Caterpillar Inc. (NYSE: CAT) executives are unveiling 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.
Caterpillar Offices
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 our strategy from 2005 and communicate the direction and goals to our employees, dealers, suppliers and stockholders, it will become very clear that Caterpillar will be intensely focused on helping our 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.
Our products, services and solutions help our customers succeed.
Our distribution system is a competitive advantage.
Our supply chain is world class.
Our business model drives superior results.
Our people are talented and live Our Values in Action.
Our work today helps our customers create a more sustainable world.
Our financial performance consistently rewards our 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 we do business – the quality of our 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 our 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,” Oberhelman said.
Caterpillar Marine Power Systems
“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 our 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.
