Slide 1: Q4 2019 Conference Call
Q4 2019 Conference Call February 14, 2020 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 presentation, the words “may,” “expects,” “intends,” “ant
Slide 3: Q4 Highlights
Q4 Highlights Results are Continuing Operations • Driving Zero Harm Culture o Improved Workplace Safety Recordable Rate by 39% • Global industrial equipment market remains challenging • Overall Q4 2019 results in-line with expectations o Continued pressure on AWP sales and margins o MP maintained do
Slide 4: Terex Strategy
Terex Strategy Genie S-85 Booms at New Utilities Facility FOCUS • SIMPLIFY • EXECUTE TO WIN 4
Slide 5: 2019 Strategy Deployment Highlights
2019 Strategy Deployment Highlights Exited low performing, capital intensive business Focus High Performing Continuing portfolio of businesses each Portfolio out-earning their cost of capital throughout the cycle Completed re-segmentation and reduced Simplify Reduce corporate G&A Complexity and G&A
Slide 6: 2020 Strategic Operational Priorities
2020 Strategic Operational Priorities New Terex Ecotec TDS 825 Slow Speed Shredder Zero Harm Environmental, Health & Safety Culture Operational Excellence Big 5: Safety, Quality, Delivery, Cost, Morale Execute commercial excellence plan Digital innovation to better respond to customer needs Operatio
Slide 7: 2020 Guidance Highlights
2020 Guidance Highlights 2020 Continuing Operations Guidance (1) • Net sales down 8 - 11% • Operating margin of 6.3 - 7.3% • EPS of $1.85 to $2.35 • Full year free cash flow of $140 million Returning Capital to Shareholders • Quarterly dividend of $0.12 per share • ~$195 million remaining on share b
Slide 8: Q4 Segment Highlights
Q4 Segment Highlights Aerial Work Platforms • Global sales of $500 million, down 21% • Operating margin 0.9%, 1.2% as adjusted • Bookings of $755 million and backlog of $753 million Materials Processing • Global sales of $321 million, down 10% • Operating margin of 12.1% • Bookings of $352 million a
Slide 9: Q4 Operating Results
Q4 Operating Results USD Millions, except Earnings per Share Q4 2019 Q4 2019 Q4 2018 Q4 2018 As As As Reported Adjusted(1) As Reported Adjusted(1) Net Sales $885.0 $885.0 $1,048.8 $1,048.8 % Change vs 2018 (15.6%) (15.6%) Gross Profit $168.6 $169.0 $214.6 $213.9 % of Sales 19.1% 19.1% 20.5% 20.4% SG
Slide 10: FY’19 Operating Results
FY’19 Operating Results USD Millions, except Earnings per Share FY 2019 FY 2019 FY 2018 FY 2018 As Reported As As Reported As Adjusted(1) Adjusted(1) Net Sales $4,353.1 $4,353.1 $4,517.2 $4,517.2 % Change vs 2018 (3.6%) (3.6%) Gross Profit $887.8 $892.2 $961.9 $961.4 % of Sales 20.4% 20.5% 21.3% 21.
Slide 11: 2020 Guidance Update
2020 Guidance Update USD Millions, except Earnings per Share and otherwise noted Net Sales Operating Margin Terex 2019 2019 2020 2019 Guidance (1) Reported Adjusted Guidance (6) Segment 2019 2020 2019 Adjusted 2020 Guidance (1,2) Recast Guidance Recast Recast Guidance (6) Net Sales $4,353 $4,353 Dow
Slide 12: Disciplined Capital Allocation
Disciplined Capital Allocation Cash Flow from Operations + SINCE ANALYST DAY IN 2016 After-tax Proceeds from • Refinanced senior notes and senior secured credit Divestures facility • Re-priced USD term loan (50 bps rate reduction) Optimal Capital Structure • Q3 ’16 – Q4 ’19 debt reduction of $512 mi
Slide 13: Aerial Work Platforms
Aerial Work Platforms Genie Innovation at Work with Safety Arrest Bar • Increasing product adoption in China • Innovative new products and services • ANSI standard implementation delayed • Continued strength in Utilities New Terex Utilities TL-80 Series AWP 2019 2019 2020 Reported Adjusted Guidance
Slide 14: Materials Processing
Materials Processing New Innovation with the Evoquip® Colt 1600 Scalping Screen • Consistent, strong execution through uncertain global industrial equipment market • Developed new products and services for global end markets • Effective for 2020, RT & Tower Cranes businesses placed with MP leadershi
Slide 15: Summary
Summary • Challenging environment for industrial equipment • Excellent liquidity, strong balance sheet and business portfolio • Continue to drive improvement in Operational Execution • Maintaining our disciplined capital allocation strategy FOCUS • SIMPLIFY • EXECUTE TO WIN 15
Slide 16: Questions?
Questions? FOCUS • SIMPLIFY • EXECUTE TO WIN 16
Slide 17: Appendix
Appendix FOCUS • SIMPLIFY • EXECUTE TO WIN 17
Slide 18: Backlog Trend
Backlog Trend USD Millions 1,661 1,651 1,612 51 64 62 Sequential Year on Year 1,298 513 449 1,234 1,263 499 $ % $ % 58 58 1,158 65 1,059 49 1,081 329 33 AWP 259 52% (345) (31%) 51 929 916 416 468 60 824 364 295 62 249 809 47 51 MP 31 12% (218) (42%) 219 229 270 264 1,100 1,098 1,088 Corp & Other (18
Slide 19: Q4 Global Sales
Q4 Global Sales Sales by Geography 2019 vs 2018 Western Europe Actual FX-Adj. Asia/ Pacific North America -13% -10% Actual FX-Adj. -2% 2% Actual FX-Adj. E. Europe, Middle -22% -21% East & Africa Actual FX-Adj. -21% -19% -24% LATAM Actual Q4 2019 Q4 2018 FX-Adj. xx 55% 59% 41% Western Europe 20% 20%
Slide 20: FY Global Sales
FY Global Sales Sales by Geography 2019 vs 2018 Western Europe Actual FX-Adj. Asia/ Pacific North America -4% 2% -10% Actual FX-Adj. 9% 16% Actual FX-Adj. E. Europe, Middle -6% -5% East & Africa Actual FX-Adj. -20% -16% -24% LATAM Actual FY 2019 FY 2018 FX-Adj. xx 40% 48% 41% 22% 22% Western Europe
Slide 21: Aerial Work Platforms
Aerial Work Platforms USD Millions Net Bookings Book-to-Bill Ratio $1,200 200% 178% 180% $1,000 157% 153% 160% 126% 140% $800 120% 97% 98% $600 100% 80% 60% 59% 60% $400 60% 40% $200 20% $932 $923 $501 $695 $962 $700 $506 $367 $755 $0 0% Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q4'19 Q4
Slide 22: Materials Processing
Materials Processing USD Millions Net Bookings Book-to-Bill Ratio $500 160% 139% $450 140% $400 120% 117% 113% 110% 120% $350 96% 90% 100% $300 $250 70% 80% 64% $200 60% $150 40% $100 $50 20% $352 $429 $293 $365 $398 $331 $231 $236 $352 $0 0% Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q4'
Slide 23: Q4 2019 Adjustments
Q4 2019 Adjustments USD Millions, except Earnings per Share Q4 2019 Restructuring Tax & Interim Q4 2019 Transformation Other As Reported & Related Period As Adjusted Net Sales $885.0 - - - - $885.0 Gross Profit 168.6 0.4 - - - 169.0 SG&A (145.7) 9.4 3.4 0.2 - (132.7) Income (Loss) from Operations 22
Slide 24: Q4 2018 Adjustments
Q4 2018 Adjustments USD Millions, except Earnings per Share Q4 2018 Restructuring Pension Tax & Interim Q4 2018 Transformation Other As Reported & Related Annuitization Period As Adjusted Net Sales $1,048.8 - - - - - $1,048.8 Gross Profit 214.6 - - - (0.7) - 213.9 SG&A (133.0) - 4.7 - - - (128.3) In
Slide 25: Q4 Adjusted OP by Segment
Q4 Adjusted OP by Segment USD Millions, except Earnings per Share Q4 2019 Q4 2018 As Reported Adjustments As Adjusted As Reported Adjustments As Adjusted AWP $4.4 1.8 $6.2 $37.1 (0.7) $36.4 MP 38.9 - 38.9 50.4 - 50.4 Corporate & Other (20.4) 11.6 (8.8) (5.9) 4.7 (1.2) Terex ConOps $22.9 13.4 $36.3 $
Slide 26: FY 2019 Adjustments
FY 2019 Adjustments USD Millions, except Earnings per Share FY 2019 Restructuring Tax & Interim FY 2019 Transformation Deal Related Other As Reported & Related Period As Adjusted Net Sales $4,353.1 - - - - - $4,353.1 Gross Profit 887.8 4.4 - - - - 892.2 SG&A (552.8) 18.0 13.7 (7.7) 0.2 - (528.6) Inc
Slide 27: FY 2018 Adjustments
FY 2018 Adjustments USD Millions, except Earnings per Share FY 2018 Restructuring Extinguishment Pension Tax & Interim FY 2018 Transformation Other As Reported & Related of Debt Annuitization Period As Adjusted Net Sales $4,517.2 - - - - - - $4,517.2 Gross Profit 961.9 0.2 - - - (0.7) - 961.4 SG&A (
Slide 28: FY Adjusted OP by Segment
FY Adjusted OP by Segment USD Millions, except Earnings per Share FY 2019 FY 2018 As Reported Adjustments As Adjusted As Reported Adjustments As Adjusted AWP $196.2 8.9 $205.1 $300.5 1.4 $301.9 MP 196.8 0.4 197.2 176.0 (2.8) 173.2 Corporate & Other (58.0) 19.3 (38.7) (64.0) 29.4 (34.6) Terex ConOps
Slide 29: 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 30: 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 31: 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 32: 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 33: 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 34: 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. Dec '19 Sep '19 Jun '19 Mar '19 Dec '18 Annualized effective tax rate as adjusted 15.6 % 15.6 % 1
Slide 35: Glossary: ROIC Continued
Glossary: ROIC Continued USD Millions Three Three Three Three months months months months ended ended ended ended 12/31/19 9/30/19 6/30/19 3/31/19 Reconciliation of income (loss) from operations: Income (loss) from operations as reported $ 22.9 $ 86.4 $ 126.0 $ 99.7 Adjustments: Deal related — (0.9)
Slide 36: Glossary: ROIC Continued
Glossary: ROIC Continued USD Millions Income (loss) from (Provision for) benefit Year Ended December 31, 2019 continuing operations Income tax rate from income taxes before income taxes Reconciliation of annualized effective tax rate: As reported $ 247.5 $ (37.8) 15.3% Effect of Adjustments: Deal Re
Slide 37: 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
Slide 38: Glossary: Recast Financials
Glossary: Recast Financials USD Millions Recast: Moves Cranes from Corp & Other to Materials Processing (1) in (000's) FY-18 Q1-19 Q2-19 Q3-19 Q4-19 FY-19 Net Sales AWP $2,950.4 $727.9 $870.4 $628.2 $500.1 $2,726.6 Materials Processing 1,576.8 410.5 430.9 382.7 378.5 1,602.6 Corp & Other/Elimination