J.P. Morgan Global High Yield and
Leveraged Finance Conference

February 3, 2009
Forward Looking Statements &
 Non-GAAP Measures
The following presentation contains forward-looking information based on t...
Terex Is…

          •   A diversified portfolio of equipment businesses
          •   Positioned for continuing long - te...
Terex Is Diversified

         Diversified Portfolio of Equipment Businesses
                                             ...
Positioned for Long Term Trends

                                     2009 GDP Forecasts: October 2008 versus Current Peri...
Positioned For Long-Term Trends
               Global Non-Residential Construction                                        ...
Terex Is A Leader In Our Industry
$31.8

                  $22.0



                                $10.4
                ...
Leveraging The Power
Of One Company




                       • Our framework to
                         build a stronge...
Near Term Outlook Challenging


• Sales trends for AWP / Utilities (down 30%-40%),
 Construction / Roadbuilding (down 25%-...
Aerial Work Platforms
 $B
$2.5                                                      30%

                                 ...
Construction
  $B
                                                                            Current Environment
        ...
Cranes
  $B
                                                             30%
$2.5
                                        ...
Materials Processing & Mining
 $B
                                                                      Materials Processi...
Terex Response To Environment

• Focus on customers
   • Developing markets distribution development, large infrastructure...
Terex To Date:
Growth With Moderate Leverage
                                                                             ...
Terex Debt Profile

Major components of debt include:
       • $700 million Revolver - July 2012
       • $196 million Ter...
Summary


• Diversified portfolio – geographic and product
• Leadership position in over 75% of revenue base
• Positioned ...
Questions?




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terex 818CD3A3-66E7-4B54-8F3A-347B1F8B4D68_JPMorgan020309

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Transcript of "terex 818CD3A3-66E7-4B54-8F3A-347B1F8B4D68_JPMorgan020309"

  1. 1. J.P. Morgan Global High Yield and Leveraged Finance Conference February 3, 2009
  2. 2. Forward Looking Statements & Non-GAAP Measures The following presentation contains forward-looking information based on the current expectations of Terex Corporation. 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 highly cyclical and weak general economic conditions may affect the sales of its products and its financial results; our business is sensitive to fluctuations in interest rates and government spending; the ability to successfully integrate acquired businesses; the retention of key management personnel; our businesses are very competitive and may be affected by pricing, product initiatives and other actions taken by competitors; the effects of changes in laws and regulations; our business is international in nature and is subject to changes in exchange rates between currencies, as well as international politics; our continued access to capital and ability to obtain parts and components from suppliers on a timely basis at competitive prices; the financial condition of suppliers and customers, and their continued access to capital; our ability to timely manufacture and deliver products to customers; possible work stoppages and other labor matters; our debt outstanding and the need to comply with restrictive covenants contained in our debt agreements; our ability to maintain adequate disclosure controls and procedures, maintain adequate internal controls over financial reporting and file its periodic reports with the SEC on a timely basis; the previously announced investigations by the SEC and the Department of Justice; compliance with applicable environmental laws and regulations; product liability claims and other liabilities arising out of our business; and other factors, risks, uncertainties more specifically set forth in our public filings with the SEC. Actual events or the actual future results of Terex may differ materially from any forward looking statement due to those and other risks, uncertainties and significant factors. The forward-looking statements speak only as of the date of this presentation. Terex expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement included in this presentation to reflect any changes in expectations with regard thereto or any changes in events, conditions, or circumstances on which any such statement is based. 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 Investors section of our website www.terex.com for a complete reconciliation. 2
  3. 3. Terex Is… • A diversified portfolio of equipment businesses • Positioned for continuing long - term trends • A leader in our industry • Leveraging the Power of One Company AERIAL WORK MATERIALS PROC. CRANES PLATFORMS AND MINING ROADBUILDING AND CONSTRUCTION UTILITIES 3
  4. 4. Terex Is Diversified Diversified Portfolio of Equipment Businesses 2008 YTD Sales by Geography 2008 LTM* Sales by Segment RBU 7% Developing AWP Markets 22% W. Europe Construction 24% 32% 20% Japan / ANZ 9% Cranes USA / MP&M 27% Canada 24% 35% $ 10.4 billion $ 7.8 billion $ 10.4 billion $ 7.8 billion Balanced by business; Balanced geographically 4 * Last Twelve Months sales through Sep 30, 2008
  5. 5. Positioned for Long Term Trends 2009 GDP Forecasts: October 2008 versus Current Period % 2009 Global GDP outlook has worsened but remains positive for developing markets 5 *Source: The Economist (economic intelligence unit)
  6. 6. Positioned For Long-Term Trends Global Non-Residential Construction Long Term Energy Outlook $Billions Spending (Real Dollars 2008) $8,000 $7,000 5.6% $6,000 CAGR 3.4 % $5,000 CAGR 5.6 % $4,000 CAGR 2.2 % CAGR $3,000 $2,000 $1,000 $0 '90'91'92'93'94'95'96'97'98'99'00'01'02'03'04'05'06'07'08'09'10'11'12'13'14'15'16'17'18 Infrastructure Industrial Other Non-Residential * Source: Global Insights, October 30, 2008; 69 countries tracked by GI + 5% to account * Source: International Energy Agency for rest of world … consistent with global GDP’s • Global non-residential construction growth slowed but continuing, driven by developing markets • Global infrastructure and energy outlook remains positive 6
  7. 7. Terex Is A Leader In Our Industry $31.8 $22.0 $10.4 $8.8 $8.7 $8.1 $5.3 $4.8 $4.5 $4.5 $4.4 $3.6 Deere (8) CNH Global (9) Oshkosh (11) Liebherr (6) Sandvik (7) JCB (6) Doosan (10) Komatsu (2) Terex (3) Caterpillar (1) Hitachi (4) Volvo (5) Based on last twelve months of available Construction Equipment Sales ($’s in Billions) (1) Represents Machinery sales for the last twelve months ended December 31, 2008; excludes Engine and Financial Product sales (2) Represents Komatsu’s Construction, Mining & Utility Equipment segment ended December 31, 2008 converted at an exchange rate of JPY/USD of 90.727 (3) Last twelve months ended September 30, 2008 (4) Represents the Construction Machinery segment ended September 30, 2008 converted at an exchange rate of USD/JPY 106.349 (5) Represents Volvo’s Construction Equipment segment as of September 30, 2008 converted at an exchange rate of USD/SEK 6.9252 (6) Estimated, as these are privately owned companies: JCB: 2007 sales of GBP 2.25 billion converted at December 31, 2007 GBP/USD rate of 1.9870 Liebherr: 2007 Cranes/Mining/Construction sales of EUR 5.5 billion converted at December 31, 2007 EUR/USD rate of 1.4598 (7) Represents Mining & Construction sales through September 30, 2008 converted at an exchange rate of SEK/USD 6.9252 (8) Represents Deere’s Construction and Forestry segment last twelve months ended October 31, 2008 (9) Represents CNH Global’s Construction Equipment Segment last twelve months ended December 31, 2008 (10) Represents 2007 Construction Equipment sales of $1.5 billion converted at an exchange rate at December 31, 2007 of KRW/USD 936.07 plus estimated 2007 bobcat sales of $2.9 billion (11) Represents Access & Commercial (both concrete & refuse trucks) for the last twelve months ended December 31, 2008 7
  8. 8. Leveraging The Power Of One Company • Our framework to build a stronger Terex • Process improvements for long term benefits 8
  9. 9. Near Term Outlook Challenging • Sales trends for AWP / Utilities (down 30%-40%), Construction / Roadbuilding (down 25%-35%), and Materials Processing (down 15%-20%) continue to be impacted by current market conditions • Mining and Cranes not immune to credit crisis but some stability at the high end • Continued slowdown in smaller cranes, smaller RT’s and Towers • Strong Dollar will have a negative translation impact 9
  10. 10. Aerial Work Platforms $B $2.5 30% 25% $2.0 Current Environment Current Environment 20% $1.5 •• Strong global market share position (top 2) Strong global market share position (top 2) 15% $1.0 •• N. America downturn and accelerated 10% N. America downturn and accelerated $0.5 downturn in W. Europe back half of 2008 5% downturn in W. Europe back half of 2008 $0.0 0% •• Long-term growth expected in developing Long-term growth expected in developing 2004 2005 2006 2007 Q3 '08 markets (ltm) markets Terex Response Sales Gross Margin Op. Margin Terex Response •• Production and head-count reductions Sales by Product Sales by Geography Production and head-count reductions 10% 8% •• Temporary factory shutdowns 4% 11% Temporary factory shutdowns 28% •• Rescheduling/delaying of raw material 21% Rescheduling/delaying of raw material deliveries deliveries •• Increased emphasis on refurbishment Increased emphasis on refurbishment 58% 60% •• Continued TBS / /improvement initiatives Continued TBS improvement initiatives 2008 Q3 YTD 2008 Q3 YTD Developing Markets Portable & Other Japan / ANZ Telehandlers W. Europe Scissors USA / Canada Booms 10
  11. 11. Construction $B Current Environment 30% Current Environment $2.0 25% •• Largest market potential but small market Largest market potential but small market $1.5 position 20% position 15% •• N. America downturn and accelerated $1.0 N. America downturn and accelerated downturn in W. Europe back half of ’08 10% downturn in W. Europe back half of ’08 $0.5 5% •• Operational improvements - -TBS, Operational improvements TBS, distribution, developing markets ––expected $0.0 0% distribution, developing markets expected 2004 2005 2006 2007 Q3 '08 to drive future profit growth to drive future profit growth (ltm) Terex Response Terex Response Sales Gross Margin Op. Margin •• Production & head-count reductions Production & head-count reductions Sales by Product Sales by Geography •• Strong Dollar creates opportunity in N. Strong Dollar creates opportunity in N. 24% 17% America America 1% 19% •• Temporary factory shutdowns Temporary factory shutdowns 28% •• Rescheduling/delaying of raw material 58% Rescheduling/delaying of raw material deliveries deliveries 36% •• Facility consolidations 17% Facility consolidations •• Continued TBS / /improvement initiatives 2008 Q2 YTD 2008 Q3 YTD Continued TBS improvement initiatives Trucks Developing Markets Material Handling Japan / ANZ Heavy W. Europe 11 Compact USA / Canada
  12. 12. Cranes $B 30% $2.5 Current Environment 25% Current Environment $2.0 •• Strong global market position (top 3) 20% Strong global market position (top 3) $1.5 15% •• Infrastructure and energy projects Infrastructure and energy projects $1.0 driving strength of larger cranes 10% driving strength of larger cranes (crawlers, ATC’s, larger RT’s) $0.5 5% (crawlers, ATC’s, larger RT’s) •• Tower crane and smaller capacity $0.0 0% Tower crane and smaller capacity 2004 2005 2006 2007 Q3 '08 cranes have been negatively impacted cranes have been negatively impacted (ltm) by credit crisis by credit crisis Sales Gross Margin Op. Margin Terex Response Terex Response •• Production and head-count reductions Sales by Product Sales by Geography Production and head-count reductions 3% •• Facility consolidation 15% Facility consolidation 27% •• Rescheduling/delaying of raw material 20% 6% Rescheduling/delaying of raw material deliveries 15% deliveries 40% •• Continued TBS / /improvement initiatives Continued TBS improvement initiatives 47% 27% 2008 Q3 YTD 2008 Q2 YTD Stackers Developing Markets Towers Japan / ANZ Crawlers W. Europe Other Mobile USA / Canada ATC / RT 12
  13. 13. Materials Processing & Mining $B Materials Processing Materials Processing $2.5 30% Current Environment Current Environment 25% $2.0 • • Leading global market position in mobile products Leading global market position in mobile products 20% $1.5 • • Accelerated global downturn in back half of 2008 Accelerated global downturn in back half of 2008 15% • • Long-term growth expected in developing markets $1.0 Long-term growth expected in developing markets 10% Terex Response Terex Response $0.5 5% • • Production and head-count reductions Production and head-count reductions $0.0 0% • • Temporary factory shutdowns 2004 2005 2006 2007 Q3 '08 Temporary factory shutdowns (ltm) • • Rescheduling/delaying of raw material deliveries Rescheduling/delaying of raw material deliveries • • Continued TBS / /improvement initiatives Sales Gross Margin Op. Margin Continued TBS improvement initiatives Mining Mining Sales by Product Sales by Geography • • Strong global market position (top 3) Strong global market position (top 3) 34% • • Significant commodities volatility 47% Significant commodities volatility • • Some rescheduling / /cancellations of order backlog 23% Some rescheduling cancellations of order backlog 13% Terex Response Terex Response 17% 13% • • Reconfirming backlog and delivery schedules Reconfirming backlog and delivery schedules 27% 26% • • More stringent production scheduling More stringent production scheduling • • Increased emphasis on customer support for installed 2008 Q2 YTD 2008 Q3 YTD Increased emphasis on customer support for installed base (parts & service) base (parts & service) Developing Markets Materials Processing Japan / ANZ Drills/ Other • • Continued TBS / /improvement initiatives Continued TBS improvement initiatives W. Europe Trucks USA / Canada Shovels 13
  14. 14. Terex Response To Environment • Focus on customers • Developing markets distribution development, large infrastructure projects, localized service and support • Increased utilization of Terex Financial Services • Customer support / refurbishment / parts and service • Internal cash generation • Discipline on terms and conditions • Raw material demand planning and scheduling vigilance • Capital spending scrutiny • Discretionary spending – wage freeze, benefit reductions, travel curtailment and reduced trade show activity … • Internal improvement initiatives continue 14
  15. 15. Terex To Date: Growth With Moderate Leverage $10.4 Net Debt Sales $9.1 $7.6 ($ in billions) $6.2 $4.8 $3.9 $2.8 $2.0 $1.9 $1.8 1999 2000 2001 2002 2003 2004 2005 2006 2007 Q3 2008* Net leverage of 1.0x at Q3 2008 provides flexibility • Q3 2008 sales is based on last 12 months sales as of Sept 30, 2008; Net Debt is as of Sept 30, 2008 • Net leverage ratio is defined as debt less cash and cash equivalents divided by last twelve months EBITDA 15
  16. 16. Terex Debt Profile Major components of debt include: • $700 million Revolver - July 2012 • $196 million Term Loan* - July 2013 • $300 million 7 3/8% Notes - January 2014 • $800 million 8.00% Notes - November 2017 Liquidity of $881 million at September 30, 2008, including: • Cash of $488 million • Revolver availability of $393 million • Working capital reductions No near-term debt maturities Adequate liquidity * Term Loan balance as of Sep 30, 2008 16
  17. 17. Summary • Diversified portfolio – geographic and product • Leadership position in over 75% of revenue base • Positioned for long-term trends • Aggressively responding to changing market conditions • Internal initiatives will enhance operating performance • No near term debt maturities, adequate liquidity 17
  18. 18. Questions? 18
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