general motors co (gm) earnings report: q1 2016 ?· general motors co (gm) earnings report: q1 ......

Download GENERAL MOTORS CO (GM) Earnings Report: Q1 2016 ?· GENERAL MOTORS CO (GM) Earnings Report: Q1 ... Dhivya…

Post on 04-Jun-2018

212 views

Category:

Documents

0 download

Embed Size (px)

TRANSCRIPT

  • CompanyName:GeneralMotorsCoCompanyTicker:GMSector:ConsumerGoodsIndustry:Automotive

    EventDescription:Q12016EarningsCallMarketCapasofEventDate:47.20BPriceasofEventDate:32.66

    2014TheStreet,Inc.Al l R ightsReserved Page1of16

    GENERALMOTORSCO(GM)EarningsReport:Q12016ConferenceCallTranscriptThefollowingGENERALMOTORSCOconferencecalltookplaceonApril21,2016,10:00AMET.Thisisatranscriptofthatearningscall:

    CompanyPart icipants

    RandyArickx;GeneralMotors;InvestorRelationsMaryBarra;GeneralMotors;Chairman&CEOChuckStevens;GeneralMotors;CFO

    OtherPart icipants

    JohnMurphy;BoAMerrillLynch;AnalystItayMichaeli;Citi;AnalystJosephSpak;RBC;AnalystPatArchambault;GoldmanSachs;AnalystRodLache;DeutscheBank;AnalystBrianJohnson;BarclaysCapital;AnalystNeelMehta;MorganStanley;AnalystColinLangan;UBS;AnalystRyanBrinkman;JPMorganChase;Analyst

    MANAGEMENTDISCUSSIONSECTION

    Operator :

    WelcometotheGeneralMotorsCompanyfirst-quarterearningsconferencecall.

    (OperatorInstructions)

    Asareminder,today'sconferenceisbeingrecordedThursday,April21,2016.

    IwouldnowliketoturntheconferenceovertoRandyArickx,ExecutiveDirectorofCorporateCommunicationsandInvestorRelations.Pleasegoahead,sir.

    RandyArickx(InvestorRelations):

    Thanks,Operator.GoodmorningandthankyouforjoiningusaswereviewGM'sfinancialresultsforthefirstquarterof2016.

    OurpressreleasewasissuedthismorningandtheconferencecallmaterialsareavailableontheGMinvestorrelationswebsite.WearealsobroadcastingthiscallviawebcastontheInternet.Includedinthechartsetmaterialspublishedthismorning,we'veincludedthekeytakeawaysfromeachchartinthenotespagesinordertoprovidecolorontheresults.

    Thismorning,MaryBarra,GeneralMotors'ChiefExecutiveOfficerandChairman,willprovidesomebriefopeningremarks,followedbyChuckStevens,GM'sExecutiveVPandCFO.Andthenwewillopenthelinesforquestionsfromtheanalystcommunity.

  • CompanyName:GeneralMotorsCoCompanyTicker:GMSector:ConsumerGoodsIndustry:Automotive

    EventDescription:Q12016EarningsCallMarketCapasofEventDate:47.20BPriceasofEventDate:32.66

    2014TheStreet,Inc.Al l R ightsReserved Page2of16

    Beforewebegin,Iwouldliketodirectyourattentiontothelegendregardingforward-lookingstatementsonthefirstpageofthechartset.Thecontentofourcallwillbegovernedbythislanguage.

    Intheroomtoday,wealsohaveTomTimko,VicePresident,ControllerandChiefAccountingOfficerandDhivyaSuryadevara,VicePresident,FinanceandTreasurertoassistinansweringyourquestions.

    NowIwillturnthecallovertoMaryBarra.

    MaryBarra(Chairman&CEO):

    Thanks,Randy.Thanks,everyone,forjoiningthecall.

    I'mextremelypleasedtoreportthatGMdeliveredaverystrongperformanceinthisquarter.Solet'stakealookatthenumbers.Thehighlightsandyear-over-yearimprovementsinclude,first,revenueof$37.3billion,up$1.6billion;Q1recordEBIT-adjustedof$2.8billion,whichisup$0.6billion;Q1recordEBIT-adjustedmarginof7.1%,up1.3percentagepoints;andQ1recordearningspershareadjustedof$1.26,up47%.

    Ournetincomewas$2billion.Thisisalsoup$1billionandinaddition,ourrecord28.5%ROIConatrailingfour-quarterbasisdemonstratesthepositiveresultsofourdisciplinedcapitalallocationframework.Ifwelook,wereturned$0.9billiontoshareholdersasofMarch31andthisreallyunderscoresourcommitmenttoenhancingshareholdervalueovertime.

    Ithinkit'salsoimportanttotakenotethat,inQ1,wesawimprovedperformanceinallofoursegmentsledbyNorthAmerica,continuedstrengthinChinaandbreakevenresultsinEurope.We'vehadpositivedevelopmentsforChevroletandCadillac,whichareourtwoglobalbrands.

    Tostartwith,intheUnitedStates,Chevroletretailsharewasupafullpointyear-over-yeartoabout11%,Malibu'sbestQ1retailsalessince1980intheUSandinMarch,85%ofMalibusalesweretheall-newmodel.Inaddition,wearelaunchingtheCruzeandveryexcitedaboutthatreceptioninthemarketplace.

    InChina,theMalibuXLflagshipsedanisalsokeytogrowingthebrandinChinafromaChevroletperspectiveandagain,thisvehicleisgettinggoodreception.

    AndfromaCadillacperspective,inthefirstquarter,ourATPswerethehighestinNorthAmericainourhistoryandweareveryexcitedabouttheCadillacCT6andtheXT5thatarenowlaunchinginbothChinaandtheUnitedStates.

    FromaNorthAmericaperspective,USretailsalesareup7%year-over-year,largelyonChevroletandBuickperformances.USretailmarketsharegrewfasterthananyotherautomaker,up1.1percentagepointsto16.6%andourATPsof$34,600exceededtheindustryaveragebyabout$3,500.Andendingtotaldealerinventorywasdown13%year-over-year.

    IfwemovetoChinawithourjointventurepartners,wedeliveredover963,000vehicles,upslightlyfromQ12015thankstothegrowthinSUVandtheluxurysegment.TheBuickEnvisionsalesmorethandoubledandwhenweincludetheBaojun560,totalSUVsalesjumped148%.WearealsoveryexcitedaboutthenewBuickLaCrossesedanthatwasintroducedthatcancontinuetobuildonthestrengthofBuickinChina.AndourCadillacsalescontinuetorise,up6.1%inthequarterontopof17%,whichwasthefull-yearincreaselastyear.

    InEurope,webrokeeveninQ1andweareonplantobreakevenforthecalendaryearandthisisreallydrivenbyOpel'sproductoffensive.Opel/Vauxhallsaleswere[309,000],up8.4%year-over-year,outpacingtheindustryandthisisreallyonthestrengthoftheAstra,whichwasnamedEurope's2016Car

  • CompanyName:GeneralMotorsCoCompanyTicker:GMSector:ConsumerGoodsIndustry:Automotive

    EventDescription:Q12016EarningsCallMarketCapasofEventDate:47.20BPriceasofEventDate:32.66

    2014TheStreet,Inc.Al l R ightsReserved Page3of16

    oftheYear.Marketsharewasupin15ofthe21marketsandtheincreasesareinmostofthemajormarketsacrossEurope.AndwestillhavetwoveryimportantproductlaunchesinEuropethisyear,theAstraSportsterandtheMokkaX.

    InSouthAmerica,operatingperformanceimprovedbecauseofourcontinuedworkandespeciallythefocuslastyearonrightsizingthebusinesswhileprotectingthenewproductpipeline.

    AndifwelookatGMFinancial,GMFinancialgrewitscaptivepresencewithGMcustomersanddealersinallregionswithNorthAmericaincreasingitspenetrationofGoodmorningretailsalesto37%inthequarter.Thisisupfrom21%inthefirstquarterof2015.

    Andacrossthecompany,ouroperationalexcellenceprogram,whichisreallydrivingSixSigmaandcontinuousimprovementineveryaspectofthebusiness,iswellunderwayandit'splayingakeyroleinthe$5.5billioncostefficiencychallengethatwehaveoutlinedandthatweexpecttoachieveby2018.

    Thesuccessofthecorebusinesshasenabledustomakesmartinvestmentsinshapingthefutureofpersonalmobility.Ontheautonomousfront,weannouncedourintenttoacquireCruiseAutomationtofurtheracceleratethedevelopmentofautonomousvehicletechnologyandpositionGeneralMotorsinaleadershiprole.

    Incarsharing,weintroducedMaven,whichcombinesandexpandsourmultiplecarsharingprogramunderasinglebrand,whichincludesMavenCityandMaven+.MavenCityofferscarsondemandinkeycitiesdrivenbyOnStar-poweredsmartphoneconnectivitythatreallyprovidesthecustomersanownership-likeexperienceandMaven+isacompletelydedicatedprivatefleetforresidentialcommunities.

    WestartedthisinNewYorkCity,asI'vetalkedaboutinthepast.WearegoingtosoonbeaddingChicagoandthiswillgiveusthepotentialtoreachmorethan5,000residents.

    Onride-sharing,asyouknow,wealsoannouncedthestrategicpartnershipwithLyftandit'safourdimensionalapproachthatenablesusfirsttodevelopanintegratednetworkofon-demandautonomouscarsandwealsointroducedExpressDrive,andthisisashort-termrentalprogramontheLyftplatformthatmakesGeneralMotorscarsavailabletoLyftdriversataffordablerates.Italsoexposesbothpassengersanddriverstoourproductsandgetsmoreseatsinseats.Wehavethefirstlaunch,whichisinChicago,anddemandis8timesthesupply.WeplantoaddhubsinBostonandBaltimoreandWashingtoninthenearfuture.

    AnotheraspectoftheallianceandthepartnershipthatwehavewithLyftisbeingabletocombinetheLyftexperiencewithourvehicleconnectivityleadershipandthisreallyprovidesabetterexperienceforthecustomer.Andwealsoseemanyopportunitiestojointlyexpandbothofourbusinessandpresentcross-marketingopportunities,andyouwillseeustakingadvantageofthoseaswemoveforward.

    Fromanalternativepropulsionperspective,wealsorevealedthe2017ChevroletBoltEVattheConsumerElectronicsshow.It'sgoingtoachievemorethan200milesperchargeofallEVrangeandwillcostabout$30,000aftergovernmentincentives.Productionwillbeginlaterthisyear.

    Soinsummary,ourstrongfirstquartergivesasevenmoreconfidencethatwewilldelivertheearningsgrowthweoutlinedinJanuary.WedeliveredQ1recordEBIT-adjusted,EBIT-adjustedmarginsandEPS-adjusted,alongwitharecordreturnoninvestedcapital.Ouraggressiveproductlaunchcadenceandcontinuedcostdisciplinewillhelpusdeliveronourcommitmentsfortheyearandcontinuetodriveshareholdervalue.

    Withthat,IwillturnitovertoChuck.

  • CompanyName:GeneralMotorsCoCompanyTicker:GMSector:ConsumerGoodsIndustry:Automotive

    EventDescription:Q12016EarningsCallMarketCapasofEventDate:47.20BPriceasofEventDate:32.66

    2014TheStreet,Inc.Al l R ightsReserved Page4of16

    ChuckStevens (CFO):

    Thanks,Mary.

    Ijustwantedtotakeacoupleofminutestoprovidesomeperspectiveonthequarter.AsMarysaid,allreportingsegmentspostedimprovedresultsfromayearago,includingabout$500millionofimprovementoutsideNorthAmerica.Clearly,weareontrackforanotherrecordyearin2016,verymuchinlinewiththeoverviewweprovidedbackinJanuary.

    Justafewcommentsonourresultsbyregion.First,letmestartwithNorthAmerica.NorthAmericacontinuestoputupimpressivenumbers.Wecontinuetoseesteady,moderateindustrygrowthintheUSofapproximately3%andweexpectthattrendtocontinuethroughouttherestoftheyear.

    EBIT-adjustedof$2.3billionwasafirst-quarterrecord,upover$100millionfromayearagodespiteover$200millioninrestructuringexpenseandtheincreasedlaunch-relatedcosts.ThesuccessofourimportantlaunchesliketheChevroletMalibuandCruze,aswellasmaterialandcostefficiencieswillhelpmorethanoffsethigherD&Amarketingandengineering-relatedcoststhroughouttheyearaswecontinuetoinvestinourportfolioandbrands.

    Aswe'vesaidbefore,weexpecttomaintain10%plusmarginsforthecalendaryearwhiledeliveringimprovedEBIT-adjustedperformancecomparedto2015.

    ShiftingtoEurope,weareverypleasedwiththebrea