Caterpillar, Inc. · NYSE:CAT
Caterpillar — Q3 2020 Earnings Presentation
21 slides from Caterpillar's earnings presentation, Oct 27, 2020
Slide 1: Third Quarter 2020 Financial Review
Third Quarter 2020 Financial Review October 27, 2020 | 1
Slide 2: Forward-Looking Statements
3Q 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: Business Update
Business Update Providing access to products and Dedicated to the safety, health and services our customers need well-being of our global team Continued focus on Well positioned for services, expanded changes in market offerings and operational demand excellence | 3
Slide 4: Financial Results Summary
Financial Results Summary Third Quarter 2020 vs. Third Quarter 2019 Sales Operating Profit & Revenues Profit Margin Per Share1 $9.9B 10.0% $1.22 (23%) (5.8pts) (54%) 1 Third-quarter 2020 profit per share included remeasurement losses of $0.12 per share resulting from settlements of pension obligatio
Slide 5: Third Quarter 2020 vs. Second Quarter 2020
Financial Results Summary Third Quarter 2020 vs. Second Quarter 2020 SALES & REVENUES OPERATING PROFIT PROFIT PER SHARE1 (in billions of dollars) (in millions of dollars) (in dollars) $1.22 $985 $10.0 $9.9 $784 $0.84 3Q 2020 2020 2020 2Q 2020 2Q 2020 3Q 2020 2Q2018 3Q2019 1 Second-quarter 2020 and t
Slide 6: End Markets by Segment
End Markets by Segment CONSTRUCTION INDUSTRIES ENERGY & TRANSPORTATION RESOURCE INDUSTRIES | 6
Slide 7: Strong Financial Position
Strong Financial Position Returned to Shareholders Enterprise Cash Dividend in 3Q 2020 Dividends Balance Aristocrat $0.6B $9.3B $2.8B 2020 YTD through dividends Increased by ~$500M in 3Q For 27 consecutive years, including 2020, and share repurchases Caterpillar has paid higher annual dividends to s
Slide 8: 2020 Financial Results
2020 Financial Results Third Quarter 2020 vs. Third Quarter 2019 SALES & REVENUES OPERATING PROFIT PROFIT PER SHARE1 (in billions of dollars) (in millions of dollars) (in dollars) $12.8 $2.66 $2,020 $9.9 $985 $1.22 2018 2019 2020 2019 2020 2019 2019 2020 1 Third-quarter 2020 profit per share include
Slide 9: Consolidated Sales & Revenues
Consolidated Sales & Revenues Third Quarter 2020 vs. Third Quarter 2019 14,000 12,758 (2,619) 12,000 (121) 3rd Quarter Highlights (6) (131) 9,881 10,000 Sales & Revenues Decreased ($2.9B) or (23%) Millions of $ 8,000 • Sales volume decreased across the three primary segments and all regions 6,000 •
Slide 10: Consolidated Operating Profit
Consolidated Operating Profit Third Quarter 2020 vs. Third Quarter 2019 2,500 2,020 (1,086) 2,000 3rd Quarter Highlights Operating Profit Decreased ($1.0B) or (51%) 1,500 • Decreased sales volume Millions of $ 242 16 (112) • Unfavorable price realization (63) (121) 985 • Lower profit from Financial
Slide 11: Construction Industries
Construction Industries Third Quarter 2020 vs. Third Quarter 2019 Total Sales* Segment Profit Segment Profit 3rd Quarter Highlights (in billions of dollars) (in millions of dollars) as a percent of total sales* Total Sales Decreased ($1,233M) or (23%) $940 • North America – Decrease due to lower end
Slide 12: Resource Industries
Resource Industries Third Quarter 2020 vs. Third Quarter 2019 Total Sales* Segment Profit Segment Profit 3rd Quarter Highlights (in billions of dollars) (in millions of dollars) as a percent of total sales* Total Sales Decreased ($494M) or (21%) • Lower end-user demand, partially offset by impact fr
Slide 13: Energy & Transportation
Energy & Transportation Third Quarter 2020 vs. Third Quarter 2019 3rd Quarter Highlights Total Sales* Segment Profit Segment Profit Total Sales Decreased ($1,291M) or (24%) (in billions of dollars) (in millions of dollars) as a percent of total sales* • Oil and Gas – Lower demand in North America fo
Slide 14: Financial Products
Financial Products Third Quarter 2020 vs. Third Quarter 2019 Total Revenues* Segment Profit (in millions of dollars) (in millions of dollars) 3rd Quarter Highlights $865 $218 Total Revenues Decreased ($141M) or (16%) $724 • Lower average financing rates $142 • Lower average earning assets Segment Pr
Slide 15: ME&T Free Cash Flow
ME&T Free Cash Flow1 ~$900M Down ~$200M Up ~$400M 3Q 2020 versus 3Q 2019 versus 2Q 2020 1 ME&T free cash flow represents ME&T operating cash flow less capital expenditures, excluding discretionary pension contributions. | 15
Slide 16: 4Q 2020 Key Thoughts
4Q 2020 Key Thoughts We expect : • Less of a decline in end-user demand than in 3Q • Normal seasonality in sales versus the third quarter • Dealers to reduce inventory levels by ~$700M in 4Q, ~$2.5B full year • About $100M of restructuring expense in 4Q, ~$400M full year • Operating margins to impro
Slide 17: Strong Financial Position
Strong Financial Position Returned to Shareholders in Enterprise Cash Available Liquidity 3Q 2020 Dividends Balance Sources $0.6B $9.3B Over $14B $2.8B 2020 YTD through Increased by ~$500M in 3Q Including revolver and dividends and share repurchases commercial paper support programs | 17
Slide 18: Key Takeaways
Key Takeaways Sequential Returned $2.8B to Strong financial position; We continue to improvement in 3Q shareholders YTD through $9.3B enterprise cash invest for long-term operating margin dividends and share and access to profitable growth and repurchases over $14B of liquidity remain agile and prep
Slide 19: 3Q 2020 Earnings Release
3Q 2020 EARNINGS RELEASE OUR SOLUTIONS HELP OUR CUSTOMERS BUILD A BETTER WORLD CATERPILLAR | °
Slide 20: Preliminary 2021 Caterpillar Earnings Call Schedule
Preliminary 2021 Caterpillar Earnings Call Schedule Earnings Quarter Release Date Call Time 4th Quarter 2020 Friday, January 29, 2021 8:30 a.m. Eastern 1st Quarter 2021 Thursday, April 29, 2021 8:30 a.m. Eastern 2nd Quarter 2021 Friday, July 30, 2021 8:30 a.m. Eastern 3rd Quarter 2021 Thursday, Octo
Slide 21: Dealer Inventory and Order Backlog
Dealer Inventory and Order Backlog Decreased Decreased Unfavorable Dealer $600M $400M $200M Inventories* 3Q 2020 3Q 2019 3Q 2020 *Dealers are independent businesses and control their own inventory Change Change Impact on Sales Increased Decreased Decreased Order $500M $1.2B $1.2B Backlog 3Q 2020 2Q