on the expansion path with the announcement last month that it has
been given a licence to operate in Turkey.
The back office element of its new Turkish operations, along
with its Dubai business, are being managed out of the UK. This is
in tune with the company’s policy of managing parts of its business
cross-border (see offices below).
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The provision of a licence to offer finance in Turkey – which,
according to Chris Coleman, marketing manager for Geneva-based Cat
Financial Services in Europe, Africa, and the Middle East (EAME),
took “a long time to get” – follows its entry into Ukraine
last October.
Last month Andrii Shevel, director of Caterpillar Financial
Ukraine, announced that he expected sales in Cat Financial Ukraine
to grow by 40 per cent in 2008. Zeppelin Ukraine, which distributes
Caterpillar equipment and machines in Ukraine, linked the increase
in Cat’s sales with the launch of the captive finance arm. Cat FS
offers financial leasing in Ukraine for excavation equipment, road
building machines, farming equipment and diesel
electricity-generating units.
The company is planning to bolster its South African operations,
where it has a financial collaboration agreement with WesBank. It
also relies on local bank support in Greece and the Balkans to
handle its financings there, while for the rest of EAME it has its
own treasury operations based in Luxembourg.
It is currently developing a deal automation system in Spain. It
plans to next roll out this product, which is only for all deals,
in Italy. Its product offerings include providing quotes and
contract documentation. Clients can submit credit applications and
receive automated responses to those applications. Dealers can also
enter lease contracts onto the system.
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By GlobalDataIt has similar systems in France and an origination system in
Germany.
The company also offers inventory financing – or stocking
finance – to its dealerships.
Cat FS achieved record profits and revenues during the first
quarter of 2008. Revenues totalled $817m, 18 per cent higher than
the equivalent quarter in 2007.
Total profits for the leasing arm rose 17 per cent to reach
$195m.This increase was partly attributed to a $13m net yield
improvement in net earning assets, although this was offset by a
$19m increase in provision for credit losses.
Revenues in its EAME region increased 36 per cent, compared with
just 6 per cent in its North America business. The proportion of
Caterpillar’s sales and revenues from outside the US grew 5 per
cent to reach 58 per cent at the end of Q1 2008. Machinery sales
grew 16 per cent and engine sales rose 22 per cent.
CATERPILLAR FINANCIAL SERVICE OVERVIEW
Term of deal: 36-48 months
Range of deal sizes: £10,000 to £50m
. Equipment
can be moved around the
world, in accordance with demand, by a company owned and managed by
Cat FS.
Finance products: Hire purchase, finance lease,
operating lease (circa 20 per cent of total
business).
