Earnings call transcript Q1 2023

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Operator

Greetings, and welcome to the Terex First Quarter 2023 Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation.

As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Paretosh Misra, Head of Investor Relations. ahead. go Please

Paretosh Misra

site welcome conference and and Terex quarter Relations first slides Good A to copy earnings Web Investor our call. posted release investors.terex.com. of XXXX are morning, on the at the presentation press

will In our available Web slide on be addition and the replay presentation site.

Officer; followed Chief We Their Financial by Executive prepared Chairman by Senior Beck, remarks and Garrison, joined Julie Vice be Q&A. Officer. are Chief will John and President and

Safe the to or Please Today's materially Harbor cause turn our two which statements, statement. subject those of implied. call are presentation, actual to risks forward-looking contains expressed be different from conference reflects slide could results which to that

for the In information addition, company's believe non-GAAP these we conference can is Reconciliations we non-GAAP found be call be evaluating measures useful materials. in will discussing in performance. the operating

slide John to to it turn Garrison. three. And turn I'll over Please

John Garrison

environment. dealers, driven Harm shareholders, Paretosh, safe, Thank global begin members to continue call, exceptional priority Way a Terex morning. and welcome our earnings of like would our tirelessly in for and I you, like to continued a their culture Terex. to for safe, work working your home to environment, for and everyone challenging think Terex's Values. this team good in remains customers, the while performance efforts Safety thanking Safety Zero safe. our all would and Terex members company, appreciate by to work top team our and macroeconomic their I commitment safe interest by to improve maintaining

points financial Operating and results. the of from performance prior-year, than were earnings financial share $X.XX up our of up year, basis more on excellent basis. XX% and year-over-year. from expanded margins slide for delivered FX XX% $X.X doubled Please four Sales turn XX% XXX to review team billion strong per at to the last neutral quarter. The

backlog, our we of per earnings are first range in share team quarter, continued a raising outlook $X. strong execution members the As to a strong to full-year our result and $X.XX of

slide and about to in I'm Terex turn excited us. front future the of five. opportunities Please the of

diverse throughout in MP segments for increasing but Our AWP markets, in the are profitable in and United well-positioned world, Infrastructure growth. end States. investments particular, participate are the and global

Infrastructure Jobs over alone drive In fact, the Act spending expected $X.X to and years. Investment is of XX trillion

growth Act In supportive to Reduction of addition, and CHIPS spending businesses. construction Inflation are in drive the be and for Act additional infrastructure that going our should

brands in from and mobile had Powerscreen will Our positions benefit growth in global aggregate. leading crushing assembly markets that screening

are will products and maintenance, Our government-sponsored projects, for needed Genie construction increased and spending infrastructure, the general benefit throughout from globe.

important The support global are waste driven initiatives by recycling regulatory that changes. is goals. Economy driver Circular solutions increasing, growth societal for demand and Another

systems demand on brands, and reduce gas for the projects benefit manufacturing meeting well are we of from sustainability recycling to United MP grid. CBI, needed digitization, reliance be continue data and Genie the wide business, chip the forefront increasing emissions Systems, initiatives. the Washing and to capacity our positioned for grid including Terex And particular, will issues, optimistic the investments macroeconomic in about our Despite including electrical near-term growth. onshoring enhance excited warehouses in States. opportunities the of Terex products a Terex electrification portfolio utilities The to greenhouse expansion. have requires increasing to Our capitalize Ecotec, at on

our turn slide to six backlog. Please to review

from strong up $X.X remains X% year-end. billion, at Our QX backlog

cancellations. push consistent outs quarters, the and customer remained fact, our and dealer we've five In and backlog had has minimal for relatively last

is current QX of our history. Our the recent backlog in highest XXXX, level consistent for of with backlog QX

robust inventory the for Elevated year, remainder early book-to-bill us in demand. customer healthy ages dealer XXX%. at historic markets, bookings resulting end of supports Consolidated Our the billion, continue a outlook and QX XXXX. and backlog ratio fleet support of to $X.X visibility low demonstrates the strength gives of remain and our their into levels

an our seven priorities; that to our and company. update continue continue we on Innovate, for strategic strategic to slide on to operational strengthen Grow initiatives Turning our make Execute, progress

had demonstrating adaptability in quarter, execution and supply the the overcome Our operations flexibility environment. team first excellent dynamic to chain

[permanent] facility budget. cycle is and improve Our (ph) is facility on The on an to Genie's of our through time important element Mexico performance. new strategy

product permanent temporary Genie our to facility. March, new lines in Starting began our in to Monterrey from facility transfer

next months. the some our will Moving place in other XX take factories network XX over to

hard moves result short-term these benefits, long-term which significant team overcome. have manufacturing will in to working this will While process Genie is inefficiencies, the

in are proud investments We of make These CONEXPO, products capital. on of India. off, above The a invested return world. investments the capital and significantly Bauma XX%, are showcased company remains paying continues of which innovative of at new our facilities XX our around World Concrete, we ARA, to cost and capital

environmentally-friendly development superior deliver products Our help are new with growth. investments in the performance will to

have dealers now strong Our We than machines in of investing including with the and sales and EIG parts Liveconnect. our customers, and technology. for My.Terex growth enabled fitted our quarter. teams strategy Telematics for organic service digital XX,XXX more offerings Execution are our

growth in complement company, In investments. technologies growing In invest that we our February, of robotics segments products with Apptronik, for MARCO, with offerings. and equity existing to manufacturer conveyors addition, reaffirming a offerings completed in material bulk continue recently the MP enhance acquired our solution a investment the we commitment that an to product inorganic We handling supplement organic portfolio.

quarter, our We to in in interest were slide members and saw tradeshows. products. the team active our during eight, attendance high Turning

in In record Powerscreen the customers around attitude set screening new success displayed Series The we World After upbeat. tradeshows, attendance a a two team North America, the wheeled MP product launched sales India. machine. Gladiator The our significant Gladiator of and at Bauma the was biggest recently with fact, crushing CONEXPO year CONEXPO, world. of this this for and at fully-electric, product the

total cost team pound of low introduced and Telehandler Telehandler ownership. at the is the superior The highest capacity offer to Show, productivity Genie engineered our XX,XXX

to truck, the Mixer utility introduced at We first Mini MP's offering all-electric similar our leverages all-electric develop zero-emission Mixer to concrete in biotech also our Mini investment our expanding products. CONEXPO

hope If visit customers. our offer to services are and our took you tradeshows, from features value. opportunity that And products our these you members away I and Terex at with engaged the team provided benefits had your the visit that booths

installation sorters we all-electric customer waste, focused example making Turning of at Terex, and on recycling to our are more the from circular delivering separation thus cardboard the developing systems products, system for waste is this material higher of nine, site Terex U.K. intensely recovers In first value, example, slide waste aggregates, sustainable landfill. to customers. separators. solution saw a solutions the our in This Terex metals, economy another heater conveyors, screened The combines a powered in from diverting efficiently and The plastics reality. products including the

XX. slide to turn Please

Our social stakeholder deliver and environmental, programs value. governance

not and our to insights. month our across thank events core rededicate continue stewardship, our to that April reinforce know assessment that We of just are and Harm member in a Zero It's stakeholders customer on wellbeing globe scheduled who meeting innovation regarded our and stakeholders ourselves product requirements and and health, Zero us as differentiators. progress for is safety product valuable an and journey, to aspiration. recently variety ESG safety, We the regulatory are completed to from critical Team participated for quality I safety expectations. teams development, heard Stakeholders materiality materiality our designated Harm. has We We business want and assessment. as possible. important. provided

Please turn slide XX. to

and continue improvements. We in operate constraints. pressures see macroeconomic slight challenging with chain environment We to a inflationary supply did chain supply

disruption fourth the in the inventories increased Overall, the market quarter in our indication to the adapt And to teams our face clear a our is declining facing. in level to strong. first continue have ability However, of and quarter that been demand the and after confident we team's macroeconomic overcome remains continue am challenges last year hospital of I overcome. of

over let me with it And turn that, Julie. to

Julie Beck

everyone. morning, good and John, Thanks,

performance take XX. to a of on quarter slide look year-over-year financial excellent strong first demonstrated at Let's price environment. billion execution on dynamic rising financial a mitigate in $X.X up Sales a were is and position. necessary XX% volume our improved in costs. higher realization We Terex found

basis Sales the Gross Pound weakened currency margins and dollar. foreign sales translation up million, X% or impacted quarter efficiencies currency expense XXX and product the impact approximately negative pricing, foreign XX% mix, in Euro were $XX strict in the against improved helped volume, British in as by and manufacturing by favorable as of costs rates. increases increased exchange quarter constant points offset as negatively the the discipline to

and spend by acquisition, coupled year with tradeshows. marketing gross basis XX marketing foreign due prior-year exchange, continued a segments the decreased Both expenses, investment points XX.X% over to increased margin. of sales expense year-over-year the from as SG&A incremental and increased new management. and were recorded SG&A prior-year unfavorable costs on and business increase inflation, was in

was of Income points up from of XX% up was basis Operating operations year. compared the margin to prior million XXX year-over-year. $XXX XX%

Interest last rates. incremental Our of the increased due margin year. to $XX million interest and year from the increased $X XX% prior million other was compared to expense

effective The global was XX.X%. rate first quarter tax

$X.XX continued First increased quarter volume, year. This by representing over share a $X.XX was improvement than more and performance doubled per driven pricing, last earnings strong of cost disciplined management.

exchange a significant the will in earnings This detail. cash from million, free flow $X.XX quarter I translation. discuss later representing quarter share prior unfavorable Free flow impact improvement cash the an negative includes for foreign of was per $XX year. more over

excellent found quarter On first on multiple basis, up Materials slide sales segment consistently businesses. with with strong XX% our Sales the at $XXX operational for product demand neutral our another quarter XXXX were XX. our look MP of Let's results, of exchange million segment yet to compared starting increased XX%. foreign healthy execution. had across with Processing

XX.X%, cost MP $X.X quarter backlog backlog resulting Bookings up of delivered of billion. were three driven robust by sales higher profit with is management, remains incremental operating in times MP XXX an the sequentially. volume, year margin prior norms. up historical basis and approximately The mix, disciplined and X% XX%. ended over product favorable of points the

prior improvement an pricing XXX%. quarter platform aerial operating our with sales a XX% XX%. billion, reduction cost Bookings with higher in from quarter, initiatives, The up had at compared neutral results. On the basis strong up higher ratio demand. AWP excellent efficiencies, $XXX see XX.X% a XX, on to of foreign X% was supplier was with sales slide end margin result disciplined than margins exchange martial up actions the last of segment year delivered AWP doubled million, offset basis, $X of quarter manufacturing an remained prior to and operating volume, the XXX of financial year. from work Backlog points increased book-to-bill cost. year sales XX%. mix, favorable On and profit of more incremental their a

disciplined overview Please strategy. capital flexibility us the provides sheet for balance for allocation slide strong an see of company's XX financial future. our The the

of risk. conditions. XXXX, asset. February as provide sold this As managing impact We although as does on current longer balance carry exposure counterparty customer exposure our our no through reminder, TFS customer banking Today, and we and our seen in in supplier a Terex not to market solutions a negative regional have risk diligent due we financing partners, sheet. well remain And

Free the supply An was reflecting million chain year end compared million $XX first This for down quarter to $XX the continued slightly year-over-year increase year $XX year of increased cash of improvement from a profit. the in at last was negative ago. of to $XX from cash fourth million. $XX a was negative due million inventory and flow disruption. flow the operating quarter million Hospital quarter free ago

our dividend million. We our We with and We XX% $XX million shares repurchased the share of invest to in of the million have per programs to March. $X.XX. prior we April, in compensation partially program, over in continue quarterly offsetting share continued year. $X capital In business increased purchased and A shares our the quarter. repurchase expenditures increase from first dilution XX investments of our

repurchase to $XXX have Through million April, share on program. our $XX we and returned shareholders, million remaining have

take advantage times. in of these volatile We dislocation and will market offset dilution,

We have of and fixed XXXX, maturities our the a no is XX% debt X% of debt rate decade. until until at of end the

The one-time, grow business. X.X company liquidity is and through low times the excellent cycle. which in below ample remains an $XXX We well to run our had million. position target of net the Our at is leverage

with to important our realize to we environment and geopolitical turning variables Now, macro it slide updated full-year and are uncertainties. XX, operating outlook, in is challenging many a

to updated expect estimate of could now we strong our of or execution said, represents XXXX Thanks So, our outlook. earnings pleased $X. the this raise today. these members that and robust positively. team per all our change best negatively of as our to backlog, are to $X.XX share With outlook We

our dialog customers Our suppliers. and increased incorporates $X.X billion $X our sales outlook to billion the of latest with

demand higher as anticipate remains We customer volume strong.

and QX in lower consistent production relatively be QX, due and to QX, expected down are sales Our in to days. slightly

outlook our benefits, This strict range continued quarter, Our a performance XX.X%. to customer from reflects latest strong our the of management. the operating first and information excellent demand, in supply continued cost XX.X% margin has chain, increased expense

expect primarily due flow three next and We cash free million, raising to to earnings. the our quarters, $XXX in $XXX to outlook we to improve are million higher

our pressures we margin our look include MP's challenges, range and Let's at strong billion, take $X.X to an cost execution, upon updated billion Based to segment increasing increased a which $X.X of are of continued XX.X%. sales mitigation chain continued outlook supply operating outlook. of approximately with

MP be consistent relatively remainder for expect and of to sales the margins We the year.

QX actions, volumes, are team's pricing to outlook improved anticipate a are range we has output. to XX.X%. AWP $X.X our And team result, operating and billion. sales the the sales outlook $X.X increased impacted increased approximately moves relatively of to full-year production and to their slightly factory raising to consistent reduction efficiencies, as manufacturing cost to our AWP impact QX scheduled Monterrey The We activities, in the billion we inefficiencies have second-half manufacturing lower increasing Incorporating margin seasonality by to to year. and and margins which a of in our greater due expected normal be in due days. be facility, are negatively will the production down QX, AWP

will I with turn you, to And John. that, back it

John Garrison

Julie. Thanks,

environmental, in in for Terex in growth. will slide to for disciplined infrastructure, and along to we including investing to capability Turning value while my XX to execute products strong allocation, manufacturing is stakeholders end electrification, and continue prepared new capital and deliver we beyond. strategic conclude Because remarks, markets, our well-positioned participate XXXX with our growth inorganic

demonstrated great have market And have brands, We resiliency adaptability importantly, businesses, most environment. members, we strong and challenging team and a positions. in strong

back that, me turn it with to let And Paretosh.

Paretosh Misra

John. Thanks,

session, a answer question-and-answer limit reminder, you and morning. questions the to many follow-up during your this ensure to a ask questions possible As to one we as we as

it up Operator? would With I open like that, to for questions.

Operator

[Operator Instructions] from first you. our Stifel. We question will Elliott take Thank at Stanley

Stanley Elliott

Thank morning, you congratulations. and everyone. Good question, for the

Julie Beck

Stanley. morning, Good

Stanley Elliott

about And negative shift Mexico talk that extent How going [XXX the that there? (ph) How price? is of the the much much to points] you a to Can what of AWP? basis is increase detractor for is throughput? be

Julie Beck

regional reduction to this higher and so the initiatives disciplined Thanks They favorable pricing much things. they supply, just a were really of cost and quarter. AWP product did volumes, chain for good in supply engineering engineering sales morning. team Stan, The with question, the They job on able executing And had great get worked and coupled then, between those and dual mix. evaluated hard team, types efforts getting actions.

the And then favorable volume, also they increased efficiencies. had with manufacturing

[cost strong had (ph) they execution, actions. So, successful out]

margin to an so, led And incremental that XX%. of

strong So, volume mentioned. very the as in the Genie quarter had we team

the the started going quarters, inefficiencies expect coming the by [say] of the to the be And of permanent product so, second-half over the in in able terms moves. from on to year we we happen due were moves all impacted to to move, those Genie Monterrey of we (ph), impact manufacturing are More the to new move that March. facility and

quarter. So, team great the a just job by really AWP execution of this

Stanley Elliott

And you switching on inventories business, talking hand one gears, at are channel MP partners on being the exceptionally your low. about

assuming I'm Looking that to any business sounds get think of backlog, forward. your normal being. of is it part still sort of When are those that orders for right-sized retail but within would end of will going lot that use, it for as opposed channel? three there what a we like just at that times visibility do stocking, just the up it's most

John Garrison

similar the have which There with at being a three also world about our is it's And the you backlog billion, we MP's is business. note, prior year. backlog that is the significant to policies normal that X.X important fact are within right. given to visibility Stan, changing times about

because in example, just similar orders in allocation in AWP it's mode. and QX the business quarter, this still received. to And are order the not business our we whole the are position slotting for fill aggregates that open in in and quarter the business here over QX, For in have of an really wasn't reality our we book we

come orders to to cut opportunity dealer to in have product. ensure in, the we dealers take of off part with as a have the no allocate don't product, and So, all the we that certain world

strong. sense type (ph) purchase fleets inventories putting not and they So, of Most the demand the or specialized into to in line. their dealers Remember remains turns rental Dealer [O are the about here on low. XX% equipment goes type] not a Their the goes dealer into stocking business channel. MP contracts, contracts. rather the equipment are of are -- inventories

again, we product to get those contracts then haven't is them need. to the been back them and the for sales, they challenge converting And to that able

in again, they so, Little in are segment, which strength globe way depletion rental fleets, their market. American the in it's strength network we given we strength North to seeing strength. see did helping in that's overall would America, So, and in the MP seeing their And the are that sustain. North across the expect, global

comment terms of understand what's And seeing important cancellations? are So, order business and quite forward. think see more outs improvement at that And backlog visibility, if time. going but that to we the in important both visibility historic we'll level really what we see supply I it's push extended the output to on we and happens within not to order of return to chain, continue in this backlog, backlog, improve, the just also this, supply strong now, and right in normal, continues

of coming That's off good know little a in an both in book-to-bill was company exceptionally XXX% backlog, year, really we that with overall MP. QX high So, last businesses. bit a robust down

remains demand robust. overall, So,

in will the and seeing And through the and still cancellations frankly, the we order continuing year. open book be mode, progress remainder not allocation outs. we as we are up are the of push We

Stanley Elliott

luck. much so Thanks time, of best for the Perfect. and

Operator

Volkmann to Jefferies. will at We move next Steve

Steve Volkmann

taking everybody. I signs John, probably morning, for question. pull as of with are like weakness smaller want on Thanks noted, the specifically see that the going if we it just be to bit, AWP, Good push any in Great. feel because I the and customers. would throw a just little outs you to or

So, comments seeing just of wanted sort your orders? independents I you to from are hear AWP I around the small guess on what

John Garrison

and Continue the both constraints And growth fact see we numerous both Thanks, delayed. dynamic, increase led nationals utilization. talked has about fundamentals see strong that to the times, Steve. fleet and have Similar segments. again, to continue cycle similar And market dynamics independent ages. customers strong across and the replacement in to cycle that market on replacement industry the in been

that relatively the due still values. constraints. than deliver think now, more we supply I can equipment Right used strong shows requesting in to up customers are

get we with more talk So, opportunity an there constraints and will the customers if supply, may with the to nationals our independents. that's supply and alleviate, be both

very ratio this segment. at you XXX% in again Again in here, was segment, XXXX, comp if AWP our look the against book-to-bill tough the

coverage. again, is good we an are allocation mode. still that backlog, the (ph) So, [good] here in reality and And

are so, to trying And strange, to where we we equally unhappy the I customers know position distributions this are as is are getting. we going with a but sound keep in

things tightness keep in that the the relative patterns are And nationals consistent to so, against the the we historical we again, market. had for speaks I independents. to that And think and trying relatively

market team continues and environment just appear constraint, to the the the customer again, but large to reduce working accounts. robust is base So, still not across backlog, in constrained, national the

Steve Volkmann

a margin. the sort inventory course inventory AWP, a we And there thank what of much but so see hospital surprised of than much. up, for, means then, stronger usually was to margin are the I hospital headwinds looking you on assume just actually little Understood, I to follow-up also

can So, those I our as maybe sort here? specifically to margin normalizes us, hospital pocket square that be inventories am and back their that you trying might with about think upside in

John Garrison

end our are did well, we million on did hospital $XX Steve, up at the of to her right, with inventory and you execute really $XX see modest the started Julie As million, QX. about a comments, increase from team

team So, supply. I work on-time improve continuing the level improvement, terms that continuity to supply we they in modest but base the is speaks seeing the in seeing, of delivery. are think improvement of are of And the disruption a

quantity We modest in of the level or are seeing improvements supply. the

in teams number XXX% dual driving sourcing, are that. a you in design, There of a so, Our that modifying working suppliers work where increase to product. ship with, world supply that is occurring work going despite the teams the that and the are the to around all we amount of was parts business of tremendous we a because really our need of are chain on

does Despite able that, higher comments, the we still on in take But able Julie they as increase in we in to to said team to output good That disruption. take a saw slight inventory -- to create able the were hospital that That get. we the quarter. had the her efficiency line. were was bottom

of continuing not a work continuity, segments we disruption, So, again, inventory. the around customer. are the Lot ship of takes drive part to hospital work, us are be the one And in hard in able we globe again, evident for supply. seeing it increase disruptions that are to both to reduce but to just to and and quantity hard the

Steve Volkmann

you. Thank it. Got

Operator

Barger KeyBanc. to at from next Steve will our We question move

Steve Barger

Hi, good morning.

you around Sorry, be thoughts consensus, with growth. above people are But to wondering drive I ability your comments. prepared going guiding FY'XX already your missed on this long-term to year

are that for Terex longevity, extent you can, are positioning the few just next to on So, and years? what cycle how thoughts you the your general

John Garrison

are Infrastructure we Yes, to about again, a at that to talk around seeing strong Act, when interest major of if massive Act, Inflation as the in seeing tailwinds Act, our Steve, coverage current pretty pointing and sums look headwind five consistent much you is and in a the the money this, we are against of around the stimulation, and as on CHIPS that I about the rate what's the our rising the this of it's environment thanks, again, put are last quarters. -- you world mentioned the environment. infrastructure good question. And top transpiring but those early then macroeconomic the Governments robust backlog world, that XXXX, in Reduction my are U.S., comments opening

of if consistent so, we you the then that performance our area, if dealing at the trends of are in at our the increase doing tailwind you one the in look environmental, this mega potentially environments. we look MP us, what normal are in know, as some And solutions and have sustainability, headwinds so, you we highlighted, trends mega with some and of time, offset of provide that in the degree we the business, for the to rising interest rate

at looking the able I'm be consistent that going if that in we we we and globe, again, compete around So, performance growth. to are to environment MP, multiple verticals drive believe in,

you in been overall the and environment. those that headwind, constrained. rising constrained rate America to bills has know, has the of Europe cycle, supply. Again, major Replacement AWP, in the both a by infrastructure backdrop interest tailwind been North market against provides

yes, do continuing at company companies look cycle, replacement as period the industry we to coming out growth December we we to in over the rental we can that be a grow, win, as so, believe continuing the And of time. laid

backlog of for into business. growth early future. but for unheard know, all XXXX for XXXX. are a trends as not December, we set drive to us, us, are up, to Obviously That our take I is from we talk we $X.X said of that but advantage it's the billion of believe company ahead linear, we about as set mega we financial too the to of up the in have always it's standpoint, Now, and

course the think an some again, now, XXXX, the tightening booked And right pretty going XXXX, significant never action cross outlook, tailwinds, a for but looks $X.X positioned is what is. have of business, it But so, give is billion we also irrespective years. subsequent But least, there do condition are and we of rising sharp of to and not we the there there, also credit have the know macroeconomic conditions. we which lot pretty rate guidance not currents and for that this we environment will and is right we out interest for

rate there think the the an interest potentially is to rising grow, despite macroeconomic I And so, that indicates also conditions and opportunity environment.

Steve Barger

Yes, commercial quantify do have the there construction? has to a point of or rate you but to fleet your about And environment, overhang type, in just office. creates project office Have guess know lot real around your ever area customers, new past much tried interest a that's of allocated relatively that this will is be And end your you to how estate, your answer, market great to really been small. and hard specifically concerns context. exposure is fleet a the in specific or that I'm wondering for by challenges I

John Garrison

environment, were First and we that have of where customers AWP retail a can't be and And information, precise the a headwind that well, their non-ready will going -- rising rate so there interest don't is do you side, office going business look on of our to impacted. I constructions, our give products have are I IV part at especially clearly the a macro you if And all, in percentage. larger report out products. they environment. believe

in non-resi be look XX that of environment. plus you public. That's not in is impacted rising totality, if going to rate interest percent at However, the

A look you and reasons the to CHIPS interest geopolitical If rising manufacturing, adversely at those supply. to manufacturing, chip going onshoring is Act the environment the of the going onshoring rate impact They're being forward. to are projects. not go improve battery for share done those of of

and North have, but in to there that's that. out and no there tailwind. be couple doubt, continue be is will large, the we the say mega of to And other that's investments. the especially strong But headwind non-resi of why definitely going a take to overall years of estate, we cross rising construction able position next there, the to commercial environment, and are currents the America, headwind is is I clearly advantage of result for think tailwinds that business these a of as And that's parts it real business office; the will interest rate so, the impact macro like things

Oliver and business, time, My talked happened. XX will increased because predecessors, we will position of Infrastructure it we've about talks uncertainty, we actions, take John the it years, we actually is never added the Bill, the and that, I for the the they understand This overall that's to believe appropriate tailwinds, environment, about billion first the think don't speaks irrespective us. for some we the appropriate unusual non-resi headwinds of but strength is into - advantage $X.X the We the business if will right But of that XXXX materialize, action. to going we'll take take position market. highly now positive so

Steve Barger

time. the Appreciate great. That's

Operator

We'll to go Timothy Citigroup. next Thein at

Timothy Thein

thank Good you. morning. Great,

look the first and if just team early talk the production levels, fourth again you there's and one with going what by you respect quarter I'm John, some pieces on have lot curious how 'XX. you've very what's Mexico, that just it's planning AWP initial your informed So, Genie's moving to just degree into backlog. But is but in seen with on a intake about in anything at to curious 'XX, of terms of thoughts, order to be totally to

of position how plan how of terms into curious 'XX. the the expectations exiting you're year. going the that's to is currently just laid in out I'm inventory kind So, as And

John Garrison

Thanks, Tim.

the due are in we Genie specifically, comments, fourth the opening her business. to in the said anticipating AWP days lower quarter segments, Julie as in volume So, production

we're and I think now, to the begin the As that's have improve, you'll to could what that's because And on, normalcy the them. larger lead excessive industry. they because issue order our lead to when they receive as to begins we customer deliver of across normally ahead supply equipment improve because the times gear improve, right customers, taking were chain the do, industry some we in to able return those that especially customers, patterns, in going times, other

took they things perhaps that wouldn't, wouldn't. the that in first in they the otherwise So, they early quarter took in quarter things otherwise they fourth

So, I strong, demand their companies in the Northern they where think I production chain supply to in Hemisphere, of degree products. terms see as normalcy return improves, some more stays the in rental think some of take you'll in

to a reason, reduction the in QX, mean or the production other quarter QX. in in on the but lower in volumes fourth due positioning production days of assuming that lower could we're production planning we're So, no production for If improve the in to needs holidays, now, increase change, customers. QX then meet number to of us I for

Timothy Thein

it. Got

just think what that, different you in to the mentioned, standpoint, which move there, same year out of the a any, product curious, you've I'm to mix policy, that of terms about should that the margin or lot of of none resulting of Okay. we on order deliver there you balance expect in backlog? differences any change then the how just any we major segments from as is And MP, is have reconfigured a as and profile.

John Garrison

of No, change, in not And favorability some but quarter said, no makeup, different, the see some did substantive through say in mix have anticipating I we Julie fundamentally favorable did the continues would the year anything aggregates. as in we that we're Aggregate segment. the

Timothy Thein

John. All right, thank you. Thanks,

Operator

go UBS. next We'll to Steven at Fisher

Steven Fisher

I it going And Thanks. or costs that narrower you Good meaningful, would make gap wondering cost morning. the expecting steady? guess of any versus be maybe to the to Are you're look wider, be that if for comment of rest price I'm excluding that the can incurring? Monterrey to year. you how the on

Julie Beck

Steve. question, the for Thanks

and think for when total company, So, year months XXXX. priced six the as for negative the in about were in you we price us cost became neutral first cost XXXX, we then were we of a

priced in material the objective for we year, particular, to cost freight and neutral talked is costs. our continue And about logistics be so and so offsetting to

increasing, XXXX pricing environment. actions row so And we've continue seen we actions And took see container taken freight while dynamic further So, company. XXXX, to across a seen multiple inflationary in the we pricing decline. we've throughout we've

being distribution partners and pricing our why actions. to we and need level seeing inflation with we're that customers of so take regarding transparent And we're

pricing. MP at by is I the business, look group that dynamic do they it If

And so they've priced been they be XXXX. cost price neutral to And cost XXXX. neutral for in continue

negative For to six cost price and AWP, to the were neutral were year. of year, turn last it months be the able for they first in

of objective see we six of look for months neutral this So, price the the year, being cost higher pricing first the year. in whole but

year. being for expect price and we're we again to So, neutral cost the transparent, be

Steven Fisher

kind and your how is there's look said when at this going general shows that backlog leveling John, well what's normalization the study going XX, then, expectation of you on added, to it mentioned Okay, know from I for slide ordering. the be off, to more of you really a trend you here? picture some

a just likely kind from of to of here, the generally, that out most what or were does it driver mean continued backlog steady be if break would So, that?

John Garrison

we Great it what question, supplier promise. to of ability we this our continuing we're late. chain and right back get customer historic we're deliver for lot let answer original our way, when as we'd a to improves, supply to be customer, being our going it me the is now, not we're as to reliable like deliver, because And to deliver will versus say we to linked as

to we'd be historical surprised would the if come of I and backlog would I back market. backlog. over not implies that more anything So, get think necessarily don't time, about levels down

now our normal more I times really because lead lead implies business, think times the we're back it getting levels, to are our across right extended.

lead chain normal I we'll time, our while remains levels, supply as delivery does normal a commitments, think clearly more as to market think historic backlog And come over the deliver result, it's our levels. into improves, buoyant. decline ability to So more the times possible get I more overall will on to

we're is we're chain deliver to surprise continuing, If coming to So, disruption do, we're on chain normally customers. in because going that commitment back supply it's think And finally our I not we back that is -- of me. improving to our what out us which finally that would getting and do getting is to help that. the mode, balance, showing supply

Steven Fisher

Terrific, thank you.

Operator

ISI. from to at go We'll Raso Evercore David question next our

David Raso

orders now level and of the or on Yes, of trying curious, are you in the Picking people of starting that chains promise kind come to around sector situation book-to-bill can hearing so rethink course particularly the get get said, expectations you're enough reason what starting just are just they the see even let's in a XQ, lead order for 'XX you're starting understand book-to-bill broadly a time conversation times that with order on backlog your you now we have that and customers here conversations to early AWP, normalizing, push you are 'XX. to how skittish need read 'XX normalization visibility to see down lead people look, below But on those little I trying whatever as one. supply if going that, already Thank think about we to are or on figure is the seen may people just that up whatever for how about from out September," seeing "Hey, you not be, high liked the are level or you. expectations? thoughts, what to that's set change customers much is having to behavior hi. And punch line, just for go try because they to abnormally any 'XX

John Garrison

you XXX% the performance. in is not Thanks, delivery right, historical strong what are near probably are which in those levels in a percentage commitments. continues time, AWP our supply we customers book-to-bill in our now anywhere does line was segment David, are delivering, right to the the I book-to-bill improving, the quarter of chain as we but because still quarter, down and there's come and to over original so improve, It's of taking that our saw think

be chain supply of going customers with lead as times time our lead in to right improves, those times David, what to extended. times, again, And terms it's lead are. get take So, remains still transparent now, we will

that customer the to lead patterns as seeing improve, historically. more that And are getting translate buying so, we behavior, to seasonal will back times

I improve to I as will more seasonal we more customers. with normal And think things see think so, a return discussions

are customer have do larger beyond we ones say looking that the out year. we'll specialty we Now,

look in having beyond multiyear time, of engaged period like for but what and those a We are not we signing contract are dialogs. the year, does demand your

So, me clear. be let

again, contracts the any at, book-to-bill improve. best in, about I signing are across -- that David, a but with made the significant And haven't not those that's down think backlog needs I absolutely multiyear the do in the dialogs what need yes, dialog are you chain are to marketplace. in probably environment, think as read but continues demand But supply their reduction place. to don't come We taking the

I a to returning quarter, do that's improvement that think but normal I environment. don't chain. more see the I supply in see in next

are outlook. We in anticipating that out

We supply are That's course our the over improvement assumption chain year. of the today. seeing

David Raso

just bit? So, logical. much, it it how makes all so chains comps because These they're behavior, a are reflection 'XX or that's is are theoretically… order big, a of backlogs really Yes, demand, it normalizing hard, sense the are supply is down, normalizing but

John Garrison

I behavior. mean, normalizing are not… a It's we

David Raso

to We people are conversations that think not per se, pushing hearing out about… like

John Garrison

for are better more a bit XXXX with AWP are would AWP environment within out segment, the to committed are take if than we get conversations, actually we we the segment. customers in In booked have much current little potential to that, pretty we able right but production, now

David Raso

All right, you, it. thank appreciate

Operator

go Feniger Michael next America. will to We of of Bank

Michael Feniger

back for more lot units those a hit 'XX-'XX add there, $X.X your to with in ability in revenue 'XX-'XX field the still kind obviously but of if level? kind capacity Thanks taking that been that Monterrey, with billion already apologies just guys. questions. I'm on now they're Hey, revenue of almost address it's if this, approaching incremental year, And above curios you this you my does production And that year that priced give for are 'XX-'XX number. strategy any forward going like period, below levels? your

John Garrison

Thank you, Michael.

producing supply and Watertown facility. of levels We the below made the able should our 'XX-'XX are be increased business, within with and Watertown get the investments we've improved chain currently production we the Genie out in within to facility,

So, and levels we XXXX produced right lower XXXX. in than at now producing we are

and Mexico our Yes, was we a this Genie facility, diversify utilize investment. very some also it strong our improve is for made our improve important; U.S-based to global provide supplying footprint. global the for incremental in and as will investment supply Monterrey not facility, capacity, we On specifically Monterrey why not will the I facility global but our the made our to competitiveness to the Terex that's us moderate position, put but chain supplying and well, competitiveness, and manufacturing. We that then cost on think think

from world, around diversify the our modest competitiveness to competitiveness a to to globally incremental compete cost standpoint, cost was footprint global Monterrey capacity. global So, and improve our

capacity to have need growth that the We we have. we the support

North capacity, world to competitiveness, Monterrey footprint yes, we will again, but our challenging was And instances, cost made cost but in it beyond regions in and some a We America, the of production on But next to a for for global a major other to and for decade, from rational was we not get next invested add be for significantly be as going years, ultimately not that's Genie globally add we export global that's the strategic be economic to environment. some our capacity. Monterrey, local competitive just that's well. source diversify the to investment the again, XX look not from it's to incremental, a of followers, over our global improve source why potentially

XXXX levels the at not we are and XXXX within Genie as are today. the We footprint

expand. to We have opportunity

Michael Feniger

inventories? for XXXX, Very inventories kind helpful. where is how you they on you processing, that finish MP curious are you dealers inventories still for Any with should how be? of help 'XX just replenishing And metrics compared normal dealing us to highlighted the year are those material how just low, to is should these low about

John Garrison

normal. than lower They're

will I through move we XXXX. as progress we think

there happen orders, expect we and the we you will, equal to again, necessarily forward, get aggregates would to are world, historical open the for time, business we don't that dealer, because levels, we is in the us the were for situation. was as the any so business improve and allocation. the to improve again, our cutoff assuming that entire ensure improves, way going for if to that slotting known order at quarter, there we And will but lead not this back production still We allocation, all for book MP we as around

mode on We are today. an still allocating

Michael Feniger

you. thank helpful, Very

Operator

will go to JPMorgan. next We at Zakaria Tami

Tami Zakaria

so much Thank morning. Hi, questions. for taking my you good

quarter price and So, sorry positive. in was just if I'm you clarify, already this, the mentioned to have but first cost

would to about think right sort way the then it? in cost for Is you first-half price understanding neutral year. was see that the that the back-half positive, the to my but the it level tapers get of So, to

Julie Beck

we pricing that you the -- year, go that as comes pricing is we what through I the think see think actions XXXX. and you if took through into about XXXX, throughout

when to thinking the about AWP. So, there for is the pricing impact second-half a greater first-half in incremental the you're

For been pricing MP, dynamically all along. they've

kept So, cost price up they with throughout. have

Tami Zakaria

costs for the for price of year neutral AWP? be rest will So, the

Julie Beck

Yes.

material definitely for logistics this offset is the class. So, remember,

Tami Zakaria

it. Got

guidance raised that so, call a by, of versus full-year And about $XXX better million. the is much you volume incremental outlook it How pricing?

Julie Beck

increases So, from of integrated that in our all almost that to price. outlook, volume are original

Tami Zakaria

it. Got

you thank Okay, so much.

Operator

We to will Fargo. move next at Seth Wells Weber

Larry Stavitski

Larry good Hi, for is Seth Stavitski on this This guys. morning, morning.

the about business, in terms utility seeing to supply some with demand you are and wanted ask and chain, Just the what what are of order there of dynamics trends?

John Garrison

pretty in So, the in utilities much especially are we booking XXXX of well utilities our and strong, business terms backlog remains units. into up and XXXX covered quite for highly-customized business, in

independent transmission demand to and we utilities, remains robust. are the continues public The seeing be strength segments power their across serve. The that We strong. really network utilities

remains trickier, unit and segment California. contractor in rolling given The strong, the transpired

are put and growth we Supply chassis bodies, that bodies, then So, strong chassis, there. chain has significantly to four business, tailwinds. and on started of especially that segments, to see improve impacted and booms there. really in the in we We were around the receiving continuing across sequencing all

to to improvement well. We availability beginning beginning chassis improve. are improved has availability. the are see Body in as to see hydraulics And supply we

with significant, multi-year expensive. just talk And required in States quite Mexico alone just And strong as demand to some are in North China in we market, market very strong have see network but The the that chain in be the America a the investments in. the but are that also Canada business. and improves to that a we grid market about makes electrification slowly, So, beginning is electrical sense we the some to that anticipate need we given as and growth segments in and the And surely we supply had increased do. compete output also across associated United that investments strong business.

that given need going to grid the the So, think And we in that's our in that all we of in be see multi-year electrical tailwind business. a all, backlog.

Larry Stavitski

gears expectations for your your what steel for Appreciate could year, little are if Okay, in switching just for terms cost And that in movement manage bit, expectations are embedded prices your great. guide? the of us And you in That's great neutrality color. the prices? it. just a you steel price how remind

Julie Beck

Thanks for the question.

have program. do So, hedging we

HRC so, XX% Genie And of requirement for hedge business. our our North we American steel

and are so a rolling hedging we And -- it's out. program, so

we so, are averaging cost. And the

the remainder ton And year, so the of about year. anticipating we $XXX assumption are per for remainder a of for

Larry Stavitski

much. Okay, the great. Thanks appreciate color. so I

Operator

Cook We at Credit will go to next Suisse. Jamie

Jamie Cook

sort I mean the on generally your the the most if guidance, the earnings was Julie, the it Congrats of morning. guess good you on improves quarter. generally, of Hi, I sequentially. it's guidance, look -- EPS quarter, in been probably while first answered. implies questions high just lowest nice quarter one have a

So, outside to the versus trying understand am normal of I quarters would quarter be highest one the first just seasonality Thanks. why of business? for Monterrey, your

Julie Beck

question, sales which suppliers. We your and in dialogs strong and volume improvement these customer demand Thanks for of high our slight we customers to $X anticipate our all outlook remained Jamie. We increased because to $X.X chain. some million, supply with million saw includes a

in QX, are So, QX days. QX to our consistent slightly and be to relatively in and due lower down production sales expected

lower consistent due relatively to QX and sales to QX days. be be QX, So, and of margins relatively We in in our slightly normal AWP consistent seasonality expect down MP and the and production for remainder we anticipate to year. sales

to negatively Monterrey than year does it impact second And be inefficiencies the to due that a half primarily the greater of in those our The the have quarter. AWP in to scheduled facility. production to are margins second expected impacted the will manufacturing moves due

so, at. what thinking, we -- relatively where we that's are So, and that's

that team really the So, outlook are executed increase able the we pleased overall, to and we well. were

Jamie Cook

Okay, great. Thank you.

Operator

conclude Garrison would back remarks. to closing does John for our time, I over that And the like turn session. conference At this question-and-answer to

John Garrison

there have here please, a get morning. know Thank you, of couple -- Operator. to up And we and questions go if this are on additional calls you more

Operator, additional And, the call. questions, you healthy, John have or follow-up stay you in interest Paretosh. your If Terex. safe, please and for disconnect thank Julie please stay and

Operator

conference. participation. your thank for Again, today's and conclude you does that you Thank

disconnect. now may You

Terex (TEX) 2 May 232023 Q1 Earnings call transcript