1q18 investor presentation - paccar...paccar overview –q1 2018 consolidated sales & revenues...
TRANSCRIPT
April 2018Page 2
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 and uncertainties is described in more detail in our periodic reports filed with the Securities and Exchange Commission (SEC).We undertake no duty to update or revise this presentation, whether as a result of new information, future events or otherwise. For the most recent financial, risk and other information about PACCAR, please see our SEC filings and most recent earnings release available on the Investor Relations page of www.paccar.com.
April 2018Page 3
April 2018Page 4
Aftermarket Support
Financial ServicesInformation Technology
Powertrain
Commercial Vehicles
April 2018Page 5
PACCAR Strategy
Premium Products and Services
Profitable Market Share Growth
Geographic Expansion
QualityQuality TechnologyTechnology InnovationInnovation
April 2018Page 6
Quality Highest Integrity
Operational Excellence
Conservative Financial
ManagementLong-Term Perspective
PACCAR Values
April 2018Page 7
71%
13% 10% 6%0%
10%
20%
30%
40%
50%
60%
70%
80%
Truck Rail Pipeline Water
% Total U.S. Freight Tonnage Hauled by Transportation Mode
Trucking Moves the EconomyIf you bought it, it probably was delivered by a truck
2012 2017Units in Thousands
2012 – 2.6 Million2017 – 3.1 Million
PACCAR Truck Assembly
North America
South America Africa & Middle East
EU28
India
Rest of Asia
Russia/CIS China
Australia
330315
360280
152.5
85155926.27
1,345
925
232
370230
20 2420
282215 315280
190195110
220
Global >6t Truck Market
April 2018Page 9
0
50
100
150
200
250
300
350
0
50
100
150
200
250
300
350
02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18
Units (000s)Units (000s)
US & Canada Europe South America
>16t Truck Market Size
April 2018Page 10
0%
5%
10%
15%
20%
25%
30%
35%
40%
0%
5%
10%
15%
20%
25%
30%
35%
40%
S. America Europe Australia U.S. and Canada Mexico
1997 2007 2017
PACCAR Heavy Duty Market Share
April 2018Page 11
0 50 100 150 200 250 300Hualing
DayunNavistar
IsuzuKamAZ
IvecoHino
HongyanJianghuai
Ashok LeylandTata Motors
Beijing FotonPACCAR
VolkswagenShaanxi
VolvoSinotruk
DongfengDaimler
FAW
Total Production 2017 = 2.3 Million
#8
>16t Truck Manufacturing2017 Production (Units 000s)
April 2018Page 12
0
20
40
60
80
100
120
140
160
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Units (000s)
BrasilAustraliaMexicoCanadaUSEurope
PACCAR Truck Production1.3 Million Trucks Produced 2008 - 2017
125.9
61.078.8
138.0 140.4 137.1 142.9154.7
140.9158.9
April 2018Page 13
0510152025
05
10152025
97 99 01 03 05 07 09 11 13 15 17
$ Billions$ Billions Revenue
00.30.60.91.21.51.8
0.00.30.60.91.21.51.8
97 99 01 03 05 07 09 11 13 15 17
$ Billions$ Billions Net Income
Net Income Adj Net Inc * Tax Benefit **
0.00.51.01.52.02.53.0
0.00.51.01.52.02.53.0
97 99 01 03 05 07 09 11 13 15 17
$ Billions$ BillionsOperating Cash Flow
0150300450600750900
0150300450600750900
97 99 01 03 05 07 09 11 13 15 17
$ Millions$ MillionsCapital Investments and R&D Expenses
Capital R&D
PACCARExcellent Financial Performance Throughout the Business Cycle
CAGR = 5% CAGR = 8%
CAGR = 10%
* 2016 adjusted net income excludes non-recurring European Commission charge of $833 million.** 2017 One-time tax benefit of $173 million from the new U.S. tax law.
S PACCAR 2017 10K f l t i f ti N GAAP
April 2018Page 14
-9%
-6%
-3%
0%
3%
6%
9%
12%
-9%
-6%
-3%
0%
3%
6%
9%
12%
08 09 10 11 12 13 14 15 16 17
PACCAR Volvo Daimler Volkswagen Iveco Navistar
Best-in-Class Operating EfficiencyCommercial Vehicle Segment Operating Margin
April 2018Page 15
0
4
8
12
16
20
24
0
4
8
12
16
20
24
08 09 10 11 12 13 14 15 16 17
PACCAR Volvo Daimler Volkswagen CNH Navistar
Best-in-Class Operating EfficiencyInventory Turns
April 2018Page 16
0%
4%
8%
12%
16%
0%
4%
8%
12%
16%
08 09 10 11 12 13 14 15 16 17
PACCAR Volvo Daimler Volkswagen CNH Navistar
Best-in-Class Operating EfficiencySG&A % of Sales
April 2018Page 17
01,2502,5003,7505,0006,2507,5008,75010,00011,250
020406080
100120140160180
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
$/TruckUnits (000s)
Trucks Net Income per Truck
Net Income per Truck
April 2018Page 18
PACCAR IncA+/A1 Credit Ratings
($ Millions)3/31/18
Cash & Securities $ 3,472Manufacturing Assets 6,720Financial Services Assets 13,590Total Assets $ 23,782
Manufacturing Debt $ 0Manufacturing Liabilities 4,841Financial Services Liabilities 10,373Shareholders' Equity 8,568Total Liabilities & Equity $ 23,782
April 2018Page 19
PACCAR Overview – Q1 2018
Consolidated Sales & Revenues $5.65 Billion
Net Income $512 Million
PACCAR Financial Pre‐Tax Profit $68 Million
PACCAR Parts Record Pre‐Tax Profit $192 Million
Stockholders’ Equity $8.57 Billion
A1/A+ Credit Ratings
Regular Dividend Increased 25% in Last 5 Years
Consolidated Sales & Revenues $5.65 Billion
Net Income $512 Million
PACCAR Financial Pre‐Tax Profit $68 Million
PACCAR Parts Record Pre‐Tax Profit $192 Million
Stockholders’ Equity $8.57 Billion
A1/A+ Credit Ratings
Regular Dividend Increased 25% in Last 5 Years
April 2018Page 20
PACCAR Revenues and Profit
79 consecutive years of net profit
Dividends every year since 1941
First Quarter($ in Millions) 2017 2018Revenues $4,238 $5,654
Net Income $310 $512Return on Revenues 7.3% 9.1%Diluted EPS $0.88 $1.45Number of Trucks Delivered 35,000 44,500
April 2018Page 21
Capex$1.9
R&D$1.2
Dividend$3.0 Share
Repurchase$0.3
Finance Company
$0.9
Debt Repayment
$0.2 Increase in Cash$1.2
PACCAR Capital Allocation
Uses of Cash Flow2013 – 2017: $8.7 Billion
Capital Allocation Strategy
• Quarterly plus special dividends• Strategic share repurchases• R&D and capex investments drive future
growth• Credit rating of A+/A1 reflects strategic
nature of our financial services operations
• Long history of successful acquisitions; highly selective, strategic, clear path to value creation
New Products
New DAF XF and CF PACCAR Powertrain
Kenworth Australia T610 Peterbilt Model 579 UltraLoft
Innovative Technologies
Zero-Emissions Kenworth T680 DAF Connect/Truck Tech/Smart LinQ
Platooning Autonomous Driving Technologies
PACCAR Investments
DAF Sales Office, Haddenham, U.K. Dynacraft, McKinney, Texas
PACCAR Engine Factories DAF Cab Paint Facility, Westerlo, Belgium
April 2018Page 25
0
200
400
600
800
1,000
1,200
0
200
400
600
800
1,000
1,200
98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
$ Millions$ Millions
Dividends Stock Repurchased
Dividends Declared and Stock Repurchases
April 2018Page 26
PACCAR Engines Worldwide
PACCAR PR9.2 Liter
PACCAR MX-1312.9 Liter
PACCAR PX-76.7 Liter
PACCAR PX-5 4.5 Liter
PACCAR MX-1110.8 Liter
PACCAR PX-98.9 Liter
April 2018Page 27
0
100
200
300
400
500
600
700
0
100
200
300
400
500
600
700
07 08 09 10 11 12 13 14 15 16 17
# of Engines (000s)# of Engines (000s)
DAF MX 13 KW/PB MX 13 MX 11
Cumulative PACCAR MX Engines Produced
April 2018Page 28
0
500
1,000
1,500
2,000
2,500
3,000
3,500
0
500
1,000
1,500
2,000
2,500
3,000
3,500
03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
$ Millions$ Millions
CAGR = 8%
PACCAR Parts Revenues
April 2018Page 29
Parts Distribution Centers and Dealers
PACCAR Distribution Centers
KW, PB, DAF Dealers29
PACCAR Parts Investments
Toronto, Canada Panama City, Panama
Renton, Washington Brisbane, Australia
PACCAR Global Dealer Network
DAF Brasil
April 2018Page 33
Road to Autonomous Commercial Vehicles
• Anti Lock Braking• Lane Departure Warning
• Object Detection• Adaptive Cruise Control
Component Controls1980-2014
• Autonomous Emergency Braking
• Predictive Cruise Control
System Integration2015-2017
• Vehicle to Infrastructure Network
• Automatic Lane Change
• Automatic Routing
Automated Vehicle2025+
Greater Vehicle Autonomy• Improves Fleets Safety, Fuel Efficiency and Truck Utilization
• Increases Truck Content• Increases Parts Demand
• Lane Keeping Assist• Traffic Jam Assist• Platooning• Driver Monitoring
Network Integration2018-2024
Environmental Leadership
Member CDP (Carbon Disclosure Project)Reduce Environmental Impact Through Product Design
Product Recyclability90%+ Reduction in NOx and Particulate Emissions
Alternative Fuel Vehicles (Natural Gas, Hybrid)Zero Waste to Landfill
Environmental Certification (ISO 14001) EPA SmartWay
April 2018Page 35
PACCAR Financial Services – Q1 2018
$13.6 Billion in Assets
Pre‐tax Profit $68 Million
Full Service Leasing
Dealer Floorplan Retail Financing
187,000 Vehicles Financed
April 2018Page 36
PACCAR Financial Services24 Countries on Four Continents
PACCAR Financial Regional Offices
BellevueSalt Lake
Mexicali
Chicago
Denton
Melbourne
Atlanta
PhiladelphiaToronto
Spartanburg
Mexico City
Madrid Milan
WarsawPrague
EindhovenLondon
Paris
Los Angeles
April 2018Page 37
0
1
2
3
4
5
6
7
8
0
1
2
3
4
5
6
7
8
91 93 95 97 99 01 03 05 07 09 11 13 15 17
%%
Low 30+ Days Past Due
PACCAR Financial ServicesTotal Assets 12/31/17 = $13.2 Billion
U.S. & Canada$6.3 Billion
48%
Europe$3.2 Billion
24%
Australia & Mexico$1.3 Billion
10%
PacLease$2.4 Billion
18%
April 2018Page 38
0.0
0.5
1.0
1.5
2.0
2.5
3.0
0.0
0.5
1.0
1.5
2.0
2.5
3.0
08 09 10 11 12 13 14 15 16 17
Assets € Billions
Assets € Billions
PACCAR Financial Europe
50,300 Vehicles
200 DAF Dealers
17 European Countries
April 2018Page 39
0
5
10
15
20
25
30
35
40
0
5
10
15
20
25
30
35
40
08 09 10 11 12 13 14 15 16 17
Trucks (000s)
Trucks (000s)
PACCAR Leasing
37,900 Vehicles
574 Locations
$2.4 Billion in Assets
April 2018Page 40
PACCAR Financial Services
3/31/18Finance & Other Receivables $10,104Equipment on Operating Leases 2,874Other Assets 612Total Financial Services Assets $13,590
Commercial Paper & Bank Loans $3,234Term Notes 5,896Deferred Taxes & Other Liabilities 1,243Total Financial Services Liabilities 10,373Equity 3,217Total Liabilities & Equity $13,590
($ Millions)
April 2018Page 41
PACCAR Competitive AdvantagesExcellent Shareholder Return
Experienced Management Team
Highest Quality Products
Rigorous Cost Control
Balanced Global Diversification
Excellent Supplier Partnerships
Extensive Capital Investments
Innovative Technology
Global Aftermarket Parts Sales
Strongest Dealer Network
Profitable Financial Services
April 2018Page 42