Terex Corporation · NYSE:TEX
Terex — Debt Investor Presentation (September 2024)
39 slides from Terex's debt investor presentation, Sep 24, 2024
Slide 1: Acquisition of Environmental Solutions Group
ACQUISITION OF SEPTEMBER 24, 2024 E X E C U T E • I N N O V A T E • G R O W E X E C U T E • I N N O VAT E • G R O W
Slide 2: Notice to and Undertaking by Recipients
Notice to and Undertaking by Recipients The information following this Notice to and Undertaking by Recipients (the "Information Material") has been prepared solely for informational purposes from information supplied by or on behalf of Terex Corporation (together with its subsidiaries, the “Company
Slide 3: Notice to and Undertaking by Recipients (Cont'd)
Notice to and Undertaking by Recipients (Cont’d) II. Information (Cont’d) The Recipient acknowledges that the Evaluation Material has been prepared for informational purposes only to assist interested parties in making their own evaluation of the Company and the Facilities and does not purport to be
Slide 4: 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 5: Today's Presenters
Today’s Presenters Simon Meester Julie Beck Jon Paterson President and CEO Senior Vice President and CFO Vice President and Treasurer • 30 years of experience • 38 years of experience • 25 years of experience • Joined Terex in 2018 • Joined Terex in 2021 • Joined Terex in 2007 • Previously President
Slide 6: Today's Agenda
Today’s Agenda 1 Transaction Overview 2 Terex Overview and Update 3 ESG Overview and Combination Rationale 4 Closing Considerations 5 Appendix 6
Slide 7: Executive Summary
1 Executive Summary • Terex has entered into a definitive agreement with Dover Corporation (NYSE: DOV) to acquire its Environmental Solutions Group (“ESG”) in an all-cash transaction for a purchase price of $2,000mm – Transaction includes a tax benefit of ~$275mm and ~$25mm of annual synergies1 expe
Slide 8: Transaction Summary
1 Transaction Summary Purchase • Purchase price of $2.0 billion on cash-free, debt-free basis Price • Net purchase price of $1.725 billion, when adjusted for ~$275 million present value of expected tax benefits • Annual run rate synergies of ~$25 million1 expected to be achieved by the end of 2026 b
Slide 9: Sources & Uses and Pro Forma Capitalization
1 Sources & Uses and Pro Forma Capitalization Sources Uses ($ in millions) Amount % Total ($ in millions) Amount % Total Upsized & Extended $800mm Revolving Credit Facility $-- -- Purchase Price of ESG $2,000 96% New 1st Lien Term Loan B 1,250 60% Illustrative Transaction Expenses 73 4% New Unsecure
Slide 10: Summary Term Sheet (RCF & 1st Lien Term Loan B)
1 Summary Term Sheet (RCF & 1st Lien Term Loan B) • RCF: Terex Corporation, New Terex Holdings UK Limited, Terex International Financial Services Company Unlimited Company, Terex Australia Pty Limited and Terex Borrowers International Holdings 2 Limited (the “Borrowers”) • Term Loan: Terex Corporati
Slide 11: Transaction Timeline
1 Transaction Timeline September 2024 October 2024 S M T W T F S S M T W T F S 1 2 3 4 5 6 7 1 2 3 4 5 8 9 10 11 12 13 14 6 7 8 9 10 11 12 15 16 17 18 19 20 21 13 14 15 16 17 18 19 20 21 22 23 24 25 26 22 23 24 25 26 27 28 27 28 29 30 31 29 30 Key Dates Market Holiday Deal Close Date Event September
Slide 12: Terex Overview and Update
2 TEREX OVERVIEW AND UPDATE 12
Slide 13: Terex Company Overview
2 Terex Company Overview Reporting Segments (LTM Q2 2024)1 Global Reach (LTM Q2 2024)1 End Market Mix1,2 8% ~10% ~15% 12% ~20% 41% ~20% 59% 19% 61% ~35% Waste Recycling / Scrap Infrastructure N. America W. Europe General Construction Industrial / Commercial Materials Processing Aerial Work Products
Slide 14: Well-Positioned to Benefit
2 Well-Positioned to Benefit… …From Megatrends …From Government Investment Infrastructure Investments Digitalization U.S. Bill Total Associated Spending Terex Opportunity >$49T Anticipated Worldwide Data Center Roads & Bridges Investment Construction Market Infrastructure Airports and Waterways from
Slide 15: Terex Timeline (2015 to 2024): Successful Transformation
2 Terex Timeline (2015 to 2024): Successful Transformation into a Process- and Performance-Driven Company Divested capital intensive, Focused on areas with high Capitalized on operating low margin businesses growth potential, supported by system and process megatrends improvements 2020 Cost reductio
Slide 16: ESG Overview and Combination Rationale
3 ESG OVERVIEW AND COMBINATION RATIONALE 16
Slide 17: ESG Aligns with Terex's Strategic Growth Priorities
3 ESG Aligns with Terex’s Strategic Growth Priorities Adds meaningful scale and significantly reduces cyclicality Growth, cash flow, EBITDA margin, and EPS accretive Tangible cost and revenue synergies Market leader in waste and recycling solutions Adds attractive addressable market in North America
Slide 18: ESG is a Leader in Waste and Recycling Solutions
3 ESG is a Leader in Waste and Recycling Solutions • Environmental Solutions Group is a global leader in the design and manufacturing of refuse collection vehicles (“RCV”), waste compaction Original Equipment equipment, and associated parts and digital solutions • ESG has the #1 position1 in waste c
Slide 19: Sustained Track Record of Resilient Organic Growth
3 Sustained Track Record of Resilient Organic Growth Supported by Several Strategic Acquisitions % Org. Growth 7% 10% (5)% 12% 14% 13% (8)% 2% 23% 13% ESG Revenue1 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022 2023 2013 2016 2020 2022 Key (IP) Acquisitions Acquired Automated Acquired Ac
Slide 20: ESG's Top-line Has Been Resilient Through the Cycle
3 ESG’s Top-line Has Been Resilient Through the Cycle Given Attractive Waste End Market Dynamics ESG and Terex Organic Revenue Growth1 30% 29% 23% 23% 20% 17% 16% 15% 14% 13% 13% 12% 12% 10% 10% 10% 7% 5% 1% 3% 3% 2% (1%) 0% 0% (2%) (1%) (3%) (5%) (8%) (10%) (10%) (20%) Avg. Standard (27%) growth de
Slide 21: Market Leader with Broad Product Offerings and Digital Solutions
3 Market Leader with Broad Product Offerings and Differentiating Digital Solutions Driving Share Gains Heil Competitive Landscape: Positioning vs. Select Competitors Revenue Competitor #1 Competitor #2 Competitor #3 Segment Presence Front-End Loaders Automated Front Loaders Automated Side Loaders Re
Slide 22: Longstanding Relationships with Blue-Chip Waste Haulers and Municipalities
3 Longstanding Relationships with Blue-Chip Waste Haulers and Municipalities Refuse Collection Channel1 • Strong relationships with major national customers • Delivering superior quality through efficiency Key Accounts investments • Focused on electrification of fleet / reduction in 45% carbon footp
Slide 23: Market Leading Equipment Portfolio Complementary to Terex
3 Market Leading Equipment Portfolio Complementary to Terex Key Considerations Complements Environmental Solutions Capabilities Terex Environmental Market leading refuse collection platform in North America Compactors Conveyors Balers Screening Fast Pickers Metal Separators Nationwide, well-invested
Slide 24: Compelling Value Upside Through Synergies
3 Compelling Value Upside Through Synergies1 Category Estimate ($mm) Operations & Commercial ~$15 Cost Sourcing ~$5 SG&A ~$5 Revenue Cross-Selling Opportunities Potential upside Total ~$25 Terex has partnered with a prestigious and globally renowned consulting firm in order to work towards deliverin
Slide 25: Well-Defined Integration Framework and Timeline
3 Well-Defined Integration Framework and Timeline Integration Timeline Integration Framework ✓ Develop integration strategy and master planning Pre-closing ✓ Interdependency and risk management ✓ Synergy identification and prioritization Functional Other IT Finance HR ✓ Top level organization design
Slide 26: Produces a Scaled, High Performing and Diversified Platform
3 Produces a Scaled, High Performing and Diversified Platform Enhanced Business Mix with 24% of pro forma revenue tied to ESG segment (Pro Forma) (Pro Forma Revenue) Revenue $5.2bn $6.0bn Environmental (LTM Q2’2024) Solutions3 Materials Processing 24% PF Adj. EBITDA1 $738mm $937mm2 41% Aerials3 (LTM
Slide 27: Increases Exposure to Growing Waste & Recycling Management End Market
3 Increases Exposure to Growing Waste & Recycling Management End Market Solid Waste Generation Waste is an essential service, with RCV market projected to (MSW, 1,000 tons) grow at 5%+ CAGR1 over the next ten years 300K 280K 225K Shift towards recycling requires equipment with more 150K advanced cap
Slide 28: Compelling Strategic Rationale
3 Compelling Strategic Rationale; Significantly Strengthens Terex and Creates Path for Accelerated Sustainable Growth ESG adds a market-leading, financially accretive, non-cyclical business to Terex with tangible synergies; entry into attractive new North American segment Scale and Financially Tangi
Slide 29: Historical Results
3 Historical Results ($ in Millions) Revenue1 Pro Forma Adjusted EBITDA2 % growth 23% 15% 16% 6% % margin 12% 15% 16% $937 $5,905 $6,022 $887 $25 $5,079 $754 $835 $174 $4,430 $149 $661 $607 $544 $111 $5,152 $5,187 $738 $738 $3,887 $4,418 $496 2021E 2022A 2023A LTM Q2'24 2022A 2023A LTM Q2'24 Revenue
Slide 30: Update to 2024 Outlook and Management Commentary
3 Update to 2024 Outlook and Management Commentary • Full-year 2024 adjusted earnings per share, excluding the benefit of the ESG acquisition, is now expected to be between $5.80 and $6.20 on revenue of $4.85 to $5.05 billion • The updated outlook is due to channels globally making adjustments faste
Slide 31: ESG has a Resilient Through-the-cycle Profile
3 ESG has a Resilient Through-the-cycle Profile with Strong Cash Flow Generation Revenue1 Key Highlights $754 $835 $574 $661 Stable, secularly growing waste hauling end market growing by ~5.3% $536 $544 CAGR2 from 2023 – 2033 2019E 2020E 2021E 2022 2023 LTM Q2'24 Low capital intensity, capital expen
Slide 32: Closing Considerations
4 CLOSING CONSIDERATIONS 32
Slide 33: Closing Remarks
4 Closing Remarks Acquisition of ESG represents a unique opportunity to acquire a market leader that aligns with Terex's growth vision and is the latest ✓ step in a multi-year transformation journey ✓ Transaction significantly enhances Terex's scale and diversification and increases exposure to attr
Slide 34: Appendix
cali ts ‘an 8 ws ae “sea ~APPENDIX 34
Slide 35: Simplified Pro Forma Legal Org Chart
5 Simplified Pro Forma Legal Org Chart Borrower $800mm RCF Terex $1,250mm 1st Lien Term Loan B Guarantor Corporation $600mm Existing Senior Notes USA $750mm New Senior Unsecured Debt Genie Industries, Terex Advance Terex International Terex Singapore Terex South Terex USA, LLC Inc. Mixer, Inc. Holdi
Slide 36: Appendix: Non-GAAP Financial Measures
5 Appendix: Non-GAAP Financial Measures This presentation includes the following non-GAAP measures, as defined under SEC rules, which are defined below: EBITDA and Adjusted EBITDA EBITDA is defined as earnings, before interest, other non-operating income (loss), income (loss) attributable to non-con
Slide 37: Appendix: Non-GAAP Financial Measures (Cont'd)
5 Appendix: Non-GAAP Financial Measures (Cont’d) ESG – Adjusted EBITDA Reconciliation Adjustment Detail ESG LTM 1. ESG incurred elevated warranty expenses related to ($ in millions) 2022 2023 YTD 6/30/23 YTD 6/30/24 6/30/24 certain non-recurring issues in 2023. This adjustment normalizes warranty ex
Slide 38: Appendix: Non-GAAP Financial Measures
5 Appendix: Non-GAAP Financial Measures Terex – Adjusted EBITDA Reconciliation Adjustment Detail Terex LTM 1. Represents portion of pension expense that is non-service ($ in millions) 2022 2023 YTD 6/30/23 YTD 6/30/24 6/30/24 Net Income (Loss) $300.0 $518.0 $272.0 $249.2 $495.2 2. Represents other m
Slide 39: Appendix: Non-GAAP Financial Measures
5 Appendix: Non-GAAP Financial Measures Pro Forma Revenue and Adjusted EBITDA Pro Forma LTM ($ in millions) 2022 2023 YTD 6/30/23 YTD 6/30/24 6/30/24 Terex Revenue $4,417.7 $5,151.5 $2,638.8 $2,674.2 $5,186.9 ESG Revenue 660.8 753.7 357.9 439.7 835.5 Total Pro Forma Revenue $5,078.5 $5,905.2 $2,996.