Slide 1: July 2023
July 2023 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 Excellent Dividend Yield 23 Distribution Centers and Dealer Map 42 Our Culture 5 Trucking Moves the Economy 24 Global Dealer Network 43 PACCAR Brands 6 >6t Global Truck Market 25 Kenworth and Peterbilt Locations 44 New Kenworth T680 8 >16t Truck Market Size 26 Financial Servi
Slide 4: PACCAR: A Global Technology Company in Commercial Vehicles
PACCAR A Global Technology Company in Commercial Vehicles 2022 Revenues $28.8B 2022 Net Income $3.0B 2022 Avg Dividend Yield 4.6% 84 Years of Consecutive Profitability; Dividend Paid Every Year Since 1941 Truck and Other Aftermarket Parts $21.5B Revenues $5.8B Revenues Premium Quality Light, Medium
Slide 5: Our Culture
Our Culture PACCAR is a company with a great culture and a bright 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 shareholders. Conserv
Slide 6: PACCAR Brands and Business Segments
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 and value
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 July 2023 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 July 2023 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 July 2023 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. July 2023 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. July 2023 Page 11
Slide 12: New DAF Truck Models
New DAF Truck Models Electric XD and XF NDG Interior XF and XG+ XD Vocational July 2023 Page 12
Slide 13: PACCAR Powertrain
The integrated PACCAR Powertrain is the most advanced heavy-duty powertrain in the market. The PACCAR MX-13 and MX-11 engines are optimally integrated to the innovative PACCAR TX-12 automated transmission and the efficient DX-40 tandem drive axle to achieve exceptional performance and fuel economy.
Slide 14: PACCAR Truck Production
PACCAR Truck Production Over 1.6 Million Trucks Produced 2013 - 2022 PACCAR produced 185,900 trucks in 2022 Units 198.8 (000s) 189.1 185.9 200 Brasil 154.7 158.9 162.7 142.9 140.9 Australia 137.1 133.3 Mexico 150 Canada US 100 Europe 50 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 July 2023 P
Slide 15: Excellent Financial Performance Throughout the Business Cycle
PACCAR Excellent Financial Performance Throughout the Business Cycle $ Billions Revenues $ Billions • Reputation for superior operational 30 30 excellence and premium-quality products 25 25 20 20 and services 15 15 10 10 • Long-term growth in revenues and net 5 5 income reflect increased market shar
Slide 16: Best-in-Class Operating Efficiency: Operating Margin
Best-in-Class Operating Efficiency Industry Operating Margin 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 1H23 PACCAR Volvo Daimler Truck Traton Iveco July 2023 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 13 14 15 16 17 18 19 20 21 22 PACCAR Volvo Daimler Truck Traton Iveco July 2023
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% 13 14 15 16 17 18 19 20 21 22 PACCAR Volvo Daimler Truck Traton Iveco July 2023 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. 200 18,000 175 16,000 • Truck sales not only generate profit 150 14,000 from the sale, but also parts and 12,000 125 finance profit. This illustrates the 10,000 strength o
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 Average 2018 - 2022 24% 24% 20% 20% 16% 16% 12% 12% 8% 8% 4% 4% 0% 0% R
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 6% (as of 4Q22) • Strategic M&A
Slide 22: Dividends Declared and Stock Repurchases
Dividends Declared and Stock Repurchases $ Millions CAGR = 11% $ Millions 1,500 1,500 1,200 1,200 900 900 600 600 300 300 0 0 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 Dividends Stock Repurchased July 2023 Page 22
Slide 23: Excellent Dividend Yield
Excellent Dividend Yield Average Dividend Yield = 3.6% • 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 3.6% 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 2017 – 3.0 Million >6t Global Truck Market 2000000 China 2022 – 2.6 Million Europe Russia/CIS 1500000 359 336 1,346 91 84 1000000 768 500000 North America 336 401 0 Rest of Asia 295 295 278 India Africa & South America Middle East 315 330 112 159 110 189 Australia PACCAR Truck Assem
Slide 26: >16t Truck Market Size
>16t Truck Market Size Units (000s) Units (000s) 350 350 300 300 2023 Market Forecast Estimate 250 250 200 200 U.S. and Canada 290,000 – 320,000 Europe 300,000 – 330,000 150 150 S. America 105,000 – 115,000 100 100 50 50 0 0 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 US & Canada
Slide 27: July 2023 Page 27
July 2023 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 July 2023 Page 28
Slide 29: Investing Throughout the Business Cycle
PACCAR Investing Throughout the Business Cycle • Operating cash flow has averaged $2.8 billion for the last Operating Cash Flow five years and has grown 7%/year over the last 20 years $ Billions $ Billions 3.5 3.5 − Strong operating cash flow enables PACCAR to invest in 3.0 3.0 growth throughout the
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 630,000 engines produced in Europe and (000s) (000s) over 290,000 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: 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 34: 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 July 2023 Page 34
Slide 35: Connected Services
Connected Services Kenworth, Peterbilt and DAF are launching a new state-of-the-art global connected truck platform, PACCAR Connect. The system is highly configurable and consists of proprietary hardware and software that provides reliable data security, over-the-air software updates and advanced fl
Slide 36: 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 37: 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 38: 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 39: PACCAR Facility Investments
PACCAR Facility Investments Parts Distribution Center Louisville, KY PFS Used Truck Center Madrid, Spain PACCAR Engine Factories Kenworth New Test Building, Chillicothe, OH
Slide 40: PACCAR Parts Strategy
PACCAR Parts Strategy PACCAR Parts achieved $5.76 billion in sales and PACCAR Parts Sales $ Millions $ Millions $1.45 billion in pretax profits in 2022. Over the last 20 6,000 CAGR = 9% 6,000 years, PACCAR Parts has achieved a sales CAGR of 9% 5,000 32% 5,000 31% and profit CAGR of 13%. 4,000 26% 27
Slide 41: Parts and Finance Growing Contribution to Pretax Profit
Parts and Finance Growing Contribution to Pretax Profit Contribution to Total Pretax Profit 70% 70% • Parts and Finance are an 60% 60% increasing percent of total pretax profits 50% 50% • These segments help reduce 40% 40% the cyclicality of the truck market on earnings and are 30% 30% an important
Slide 42: 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 July 2023 Page 42
Slide 43: 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 Ju
Slide 44: Growth in Kenworth and Peterbilt Dealer Locations
Growth in Kenworth and Peterbilt Dealer Locations U.S. and Canada Locations Locations 900 PACCAR MX-13 Introduced in 2010 900 Dealer Investments of $2.8 Billion since 2010 800 800 60% Growth in Dealer Locations 700 700 Drives Long-Term PACCAR Parts Growth 600 600 500 500 400 400 00 01 02 03 04 05 06
Slide 45: PACCAR Financial Services Strategy
PACCAR Financial Services Strategy • PACCAR Financial Services supports truck sales by Total Assets 12/31/22 = $17.2 Billion providing financing and leasing services to Australia, Mexico & Brasil $2.6 Billion PACCAR customers 15% U.S. & Canada $7.6 Billion • In 2022, PACCAR Financial financed 26% of
Slide 46: Long-Term Growth in PACCAR Heavy Duty Market Share
Long-Term Growth in PACCAR Heavy Duty Market Share 32% 32% • Since 2002, PACCAR’s above 16 tonne market 28% 28% share has increased in South America, Europe, Australia and U.S. & Canada 24% 24% • Kenworth is the market leader in Australia 20% 20% • PACCAR’s investment in truck manufacturing 16% 16%
Slide 47: 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 48: 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 $1.2 trillion in spending will benefit PACCAR, as it is an industry leader in vocational trucks • Kenworth and Peterbilt combined have
Slide 49: Emissions Global View
Emissions Global View - 15% GHG Euro 7 - 15% GHG Greenhouse Gas - Zero Emission Vehicles (ZEV) - 75% NOx Red. - More ZEVs – 30% 2021 2022 2023 2024 2025 2026 2027 2030 Greenhouse Gas – 25% -14% GHG -5% GHG -6% GHG California: Nationwide: - 75% NOx Reduction - 75% NOx Reduction - ZEV Mandates July 20
Slide 50: ESG Leadership
ESG Leadership CDP “A” Rating Newsweek America’s Greatest Workplaces 2023 PACCAR Achieved an “A” rating for its Recognized as One of the Environmental Practices; Top 0.26% Workplaces in Top 1.5% of over 18,700 America by Newsweek Reporting Companies and Plant-A Insights Group Science Based Targets S
Slide 51: Second Quarter 2023 Earnings
Second Quarter 2023 Earnings July 2023 Page 51
Slide 52: PACCAR Revenues and Profit
PACCAR Revenues and Profit 84 consecutive years of net profit Dividends every year since 1941 2nd Quarter First Half ($ in Millions) 2023 2022 2023 2022 Revenues $8,881 $7,159 $17,354 $13,631 Net Income $1,221 $720 $1,955 $1,321 Adjusted Net Income $1,221 $720 $2,401 $1,321 Adjusted Return on Revenu
Slide 53: 2023 Financial Results: Second Quarter 2023 vs. Second Quarter 2022
2023 Financial Results Second Quarter 2023 vs. Second Quarter 2022 Sales and Revenues Net Income (Billions of Dollars) (Millions of Dollars) $8.9 • Sales and revenues of $8,881 million $1,221 • Net income of $1,221 million $7.2 • After-tax return on revenues of 13.7% • PACCAR Parts revenues of $1,59
Slide 54: Historical Annual Gross Margins
Historical Annual Gross Margins Total Manufacturing 20% 20% • Truck margins increased due to new products, higher 19.1% 18% 18% production volumes and an improving supply base 16% 16% • Parts margins have benefited from distribution and 14% 14% technology investments and growing populations of 12% 1
Slide 55: Truck: Second Quarter 2023 vs. Second Quarter 2022
Truck Second Quarter 2023 vs. Second Quarter 2022 Sales Segment Pretax Profit (Billions of Dollars) (Millions of Dollars) • Sales totaled $6,828 billion, up 28% compared to $948 a year ago $6.8 • Pretax operating profit improved to $948 million, $5.3 up 125% • Deliveries for the second quarter of 20
Slide 56: Aftermarket Parts: Second Quarter 2023 vs. Second Quarter 2022
Aftermarket Parts Second Quarter 2023 vs. Second Quarter 2022 Revenues Segment Pretax Profit (Billions of Dollars) (Millions of Dollars) $419 $1.6 • Revenues of $1,599 billion, an increase of 11% $1.4 $353 • Pretax profit of $419 million, an increase of 19% • Parts revenues and profit growth due to
Slide 57: Financial Services Balance Sheet & Second Quarter 2023 Profit
Financial Services Balance Sheet & Second Quarter 2023 Profit Segment $ Millions Pretax Profit (Millions of Dollars) 6/30/2023 Finance & Other Receivables $15,665 $144 $145 Equipment on Operating Leases 2,351 Other Assets 1,025 Total Financial Services Assets $19,041 Commercial Paper & Bank Loans $4
Slide 58: PACCAR Inc: A+/A1 Credit Ratings
PACCAR Inc A+/A1 Credit Ratings ($ Millions) • Superb balance sheet 6/30/23 Mfg Cash & Securities $6,618 • $6.6 billion in manufacturing cash and securities to support growth opportunities Other Manufacturing Assets 11,209 and investments in all phases of the cycle Financial Services Assets 19,041 T
Slide 59: 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 July 2023 Page 59
Slide 60: 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 61: July 2023 Page 61
July 2023 Page 61