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How to break the barrier to growthin Australian Mid-Market?
THE GE CHALLENGE 2012
1
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GE MONEY
Retailer Solutions
Insurance Services
Money Direct
GE CORPORATE FINANCE
Commercial Real Estate
Distribution Finance
Fleet & Equity Finance
Pacific Premium
70%GE ANZ
2 Source: Team's Estimation & GE in Australia FactSheet (2009)
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GE ANZ CAPS REVENUE FINANCIAL CONCERNS
Consum
er
30%
Real
Estate
5%
GE
Vertical
25%
Mid-
Market
Lending
40%
Complicated Matrix RelationsWith GE Verticals
Reliance On Credit To EarnLow Interest Rate Loan
Low ROI (~1-2%)
GECS reported decreasingCash at End FY10-12
10% Of Debt Compositionarriving from Securitization
Source: Team's Estimation & GE Capital Investor Meeting Presentation (2011) & GE Capital WebCast Presentation (2010)3
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Economic Contribution byMid-Market (2009-10)
Current:
BARRIER TO GROWTH
Non-service sectors, accountsup to 49% national GDP, but onthe decline in 2012.
Mid-Markets firms considered
too big to received governmentsupport. But too small to accesscapital from banks.
Not large enough to attract
media attention
Source: Team's Analysis & GE Capital Mid-Market Report (2011, 2012)4
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Focus on GE Verticals
5 Source: Team's Strategies & GE Capital Investor Meeting Presentation (2011) & GE Finance Thoughts, BetterTrades (2012)
Rising AsiaUrbanization:
Long term invest onmineral & hedgingto reduce impact ofcommodity priceschanges
EnvironmentalRegulation:
Moving forward togas, take advantageof Water TreatmentServices
PopulationGrowth:
Huge opportunitiesfor more in GE ANZ
Healthcare sectorsto grow
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6 Source: Team's Analysis & GE Capital Investor Meeting Presentation (2011) & IBIS Report: Fastfood Industry in Australia (2012)
Implementing GE Insurance & GE Franchising
Learn from GE Insurance
-More Insurance product choices
-Approach to corporatecustomers: firms, hospitals,
factories
Start GE Franchising
ANZ Fast Food market reached
its maturity in 2011 and growconstantly at 7% per ann., whilstmore than 50% of market shareis non-brand retailers highsimilarity with the USA.
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7/137 Source: Team's Analysis & GE Capital Mid-Market Report (2011, 2012)
Sub-plans Action Plan Expected OutcomeEstimatedExpense
ON CAMPUS
TRAINING
-Mid Semester
-Once/ year
-TAFE, universities-Focus: non service s
oriented courses.
More skilled worker in
the field in next 5 years.
~$5-8,000/school/
event/year
EXPERIENCED
LEADERSHIP
PROGRAMS
-Upon/closer to
graduation of
postgraduate studies
-Once/ year
- Universities
- Focus: on non-service
oriented courses
More skilled workers in
the specific sector of
sales & marketing in the
next 5 years ( specialisingin midmarket firms)
~$10 -15,000/ year
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8/138 Source: Team's Analysis & GE Capital Mid-Market Report (2011, 2012)
Sub-Plans Action PlanExpectedOutcome
EstimatedExpense
OUTSOURCING -Collaborate with
foreign recruitment
agencies
-Add-in services for mid
market firms
-Solve the current
threat of limited access
to skilled workers in
next 5 years
Expense:
~$40,000/5 admin
staff + workplace/
month
Revenue:
~$5-10,000/ one
outsource labour
PROPOSE TO
FEDERAL ABOUT
SKILLED LABOUR
ISSUES
-Take an example in
Singapore, for every 4
locals hired, 1 foreigner
can be outsourced.
-This creates jobopportunities for locals
as well as foreigners-$0
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APPENDIX
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10/1310 Source: Team's Analysis & GE Australia and New Zealand Fact Sheet & GE Finance Thoughts, BetterTrades (2012)
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S W
T
Strengths
Diversified Business Portfolio
Dominant Lender for Mid-Market
High Level Of Expertise Strong Financial Position
Opportunities
Rising Asia Urbanization
Environmental Regulation
High Population Growth
Mid Market Financing
Threats
Chinas Growth
Falling Commodity Prices Access to Skilled Worker
Long term AUD StrengthO
Weaknesses
More Than 60% Profits ArrivingFrom GE Capital
Weak Revenue Growth Of CoreIndustrial Segments
Gap Amongst Core Segments
11 Source: Team's Estimation & GE Capital Investor Meeting Presentation (2011)
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12/13Source: Team's Analysis & Mid-market China Investment Survey, Pillsbury Law (2011)12
6%
willing to M&Awith foreign firms
55%
will likely go tothe market next
to raise capital
26%
consider Australia& NZ are biggest
opportunities
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We have discussed about:
Slide 2: GE ANZ Capital Structure Analysis
Slide 3: GE ANZ Capital Sources of Financing Analysis
Slide 4: Australian Mid-Market Financing Analysis Slide 5 & 6: Strategy to improve GEs Financial Position
Slide 7 & 8: Strategy to gain more Skilled Labour
Appendix:
Slide 10: Imbalance of GE Australia & NZ Segmentation Slide 11: GE Australia & NZ SWOT Slide 12: Opportunities with Chinas Mid-Market
Thank you very much