Terex Corporation · NYSE:TEX
Terex — Q4 2021 Earnings Presentation
32 slides from Terex's earnings presentation, Feb 11, 2022
Slide 1: Q4 2021 Conference Call
Q4 2021 Conference Call February 11, 2022 E X E C U T E • I N N O V A T 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 and the Private Securities Litigation Reform Act of 1995) regarding future even
Slide 3: Zero Harm Safety Culture and Terex Way Values
Zero Harm Safety Culture and Terex Way Values Safety is an absolute way of life Terex Way Values whether you work for us, supply guide team members' actions us, use our equipment, or receive with all stakeholders, so the our services Company performs at the highest level Total Recordable Incident Ra
Slide 4: Environment Social Governance (ESG): Progress and Priorities
Environment Social Governance (ESG): Progress and Priorities Environmental Social Strong Stewardship Responsibility Governance Products Diversity, Equity, & Inclusion (DEI) Board Composition Continuing to develop a product roadmap Increase non-majority leadership and Strong, independent Board with d
Slide 5: Q4 2021: Financial Highlights
Q4 2021: Financial Highlights EPS Sales Backlog $0.82 $990 Million ~$3 Billion +290% YoY +26% YoY +122% YoY SG&A as % of Sales NWC as % of Sales Operating Margin 10.3% 19.1% 7.0% (460bps) YoY (10bps) YoY +300bps YoY IMPROVED Q4 RESULTS DESPITE DYNAMIC OPERATING ENVIRONMENT 5
Slide 6: Full Year 2021: Delivered on our Strategy
Full Year 2021: Delivered on our Strategy EXECUTE INNOVATE GROW • Proactively managed the supply • Expanded Materials Processing • Increased mobile crushing and chain to mitigate disruptions product portfolio into adjacent screening capacity with purchase of markets China facility • Strong execution
Slide 7: Materials Processing: Products, Services and End-Markets
Materials Processing: Products, Services and End-Markets Materials Processing Equipment Parts & Services End Markets Aggregates Environmental Aggregates Recycling Specialty Equipment Construction Infrastructure Concrete Material Handling Lifting EXCELLENT END-MARKET, PRODUCT, AND GEOGRAPHIC DIVERSIF
Slide 8: Aerial Work Platforms: Products, Services and End-Markets
Aerial Work Platforms: Products, Services and End-Markets Utilities End Markets Grid Telecom Bucket Trucks Digger Derricks Tree Trimmers Parts & Services Genie End Markets Construction Infrastructure Industrial Booms Scissors Telehandlers Parts & Services Applications STRONG DEMAND FOR MARKET LEADIN
Slide 9: Supply Chain and Labor: Environment and Response
Supply Chain and Labor: Environment and Response Supply Chain and Labor Constraints Managing Constraints with Aggressive Actions • Staying close with suppliers and escalating issues Excellent work by supply chain team members to minimize disruption from limited supply of chassis, engines, fabricatio
Slide 10: Q4 2021: Operational Results
Q4 2021: Operational Results USD Millions, except Earnings per Share Q4 2021 Q4 2020 Q4 2021 Financial Call-Outs Net Sales $ 990.1 $ 786.7 Operating Profit % Change vs 2020 25.9% • $6 million gain on sale of Brazilian tools business Gross Profit 171.9 149.2 • $3 million of restructuring and other ch
Slide 11: Q4 2021: Materials Processing Segment Results
Q4 2021: Materials Processing Segment Results USD Millions Sales Operating Margin Backlog +24.0% YoY (110bps) YoY +98% YoY 14.9% 13.8% 454.1 366.3 1,034 523 Q4 '20 Q4 '21 Q4 '20 Q4 '21 Q4 '20 Q4 '21 STRONG RESULTS DRIVEN BY REVENUE GROWTH AND DISCIPLINED COST MANAGEMENT 11
Slide 12: Q4 2021: Aerial Work Platforms Segment Results
Q4 2021: Aerial Work Platforms Segment Results USD Millions Sales Operating Margin Backlog +29.6% YoY +530bps YoY +137%YoY 1,956 534.4 4.8% 412.3 826 Q4 '20 Q4 '21 Q4 '20 Q4 '21 (0.5%) Q4 '20 Q4 '21 MARGINS REFLECT IMPROVED CUSTOMER DEMAND AND STRICT EXPENSE MANAGEMENT 12
Slide 13: Full Year 2021: Financial Highlights
Full Year 2021: Financial Highlights EPS Sales Operating Margin $3.07 ~$3.9 Billion 8.4% +$2.94 YoY +26% YoY +620bps YoY SG&A as % of Sales Debt Reduction Incremental Margin 11.0% ($503 Million) 32% (430bps) YoY Net Leverage ~1.1x Exceeded 25% Target IMPROVED FULL YEAR RESULTS IN A CHALLENGING OPERA
Slide 14: Full Year 2021: Operational Results
Full Year 2021: Operational Results USD Millions, except Earnings per Share FY 2021 FY 2020 FY 2021 Financial Call-Outs Net Sales $ 3,886.8 $ 3,076.4 Operating Profit % Change vs 2020 26.3% • $9 million restructuring and severance charges Gross Profit 757.4 539.3 • $1 million tax receivable / settle
Slide 15: Disciplined Capital Allocation: 2021 Accomplishments
Disciplined Capital Allocation: 2021 Accomplishments USD Millions Cash Capital Organic Inorganic Efficient Return Flow Structure Growth Growth of Capital Free Cash Flow Disciplined Capital Allocation: Uses of Cash Liquidity at Year-End 2021 141 125 $867 Million CapEx $600 Million 86 $60 Undrawn Revo
Slide 16: Full Year 2022: Outlook
Full Year 2022: Outlook USD Millions, except Earnings per Share Terex Outlook (1) FY 2021 FY 2022 Outlook FY 2021 FY 2022 Outlook (1) Outlook Operating Operating Net Sales $3,887 $4,100 - $4,300 Net Sales Net Sales Margin Margin SG&A % to Sales 11.0% ~10.9% Aerial Work $2,179 7.0% $2,300 - $2,400 7.
Slide 17: Full Year 2022: EPS Outlook
Full Year 2022: EPS Outlook ~ $2.55 Operating Profit Items ~($0.05) Debt Extinguishment Cost ~ $0.35 Genie Relocation Gain / Other ~($0.15) ~ $0.85 ~ ($2.30) ~ $0.05 ~ $0.15 ~ ($0.30) ~ ($0.15) ~ ($0.15) $3.07 $3.55 - $4.05 FY 2021 Volume / Price / Cost SG&A FX / Other Interest & Income Tax Call-Out
Slide 18: Full Year 2022: Strategic Priorities
Full Year 2022: Strategic Priorities SAFETY PEOPLE OPERATIONS EXECUTE Continued safety Attract and retain Manage supply chain performance improvement team members disruptions INNOVATE CUSTOMER EXPERIENCE BUSINESS PROCESSES PRODUCT DEVELOPMENT Sustained investment in Digital customer solutions Digiti
Slide 19: Summary
Summary GREAT BUSINESSES LONG-TERM ATTRACTIVE AND GROWTH POTENTIAL RETURN PROFILE GREAT BRANDS 19
Slide 20: Appendix
APPENDIX E X E C U T E • I N N O V A T E • G R O W
Slide 21: Backlog Trend
Backlog Trend USD Millions 2,990 2,725 2,305 1,034 2,019 1,020 1,661 1,651 868 713 1,349 563 563 1,158 1,081 989 523 412 809 328 772 767 1,956 272 1,705 315 262 1,306 1,437 1,098 1,088 289 746 753 717 826 494 509 478 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21
Slide 22: Q4 Sales by Geography ('21 vs. '20)
Q4 Sales by Geography ('21 vs. '20) North America Western Europe Asia / Pacific Rest of World Actual FX-Adj. Actual FX-Adj. Actual FX-Adj. Actual FX-Adj. 21% 22% 42% 43% 13% 13% 51% 52% 8% 7% North America 16% 18% Western Europe Q4 2021 Q4 2020 Asia / Pacific 54% 56% Rest of World 22% 19% Results sh
Slide 23: Full Year Sales by Geography ('21 vs. '20)
Full Year Sales by Geography ('21 vs. '20) North America Western Europe Asia / Pacific Rest of World Actual FX-Adj. Actual FX-Adj. Actual FX-Adj. Actual FX-Adj. 21% 20% 41% 35% 24% 17% 33% 30% 6% 6% 17% 17% North America Western Europe FY 2021 FY 2020 Asia / Pacific 55% 57% Rest of World 22% 20% Res
Slide 24: Segment Results
Segment Results USD Millions AERIAL WORK PLATFORMS MATERIALS PROCESSING Q4 '21 Q4 '20 YTD'21 YTD'20 Q4 '21 Q4 '20 YTD'21 YTD'20 Net Sales $534.4 $412.3 $2,178.8 $1,782.9 Net Sales $454.1 $366.3 $1,691.8 $1,256.8 % Change vs. '20 29.6% 22.2% % Change vs. '20 24.0% 34.6% Operating Profit (Loss) $25.4
Slide 25: 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 26: 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 27: Glossary: Debt and Net Debt
Glossary: Debt and 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,
Slide 28: Glossary: EBITDA
Glossary: EBITDA USD Millions EBITDA is defined as earnings, before interest, other non-operating income (loss), income (loss) attributable to non-controlling USD Millions interest, taxes, depreciation and amortization. The Company calculates this by subtracting the following items from Net income (
Slide 29: 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 30: Glossary: ROIC Continued
Glossary: ROIC Continued USD Millions USDSee reconciliation of adjusted amounts below on the following ROIC tables. Amounts are as of and for the three months ended Millions for the period referenced in the tables. Dec '21 Sep '21 Jun '21 Mar '21 Dec '20 Effective tax rate 17.6 % 17.6 % 17.6 % 17.6
Slide 31: Glossary: ROIC Continued
Glossary: ROIC Continued USD Millions Three months Three months Three months Three months ended 12/31/21 ended 9/30/21 ended 6/30/21 ended 3/31/21 Reconciliation of income (loss) from operations: Income (loss) from operations as reported $ 69.8 $ 74.2 122.5 61.5 Adjustments: (Income) loss from TFS 0
Slide 32: 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 USD Millions Inventories less Trade accounts payable and Customer advances. The Company views excessive working capital as an inefficient us