Financial Performance - The company reported Q1 earnings per share of $0.83 on sales of $1.2 billion, with a return on invested capital of 15% [7][24] - Total net sales decreased by 4.9% year-over-year, or 3.6% at constant exchange rates, with organic sales excluding ESG declining by 25% [24][26] - The operating margin for the Environmental Solutions segment was 19.4%, showing strong execution and a significant improvement from previous periods [31][32] Business Line Performance - Aerials segment sales were $450 million, with operating margins expected to return to double digits in Q2 as production ramps up [27][28] - Materials Processing (MP) sales were $382 million, maintaining double-digit margins due to cost reduction actions despite lower volume [30][31] - Environmental Solutions generated approximately $400 million in sales, representing one-third of total sales, with record throughput contributing to strong margins [31][32] Market Dynamics - Approximately 75% of the company's 2025 U.S. machine sales are expected to come from products manufactured in the U.S., benefiting from the USMCA trade agreement [10][11] - The company sees a generally weak economic environment in Europe but is optimistic about infrastructure spending growth in the medium to long term [18][19] - The waste and recycling market, which represents about 25% of global revenue, is characterized by low cyclicality and steady growth [16] Strategic Direction - The company is focused on integrating ESG into its operations, expecting to deliver over $25 million in operational run rate synergies by the end of 2026 [19][90] - The strategy includes leveraging digital solutions and investing in robotics and automation to enhance operational efficiency [20][21] - The company maintains a strong financial position, planning to deleverage in the second half of the year while continuing to invest in growth [33][34] Management Commentary - Management expressed confidence in navigating the current dynamic environment and emphasized the importance of maintaining price-cost neutrality amid tariff challenges [9][52] - The company anticipates a gradual recovery in the MP segment driven by replacement demand in North America [124][125] - Management highlighted the need for ongoing investments to support demand and improve throughput in the Environmental Solutions segment [90] Other Important Information - The company ended Q1 with $1.1 billion in liquidity and plans to return capital to shareholders through stock repurchases and dividends [33][34] - The current backlog stands at $2.6 billion, up 13% sequentially, indicating strong demand across segments [35][36] Q&A Session Summary Question: Can you expand on the margin outlook for Environmental Solutions? - Management noted that strong Q1 performance was driven by increased sales and record throughput, but expects moderation in margins due to one-off factors and increased expenses in the coming quarters [46][47][118] Question: How are you handling orders in the current tariff environment? - The company is in full mitigation mode, having pulled forward inventory and implemented surcharges where necessary, while maintaining a focus on price-cost neutrality [52][54] Question: What is the impact of tariffs on your manufacturing footprint? - Management indicated that a significant portion of products is manufactured in the U.S., providing a competitive advantage, particularly in the Environmental Solutions and Aerials segments [64][65] Question: What are the expectations for the Materials Processing segment? - The company expects a gradual recovery in MP, driven by healthy fleet utilization and replacement demand, with a cautious outlook on macroeconomic factors [122][124]

Group 1: Earnings Performance - Terex reported quarterly earnings of $0.83 per share, exceeding the Zacks Consensus Estimate of $0.49 per share, but down from $1.60 per share a year ago, representing an earnings surprise of 69.39% [1] - The company has surpassed consensus EPS estimates in all four of the last quarters [2] - Terex's revenues for the quarter ended March 2025 were $1.23 billion, surpassing the Zacks Consensus Estimate by 0.64%, but down from $1.29 billion year-over-year [2] Group 2: Stock Performance and Outlook - Terex shares have declined approximately 21.3% since the beginning of the year, compared to a decline of 4.7% for the S&P 500 [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters [4] - The current consensus EPS estimate for the next quarter is $1.47 on revenues of $1.43 billion, and for the current fiscal year, it is $4.49 on revenues of $5.29 billion [7] Group 3: Industry Context - The Manufacturing - Construction and Mining industry, to which Terex belongs, is currently ranked in the top 6% of over 250 Zacks industries, indicating strong performance potential [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Terex's stock performance [5][6]

Financial Performance - The company reported Q1 earnings per share of $0.83 on sales of $1.2 billion, with a return on invested capital of 15% [6][23] - Total net sales decreased by 4.9% year-over-year, or 3.6% at constant exchange rates, with organic sales excluding ESG declining by 25% [23][35] - The operating margin for the overall company was 9.1%, down 350 basis points from the prior year, but showed a sequential improvement of 130 basis points from Q4 2024 [24][30] Business Line Performance - Aerials segment sales were $450 million, with operating margins down 3% year-over-year but expected to return to double digits in Q2 due to seasonal demand [26][36] - Materials Processing (MP) sales were $382 million, maintaining double-digit margins despite lower volume, with expectations for sequential improvement throughout the year [27][36] - Environmental Solutions (ES) generated approximately $400 million in sales, representing a third of total sales, with an operating margin of 19.4%, showing strong performance and record throughput [29][30] Market Data - Approximately 75% of the company's 2025 U.S. machine sales are expected to come from products manufactured in the U.S., enhancing resilience against tariffs [8][10] - The company noted a generally weak economic environment in Europe but sees potential growth in infrastructure spending in the medium to long term [15][16] Company Strategy and Industry Competition - The company is focused on integrating ESG into its operations, expecting to deliver over $25 million in operational run rate synergies by the end of 2026 [17][38] - The company is leveraging its global sourcing capabilities to mitigate tariff impacts and maintain price-cost neutrality [13][50] - The company is optimistic about its position in the market, particularly in the U.S. and North America, where a significant portion of its products are manufactured [60] Management Commentary on Operating Environment and Future Outlook - Management expressed caution regarding the macroeconomic environment and geopolitical uncertainties but maintained a full-year EPS outlook of $4.7 to $5.1 [7][35] - The company anticipates a gradual recovery in MP driven by replacement demand in North America, with a focus on maintaining operational efficiency [36][118] Other Important Information - The company ended Q1 with $1.1 billion in liquidity and plans to deleverage in the second half of the year while continuing to invest in growth [31][32] - The company repurchased $32 million of its stock and paid $11 million in dividends during the first quarter [32] Q&A Session Summary Question: Margin outlook for Environmental Solutions - Management noted that strong Q1 performance was driven by increased sales, record throughput, and integration synergies, but expects moderation in margins going forward due to one-off items and increased expenses [41][44][46] Question: Handling of orders and tariff assumptions - Management confirmed they are in mitigation mode regarding tariffs, having pulled forward inventory and implemented surcharges where necessary, while maintaining price-cost neutrality [47][49][50] Question: Guidance dynamics and competitive advantage - Management explained that the Q1 performance exceeded expectations, and while tariffs are a concern, the majority of products are manufactured in the U.S., providing a competitive edge [53][59] Question: Aerials and Material Processing margin progression - Management indicated that Aerials are expected to see a seasonal ramp-up in Q2, with MP showing a gradual recovery driven by replacement demand [63][66][68] Question: Impact of tariffs on the UK and pricing strategies - Management acknowledged the impact of tariffs on raw materials from China and indicated that pricing strategies would be adjusted as necessary to maintain competitiveness [79][82] Question: Sustainability of ES margins - Management expressed confidence in the sustainability of ES margins due to strong demand and expected synergies from the ESG acquisition [84][86] Question: Clarification on tariff assumptions - Management clarified that the $0.40 tariff impact assumption includes expected easing of China tariffs, with a focus on maintaining competitive pricing [91][92] Question: Impact of Germany's stimulus plan - Management noted that while the stimulus plan in Germany is not included in current sales outlook, it could positively impact the Material Processing segment in the future [93][94]

Q1 2025 Earnings Conference Call May 2, 2025 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 (the "Exchange Act") and the Private Securities Litigation Reform Act of 1995) regarding future events or our future financial performance that involve certain contingencies and uncertainties, including those discussed in our Annual Report on For ...

Financial Performance - Terex reported Q1 2025 sales of $1.2 billion, with an operating margin of 5.6% and adjusted operating margin of 9.1%[5]. - The company achieved EPS of $0.31 and adjusted EPS of $0.83, compared to $1.60 and $1.74 in Q1 2024 respectively[6]. - Net sales for Q1 2025 were $1,229 million, a decrease of 4.9% compared to $1,292 million in Q1 2024[30]. - Gross profit for Q1 2025 was $230 million, representing a gross margin of 18.7%, down from 23.0% in Q1 2024[35]. - Operating profit decreased to $69 million in Q1 2025, with an operating margin of 5.6%, compared to $158 million and 12.2% in Q1 2024[30]. - Net income for Q1 2025 was $21 million, a significant decline from $109 million in Q1 2024, resulting in earnings per share of $0.32 compared to $1.62[30]. - Adjusted EBITDA for the three months ended March 31, 2025, was $128 million, with an adjusted EBITDA margin of 10.4%[40]. - The company's ROIC as of March 31, 2025, was 15.0%, indicating effective capital utilization[42]. - Operating profit as adjusted for the three months ended March 31, 2025, was $111 million, compared to $97 million in the previous quarter[44]. - The company reported an EBITDA margin of 8.7% for the three months ended March 31, 2025[40]. Sales and Bookings - Bookings increased by 5.3% sequentially to $1.5 billion, resulting in a book-to-bill ratio of 124%, led by Aerials at 144%[6]. - Net sales in the Aerials segment were $450 million, down 27.8% year-over-year, while Materials Processing saw net sales of $382 million, down 26.5%[11]. - Environmental Solutions Group contributed approximately one-third of Q1 sales, with net sales of $399 million, reflecting a 10.5% increase on a pro forma basis compared to Q1 2024[11]. - The Aerials segment saw net sales drop to $450 million in Q1 2025 from $623 million in Q1 2024, with an operating profit of only $2 million[30]. Financial Outlook - Terex maintains its full-year adjusted EPS outlook of $4.70 to $5.10 for 2025[5]. - The company expects full-year net sales between $5.3 billion and $5.5 billion, with an EBITDA of approximately $660 million[12]. - The company anticipates organic sales to decline by 8%-12% compared to 2024, with segment net sales outlooks indicating low to high single-digit changes across various segments[12]. - The company expects a free cash flow of $325 million for the year ending December 31, 2025, based on an outlook of $445 million in net cash provided by operating activities[34]. Liquidity and Capital Structure - As of March 31, 2025, Terex reported liquidity of $1.1 billion and returned $43 million to shareholders through dividends and share repurchases[11]. - Total assets increased to $5,840 million as of March 31, 2025, up from $5,730 million at the end of 2024[26]. - Cash and cash equivalents decreased to $298 million at the end of Q1 2025, down from $388 million at the beginning of the period[27]. - Total debt was $2,586 million as of March 31, 2025, with cash and cash equivalents of $298 million[44]. - Stockholders' equity as adjusted was $1,957 million as of March 31, 2025, compared to $1,908 million as of December 31, 2024[46]. Tax and Other Considerations - The effective tax rate for Q1 2025 was 20.3%, compared to 20.5% in Q1 2024[35]. - The annualized effective tax rate as adjusted for March 31, 2025, was 17.5%, up from 15.6% in the previous quarter[44]. - Terex is closely monitoring geopolitical and macroeconomic factors, including potential tariff impacts, while positioning itself as a more US-centric company[3]. Operational Strategy - The company plans to continue focusing on operational improvements and capital investments to drive future growth[42]. - The company reported a net cash used in operating activities of $21 million for Q1 2025, compared to $34 million used in Q1 2024[27].

Core Insights - Terex Corporation reported strong financial results for Q1 2025, exceeding initial expectations, primarily due to the performance of its newly acquired Environmental Solutions Group (ESG) [2][5][6] - The company anticipates a competitive position moving forward, with a focus on U.S. production to mitigate geopolitical risks [2][9] Financial Performance - Net sales for Q1 2025 were $1.229 billion, a decrease of 4.9% compared to Q1 2024 [6][29] - Adjusted EPS for Q1 2025 was $0.83, down from $1.74 in Q1 2024 [6][29] - Operating profit was $69 million, representing 5.6% of net sales, compared to $158 million or 12.2% in the prior year [6][29] Business Segment Performance - Environmental Solutions segment net sales reached $399 million, up 10.5% year-over-year, driven by strong demand for refuse collection vehicles [5][29] - Aerials segment net sales were $450 million, down 27.8% year-over-year, attributed to seasonal delivery patterns [6][29] - Materials Processing segment net sales were $382 million, down 26.5% year-over-year, reflecting lower channel requirements and end-market demand [6][29] Bookings and Outlook - Bookings for Q1 2025 were $1.5 billion, a sequential increase of 5.3%, with a book-to-bill ratio of 124% [6][29] - The company maintains its full-year adjusted EPS outlook of $4.70 to $5.10 for 2025 [10][11] Capital Allocation and Liquidity - As of March 31, 2025, Terex had liquidity of $1.1 billion, with $36 million deployed in capital expenditures during Q1 [14][29] - The company returned $43 million to shareholders through dividends and share repurchases in Q1 2025 [14][29]

Company Overview - Terex Corporation is a global industrial equipment manufacturer specializing in materials processing machinery, waste and recycling solutions, mobile elevating work platforms (MEWPs), and equipment for the electric utility industry [3] - The company designs, builds, and supports products used across various sectors including maintenance, manufacturing, energy, minerals and materials management, construction, waste and recycling, and the entertainment industry [3] - Terex provides lifecycle support through a global parts and services organization and offers digital solutions to maximize customer investment returns [3] Environmental Initiatives - Certain Terex products and solutions are designed to reduce environmental impact, including electric and hybrid offerings that provide quiet and emission-free performance [3] - The company also supports renewable energy and aids in the recovery of useful materials from various types of waste [3] Upcoming Financial Results - Terex Corporation will host a conference call to review its first quarter 2025 financial results on May 2, 2025, at 8:00 a.m. Eastern Time [1] - The financial results will be available on the company's investor relations website prior to the call [1]

Core Insights - Terex's international operations are crucial for assessing its financial strength and growth potential, given the interconnected nature of the global economy [2][3] - The company's total revenue for the recent quarter was $1.24 billion, reflecting a 1.5% increase year-over-year [4] International Revenue Breakdown - Western Europe generated $157 million, accounting for 12.65% of total revenue, which was a 32.19% miss against the consensus estimate of $231.54 million [5] - Asia-Pacific contributed $137 million, representing 11.04% of total revenue, falling short by 18.2% compared to the projected $167.48 million [6] Future Revenue Projections - Analysts project total revenue for the current fiscal quarter to reach $1.36 billion, a 5.1% increase from the same quarter last year, with Western Europe expected to contribute $257.14 million and Asia-Pacific $153.7 million [7] - For the full year, total revenue is anticipated to be $5.39 billion, also reflecting a 5.1% increase, with Western Europe and Asia-Pacific expected to contribute $987.49 million and $623.95 million, respectively [8] Market Context - The reliance on international markets presents both opportunities and challenges for Terex, necessitating close monitoring of revenue trends to accurately project future performance [9] - Financial analysts are increasingly focused on international developments and geopolitical factors that may influence earnings estimates for companies like Terex [10]

Financial Performance - Full-year 2024 net sales were $5.1 billion, slightly down from $5.2 billion in 2023, primarily due to industry-wide channel adjustments[9]. - Adjusted earnings per share (EPS) for full-year 2024 was $6.11, the second highest in Terex history, compared to $7.06 in the prior year[5][9]. - Fourth quarter 2024 net sales reached $1.2 billion, a 2% increase year-over-year, driven by the addition of Environmental Solutions Group (ESG)[6]. - Net sales for Q4 2024 were $1,241 million, a slight increase from $1,223 million in Q4 2023, while total net sales for the year were $5,127 million, down from $5,152 million in 2023[25]. - For FY 2024, net sales totaled $5,127 million, with a gross profit of $1,112 million, achieving a gross margin of 21.7%[38]. - Q4 2024 earnings per share (EPS) improved to $0.77, compared to a loss of $0.03 in Q4 2023[37]. - FY 2024 EPS was reported at $6.11, up from $4.96 in FY 2023[38]. Profitability and Margins - Adjusted operating margins for ESG in Q4 2024 were 21.9%, contributing significantly to overall performance[5][12]. - Gross profit for Q4 2024 was $197 million, compared to $263 million in Q4 2023, resulting in a gross margin decrease from 21.5% to 15.9%[25]. - Income from operations for Q4 2024 was $53 million, significantly lower than $116 million in Q4 2023, reflecting a decrease in operating margin from 9.5% to 4.3%[31]. - The company reported a net loss of $2 million in Q4 2024, contrasting with a net income of $127 million in Q4 2023, leading to a loss per share of $0.03 compared to earnings of $1.89 per share in the prior year[25]. - Q4 2024 operating income was $97 million, leading to an operating margin of 7.8%[37]. - FY 2024 operating income increased to $582 million, with an operating margin of 11.3%[38]. - Adjusted EBITDA for Q4 2024 was $114 million, with an adjusted EBITDA margin of 9.2%[45]. - Adjusted EBITDA for FY 2024 reached $642 million, with an adjusted EBITDA margin of 12.5%[45]. Cash Flow and Investments - Full-year 2024 free cash flow was $190 million, lower than the previous year due to reduced operating income and higher interest expenses[12]. - Capital expenditures for 2024 were $137 million, slightly higher than $127 million in 2023, indicating ongoing investment in operations[29]. - The company expects 2025 earnings per share to be impacted by potential future acquisitions and restructuring, with an outlook of $445 million in net cash provided by operating activities[35]. Debt and Equity - Long-term debt rose significantly to $2,580 million as of December 31, 2024, compared to $620 million in 2023, indicating increased leverage[26]. - Total debt as of December 31, 2024, was $2,584 million, with cash and cash equivalents of $388 million[48]. - Debt less cash and cash equivalents amounted to $2,196 million as of December 31, 2024[48]. - Stockholders' equity as adjusted was $1,918 million as of December 31, 2024, an increase from $1,682 million in December 2023[49]. Taxation - The effective tax rate for full-year 2024 was 17.8%, up from 10.9% in the prior year, reflecting changes in tax benefits[9]. - The effective tax rate as adjusted for Q4 2024 was 15.6%, consistent across the previous quarters[48]. - The company reported an effective tax rate of 15.6% for the full year 2024, down from 17.8% as reported[49]. Future Outlook - The company expects 2025 net sales between $5.3 billion and $5.5 billion, with EPS guidance of $4.70 to $5.10[3][13]. - Aerial Work Platforms segment net sales for 2025 are expected to decline in low double digits, while Environmental Solutions is projected to grow in mid single digits[13]. - The company plans to focus on deleveraging and investing in business growth while maintaining a flexible balance sheet in 2025[12]. - The company is facing challenges from increased international tariffs, economic conditions, and competitive pressures, which may affect future performance[23].

Company Segments - The company operates in three segments: Materials Processing (MP), Aerial Work Platforms (AWP), and Environmental Solutions Group (ESG) [10] - The MP segment includes products such as crushers, washing systems, and material handlers, serving construction, mining, and recycling industries [11] - The AWP segment offers aerial work platform equipment, enhancing safety and productivity for various construction and maintenance applications [14] - The ESG segment focuses on waste and recycling equipment, including refuse collection bodies and compaction systems, targeting the solid waste industry [16] Financial Performance and Strategy - The company aims for a net leverage target of 2.5x through the cycle, balancing growth investments and efficient capital return to stockholders [27] - The total backlog as of December 31, 2024, was $2,291 million, a decrease of $1,120 million from $3,411 million in 2023 [44] - The Materials Processing (MP) backlog decreased approximately 58% from $767 million in 2023 to $320 million in 2024 [47] - The Aerial Work Platforms (AWP) backlog decreased approximately 45% from $2,644 million in 2023 to $1,451 million in 2024 [48] - The Environmental Solutions Group (ESG) backlog was $520 million as of December 31, 2024 [49] - The company expects second half sales in 2025 to be higher than first half sales, with stronger demand anticipated in the second quarter due to seasonal project spending [69] Innovation and Product Development - The company emphasizes digital transformation and innovation to improve product offerings and operational efficiency [25] - The company is focusing on product innovation and has established robust product development pipelines to introduce new differentiated products in the coming years [56] - The company is developing alternative power solutions across its product range, including battery-electric and fuel-electric hybrid options, to reduce carbon footprints [55] - The company is actively investing in alternative energy solutions and developing products that meet increasingly stringent environmental regulations [66] Safety and Environmental Commitment - The company aims to achieve a lost time injury rate of 0.4 and a total recordable injury rate of 1.4 by the end of 2026, with current rates at 0.37 and 1.49 respectively [71] - The company is committed to reducing greenhouse gas emissions and has developed all-electric utility bucket trucks, which support electrification and sustainability goals [66] - The company maintains a commitment to safety and environmental stewardship, ensuring compliance with health, safety, and environmental laws [63] - The company is committed to complying with environmental laws and regulations, conducting environmental audits at least once every five years [64][68] Workforce and Culture - The company has approximately 11,400 team members, with 88% participating in a global engagement survey, indicating a strong focus on team member engagement [73] - The company has a robust talent review process and offers a wide range of training programs to support team member development [74] - The company emphasizes a culture of inclusion and diversity, aiming to create a supportive and non-discriminatory workplace [77] Legal and Compliance - The company is engaged in various legal proceedings regarding intellectual property rights but does not expect a material adverse effect on its business [62] - The company’s engineering teams are focused on delivering customer-responsive solutions and complying with evolving regulatory standards [54] Customer Focus - In 2024, the largest customer accounted for less than 6% of consolidated net sales, and the top ten customers collectively accounted for less than 29% [60] - The company operates under a best value strategy, focusing on improving customer return on invested capital (ROIC) through quality by design [59] - The company offers a range of services for its products, including inspections, maintenance, and training services [39][43]