GM to detail significant revenue expansion plans during highly anticipated investor day

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  • GM CEO Mary Barra and other executives will detail the company’s plans to expand its revenue and earnings opportunities during an investor day this week.
  • Growth will be the main focus of the event, which will include detailed targets regarding revenue, profit margins and outlook on total addressable markets for early expanding businesses.
  • In addition to financial goals, GM executives are expected to discuss the company’s plans to move from a traditional automaker focused on costs to a “platform company” that generates new revenue.

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DETROIT — General Motors CEO Mary Barra and other executives will detail plans to significantly expand and diversify the company’s revenue and earnings during a much-anticipated investor event this week in Detroit.

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According to people familiar with the matter, future growth is the main focus of the event where executives will reveal specific targets regarding revenue, profit margins and outlook on total market size for initial expanding businesses, such as self-driving taxis, According to people familiar with the matter. to be named because the plans have not been made public.

GM’s revenue last year was about $122.5 billion, down 10.8% compared to 2019 due to massive factory closures at the start of the coronavirus pandemic. It still generated net income of $6.4 billion for the year, while its 2020 adjusted operating profit was $9.7 billion, or $4.90 per share.

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In addition to financial goals, GM executives will discuss the company’s plans to move from a traditional automaker to a cost-focused “platform company” that focuses on software, core technologies and additional business lines, such as OnStar and its EV commercial start-up. generates new revenue through Brightdrop according to the people.

Barra and other executives are laying the foundation for the event for much of this year after expanding the company’s operations beyond just producing cars and trucks.

“I can’t wait to be able to design General Motors’ full growth strategy,” Barra said during the Credit Suisse investor event in June. “We’ve talked about a lot of the pieces, but being able to face-to-face and really show it and get investors to the teams that are doing it, I think will be important.”

Executives are expected to discuss the company’s product transition in more depth, which is heavily dependent on vehicles with internal combustion engines and offers exclusively electric cars and trucks by 2035. It will include more information about the company’s plans to invest $35 billion in Electric and Autonomous. Vehicles by 2025 according to people.

cruise

Dan Amman, CEO of GM’s majority-owned autonomous vehicle subsidiary Cruise, will tell investors it sees a way to reach $50 billion in revenue for its ride-hailing business as it ramps up operations.

A timeline for hitting such a milestone is not expected to extend, but how fast it could grow compared to other transformational businesses, according to a person familiar with the plans, previously reported by Businesshala. had gone.

Cruise is expected to start charging for rides as soon as next year, pending approval from California regulators, the source confirmed.

About 100 investors are expected to attend GM’s investor program. Executives will focus on presentations at its design and technology campus on Wednesday, followed by a day at GM’s Milford Proving Ground on Thursday to experience new products and technologies.

GM CFO Paul Jacobson has said that the details released at the event, including long-term financial objectives, are meant to inform investors on its baseline goals and plans for the coming years.

“We’ve delved really deep into our long-term plans and are looking at the long-term financial model,” Jacobson said during a discussion with RBC Capital Markets last month. “And there are some exciting things about growth initiatives and opportunities and what the industry looks like. And we’re going to go into some of those details in the Investor Day going forward.”

The overall investor event is expected to provide a “clear strategy” in an effort to raise the company’s valuation to a technology company, much like Tesla’s, to more than $750 billion. GM’s market cap is about $79 billion.

GM stock soared nearly 30% this year to $53.98 as of Monday’s close. This is an increase of about 80 percent compared to the previous year.

engine number 1

Upstart activist investment firm Engine No. 1 said the stock rose 4.7 percent on Monday after taking a stake in GM. Engine No. 1 founder Chris James believes the company’s stock could triple over the next five years.

“We think it can become a growth company again… We think this stock could triple over the next five years,” James said Monday on CNBC’s “Squawk Box.”

Engine No. 1 rose to prominence after a successful campaign against Exxon. But the firm’s investment in GM is a seal of approval rather than the more traditional active investor approach, James said.

“We think this is a real opportunity for people to pay attention and see how a company can disrupt itself in an industry that is going through transition,” he said. “General Motors is unique in that we think they’re doing the right thing.”

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