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TEX110308

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    TEX110308 TEX110308 Presentation Transcript

    • European Non-deal Road Show November 2008
    • Terex NDRS Team Ron DeFeo, Chairman & Chief Executive Officer Tom Riordan, President & Chief Operating Officer Phil Widman, Senior Vice President & Chief Financial Officer Laura Kiernan, Director of Investor Relations 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. 3
    • Overview and Strategy Ron DeFeo Chairman & Chief Executive Officer
    • Who is Terex? Purpose • To improve the lives of people around the world Mission • To delight construction, infrastructure, mining and other customers with value-added offerings that exceed their needs • To attract the best people by creating a culture that is safe, exciting, creative, fun, and embraces continuous improvement Vision • To be the most responsive company in the industry as determined by the customer • To be the most profitable company in the industry as measured by Return on Invested Capital (ROIC) • To be the best place to work in our industry as determined by our team members 5
    • Who is Terex? • Diversified Portfolio of Equipment Businesses • Positioned for Continuing Long - Term Trends • Leader In Our Categories and Our Industry • Leveraging the Power Of One Company AERIAL WORK MATERIALS PROC. CRANES PLATFORMS AND MINING ROADBUILDING AND CONSTRUCTION UTILITIES 6
    • Why Invest? Diversified Portfolio of Equipment Businesses Commodity Extraction Infrastructure Building and Operations/ Residential Construction Industrial Maintenance Mining X Matls. Proc. X X Construction X X X X Roadbuilding X X X Utilities X X Cranes X X X X AWP X X X X Exposure to Commodity, Construction, and Post - Construction Drivers 7
    • Why Invest? Diversified Portfolio of Equipment Businesses 2007 SALES BY BUSINESS 2007 SALES BY GEOGRAPHY RBU 7% Developing AWP Markets 25% 22% W. Europe Construction Japan / ANZ 37% 21% 7% MP&M Cranes USA / 23% 24% Canada 34% $ 9.1 B $ 9.1 B $ 9.1 B $ 9.1 B Balanced by business; Balanced geographically 8
    • Why Invest? Positioned for Continuing Long - Term Trends WORLD PRIMARY ENERGY DEMAND* • Beneficial to multiple Terex categories • Particularly positive for Cranes and Mining * Source: International Energy Agency 9
    • Why Invest? Positioned for Continuing Long - Term Trends EXAMPLE: NON-FERROUS METALS EXPENDITURES BY TOP 40 MINING COMPANIES EXPLORATION (1989 – 2007), $B* OPEX ($B)** CAPEX ($B)** 12 200 60 $176 180 $51 10 160 50 $141 $134 140 $125 40 $37 8 120 $95 $28 6 100 30 $75 80 4 60 20 40 2 10 20 0 0 0 '89 '90'91 '92'93 '94'95 '96'97 '98'99'00 '01'02 '03'04 '05'06 '07 '02 '03 '04 '05 '06 '07 '05 '06 '07 • Global consumption driving unprecedented levels of investment • Outlook for mining equipment remains positive and the corresponding industrial growth is a driver for other businesses * Source: Metals Economics Group; **Source: PWC: “Mine: As Good as it Gets?”, 2008 – capex excludes acquisitions 10
    • Why Invest? Positioned for Continuing Long - Term Trends $B GLOBAL NON-RESIDENTIAL $B GLOBAL RESIDENTIAL $7,000 CONSTRUCTION (REAL 2007 $)* $4,000 CONSTRUCTION (REAL 2007 $)* $3,500 4.4 % $6,000 CAGR 5.6 % CAGR $3,000 -0.8 % $5,000 CAGR 5.6 % $2,500 CAGR 5.1 % 1.3 % $4,000 1.6 % CAGR CAGR CAGR $2,000 $3,000 $1,500 $2,000 $1,000 $1,000 $500 $0 $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 '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 Infrastructure Industrial Other Non-residential Total Residential • Global infrastructure construction growing, despite weakness in developed markets – not yet incorporated in the survey data above • Terex well positioned to capitalize, with 22% of sales, over 4,000 team members, and more than 30 locations now in developing countries * Source: Global Insights, July ‘08; 69 countries tracked by GI + 5% to account for rest of world … consistent with global GDP’s 11
    • Where We Are Today Leader in Our Categories and Our Industry Terex is one of the Largest Manufacturers of $31.6 Construction Equipment in the World Based on last twelve months of available Construction Equipment Sales ($’s in Billions) $19.7 $10.4 $9.1 $8.7 $8.1 $5.2 $5.1 $4.8 $4.5 $4.4 $3.7 Caterpillar (1) Komatsu (2) Terex Hitachi (3) Volvo (4) Liebherr (7) Sandvik (10) CNH Global (8) Deere (5) JCB (7) Doosan (6) Oshkosh (9) (1) Represents Machinery sales for the last twelve months ended Sep 30, 2008; excludes (7) Estimated, as these are privately owned companies: Engine and Financial Product sales. JCB: 2007 sales of GBP 2.25 billion converted at Dec 31, 2007 GBP/USD rate of (2) Represents Komatsu’s Construction, Mining & Utility Equipment segment as of June 30, 1.9870 2008 converted at an exchange rate of JPY/USD of 106.18 Liebherr: 2007 Cranes/Mining/Construction sales of EUR 5.5 billion converted at Dec (3) Exchange rate used as of June 30, 2008 of USD/JPY 106.18 31, 2007 EUR/USD rate of 1.4598 (4) Represents Volvo’s Construction Equipment segment as of Sep 30, 2008 converted at (8) Represents CNH Global’s Construction Equipment Segment as of Sep 30, 2008 an exchange rate of USD/SEK 6.9252 (9) Represents Access & Concrete Placement equipment sales for the 9 months ended (5) Represents Deere’s Construction and Forestry segment as of July 31, 2008 June 30, 2008 plus Access & Commercial (both concrete & refuse trucks) for the 3 (6) Represents 2007 Construction Equipment sales of $1.5 billion converted at an exchange months ended Sep 30, 2007. rate at Dec 31, 2007 of KRW/USD 936.07 plus estimated 2007 bobcat sales of $2.9 (10) Represents Mining & Construction sales through Jun 30, 2008 converted at an billion exchange rate of SEK/USD 6.9252 12
    • Why Invest? Leader in Our Categories and Our Industry Approximately 75% of 2007 sales were generated in markets where Terex has significant market presence AERIAL WORK CRANES MP&M PLATFORMS • All Terrain Cranes (top 2) • Hydraulic Excavators (top 3) • Articulated boom lifts (top 2) • Rough Terrain Cranes (top 3) • Mining Trucks (#3) • Telescopic boom lifts (top 2) • Tower Cranes (#3) • Surface Drills (# 3) • Scissor lifts (top 3) • Crushing & Screening (#1)** • Large Crawlers (#1) • NA Telehandlers (#2) • Port Cranes (top 2)* • Highwall Miners (#1) ROADBUILDING AND CONSTRUCTION UTILITIES • Compact Track Loaders (#1) • Front Discharge Mixers (#1) • Material Handlers (#2 or 3) • Insulated Aerials (#2) * Including pro forma impact of Fantuzzi acquisition; ** Mobile Equipment 13
    • Why Invest? Leader in Our Categories and Our Industry 2Q 2008 LTM After-Tax ROIC-Machinery Industry • In-line with larger, more vertically integrated competitors 2Q 2008 LTM After-Tax ROIC-Diversified Industrials • Better than diversified industrials with higher valuations ROIC is calculated by dividing the sum of the last four quarters’ net operating income after tax by the average of the sum of total stockholders’ equity plus debt less cash and cash equivalents for the last five quarters ended. DE and JOYG as of Apr 30, 2008 and the remainder are as of Jun 30, 2008; OSK includes $175.2 million goodwill impairment charge incurred during their Q3 2008; *Does not include finance arm of company 14
    • Why Invest? Leveraging the Power of One Company • Our framework to build a stronger Terex • Process improvements will assure long term success 15
    • Why Invest? Leveraging the Power of One Company Tom Riordan, Phil Widman President & Chief Senior Vice President & Operating Officer Chief Financial Officer Tim Ford, Bob Isaman, Rick Nichols, Eric Nielsen, George Ellis, Steve Filipov, President President President President President President Terex AWP Terex Construction Terex Cranes Terex MP&M Terex RBU Developing Markets 16
    • Summary of Overview & Strategy Continue Building a Better Company • Improved capabilities • Diverse end market exposure • ROIC focused Positioned for the Attractive Growth Opportunities • Right sectors and segments • Right geographies • Delivering unique value to customers • Targeted acquisitions Execute, Execute, Execute • Do what we say • Overcome challenges that are often hard to predict 17
    • Supporting Profitable Growth Phil Widman Senior Vice President and Chief Financial Officer 18
    • Supporting Profitable Growth • 5+ years of strong growth, driven by favorable market conditions and an increasingly robust portfolio • Committed to core financial principles – Growth with modest debt leverage – Industry leading ROIC – Generate cash to enable capital investments, targeted acquisitions and share repurchases • Near term outlook is mixed but long term remains positive. Focus near term is on cash & liquidity, and cost reduction. • Improving performance via core business initiatives that will enhance long-term results 19
    • Terex to Date: Consistent Sales Growth Sales growth from 2003 to 2007 was ~90% organic Sales (USD billions) Operating Income (USD billions) $1.2 $10.0 $1.0 $8.0 $0.8 $6.0 $0.6 $4.0 $0.4 $2.0 $0.2 $0.0 $0.0 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 Q3 Acquisitions: PPM Simon LTM O&K Reedrill Powerscreen, Cedarapids ASV Fermec Hydra CMI, Atlas SHM Schaeff, Demag, Genie 20
    • Terex to Date: Balanced Sales Growth Sales (USD billions) $10.0 $8.0 CAGR 26% $6.0 $4.0 $2.0 $0.0 2002 2003 2004 2005 2006 2007 LTM Q3 2008 Aerial Work Platforms Construction Cranes Material Processing & Mining Roadbuilding, Utilities & Other Sales balanced between segments 21
    • Terex to Date: Broad-based Profit Growth Operating Income (USD billions) $1.2 $1.0 $0.8 CAGR 82% $0.6 $0.4 $0.2 $0.0 2002 2003 2004 2005 2006 2007 LTM Q3 2008 Aerial Work Platforms Construction Cranes Material Processing & Mining Roadbuilding, Utilities & Other Operating income growth outpacing sales growth Increasingly evenly distributed (AWP, MPM, Cranes) 22
    • Terex to Date: Growth with Minimal Leverage $10.4 Net Debt Sales $9.1 ($ in billions) $7.6 $6.2 $4.8 $3.9 $2.8 $1.9 $2.0 $1.8 1999 2000 2001 2002 2003 2004 2005 2006 2007 Q3 2008* Net leverage of 1.0x in Q3 provides flexibility • Q3 2008 sales is based on last 12 months sales as of Sept 30, 2008; Net Debt is as of Sept 30, 2008 • Net leverage ratio is defined as debt less cash and cash equivalents divided by last twelve months EBITDA 23
    • Terex to Date: Cash Flow FREE CASH FLOW ($M) WORKING CAPITAL DETAIL (DAYS) 450 140 400 120 350 100 300 80 250 60 200 150 40 100 20 50 0 0 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 2004 2005 2006 2007 Q3 '08 LTM '03 '04 '04 '05 '05 '06 '06 '07 '07 '08 Inventory Days Receivable Days Payable Days • Consistent cash generation, with • Working capital has remained 2007 shift explained by utilization consistent but presents a of tax loss benefits significant opportunity to improve • Targeting further improvement as • Working capital (particularly our business continues to grow inventory) should decrease with improved processes Free Cash Flow is defined as Cash from Operations less Capital Expenditures 24
    • Priorities for Cash Utilization Must consider current environment Near term focus is on cash, liquidity, and cost reduction Internal investment • Manufacturing capability / footprint • Human capital • Systems Value generating acquisitions Returning cash to shareholders • Currently suspended share repurchase program, pending access to credit markets • $1.2 billion authorized through June 2009 ($0.6 B to date) 25
    • Terex to Date: Return on Invested Capital 50% 43% 45% 38% 40% 35% 35% 30% 29% Pre-tax ROIC 25% 21% 25% 24% After-tax ROIC 20% 15% 12% 14% 10% 10% 3% 5% 0% 2003 2004 2005 2006 2007 Q3 LTM ROIC growth driven by operating income growth faster than invested capital Recent acquisitions of SHM and ASV dampen returns in the short term ROIC is calculated by dividing the sum of the last four quarters’ net operating income after tax by the average of the sum of total stockholders’ equity plus debt less cash and cash equivalents for the last five quarters ended. 26
    • Near Term Outlook Next four quarters net sales expectations beginning 4Q’08: • Mining and Cranes continuing favorable trends • AWP (30%-40%), Construction (25%-35%) and Materials Processing (15%-20%) negatively impacted by current market conditions Material Cost pressure continues Cost reduction actions underway to adjust to market expectations 2008 sales $10.0 to $10.3 billion 2008 EPS $5.69 to $5.79 All EPS amounts are on a fully diluted basis 27
    • Sales Growth Initiatives Active and relevant in high growth markets Global Market Participation Doing business efficiently and effectively Positioned to support product after sale Aligned with local market needs “Local” Products Delivered at local market price points Optimized production with global supply chain Clear product, service, or other advantages in all markets Competitive Differentiation Value-adding relationships with customers Leveraging the Power of One Company 28
    • Operating Income Initiatives Ensure Terex is receiving appropriate value for its products Pricing / Mix Optimize product mix Offset rising commodity costs with commensurate pricing actions Coordinate supply efforts to leverage the scale of Terex Supply Management Facilitate common designs and components Sourcing centers – China and India Terex Business System (TBS) & Terex Management System (TMS) Productivity Optimize manufacturing footprint Sales and production planning methodology Goal: 2% - 3% margin improvement 29
    • Cash Flow Initiatives Sales Growth Product Enhance Profitability Margin Integrated and aligned approach to tax planning Tax Planning More tax efficient business structure(s) Processes and resources to assure tax minimization Continued diligence - AP / AR Capital Aggressive inventory management Efficiency Capital expenditures to enhance profitable growth 15% working capital / trailing sales Capex between 1.5% and 2.0% of sales Cash taxes will approximate tax expense 30
    • Enabling Initiative: Terex Financial Services (TFS) ’03 – ’05 ’06 - ’08 ’09 + Expand Launch Transform Impact • Limited • Reflect Terex • True Global Captive Geography Global Footprint • Enable Terex Growth • Low Coverage & • Segment Coverage Globally Penetration & Penetration • Optimize Partnerships • Functions • Influence • Expand Customer Outsourced Customer Touch Points Experience Protect balance sheet while supporting growth of business, especially in developing markets 31
    • TFS: Path Forward Owning More of the Customer Experience 2010 $2.5B • Tap into Broader Risk Appetite from Multiple Sources • Responsiveness – “Take the Deal Off the Street” TFS Originated • Increase Avenues to Competitive Capital Originate & Sell 2007 $1.3B 3rd Party Funding 2004 $0.5B Dealer Finance Dealer Finance 32
    • Tax Planning Objectives EFFECTIVE TAX RATE – TEREX VS. INDUSTRY PEERS 40% 36% 36% 35% 34% 35% 33% 33% 32% 31% 29% 30% 28% 25% 25% TAX STRATEGIES 25% 23% 20% • Traditional Planning and 15% 10% Execution 10% 5% 0% • Statutory Rate Reduction ASTE OSK DE JOYG TEX BUCY CAT KMT UTX MTW DHR PKI IR ETN • Global Expansion and • Reduce effective tax rate in line with leading Optimization industry peers • Operationally Aligned Tax • Industry-minimums only achievable through Strategies (OATS) aggressive structural change, but meaningful improvement can come through improved processes and practices 33
    • Summary Supporting Profitable Growth • 5+ years of strong growth, driven by favorable market conditions and an increasingly robust portfolio • Committed to core financial principles – Growth with modest debt leverage – Industry leading ROIC – Generate cash to enable capital investments, targeted acquisitions and share repurchases • Near term outlook is mixed but long term remains positive • Improving performance via core business initiatives that will enhance long-term results 34
    • Operations Overview Tom Riordan President and Chief Operating Officer 35
    • Injury Statistics Terex Lost Time Rate Trending (12 Month Moving Average) 7.0 6.0 Cranes 5.0 Construction 4.0 TLTR MP&M Terex 3.0 AWP RBU 2.0 1.0 0.0 Jan 07 Sept 08 36
    • Operational Update • Progress towards an integrated operating company • Integration examples Customer Satisfaction Supply Management New Product Development Terex Business Systems • Challenging economic environment – actions we’re taking • Other progress and path forward 37
    • Transformation Underway • Transitioning from a holding company to an operating company • Upgrading capabilities to drive business and functional performance GOALS OBJECTIVES Right • Experienced leadership, driven to create change Talent • Resources and mandate required to succeed Clear • Measurements defined and goals established Metrics • Alignment within and across businesses Good • Well defined and well executed business processes Process • Systems that enable execution • Clear, permanent shifts in performance Results • Ability to sustain and improve 38
    • Progress Examples • Customer Satisfaction • Supply Management • Product Development • Terex Business System (TBS) 39
    • Customer Satisfaction: Objectives Vision: Most Responsive Company in the Industry as Determined by the Customer People to People Solutions Customer-Defined Value Make My Job Easier Relationships that II can depend “Relationships that can depend Deliver highly competitive entry, ““Deliver highly competitive entry, “Make it easy for me to run my “Make it easy for me to run my on to help me ”” on to help me operating and exit value”” operating and exit value business” business” CUSTOMER ENABLERS • Ensure initial experience with products is positive • Improve aftermarket service and support • Deliver effectively through multiple channels Distribution/ Branches Rental Direct • Build long-term value proposition 40
    • Customer Satisfaction: Actions • Multiple activities in progress to: Understand customer purchase drivers Measure current levels of satisfaction Identify improvement actions for Terex Build meaning and value for the Terex brand • Supporting changes are underway: Product/ offering development Distribution improvement Global aftermarket • We have a long way to go but, increasingly, we have the right people and processes in place to deliver the results we are targeting 41
    • Supply Management: Objectives Create competitive advantage in the supply chain while minimizing the impact of rising material and component costs 2007 2008 2009 2010 Build the Foundation Establish consistent sourcing processes Expand the Core Build the Common objectives Achieve Excellence organization International Sourcing Enhance sourcing Infrastructure tool set Deeper supplier integration Drive savings and mitigate inflation TBS initiatives Continual focus on savings and mitigating cost inflation 42
    • Supply Management: Priorities Teams activity engaged in major material cost elements Expected Valves, hydraulic Other consumables, average tools & dispatch kits 15 % Clamps, ties & straps savings Plastic, Documentation Fittings & adaptors polymers Paint & coatings & rubber Other hydraulic & Cabs, accessories Aluminum pneumatic & ropes Bearings, bushings & accessories Transmissions, hydrostatic components Machined components, steel Other Other Other Pumps & pump Gearboxes electrical hardware mech. assemblies, hydraulic & gears & control Indirect 10% components spend Motors, Fluid transfer Product identification & labeling Cylinders hydraulic & control, non-hydraulic Fasteners & retainer rings Hose Other structural fabricated components assemblies Other Controllers, timers, control powertrain modules & PBC Axles Complex Tires, assemblies rubber Batteries 5% Other power Other running Castings & Steel plants, IC engine gear forgings Engine, Tire & Crawler track diesel wheel assemblies assemblies Weldment, steel Third Second High priority priority priority 0% Difficult Ease of Implementation Easy Size of bubble: Total spend of respective commodity 43
    • Product Development Status • VP of Technology added in late 2007 • Launched New Product and Process Development Process in early 2008 • Roll-out of New Product Identification Process underway • Actively migrating existing product programs to new process and new phase-gate discipline • Upgrading engineering and cross-functional product development capabilities in parallel • Realizing clear benefits as we go 44
    • Terex Business System (TBS) The Terex Business System is our framework to build a stronger Terex 45
    • TBS: Objectives • Improve margin from efficiency/productivity gains • Increase production capacity within existing manufacturing footprint • Improve customer satisfaction and reduce warranty costs due to improved quality • Lower inventory, particularly raw materials and work-in-process, leads to improved cash flow • More easily move or replicate production lines around the globe • Empower team members, enriching their work experience • Develop team member skill sets, knowledge, and capabilities 46
    • TBS: Recent Improvements TEREX CRANES - WAVERLY, IOWA TEREX UTILITIES – WATERTOWN, SD Before After After After • From poorly lit, inventory laden facility to a • Moving line for Tree Trimmers and TL clean, transparent factory floor with flow Mixed Model Line, designed for ergonomic and visual controls build activity and attached to a moving line • Increased throughput by 4 – 5 x • Parts Carts – Parts pulled and kitted prior to build • Cut working capital days by 2/3 – Visual Management for unit status and • Now turning inventory at 11-12 times per identification of part shortages year vs. 2-3 at the beginning of 2005 – Carts follow build sequence, adding a visual quality step • Andon System/ Escalation Procedure • On-time delivery improved by 50% 47
    • TBS: Recent Improvements Material Processing – Omagh, N. Ireland Mining Trucks – Acuna Mexico After Photo Before After Before After Portable crane in use to rotate frame New “craneless” production line • Implement a factory wide system to • Redesign of mining truck production line to smooth production levels to standard takt dramatically increase throughput, on-time times and implement visual controls delivery and team member safety. • Additional improvements will now be • Eliminated the use of cranes, improving based on the established standards productivity, quality and safety • Production increased almost 50% over • Monthly production levels increased by a two years within the existing factor of 4 times within existing manufacturing footprint manufacturing footprint • Inventory turns improved 35% over a two year period to mid-teens 48
    • TBS and Global Manufacturing Footprint • Developing shared production campuses in India and China 45 acre site near Chennai, India currently under construction Scheduled to begin producing crushing equipment in early 2009 Other products to follow in late 2009/ early 2010 Expansion of existing facility in Tianjin, China Will produce crane and mining components Production begins in 2010 • Each campus will house up to 3 Terex shipping segments, leveraging shared capabilities MINING – PHASE I • Designing facilities from the ground-up MINING – PHASE I I based on TBS principles CRANES CRANES • Using TBS to plan and execute line moves to replicate successes from other stock global locations 49
    • TBS and Global Manufacturing Footprint DEVELOPED WORLD DEVELOPING WORLD Improve effectiveness at existing Increase presence in developing locations – applying TBS to countries streamline operations Leverage product and cost Rationalize developed market positions globally footprint • Significant progress is underway, but change will require investment • Balancing opportunity for change with market and other factors 50
    • Cost Reduction Activities • Production level and headcount reductions • Facility rationalization • Segment realignment • Capital spending delayed • Material inflow constrained 51
    • Other Progress • Impossible to cover the amount of improvement underway at Terex in a short presentation • Parallel progress continues on multiple fronts: Talent Recruitment and Development Diversity and Inclusion Terex Management Systems implementation Branding/ Marketing/ and Customer Satisfaction Terex Financial Services Global Logistics Global Service and Support • Positioned to take our performance to the next level 52
    • Terex Operations Summary • Continuing our journey to be an effective global operating company • Significant talent now invested and beginning to deliver the results that we expect • We are aggressively responding to changing market conditions – cash and cost focused • We remain excited about the transformation that is underway in our company and about the value that it can deliver both near and long term 53
    • European Non-deal Road Show November 2008 54