Caterpillar, Inc. · NYSE:CAT
Caterpillar — Credit Suisse 4th Annual Industrials Conference 2016
19 slides from Caterpillar's conference presentation, Dec 1, 2016
Slide 1: Credit Suisse Conference
Credit Suisse Conference December 1, 2016 Denise Johnson – Caterpillar Group President – Resource Industries Amy Campbell – Caterpillar IR Director CUSTOMERS. PEOPLE. STOCKHOLDERS. 1
Slide 2: Discussion
Discussion • 3Q 2016 Results / 2017 Discussion Amy Campbell • Resource Industries Denise Johnson • Q&A CUSTOMERS. PEOPLE. STOCKHOLDERS. 2
Slide 3: Forward-Looking Statements
Forward-Looking Statements 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,” “w
Slide 4: Q3 2016 vs Q3 2015 Sales and Revenues
3rd Quarter Q3 2016 vs Q3 2015 Sales and Revenues (billions) 2015 $11.0 2016 $9.2 Change $(1.8) Operating Profit Comparison Profit Per Share $0.94 $0.48 $(0.46) Restructuring Costs (millions) $98 $324 $226 Profit Per Share $1.05 $0.85 $(0.20) Excluding Restructuring Costs Machine market position and
Slide 5: 2016 Cost Reduction
2016 Cost Reduction On track for over $2 billion of period and variable cost reduction for the full year of 2016 (millions of dollars) Cost Reduction versus Prior Year 1st Qtr 2nd Qtr 3rd Qtr 9 Months Variable Cost Reduction $ 107 $ 243 $ 234 $ 584 Period Cost Reduction 367 427 420 1,214 Total $ 474
Slide 6: 2016 – 3rd Quarter Year-to-date Summary
2016 – 3rd Quarter Year-to-date Summary • Not much recent change in the industries we serve with the exception of North American Construction – More stable commodity prices, but no significant rebound in order activity in mining or oil and gas yet … rail continues to be weak in North America. • Good
Slide 7: Our Thoughts on 2017 Consensus: Sales & Revenues
Our Thoughts on 2017 Thomson First Call Consensus* Sales & Revenues Consensus for Sales and Revenues is $38 Billion In our view, $38 Billion is a reasonable midpoint expectation Potential Positives for 2017 What Concerns Us • Sustained mined commodity prices could • Oil prices remain volatile and no
Slide 8: Our Thoughts on 2017 Consensus: PPS, Excluding Restructuring
Our Thoughts on 2017 Thomson First Call Consensus* PPS, Excluding Restructuring Consensus PPS, Excluding Restructuring Costs is $3.25 In our view, $3.25 on $38 Billion of Sales and Revenues is too optimistic considering expected headwinds Significant Operating Profit Tailwinds Significant Operating
Slide 9: Discussion
Discussion • 3Q 2016 Results / 2017 Discussion Amy Campbell • Resource Industries Denise Johnson • Q&A CUSTOMERS. PEOPLE. STOCKHOLDERS. 9
Slide 10: Resource Industries Has an Expansive Reach
Resource Industries Has an Expansive Reach Products, Parts, Services, and Support Ultra Class Material Handling Underground CUSTOMERS. PEOPLE. STOCKHOLDERS. 10
Slide 11: Commodity Decline Among the Fastest in Past Years
Commodity Decline Among the Fastest in Past 132 Years and Places Resource Industries at its Deepest Trough Commodity Dollar Index Cat Mining Machine End User Demand 220 Average Sales to End Users 2006 - 16E 200 180 Cat End-User Demand 160 140 120 100 80 60 1887 1893 1899 1905 1911 1917 1923 1929 193
Slide 12: What Have We Done to Mitigate the Sales Drop?
What Have We Done to Mitigate the Sales Drop? Since 2012 Resource Industries has… • Closed or announced the exit of 17 manufacturing facilities • Downsized 5 other facilities • Reduced its headcount – Accounting for almost half of the overall Caterpillar reductions of 34,000 • Lowered the breakeven
Slide 13: The Portfolio is Positioned for Growth with New Technologies and New Products
The Portfolio is Positioned for Growth with New Technologies and New Products Autonomous Capabilities Hard Rock Cutting New Products CUSTOMERS. PEOPLE. STOCKHOLDERS. 13
Slide 14: Autonomous Capabilities
Autonomous Capabilities • Tremendous customer pull to improve safety and productivity • “Command for Hauling is 20 percent more productive than a manned fleet of trucks of the same type” Customer quote • Can retrofit trucks or provide on new units • Applications for drills, tractors and underground
Slide 15: Hard Rock Cutting
Hard Rock Cutting • Strong customer interest for continuous mining systems • Rock Straight System • First commercial continuous mining and hauling system for underground hard rock applications • Disrupt old drill and blast by using our patent protected activated undercutting technology CUSTOMERS. PE
Slide 16: New Products
New Products • Hydraulic Mining Shovels • 6015B • 6020B • Large Mining Trucks • 794AC • Surface Rock Drills • MD6420C • Articulated Truck • 745C CUSTOMERS. PEOPLE. STOCKHOLDERS. 16
Slide 17: State of the Business
State of the Business • Mining customers have expressed increased optimism • Current focus on maximizing asset utilization and lowering costs by leveraging existing fleets; growing aftermarket opportunity • Machine replacements needed over time, even with no increase in commodity production levels •
Slide 18: Non-GAAP Financial Measures
Non-GAAP Financial Measures The following definition is provided for “non-GAAP financial measures” in connection with Regulation G issued by the Securities and Exchange Commission. The non-GAAP financial measures we use have no standardized meaning prescribed by U.S. GAAP and therefore are unlikely
Slide 19: CUSTOMERS. PEOPLE. STOCKHOLDERS.
CUSTOMERS. PEOPLE. STOCKHOLDERS. 19
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