Strong financial trajectory from robust demand
and better execution
- Now anticipates ~$45B of revenue and 14% adjusted EBITDA
margin* by 2028
- Plans to invest ~$4B in capex and ~$5B in R&D through 2028
to fuel growth and innovation
- Expects to generate at least $14B of cumulative free cash flow*
from 2025 to 2028
- Board of Directors declared a $0.25 per share quarterly
dividend, payable in the first quarter of 2025, and approved an
initial $6B share repurchase authorization
GE Vernova (NYSE: GEV), a unique industry leader enabling
customers to accelerate the energy transition, today hosts its 2024
Investor Update event to present its multi-year financial outlook
and frame its capital allocation strategy.
“GE Vernova is well-positioned to lead as the investment
supercycle for the energy transition gains momentum,” said GE
Vernova CEO Scott Strazik. “Robust demand for our technologies
and services, along with better execution through our lean culture,
is driving improved financial results. We are driving growth and
innovation with $9 billion in cumulative capex and R&D
investments planned through 2028, including an approximately 20
percent increase in R&D spend expected in 2025. With growing
revenue, margins, and free cash flow, we are building on our strong
foundation and deploying a disciplined capital allocation strategy
for shareholder value creation.”
“We are executing our financial strategy, and we now expect to
generate at least $14 billion in cumulative free cash flow by
2028,” said GE Vernova CFO Ken Parks. “Our large and growing
backlog, with healthy margins from services and better equipment
pricing, is fueling our trajectory as we raise our 2025 guidance
and outlook by 2028. We remain committed to maintaining an
investment grade balance sheet as we make organic investments,
pursue targeted M&A, and return at least one third of cash
generation to shareholders through dividends and share
repurchases.”
Financial Outlook
Today, GE Vernova reaffirms its 2024 revenue and free cash flow*
guidance and narrows its 2024 adjusted EBITDA margin* guidance
range. The company also raises its multi-year financial outlook,
previously presented at its Investor Day in March 2024.
Financial Metric
2024 Guidance
2025 Guidance
Outlook by 2028
Revenue
$34-$35B, trending towards the
higher end
$36-$37B, up from mid-single digits
organic growth* (implied $35-$37B)
High-single digits-a) organic revenue
growth*, up from mid-single digits
Adjusted EBITDA margin*
5.5%-6%, narrowed from 5%-7%
High-single digits, up from the low
end of high-single digits
14%, up from 10%
Free cash flow*
$1.3-$1.7B, trending towards the
higher end
$2.0-$2.5B, up from $1.2-$1.8B
~100% conversion-b),up from
90-110%
(a - Compound annual growth rate through 2028; 2025 is the base
year (b - Represents the expected free cash flow* conversion by
2028
Multi-Year Segment Financial Outlook
GE Vernova also reaffirms its 2024 segment guidance and provides
additional multi-year guidance.
Segment
2024 Guidance
2025 Guidance
Outlook by 2028
Power
- Mid-single digit organic revenue* growth
- Higher end of ~150-200 basis points of organic segment EBITDA
margin* expansion
- Mid-single digit organic revenue* growth
- 13%-14% segment EBITDA margin
- Segment EBITDA margin of 16%
Wind
- Flat organic revenue*
- Approaching profitability with nearly 50% segment EBITDA
improvement
- Organic revenue* down mid-single digits
- Segment EBITDA loss of $200-$400M
- Segment EBITDA margin of 10%
Electrification
- High-teens organic revenue* growth
- Higher end of high single-digit segment EBITDA margin
- Mid-to-high teens organic revenue* growth
- 11%-13% segment EBITDA margin
- Segment EBITDA margin of 16%
*Non-GAAP Financial Measure
Capital Allocation
GE Vernova’s strategic principles for capital allocation include
incremental organic investments to drive profitable growth,
returning at least one third of cash generation to shareholders,
and targeted, bolt-on mergers and acquisitions along with select
next-generation technology investments. The GE Vernova Board of
Directors has declared a $0.25 per share quarterly dividend,
payable on January 28, 2025 to shareholders of record as of
December 20, 2024, and approved an initial $6B share repurchase
authorization.
Event Webcast
GE Vernova CEO Scott Strazik and CFO Ken Parks will present live
from New York City, beginning at 4:30 PM ET today. The event will
also be webcast, and accompanying materials and a replay can be
accessed on GE Vernova’s Investor Relations website here.
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 U.S. generally accepted
accounting principles (GAAP). Certain of these data are considered
“non-GAAP financial measures” under the U.S. Securities and
Exchange Commission (SEC) rules. These non-GAAP financial measures
supplement the Company’s GAAP disclosures and should not be
considered an alternative to the GAAP measure. The reasons the
Company uses these non-GAAP financial measures and the
reconciliations to their most directly comparable GAAP financial
measures are included in this press release and GE Vernova's
quarterly reports on Form 10-Q filed with the SEC and any updates
or amendments it makes in future filings.
2024 Guidance and Outlook by 2028: Adjusted EBITDA
margin*
We cannot provide a reconciliation of the differences between
the non-GAAP financial measures expectations and the corresponding
GAAP financial measures for adjusted EBITDA margin* in the 2024
guidance and outlook by 2028 without unreasonable effort due to the
uncertainty of the costs and timing associated with potential
restructuring actions and the impacts of depreciation and
amortization.
2024 Guidance: Power segment organic EBITDA margin*
expansion
We cannot provide a reconciliation of the differences between
the non-GAAP financial measures expectations and the corresponding
GAAP financial measure for Power segment organic EBITDA margin*
expansion in the 2024 guidance without unreasonable effort due to
the uncertainty of foreign exchange rates.
2024 and 2025 Guidance: Free cash flow*
We cannot provide a reconciliation of the differences between
the non-GAAP financial measures expectations and the corresponding
GAAP financial measure for free cash flow* in the 2024 and 2025
guidance without unreasonable effort due to the uncertainty of
timing for capital expenditures.
2025-2028 Outlook: Cumulative Free cash flow*
We cannot provide a reconciliation of the differences between
the non-GAAP financial measures expectations and the corresponding
GAAP financial measure for cumulative free cash flow* for 2025
through 2028 without unreasonable effort due to the uncertainty of
timing for capital expenditures.
Caution concerning forward-looking statements
Certain statements contained in this release and certain of our
other public communications and SEC filings may constitute
“forward-looking statements” that involve risks and uncertainties.
Forward-looking statements are based on our current assumptions
regarding future business and financial performance and condition.
These statements by their nature address matters that are uncertain
to different degrees, such as our expected future business and
operating results and opportunities; our progress as an independent
company; the demand for our products and services, the roles we
expect them to play in the energy transition and our ability to
meet those demands and execute those roles; our business strategy
and the benefits we expect to realize; our expected operational and
safety efficiencies and improvements, including from our lean
operating model; our expectations regarding the energy transition;
our actual and planned investments, including in breakthrough
technologies and capital expenditures; our ability to increase
production capacity, efficiencies, and quality; the ability of us
and others to innovate breakthrough technologies that enable us to
meet our sustainability goals and targets; the ability of us and
others to deploy such technologies at scale; our expected cash
generation; our capital allocation strategies, including our future
capital deployment, including mergers and acquisitions, share
repurchase activity and dividends, if any, and long-term
shareholder value creation; and our commitment to maintaining an
investment grade rated balance sheet. Forward-looking statements
provide current expectations of future events based on certain
assumptions and include any statement that does not directly relate
to any historical or current fact. Words such as “anticipates,”
“believes,” “expects,” “estimates,” “intends,” “plans,” “projects,”
and similar expressions, may identify such forward-looking
statements. Any forward-looking statement in this release speaks
only as of the date on which it is made. Although we believe that
the forward-looking statements contained in this release are based
on reasonable assumptions, you should be aware that many factors
could affect our actual financial results, cash flows, or results
of operations and could cause actual results to differ materially
from those in such forward-looking statements, including but not
limited to:
- 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 the Middle East),
demand or supply shocks from events such as a major terrorist
attack, natural disasters, actual or threatened public health
pandemics or other emergencies, or an escalation of sanctions,
tariffs or other trade tensions, and related impacts on our supply
chains and strategies;
- Actual or perceived quality issues or product or safety
failures related to our complex and specialized products,
solutions, and services, the time required to address them, costs
associated with related project delays, repairs or replacements,
and the impact of any contractual claims for damages or other legal
claims asserted in connection therewith, some of which may be for
significant amounts, on our financial results, competitive position
or reputation;
- Market developments or customer actions that may affect our
ability to achieve our 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 our business, and significant
disruptions to our manufacturing and production facilities and
distribution networks;
- Our ability to attract and retain highly qualified
personnel;
- Our ability to obtain, maintain, protect and effectively
enforce our intellectual property rights;
- Our capital allocation plans, including the timing and amount
of any dividends, share repurchases, acquisitions, organic
investments, and other priorities;
- Downgrades of our 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 electrification,
decarbonization or sustainability;
- The amount and timing of our cash flows and earnings, which may
be impacted by macroeconomic, customer, supplier, competitive,
contractual and other dynamics and conditions;
- Actions by our 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;
- Our ability to develop and introduce new technologies to meet
market demand and evolving customer needs;
- Our ability to obtain required permits, licenses and
registrations;
- Changes in law, regulation or policy that may affect our
businesses, such as trade policy and tariffs, regulation and
incentives related to sustainability, climate change,
environmental, health and safety laws, and tax law changes;
- Our ability and challenges to manage the transition as a newly
stand-alone public company or achieve some or all of the benefits
we expect to achieve from such transition;
- The risk of an active trading market not being sustained for
our securities or significant volatility in our stock price;
and
- The impact related to information technology, cybersecurity or
data security breaches at GE Vernova or third parties.
These or other uncertainties may cause our actual future results
to be materially different than those expressed in our
forward-looking statements, and these and other factors are more
fully discussed in our Quarterly Report on Form 10-Q for the
quarter ended September 30, 2024, and in the “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” sections included in our information
statement dated March 8, 2024, which was attached as Exhibit 99.1
to a Current Report on Form 8-K furnished with the Securities and
Exchange Commission (SEC) on March 8, 2024 as may be updated from
time to time in our SEC filings and as posted on our website at
www.gevernova.com/investors/fls. There may be other factors not
presently known to GE Vernova or which we currently consider to be
immaterial that could cause our actual results to differ materially
from those projected in any forward-looking statement that we make.
We do not undertake any obligation to update or revise our
forward-looking statements except as required by applicable law or
regulation. This press release also includes certain
forward-looking projected financial information that is based on
current estimates and forecasts. Actual results could differ
materially.
Additional Information
GE Vernova’s website at https://www.gevernova.com/investors
contains a significant amount of information about GE Vernova,
including financial and other information for investors. GE Vernova
encourages investors to visit this website from time to time, as
information is updated, and new information is posted. Investors
are also encouraged to visit GE Vernova’s LinkedIn and other social
media accounts, which are platforms on which the Company posts
information from time to time.
Additional Financial Information
Additional financial information can be found on the Company’s
website at: www.gevernova.com/investors under Reports and
Filings.
About GE Vernova
GE Vernova is a purpose-built global energy company that
includes Power, Wind, and Electrification segments and is supported
by its accelerator businesses. 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 Cambridge, Massachusetts,
U.S., with approximately 75,000 employees across 100+ countries
around the world.
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.
© 2024 GE Vernova and/or its affiliates. All rights reserved. GE
and the GE Monogram are trademarks of General Electric Company used
under trademark license.
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Investor Relations: Michael Lapides +1.617.674.7568
m.lapides@ge.com Media: Adam Tucker +1.518.227.2463
Adam.Tucker@ge.com
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