planned and potential transactions, including GE’s planned spin-off of GE Vernova; the impacts of macroeconomic and market conditions and volatility on the Company’s business operations, financial results and financial position and on the global supply chain and world economy; its expected financial performance, including cash flows, revenues, organic growth, margins, earnings and earnings per share; the Company’s credit ratings and outlooks; its funding and liquidity; its business’ cost structures and plans to reduce costs; restructuring; goodwill impairment or other financial charges; or tax rates.
For GE Vernova, particular areas where risks or uncertainties could cause its actual results to be materially different than those expressed in its forward-looking statements include:
- The Company’s success in executing planned and potential transactions, including GE’s plan to pursue a spin-off of GE Vernova;
- Changes in macroeconomic and market conditions and market volatility, including risk of recession, inflation, supply chain constraints or disruptions, interest rates, the value of securities and other financial assets, oil, natural gas and other commodity prices and exchange rates, and the impact of such changes and volatility on the Company’s business operations, financial results and financial position;
-
Global economic trends, competition and geopolitical risks, including impacts from the ongoing geopolitical conflicts (such as the
Russia -Ukraine conflict and conflict in theMiddle East ), demand or supply shocks from events such as a major terrorist attack, natural disasters or actual or threatened public health pandemics or other emergencies, or an escalation of sanctions, tariffs or other trade tensions, and related impacts on the Company’s business’ goal supply chains and strategies; - Actual or perceived quality issues or safety failures related to the Company’s complex and specialized products, solutions and services;
- Market developments or customer actions that may affect the Company’s ability to achieve its anticipated operational cost savings and implement initiatives to control or reduce operating costs;
- Significant disruptions in the Company’s supply chain, including the high cost or unavailability of raw materials, components, and products essential to its business, and significant disruptions to its manufacturing and production facilities and distribution networks;
- The Company’s capital allocation plans, including the timing and amount of dividends, share repurchases, acquisitions, organic investments, and other priorities;
- Downgrades of the Company’s credit ratings or ratings outlooks, or changes in rating application or methodology, and the related impact on the Company’s funding profile, costs, liquidity and competitive position;
- Shifts in market and other dynamics related to decarbonization;
- The amount and timing of the Company’s cash flows and earnings, which may be impacted by macroeconomic, customer, supplier, competitive, contractual and other dynamics and conditions;
- Actions by the Company’s joint venture arrangements, consortiums, and similar collaborations with third parties for certain projects that result in additional costs and obligations;
- Any reductions or modifications to, or the elimination of, governmental incentives or policies that support renewable energy and energy transition innovation and technology;
- The Company’s ability to develop and introduce new technologies to meet market demand and evolving customer needs;
- Changes in law, regulation or policy that may affect the Company’s businesses, such as trade policy and tariffs, regulation and incentives related to climate change (including the impact of the Inflation Reduction Act and other policies), environmental, health and safety laws, and the effects of tax law changes;
- The impact related to information technology, cybersecurity or data security breaches at GE Vernova or third parties; and
- The other factors that are described in the “Risk Factors” section of GE Vernova’s Form 10 filed with the SEC and any updates or amendments it makes in future filings.
These and other uncertainties may cause the Company’s actual future results to be materially different than those expressed in its forward-looking statements. GE Vernova does not undertake to update its forward-looking statements. This document includes certain forward-looking projected financial information that is based on current estimates and forecasts. Actual results could differ materially.
About GE
GE (NYSE:GE) rises to the challenge of building a world that works. For more than 130 years, GE has invented the future of industry, and today the company’s dedicated team, leading technology, and global reach and capabilities help the world work more efficiently, reliably, and safely. GE’s people are diverse and dedicated, operating with the highest level of integrity and focus to fulfill GE’s mission and deliver for its customers. www.ge.com
About GE Vernova
GE Vernova is a planned, purpose-built global energy company that includes Power, Wind, and Electrification businesses and is supported by its accelerator businesses of Advanced Research, Consulting Services, and Financial Services. Building on over 130 years of experience tackling the world’s challenges, GE Vernova is uniquely positioned to help lead the energy transition by continuing to electrify the world while simultaneously working to decarbonize it. GE Vernova helps customers power economies and deliver electricity that is vital to health, safety, security, and improved quality of life. GE Vernova is headquartered in
GE Vernova’s mission is embedded in its name – it retains its legacy, “GE,” as an enduring and hard-earned badge of quality and ingenuity. “Ver” / “verde” signal Earth’s verdant and lush ecosystems. “Nova,” from the Latin “novus,” nods to a new, innovative era of lower carbon energy. Supported by the Company Purpose, The Energy to Change the World, GE Vernova will help deliver a more affordable, reliable, sustainable, and secure energy future. Learn more: GE Vernova’s website and LinkedIn. www.gevernova.com
View source version on businesswire.com: https://www.businesswire.com/news/home/20240306605830/en/
GE Vernova Investor Contact
Michael Lapides
631.662.4317
M.Lapides@ge.com
GE Investor Contact
Steve Winoker
617.443.3400
swinoker@ge.com
GE Vernova Media Contact
Adam Tucker
518.227.2463
adam.tucker@ge.com
GE Media Contact
Mary Kate Mullaney
202.304.6514
marykate.nevin@ge.com
Source: GE
FAQ
When will GE Vernova spin off from GE?
What is the ticker symbol for GE Vernova?
What financial guidance did GE Vernova reaffirm for 2024?
What is GE Vernova's sustainability framework focused on?
Who will be leading GE Vernova as CEO?
