Cummins Inc. · NYSE:CMI
Cummins — Q4 2024 Earnings Presentation
64 slides from Cummins's earnings presentation, Feb 4, 2025
Slide 1: Fourth Quarter 2024 Earnings Teleconference
Fourth Quarter 2024 Earnings Teleconference February 4th, 2025
Slide 2: Contents
CONTENTS 2024 Summary Q4 2024 Summary 2025 Guidance Q4 2024 Supplemental Information Appendix 2
Slide 3: Disclosure Regarding Forward-Looking Statements
Disclosure Regarding Forward-Looking Statements Information provided in this presentation 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 resul
Slide 4: 2024 Summary
2024 Summary
Slide 5: 2024 Summary
2024 Summary • Full year revenues of $34.1 billion • GAAP1 Net Income of $3.9 billion and Diluted EPS of $28.37 ◦ Net income of $3.0 billion and Diluted EPS of $21.37 excluding net benefit related to the separation of Atmus, cost related to restructuring expenses, and cost related to the Accelera re
Slide 6: Selected Financial Data - Full Year
Cummins Inc. Selected Financial Data - Full Year $ MILLIONS 2024 2023 Sales 34,102 34,065 Gross Margin (% of Sales)1 25.1% 24.3% SAR (% of Sales)2 13.7% 13.9% EBITDA3 5,369 5,195 EBITDA (% of Sales)3 15.7% 15.3% Net Income attributable to Cummins Inc.4 2,973 2,810 Net Income (% of Sales)4 8.7% 8.2%
Slide 7: 2024 Net Sales and EBITDA by Segment
2024 Net Sales and EBITDA by Segment Engine Components Distribution Power Accelera Intersegment Total $ MILLIONS Systems Eliminations Year ended December 31, 2024 Net Sales 11,712 11,679 11,384 6,408 414 (7,495) 34,102 Sales growth vs 2023 —% (13)% 11% 13% 17% 3% —% EBITDA1 1,653 1,612 1,378 1,180 (
Slide 8: 2024 EBITDA Detail
2024 EBITDA Detail Engine Components Distribution Power Accelera CMI Systems Eliminations $ MILLIONS Segment Segment Segment Segment Segment Reported EBITDA 6,326 1,653 1,591 1,378 1,180 (764) 1,288 Reported EBITDA included net benefit 1,298 (21) 1,319 related to the separation of Atmus Reported EBI
Slide 9: 2024 EPS Detail
2024 EPS Detail EPS Reported EPS $ 28.37 Reported EPS included net benefit $ 9.28 related to the separation of Atmus Reported EPS included restructuring $ (0.16) expenses Reported EPS included costs related to $ (2.12) the Accelera reorganization 9
Slide 10: Q4 2024 Summary
Q4 2024 Summary
Slide 11: Q4 2024 Summary
Q4 2024 Summary • Fourth quarter revenues of $8.4 billion • GAAP1 Net Income of $418 million and Diluted EPS of $3.02 ◦ Net income of $714 million and Diluted EPS of $5.16 excluding the cost associated with the Accelera reorganization • EBITDA of $1,020 million or 12.1 percent of sales ◦ EBITDA of $
Slide 12: Selected Financial Data - Quarter
Cummins Inc. Selected Financial Data - Quarter $ MILLIONS Q4 2024 Q4 2023 Sales 8,447 8,543 Gross Margin (% of Sales)1 25.4% 23.7% SAR (% of Sales)2 13.6% 14.2% EBITDA3 1,332 1,233 EBITDA (% of Sales)3 15.8% 14.4% Net Income attributable to Cummins Inc.4 714 592 Net Income (% of Sales)4 8.5% 6.9% Di
Slide 13: Q4 2024 Net Sales and EBITDA by Segment
Q4 2024 Net Sales and EBITDA by Segment Engine Components Distribution Power Accelera Intersegment Total $ MILLIONS Systems Eliminations Three months ended December 31, 2024 Net Sales 2,720 2,641 3,068 1,743 100 (1,825) 8,447 Sales growth vs 2023 (2)% (17)% 13% 22% 23% 11% (1)% 1 EBITDA 367 361 400
Slide 14: Q4 2024 EBITDA Detail
Q4 2024 EBITDA Detail Engine Components Distribution Power Accelera CMI Systems Eliminations $ MILLIONS Segment Segment Segment Segment Segment Reported EBITDA 1,020 367 361 400 314 (431) 9 Reported EBITDA included costs related to (312) (312) the Accelera reorganization 14
Slide 15: Q4 2024 EPS Detail
Q4 2024 EPS Detail EPS Reported EPS $ 3.02 Reported EPS included costs related to $ (2.14) the Accelera reorganization 15
Slide 16: 2025 Guidance
2025 Guidance
Slide 17: Guidance for 2025 Consolidated Results
Guidance for 2025 Consolidated Results ITEM FULL YEAR GUIDANCE Consolidated Revenue Down 2% to Up 3% Earnings from JVs Down 5% to 15% EBITDA Margin 16.2% to 17.2% Depreciation & Amortization $1.1 to $1.2 B 1 Effective Tax Rate 24.5% Capital Expenditures $1.4 to $1.5 B Global Pension Funding $52 M In
Slide 18: Guidance for 2025 Segment Results
Guidance for 2025 Segment Results ITEM ENGINE COMPONENTS DISTRIBUTION POWER SYSTEMS ACCELERA Consolidated Down 2% to Up 3% Down 5% to Flat Up 2% to 7% Up 2% to 7% $400M to $450M Revenue Growth 2025 EBITDA Margins 14.2% to 15.2% 13.8% to 14.8% 12.0% to 13.0% 19.0% to 20.0% ($415M) to ($385M) (% of Re
Slide 19: Key On-Highway Engine Markets - 2025
Key On-Highway Engine Markets - 2025 2025 Market Size KEY MARKET Forecast Vs. 2024 Heavy Duty Truck - North America 260K - 290K units Flat to Down 10% Class 8, Group 2 - Production No change to prior guidance Medium Duty Truck - North America 140K - 155K units Down 5% to 15% Class 6-7, and Class 8 G
Slide 20: 2025 Guidance
Cummins Inc. 1 2 3 2025 Guidance Sales Down 2% to Up 3% EBITDA 16.2% to 17.2% 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 including $115 million of Meritor acquisition and in
Slide 21: Q4 2024 Supplemental Information
Q4 2024 Supplemental Information
Slide 22: Engine Segment Selected Financial Data
Engine Segment Selected Financial Data • Sales decrease of 2% due to softening demand in the North $ MILLIONS Q4 2024 Q4 2023 CHANGE American heavy-duty truck and pickup markets partially offset by Sales 2,720 2,779 (2)% strength in global medium-duty truck markets. EBITDA1 367 365 1% • EBITDA margi
Slide 23: Engine Segment - Sales by Market
Engine Segment - Sales by Market • On-highway revenues $ MILLIONS Q4 2024 Q4 2023 CHANGE decreased 3% due to softening demand in the North American Heavy-Duty Truck 980 1,052 (7)% heavy-duty truck and pickup Medium-Duty Truck & 1,024 894 15% markets partially offset by Bus strength in global medium-
Slide 24: Components Segment Selected Financial Data
Components Segment Selected Financial Data • Sales decreased 17% primarily due to $ MILLIONS Q4 2024 Q4 2023 CHANGE the separation of Atmus and lower demand in heavy-duty truck. Sales 2,641 3,191 (17)% • The decrease in EBITDA margin is driven primarily by the dilutive impact EBITDA1 361 443 (19)% o
Slide 25: Distribution Segment Selected Financial Data
Distribution Segment Selected Financial Data • Sales increased 13% driven by $ MILLIONS Q4 2024 Q4 2023 CHANGE increased demand for power generation products, particularly for Sales 3,068 2,713 13% data center applications, and pricing actions. EBITDA 400 269 49% • EBITDA margin increased primarily
Slide 26: Power Systems Segment Selected Financial Data
Power Systems Segment Selected Financial Data • Sales increased 22% due to $ MILLIONS Q4 2024 Q4 2023 CHANGE increased global demand in power generation, particularly for data center applications, and mining Sales 1,743 1,429 22% markets. EBITDA 314 182 73% • EBITDA margin increased primarily as a r
Slide 27: Accelera Segment Selected Financial Data
Accelera Segment Selected Financial Data • Sales increased due to higher eMobility demand. $ MILLIONS Q4 2024 Q4 2023 CHANGE • Beyond the expenses associated Sales 100 81 23% with the strategic reorganization actions, costs associated with the development of electric powertrains, EBITDA2 (119) (121)
Slide 28: Joint Venture Income - Full Year
Joint Venture Income - Full Year $ MILLIONS 2024 2023 Engine 212 251 Components 64 97 Distribution 90 97 Power Systems 79 53 Accelera1 (33) (15) Total JV Income 412 483 1 2024 JV Income excludes $17M of impairment related to the Accelera reorganization 28
Slide 29: Joint Venture Income - Quarter
Joint Venture Income - Quarter $ MILLIONS Q4 2024 Q4 2023 Engine 54 53 Components 13 26 Distribution 17 27 Power Systems 14 11 Accelera1 (11) (4) Total JV Income 87 113 1 Q4 2024 JV Income excludes $17M of impairment related to the Accelera reorganization 29
Slide 30: Cash Flow - Quarter
Cash Flow - Quarter $ MILLIONS Q4 2024 Q4 2023 Operating Cash Flow 1,422 1,459 Capital Expenditures 540 519 Working Capital Measure 6,972 7,000 Working Capital Measure 20.6% 20.5% (% of Net Sales) Total Debt to Capital % 38.4% 40.3% Net Debt to Capital % 26.1% 23.8% 30
Slide 31: Appendix
Appendix
Slide 32: Cummins Inc.
Cummins Inc. • Strong product portfolio and 2024 Revenue by Segment global partners • Macro growth trends play to Cummins' strengths • Disciplined investment for growth • Demonstrated technology leadership 2024 Results Sales: $34.1 billion EBITDA1: $5.4 billion EBITDA%1: 15.7% 1 Excluding $1.298 bil
Slide 33: Cummins Inc. - Revenue by Marketing Territory
Cummins Inc. • Capitalizing on global 2024 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 33
Slide 34: Cummins - Joint Venture Sales Unconsolidated
Cummins - Joint Venture Sales Unconsolidated 2024 Revenue 1 1 2024 includes higher JV unconsolidated sales as a result of JV ownership restructuring within the Distribution Segment; however, no material change to overall JV income 34
Slide 35: Engine Segment - Overview
Engine Segment - Overview • Diesel and natural gas engines from 2024 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 end-mar
Slide 36: Engine Segment - Sales Mix
Engine Segment - Sales Mix 2024 Revenue $11.7 billion 36
Slide 37: Engine Segment - Historical Performance
Engine Segment - Historical Performance 1 1 2 2025 Guidance Sales Down 2% to Up 3% EBITDA 14.2% to 15.2% 1 2022 EBITDA excluding $33 million of net cost related to the indefinite suspension of operations in Russia 2 2023 EBITDA excluding $12 million of cost related to employee voluntary retirement a
Slide 38: Engine Segment - Joint Venture Sales Unconsolidated
Engine Segment - Joint Venture Sales Unconsolidated 2024 Revenue 38
Slide 39: Components Segment - Overview
Components Segment - Overview • Leading supplier of axles, brakes, 2024 Revenue by Business and aftertreatment products for commercial vehicle applications • Largest worldwide supplier of turbochargers from 3.8L to 25L for commercial applications 2024 Results Sales: $11.7 billion EBITDA1: $1.6 billi
Slide 40: Components Segment - Sales Mix
Components Segment - Sales Mix 2024 Revenue $11.7 billion 40
Slide 41: Components Segment - Historical Performance
Components Segment - Historical Performance 1 2 3 2025 Guidance Sales Down 5% to Flat EBITDA 13.8% to 14.8% 1 2022 EBITDA excludes $28 million of cost related to the separation of Atmus, $4 million of net cost related to the indefinite suspension of operations in Russia, and including $70 million of
Slide 42: Components Segment - Joint Venture Sales Unconsolidated
Components Segment - Joint Venture Sales Unconsolidated 2024 Revenue 42
Slide 43: Distribution Segment - Overview
Distribution Segment - Overview • Provide aftermarket support and 2024 Revenue by Product increase solution-based revenue • Increasing network capabilities in emerging markets to capture profitable growth 2024 Results Sales: $11.4 billion EBITDA: $1.4 billion EBITDA%: 12.1% 43
Slide 44: Distribution Segment - Sales Mix
Distribution Segment - Sales Mix • Key enabler for Cummins growth • Benefiting from increased population of products in the field 2024 Revenue $11.4 billion 44
Slide 45: Distribution Segment - Historical Performance
Distribution Segment - Historical Performance 1 1 2025 Guidance Sales Up 2% to 7% EBITDA 12.0% to 13.0% 1 2022 EBITDA excludes $55 million of cost related to the indefinite suspension of operations in Russia. 45
Slide 46: Distribution Segment - Joint Venture Sales Unconsolidated
Distribution Segment - Joint Venture Sales Unconsolidated 2024 Revenue 1 1 2024 includes higher JV unconsolidated sales as a result of JV ownership restructuring; however, no material change to overall JV income 46
Slide 47: Power Systems Segment - Overview
Power Systems Segment - Overview • Global provider of power generation 2024 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 2024 Results Sales: $6.4 billion EB
Slide 48: Power Systems Segment - Sales Mix
Power Systems Segment - Sales Mix 2024 Revenue $6.4 billion 48
Slide 49: Power Systems Segment - Historical Performance
Power Systems Segment - Historical Performance 1 1 2025 Guidance Sales Up 2% to 7% EBITDA 19.0% to 20.0% 1 2022 EBITDA excludes $19 million of net cost related to the indefinite suspension of operations in Russia. 49
Slide 50: Power Systems Segment - Joint Venture Sales Unconsolidated
Power Systems Segment - Joint Venture Sales Unconsolidated 2024 Revenue 50
Slide 51: Emerging Market Sales - India
Emerging Market Sales - India1 • Present in India for over 60 years • Market leadership • Strong OEM relationships • Expanding our markets in a variety of technologies 1 Consolidated & JV sales with eliminations 51
Slide 52: 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 • Long-term growth from new products and tightening emission standards 1 Consolidated & JV sales with eliminations 52
Slide 53: Non-GAAP Reconciliation - EBITDA
Non-GAAP Reconciliation - EBITDA Three Months Ended In Millions 31-Dec-24 31-Dec-23 Net income (loss) attributable to Cummins Inc. $ 418 $ (1,431) Net income attributable to noncontrolling interests 27 38 Consolidated net income (loss) 445 (1,393) Income tax expense 217 163 Income before taxes 662 (
Slide 54: Non-GAAP Reconciliation - EBITDA (LTM)
Non-GAAP Reconciliation - EBITDA (LTM) Last Twelve Months Ended In Millions 31-Dec-24 31-Dec-23 Net income attributable to Cummins Inc. $ 3,946 $ 735 Net income attributable to noncontrolling interests 122 105 Consolidated net income 4,068 840 Income tax expense 835 786 Income before taxes 4,903 1,6
Slide 55: Non-GAAP Reconciliation - EBITDA (LTM 2022 & 2021)
Non-GAAP Reconciliation - EBITDA (LTM 2022 & 2021) Last Twelve Months Ended In Millions 31-Dec-22 31-Dec-21 Net income attributable to Cummins Inc. $ 2,151 $ 2,131 Net income attributable to noncontrolling interests 32 33 Consolidated net income 2,183 2,164 Income tax expense 636 587 Income before t
Slide 56: Non-GAAP Reconciliation - Working Capital
Non-GAAP Reconciliation - Working Capital Three Months Ended In Millions 31-Dec-24 31-Dec-23 Accounts and notes receivable, net $ 5,181 $ 5,583 Inventories 5,742 5,677 Accounts Payable - (principally trade) (3,951) (4,260) Working capital measure $ 6,972 $ 7,000 Annualized Working capital measure (%
Slide 57: Non-GAAP Reconciliation - Working Capital
Non-GAAP Reconciliation - Working Capital Years Ended In Millions 31-Dec-24 31-Dec-23 Accounts and notes receivable, net $ 5,181 $ 5,583 Inventories 5,742 5,677 Accounts Payable - (principally trade) (3,951) (4,260) Working capital measure $ 6,972 $ 7,000 Working capital measure (% of Net Sales) 20.
Slide 58: Non-GAAP Reconciliation - Net Assets
Non-GAAP Reconciliation - Net Assets In Millions 31-Dec-24 31-Dec-23 Total Assets $ 31,540 $ 32,005 Less: Deferred debt costs 5 4 Less: Deferred tax assets 1,119 1,082 Less: Pension and other postretirement benefit adjustments excluded 352 307 from net assets Less: Liabilities deducted in arriving a
Slide 59: Non-GAAP Reconciliation - Invested Capital Used for ROIC Calculation
Non-GAAP Reconciliation - Invested Capital Used for Return on Invested Capital Calculation In Millions 31-Dec-24 31-Dec-23 Total Equity $ 11,308 $ 9,904 Less: Defined benefit postretirement plans (842) (848) Equity used for return on invested capital calculation 12,150 10,752 Loans payable 356 280 C
Slide 60: Non-GAAP Reconciliation - NOPAT Used 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-Dec-24 31-Dec-23 Net income attributable to Cummins Inc. $ 3,946 $ 735 Net income attributable to noncontrolling interests 122 105 Consolidated net incom
Slide 61: Non-GAAP Reconciliation - ROANA
Non-GAAP Reconciliation - ROANA Last 12 Months Ended In Millions 31-Dec-24 31-Dec-23 Unadjusted ROANA EBITDA $ 6,326 $ 3,017 Beginning - Total Net Assets 16,081 17,568 Ending - Total net Assets 17,508 16,081 Unadjusted ROANA 38 % 18 % Adjusted ROANA EBITDA excluding One-Time Items1 5,369 5,195 Begin
Slide 62: Non-GAAP Reconciliation - ROIC
Non-GAAP Reconciliation - ROIC Last 12 Months Ended In Millions 31-Dec-24 31-Dec-23 Unadjusted ROIC Net Operating Profit after Taxes $ 4,377 $ 1,035 Beginning - Unadjusted Invested capital used for ROIC calculation 17,448 18,249 Ending - Unadjusted Invested capital used for ROIC calculation 19,209 1
Slide 63: Net Debt to Capital Reconciliation
Net Debt to Capital Reconciliation In Millions 31-Dec-24 31-Dec-23 Total Debt (A) $ 7,059 $ 6,696 Total Equity (B) 11,308 9,904 Total Capital (C) = (A+B) 18,367 16,600 Total Cash, Cash Equivalents & Marketable Securities (D) 2,264 2,741 Net Debt (E) = (A-D) $ 4,795 $ 3,955 Total Debt to Capital % (A
Slide 64: 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 www.investor.cummins.com