GM to Detail Revenue Expansion on Highly Anticipated Investor Day

DETROIT – General Motors CEO Mary Barra and other executives will detail plans to significantly expand and diversify the company’s revenue and profits at a highly anticipated investor event this week in Detroit.

Future growth is a main focus of the event where executives will disclose specific targets regarding revenue, profit margins and full market size outlook for early expanding businesses like self-driving taxis, according to people close to them. of the case, who asked not to be named because the plans were not made public.

GM’s revenue last year was nearly $ 122.5 billion, down 10.8% from 2019 thanks in large part to plant closures at the start of the pandemic. coronavirus. It still posted net income of $ 6.4 billion for the year, while its adjusted operating income was $ 9.7 billion, or $ 4.90 per share, in 2020.

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

Barra and other executives have set the stage for the event for much of this year after expanding the company’s operations beyond simply producing cars and trucks.

“I look forward to just being able to outline General Motors’ full growth strategy,” Barra said at a Credit Suisse investor event in June. “We’ve talked about a lot of things, but being able to come back face to face and really show it and bring the investors to the teams that are doing it, I think that will be key.”

Executives are also expected to discuss in more depth the company’s product transition from an automaker heavily reliant on internal combustion engine vehicles to an exclusive offering of electric cars and trucks by 2035. This will include more information on the company’s plans to invest $ 35 billion in electric and autonomous vehicles. vehicles by 2025, people say.

Dan Ammann, CEO of Cruise, the GM majority-owned autonomous vehicle subsidiary, will tell investors he sees a path for his rideshare business to reach $ 50 billion in revenue as it ramps up its operations.

There are no plans to detail a timeline for reaching such a milestone, but how it can scale as quickly, if not faster, than other transformative companies, according to a person familiar with the plans, which were reported earlier by Bloomberg.

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

Around 100 investors are expected at the GM investor event. Executives will focus on presentations at its design and engineering campus on Wednesday, followed by a day at GM’s Milford Proving Grounds to learn about new products and technologies on Thursday.

GM Chief Financial Officer Paul Jacobson said details released at the event, including long-term financial goals, are intended to educate investors on its core goals and plans for the coming years.

“We’ve kind of deepened our long-term plans and looked at a longer-term financial model,” Jacobson said last month in a discussion with RBC Capital Markets. “And there are some exciting things about initiatives and growth opportunities and what the industry looks like. And we’re going to get into some of those details a bit on Investor Day in the future.”

The event for investors as a whole is expected to provide a “clear strategy” to increase the company’s valuation to make it more like a tech company, much like Tesla at over $ 750 billion. . GM’s market capitalization is approximately $ 79 billion.

GM shares this year rose about 30% to $ 53.98 at Monday’s close. He’s gained about 80% over the past year.

The stock rose 4.7% on Monday after activist investment firm Engine No. 1 announced it had taken a stake in GM. Engine No. 1 founder Chris James believes the company’s shares could triple in the next five years.

“We think this may become a growing business again… we think this stock could triple in the next five years,” James said Monday on CNBC’s “Squawk Box”.

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

“We think this is a real opportunity for people to pay attention and see how a business can be disrupted in an industry in transition,” he said. “General Motors is unique in that we believe they are doing the right things.”