Cummins' facility in Darlington, north-east England
Sales for Cummins increased in all major regions compared to the prior year, which was severely impacted by the height of the COVID-19 pandemic. Sales in North America increased 17%, and international revenues increased 27%. Earnings before interest, taxes, depreciation and amortisation (EBITDA) for the year was $3.5 billion (14.7% of sales) compared to $3.1 billion (15.7% of sales) in 2020.
Net income attributable to Cummins for the full year was $2.1 billion ($14.61 per diluted share), compared to $1.8 billion ($12.01 per diluted share) in 2020. The tax rate for 2021 was 21.3%. Fourth-quarter revenues of $5.9 billion were flat with the same quarter in 2020. Sales in North America decreased 4% while international revenues increased 6%, driven by strong demand across most global markets, except for China, compared to the same quarter in 2020.
EBITDA in the fourth quarter were $705 million (12.1% of sales), compared to $837 million (14.4% of sales) a year ago. In the fourth quarter, the net income attributable to Cummins was $394 million ($2.73 per diluted share) compared to $501 million ($3.36 per diluted share) in 2020. The tax rate in the fourth quarter was 22.2%.
“Strong economic recovery combined with high demand for our products resulted in record full-year revenues in 2021. 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,” said Cummins chairman and CEO Tom Linebarger.
“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 decarbonisation 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 fulfil their needs. Cummins key capabilities uniquely position us to lead in the transition to zero emissions.”
