Cummins Inc. · NYSE:CMI
Cummins — Q1 2024 Earnings Presentation
57 slides from Cummins's earnings presentation, May 2, 2024
Slide 1: First Quarter 2024 Earnings Teleconference
First Quarter 2024 Earnings Teleconference May 2, 2024
Slide 2: Contents
CONTENTS Q1 2024 Summary 2024 Guidance Q1 2024 Supplemental Information Appendix 2
Slide 3: Disclosure Regarding Forward-Looking Statements
Disclosure Regarding Forward-Looking Statements Information provided in this release that is not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our forecasts, guidance, preliminary results, e
Slide 4: Q1 2024 Summary
Q1 2024 Summary
Slide 5: Q1 2024 Summary
Q1 2024 Summary • First quarter revenues of $8.4 billion • GAAP1 Net Income of $1,993 million and Diluted EPS of $14.03 ◦ Net income of $724 million and Diluted EPS of $5.10 excluding the net benefit related to the separation of Atmus and restructuring expenses ◦ Net income includes noncontrolling i
Slide 6: Selected Financial Data - Quarter
Cummins Inc. Selected Financial Data - Quarter $ MILLIONS Q1 2024 Q1 2023 Sales 8,403 8,453 Gross Margin (% of Sales)1 24.5% 24.0% SAR (% of Sales)2 13.8% 12.9% EBITDA3 1,303 1,379 EBITDA (% of Sales)3 15.5% 16.3% Net Income attributable to Cummins Inc.4 724 804 Net Income (% of Sales)4 8.6% 9.5% Di
Slide 7: Q1 2024 Net Sales and EBITDA by Segment
Q1 2024 Net Sales and EBITDA by Segment Components Engine Distribution Power Accelera Intersegment Total $ MILLIONS Systems Eliminations Three months ended March 31, 2024 Net Sales 3,332 2,928 2,535 1,389 93 (1,874) 8,403 Sales growth vs 2023 (6)% (2)% 5% 3% 9% (3)% (1)% 1 EBITDA 494 414 294 237 (10
Slide 8: Q1 2024 EBITDA Detail
Q1 2024 EBITDA Detail Components Engine Distribution Power Accelera CMI Systems Eliminations Segment Segment Segment Segment Segment $ MILLIONS Reported EBITDA 2,572 473 414 294 237 (101) 1,255 Reported EBITDA included net benefit 1,298 (21) 1,319 related to the separation of Atmus Reported EBITDA i
Slide 9: Q1 2024 EPS Detail
Q1 2024 EPS Detail EPS Reported EPS $ 14.03 Reported EPS included costs and benefits related to the separation of $ 9.08 Atmus Reported EPS included restructuring $ (0.15) expenses 9
Slide 10: 2024 Guidance
2024 Guidance
Slide 11: Guidance for 2024 Consolidated Results
Guidance for 2024 Consolidated Results ITEM FULL YEAR GUIDANCE2 Consolidated Revenue Down 2% to 5% Earnings from JVs Down 5% to 15% EBITDA Margin 14.5% to 15.5% Depreciation & Amortization $1,030 to $1,080 M 1 Effective Tax Rate 24.0% Capital Expenditures $1.2 to $1.3 B Global Pension Funding $68 M
Slide 12: Guidance Update Following Atmus Separation
Guidance Update Following Atmus Separation PRIOR GUIDANCE UPDATED GUIDANCE (Includes Atmus for Full Year) (Includes Atmus Through Mar. 18 Only) Cummins Revenue Down 2% to 5% Down 2% to 5% Cummins EBITDA 14.4% to 15.4% 14.5% to 15.5% 1 Atmus Revenue $1,610 to $1,675 M $353 M 1 Atmus EBITDA 18.25% to
Slide 13: Guidance for 2024 Segment Results
Guidance for 2024 Segment Results ITEM COMPONENTS2 ENGINE DISTRIBUTION POWER SYSTEMS ACCELERA 3 Consolidated Down 9% to 14% Down 5% to Flat Flat to Up 5% Flat to Up 5% $450M to $500M Revenue Growth 2024 EBITDA Margins 13.5% to 14.5% 12.7% to 13.7% 11.5% to 12.5% 16.0% to 17.0% ($430M) to ($400M) (%
Slide 14: Key On-Highway Engine Markets - 2024
Key On-Highway Engine Markets - 2024 2024 Market Size KEY MARKET Forecast Vs. 2023 Heavy Duty Truck - North America 255K - 275K units Down 7% to 12% Class 8, Group 2 - Production Down 10% to 15% in prior guidance Medium Duty Truck - North America 140K - 150K units Down 5% to Flat Class 6-7, and Clas
Slide 15: Cummins Inc. 2024 Guidance
Cummins Inc. 1,2,3 2024 Guidance Sales down 2% to 5% EBITDA 14.5% to 15.5% 1 2022 EBITDA excludes $111 million of net cost related to the indefinite suspension of operations in Russia, $81 million of cost related to the separation of Atmus, and includes $115 million of cost related to the acquisitio
Slide 16: CMI Analyst Day Thursday, May 16, 2024
CMI Analyst Day Thursday, May 16, 2024 For additional information contact: Investor Relations investor.relations@cummins.com www.cummins.com 16
Slide 17: Q1 2024 Supplemental Information
Q1 2024 Supplemental Information
Slide 18: Components Segment Selected Financial Data
Components Segment Selected Financial Data • Sales decreased 6% driven by lower $ MILLIONS Q1 2024 Q1 2023 CHANGE demand in both North America and China. Sales 3,332 3,557 (6)% • The increase in EBITDA margin is primarily due to improved EBITDA1 494 519 (5)% performance within Cummins-Meritor. EBITD
Slide 19: Engine Segment Selected Financial Data
Engine Segment Selected Financial Data • Sales decreased 2% driven by $ MILLIONS Q1 2024 Q1 2023 CHANGE lower demand in international markets partly offset with Sales 2,928 2,986 (2)% increased On-highway revenues. EBITDA 414 457 (9)% • EBITDA margin decreased as the benefit from pricing was EBITDA
Slide 20: Engine Segment - Sales by Market
Engine Segment - Sales by Market • On-highway revenues increased $ MILLIONS Q1 2024 Q1 2023 CHANGE 1% driven by continued strong demand in the North American Heavy-Duty Truck 1,059 1,114 (5)% medium-duty truck market and Medium-Duty Truck & 995 903 10% pricing actions. Bus Light-Duty Automotive 438
Slide 21: Distribution Segment Selected Financial Data
Distribution Segment Selected Financial Data • Sales increased 5% driven by $ MILLIONS Q1 2024 Q1 2023 CHANGE increased demand for power generation products and pricing Sales 2,535 2,406 5% actions. • EBITDA margin decreased primarily EBITDA 294 335 (12)% due to aftermarket sales declining from reco
Slide 22: Power Systems Segment Selected Financial Data
Power Systems Segment Selected Financial Data • Sales increased 3% due to higher $ MILLIONS Q1 2024 Q1 2023 CHANGE global demand, particularly in the power generation markets, partly offset by weaker demand in oil & gas Sales 1,389 1,343 3% markets. EBITDA 237 219 8% • EBITDA margin increased primar
Slide 23: Accelera Segment Selected Financial Data
Accelera Segment Selected Financial Data • Sales increased due to increased electrolyzer installations. $ MILLIONS Q1 2024 Q1 2023 CHANGE • EBITDA losses are driven by costs Sales 93 85 9% associated with the development of electric powertrains, fuel cells and electrolyzers, as well as products to E
Slide 24: Joint Venture Income - Quarter
Joint Venture Income - Quarter $ MILLIONS Q1 2024 Q1 2023 Components 26 21 Engine 57 65 Distribution 24 24 Power Systems 19 13 Accelera (3) (4) Total JV Income 123 119 24
Slide 25: Cash Flow - Quarter
Cash Flow - Quarter $ MILLIONS Q1 2024 Q1 2023 Operating Cash Flow 276 495 Capital Expenditures 169 193 Working Capital Measure 6,745 7,076 Working Capital Measure 20.1% 20.9% (% of Net Sales) Total Debt to Capital % 40.4% 42.2% Net Debt to Capital % 22.3% 28.9% 25
Slide 26: Appendix
Appendix
Slide 27: Cummins Inc.
Cummins Inc. • Strong product portfolio and Q1 2024 LTM Revenue by Segment global partners • Macro growth trends play to Cummins' strengths • Disciplined investment for growth • Demonstrated technology leadership Q1 2024 LTM Results Sales: $34.0 billion EBITDA1: $5.1 billion EBITDA%1: 15.0% 1 Exclud
Slide 28: Cummins Inc.
Cummins Inc. • Capitalizing on global Q1 2024 LTM Revenue by Marketing Territory emissions regulations • Strong geographic diversification and leadership across multiple end-markets • Global distribution network with presence in approximately 190 countries and territories 28
Slide 29: Cummins - Joint Venture Sales Unconsolidated
Cummins - Joint Venture Sales Unconsolidated Q1 2024 LTM Revenue * Rest of world 29
Slide 30: Components Segment - Overview
Components Segment - Overview • Leading supplier of axles, brakes, Q1 2024 LTM Revenue by Business and aftertreatment products for commercial vehicle applications • Largest worldwide supplier of turbochargers from 3.8L to 25L for commercial applications Q1 2024 LTM Results Sales: $13.2 billion EBITD
Slide 31: Components Segment - Sales Mix
Components Segment - Sales Mix Q1 2024 LTM Revenue $13.2 billion 31
Slide 32: Components Segment - Historical Performance
Components Segment - Historical Performance 4 1,2,3,4 2024 Guidance5 Sales Down 9% to 14% EBITDA 13.5% to 14.5% 1 2022 EBITDA excludes $4 million of net cost related of the indefinite suspension of operations in Russia and $28 million of cost related to the separation of Atmus, and includes $70 mill
Slide 33: Components Segment - Joint Venture Sales Unconsolidated
Components Segment - Joint Venture Sales Unconsolidated Q1 2024 LTM Revenue 33
Slide 34: Engine Segment - Overview
Engine Segment - Overview • Diesel and natural gas engines from Q1 2024 LTM Revenue by Product 2.8L to 15L and 48 hp to 715 hp • Long-term engine supply agreements with key customers to stabilize pricing and to jointly engineer better integrated vehicles to market • Leading market share in multiple
Slide 35: Engine Segment - Sales Mix
Engine Segment - Sales Mix Q1 2024 LTM Revenue $11.6 billion 35
Slide 36: Engine Segment - Historical Performance
Engine Segment - Historical Performance 1, 2, 3 2024 Guidance Sales Down 5% to Flat EBITDA 12.7% to 13.7% 1 2022 EBITDA excludes $33 million of cost related of the indefinite suspension of operations in Russia 2 2023 EBITDA excludes $12 million of cost related to employee voluntary retirement and se
Slide 37: Engine Segment - Joint Venture Sales Unconsolidated
Engine Segment - Joint Venture Sales Unconsolidated Q1 2024 LTM Revenue 37
Slide 38: Distribution Segment - Overview
Distribution Segment - Overview • Provide aftermarket support and Q1 2024 LTM Revenue by Product increase solution-based revenue • Increasing network capabilities in emerging markets to capture profitable growth Q1 2024 LTM Results Sales: $10.4 billion EBITDA1: $1.2 billion EBITDA%1: 11.3% 38
Slide 39: Distribution Segment - Sales Mix
Distribution Segment - Sales Mix • Key enabler for Cummins growth • Benefiting from increased population of products in the field Q1 2024 LTM Revenue $10.4 billion 39
Slide 40: Distribution Segment - Historical Performance
Distribution Segment - Historical Performance 1 2024 Guidance Sales Flat to Up 5% EBITDA 11.5% to 12.5% 1 2022 excludes $55 million of net cost related to the indefinite suspension of operations in Russia 40
Slide 41: Distribution Segment - Joint Venture Sales Unconsolidated
Distribution Segment - Joint Venture Sales Unconsolidated Q1 2024 LTM Revenue 1 1 2024 includes higher JV unconsolidated sales as a result of JV ownership restructuring; however, no material change to overall JV income * Rest of World 41
Slide 42: Power Systems Segment - Overview
Power Systems Segment - Overview • Global provider of power generation Q1 2024 LTM Revenue by Product systems, components and services from 2kW to 3.5 Megawatts (MW) • Leading supplier of alternators from 7.5kVA to 11,200kVA • Leading market share in multiple geographies Q1 2024 LTM Results Sales: $
Slide 43: Power Systems Segment - Sales Mix
Power Systems Segment - Sales Mix Q1 2024 LTM Revenue $5.7 billion 43
Slide 44: Power Systems Segment - Historical Performance
Power Systems Segment - Historical Performance 1 2024 Guidance Sales Flat to Up 5% EBITDA 16.0% to 17.0% 1 2022 excludes $19 million of net cost related to the indefinite suspension of operations in Russia 44
Slide 45: Power Systems Segment - Joint Venture Sales Unconsolidated
Power Systems Segment - Joint Venture Sales Unconsolidated Q1 2024 LTM Revenue 45
Slide 46: Emerging Market Sales - India
Emerging Market Sales - India1 • Present in India for over 60 years • Market leadership • Strong OEM relationships • Expanding our markets 1 Consolidated & JV sales with eliminations 46
Slide 47: Emerging Market Sales - China
Emerging Market Sales - China1 • Present in China for over 40 years • Broad product portfolio for On and Off Highway • Strong OEM partners • Growth from new products and tightening emission standards 1 Consolidated & JV sales with eliminations 47
Slide 48: Non-GAAP Reconciliation - EBITDA
Non-GAAP Reconciliation - EBITDA Three Months Ended In Millions 31-Mar-24 31-Mar-23 Net income attributable to Cummins Inc. $ 1,993 $ 790 Net income attributable to noncontrolling interests 35 16 Consolidated net income 2,028 806 Income tax expense 193 223 Income before taxes 2,221 1,029 Interest ex
Slide 49: Non-GAAP Reconciliation - EBITDA (LTM)
Non-GAAP Reconciliation - EBITDA (LTM) Last Twelve Months Ended In Millions 31-Mar-24 31-Mar-23 Net income attributable to Cummins Inc. $ 1,938 $ 2,523 Net income attributable to noncontrolling interests 124 43 Consolidated net income 2,062 2,566 Income tax expense 756 704 Income before taxes 2,818
Slide 50: Non-GAAP Reconciliation - Working Capital
Non-GAAP Reconciliation - Working Capital Three Months Ended In Millions 31-Mar-24 31-Mar-23 Accounts and notes receivable, net $ 5,463 $ 5,834 Inventories 5,758 5,878 Accounts Payable - (principally trade) (4,476) (4,636) Working capital measure $ 6,745 $ 7,076 Annualized Working capital measure (%
Slide 51: Non-GAAP Reconciliation - Net Assets
Non-GAAP Reconciliation - Net Assets In Millions 31-Mar-24 31-Mar-23 Total Assets $ 31,827 $ 31,433 Less: Deferred debt costs 4 4 Less: Deferred tax assets 950 688 Less: Pension and other postretirement benefit adjustments excluded 291 922 from net assets Less: Liabilities deducted in arriving at ne
Slide 52: Non-GAAP Reconciliation - Invested Capital for ROIC Calculation
Non-GAAP Reconciliation - Invested Capital Used for Return on Invested Capital Calculation In Millions 31-Mar-24 31-Mar-23 Total Equity $ 10,101 $ 10,620 Less: Defined benefit postretirement plans (861) (436) Equity used for return on invested capital calculation 10,962 11,056 Loans payable 342 229
Slide 53: Non-GAAP Reconciliation - NOPAT for ROIC Calculation
Non-GAAP Reconciliation - Net Operating Profit After Taxes Used for Return on Invested Capital Calculation Last Twelve Months Ended In Millions 31-Mar-24 31-Mar-23 Net income attributable to Cummins Inc. $ 1,938 $ 2,523 Net income attributable to noncontrolling interests 124 43 Consolidated net inco
Slide 54: Non-GAAP Reconciliation - ROANA
Non-GAAP Reconciliation - ROANA Last 12 Months Ended In Millions 31-Mar-24 31-Mar-23 Unadjusted ROANA EBITDA $ 4,228 $ 4,405 Beginning - Total Net Assets 18,091 12,738 Ending - Total net Assets 16,393 18,091 Unadjusted ROANA 25 % 29 % Adjusted ROANA EBITDA excluding One-Time Items1 5,119 4,440 Begin
Slide 55: Non-GAAP Reconciliation - ROIC
Non-GAAP Reconciliation - ROIC Last 12 Months Ended In Millions 31-Mar-24 31-Mar-23 Unadjusted ROIC Net Operating Profit after Taxes $ 2,339 $ 2,778 Beginning - Unadjusted Invested capital used for ROIC calculation 18,808 13,426 Ending - Unadjusted Invested capital used for ROIC calculation 17,797 1
Slide 56: Net Debt to Capital Reconciliation
Net Debt to Capital Reconciliation In Millions 31-Mar-24 31-Mar-23 Total Debt (A) $ 6,835 $ 7,752 Total Equity (B) 10,101 10,620 Total Capital (C) = (A+B) 16,936 18,372 Total Cash, Cash Equivalents & Marketable Securities (D) 3,051 2,439 Net Debt (E) = (A-D) $ 3,784 $ 5,313 Total Debt to Capital % (
Slide 57: Thank you for your interest
Thank you for your interest For additional information: Chris Clulow – Vice President Investor Relations (812) 377-3121 | Investor.Relations@cummins.com, Christopher.Clulow@cummins.com www.cummins.com