GE HealthCare Reports Fourth Quarter and Full Year 2023 Financial Results

CHICAGO - GE HealthCare (Nasdaq: GEHC), a leading global precision care innovator, today reported financial results for the fourth quarter ended December 31, 2023.

GE HealthCare President and CEO Peter Arduini said, 'After our first year as a publicly traded company, I'm pleased to announce robust fourth quarter and full year results. This strong financial performance is a testament to our dedicated team and successful execution of our precision care strategy. We've made significant strides, including investing over $1 billion in R&D for future growth, helping drive more than 40 innovations in 2023. We bolstered our market position with strategic acquisitions, while at the same time paying down $1 billion in debt, setting a solid foundation for continued growth. We're confident heading into 2024 amid the backdrop of an improved capital equipment landscape.'

Fourth Quarter 2023 Total Company Financial Performance

Revenues of $5.2 billion increased 5% on both a reported and Organic basis year-over-year, driven by price and volume.

Total company book-to-bill was strong at 1.05 times, defined as Total orders divided by Total revenues, as the Company continues to build a robust backlog. Total company orders increased 3% organically year-over-year.

Net income attributable to GE HealthCare was $403 million versus $554 million for the prior year, and Adjusted EBIT was $837 million versus $844 million.

Net income margin was 7.7% versus 11.2% for the prior year, down 350 basis points (bps) primarily impacted by standalone interest expense. Adjusted EBIT margin was 16.1% versus 17.1%, down 100 bps. Adjusted EBIT margin for the fourth quarter of 2023 was flat versus the Company's estimated fourth quarter 2022 Standalone Adjusted EBIT margin of 16.1% as benefits from productivity and price were offset primarily by investments.

Earnings per share (EPS) from continuing operations were $0.88 versus $1.21, down $0.33 from the prior year. Adjusted EPS was $1.18 versus $1.31, down $0.13 from the prior year. Both comparisons were impacted by standalone interest expense. Adjusted EPS for the fourth quarter of 2023 grew $0.12 versus the Company's estimated fourth quarter 2022 Standalone Adjusted EPS of $1.06.

Cash flow from operating activities was $1.1 billion, down $13 million year-over-year. Free cash flow was $956 million, down $31 million year-over-year. Both metrics were primarily impacted by standalone interest and postretirement benefit payments. The Company repaid $850 million of debt in the fourth quarter of 2023 and an additional $150 million of debt in January 2024.

Fourth Quarter 2023 Segment Financial Performance

Imaging

Revenues of $2.8 billion increased 4% on both a reported and Organic basis year-over-year.

Segment EBIT was $337 million versus $321 million for the prior year.

Segment EBIT margin was 11.9% versus 11.8% for the prior year.

Ultrasound

Revenues of $944 million declined 1% reported and 2% on an Organic basis year-over-year.

Segment EBIT was $244 million versus $285 million for the prior year.

Segment EBIT margin was 25.8% versus 29.8% for prior year.

Patient Care Solutions

Revenues of $827 million increased 5% reported and 4% on an Organic basis year-over-year.

Segment EBIT was $110 million versus $130 million for the prior year.

Segment EBIT margin was 13.3% versus 16.5% for the prior year.

Pharmaceutical Diagnostics

Revenues of $591 million increased 25% reported and 23% on an Organic basis year-over-year.

Segment EBIT was $144 million versus $109 million for the prior year.

Segment EBIT margin was 24.4% versus 23.0% for the prior year.

Full Year 2023 Total Company Financial Performance

Revenues of $19.6 billion increased 7% year-over-year and 8% on an Organic basis with growth across all segments and regions.

Total company book-to-bill was 1.03 times, as orders dollars outpaced revenues. Total company orders increased 3% organically year-over-year.

Net income attributable to GE HealthCare was $1.6 billion versus $1.9 billion for the prior year, and Adjusted EBIT was $3.0 billion versus $2.9 billion in the same period last year.

Net income margin was 8% versus 10.4% for the prior year, down 240 bps, primarily impacted by standalone interest expense. Adjusted EBIT margin was 15.1% versus 15.6% last year, down 50 bps. Adjusted EBIT margin for the full year 2023 was up 60 bps versus the Company's estimated full year 2022 Standalone Adjusted EBIT margin of 14.5% last year. Margin benefited from productivity, price, and volume, and was partially offset by inflation.

EPS from continuing operations was $3.04 compared to $4.18 for full year 2022, down $1.14 from the prior year. Adjusted EPS was $3.93, versus $4.63 in prior year. Both comparisons were impacted by standalone interest expense. Adjusted EPS for the full year 2023 grew $0.55 versus the Company's estimated full year 2022 Standalone Adjusted EPS of $3.38.

Cash flow from operating activities was $2.1 billion, down $33 million year-over-year, and Free cash flow was $1.7 billion, down $113 million year-over-year, due to standalone interest and postretirement benefit payments.

Cash flow conversion, defined as cash from operating activities divided by net income attributable to GE HealthCare, was 134% while Free cash flow conversion was 95% for 2023.

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Forward-looking Statements

This release contains forward-looking statements. These forward-looking statements might be identified by words, and variations of words, such as 'will,' 'expect,' 'may,' 'would,' 'could,' 'plan,' 'believe,' 'anticipate,' 'intend,' 'estimate,' 'potential,' 'position,' 'forecast,' 'target,' 'guidance,' 'outlook,' and similar expressions. These forward-looking statements may include, but are not limited to, statements about the Company's expected financial performance, including revenue, revenue growth, profit, taxes, earnings per share, and cash flows, and the Company's outlook and the Company's strategy, innovation, and investments. These forward-looking statements involve risks and uncertainties, many of which are beyond the Company's control. Factors that could cause the Company's actual results to differ materially from those described in its forward-looking statements include, but are not limited to, operating in highly competitive markets; the Company's ability to successfully complete strategic transactions; the actions or inactions of third parties with whom the Company partners and the various collaboration, licensing, and other partnerships and alliances the Company has with third parties; demand for the Company's products, services, or solutions and factors that affect that demand; management of the Company's supply chain and the Company's ability to cost-effectively secure the materials it needs to operate its business; disruptions in the Company's operations; changes in third-party and government reimbursement processes, rates, contractual relationships, and mix of public and private payers, including related to government shutdowns; the Company's ability to attract and/or retain key personnel and qualified employees; global geopolitical and economic instability, including as a result of the conflict between Ukraine and Russia, the conflict in Israel and surrounding areas, and the actions in the Red Sea region; public health crises, epidemics, and pandemics, such as the Coronavirus Disease 2019 ('COVID-19') and their effects on the Company's business; maintenance and protection of the Company's intellectual property rights, as well as maintenance of successful research and development efforts with respect to commercially successful products and technologies; the impact of potential information technology, cybersecurity or data security breaches; compliance with the various legal, regulatory, tax, privacy, and other laws to which the Company is subject, such as the Foreign Corrupt Practices Act and similar anti-corruption and anti-bribery laws globally, and related changes, claims, inquiries, investigations, or actions; the Company's ability to control increases in healthcare costs and any subsequent effect on demand for the Company's products, services, or solutions; the impacts related to the Company's increasing focus on and investment in cloud, edge, artificial intelligence, and software offerings; the impact of potential product liability claims; environmental, social, and governance matters; the Company's ability to operate effectively as an independent, publicly-traded company and the Company's level of indebtedness, as well as its general ability to comply with covenants under its debt instruments and any related effect on the Company's business. There may be other factors not presently known to the Company or which it currently considers to be immaterial that could cause the Company's actual results to differ materially from those projected in any forward-looking statements the Company makes. The Company does not undertake any obligation to update or revise its forward-looking statements except as required by applicable law or regulation.

About GE HealthCare Technologies Inc.

GE HealthCare is a leading global medical technology, pharmaceutical diagnostics, and digital solutions innovator, dedicated to providing integrated solutions, services, and data analytics to make hospitals more efficient, clinicians more effective, therapies more precise, and patients healthier and happier. Serving patients and providers for more than 100 years, GE HealthCare is advancing personalized, connected, and compassionate care, while simplifying the patient's journey across the care pathway. Together our Imaging, Ultrasound, Patient Care Solutions, and Pharmaceutical Diagnostics businesses help improve patient care from diagnosis, to therapy, to monitoring. We are a $19.6 billion business with 51,000 colleagues working to create a world where healthcare has no limits.

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