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TEXAnalyst090408
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TEXAnalyst090408

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  • 1. Terex Investment Analyst Meeting
  • 2. Welcome September 4, 2008 Laura Kiernan Director, Investor Relatons
  • 3. 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. materially Such risks and uncertainties, many of which are beyond the control of Terex include among others: our uncertainties Terex, 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 p p y y pricing, p g, product initiatives and other actions taken by competitors; the effects of y p ; 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.
  • 4. Overview and Strategy September 4, 2008 Ron DeFeo Chairman & Chief Executive Officer
  • 5. Agenda 8:30 – 9:00 Registration and Breakfast 9:00 – 9:30 Opening Remarks and Strategic Overview 9:30 – 10:00 Financial Update 10:00 – 10:30 0 00 0 30 Ope at o s O e e Operations Overview 10:30 – 10:45 Break 10:45 – 11:15 Developing Markets 11:15 – 11:45 Terex Materials Processing and Mining 11:45 – 12:45 Luncheon 12:45 1:15 12 4 – 1 1 Terex Aerial Work Platforms f 1:15 – 1:45 Terex Construction 1:45 – 2:15 Terex Cranes 2:15 – 2:30 Break 2:30 – 3:00 Terex Roadbuilding, Utility Products & Other g y 3:00 – 4:00 Closing Remarks and Q&A
  • 6. 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 pp y g • 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 b h best place to work i our i d T be the b l k in industry as • determined by our team members
  • 7. Who is Terex? • Diversified Portfolio of Equipment Businesses • Positioned for Continuing Long - Term Trends g g • 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
  • 8. Why Invest? Diversified Portfolio of Equipment Businesses Terex sales percentage is based on last twelve months of sales through June 30 2008 30, Broadest portfolio in the industry
  • 9. Why Invest? Diversified Portfolio of Equipment Businesses Commodity Infrastructure Building and Operations/ Extraction Residential Construction Industrial Maintenance X Mining X X Matls. Proc. X X X X Construction X X X Roadbuilding X X Utilities X X X X Cranes X X X X AWP Exposure to Commodity, Construction, and Post - Construction Drivers
  • 10. Why Invest? Diversified Portfolio of Equipment Businesses 2007 SALES BY GEOGRAPHY 2007 SALES BY BUSINESS RBU 7% Developing AWP Markets 25% W. Europe 22% Construction 37% Japan / ANZ 21% 7% USA / Cranes MP&M Canada 24% 23% 34% $ 9.1 B $ 9.1 B Balanced by business; Balanced geographically
  • 11. 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
  • 12. Why Invest? Positioned for Continuing Long - Term Trends EXPENDITURES BY TOP 40 MINING COMPANIES EXAMPLE: NON-FERROUS METALS EXPLORATION (1989 – 2007), $B* CAPEX ($B)** OPEX ($B)** 200 60 12 $176 $51 180 50 10 160 $141 $134 140 $125 $37 40 8 120 $95 $28 100 30 6 $5 $75 80 20 4 60 40 10 2 20 0 0 0 '02 '03 '04 '05 '06 '07 '05 '06 '07 '89 '90'91 '92'93 '94'95 '96'97 '98'99'00 '01'02 '03'04 '05'06 '07 • Gl b l consumption d i i unprecedented l Global ti driving d t d levels of i l f investment t t • 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
  • 13. Why Invest? Positioned for Continuing Long - Term Trends GLOBAL RESIDENTIAL GLOBAL NON-RESIDENTIAL $B $B CONSTRUCTION (REAL 2007 $)* CONSTRUCTION (REAL 2007 $)* $4,000 $7,000 4.4 % $3,500 $6,000 CAGR 5.6 % $3,000 CAGR -0.8 % $5,000 CAGR 5.6 % $2,500 CAGR 1.3 % 5.1 % $4,000 CAGR 1.6 % CAGR $2,000 CAGR $3,000 $1,500 $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 Total Residential Infrastructure Industrial Other Non-residential • Global construction strong, despite weakness in developed markets • Terex is increasingly well positioned to capitalize with 22% of sales over capitalize, sales, 4,000 team members, and more than 30 locations now in developing countries * Source: Global Insights, July ‘07; 69 countries tracked by GI + 5% to account for rest of world … consistent with global GDP’s
  • 14. Why Invest? Leader in Our Categories and Our Industry Terex is one of the Largest Manufacturers of Construction Equipment in the World $30.4 Based on last twelve months of available Construction Equipment Sales ($’s in Billions) ( ) $19.0 $10.1 $9.1 $8.7 $8.1 $5.2 $5.1 $4.9 $4.5 $4.4 $3.7 Caterpillar (1) Hitachi (3) (4) Liebherr (7) CNH Global (8) Sandvik (10) Deere (5) JCB (7) Doosan (6) Oshkosh (9) Volvo Komatsu (2) Terex (1) R Represents t t l sales b f t total l before PPower Products, Fi P d t Financing and I i d Insurance S i Services sales l (6) Represents 2007 Construction equipment sales of $1.5 billion b R t C t ti i tl f $1 5 billi based on exchange d h for the 9 months ended March 31, 2008 plus Building Construction Products, EAME rate at December 31, 2007 of KRW/USD 936.07 plus estimated 2007 Bobcat sales of Operations, Heavy Construction & Mining and Infrastructure Development sales for the 3 $2.9 billion months ended June 30, 2008. (7) Estimated, as these are privately owned companies: (2) Represents Komatsu’s Construction and Mining Products segment as of March 31, JCB: 2007 sales of GBP 2.25 billion converted at Dec 31, 2007 GBP/USD rate of 2008. 1.9870 Exchange rate of 99.691 as of Mar 31, 2008 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 Eh t d fJ 30 f 106 18 31, 31 2007 EUR/USD rate of 1.4598 t f 1 4598 (4) Represents Volvo’s Construction segment as of June 30, 2008. Rate of USD/SEK (8) Represents CNH Global’s Construction Equipment Segment as of June 30, 2008 6.0241 (9) Represents Access & Concrete Placement equipment sales for the 9 months ended (5) Represents Deere’s Construction and Forestry segment as of April 30, 2008 June 30, 2008 plus Access & Commercial (both concrete & refuse trucks) for the 3 months ended Sep 30, 2007. (10) Represents 2007 Mining & Construction sales converted at SEK/USD 6.46
  • 15. 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 MP&M CRANES PLATFORMS • Hydraulic Excavators (top 3) • All Terrain Cranes (top 2) • Articulated boom lifts (top 2) (p) • Mining Trucks Mi i T k (#3) • Rough Terrain Cranes (top 3) • Telescopic boom lifts (top 2) • Surface Drills (# 3) • Tower Cranes (#3) • Scissor lifts (top 3) • Crushing & Screening (#1)** • Large Crawlers (#1) • NA Telehandlers (#2) • Highwall Miners ( ) g (#1) • Port Cranes (top 2)* (p) 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
  • 16. Why Invest? Leader in Our Categories and Our Industry LTM After-Tax ROIC-Machinery Industry • In-line with larger, more vertically integrated competitors • Better than diversified LTM After-Tax ROIC-Diversified Industrials 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
  • 17. Why Invest? Leveraging the Power of One Company • Our framework to build a stronger Terex • Process improvements will assure long term success
  • 18. Why Invest? Leveraging the Power of One Company Tom Riordan, Phil Widman President & Chief Senior Vice President & Operating Officer Chief Financial Officer Steve Filipov, Tim Ford, Bob Isaman, Rick Nichols, Eric Nielsen, George Ellis, President President President President President President Developing Markets Terex AWP Terex Construction Terex Cranes Terex MP&M Terex RBU
  • 19. Goals for 2010 GOAL June 30, 2008 LTM* What we must accomplish $12.0B in Sales $10.1B Implies 7.2% CAGR 12% Operating Margin 10.9% Execute on pricing process discipline, supply chain management, & TBS t initiatives 15% Working Capital to Sales 22.1% Optimize supply chain planning and execution “12 by 12 in ’10” is our medium - term stretch goal * LTM = Last Twelve Months
  • 20. Summary 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 y • Overcome challenges that are often hard to predict
  • 21. Terex Investment Analyst Meeting
  • 22. Supporting Profitable Growth September 4, 2008 Phil Widman Senior Vice President Chief Financial Officer
  • 23. Summary • 5+ years of strong g y g growth, driven by favorable market , y conditions and an increasingly robust portfolio •C Committed t core financial principles itt d to fi il i il Growth with modest debt leverage Industry l di I d t 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 long-term
  • 24. 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 $1 0 $8.0 $0.8 $6.0 $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 Q2 LTM Acquisitions: PPM Simon O&K Reedrill Powerscreen, Cedarapids ASV Hydra Fermec SHM CMI, Atlas Schaeff, Demag, Genie
  • 25. Terex to Date: Balanced Sales Growth Sales (USD billions) 2010 Goal $12B $10.0 $8.0 $8 0 CAGR 26% $6.0 $4.0 $2.0 $0.0 2002 2003 2004 2005 2006 2007 LTM Q2 2008 Aerial Work Platforms Construction Cranes Material Processing & Mining Roadbuilding, Utilities & Other Sales balanced between segments
  • 26. Terex to Date: Broad-based Profit Growth Operating Income 2010 Goal $1.44B (USD billions) $1.2 $1 2 $1.0 $0.8 CAGR 82% $0.6 $0.4 $0.2 $0.0 2002 2003 2004 2005 2006 2007 LTM Q2 2008 Aerial Work Platforms Construction Cranes Material Processing & Mining Roadbuilding, Utilities & Other Operating income growth outpacing sales growth Increasingly evenly distributed (AWP, MPM, Cranes)
  • 27. Terex to Date: Growth with Minimal Leverage g $10.1 $10 1 Net Debt Sales $9.1 ($ in billions) $7.6 $7 6 $6.2 $4.8 $4 8 $3.9 $2.8 $2.0 $2 0 $1.9 $1.8 1999 2000 2001 2002 2003 2004 2005 2006 2007 Q2 2008* Net leverage of .7x in Q2 provides flexibility • Q2 2008 sales is based on last 12 months sales as of June 30, 2008; Net Debt is as of June 30, 2008 • Net leverage ratio is defined as debt less cash and cash equivalents divided by last twelve months EBITDA
  • 28. Terex to Date: Cash Flow FREE CASH FLOW ($M) WORKING CAPITAL DETAIL (DAYS) 140 450 400 120 350 100 300 80 250 60 200 40 150 100 20 50 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 0 '03 '04 '04 '04 '04 '05 '05 '05 '05 '06 '06 '06 '06 '07 '07 '07 '07 '08 '08 2004 2005 2006 2007 Q2 '08 LTM Inventory Days Receivable Days Payable Days • Steady improvement in cash • Working capital has remained generation, with 2007 shift consistent but presents a explained b utilization of t l l i d by tili ti f tax loss significant opportunity t improve i ifi t t it to i benefits • Working capital (particularly • Targeting further improvement as g g p inventory) can and should y) our business continues to grow decrease with higher scale and improved processes Free Cash Flow is defined as Cash from Operations less Capital Expenditures
  • 29. Priorities for Cash Utilization Internal investment • Manufacturing capability / footprint • Human capital • Systems Value generating acquisitions • Geographic expansion • Category diversification • Bolt-ons Returning cash to shareholders Rt i ht h h ld • Current program in place • $1.2 billion authorized through June 2009
  • 30. Terex to Date: Return on Invested Capital 50% 43% 45% 40% 38% 40% 35% 30% 27% Pre-tax ROIC 27% 25% 5% 25% 21% After-tax ROIC f OC 20% 12% 15% 14% 10% 10% 3% 5% 0% 2003 2004 2005 2006 2007 Q2 LTM ROIC growth driven by operating income g g yp g growth faster than invested capital p 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.
  • 31. Terex to Date: Shareholder Returns Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Jun-08 $100 $256 $428 $533 $1,159 $1,177 $922 Terex Corp. $100 $129 $143 $150 $173 $183 $161 S&P 500® Custom Composite Index (8 $100 $163 $196 $228 $280 $434 $373 Stocks)
  • 32. Current Valuation versus Peer Group ENTERPRISE VALUE TO EBITDA 16 (Trailing 12 Months) 14 12 10 Sector Average 9.1x 8 6 4 2 0 Terex Manitow oc Oshkosh Astec CNH CAT Deere Joy Bucyrus Trading well below average industry valuation, despite continuing strong performance ii f
  • 33. Near Term Outlook - 2008 Continuing favorable trends in Cranes and Mining AWP and Construction anticipating weakness near term Difficult market conditions in the US • Europe softening faster than anticipated E ft i f t th ti i t d • Material costs increasing in advance of offsetting pricing actions • 2008 sales guidance $10.2 t $10 6 billi l id $10 2 to $10.6 billion 2008 earnings per share guidance: gp g $6.35 to $6.65 • 9% to 14% increase over 2007 • 2008 quarterly earnings per share guidance: 3rd quarter: $1.26 to $1.38 • 4th quarter: $1.20 to $1 33 $1 20 $1.33 • All EPS amounts are on a fully diluted basis
  • 34. Goals through 2010 GOAL June 30, 2008 LTM* What we must accomplish $12.0B in Sales $10.1B Implies 7.2% CAGR 12% Operating Margin 10.9% Execute on pricing process discipline, supply chain management, & TBS initiatives 15% Working Capital to Sales 22 1% 22.1% Optimize supply chain planning and execution “12 by 12 in ’10” is our medium - term stretch goal g * LTM = Last Twelve Months
  • 35. Sales Growth Drivers Active and relevant in high growth markets Global Market Doing business efficiently and effectively Participation Positioned to support product after sale Aligned with local market needs “Local” Delivered at local market price points Products Optimized production with global supply chain Clear product, service, or other advantages in all markets Competitive Value-adding relationships with customers Differentiation Leveraging th P L i the Power of O Company f One C 20% developing and 5% developed world growth would achieve ~$12B in 2010
  • 36. Operating Income Drivers Ensure Terex is receiving appropriate value for its p g pp p products Pricing / Mix Optimize product mix Offset rising commodity costs with commensurate pricing actions Coordinate supply efforts to leverage the scale of Terex Supply pp y Facilitate common designs and components Management Sourcing centers – China and India Terex Business System (TBS) & Terex Management System (TMS) Optimize manufacturing footprint Productivity Sales and production planning methodology Goal: 2 3% incremental margin G l 2-3% i tl i
  • 37. Cash Flow Drivers Grow Sales Product Enhance P fit bilit Eh Profitability Margin Integrated and aligned approach to tax planning More tax efficient business structure(s) Tax Planning Processes and resources to assure tax minimization Continued diligence around AP / AR Capital Aggressive inventory management Efficiency Capital expenditures to enhance profitable growth 15% working capital / trailing sales by 2010 Capex between 1.5% and 2.0% of sales 1 5% 2 0% Cash taxes will approximate tax expense
  • 38. 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 • O ti i Partnerships Optimize P t hi • Functions • Influence • Expand Customer Outsourced Customer Touch Points Experience pe e ce Protect balance sheet while supporting growth of business, especially in developing markets
  • 39. 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 Oi i t d • Increase Avenues to Competitive Capital Originate & Sell 2007 $1.3B 3rd Party Funding 2004 $0.5B Dealer Fi D l Finance Dealer Finance
  • 40. Enabling Initiative: Information Systems & TMS Infrastructure enhancements • E-mail standardized across the globe • Collaboration tools deployed to share information • St d di d WAN i f t t Standardized infrastructure t support Video, V i to t Vid Voice, and D t d Data Value-added solutions Supply Management analytics • Human Resource Standardization • Service Part Demand Planning • Customer Relationship Management (CRM) • Terex Management System (TMS) T M tS t Multi-year ERP Implementation • 1/3 of sales addressed by end of 2009 • Rest of company to follow •
  • 41. Terex Management Systems: Progress Single Integrated System Legacy Systems Architecture MK Avantage PRMS SPCS DIAPASON KBM Motherwell Coventry Data3 Great Plains Redmond Zweibrücken Zweibrü SAP R2 SAGE PBS Southaven Brisbane Omnis Germiston Langenburg SAP R3 Coalville Fourth Shift AUDITOR • Complete systems overhaul - implementing a single integrated ERP system single, • 3 businesses have “gone live” and the pace of implementation is accelerating • Implementation will enable more effective and efficient business practices
  • 42. Tax Planning Objectives EFFECTIVE TAX RATE – TEREX VS. INDUSTRY PEERS (Q2 2008) 40% 36% 36% 35% 34% 35% 33% 33% 32% 31% 29% TAX STRATEGIES 30% 28% 25% 25% 25% 23% 20% • Traditional Planning and 15% Execution 10% 10% 5% • Statutory Rate Reduction 0% 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 p yg • Industry minimums only achievable through Industry-minimums Strategies (OATS) aggressive structural change, but meaningful improvement can come through improved processes and practices
  • 43. Tax Strategy One Terex • OATS* can increase simplification, standardization, scalability and process i l bilit d improvement across T t Terex. • Proactively integrate business change with operational Total Solution and legal structures to place earnings in low tax countries. •C Comprehensive OATS are currently i place at our h i tl in l t Proven Strategy competitors and other leading multinationals. Material Tax Savings • Structural ETR# reductions average between 6% and 12% depending on industry and geographical footprint. Sustainable Benefits • Structural ETR reduction improves the ROI of business initiatives, increasing EPS and cash flow. * Operationally Aligned Tax Strategies; # Effective Tax Rate
  • 44. Summary • 5+ years of strong g y g growth, driven by favorable market , y conditions and an increasingly robust portfolio •C Committed t core financial principles itt d to fi il i il Growth with modest debt leverage Industry l di I d t 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 long-term
  • 45. Terex Investment Analyst Meeting
  • 46. Operations Overview September 4, 2008 Tom Riordan President and Chief Operating Officer
  • 47. Safety First Safety is ingrained in our culture through constant emphasis, training and tracking Lost Time Days continue to improve 4.5 4.0 3.5 Terex LTR 3.0 2.5 2.0 1.5 Jan 07 Jun 08 Dec 08
  • 48. Operational Update • Progress towards a integrated ope a g co pa y og ess o a ds an eg a ed operating company • Integration examples g Customer Satisfaction Supply M S l Management t New Product Development Terex Business Systems • Other progress and path forward
  • 49. Transformation Underway • Transitioning from a holding company to an operating company • Upgrading capabilities to drive business and functional performance GOALS OBJECTIVES •E Experienced l d hi d i i d leadership, driven t create change to th Right Talent • Resources and mandate required to succeed • Measurements defined and goals established Clear Metrics • Alignment within and across businesses • Well defined and well executed business processes Good Process •S t Systems that enable execution th t bl ti • Clear, permanent shifts in performance Results Res lts • Ability to sustain and improve
  • 50. Progress to Date Right Clear Good Results Talent Metrics Process AREA Safety Human Resources Information Technology Supply Management Product Development Manufacturing Marketing M k ti Finance/ Financial Services Distribution/ Logistics Aftermarket Support Process Improvement (TBS) Talent in place – progress underway
  • 51. Progress Examples • Customer Satisfaction • Supply Management • Product Development • Terex Business System (TBS)
  • 52. Customer Satisfaction: Objectives Vision: Most Responsive Company in the Industry as Determined by the Customer People to People Solutions P ltP l S l ti Customer-Defined Value Ct D fi d V l Make My Job Easier M k M J bE i “Relationships that II can depend Relationships that can depend “Make it easy for me to run my ““Deliverhighly competitive entry, Deliver highly competitive entry, “Make it easy for me to run my on to help me ”” business” operating and exit value”” on to help me business” operating and exit value 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
  • 53. 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 g p 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
  • 54. Customer Satisfaction Example: Net Promoter Score METHODOLOGY STATUS √ Current customer list • Piloted in Terex Fuchs in 2007 1. Target √ Decision makers & key influencers and extended into company- √ Core questions Conduct survey: 2. Listen wide roll-out in 2008 roll out √ Approved third party 3. Understand • Revealing significant opportunities to improve √ Sr. Management calls detractors 4. Detractor Follow Ups p • Revealing opportunities to √ Cross function team action plan meetings 5. Act √ Determine priorities better position in our markets √ To customers √ To team members 6. Communicate • Part of an on-going process on going √ Correlate with that will continue in our 7. Use to secondary number to validate business results company √ Once a year for relationship 8. Repeat & monitor Satisfaction studies NPS to be implemented in all Terex businesses by mid-2009
  • 55. Customer Satisfaction Example: Terex Brand of the Future METHODOLOGY STATUS • 1,268 interviews • Findings revealed several key insights regarding our customers, • Addressed a broad cross section of the our company and our industry company, industry • Currently using these findings to End-users, dealers and rental houses refine long-term objectives for the g j All b i businesses Terex brand Multiple geographies • Actions are already underway to • Sample included owners and non non- address some underlying d i dd d l i drivers of long-term brand value owners of Terex equipment Committed to building a strong brand that drives customer preference for our products di t f f dt
  • 56. Progress Examples • Customer Satisfaction • Supply Management • Product Development • Terex Business System (TBS)
  • 57. 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 Expand the Core sourcing processes Build the Common objectives Achieve Excellence A hi E ll organization International Sourcing Enhance sourcing Infrastructure tool set Deeper supplier integration eepe supp e eg a o Drive savings and TBS initiatives mitigate inflation Continual focus on savings and mitigating cost i fl ti d iti ti t inflation
  • 58. Supply Management: Priorities Teams activity engaged in major material cost elements Expected Valves, hydraulic Other consumables, average tools & dispatch kits Clamps, ties & straps 1 5% savings Documentation Plastic, polymers Fittings & adaptors Paint & coatings & rubber Other hydraulic & Cabs, accessories Aluminum Bearings, bushings & accessories & ropes pneumatic Transmissions, components hydrostatic Machined components, steel Other Other Other Gearboxes Pumps & pump hardware mech. electrical & gears assemblies, hydraulic Indirect & control spend p components 10% Product identification & labeling Motors, Fluid transfer Cylinders hydraulic & control, Fasteners & retainer rings non-hydraulic Hose Other structural fabricated components assemblies Other Controllers, timers, control powertrain modules & PBC Complex Tires, Axles Batteries assemblies rubber 5% Other power Castings & Steel Other running plants, IC engine forgings gear Tire & Crawler track Engine, wheel diesel assemblies assemblies Weldment, steel High Third Second priority priority priority 0% Ease of Implementation Difficult Easy Size of bubble: Total spend of respective commodity
  • 59. Building a Solid Foundation through Integrated Information Management eCOST COST Data warehouse Spending by BU, supplier, commodity, part, etc. NEW NEW GBT TST Terex Sourcing Tool Global Benefit Tracker eSourcing system used Detailed tracking and to efficiently manage NEW analysis of pricing changes l i f ii h RFIs, RFPs d Reverse RFI RFP and R TPT Auctions Terex Project Tracker j System used by sourcing teams to manage implementation steps following supplier award decisions
  • 60. Hydraulics Value Engineering Dramatic cost savings and efficiency improvement achieved by consolidating multiple component suppliers into a single, preferred g p p pp g ,p system supplier. Many similar opportunities currently being evaluated. • Value analysis and supplier consolidation • Annual spending on initial in scope components: $2.6 million • Savings by sourcing as a complete system: over $1.5 million, 59% •I l Implemented July 2008 t dJ l
  • 61. Steel Fabrication Sourcing in India Five-year agreement executed with a large, well positioned Indian fabricators to produce large fabrications for Terex operations world-wide. world wide. • 5-year fixed labor, overhead and profit margins Advantage: favorable labor cost environment • Linkage to published local Indian steel price index Advantage: favorable Indian steel market dynamics • Local Terex sourcing & SQA presence to support supplier pp pp One-Terex approach • Build business presence in India • Six initial business units, annual spend: $16.8 million • Initial annual savings: $3.1 million
  • 62. Progress Examples • Customer Satisfaction • Supply Management • Product Development • Terex Business System (TBS)
  • 63. Product Development: Process Customer Insights/ Feedback New Technologies Competitive Benchmarking Ideas for New Products / Product Enhancements New P d t Product Identification “Doing the (NPI) method Right Things” New Product & • Customer driven Process • Innovative NOT Development Inventive (NPPD) method • Profitability based • Cross-functional “Doing Things Right” Gate 0 • Clear upfront objectives • Detailed plans • Progress metrics • Rapid escalation and p decision-making
  • 64. Product Development: Objectives SITUATION: OBJECTIVE: ENHANCE INCREASING DEMAND CAPABILITY AND CAPACITY New Global Markets Tier 4 Regulations Standardization and Collaboration • Powertrain Global R&D Centers • Electrical & Electronics • H d li Hydraulics Process Efficiency • Metals Improvements • Major new regulatory requirements (Tier 4) and new market opportunities will place increasing demand on existing product development capacity • Improve processes, collaboration and standardization within and across businesses • Utilize existing resources more efficiently and effectively • Access incremental staffing with the right skills through R&D Centers in India and China
  • 65. 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 d Actively migrating existing product programs to • new process and new phase-gate discipline Upgrading engineering and cross functional cross-functional • product development capabilities in parallel • Realizing clear benefits as we go
  • 66. Progress Examples • Customer Satisfaction • Supply Management • Product Development • Terex Business System (TBS)
  • 67. Terex Business System (TBS) The Terex Business System is our framework to build a stronger Terex
  • 68. 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 p • 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
  • 69. TBS Operational Diagnostic • Terex facilities are at various stages of TBS implementation – diagnostic tool will: Determine progress Enable team member education and development Provide a roadmap for dep oy g TBS co cep s o de oad ap o deploying S concepts • Provides a consistent framework for measuring improvement over time
  • 70. 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, t l transparent factory floor with flow tf t fl ith fl Mixed M d l Line, d i Mi d Model Li designed f ergonomic d for i and visual controls build activity and attached to a moving line • Parts Carts • Increased throughput by 4 – 5 x – P t pulled and kitt d prior t b ild Parts ll d d kitted i to build • Cut working capital days by 2/3 – Visual Management for unit status and identification of part shortages • Now turning inventory at 11-12 times per – Carts follow build sequence adding a sequence, year vs. 2 3 at the beginning of 2005 vs 2-3 visual quality step • Andon System/ Escalation Procedure • On time delivery improved by 50% On-time
  • 71. TBS: Recent Improvements Material Processing – Omagh, N. Ireland Mining Trucks – Acuna Mexico After Photo After Before After Before New “craneless” production line Portable crane in use to rotate frame • 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. • Eliminated the use of cranes, improving • Additional improvements will now be productivity, quality and safety based on the established standards • Monthly production levels increased by a • Production increased almost 50% over factor of 4 times within existing two years within the existing manufacturing footprint manufacturing footprint • Inventory turns improved 35% over a two year period to mid-teens
  • 72. TBS and Global Manufacturing Footprint • Developing shared production campuses in India and China 45 acre site near Chennai India currently under construction Chennai, 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 g • Each campus will house up to 3 Terex shipping segments, leveraging shared capabilities g , gg p 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
  • 73. TBS and Global Manufacturing Footprint DEVELOPED WORLD DEVELOPING WORLD Improve effectiveness at existing Increase presence in developing locations – applying TBS to countries ti streamline operations Leverage product and cost Rationalize developed market positions globally footprint • Significant progress is underway, but change will require investment g pg y, g q • Balancing opportunity for change with market and other factors
  • 74. Other Progress • Impossible to cover the amount of improvement underway at Terex in a 30 minute presentations • Parallel progress continues on multiple fronts: pg p Talent Recruitment and Development Diversity and Inclusion y Terex Management Systems implementation Branding/ Marketing/ and Customer Satisfaction Terex Financial Services Global Logistics Global Service d Support Gl b l S i and S t • Positioned to take our performance to the next level
  • 75. 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 • Progress is significant • 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
  • 76. Terex Investment Analyst Meeting
  • 77. Terex Developing Markets September 4, 2008 Steve Filipov President, Terex Developing Markets and Strategic Accounts
  • 78. Developing Markets Summary • ~$2 2B* of sales were from developing countries growing at ~$2.2B countries, more than 3x our overall growth rate • 4,000 team members operating from more than 30 company and joint venture facilities in developing markets j pg • The Developing Markets Team will enable and drive our continued success • Goal of $4B sales at the end of 2010 * Latest 12 months sales as of Q2 ‘08
  • 79. What is a is a Developing What developing market? Market? ’06–’07 Growth in GDP/Capita $25k/head (i.e., “development”) 15% “Developing” “Developed” • Low but increasing prosperity High • Increasing 10% Growth construction spending Moderate 5% Growth • Increasing commodityy Low consumption Growth 0% • Conditions favoring ($10) $0 $10 $20 $30 $40 $50 $60 GDP/Capita GDP/C it sustained, long- (i.e., “prosperity”) term growth -5% W. E W Europe N. America NA i ANZ M. East ME t Africa Af i Japan Asia E. Europe S/C America Source: Analysis of data from the Economist eiu; Bubbles represent countries. Bubble size is proportioned to country GDP
  • 80. What is a is a Developing What developing market? Market? REAL GDP REAL GDP PER CAPITA ($Trillion, ’07) ($000, ‘07) China India Other Asia Russia E. Europe Brazil Other S/C America 2007 2017 Middle East 2027 Southern Africa $0 $2 $4 $6 $8 $10 $12 $0 $5 $10 $15 $20 • China and India are important, but we are at least as bullish on other economies where total GDP is smaller but average wealth is increasing rapidly • Strong potential both within and outside of “BRIC” countries Source: Analysis of data from the Economist eiu; + Terex internal estimates
  • 81. What is a Developing Market? Shenzhen Source: http://www.tongz.net/life/bulletin.asp Source: http://www.tongz.net/life/bulletin.asp 1992 2007 Source: Source: http://urbancom.blogspot.com/2007_07_01_archive.html http://urbancom.blogspot.com/2007_07_01_archive.html Source: http://urbancom.blogspot.com/2007_07_01_archive.html 2007 2007
  • 82. What is a Developing Market? Dubai 1990 2007 2003 No attribution – can be found on numerous websites regarding Dubai
  • 83. What is a Developing Market? Mexico City y ~ 1970 ~ 2007 Source: MEXonline.com® LLC Source: www.wikipedia.com
  • 84. Long-Term Global Infrastructure Need • W ld t spend World to d >$40T on infrastructure • 65 % will be in developing countries • Opportunity to benefit from this trend and the subsequent building and operating activity that it creates
  • 85. Terex: Developing Markets Growth to Date DEVELOPING MARKET DEVELOPING MARKET SALES BY BUSINESS ($) SALES GROWTH ($) RBU AWP Africa Construction Middle East S/C America MP&M Russia/ E. Europe Cranes Asia, ex. Japan 2004 2005 2006 2007 2004 2005 2006 2007 Broad Based Global Growth 22% of 2007 sales Strongest In 3 Businesses 42% CAGR 2004 - 2007
  • 86. Developing Markets - Goal Developed Markets Developing Markets Sales Current Goal 2007 ~$ 2B 2010 $ 4B
  • 87. Developing Markets – How? Accelerate • Remove roadblocks, accelerate roadblocks progress we are investments, etc. to enable faster growth already making where traction has already been achieved Broaden benefits • Leverage synergies between businesses from the progress to achieve greater overall benefit from we make market progress that is made Establish traction in • Facilitate entry by Terex businesses into high potential but high growth developing markets where we under-penetrated are currently under-represented geographies Pursue “white • Identify and pursue opportunities in space” opportunities developing markets that offer growth that might have been potential but sit outside the domain of missed i d current Terex businesses
  • 88. Developing Markets: First Steps ‘One Terex’ Strategies • Chi China, India, S/C America, Russia/ E t I di A i R i / Eastern Europe, Africa E Af i Great Talent – Organized to Win • Top talent in key country roles • Local “back-office” Support teams • Clarity of roles and responsibilities Global Network with Local Relevance • Global Supply and Manufacturing, positioned to deliver locally •LLocally d i ll driven b t globally consistent sales, service, and support but l b ll it t l i d t • Terex Financial Services Integrated Execution that leverages the Power of One Company • Visibility from the top • Aligned approach to maximize outcomes
  • 89. Specifics by Market: China PATH FORWARD IN CHINA • Build-out leadership and support structure – Shared service in Beijing – Local business teams • Strengthen local p g presence in existing high-growth product areas – Construction products – Mining products TEREX TODAY • # 1 in >100 t trucks (2007) – Cranes • # 1 in <100 t trucks (minority position) • Develop emerging opportunities p g g pp • # 3 in truck mounted cranes (JV) – Aerials • # 1 in a small current market for AWPs – Mining Excavators • 5 manufacturing l f t i locations* ti * –Mt il P Materials Processing i * Includes JVs and minority owned facilities; also includes Fantuzzi at Xiamen
  • 90. Specifics by Market: India PATH FORWARD IN INDIA • Build-out leadership and support structure – Shared service in Delhi – Local business teams • Establish manufacturing and engineering center in Hosur – Materials Processing – Tower Cranes – Technology TEREX TODAY • # 1 in mobile materials processing • Develop distribution and strengthen local alliances • # 4 in backhoe loaders – Vectra distribution • Long sales history in mining ( g y g (trucks) ) – Local partners • Positioning for future growth * Includes JVs and minority owned facilities; also includes Fantuzzi at Xiamen
  • 91. Hosur, India – Regional Presence
  • 92. Specifics by Market: South & Central America PATH FORWARD IN SOUTH AND CENTRAL AMERICA • Build-out leadership and support structure – Sao Paulo – Mexico City Continue momentum with “One- Terex” offering concept • Increase local manufacturing content/ presence TEREX TODAY – Porto Allegre g • # 1 in aerial work platforms – Other? • # 1 in asphalt paving • Increase exposure to local centers • Strong recent growth in construction of demand (mining, Panama, …) and mining products
  • 93. Specifics by Market: Russia/ E. Europe PATH FORWARD IN RUSSIA AND EASTERN EUROPE • Build-out leadership and support Russia structure – Shared service in Moscow – Local business teams • Develop and strengthen local distribution TEREX TODAY • ~$400M in 2007 sales • Access local components – especially for use in W. European • Excellent growth across multiple manufacturing fti businesses (Construction, Cranes, Materials Processing, …) • Develop options around local/ • Primarily succeeding via strong local y g g regional manufacturing distribution
  • 94. Developing Markets Summary • ~$2 2B* of sales were from developing countries growing at ~$2.2B countries, more than 3x our overall growth rate • 4,000 team members operating from more than 30 company and joint venture facilities in developing markets j pg • The Developing Markets Team will enable and drive our continued success • Goal of $4B sales at the end of 2010 * Latest 12 months sales as of Q2 ‘08
  • 95. Terex Investment Analyst Meeting
  • 96. Terex Materials Processing & Mining September 4, 2008 Eric Nielsen President, Terex MP&M
  • 97. Terex MP&M in Summary • $2.4 B* provider of surface mining and aggregate p g gg g equipment solutions sold to mining, quarrying, and construction customers worldwide • Capitalizing on continuing favorable trends in global commodity and aggregate demand • Addressing constraints globally while investing in people and capabilities that improve the customer experience • Well positioned to deliver excellent value to Terex shareholders in the years to come * Last 12 months through June 30, 2008
  • 98. MP&M: Products Mining Mining Highwall Surface Trucks Excavators Miners Mining Drills Top 3 Top 3 #3 #1 Parts/ Mobile Materials Static Materials Tools Processing Processing High Margin #1 Technology
  • 99. MP&M: Mix PRODUCT MIX ($) GEOGRAPHIC MIX ($) 29% 35% 47% 58% 15% 21% 13% 22% 13% 19% 13% 34% 29% 27% 25% 2004 2008 Q2 YTD 2004 2008 Q2 YTD Developing Markets D li M kt Materials Processing Japan / ANZ Drills/ Other W. Europe Trucks USA / Canada Shovels
  • 100. MP&M: Growth MP&M RESULTS $B $2.5 30% • Sales up 31% since 25% $2.0 $2 0 2004 (C G ) (CAGR) 20% • Operating Profit up $1.5 51% (CAGR) 15% $1.0 • Robust demand for 10% mining and $0.5 5% quarrying $0.0 0% 2004 2005 2006 2007 Q2 '08 (ltm) Sales Gross Margin Op. Margin
  • 101. MP&M: Market Environment in Mining REAL ALUMINUM PRICES REAL COPPER PRICES REAL IRON ORE PRICES 5000 14000 120 SINCE 1900 (’07 $/TON) SINCE 1900 (’07 $/TON) SINCE 1900 (’07 $/TON) 4500 1983 12000 100 Reagan 4000 steel tariffs 10000 3500 80 3000 8000 Omitted 2500 60 6000 aluminum 2000 pre-WWII pre WWII 40 1500 4000 1000 20 2000 500 0 0 0 898 908 918 928 938 948 958 968 978 988 998 008 898 908 918 928 938 948 958 968 978 988 998 008 898 908 918 928 938 948 958 968 978 988 998 008 18 19 19 19 19 19 19 19 19 19 19 20 18 19 19 19 19 19 19 19 19 19 19 20 18 19 19 19 19 19 19 19 19 19 19 20 REAL SILVER PRICES REAL GOLD PRICES 60 1800 SINCE 1900 (’07 $/troy oz) SINCE 1900 (’07 $/troy oz) 1600 50 1400 40 1200 1000 30 800 20 600 400 10 200 0 0 1898 1908 1918 1928 1938 1948 1958 1968 1978 1988 1998 2008 1898 1908 1918 1928 1938 1948 1958 1968 1978 1988 1998 2008 GDP growth in developing markets driving price growth Source: Analysis of USGS Historical Statistics for Mineral and Material Commodities
  • 102. MP&M: Market Environment GLOBAL NON-RESIDENTIAL GLOBAL RESIDENTIAL $B $B CONSTRUCTION (REAL 2007 $) $)* CONSTRUCTION (REAL 2007 $) $)* $4,000 $4 000 $7,000 $7 000 4.4 % $3,500 $6,000 CAGR 5.6 % $3,000 CAGR -0.8 % $5,000 CAGR 5.6 % $2,500 $2 500 CAGR 1.3 % $4,000 5.1 % CAGR 1.6 % $2,000 CAGR CAGR $3,000 $1,500 $2,000 $1,000 $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 Total Residential Infrastructure Industrial Other Non-residential • Global growth in construction continues, despite weakness in US • Construction driving high need for quarrying and aggregates • Fl ibili of mobile equipment i i Flexibility f bil i is increasingly valued il ld Source: Global Insights, July ‘07; *69 countries tracked by GI + 5% to account for rest of world … consistent with global GDP’s
  • 103. MP&M: Outlook • Underlying drivers for g yg global mining and aggregate demand g gg g are intact and are likely to continue Developing markets driving increased g pg g global demand Demand driving increased investment and activity Expanding need for equipment • Competition will intensify, but we are well p p y positioned to capitalize on strong global markets Strong p g product franchises Quality of global distribution Improving aftermarket capabilities
  • 104. MP&M: Strategy Key focus areas through 2010 Kf h h 1. New Product Introductions 1 N P d t I t d ti 2. 2 Strength/ Consistency of Global Distribution, Service and Support 3. Globally Optimized Footprint & Cost Structure 4. Leveraging our Portfolio of Businesses
  • 105. MP&M: New Product Introductions MT 6300 Electric Drive SK-L • Increased focus on • Ultra-capacity truck • Large capacity drill to electric drive (400 t) complement large excavators to lower t tl haul d h h l and shovel l • Built with Terex- fuel cost products designed drive system • New markets for • Electric drive option large excavators to lower fuel cost • Trucks in operation in Australia and • Work in progress on • Work in progress on Canada automation automation
  • 106. MP&M: New Product Introductions XA 750 984 SCREEN • Large capacity mobile • Large Crusher, capable of horizontal screen p producing 800 tons p hour g per • Designed to work in • Targeting large quarries and conjunction with higher output small mines crushing plant as part of a hi lt tf “mobile system” • Market launch scheduled for October/ November 2008 • Target customers will be large quarries and mines
  • 107. MP&M: Distribution, Service, and Support Priorities pp OBJECTIVES Installed base continues to grow, grow driving aftermarket service • Strengthen Global Distribution opportunities – Increased standards EXAMPLE: HYDRAULIC – Renewal of distribution capabilities EXCAVATOR INSTALLED BASE – Improved support for larger, more sophisticated customers p – Extend into new geographies • Greater Aftermarket Participation – Improve aftermarket capabilities internally and in the channel – Increase perceived value for Terex branded parts & service – Add/improve maintenance & service capabilities 2002 2003 2004 2005 2006 2007
  • 108. MP&M: Manufacturing Footprint Crushing and Screening Products, UK Drills, Crushing Excavators and Screening Germany Equipments, USA New Factory Excavators Tianjin, China Mining Trucks Acuna, Mexico New Factory Crushing and Screening Products Hosur, India • Adding footprint in India (Materials Processing) • Adding small excavator capability in China (Mining) • Evaluating acquisitions to accelerate global progress
  • 109. MP&M: Portfolio Leverage Roadbuilding and Segment: Quarries/ Small Mines Large Mines Construction Contractors Mobile Materials Processing g MP&M Offering: Static Materials Processing Shovels and Trucks Drills/ Drilling Tools Construction Equipment Other Tere Terex Offerings: Rigid and Articulating Trucks • Potential synergy within MP&M and across Terex • Developing approaches to strategic accounts that provide value from a portfolio offering
  • 110. Terex MP&M in Summary • $2.4 B* provider of surface mining and aggregate p g gg g equipment solutions sold to mining, quarrying, and construction customers worldwide • Capitalizing on continuing favorable trends in global commodity and aggregate demand • Addressing constraints globally while investing in people and capabilities that improve the customer experience • Well positioned to deliver excellent value to Terex shareholders in the years to come * Last 12 months through June 30, 2008
  • 111. Terex Investment Analyst Meeting
  • 112. Terex Aerial Work Platforms September 4, 2008 Tim Ford President, Terex AWP
  • 113. AWP: Summary • $2.3B* supplier of aerial booms, scissor lifts, and other $2.3B products Well recognized brands and products Strong industry reputation • Short term challenges exist – but the industry is better positioned than in previous cycles • Long-term aerial work platform growth fundamentals remain strong • We are building a more diverse business to win globally * Last 12 months through June 30, 2008
  • 114. AWP: Products Power & Other Telehandlers Booms Scissors Products & Portables Global Strong Growth Growth Leader Position Potential Potential
  • 115. AWP: Mix PRODUCT MIX ($) GEOGRAPHIC MIX ($) 5% 8% 6% 16% 4% 29% 9% 21% 29% 19% 13% 19% 68% 59% 56% 39% 2004 2008 Q2 YTD 2004 2008 Q2 YTD Developing Markets Portable, Power & Other Japan / ANZ Telehandlers W. Europe Scissors USA / Canada Booms • Growth propelled by Booms and • Less dependence on North America Scissors • Growth in Western Europe and • Telehandlers and Power Products Developing Markets represent growth potential
  • 116. AWP: Growth AWP RESULTS $B $2.5 30% • Sales up 30% since 25% $2.0 $2 0 2004 (CAGR) 20% $1.5 • Operating Profit up 15% 48% (CAGR) $1.0 10% • 18.6 % Operating $0.5 5% Margin M i Q2 2008 $0.0 0% 2004 2005 2006 2007 Q2 '08 (ltm) Sales Gross Margin Op. Margin
  • 117. AWP: Market Environment U.S. near term construction market is challenging… ARCHITECT BILLING INDEX BUSINESS CAPITAL SPENDING CYCLE
  • 118. AWP: Market Environment • Near term weakness in North America and W t A i d Western Europe E 2H08 and 1H09 rental cap ex to be down 15% - 30% Recovery beginning in 2H09 • No signs of weakness in Developing Markets Latin America remains strong L ti A i i t Asia Pacific orders strengthening Eastern Europe, Middle East continue to grow • Manufacturers responsibly reducing production • Customers recognize need for manufacturers to raise prices …But long term outlook is promising
  • 119. AWP: Rental Industry Fleet Large rental companies getting bigger… TOP 50 RENTAL COMPANY AERIAL FLEET SIZE * • Top 50 rental companies are (Units) growing organically and 500000 through acquisition 446956 402900 400000 • Large fleets being managed 176446 332700 151200 with more discipline 300000 283071 266511 124942 95096 81011 200000 • Growth cap ex likely to be reduced in the near term 270510 251700 207758 100000 187975 185500 • Replacement cap ex required p p q 0 to mitigate fleet aging 2004 2005 2006 2007 2008 Top 10 Next 40 …Industry fleet management improving * Source: Access International
  • 120. AWP: What’s Different Aerials industry has matured in this decade… 2008 2000 – 2002 • 4 – 5 major manufacturers j ft • 25+ manufacturers • 5 – 10 strong rental leaders in each • Little rental channel consolidation region • Largely a U.S. market • Accelerating demand in new markets • Younger fleet age on average • Broadening base of applications •N Narrow application usage li ti • Sophisticated fleet management • Weak fleet management practices • More predictable purchasing • Inconsistent purchasing behaviors behavior bh i More favorable industry structure
  • 121. AWP: Vision Our i i is to be the O vision i t b th most t global, global trusted and responsive responsive, local solutions provider in the access industry. y
  • 122. AWP: Strategy High growth, growth Strengthen Extend E t d aerial il high margin and globalize offering and Maximize the contributor to our core channel installed base 12 X 12 in ‘10 10 business penetration Terex Business System • Manage cost structure • Grow existing • More global enterprise • New “work at height” aftermarket business offerings • Globalize • More diverse revenue manufacturing and • Expand services profile • “Non-aerial” supply chain business products for rental • Increased share of • Extend global sales • Secure business rental wallet • Add new distribution and service reach through TFS channels h l • Continued industry • Improve IT capability leader in terms of revenues and returns Strengthen the core, globalize the business and diversify the revenue
  • 123. AWP: Terex Business System TEREXLIFT ITALY Z-45 Lean with Customers for deeper relationships Lean with Suppliers for better cost and quality Before After Lean for • Approximately 1500 participants in over 170 TIP Administrative Processes events delivers better efficiency • Administrative Kaizen focus on forecast–to-cash; forecast to cash; over 10 TIP events run in support of the effort Lean in Manufacturing • Japan Study Missions for continued development for lower costs and Nearly 100 Team Members sent over past two years better working capital AWP Executive leadership participating end of September
  • 124. AWP: Globalizing Manufacturing EUROPE CHANGZHOU, CHINA • Boom production in Italy in 2007 • Plans announced in April • Scissor production in UK in 2007; second line later this year • Operational mid next year • Eastern European facility selection • Full product line over time p process underway • Domestic consumption and export
  • 125. AWP: Developing Markets AWP resources deployed to capitalize on emerging opportunities… opportunities CHINA LATIN AMERICA MIDDLE EAST Growing market beginning Buoyant economic growth Substantial construction • • • to adopt aerials in South and Central investment in region America Team deployed since 1998 Team deployed since early • • Team deployed since 1999 2007 • Adding engineering and • sourcing “One Terex” sales One Terex Dubai service center • • approach Brazil service center • Value V l proposition of “safety and productivity” iti f“ f t d d ti it ” translates around the world…
  • 126. AWP: Genie Fleet Growth • 250% increase in Booms; 400% increase in Scissors • Fl Fleet nearing end of “fi lif ” i d f “first life” • Customers seeking refurbishment and maintenance solutions SALES GROWTH SINCE 2002 (Indexed) 700 Before 600 500 400 300 200 100 After 0 2002 2003 2004 2005 2006 2007 Scissors Booms Several hundred million dollar global S l h d d illi d ll lbl opportunity with attractive margins
  • 127. AWP: Beyond Aerials AWP products represent 23% of rental customer capital expenditures expenditures….. Cross Selling Opportunities • Utility equipment • Backhoe loaders B kh l d • Compact track loaders Current AWP • And more … Other Products Compact Equipment Big Dirt Present one face to the customer to P t f t th t t more deeply penetrate the rental channel
  • 128. AWP: Near Term Agenda Several initiatives to drive continued performance… 1. Continued cost • Align cost with volume reduction • TBS investment • Product line rationalization • Strategic sourcing • Strengthen sales leadership 2. Strengthen value • Improve financial services offering proposition • Improve p p parts p performance and aftermarket capability p y • Local management teams 3. Globalize • Global sales, service and manufacturing infrastructure • Information systems
  • 129. Terex AWP in Summary • Leading position in key products and room to grow in others •M More mature industry will prevent short t t id t ill t h t term challenges from becoming a long term problem • Value proposition translates around the world and developing markets are adopting aerials • Focused management team in place to execute through near term challenges and deliver on long term strategy
  • 130. Terex Investment Analyst Meeting
  • 131. Terex Construction September 4, 2008 Robert Isaman President, Terex Construction
  • 132. Terex Construction in Summary • $1.9 B* provider of construction-related equipment • On-going operations and market-based transformation during a period of weakness in traditional core g g p p geographies • Near term performance is challenging but long-term potential has never been higher • Recent addition of ASV furthers an already strong growth platform in compact • High growth in scrap, quarries, and other segments where Terex products create unique value • Continuing opportunity to change the game in more crowded, heavy equipment categories • Positioning Terex for segment and geographic leadership as conditions improve over the coming 2-3 years * Last 12 months through June 30, 2008
  • 133. Construction: Products Material Compact Heavy Off-Road Handling Equipment Equipment Trucks Robust Filling Global 1 of 4 Portfolio Gaps Growth
  • 134. Construction: Mix PRODUCT MIX ($) GEOGRAPHIC MIX ($) 13% 17% 20% 28% 1% 1% 19% 13% 65% 17% 28% 63% 42% 36% 21% 16% 2004 2008 Q2 YTD 2004 2008 Q2 YTD Developing Markets D li M kt Trucks Japan / ANZ Material Handling W. Europe Heavy USA / Canada Compact
  • 135. Construction: Growth CONSTRUCTION RESULTS $B • Sales up 14% since 30% $2.0 2004 (CAGR) 25% • US and W. Europe $1.5 20% soft, but global 15% growth solid th lid $1.0 10% • Strengthening/ $0.5 improving 5% performance in $0.0 0% advance of recovery 2004 2005 2006 2007 Q2 '08 (ltm) Sales Gross Margin Op. Margin
  • 136. Construction: Market Environment • Demand weaker Core Geographies Soft • Volume and material costs impacting margin • Excellent growth in Eastern Europe, Africa, Developing Geographies and other developing geographies Strong • China, India, and South America are continuing opportunities • Dollar appreciating, but denomination in Currency Improving but Euro is a continuing disadvantage Still a Barrier • Global Footprint critical • Consolidation likely in a down market and Opportunities to accelerate global opportunities continue via partnerships and/or • Focused on step-change transactions versus step change acquisitions small bolt-ons that bring breadth vs. depth
  • 137. Construction: Strategy Three phase path toward achieving full potential… 1 2 3 Build-out long- Build around the Optimize the p p profitability y term through g strongest and most a repeatable of the current portfolio attractive businesses system Fix the overall cost Develop and expand Roll-out Roll out winning • • • and asset structure winning, repeatable models organically business model for across best markets Implement • our strongest redesigned business Evaluate and pursue • markets processes focused M&A targets Evaluate a disruptive that leverage and • Focus investments • business model in enhance our best and redesign around ddi d attractive markets geographic, product, stronger/attractive areas where you are and customer markets and weaker/not present segments products today
  • 138. Construction Programs Activity in Progress Program • Improve existing manufacturing Operations Improvement • Globalize and rationalize footprint and Integration dI t ti Channel • “3 Crown” dealer standards Management M t • Integrate and upgrade network Local Product • Repeatable customer-oriented approaches Repeatable, customer oriented Density • Increase product densities to enable efficient support • Build-out presence in India and China Global Growth • Continue growth in other developing markets • One-stop shopping where current presence is limited
  • 139. Operations Improvement Example MOTHERWELL, SCOTLAND – ARTICULATED AND RIGID TRUCKS Before f After f After f • Integration of TA30 and TA40 articulated truck lines into a single, mixed model line • Cycle times reduced by 38% • Lead time reduced by 20 – 30% y • Released $750k of work in process inventory
  • 140. Operations Integration Plan 40 % of Total Manufacturing Footprint EMEA 30 % of Total Manufacturing Footprint 30 % of Total Americas Manufacturing Asia Footprint Sourcing Manufacturing Engineering
  • 141. Channel Management Progress 3 Crown: Measuring Dealer Performance/ Implementing Best/ Improving Capabilities Dealer Capabilities include… •Staffing 3 Crown •Training •Marketing •Service Infrastructure •Parts Infrastructure 2 Crown Performance Metrics include… •Business Management •Facility • Market Share • Customer satisfaction • Number of Terex lines carried 1 Crown • Parts sales • Equipment sales • Year over year growth 0 Crown • Utilization of Terex Financial Services “Qualifying” • Rental •IInvesting and d ti d developing our channel li h l • Enabling partners to further drive our business
  • 142. Local Density Objective and Progress Customer Value Proposition p • We will “never leave a customer with a problem” • We will drive down the total lifecycle cost of ownership • Focusing on building products that increase jobsite productivity Build local machine population sufficient to attract good dealers B ild l l hi l ti ffi i t t tt t dd l
  • 143. Global Markets Update Emerging Growth Emerging markets helping to sustain business as gg g developed markets soften. Russia/ R ssia/ South Africa China India Latin America Eastern Europe • Largest • Significant heavy • Strengthening • Commodities, • Transition of g y developing position in energy, and Eastern equipment country for backhoes infrastructure- European market with Terex driven growth economies opportunities to • Opportunity to pp y Construction penetrate penetrate in • Large, multi- • Affinity for • Promising other categories year projects in Western • Emerging future outlook as strong pipeline (e.g., European opportunities in market growth Panama) products compact t continues • Excellent growth to date
  • 144. Terex Construction in Summary • $1.9 B* provider of construction-related equipment • On-going operations and market-based transformation during a period of weakness in traditional core geographies • Near term performance is challenging but long-term potential has never been higher g Recent addition of ASV furthers an already strong growth platform in compact High Hi h growth in scrap, quarries, and other segments where T th i i d th t h Terex products create unique value Continuing opportunity to change the g g pp y g game in more crowded, heavy y equipment categories • Positioning Terex for segment and g g p g g geographic leadership as p conditions improve over the coming 2-3 years * Last 12 months through June 30, 2008
  • 145. Terex Investment Analyst Meeting
  • 146. Terex Cranes September 4, 2008 Steve Filipov President, Terex Developing Markets
  • 147. Terex Cranes in Summary • $2.6B* provider of mobile cranes, crawler cranes, and tower $ p , , cranes sold through dealers and rental houses worldwide • Benefitting from strong demand for energy, infrastructure, and industrial projects worldwide • Generating excellent returns via well managed mix and pricing and via targeted productivity improvements in some g g y segments of the business • W ll positioned i a continuing strong market, while Well iti d in ti i t k t hil protecting the downside through investment discipline and through increased diversification of the p g portfolio * Last 12 months through June 30, 2008
  • 148. Cranes: Broad Product Portfolio All Terrain Crawler Rough Terrain Truck Cranes Cranes Cranes Cranes Large capacity it #3 #2 #3 leader Tower Boom Pick & Carry Reach Cranes Trucks Cranes (AU) Stackers #3 #2 #1 # 2* * Including Fantuzzi
  • 149. Fantuzzi: Diversity & Growth Opportunities Ship To Shore Straddle Carrier Rail / Rubber Tire Gantry Fixed Mast Container Handler Mobile Harbor Crane Reach Stacker • World’s Number 2 in Port Cranes; 2007 sales of $ $650M • Market, geographic, and product diversification for Terex
  • 150. Cranes: Mix PRODUCT MIX* ($) GEOGRAPHIC MIX* ($) 3% 6% 17% 15% 27% 11% 6% 6% 20% 7% 15% 15% 55% 40% 62% 47% 25% 22% 2004 2008 Q2 YTD 2004 2008 Q2 YTD Developing Markets Stackers Towers Japan / ANZ Crawlers W. Europe Other Mobile USA / Canada ATC / RT Balanced and broad portfolio * Excluding Fantuzzi
  • 151. Profitable Growth CRANES RESULTS* $B 30% $2.5 • Sales up 29% 25% (CAGR) since 2004 $2.0 20% • Operating Income $1.5 15% up 92% (CAGR) $1.0 10% • Continuing strong $0.5 5% outlook $0.0 0% 2004 2005 2006 2007 Q2 '08 (ltm) Sales Gross Margin Op. Margin * Excluding Fantuzzi
  • 152. Cranes: Energy Applications WORLD WIND ALTERNATIVES PENETRATION Global Wi d P Gl b l Wind Power Projected Wind Consumption Opportunity** as % of Energy Consumption 22% a s % o f E le c tr ic ity C o n s u m p tio n 20% P r o je c te d W in d G e n e r a tio n o Terex® Demag T ®D 18% Approximate Wind Penetration, end of 2007 16% CC 2800-1 NT Approximate Wind Penetration, end of 2006 14% 12% 10% r 8% 6% 4% 2% 0% P o r tu g a l U .S . B r a z il G e rm a n y Ita ly D e n m a rk G re e c e N e th e r la n d s A u s tr ia In d ia F ra n c e A u s tr a lia C anada N o rw a y S p a in Ir e la n d Japan TOTAL Sw eden UK C h in a 1981 1985 1990 1996 1999 2000 2005 2008 rotor diameter (in meters) 10 17 27 40 50 71 104 120 rated capacity Source: Berkeley Lab estimates based on data (in kilowatts) 25 100 225 550 750 1,650 3,600 5,000 from BTM Consult and elsewhere Product applications: Crawler cranes and All-terrain cranes Opportunity: Installation and maintenance * Analysis of data from Oil and Gas Journal, ** AWEA 2007
  • 153. Cranes: Construction Applications GENERAL CONSTRUCTION INFRASTRUCTURE • World to invest >$40T in infrastructure between now and 2030* • Every dollar of infrastructure creates several dollars of subsequent construction activity • Continuing opportunity across all categories of construction, with Terex positioned t participate i virtually every lifting application iti d to ti i t in i t ll lifti li ti * Booz Allen & Hamilton: “Lights!, Water!, Motion!”, Strategy and Business: Spring 2007
  • 154. Cranes: Market Environment Robust demand continues across most categories g Challenges • Strained capacity • Continuing but easing supply constraints • High backlogs • ‘Low spec’ products from China & India Opportunities O t iti • Market shift to greater lifting capacity • Growing demand for ‘higher spec’ cranes from developing higher spec markets • Differentiate on product and g p global support pp
  • 155. Outlook: Remains solid Cyclical Industry but mid-term outlook is bright Product & geographic diversity helps mitigate specific market slow-downs slow downs End Market Strength • Energy demand remains a major driver • Repair/maintenance, population growth and rising incomes driving infrastructure needs • Global non-residential construction outlook remains strong - growth forecast 5-7% for next 8–10 years Excellent time to be in the crane business!
  • 156. Cranes: Strategy • One Team Strengthen • Shared Objectives • Common Approach • New Products Grow • New Markets •I Increased Aft d Aftermarket kt • New Applications Diversify • Less dependent on the “crane cycle crane cycle”
  • 157. Cranes: Strengthen More from our Facilities More from our Team Members TEREX CRANES - WAVERLY, IOWA NEW TALENT/ NEW STRUCTURE • Factory-led • Integrated, single organizations g business structure • Isolated functional • Targeted functional capabilities adds (marketing, manufacturing, …) • Little sharing across businesses in the • Operating as one group business globally bi l b ll Before After Before After • Tripled factory throughput in 2 years, • Global product-management structure without major capital investment that cuts across legacy businesses and • Cut working capital days by 60% drives operation as One Terex • Turning inventory at 11-12 times per • Adding talent to drive best practices in year vs. 2-3 at Q1 2005 vs 2 3 marketing, engineering marketing engineering, and business process improvement • Resources allocated to Germany to drive similar improvements in All • Driving efficiency while improving Terrain and Crawler production organizational effectiveness processes
  • 158. Cranes: Grow New Products New Geographies DEVELOPING MARKETS GROWTH CC 8800 TWIN BENDINI RC 60 • Long history of product introductions and 2004 2005 2005 2007 improvements • Cranes continues to lead our company in • Recently introduced one of the world’s terms of the percentage of sales derived from largest lattice boom crawler cranes, which developing markets can lift 3,200 metric tons and travel while 3 200 • We continue to grow our global sales and carrying the load service capabilities • Incremental innovations continue, including • We are rationalizing our manufacturing a 60 ton Rough Terrain (the RC60), recently RC60) footprint to provide local products for local introduced by Terex Cranes Italy markets
  • 159. Cranes: Grow Increased Aftermarket New Markets CHIANGJIANG CRANES • Increasing global aftermarket opportunity • Joint venture with Chiangjiang Cranes in as the installed base grows g Luzhou, Chi i th 3rd l Lh China is the largest t k crane t truck manufacturer in China and has potential to • Opportunity to strengthen value-proposition grow into other markets via improved service and support • Efforts are also underway in markets like • Strengthening core service infrastructure in India, the Middle East, and elsewhere to developed markets further Terex participation in the world’s • Sales & Service facility developed in Dubai fastest growing geographies to serve the Middle East • Opportunities to acquire or enter via organic • Other global investments in progress market development
  • 160. Cranes: Diversify New Applications More Global Footprint PORT AND HARBOR CRANES Sprinter Straddle Carrier Mobile Harbor Crane • The acquisition of Fantuzzi provides an • Expansion of Terex facility in Tianjin, China excellent example of the opportunities that for Cranes exist to add scope in new categories • Fantuzzi provides additional Chinese based • Terex has a long history of successful manufacturing capacity that can lead to integration of acquisitions and turning additional growth opportunities for our acquired businesses into successful long long- company term franchises • Local footprint, in many cases, is critical to • Continue to search for opportunities like developing markets growth so India Fantuzzi that offer high potential returns for represents a logical location for crane our shareholders production
  • 161. Terex Cranes in Summary • $2.6B* provider of mobile cranes, crawler cranes, and tower $ p , , cranes sold through dealers and rental houses worldwide • Benefitting from strong demand for energy, infrastructure, and industrial projects worldwide • Generating excellent returns via well managed mix and pricing and via targeted productivity improvements in some g g y segments of the business • W ll positioned i a continuing strong market, while Well iti d in ti i t k t hil protecting the downside through investment discipline and through increased diversification of the p g portfolio * Last 12 months through June 30, 2008
  • 162. Terex Investment Analyst Meeting
  • 163. Terex Roadbuilding and Utility Products September 4, 2008 George Ellis Vice President and General Manager, Terex Roadbuilding and Utilities
  • 164. Roadbuilding and Utility Products Summary • $0 7 B* portfolio of businesses, serving two distinct business $0.7 businesses segments and mostly concentrated in North America •P f Performance has suffered from a significant fall-off in North h ff d f i ifi t f ll ff i N th American mixer truck demand, but adjustments have been made and results are now improving p g • Improvements continue elsewhere in the business that should drive results going forward • Eventual recovery in mixer trucks, including the opportunity for a now more focused business to take share as the market recovers * Last 12 months sales through June 30, 2008
  • 165. RBU: Products Asphalt / Asphalt/ Concrete Concrete Mixer Utility Products Concrete Plants Equipment Trucks Latin Front Number 2 America Discharge #1
  • 166. RBUO: Mix PRODUCT MIX ($) GEOGRAPHIC MIX ($) 3% 4% 4% 1% 17% 13% 1% 20% 1% 1% 37% 33% 94% 81% 47% 43% 2004 2008 Q2 YTD 2004 2008 Q2 YTD Other Developing Markets Mixer Trucks Japan / ANZ Asphalt / Concrete W. Europe Utility Equipment yqp USA / Canada
  • 167. RBU: Growth RBUO RESULTS $B $1.0 30% • Dramatic fall-off in 25% mixer trucks, but i t k bt $0.8 $0 8 now stable 20% $0.6 15% • Recent performance $0.4 improving 10% $0.2 • Niche product 5% potential $0.0 0% 2004 2005 2006 2007 Q2 '08 (ltm) Sales Gross Margin Op. Margin
  • 168. RBU: Market Environment N. AMERICA TRANSPORTATION S. AMERICA TRANSPORTATION N. AMERICA ELECTRICITY INFRASTRUCTURE SPENDING1 INFRASTRUCTURE SPENDING1 TRANSMISSION INVESTMENTS2 ($B, 07) ($B ’07) ($B, 07) ($B ’07) ($B, ($B Nominal) $70 $25 $12 $60 $10 $20 $50 $8 $15 $40 $6 $30 $10 $4 $20 $5 $2 $10 $0 $0 $0 '02 '03 '04 '05 '06 '07 '08 '09 '10 '02 '03 '04 '05 '06 '07 '08 '09 '10 '02 '03 '04 '05 '06 '07 '08 '09 '10 • Flat outlook for • 5-6% real growth in • Strong recent transportation Latin America investment trends spending di Roadbuilding R db ildi in Utility Products i Utilit P d t • Higher pricing • Increasing trade • Continued impacting volume p g between Brazil and spending on p g demand other countries maintenance 1. Global Insights, 2. Edison Electric Institute
  • 169. RBU: Outlook • Steady improvement, with mixer trucks now stabilized and other businesses improving US residential appears near bottom Other drivers remain healthy to strong Business quality improved following actions to reduce costs • Multiple attractive stories below the surface Healthy and growing utilities business Effective and profitable business in North American asphalt Excellent trajectory in Latin America, based on domestic production in Brazil Small but S ll b t profitable b id b i fit bl bridge business – Bid ll & H d Bidwell Hydra • Opportunities for portfolio and operations footprint improvement
  • 170. RBU: Strategy Key focus areas through 2010 1. Continue a successful turn-around in Utility Products y 2. Build on niche strengths in Roadbuilding • North American asphalt • Bridge paving, inspection, and maintenance • Leadership and growth in Latin America 3. Sustain then grow mixer trucks • Front discharge concept inherently advantaged • Expand the front discharge market
  • 171. RBU: Utility Products Operating Margin in Terex Utility Products y UTILITY PRODUCTS NEXT STEPS • Execute on-going product enhancements and developments • Aggressive lean implementation •I Improve parts, service, and t i d 2004 2005 2006 2007 2008 support LTM • Leverage route to market for other • Streamlined distribution network Terex products • Consolidated assembly activities • Explore opportunities for global growth (e.g., China) • Strengthened product and pricing • Increased sales to major customers j
  • 172. RBU: Roadbuilding NA ASPHALT BRIDGES LATIN AMERICA • Technology driven • Full-line bridge • Increase localized growth in plants (super construction and manufacturing portable, warm mix) maintenance offering • Upgrade product •G Grow improved i d •T Target contractors, t tt offering ff i distribution in asphalt utilities and • Capitalize on market equipment governments g growth & infrastructure • Expand internationally demands
  • 173. RBU: Mixer Trucks – Front Discharge INDUSTRY SALES BY REGION* Front Discharge #1 51% 65% 70% 98% 98% 49% 35% 30% 2% 2% Central Northeast Southeast Southwest West Front Rear • Enhanced visibility, higher discharge point and longer reach allow for • Preference for front vs. rear accurate placement of concrete p discharge is g g p g geographic • Faster turn around and single operator • Significant opportunity to drive efficiency save time and money market acceptance of front discharge advantages • All wheel drive and superior weight balance provide excellent mobility * Regions are approximately equal in annual truck sales
  • 174. Roadbuilding and Utilities Summary • $0.7 B* portfolio of businesses, serving t o d st ct bus ess $0 po t o o o bus esses, se g two distinct business segments and mostly concentrated in North America • Performance has suffered from a significant fall off in North fall-off American mixer truck demand, but adjustments have been made and results are now improving • Improvements continue elsewhere in the business that should drive results going forward • Eventual recovery in mixer trucks, including the opportunity for a now more ffocused business t t k share as the market db i to take h th kt recovers * Last 12 months sales through June 30, 2008
  • 175. Terex Investment Analyst Meeting
  • 176. Closing Remarks September 4, 2008 Ron DeFeo Chairman & Chief Executive Officer
  • 177. Summary • Diversified Portfolio of Equipment Businesses • Positioned for Continuing Long - Term Trends g g • 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
  • 178. Terex Investment Analyst Meeting

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