GEhas published its financial results after a “challenging” Q2 2020. The accounts report $877 million in goodwill impairment charges related to the firm’s recent 3D printing acquisitions.
在2020年第一季度，GE的收入从2019年第一季度的234亿美元下降到177.5亿美元，使该公司从2020年第四季度将其年度基于风险的损害审查转移到第三季度。该公司的评估价值2016年的收购Arcam和Concept Laser的价值低于支付的金额，在此过程中签下了价值8.77亿美元的商誉。此举之后，GE的CFO Carolina Dybeck承认，该公司在H2 2020期间“预期其现金流假设的压力”。
Speaking to 3D Printing Industry, a GE spokesperson would not answer direct questions about the goodwill impairment.
GE’s 3D printing acquisitions
GE宣布了计划购买金属3D印刷公司Arcam的计划，最初是在2016年底购买SLM Solutions。reported to be worth $1.4 billion, was designed to act as a spearhead for GE’s 3D printing implementation program across its business. Shareholders in SLM Solutions saw their investment increase by 36.7 percent after negotiations were made public, and shares in Arcam jumped more than 50 percent.
尽管这笔交易的势头和SLM董事会建议股东接受要约, negotiations faltered. At this point, SLM’s shares had soared to $42.54, raising the value of the company to $761 million. The increasing influence of theElliott Group, run by billionaire Paul Singer,ended GE’s involvement in the process, with the firm declining to pay the premium demanded by the opportunist U.S. hedge fund.
Since the negotiations collapsed, SLM hasfaced financial challenges，埃利奥特小组介入€13 million cash injection2019年4月。到2019年底，SLM将其财务业绩转变为considerable increase in orders。This momentum carried over to 2020, and the company posted itsrecord revenue intake在2020年第1季度，90 percent revenue growthover H1 2020.
相比之下，GE最终在2016年购买了Metal 3D印刷公司Arcam和Concept Laser，当时它预计到2020年将使该业务增长超过10亿美元。GE继续投资于该公司increasing its stake in the companyfrom 77 percent to 95 percent later that year. Arcam has continued to expand its 3D printing offering,launching its EBM Spectra H systemand opening a瑞典哥德堡的新卓越中心。
耗资8.77亿美元的GE商誉损害注销
对商誉的损害通常表明，自收购以来，公司决定要么决定支付超过账面价值，要么自从收购以来就下降了。无论哪种方式，一旦确定了购买业务支付的金额与资产的公允价值之间的差额，则可以将差异注销为善意。
Although companies list the goodwill of acquisitions on their balance sheets, they don’t depreciate or amortize like regular assets, so businesses are required to appraise them on a yearly basis. The fact that GE has opted to assess 20 percent of its assets early, indicates that its investments have been particularly badly affected by the ongoing pandemic.
Reducing the value of a company’s goodwill can be risky, given that businesses are valued on their assets, but firms tidying up their balance sheets can be good news for investors. Sometimes it’s considered better to ‘bite the bullet’ and write-off part of an investment, rather than have a bloated, unrealistic balance sheet. In this context, and under the cover of COVID-19, now could be an opportune time for companies to tidy their balance sheets without damaging their shares prices.
Over H1 2020, GE’s shares slipped from $11.16 to $6.83, and it’s leadership may have decided that they couldn’t decline much further, and proceeded with the write-off. After the firm’s financial results were published, its shares declined to $6.07 but quickly recovered to $6.61, suggesting that investors have factored the impairment into their valuation.
GE第2季度2020财务业绩的影响
GE suffered a 26 percent decline in its total revenue during Q2 2020, with its flagship aerospace segment being particularly badly affected by the pandemic. The travel restrictions caused by COVID-19 have led GE’s aviation revenue to drop from $8.5 billion in Q2 2019 to $3.7 billion in Q2 2020.
Although GE didn’t break down its Q2 3D printing figures in detail within its financials, it’s likely that its 3D printing business is also suffering from the macroeconomic climate. The fact that the firm’s goodwill impairments came from its GECAS aviation and Additive divisions, also lends further credence to the idea that these segments were identified as risk areas by GE.
GE董事长兼首席执行官Lawrence Culp JR在与分析师和投资者的收入电话会议中为该公司写下其资产的商誉的举动。Culp Jr说：“我们的第二季度非常具有挑战性，我们正面遇到了，在我们采取行动进一步降低公司时，运营良好。”
他补充说：“我们的收入绩效受到了Covid-19对业务的持续影响的影响，但我们在控制范围内的要素上取得了更快的进步，包括我们的目标成本和现金保存行动。”
Concluding with a Q&A on the earnings call, GE’s CFO Carolina Dybeck, said that the firm would continue to review its portfolio, but also raised concerns about its cash flow during H2 2020. “We’ll finalize our annual review of the entire portfolio in the third quarter,” said Dybeck. “We do anticipate pressure on our cash flow assumptions driven by possible elevated repossession and a prolonged recovery for the industry.”
“We’ll continue to monitor credit risk impairments, as we go over the year,” she added. GE reduced its Earnings Per Share EPS by $0.15 year-on-year in response to the reduction in customer demand seen during Q2 2020, and the firm’s goodwill impairment charges.
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Featured image shows a series of Arcam 3D printers that were acquired and installed by GE Additive. Image via GE Additive.
