In its recently released 2022 Annual Report, GE (NYSE:GE) highlighted 2022 as the year that propelled the company forward. In his annual shareholder letter, GE Chairman and CEO Larry Culp noted that changes and achievements at GE during the year were both big and small, and included the company’s successful launch of GE HealthCare; delivery of a strong financial performance; acting on GE’s purpose to build a world that works; and meeting customer commitments.
He highlighted that services – which are higher margin and more resilient to external changes – represent a large part of the company’s portfolio and a significant share of company revenue, standing at 60% in 2022 when excluding GE HealthCare. These strong results were made possible in part by embedding lean more deeply across the organization to drive continuous improvement, putting customers first, and embracing a culture of humility, transparency, and focus.
By deeply embedding lean principles and tools, he explained that GE is creating a problem-solving culture, with the aim of serving customers better. Across the MENAT region, there were numerous examples of this in 2022. This includes a series of exercises held during a major inspection at a power plant in the Gulf that successfully reduced the time required for inspection from 29 days to 24 days. In another example, the GE Gas Power Jebel Ali Service Center in Dubai reduced the servicing turnaround time for a gas turbine component by up to 80%, decreased crane lifts of the component by up to 70%, and shrunk the distance that the part travels across the shop floor by up to 70%.
Below is a summary of key points from the annual report to keep you informed about GE’s financials, operations, and business strategy.
Highlights from the report
- GE ended the year with solid revenue growth and margin expansion, and $4.8 billion of free cash flow.
- GE Aerospace led the way with order and revenue growth above 20% for the year, and Power delivered double-digit order growth organically and achieved high-single-digit margins.
- GE reduced its debt load by over $100 billion since 2018.Today, the company’s balance sheet is solid, and GE is operating from a position of strength.
- GE is also focused on changing the way they work by embedding a lean mindset focused on safety, quality, delivery, and cost (SQDC), which gives the company the tools to make the right decisions and necessary trade-offs.
- GE Aerospace – A bold vision for the future of flight
- In 2022, nearly 3 billion people flew with GE’s technology under wing. GE has nearly 41,000 commercial engines at work in more than 70% of global airlines.
- In the MENAT, GE Aerospace and partners’ 4,800+ engines make up nearly two-thirds of all regional commercial engines.
- The commercial market recovery continues, and GE expects total departures to return to 2019 levels in late 2023. GE Aerospace is uniquely positioned to serve this market as customers expand and upgrade their fleets.
- Today GE has new engines in each market segment that offer double-digit fuel burn reduction, lowering one of its customers’ greatest variable costs.
- In 2022, GE signed an order with Qatar Airways for GE9X engines to propel up to 50 of its Boeing 777-8 Freighters, as well as a services agreement to cover the maintenance, repair, and overhaul (MRO) of these engines.
- For the year, revenue was up 23% organically, driven by Commercial Services, with internal shop visits up over 20%. Margins were 18.3%, and free cash flow was $4.9 billion, driven by earnings and working capital.
- GE is continuing its efforts to support use of sustainable aviation fuel, or SAF, which is vital to enabling the airline industry to meet its decarbonization goals. This includes a January 2023 event where GE Aerospace supported Emirates Airlines in conducting the first flight in the Middle East with an engine powered 100% by SAF.
- GE Vernova – Helping the energy sector solve for sustainability, reliability, and affordability
- With approximately 54,000 wind turbines and 7,000 gas turbines worldwide, GE Vernova helps generate up to 30% of the world’s electricity and has a meaningful role to play in the energy transition.
- In the Middle East, North Africa and Turkey (MENAT), GE’s fleet consists of up to 1060 gas turbines (heavy duty and aeroderivatives).
- Saudi Arabia: up to 390 GE built gas turbines
- UAE: up to 90 GE built gas turbines
- Iraq: up to 180 GE built gas turbines
- GE technologies provide up to 40% of available generating capacity in the MENAT region
- External catalysts are increasing investment in new decarbonization technologies, an area where GE Vernova’s portfolio is uniquely positioned to lead.
- Our customers in the region are engaging our full technology roadmaps, including wind, hydropower, gas fuel blends, and grid.
- Gas Power grew in 2022, driven by services strength and aeroderivative momentum including several new aeroderivative deals in the region.
- Services continued to be a major driver of GE’s business performance and improvement, and the company is well positioned for continued growth with its expanded HA fleet.
- Onshore Wind is an $8 billion annual revenue business, where GE added over 40 gigawatts to the grid. Offshore Wind is transitioning to approximately $500 million in annual revenue and growing.
- Grid Solutions is a $3 billion annual revenue business, where market demand in automation and hardware remains strong. In the fourth quarter of 2022, GE saw a major inflection point—Grid was profitable for the first time since 2018, reflecting the company’s restructuring and selectivity efforts, and orders also grew significantly.
- In 2022, Gas Power Services’ business playbook for planned maintenance outage events called Live Outage expanded to the Middle East for GE 9F turbines.
- The planned spin-off of GE Vernova comes as the world faces a 50% increase in electricity demand over the next two decades.
Download the full 2022 Annual Report from here.
For media enquiries, please contact:
Kirsten Kutz
Communications Director
GE Corporate
