Slide 1: Q2 2023 Earnings Conference Call
Q2 2023 Earnings Conference Call August 2, 2023 EXECUTE • INNOVATE • GROW
Slide 2: Forward Looking Statements
Forward Looking Statements Certain information in this presentation includes forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”) and the Private Securities Litigation Reform Act of 1995)
Slide 3: Strong Commitment to Zero Harm Culture and Terex Values
Strong Commitment to Zero Harm Culture and Terex Values Total Recordable Incident Rate (TRIR) 3.4 3.2 3.2 3.0 2.8 2.6 3.82 3.27 2.98 2.09 1.52 1.77 1.93 1.96 1.00 2016 2017 2018 2019 2020 2021 2022 2023 2024 Q2 YTD Target TRIR Machinery Manufacturing Average TEREX WAY VALUES... SUPPORT A STRONG COMP
Slide 4: Q2 2023: Outstanding Execution Driving Another Full-Year EPS Outlook Raise
Q2 2023: Outstanding Execution in Dynamic Operating Environment Driving Another Full-Year EPS Outlook Raise SALES OPERATING PROFIT $1.4B $210M 30% 102% OPERATING MARGIN EPS 15.0% $2.35 Terex Utilities showcased the all-electric bucket truck at a national 540 bps 120% conference for fleet managers EP
Slide 5: Terex Solutions Enabling Sustainable Global Growth
Terex Solutions Enabling Sustainable Global Growth Sources: Global Data; Quanta Services; The World Bank; Business Wire; Globe Newswire; Grand View Research; World Economic Forum; Cities Today; Precedence Research; Industry ARC 5
Slide 6: Q2 Bookings and Backlog Trends Remain Healthy
Q2 Bookings and Backlog Trends Remain Healthy USD Millions Materials Processing Backlog remains elevated at $3.7B • Backlog significantly above historical average $654 • Minimal push outs and cancellations $490 $451 $334 $360 $279 Total company Q2 bookings remained at healthy levels $250 Elevated cu
Slide 7: Focused on Strategy Execution
Focused on Strategy Execution Operational Excellence • Improved supply chain and operating performance • Realized benefits of cost reductions and manufacturing productivity improvement • Transfer into permanent Genie Mexico facility on time and on budget ◦ Production moves will impact 2H margin perf
Slide 8: Innovation: New Products for Forestry and Waste Recycling
Innovation: New Products for Forestry and Waste Recycling MP continuing to expand product offering into attractive adjacent opportunities Fuchs MHL420 VacRecover Plant Expands Fuchs' end markets into the forestry and Developed VacRecover plant to process hydrovac vegetation maintenance waste into sa
Slide 9: Continued Commitment to Strong Sustainability Practices
Continued Commitment to Strong Sustainability Practices ENVIRONMENTAL STRONG SOCIAL STEWARDSHIP GOVERNANCE RESPONSIBILITY What we do: Effective Link substantial portion of total executive lead Regular compensation directly to performance Data director independent 7/8 directors are protection structu
Slide 10: Proactively Managing Macroeconomics Headwinds
Proactively Managing Macroeconomics Headwinds Macro Issues Mitigation Strategies • Engaged with suppliers, customers and diversified global Geopolitical uncertainty footprint • Continue to monitor regional, customer, supplier credit Volatility in credit and conditions and counterparty risk interest
Slide 11: Outstanding Execution in Dynamic Environment
Outstanding Execution in Dynamic Environment USD Millions, except Earnings per Share Q2 2023 Q2 2022 Q2 2023 Financial Call-Outs Net Sales $ 1,403.1 $ 1,077.1 Operating Profit • $2 million gain related to sale of Oklahoma City facility % Change vs 2022 30.3% Other Income Gross Profit 342.9 212.9 • M
Slide 12: Materials Processing: Consistent Strong Performance
Materials Processing: Consistent Strong Performance USD Millions Sales Operating Margin Backlog +20.1% YoY +50bps YoY (15%) YoY 16.5% 17.0% 1,265 577.4 1,074 480.7 Q2 '22 Q2 '23 Q2 '22 Q2 '23 Q2 '22 Q2 '23 Results Drivers • Sales up 22% on FX neutral basis • Continued strong margin performance up 16
Slide 13: Aerial Work Platforms: Excellent Year-over-Year Improvement
Aerial Work Platforms: Excellent Year-over-Year Improvement USD Millions Sales Operating Margin Backlog +38.0% YoY +850bps YoY 2,818 (5%) YoY 2,668 824.9 16.2% 597.7 7.7% Q2 '22 Q2 '23 Q2 '22 Q2 '23 Q2 '22 Q2 '23 Results Drivers • Sales up 38% due to strong customer demand and improved supply chain
Slide 14: Strong Balance Sheet and Liquidity: Q2 2023
Strong Balance Sheet and Liquidity: Q2 2023 USD Millions Highlights Liquidity • Dividend up 31% since start of 2023 Undrawn Revolver $465 • Investing in Growth Cash 298 Total Liquidity $763 • Ample liquidity of $763; Net leverage of 0.7x • Raising 2023 FCF Outlook to ~$375 Net Debt & Leverage • ROIC
Slide 15: Raising Full-Year 2023 Outlook
Raising Full-Year 2023 Outlook USD Millions, except Earnings per Share PREVIOUS UPDATED Terex Outlook (1) PREVIOUS Outlook UPDATED Outlook Outlook Outlook Segment Outlook (1) Operating Operating Net Sales $4,800 - $5,000 ~$5,100 Net Sales Net Sales Margin Margin SG&A % to Sales ~10.7% ~10.5% Materia
Slide 16: Positioned for Growth to Deliver Long-Term Value
Positioned for Growth to Deliver Long-Term Value ▪ Great businesses with strong brands ▪ Continuing strong execution in a challenging environment ▪ Maintaining a strong balance sheet ▪ Expanding presence in growing markets, supported by favorable industry tailwinds ▪ Driving purposeful innovation ▪
Slide 17: Appendix
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Slide 18: Q2 2023: Financial Highlights
Q2 2023: Financial Highlights EPS $2.35 Sales $1.4 Billion Backlog $3.7 Billion +47% sequentially +14% sequentially (10%) sequentially +120% YoY +30% YoY (8%)YoY SG&A % of Sales 9.5% NWC % of Sales 19.2% Operating Margin 15.0% (110)bps sequentially (80)bps sequentially +300bps sequentially (60)bps Y
Slide 19: Backlog Trend
Backlog Trend USD Millions 4,149 4,083 4,071 4,137 3,933 3,742 3,331 1,295 1,265 1,174 1,162 1,213 1,074 2,957 1,047 2,408 1,062 2,041 926 1,370 714 2,854 2,818 2,720 2,897 2,975 2,668 788 528 2,284 781 1,895 263 1,327 1,482 293 842 525 488 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun
Slide 20: Q2 Sales by Geography (2023 vs. 2022)
Q2 Sales by Geography (2023 vs. 2022) North America Western Europe Asia-Pacific Rest of World Actual FX-Adj. Actual FX-Adj. Actual FX-Adj. Actual FX-Adj. 36% 36% 21% 21% 9% 15% 43% 45% 8% 7% 11% 13% North America Western Europe Q2 2023 Q2 2022 Asia / Pacific 58% 21% 60% 22% Rest of World Results sho
Slide 21: YTD Sales by Geography (2023 vs. 2022)
YTD Sales by Geography (2023 vs. 2022) North America Western Europe Asia-Pacific Rest of World Actual FX-Adj. Actual FX-Adj. Actual FX-Adj. Actual FX-Adj. 32% 33% 18% 22% 8% 15% 44% 48% 8% 7% 12% 14% North America Western Europe YTD 2023 YTD 2022 Asia / Pacific 55% 58% 22% Rest of World 24% Results
Slide 22: Segment Results
Segment Results USD Millions MATERIALS PROCESSING AERIAL WORK PLATFORMS Q2 '23 Q2 '22 YTD' 23 YTD' 22 Q2 '23 Q2 '22 YTD' 23 YTD' 22 Net Sales $577.4 $480.7 $1,131.2 $933.4 Net Sales $824.9 $597.7 $1,510.8 $1,149.2 % Change vs. '22 20.1% 21.2% % Change vs. '22 38.0% 31.5% Operating Profit (Loss) $98.
Slide 23: 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 24: 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 less Capital expenditures, net of proceeds from sale of capital assets. We believe this measure of free cash flow
Slide 25: 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, i
Slide 26: 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 27: 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 Sto
Slide 28: Glossary: ROIC Continued
Glossary: ROIC Continued USD Millions Amounts described below are reported in millions of U.S. dollars, except for the Effective Tax Rate. Amounts are as of and for the three months ended for the periods referenced in the tables below. Jun '23 Mar '23 Dec '22 Sep '22 Jun '22 Annualized effective tax
Slide 29: Glossary: ROIC Continued
Glossary: ROIC Continued USD Millions Six Months Ended June 30, 2023 Income (loss) from continuing (Provision for) benefit from operations before income taxes income taxes Income tax rate Reconciliation of annualized effective tax rate: As reported $ 325.0 $ (55.3) 17.0% Effect of Adjustments: Tax r
Slide 30: Glossary: Working Capital
Glossary: Working Capital USD Millions Working Capital is calculated using the Consolidated Balance Sheet amounts for Receivables (net of allowance) plus Inventories less Trade accounts payable and Customer advances. The Company views excessive working capital as an inefficient use of resources, and