Terex Corporation · NYSE:TEX
Terex — Q2 2022 Earnings Presentation
31 slides from Terex's earnings presentation, Aug 3, 2022
Slide 1: Q2 2022 Earnings Conference Call
Q2 2022 Earnings Conference Call August 3, 2022 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 and the Private Securities Litigation Reform Act of 1995) regarding future even
Slide 3: Strong Commitment to Zero Harm Culture and Terex Values
Strong Commitment to Zero Harm Culture and Terex Values TEREX WAY VALUES... SUPPORT A STRONG COMPANY CULTURE Integrity • Guide team members' actions with all stakeholders, so the Company Respect performs at the highest level Improvement Servant Leadership • Drive our unwavering focus on Zero Harm sa
Slide 4: Q2 2022: Solid Performance in Dynamic Operating Environment Driving Full-Year EPS Outlook Raise
Q2 2022: Solid Performance in Dynamic Operating Environment Driving Full-Year EPS Outlook Raise Backlog* of $3.5B up 51% year-over-year • Additional $600M backlog beyond 12 months Sales of $1.1B continued to be constrained by supply chain • Sales up 4% year-over-year; 9% on FX neutral basis Prudent
Slide 5: Attractive End-Markets Supported by Favorable Trends
Attractive End-Markets Supported by Favorable Trends The Terex Advantage Strong brands • Diverse end markets, products and geographies • Capacity to support growth Materials Processing Aerial Work Platforms Infrastructure / Construction Anticipate increased spending from Infrastructure Bill to ramp
Slide 6: Q2 Bookings and Backlog Trends Remain Healthy
Q2 Bookings and Backlog Trends Remain Healthy USD Millions Materials Processing Total company bookings continue to be strong • Second highest Q2 bookings rate • Bookings above pre-COVID levels • Minimal cancellations Elevated customer fleet ages support continuing robust demand Historically low MP d
Slide 7: Strategic Operational Priorities Update
Strategic Operational Priorities Update Operational Excellence • Continuing to navigate supply and labor constraints while working to mitigate cost inflation • Acquisition of Northern Ireland fabricator relieving capacity constraints in MP Purposeful Innovation • Launched first of its kind, all-elec
Slide 8: Innovation: MP Wash Recycling Plant
Innovation: MP Wash Recycling Plant Delivering Efficient, Sustainable Product Solutions Wash Recycling: Producing recycled sand and aggregates from various waste streams Materials Processing provides complete end-to-end solution integrating crushing, screening and washing products Converts construct
Slide 9: Innovation: First Utilities All-Electric Bucket Truck
Innovation: First Utilities All-Electric Bucket Truck Delivering Efficient, Sustainable Product Solutions Delivered first ever all-electric bucket truck on class 6/7 medium duty chassis Supports sustainability goals at electric utilities Introduced at Electric Utility Fleet Managers Conference in Ju
Slide 10: Firmly Committed to Maintaining Strong ESG Practices
Firmly Committed to Maintaining Strong ESG Practices Environmental Social Stewardship Strong Governance Responsibility An Engaged, Diverse and Independent Board of Directors 3 of 8 7 of 8 Board Committees directors bring diversity based on directors are independent; Compensation chairperson engages
Slide 11: Proactively Managing Macroeconomics Headwinds
Proactively Managing Macroeconomics Headwinds Macro Issues Mitigation Strategies Geopolitical uncertainty and • Engaging with suppliers and customers regional COVID policies • Implementing alternative sources, design modifications, and adjusting production schedules Challenging supply chain environm
Slide 12: Solid Execution Despite Significant Supply Chain Challenges
Solid Execution Despite Significant Supply Chain Challenges USD Millions, except Earnings per Share Q2 2022 Q2 2021 Q2 2022 Financial Call-Outs Net Sales $ 1,077.1 $ 1,038.7 Operating Profit 3.7% • Corporate & Other: $1 million of charges associated with a % Change vs 2021 litigation settlement on a
Slide 13: Materials Processing: Consistent Strong Performance
Materials Processing: Consistent Strong Performance USD Millions +9.1% YoY +10bps YoY +32% YoY Results Drivers • Sales up 16% on FX neutral basis • Continued strong margin performance up 230 bps sequentially • Successfully mitigating persistent input cost and supply chain challenges • Strong backlog
Slide 14: Aerial Work Platforms: Sequential Margin Improvement
Aerial Work Platforms: Sequential Margin Improvement USD Millions +0.4% YoY (330bps) YoY +62% YoY Results Drivers • Sales up 4% on FX neutral basis • Prudent cost management and disciplined pricing actions delivering sequential margin improvement • Supply chain constraints persist • Record backlog w
Slide 15: Disciplined Capital Allocation Strategy and Strong Balance Sheet Driving Return of Capital
Disciplined Capital Allocation Strategy and Strong Balance USD Millions Sheet Driving Return of Capital Quarterly Free Cash Flow Q2 2022 Liquidity / Capital Deployment Undrawn Revolver $425 Cash 253 Total Liquidity $678 Q2 '22 YTD '22 Share Repurchases $61 $79 CapEx + Investments 32 55 Term Loan Pre
Slide 16: Raising Full-Year 2022 Outlook
Raising Full-Year 2022 Outlook USD Millions, except Earnings per Share INITIAL UPDATED INITIAL UPDATED Terex Outlook (1) Outlook Outlook Outlook Outlook Segment Outlook (1) Operating Operating Net Sales $4,100 - $4,300 $4,100 - $4,300 Net Sales Net Sales Margin Margin SG&A % to Sales ~10.9% ~10.6% M
Slide 17: Strong Foundation to Deliver Long-Term Value
Strong Foundation 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 ▪ Inve
Slide 18: Appendix
i] TEREX. APPENDIX 18
Slide 19: Q2 2022: Financial Highlights
Q2 2022: Financial Highlights EPS $1.07 Sales $1.1 Billion Backlog $3.5 Billion +45% sequentially +7% sequentially Flat sequentially 5% YoY +4% YoY +51% YoY SG&A % of Sales 10.1% NWC % of Sales 20.7% Operating Margin 9.6% (100bps) sequentially (50bps) sequentially +220bps sequentially (40bps) YoY +4
Slide 20: Backlog Trend
Backlog Trend USD Millions Sequential Year on Year $ % $ % MP (38) (3%) 277 32% AWP 22 1% 894 62% Total (16) 0% 1,171 51% Backlog shown is deliverable in less than 12 months which reflects continuing operations. Total amounts may not add due to rounding. 20
Slide 21: Q2 Sales by Geography (2022 vs. 2021)
Q2 Sales by Geography (2022 vs. 2021) North America Western Europe Asia-Pacific Rest of World Actual FX-Adj. Actual FX-Adj. Actual FX-Adj. Actual FX-Adj. 7% 9% 2% 13% -16% -10% 42% 52% Q2 2022 Q2 2021 Results shown are for Continuing Operations 21
Slide 22: YTD Sales by Geography (2022 vs. 2021)
YTD Sales by Geography (2022 vs. 2021) North America Western Europe Asia-Pacific Rest of World Actual FX-Adj. Actual FX-Adj. Actual FX-Adj. Actual FX-Adj. 12% 14% 10% 19% -13% -8% 50% 59% YTD 2022 YTD 2021 Results shown are for Continuing Operations 22
Slide 23: Segment Results
Segment Results USD Millions MATERIALS PROCESSING AERIAL WORK PLATFORMS Q2 '22 Q2 '21 YTD'22 YTD'21 Q2 '22 Q2 '21 YTD'22 YTD'21 Net Sales $480.7 $440.8 $933.4 $819.0 Net Sales $597.7 $595.2 $1,149.2 $1,071.9 % Change vs. '21 9.1% 14.0% % Change vs. '21 0.4% 7.2% Operating Profit (Loss) $79.5 $72.1 $
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 Current portion of long- term debt plus Long-term debt, less current portion. Net Debt is calculated as Debt less Cash and cash equivalents, including amounts in assets held for sale.
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 Sto
Slide 29: Glossary: ROIC Continued
Glossary: ROIC Continued USD Millions Amounts described below are reported in millions of U.S. dollars, except for the annualized effective tax rates. Amounts are as of and for the three months ended for the periods referenced in the tables below. Jun '22 Mar '22 Dec '21 Sep '21 Jun '21 Annualized e
Slide 30: Glossary: ROIC Continued
Glossary: ROIC Continued USD Millions As of 6/30/22 As of 3/31/22 As of 12/31/21 As of 9/30/21 As of 6/30/21 Reconciliation of Cash and cash equivalents: Cash and cash equivalents - continuing operations $ 253.3 $ 218.4 $ 266.9 $ 553.2 $ 542.2 Cash and cash equivalents - assets held for sale — — — 5
Slide 31: Glossary: Working Capital
Glossary: Working Capital USD Millions Working Capital is calculated using the Condensed 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