Cummins Inc. reported full year revenues of $24 billion, a 21-percent year-over-year increase compared to 2020. Sales in North America increased 17 percent and international revenues posted a 27-percent jump. Sales increased in all major regions compared to 2020, which was severely impacted by the COVID-19 pandemic.
EBITDA was $3.5 billion in 2021, 14.7-percent of sales, compared to $3.1 billion, 15.7 percent of sales in 2020, a 12.9-percent increase.
Net income was $2.1 billion for the full year, compared to $1.8 billion in 2020, a 16.7-percent hike.
Fourth quarter revenues of $5.9 billion were flat with the same quarter in 2020. Sales in North America decreased 4 percent while international revenues increased 6 percent, driven by strong demand across most global markets, with the exception of China, compared to the fourth quarter in 2020.
“Strong economic recovery combined with high demand for our products resulted in record full year revenues in 2021,” said chairman and CEO Tom Linebarger. “Our industry continues to experience significant supply chain constraints resulting in elevated manufacturing, logistics, and material costs resulting in margins below our expectations, particularly in the fourth quarter. We have taken actions to improve margins in 2022 and expect to generate strong incremental margins through increased pricing, surcharges, a number of cost reduction initiatives and operational improvements. Having effectively managed through a challenging 2021, Cummins is in a solid position to keep investing in future growth while continuing to return cash to shareholders.
“The transition to low carbon power across industries will be a significant driver in the fight against climate change and will require a broad mix of innovative technologies to achieve these goals. This decarbonization effort represents a significant growth opportunity for Cummins as many of our OEM partners and end customers look to achieve their climate goals, while still having power solutions that fulfill their needs. Cummins’ key capabilities uniquely position us to lead in the transition to zero emissions.”
2022 Outlook
Based on the current forecast, Cummins projects full year 2022 revenues to rise 6 percent, and EBITDA to be about 15.5 percent of sales. Cummins expects revenues to increase in all regions and major markets with the exception of China, where the company expects demand to moderate after a record year in 2021.
Cummins announced it will bring a 15-liter natural gas engine for heavy-duty trucks to market. The 15-liter natural gas engine is an important part of Destination Zero, Cummins’ strategy for the best way to decarbonize the industry, focusing on reducing carbon from the technologies that are widely available, while investing in the infrastructure capabilities and technologies with the potential to reach zero. The strategy focuses on new powertrains including advanced diesel, natural gas, hydrogen engines, hybrids, battery electric, and fuel cells along with an increased use of low carbon fuels and renewable electricity. The expanding product lineup will help Cummins to achieve its PLANET 2050 environmental goals, including lowering emissions from newly sold products by 30 percent by 2030 and a goal of carbon neutrality by 2050, aligned with the Paris Climate Accord targets.
Cummins and Sinopec have formed a 50-50 joint venture called Cummins Enze to accelerate the affordability and availability of green hydrogen in China. The joint venture will invest in an electrolyzer plant with annual capacity starting at 500 megawatts in 2023, and scalable to one gigawatt within five years after completion. Cummins Enze will also provide a variety of hydrogen generation system solutions to meet diversified application requirements for both small- and large-scale hydrogen production.
In response to the COVID-19 pandemic, the company launched an aggressive global effort to acquire vaccines and provide them onsite or near-site to employees, their families and other stakeholders. By partnering with governments and health care providers, Cummins facilitated the delivery of more than 45,000 doses of approved vaccines to employees.
