© Reuters. FILE PHOTO: A logo is displayed on GE’s digital anesthesia care device as U.S. Vice President Mike Pence (not pictured) visits a GE Healthcare manufacturing facility during an outbreak caused by a disease caused by the coronavirus. global coronavirus (COVID-19) in Madison, Wisconsin, USA in April
By Khushi Mandowara and Leroy Leo
(Reuters) – General Electric Co’s healthcare division is targeting single-digit mid-term organic revenue growth, unit CEO Peter Arduini said at a conference. investor day on Thursday.
GE Healthcare, which will spin off as a separate listed company early next year, expects aging populations, chronic illnesses and the rise of the middle class in many emerging markets to boost its growth target. company.
Arduini said China, which accounts for about 15% of GE Healthcare’s total sales, will also help drive growth due to pent-up demand in the market.
Chief Financial Officer Helmut Zodl said that alongside organic growth, the company will also look at “tied-up” acquisitions to boost its business, similar to the acquisition of an appliance maker. had a BK Medical ultrasound worth $1.45 billion last year.
GE Healthcare also expects medium-term adjusted core margin to be near 20%.
Zodl highlighted challenges such as macroeconomic factors, supply chain challenges, restructuring action to be taken in 2022, and planned investments in research and development that could affect rates the company’s core profit margin.
The new company’s mid-term target for core margins “should be warmly received in light of concerns that increased R&D may be needed,” writes Barclays (LON:) analyst Julian Mitchell in a note.
The healthcare company had about $18 billion in revenue last year, with about half of that coming from recurring sources, GE Healthcare said in a presentation.
general electricity (NYSE:) last November announced it would split into three publicly traded units focusing on healthcare, aviation, and energy with the aim of simplifying its business and reducing debt.
GE Healthcare will operate imaging and ultrasound equipment, patient care solutions, and diagnostic pharmaceutical businesses.
The healthcare unit is expected to complete operations on January 3, with public trading set for the following day.