Earnings call transcript Q2 2023

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Operator

Greetings, and welcome to the Terex Second 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.

Paretosh Misra

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

available replay presentation and In website. addition, will the be on slide our

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

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

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

I'll over X, John Please to Slide turn to turn it and Garrison.

John Garrison

you, good Thank in the in begin needs to for our members Terex to our your welcome of meeting I team call like their by would and everyone and I'd interest excellent and customers to work like for to safety. their commitment appreciate all Terex. and earnings continued dealers the morning. thanking globe Paretosh, around

single primary zero It members, harm across to zero extends priority day. safe, work everything responsibility think harm home who a and every we our go Our create environment safe culture for first team do. safety is our and safe

Slide to second X financial review to turn results. outstanding Please our quarter

a more XX% and earnings $X.X of and from on up expansion of prior points sales from basis of share year, XXX the delivered team per doubled billion, year-over-year the quarter, $X.XX, of operating last This margins XX% basis. than year,

$X our team backlog share. the the strong in the half we to full raising As a the across are year, approximately first outlook members year and of by per of execution our robust businesses, result

private population increasing public and to is Across is which to that is significant infrastructure on of in globe, coming to alone decades the sectors expected investments, approximately capitalize over Slide economic megatrends years. five the underinvestment. X. well are Jobs the and continued meet billion spending are of Act to needs growth urbanization. $XXX several turn drive have U.S. Investment Terex and after made modernize drive to The of on $X positioned to critical growth Infrastructure infrastructure Please expected and And annual starting years. Global the additional is the spending infrastructure support trillion.

Both our benefit positioned well segments are accelerating to infrastructure from spending.

in and and the Finlay in any enhance Terex a Utilities markets For aggregates. well leading brands investments components the the demand and positioned crushing of mobile are portfolio that telehandlers project. global infrastructure Powerscreen scissors example, from offers wide benefit In our to our screening essential Genie booms, capitalize positions needed for growth of have grid. will on to electric products

to CHIPS Inflation digitization, the clean Act to In onshoring expected addition, are Reduction years. energy more and chip manufacturing, than Act of generate over $XXX billion next the several related the and spending

and XX-month EV dollar are spending in as investments related energy semiconductor manufacturing, and is the XX% to multiyear fact, battery period last manufacturing the in In multibillion clean up U.S. projects beginning.

warehousing strengthening support growth place in related electrification demand business from Genie leading energy has and in initiatives. will benefit Utilities onshoring capabilities data from Terex while to manufacturing Our clean projects, chip

on and becoming increasing disposal sustainability. globally waste in to stringent focus Further, recycling response regulations are more

providing Systems MP at innovative are the CBI forefront with brands, recycling solutions. Ecotec, Our Washing customers markets, the including of and Terex

customers. solutions had for on Terex our innovative opportunities We are products and megatrends capitalize excited these about by the delivering for we to

to turn backlog. Slide Please to review our X

chain For challenges. two more constrained due been deliveries to years, increase in than we've to ability supply our

$X Consolidated the above dealer significantly minimal. is history. healthy QX for push outs cancellations consistent $X.X Customer historic of last second at levels. backlog it's and year. backlog and recent remain with which And highest QX billion, bookings Our remains remain billion in

backlog XXXX. improved our into outlook the gives and markets, us strength early visibility supports end Our demonstrates our of

customer cycle and pre-pandemic is are dealer business, MP an ahead up growth. continue low segment, Genie fleet year-over-year. levels still of In In replacement addition, at ages we inventory In elevated and which not for our our bookings levels to us, industry demand. creates X% opportunity the future support our were

Turning to operational on Slide priorities. our X for strategic an update

and on our make to continue We initiatives. strategic strong grow progress execute, innovate

sales us by Our improve operations during execution customers and chain system. allowing team disruptions but our chain in the lingering second experience quarter, did continue we to improve quarter, performance to supply during the XX%. had the excellent Supply to a deliveries increased

members half. productivity and team a persistent focus XXX margin points. basis hospital by on reduced inventory levels of improvements contributed to reduction our And Our our cost improvement

Genie the model on followed facility by in which made with in in April, a time transfer on the focus early one budget. production we In and as and remains permanent continue Mexico, was to on permanent work to two lines May Our facility planned. started progress good Monterrey, the second product We of telehandler model lines. QX, new on

our quarters, the we factories from product moves coming In anticipate network. other additional in

paying year. operational in-house half in our system second to expect be also the We of the

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

winning contribution congratulate in help new members our our their of investments also to carbon and to friendly products for XXXX team Sustainability improve strong plans. the to on us efficiency. I want growth reduce energy will superior Genie recognition emissions Award, the a for development IAPA Our deliver environmentally performing

of examples X wide Slide The applications. capable purposeful material are review to in a Turning to of working machines handling innovation. some Fuchs range of

team recently show example, by for is driven trade The Germany. Fuchs waste recycling solutions and societal LIGNA and For increasing, in the forestry changes. at global launched tree on care demand focused regulatory model a new our

by Washing businesses leveraging environmental innovative a products to and reducing that existing disposal. our Terex waste recycling waste while competencies Systems on customers water opportunities. bright an into market for revenue We recently solution process generate developed capitalizing ahead for hydrovac and future see our attractive

X. Slide Please turn to

program deliver all are will for stakeholders. ESG value to that We our committed

investor quarterly of we feature pillars one each of strategy. During will ESG the call, our

governance of firm commitment Terex, our to we highlighting are quarter, we This strong practices. are governance. proud At

independent We have strong diverse engaged, governance to Board an practices. of maintaining Directors experienced, committed and

We company engagement. linked and conduct directly also maintained executive vote of performance. to an annual compensation say-on-pay is substantial a We extensive shareholder portion

Board Directors of also provides Our oversight efforts. sustainability for

We code are firmly our reputation taking making decisions committed and ethics. align Terex by actions our outlined the to framework values protecting with our and in that of Way

Please Slide to turn XX.

operate continue in quarter. during to challenging chain the conditions monitoring remain We to macroeconomic with that evolve. chain uncertainties. rate supply the and in environment, continue market We and in saw interest diligent supply We a credit improvement

reduce, inventories, hospital to that indicates able are to team not but we pre-pandemic Our our eliminate was levels. which back not

confident are Additionally, and facing. in continue team’s moderating, continue our to increase. adapt I the to costs inflationary the pressures am ability have overcome macroeconomic challenges to but that been overall, we

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

Julie Beck

and John, everyone. good morning, Thanks,

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

manufacturing strict in impacted currency helped and Sales million XX% negatively by as basis margins improved the increased points as sales quarter foreign X%. expense pricing, and Gross $XX offset in discipline to efficiencies currency volume, up approximately constant cost by XXX were or translation inflation.

engineering a X.X% to expense and year increased sales. of due the incremental over from strict points technology year the new to prior XX sales, spend of and acquisitions inflation, due and on higher marketing, SG&A increased SG&A expenses. was basis decrease management prior

other was interest and of operations more XX% margin from prior to than Compared investments rates. up XXX of expense higher operating increased doubled, $XXX the last of Interest on margin to million year, unfavorable expenses and our $X incremental year XX%. and due $XX income million mark-to-market basis points from third-party million was

quarter second the to valuation rate due tax a global effective The of reversal allowance. XX.X% was

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

This earnings from $X.XX share includes of an exchange quarter unfavorable per translation. foreign impact

for cash prior I improvement the more $XXX million, over later discuss quarter in detail. significant Free a was cash free flow representing the year. will flow

strong multiple exchange businesses. sales by were the with year, prior manufacturing results. sales quarter XX. On Processing XX%. had efficiencies our management for over margins XX% neutral with XX%. products XXXX, increased demand million our increased foreign segment basis, our favorable on segment a consistently second of driven $XXX profit across XX% at product and found another cost of to execution. up with volumes, mix, of MP operating higher look improved operating strong yet Let’s with healthy disciplined geographic and operational compared Materials MP excellent the quarter Starting Slide Sales

approximately Bookings backlog remains of were over historical ended norms. robust with the MP the up $X.X billion. backlog The year. is prior X.X times X% and quarter

to up actions offset financial AWP results. segment of Aerial On outstanding the operating Slide operating on hospital a with million demand, had and than our profit and see of to higher pressures, XX, compared delivered more quarter, chain mix, billion. prior $XXX pricing disciplined manufacturing doubled XXX incremental $XXX was XX.X% cost higher sales and The inventories. Work Platforms a margin AWP a geographic million supply year reduction initiatives improve our last AWP their efficiencies an cost $X.X an up the improvement sales of in of backlog margins level at healthy a reduction favorable with has quarter, of from and Bookings increasing of points basis costs. strong volumes, offsetting XX%. a year of were result XX%

disciplined of to quarter the hard our at position strategy. a for invest free to Free operating million, Hospital of the us capital financial from year-over-year overview financial first quarter an due a team million second excellent of of to our members. $XX cash $XX increased million year of the and facility. The City of flexibility to quarter thanks for million our the $XX our XX ago. Terex with flow allocation the balance year, decrease and was cash sale compared Slide improvement see Oklahoma an strong our future in million $XX the sheet end growth. provides $XXX inventory Please profit work flow was is in was the

offset with strong reflect of in our invest increase increases XX% confidence the position XX% combined second in announced prospects. the sale XX% more proceeds continue our expenditures this above a capital quarter. We earlier in This the of our company's year. million, from in announced $XX The shares and of follows in we financial investments July, City repurchased $X.XX. million We future we $XX was and continued facility. Oklahoma put a which last million $XX dividend to business In to than our and year by our dividend increase

have incentive have year offset $XXX our repurchase dilution million and fully program. comp the remaining share for on associated We with

investment are We intend and dislocation. market Terex of we to advantage shares continue an take believe attractive to

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

times, target Our X.X leverage below through our cycle. the remains net X.X low at times is which well

of have company We reported and XX.X%. plan ample we return is capital execute to an liquidity $XXX position a in The on our million the excellent business. grow of invested and

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

results performance and of our positively. updated said, change of approximately that are share. estimate outlook XXXX best With to we per So as negatively team represents $X this members backlog, could strong today. or Thanks robust raising outlook our to our the

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

constraints. seasonality Our and lower than of half first the year are lingering expected to second production chain to be sales due the the supply half normal in

We partially have cost our year, Genie excellent out half product increases continued continued increased benefits offset XX%. of operating related latest inefficiencies backlog, transfers robust performance manufacturing our to in to the chain, the network. our management This margin the and from our in supply cost by first strict expense outlook approximately information and reflects the

are free improved to million second earnings. half outlook to due we the higher expect of flow year, cash approximately We $XXX the our and in raising

of billion we look strong Let's an upon take approximately at margin are to our approximately our continued segment a operating MP's and outlook $X.X XX%. increasing outlook. Based updated execution, sales

cost year AWP reduction The to related days factory margins are year sales in raising MP cost strong sales margin due We for lower constraints. billion. be to half Monterrey increasing fewer the result, and in we increased has than second AWP the to and team Incorporating full increased production first outlook negatively the remainder to of XX.X%. the sales expect anticipate pricing inefficiencies relatively margins team's efficiencies, supply volumes, our their be the our to consistent moves the We of chain are to outlook approximately we output manufacturing are $X.X a improved facility. and half to by actions activities, approximately as XXXX. manufacturing seasonal lingering operating volumes, be our increases the and expected second scheduled impacted half to and lower of AWP's production

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

John Garrison

Thanks, Julie.

to Turning disciplined value capabilities, to markets, well beyond growth we because capital remarks. for including new Terex Slide in in growth. stakeholders conclude positioned our electrification to prepared is participate products allocation for investing We'll infrastructure, to in XX our inorganic and and strategic environmental. and end while execute manufacturing strong my XXXX with strategy continue along deliver

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

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

Paretosh Misra

John. Thanks,

to With Operator? this a you it to question-and-answer reminder, questions. session, ensure ask we follow-up I open many would to as morning. as like possible your the As a for limit answer one during to we that, and up questions questions

Operator

Instructions] comes Thank you. ahead. Please first go Steven UBS. Our from [Operator from question Fisher

is line open. Your

Steven Fisher

Thanks. on the Good margins quarter and there. nice morning

about guys bit been vocal times your lower a backlog reducing You have wanting have lead customers. to for and

guess your I – their yours So quarter? that experience the showed think difference competitor, yesterday. but What backlog you main and do looking the between main is AWP growth during at

John Garrison

and year. consistent a that We the across again, just, timing historical at both There's did also overall $X segments. at minimal three quarter in what's across it which looking norms. bookings our I But with of strong lot backlog continue having the is activities. again think to billion, billion, Steve. see have level, was cancellations from reflects last the thanks, times we Yes, $X.X of important And company push-outs it highest backlog

And given backlog, really that's the important. think of level we

other billion The comment for booked is we've $X.X XXXX.

demand over us unique beginning and But that when customers is need in and be strong could our we're strong in circumstances and early with and a I've to gives demand have time, And in spoken, as when products that why at that of improvement out I'm better providing XXXX. the banker's a are have see to really a I the they and to looking spoken you delivering we we declining some conference, So production closer visibility backlog. because into on environment. it. environment set And we service investors

more currently be we're but decline, in environment, a thing other book-to-bill Because still our from norms, historic but may us which the to back it's as lead see customers is we Why again, improve lead still And is strong And as times, seeing. extended be continue times we're possible is times have and that? lead to planning and they helps demand going helps move rates to what normalizing. a would our cycle. again, that we

seeing So a environment. overall, demand strong we're

I more Now think specifically to pertains as it's of AWP, it anything. timing

with the look it's significant the way no or billion. with other. we $X.X for then at Conversations is consistent the share times, that months, about. last XX talked just one relatively disruptions customers AWP backlog bookings given as vary, And overall, we Our segment, vary been our our different in market at change

But into which timing strong, as got customers underlying and with And with as potentially is we've – XXXX, so anything. is conversations early demand market remains the much think high. good some I visibility it's

You've been long unusual. covering highly It's us time. a

We have this into backlog of XXXX. going level

that's I an how dynamic. And again, it. So unique approach Again, interesting circumstances. it's

overall is You than may backlog more can that's that declining and with book-to-bill demand. be it but declining, about have production strong demand

So times it's interesting environment. norm. three And again, our $X.X historical billion,

Julie Beck

strength add of bit expect infrastructure to as remains supported to builds in and rental the strong a onshoring and residential little well. we the aging by demand strong high utilization Hey be projects. rates, due multiple customer replacement Steven, And the further and just due result a electrification – those and to fleets that. fleets as construction of Demand the of growth multiyear to

So – we into the demand expect visibility with that strong good going with forward, XXXX.

Steven Fisher

a it's have That's XXXX. And amount very backlog helpful. but do of for a early, you bit good

next could I be be actually likely going a inevitability think somewhat your they're cost to year? higher? scenario it $X.X mentioned that is still you billion, sort Or of that lower is it an how

John Garrison

on – levels, did from improvement side, the but broader clearly helped. has news a good back cost supply I we're chain question. not to in quarter, think the supply overall, chain and Again, although in the So a improvement pre-pandemic our see we it's

And as inflationary We in of to disruptions. terms some materials supply we in we rates have material go see being the lingering as have continue cost. especially that's in gone up, seen our labor side, the inflation forward, incorporated global labor

cost see to component we So continue increases.

in net-net, ocean rates we've [ph] the in cost booked structure have and cost anticipating, what help. XXXX. On seen and increased will into land we decline a rates, the that XXXX But will we XXXX, side, which anticipating be, anything freight think we're we're positive

Steven Fisher

helpful. much. Very Thanks so

Julie Beck

Steve. Thanks,

Operator

comes Our Please Markets. Capital next ahead. Barger from Steve question go KeyBanc from

open. is line Your

Steve Barger

Hey, thanks. Good morning.

John Garrison

Good Steve. morning,

Steve Barger

XX% Your guidance typically mid-XX% which assumes incremental, talk about. above maybe the consolidated is nicely a you

If year – or top above-trend is the digit next this detract growth? that XX% incremental from better, growth you Or incremental year achievable generate year? line on next that's mid-single does that

Julie Beck

Steve. talk for goal margins. but – this question, incremental about Thanks bit we to XXXX would at the early A term, is XX% our long point,

Steve Barger

anything Got structurally you it. see there But like that that is hinder would that? could

Julie Beck

Not to talk at XXXX. It's about time. this early

Steve Barger

if constraints at looking instance, And and demand XX% Or the to chain enough about the for constraints you something capacity are your year? resolved? or can environment talk do grow Understood. there revenue, for and capacity have you next backlog, demand supply next the is year

John Garrison

Steve, yes, have capacity. the we do

were XXXX. look AWP segment, lower just if producing we at where you levels than our at at in and we – we're If it look XXXX

the So physical capacity. we have

businesses, investing investments We've we've through in We're look capital that our investments new investments making at for in we've Northern Monterrey. competitive will been in we cycle capacity. our it Ireland. been CapEx. made made We've us German investing, but India. the Again, expenditures, MP our in give have in at you plant. global plant if reasons, We our was look If

along been our capacity. we've So all plants and investing capabilities our in and

meet if growth when XXXX. they materialize needs or positioned So the we're well materialize in to they

Steve Barger

Appreciate the time. great. That’s

John Garrison

Steve. Thanks,

Julie Beck

Thanks, Steve.

Operator

Our next go question from from comes Steve ahead. Jefferies. Please Volkmann

open. Your line is

Steve Volkmann

Steves… I what doing morning All leading the right. we're Good with see guys. here,

John Garrison

– go ahead. Yes, two these

Steve Volkmann

just I'm part of glad group to the be that's all.

is of my the the curious relative AWP. in sort maybe second and also sort more of any moves on I'm half around for Monterrey. down if the guidance pencil margins have impact of So to second of the cadence you sharper us the And half little a question to

Julie Beck

And happy to. question, thanks Steve, the Okay. for

the for an will implies the our $X.X impacted lingering second We perspective, typical of outlook second a anticipate So operating reflects From fiscal supply the point is the in and our segment XX.X%, sees AWP outlook so billion also days year. in sales business path. which sales chain we fourth It sales look billion production the the at half, by for $X.X year lower as quarter. the half fewer is improvement second as XXX constraints, be in year-over-year. basis margin the

factors impact second manufacturing the scheduled the and between $XX moves throughout million production in are of Genie that estimate Some $XX half somewhere network. like million efficiencies be to that that related the and We second to half. things the

those favorable rest and inventory the flat production efficiencies we're the impacts hospital the in of days particular, is product less as regional mix, Again, in quarter, for typical. and manufacturing And year. that fewer fourth assuming

has improvement year-over-year. outstanding a the of point So delivering basis done team and job really XXX they're an execution

to that customer deliver great they're doing year-over-year So a cost production and with significant changes orders, – job improvement. AWP supply inflation, really managing disruptions happy

Steve Volkmann

Got it.

that's in it's guess also for but that. about area of sort for small on curious electrification how early I'm is electrification, guess thinking you're so then but pretty this And my Thanks a ripe of is maybe topic, My AWP. a Okay. far. little

available? sort of are curious how kind models of of electric AWPs So many I'm

product? And see the electric an of product? that on ICE final do And your people margins then do over that the is from electric shifting in you to piece does of think versus to How margin what time? a is sort nice that you

John Garrison

total some very team then and powered. to question. Genie today business. Genie the throw scissor XX% scissors active Thanks you. statistics electric for program, the is of in But have just a already electrification AWP or the revenue that In for XX% out electric. so we've Genie the had hybrid also we the of offer And either Steve, utilities.

the quarters already more scissor and three to over electric electric, almost the there as see continue can go is more of future. we'll adapt drives, volume hydraulics you to electric we So electric, in

are at products products, look from our our offered standpoint. electric hybrid in you in boom – – an of XX% or If electrification either

margin because or the And they great brought I in three also this the think the been work years margins. good part XX% to electric is team our the last we of is progress products expansion new of that important enjoy development and hybrid product and of doing over is market have either the

things of the to One meet new but market of also in for that we're is that products we improvement we development well. it, the at strive drive we product the looking customer, as gross are bringing can margin needs

think I team job the So has really done of good a that.

investment equipment. right So, almost from as total battery you of well. a that And Acculon on electrified of saw a third then will And and this things type third, thing think attributed is us over is grow well to time. certification these that important to piece we bringing some to it's I revenue in the over to And other the market continue standpoint technology, now, is I Acculon. help going with battery, thought of a really made the

forward. And one well telehandlers is go is on product that's And across to occurring but portfolio Genie as our electrification the portfolio. so there's in product The more will around duty positioned the activity well. incredibly really perhaps line we cycle, electrification telehandlers important as is I that think and lag

the into of are again, and And you introduced bucket that brought to continuing. that Utilities industry then sales were we the as And our first first. know, all-electric we market truck the segment,

on, anticipate the in over margins that tracking overall dollars be, [indiscernible]. an but is that that of time, very lot that may Early will investment our of it it's ultimately, margins important we to spending MP we're similar So a well the in it time segment area electrification direction. our we and And enjoy in over definitely in as not be product technology.

Steve Volkmann

Great. on, the you're I I do color. will think but appreciate Thanks, I of out Steve's. John. pass it

John Garrison

work We'll it. on

Operator

Our come go Seth from next Fargo. question ahead. Weber Wells will from Please

line open. Your is

Seth Weber

– you're in. me to So MP orders. close. appreciate wanted the appreciate I slotting Well, about strength ask I the I in

had screening the your categories wondering orders of screening, your business. crushing less peers good disaggregate little and if side on maybe some of in Some saw just what the crushing particularly talk orders I'm bit, could maybe Thanks. MP were a or that and about you you other of the better?

John Garrison

Seth. Sure,

MP and quarter product in I'll overall, with some strong couple caution Europe, their had particularly really that offerings. a prior some in X%. Bookings and a year the were our softness over up about America. of talk in There sales So is strong XX% and North up

elevated. side, bookings the and sales up year-over-year, backlogs aggregate remain were On and

for We continued to side aggregate see globally aggregates. the in the given when again, or – lumpy processing order demand continue of order good the there open the open book in But is business. not

year-over-year. were bookings On the and concrete sales side, up

However, the backlog remains think and activities. but going is bounce based on slightly, that was down We infrastructure healthy level. infrastructure bills to back at a

then tied Our you and saw of other going pick and quarter that's residential out back the second up. concrete think businesses decline here the We in construction in of starts. to business third to bottom residential and our any is more

they've to business with. had be more issues impacted deal that. So chain we'll was And availability by also and that watching that chassis supply

in our build-in really done year-over-year came scrap and little that of been Handling up markets, steel around but this were the comments. and and the off, in business, Germany, what story other prices we're news business highlighted focused our recycling, inventory, were into backlog saw bringing sales on flat steel into bookings Fuchs earlier team the over new is diversification QX some just slight I good Material we're scrap a were with because has is dealers has this we Our that in products bringing softer, a in products think

strong, us. Europe, Moving is grow as the adopt continues business. but and helping continues to is that to Environmental that into environmental our Tree diversification world really practices by change Fuchs led for business Care,

in it's that bookings declined. sales our saw principally, some then tower And both called business listing were flat We We cranes last business, and backlog Europe. and softness. in quarter, our out

cranes quarter. business, did and the RT Franna of recover over market year's a And worth our remains business nicely well in in Australian then the down Australia, Our has strong. demand

demand at in here X.Xx backlog Hopefully, what's the that overall, we'll book. focus again, outs historical to that's minimal And really minimal really Seth. push norms. seeing important on. and cancellations continue strong order And helps, So what

Seth Weber

less about impact? year number to… think bad might XXXX that what John. million how XXXX trying to that's million compares the $XX that Yes, pick follow-up with for Thanks, the next great. I'm appreciate to to Julie. to maybe just color or that I just be the for about then a way there move cost $XX and understand Is And if relative Mexico. gets any up worse the to in

Julie Beck

to we for the our but Again, about throughout continuing will early talk Genie that, network be and into XXXX. XXXX moves

line will I inefficiencies moves. not So XXXX, in in still product higher, we there disruption as make will system the wouldn't and some be anticipate, those have but we some

Seth Weber

you. thank Okay,

Operator

Our Suisse. Please next from Cook Credit go question from ahead. Jamie comes

open. Your line is

Jamie Cook

morning good I congrats a on and guess, quarter. Julie… Hi, nice

John Garrison

Jamie. Thanks,

Jamie Cook

are another but Julie, are just John. margins year, question half your on sales your Thanks, incremental significantly. the moderating and actually improving the margins of in back the

margins I off. incremental most companies to taper think starting when about other talking see you

a comfortable going the back an inventory normal, So, on? Or you. just chain that feel second there chain structural. a hold totally stuff better. it there, issues? I'm price/cost just getting as I'm supply is more little do be what's opportunity on the need supply the just isn't wondering with to more inventory understanding wondering to you if And as question what's what's you just but might get of is just then my of excess side going still versus on because Thank lot

Julie Beck

of start cost efficiencies I'll value-added couple particular job an and Jamie, reduction that say done just in the in with. questions. engineering in Genie So outstanding I a would really manufacturing really, improved. team has

the delivering done great just they've margins. what's so really really improved job, a And that's and

XX.X%. again, they're So margins XXX there this And supply they're chain as been managing new basis to they've increased by disruptions. those points opening well. operating up – their They've facility

a improvement the So job in big year. they've the done see and second continue really And in Genie and that nice we we're really the really line, costs, in that bottom is half of expect to the the starting in to that.

John Garrison

on the Jamie, is again, there then in inventories, inventory And more channel.

So to the we're we're for and seeing reduced we remainder think in our of the a again, the don't be supply going inventory about half, I also couple disruptions of The I substantial, improvement. still of experienced. But chain is inventory, the said, over I anticipating stay be ensure disruptions going bad that Julie level in time, job given that news last some but over do carried that's to we've year. think did of Jamie. quarter. inventory years, really to level going the are all is it's as there level higher team hospital believe, talking at felt good We reduce we the to it's hospital we've by the level the that of

commitments to go in going practices to But that the meeting do in are No. we it's our customers a of that I system bit over? us require delivery do time think better a little just for job more our mean inventory Does inventory as management forward. for

that seeing Payables good. working capital area So great. a it's receivables. in job higher, you that good not, Inventory substantially again, in levels driven see and our our we're in inventory doing are look being perhaps They and levels, really on, disruption. an level we're focused it a disruptions inventory but still by is of higher

Jamie Cook

Thank you.

Operator

David from from Our Evercore comes ahead. go next ISI. Please question Raso

open. Your line is

David Raso

in sits mix more majors some curious, then get as to could Hi, we Can start what's trying the to sense the the mix the visibility on backlog was with geographically, it the us market, Can mix the or speak products on end the maybe time. you a of spring independents? with of And XXXX? the meaning AWP. bit just also today, shipments some a that's where assuming be within for of on backlog color mix in it? I help of you of thank

John Garrison

Right.

David. you, thank So

customer mix, mix. bit close. keep accounts. at no – and in look been little to start happy. we flows It of quarter-to-quarter Again, fundamental terms It's we're it's equally ebbs if customers really there, national and backlog, of terms change independents a in trying In customer

not quite story to And so does of any in From significant standpoint, product sales telehandlers market. historical I a production I change reflects Mexico, been over and that standpoint, It's would say, help product similar it telehandler that's ramp going mix up we think mix strong. the norms. as backlog a reflect from

production our plant in And that so for Mexico telehandlers. of we out need increased down

no dramatic us, that frankly, the China. given product the Chinese But And if again, rather definitely in – mix, mix and in take product market, So geographical A made softness more some North year and the in shift look than levels, we export at to had in backlog David, China regions then is to have pricing the China. for market seen mix. the more other and extent, going geographical choice. that Chinese the ago, from Europe. would we were to you the America no fight we've towards we skewed it on chose

it's a have mix ago, So Does versus backlog year that more from we David, favorable that China. in and bit North more customer had geographic and actually standpoint, mix would a us help, from a a product oriented America/Europe it's for standpoint?

Julie Beck

also East Middle the little bit, seeing we're well. and a in add strength as Asia to Just

David Raso

all-in North trying is of geographically and just similar, AWP utilities, going the be thirds everything. to similar, to I'm XXXX. kind about XXXX helpful, It's sales to America is year's mix of the right? assuming be mix. XX% about bigger picture, of probably I argue are XX%, two Yes. pretty think similar This would

at has but right? it year not you look similar, they when about mean lot this I in more to as margin you is volumes revenues, obviously, bps terribly first But looks at a pricing, were the different. look doesn't are higher. blush, the your or where XXX So said, but, back XXXX, it so

be margins in currently but the basis about also was, just as driver it might margins we bit The on with cost, backlog, help mix are Can are price margins? this about bit us us little And just enlighten the to little And price think if why the a same obvious I trying main a just cost I at higher. to but you I'm mix. XXXX blush the lower revenue that XXXX's think don't answer in that's points year people might asked is the first XXXX, how you, volumes? said XXX at higher see right and the

John Garrison

half the No, We for really businesses. pricing been negative at they've dramatically and if the Utility our that. seeking were And cost year. neutrality look their the think first of the this achieved these cost really cost But global you Genie – really good last improving specific, we've I cost. we're we competitiveness. AWP question, teams, David. year on segment, price focused And it's of changed Remember, recovered structure not all and and the price have strategy

we is in at cost If improving doing on productivity you job the really cost total this good disruptive fixed our and productivity, look environment. focus a that and flex variable even ratios, and team intently on

Cost-out behind programs, have going taken It’s with on get the chain but supply now to Julie seeing the challenges, longer, parts longer talked for because as about years the businesses scenes. value-added been better increase. across but prototype that some engineering it things Those very the we’re volume, programs. sales starting this leveraging disciplined. They’ve and show Terex, Genie up in been say to are SG&A I as the is would especially Utilities around in and our those P&L. takes

David, big happen has of there’s strategic and as a developing Mexico this to engineering and forward ton in helped. technology, product challenging doing go but going what and again, job said, that so Mexico to were that we and to and forward have sourcing environment chain. work sourcing strategic with good it’s in a really the down has as we they’ve plans a of they’re in supply our go Now in we that been But thank you. the are there, great part plant, you that a and to know and job invest doing but continue supply I we chain, suppliers their do, managing

process And the rigorous and discipline. our marketplace, to that we and efficiency product improvement. effectiveness, to bringing really are again, the then spoke on driving story as customers, value but providing that gross developments we’re focused margin about also new products mindset. making sure really pricing pricing new staying That’s on discipline, a But

it out product than bring margin lower the that a can’t it at replaces. gross You

so important. working the on that. service And hard is really is And also team then our and business parts

So that go done then was they’ve that, if of And business AWP. look part through And at all team just great our multiple executed at We we the margin. other what you a lot of the well how David, done good very cycles, look forward, positioned work. we’re and and about has you think as is business. MP the they’ve if

We’re in making that business. investments

quite isn’t Why? in always XX% business. at right? investing margin environmental we’re incremental Because Our our that

We’re our quarter-after-quarter, consistently investing side and they technology again. deliver in time

to think to So we again, is David, we’re about talk But not XXXX. the demand going going be good. environment

going whatever going we’re be the market We’re to to to turns out and be resilient adaptable end be.

Julie Beck

as us, for though, since XXXX. MP well operating and just our of have David, on, they margins And XX% to profit, add their improved is

David Raso

at XXXX is change, little that’s to it we least than last bigger One XXXX. being those strength. know going picture, that. amount capacity least about at it, plans a of enough quick being can but feels now, discussed one, like XXXX at appreciate thoughts more I No, right with start maybe The

China and sounds all eyebrow some want of profitability I you is out the it the players. to players additions XXXX, look think at the power longer in know capacity -- coming like people from earnings an would It on. Canada if of for Terex. You capacity and discussed XXXX, least to enough players what’s in the raises mean,

on aerials coming It if players, and some but to your classic ones a smaller us other more think you give kind how little than Just [ph] feels about for to that curious that of scissors thoughts booms. want capacity on. telly maybe

get thoughts it your that. to me. about think to for Thank That’s curious Just how you.

John Garrison

Thanks, Overall, It’s the all broad-ranging a Western manufacturers, David. play by rules. question. we same

have manufacturers. so very concern are the no adds is being of Western right slow in now. brought there I market capacity by on that And terms the China

type of And comes Chinese to a of the to that so it of comes the again, world. It’s of that But parts just operate, that’s to we all the That’s wildcard. players of cost, it playing other seeing an those not sell, you’re we a over look competitors acquisition field bit to the products and battle world value, importance always products the how equal we can the win. and life Chinese the cost cycle product. on it’s residual when

the executed team continuous of and And then implemented values finally, improvement. all has that the our one is process improvements

we That with continue going satisfied across Terex. team never are. We’re is where to

are. be will return the can improvement say continuous that to on just year, the margin, again, that to We’re we to going would future. and will adapt, operating we reasonable a will into I And continue this so market drive and team mindset deliver. we whatever just this, capital but conditions deliver the And resilient not

David Raso

you. Thank

Operator

next JPMorgan. Our Zakaria Please ahead. question comes from from go Tami

Your open. line is

Tami Zakaria

so much. good Thank you Hi morning.

question said into is, next have you to good cost visibility and So you’re persist. also I you my first year, inflation anticipating think

to expecting of So are XXXX? pricing realize you kind what for

John Garrison

So what and also strategy logistics I will pricing material changed say, our our pricing freight strategy of costs. terms in hasn’t

by world that costs. pricing manufactured designed where it’s to by offset vary, again product, implemented have region the again, actions We of those

back. hard costs those working manage and to We’re push

positive dynamic in components we’re especially a As rates. news good I earlier, inflationary spoke around freight on still environment,

We’re pricing our have. again, partners transparent the that cost the going on neutral we’re customers And with reflect and be we will seeing our price that. that to objective distribution level and is

Tami Zakaria

one. ask it. for Got one can the versus I segments of price And quarter? in was each the if quick the What volume second

Julie Beck

X%. for year. And So XX%. X% the was at to we’d We overall X% be Tami, a total X%. said the the was volume FX was in company negative Price

so the AWPs than the that. higher where volume volume, a overall AWP we the XX% volume XX% the MP average, prices, that And on through and as pricing bit had a when in bit had was they about then think higher their MP increase, side, had on pricing is and the they network, AWP side, pricing go volume higher dynamically So and their than increase that is than because increase lower a average. dealer they a that

Tami Zakaria

you Thank Got so it. much.

Operator

from go comes Citigroup. Our from ahead. question Thein next Please Tim

open. is line Your

Tim Thein

that. impact just gotten seen just -- I’m rates, move inflows back I that inventory? is interest especially have of seasonal around standpoint is it. on it’s maybe earlier just so of the given seen And business disjointed. we’ve an little just in have you The that you’ve distribution given one. just of it’s question rates but Great. – keep of it some the there’s question know more seeing are products broad the and I’ll it’s of I of or MP to John, through curious, if kind in guess much much, holding to not from Thanks. or just how bit distribution. of going goes a you the any regarding than heard version from aggregates, channel you impact are starting But that, pushback more from any much just

get more or come just within just curious of if that’s up level, of an you issue So MP? been high a for but much Thanks.

John Garrison

the is aggregate goes And Thanks, remember, in Yes. really dealer strong, this dealer demand remains contracts. space, rental low. a are relatively Tim. overall dealer aggregate type Again, inventory rent-to-own especially fleet global levels in on inventory it and space,

inventory. are their And to looking replenish so dealers

the high on and has been news high. out equipment rent the continues On the side, of utilization remain to good rates

watch conditions on final not we and staying time. of customer not before will fund. dealers’ credit to conditions they What are that to rate that And ability -- kind are about sale. impacting makes on convert heard have little equity than environment hearing sense previously kind and interest longer which the building a a we we’re Credit rental seen it over a that’s is rising rent of bit

business strong of demolition basis. as strong. part that. So again, not construction process on we’ll the that in demand overall just virgin well. good is And been global And that we it’s But still has environment that watch a market aggregates

is news that we’re rent. that expanding bit inventories forward. a high, longer little what dealer closely. that’s good is it on seeing, utilization dealer So see as We’ll watching built be up, rental to impact has and fleet go what The watch we need

Tim Thein

Okay. you. Thank

Operator

Our Jerry ahead. Sachs. go Goldman Please from next from question Revich comes

is line Your open.

Jerry Revich

everyone. morning hi, Yes, good

John Garrison

Jerry. Good morning,

Jerry Revich

margin since four [ph] an years looking Analyst we Can then, might deck, think of then your essentially there so? look what’s type like, both nine update segments margin you gone you’re expansion XXXX expected off XXXX Julie, current Day that levels early. folks for terms us levels than had in of about XXXX to of off your of is or John, expansion back margin at get opportunity in better an months the give at outlined as targets you just ago what you

John Garrison

hospital years of Jerry. time, scenes think the behind in some reducing programs the on time going been working executed they’re for that in and again, AWP inventory in now value-added first cost-out saw Well, a I half the Thanks, on the it’s engineering the efficiency volumes our increase. in long actually activity, has segment team now, our for year. the improvement as that’s manufacturing is both MP the across but work first well showing Again, this up

Monterrey. overall products optimization spoke the bring, work going months into over marketplace. continue to on move part And -- to network globe facility. course program. to to next new I that the They’re manufacturing of as products from go of make the of That’s as continue to XX progress, of the still so the has an they there’s important the lot that to a That’s we around on going be

gives that us And when confidence, drive targets team improved the we so to team execution it forward. we we have achievable those absolutely progress -- confidence out had is for continue put we yes, to the the confidence going should as targets, are given date, the more

Jerry Revich

this Super. cycle little I a different a standpoint. is with seasonality up, of ramping the supply ask from bit then And chain can terms in

has in has into XXXX, fourth been just half growth terms a off the normal considering chain to there year-over-year think deliveries about just of in just and sure seasonality would supply first production I shift this the of in quarter year. want from we standpoint? make seasonal imply And first even schedule applying abnormal been As no the early year how numbers pattern the quarter of

John Garrison

on call, we’ll -- outlook XXXX it’s seasonality. the the again, provide but QX Jerry, no, No, our and

customers. going more return to patterns Jerry, of over matter our with as As fact, a seasonal things normal improve, time to we’re

supply as drive as to chain will more we go seasonality so And more normal improves, forward. that

Jerry Revich

you. Thank

John Garrison

you. Thank

Operator

turn We for further remarks. I’d queue. to over call closing like no the to Garrison John have back questions in

John Garrison

Thank you, operator.

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

Operator

for concludes This today’s you conference your call. Thank participation.

disconnect. now may You

Terex (TEX) 2 Aug 232023 Q2 Earnings call transcript