GE HealthCare Reports Full-Year 2020 Revenue of $18 Billion, with China Exceeding $2 Billion

GEGE announced its fourth-quarter and full-year 2020 financial results on January 27. GE’s total revenue for fiscal year 2020 amounted to $79.6 billion, a 16% year-over-year decline. Of this, the Industrial segment (excluding the Financial Services segment) generated $73.2 billion in revenue, a 13% year-over-year decrease.

Industrial margin (GAAP) was 14.4%, an increase of 800 basis points; adjusted industrial margin (Non-GAAP) was 6.4%, a decrease of 460 basis points.

GEGeneral ElectricChairman and Chief Executive Officer H. Lawrence Culp Jr.stated: "Despite the continued challenges in the macroeconomic environment,However, we have significantly improved GE’s profitability and cash performance.Strong free cash flow in the fourth quarter (industrial free cash flow of $4.4 billion) reflected improved operating results and robust, growing orders in the Power and Renewable Energy sectors.

We are atEnergy, HealthcareandAviationa leader in the field. As we continue our transformation, we will remain focused on strengthening GE’s capabilities and delivering long-term value.”

GE HealthcareTotal Revenue for the Full Year 2020$18 billion, year-on-year-10%, organic year-on-year+4%. This was primarily driven by a 5% year-over-year organic growth in the Healthcare Systems segment.

GE Healthcare's Revenue as a Percentage of GE Group's Total Revenue23%, second only to the power and aviation businesses.

Lawrence Culp The statement read: “Within the GE Healthcare sector, we have already seen strong prospects.”

Order:Revenue of $18.6 billion, down 12% year-over-year, up 1% organically year-over-year.

GE Healthcare Business Profit:$3.1 billion, -18% year-over-year, +17% organic year-over-year.

GE Healthcare Operating Margin:17%, a decline of 170 basis points.

From a product perspective:

In 2020, GE Healthcare launchedOver 40 typesNew medical products, including enhancedMural Virtual Care Solution, this solution provides a comprehensive view of patient status across the entire care area, hospital, or system.

From a regional perspective:

In 2020, GE Healthcare achieved strong growth in Europe and China.

China RevenueOver $2 billion, with an 11% increase in the first quarter alone.

US RevenueOver $6.5 billionYuan, year-on-year+2%, including ventilator orders from the U.S. government.

From a management perspective:

According to the financial conference call held, GE Healthcare’s MR team has implemented a lean transformation in production, which has increased the on-time delivery rate by approximately 15% and doubled the inventory turnover rate to date.

GE Healthcare has achieved operational improvements, creating greater room to focus on continued profit expansion.

Q4, provided $2.9 billion in cash and laid off 1,200 employees

Q4 2020, GE Healthcare RevenueFor$4.8 billion, year-on-year-11%, organic growth+6%, mainlyDriven by growth in life care solutions, including strong deliveries of the Carescape R860 ventilator and imaging and ultrasound equipment.

Order:Total orders amounted to $5 billion, a 15% year-over-year decline, while organic orders increased by 1% year-over-year; this discrepancy was primarily driven by the divestiture of BioPharma.

Healthcare Systems orders +1%,Strong Performance in Europe and China；

Pharmaceutical Diagnostics Orders -1%.

Profit:$900 million, -17% YoY, +27% organic growth, primarily driven by cost reductions and an increase in the number of healthcare systems.

It is worth noting that, amid weak aviation business performance, GE Healthcare drove GE’s results and delivered in Q4$2.9 billionof free cash. This was primarily driven by higher earnings resulting from COVID-19-related demand growth, cost actions, and improved working capital turnover.

GE Healthcare cut approximately 1,200 jobs in Q4 and imposed stricter controls on discretionary costs.The company’s revenue grew by 4% this year, with the Healthcare Systems segment increasing by 5% and achieving a profit margin of 17%. Our team delivered operational improvements, creating greater room to focus on continued profit expansion.

Future Outlook: Recovery in Markets for Pharmaceutical Diagnostics and Ultrasound, with Telemedicine as the Future Direction

As GE Group’s financial reports contained no further information on GE Healthcare, MedTrend sourced from December 3, 2020Steve Winoker, Vice President of Investor Relations at GE GroupandKieran Murphy, CEO of GE HealthCareKey Highlights from a Public Dialogue at RSNA

We Attempt to Understand GE Healthcare's 2020 and 2021 from the Dialogue.

What Did GE Healthcare Primarily Do in 2020?

Kieran Murphy："I believe that since March,"We have been striving to produce everything needed for COVID-19.We have made significant efforts to improve our business operations to ensure that we fulfill our commitments to investors.

We prudently conserve cash and resources to ensure employee safety, which is, of course, critical in this environment.

How Does COVID-19 Truly Shape the Future of Healthcare?

Kieran Murphy：Over the past year, I have conducted numerous symposia, most of which wereOn Telemedicine, and How Radiologists and Physicians Typically Adapt Quickly to Telemedicine“A hospital group CEO remarked, ‘We have achieved eight years’ worth of progress in just two months.’ This demonstrates the adaptability of the healthcare system.”

Necessity is the mother of invention. We must all work together to ensure that we launch artificial intelligence and other useful digital tools that are beneficial in this environment.

Meanwhile, I began to consider the technologies we deploy to enhance workflows. Workflows have become increasingly critical, as the goal is to minimize the time and effort caregivers must devote to managing administrative tasks alongside clinical care. The concept of intelligent efficiency is paramount in this environment.

GE Healthcare's MostRecently announced the acquisition of Prismatic Sensors.This marks the first acquisition by GE Healthcare and GE Group in a long time.Prismatic Sensors is a leader in deep silicon detector technology for photon-counting CT. Is this major news for the industry and GE Healthcare?

Kieran Murphy：This is major news for the entire industry.This is a significant change, as we are now able to perform high-quality CT scans and visualize findings that were previously undetectable on imaging.

This technology enables earlier cancer detection from the outset and allows for more imaging procedures in children without exposure to radiation doses. Currently, all of these applications require further clinical trials and so on.But in terms of image quality, this is a game changer, just like the transition from black-and-white television to high-resolution color television.

Of course, as the volume of information continues to grow, you need better data and analytics. Therefore, this acquisition is also aligned with our digital technology strategy.

ConsideringGE GroupAll challenges experienced in recent years,What is the magnitude of the balance sheet losses and the impairment of M&A capabilities?How Important Is This to the Future Development of GE Healthcare?

Kieran Murphy：First, I believe, as you are well aware, our current situation is much better than it was a year ago.We have completed the BioPharma transaction, and we have been actively seeking suitable deals at appropriate prices.

I believe Prismatic is a prime example of the kind of deal I enjoy. Reflecting on my past decade at GE, we acquired many companies in their early stages, drove up our stock price, validated our technology, and then proceeded with the acquisition.I favor this investment approach, as it carries lower risk and enables the commercialization of truly exciting technologies.。

I believe that our current primary focus is to create as much room as possible for achieving this goal by expanding profit margins and generating stronger cash flows. Meanwhile, we have made significant efforts to increase R&D investment and grow the business organically.

COVID-19 demand provided a boost to certain segments of the portfolio.What do you think the situation will be like in 2020? And looking ahead, what about after 2021?

Kieran Murphy：In 2020, GE Healthcare’s organic revenue growth was in the low single digits.This year (2020), we indeed received some COVID-19-related demand for ventilators, monitors, CT scanners, and X-ray machines.

Certainly, the COVID-19 pandemic has placed immense pressure on all businesses related to elective surgeries. Therefore,We lost sales in PDx (pharmaceutical diagnostics), MR, and ultrasound, with PDx and ultrasound being high-margin businesses for us.

As we approach the end of 2020, we are concluding a strong year. We are seeing robust performance in both scan speed and scan volume per device across global markets.

In the fourth quarter, we will see a rebound in PDx sales.

I believe that as we entered 2021, there was a significant backlog. Therefore, I think the market is stabilizing. However, I would also like to remind everyone to remain cautious, as many epidemics are still rampant. Thus, while we must maintain a prudent outlook on market growth, we will not change our guidance and continue to project low-to-mid single-digit growth rates.

Of course, our profit margin growth is also roughly in line with what we pointed out last year. But I have to say, fromFrom the perspective of profit margins, we performed quite well in 2020.

The recent global pandemic has had a significant impact in both Europe and the United States.，They maywill impact GE HealthcareExert some impact.YouHow to handle this type ofSituation?

Kieran Murphy：I would like to say that, overall,We are seeing the market return to a somewhat more stable level, with scan rates also increasing.

Don't forget,Hospitals are becoming increasingly resilient,For example, they are building capabilities to address the pent-up demand in oncology and cardiology. We are also seeing the financial positions of many healthcare systems strengthen.

Therefore,I would say that we have a solid foundation to maintain our general market outlook, which is characterized by low-to-mid single-digit growth and market softness.。

Given our product portfolio and robust service business, we will have a significant amount of stable revenue.

Demand in the LCS business segment, including vents and monitors, will continue to some extent through 2021.

Certainly, we delivered a large volume of products last year, such as ventilators, which will not happen again. But as I mentioned earlier, we are seeing a strong recovery in the PDx and ultrasound segments. These are businesses with better profit margins.