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June 5, 2014
Deutsche Bank Global Industrials and Basic Materials Conference
Forward-Looking Statements & Non-GAAP Measures
This presentation contains forward-looking information regarding future events or the Company’s future financial performance based on the current expectations of Terex Corporation. In addition, when included in this presentation, the words “may,” “expects,” “intends,” “anticipates,” “plans,” “projects,” “estimates” 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. The Company has based these forward-looking statements on current expectations and projections about future events. These statements are not guarantees of future performance.
Because forward-looking statements involve risks and uncertainties, actual results could differ materially. Such risks and uncertainties,
many of which are beyond the control of Terex, include among others: Our business is cyclical and weak general economic conditions
affect the sales of our products and financial results; our ability to successfully integrate acquired businesses; the 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; our business is sensitive to government
spending; our business is very competitive and is affected by our cost structure, pricing, product initiatives and other actions taken by
competitors; our ability to timely manufacture and deliver products to customers; our retention of key management personnel; the financial
condition of suppliers and customers, and their continued access to capital; our providing financing and credit support for some of our
customers; we may experience losses in excess of recorded reserves; impairment in the carrying value of goodwill and other indefinite-
lived intangible assets; our ability to obtain parts and components from suppliers on a timely basis at competitive prices; our business is
global and subject to changes in exchange rates between currencies, regional economic conditions and trade restrictions; our operations
are subject to a number of potential risks that arise from operating a multinational business, including compliance with changing
regulatory environments, the Foreign Corrupt Practices Act and other similar laws and political instability; a material disruption to one of
our significant facilities; possible work stoppages and other labor matters; compliance with changing laws and regulations, particularly
environmental and tax laws and regulations; litigation, product liability claims, patent claims, class action lawsuits and other liabilities; our
ability to comply with an injunction and related obligations resulting from the settlement of an investigation by the United States Securities
and Exchange Commission (“SEC”); our implementation of a global enterprise resource planning system and its performance; and other
factors, risks and uncertainties that are more specifically set forth in our public filings with the SEC. Non-GAAP Measures: Terex from time to time refers to various non-GAAP (generally accepted accounting principles) financial measures in this presentation. Terex believes that this information is useful to understanding its operating results and the ongoing performance of its underlying businesses without the impact of special items. See the appendix at the end of this presentation as well as the Terex first quarter 2014 earnings release on the Investor Relations section of our website www.terex.com for a description and/or reconciliation of these measures.
2
Defining Who We Are
Lifting & Material Handling Solutions Company
Focused on Operational Improvement
Leader in Product Categories
Geographically Diverse
Cash Generator
Profitable
3
Why Invest in Terex?
• Growth in sales is expected to
accelerate in the next 2 to 3 years
• Margins should continue to improve
through initiatives and volume
• Committed to deploying capital
intelligently and efficiently
• Near term performance
expectations are positive
4
Adjusted EPS for Q1-14 of $0.28 vs. Q1-13 of $0.22 (Reported was $0.28 vs. $0.17)
Performance was mixed in the quarter
• Net sales flat and slight improvement in operating margins
• AWP delivered record first quarter sales and strong operating profit
• Construction, MP and MHPS performed inline with expectations
• Cranes performance was disappointing; backlog is improving
• Order activity and backlog improving across the Company
Free cash flow of $6 million in the quarter
Reaffirm 2014 guidance of $2.50 to $2.80 EPS, and free cash flow of $200 to $250
million
First Quarter Results
5
Terex Cranes (USD Millions)
Higher bookings and
book-to-bill ratio
indicative of an improved
second half of 2014
Trailing 6-month sales and
bookings comparison
passed the inflection point
early first quarter
6
Terex Book-to-Bill Trend (USD Millions)
7
Significant Sales Growth Expected
• Terex net sales are at 65% of prior peak…. Significant growth potential ahead
as markets improve
Note: Includes history for businesses acquired during the period (based on best-available data from predecessor companies)
and excludes the results of any divested businesses
• AWP category is growing worldwide. Is at 90% of prior peak in
2013, but Europe only at ~40% and ROW is growing
• Percentage of prior peak: MP 57%, Cranes 59%, MHPS 70%,
Construction 45%
8
Global Reach – Positioned for Growth
• Improvement in North America driving general improvement in results
• Well positioned in Europe in advance of expected recovery
• Continuing focus on U.S. recovery and on steady, higher margin growth in
other regions
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
2005 2006 2007 2008 2009 2010 2011 2012 2013
North America : Pro Forma Sales by Year ($M)
24% CAGR since '09
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
$5,000
2005 2006 2007 2008 2009 2010 2011 2012 2013
Western Europe: Pro Forma Sales by Year ($M)
Finding Bottom after"Double Dip"
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
2005 2006 2007 2008 2009 2010 2011 2012 2013
ROW: Pro Forma Sales by Year ($M)
Continuing to focus on profitable growth
Sales shown are on a pro forma basis to show underlying trends in all current businesses over time; data are per best available historical information
9
2014 Outlook
* 2013 adjusted- Please see the reconciliations to GAAP provided in the appendix attached to this presentation.
** Outlook excludes the impact of future acquisitions, restructuring and other unusual items, as reiterated 5/1/2014 (1) Free Cash Flow = Cash from operations less capital expenditures
2013 2013 2014
Reported Adjusted* Outlook**
Net Sales $7,084 $7,084 $7,300 – 7,700
Operating Margin 5.9% 6.8% 7.5 - 8.5%
EPS (cont. ops) $1.78 $2.23 $2.50 – 2.80
Interest / Other Expense $128 $119 $125 - 130
Tax Rate 30% 29% 33 – 35%
Depreciation / Amortization $144 $144 $145 - 150
Free Cash Flow (1) $106 $200 - 250
Share Count 117 million 117 million ~118 million
(USD Millions, except Earnings per Share)
10
Goals – Where We Are Heading
• It is expected the market will remain steady through
the first half of 2014 with improvements in the second
half of the year
• Remain focused on execution of internal initiatives to
drive EPS and ROIC growth
• Significant upside potential to performance with end
market improvement in North America and Europe
• $5+ EPS goal still appropriate, but more likely in 2016
11
Questions?
Continuing Operations Results
* Please see reconciliation to US GAAP provided in the appendix attached to this presentation .
USD in Millions, except Earnings per Share Q1 2014 Q1 2013 Q1 2013
As Reported As Adjusted* As Reported
Net Sales $1,654.6 $1,653.7 $1,653.7
% Change Q1 2013 0.1%
Gross Profit $333.4 $324.4 $321.2
Gross Margin 20.1% 19.6% 19.4%
SG&A $258.4 $252.7 $255.6
% Net Sales 15.6% 15.3% 15.5%
Income From Operations $75.0 $71.7 $65.6
Operating Margin 4.5% 4.3% 4.0%
Other Income/ (Expense) ($32.0) ($30.6) ($33.3)
Effective Tax Rate 26.7% 42.8% 45.2%
Earnings per Share $0.28 $0.22 $0.17
Net Working Capital $1,828.6 $1,699.7
As a % of annualized sales 27.6% 25.7%
ROIC 8.6% 7.2%
13
Segment Guidance*
USD Millions 2013 Reported 2014 Percentage Growth
AWP $2,131 High single digit/
low double digit growth
Construction $820 Flat sales
Cranes $1,926 Low single digit growth
MHPS $1,698 Low double digit growth
MP $628 Mid single digit growth
Total $7,084 $7,300 - 7,700
* Guidance for segments as of 2/19/2014 14
* Guidance for segments as of 2/19/2014
** Reflects the exclusion of certain items. Please see the reconciliations to GAAP provided in the appendix of this presentation.
*** Outlook excludes restructuring and unusual items.
USD Millions 2013 2013 Margin
2014 Margin Outlook*** (Adjusted**) (Adjusted*)
AWP $328 15.4% Stable
Mid-teens
Construction ($22) (2.7)% Continued Improvement
Breakeven
Cranes $121 6.3% Moderate Improvement
Mid/ upper single digits
MHPS $4 0.3% Solid Improvement Low/ mid single digits
MP $72 11.4% Stable
Low double digits
Total $480 6.8% 7.5% – 8.5%
Segment Guidance*
15
Net Sales Bridge Q1-13 to Q1-14
16
Net Sales remained flat versus prior year
• AWP’s record first quarter was fueled by growth in North America, Europe and the Middle East
• Cranes sales were below Q1 2013 levels in most regions, except Europe
• MHPS grew in North America and Europe, with the delivery of some of the major port
automation projects
Operating Profit Bridge Q1-13 to Q1-14
17
Operating profit up 4.6%; slight improvement in operating margins
versus prior year
• AWP increased profitability on higher sales while maintaining strong margins
• Construction losses narrow compared to prior year
• Cranes performance disappointing with lower than expected sales volume, decline in margin
driven in part by underutilized factories, and increased Tier IV engineering costs
• MHPS reduced losses as sales volume improved and cost reductions took effect
Backlog Bridge
Prior Year
Mar 13 to Mar 14
Sequential
Dec 13 to Mar 14
18
Backlog Trend (USD Millions)
19
FY 2013 Adjustments
FY 2013 As Reported
Debt
Reduction
Roadbuilding
Related
Restructuring &
Related Items
Redeemable
NCI FY 2013
As Adjusted
Net Sales $7,084.0 - - - - $7,084.0
Gross Profit 1,439.5 - 3.2 29.0 - 1,471.7
SG&A (1,020.4) - 0.2 28.6 - (991.6)
Income from Operations 419.1 - 3.4 57.6 - 480.1
Interest Expense - Net (119.4) - - - - (119.4)
Other Income (Expense) (8.4) 5.2 2.7 4.5 (3.1) 0.9
Provision for Inc. Taxes (87.4) (1.7) (2.2) (14.2) - (105.5)
Non-controlling Interest 5.1 - - - - 5.1
Income from Cont. Ops. $209.0 3.5 3.9 47.9 (3.1) $261.2
Earnings per share $1.79 0.03 0.03 0.41 (0.03) $2.23
(USD Millions, except Earnings
per Share)
20
FY 2012 Adjustments
FY 2012
As Reported
Acquisition
Note Write
Down
Debt
Reduction
Restructuring &
Related RB Sale
Other
Items
FY 2012
As Adjusted
Net Sales $6,982.2 - - - - - 6,982.2
Gross Profit 1,400.1 - - 17.0 12.3 7.7 1,437.1
SG&A (1,033.3) 12.3 - 12.5 3.0 3.1 (1,002.4)
Income (Loss) from
Operations 366.8 12.3 - 29.5 15.3 10.8 434.7
Interest Income (Expense) -
Net (155.8) - - - - - (155.8)
Other Income (Expense) (84.7) - 80.6 - - - (4.1)
(Provision for) benefit from
Income Taxes (51.5) (28.6) (10.0) (5.3) (2.1) (97.5)
Non-controlling Interest 2.2 - - - - - 2.2
Income (Loss) from
Continuing Operations $77.0 12.3 52.0 19.5 10.0 8.7 $179.5
Earnings per share $0.68 0.11 0.46 0.17 0.09 0.07 $1.58
(USD Millions, except Earnings
per Share)
21
Income from Operations Segment
* Reflects the exclusion of certain items. Please see the reconciliations to GAAP provided in the appendix of this presentation.
USD Millions 2013 Adjustments 2013
Reported Roadbuilding
Related
Restructuring &
Related (Adjusted*)
AWP $326 - $2 $328
Construction ($25) $4 ($1) ($22)
Cranes $111 - $10 $121
MHPS ($42) - $46 $4
MP $72 - - $72
Total $419 $4 $57 $480
22
Q1 2013 Adjustments
(USD Millions, except Earnings
per Share)
FY 2013 As Reported
Debt
Reduction
Roadbuilding
Related
Restructuring &
Related Items
Redeemable
NCI FY 2013
As Adjusted
Net Sales $7,084.0 - - - - $7,084.0
Gross Profit 1,439.5 - 3.2 29.0 - 1,471.7
SG&A (1,020.4) - 0.2 28.6 - (991.6)
Income from Operations 419.1 - 3.4 57.6 - 480.1
Interest Expense - Net (119.4) - - - - (119.4)
Other Income (Expense) (8.4) 5.2 2.7 4.5 (3.1) 0.9
Provision for Inc. Taxes (87.4) (1.7) (2.2) (14.2) - (105.5)
Non-controlling Interest 5.1 - - - - 5.1
Income from Cont. Ops. $209.0 3.5 3.9 47.9 (3.1) $261.2
Earnings per share $1.79 0.03 0.03 0.41 (0.03) $2.23
23
Adjusted OP by Segment – Q1 2013
USD in millions Q1 2013 MHPS Charge Q1 2013
As Reported As Adjusted
AWP$72.4 - - $72.4
Construction($14.5) $3.4 - ($11.1)
Cranes$32.5 - - $32.5
MHPS($29.1) - $2.7 ($26.4)
MP$11.7 - - $11.7
Corporate($7.4) - - ($7.4)
Consolidated $65.6 $3.4 $2.7 $71.7
Sale of
Roadbuilding
24
Q1 2013 ROIC Calculation
See reconciliation of adjusted amounts below on table following ROIC table. Amounts are as of and for the three months ended for the periods referenced in
the table below.
Provision for (benefit from) income taxes $ 14.6 $ (9.2) $ 7.4 $ 40.7
Divided by: Income (loss) before income taxes 32.3 (40.7) 32.9 112.0
Effective tax rate 45.2% 22.6% 22.5% 36.3%
Income (loss) from operations as adjusted $ 66.1 $ 21.4 $ 127.8 $ 162.5
Multiplied by: 1 minus Effective tax rate 54.8% 77.4% 77.5% 63.7%
Adjusted net operating income (loss) after tax $ 36.2 $ 16.6 $ 99.0 $ 103.5
Debt (as defined above) $ 2,082.5 $ 2,098.7 $ 2,063.8 $ 2,402.8 $ 2,608.5
Less: Cash and cash equivalents (729.7) (678.0) (542.6) (841.5) (973.2)
Debt less Cash and cash equivalents $ 1,352.8 $ 1,420.7 $ 1,521.2 $ 1,561.3 $ 1,635.3
Total Terex Corporation stockholders’ equity as adjusted $ 2,053.8 $ 2,103.7 $ 2,149.2 $ 2,089.2 $ 1,881.0
Debt less Cash and cash equivalents plus Total Terex
Corporation stockholders’ equity as adjusted$ 3,406.6 $ 3,524.4 $ 3,670.4 $ 3,650.5 $ 3,516.3
March 31, 2013 ROIC 7.2%
Adjusted net operating income (loss) after tax (last 4
quarters)$
255.3
Average Debt less Cash and cash equivalents plus
Total Terex Corporation stockholders’ equity as adjusted
(5 quarters)
$ 3,553.6
Reconciliation of loss from operations:
Income (loss) from operations as reported $ 65.6 $ 23.0 $ 127.1 $ 162.0
(Income) loss from TFS 0.5 (1.6) 0.7 0.5
Income (loss) from operations as adjusted $ 66.1 $ 21.4 $ 127.8 $ 162.5
Reconciliation of Terex Corporation stockholders’ equity:
Total Terex stockholders’ equity as reported $ 1,957.5 $ 2,007.7 $ 2,054.6 $ 1,989.6 $ 1,996.7
Less: TFS Assets (147.5) (150.9) (142.3) (129.9) (115.7)
Redeemable noncontrolling interest 243.8 246.9 236.9 229.5 0.0
Total Adjusted Stockholders' Equity $ 2,053.8 $ 2,103.7 $ 2,149.2 $ 2,089.2 $ 1,881.0
Jun '12 Mar '12
Mar '13 Dec '12 Sep '12 Jun '12 Mar '12
Mar '13 Dec '12 Sep '12
25