Slide 1: January 2024
January 2024 Page 1
Slide 2: Disclosure Regarding Forward-Looking Statements
Disclosure Regarding Forward-Looking Statements This presentation may contain statements that are forward looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties, which may cause actual results to differ materially. A summary of risks a
Slide 3: Index
Index PACCAR Overview 4 Trucking Moves the Economy 24 Distribution Centers and Dealer Map 43 Our Culture 5 >6t Global Truck Market 25 Global Dealer Network 44 PACCAR Brands 6 >16t Truck Market Size 26 Kenworth and Peterbilt Locations 45 New Kenworth T680 8 PACCAR Strategy 28 Financial Services Strat
Slide 4: PACCAR: A Global Technology Company in Commercial Vehicles
PACCAR A Global Technology Company in Commercial Vehicles 2023 Revenues $35.1B 2023 Net Income $4.6B 2023 Avg Dividend Yield 5.3% 85 Years of Consecutive Profitability; Dividend Paid Every Year Since 1941 Truck and Other Aftermarket Parts $26.9B Revenues $6.4B Revenues Premium Quality Light, Medium
Slide 5: Our Vision
Our Vision PACCAR is creating trucks and transportation solutions that drive the world’s future. Our focus is on doing things in an ethical and disciplined manner. We make decisions utilizing conservative financial principles and common sense for the long-term benefit of our customers, employees and
Slide 6: PACCAR business segments and brands
PACCAR’s business segments include Commercial Vehicles, Powertrain, Aftermarket Parts, Financial Services and Information Technology. PACCAR’s premium brands Kenworth, Peterbilt and DAF are the premier light, medium and heavy duty commercial trucks in their markets. Other brands include PACCAR Power
Slide 7: PACCAR's product investments deliver industry-leading performance
PACCAR’s product investments Our products reflect our core deliver industry-leading brand values of quality, performance and value to our innovation and technology customers January 2024 Page 7
Slide 8: New Kenworth T680
New Kenworth T680 Kenworth’s next generation T680 heavy truck features an enhanced aerodynamic exterior design, driver optimized technology, including a customizable 15” digital dash display, and 7% greater fuel economy January 2024 Page 8
Slide 9: New Peterbilt Model 579
New Peterbilt Model 579 Peterbilt’s new Model 579 Class 8 truck sets the standard for technology and driver comfort and delivers 7% greater fuel efficiency January 2024 Page 9
Slide 10: New Peterbilt and Kenworth Medium Duty
New Peterbilt and Kenworth Medium Duty The all new medium duty product line-up features an 8” wider cab with 3-person seating. Powered by the updated PACCAR PX engine and all-new PACCAR TX-8 automatic transmission. January 2024 Page 10
Slide 11: New DAF XD, XF, XG, XG+
New DAF XD, XF, XG, XG+ DAF is the first truck manufacturer in the industry to have taken full advantage of Europe’s new regulations governing truck design. The new trucks feature a new aerodynamic design, 10% greater fuel efficiency and larger interior space. January 2024 Page 11
Slide 12: New DAF Truck Models
New DAF Truck Models Electric XD and XF NGD Interior XF and XG+ XD Vocational January 2024 Page 12
Slide 13: PACCAR Powertrain
The proprietary PACCAR Powertrain is the most advanced heavy-duty powertrain in the market. The PACCAR MX engines are integrated to the PACCAR TX-12 automated transmission and the efficient DX-40 tandem drive axle to achieve exceptional performance and fuel economy. Kenworth and Peterbilt offer the
Slide 14: PACCAR Truck Production
PACCAR Truck Production Over 1.6 Million Trucks Produced 2014 - 2023 PACCAR produced 204,200 trucks in 2023 Units (000s) 250 198.8 204.2 Brasil 189.1 185.9 Australia 200 154.7 158.9 162.7 Mexico 142.9 140.9 Canada 133.3 150 US Europe 100 50 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 January
Slide 15: Excellent Financial Performance Throughout the Business Cycle
PACCAR Excellent Financial Performance Throughout the Business Cycle $ Billions Revenues $ Billions • Reputation for superior operational 40 35 40 35 excellence and premium-quality products 30 30 and services 25 25 20 20 15 10 15 10 • Long-term growth in revenues and net 5 5 income reflect increased
Slide 16: Net Income as % of Revenues
Net Income as % of Revenues 18% 18% 15% 15% 12% 12% 9% 9% 6% 6% 3% 3% 0% 0% -3% -3% -6% -6% 13 14 15 16 17 18 19 20 21 22 23 PACCAR Volvo Daimler Truck Traton Iveco January 2024 Page 16
Slide 17: Best-in-Class Operating Efficiency: Inventory Turns
Best-in-Class Operating Efficiency Inventory Turns PACCAR’s inventory turns are the highest in the industry, a result of the PACCAR Production System, Lean Manufacturing and Six Sigma 24 24 20 20 16 16 12 12 8 8 4 4 0 0 14 15 16 17 18 19 20 21 22 23 PACCAR Volvo Daimler Truck Traton Iveco January 20
Slide 18: Best-in-Class Operating Efficiency: SG&A % of Sales
Best-in-Class Operating Efficiency SG&A % of Sales PACCAR’s SG&A as a percentage of sales is much lower than its peer group, reflecting strong financial discipline 16% 16% 12% 12% 8% 8% 4% 4% 0% 0% 14 15 16 17 18 19 20 21 22 23 PACCAR Volvo Daimler Truck Traton Iveco January 2024 Page 18
Slide 19: Net Income per Truck
Net Income per Truck • Net income per truck is PACCAR’s Truck Units $/Truck net income divided by total truck (000s) unit sales. 250 25,000 225 22,500 200 20,000 • Truck sales not only generate profit from the sale, but also parts and 175 17,500 finance profit. This illustrates the 150 15,000 streng
Slide 20: Best-in-Class Return on Invested Capital
Best-in-Class Return on Invested Capital PACCAR’s high profitability, strong working capital management and prudent investments resulted in best in class return on invested capital with an average of 22% over the last five years. PACCAR had an excellent 37.8% ROIC in 2023. Average 2018 - 2022 24% 24
Slide 21: Capital Allocation Strategy
Capital Allocation Strategy • High ROI Capital Investments • Pay Regular Quarterly and Annual Dividend − Dividend paid every year since 1941 − Total dividends paid approximately 50% of net income for many years − Regular quarterly dividend 10-year annualized growth of 7% (as of 4Q23) • Strategic M&A
Slide 22: Dividends Declared and Stock Repurchases
Dividends Declared and Stock Repurchases $ Millions CAGR = 12% $ Millions 2,500 2,500 2,000 2,000 1,500 1,500 1,000 1,000 500 500 0 0 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Dividends Stock Repurchased January 2024 Page 22
Slide 23: Excellent Dividend Yield
Excellent Dividend Yield Average Dividend Yield = 3.8% • PACCAR’s dividend yield 6% 6% reflects the total quarterly + annual dividends declared in 5% 5% the year, divided by the 4% 4% average stock price for the year 3% 3% • PACCAR’s dividend yield has 2% 2% averaged 3.8% over the last ten years 1%
Slide 24: Trucking Moves the Economy
Trucking Moves the Economy 74% of U.S. Freight is Moved by Truck Trucking is the lifeblood of the economy. In the U.S., the economy depends on trucks to deliver ten billion tons of virtually every commodity consumed - 74% of all the freight transported in 2020. 36.9 million commercial trucks, includ
Slide 25: >6t Global Truck Market
>6t Truck Market 2018 – 3.2 Million >6t Global Truck Market 2023 – 3.1 Million Europe 2000000 Russia/CIS China 371 385 96 148 1500000 1,325 1,060 1000000 500000 North America 416 435 0 Rest of Asia 311 311 316 India Africa & South America Middle East 398 366 111 172 133 170 Australia PACCAR Truck As
Slide 26: >16t Truck Market Size
>16t Truck Market Size Units (000s) Units (000s) 350 350 300 300 2024 Market Forecast Estimate 250 250 U.S. and Canada 260,000 – 300,000 200 200 Europe 260,000 – 300,000 150 150 S. America 105,000 – 115,000 100 100 50 50 0 0 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 US & Canada
Slide 27: January 2024 Page 27
January 2024 Page 27
Slide 28: PACCAR Strategy: Profitable Growth
PACCAR Strategy Quality Technology Innovation Brand Values Premium Products and Services Profitable Growth Profitable Market Share Growth Geographic Expansion January 2024 Page 28
Slide 29: Investing Throughout the Business Cycle
PACCAR Investing Throughout the Business Cycle • Operating cash flow has averaged $3.1 billion for the last Operating Cash Flow five years and has grown 9%/year over the last 20 years $ Billions $ Billions 4.5 4.5 − Strong operating cash flow enables PACCAR to invest in 4.0 4.0 3.5 3.5 growth throug
Slide 30: Cumulative PACCAR MX Engines Produced
Cumulative PACCAR MX Engines Produced • The PACCAR MX-13 is the flagship of PACCAR’s engine line- # of Engines Cumulative PACCAR MX Engines Produced # of Engines up with over 676,000 engines produced in Europe and (000s) (000s) over 324,000 engines installed in North America and a growing presence i
Slide 31: Zero Emission Trucks
Zero Emission Trucks • Peterbilt, Kenworth and DAF lead the industry with nine battery electric vehicle models available for Peterbilt 220EV Peterbilt 579EV DAF LF Electric customers • PACCAR’s zero emission heavy- and medium-duty vehicles provide competitive total cost of ownership Peterbilt 520EV
Slide 32: Battery Charging Solutions
Battery Charging Solutions • PACCAR Parts has introduced new electric vehicle charging stations to support the global launch of electric vehicles • Compatible with Kenworth, Peterbilt and DAF electric trucks and other brands • Charging power from 20 kW up to 350 kW • PACCAR is collaborating with Fai
Slide 33: Battery Cell Production Joint Venture
Battery Cell Production Joint Venture • PACCAR has partnered with Accelera by Cummins, Daimler Truck, and EVE to manufacture LFP batteries in the United States for the North American commercial vehicle market • PACCAR, Accelera, and Daimler will each own 30% of the JV and EVE will own 10% • The JV e
Slide 34: Battery Strategy
Battery Strategy • Lithium-iron-phosphate (LFP) battery technology has advantages over other chemistries: − Lower cost − Longer life − Enhanced safety − No nickel or cobalt • PACCAR to assemble customized battery packs in-house • Proprietary Battery Management System • Proprietary parts growth oppor
Slide 35: Autonomous Trucks
Autonomous Trucks • PACCAR has invested in a strategic partnership with Aurora to develop, test and commercialize autonomous Peterbilt and Kenworth trucks • PACCAR’s autonomous vehicle platform will be integrated with the Aurora self-driving technologies • PACCAR customers will benefit from the auto
Slide 36: PACCAR and Aurora Partner on Autonomous Truck Pilots
PACCAR and Aurora Partner on Autonomous Truck Pilots • PACCAR and Aurora have three customer trials underway with FedEx, Uber Freight and Werner Enterprises – each operating in Texas January 2024 Page 36
Slide 37: Connected Services
Connected Services PACCAR is launching a new state-of-the-art global connected truck platform, PACCAR Connect. New proprietary Hardware and Data Secure Vehicle Data Business Solutions platform provides: • Cybersecurity Protection & Monitoring • Over-the-Air Software Updates • Access to Industry Lead
Slide 38: PACCAR and Platform Science Connected Vehicle Partnership
PACCAR and Platform Science Connected Vehicle Partnership • PACCAR has made a strategic investment in Platform Science • PACCAR and Platform Science will collaborate on connected trucks • PACCAR will integrate the Platform Science Virtual Vehicle into Kenworth and Peterbilt trucks • The solution ena
Slide 39: PACCAR Innovation Center, Sunnyvale, CA
PACCAR Innovation Center, Sunnyvale, CA • PACCAR Innovation Center in Silicon Valley enhances PACCAR’s access to emerging technologies and talent from around the world • The Innovation Center collaborates with other PACCAR engineering teams to develop next generation technologies such as autonomous
Slide 40: PACCAR Global Embedded Services
PACCAR Global Embedded Services PACCAR has three embedded service technology centers located at Kenworth in Kirkland, WA; at DAF in Eindhoven, the Netherlands; and in Pune, India The centers will accelerate embedded software development and connected vehicle solutions to benefit customers’ operating
Slide 41: PACCAR Facility Investments
PACCAR Facility Investments Parts Distribution Center Louisville, KY PFS Used Truck Center Madrid, Spain January 2024 Page 41 PACCAR Engine Factories Kenworth New Test Building, Chillicothe, OH
Slide 42: PACCAR Parts Strategy
PACCAR Parts Strategy PACCAR Parts achieved $6.41 billion in sales and PACCAR Parts Sales $ Millions $ Millions $1.70 billion in pretax profits in 2023. Over the last 20 7,000 CAGR = 9% 7,000 years, PACCAR Parts has achieved a sales CAGR of 9% 6,000 32% 32% 6,000 5,000 5,000 and profit CAGR of 14%.
Slide 43: PACCAR Parts Distribution Centers and Dealers
PACCAR Parts Distribution Centers and Dealers 18 PDCs in 10 Countries; 2,300 Dealer Locations PACCAR Distribution Centers Kenworth and Peterbilt Dealers DAF Dealers Kenworth/DAF Dealers January 2024 Page 43
Slide 44: PACCAR Global Dealer Network
PACCAR Global Dealer Network • Independent dealer network of 2,300 dealer locations • Premium customer experience • Strong dealer profitability and expanded opportunities from PACCAR engines and TRP stores • Competitive flooring and retail financing provided by PACCAR Financial and PACCAR Leasing Ja
Slide 45: Growth in Kenworth and Peterbilt Dealer Locations
Growth in Kenworth and Peterbilt Dealer Locations U.S. and Canada Locations Locations 1,000 PACCAR MX-13 Introduced in 2010 1000 900 Dealer Investments of $3.5 Billion since 2010 900 800 84% Growth in Dealer Locations 800 Drives Long-Term PACCAR Parts Growth 700 700 600 600 500 500 400 400 00 01 02
Slide 46: PACCAR Financial Services Strategy
PACCAR Financial Services Strategy • PACCAR Financial Services supports truck sales by Total Assets 12/31/23 = $21.0 Billion providing financing and leasing services to Australia, Mexico & Brasil $3.9 Billion PACCAR customers 18% U.S. & Canada $9.0 Billion • In 2023, PACCAR Financial financed 24% of
Slide 47: Long-Term Growth in PACCAR Heavy Duty Market Share
Long-Term Growth in PACCAR Heavy Duty Market Share Market Share 5-Year Average • Since 2003, PACCAR’s above 16 tonne market 32% 32% share has increased in South America, Europe, Australia and U.S. & Canada 28% 28% • Kenworth is the market leader in Australia 24% 24% 20% 20% • PACCAR’s investment in
Slide 48: DAF Brasil
DAF Brasil Opened Manufacturing Plant 2013 PFS Brasil Begins Operations 2019 Opened New Parts Distribution Center 2020 4th Brand of the Year Award from FENABRAVE 2021 DAF CF Rigid Introduced 2021 DAF Brasil Builds 20,000th Truck 2022 DAF CF Parts Distribution Center Ponta Grossa, Brasil DAF Brasil M
Slide 49: Infrastructure Investment and Jobs Act
Infrastructure Investment and Jobs Act • In 2021, congress approved $1.2 trillion in new infrastructure spending in the Infrastructure Investment and Jobs Act • This $1.2 trillion in spending will benefit PACCAR, as it is an industry leader in vocational trucks • Kenworth and Peterbilt combined have
Slide 50: Emissions Global Overview
Emissions Global View - 15% GHG Euro 7 - 30% GHG Greenhouse Gas - Zero Emission Vehicles (ZEV) - 75% NOx Red. - More ZEVs – 45% 2021 2022 2023 2024 2025 2026 2027 2030 Greenhouse Gas – 25% -14% GHG -5% GHG -6% GHG California: Nationwide: - 75% NOx Reduction - 75% NOx Reduction - ZEV Mandates January
Slide 51: ESG Leadership
ESG Leadership CDP “A” Rating Newsweek America’s Greatest Workplaces 2023 PACCAR Achieved an “A” rating for its Recognized as One of the Environmental Practices; Top 0.26% Workplaces in Top 1.5% of over 18,700 America by Newsweek Reporting Companies and Plant-A Insights Group Science Based Targets S
Slide 52: Fourth Quarter and Full Year 2023 Earnings
Fourth Quarter and Full Year 2023 Earnings January 2024 Page 52
Slide 53: PACCAR Revenues and Profit
PACCAR Revenues and Profit 85 consecutive years of net profit Dividends every year since 1941 4th Quarter Full Year ($ in Millions) 2023 2022 2023 2022 Revenues $9,077 $8,130 $35,127 $28,820 Net Income $1,417 $921 $4,601 $3,012 Adjusted Net Income $1,417 $921 $5,047 $3,012 Adjusted Return on Revenue
Slide 54: 2023 Financial Results: Fourth Quarter 2023 vs. Fourth Quarter 2022
2023 Financial Results Fourth Quarter 2023 vs. Fourth Quarter 2022 Sales and Revenues Net Income (Billions of Dollars) (Millions of Dollars) $9.1 $1,417 • Sales and revenues of $9.08 billion $8.1 • Net income of $1,417 million • After-tax return on revenues of 15.6% $921 • PACCAR Parts revenues of $
Slide 55: Historical Annual Gross Margins
Historical Annual Gross Margins Total Manufacturing 20% 20% • Truck margins increased due to new products, higher 19.3% production volumes and an improving supply base 18% 18% • Parts margins have benefited from distribution and 16% 16% technology investments and growing populations of 14% 14% PACCA
Slide 56: Truck Full Year 2023 vs. Full Year 2022
Truck Full Year 2023 vs. Full Year 2022 Sales Segment Pretax Profit (Billions of Dollars) (Millions of Dollars) • Sales totaled $26.8 billion, up 25% compared to a $3,800 year ago $26.8 • Pretax operating profit improved to $3.8 billion, $21.5 up 117% • Deliveries for 2023 totaled 204,200 compared t
Slide 57: Aftermarket Parts Full Year 2023 vs. Full Year 2022
Aftermarket Parts Full Year 2023 vs. Full Year 2022 Revenues Segment Pretax Profit (Billions of Dollars) (Millions of Dollars) $1,703 $6.4 • Revenues of $6.4 billion, an increase of 11% $5.8 $1,447 • Pretax profit of $1.7 billion, an increase of 18% • Parts revenues and profit growth due to high cus
Slide 58: Financial Services Balance Sheet & Full Year 2023 Profit
Financial Services Balance Sheet & Full Year 2023 Profit Segment $ Millions Pretax Profit (Millions of Dollars) 12/31/2023 $589 Finance & Other Receivables $17,572 $540 Equipment on Operating Leases 2,175 Other Assets 1,217 Total Financial Services Assets $20,964 Commercial Paper & Bank Loans $5,610
Slide 59: PACCAR Inc: A+/A1 Credit Ratings
PACCAR Inc A+/A1 Credit Ratings ($ Millions) • Superb balance sheet 12/31/23 Mfg Cash & Securities $8,659 • $8.7 billion in manufacturing cash and securities to support growth opportunities Other Manufacturing Assets 11,200 and investments in all phases of the cycle Financial Services Assets 20,964
Slide 60: PACCAR Competitive Advantages
PACCAR Competitive Advantages Innovative Technology Highest Quality Products Global Aftermarket Parts Sales Profitable Financial Services Rigorous Cost Control Experienced Management Team Excellent Supplier Partnerships Strongest Dealer Network January 2024 Page 60
Slide 61: Appendix
Appendix This earnings release includes “adjusted net income (non-GAAP)” and “adjusted net income per diluted share (non-GAAP)”, which are financial measures that are not in accordance with U.S. generally accepted accounting principles (“GAAP”), since they exclude a charge for EC-related claims. The
Slide 62: January 2024 Page 62
January 2024 Page 62