Slide 1: Q1 2023 Earnings Conference Call
Q1 2023 Earnings Conference Call May 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 1.92 1.00 2016 2017 2018 2019 2020 2021 2022 2023 2024 Q1 YTD Target TRIR Machinery Manufacturing Average TEREX WAY VALUES... SUPPORT A STRONG COMP
Slide 4: Q1 2023: Excellent Performance in Dynamic Operating Environment
Q1 2023: Excellent Performance in Dynamic Operating Environment Driving Full-Year EPS Outlook Raise Backlog remains strong at $4.1B • Q1 Book-to-Bill ratio of 105% Sales of $1.2B up 23% year-over-year; up 27% on FX neutral basis • Increased volumes as supplier on-time-delivery improved Gross profit
Slide 5: Positioned to Benefit from Megatrends
Positioned to Benefit from Megatrends INFRASTRUCTURE INVESTMENTS DIGITALIZATION Crushers / Booms / Mixer Trucks Scissor Lifts Booms / Telehandlers Screens Telehandlers ELECTRIFICATION WASTE / RECYCLING Stationary Recycling Material Digger Derricks Substation Aerials Articulated Aerials Tree Care Aer
Slide 6: Bookings and Backlog Trends Remain Healthy
Bookings and Backlog Trends Remain Healthy USD Millions Materials Processing (Q1 LTM) Backlog remains elevated at $4.1B • Backlog up 2% versus Q4 '22 and flat year-over-year 133% 133% • Minimal push outs and cancellations 116% 103% 93% Total company Q1 bookings remained at healthy levels 81% • Secon
Slide 7: Continued Progress on Strategy Execution
Continued Progress on Strategy Execution Operational Excellence • Continuing to navigate supply and labor constraints while managing expenses • Manufacturing productivity improving • Transfer into permanent Genie Mexico facility started in March. Highly capable local team with significant industry e
Slide 8: Innovation: Introduced New Products at Trade Shows
Innovation: Introduced New Products at Trade Shows Showcased Innovative, Sustainable Products at ConExpo, ARA, and Bauma India Powerscreen Gladiator GTH 1256 Telehandler All-electric Mini-Mixer Provides efficient crushing and Enables precise placement of Combines Viatec technology screening capacity
Slide 9: Terex Products Supporting Recycling
Terex Products Supporting Recycling Delivering Customized, Cost-efficient and Sustainable Solutions Helping our customers and communities achieve sustainability goals by enabling efficient waste recycling Developed an all-electric powered mechanical separation process tailored to customer requiremen
Slide 10: Completed Materiality Assessment
Completed Materiality Assessment Continued Commitment to Strong Sustainability Practices ENVIRONMENTAL SOCIAL STRONG STEWARDSHIP RESPONSIBILITY GOVERNANCE Our products and • Product Development, Stewardship, and Innovation our people were ◦ Energy and GHG Emissions ◦ Circular Economy identified as a
Slide 11: Proactively Managing Macroeconomics Headwinds
Proactively Managing Macroeconomics Headwinds Macro Issues Mitigation Strategies Geopolitical uncertainty • Engaged with suppliers, customers and diversified global footprint Volatility in credit and • Continued monitoring of regional, customer, supplier credit conditions and counterparty risk inter
Slide 12: Excellent Execution in Dynamic Environment
Excellent Execution in Dynamic Environment USD Millions, except Earnings per Share Q1 2023 Q1 2022 Q1 2023 Financial Call-Outs Net Sales $ 1,235.7 $ 1,002.5 Other Income • Mark-to-market gain of $1 million on third-party investment % Change vs 2022 23.3% Gross Profit 278.7 185.8 FX Commentary % of S
Slide 13: Materials Processing: Consistent Strong Performance
Materials Processing: Consistent Strong Performance USD Millions Sales Operating Margin Backlog +22.3% YoY +120bps YoY (10%) YoY 1,295 15.4% 1,162 553.8 14.2% 452.7 Q1 '22 Q1 '23 Q1 '22 Q1 '23 Q1 '22 Q1 '23 Results Drivers • Sales up 28% on FX neutral basis • Continued strong margin performance driv
Slide 14: Aerial Work Platforms: Excellent Year-over-Year Improvement
Aerial Work Platforms: Excellent Year-over-Year Improvement USD Millions Sales Operating Margin Backlog +24.4% YoY +620bps YoY +4% YoY 685.9 12.1% 551.5 2,854 2,975 5.9% Q1 '22 Q1 '23 Q1 '22 Q1 '23 Q1 '22 Q1 '23 Results Drivers • Sales up 27% on FX neutral basis • Operating profit more than doubled
Slide 15: Strong Balance Sheet and Liquidity: Q1 2023
Strong Balance Sheet and Liquidity: Q1 2023 USD Millions Highlights Liquidity • Investing in Growth • Net leverage of 1.0x Undrawn Revolver $423 Cash $254 • Ample liquidity of $677 Total Liquidity $677 • Raising 2023 FCF Outlook to $300 - $350 • ROIC of 23.9% Capital Deployment Leverage $777 $523 Q1
Slide 16: 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 $4,600 - $4,800 $4,800 - $5,000 Net Sales Net Sales Margin Margin SG&A % to Sales ~10.5% ~10.7%
Slide 17: 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 18: Appendix
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Slide 19: Q1 2023: Financial Highlights
Q1 2023: Financial Highlights EPS $1.60 Sales $1.2 Billion Backlog $4.1 Billion +19% sequentially +1% sequentially +2% sequentially +116% YoY +23% YoY Flat YoY SG&A % of Sales 10.6% NWC % of Sales 20.0% Operating Margin 12.0% +120bps sequentially +200bps sequentially +210bps sequentially (50bps) YoY
Slide 20: Backlog Trend
Backlog Trend USD Millions 4,149 4,083 4,071 4,137 3,933 3,331 1,295 1,265 1,174 1,162 1,213 2,957 1,047 2,408 1,062 2,041 926 1,370 714 2,854 2,818 2,720 2,897 2,975 1,015 2,284 788 781 528 273 1,895 263 1,327 1,482 293 742 842 525 488 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22
Slide 21: Q1 Sales by Geography (2023 vs. 2022)
Q1 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. 28% 29% 15% 23% 8% 15% 45% 53% 9% 7% 12% 14% North America Western Europe Q1 2023 Q1 2022 Asia / Pacific 55% 54% Rest of World 24% 25% Results sho
Slide 22: Segment Results
Segment Results USD Millions MATERIALS PROCESSING AERIAL WORK PLATFORMS Q1 '23 Q1 '22 Q1 '23 Q1 '22 Net Sales $553.8 $452.7 Net Sales $685.9 $551.5 % Change vs. '22 22.3% % Change vs. '22 24.4% Operating Profit (Loss) $85.3 $64.5 Operating Profit (Loss) $83.1 $32.5 Operating Margin % 15.4% 14.2% Ope
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. Mar '23 Dec '22 Sep '22 Jun '22 Mar '22 Annualized effective tax
Slide 29: Glossary: ROIC Continued
Glossary: ROIC Continued USD Millions Three Months Ended March 31, 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 $ 133.2 $ (23.3) 17.5% Effect of Adjustments: Ta
Slide 30: 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