GE HealthCare (GEHC) Q4 2022 Earnings Call Transcript

For the period ending December 31, 2022

January 30, 2023 8:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen, and welcome to the GE HealthCare Fourth Quarter 2022 Earnings Conference Call. My name is Michelle, and I’ll be your conference coordinator today. As a reminder, this conference is being recorded.

I would now like to turn the program over to your host for today’s conference, Carolynne Borders, Chief Investor Relations Officer. Please proceed.

Carolynne Borders

Thanks, Michelle. Welcome to GE HealthCare’s fourth quarter and full year 2022 earnings call. I’m joined by our President and CEO, Peter Arduini; and Vice President and CFO, Helmut Zodl.

Our conference call remarks will include both GAAP and non GAAP financial results. Reconciliations between GAAP and non-GAAP measures can be found in today’s press release and in the presentation slides available on our website.

During this call, we’ll make forward-looking statements about our performance. These statements are based on how we see things today. As described in our SEC filings, actual results may differ materially due to risks and uncertainties.

And with that, I’ll hand the call over to Peter.

Peter Arduini

Thank you, Carolynne, and good morning, everyone. Welcome to our first earnings call as an independent publicly traded company. I’m incredibly proud of the work our team has done to complete the spin-off of GE HealthCare. The energy across the company is palpable and there’s tremendous excitement and focus around our purpose to create a world where healthcare has no limits. I want to thank all of our team for their commitment to the customers and patients we serve as we chart our own path forward and execute on our precision care strategy.

Let’s start with our fourth quarter 2022 performance. We delivered strong organic revenue growth of 13% year-over-year, reflecting an acceleration from prior quarters in 2022. These results were driven by continued robust demand, backlog fulfillment and improved pricing. In addition, supply chain pressures that we experienced earlier in the year eased continuing the trend that we experienced in the third quarter.

Adjusted EBIT margin was 17.1%. Volume and price improved in the fourth quarter, but this was offset by inflation, mix, planned R&D investments and some foreign exchange headwinds. We saw sequential margin improvement as volume and price grew and logistics cost eased with the disciplined optimization actions we’ve taken across the business. This result is equivalent to 16.1% on a standalone basis.