Cummins Expects 14% Growth Rate as it Takes Advantage of Global Trends

Senior leaders of Cummins predict 2011 will be a record year for the company and expects to grow by 14% per year between now and 2015. While global trends will help make that happen, they said, at the same time, the global economy could throw a wrench in those plans.

Speaking at a meeting with approximately 150 Wall Street analysts and shareholders, Cummins senior executives released new long-term targets for revenue growth and profitability.

Company leaders set a target of achieving $30 billion in sales, with Earnings Before Interest and Taxes of 18% of sales in 2015. Cummins expects to grow at an approximate annual growth rate of 14% over the period to reach the $30 billion sales target. Management expressed its confidence in achieving these targets in 2015, but also acknowledged concerns about the pace of growth in the global economy, particularly in developed economies.

"Despite the current uncertainty surrounding the strength of economic growth in some regions of the world, 2011 will be a record year for Cummins," said Chairman and Chief Executive Officer Tim Solso.

The executives highlighted investments in new products and in its distribution network that will enable it to benefit from a number of important key trends, including:

* Tightening diesel engine emission standards around the world and regulations around commercial vehicle fuel economy that will allow Cummins to leverage its abilities in both emissions reduction and improving fuel efficiency.

* The rising price of energy is expected to further increase the demand for fuel-efficient engines, while the growing gap between the supply and demand for electricity in developing economies will benefit the company's power generation business.

* Increasing globalization will continue to benefit Cummins as OEMs in developing countries look to leverage its technology and distribution network in their pursuit of global growth.

* Increasing infrastructure investments in many of the company's markets will continue to drive demand for Cummins engines and power generation technology.

President and Chief Operating Officer Tom Linebarger told analysts that the company's financial strength, technology leadership and global footprint will be important enablers of future success.