Caterpillar, Inc. · NYSE:CAT
Caterpillar — Q4 2020 Earnings Presentation
24 slides from Caterpillar's earnings presentation, Jan 29, 2021
Slide 1: Fourth Quarter and Full Year 2020 Financial Review
Fourth Quarter and Full Year 2020 Financial Review January 29, 2021 | 1
Slide 2: Forward-Looking Statements
4Q 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: Resilience and Performance of our Global Team
Resilience and Performance of our Global Team RECORD LEVEL OF SUPPORT FOR BEST SAFETY RELIEF EFFORTS THROUGH PERFORMANCE ON RECORD CATERPILLAR FOUNDATION | 3
Slide 4: Financial Results Summary
Financial Results Summary Fourth Quarter 2020 vs. Fourth Quarter 2019 Sales Operating Profit Adjusted Profit & Revenues Profit Margin Per Share Per Share1 $11.2B 12.3% $1.42 $2.12 (15%) (1.8pts) (28%) (22%) 1 Fourth-quarter 2020 adjusted profit per share excluded mark-to-market losses for remeasurem
Slide 5: Full Year 2020 Performance
Full Year 2020 Performance 11.8% $3.1B $3.4B ADJUSTED OPERATING ME&T FREE CASH FLOW2 RETURNED TO PROFIT MARGIN MET SHAREHOLDERS3 INVESTOR DAY TARGET1 1 Adjusted operating profit margin excludes restructuring costs 2 ME&T Free Cash Flow represents ME&T operating cash flow less capital expenditures, e
Slide 6: End Market Commentary
End Market Commentary CONSTRUCTION INDUSTRIES ENERGY & TRANSPORTATION RESOURCE INDUSTRIES | 6
Slide 7: Advancing Our Strategy
Advancing Our Strategy New GX Excavators Mining Technology on U.S. Department of Energy launched in China display at CES® (Consumer Hydrogen Research Electronics Show) Project Funding Awards | 7
Slide 8: Financial Results Summary
Financial Results Summary Fourth Quarter 2020 vs. Fourth Quarter 2019 SALES & REVENUES OPERATING PROFIT ADJUSTED PROFIT (in billions of dollars) (in millions of dollars) PER SHARE1 (in dollars) $13.1 $11.2 $1,850 $2.71 $2.12 4Q 2020 $1,380 2019 2020 4Q 2019 4Q 2019 4Q 2020 4Q2018 4Q2019 1 Fourth-qua
Slide 9: Consolidated Sales & Revenues
Consolidated Sales & Revenues Fourth Quarter 2020 vs. Fourth Quarter 2019 4th Quarter Highlights Sales & Revenues Decreased ($1.9B) or (15%) • Sales volume decreased across the three primary segments • Lower end-user demand • Changes in dealer inventories | 9
Slide 10: Consolidated Operating Profit
Consolidated Operating Profit Fourth Quarter 2020 vs. Fourth Quarter 2019 4th Quarter Highlights Operating Profit Decreased ($470M) or (25%) • Decreased sales volume • Favorable manufacturing costs • Favorable SG&A/R&D expenses • Lower profit from Financial Products Operating Profit Margin of 12.3%
Slide 11: Construction Industries
Construction Industries Fourth Quarter 2020 vs. Fourth Quarter 2019 Total Sales* Segment Profit Segment Profit 4th Quarter Highlights (in billions of dollars) (in millions of dollars) as a percent of total sales* Total Sales Decreased ($512M) or (10%) $659 14.0% • North America – Decrease due to cha
Slide 12: Resource Industries
Resource Industries Fourth Quarter 2020 vs. Fourth Quarter 2019 Total Sales* Segment Profit Segment Profit 4th Quarter Highlights (in billions of dollars) (in millions of dollars) as a percent of total sales* Total Sales Decreased ($215M) or (9%) • Lower end-user demand $261 $273 12.5% 10.9% Segment
Slide 13: Energy & Transportation
Energy & Transportation Fourth Quarter 2020 vs. Fourth Quarter 2019 4th Quarter Highlights Total Sales* Segment Profit Segment Profit (in billions of dollars) (in millions of dollars) as a percent of total sales* Total Sales Decreased ($1,138M) or (19%) • Oil and Gas – Lower demand in North America
Slide 14: Financial Products
Financial Products Fourth Quarter 2020 vs. Fourth Quarter 2019 Total Revenues* Segment Profit 4th Quarter Highlights (in millions of dollars) (in millions of dollars) Total Revenues Decreased ($103M) or (12%) $846 • Lower average financing rates $210 $743 $195 • Lower average earning assets Segment
Slide 15: ME&T Free Cash Flow and Capital Deployment
ME&T Free Cash Flow1 and Capital Deployment 4Q ME&T Free FY20 ME&T Free Enterprise Cash Dividend Cash Flow1 Cash Flow1 Balance Aristocrat ~$1.7B ~$3.1B $9.4B 4Q 2020 Generated in 2020; 110% returned to For 27 consecutive years, shareholders About flat from 3Q 2020 including 2020, Caterpillar has pai
Slide 16: 1Q 2021 Key Thoughts
1Q 2021 Key Thoughts We expect : • Stronger YoY sales to users, led by Construction Industries in 1Q • Seasonal increase in dealer inventories1 ahead of selling season • 1Q headwind of ~$225M due to reinstatement of incentive compensation • Sequential improvement in operating profit margins 4Q 2020
Slide 17: Key Takeaways
Key Takeaways Continued Improving trend in Sequential Best safety focus on long-term end-user demand; improvement in adjusted performance on profitable growth, reductions in dealer operating profit margin record while investing in services and inventory1 in 4Q 2020 4Q 2020 versus 3Q 2020 providing e
Slide 18: Q&A
4Q 2020 EARNINGS RELEASE Q&A | 18
Slide 19: 2021 Caterpillar Earnings Call Schedule
2021 Caterpillar Earnings Call Schedule Earnings Quarter Release Date Call Time 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, October 28, 2021 8:30 a.m. Eastern | 19
Slide 20: Dealer Inventory, Order Backlog and ME&T Services Revenues
Dealer Inventory, Order Backlog and ME&T Services Revenues Decreased Decreased Unfavorable Dealer $1.1B $0.7B $0.4B Inventories1 4Q 2020 4Q 2019 4Q 2020 1Dealers are independent businesses and control their own inventory Change Change Impact on Sales Increased Increased Increased Order $0.8B $0.5B $
Slide 21: Adjusted PPS Walk
Adjusted PPS Walk *Certain amounts may not add due to rounding | 21
Slide 22: Reconciliation to U.S. GAAP
Reconciliation to U.S. GAAP Reconciliation of ME&T Cash Flow from Operations to ME&T Free Cash Flow (USD in billions) 2019 2020 ME&T cash flow from operations $4.9 $4.1 ME&T discretionary pension and OPEB plan contributions 1.5 - ME&T capital expenditures (1.1) (1.0) ME&T free cash flow $5.3 $3.1 No
Slide 23: Consolidated Full Year Sales and Revenues
Consolidated Full Year Sales and Revenues Full Year 2020 vs. Full Year 2019 | 23
Slide 24: Consolidated Full Year Operating Profit
Consolidated Full Year Operating Profit Full Year 2020 vs. Full Year 2019 | 24