Paccar Inc. · NASDAQ:PCAR

Paccar — Q1 2017 Earnings Presentation

44 slides from Paccar's earnings presentation, April 2017

  1. Slide 1: PACCAR

    PACCAR ..

  2. Slide 2: 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 and uncertainties is described in more detail in

  3. Slide 3: PACCAR brands and businesses

    PACCAR... Ee] KENWORTH [a (ierbilt) DAF PACCARFINANCIAL PACCARPARTS rl PACCAR MEXICO PACCARENGINES Fai PACKAR INFORMATION LEYLAND TRUCKS S TECHNOLOGY PACCAR WINCH DIVISION BRADEN carco Gearmatic PAICCAIR TECHNICAL CENTER 7) Kenworth DYNACGRAFT. Australia —* »acem April 2017

  4. Slide 4: Commercial Vehicles, Aftermarket, Financial Services, IT

    Powertrain Aftermarket Support Commercial Vehicles Information Technology Financial Services April 2017 Page 3

  5. Slide 5: PACCAR Strategy

    PACCAR Strategy Quality Technology Innovation Premium Products and Services Profitable Market Share Growth Geographic Expansion April 2017 Page 4

  6. Slide 6: PACCAR Values

    PACCAR Values Conservative Highest Operational Long Term Quality Financial Integrity Excellence Perspective Management April 2017 Page 5

  7. Slide 7: Trucking Moves the Economy

    Trucking Moves the Economy If you bought it, it probably was delivered by a truck 69% 15% 10% 6% Truck Rail Pipeline Water % Total U.S. Freight Tonnage Hauled by Transportation Mode April 2017 Page 6

  8. Slide 8: Global >6T Truck Markets

    Global >6T Truck Markets 2011 – 2.9 Million Russia/CIS China 2016 – 2.7 Million 2021 – 2.9 Million EU28 1,1751172.559 130 132.4 120 55 960 355 320 920 305 North America 275 330 330 Rest of Asia India 355 360 361.135 210 213 South America Africa & 335 295 360 332583 Middle East 235 205 215 240 100 18

  9. Slide 9: Heavy Duty Commercial Vehicles

    Heavy Duty Commercial Vehicles Units 000s Units (000s) 350 350 300 300 250 250 200 200 150 150 100 100 50 50 0 0 99 01 03 05 07 09 11 13 15 17 Fcst US & Canada Europe South America April 2017 Page 8

  10. Slide 10: PACCAR Heavy Duty Market Share

    PACCAR Heavy Duty Market Share 40% 40% 35% 35% 30% 30% 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% 0% 0% S. America Europe Australia U.S. and Canada Mexico 2006 2016 April 2017 Page 9

  11. Slide 11: >16T Truck Manufacturing

    >16T Truck Manufacturing 2016 Production (Units 000’s) Daimler Volvo FAW Volkswagen Dongfeng PACCAR #6 Sinotruk Shaanxi Tata Motors Beijing Foton Ashok Leyland Jianghuai Iveco Hino KAMaz Navistar Isuzu Dayun Hongyan Total Production 2016 = 1.8 Million Hualing 0 50 100 150 200 250 April 2017 Page 10

  12. Slide 12: PACCAR Truck Production

    PACCAR Truck Production 1.3 Million Trucks Produced 2007-2016 154,700 160 140,400 142,900 138,000 140,900 133,900 137,100 140 125,900 Brasil 120 Australia 100 78,800 Europe 80 61,000 Mexico 60 Canada 40 US 20 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 April 2017 Page 11

  13. Slide 13: Excellent Financial Performance Throughout the Business Cycle

    PACCAR Excellent Financial Performance Throughout the Business Cycle $ Billions Revenue $ Billions $ Millions Net Income $ Millions 20 20 1.8 1.8 7% 5% (10% Adj. NI)** 1.5 1.5 15 15 1.2 1.2 10 10 0.9 0.9 0.6 0.6 5 5 0.3 0.3 0.0 0.0 0 0 96 98 00 02 04 06 08 10 12 14 16* 96 98 00 02 04 06 08 10 12 14

  14. Slide 14: Best-in-Class Operating Efficiency: Operating Margin

    Best-in-Class Operating Efficiency Commercial Vehicle Segment Operating Margin 15% 15% 12% 12% 9% 9% 6% 6% 3% 3% 0% 0% -3% -3% -6% -6% -9% -9% 07 08 09 10 11 12 13 14 15 16 PACCAR Volkswagen Daimler Volvo Iveco Navistar April 2017 Page 13

  15. Slide 15: Best-in-Class Operating Efficiency: Inventory Turns

    Best-in-Class Operating Efficiency Inventory Turns # Inventory Turns # Inventory Turns 25 25 20 20 15 15 10 10 5 5 0 0 07 08 09 10 11 12 13 14 15 16 PACCAR Volkswagen Daimler Volvo CNH Navistar April 2017 Page 14

  16. Slide 16: Best-in-Class Operating Efficiency: SG&A

    Best-in-Class Operating Efficiency SG&A % of Sales 20% 20% 15% 15% 10% 10% 5% 5% 0% 0% 07 08 09 10 11 12 13 14 15 16 PACCAR Volkswagen Daimler Volvo CNH Navistar April 2017 Page 15

  17. Slide 17: Net Income per Truck

    Net Income per Truck Units (000s) $/Truck 180 11,250 160 10,000 140 8,750 120 7,500 100 6,250 80 5,000 60 3,750 40 2,500 20 1,250 0 0 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* Trucks Net Income per Truck Adjusted Net Income Per Truck * * 2016 Adjusted Net Inco

  18. Slide 18: Annualized Shareholder Total Return %

    Annualized Shareholder Total Return % Fifteen Years, As of March 31, 2017 Deere Volvo Eaton Caterpillar Hino Volkswagen S&P 500 Daimler Toyota Ford Navistar -4 0 4 8 12 16 April 2017 Page 17

  19. Slide 19: PACCAR Inc balance sheet

    PACCAR Inc A+/A1 Credit Ratings ($ Millions) 3/31/17 Cash & Securities $ 2,895 Manufacturing Assets 5,879 Financial Services Assets 12,266 Total Assets $ 21,040 Manufacturing Debt $ 0 Manufacturing Liabilities 4,273 Financial Services Liabilities 9,687 Shareholders' Equity 7,080 Total Liabilities &

  20. Slide 20: PACCAR Overview – Q1 2017

    PACCAR Overview – Q1 2017 Consolidated Sales & Revenues $4.24 Billion Net Income $310 Million PACCAR Financial Pre-Tax Profit $57 Million PACCAR Parts Pre-Tax Profit $152 Million Stockholders’ Equity $7.08 Billion A1/A+ Credit Ratings Regular Dividend Increased 33% in Last 5 Years April 2017 Page 19

  21. Slide 21: Revenues and Profit

    PACCAR Revenues and Profit 78 consecutive years of net profit Dividends every year since 1941 ($ Millions) 1ST Quarter 2017 2016 Revenues $4,238 $4,300 Net Income (Loss) 310 (595) Diluted Net Income (Loss) Per Share 0.88 (1.69) Adjusted Net Income (Non-GAAP) 348 Adjusted Diluted EPS (Non-GAAP) 0.99

  22. Slide 22: Capital Allocation

    PACCAR Capital Allocation Uses of Cash Flow Capital Allocation Strategy 2012 – 2016: $8 Billion • R&D and capex investments Debt Repayment Share Repurchase Finance $0.2 drive future growth $0.5 Company $1.0 Capex $1.9 • Credit rating of A+/A1 reflects strategic nature of our financial services opera

  23. Slide 23: New Products and Technologies

    New Products and Technologies Remote Diagnostics Fault Off-Board Automated Action Resolution Detected Diagnostics Notification Plan April 2017 Page 22

  24. Slide 24: Investments

    PACCAR Investments DAF Sales Office, Haddenham, U.K. DAF, Westerlo, Belgium PACCAR Engine Factory, Columbus, Mississippi PACCAR Parts Distribution Center, Toronto, Canada April 2017 Page 23

  25. Slide 25: Dividends Declared and Stock Repurchases

    Dividends Declared and Stock Repurchases $ Millions $ Millions 1,200 1,200 1,000 1,000 800 800 600 600 400 400 200 200 0 0 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Dividends Stock Repurchased April 2017 Page 24

  26. Slide 26: Engines Worldwide

    PACCAR Engines Worldwide PACCAR PX-5 PACCAR PX-7 PACCAR PX-9 4.5 Liter 6.7 Liter 8.9 Liter PACCAR PR PACCAR MX-11 PACCAR MX-13 9.2 Liter 10.8 Liter 12.9 Liter April 2017 Page 25

  27. Slide 27: Cumulative PACCAR MX Engines Produced

    Cumulative PACCAR MX Engines Produced Engines (000s) Engines (000s) 550 550 500 500 450 450 400 400 350 350 300 300 250 250 200 200 150 150 100 100 50 50 0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 DAF MX-13 KW/PB MX-13 MX-11 April 2017 Page 26

  28. Slide 28: Parts Revenue

    PACCAR Parts Revenue $ Millions $ Millions 3,500 3,500 3,000 3,000 8% 2,500 2,500 2,000 2,000 1,500 1,500 1,000 1,000 500 500 0 0 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 April 2017 Page 27

  29. Slide 29: Parts Distribution Centers and Dealers

    PACCAR Parts Distribution Centers and Dealers PACCAR Distribution Centers KW, PB, DAF Dealers April 2017 Page 28

  30. Slide 30: Parts Investments

    PACCAR Parts Investments Eindhoven, NL Lancaster, PA Renton, WA Ponta Grossa, BR April 2017 Page 29

  31. Slide 31: Global Dealer Network

    PACCAR Global Dealer Network April 2017 Page 30

  32. Slide 32: Global Expansion

    PACCAR Global Expansion Taiwan Russia Brasil India April 2017 Page 31

  33. Slide 33: Road to Autonomous Commercial Vehicles

    Road to Autonomous Commercial Vehicles Component Controls System Integration Network Integration Automated Vehicle 1980-2014 2015-2017 2018-2024 2025+ • Anti Lock Braking • Collision Avoidance • Vehicle to Vehicle • Vehicle to Network Infrastructure • Lane Departure • Lane Keeping Assist Network War

  34. Slide 34: Environmental Leadership

    Environmental Leadership Ranked in Top 10% of Companies Reporting to CDP (Carbon Disclosure Project) Reduce Environmental Impact Through Product Design Product Recyclability 90%+ Reduction in NOx and Particulate Emissions Alternative Fuel Vehicles (Natural Gas, Hybrid) Zero Waste to Landfill Environ

  35. Slide 35: Financial Services – Q1 2017

    PACCAR Financial Services – Q1 2017 $12.3 Billion in Assets Pre-tax Profit $57 Million 178,000 Vehicles Financed Dealer Floorplan Retail Financing Full Service Leasing April 2017 Page 34

  36. Slide 36: Financial Services Countries on Four Continents

    PACCAR Financial Services 23 Countries on Four Continents PACCAR Financial Regional Offices April 2017 Page 35

  37. Slide 37: Financial Services Assets

    PACCAR Financial Services Assets Australia & Mexico Australia & Mexico $1.3 Billion $0.9 Billion 10% 9% Europe Europe $2.2 Billion $2.7 Billion 22% 22% U.S. & U.S. & Canada Canada PacLease $6.1 Billion $5.2 Billion $2.2 Billion 50% 53% 18% PacLease $1.5 Billion 16% 2006 - $9.8 Billion 1Q17 - $12.3 B

  38. Slide 38: Financial Europe

    PACCAR Financial Europe Assets Assets € Billions € Billions 3.0 3.0 2.5 2.5 2.0 2.0 1.5 1.5 1.0 1.0 47,800 Vehicles 0.5 0.5 200 DAF Dealers 0.0 07 08 09 10 11 12 13 14 15 16 0.0 16 European Countries April 2017 Page 37

  39. Slide 39: Leasing

    PACCAR Leasing Trucks Trucks 000’s 000’s 40 40 35 35 30 30 25 25 20 20 566 Service Locations 15 15 37,100 Vehicles 10 07 08 09 10 11 12 13 14 15 16 10 $2.2 Billion Assets April 2017 Page 38

  40. Slide 40: Financial Services Delivers Strong Performance

    PACCAR Financial Services Delivers Strong Performance Low 30+ Days Past Due Assets and Pretax Profit Assets Pre-tax Profit % % $ Billions $ Millions 8 8 16 400 7 7 14 350 6 6 12 300 5 5 10 250 4 4 8 200 3 3 6 150 2 2 4 100 1 1 2 50 0 0 0 0 90 92 94 96 98 00 02 04 06 08 10 12 14 16 07 08 09 10 11 12

  41. Slide 41: Financial Services balance sheet

    PACCAR Financial Services ($ Millions) 3/31/17 Finance & Other Receivables $8,971 Equipment on Operating Leases 2,646 Other Assets 649 Total Financial Services Assets $12,266 Commercial Paper & Bank Loans $2,516 Term Notes 5,849 Deferred Taxes & Other Liabilities 1,322 Total Financial Services Liabi

  42. Slide 42: Competitive Advantages

    PACCAR Competitive Advantages Excellent 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 Profitable Financia

  43. Slide 43: Reconciliation of GAAP to Non-GAAP Financial Measures

    Appendix Reconciliation of GAAP to Non-GAAP Financial Measures This presentation 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”), sinc

  44. Slide 44: April 2017 Page 43

    PACCAR... April 2017 Page 43

PACCAR — Q1 2017 Earnings Presentation on 6ix