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Caterpillar Inc.
Caterpillar Inc.: Caterpillar Inc.: Files Form 8-K - Investor Day
2019/Exhibit 99.1
02-May-2019 / 20:51 CET/CEST
Dissemination of a French Regulatory News, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
May 2, 2019
Caterpillar contact:
Corrie Heck Scott
Global Government & Corporate Affairs
(224) 551-4133
Scott_Corrie@cat.com
FOR IMMEDIATE RELEASE
*********************
Caterpillar Raises Dividend, Sets New Financial Targets and Provides Update
on Enterprise Strategy at 2019 Investor Day
? Caterpillar raises quarterly cash dividend by 20% to $1.03 per share of
common stock
? Company plans to return substantially all Machine, Energy &
Transportation (ME&T) free cash flow to shareholders through continued
dividend growth and more consistent share repurchases
? Caterpillar expects to double ME&T services sales to $28 billion by 2026
and deliver higher adjusted operating margins through the cycles of three
to six percentage points above historical performance
CLAYTON, N.C. - Caterpillar Inc. (NYSE: CAT) will host a meeting with
investors and analysts today, detailing the progress made in executing the
company's enterprise strategy, its plans for future profitable growth and
its intention for more consistent and enhanced return of capital to
shareholders.
"Our enterprise strategy for profitable growth is working. We achieved or
exceeded the financial targets we communicated during our 2017 Investor Day,
which resulted in record profit per share in 2018 and the first quarter of
2019," said Caterpillar Chairman and CEO Jim Umpleby. "We will continue to
execute our strategy while investing to double services sales by 2026, an
area of significant opportunity for further profitable growth."
Strategy Driving Improved Profitability, New Margin Targets
Caterpillar has significantly improved its financial performance over the
course of the last two years. On about $55 billion of sales in 2014,
Caterpillar's adjusted operating margin performance was 11%. At the 2017
Investor Day, Caterpillar targeted improving adjusted operating margin by 2%
to 5% the next time sales returned to that level. In 2018, Caterpillar sales
and revenues were again about $55 billion and its adjusted operating margin
of 16% was at the top end of the targeted improvement range. The company is
now targeting future adjusted operating margins through the cycles of three
to six percentage points above historical performance from 2010 to 2016.
Caterpillar attributes much of its improved profitability, as well as its
confidence to achieve future targets, to the execution of its enterprise
strategy for profitable growth through operational excellence and investing
in expanded offerings and services. These investments are guided by the
Operating and Execution Model, which helps the company allocate resources to
the products and services that generate the greatest returns. With the
success of the company's strategy execution, strong cash flow generation and
its commitment to maintaining a competitive and flexible cost structure,
Caterpillar's balance sheet remains strong. The existing balance sheet
capacity will also support inorganic growth opportunities.
Returning Value to Shareholders
Reflecting this improved performance and profitability, the company's board
of directors authorized an increase to the quarterly cash dividend of 20% to
$1.03 per share of common stock, payable August 20, 2019, to shareholders of
record at the close of business on July 22, 2019. Caterpillar expects to
increase the dividend in each of the following four years by at least a high
single-digit percentage. With its remaining free cash flow, the company
intends to repurchase shares on a more consistent basis, with the goal of at
least offsetting dilution in market downturns.
"Through the execution of our strategy, Caterpillar is now a stronger and
more profitable company that can produce higher free cash flow through the
cycles," added Umpleby. "We plan to return substantially all ME&T free cash
flow to shareholders through dividend increases and more consistent share
repurchases to create more long-term value for shareholders."
Emphasis on Services Growth
Caterpillar's executive leadership team will describe its plans to grow
services, which offer additional opportunity for profitable growth.
Caterpillar intends to double ME&T services sales to about $28 billion by
2026, from a 2016 baseline of about $14 billion.
Caterpillar's services offerings encompass all the ways the company supports
customer success after the equipment purchase, including aftermarket parts
sales and digitally-enabled solutions. Services aim to maximize asset
utilization and minimize downtime for customers, making them more efficient
and lowering their owning and operating costs while providing a more
consistent revenue stream for Caterpillar and improving profitability
through the cycles.
The full investor presentation can be found at caterpillar.com/investors.
About Caterpillar
For more than 90 years, Caterpillar Inc. has been making sustainable
progress possible and driving positive change on every continent. Customers
turn to Caterpillar to help them develop infrastructure, energy and natural
resource assets. With 2018 sales and revenues of $54.722 billion,
Caterpillar is the world's leading manufacturer of construction and mining
equipment, diesel and natural gas engines, industrial gas turbines and
diesel-electric locomotives. The company principally operates through its
three primary segments - Construction Industries, Resource Industries and
Energy & Transportation - and also provides financing and related services
through its Financial Products segment. For more information, visit
caterpillar.com [1]. To connect with us on social media, visit
caterpillar.com/social-media [2].
Forward-looking Statements
Certain statements in this press release 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," "will," "would," "expect," "anticipate," "plan,"
"forecast," "target," "guide," "project," "intend," "could," "should" or
other similar words or expressions often identify forward-looking
statements. All statements other than statements of historical fact are
forward-looking statements, including, without limitation, statements
regarding our outlook, projections, forecasts or trend descriptions. These
statements do not guarantee future performance and speak only as of the date
they are made, and we do not undertake to update our forward-looking
statements.
Caterpillar's actual results may differ materially from those described or
implied in our forward-looking statements based on a number of factors,
including, but not limited to: (i) global and regional economic conditions
and economic conditions in the industries we serve; (ii) commodity price
changes, material price increases, fluctuations in demand for our products
or significant shortages of material; (iii) government monetary or fiscal
policies; (iv) political and economic risks, commercial instability and
events beyond our control in the countries in which we operate; (v)
international trade policies and their impact on demand for our products and
our competitive position, including the imposition of new tariffs or changes
in existing tariff rates; (vi) our ability to develop, produce and market
quality products that meet our customers' needs; (vii) the impact of the
highly competitive environment in which we operate on our sales and pricing;
(viii) information technology security threats and computer crime; (ix)
inventory management decisions and sourcing practices of our dealers and our
OEM customers; (x) a failure to realize, or a delay in realizing, all of the
anticipated benefits of our acquisitions, joint ventures or divestitures;
(xi) union disputes or other employee relations issues; (xii) adverse
effects of unexpected events including natural
disasters; (xiii) disruptions or volatility in global financial markets
limiting our sources of liquidity or the liquidity of our customers, dealers
and suppliers; (xiv) failure to maintain our credit ratings and potential
resulting increases to our cost of borrowing and adverse effects on our cost
of funds, liquidity, competitive position and access to capital markets;
(xv) our Financial Products segment's risks associated with the financial
services industry; (xvi) changes in interest rates or market liquidity
conditions; (xvii) an increase in delinquencies, repossessions or net losses
of Cat Financial's customers; (xviii) currency fluctuations; (xix) our or
Cat Financial's compliance with financial and other restrictive covenants in
debt agreements; (xx) increased pension plan funding obligations; (xxi)
alleged or actual violations of trade or anti-corruption laws and
regulations; (xxii) additional tax expense or exposure, including the impact
of U.S. tax reform; (xxiii) significant legal proceedings, claims, lawsuits
or government investigations; (xxiv) new regulations or changes in financial
services regulations; (xxv) compliance with environmental laws and
regulations; and (xxvi) other factors described in more detail in
Caterpillar's Forms 10-Q, 10-K and other filings with the Securities and
Exchange Commission.
Regulatory filing PDF file
Document title: Caterpillar Inc.: Files Form 8-K - Investor Day 2019/Exhibit
99.1
Document: http://n.eqs.com/c/fncls.ssp?u=TBAHVLDYJH [3]
Language: English
Company: Caterpillar Inc.
500 Lake Cook Road, Suite 100
60015 Deerfield, Illinois
United States
Phone: 224-551-4000
Internet: www.caterpillar.com
ISIN: US1491231015
Euronext Ticker: CATR
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