How to break the barrier to growth in Australian Mid-Market?

THE GE CHALLENGE 2012

1

GE MONEY

GE CORPORATE FINANCE

70% GE ANZ

Retailer Solutions

Commercial Real Estate

Insurance Services

Distribution Finance

Money Direct

Fleet & Equity Finance

Pacific Premium

2

Source: Team's Estimation & GE in Australia FactSheet (2009)

Complicated Matrix Relations With GE ‘Verticals’ Reliance On Credit To Earn Low Interest Rate Loan Low ROI (~1-2%) GECS reported decreasing Cash at End FY10-12 10% Of Debt Composition arriving from Securitization

MidMarket Lending

Consum er

40%

30%

 

GE Vertical

Real Estate

25%

5%

GE ANZ CAP’S REVENUE

FINANCIAL CONCERNS

3

Source: Team's Estimation & GE Capital Investor Meeting Presentation (2011) & GE Capital WebCast Presentation (2010)

Non-service sectors, accounts up to 49% national GDP, but on the decline in 2012. Mid-Markets firms considered too big to received government support. But too small to access capital from banks. Not large enough to attract media attention

Economic Contribution by Mid-Market (2009-10)
4

Current: BARRIER TO GROWTH
Source: Team's Analysis & GE Capital Mid-Market Report (2011, 2012)

Focus on GE ‘Verticals’

Rising Asia Urbanization:
Long term invest on mineral & hedging to reduce impact of commodity prices changes
5

Environmental Regulation:
Moving forward to gas, take advantage of Water Treatment Services

Population Growth:
Huge opportunities for more in GE ANZ Healthcare sectors to grow

Source: Team's Strategies & GE Capital Investor Meeting Presentation (2011) & GE Finance Thoughts, BetterTrades (2012)

Implementing GE Insurance & GE Franchising

Learn from GE Insurance
-More Insurance product choices -Approach to corporate customers: firms, hospitals, factories…

Start GE Franchising
ANZ Fast Food market reached its maturity in 2011 and grow constantly at 7% per ann., whilst more than 50% of market share is non-brand retailers – high similarity with the USA.

6

Source: Team's Analysis & GE Capital Investor Meeting Presentation (2011) & IBIS Report: Fastfood Industry in Australia (2012)

Sub-plans

Action Plan
-Mid Semester -Once/ year -TAFE, universities -Focus: non –service s oriented courses. -Upon/closer to graduation of postgraduate studies -Once/ year - Universities - Focus: on non-service oriented courses

Expected Outcome

Estimated Expense

ON CAMPUS TRAINING

More skilled worker in the field in next 5 years.

~$5-8,000/school/ event/year

EXPERIENCED LEADERSHIP PROGRAMS

More skilled workers in the specific sector of sales & marketing in the next 5 years ( specialising
in midmarket firms)

~$10 -15,000/ year

7

Source: Team's Analysis & GE Capital Mid-Market Report (2011, 2012)

Sub-Plans OUTSOURCING

Action Plan

Expected Outcome

Estimated Expense

-Collaborate with foreign recruitment agencies -Add-in services for mid market firms

Expense: -Solve the current ~$40,000/5 admin threat of limited access staff + workplace/ month to skilled workers in Revenue: next 5 years ~$5-10,000/ one outsource labour -This creates job opportunities for locals -$0 as well as foreigners

PROPOSE TO FEDERAL ABOUT SKILLED LABOUR ISSUES

-Take an example in Singapore, for every 4 locals hired, 1 foreigner can be outsourced.

8

Source: Team's Analysis & GE Capital Mid-Market Report (2011, 2012)

APPENDIX

10

Source: Team's Analysis & GE Australia and New Zealand Fact Sheet & GE Finance Thoughts, BetterTrades (2012)

Strengths

Weaknesses

• Diversified Business Portfolio • Dominant Lender for MidMarket • High Level Of Expertise • Strong Financial Position
Opportunities

S O

W T

• More Than 60% Profits Arriving From GE Capital • Weak Revenue Growth Of Core Industrial Segments • Gap Amongst Core Segments
Threats

• Rising Asia Urbanization • Environmental Regulation • High Population Growth • Mid Market Financing

• China’s Growth • Falling Commodity Prices • Access to Skilled Worker • Long term AUD Strength

11

Source: Team's Estimation & GE Capital Investor Meeting Presentation (2011)

6%
willing to M&A with foreign firms

55%
will likely go to the market next to raise capital

26%
consider Australia & NZ are biggest opportunities

12

Source: Team's Analysis & Mid-market China Investment Survey, Pillsbury Law (2011)

We have discussed about:
 Slide 2: GE ANZ Capital Structure Analysis  Slide 3: GE ANZ Capital Sources of Financing Analysis  Slide 4: Australian Mid-Market Financing Analysis  Slide 5 & 6: Strategy to improve GE’s Financial Position  Slide 7 & 8: Strategy to gain more Skilled Labour

Appendix:
• Slide 10: Imbalance of GE Australia & NZ Segmentation • Slide 11: GE Australia & NZ SWOT • Slide 12: Opportunities with China’s Mid-Market

Thank you very much

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