Terex Corporation · NYSE:TEX
Terex — Q3 2021 Earnings Presentation
28 slides from Terex's earnings presentation, Oct 29, 2021
Slide 1: Q3 2021 Conference Call
Q3 2021 Conference Call October 29, 2021 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 Culture & Terex Way Values
Zero Harm Culture & Terex Way Values Safety is an absolute way of life whether you Global team members are social distancing and work for us, supply us, use our equipment, or following safety protocols to safely serve receive our services customers ZERO HARM SAFETY CULTURE IS FOUNDATIONAL TO TEREX'S
Slide 4: ESG Progress
ESG Progress Successfully operated during COVID-19 pandemic to keep employees safe and deliver for our customers Published inaugural Sustainability Report Launched 2025 Diversity, Equity & Inclusion goals to increase diverse leadership across the company Continued innovation and adoption of environm
Slide 5: Q3 2021 Financial Highlights
Q3 2021 Financial Highlights Strong sales growth despite supply chain constraints • Sales up 30% year-over-year Global customer demand reflects continued strong end-markets • Bookings up 106% year-over-year • Backlog up 255% year-over-year Company margins improved 270 bps year-over-year to 7.5% • AW
Slide 6: Strategic Operational Priorities Update
Strategic Operational Priorities Update OPERATIONAL EXCELLENCE • Supply chain disruptions and labor constraints continue to impact production ◦ Aggressively working to mitigate material cost inflation with pricing • Global cost competitiveness ◦ Monterrey, Mexico facility produced first Genie teleha
Slide 7: End-Markets & Supply Chain
End-Markets & Supply Chain END-MARKETS AWP MP • Robust end-market demand across minerals • Continued strong global demand driven by fleet processing, material handling and lifting, replacement and growth environmental, and concrete • Increased electrical grid investment is a tailwind • Demand remain
Slide 8: Q3 2021: Operational Results
Q3 2021: Operational Results USD Millions, except Earnings per Share Q3 2021 Q3 2020 Q3 2021 Financial Call-Outs Net Sales $ 993.8 $ 765.6 Operating Profit % Change vs 2020 29.8% Impacted by charges for business impairment and Gross Profit 178.5 146.3 restructuring of $1 million % of Sales 18.0% 19.
Slide 9: Q3 2021: AWP Segment Results
Q3 2021: AWP Segment Results USD Millions Sales Operating Margin Backlog +28.7% YoY +310bps YoY +257% YoY 572.5 6.1% 1,705 445.0 3.0% 478 Q3 '20 Q3 '21 Q3 '20 Q3 '21 Q3 '20 Q3 '21 Results Drivers • Global end-market demand is robust with increased backlog • Continued cost structure discipline • Glob
Slide 10: Q3 2021: MP Segment Results
Q3 2021: MP Segment Results USD Millions Sales Operating Margin Backlog +34.5% YoY +70bps YoY +253% YoY 418.7 1,020 12.9% 13.6% 311.3 289 Q3 '20 Q3 '21 Q3 '20 Q3 '21 Q3 '20 Q3 '21 Results Drivers • Global markets reflect positive customer sentiment • Continued solid margin performance despite input
Slide 11: Full-Year 2021 Updated Outlook
Full-Year 2021 Updated Outlook USD Millions, except Earnings per Share 2021 Outlook 2021 Outlook 2021 Outlook 2021 Outlook Terex Outlook (1) PREVIOUS UPDATED PREVIOUS UPDATED (1) Outlook Operating Operating Net Sales ~$3,900 ~$3,850 Net Sales Net Sales Margin Margin SG&A % to Sales ~11.75% ~11.4% Ae
Slide 12: Updated Full-Year 2021 EPS Outlook
Updated Full-Year 2021 EPS Outlook ~ $0.25 ~ $0.15 ~ ($0.20) ~ ($0.35) $2.85 - $3.05 $2.75 - $2.85 Outlook Provided Volume / Mix Price / Efficiency Cost Pressure Incentive Comp / Updated Outlook July'21 SG&A FULL-YEAR 2021 EPS OUTLOOK RANGE UPDATED TO $2.75 - $2.85 12
Slide 13: Disciplined Capital Allocation
Disciplined Capital Allocation USD Millions Cash Capital Organic Inorganic Efficient Return Flow Structure Growth Growth of Capital Free Cash Flow Liquidity Net Debt 183 662 1,113 1,158 335 13 Q3 '20 YTD Q3 '21 YTD Q3 '20 Q3 '21 Q3 '20 Q3 '21 Aggressively managing net working Ample liquidity to fund
Slide 14: Summary
Summary EXECUTE • Safety, Health and Customer Engagement • Excellent work by Supply Chain team • Disciplined focus on cost structure to manage market environment • Driving strong free cash flow and liquidity INNOVATE • Delivering innovative product solutions to our customers GROW • Executing on stra
Slide 15: APPENDIX
APPENDIX E X E C U T E • I N N O V A T E • G R O W
Slide 16: Backlog Trend
Backlog Trend USD Millions 2,725 2,305 2,019 1,020 1,661 1,651 868 713 1,349 1,263 563 563 1,158 1,081 989 523 526 412 809 772 767 328 272 1,705 315 262 1,306 1,437 1,098 1,088 289 738 746 753 717 826 494 509 478 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep
Slide 17: Q3 Sales by Geography ('21 vs. '20)
Q3 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. 31% 30% 33% 30% 15% 10% 68% 64% 7% 5% 18% 20% North America Western Europe Q3 2021 Q3 2020 Asia / Pacific 55% 55% Rest of World 20% 20% Results sh
Slide 18: YTD Sales by Geography ('21 vs. '20)
YTD 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% 32% 28% 19% 26% 21% 6% 6% 17% 17% North America Western Europe YTD 2021 YTD 2020 Asia / Pacific 55% 57% Rest of World 22% 20% Results
Slide 19: AWP & MP Segment Results
AWP & MP Segment Results USD Millions AERIAL WORK PLATFORMS MATERIALS PROCESSING Q3 '21 Q3 '20 YTD'21 YTD'20 Q3 '21 Q3 '20 YTD'21 YTD'20 Net Sales $572.5 $445.0 $1,644.4 $1,370.6 Net Sales $418.7 $311.3 $1,237.7 $890.5 % Change vs. '20 28.7% 20.0% % Change vs. '20 34.5% 39.0% Operating Profit (Loss)
Slide 20: Q3 YTD Operating Results
Q3 YTD Operating Results USD Millions, except Earnings per Share YTD'21 YTD'20 Net Sales $2,896.7 $2,289.7 % Change vs 2020 26.5% Gross Profit $585.5 $390.1 % of Sales 20.2% 17.0% SG&A ($327.3) ($353.3) % of Sales (11.3%) (15.4%) Income (loss) from Operations $258.2 $36.8 Operating Margin 8.9% 1.6%
Slide 21: 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 22: 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 23: Glossary: Debt & Net Debt
Glossary: Debt & 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, i
Slide 24: 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 25: 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 26: 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. Sep '21 Jun '21 Mar '21 Dec '20 Sep '20 (1) Annualized effective tax rate, as adjusted 18.8 % 18.
Slide 27: Glossary: ROIC Continued
Glossary: ROIC Continued USD Millions Three months Three months Three months Three months ended 9/30/21 ended 6/30/21 ended 3/31/21 ended 12/31/20 Reconciliation of income (loss) from operations: Income (loss) from operations, as reported $ 74.2 $ 122.5 61.5 31.6 Adjustments: (Income) loss from TFS
Slide 28: 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