Cummins released 2022 fourth quarter and full-year financial report

Fourth quarter sales of $7.8 billion net income of $631 million
Fourth Quarter EBIT of 14.2% Diluted EPS of $4.43
Annual sales of US$28.1 billion and net income of US$2.2 billion
Full-year EBIT of 13.5% Diluted EPS of $15.12
The company expects full-year revenue growth of 12%-17% in 2023, and the EBIT rate is expected to be 14.5%-15.2%.
Cummins China achieved sales revenue of US$5.4 billion including joint ventures

Cummins Announces 2022 Fourth Quarter and Annual Performance
In the fourth quarter, Cummins’ sales revenue reached US$7.8 billion. Excluding the impact of the Meritor acquisition completed on August 3, 2022, the revenue was US$6.6 billion, a year-on-year increase of 13% over 2021. In the fourth quarter, sales in the North American market, excluding the acquisition of Meritor, increased by 25% from the previous quarter, and revenue from the international market decreased by 1% from the previous quarter. Demand in various markets around the world was strong, but demand in the Chinese market slowed down.

Cummins achieved net income of $630 million in the fourth quarter, or $4.43 per diluted share. Excluding the Meritor acquisition and related integration costs, net income for the quarter was $644 million, or $4.52 per diluted share, compared to $394 million, or $2.73 per diluted share, in 2021. The fourth quarter figures also include costs related to the divestiture of the Filtration business, resulting in $0.11 per diluted share.

Earnings before interest and taxes (EBITDA) in the fourth quarter were US$1.1 billion, with an EBITDA margin of 14.2%. Excluding the Meritor acquisition and related business integration costs, as well as $19 million in costs related to the divestiture of the Filtration business, the EBIT margin was 16.1%, compared to 12.1% in 2021.

The company’s fourth-quarter results include Meritor’s revenue for the full three months. Meritor’s performance for the quarter included revenue of $1.2 billion and earnings before interest and taxes of $60 million. Fourth-quarter results also included $27 million in business integration-related costs. Excluding these costs, Meritor EBIT for the quarter was $87 million, representing an EBIT margin of 7.5%.
“In 2022, Cummins continues to advance its zero-carbon target growth strategy through the acquisition of Jacobs Vehicle Systems, Meritor and Siemens Commercial Vehicles. The innovative talents, technologies and capabilities brought by these acquisitions will promote Cummins’ achievements in the process of decarbonizing the industry. success,” said Jennifer Rumsey, President and Chief Executive Officer of Cummins. Benefits. Thank you to all Cummins employees for working together to overcome supply chain challenges and make 2022 a successful close.”

Cummins’ full-year sales revenue in 2022 will be US$28.1 billion. After excluding the costs related to Meritor’s acquisition, the revenue will be US$26.2 billion, a year-on-year increase of 9%. Compared with 2021, sales in the North American market increased by 18%, and revenue in the international market decreased by 2%.

Cummins’ full-year net income was $2.2 billion, with diluted earnings per share of $15.12. Excluding the Meritor business and related acquisitions, integration costs and purchase accounting effects, diluted net income per share in 2022 was $15.67, compared to $14.61 in 2021. Full year results include Filtration divestment costs ($0.45 per diluted share).

In 2022, Cummins’ earnings before interest and taxes will be US$3.8 billion, with an EBIT yield of 13.5%. Excluding the Meritor business and related acquisitions, integration costs and purchase accounting impact, Filtration divestment costs of $81 million, EBIT of $4 billion, EBIT margin of 15.1%, 2021 EBIT of $3.5 billion , EBIT yield of 14.7%.

The company’s full-year results include five months of operations following the Meritor acquisition. Meritor’s 2022 results include $1.9 billion in revenue and $26 million in EBIT.

Outlook for 2023
Based on current forecasts, Cummins’ full-year 2023 revenue is forecast to grow by 12% to 17%, with an EBIT margin of approximately 14.5% to 15.2%.

The above outlook includes Meritor’s projected 2023 performance, but does not include costs or benefits associated with the divestiture of the Filtration business. In the Components Division, Cummins expects Meritor’s revenue in 2023 to be US$4.5 billion to US$4.7 billion, with an EBIT margin of 10.3% to 11.0%. The electric powertrain division of Meritor’s business has been integrated into the new energy power division, and the overall expected loss of earnings before interest and taxes of this business is US$55 million.
Rong Zhanning said: “In 2023, we expect demand in most major regions and markets to remain strong, especially in the first half of this year. We will continue to pay close attention to global economic indicators to ensure that the company is prepared for a further slowdown in the economy. It is expected that in 2023, our core business will achieve revenue and profit margin growth, and the new energy business will also have a brighter performance.”

2022 Performance Highlights
o Cummins completes acquisition of Jacobs Vehicle Systems, a critical engine braking,
A supplier of cylinder deactivation, start-stop and thermal management technologies, engine braking and cylinder deactivation technologies are an essential part of meeting current and future emissions regulations.

o Cummins completes acquisition of Meritor Corporation. Meritor is a global leader in the commercial vehicle and industrial markets
Provider of transmission, mobility, braking, aftermarket and electric powertrain solutions. Integrating Meritor’s outstanding talents, axle and braking technologies and products will help Cummins further enhance its ability to provide integrated powertrain solutions for internal combustion engine and electric power applications.

o Cummins completes acquisition of Siemens Commercial Vehicles business, which focuses on high-performance commercial vehicles
Electric drive system solutions.

Cummins Hosts Biennial Analyst Day to Present Company’s Zero Carbon Goal Long-Term Growth Strategy
According to the strategy, the strategy includes further improving the advanced internal combustion engine technology that has been widely used, while continuing to invest in frontier areas that have not yet been mass-marketed to promote the development of zero-emission technology.

o Cummins is the first to release a multi-fuel internal combustion engine powertrain platform, which will be applied to the
Cummins X, L and B series product platforms help fleets reduce carbon emissions by burning low-carbon or zero-carbon fuels. The platform utilizes internal combustion engine technology that has been widely used by fleets, has a high degree of commonality of parts, and can use a variety of fuels including diesel, natural gas, and hydrogen.

o The new energy business continued to expand its global green hydrogen business footprint. The capacity expansion of water electrolysis hydrogen production equipment is the focus of 2022. Cummins announced that it will produce electrolysis water hydrogen production equipment in Fridley, Minnesota, USA, expand the production capacity of electrolysis water hydrogen production equipment in Oevel, Belgium, and start construction in Castilla-La Mancha, Spain Electrolyzed water hydrogen production equipment factory. In January 2022, Cummins and Enze Fund, a subsidiary of Sinopec, started construction of the water electrolysis hydrogen production equipment manufacturing base. In addition, it has been successfully assembled with major global customers and partners including Linde, Atura Power, Florida Power and Light, Sinopec, and China Three Gorges Corporation.

o Cummins has received numerous honors, including being named to the S&P Dow Jones Sustainability World Index for two consecutive years, named to Barron’s list of America’s 100 Most Sustainable Companies, ranked No. 4 on Forbes’ list of Best Employers for Diversity, and Named to the Ethisphere Institute’s list of the World’s Most Ethical Companies. In addition, Morgan Stanley Capital International (MSCI) upgraded Cummins’ corporate governance ESG rating from AA to the highest rating of AAA, and it was named to Investor’s Business Daily’s fourth annual list of the 100 Best ESG Companies.

o On August 1 this year, Rong Zhanning became the company’s seventh and first female chief executive officer (CEO), and former CEO Tom Linebarger continued to serve as the executive chairman of the board of directors.

o The Filtration spin-off project continued to progress.