Slide 1: Q1 2019 Conference Call
Q1 2019 Conference Call May 1, 2019 FOCUS • SIMPLIFY • EXECUTE TO WIN
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 press release, the words “may,” “expects,” “intends,” “an
Slide 3: Q1 Highlights
Q1 Highlights Results are Continuing Operations Q1 2019 Continuing Operations and Prior Year Results • Significant as Presented in Q1 2018(1, 2) improvement in Operating Profit financial performance (millions) $99.7 $105.7 $71.3 $73.6 • Global markets +40% +44% generally stable at As Reported As Adj
Slide 4: Terex Strategy: Focus, Simplify, Execute to Win
Terex Strategy Focus Simplify Execute to Win FOCUS • SIMPLIFY • EXECUTE TO WIN 4
Slide 5: Strategy Deployment Progress
Strategy Deployment Progress Demag® Mobile Crane sale-related Focus High activities progressing Performing Portfolio Completed sale of boom truck, truck crane and crossover product lines Completed re-segmentation, Simplify Reduce G&A reduction underway Complexity and G&A New manufacturing facilities
Slide 6: 2019 Guidance
2019 Guidance Continuing Operations Guidance (1) • Net sales of ~$4.7 billion • Operating margin of 9% to 10% • EPS of $3.60 to $4.20 • Expect to be in upper half of EPS guidance range Returning Capital to Shareholders • Planned quarterly dividend increase of 10%, to $0.11 per share • ~$200 million
Slide 7: Q1 Segment Highlights
Q1 Segment Highlights Aerial Work Platforms • Global sales of $728 million down 1%, FX neutral up 2% • Operating margin 8.2% • Backlog stable at $1.1 billion Materials Processing • Global sales of $346 million up 10%, FX neutral up 15% • Operating profit up 23%,Operating margin of 14.2% • Increased
Slide 8: Q1 Operating Results
Q1 Operating Results USD Millions, except Earnings per Share Q1 2019 Q1 2019 Q1 2018 Q1 2018 As Reported As Adjusted(1) As Reported As Adjusted(1) Net Sales $1,136.6 $1,136.6 $1,116.6 $1,116.6 % Change vs 2018 1.8% 1.8% Gross Profit $237.8 $238.8 $228.6 $228.7 % of Sales 20.9% 21.0% 20.5% 20.5% SG&A
Slide 9: Disciplined Capital Allocation
Disciplined Capital Allocation Cash Flow from Operations + • Q1 free cash flow of ($257) million After-tax Proceeds from Divestures • Making strategic investments in high-performing businesses • Continuing to invest in Restructuring and Execute Optimal Capital Structure to Win initiatives ~$12 milli
Slide 10: Terex Innovation Showcased at BAUMA
Terex Innovation Showcased at BAUMA FOCUS • SIMPLIFY • EXECUTE TO WIN 10
Slide 11: Aerial Work Platforms
Aerial Work Platforms USD Millions • Backlog stable at $1.1 billion • Gaining momentum heading into Q2 • Innovative new products • Continued strength in Genie® S-85 XC Utilities FOCUS • SIMPLIFY • EXECUTE TO WIN 11
Slide 12: Materials Processing
Materials Processing USD Millions Fuchs® MHL 320 Material Handler Powerscreen® Metrotrak Mobile Jaw Crusher • Stable global markets • Increased backlog 11%, up 17% in constant currency • New product development • Global manufacturing strategy FOCUS • SIMPLIFY • EXECUTE TO WIN 12
Slide 13: Summary
Summary • Strong start in MP, AWP gaining momentum • Expect to be in upper half of full year EPS guidance range • Focused the portfolio on high-performing businesses • Continue to implement Simplify and Execute to Win priorities • Continue to execute our disciplined capital allocation strategy FOCUS
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 1,661 1,651 1,612 51 64 62 1,298 513 Sequential Year on Year 449 1,234 1,263 499 58 58 65 $ % $ % 1,059 329 946 51 929 916 416 468 AWP (10) (1%) (12) (1%) 127 62 249 60 824 737 47 187 659 219 229 MP (14) (3%) 50 11% 90 70 270 170 1,100 1,098 1,088 Corp & Other 13 25% 2 3%
Slide 17: Q1 Global Sales
Q1 Global Sales Sales by Geography 2019 vs 2018 Western Europe Asia/ Pacific Actual FX-Adj. North America Actual FX-Adj. 2% 9% 28% 38% Actual FX-Adj. E. Europe, Middle -3% -2% East & Africa Actual FX-Adj. -24% -18% LATAM Actual FX-Adj. 2019 Q1 QTD 2018 Q1 QTD 61% 72% Western Europe 27% 27% Asia / Pa
Slide 18: Aerial Work Platforms
Aerial Work Platforms USD Millions Net Bookings Book-to-Bill Ratio $1,200 200% 178% 180% $1,000 157% 160% 122% 126% 140% $800 120% 97% 98% $600 86% 81% 100% 80% 60% $400 60% 40% $200 20% $667 $569 $502 $932 $923 $501 $695 $962 $700 $0 0% Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q1 '19 Q
Slide 19: Materials Processing
Materials Processing USD Millions Net Bookings Book-to-Bill Ratio $500 160% 139% $450 140% $400 120% 117% 112% 113% 113% 120% $350 90% 95% 96% $300 100% $250 80% $200 60% $150 40% $100 $50 20% $283 $275 $303 $352 $429 $293 $365 $398 $331 $0 0% Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q1
Slide 20: Q1 2019 Adjustments
Q1 2019 Adjustments USD Millions, except Earnings per Share Q1 2019 Restructuring Tax & Interim Q1 2019 As Reported & Related Transformation Deal Related Other Period As Adjusted 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
Slide 21: Q1 2018 Adjustments
Q1 2018 Adjustments USD Millions, except Earnings per Share Q1 2018 Restructuring Extinguishment Tax & Interim Q1 2018 As Reported & Related Transformation of Debt Other Period As Adjusted Net Sales $ 1,116.6 - - - - - $ 1,116.6 Gross Profit 228.6 0.1 - - - - 228.7 SG&A (134.3) 1.0 6.3 - (2.8) - (12
Slide 22: Q1 2018 Adjustments
Q1 2018 Adjustments USD Millions, except Earnings per Share Income (loss) from Continuing (Provision for) Income (loss) Operations benefit from from Continuing Earnings (loss) Q1 2018 before Taxes Income Taxes (1) Operations per share (2) As Originally Reported (May 1, 2018) 59.0 (11.4) 47.6 0.59 Re
Slide 23: Q1 Adjusted OP by Segment
Q1 Adjusted OP by Segment USD Millions Q1 2019 Q1 2018 As Reported Adjustments As Adjusted As Reported Adjustments As Adjusted AWP $ 59.6 $ 1.6 $ 61.2 $ 70.2 $ 0.3 $ 70.5 MP 49.2 - 49.2 39.9 (2.8) 37.1 Corporate & Other (9.1) 4.4 (4.7) (15.8) 7.1 (8.7) Continuing $ 99.7 $ 6.0 $ 105.7 $ 94.3 $ 4.6 $
Slide 24: 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 25: 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 26: Glossary: Debt & Net Debt
Glossary: Debt & Net Debt USD Millions Debt is calculated using the Condensed Consolidated Balance Sheet amounts for Notes payable and 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 ca
Slide 27: 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 28: 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 29: 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'19 Dec '18 Sep '18 Jun '18 Mar'18 (1),(2) Annualized effective tax rate, as adjusted 21.0% 16
Slide 30: Glossary: ROIC Continued
Glossary: ROIC Continued USD Millions Three Three Three Three months months months months ended ended ended ended 3/31/19 12/31/18 9/30/18 6/30/18 Reconciliation of income (loss) from operations: Income (loss) from operations, as reported $ 99.7 $ 81.6 $ 104.2 $ 132.4 Adjustments: Deal Related 0.2 -
Slide 31: Glossary: ROIC Continued
Glossary: ROIC Continued USD Millions Income (loss) from (Provision for) Three months ended continuing operations benefit from Income tax March 31,2019 before income taxes income taxes rate Reconciliation of annualized effective tax rate: As reported $ 75.2 $ (18.0) 23.9% Effect of Adjustments: Deal
Slide 32: 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