TEREX CORP Q3 FY2024 earnings call

• Simon welcomes everyone, highlights ESG acquisition as strategic fit reducing cyclicality. • Discusses core values, ESG team integration. • Julie details Q3 financials: net sales down 6%, gross profit margin 20.5%, SG&A down $7M, EPS $1.46, EBITDA $141M. • Talks about bookings and backlog trends, MP and AWP segment specifics, ESG acquisition financing, and full-year outlook including sales, EBITDA, and EPS ranges.

MP: Sales of $444 million, slightly lower than expected due to macro factors. Operating margin 13.3% impacted by lower volume and unfavorable mix, but offset by cost reduction actions. Backlog $371 million. AWP: Sales grew 2.4% y-o-y but lower than anticipated due to delivery adjustments. Margins affected by product mix and higher freight costs. Backlog $1.2 billion. ESG: Acquired, expected to add ~$40 million in EBITDA in Q4, backlog healthy with book-to-bill over 100% for last few quarters.

• Full-year sales forecast $5 billion to $5.2 billion, including ~$200 million from ESG. • EBITDA expected $635 million to $670 million, including ~$40 million Q4 from ESG. • EPS forecast $5.85 to $6.25. • MP sales ~$1.9 billion with margin 14.1% to 14.3%. • AWP sales ~$3 billion with operating margin 11.5% to 11.8%.

• Macro factors impacting MP such as European weakness, geopolitical concerns, and U.S. election. • Caution in AWP rental demand through fourth quarter and into 2025. • Shorter-term dynamics in some markets. • Interest rate uncertainty affecting local project deferrals.

Q: Typically, first production cut of downturn is hardest, and once production normalizes, we see decremental margins normalizing. Should we be at that level of decremental margins as we move into next year?

A: Julie notes AWP margins impacted in Q4 due to lower production rates, but trending back to normal targets next year. Simon adds MP and AWP taken channel adjustments, with ESG helping for 2025 targets.

Q: Any visibility on the timing of the ESG synergies going into the next year?

A: Julie says planning kicked off, expect $25 million in run rate synergies by end of 2026, some starting in 2025.

Q: Revenue guidance relative to September pre-announcement?

A: Julie states within margin of September outlook. Simon adds still within outlook margin.

Q: Organic growth rate in ESG for next few years?

A: Simon says safe to assume high-single-digits for ESG, utilities, with aerials and MP expected to be up/down in high-single-digits.