Terex Corporation · NYSE:TEX
Terex — Robert W. Baird Industrial Conference 2014
25 slides from Terex's conference presentation, Nov 11, 2014
Slide 1: Robert W. Baird Industrial Conference
Robert W. Baird Industrial Conference November 11, 2014
Slide 2: Forward-Looking Statements & Non-GAAP Measures
Forward-Looking Statements & Non-GAAP Measures 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,” “expec
Slide 3: Defining Who We Are
Defining Who We Are Lifting & Material Handling Solutions Company Focused on Operational Improvement Leader in Product Categories Geographically Diverse Cash Generator Profitable 3
Slide 4: Market Environment
Market Environment • AWP: Market expected to remain strong – anticipate flat near term demand • Construction: Mostly European dependent – outlook is flat to negative • Cranes: Flat near term market – non-residential growth uncertain; Utilities and Services expected to be positive • MHPS: Flat MH bus
Slide 5: Sales by Geography 2013 vs 2014
Sales by Geography 2013 vs 2014 Western Europe Asia/ Oceania North America 31% 32% (5)% 17% 3% Q3 YTD 6% Q3 YTD Q3 YTD Other Q3 YTD (39)% (22)% LATAM Q3 YTD (30)% (26)% 5 Total Terex Sales by Geography %
Slide 6: Continuing Operations Results YTD
Continuing Operations Results YTD *Please see reconciliation to US GAAP on page 18 6 ** Please see reconciliation to US GAAP on page 19
Slide 7: Liquidity Bridge Jun-14 to Sep-14
Liquidity Bridge Jun-14 to Sep-14 Liquidity in the quarter increased by $115 million • Generated $92 million from operating activities, including $22 million from reduced working capital • Stock repurchase and dividend payment combined for $12 million use of cash • Repaid debt of $51 million • Expan
Slide 8: Net Sales Bridge 2013 to 2014
Net Sales Bridge 2013 to 2014 Third Quarter Year to Date Net Sales grew $53 million in Q3 versus prior year, approximately $22 million from favorable exchange rates • AWP Q3 sales grew in all regions except South America where volumes were down 24% • Excluding foreign exchange, Construction grew 8%
Slide 9: Operating Profit Bridge 2013 to 2014
Operating Profit Bridge 2013 to 2014 Third Quarter Year to Date Mixed Operating Profit results in the quarter • AWP decline driven by under-absorption, product campaign, currency, and factory start-up costs • Construction improved on higher sales, productivity and cost base vigilance • Cranes declin
Slide 10: Terex Capital Structure
Terex Capital Structure Cash of $345mm with leverage at 2.4x net debt/EBITDA Maturity Profile $1330 Sep 30 2014 x2014 EBITDA Amount multiple* Coupon Maturity Rating Price Yield $600 Cash $ 345 $600mm Revolver 50 0.1 2.15% Aug-19 Ba1 / BBB- $300 USD Term Loan B 228 0.4 3.50% Aug-21 Ba1 / BBB- $49 $12
Slide 11: Improvement Initiatives
Improvement Initiatives • Improvement Initiatives include more than 50 specific projects addressing a range of opportunities within and across Terex businesses • Currently targeted OP opportunities totaling ~$200 million over the next few years • Working capital improvement opportunity exceeds $300
Slide 12: Improvement Initiatives
Improvement Initiatives DSO vs DPO Unfavorable 10-day gap Favorable 10-day gap Gap Cost DSO = ($150M) DPO = ($150M) Total = ($300M) • Working Capital improvement initiative underway to address unfavorable AR vs AP relationship 12
Slide 13: Summary
Summary • End markets remain difficult to predict – focused on improvement initiatives that make the company stronger in any environment • Equipment commissioning in our MHPS segment will be key to Q4 performance • Full year EPS and Free Cash Flow estimated at or near the lower end of our guidance •
Slide 14: Questions?
Questions? Third Quarter 2014 Conference Call October 30, 2014 14
Slide 15: Terex Book-to-Bill Trend (USD Millions)
Terex Book-to-Bill Trend (USD Millions) 15
Slide 16: Backlog Trend (USD Millions)
Backlog Trend (USD Millions) 16
Slide 17: Third Quarter Results
Third Quarter Results Q3 Reported EPS of $0.51 and Adjusted EPS of $0.59 compared to prior year EPS of $0.73 Performance in the quarter was in line with our revised guidance • Overall sales growth of 3% versus prior year period, almost half from favorable exchange rates • AWP margin decline driven b
Slide 18: Continuing Operations Results Q3
Continuing Operations Results Q3 * Please see reconciliation to US GAAP on page 17 1 8
Slide 19: Q3 2014 Adjustments
Q3 2014 Adjustments USD Millions, except Earnings per Share Net Sales Gross Profit SG&A Income From Operations Interest Income (Expense) Other Income (Expense) Income (Loss) from Cont. Ops before Taxes Provision for Income Taxes Non Controlling Interest Income (Loss) from Continuing Operations Earni
Slide 20: YTD 2014 Adjustments
I TEREX YTD 2014 Adjustments USD Millions, except Earnings per Share YTD 2014 YTD 2014 As Reported As Adjusted Net Sales $5,519.5 - - $5,519.5 Gross Profit $1,114.5 $10.1 - $1,124.6 SG&A $761.8 ($0.6) - $761.2 Income From Operations $352.7 $10.7 - $363.4 Interest Income (Expense) ($86.1) - . ($86.1)
Slide 21: YTD 2013 Adjustments
I TEREX YTD 2013 Adjustments USD Millions, except Earnings per Share YTD 2013 Sale of MHPS Restructuring YTD 2013 As Reported Roadbuilding Charge & Related As Adjusted Net Sales $5,272.2 - - - $5,272.2 Gross Profit $1,053.8 $3.2 - $41.4 $1,098.4 SG&A $766.1 ($0.2) ($2.7) ($23.5) $739.7 Income From O
Slide 22: Adjusted OP by Segment – Q3 2014
Adjusted OP by Segment – Q3 2014 22
Slide 23: Adjusted OP by Segment – 2014 YTD
Adjusted OP by Segment – 2014 YTD 23
Slide 24: Adjusted OP by Segment – 2013 YTD
Adjusted OP by Segment – 2013 YTD 24
Slide 25: Q3 2013 ROIC Calculation
Q3 2013 ROIC Calculation See reconciliation of adjusted amounts below on table following ROIC table. Amounts are as of and for the three months ended for the periods referenced in the table below. 25