Q2 2025 Earnings Conference Call July 31, 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 F ...

[Executive Summary](index=1&type=section&id=Executive%20Summary) [Q2 2025 Performance Highlights](index=1&type=section&id=Q2%202025%20Performance%20Highlights) Terex reported **Q2 2025 sales of $1.5 billion**, up **7.6%** year-over-year, with adjusted EPS at **$1.49** Q2 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $1.5B | $1.38B | +7.6% | | Operating Profit (GAAP) | $129M | $193M | -33.2% | | Operating Margin (GAAP) | 8.7% | 14.0% | -530 bps | | Adjusted Operating Profit | $164M | $195M | -15.9% | | Adjusted Operating Margin | 11.0% | 14.1% | -310 bps | | EPS (GAAP) | $1.09 | $2.08 | -47.6% | | Adjusted EPS | $1.49 | $2.16 | -31.0% | - Bookings of **$1.1 billion** grew **19%** year-over-year on a pro forma basis, with a book-to-bill ratio of **73%**, consistent with seasonal patterns[6](index=6&type=chunk) - Excluding the contribution from the new Environmental Solutions Group (ESG), legacy revenue declined by **12%** year-over-year, driven by channel adjustments and backlog conversion timing[6](index=6&type=chunk) - The Board of Directors authorized a new **$150 million** share repurchase program, signaling confidence in the company's long-term strategy[5](index=5&type=chunk)[11](index=11&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlighted strong ES performance offsetting Aerials headwinds, while maintaining the full-year EPS outlook - CEO Simon Meester emphasized that the Environmental Solutions segment's strong sales and margin performance more than offset headwinds in Aerials[3](index=3&type=chunk) - CFO Jennifer Kong-Picarello highlighted strong free cash flow generation of **$78 million**, achieving a **108%** cash conversion rate in Q2[12](index=12&type=chunk)[13](index=13&type=chunk) - The healthy backlog and **19%** year-over-year pro forma booking growth support the sales outlook for the second half of the year[13](index=13&type=chunk) - The company is maintaining its full-year EPS outlook of **$4.70 to $5.10**, assuming tariffs remain broadly at current rates[13](index=13&type=chunk) [Business Segment Review](index=2&type=section&id=Business%20Segment%20Review) [Aerials Segment](index=2&type=section&id=Aerials) Aerials segment **net sales declined 17.1% to $607 million**, with operating margin at **7.6%**, impacted by reduced rental capex Aerials Segment Q2 Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $607M | $732M | -17.1% | | Operating Profit | $46M | $115M | -60.0% | | Operating Margin | 7.6% | 15.7% | -810 bps | | Adjusted Operating Profit | $49M | $115M | -57.4% | | Adjusted Operating Margin | 8.0% | 15.7% | -770 bps | - The sales decline was driven by rental customers deploying less capex and focusing on replacement requirements Sales to independent rental customers were down proportionately more than to national customers[12](index=12&type=chunk) [Materials Processing (MP) Segment](index=2&type=section&id=Materials%20Processing) MP segment **net sales declined 9.0% to $454 million**, with operating margin at **10.8%**, due to lower channel and end-market demand Materials Processing Segment Q2 Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $454M | $499M | -9.0% | | Operating Profit | $49M | $77M | -36.4% | | Operating Margin | 10.8% | 15.4% | -460 bps | | Adjusted Operating Profit | $58M | $78M | -25.6% | | Adjusted Operating Margin | 12.7% | 15.6% | -290 bps | - The sales decline was attributed to lower channel requirements and end-market demand across most product lines and geographies[12](index=12&type=chunk) [Environmental Solutions (ES) Segment](index=2&type=section&id=Environmental%20Solutions) ES segment delivered strong results with **net sales of $430 million**, up **12.9%** pro forma, and an adjusted operating margin of **19.1%** Environmental Solutions Segment Q2 Performance | Metric | Q2 2025 | Q2 2024 (Pro Forma) | Change | | :--- | :--- | :--- | :--- | | Net Sales | $430M | $381M (Est.) | +12.9% | | Operating Profit | $61M | $19M | +221.1% | | Operating Margin | 14.2% | 12.5% | +170 bps | | Adjusted Operating Profit | $82M | N/A | N/A | | Adjusted Operating Margin | 19.1% | 16.8% (Est.) | +230 bps | - Growth was driven by strong delivery of refuse collection vehicles (RCVs) and strong book-to-bill installs in Terex Utilities[12](index=12&type=chunk) [Financial Position and Capital Allocation](index=2&type=section&id=Financial%20Position%20and%20Capital%20Allocation) [Liquidity and Cash Flow](index=2&type=section&id=Strong%20Liquidity) Terex maintained **$1.2 billion** in liquidity and generated **$78 million** in free cash flow, achieving a **108%** cash conversion rate - Total liquidity was **$1.2 billion** as of June 30, 2025[12](index=12&type=chunk) Q2 Cash Flow Performance | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Free Cash Flow | $78M | $43M | | Cash Conversion Rate | 108% | 30% | [Capital Allocation](index=2&type=section&id=Capital%20Allocation) Company deployed **$24 million** in capex, returned **$75 million** to shareholders, and authorized a new **$150 million** share repurchase program - A new share repurchase program of up to **$150 million** was authorized by the Board of Directors[11](index=11&type=chunk) - Year-to-date through June 30, 2025, Terex returned **$75 million** to shareholders via dividends and buybacks[12](index=12&type=chunk) - The company repurchased **1.4 million** shares at an average price of **$38.74** per share[12](index=12&type=chunk) [Full-Year 2025 Outlook](index=3&type=section&id=Full-Year%202025%20Outlook) [Full-Year 2025 Guidance](index=3&type=section&id=Full-Year%202025%20Guidance) Terex maintained its full-year 2025 guidance, projecting **net sales between $5.3 billion and $5.5 billion** and adjusted EPS of **$4.70 to $5.10** Full-Year 2025 Financial Outlook | Metric | 2025 Outlook | | :--- | :--- | | Net Sales | $5,300M - $5,500M | | Segment Operating Margin (Adjusted) | ~12% | | EBITDA (Adjusted) | ~$640M | | EPS (Adjusted) | $4.70 - $5.10 | | Free Cash Flow | $300M - $350M | | FCF Conversion | >120% | 2025 Segment Net Sales Outlook vs. 2024 Baseline | Segment | 2024 Baseline | 2025 Outlook | | :--- | :--- | :--- | | Aerials | $2,410M | Down low double-digits (LDD) | | Materials Processing | $1,902M | Down high single-digits (HSD) | | Environmental Solutions | $1,500M | Up low double-digits (LDD) | [Financial Statements](index=6&type=section&id=Financial%20Statements) [Condensed Consolidated Statement of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Operations) Q2 2025 net sales increased to **$1.487 billion**, but operating profit declined to **$129 million**, resulting in diluted EPS of **$1.09** Q2 Statement of Operations (in millions, except EPS) | Account | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net sales | $1,487 | $1,382 | | Gross profit | $291 | $329 | | Operating profit | $129 | $193 | | Net income | $72 | $141 | | Diluted EPS | $1.09 | $2.08 | [Condensed Consolidated Balance Sheet](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheet) As of June 30, 2025, total assets were **$6.152 billion**, total liabilities **$4.187 billion**, and stockholders' equity **$1.965 billion** Balance Sheet Summary (in millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total current assets | $2,684 | $2,320 | | Total assets | $6,152 | $5,730 | | Total current liabilities | $1,293 | $1,073 | | Long-term debt | $2,583 | $2,580 | | Total liabilities | $4,187 | $3,898 | | Total stockholders' equity | $1,965 | $1,832 | [Condensed Consolidated Statement of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) Net cash from operating activities for YTD Q2 2025 was **$81 million**, leading to a **$14 million** decrease in cash and equivalents Six-Month Cash Flow Summary (in millions) | Account | YTD Q2 2025 | YTD Q2 2024 | | :--- | :--- | :--- | | Net cash from operating activities | $81 | $33 | | Net cash from investing activities | ($38) | ($52) | | Net cash from financing activities | ($84) | ($23) | | Net change in cash | ($14) | ($52) | | Cash at end of period | $374 | $319 | [Segment Results Disclosure](index=9&type=section&id=Segment%20Results%20Disclosure) Q2 2025 segment sales: Aerials **$607 million** (7.6% margin), MP **$454 million** (10.8% margin), and ES **$430 million** (14.2% margin) Q2 2025 Segment Performance (in millions) | Segment | Net Sales | % of Total | Operating Profit | Operating Margin | | :--- | :--- | :--- | :--- | :--- | | Aerials | $607 | 40.8% | $46 | 7.6% | | MP | $454 | 30.5% | $49 | 10.8% | | ES | $430 | 28.9% | $61 | 14.2% | | **Consolidated** | **$1,487** | **100%** | **$129** | **8.7%** | [Appendix: Non-GAAP Reconciliations](index=10&type=section&id=Appendix%3A%20Non-GAAP%20Reconciliations) [GAAP to Non-GAAP Reconciliation](index=11&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliation) Q2 2025 adjustments of **$35 million** increased operating profit from **$129 million** (GAAP) to **$164 million** (non-GAAP) and EPS to **$1.49** Q2 2025 GAAP to Non-GAAP Reconciliation Summary (in millions) | Metric | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Operating Profit | $129 | $35 | $164 | | Operating Margin | 8.7% | | 11.0% | | Net Income | $72 | $26 | $98 | | EPS | $1.09 | $0.40 | $1.49 | [Segment Adjusted Operating Profit Reconciliation](index=13&type=section&id=Segment%20Adjusted%20Operating%20Profit%20Reconciliation) Q2 2025 segment adjustments led to adjusted operating margins of **8.0%** for Aerials, **12.7%** for MP, and **19.1%** for ES Q2 2025 Segment Operating Profit Reconciliation (in millions) | Segment | Operating Profit (GAAP) | Adjustments | Adjusted Operating Profit | | :--- | :--- | :--- | :--- | | Aerials | $46 | $3 | $49 | | MP | $49 | $9 | $58 | | ES | $61 | $21 | $82 | [Return on Invested Capital (ROIC)](index=14&type=section&id=Return%20on%20Invested%20Capital%20%28ROIC%29) Terex reported a Return on Invested Capital (ROIC) of **12.3%** as of June 30, 2025, reflecting effective capital utilization - The company's ROIC was **12.3%** as of June 30, 2025[44](index=44&type=chunk)[46](index=46&type=chunk) - ROIC is calculated using adjusted NOPAT of **$421 million** over the last four quarters and average invested capital of **$3.414 billion** over the last five quarters[46](index=46&type=chunk)

Core Insights - Terex Corporation reported strong financial performance in Q2 2025, driven by the Environmental Solutions segment, which exceeded expectations despite challenges in the Aerials segment [2][5][6] - The company maintains its full-year adjusted EPS outlook of $4.70 to $5.10, reflecting confidence in its growth strategy and operational resilience [8][9] Financial Performance - Net sales for Q2 2025 were $1.5 billion, a 7.6% increase from Q2 2024, with adjusted operating profit at $164 million, or 11.0% of net sales [5][6][29] - Net income was $72 million, or $1.09 per share, compared to $141 million, or $2.08 per share in the same quarter last year [6][22] - The company generated strong free cash flow of $78 million, up from $43 million in the prior year, achieving a cash conversion rate of 108% [6][8] Business Segment Performance - The Aerials segment reported net sales of $607 million, down 17.1% year-over-year, with an operating profit margin of 7.6% [6][29] - Materials Processing segment net sales were $454 million, down 9.0% year-over-year, with an operating profit margin of 10.8% [6][29] - Environmental Solutions segment net sales increased by 12.9% year-over-year to $430 million, with an operating profit margin of 14.2% [6][29] Strategic Initiatives - The Board of Directors authorized a new share repurchase program of up to $150 million, reflecting the company's commitment to returning capital to shareholders [7] - The company continues to focus on long-term organic growth while balancing capital allocation strategies [8] Outlook - For the full year 2025, Terex expects net sales between $5.3 billion and $5.5 billion, with a segment operating margin of approximately 12% [9][10] - The company anticipates a healthy backlog and normal seasonal booking patterns to support its sales outlook for the second half of the year [8]

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 offers products that support renewable energy and aid in the recovery of useful materials from various types of waste [3] Financial Results Announcement - Terex Corporation will host a conference call to review its second quarter 2025 financial results on July 31, 2025, at 8:30 a.m. Eastern Time [1] - The financial results will be available on the company's investor relations website prior to the call [1]

Core Viewpoint - Terex Corp. (TEX) is given a sell rating due to significant macroeconomic challenges, particularly in its legacy MP and Aerials segments, and the current forward P/E valuation of 9.5x is deemed insufficient [1] Company Analysis - The investment approach emphasizes understanding the core economics of a business, including competitive moat, unit economics, reinvestment opportunities, and management quality, which are crucial for long-term free cash flow generation and shareholder value creation [1] - The focus is on sectors with strong secular tailwinds, indicating a preference for industries that are expected to grow over time [1] Investment Philosophy - The analysis is rooted in fundamental research, aiming to identify businesses with potential for scaling and unlocking significant terminal value [1] - The goal is to provide insights that help investors concentrate on factors that drive long-term equity value [1]

Group 1 - The article discusses the impact of the acquisition of the Environmental Solutions Group by Terex (NYSE: TEX) from Dover (DOV), indicating that this acquisition aimed to create a more diversified business for Terex [1] - It is noted that the timing of the acquisition coincided with a period of softness in Terex's shares, suggesting potential challenges in the market environment following the deal [1] - The investing group "Value In Corporate Events" provides insights and actionable ideas related to major corporate events such as earnings reports, M&A, and IPOs, with a focus on identifying the best investment opportunities [1] Group 2 - The article emphasizes that the coverage includes 10 major events per month, highlighting the group's commitment to finding lucrative investment opportunities in the corporate sector [1] - There is a mention of the group's services being available through a premium subscription, which includes a free trial for potential members [1] - The analyst's disclosure states that there are no current stock or derivative positions in the companies mentioned, indicating an unbiased perspective in the analysis provided [1]

Core Insights - Terex's international operations are crucial for understanding its financial strength and growth potential, especially given the interconnected global economy [2][3] - The company's total revenue for the quarter ending March 2025 was $1.23 billion, reflecting a year-over-year decline of 4.9% [4] International Revenue Breakdown - Western Europe generated $162 million in revenue, accounting for 13.18% of total revenue, which was a significant miss of -33.91% compared to the projected $245.13 million [5] - Asia-Pacific contributed $102 million, representing 8.30% of total revenue, also falling short by -24.6% against the consensus estimate of $135.27 million [6] Revenue Forecasts - For the current fiscal quarter, total revenue is projected to reach $1.46 billion, an increase of 5.5% from the same quarter last year, with Western Europe expected to contribute 16.5% ($240.62 million) and Asia-Pacific 12.2% ($178.16 million) [7] - For the full year, total revenue is anticipated to be $5.32 billion, indicating a rise of 3.7% from the previous year, with Western Europe at 14.9% ($794.87 million) and Asia-Pacific at 11.8% ($629.27 million) [8] Market Context - The reliance on international markets presents both opportunities and risks, making it essential to monitor international revenue trends for forecasting the company's prospects [9] - Analysts are increasingly focused on international developments and their impact on earnings estimations, influenced by local market conditions [10]

Investment Rating - The industry investment rating is "Positive" and maintained [11] Core Viewpoints - Overseas companies are actively responding to the impact of US tariffs through various strategies such as inventory preparation, supply chain adjustments, price increases, and internal cost control [10][19] - Different companies are experiencing varying degrees of price adjustments, with Stanley Black & Decker already implementing price increases and expecting further hikes in Q3, while others like Amazon and Rational have yet to raise prices but may need to do so to alleviate cost pressures [10][19] - Companies have generally stocked up on inventory before the tariffs took effect to mitigate cost pressures [10] Summary by Relevant Sections Tools Sector - Stanley Black & Decker plans to mitigate tariff impacts through supply chain adjustments, price increases, and collaboration with the US government. Approximately 15% of its supply chain is from China, and the company aims to adjust this over 12-24 months [17][19] - The company has already raised prices in April 2025 and anticipates further increases in Q3 2025 [17] Aerial Work Platforms - Oshkosh manufactures nearly all its products sold in the US domestically and is using supply chain adjustments and cost control to mitigate tariff impacts. The company reports healthy market demand and order levels [22][23] - Terex's Genie brand sources about 90% of its AWP products from the US and Mexico, and the company is also taking steps to minimize tariff impacts through inventory preparation and supply chain adjustments [28][30] Technology Sector - Apple expects limited impact from tariffs on its Q1 2025 performance, with a projected cost increase of $900 million due to tariffs. The majority of its products sold in the US will be sourced from India and Vietnam [40][41] - Amazon has not seen significant price increases in retail goods but anticipates potential price adjustments in the future to manage costs [44][45] Commercial Kitchen Equipment - Rational's products exported to the US are affected by a 10% additional tariff, but the company is focusing on efficiency improvements to avoid price increases. The company has not yet adjusted prices but may need to pass on some costs [51][52]

Core Viewpoint - Terex Corporation reported a significant decline in adjusted earnings per share, down 52% year-over-year, despite beating consensus estimates, indicating challenges in sales volume and production adjustments due to weak demand [1][2][3]. Financial Performance - Adjusted earnings per share were 83 cents, surpassing the Zacks Consensus Estimate of 49 cents, but down from $1.74 in the prior-year quarter [1][3]. - Total revenues decreased by 5% year-over-year to $1.23 billion, slightly above the Zacks Consensus Estimate of $1.22 billion [3]. - Including one-time items, earnings were reported at 31 cents per share, down from $1.60 in the same quarter last year [3]. Segment Performance - The Materials Processing segment saw revenues fall by 27% year-over-year to $382 million, with operating income down 50% [8]. - The Aerial Work Platforms segment generated revenues of $450 million, a 28% decline, with operating profit plunging 98% [9]. - The Environmental Services segment, including the recently acquired Environmental Solutions Group, reported revenues of $399 million and an operating profit of $56 million [9]. Cost and Margin Analysis - Cost of goods sold increased by 0.4% year-over-year to $999 million, while gross profit fell by 23% to $230 million [6]. - Adjusted operating profit was $111 million, down from $163 million in the previous year, with an adjusted operating margin of 9.1%, a contraction of 350 basis points [7]. Cash Flow and Shareholder Returns - As of March 31, 2025, cash and cash equivalents were $298 million, down from $388 million at the end of 2024 [10]. - The company returned $43 million to shareholders through share repurchases and dividends during the quarter [11]. Outlook - Terex expects sales in the Materials Processing segment to decline in high single digits from a baseline of $1.9 billion, and AWP segment revenues to decrease in low double digits from a baseline of $2.41 billion [12]. - Projected net sales for 2025 are in the range of $5.3 billion to $5.5 billion, indicating a year-over-year growth of 6% at the midpoint [12]. - Adjusted earnings per share are expected to be between $4.70 and $5.10, reflecting a 20% drop at the midpoint from the previous year's earnings of $6.11 [13]. Stock Performance - Terex's shares have declined by 33.5% over the past year, compared to a 7.1% decline in the industry [16].

Core Insights - Terex reported revenue of $1.23 billion for Q1 2025, a year-over-year decline of 4.9%, with EPS of $0.83 compared to $1.60 a year ago, indicating a significant drop in profitability [1] - The revenue exceeded the Zacks Consensus Estimate of $1.22 billion by 0.64%, while the EPS surprised positively by 69.39% against the consensus estimate of $0.49 [1] Financial Performance - Net sales for Aerial Work Platforms (AWP) were $450 million, surpassing the average estimate of $431.38 million, but reflecting a year-over-year decline of 41.8% [4] - Net sales for Materials Processing & Mining (MP) were $382 million, slightly below the average estimate of $401.61 million, with a year-over-year decline of 26.5% [4] - Net sales for Corporate and Other / Eliminations were -$2 million, compared to an average estimate of $0.24 million, showing a year-over-year increase of 900% [4] - Net sales for ESG were $399 million, slightly above the estimated $389.63 million [4] Operational Metrics - Income from Operations for AWP was $2 million, significantly lower than the average estimate of $17.14 million [4] - Income from Operations for MP was $36 million, exceeding the average estimate of $28.10 million [4] - Income from Operations for Corporate and Other / Eliminations was -$25 million, worse than the average estimate of -$18.87 million [4] - Income from Operations for ESG was $56 million, below the average estimate of $65.71 million [4] Stock Performance - Terex shares returned +1.6% over the past month, outperforming the Zacks S&P 500 composite, which declined by -0.5% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]