Terex Corporation · NYSE:TEX
Terex — Q1 2020 Earnings Presentation
29 slides from Terex's earnings presentation, May 1, 2020
Slide 1: Q1 2020 Conference Call
Q1 2020 Conference Call May 1, 2020 FOCUS • SIMPLIFY • EXECUTE TO WIN 1
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking information regarding future events or the Company’s future financial performance based on the current expectations of Terex Corporation. In addition, when included in this presentation, the words “may,” “expects,” "should," “inte
Slide 3: COVID-19: Terex Way Values
COVID-19: Terex Way Values Global team members are social Safety is an absolute way of life distancing, yet working together to whether you work for us, supply us, safely serve our customers by use our equipment, or receive our following preventive guidelines services TEREX TEAM MEMBERS ARE LIVING O
Slide 4: COVID-19: Purpose & Values in Action
COVID-19: Purpose & Values in Action Aerial Work Platforms Materials Processing Our China and The Genie Northern Ireland team manufactured teams donated more 4,500 protective face than 5,000 surgical shields for local masks to support medical local hospitals and professionals care workers The Utilit
Slide 5: COVID-19: Health & Safety Actions
COVID-19: Health & Safety Actions Prevention Communication Leadership • Implemented on-site • Cascaded critical • HR and Health, Safety social distancing information from & Environment (HSE) processes governmental teams highly health agencies coordinated • Remote working • Broadcasting weekly • Faci
Slide 6: COVID-19: Cost Reduction Actions
COVID-19: Cost Reduction Actions Compensation Team Members Operations • Reduced CEO, senior • Implemented hiring • Suspended manufacturing executive and team freeze across the to respond to lower member salaries company demand and comply with local government • Deferred discretionary • Furloughs & s
Slide 7: COVID-19: Financial Actions
COVID-19: Financial Actions Cash Liquidity Capital Preservation Management Structure • Deferring payroll tax • $945 million of liquidity • Amended covenants payments in the United available as of provides access to States March 31, 2020 revolver liquidity • Reducing / deferring • Extended • Aggressi
Slide 8: Q1 2020: Credit Amendment Highlights
Q1 2020: Credit Amendment Highlights 2020 2021 2022 Apr Jan Jan Subject only to a Minimum Waiver Period Liquidity maintenance covenant Subject to a springing Secured Reinstatement Leverage Ratio maintenance Period covenant One-year extension and Extension amendment of the existing $600MM Revolving C
Slide 9: Q1 2020: Operating Results
Q1 2020: Operating Results Q1 2020 Q1 2019 Q1 2019 USD Millions, except Earnings per Share Reported Reported Adjusted COVID-19 Financial Impacts Net Sales $ 833.6 $ 1,136.6 $ 1,136.6 Gross Profit • Impacted by $7.8MM due to reserves % Change vs 2019 (26.7%) for government recoveries and Gross Profit
Slide 10: Q1 2020: Segment Results
Q1 2020: Segment Results Aerial Work Platforms Materials Processing • Global sales of $512 million • Global sales of $316 million down 30% down 23% Results • Operating margin (1.2%) • Operating margin 7.9% • Bookings of $498 million and • Bookings of $262 million and backlog of $717 million backlog
Slide 11: 2020: Updated Operational Priorities
2020: Updated Operational Priorities • Continue driving Zero Harm Culture and Big 5: Safety, Operational Excellence Quality, Delivery, Cost and Morale • Tighten Sales Inventory and Operations Planning (SIOP) • Maintain strong vendor relationships to position for eventual recovery • Aggressively mana
Slide 12: Disciplined Capital Allocation
Disciplined Capital Allocation Cash Flow: Taking the necessary actions to responsibly reduce costs 1 and preserve cash given the rapidly changing environment. Optimal Capital Structure: Strong balance sheet and ample liquidity to 2 fund our business operations and activities Organic Growth: Reduced
Slide 13: Summary
Summary Terex Way Values Safety of all our stakeholders is our most important operating principle Customer Centric Staying close to our customers and supporting them with machinery, parts and service, and other solutions Strong Business Future Strong future when conditions normalize for businesses t
Slide 14: Questions?
Questions? FOCUS • SIMPLIFY • EXECUTE TO WIN 14
Slide 15: Appendix
Appendix FOCUS • SIMPLIFY • EXECUTE TO WIN 15
Slide 16: Backlog Trend
Backlog Trend USD Millions Sequential Year on Year $ % $ % AWP (35) (5%) (371) (34%) MP (57) (17%) (291) (52)% Total (92) (9%) (662) (40)% Backlog shown is deliverable in less than 12 months which reflects continuing operations. Total amounts may not add due to rounding. FOCUS • SIMPLIFY • EXECUTE T
Slide 17: Q1 Global Sales
Q1 Global Sales Sales by Geography 2020 vs 2019 Western Europe Actual FX-Adj. Asia/ Pacific North America Actual FX-Adj. -37% -36% Actual FX-Adj. E. Europe, Middle -28% -26% -21% -21% East & Africa Actual FX-Adj. -25% -24% LATAM -24% Actual FX-Adj. 2020 Q1 QTD 2019 Q1 QTD -30% -26% Western Europe As
Slide 18: Aerial Work Platforms
Aerial Work Platforms USD Millions Q1 '20 Q1 '19 Net Sales $511.7 $727.9 % Change vs. '19 (29.7%) Operating Profit (Loss), as reported ($5.9) $59.6 Operating Margin % (1.2)% 8.2% Operating Profit (Loss), as adjusted (1) ($5.9) $61.2 Operating Margin % (1.2)% 8.4% Backlog $717 $1,088 % Change vs. '19
Slide 19: Materials Processing
Materials Processing USD Millions Q1 '20 Q1 '19 Net Sales $315.6 $410.5 % Change vs. '19 (23.1 %) Operating Profit (Loss), as reported $25.0 $59.5 Operating Margin % 7.9 % 14.5 % Operating Profit (Loss), as adjusted (1) $25.0 $59.5 Operating Margin % 7.9 % 14.5 % Backlog $272 $563 % Change vs. '19 (
Slide 20: Q1 2019 Adjustments
Q1 2019 Adjustments USD Millions, except Earnings per Share Q1 2019 Restructuring Tax & Interim Q1 2019 As Reported Transformation Deal Related Other As Adjusted & Related Period Net Sales $1,136.6 — — — — — $1,136.6 Gross Profit 237.8 1.0 — — — — 238.8 SG&A (138.1) 0.7 4.1 0.2 — — (133.1) Income (l
Slide 21: Glossary
Glossary In an effort to provide investors with additional information regarding the Company’s results, Terex refers to various GAAP (U.S. generally accepted accounting principles) and non-GAAP financial measures which management believes provides useful information to investors. These non-GAAP meas
Slide 22: Glossary: Free Cash Flow
Glossary: Free Cash Flow USD Millions Free Cash Flow - We calculate a non-GAAP measure of free cash flow. We define free cash flow as Net cash provided by (used in) operating activities, plus (minus) increases (decreases) in Terex Financial Services finance receivables consisting of sales-type lease
Slide 23: Glossary: Debt & Net Debt
Glossary: Debt & Net Debt USD Millions Debt is calculated using the Condensed Consolidated Balance Sheet amounts for Current portion of long-term debt plus Long-term debt, less current portion plus debt from liabilities held for sale. Net Debt is calculated as Debt less Cash and cash equivalents, in
Slide 24: Glossary: EBITDA
Glossary: EBITDA USD Millions EBITDA is defined as earnings, before interest, other non-operating income (loss), income (loss) attributable to non-controlling interest, taxes, depreciation and amortization. The Company calculates this by subtracting the following items from Net income (loss): (Gain)
Slide 25: Glossary: ROIC
Glossary: ROIC ROIC and other Non-GAAP Measures (as calculated below) assist in showing how effectively we utilize capital invested in our operations. ROIC is determined by dividing the sum of NOPAT for each of the previous four quarters by the average of Debt less Cash and cash equivalents plus Ter
Slide 26: Glossary: ROIC Continued
Glossary: ROIC Continued USD Millions See reconciliation of adjusted amounts below on the following ROIC tables. Amounts are as of and for the three months ended for the period referenced in the tables. Mar '20 Dec '19 Sep '19 Jun '19 Mar '19 Annualized effective tax rate, as adjusted (1),(2) 19.8 %
Slide 27: Glossary: ROIC Continued
Glossary: ROIC Continued USD Millions Three months Three months Three months Three months ended 3/31/20 ended 12/31/19 ended 9/30/19 ended 6/30/19 Reconciliation of income (loss) from operations: Income (loss) from operations, as reported $ (7.1) $ 22.9 86.4 126.0 Adjustments: Deal Related — — (0.9)
Slide 28: Glossary: ROIC Continued
Glossary: ROIC Continued USD Millions Income (loss) from (Provision for) Three Months Ended March 31, 2020 continuing operations benefit from Income tax before income taxes income taxes rate Reconciliation of annualized effective tax rate: As reported $ (25.5) $ 0.8 3.1% Effect of Adjustments: Tax r
Slide 29: Glossary: Working Capital
Glossary: Working Capital USD Millions Working Capital is calculated using the Consolidated Balance Sheet amounts for Trade receivables (net of allowance) plus Inventories less Trade accounts payable and Customer advances. The Company views excessive working capital as an inefficient use of resource