Terex reports strong First Quarter 2024 results; raises full-year outlook

Posted on Apr 25, 2024 in Nuts & Bolts

Sales of $1.3 billion increased 5% year-over-year
Income from operations of $158 million, up 7% year-over-year
Operating profit margin of 12.2% improved 20 bps year-over-year
Earnings per share of $1.60
Return on invested capital of 27.6%, up 370 bps from the prior year
Raising full-year 2024 EPS outlook to a range of $6.95 to $7.35
Increasing full-year 2024 sales outlook to a range of $5.2 to $5.4 billion

Terex Corporation, a global manufacturer of materials processing machinery and aerial work platforms, today announced its results for the first quarter 2024.

Simon Meester

“Terex delivered excellent first quarter results, achieving sales growth and margin expansion versus the prior year,” said Simon Meester, Terex President and Chief Executive Officer. “The Terex team continues to perform at a high level and demonstrate the power of its focused strategy and its proven ability to create value.”

“We are raising our full-year outlook to reflect our strong first quarter performance, while also prudently planning for continued softness in Europe over the balance of the year.” Meester continued, “Overall, customer demand remains strong for Terex’s differentiated products as evidenced by our robust backlog. In addition, we are advancing our new product initiatives to bolster the Company’s portfolio of market-leading businesses that will continue to benefit from megatrends over the coming years. We are focused on accelerating our profitable growth strategy and are committed to delivering strong performance through the cycle.”

First Quarter Operational and Financial Highlights

Net sales of $1.3 billion increased 4.6%, up from $1.2 billion in the first quarter of 2023. The increase was primarily driven by continued demand for our products across multiple businesses.
Income from operations of $158.3 million, or 12.2% of net sales improved from $147.7 million, or 12.0% of net sales during the prior year. The year-over-year increase of $10.6 million was primarily due to incremental profit achieved on higher sales volume, improved manufacturing throughput and disciplined price-cost management.
Income from continuing operations was $108.5 million, or $1.60 per share, compared to $109.9 million, or $1.60 per share, in the first quarter of 2023.
Return on invested capital was 27.6%, up 370 bps from the prior year and significantly exceeded our cost of capital.

Business Segment Review

Materials Processing

Net sales of $520.0 million were down 6.1% or $33.8 million year-over-year, primarily driven by lower end-market demand for material handling equipment and cranes in Europe, partially offset by growth for aggregates in North America.
Income from operations decreased to $72.1 million or 13.9% of net sales, compared to $85.3 million, or 15.4% of net sales, in the prior year. The decrease was primarily due to the impact of lower sales volume and net unfavorable product mix.

Aerial Work Platforms

Net sales of $772.7 million were up 12.7% or $86.8 million year-over-year. The increase was primarily driven by higher demand, as well as improved supply chain and manufacturing performance.
Income from operations increased to $107.3 million or 13.9% of net sales, compared to $83.1 million, or 12.1% of net sales in the prior year. The increase was primarily due to incremental profit achieved on higher sales volume, improved manufacturing throughput and disciplined price-cost management.

Strong Balance Sheet and Liquidity

As of March 31, 2024, the Company had liquidity (cash and availability under our revolving line of credit) of $866 million and net leverage of 0.5x.
Terex deployed $35 million for capital expenditures during the first quarter of 2024 to support business growth.

CFO Commentary

Julie Beck

Julie Beck, Senior Vice President and Chief Financial Officer, said “We expanded total company operating margin by 20 bps compared to last year and delivered ROIC of more than 27%. We expect a significant step-up in free cash flow over the balance of the year and remain on-track to generate more than $300 million of free cash flow for a second consecutive year. The strength of our balance sheet and expected cash flow provide significant capacity to fuel our strategic growth initiatives and return capital to shareholders.”

Full-Year 2024 Outlook

(in millions, except per share data)

Terex Outlook⁽¹⁾	PREVIOUS Outlook		UPDATED Outlook
Net Sales	$5,100 – $5,300		$5,200 – $5,400
Operating Margin	12.8% – 13.1%		12.8% – 13.1%
Interest / Other Expense	~$60		~$65
Tax Rate	~22%		~22%
EPS	$6.85 – $7.25		$6.95 – $7.35
Share Count	~68		~68
Depreciation / Amortization	~$65		~$65
Free Cash Flow⁽²⁾	$325 – $375		$325 – $375
Corp & Other OP	~($80)		~($85)

Segment Outlook ⁽¹⁾	PREVIOUS Outlook		UPDATED Outlook
	Net Sales	Operating Margin	Net Sales	Operating Margin
Materials Processing	$2,200 – $2,300	15.6% – 15.9%	$2,200 – $2,300	15.6% – 15.9%
Aerial Work Platforms	$2,900 – $3,000	13.4% – 13.7%	$3,000 – $3,100	13.5% – 13.8%

(1)	Excludes the impact of future acquisitions, divestitures, restructuring and other unusual items
(2)	Capital expenditures, net of proceeds from sale of capital assets: ~$145 million