Following a pandemic-induced decline in 2020, Caterpillar says its full-year sales rose 22% in 2021 to $51 billion, up from $41.7 billion.
While the numbers were up, Caterpillar says supply constraints kept the company from meeting production demand. In a January 28 earnings call, Caterpillar Chairman and CEO Jim Umpleby cited several reasons for lower-than-expected margins, including freight costs, production inefficiencies and material costs. Dealer inventories remained relatively flat this year after a $2.9 billion decline in 2020.
“I’m proud of our global team’s continued resilience in what proved to be a challenging and dynamic operating environment. We delivered adjusted operating profit margins and ME&T free cash flows consistent with our long-term targets established during our 2019 Investor Day,” said Umpleby. “Amid ongoing supply chain constraints, our team continues to execute our strategy for long-term profitable growth while striving to meet customer demand.”
Price increases were implemented in 2021 to offset inflation, with further adjustments coming in 2022. Total company sales in 2021 remained lower than 2019.
In Q4, Cat’s sales increased by 23% to $13.8 billion, up from $11.2 billion in Q4 2020, due to increases in equipment sales, services and changes in dealer inventories. Sales to users in construction industries rose by 4%, with double-digit growth in Europe, the Middle East and Africa (EMEA) and Latin America. Demand slowed in the Asia-Pacific region, driven by a Chinese construction downturn.
“Services growth in 2021 benefitted from investments in our digital capabilities and the increased focus we and our dealers placed on meeting customer needs for services, particularly aftermarket parts,” said Umpleby. “We saw significant increases in 2021 in e-commerce sales, sales of customer value agreements and prioritized service events. Now we have critical mass and connectivity with more than 1.2 million connected assets.”
Cat Financial reported revenues of $2.56 billion for 2021, an increase of $12 million compared with 2020.
Retail new business volume for the year was $13.10 billion, an increase of $2.34 billion, or 22%, from 2020. The increase was driven by higher volume across all segments with the exception of a slight decrease in Caterpillar Power Finance.
Cat Financial says past dues decreased across all portfolio segments as global markets generally improved. Past dues were 1.95% at the end of 2021, compared with 3.49% at the end of 2020.
"We were pleased with the overall performance of our business during 2021, especially the strong health of our global portfolio and solid operational results delivered by our dedicated global team," said Dave Walton, president of Cat Financial. “We continue to focus on expanding our ability to serve our customers through financial services solutions."