Terex Corporation · NYSE:TEX
Terex — Investor Day (August 2018)
28 slides from Terex's investor day presentation, Aug 21, 2018
Slide 1: Terex Aerial Work Platforms Analyst Visit
Terex Aerial Work Platforms Analyst Visit August 21, 2018 FOCUS • SIMPLIFY • EXECUTE TO WIN 11
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: Terex Strategy: Execution Update
Terex Strategy: Execution Update John Garrison President and Chief Executive Officer FOCUS • SIMPLIFY • EXECUTE TO WIN 33
Slide 4: Team Member Safety
Team Member Safety Commitment to Zero Harm Safety is our number #1 Priority and our #1 Responsibility FOCUS • SIMPLIFY • EXECUTE TO WIN 44
Slide 5: Terex Strategy: Focus, Simplify, Execute to Win
Terex Strategy Focus Simplify Execute to Win FOCUS • SIMPLIFY • EXECUTE TO WIN 55
Slide 6: Execute to Win: Priorities
Execute to Win: 3 Priorities Aerial Work Materials Platforms Cranes Processing Customer Offerings and Value Propositions Commercial Sales and Pricing Execution Excellence Dealer Management Services and Solutions Lifecycle Spare Parts Solutions Technology and Innovation Global Sourcing
Slide 7: Strategy Deployment – 2017 Highlights
Strategy Deployment – 2017 Highlights Completed sale of: Material Handling & Port Solutions German Compact Construction Focus Coventry LBH business India LBH business Exited 12 manufacturing facilities, reducing global footprint by 2.6M square feet, 27% Reduced administrative expenses, while Simplif
Slide 8: Strategy Deployment – 2018 Update
Strategy Deployment – 2018 Update Broke ground on new Utilities Simplify Reduce facility in South Dakota Complexity and G&A Continued to implement Finance simplification program Completed initial Terex Proven Sales Process training sessions Commercial Excellence Deployed CRM at Powerscreen, Execute
Slide 9: Disciplined Capital Allocation
Disciplined Capital Allocation ACCOMPLISHMENTS SINCE DEC ’16 INVESTOR DAY Cash Flow from Operations + • Monetized Konecranes shares for ~ $770 M After-tax Proceeds from Divestures • Completed recapitalization ‒ Reduced debt by ~ $600M ‒ Lowered interest rates Optimal Capital Structure • Reduced NWC
Slide 10: Aerial Work Platforms
Aerial Work Platforms Matt Fearon President, Aerial Work Platforms FOCUS • SIMPLIFY • EXECUTE TO WIN 10 10
Slide 11: Aerial Work Platforms Overview
Aerial Work Platforms Overview Full Product Range and Market Leading Brand Telescopic Articulating Slab Rough Terrain Runabouts Material Compact High Reach Light Booms Booms Scissors Scissors Lifts Telehandlers Telehandlers Towers Applications Footprint Customers/Channels ▪ Construction/Maintenance
Slide 12: Aerial Work Platforms Current Situation
Aerial Work Platforms Current Situation • Growth in 2017, accelerating in 2018 • Margins improving as revenues grow • “Execute to Win” impact is increasing • Genie brand, global footprint, new products and operational execution are all key to continued success AWP Revenue ($M) AWP Operating Profit (
Slide 13: Demand Logic (Fleet Growth)
Aerial Work Platforms Demand Logic (Fleet Growth) Sources: IHS Global Insights, AIA Consensus Construction Forecast, Terex fleet modeling Construction Aerials Aerials Spending Growth + Adoption = Fleet Growth Real Global Construction Spending (CAGR) Global Fleet/ Global Construction Spend All Aerial
Slide 14: Demand Logic (Construction Spending Growth)
Aerial Work Platforms Demand Logic (Construction Spending Growth) Sources: IHS Global Insights, AIA Consensus Construction Forecasts BJH 2 pct BJH 2 pct Real Residential Construction per Capita Real Non-Residential Construction per Capita $3,000 $3,000 $2,500 $2,500 $2,000 $2,000 $1,500 $1,500 $1,00
Slide 15: Demand Logic (Aerial Adoption)
Aerial Work Platforms Demand Logic (Aerial Adoption) Sources: Terex fleet modeling, Terex estimates BJH 2 pct BJH 2 pct Boom & Scissor Units per $B of Non-Res Construction Telehandler Units per $B of Total Construction 900 140 800 120 700 100 600 500 80 400 60 300 40 200 100 20 0 0 2001 2012 2017 20
Slide 16: Demand Logic (Aerials Fleet Growth)
Aerial Work Platforms Demand Logic (Aerials Fleet Growth) Sources: Terex modeling of historical fleet size; Terex fleet forecasts Global Fleet Size (000 Units): Booms + Scissors Global Fleet Size (000 Units): Telehandlers 1,800 600 1,600 CAGR (’03 – ’18) = 7.5 % 500 CAGR (’03 – ’18) = 5.6 % 1,400 CA
Slide 17: Demand Logic (Annual Demand)
Aerial Work Platforms Demand Logic (Annual Demand) Sources: Terex modeling of global aerial demand Annual Annual Fleet Total Replacement Demand + Growth = Annual Demand BJH 2 pct Annual Replacement Demand ($M) Annual Fleet Growth ($M) All Aerial Industry Revenue: World ($M) $9,000 $9,000 $12,000 @ 2
Slide 18: Replacement Demand Example
Aerial Work Platforms Replacement Demand Example Sources: United Rentals Quarterly Financial Review, Q4 2017, page 17 URI Fleet Composition ($M OEC, Dec. 2017) $12,000 $10,000 $8,000 $M OEC $6,000 Several years $4,000 of stong replacement $2,000 Typical Replacement Window $0 1-2 2-3 3-4 4-5 5-6 6-7
Slide 19: Major Customer Demand Conditions
Aerial Work Platforms Major Customer Demand Conditions Sources: United Rentals, Ashtead Group, ISI URI Pro Forma Time Utilization (June) Sunbelt Fleet Utilization Fleet on Rent ($B) Physical Utilization (%) 75% $6.0 Source: Ashtead Group 75% Source: URI Financial Reports $5.0 73% 73% $4.0 71% 71% $3
Slide 20: Demand Outlook: Summary
Aerial Work Platforms Demand Outlook: Summary • Demand growth is driven by underlying fleet dynamics ‒ Construction spending and aerials adoption drive fleet growth ‒ Fleet growth + replacement = annual demand • Construction spending outlook is favorable • Global adoption continues to increase • Str
Slide 21: Business Objectives
Aerial Work Platforms Business Objectives • Customer NPS AWP SUCCESS • Revenue Growth METRICS • Margin Improvement • Product Leadership • Cost Discipline REVENUE • Footprint & Global Reach PROFIT ENABLERS DRIVERS • ETW Improvements • Responsiveness & Customer Support Genie is Well Positioned to Capi
Slide 22: Revenue Enablers
Aerial Work Platforms Revenue Enablers Product Footprint & Responsiveness & Leadership Global Reach Customer Support AWP Vitality Index (%) Regional Sales by Source of Product (2023) AWP Customer NPS (%) 40% 100% 60% 35% 50% 80% 30% 25% 40% 60% 20% 30% 34.0% 40% 52% 55% 15% 28.0% 47% 20% 39% 10% 14.
Slide 23: Product Innovation - XC
Aerial Work Platforms Product Innovation - XC XC Product Family S40/45 XC S60/65 XC S80/85 XC Z45 XC Z62 XC Z85 XC Z105 XC ZX 135 XC SX 105 XC / SX 125 XC LAUNCHED PLANNED SX 135 XC FOCUS • SIMPLIFY • EXECUTE TO WIN 23 23
Slide 24: Product Innovation – Hybrid Drive
Aerial Work Platforms Product Innovation – Hybrid Drive Technology for All Jobsites Z-60/37 FE- Fuel Electric Hybrid ▪ Switch between low emissions hybrid operation to zero emissions all electric operation FOCUS • SIMPLIFY • EXECUTE TO WIN 24 24
Slide 25: 2018 Manufacturing Footprint
Aerial Work Platforms 2018 Manufacturing Footprint Redmond, WA Changzhou, Moses Lake, Booms CN Scissors WA Scissors Booms Booms Umbertide, IT Rock Hill, Telehandlers SC Booms OKC, OK Booms Light Towers Telehandlers Runabouts • Global manufacturing capacity significantly greater than in 2007 and 2014
Slide 26: Terex Margin Drivers
Aerial Work Platforms Terex Margin Drivers North China, AP, America EMEAR LATAM Salesforce.com Deployment Commercial Terex Proven Sales Process Excellence Back-office process and systems improvement Services and Solutions Lifecycle Spare Parts Solutions Technology and Innovation Catego
Slide 27: Terex Margin Progress
Aerial Work Platforms Terex Margin Progress AWP Quarterly Incremental Margins* 30% 25% 20% 15% 25.7% 23.0% 10% 16.7% 5% 11.8% 0% Q3 '17 Q4 '17 Q1 '18 Q2 '18 * as adjusted Cost Leverage Execute to Win (ETW) • Demand planning • Commercial Excellence • Fixed cost discipline • Lifecycle Solutions • Labo
Slide 28: Positioned for Growth
Aerial Work Platforms Positioned for Growth • Favorable demand outlook for 2019 - 2023 • Well positioned to grow revenue ‒ Robust new product pipeline ‒ Advantaged global footprint ‒ Demonstrated customer responsiveness • Margin outlook is strong ‒ Cost leverage as revenues strengthen ‒ Accelerating