Terex Reports Strong First Quarter 2024 Results; Raises Full-Year Outlook

"Terex delivered excellent first quarter results, achieving sales growth and margin expansion versus the prior year," said Simon Meester, Terex President and Chief Executive Officer. "The Terex team continues to perform at a high level and demonstrate the power of its focused strategy and its proven ability to create value."

"We are raising our full-year outlook to reflect our strong first quarter performance, while also prudently planning for continued softness in Europe over the balance of the year." Meester continued, "Overall, customer demand remains strong for Terex's differentiated products as evidenced by our robust backlog. In addition, we are advancing our new product initiatives to bolster the Company's portfolio of market-leading businesses that will continue to benefit from megatrends over the coming years. We are focused on accelerating our profitable growth strategy and are committed to delivering strong performance through the cycle."

First Quarter Operational and Financial Highlights

• Net sales of $1.3 billion increased 4.6%, up from $1.2 billion in the first quarter of 2023. The increase was primarily driven by continued demand for our products across multiple businesses.
• Income from operations of $158.3 million, or 12.2% of net sales improved from $147.7 million, or 12.0% of net sales during the prior year. The year-over-year increase of $10.6 million was primarily due to incremental profit achieved on higher sales volume, improved manufacturing throughput and disciplined price-cost management.
• Income from continuing operations was $108.5 million, or $1.60 per share, compared to $109.9 million, or $1.60 per share, in the first quarter of 2023.
• Return on invested capital was 27.6%, up 370 bps from the prior year and significantly exceeded our cost of capital.

Business Segment Review

Materials Processing

• Net sales of $520.0 million were down 6.1% or $33.8 million year-over-year, primarily driven by lower end-market demand for material handling equipment and cranes in Europe, partially offset by growth for aggregates in North America.
• Income from operations decreased to $72.1 million or 13.9% of net sales, compared to $85.3 million, or 15.4% of net sales, in the prior year. The decrease was primarily due to the impact of lower sales volume and net unfavorable product mix.

Aerial Work Platforms

• Net sales of $772.7 million were up 12.7% or $86.8 million year-over-year. The increase was primarily driven by higher demand, as well as improved supply chain and manufacturing performance.
• Income from operations increased to $107.3 million or 13.9% of net sales, compared to $83.1 million, or 12.1% of net sales in the prior year. The increase was primarily due to incremental profit achieved on higher sales volume, improved manufacturing throughput and disciplined price-cost management.

Strong Balance Sheet and Liquidity

• As of March 31, 2024, the Company had liquidity (cash and availability under our revolving line of credit) of $866 million and net leverage of 0.5x.
• Terex deployed $35 million for capital expenditures during the first quarter of 2024 to support business growth.

CFO Commentary

Julie Beck, Senior Vice President and Chief Financial Officer, said "We expanded total company operating margin by 20 bps compared to last year and delivered ROIC of more than 27%. We expect a significant step-up in free cash flow over the balance of the year and remain on-track to generate more than $300 million of free cash flow for a second consecutive year. The strength of our balance sheet and expected cash flow provide significant capacity to fuel our strategic growth initiatives and return capital to shareholders."

Full-Year 2024 Outlook

(in millions, except per share data)

Non-GAAP Measures and Other Items

Results of operations reflect continuing operations. All per share amounts are on a fully diluted basis.  A comprehensive review of the quarterly financial performance is contained in the presentation that will accompany the Company's earnings conference call.

In this press release, Terex refers to various GAAP (U.S. generally accepted accounting principles) and non-GAAP financial measures. These non-GAAP measures may not be comparable to similarly titled measures being disclosed by other companies. Terex believes that this non-GAAP information is useful to understanding its operating results and the ongoing performance of its underlying businesses. 

The Glossary at the end of this press release contains further details about this subject.

Conference call

The Company has scheduled a conference call to review the financial results on Friday, April 26, 2024 beginning at 8:30 a.m. ET.  Simon A. Meester, President and CEO, and Julie Beck, Senior Vice President and Chief Financial Officer, will host the call. A simultaneous webcast of this call can be accessed at https://investors.terex.com. Participants are encouraged  to access the call 15 minutes prior to the starting time. The call will also be archived in the Event Archive at https://investors.terex.com. 

Forward-Looking Statements

Certain information in this press release 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 Form 10-K for the year ended December 31, 2023, and subsequent reports we file with the U.S. Securities and Exchange Commission from time to time, in the sections entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations – Contingencies and Uncertainties."  In addition, when included in this press release the words "may," "expects," "should," "intends," "anticipates," "believes," "plans," "projects," "estimates," "will" and the negatives thereof and analogous or similar expressions are intended to identify forward-looking statements.  However, the absence of these words does not mean that the statement is not forward-looking.  We have based these forward-looking statements on current expectations and projections about future events.  These statements are not guarantees of future performance.  Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those reflected in such forward-looking statements.  Such risks and uncertainties, many of which are beyond our control, include, among others:

• our operations are subject to a number of potential risks that arise from operating a multinational business, including political and economic instability and compliance with changing regulatory environments;
• changes in the availability and price of certain materials and components, which may result in supply chain disruptions;
• consolidation within our customer base and suppliers;
• our business may suffer if our equipment fails to perform as expected;
• a material disruption to one of our significant facilities;
• our business is sensitive to general economic conditions, government spending priorities and the cyclical nature of markets we serve;
• our consolidated financial results are reported in U.S. dollars while certain assets and other reported items are denominated in the currencies of other countries, creating currency exchange and translation risk;
• our need to comply with restrictive covenants contained in our debt agreements;
• our ability to generate sufficient cash flow to service our debt obligations and operate our business;
• our ability to access the capital markets to raise funds and provide liquidity;
• the financial condition of customers and their continued access to capital;
• exposure from providing credit support for some of our customers;
• we may experience losses in excess of recorded reserves;
• our industry is highly competitive and subject to pricing pressure;
• our ability to integrate acquired businesses;
• our ability to successfully implement our strategy and the actual results derived from such strategy;
• increased cybersecurity threats and more sophisticated computer crime;
• increased regulatory focus on privacy and data security issues and expanding laws;
• our ability to attract, develop, engage and retain team members;
• possible work stoppages and other labor matters;
• litigation, product liability claims and other liabilities;
• changes in import/export regulatory regimes, imposition of tariffs, escalation of global trade conflicts and unfairly traded imports, particularly from China, could continue to negatively impact our business;
• compliance with environmental regulations could be costly and failure to meet sustainability expectations or standards or achieve our sustainability goals could adversely impact our business;
• our compliance with the U.S. Foreign Corrupt Practices Act and similar worldwide anti-corruption laws;
• our ability to comply with an injunction and related obligations imposed by the U.S. Securities and Exchange Commission; and
• other factors.

Actual events or our actual future results may differ materially from any forward-looking statement due to these and other risks, uncertainties and material factors.  The forward-looking statements contained herein speak only as of the date of this press release.  We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained in this press release to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

About Terex

Terex Corporation is a global manufacturer of materials processing machinery and aerial work platforms. We design, build and support products used in maintenance, manufacturing, energy, recycling, minerals and materials management, and construction applications.  Certain Terex products and solutions enable customers to reduce their impact on the environment including electric and hybrid offerings that deliver quiet and emission-free performance, products that support renewable energy, and products that aid in the recovery of useful materials from various types of waste. Our products are manufactured in North America, Europe, Australia and Asia and sold worldwide.  We engage with customers through all stages of the product life cycle, from initial specification to parts and service support. We report our business in the following segments: (i) Materials Processing and (ii) Aerial Work Platforms.

Contact Information

Neil Frohnapple
Vice President, Investor Relations
Phone: 440-334-7947  
Email: neil.frohnapple@terex.com