GE Vernova Inc.

My name is Liz and I will be your conference coordinator today. If you experience issues with the webcast slides refreshing or there appears to be delays in the slide advancement, please hit F5 on your keyboard to refresh. As a reminder, this conference is being recorded. I would now like to turn the program over to your host for today's conference, Michael Lapidus, Vice President of Investor Relations. Please proceed.

Welcome to GE Vernova's fourth quarter and full year 24 earnings call. I'm joined today by our CEO, Scott Strasick, and our CFO, Ken Parks. Our conference call remarks will include both GAAP and non-GAAP financial results. Reconciliations between GAAP and non-GAAP measures can be found in today's press release and in the presentation slides, all of which are available on our website. Please note that year-over-year commentary or variances on orders, revenue, adjusted, and segment EBITDA and margins discussed during our prepared remarks are on an organic basis unless otherwise specified. We will make forward-looking statements about our performance. These statements are based on how we see things today. While we may elect to update these forward-looking statements at some point in the future, we do not undertake an obligation to do so. As described in our SEC filings, actual results may differ materially due to risk and uncertainties. With that, I'll hand the call over to Scott.

Thanks, Michael. Good morning, everyone, and welcome to our fourth quarter earnings call. We built a strong foundation in 24 in our first year as an independent company. The investment super cycle in the electric power sector, driven by the growing need for reliable power generation, grid modernization, and decarbonization, continues to accelerate. The world is shifting, relying more on electrons and megawatts, and this is changing the energy landscape driving increased demand for our equipment and services. We are investing in decarbonization technologies within our own portfolio. For example, advancing carbon capture and sequestration. Late last year, we had a great customer milestone with the announcement of the Net Zero Teesside Power Project, expected to be the first gas-fired power station fully integrated with carbon capture technology. Last week, we also announced efforts jointly with multiple large U.S. utilities to accelerate the deployment of our small modular nuclear reactor, the BWRX-300. We expect these technologies to impact the electric power system in the coming decades. Our progress in 24 reinforced the important role we play at GE for NOVA in electrifying and decarbonizing the world while creating value for our stakeholders. Turning to slide four. I will spend a few minutes on each of our segments and how we are executing to meet demand. In power, market demand for gas generation is driving significant orders growth. For the full year, we booked approximately 20 gigawatts of gas orders, double last year's level, and secured 9 gigawatts of slot reservation agreements for new turbines, agreements that should convert to orders in 2025 to 2026. These agreements are tied to load growth in the U.S., partially driven by data center hyperscaler demand associated with AI. Given our expansion plans to produce 70 to 80 heavy-duty gas turbines per year, beginning in the second half of 26, up from 48 this year, we are positioning to meet this demand. We expect to grow our gas equipment backlog considerably in 25, even as we ramp to ship approximately 20 gigawatts annually starting in 27. and expect to remain at that level going forward. In addition to equipment demand growth, we are also seeing high margin services growth in our install base as customers aim to get more capacity and better performance out of their plants. Today, we deliver about 2 billion of upgrades annually in our gas business, and we anticipate this could grow by 50% by the end of the decade. Beyond gas power, we were having more active customer discussions on nuclear about the existing install base of 65 plants here in the U.S. that are running our technology today. We see an opportunity to add 5 gigawatts of nuclear power in the U.S. between these existing facilities and potential restarts that could impact both nuclear and steam services beginning late in this decade. Against this backdrop, power delivered 7% revenue growth and nearly 200 basis points of margin expansion in 24. Overall, there is a lot to be excited about as our power segment drives profitable growth and significant free cash flow. In electrification, demand for our products remains strong, with equipment orders more than doubling in 4Q24 compared to last year as customers modernize and invest in critical grid components such as transformers. switchgears, and HVDC systems, which are essential to ensuring a reliable electricity system and effectively connecting new generation sources. We are seeing significant orders and backlog growth in both Europe and North America. And while Europe remains our largest market for grid, we are seeing orders accelerate in North America, which was our fastest growing market in 24. For the full year, Electrification achieved 18% revenue growth and over 500 basis points of margin expansion. Demand trends and improving execution are driving an acceleration of margin expansion, increasing our confidence in our trajectory, and we expect this segment to deliver double-digit EBITDA margin in 25 and expand further in 26 and beyond. Turning to WINT, we've made solid progress in our turnaround of this segment in 24, cutting our EBITDA losses by almost half despite lower revenues. At Onshore, we delivered high single-digit EBITDA margins on roughly flat revenue in 24. The timing of an inflection in North America Onshore wind orders remains uncertain, but we expect to continue accreting margin in this business with our focus on our key countries, improving quality, and delivering cost-out initiatives. We are deploying more crews and cranes to insert technology that should improve the performance of the existing fleet and better serve our customers. As a result, we expect to grow these investments by over 100 million in 25 versus 24, with a heavy year-on-year increase in the first half as we accelerate our operational improvements in this business. In offshore, We're focused on improving execution and delivering on the approximately $3 billion remaining backlog swiftly, safely, and economically for our customers and ourselves. We are back to fully installing at both project sites, and as we discussed during our investor update in December, we expect to materially complete with Vineyard Wind in 2025, and we have a pathway to be mostly complete with Dogger Bank in 2026. We do not foresee adding to the offshore backlog without substantially different industry economics than what we see in the marketplace today. Looking ahead, we are applying what we've learned from the challenges in offshore wind to make us a stronger company going forward. Now over to the right-hand side of the page. We're focused on further embedding the lean culture across the organization, driving operational improvement across safety, quality, delivery, and cost. Let me take you through an example where the lean journey over the last seven years has driven real results and improved performance across all of SQDC. Earlier this month, I visited a gas power services and repair facility in Singapore that focuses on F and H gas turbines. On safety, this facility has achieved decades of fatality-free operations supported through implementation of lean lines which is have eliminated millions of mechanical lifts per year. On quality, we have lowered escapes at this facility by 25% from driving standard work and have used lean to reduce the amount of rework, generating cost savings. On delivery, through implementing eight lean lines, we have tripled the output, utilizing 50% less shop floor space and doubling the working hours. on cost by performing more database preventative maintenance and removing waste, we reduced machine costs by 50% and significantly increased productivity on existing machines. The Singapore example represents the culture we are building at GE Vernova as we accelerate our lean progress across the entire company and improve our own efficiency. There is significant growth will achieve in this facility in the years ahead all within the same four walls without pouring concrete or adding new cranes with a team that has fully embraced lean to serve our customers while preserving our capital for our shareholder accretive actions turning to slide five on our financial performance in 24 we booked 44 billion of orders with 35 billion in revenue delivered EBITDA margin expansion across all segments, and more than a billion-dollar improvement in free cash flow. We grew our backlog to $119 billion and nearly doubled our cash balance to over $8 billion since spin from a combination of strong free cash flow generation and capitalizing on value creation opportunities, such as the partial stake sales of GEV T&D India and China XD Electric. which generated 1.3 billion of pre-tax proceeds in 24. As I said in December, this is representative of the culture we are building inside GE Vernova. When we see opportunities to simplify our organization or to monetize parts of the portfolio at attractive prices that creates capital that allows us to either invest back into our business or return to shareholders, we are going to act with urgency. In December, we raised our multi-year financial outlook and framed our capital allocation strategy, including a shareholder return program with our initial dividend and first buyback authorization, reflecting our conviction in the substantial value creation opportunities ahead. One of the primary drivers of our conviction in our path forward is the significant growth and margin expansion in our equipment backlog again in 24, which I'll touch on in the next page. Over the past two years, we have added more than 6 billion of margin to our equipment backlog, given better pricing and more disciplined underwriting as this backlog has grown over 50% to 43 billion. We also expanded margin across all three segments again in 24. Starting with power and electrification, we expect these segments to continue to materially grow their backlogs in 25 at better margins. We see this clearly in front of us because of our wins in late 24, such as the gas lot reservation agreements that we expect to turn into orders this year, along with a continued strong demand for electrification products driven by increased grid investments. Because these segments are longer cycle, we won't begin delivering on the majority of the high margin orders of 23 and 24 until 26 and beyond. Moving to wind, we project a stable to modestly lower backlog in 25. Our backlog will reduce an offshore wind as we execute on the remaining 3 billion of backlog, but the margins will improve as this unprofitable business is completed. At onshore, we expect backlog should remain approximately flat with stable margins as we remain focused on key markets and disciplined underwriting while we leverage our existing footprint and our supply chain. But as we said in December, we see incremental opportunity for the teams to expand margins that aren't projected in our external backlog today. That starts with our operating teams delivering variable cost productivity from things like sourcing savings and project execution at important milestones that can secure lower costs and allow us to accrete margins as we execute. The teams are also working hard to accelerate capacity additions, leveraging lean, which can create incremental slots we can sell at premium pricing. In summary, we are encouraged with our progress here, but it is just the beginning. When I look at our pricing success in gas in late 24, our continued momentum and electrification with things like switchgears in North America, and the internal expectations I have of the opportunity for teams to accrete incremental margin with variable cost productivity savings, and I expect the margin we create in backlog in 25 to be higher than our run rate the prior two years, further positioning GE Vernova for profitable growth over the long term. With that, I will now turn the call over to Ken for more details on our fourth quarter performance.