Caterpillar Inc. executives unveiled the company's updated Vision 2020 strategy to employees, dealers, suppliers and shareholders, setting the stage for the next phase of the company's leadership and growth in the global industries it serves.
For the last five months, vice chairman and CEO-elect Doug Oberhelman has led a team in updating the company's Vision 2020 strategy, which was first introduced by chairman and CEO Jim Owens in 2005.
"As we build on its strategy from 2005 and communicate the direction and goals to its employees, dealers, suppliers and stockholders, it will become very clear that Caterpillar will be intensely focused on helping its customers succeed," Oberhelman said. "We'll be driving execution in key areas of the business that are critical to customers – quality, production capability and cost."
The strategy update includes a vision of the future where:
- Caterpillar is the recognized leader everywhere it does business.
- Its products, services and solutions help its customers succeed.
- Its distribution system is a competitive advantage.
- Its supply chain is world class.
- Its business model drives superior results.
- Its people are talented and live Its Values in Action.
- Its work today helps its customers create a more sustainable world.
- Its financial performance consistently rewards its stockholders.
Goals for the next five years are focused in three areas:
- Delivering superior results – earnings per share growth, OPACC (Operating Profit After Capital Charge) and cash flow.
- Developing the best team of people – world-class safety and inclusion.
- Becoming the global leader everywhere it does business – the quality of its products, PINS (percent of industry sales) and aftermarket parts growth.
"From a stockholder perspective, our goals are focused on delivering total shareholder returns over the business cycle in the top 25 percent of the S&P 500," Oberhelman said. "To do that, I believe we need to deliver compound annual earnings per share growth of 15 to 20 percent over the business cycle. Last year, we introduced a 2012 goal of achieving $8 to $10 profit per share, and that's still its goal for 2012. That level of performance in 2012 is squarely on the path to delivering the growth that should place us in the top quartile of the S&P 500."
"I'm personally energized and ready to take on our competitors. And as we roll out the strategy to the entire Caterpillar team, there are a few key messages that will emerge," Oberhelman said. "First, we're energized, playing offense and driving to win everywhere in the world. Second, we're highly focused on customers. Simply put, delivering products and services that help customers make more money with Caterpillar products than our competitors. Third, there will be an intense focus on execution and accountability throughout the company as we deliver for its customers, our people and our stockholders."
The company's updated strategy is focused on the execution of Caterpillar's proven business model. The company will provide more details about the strategy for investors at its analyst meeting in New York on August 19.
About Caterpillar
For more than 85 years, Caterpillar Inc. has been making progress possible and driving positive and sustainable change on every continent. With 2009 sales and revenues of $32.396 billion, Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. The company also is a leading services provider through Caterpillar Financial Services, Caterpillar Remanufacturing Services, Caterpillar Logistics Services and Progress Rail Services.
