Caterpillar, Inc. · NYSE:CAT
Caterpillar — Q2 2024 Earnings Presentation
29 slides from Caterpillar's earnings presentation, Aug 6, 2024
Slide 1: Second Quarter 2024 Financial Review
Second Quarter 2024 Financial Review August 6, 2024
Slide 2: Forward-Looking Statements
2Q 2024 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: Thank you to our Global Team
2Q 2024 EARNINGS RELEASE Thank you to our Global Team HIGHER RECORD ROBUST 2Q ADJUSTED OPERATING 2Q ADJUSTED ME&T FREE PROFIT MARGIN1 PROFIT PER SHARE2 CASH FLOW3 EXECUTING OUR STRATEGY FOR LONG-TERM PROFITABLE GROWTH 1 Adjusted operating profit margin is a non-GAAP measure, and a reconciliation to
Slide 4: Key Takeaways
2Q 2024 EARNINGS RELEASE Key Takeaways Second Quarter 2024 vs. Second Quarter 2023 $16.7B $3.5B $3.7B $5.48 $5.99 4% 5% 3% 2% 8% ADJUSTED ADJUSTED SALES & OPERATING OPERATING PROFIT PROFIT REVENUES PROFIT PROFIT1 PER SHARE PER SHARE2 RECORD RECORD 1 Adjusted operating profit is a non-GAAP measure, a
Slide 5: ME&T Free Cash Flow & Capital Deployment
2Q 2024 EARNINGS RELEASE ME&T Free Cash Flow1 & Capital Deployment $2.5B $2.5B $7.6B 2Q 2024 ME&T 2Q 2024 SHARE REPURCHASES DEPLOYED TO SHAREHOLDERS FREE CASH FLOW1 AND DIVIDENDS IN THE FIRST HALF OF 2024 Expect to return substantially all Deployed more than $1.8B in Through share repurchases ME&T F
Slide 6: End Market Commentary
2Q 2024 EARNINGS RELEASE End Market Commentary CONSTRUCTION INDUSTRIES RESOURCE INDUSTRIES ENERGY & TRANSPORTATION 6 Caterpillar: Confidential Yellow
Slide 7: Sustainability
2Q 2024 EARNINGS RELEASE Sustainability CAT CG260 GAS GENERATOR SET PORTFOLIO NOW INCLUDES HYDROGEN FUEL CAPABILITY AGREEMENT WITH VALE TO TEST BATTERY ELECTRIC LARGE MINING TRUCKS 7 Caterpillar: Confidential Yellow
Slide 8: Financial Results Summary
2Q 2024 EARNINGS RELEASE Financial Results Summary Second Quarter 2024 vs. Second Quarter 2023 SALES & OPERATING ADJUSTED PROFIT REVENUES PROFIT PER SHARE1 (in billions of dollars) (in billions of dollars) (in dollars) $17.3 $3.7 $16.7 $5.99 $3.5 $5.55 2019 2018 2022 2022 1Q 1Q 1 Second-quarter 2024
Slide 9: Consolidated Sales & Revenues
2Q 2024 EARNINGS RELEASE Consolidated Sales & Revenues Second Quarter 2024 vs. Second Quarter 2023 18,000 17,318 (1,206) 2ND QUARTER HIGHLIGHTS 578 (77) 76 16,689 16,000 Sales & Revenues Decreased $629M or 4% 14,000 • Lower sales volume of $1.206B 12,000 • Favorable price realization of $578M 10,000
Slide 10: Consolidated Operating Profit
2Q 2024 EARNINGS RELEASE Consolidated Operating Profit Second Quarter 2024 vs. Second Quarter 2023 4,500 4,000 578 77 (79) (8) (63) (227) 2ND QUARTER HIGHLIGHTS 3,652 (431) (17) 3,482 3,500 Operating Profit Decreased $170M or 5% 3,000 • Favorable price realization of $578M • Profit impact of lower s
Slide 11: Construction Industries
2Q 2024 EARNINGS RELEASE Construction Industries Second Quarter 2024 vs. Second Quarter 2023 TOTAL SALES* SEGMENT PROFIT SEGMENT PROFIT 2ND QUARTER HIGHLIGHTS (in billions of dollars) (in millions of dollars) (as a percent of total sales*) Total Sales Decreased by $471M or 7% • North America – Sales
Slide 12: Resource Industries
2Q 2024 EARNINGS RELEASE Resource Industries Second Quarter 2024 vs. Second Quarter 2023 TOTAL SALES* SEGMENT PROFIT SEGMENT PROFIT 2ND QUARTER HIGHLIGHTS (in billions of dollars) (in millions of dollars) (as a percent of total sales*) Total Sales Decreased $357M or 10% • Lower sales volume of $475M
Slide 13: Energy & Transportation
2Q 2024 EARNINGS RELEASE Energy & Transportation Second Quarter 2024 vs. Second Quarter 2023 TOTAL SALES* SEGMENT PROFIT SEGMENT PROFIT 2ND QUARTER HIGHLIGHTS (in billions of dollars) (in millions of dollars) (as a percent of total sales*) Total Sales Increased $118M or 2% • Oil and Gas – Increase i
Slide 14: Financial Products
2Q 2024 EARNINGS RELEASE Financial Products Second Quarter 2024 vs. Second Quarter 2023 TOTAL REVENUES* SEGMENT PROFIT 2ND QUARTER HIGHLIGHTS (in millions of dollars) (in millions of dollars) Total Revenues Increased $81M or 9% • Higher average financing rates across all $1,004 $240 $227 regions of
Slide 15: ME&T Free Cash Flow and Capital Deployment
2Q 2024 EARNINGS RELEASE ME&T Free Cash Flow1 and Capital Deployment $2.5B $1.8B $4.3B 2Q 2024 ME&T DEPLOYED IN THE QUARTER ENTERPRISE CASH FREE CASH FLOW1 FOR SHARE REPURCHASES BALANCE Expect to be in the top half Including $1.0B accelerated Hold additional $1.8B in slightly of the ME&T free cash f
Slide 16: Key Thoughts As We Look Ahead – Full Year 2024
2Q 2024 EARNINGS RELEASE Key Thoughts As We Look Ahead – Full Year 2024 ● Anticipate 2024 full-year sales and revenues to be slightly lower than 2023, with the year-over-year decline in the second half being roughly similar to the first half ● Expect a slight reduction in machine dealer inventory1 i
Slide 17: Key Thoughts As We Look Ahead – Second Half 2024
2Q 2024 EARNINGS RELEASE Key Thoughts As We Look Ahead – Second Half 2024 ● Expect second-half 2024 sales and revenues to be slightly higher compared to the first half of 2024 ● Expect changes in dealer inventories1 of machines to have a nominal impact to second-half 2024 sales and revenues ● Expect
Slide 18: Key Thoughts As We Look Ahead – 3Q 2024
2Q 2024 EARNINGS RELEASE Key Thoughts As We Look Ahead – 3Q 2024 ● Expect 3Q 2024 sales and revenues to be slightly lower compared to 3Q 2023 ● Expect dealer inventory1 of machines to be flat to slightly lower in 3Q 2024 ● Anticipate lower machine sales to end users in 3Q 2024 compared to a strong 3
Slide 19: Second Quarter 2024 Key Takeaways
2Q 2024 EARNINGS RELEASE Second Quarter 2024 Key Takeaways HIGHER EXPECT FULL YEAR CONTINUE TO EXPECT ME&T 2Q ADJUSTED OPERATING ADJUSTED OPERATING FREE CASH FLOW4 PROFIT MARGIN1 PROFIT MARGIN1 TO BE TO BE IN TOP HALF RECORD ABOVE THE TOP OF OF THE TARGET 2Q ADJUSTED PROFIT PER SHARE2 THE TARGET RAN
Slide 20: Q&A
2Q 2024 EARNINGS RELEASE Q&A 20 Caterpillar: Confidential Yellow
Slide 21: Appendix
2Q 2024 EARNINGS RELEASE Appendix 21 Caterpillar: Confidential Yellow
Slide 22: 2024 Caterpillar Earnings Call Schedule
2Q 2024 EARNINGS RELEASE 2024 Caterpillar Earnings Call Schedule Earnings Quarter Release Date Call Time 3rd Quarter 2024 Wednesday, October 30, 2024 8:30 a.m. Eastern 22 Caterpillar: Confidential Yellow
Slide 23: Dealer Inventory Changes
2Q 2024 EARNINGS RELEASE Dealer Inventory1 Changes (in billions of dollars) Increase/(Decrease) 2023 2024 YoY Impact Full to 2Q Sales 1Q 2Q 3Q 4Q 1Q 2Q Year2 Dealer Inventory1 of Machines $1.1 $0.2 $0.4 ($1.4) $0.7 $1.1 ($0.4) ($0.6) Total Dealer Inventory1 $1.4 $0.6 $0.6 ($0.9) $2.1 $1.4 ($0.2) ($0
Slide 24: Order Backlog
2Q 2024 EARNINGS RELEASE Order Backlog Increased Increased Decreased $0.7B $0.4B $2.2B 2Q 2024 1Q 2024 2Q 2024 vs. 1Q 2024 vs. 4Q 2023 vs. 2Q 2023 24 Caterpillar: Confidential Yellow
Slide 25: Adjusted Operating Profit Margin Target Range
2Q 2024 EARNINGS RELEASE Adjusted Operating Profit Margin1 Target Range 25% Adjusted Operating Profit Margin %1 22.0% 20.0% 20% 18.0% • Progressive adjusted operating profit margin1 target 18.0% 16.0% range 15% 14.0% 16.0% 14.0% 12.0% • Adjusted operating profit margin1 target range: 10% 10.0% • 10-
Slide 26: Additional Key Thoughts As We Look Ahead – Full Year 2024
2Q 2024 EARNINGS RELEASE Additional Key Thoughts As We Look Ahead – Full Year 2024 ● Capital expenditures expected range of $2.0 billion to $2.5 billion ● Anticipate restructuring costs to be around $450 million ● Expect annual effective tax rate, excluding discrete items, of 22.5% 26 Caterpillar: C
Slide 27: Non-GAAP Financial Measures
2Q 2024 EARNINGS RELEASE Non-GAAP Financial Measures Provision Operating Operating Profit Before (Benefit) for Profit per (Dollars in millions except per share data) Profit Profit Margin Taxes Income Taxes Profit Share Three Months Ended June 30, 2024 - U.S. GAAP $ 3,482 20.9% $ 3,500 $ 836 $ 2,681
Slide 28: Estimated Annual Tax Rate Reconciliation
2Q 2024 EARNINGS RELEASE Estimated Annual Tax Rate Reconciliation Provision Profit Before (Benefit) for Effective Tax (Dollars in millions) Taxes Income Taxes Rate Three Months Ended June 30, 2024 - U.S. GAAP $ 3,500 $ 836 23.9% Restructuring costs - divestiture of two non-U.S. entities 228 - Excess
Slide 29: Reconciliation to U.S. GAAP
2Q 2024 EARNINGS RELEASE Reconciliation to U.S. GAAP Reconciliation of ME&T Cash Flow from Operations to ME&T Free Cash Flow Jun YTD Jun YTD (USD in billions) 2Q 2023 2Q 2024 2023 2024 ME&T cash flow from operations $ 2.9 $ 2.8 $ 4.7 $ 4.6 ME&T capital expenditures (0.3) (0.3) (0.7) (0.8) ME&T free