Caterpillar, Inc. · NYSE:CAT
Caterpillar — Investor Day (May 2019)
23 slides from Caterpillar's investor day presentation, May 2, 2019
Slide 1: Investor Day 2019
OUR SOLUTIONS HELP OUR CUSTOMERS BUILD A BETTER WORLD. INVESTOR DAY 2019 CATERPILLAR’ 4
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements in this financial presentation relate to future events and expectations and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “believe,” “estimate,” “will be,” “will,” “would,” “expec
Slide 3: Agenda
Welcome Agenda Strategy Execution – Jim Umpleby Services – Bob De Lange Operational Excellence / Expanded Offerings – Denise Johnson Financial Framework – Andrew Bonfield Q&A – Executive Office INVESTOR DAY 2019
Slide 4: Strategy Execution
INVESTOR DAY 2019 Strategy Execution Jim Umpleby Chairman & CEO
Slide 5: Our Company
Our Company 2018 SALES & REVENUES ~ $55 BILLION CONSTRUCTION INDUSTRIES RESOURCE INDUSTRIES ENERGY & TRANSPORTATION FINANCIAL PRODUCTS Sales $23B* Sales $10B* Sales $23B* Revenues $3B* SERVICES, DISTRIBUTION & DIGITAL INVESTOR DAY 2019 * Full-Year 2018 including inter-segment sales
Slide 6: Experienced Leadership Team
Experienced Leadership Team Jim Umpleby Andrew Bonfield Ramin Younessi Denise Johnson Billy Ainsworth Bob De Lange Cheryl Johnson Suzette Long Chairman & CEO Chief Financial Group President Group President Group President Group President Chief Human Chief Legal Officer, Officer Construction Resource
Slide 7: Executing Our Strategy
Executing Our Strategy INVESTOR DAY 2019
Slide 8: Achieved 2017 Investor Day Segment Targets
Achieved 2017 Investor Day Segment Targets Construction Industries Resource Industries Energy & Transportation Total Sales1 Total Sales1 Total Sales1 Total Sales1 Total Sales1 Total Sales1 ~$21B $23B ~$10-$12B $10B ~$23B $23B +1-3% 18.0% 17.3% +5-7% 15.6% ~15% 2 +2-6% 2 ~10% ~10% 2 Historical Target
Slide 9: Achieved 2017 Investor Day Enterprise Targets
Achieved 2017 Investor Day Enterprise Targets Sales & Revenues Adjusted Operating Margin ~$55B $54.7B 15.9% +2-5% ~12% * Historical 2018 Historical Targeted 2018 Performance Actual Performance Performance Actual 2017 Investor Day Adjusted Operating Margin Target INVESTOR DAY 2019 * 2017 Investor Day
Slide 10: Historical Financial Results
Historical Financial Results Historical Adjusted Operating Margin Range 7% - 15% $66B $60B $56B $55B $47B $43B 15% 13% $39B 11% 11% 10% 10% 7% 2010 2011 2012 2013 2014 2015 2016 2017 2018 Historical Sales & Revenues $B Historical Adjusted Operating Margin % INVESTOR DAY 2019 Note: A reconciliation o
Slide 11: Delivered Stronger Financial Results
Delivered Stronger Financial Results Improved Financial Performance Historical Adjusted Operating Margin Range 7% - 15% Record PPS in 2018 $66B $60B $56B $55B $55B $47B $45B $43B 15% 13% $39B 16% 11% 11% 10% 10% 7% 13% 2010 2011 2012 2013 2014 2015 2016 2017 2018 Historical Sales & Revenues $B Histo
Slide 12: Delivered Stronger Financial Results
Delivered Stronger Financial Results Improved Financial Performance Adjusted Operating Margin Improvement 5% pts Record PPS in 2018 $66B $55B $55B $60B $56B $55B $55B $47B $45B $43B 15% 16% 13% 11% 11% $39B 16% 10% 11% 10% 7% 13% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2014 2018 Historical Sale
Slide 13: Improved Adjusted Operating Margin Performance Through the Cycles
Improved Adjusted Operating Margin Performance Through the Cycles Future Expected Adjusted Operating Margin Range 10% - 21% 18%-21% 16%-19% 14%-17% 14%-17% +3%-6% 13%-16% 13%-16% 15% 13% 10%-13% 16% Margin pts 11% 11% 10% 10% Improvement 7% 13% $43B $60B $66B $56B $55B $47B $39B $45B $55B 2010 2011
Slide 14: Returning Capital to Shareholders
Returning Capital to Shareholders Targeting at least high single-digit % Raising the Dividend Quarterly Dividend $1.03 Increases by 20% each of the next per share 4 years ($4.12 annualized) Dividend payable on August 20, 2019 to shareholders of record at the close of business on July 22, 2019 INVEST
Slide 15: Profitable Growth Through Services
Profitable Growth Through Services SERVICES INVESTOR DAY 2019
Slide 16: Services Drive …
Services Drive … Increased Customer Value Including Improved Asset Utilization Reduced Cyclicality of Sales & Revenues Improved Profitability Through the Cycles INVESTOR DAY 2019
Slide 17: Services at Strategy Launch
Services at Strategy Launch ME&T Services ~$14B Sales 2016 Baseline Aftermarket Parts Other Caterpillar Services INVESTOR DAY 2019 Note: Machinery, Energy & Transportation (ME&T) Services include, but are not limited to, aftermarket parts and other service-related revenues (excludes Cat Financial an
Slide 18: Double ME&T Services Sales by 2026
Double ME&T Services Sales by 2026 $28B Double to ~$18B $28B ~$14B by 2026 2016 2018 2026 Baseline Actual Target INVESTOR DAY 2019 Note: ME&T Services include, but are not limited to, aftermarket parts and other service-related revenues (excludes Cat Financial and discontinued products) Note: A reco
Slide 19: Agenda
Welcome Agenda Strategy Execution – Jim Umpleby Services – Bob De Lange Operational Excellence / Expanded Offerings – Denise Johnson Financial Framework – Andrew Bonfield Q&A – Executive Office INVESTOR DAY 2019
Slide 20: Appendix
OUR SOLUTIONS HELP OUR CUSTOMERS BUILD A BETTER WORLD. INVESTOR DAY 2019 Appendix CATERPILLAR’
Slide 21: Appendix A of Reconciliation to U.S. GAAP
Caterpillar Inc. – Appendix A of Reconciliation to U.S. GAAP Operating Margin % to Adjusted Operating Margin % $66B $60B $56B $55B $55B $47B $45B 15% $43B 14% 13% 11% $39B 10% 10% 10% 8% 3% 2010 2011 2012 2013 2014 2015 2016 2017 2018 Operating margin % 10% 13% 14% 11% 10% 8% 3% 10% 15% Operating ma
Slide 22: Appendix B of Reconciliation to U.S. GAAP
Caterpillar Inc. – Appendix B of Reconciliation to U.S. GAAP ME&T Cash Flow from Operations to ME&T Free Cash Flow $66B $60B $56B $55B $55B $9B $47B $45B $43B $8B $7B $39B $6B $6B $5B $5B $4B $4B (USD in billions) 2010 2011 2012 2013 2014 2015 2016 2017 2018 ME&T cash flow from operations $ 6 $ 8 $
Slide 23: Appendix C of Reconciliation to U.S. GAAP
Caterpillar Inc. – Appendix C of Reconciliation to U.S. GAAP Services Revenues to ME&T Services Sales (USD in billions) 2016 2018 Services revenues $ 18 $ 21 Financial Products’ revenues (3) (3) Discontinued products (1) (1) ME&T services sales $ 14 $ 18 Note: Amounts may not add due to rounding. No