07.22.14
$18.20 Billion ($146 B total)
KEY EXECUTIVES:
Jeffrey R. Immelt, Chairman & CEO, General Electric
John Dineen, President & CEO, GE Healthcare
Frank Schulkes, VP & Chief Financial Officer, GE Healthcare
Marcelo Mosci, President & CEO, U.S. and Canada Region
Tom Gentile, President & CEO, GE Healthcare Systems
Rachel Duan, President & CEO, GE Healthcare China
Akihiko Kumagai, President & CEO, GE Healthcare Asia Pacific
Brian Masterson, VP, Global Supply Chain
Markus Ewert, Exec. VP, Business Development
Jean-Michel Malbrancq, President & CEO, GE Healthcare Europe
Joe Shrawder, President & CEO, GE Healthcare Latin America
Terri Brensenham, President & CEO, GE Healthcare India
Kieran Murphy, President & CEO, Life Sciences
Jan De Witte, President & CEO, Healthcare IT
Rafael Díaz-Granados, GE Healthcare Simplification Leader
Mike Swinford, President & CEO, Global Healthcare Services
NO. OF EMPLOYEES: 54,000
GLOBAL HEADQUARTERS: Fairfield, Conn.
“If there is no struggle, there is no progress.” — Frederick Douglas.
The road to progress is seldom smooth. More often than not, it’s littered with bumps, breaks and barriers that can discourage and test even the most seasoned of travelers. The typical journey is excruciatingly slow, with the destination looming far off in the distance, perpetually hanging on the horizon like a desert mirage in the midday sun.
While frustrating, achieving progress through such means is necessary for business success. Many Fortune 500 companies—Apple Inc., Exxon Mobile Corporation, General Electric, Walmart among others—consistently have changed, grown and profited by “failing forward,” or learning from their mistakes.
Apple, for one, received quite an extensive education from its misfires: without the Apple Lisa, the Performa, the QuickTake, the PowerCD, the Bandai Pippin, the Newton, and the Interactive Television Box, there likely wouldn’t be the iMac, iPod and iPhone.
Walmart, too, learned some valuable lessons from the short-lived (higher-priced) Metro7 clothing line, the failed expansion into Germany and South Korea, and the 2012 Mexican bribery scandal (a New York Times report accused the company’s Mexican subsidiary of accepting more than $24 million worth of bribes to help the firm beat its competition’s expansion plans in the country).
Mistakes, then some progress. GE is not immune to the gaffe-and-grow formula, having long ago sold its computer division (developer of the cutting-edge GE 200, GE 400, GE 600, Datanet 30, Datanet 355 and others) to focus on the more promising fields of aviation, power/water, oil/gas, energy management and healthcare.
“GE has stayed competitive for more than a century—not because we are perfect—but because we make progress,” Board Chairman/CEO Jeffrey R. Immelt told shareholders in an eight-page letter at the start of the company’s 2013 annual report.
“Progress is about getting better, being better, doing better...As investors, you can expect us to listen, learn, adapt and change. You should expect us to get better every day, to make progress.”
Progress as well as mistakes.
GE certainly made progress last year, growing its segment profit 7 percent to $24.5 billion, expanding its operating earnings per share 9 percent, and returning $18 billion to investors through dividends and share repurchases through Dec. 31. The company ended 2013 with a record $244 billion in backlog and increased its earnings 12 percent mostly through strong performances in real estate and international lending/leasing.
In addition, total shareholder return ballooned 38 percent, and GE’s dividend jumped 16 percent, according to the 2013 annual report. The firm also added $64 billion of market cap, bringing its total worth to $282 billion and turning it into the world’s sixth most valuable company.
Much of that progress, however, was shadowed by mistakes. The multinational’s total revenues ($146 billion), for instance, remained flat for the second consecutive year, and only five of its seven business segments generated profits (a dramatic change from 2012, when all seven segments posted gains for the first time since 2006). The profit-makers included Energy Management, which grew sales 2.1 percent to $7.5 billion; Appliances & Lighting, which expanded revenue 4.6 percent to $8.3 billion; Transportation, which increased sales 4.9 percent to $5.8 billion; Aviation, which boosted revenues 9.5 percent to $21.9 billion; and Oil & Gas, which generated an additional 11.3 percent in sales ($16.9 billion).
The Healthcare and Power & Water segments failed to bear fruit last year, slipping 0.5 percent and 12.6 percent respectively, but both managed to maintain their top-earning spots within the company (Power & Water at No. 1 and Healthcare at No. 3).
Healthcare profits basically flatlined last year, grossing $18.2 billion in total, or just $90 million less than its 2012 haul. In the company’s annual report, executives attributed the ebb to lower prices, the effects of a stronger U.S. dollar and lower other income.
Healthcare’s profits were considerably more sound, rising 4 percent to $3 billion on higher volume and increased productivity.
“The difficult part about progress is that great results take time. But the payback can be huge,” Immelt said in his shareholder letter.
“At our kickoff meeting this year, the leader of our Ultrasound business—Anders Wold—gave a presentation about the power of ultrasound to solve global and rural health issues. In the 1990s, we were No. 7 in ultrasound. Today we are No. 1. In the past, we broke even; today we grow profits 15 percent annually at high margins. Ultrasound is a fast-paced, global business ... if we trapped ourselves in dogma and slogans—don’t try new things; big companies can’t be fast; stick to what you know—we would have given up on ultrasound long ago. Instead, we are winning.”
Immelt expects his company to travel the same slow path to progress in magnetic resonance imaging (MRI) technology and traumatic brain injury treatment. In March 2013, GE and the National Football League (NFL) announced a four-year, $60 million collaboration to speed and improve traumatic brain injury diagnosis and treatment. Dubbed the “Head Health Initiative,” the plan features two Challenge topics: The first focused on developing imaging technologies and algorithms that could better detect and analyze subtle changes in the brain. Specifically, the two organizations wanted to help doctors better understand the molecular and physiological changes that occur shortly after a traumatic event.
“Traumatic brain injury is one of the greatest unmet medical needs of our time,” noted Geoff Manley, M.D., professor and vice-chairman of the Department of Neurological Surgery at the University of California-San Francisco and chief of Neurotrauma at San Francisco General Hospital. Manley also is one of the 10 professionals named to the Head Health Initiative’s research advisory board.
“Every 20 seconds someone in the United States sustains a brain injury,” he continued. “A better understanding of the molecular, physiological and behavioral/biomechanical changes that occur shortly after a traumatic event is needed to reliably diagnose the types of changes that are difficult to identify using current technologies.”
In January 2014, GE and the NFL awarded $300,000 to each of the 16 most innovative Challenge I ideas. The winners, chosen from more than 400 entries in 27 countries, included Banyan Biomarkers Inc. of Alachua, Fla., which is developing a point-of-care blood test to rapidly detect the presence of mild and moderate brain trauma; VTT Technical Research Centre of Finland in Espoo, which is studying the reaction of small molecules such as cholesterol, glucose and amino acids in the body after mild traumatic brain injury; the University of Pittsburgh (Pa.), where researchers—in conjunction with the University of Pittsburgh Medical Center—are using high-definition fiber-tracking to link impairments from concussions with changes in the brain; and Indiana University School of Medicine in Indianapolis, where analysts at the Center for Neuroimaging and St. Vincent Sports Performance are using MRI to investigate the ways brain flow is altered after concussions in high school athletes.
GE and the NFL are providing mentorship, access to GE researchers and industry thought leaders to develop the 16 ideas into viable diagnostic tools. Six of the awardees also could win an additional $500,000 award in 2015.
The Initiative’s Challenge II focus is on new materials and technologies that can protect the brain from traumatic injury and new tools for tracking head impacts in real time. Up to 10 ideas will be rewarded with as much as $500,000 in funding this fall.
“In December, I sat with four of the most pre-eminent brain scientists in the U.S. We discussed the advanced technology around treating diseases of the brain, from Alzheimer’s to traumatic brain injury,” Immelt said. “[Brain disease] is one of the most interesting, promising and challenging horizons in healthcare.”
So is medical imaging, and GE significantly broadened its horizons last year with several key product launches, including: the MAVRIC SL, a magnetic resonance (MR) device that can more accurately capture soft tissue and bone images in patients with MR conditional-labeled implants such as joint replacements; the Vivid E9 Cardiovascular Ultrasound system featuring XDclear technology, which enhances image quality in two-dimensional, four-dimensional, color and Doppler photos. The system is designed to help shorten ultrasound exam times and enhance diagnostic confidence in adult and pediatric echo cardiogram labs, during interventions, or in the operating room; and the Invenia Automated Breast Ultrasound System (ABUS), designed to detect cancer in women with very dense breasts. GE claims its ABUS can improve breast cancer detection by up to 35.7 percent over mammography alone.
In December, GE unveiled its Revolution CT at the Radiological Society of North America’s 99th Annual Meeting in Chicago, Ill. The product converges wide coverage, high spatial resolution (clear image) and high temporal resolution (speed) into a single computed tomography (CT) system that can capture a motion-free image of the human heart in just one beat.
Approved by the U.S. Food and Drug Administration in April 2014, the Revolution CT can be used for practically all clinical applications, and features capabilities such as whole heart scans even in patients with a high heart rate, low-dose whole organ (16 centimeter) scans using dynamic acquisition modes, and whole brain perfusion and dynamic CT angiography at low dose for stroke assessment.
“This is really an all-in-one scanner,” said Ricardo C. Cury, M.D., chairman of Radiology and director of Cardiac Imaging at Baptist Health South Florida in Miami. “Diagnostic quality images are now possible in challenging patients like those with high heart rates, which is a significant advancement. The ability of Revolution to combine coverage, spatial and temporal resolution in a single scanner will translate to many clinical applications and potentially new applications in the future.”
GE also cleared a path for future progress through the acquisition of Unisyn Medical Technologies’ Transactional Business, and $1.06 billion purchase of Thermo Fisher Scientific Inc.’s HyClone cell culture (sera and media), gene modulation and magnetic beads businesses. The trio will be rolled into GE Healthcare’s life science sector, expanding its bioprocessing manufacturing presence in Asia, Europe, and the Americas.
Thermo Fisher, the world’s biggest supplier of lab testing equipment by market value, agreed to sell the businesses in November last year to secure European regulatory approval for its $13.6 billion deal to buy Life Technologies Corp., which makes genetic testing and mapping equipment.
HyClone is used to manufacture vaccines and drugs that treat diseases including cancer and arthritis. GE Healthcare has a cell biology business performing similar work.
“Life Sciences is one of our strongest and fastest-growing business areas, driven by the world’s demand for improved diagnostics and new, safer medicines,” John Dineen, CEO of GE Healthcare, said when the deal was announced. “It is a business that we have been expanding over the last several years.”
GE’s biomanufacturing business accounts for $1 billion of the company’s $18 billion in healthcare revenue. The three newly acquired Thermo Fisher businesses generated a combined estimated revenue of roughly $250 million in 2013.
GE has been building out its life sciences operations since its 2003 acquisition of Amersham plc. In 2011, the company acquired cellular-imaging supplier Applied Precision Inc., and last year it bought biomolecular manufacturing technology supplier Xcellerex Inc.
KEY EXECUTIVES:
Jeffrey R. Immelt, Chairman & CEO, General Electric
John Dineen, President & CEO, GE Healthcare
Frank Schulkes, VP & Chief Financial Officer, GE Healthcare
Marcelo Mosci, President & CEO, U.S. and Canada Region
Tom Gentile, President & CEO, GE Healthcare Systems
Rachel Duan, President & CEO, GE Healthcare China
Akihiko Kumagai, President & CEO, GE Healthcare Asia Pacific
Brian Masterson, VP, Global Supply Chain
Markus Ewert, Exec. VP, Business Development
Jean-Michel Malbrancq, President & CEO, GE Healthcare Europe
Joe Shrawder, President & CEO, GE Healthcare Latin America
Terri Brensenham, President & CEO, GE Healthcare India
Kieran Murphy, President & CEO, Life Sciences
Jan De Witte, President & CEO, Healthcare IT
Rafael Díaz-Granados, GE Healthcare Simplification Leader
Mike Swinford, President & CEO, Global Healthcare Services
NO. OF EMPLOYEES: 54,000
GLOBAL HEADQUARTERS: Fairfield, Conn.
“If there is no struggle, there is no progress.” — Frederick Douglas.
The road to progress is seldom smooth. More often than not, it’s littered with bumps, breaks and barriers that can discourage and test even the most seasoned of travelers. The typical journey is excruciatingly slow, with the destination looming far off in the distance, perpetually hanging on the horizon like a desert mirage in the midday sun.
While frustrating, achieving progress through such means is necessary for business success. Many Fortune 500 companies—Apple Inc., Exxon Mobile Corporation, General Electric, Walmart among others—consistently have changed, grown and profited by “failing forward,” or learning from their mistakes.
Apple, for one, received quite an extensive education from its misfires: without the Apple Lisa, the Performa, the QuickTake, the PowerCD, the Bandai Pippin, the Newton, and the Interactive Television Box, there likely wouldn’t be the iMac, iPod and iPhone.
Walmart, too, learned some valuable lessons from the short-lived (higher-priced) Metro7 clothing line, the failed expansion into Germany and South Korea, and the 2012 Mexican bribery scandal (a New York Times report accused the company’s Mexican subsidiary of accepting more than $24 million worth of bribes to help the firm beat its competition’s expansion plans in the country).
Mistakes, then some progress. GE is not immune to the gaffe-and-grow formula, having long ago sold its computer division (developer of the cutting-edge GE 200, GE 400, GE 600, Datanet 30, Datanet 355 and others) to focus on the more promising fields of aviation, power/water, oil/gas, energy management and healthcare.
“GE has stayed competitive for more than a century—not because we are perfect—but because we make progress,” Board Chairman/CEO Jeffrey R. Immelt told shareholders in an eight-page letter at the start of the company’s 2013 annual report.
“Progress is about getting better, being better, doing better...As investors, you can expect us to listen, learn, adapt and change. You should expect us to get better every day, to make progress.”
Progress as well as mistakes.
GE certainly made progress last year, growing its segment profit 7 percent to $24.5 billion, expanding its operating earnings per share 9 percent, and returning $18 billion to investors through dividends and share repurchases through Dec. 31. The company ended 2013 with a record $244 billion in backlog and increased its earnings 12 percent mostly through strong performances in real estate and international lending/leasing.
In addition, total shareholder return ballooned 38 percent, and GE’s dividend jumped 16 percent, according to the 2013 annual report. The firm also added $64 billion of market cap, bringing its total worth to $282 billion and turning it into the world’s sixth most valuable company.
Much of that progress, however, was shadowed by mistakes. The multinational’s total revenues ($146 billion), for instance, remained flat for the second consecutive year, and only five of its seven business segments generated profits (a dramatic change from 2012, when all seven segments posted gains for the first time since 2006). The profit-makers included Energy Management, which grew sales 2.1 percent to $7.5 billion; Appliances & Lighting, which expanded revenue 4.6 percent to $8.3 billion; Transportation, which increased sales 4.9 percent to $5.8 billion; Aviation, which boosted revenues 9.5 percent to $21.9 billion; and Oil & Gas, which generated an additional 11.3 percent in sales ($16.9 billion).
The Healthcare and Power & Water segments failed to bear fruit last year, slipping 0.5 percent and 12.6 percent respectively, but both managed to maintain their top-earning spots within the company (Power & Water at No. 1 and Healthcare at No. 3).
Healthcare profits basically flatlined last year, grossing $18.2 billion in total, or just $90 million less than its 2012 haul. In the company’s annual report, executives attributed the ebb to lower prices, the effects of a stronger U.S. dollar and lower other income.
Healthcare’s profits were considerably more sound, rising 4 percent to $3 billion on higher volume and increased productivity.
“The difficult part about progress is that great results take time. But the payback can be huge,” Immelt said in his shareholder letter.
“At our kickoff meeting this year, the leader of our Ultrasound business—Anders Wold—gave a presentation about the power of ultrasound to solve global and rural health issues. In the 1990s, we were No. 7 in ultrasound. Today we are No. 1. In the past, we broke even; today we grow profits 15 percent annually at high margins. Ultrasound is a fast-paced, global business ... if we trapped ourselves in dogma and slogans—don’t try new things; big companies can’t be fast; stick to what you know—we would have given up on ultrasound long ago. Instead, we are winning.”
Immelt expects his company to travel the same slow path to progress in magnetic resonance imaging (MRI) technology and traumatic brain injury treatment. In March 2013, GE and the National Football League (NFL) announced a four-year, $60 million collaboration to speed and improve traumatic brain injury diagnosis and treatment. Dubbed the “Head Health Initiative,” the plan features two Challenge topics: The first focused on developing imaging technologies and algorithms that could better detect and analyze subtle changes in the brain. Specifically, the two organizations wanted to help doctors better understand the molecular and physiological changes that occur shortly after a traumatic event.
“Traumatic brain injury is one of the greatest unmet medical needs of our time,” noted Geoff Manley, M.D., professor and vice-chairman of the Department of Neurological Surgery at the University of California-San Francisco and chief of Neurotrauma at San Francisco General Hospital. Manley also is one of the 10 professionals named to the Head Health Initiative’s research advisory board.
“Every 20 seconds someone in the United States sustains a brain injury,” he continued. “A better understanding of the molecular, physiological and behavioral/biomechanical changes that occur shortly after a traumatic event is needed to reliably diagnose the types of changes that are difficult to identify using current technologies.”
In January 2014, GE and the NFL awarded $300,000 to each of the 16 most innovative Challenge I ideas. The winners, chosen from more than 400 entries in 27 countries, included Banyan Biomarkers Inc. of Alachua, Fla., which is developing a point-of-care blood test to rapidly detect the presence of mild and moderate brain trauma; VTT Technical Research Centre of Finland in Espoo, which is studying the reaction of small molecules such as cholesterol, glucose and amino acids in the body after mild traumatic brain injury; the University of Pittsburgh (Pa.), where researchers—in conjunction with the University of Pittsburgh Medical Center—are using high-definition fiber-tracking to link impairments from concussions with changes in the brain; and Indiana University School of Medicine in Indianapolis, where analysts at the Center for Neuroimaging and St. Vincent Sports Performance are using MRI to investigate the ways brain flow is altered after concussions in high school athletes.
GE and the NFL are providing mentorship, access to GE researchers and industry thought leaders to develop the 16 ideas into viable diagnostic tools. Six of the awardees also could win an additional $500,000 award in 2015.
The Initiative’s Challenge II focus is on new materials and technologies that can protect the brain from traumatic injury and new tools for tracking head impacts in real time. Up to 10 ideas will be rewarded with as much as $500,000 in funding this fall.
“In December, I sat with four of the most pre-eminent brain scientists in the U.S. We discussed the advanced technology around treating diseases of the brain, from Alzheimer’s to traumatic brain injury,” Immelt said. “[Brain disease] is one of the most interesting, promising and challenging horizons in healthcare.”
So is medical imaging, and GE significantly broadened its horizons last year with several key product launches, including: the MAVRIC SL, a magnetic resonance (MR) device that can more accurately capture soft tissue and bone images in patients with MR conditional-labeled implants such as joint replacements; the Vivid E9 Cardiovascular Ultrasound system featuring XDclear technology, which enhances image quality in two-dimensional, four-dimensional, color and Doppler photos. The system is designed to help shorten ultrasound exam times and enhance diagnostic confidence in adult and pediatric echo cardiogram labs, during interventions, or in the operating room; and the Invenia Automated Breast Ultrasound System (ABUS), designed to detect cancer in women with very dense breasts. GE claims its ABUS can improve breast cancer detection by up to 35.7 percent over mammography alone.
In December, GE unveiled its Revolution CT at the Radiological Society of North America’s 99th Annual Meeting in Chicago, Ill. The product converges wide coverage, high spatial resolution (clear image) and high temporal resolution (speed) into a single computed tomography (CT) system that can capture a motion-free image of the human heart in just one beat.
Approved by the U.S. Food and Drug Administration in April 2014, the Revolution CT can be used for practically all clinical applications, and features capabilities such as whole heart scans even in patients with a high heart rate, low-dose whole organ (16 centimeter) scans using dynamic acquisition modes, and whole brain perfusion and dynamic CT angiography at low dose for stroke assessment.
“This is really an all-in-one scanner,” said Ricardo C. Cury, M.D., chairman of Radiology and director of Cardiac Imaging at Baptist Health South Florida in Miami. “Diagnostic quality images are now possible in challenging patients like those with high heart rates, which is a significant advancement. The ability of Revolution to combine coverage, spatial and temporal resolution in a single scanner will translate to many clinical applications and potentially new applications in the future.”
GE also cleared a path for future progress through the acquisition of Unisyn Medical Technologies’ Transactional Business, and $1.06 billion purchase of Thermo Fisher Scientific Inc.’s HyClone cell culture (sera and media), gene modulation and magnetic beads businesses. The trio will be rolled into GE Healthcare’s life science sector, expanding its bioprocessing manufacturing presence in Asia, Europe, and the Americas.
Thermo Fisher, the world’s biggest supplier of lab testing equipment by market value, agreed to sell the businesses in November last year to secure European regulatory approval for its $13.6 billion deal to buy Life Technologies Corp., which makes genetic testing and mapping equipment.
HyClone is used to manufacture vaccines and drugs that treat diseases including cancer and arthritis. GE Healthcare has a cell biology business performing similar work.
“Life Sciences is one of our strongest and fastest-growing business areas, driven by the world’s demand for improved diagnostics and new, safer medicines,” John Dineen, CEO of GE Healthcare, said when the deal was announced. “It is a business that we have been expanding over the last several years.”
GE’s biomanufacturing business accounts for $1 billion of the company’s $18 billion in healthcare revenue. The three newly acquired Thermo Fisher businesses generated a combined estimated revenue of roughly $250 million in 2013.
GE has been building out its life sciences operations since its 2003 acquisition of Amersham plc. In 2011, the company acquired cellular-imaging supplier Applied Precision Inc., and last year it bought biomolecular manufacturing technology supplier Xcellerex Inc.