Terex Corporation · NYSE:TEX
Terex — Q1 2021 Earnings Presentation
26 slides from Terex's earnings presentation, Apr 30, 2021
Slide 1: Q1 2021 Conference Call
Q1 2021 Conference Call April 30, 2021 EXECUTE INNOVATE GROW
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 Global team members are social whether you work for us, supply us, use distancing and following safety our equipment, or receive our services protocols to safely serve customers ZERO HARM SAFETY CULTURE IS FOUNDATIONAL TO TEREX'S
Slide 4: Environmental, Social and Governance
Environmental, Social and Governance Environmental Social Governance Board and Leadership Continue to develop Issued inaugural ESG Report expanded mandate to electric and hybrid products in December 2020 Diversity, Equity and Inclusion (DE&I) AN INTEGRAL PART OF TEREX'S PURPOSE, VALUES, AND STRATEGY
Slide 5: Q1 Financial Highlights
Q1 Financial Highlights Sales above expectations as customer sentiment continues to improve • Sales up 4% year-over-year • Sales up 10% sequentially Customer demand increased • Bookings up 101% year-over-year • Backlog up 104% year-over-year Significantly improved company margins • AWP margins impro
Slide 6: Strategic Operational Priorities Update
Strategic Operational Priorities Update Operational Excellence • Continued aggressive management of SG&A to achieve targeted full-year SG&A percent to sales of ~12.5% or better • Future global cost competitiveness to improve with announced move of Telehandler production to Monterrey, Mexico • Effect
Slide 7: End-Markets Update
End-Markets Update AERIAL WORK PLATFORMS MATERIALS PROCESSING • Global rental customer ordering robust and • Strong end-market demand across Crushing & expected to continue Screening, Environmental, Material Handlers, Cranes and Concrete • Electrical grid infrastructure investment will be a tailwind
Slide 8: Q1 2021: Operating Results
Q1 2021: Operating Results USD Millions, except Earnings per Share Q1 2021 Q1 2020 Q1 2021 Financial Call-Outs Net Sales $ 864.2 $ 833.6 Operating Profit TFS portfolio sale gain of $6 million offset by % Change vs 2020 3.7% restructuring and severance of $6 million Gross Profit 175.4 136.7 % of Sale
Slide 9: Q1 2021: AWP Segment Results
Q1 2021: AWP Segment Results USD Millions Sales Operating Margin Backlog (6.8%) YoY +680bps YoY 5.6% +82% YoY 511.7 1,306 476.7 717 (1.2)% Q1 '20 Q1 '21 Q1 '20 Q1 '21 Q1 '20 Q1 '21 Results Drivers • Global end-markets recovering • Aggressively rightsized Aerials cost structure • Adapting to supply c
Slide 10: Q1 2021: MP Segment Results
Q1 2021: MP Segment Results USD Millions Sales Operating Margin Backlog +19.8% YoY +510bps YoY +162% YoY 378.2 13.0% 713 315.6 7.9% 272 Q1 '20 Q1 '21 Q1 '20 Q1 '21 Q1 '20 Q1 '21 Results Drivers • Global markets reflect positive customer sentiment ◦ Continued new product development • Strong margin p
Slide 11: 2021 Updated Outlook
2021 Updated Outlook USD Millions, except Earnings per Share 2021 Outlook 2021 Outlook 2021 Outlook 2021 Outlook Terex Outlook (1) PREVIOUS UPDATED PREVIOUS UPDATED Outlook (1) Operating Operating Net Sales Net Sales Net Sales ~$3,450 ~$3,700 Margin Margin Aerial Work ~$2,000 ~6.5% ~$2,125 ~7% Platf
Slide 12: Updated 2021 EPS Outlook
Updated 2021 EPS Outlook ~ $0.40 ~ $0.85 ~ $0.15 ~($0.55) ~ ($0.25) ~ ($0.30) $2.35 - $2.55 $1.95 - $2.35 FY'21 Volume / Price / Cost Incentive Interest / Refinance FY'21 Previous EPS Mix Mfg Efficiency Pressure Comp Other Charges Updated EPS Outlook Outlook RAISING 2021 EPS TO $2.35 - $2.55 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 40 1,178 830 945 401 (113) Q1 '20 Q1 '21 Q1 '20 Q1 '21 Q1 '20 Q1 '21 • Positive Q1 free cash flow • Rating agency upgrade of credit •
Slide 14: Summary
Summary EXECUTE • Safety, Health and Customer Engagement • Maintaining focus on cost structure to achieve targeted margins • Driving strong free cash flow and liquidity INNOVATE • Delivering electric and hybrid product solutions to our customers GROW • Business portfolio is well positioned for both
Slide 15: Appendix
2] TEREX APPENDIX
Slide 16: Backlog Trend
Backlog Trend USD Millions 2,019 1,661 1,651 1,612 713 1,349 Sequential Year on Year 512 1,263 563 563 1,234 1,158 1,081 $ % $ % 989 523 480 526 AWP 480 58% 589 82% 412 809 328 272 772 767 MP 190 36% 441 162% 315 262 1,306 Total 670 50% 1,030 104% 289 1,100 1,098 1,088 826 754 738 746 753 717 494 50
Slide 17: Q1 Sales by Geography ('21 vs. '20)
Q1 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. -4% -5% 9% 1% 39% 28% -19% -22% Q1 2021 Q1 2020 5% 7% 18% 13% North America Western Europe 52% 57% Asia / Pacific 23% Rest of World 25% Results sh
Slide 18: AWP & MP Segment Results
AWP & MP Segment Results USD Millions AERIAL WORK PLATFORMS MATERIALS PROCESSING Q1 '21 Q1 '20 Q1 '21 Q1 '20 Net Sales $476.7 $511.7 Net Sales $378.2 $315.6 % Change vs. '20 (6.8%) % Change vs. '20 19.8% Operating Profit (Loss) $26.6 ($5.9) Operating Profit (Loss) $49.1 $25.0 Operating Margin % 5.6%
Slide 19: 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 20: 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 21: 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, in
Slide 22: 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 23: 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 24: 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. Mar '21 Dec '20 Sep '20 Jun '20 Mar '20 (1) Annualized effective tax rate, as adjusted 17.8 % 18.
Slide 25: Glossary: ROIC Continued
Glossary: ROIC Continued USD Millions Three months Three months Three months Three months ended 3/31/21 ended 12/31/20 ended 9/30/20 ended 6/30/20 Reconciliation of income (loss) from operations: Income (loss) from operations, as reported $ 61.5 $ 31.6 36.5 7.4 Adjustments: (Income) loss from TFS (6
Slide 26: 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