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Today’s agenda
Topic Presenter Additional activities
This is GE Healthcare Kieran Murphy Digital Showcase 10:30 a.m. – 11:00 a.m.
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This is GE Healthcare
Kieran Murphy
President and CEO, GE Healthcare
Near to medium term opportunities for operating margin and cash flow growth
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© 2019 General Electric Company - All rights reserved
A global leader in large, attractive markets
Solutions for the diagnosis, treatment and monitoring of patients
Operating Profit $3.5B $3.7B • 4M+ Installed Base and 2B+ exams per year
• 3 patients using contrast media per second
Global scale with
• 160+ countries
% of revenue 18.3% 18.7% world’s largest IB
• 57K employees worldwide
• Local, globally with R&D in 18 countries
1 Non-GAAP; FCF conversion: segment FCF / segment net income ($3.4B in ‘17 and $2.4B in ’18), adjusted to include restructuring expense
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Legacy of industry-defining innovations for our customers
1960s 1970s 1990s 2000 2003 2014 2015 2018 2019
First 500-cycle, The world’s first World’s first The first to The world’s first Advanced First The world’s New MR AIR™
battery- “rotate only” and only iso- combine the high resolution Workstation™ hospital first Coils named
powered Computed osmolar power of PET 4D fetal TAVI Analysis for Command Ultrasound best new
comprehensive
mobile X-ray Tomography contrast and CT in a Ultrasound surgical workup Center optimized for radiology
generator (CT) medium single system system planning (JHU) AI device
2,400
Channel partners
1/3 $4 billion
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Manufacturing sites
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We are a trusted partner to our customers
1 Backlog as of Q3’19 11
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Shift towards Precision Health opens significant new avenues of
growth for GE Healthcare
Precision Diagnostics Precision Therapeutics Precision Monitoring
From Protocol driven Too much data, in too Costly and risky R&D Complex and Patients only
many different places unguided monitored when sick
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© 2019 General Electric Company - All rights reserved
Our solutions are being enhanced with digital innovations
Predictive Platform and
services and Subscriptions to Intelligent ecosystem to
Smart devices remote fix increase access applications and integrate data
with enhanced capabilities to and align workflows to enable across disparate
results in less increase business model to contextual insights systems and enable
time customer uptime customer needs and visualization analytics
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© 2019 General Electric Company - All rights reserved
Our digitally-led solutions enable improved outcomes for our
customers and expand our market
Unlocking quality and Supporting improved Driving operational New business and
capacity with smart devices clinical outcomes using AI efficiency by unlocking data delivery models to drive
that create higher quality to enhance clinical decision silos and applying analytics to fleet consistency, manage
images with faster throughput support improve in-procedure workflow obsolescence, and align to
and patient flow evolving customer needs
Voluson™ E10 Critical Care Suite on Command Center CT Smart Subscription
OPTIMA™ XR240amx
Built on an integrated platform and ecosystem that connects data from across
devices, applies intelligence (e.g., analytics, AI) on the Edison platform, and engages
$1.1B
Digital revenue1
3rd party developers to build and deploy solutions to complement our offerings in 2018
1 Excludes dispositions; includes PACS, Advanced Visualization, and subscription and licensed software offerings 14
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Executing on our growth agenda
Key strategies Priorities for ‘20 – ‘22 Examples
Increasing R&D investments to expand portfolio Growing programs at 2X rate of
Innovation in high-value areas, including Digital revenue, investing in higher ROI
segments/adjacencies
Expand portfolio of solutions to new care areas Investing in integrated cardiology and
Enterprise Solutions
and integrated offerings oncology offerings
Improving Operating rigor through Lean to fund ~2.5k product & service cost out
Operational
growth while growing margins and cash projects / yr, Lean AWOs, automation
Execution
in back office
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Opportunity to accelerate growth through global commercial reach
52 local customer teams across the world… Priorities to accelerate growth
Account Executives
Product Sales Improving market visibility across key
Channel
Specialists regions and modalities
Partners
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Pharmaceutical Diagnostics (PDx)
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Pharmaceutical Diagnostics… investing for growth acceleration
Priorities to accelerate growth
Core growth • Continued expansion of contrast business in MR,
Ultrasound
• Expansion of programs including diagnostic
agents in contrast media, PET cardiology,
Alzheimer’s + Parkinson’s Disease, immuno-
oncology
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Overview of GE Healthcare
Healthcare Systems CAGR, ’16-’18
Revenue ($ in Billions) %, adj for Acq/Disp Drivers of growth
Biopharma
Digital Bringing modern techniques in $1.1B
Al to the practice of healthcare, In 2018 revenue from digital
Pharma Dx
powered by EdisonTM offerings, at accretive margins
2016 2017 2018
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Proven, experienced management team
Leadership highlights
Products Regions Functions
Tom McGuinness Everett Cunningham Monish Patolawala
Imaging US & Canada Finance
• 3 yrs @ GEHC • GEHC since June 2019 • 5 yrs @ GEHC
• 25+ yrs in Healthcare • 28 yrs in Healthcare • 25+ yrs @ GE
• VP, Operational
• Previously at Quest Transformation, GE
Anders Wold Catherine Estrampes Katya Kruglova
Ultrasound and Life Care Europe HR
Solutions • 22 Yrs @ GEHC • 8 yrs @ GEHC
• 20 yrs @ GEHC • 33 yrs @ GE • 21 yrs @ GE
• 35+ yrs in Healthcare
Kevin O’Neill Yihao Zhang Jim Borzi
Kieran Murphy Pharmaceutical Diagnostics China Integrated Supply Chain
President & CEO • 15 yrs @ GEHC • GEHC since July 2019 • 1 yr @ GEHC
• 21 yrs @ GE • 10 years in Healthcare • 25 yrs of SC leadership in
• Appointed June 2017 • Previously at Danaher Healthcare and Automotive
• Led Life Sciences division Amit Phadnis Soichiro Tada Mike McAlevey
through significant Digital Japan Legal and BD
growth over prior 6 years • 3 yrs @ GEHC • 7 yrs @ GEHC • 2 yrs @ GEHC
• 25+ years in Healthcare • 30 yr in Digital • 16 yrs in healthcare • 16 yrs @ GE
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Imaging
Tom McGuinness
President & CEO, Imaging
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Imaging is an attractive $30B+ equipment & services global market
SOURCE: NEMA, JIRA, Yano research, IPSOS, COCIR, Infoview, Internal company data
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Extending GEHC Imaging innovation leadership
Diagnostic Imaging Image Guided Therapy
Market
#1 #2 #1 #2 #2 #1 #3
Position
• CT Smart • Minnie Award for • Metabolic imaging • First clearance on- • Patient-assisted • Bringing smart • Robotic interventional
Subscription (SaaS 2019 best radiology enables early device AI triage mammography algorithms to OR gantry for image-
Key Innovations
model) device – AIR™ Coils therapy decisions, application, e.g., exams imaging … eNR guided therapies, e.g.,
• Revolution Apex ™ • AIR™ Recon DL with e.g., Discovery™ Critical Care Suite • First to market reduces image Discovery™ IGS 7
with TrueFidelity ™ TrueFidelity™ AI- MI with on OPTIMA™ with contrast noise at least 30% • ASSIST application
AI-enabled images enabled images 1 quantitation XR240amx that enhanced during vascular and suite automated
• Revolution Maxima TM • AIR Touch™ auto • Advanced digital alerts clinicians precision biopsy, cardiac procedures identification of blood
enhanced workflow patient setup, AIR x™ applications to about critical e.g., SenoBright without an increase vessels feeding tumors
leveraging AI based AI-based workflow remove image conditions at point HD™ 1 with CESM in power or dose2 for cancer therapy, e.g.,
Auto Positioning 1 artifacts, e.g., of care LiverASSIST V.I.
MotionFree
1 510K pending 2 Enhanced Noise Reduction - K192819
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© 2019 General Electric Company - All rights reserved
GEHC Imaging strengths drive strong customer experience
Accelerate service • Focus on meeting strong customer demand for enhanced services offerings
growth • Continue to expand options and upgrades available when customers need them
Differentiate quality • Investing to further differentiate product quality and reliability from competitors
and customer experience • Driving industry-leading customer experience
Enhance margin • Strengthen pricing strategy and performance with supporting tools and product mix actions
and free cash flow • Continue track record of delivering $0.2B+ in cost productivity annually
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Leveraging AI across Imaging department workflow to improve
clinical and operational outcomes for customers
Scanning Diagnostics Therapy Operations
• Optimize clinical parameters • Detect / quantify findings • Streamline planning & • Insights across clinical
• Automate technologist tasks • Automate radiologist tasks procedures operations
Outcomes • Fast and accurate scans • Efficient and precise • Automate interventionalist tasks • Standardize practice
diagnostic decisions • Improving therapy planning and • More throughput and less waste
delivery
MR ViosWorks Bone Volume Reading Interventional LiverASSIST Imaging Insights
Solutions
examples
<10 min free breathing scan¹ Auto … spine identification & ~68% Complete tumor response 36% increase in exams/wk5
labeling rate vs 36% using conventional
KPIs method3
25 min MR time saving¹ < 5 sec to label the spine 11% procedure time reduction4 4 week less patient wait time5
300mm volume or less2
1 With ViosWorks, possible to perform a 30 min MRI exam and obtain report in minutes. Data on file at Arterys, based on internal study 2018 and based on internal study with semi-automated segmentation of LV epi, LV endo, RV endo and Deep Learning
2 Source: Data on file
3 Hepatic Arterial Embolization Using Cone Beam CT with Tumor Feeding Vessel Detection Software: Impact on Hepatocellular Carcinoma Response - Cornelis et al. Cardiovasc. Intervent. Radiol. 2017.
4 Comparison of the Number of Image Acquisitions and Procedural Time Required for Transarterial Chemoembolization of Hepatocellular Carcinoma with and without Tumor-Feeder Detection Software – Iwazawa et al. Radiology Research and Practice. 2013.
5 Refers to Imaging Insights project recently led at Radiomed http://newsroom.gehealthcare.com/analytics-real-world-radiology-practice-helping-patients-exam-faster-ecr18
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Margin enhancement focused on mix, pricing, and cost productivity
Strengthen mix by accelerating
highest margin segments… …and continuing track record of cost productivity
• Capital allocation against most • $0.2B product and service cost productivity1 in 2018
strategic product/region segments
• Delivering 1K+ productivity projects in 2018
• Product and commercial – 80+ cost-out events
outperformance in those areas
– 200+ should-cost projects
1 Net material cost reduction, logistics, factory productivity and other product and service cost productivity, partially offset by annual wage inflation
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Summary for Imaging
Revenue
($ in Billions) How we will grow Imaging
Equipment
Differentiate on quality and
customer experience
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Ultrasound
Anders Wold
President and CEO,
Clinical Care Solutions
Outlook: 4% growth in near- to mid- AI makes Ultrasound more precise and simpler
term, LSD/MSD in developed markets, • Automate complex tasks, work flow. Reduces user and patient variability
MSD in developing markets
Source: All GE internal market size estimates above aggregated from regional reporting on competitive market activity, import/export data (when available), market studies and third-party published reports
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Leader across a broad portfolio of products with range of customers
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Extending reach and innovation along continuum of care
Growth priorities
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Strong product vitality and proven cost reduction support margin
expansion
KPIs (2018) Key drivers embedded in culture Annual goals
NPI vitality - Competitiveness >15 NPIs
NPI Vitality: • Platform based - fast and frequent NPI
35%+ •
•
Refreshed HW - faster cost reduction
Latest technology – higher performance/price protector
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Summary for Ultrasound
Revenue
($ in Billions) How we will grow Ultrasound
Innovate to grow leadership position and
expand margin
+7% CAGR
2.7
2.6 Continue to develop new uses and
2.4 new users
Services
Use our ultrasound leadership to expand
our strategic partnerships
Equipment
Increase commercial coverage and drive
service penetration in large install base
2016 2017 2018
Improve customer experience through
Outlook: MSD growth in near- to mid-term GEHC digital tools (Edison)
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Life Care Solutions
Anders Wold
President and CEO,
Clinical Care Solutions
MONITORING
SOLUTIONS
#2
Incubators, warmers, fetal Anesthesia delivery, Resting ECG, Stress ECG, Vital signs measurement,
monitoring critical care ventilation ECG Management consumables
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LCS is an attractive $6B global equipment market
Source: All GE internal market size estimates above aggregated from regional reporting on competitive market activity, import/export data (when available), market studies and third-party published reports
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© 2019 General Electric Company - All rights reserved
Invested to refresh LCS product portfolio with early results
Recent launches Performance Early results
CARESCAPE • Transport monitor expands portfolio:
ONE™ 1 Intra- • Optimized data continuity and patient care flexibility Eur’19
hospital • GEHC and partner developed parameters +10%
transport
• Central surveillance of cardiac telemetry patients • Scalable, enterprise digital teleHealth platform Partnering to develop
Partnering to develop solutions that matter
• Flexibility to decide which alert notifications to solutions that matter • Edison backbone drives efficient, fast development
assign to caregiver, without phone calls
• teleICU and care protocol compliance
• Platform is set-up to incorporate AI tools for
additional value-add • Launching now – rapidly expanding global funnel
• $41M+ orders (USA) in 8 quarters – new category
teleHealth allows hospitals and health systems to care for patients across departments and geographies
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LCS is building momentum in cost productivity
2X 7%
3%
2016 2018
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Summary for Life Care Solutions
Revenue
($ in Billions) How we will grow LCS
Building platforms to refresh portfolio; fast
and frequent NPIs
+6% CAGR
2.2
2.0 2.1 Global growth – expanding outside US and
new care areas
Services
Equipment
Driving cost productivity for expanding
value offerings and margins
2016 2017 2018
Expand services for IB and accessories
Outlook: LSD/MSD growth in near- to mid-term offerings for new markets
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Services
Jan Makela
Vice President & CEO,
Healthcare Services
HCS
✓ Expanding clinical & productivity analytics solutions … driven by machine data
2016 2017 2018 ✓ Introducing more clinical upgrades and subscription services to enhance position as
trusted partner
LSD growth near/mid term
✓ Driving GoldSeal™ growth … upgrade to latest specs & resell
Example lifetime of a system:
Traditional Warranty
Services support Service Contract Non-contract parts & labour
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Services … local, globally for customers and patients
43 customer call centers, 55 parts warehouses, 31 repair centers & 8K field service engineers
On-demand Multi-vendor & Upgrades &
Contractual services
parts & services biomed services refurbishment
• 1 – 5 year contacts, uptime • New and repaired parts; • Capability to serve GE and • Upgrades of consoles &
guarantees sales online, phone & direct non-GE IB, longer term image processing elements
• Remote fix, <24 hr. • Break/fix, ~90% of parts contracts • Lifecycle services, including
response, 79% of issues shipped within 24 hours • Demonstrate value of GE buy-back and resell
resolved 1st call equipment & services
Delivering Maximize
Flexibility & Operational
peace of customers’
quality simplicity
mind return
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Productivity improvements for customers translates to improved
operational efficiencies for our services team
Constant visibility to customer experience… …informs our execution priorities
Product • ↑ Reliability by design
Unplanned
• ↑ Condition monitoring
repairs
• Design for serviceability
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US and Canada
Everett Cunningham
President and CEO,
GE Healthcare US and Canada
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1 Source: Imaging, Ultrasound and LCS markets measured in equipment order $; all others based on revenue $
© 2019 General Electric Company - All rights reserved
Partnerships that deliver outcome based solutions
Workflow
Operational optimization: scalability and beyond
Scale: multi-facility,
off-site
Command Center™ & X-ray apps
improving capacity while reducing
patient waiting time
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US & Canada growth strategy
Revenue outlook
($ in billions) Execution priorities
2018 Near-/mid-term • Invest in tools, analytics & insights for precision selling
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Europe
Catherine Estrampes
President and CEO,
GE Healthcare Europe
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1 Source: Imaging, Ultrasound and LCS markets measured in equipment order $; all others based on revenue $
© 2019 General Electric Company - All rights reserved
Europe: GE positioned to deliver full solutions
Driving efficiency and quality Integrating AI into healthcare Building innovative partnerships
• Leader in advanced diagnostic • Academic, clinical and Industry • R&D laboratory focused on driving
imaging, outpatient and cancer care collaboration digital benefits across care
pathways
• $100M multi-year, enterprise-wide • Established by the University of
technology partnership Oxford with 15 NHS trusts • Data, AI to optimize operating
rooms and contrast media dose
• Networked imaging fleet w/ • Data hub for collection, storage
advanced performance analytics and management of protected data • 6-year upgrade of imaging fleet
combined with AI
• Full solution: equipment + service • Developing new AI Clinical
+ digital + contrast media algorithms • Deployment through innovative
business model
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Europe growth strategy
Revenue outlook
($ in billions) Execution priorities
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China
Yihao Zhang
President and CEO,
GE Healthcare China
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SOURCE: Imaging, Ultrasound and LCS markets measured in equipment order $; all others based on revenue $
© 2019 General Electric Company - All rights reserved
China: GE positioned to deliver full solutions
Local Private Partnership
+ +
• End-to-end capability, launching • Investing in sales force … enhancing • Partnering with County Hospital Alliance
China NPIs across modalities dedicated team including sales, product for L2 upgrade with chest pain + stroke
specialists, and enterprise account center & cancer screening solutions
• R&D team with 1,000+ engineers, managers
including senior roles • Collaborated with NHC to release
• Full solutions … Offering full equipment, National Neuro Imaging Guideline to
• 4 plants + local supply chain with financing, digital solutions and services. standardize CT & MR scanning for stroke
~300 strategic suppliers
• Prioritizing top strategic accounts • Driving hospital training through China
positioned to grow over long term Society of Radiology
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China growth strategy
Revenue outlook
($ in billions) Execution priorities
MSD/HSD
• Enhance lifetime value proposition and customer
experience: services, upgrades
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Operations and Financials
Monish Patolawala
CFO, GE Healthcare
VP Operational Transformation, GE
$2.3 - 19.3-
2.5B 19.6%+
100%+ core ~0.4 - 0.7 pts
FCF conv.3 VPY organic
1 Organic excludes impact of foreign exchange, acquisitions, and dispositions; Revenue: GAAP of $19.8B-20.0B with approx. $(0.5)B reduction due to adjustments; Segment Profit: GAAP of $3.8B-3.9B with approx. $(0.1)B reduction due to adjustments
2 FCF conversion: segment FCF / segment net income, adjusted to include restructuring expense
3 Core FCF conversion: FCF conversion excluding the effects of reductions (In total approximately $0.6B) during 2019 in sales of customer receivables & supply chain financing relative to prior years, one-time tax items and separation costs
* Non-GAAP
• $4B spend… single/sole • Unique mfg technology, • Global mfg footprint… low • Contrast agents scale…
sources at 76% producing “crown jewels” cost, in region / for region 85mm doses / year @
• Regional … ¼ in low cost at scale • Localized value stream cost
country • Global… US, Europe, • Quality and regulatory • Nuclear imaging … 24
Japan, China, India expertise hours from cyclotron to
patient
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How we’re running GE Healthcare
Targets to Our approach
Owner Jump off point Goal YTD 1Q 2Q 3Q OCT 4Q
Improve
X% Prior Year X% X% X% X% X% • “Bowler” metrics deployed for all KPIs
Metric 1 Name X% X% X% Plan X% X% X% X% X% – 14 standard KPIs focused on:
X% Actual X% X% X% X% X% • Safety: patient and employee
## Prior Year ## ## ## ## ## • Customer: reliability and delivery
Metric 2 Name ## ## ## Plan ## ## ## ## ## • Organic growth and margin
## Actual ## ## ## ## ## expansion
## Prior Year ## ## ## ## ## • Cash generation
Metric 3 Name ## ## ## Plan ## ## ## ## ## • Transparent: Corporate sees what we
## Actual ## ## ## ## ## see
## Prior Year ## ## ## ## ## • Pulsed often … daily, weekly and monthly
Metric 4 Name ## ## ## Plan ## ## ## ## ## data-driven operating mechanisms
## Actual ## ## ## ## ## • Embracing “reds” to drive root cause
analysis and countermeasures
## Prior Year ## ## ## ## ##
Metric 5 Name ## ## ## Plan ## ## ## ## ##
## Actual ## ## ## ## ##
## Prior Year ## ## ## ## ##
Metric 6 Name ## ## ## Plan ## ## ## ## ##
## Actual ## ## ## ## ##
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Expanding segment margins
($ in billions)
Reported margins up ~3+ pts from ’15 … Targeting 25 – 75 bps per year improvement
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Healthy funnel of investments with strong returns
Strong project funnel Rigorous capital allocation Examples of outcomes
Total Engineering efforts1 • Digital spend to support AI, cloud-based image visualization &
% of equipment sales Platform capabilities
Cost productivity1/year
Material • Design for lifecycle cost, including manufacturing & serviceability
Ex-Biopharma
Cost • Improve dual sourcing by 6+ pts by ‘21, increased local sourcing
1 Net material cost reduction, logistics, factory productivity and other product and service cost productivity, partially offset by annual wage inflation
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Lean in action: Florence MR site
At beginning of the week … .. Action Work Out held .. … by end of week
Status quo Value-stream mapped current state $70M • Pull consumption, Kanban
Inventory • Improve TAKT execution
Inventory Turns
< Benchmark Identified
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Lean goes beyond our factories
Product & • Reducing scrap & waste in plants • Further improving On time Delivery
World-class
service
• Improving service 1st call resolution rate delivery • Best-in-class Installation experience
cost out
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Free Cash Flow*
($ in billions, includes Biopharma)
2018 Working capital cash flow ’18 Cash Flow
Kieran Murphy
President and CEO, GE Healthcare
Significant
opportunity for
value creation Near-/mid-term financial outlook
* Non-GAAP 73
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Financial summary
($ in Billions)