Caterpillar, Inc. · NYSE:CAT
Caterpillar — Q1 2020 Earnings Presentation
19 slides from Caterpillar's earnings presentation, Apr 28, 2020
Slide 1: First Quarter 2020 Financial Review
First Quarter 2020 Financial Review April 28, 2020 | 1
Slide 2: Forward-Looking Statements
1Q 2020 EARNINGS RELEASE Forward-Looking Statements Certain statements in this financial review 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,” “wil
Slide 3: COVID-19 Response
COVID–19 Response Protecting the health and Customers doing Caterpillar and dealers safety of our global team essential business continue to serve customers Cat Financial The Caterpillar Foundation customer has committed $10M to support in place COVID-19 relief efforts | 3
Slide 4: COVID-19 Response
COVID–19 Response Strong balance sheet, Better positioned due to liquidity position and disciplined management of structural costs during upturn credit rating of 2017-2019 Lowering costs: reduced Approximately 75% discretionary spending and of primary production suspended base pay increase facilitie
Slide 5: First Quarter 2020 Financial Results
First Quarter 2020 Financial Results Sales Operating Profit & Revenues Profit Margin Per Share1 $10.6B 13.2% $1.98 (21%) (3.2pts) (39%) 1 First-quarter 2020 profit per share included a remeasurement gain of $0.38 per share resulting from settlement of a non-U.S. pension obligation. First-quarter 201
Slide 6: Executing Our Strategy
Executing Our Strategy Focused on operational We expect to continue to excellence, continuing to invest return substantially all free in services and expanded cash flow to shareholders offerings for profitable growth Prepared to respond to Margins and free cash flow changes in demand, expected to be
Slide 7: 2020 Financial Results
2020 Financial Results First Quarter 2020 vs. First Quarter 2019 SALES & REVENUES OPERATING PROFIT PROFIT PER SHARE1 (in billions of dollars) (in billions of dollars) (in dollars) $13.5 $3.25 $2.2 $10.6 $1.4 $1.98 2018 2019 2020 2019 2020 2019 2019 2020 1 First-quarter 2020 profit per share included
Slide 8: Consolidated Sales & Revenues
Consolidated Sales & Revenues First Quarter 2020 vs. First Quarter 2019 16,000 14,000 13,466 (2,611) 12,000 1st Quarter Highlights (62) (137) (21) 10,635 Sales & Revenues Decreased ($2.8B) or (21%) 10,000 Millions of $ • Sales volume decreased across all regions and the three primary segments 8,000
Slide 9: Consolidated Operating Profit
Consolidated Operating Profit First Quarter 2020 vs. First Quarter 2019 2,500 2,207 (1,139) 2,000 1st Quarter Highlights 261 (69) Operating Profit Decreased ($803M) or (36%) 1,500 (13) 19 1,404 • Decreased sales volume Millions of $ 200 • Lower SG&A/R&D, driven by short-term incentive (62) 1,000 com
Slide 10: Energy & Transportation
Energy & Transportation First Quarter 2020 vs. First Quarter 2019 Total Sales* Segment Profit Segment Profit 1st Quarter Highlights (in billions of dollars) (in millions of dollars) as a percent of total sales* Total Sales Decreased ($861M) or (17%) • Oil and Gas – Lower demand in North America for
Slide 11: Resource Industries
Resource Industries First Quarter 2020 vs. First Quarter 2019 Total Sales* Segment Profit Segment Profit 1st Quarter Highlights (in billions of dollars) (in millions of dollars) as a percent of total sales* Total Sales Decreased ($668M) or (24%) • Decrease due to changes in dealer inventories and lo
Slide 12: Construction Industries
Construction Industries First Quarter 2020 vs. First Quarter 2019 Total Sales* Segment Profit Segment Profit 1st Quarter Highlights (in billions of dollars) (in millions of dollars) as a percent of total sales* Total Sales Decreased ($1,567M) or (27%) • North America – Decrease due to changes in dea
Slide 13: Financial Products
Financial Products First Quarter 2020 vs. First Quarter 2019 Total Revenues* Segment Profit (in millions of dollars) (in millions of dollars) 1st Quarter Highlights $850 $814 $211 Total Revenues Decreased ($36M) or (4%) • Lower average earning assets Segment Profit Decreased ($106M) or (50%) $105 •
Slide 14: COVID-19 Cat Financial Response
COVID-19 Cat Financial Response Customers • Providing relief through Customer Care Programs • Supporting qualified customers with new loans and leases Portfolio • Portfolio performance was strong entering 2020 • Modest increase in allowances due to elevated risks from COVID-19 | 14
Slide 15: How we are managing
How we are managing Demand Stewardship Aligning production with Analysis to ensure we customer demand and are prepared for expectations for lower differing scenarios dealer inventory Strengthened our cash position Cost Control Customers, Dealers Reduced discretionary and Suppliers spend, suspended s
Slide 16: Key Thoughts for 2020
Key Thoughts for 2020 • Decline in dealer inventories expected to be at the higher end of our prior range of $1.0B - $1.5B • Estimated annual tax rate of 31%, excluding discrete items • 2Q 2020 will be more significantly impacted by COVID-19 than 1Q 2020 • Difficult comparison due to 2Q 2019 increas
Slide 17: Capital Allocation, Cash and Liquidity Position
Capital Allocation, Cash and Liquidity Position Returned to Enterprise Cash Available Liquidity Shareholders in 1Q 2020 Balance Sources $1.6B $7.1B $20.5B * Through Dividends Strong Financial Position $10.5B revolver and Share Repurchases $8.0B* of supplemental liquidity facilities $2.0B* in debt pr
Slide 18: First Quarter 2020 Key Takeaways
First Quarter 2020 Key Takeaways Strong financial position; Returned $1.6B to Managing Executing our $7.1B enterprise cash shareholders through operations strategy and continuing and access to dividends and share to respond to changes in to invest for long-term $20.5B of liquidity* repurchases deman
Slide 19: Q&A
1Q 2020 EARNINGS RELEASE Q&A | 19