Terex Corporation · NYSE:TEX
Terex — Merger or Acquisition (September 2024)
22 slides from Terex's merger presentation, Sep 10, 2024
Slide 1: Acquisition of Environmental Solutions Group
ACQUISITION OF SEPTEMBER 10, 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: 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: 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 4: Executive Summary
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 expect
Slide 5: Transaction Overview
Transaction Overview 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 ba
Slide 6: ESG Aligns with Terex's Strategic Growth Priorities
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 R
Slide 7: ESG is a Leader in Waste and Recycling Solutions
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 col
Slide 8: Sustained Track Record of Resilient Organic Growth Supported by Several Strategic Acquisitions
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 Acqu
Slide 9: ESG's Top-line Has Been Resilient Through the Cycle
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 devi
Slide 10: Market Leader with Broad Product Offerings and Differentiating Digital Solutions
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 Rear
Slide 11: Market Leading Equipment Portfolio Complementary to Terex
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 f
Slide 12: Creates Three Market-Leading Business Segments with $40B TAM
Creates Three Market-Leading Business Segments with $40B TAM Environmental Solutions Materials Processing Aerials ESG Utilities • Market leader in providing solutions • Operates in high growth utility & • Global, well-established platform • Market leader in aerial work to waste end markets environme
Slide 13: Produces a Scaled, High Performing and Diversified Platform
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 $937mm2 41% Aerials3 (LTM Q
Slide 14: Increases Exposure to Growing Waste & Recycling Management End Market
Increases Exposure to Growing Waste & Recycling Management End Market Solid Waste Generation Waste is an essential service, with RCV market projected to (MSW, 1,000 tons) grow at 5%+ CAGR1 over the next ten years 300K 280K 225K Shift towards recycling requires equipment with more 150K advanced capab
Slide 15: Compelling Strategic Rationale; Significantly Strengthens Terex
Compelling Strategic Rationale; Significantly Strengthens Terex and Creates Path for Accelerated Sustainable Growth ESG adds a market-leading, financially accretive, non-cyclical business to Terex with tangible synergies; entry into attractive new North American segment Scale and Financially Tangibl
Slide 16: Historical Results
Historical Results ($ 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 C
Slide 17: ESG has a Resilient Through-the-cycle Profile with Strong Cash Flow Generation
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 $544 CAGR2 from 2023 – 2033 2019E 2020E 2021E 2022 2023 LTM Q2'24 Low capital intensity, capital expendi
Slide 18: Appendix: Non-GAAP Financial Measures
Appendix: Non-GAAP Financial Measures This presentation includes the following non-GAAP measures, as defined under SEC rules, which are defined below: EBITDA EBITDA is defined as earnings, before interest, other non-operating income (loss), income (loss) attributable to non-controlling interest, tax
Slide 19: Appendix: Non-GAAP Financial Measures (Cont'd)
Appendix: Non-GAAP Financial Measures (Cont’d) ESG – Adjusted EBITDA Reconciliation Adjustment Detail ESG LTM 1. ESG incurred elevated warranty expenses related to ($ 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 expe
Slide 20: Appendix: Non-GAAP Financial Measures (Cont'd)
Appendix: Non-GAAP Financial Measures (Cont’d) 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 $495.2 2. Represents
Slide 21: Appendix: Non-GAAP Financial Measures (Cont'd)
Appendix: Non-GAAP Financial Measures (Cont’d) Pro Forma Revenue and Adjusted EBITDA Pro Forma LTM ($ 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 $5,905.2
Slide 22: Appendix: Non-GAAP Financial Measures (Cont'd)
Appendix: Non-GAAP Financial Measures (Cont’d) Pro Forma Leverage Ratios Pro Forma Leverage Ratios LTM ($ in millions) 6/30/24 New $800mm Revolving Credit Facility $40.0 New Debt $2,000.0 Finance Leases 11.2 Secured Borrowings 18.4 5.000% Senior Unsecured Notes 600.0 Pro Forma Debt $2,669.6 Cash $31