Published on

Published in: Economy & Finance, Business
  • Be the first to comment

  • Be the first to like this

No Downloads
Total Views
On Slideshare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide


  1. 1. Sterne Agee Global Industrial Infrastructure Investor Trip November 18, 2008 Steve Filipov President, Developing Markets & Strategic Accounts
  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. 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 3
  4. 4. Where We Are Today Leader in Our Categories and Our Industry Terex is one of the Largest Manufacturers of Construction Equipment in the World $31.6 Based on last twelve months of available Construction Equipment Sales ($’s in Billions) $19.9 $10.4 $9.2 $8.7 $8.1 $5.3 $5.1 $4.8 $4.5 $4.4 $4.1 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 Sep 30, 1.9870 2008 converted at an exchange rate of JPY/USD of 106.35 Liebherr: 2007 Cranes/Mining/Construction sales of EUR 5.5 billion converted at Dec (3) Exchange rate used as of Sep 30, 2008 of USD/JPY 106.35 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 & Commercial (both concrete & refuse trucks) for the 12 months (5) Represents Deere’s Construction and Forestry segment as of July 31, 2008 ended Sep 30, 2008. (6) Represents 2007 Construction Equipment sales of $1.5 billion converted at an exchange (10) Represents Mining & Construction sales through Sep 30, 2008 converted at an rate at Dec 31, 2007 of KRW/USD 936.07 plus estimated 2007 bobcat sales of $2.9 exchange rate of SEK/USD 6.9252 billion 4
  5. 5. Diversified Portfolio of Product Leaders 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 5
  6. 6. Segment and Geographic Diversification Diversified Portfolio of Equipment Businesses 2007 Sales by Segment 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 Billion $ 9.1 Billion $ 9.1 B $ 9.1 B Balanced by business; Balanced geographically 6
  7. 7. Developing Markets Summary • ~$2.3 billion* of sales were from developing countries, growing at more than 3x the overall growth rate for Terex • Near-term uncertainty caused by the global credit crisis tempered by long-term need and priority for continued infrastructure investment • 4,000 team members operating from more than 30 company and joint venture facilities in developing markets • Goal of $4 billion sales at the end of 2010 - Current environment makes this goal more challenging - Still guiding our thinking as to how we deploy * Last 12 months sales as through Q3 2008 7
  8. 8. Terex: Developing Markets Growth DEVELOPING MARKET DEVELOPING MARKET SALES GROWTH ($) SALES BY BUSINESS ($) RBU Africa AWP Middle East Construction Latin America MP&M Russia/ E. Europe Cranes Asia, ex. Japan 2004 2005 2006 2007 2004 2005 2006 2007 22% of 2007 sales * Broad Based Global Growth 42% CAGR 2004 - 2007 Strongest In 3 Businesses * Developing market sales represented approximately 24% of sales YTD through Q3 2008 and 26% of Q3 2008 sales 8
  9. 9. Developing Markets - Goal Developed Markets Developing Markets 2007 Sales 2010 Sales Goal CAGR ~$ 2B $ 4B 26% 9
  10. 10. Developing Market Changing Outlook April 2008 Outlook October 2008 Outlook April 2008 vs. Present April 2008 vs. Present •• Downward revisions Downward revisions due to global economic due to global economic conditions conditions •• Weak 2009 consensus Weak 2009 consensus forecasts for USA and forecasts for USA and Europe Europe •• Uncertainty regarding Uncertainty regarding near term growth near term growth •• Continuing risk to the Continuing risk to the downside until credit downside until credit crisis begins to ease crisis begins to ease Source: IMF World Economic Outlook, April 2008 Source: IMF World Economic Outlook, October 2008 10
  11. 11. Most current outlooks for major developing markets (10/ 2008) Current Outlook for Growth Outlook for Real GDP Growth: 15 Developing World (Nov. 2008) •• Pressure on exports will hurt all Pressure on exports will hurt all 12 developing markets ––some worse developing markets some worse than others than others 9 –– Exports slowed by softer trade Exports slowed by softer trade 6 –– Commodities weaker Commodities weaker 3 •• International investment spending International investment spending down, but offset in part by down, but offset in part by 0 increased government spending increased government spending '04 '05 '06 '07 '08 '09 '10 '11 '12 China India Russia/ CIS •• Governments appear committed to Governments appear committed to SA/ Mexico ME/ N. Africa Southern Africa infrastructure investments as key to infrastructure investments as key to near and long term growth near and long term growth •• Implies continuing equipment Implies continuing equipment •• Outlooks shifting downwards, but Outlooks shifting downwards, but demand despite softer economic demand despite softer economic rates of anticipated growth are high rates of anticipated growth are high conditions conditions •• Full impact of the financial crisis Full impact of the financial crisis remains unclear but most believe remains unclear but most believe that growth will be sustained that growth will be sustained Source: Analysis of data from the Economist Economic Intelligence Unit (EIU) 11
  12. 12. Near Term Realities Developing Markets: Downside Risks Developing Markets: Upside Potential • Tightening of global credit delays • Governments continue to provide projects and stalls procurement of monetary stimulus to develop capital goods infrastructure and create jobs, providing significant employment • “Reforms” to global financial and opportunities for our products markets put unintended constraints on continued growth in developing economies • The global economy confronts another major shock (terror attack, military conflict, etc.) 12
  13. 13. Long Term Prospects Developing Markets: Downside Risks Developing Markets: Upside Potential • Near term situation creates • Stability returns to global financial instability that causes some markets economies to underperform their potential • Recent/continuing investments in infrastructure drive continued expansion • Local consumption becomes the driver for developing market growth • Upward spiral of wealth creation is restored 13
  14. 14. Strategy for Developing Markets Accelerate Accelerate • Remove roadblocks, accelerate progress we are progress we are investments, etc. to enable faster growth already making already making where traction has already been achieved Broaden benefits Broaden benefits • Leverage synergies between businesses from the progress from the progress to achieve greater overall benefit from we make we make market progress that is made Establish traction in Establish traction in high potential but high potential but • Facilitate entry by Terex businesses into under-penetrated under-penetrated high growth developing markets where we geographies geographies are currently under-represented Pursue “white Pursue “white • Identify and pursue opportunities in space” opportunities space” opportunities developing markets that offer growth that might have been that might have been missed potential but sit outside the domain of missed current Terex businesses 14
  15. 15. Russia Remains Committed to Infrastructure Projects November 6, 2008 – Reuters Story on infrastructure: • Tender awarded for ~$1.3 billion railroad in the far eastern republic of Yakutia • The 400-kilometre state-funded line will allow access to natural resources such as coal, diamonds & natural gas • Russia has a $1 trillion plan to develop its infrastructure over the next 10 years. • Railroad project is among the first to go forward since the onset of the global financial crisis. • Tender was awarded in October to build the first stage of a motorway from Moscow to St. Petersburg. • These projects are “… signaling that Russia is still committed to renewing its infrastructure despite the financial turmoil.” [bold font added by Terex] Troika Dialog, Russia’s Investment Story, Sept. 2008 15
  16. 16. China Infrastructure Investment November 9, 2008 – Bloomberg China Stimulus Package • China's State Council announced a $586 billion economic stimulus package • To be used by the end of 2010 • The Central Bank will pursue a ``moderately loose'' monetary policy • Size of stimulus package is equivalent to almost a fifth of the country's 2007 GDP • The extra spending may boost the nation's economic growth by 2% next year, said Xing Zigiang, an economist at China International Capital Corp. in Beijing 16
  17. 17. Panama Canal Project Moving Forward The Panama Canal Authority announced approval for a $2.3 billion financing package on October 14, 2008 for the Canal Expansion Program. Canal generated cash flow will finance the remainder of the $5.25 billion project. Two Terex hydraulic excavators working at the Panama Canal expansion project 17
  18. 18. Brazil – PAC Program Destination of investments in USD 2007 to 2010 (4 years) Logistics Social & Transports and Urban US$ 36 Bi US$ 106 Bi Total: US$ 315 Bi Energy US$ 173 Bi Source: Brazilian Government 18
  19. 19. Brazil – PAC Program Results up to September 2008: • 190 projects finished – US$ 13.6 Billion (R$ 30.6 Billion) • 87 Logistics & Urban • 106 Energy Project progress: • 59% of total under Construction • 86% on course • 5% red flags • 1% delayed Terex RH 340 hydraulic excavator at work in the • 20% in Bidding phase mining site of Carajás, PA - Brazil • 12% project phase • 9% concluded Source: 5th PAC Balance Report Sep/2008 19
  20. 20. Brazil - Other Important Projects Extension of the Sao Paulo Subway System • Over 9 Billion USD World Cup 2014 • Estimated 20 Billion USD CSA ThyssenKrupp • Over 5 Billion USD CSN Sepetiba • Over 3 Billion USD Estaleiro Atlântico Sul • Over 1 Billion USD Terex RT crane assembling Terex Tower crane at the hydroelectric plant of Dardanellos, MT - Brazil 20
  21. 21. Terex Latin America 21
  22. 22. Strong Presence in Latin America Miami, Florida Mexico City Sales location Sales/Service location 6 team members 8 team members Santiago, Chile Terex Mining location 10 team members Sao Paulo, Brazil Terex Latin America Headquarters Porto Alegre, Brazil 62 team members Roadbuilding/Asphalt Plant Manufacturing 250 team members 22
  23. 23. Cross-selling of All Terex Products • Geographic sales approach to the Latin American market rather than by each individual Terex product Segment • Selling all Terex products in Latin America • Growing dealer network including dealers that only carry Terex equipment • Rental channel is developing quickly in certain markets such as Brazil Growing distribution network 23
  24. 24. Terex Latin America Highlights • 4 year compounded annual growth rate (CAGR) 62% Sales in through 2007 of 62% from Latin America CAGR a growing customer base • Doubled number of dealers over last 12 months • Tripled number of rental partners over last 12 20 04 months as the rental 20 05 channel develops in 20 06 certain markets 20 07 24
  25. 25. Developing Markets Summary • ~$2.3 billion* of sales were from developing countries, growing at more than 3x the overall growth rate for Terex • Near-term uncertainty caused by the global credit crisis tempered by long-term need and priority for continued infrastructure investment • 4,000 team members operating from more than 30 company and joint venture facilities in developing markets • Goal of $4 billion sales at the end of 2010 - Current economic environment makes this goal more challenging - Still guiding our thinking as to how we deploy * Last 12 months sales as through Q3 2008 25
  26. 26. Questions?
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.