Q4 2024 Terex Corp Earnings Call

Question and answer session will follow the formal presentation.

Speaker Change: As a reminder, this conference is being recorded it is now my pleasure to introduce your host Derek Everett Vice President Investor Relations.

Speaker Change: Good morning, and welcome to the <unk> fourth quarter 2024 earnings conference call a copy of the press release and presentation slides are posted on our Investor Relations website.

Speaker Change: Investors got tax Dot com.

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

Simon: We are joined today by Simon Mr President and Chief Executive Officer, and Julie Duck, Senior Vice President and Chief Financial Officer, along with Jennifer Collins, who will succeed Julie as senior Vice President and Chief Financial Officer. Shortly after Terex files. Its 2024 annual report on Form 10-K.

Simon: Their remarks will be followed by Q&A.

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

Simon: These risks are described in greater detail in the earnings materials and in our reports filed with the SEC.

Simon: On this call we will be discussing non-GAAP financial information.

Simon: <unk> adjusted figures that we believe are useful in evaluating the company's operating performance reconciliations for these non-GAAP measures can be found in the conference call materials.

Speaker Change: Please turn to slide three and I'll turn it over to siding.

Siding: Thanks, Derek and good morning.

Speaker Change: I'd like to welcome everyone to our earnings call and appreciate your interest in Terex.

Speaker Change: No. This will be Julian <unk> last earnings call as she will be leaving Terex in April I want to thank Julie on behalf of our team our board of directors and our shareholders for their commitment and contributions to terex over these past three years.

Speaker Change: I also want to welcome our incoming CFO, Jennifer Kang who started on Monday, Jim's extensive finance experience, including leading significant integrations and transformations and large multinationals makes her a great fit for terex.

Speaker Change: Looking at the year's performance I'm very pleased by our improved safety performance and as we enter 2025, our commitment to safety and the Terex values remains steadfast.

Good day and welcome to the under armour third quarter.

Speaker Change: As we continue to transform and grow our company our values will continue to include keeping each other safe treating each other with respect and dignity and being stewards of our environment and our communities.

2025 earnings conference call.

All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on <unk>.

Speaker Change: Turning to slide four.

Speaker Change: Our financial performance in the final quarter of 2024 was consistent with our Q3 outlook.

On your telephone keypad.

Speaker Change: For the full year, we delivered earnings per share of $6 11.

To withdraw your question. Please press Star then two please.

Speaker Change: Until a $5 $1 billion.

Lance: Please note. This event is being recorded I would now like to talk turn the conference over to Lance <unk> Senior Vice President of <unk>.

Speaker Change: This is the second highest full year EPS performance in the company's history, and a reflection of the strength of the <unk> portfolio.

Speaker Change: As we discussed last quarter, AWP and MP scaled back production in the second half to align with industry wide channel adjustments and will maintain a prudent operational posture for 2025.

Speaker Change: ESG executed very well in their first quarter with terex in the periods. Following the October <unk> close ESG earned $51 million or 22% EBITDA on revenue of $228 million.

Speaker Change: Delivering on the commitment of being financially accretive from day one.

Speaker Change: I am excited to see this level of performance continue into 2025 and beyond.

Speaker Change: Turning to slide five.

Speaker Change: ESG is a strong leadership team led by apparel chartered esg's impressive growth over the past 15 years.

Speaker Change: In Q1 of 2025 at took on additional responsibilities, becoming president of our new Environmental solutions segment, which includes ESG and Terex utilities.

Speaker Change: I know Pat and the team will do a great job capitalizing on the many opportunities ahead.

Speaker Change: And thanks to detailed advanced planning the integration team hit the ground running with eight work streams, making progress we fully expect to deliver at least $25 million in operational run rate synergies by the end of 2026 and realize additional commercial opportunities as we integrate.

Speaker Change: ESG into Terex.

Speaker Change: Turning to slide six.

Speaker Change: With the addition of <unk> to our portfolio approximately 25% of our revenue is from waste and recycling markets characterized by low cyclicality and steady growth.

Speaker Change: About 20% of our business is related to infrastructure, where significant investments is being put in place in the United States and around the world.

Speaker Change: Utilities is about 10% and growing as the well documented need to expand and strengthen energy distribution is clear.

Speaker Change: General construction, which in the past had represented the majority of our end markets is now less than a third.

Speaker Change: An important macro headwind is the elevated level of interest rates and uncertainty around the fed's outlook.

Speaker Change: We continue to see strong public sector spending on infrastructure and utilities, but rate sensitive private projects continued to be impacted by the higher rates.

Speaker Change: I'll see that stabilize inflation, enabling rate reductions would unlock pent up demand on the private investment side.

Speaker Change: We are encouraged by the improved sentiment that followed the U S election in November the new administration's focus on easing the regulatory environment for new projects and encouraging growth in investments in the United States are stimulants for many of our end markets.

Speaker Change: With over two thirds of our revenue coming from North America is strong U S. Economy is an important overall tailwind for us.

Speaker Change: We're closely following the administration's approach to international trade policy. It is important to understand that the majority of the products we sell in the United States, we make in the United States, which limits our exposure.

Speaker Change: Moreover, we initiated mitigation actions last year in anticipation of additional tariffs leveraging our global capabilities to manage the impact.

Speaker Change: As a global company with a significant footprint in the United States and around the World, We have optionality and are ready to take additional actions if needed.

Speaker Change: Turning to Europe, we continued to see a generally weak economic environment. We do remain encouraged by increasing adoption of our products in emerging markets, such as India Southeast Asia, The Middle East and Latin America.

Speaker Change: Please turn to slide seven.

Speaker Change: While we see shorter term adjustments in some of our legacy markets. We continue to be highly confident in our longer term growth outlook. Our portfolio of strong businesses. We will continue to benefit from Mega trends onshoring technology advancements and federal investments.

We continue to see record levels of Mega projects in data centers manufacturing semiconductor plants and others with more projects expected to come online through 2027.

Speaker Change: We anticipate increased activity from infrastructure investments from roads, and bridges airports railways and the power grid.

Speaker Change: We are encouraged by the new administration support for AI.

Speaker Change: Sure and other infrastructure investments and wild priorities May shift we believes these high investment levels will continue.

Speaker Change: Turning to slide eight.

Speaker Change: We started implementing our revised execute innovate and growth strategy and will continue to drive progress in 2025 and beyond.

Speaker Change: Said, we are evaluating our global footprint focusing on opportunities to reduce fixed costs, while improving operational performance and efficiency.

Speaker Change: When it comes to innovation, we have a very exciting new product development pipeline is focused on maximizing return on investment for our customers.

Speaker Change: We also continued to invest in robotics automation and digitizing work streams to make our operations more efficient and more flexible.

Speaker Change: Turning to growth.

Speaker Change: Leading the ESC acquisition was a significant step forward, we fully expect organic growth in that business to continue in line with its demonstrated performance over the past decade.

Speaker Change: On the utilities front, we are unlocking growth potential by improving productivity and expanding capacity as the long term demand outlook continues to expense.

Speaker Change: RMP in aerials businesses will manage through the current portion of the cycle before returning to growth as the need for more replacement equipment and Mega trends are expected to remain significant tailwind.

Speaker Change: Overall, we have a $40 billion addressable market with significant upside for our businesses.

Speaker Change: On to slide nine.

Speaker Change: Maintaining industrial market leadership requires a regular cadence of new innovative product introductions.

We are unlocking growth potential by improving productivity and expanding capacity as the long term demand outlook continues to expense.

Speaker Change: Our businesses pride themselves on bringing groundbreaking products to market that improve ROI for our customers.

Speaker Change: A great example is the completely redesigned next generation Genie slap Scissor family Pictures on the left.

RMP in aerials businesses will manage through the current portion of the cycle before returning to growth as the need for more replacement equipment and Mega trends are expected to remain significant tailwind.

Speaker Change: New genius scissors provide our customers with industry, leading quality performance and significantly lower total cost of ownership.

Overall, we have a $40 billion addressable market with significant upside for our businesses.

Speaker Change: Included in the launch is the first ever Genie Scissor that does not use any hydraulic oil which is perfect for the rapidly growing data center and entertainment markets.

Turning to slide nine.

Maintaining industrial market leadership requires a regular cadence of new innovative product introductions.

Speaker Change: The Middle picture features the industry's first all electric refuse collection body recently introduced by Hyatt.

<unk> businesses pride themselves on bringing groundbreaking products to market that improve ROI for our customers.

Speaker Change: While on route the automated side loader is entirely electrically actuated with no hydraulics.

A great example is the completely redesigned next generation Genie slap Scissor family Pictures on the left.

Speaker Change: Plug directly into an electric chassis battery or run on its own battery to maximize the vehicles collection range.

The new genius scissors provide our customers with industry, leading quality performance and significantly lower total cost of ownership.

Speaker Change: Customers love it because it has demonstrated fuel savings of up to 38% and supports sustainability and contamination reduction objectives, while delivering excellent productivity.

Included in the launch is the first ever Genie Scissor that does not use any hydraulic oil which is perfect for the rapidly growing data center and entertainment markets.

Speaker Change: And finally, the image on the right shows our new brush Chipper. The latest addition to our new Green Tech product line, we launched Green Tech last year to focus on the growing treat care and vegetation management markets.

The Middle picture features the industry's first all electric refuse collection body recently introduced by Hyatt.

I am on routes the automated side loader is entirely electrically actuated with no hydraulics it can.

Speaker Change: The team is doing a great job growing the new business line entering 2025 with a healthy backlog.

Plug directly into an electric chassis battery or run on its own battery to maximize the vehicles collection range.

Speaker Change: Each of these new product offerings are examples of the strength and the leverage of the terex portfolio to maximize ROI for our customers in a diverse and continually expanding markets.

Customers love it because it has demonstrated fuel savings of up to 38% and supports sustainability and contamination reduction objectives, while delivering excellent productivity.

Julie Duck: And with that I'll turn it over to Julie.

Julie Duck: Thank you Simon and good morning, everyone looking at our fourth quarter financial results found on slide 10.

And finally, the image on the right shows our new brush Chipper. The latest addition to our new Green Tech product line, we launched Green Tech last year to focus on the growing <unk> and vegetation management markets. The team is doing a great job growing the new business line entering 2025 with a healthy backlog.

Julie Duck: Net sales of $1 2 billion were up slightly versus the prior year due to the addition of ESG.

Julie Duck: And the legacy segments were down 17% largely in line with our expectations due to industry wide channel adjustment.

Each of these new product offerings are examples of the strength and the leverage of the terex portfolio to maximize ROI for our customers in a diverse and continually expanding markets.

Julie Duck: Gross margin of 19% reflects lower year over year margin in the legacy segment, partially offset by accretive margins from ESG.

And with that I'll turn it over to Julie.

Julie Duck: Unfavorable manufacturing variances and mixed in the legacy segments were partially offset by cost reduction actions.

Thank you Simon and good morning, everyone looking at our fourth quarter financial results found on slide 10.

Julie Duck: We reduced legacy SG&A expenses by $14 million or 10, 4% year over year, as we executed cost reduction actions and lower incentive compensation.

Total net sales of $1 2 billion were up slightly versus the prior year due to the addition of ESG sales in the legacy segments were down 17% largely in line with our expectations due to industry wide channel adjustment.

Julie Duck: Operating profit was $97 million or seven 8%.

Julie Duck: Interest and other expense was $39 million.

Gross margin of 19% reflects lower year over year margin in the legacy segment.

Julie Duck: $4 million higher than last year.

Julie Duck: On acquisition.

Julie Duck: Yes.

Actually offset by accretive margins from ESG.

Julie Duck: Our fourth quarter effective tax rate was 10, 9% compared to 18, 7% in the fourth quarter of 2023 due to favorable jurisdictional mix.

Volume unfavorable manufacturing variances and mixed in the legacy segment were partially offset by cost reduction actions.

We reduced legacy SG&A expenses by $13 million or 10, 4% year over year, as we executed cost reduction actions and lower incentive compensation.

Speaker Change: Great one time items.

Speaker Change: Earnings per share for the quarter was 77 and.

Speaker Change: And EBITDA was $114 million.

Speaker Change: Free cash flow for the quarter was $129 million compared to $135 million in the fourth quarter of 2023.

Operating profit was $97 million or seven 8%.

Interest and other expense was $39 million $24 million higher than last year.

Speaker Change: Turning to slide 11 for the full year results.

Total net sales of $5 1 billion were generally in line with 2023 at the FERC quarter addition of ESG offset a four 9% decline in legacy revenue.

On acquisition related financing.

Our fourth quarter effective tax rate was 10, 9% compared to 18, 7% in the fourth quarter of 2023 due to favorable jurisdictional mix.

Speaker Change: Gross margin of 21, 7% was 120 basis points lower year over year volume and unfavorable mix and the legacy segment.

Great one time items.

Earnings per share for the quarter was 77 and.

Speaker Change: Only partially offset our cost reduction actions in the fourth quarter accretion from ESG.

And EBITDA was $114 million.

Free cash flow for the quarter was $129 million compared to $135 million in the fourth quarter of 2023.

Speaker Change: We reduced legacy SG&A expenses by $18 million or three 4% for the full year cost reduction actions and lower incentive compensation.

Turning to slide 11 for the full year results.

Total net sales of $5 1 billion Regeneracy aligned with 2023.

Speaker Change: Operating profit was $582 million or 11, 3%.

Quarter addition of ESG offset a four 9% decline in legacy revenue.

Speaker Change: Interest and other expense was $83 million $20 million higher than last year due to interest on acquisition related financing.

Gross margin of 21, 7% with 120 basis points lower year over year as volume and unfavorable mix and the legacy segment were only partially offset by cost reduction actions in the fourth quarter accretion from ESG.

Speaker Change: Full year effective tax rate was 17, 2% 100 basis points other than the prior year due to favorable geographic mix.

Speaker Change: Earnings per share for the year was $6 11.

We reduced legacy SG&A expenses by $18 million or three 4% for the full year through cost reduction actions and lower incentive compensation.

Speaker Change: <unk> mentioned that is the second highest third fifth street, and EBITDA was $642 million or 12, 5%.

Speaker Change: Free cash flow of $190 million was down from last year due to lower net income.

Operating profit was $582 million or 11, 3%.

Speaker Change: Higher interest expense.

Interest and other expense was $83 million $20 million higher than last year due to interest on acquisition related financing.

Speaker Change: Increased net working capital and a one time benefit in the prior year associated with it.

Speaker Change: The city facility.

Speaker Change: Please turn to slide 12 to review our segment results starting with AWP.

Full year effective tax rate was 17, 2% 100 basis points other than the prior year due to favorable geographic mix.

Speaker Change: AWP sales of $3 billion for the year, representing 3% growth compared to 2023 with similar growth rates in <unk> and Terex utilities.

Earnings per share for the year was $6 11.

As Simon mentioned that is the second highest compared to history, and EBITDA was $642 million or 12, 5%.

Speaker Change: Year was characterized by a return to signal delivery pattern, which we expect to be the norm going forward.

Free cash flow of $190 million was down from last year due to lower net income, including higher interest expense <unk>.

Speaker Change: During this market transition, we were encouraged to see market share gains, resulting from new products and other customer bookings improvements made by the team.

Increased net working capital and a one time benefit in the prior year associated with the sale of the Oklahoma City facility.

Speaker Change: Full year AWP operating margin was 11, 6%.

Speaker Change: Consistent with our third quarter outlook fourth quarter margins impacted by aggressive production cuts product list.

Please turn to slide 12 to review our segment results starting with AWP.

AWP sales of $3 billion for the year represents 3% growth compared to 2023.

Speaker Change: Favorable mix and <unk>.

Speaker Change: The Genie team continues to optimize manufacturing footprint.

Similar growth rates in <unk> and Terex utilities.

Speaker Change: <unk> operational efficiency and introduced a host of new products that maximize return on investment for our customers.

Speaker Change: The year was characterized by a return to seasonal delivery pattern, which we expect to be the norm going forward.

Speaker Change: Please turn to slide 13 to review <unk> performance.

Speaker Change: During this market transition, we were encouraged to see market share gains, resulting from new products and other customer focused improvements made by the team.

Speaker Change: Full year sales of $1 $9 billion or 14, 6% lower than the prior year industry wide channel adjustments, combining with challenging macroeconomic factors in Europe, especially in the second half.

Speaker Change: Full year AWP operating margin was 11, 6%.

Speaker Change: With our third quarter outlook fourth quarter margins impacted by aggressive production cuts.

Speaker Change: Aggregate side, we saw machines on rent longer than usual impacting dealers replenishment of new units.

Speaker Change: It moves and unfavorable mix in Aero.

Speaker Change: The Genie team continues to optimize manufacturing footprint drive operational efficiency and introduced a host of new products that maximize return on investment for us.

Speaker Change: The European market with weak all year, which were initially impacted material handling crane and eventually aggregate.

Speaker Change: Our U S concrete in India aggregates businesses were bright spots.

Speaker Change: Yes.

Speaker Change: Please turn to slide 13 to review <unk> performance.

Speaker Change: In the fourth quarter.

Speaker Change: MTA solid 13, six full year operating margin was impacted by lower volume and unfavorable product and geographic mix.

Speaker Change: Full year sales of $1 $9 billion or 14, 6% lower than the prior year due to industry wide channel adjustment combining with challenging macroeconomic factors in Europe, especially in the second half.

Our cost reduction action.

Speaker Change: Please turn to slide 14 to review ESG.

Speaker Change: We were very pleased that the ESG performance following the October 8th close.

Speaker Change: On the aggregate side, we saw machines on rent longer than usual impacting dealers replenishment of new units.

Speaker Change: The business achieved 21, 9% operating margin and net sales of $228 million, representing meaningful growth and profitability improvement over the prior year period.

Speaker Change: The European market with weak all year, which were initially impacted material handling crane and eventually aggregates.

Speaker Change: Our U S concrete in India aggregates businesses for bright spot both growing in the fourth quarter.

Speaker Change: Operational initiatives are both collection vehicle and compact of production contributed to the margin expansion.

Speaker Change: MTA solid 13, six full year operating margin was impacted by lower volume and unfavorable product and geographic mix, partially offset our cost reduction action.

Speaker Change: EBITDA in the period was $51 million or 22% of sales. We are very excited about 2025 and future contributions to tariffs.

Speaker Change: Please turn to slide 14 to review ESG.

Speaker Change: Please turn to slide 15.

Speaker Change: In the fourth quarter, we funded the ESG acquisition at favorable rates and terms and maintained our corporate rating.

Speaker Change: We were very pleased with the ESG performance following the October close.

Speaker Change: The business achieved 21, 9% operating margin and net sales of $228 million, representing meaningful growth and profitability improvement over the prior year period.

Speaker Change: We continue to maintain a solid balance sheet and flexible capital structure with the right mix of secured and unsecured debt variable versus fixed rate.

Speaker Change: We can prepay or re priced a significant portion of the debt.

Speaker Change: Operational initiatives are both collection vehicle and compact or production contributed to the margin expansion.

Speaker Change: And we do not have any maturities until 2029, we.

Speaker Change: We continue to have ample liquidity with a year end leverage ratio of two six times based on the calculation in our credit agreement.

Speaker Change: EBITDA in the period was $51 million or 22% of sales.

Speaker Change: We're very excited about ESG is 2025 and future contributions to tariffs.

Speaker Change: We plan to deleverage in future periods as we generate increased cash flow from operations and take advantage of cash tax benefits associated with the acquisition. We will also continue to invest in our businesses fueling organic growth and profitability improvement.

Speaker Change: Please turn to slide 15.

Speaker Change: In the fourth quarter, we funded the ESG acquisition at favorable rates and terms and maintained our corporate rating.

Speaker Change: We continue to maintain a solid balance sheet and flexible capital structure with the right mix of secured and unsecured debt and variable versus fixed rate.

Speaker Change: We reported a return on invested capital of 19, 4% well above our cost of capital.

Speaker Change: Can prepay or repriced, a significant portion of the debt.

Speaker Change: Returning capital to shareholders remains a priority in 2024 tariffs returned $92 million to shareholders through share repurchases and dividends more than offsetting equity compensation dilution, we have $86 million remaining under our share repurchase authorization and we will continue to buy back she.

Speaker Change: We do not have any maturities until 2029, we.

Speaker Change: We continue to have ample liquidity with a year end leverage ratio of two six times based on the calculation in our credit agreement.

Speaker Change: We plan to deleverage in future periods as we generate increased cash flow from operations and take advantage of cash tax benefits associated with the acquisition. We will also continue to invest in our businesses fueling organic growth and profitability improvement.

Speaker Change: Sure.

Speaker Change: Paroxysmal strong financial position to continue investing in our business and executing our strategic initiatives, while returning capital to shareholders.

Speaker Change: Turning to bookings and backlog on slide 16.

Speaker Change: We reported a return on invested capital of 19, 4% well above our cost of capital.

Speaker Change: Our current backlog of $2 $3 billion includes a very healthy $520 million for ESG and $1 8 billion legacy businesses, which.

Speaker Change: Returning capital to shareholders remains a priority in 2024 tariffs returned $92 million to shareholders through share repurchases and dividends more than offsetting equity compensation dilution, we have $86 million remaining under our share repurchase authorization and we will continue to buy back she.

Speaker Change: In line with historical pre Covid norm.

Speaker Change: As expected, we stopped booking trends, Rick <unk> historical pattern with the fourth quarter traditionally being our seasonally strong bookings period.

Speaker Change: Sure.

Speaker Change: Paroxysm, a strong financial position to continue investing in our business and executing our strategic initiatives, while returning capital to shareholders.

Speaker Change: Book to Bill for the legacy business was 116% led by Ariel component of AWP at 153% as rental customers ramped up orders for 2025.

Speaker Change: Turning to bookings and backlog on slide 16.

Speaker Change: Our current backlog of $2 $3 billion includes a very healthy $520 million for ESG, and $1 $8 billion or legacy businesses, which.

Speaker Change: Moreover, the Genie team has secured a sizable additional 2025 commitments from large customers in January.

Speaker Change: We expect book to Bill greater than 100% again in the first quarter, providing further support for our 2025 outlets.

Speaker Change: In line with historical pre Covid norm.

Speaker Change: As expected we saw bookings trends returned to historical pattern with the fourth quarter traditionally being our seasonally strong bookings period.

Speaker Change: MTS has returned to its traditional book to Bill Clinton.

Speaker Change: Supported by reliable lead times with backlog coverage of approximately three months.

Speaker Change: Book to Bill for the legacy business was 116% led by Ariel component of AWP at 153% as rental customers ramped up orders for 2025.

Speaker Change: ESG backlog of $520 million heading into 2025 is up 16% from the prior year.

Speaker Change: It's strong fourth quarter bookings of $255 million represents a 112% book to bill supporting our growth outlook for ESG.

Speaker Change: Moreover, the Genie team has secured a sizable additional 2025 commitments from large customers in January.

Speaker Change: Now I'll turn to slide 17 for our 2025 outlets.

Speaker Change: We expect book to bill of greater than 100% again in the first quarter, providing further support for our aerial 2025 outlook.

Speaker Change: We are operating in a complex environment with many macroeconomic variables and geopolitical uncertainties and results could change negatively or positively with that said this outlook represents our best estimate as of today and does not include the impact of any new tariffs or trade policy changes that are not.

Speaker Change: M. P has returned to its traditional book to Bill cadence supported by reliable lead times with backlog coverage of approximately three months.

Speaker Change: ESG backlog of $520 million heading into 2025 is up 16% from the prior year.

Speaker Change: And in fact.

Speaker Change: We expect overall growth in 2025 with the full year contribution of ESG anticipating net sales of approximately $5 $4 billion with a segment operating margin of about 12% and EBITDA of roughly $660 million.

Speaker Change: It's strong fourth quarter bookings of $255 million represents 112% book to Bill supporting our growth outlook for ESG.

Speaker Change: Now I'll turn to slide 17 for our 2025 outlets.

Speaker Change: We are operating in a complex environment with many macroeconomic variables and geopolitical uncertainties and results unchanged negatively or positively with that said this outlook represents our best estimate as of today and does not include the impact of any new tariffs or trade policy changes that are not current.

Speaker Change: Interest and other expenses will increase compared to 2024 due to acquisition related financing to an expected full year total of about $175 million.

Speaker Change: We expect 2025 earnings per share of between $4 77 and.

Speaker Change: $5 and 10% on lower legacy volume, partially offset by accretive ESG dropped.

Speaker Change: In effect.

Speaker Change: We expect overall growth in 2025 with the full year contribution of ESG anticipating net sales of approximately $5 $4 billion with a segment operating margin of about 12% and EBITDA of roughly $660 million.

Speaker Change: From a quarterly perspective, we anticipate a slower start to the year.

Speaker Change: About 10% of our full year earnings per share in the first quarter as we continued to execute the corrective actions we deployed in the fourth quarter to set us up for the longer term.

Speaker Change: Interest and other expenses will increase compared to 2024 due to acquisition related financing to an expected full year total of about $175 million.

Speaker Change: We expect about two thirds of the full year earnings per share over the middle two quarters.

Speaker Change: We expect a significant increase in free cash flow compared to 2020 for anticipating between 300 and $350 million in 2025, driven by working capital reduction and a full year of ESG cash generation, while continuing to invest in our businesses with expected capex of approximately.

Speaker Change: We expect 2025 earnings per share of between $4 70.

Speaker Change: $5 and 10 pence on lower legacy volume, partially offset by accretive ESG dropped.

Speaker Change: From a quarterly perspective, we anticipate a slower start to the year.

Speaker Change: $120 million.

Speaker Change: Every about 10% of our full year earnings per share in the first quarter as we continued to execute the corrective actions we deployed in the fourth quarter to set us up for the longer term.

Speaker Change: Looking at our segments during the first quarter ESG, when combined with Terex utilities to create environmental solution or E. S.

Speaker Change: We expect about two thirds of the full year earnings per share over the middle two quarters.

Speaker Change: MP is unchanged and Ariel which is our Genie business really reported stand alone.

Speaker Change: We expect a significant increase in free cash flow compared to 2020 for anticipated between 300 and $350 million in 2025, driven by working capital reduction and a full year of ESG cash generation, while continuing to invest in our businesses with expected capex of approximately.

Speaker Change: We will provide historical comparative information when we release, our first quarter 2025.

Speaker Change: Let's start with area.

Speaker Change: Sales to be down low double digit comps.

Speaker Change: Compared to $2 $4 billion in 2024.

Speaker Change: $120 million.

Speaker Change: Excluding the first quarter of one timers.

Speaker Change: Looking at our segments during the first quarter ESG, when combined with Terex utilities to create environmental solutions or E. S.

Speaker Change: Full year 2025 margin to be consistent with our 25% decremental target.

Speaker Change: As a result, and consistent with historical seasonal pattern, we expect the second and third quarters to be highest margin quarters.

Speaker Change: M. P is unchanged and aerials, which is our genie business will be reported stand alone.

Speaker Change: We expect <unk> sales to be down high single digits compared to the prior year.

Speaker Change: We will provide historical comparative information when we released our first quarter 2025.

Speaker Change: Europe remained generally weak with North America, starting slowly been picking up steam as the year unfolds.

Speaker Change: Let's start with Ariel.

Speaker Change: Sales to be down low double digits compared.

Speaker Change: We anticipate LTE to achieve decremental margins well within our 25% target.

Speaker Change: Compared to $2 $4 billion in 2024.

Speaker Change: Excluding first quarter, one timers, we expect full year 2025 margin to be consistent with our 25% decremental target.

Speaker Change: ESG had a strong fourth quarter and we expect that momentum carry into 2025, combining with utilities to generate mid single digit sales growth for the year.

Speaker Change: As a result, and consistent with historical seasonal pattern, we expect the second and third quarters to be highest margin quarters.

Speaker Change: Segment.

Speaker Change: RCV demand remains strong and the marathon team has implemented several commercial excellent programs that continue to drive growth and comp factors you'd.

Speaker Change: We expect <unk> sales to be down high single digits compared to the prior year.

Speaker Change: Utilities demand remained strong with backlog stretching into 2026.

Speaker Change: Europe remained generally weak with North America, starting slowly that is picking up steam as the year unfolds.

Speaker Change: The 2024 comparable baseline for Es is revenue of $1 $5 billion with an operating profit of 17%.

Speaker Change: We anticipate empty to achieve decremental margins well within our 25% target.

Speaker Change: We anticipate continued strong margin performance for <unk> in 2025 through new product introduction operational improvement and synergy capture.

Speaker Change: ESG had a strong fourth quarter and we expect that momentum carry into 2025, combining with utilities to generate mid single digit sales growth for the Es segment.

Simon: With that I will turn it back to Simon.

Speaker Change: RCV demand remains strong and the marathon team has implemented several commercial excellent programs that continue to drive growth and comp actors use.

Simon: Thanks, Julie I will now turn to slide 18.

Simon: Eric This is very well positioned to deliver long term value to our shareholders. We have a strong portfolio of industry, leading businesses across the diverse landscape of industrial segments with attractive end markets.

Speaker Change: Utility demand remained strong with backlog stretching into 2026.

Speaker Change: The 2024 comparable baseline for Es is revenue of $1 $5 billion with an operating profit of 17%.

Eric: We will continue to demonstrate improved through cycle financial performance as we integrate ESG and realized synergies across the company.

Speaker Change: We anticipate continued strong margin performance for E. S. In 2025 through new product introduction operational improvement and synergy capture.

Eric: As always I want to close by thanking our team members around the world. We have made great strides together and we will continue to grow our company together.

Simon: With that I will turn it back to Simon.

Simon: Thanks, Julie and I will now turn to slide 18.

Eric: I am very excited about the roadmap for terex.

Eric: And with that I would like to open it up for questions operator.

Simon: Eric This is very well positioned to deliver long term value to our shareholders. We have a strong portfolio of industry, leading businesses across the diverse landscape of industrial segments with attractive end markets.

Speaker Change: At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad, we do request for today's session that you. Please limit to one question and one follow up we will pause for just a moment to compile the Q&A roster.

Simon: We will continue to demonstrate improved through cycle financial performance as we integrate ESG and realized synergies across the company.

Eric: Sure.

Simon: As always I want to close by thanking our team members around the world. We have made great strides together and we will continue to grow our company together.

Speaker Change: Your first question comes from the line of Jerry Revich from Goldman Sachs. Please go ahead.

Eric: Yeah.

Jerry Revich: Yes, hi, good morning, everyone.

Simon: I am very excited about the road ahead for Terex.

Eric: Hey, good morning Simon.

Simon: And with that I would like to open it up for questions operator.

Eric: Alright.

Eric: Congratulations.

Eric: Strong performance out of the gate, what really stood out was the margin performance.

Speaker Change: At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad, we do request for today's session that you. Please limit to one question and one follow up we will pause for just a moment to compile the Q&A roster.

Speaker Change: In the quarter and the year over year growth can you just talk about the sustainability of the margin performance. We saw in the quarter, whether there is any favorable mix or any other pieces, because I always looked to be up significantly year over year as we think about.

Simon: Sure.

Eric: The outlook heading into next year.

Speaker Change: Your first question comes from the line of Jerry Revich from Goldman Sachs. Please go ahead.

Eric: The other dynamic as Harold has picked up significant share over the past post COVID-19 cycle. It looks like based on the bookings it looks like that momentum is continuing but I'm wondering if you could just doubled.

Simon: Yeah.

Simon: Yes, hi, good morning, everyone.

Simon: Hey, good morning Shannon.

Simon: Alright.

Eric: Double click on that for US if you don't mind.

Simon: Congratulations.

Simon: Strong performance out of the gate, what really stood out was the margin performance.

Speaker Change: No. Thanks for the question no other than just they're firing on all cylinders you know it's been a record year for them in terms of bookings sales deliveries.

Simon: In the quarter and the year over year growth can you just talk about the sustainability of the margin performance. We saw in the quarter, whether there is any favorable mix or any other pieces, because I always looked to be up significantly year over year as we think about.

Speaker Change: New product and new product introductions throughput.

Speaker Change: They basically they they can turn a bear chassis into a full blown refuse collection truck in less than 60 days, which gives a big net working capital advances to their customers. So it's just a.

Simon: The outlook heading into next year.

Speaker Change: The other dynamic as Carl has picked up significant share over the past post COVID-19 cycle. It looks like based on the bookings it looks like that momentum is continuing but I'm wondering if you could just doubled.

Speaker Change: All out success story, nothing really you know that help them in terms of mix other than just great performance and we see that carryover into 2025 they are literally.

Simon: Double click on that for US if you don't mind.

Simon: No. Thanks for the question no other than just just they're firing on all cylinders you know it's been a record year for them in terms of bookings sales deliveries.

Speaker Change: Firing on all cylinders. So we're very pleased with the.

Speaker Change: Obviously, your ESG, joining the terex family and.

We're very excited about 2025.

Speaker Change: Strong bookings in the quarter, you know that points to a really strong 2025 and military so very excited.

Simon: New product new product introductions throughput.

Simon: They basically.

Simon: They can turn a bear chassis into a full blown refuse collection truck in less than 60 days, which gives a big net working capital advances to their customers. So it's just an all out success story nothing really you know that help them in terms of mix other than just great performance and we see that carryover into 2020.

Speaker Change: Super.

And can I shift gears.

Speaker Change: Just give you an opportunity to comment on the company's ability to move around.

Speaker Change: Given.

Speaker Change: Every two days, we're looking at different potential.

Speaker Change: Terrorist picture I think initially when you were contemplating changes in the footprint you are targeting.

Simon: There are literally.

Speaker Change: Significantly more than 25% cost savings there to make the investment moves so.

Simon: Firing on all cylinders. So we're very pleased with the.

Simon: Obviously, you see joining the terex family and.

Speaker Change: I'm wondering if you could just flesh that out for us so it's been.

Simon: We're very excited about 2025.

Speaker Change: Key topic over the past couple of weeks.

Simon: Strong bookings in the quarter, you know and that points to a really strong 2025 and military so very excited.

Speaker Change: Are you asking particularly about North America, or what kind of tariff.

Simon: Super.

Simon: And can I shift gears.

Speaker Change: Apologize.

Speaker Change: Tariff picture in North America.

Simon: Just give you an opportunity to comment on the companys ability to move around.

Speaker Change: Central to tear out to be a permit, but Mexico and Canada just wanted to give you a platform.

Simon: <unk> given you.

Speaker Change: Expand on what the company can do.

Simon: Every two days, we're looking at different potential.

Speaker Change: Yeah, obviously, it's been a bit of a roller coaster in the last couple of weeks, but yes.

Simon: Terrorist picture I think initially when you were contemplating changes in the footprint you were targeting.

Speaker Change: Yes overall.

Speaker Change: I've said this in my opening remarks at the end of the day, we're still a U S based manufacturer of Terex level, we have 11 factories in the United States One in Mexico, one in Canada. So the lion's share of what we sell in the United States, we make in the United States.

Simon: Significantly more than 25% cost savings there.

Simon: Make the investment move so.

Simon: I'm wondering if you could just flush that out for us so it's been.

Simon: Key topic over the past couple of weeks.

Simon: Yes are you asking particularly about North America, or what kind of tariff yeah I apologize yeah.

Speaker Change: But.

Speaker Change: Having said that we have we have a lot of optionality to be very honest with you. Jerry is no matter what the outcome will be if anything will change.

Simon: The tariff picture in North America.

Simon: I'll turn out to be implemented in Mexico, and Canada. Just wanted to give you a platform to expand on what the company can do.

Speaker Change: Single shifts in most of our U S factories we.

Simon: Yeah, obviously, it's been a bit of a roller coaster in the last couple of weeks, but yes.

Speaker Change: We can we can reroute demand.

Simon: Yes overall.

Speaker Change: Across our factories, we we source.

Simon: I've said this in my opening remarks at the end of the day, we're still a U S based manufacturer of Terex level, we have 11 factories in the United States One in Mexico, one in Canada. So the lion's share of what we sell in the United States, we make in the United States.

Speaker Change: From the Monterrey facility from other facilities as well so we have a dual source setup that we can we can play with so we have a lot of optionality, but.

Speaker Change: We're still very pleased with our Monterey facility is a world class facility state of the art manufacturing and we can use that facility no matter what happens with the U S landscape, but we like where we are from a from a competitive standpoint, the optionality that we have we have multi.

Simon: But.

Having said that we have we have a lot of optionality to be very honest with you Jeremy no matter kind of what the outcome will be if anything will change.

Simon: Run single shifts in most of our U S factories a weekend.

Simon: We can we can reroute demand.

Speaker Change: Or mitigation plans ready to go if.

Simon: Across our factories, we we source.

Speaker Change: The situation would change.

Speaker Change: <unk>.

Speaker Change: We think that if something were to happen that.

Simon: From the Monterrey facility from other facilities as well so we have a dual source setup that we can we can play with so we have a lot of optionality, but.

Speaker Change: We would be able to mitigate.

Speaker Change: Most of it and.

Simon: We're still very pleased with our Monterey facility is a world class facility is state of the art manufacturing and we can use that facility no matter what happens with the U S landscape, but we like where we are from a from a competitive standpoint, the optionality that we have we have.

Speaker Change: It wouldn't make a significant impact on our guidance either way.

Speaker Change: Super Thank you.

Speaker Change: Thanks for the question.

Speaker Change: Your next question comes from the line of Steven Fisher from UBS. Please go ahead.

Speaker Change: Thanks, Good morning, and.

Simon: Or mitigation plans ready to go if.

Speaker Change: Best wishes Julian Thanks for all the help.

Speaker Change: Congratulations Jim.

Simon: The situation would change.

Speaker Change: Just wanted to start off by asking about.

Simon: <unk>.

Simon: We think that if something were to happen that.

Speaker Change: The AWP order trends, how they came in relative to your expectations for the quarter.

Simon: We should be able to mitigate.

Simon: Most of it and.

Simon: It wouldn't make a significant impact on our guidance either way.

Speaker Change: And kind of what you see your customer is doing with their fleets. This year or is this sort of just a replacement year as it is a bit of a shrinking.

Speaker Change: Super Thank you.

Speaker Change: Thanks for the question.

Speaker Change: How do you kind of frame that I know you said you.

Speaker Change: Your next question comes from the line of Steven Fisher from UBS. Please go ahead.

Speaker Change: We have secured some additional commitments and in January so like how important is is the first quarter relative to sort of the seasonal picture of of bookings or is there something.

Steven Fisher: Thanks, Good morning, and.

Steven Fisher: Best wishes Julian Thanks for all the help and.

Speaker Change: Congratulations Jim.

Speaker Change: More clarity that that the industry got in January that enable those commitments.

Speaker Change: Just wanted to start off by asking about the the AWP order trends, how they came in relative to your expectations for the quarter.

Speaker Change: That's a great question no. We're just going back to kind of normal normal pattern. So typically we take most of our annual agreements in Q4, and then some in Q1 and that's kind of where we are where are we going back to so in Q4, we secured a 153% book to bill.

Speaker Change: And kind of what you see your customer is doing with their fleets. This year or is this sort of just a replacement year as it is it a bit of a shrinking.

Speaker Change: How do you kind of frame that I know you said.

Speaker Change: Very pleased with the order intake and then again in Q1, we expect to be north of 100%. So we feel really good about our.

Speaker Change: You have secured some additional commitments.

Speaker Change: In January so like how important is is the first quarter relative to sort of the seasonal picture of of bookings or is there something.

Speaker Change: Sales outlook for aerials and other then.

Speaker Change: More clarity that that the industry got in January that enable those commitments.

Speaker Change: In terms of kind of the seasonality, we expect in 2025, Q2, and Q3 to go back to bnb traditionally the strongest quarters.

Speaker Change: That's a great question no. We're just going back to kind of normal normal pattern. So typically we take most of our annual agreements in Q4, and then some in Q1 and Thats kind of where we are where are we going back to so Q4, we secured 153% book to bill.

Speaker Change: Like it was pre COVID-19 and in terms of what our customers are telling US yes. It is mostly replacement demand to your point.

Speaker Change: But.

Speaker Change: Fleet fleet utilization still healthy levels.

Speaker Change: Very pleased with the order intake and then again in Q1, we expect to be north of a 100%. So we feel really good about our.

Speaker Change: So not really.

Speaker Change: That eight spending more so they are where they need to be but they have a strong.

Speaker Change: Project pipelines that have been very transparent with us from kind of what they need and.

Speaker Change: Our sales outlook for aerials and other then.

Speaker Change: In terms of kind of the seasonality we expect in 2025 Q2, and Q3 to go back to bnb traditionally the strongest quarters like it was pre COVID-19 and in terms of what our customers are telling US yes. It is mostly replacement demand to your point.

Speaker Change: At what time, they're going to need that product. So we just see the year going back to to normal if you will.

Speaker Change: And we're very pleased with our backlog and our coverage for the year.

Speaker Change: Okay. That's very helpful and then.

Speaker Change: I guess on on Europe can you just give us a sense of.

Speaker Change: But.

Speaker Change: Fleet fleet utilization still healthy levels.

Speaker Change: Kind of momentum there is it is it still getting weaker is it stabilizing in any sense of what it will take to get that going a little bit more positively.

Speaker Change: So not really.

Speaker Change: That eight spending more so they are where they need to be but they have a strong.

Speaker Change: Project pipelines, they have been very transparent with us from kind of what they need and.

Speaker Change: Are you, referring to tariffs and general or aerials.

Speaker Change: In general across the business Yeah. Our expectation is that Europe is going to continue to stay soft in 2025.

Speaker Change: What time, they're going to need their product. So we just see the year going back to to normal if you will.

Speaker Change: And we're very pleased with our backlog and our coverage for the year.

Speaker Change: We do see some pick up some fleets are starting to age for example, and handling some of our crushing and screening fleets start to age. So there is going to.

Speaker Change: Okay. That's very helpful and then.

Speaker Change: I guess on on Europe can you just give us a sense of you know.

Speaker Change: There's going to be some demand.

Speaker Change: Kind of momentum there is it is it still getting weaker or is it stabilizing in any sense of what it will take to get that going a little bit more positively.

Speaker Change: Around around replacement, but generally speaking we are assuming.

Speaker Change: Soft market.

Speaker Change: For 2025 in terms of RSV and in commercial construction for sure there is a little bit of pickup in civil.

Speaker Change: Are you, referring to tariffs and general or aerials.

Speaker Change: In general across the business.

Speaker Change: And some of the European markets, but overall, we see we.

Speaker Change: Our expectation is that Europe is going to continue to stay soft.

Speaker Change: In 2025.

Speaker Change: We see the market will continue to stay so having said that there are a couple of businesses that showed are showing signs of bottoming.

Speaker Change: We do see some pick up some fleets are starting to ache for example, and handling some of our crushing and screening fleets start to age. So there is going to.

Speaker Change: For example, we see some pickup in our cranes business, we see some positive quoting activity.

Speaker Change: There's going to be some demand.

Speaker Change: We see some positive bookings and then there are some bright spots like Saudi is a bright spot for us.

Speaker Change: Around around replacement, but generally speaking we are assuming.

Speaker Change: Soft market.

Speaker Change: So there are some from some markets that are doing slightly better, but as a general statement, we expect Europe to remain soft in 2025.

Speaker Change: For 2025 in terms of <unk> and in commercial construction for sure there is a little bit of a pickup in civil.

Speaker Change: Got it thank you very much.

Speaker Change: And some of the European markets, but overall, we see.

Speaker Change: Thank you.

Speaker Change: Your next question comes from the line of Tami Zakaria from Jpmorgan. Please go ahead.

Speaker Change: We see that the market will continue to stay so having said that there are a couple of businesses that showed are showing signs of bottoming.

Tami Zakaria: Hey, good morning, Thank you so much.

Speaker Change: For example, we see some pickup in our cranes business, we see some positive quoting activity.

Tami Zakaria: My first question is on the ESG outlook.

Tami Zakaria: And up mid single digit percent youre expecting this year, which seems a bit lower than the high single digit kindergarten that business has seen historically, so what's driving that outlook is is it including the.

Speaker Change: We see some positive bookings and then there are some bright spots like Saudi is a bright spot for us.

Speaker Change: So there are some.

Speaker Change: Some markets that are doing slightly better, but as a general statement, we expect Europe to remain soft in 2025.

Tami Zakaria: Legacy, Texas utilities business or just just the es portion so any color there would be helpful.

Speaker Change: Got it thank you very much.

Speaker Change: Thank you.

Speaker Change: Your next question comes from the line of Tami Zakaria from Jpmorgan. Please go ahead.

Tami Zakaria: It does it does include utilities for those those two businesses combined and if you if you break it apart.

Tami Zakaria: And ESG as I said firing on all cylinders as to Julie's point, we have a strong a record.

Tami Zakaria: Hey, good morning, Thank you so much.

Tami Zakaria: My first question is on the ESG outlook.

Tami Zakaria: <unk> coverage actually for <unk> going into 2025, and then in utilities, we're still a little bit constrained on supply. So we're actually expanding capacity because we're now starting to quote into 2026 for our utilities business. So our focus on 2025 will be to just continue to ramp up production on the utility.

Speaker Change: Up mid single digit percent youre expecting this year, which seems a bit lower than the high single digit kindergarten that business has seen historically, so what's driving that.

Speaker Change: Outlook is is it including the.

Speaker Change: Legacy, Texas utilities business or just just the es portion so any color there would be helpful.

Tami Zakaria: <unk> side and that might just drive a little bit of caution in our revenue guide for <unk> overall, but its tough because of ESG.

Speaker Change: It does it does include utilities for those those two businesses combined and if you if you break it apart.

Speaker Change: Got it got it that's that's very helpful. And then the other question is I think I heard you say that first quarter EPS.

Speaker Change: And ESG as I said firing on all cylinders to Julie's point, we have a strong a record backlog coverage actually for <unk> going into 2025, and then in utilities, we're still a little bit constrained on supply. So we're actually expanding capacity because we're now starting to close into 2026.

Tami Zakaria: 10% of the.

Tami Zakaria: Those guys. So could you just give us some pointers on how to model. The first quarter in terms of the segments, especially AWP I'm, just trying to understand how to get to that 10% EPS.

Speaker Change: For our utilities business. So our focus on 2025 will be to just continue to ramp up production on the utility side and that might just drive a little bit of caution in our revenue guidance for es overall, but it's not because of these fees.

Tami Zakaria: It's quite a key segments.

Tami Zakaria: Yeah. So yeah, so what we would expect.

Tami Zakaria: First of all for the first for the first quarter again, 10% of our earnings per share would be in that first quarter.

Tami Zakaria: And we would say that the revenues in our aerials business win would be seasonally lower in the first quarter and as well we took production down in the fourth quarter, which impacted margin and and.

Speaker Change: Got it got it that's very helpful. And then the other question is I think I heard you say first quarter EPS would be about a 10% of the.

Speaker Change: Those guys. So could you just give us some pointers on how to model. The first quarter in terms of the segments, especially AWP I'm, just trying to understand how to get to that 10% EPS.

Tami Zakaria: Simon referred to it as a speed bump and we.

Tami Zakaria: We will continue to do that in Q1 to more to match our production with our demand stuff. So our production will be lower in the first quarter for our aerials fitness.

Speaker Change: For the three segments.

Speaker Change: Yeah. So yeah, so what we would expect.

Speaker Change: M. T is it will have a lower first quarter as well.

Speaker Change: First of all you know for the first for the first quarter again, 10% of our earnings per share would be in that first quarter.

Speaker Change: They will continue to improve throughout the year and they'll perform well within our 25% decremental target and the Es business is just going to be strong and steady throughout the year consistent performance throughout the year. So that's how we we expect to see the year unfolding and particularly in Q1 Q1 will primarily.

Speaker Change: And we would think to say that you know the revenues in our aerials business win would be seasonally lower in the first quarter and as well we took production down in the fourth quarter, which impacted margin and and.

Speaker Change: Simon referred to it as a speed bump and we.

Speaker Change: <unk> impacted by some lower volume spokesman and MP add the aerial segments and some lower production volumes.

Speaker Change: We will continue to do that in Q1 to more to match our production with our demand stuff. So our production will be lower in the first quarter for our aerials fitness.

Speaker Change: Got it thank you so much.

Speaker Change: Yeah.

Speaker Change: M. T is it will have a lower first quarter as well.

Speaker Change: Your next question comes from the line of it Steve.

Speaker Change: They will continue to improve throughout the year and they'll perform well within our 25% decremental targets and the Es business is just going to be strong and steady throughout the year consistent performance throughout the year. So that's how we we expect to see the year unfolding and particularly in Q1 for Q1 were.

Steve Volkmann: Volkmann from Jefferies. Please go ahead.

Speaker Change: Alright, Thank you guys.

Speaker Change: Julie my thanks, as well and welcome Jen.

Just to follow on <unk> question, there truly your comments about lower are you talking about lower year over year in the <unk> or is it actually sequentially lower than the fourth.

Speaker Change: <unk> impacted by some lower volume spokesman and MP add the aerial segments and some lower production volumes.

Speaker Change: Yes.

Speaker Change: Yeah, we are going to be lower year over year and fairly consistent from Q4 to Q1 in terms of production.

Speaker Change: Got it thank you so much.

Speaker Change: Yeah.

Speaker Change: Okay, great. Thank you.

Speaker Change: Your next question comes from the line of Steve.

Speaker Change: And then maybe some in a couple of kind of a real bigger picture questions. I'm curious if you have any comments too.

Steve Volkmann: Volkmann from Jefferies. Please go ahead.

Speaker Change: What you think is happening with the AWP cycle are we in sort of a low here and it starts to re grow going forward or.

Steve Volkmann: Alright, Thank you guys.

Speaker Change: Julie my thanks, as well and welcome Jen.

Speaker Change: Just to follow on <unk> question, there truly your comments about lower are you talking about lower year over year in the <unk> or is it actually sequentially lower than the fourth.

Speaker Change: Do we have sort of a more protracted downturn, just any kind of abuse from your seat would be great.

Speaker Change: Yeah. So.

Speaker Change: Yes.

Speaker Change: Obviously, we're not ready to guide for anything beyond 2025, some mostly going to talk about 2020, I'm sorry, 2025, we can't we're not ready to talk about 2026, but overall, we're seeing U S to remain resilient in Europe, and the rest of the world to remain soft as the story for us.

Speaker Change: Yeah, we are going to be lower year over year and fairly consistent from Q4 to Q1 in terms of production.

Speaker Change: Okay, great. Thank you.

Speaker Change: And then maybe some in a couple of kind of a real bigger picture questions. I'm curious if you have any comments too.

Speaker Change: What you think is happening with the AWP cycle are we in sort of a low here and it starts to re grow going forward or.

Speaker Change: 2025 Mega projects main fill ins in the U S.

Speaker Change: We do see spending on the large projects continued to grow although at a lower pace, but infrastructure and now with manufacturing onshoring.

Speaker Change: Do we have sort of a more protracted downturn, just any kind of abuse from your seat would be great.

Speaker Change: We will continue to be a tailwind for us and that will that will carry forward.

Speaker Change: Yeah. So.

Speaker Change: Obviously, we're not ready to guide for anything beyond 2025, some mostly kind of talk about 2020, sorry 25.

Speaker Change: We see positive customer sentiment strong project pipeline, but yes, if there could be there could be upside if interest rates.

Speaker Change: It will come our way in private more local smaller projects will start to pick up again, but for 2025, it's mostly.

Speaker Change: We're not ready to talk about 2026, but overall, we're seeing U S to remain resilient in Europe and the rest of the world to remain soft as the story for US 2025 Mega projects main pillars in the U S.

Speaker Change: Replacement demand and that's what drives our or kind of compressed outlook for aerials.

Speaker Change: We do see spending on the large projects continued to grow although at a lower pace, but infrastructure in our manufacturing.

Speaker Change: And then we will have to see what happens going into 2026.

Speaker Change: Okay. Thanks.

Speaker Change: Yeah.

Speaker Change: <unk> onshoring.

Speaker Change: It continues to be a tailwind for us and that will that will carry forward.

Speaker Change: From the line of Jamie Cook from Trish. Thank you. Please go ahead.

Speaker Change: We see positive customer sentiment strong project pipeline, but yes, if there could be there could be upside if interest rates.

Speaker Change: Hi, Hi, good morning, I guess, just two follow up questions.

Speaker Change: One just on E S T.

Speaker Change: We'll come our way and private more local smaller projects will start to pick up again, but for 2025, it's mostly.

Speaker Change: I'm just trying to understand how youre thinking about the accretion of ESG in 2025 relative to when you announced.

Speaker Change: The deal and you talked about double digit accretion it doesn't sound like anything's changed given their performance in the quarter and what you've seen in bookings, but I just wanted to clarify that because it's hard to back into it the way.

Speaker Change: Replacement demand and Thats, what drives our our kind of compressed outlook for aerials.

Speaker Change: And then we will have to see what happens going into 2026.

Speaker Change: You guided and then I guess just my my second question you know on the aerials business understanding them. You know you had strong orders I think you said in January and we expect normal seasonality. So I'm just trying to understand to what degree how youre thinking about pricing and giving yourself flexibility.

Speaker Change: Okay. Thanks.

Speaker Change: Yes.

Speaker Change: From the line of Jamie Cook from Trish. Thank you. Please go ahead.

Speaker Change: Hi, Hi, good morning, I guess, just two follow up questions.

Speaker Change: One just on E S T.

Speaker Change: Just trying to understand how youre thinking about the accretion of ESG in 2025 relative to when you announced.

Speaker Change: I guess, if we do get into a situation.

Speaker Change: You know where tariffs become an issue I mean, I think terex under Trump last administration managed very well in terms of like price cost and managing that but just wondering how youre thinking about managing the business and getting these orders with tariffs potentially on a comp. Thank you.

Speaker Change: The deal and you talked about double digit accretion it doesn't sound like anything's changed given the performance in the quarter and what you've seen in bookings, but I just wanted to clarify that because it's hard to back into it the way.

Speaker Change: You guided them and then I guess just my my second question you know on the aerials business understanding you.

Julie Duck: I'll, let I'll, let Julie take the first part now.

Speaker Change: ESG again.

Julie Duck: Great fourth quarter performance.

Speaker Change: You had strong orders I think you said in January and we expect normal seasonality. So I'm just trying to understand to what degree how youre thinking about pricing and giving yourself flexibility I guess, if we do get into a situation.

Julie Duck: We expect them and there is no change from when.

Julie Duck: We announced I E.

Julie Duck: <unk> and brought them in in October we expect continued solid performance for ESG and entity.

Speaker Change: You know where tariffs become an issue I mean, I think terex under trumps last administration managed very well in terms of like price cost and managing that but just wondering how you're thinking about managing the business and getting these orders with tariffs potentially on a comp. Thank you.

You know add accretion to our earnings and we expect them to do really really well and nothing has changed or even even even feel better because of the great performance in fourth quarter and going into 2025.

Julie Duck: Yes, and on the <unk>.

Julie Duck: Tariffs pricing side, if tariffs were to come our way in.

Speaker Change: Yeah, I'll, let I'll, let Julie take the first part analysis.

Jay: So this is Jay again.

Jay: Great fourth quarter performance, and we expect them and there is no change from when you know that we are.

Julie Duck:

Julie Duck: That's obviously, a big if and we can only speculate but our aim would be to mitigate this.

Jay: <unk> announced ESG in and brought them in in October we expect continued solid performance for ESG and entity.

Julie Duck: No ourselves first and foremost that would be that would be the angle and we think we can mitigate.

Julie Duck: A big piece of it.

Jay: At.

Julie Duck: Depending on what what kind of tariffs we will have to deal with so are our aim will be to obviously stay disciplined.

Jay: Accretion to our earnings and we expect them to do really really well and nothing's changed or even even even feel better because of the great performance in fourth quarter and going into 2025.

Julie Duck: On pricing, we aim to be price cost neutral and there is still inflation other than tariffs.

Speaker Change: Yeah and on the on the tariffs pricing side, if tariffs were to come our way in.

Julie Duck: In our industry.

Julie Duck: Material freight and labor so we want to stay disciplined on pricing, but when it comes to tariffs. Our first our first approach will be to mitigate as much of it ourselves.

Speaker Change: You know, that's obviously, a big if and we can only speculate but our aim would be to mitigate this.

Speaker Change: No ourselves first and foremost that would be that would be the angle and we think we can mitigate.

Speaker Change: And before you cut me off Julie I just wanted to say thank you for all your help and congrats on a.

Julie Duck: Great performance and congrats to whatever is ahead.

Speaker Change: A big piece of it.

Speaker Change: Depending on what what kind of tariffs we will have to deal with so are our aim will be to obviously stay disciplined.

Speaker Change: Thank you.

Speaker Change: Thank you.

Speaker Change: Yeah.

Speaker Change: Your next question comes from the line of David Raso from Evercore ISI. Please go ahead.

Speaker Change: On pricing, we aim to be price cost neutral and there is still inflation other than tariffs.

David Raso: Hi, Thank you for the time and also congratulations Julia.

Speaker Change: Our in our industry.

David Raso: I don't want to make this a math question, but given the moving parts the lack of the restate I apologize in advance for the map here.

Speaker Change: Material freight and labor.

Speaker Change: So we want to stay disciplined on pricing, but when it comes to tariffs. Our first our first approach will be to mitigate as much of it ourselves.

David Raso: Can you I don't understand the decremental margin commentary on the segments that down within our 25% target.

Speaker Change: And before you cut me off Julie I just wanted to say thank you for all your help and congrats on a.

Speaker Change: A great performance and congrats to whatever is ahead.

David Raso: To help me get a better sense, how that's possible what is the operating margin you're assuming ESG Dover has the standalone business don't don't blend it with the utility.

Speaker Change: Thank you.

Speaker Change: Thank you.

Speaker Change: Your next question comes from the line of David Raso from Evercore ISI. Please go ahead.

David Raso: So the business that just reported 21.9 for the quarter I know it was a stub quarter. What are you thinking that business stand alone EBIT margin would be for 25.

David Raso: Hi, Thank you for the time and also congratulations Julien.

David Raso: I don't want to make this a math question, but given the moving parts the lack of the restate I apologize in advance for the map here.

Speaker Change: And David we would expect.

David Raso: <unk> margins to be at.

David Raso: <unk> merchants to be comparable in 2025.

David Raso: Can you I don't understand the decremental margin commentary on the segments that down within our 25% target.

David Raso: 2024.

David Raso: With that stub Denver.

David Raso: Yeah, No no no.

David Raso: To help me get a better sense of how that's possible what is the operating margin you're assuming ESG Dover has to stand alone business don't don't blend it with the utility.

David Raso: Yes.

Speaker Change: Okay. So again I apologize in advance, but we have a lot of moving numbers here, we don't have normal detail.

David Raso: If you strip out.

Speaker Change: ESG Dover.

David Raso: So the business such as reported 21.9 for the quarter I know it was a stub quarter. What are you thinking that business stand alone EBIT margin would be for 25.

Speaker Change: You have 2024 revenues.

Speaker Change: $4 9 billion.

Speaker Change: Take out the $50 million of EBIT right. So the EBIT 530 to 10, 9% margins I mean, I want to look at legacy legacy.

David Raso: David We would expect.

David Raso: <unk> margins to be at.

Speaker Change: Then we have it.

David Raso: ESG merchants to be comparable in 2025.

Speaker Change: Guide of $5 4 billion, but roughly 900 million is ESG Dover.

David Raso: 2024 months.

David Raso: With that stub number.

Speaker Change: So legacy legacy it's $4 9 billion of Rev is going a 4.5.

David Raso: Yeah, No no no.

David Raso: Yes.

David Raso: Okay. So again.

Speaker Change: If I look at the EBIT implied for 25, all in right, 12% margins on the five for take out the $75 million of corporate expense.

Speaker Change: I apologize in advance, but we have a lot of moving numbers here, we don't have normal detail.

David Raso: If you strip out.

Speaker Change: ESG Dover.

David Raso: You have 2024 revenues.

So we're at $573 million of EBIT all in.

David Raso: $4 9 billion.

David Raso: And take out the $50 million of EBIT.

Speaker Change: But if you pull out the $900 million of revenue from Dover and pull it out of the 21, 9% margin.

David Raso: Alright, so the EBIT is $5 30 to 10, 9% margins I want to look at legacy legacy.

Speaker Change: It's implying the legacy company had decrementals of 39.

David Raso: Then we have it.

David Raso: Guide of 5.4 billion, but roughly 900 million is ESG Dover.

Speaker Change: So how does AWP and MP.

David Raso: So legacy legacy it's $4 9 billion of Rev is going a 4.5.

Speaker Change: Let's say, we're 25% decremental margins.

Speaker Change: So again I apologize for all of that math.

David Raso: If I look at the EBIT implied for 25, all in right, 12% margins on the 542.

Speaker Change: But again, the decrementals legacy appear to be closer to 40 than than the 25 year, implying and again I apologize, but that that is the math I'm just trying to understand so David thanks for the question.

David Raso: Take out the $75 million of corporate expense.

David Raso: So we're at $573 million of EBIT all in.

Speaker Change: What we're talking about.

Speaker Change: And what we had in our remarks is that you know again, we have some spillover into Q1, and our aerials business where were taking production down to meet demand.

David Raso: But if you pull out the $900 million of revenue from Dover and pull it out at a 21, 9% margin.

David Raso: It's implying the legacy company had decrementals of 39.

Speaker Change: And what I indicated is that from Q2 to Q4 that business a little will.

David Raso: So how does AWP and an M P.

Speaker Change: Be within our 25% decremental margin targets from Q2 to Q4 as far as our MTS segment, they will be well within our 25% Decrementals for for 2025.

Let's say, we're 25% decremental margins.

David Raso: So again I apologize for all that math.

David Raso: But again, the decrementals legacy appear to be closer to 40 than than the 25 year, implying and again I apologize, but that that is the math. So I'm just trying to understand so David thanks for the question.

Speaker Change: Okay. So AWP decrementals for the full year.

Speaker Change: And again I know, it's just a bad start but for the full year they're down.

Speaker Change: Whatever 40, 50% decrementals for the year, it's just saying Hey, all that pain is in the first quarter and then we kind of get within our normal trajectory of Decrementals after that that that's the key wrinkle there.

David Raso: What we're talking about.

David Raso: What we had in our remarks is that you know again, we have some spillover into Q1, and our aerials business where were taking production down to meet demand.

David Raso: And what I indicated is that from Q2 to Q4 that business a little will.

Speaker Change: We don't quite get those those numbers.

Speaker Change: Alright, but directionally you're correct yes.

David Raso: Be within our 25% decremental margin targets from Q2 to Q4 as far as our MTS segment, they will be well within our 25% Decrementals first for 2025.

Speaker Change: Okay really appreciate it and lastly on the orders for 25 on the AWP.

Speaker Change: Any sense of price or even price cost just trying to get a sense of the comfort of improving those margins.

Speaker Change: Okay. So AWP decrementals for the full year.

Speaker Change: And again I know, it's just a bad start but for the full year, they're down whatever 40, 50% decrementals for the year, It's just saying hey, all that pain is in the first quarter and then we kind of get within our normal trajectory of Decrementals after that that that's the key wrinkle there.

Speaker Change: After the first quarter, just just a better sense of why the decrementals would be so much better the rest of the year.

Speaker Change: Yes.

Speaker Change: It's obviously, a big volume tailwind Q2, Q3 units, where most of the margin improvement will come from come from we expect to be in the double digit range again in aerials in Q2, and Q3 and a lot of that will be volume, but when it comes to pricing, we obviously don't call out specifics, but.

Speaker Change: We don't quite get those those.

Speaker Change: Right, but directionally you're correct yes.

Speaker Change: Okay really appreciate it and lastly on the orders for 25 on AWP.

Speaker Change: The aim is always and will be and will continue to be to be price cost neutral on that thus far we want to be for 2025 school.

Speaker Change: Any sense of price or even price cost just trying to get a sense of the comfort of improving those margins.

Speaker Change: I appreciate it thanks, so much.

Speaker Change: After the first quarter just to just a better sense of why the decrementals would be so much better the rest of the year.

Speaker Change: Thank you.

Speaker Change: Okay.

Speaker Change: Your next question comes from the line of Mig <unk> from Baird. Please go ahead.

Speaker Change: Yes.

Speaker Change: Obviously, a big volume tailwind Q2, Q3 units, where most of the margin improvement will come from come from we expect to be in the double digit range again.

Speaker Change: Yeah.

Julie Duck: Yes. Thank you good morning, Julie all the best to you going forward.

Speaker Change: Want to ask MP question here when I was looking at your outlook one of the things that stood out to me is that you.

Speaker Change: In aerials in Q2, and Q3 and a lot of that will be volume, but when it comes to pricing, we obviously don't call out specifics, but.

Speaker Change: Do you expect <unk> to decline less than AWP, but arguably speaking the orders and backlog pressure is maybe maybe even greater here in N P. So.

Speaker Change: The aim is always and will be and will continue to be to be price cost neutral on that so thats, what we want to be for 2025 schools.

Speaker Change: Yes, what I'm wondering is why is that the case.

Speaker Change: I appreciate it thanks, so much.

Speaker Change: Do you think about demand just operate customer demand as the year progresses. It seems like you might have some improvement baked in here.

Speaker Change: Thank you.

Speaker Change: Yeah.

Speaker Change: Your next question comes from the line of Mig <unk> from Baird. Please go ahead.

Speaker Change: And then on Q1, how should we think about this segment relative to what you were you put up in Q4 from a margin standpoint.

Speaker Change: Yeah.

Speaker Change: Yes. Thank you good morning, Julie all the best to you going forward.

Speaker Change: Want to ask MP question here when I was looking at your outlook one of the things that stood out to me is that you.

Speaker Change: Alright, I'll I'll take the first part of the pipeline and then I'll, let Julie talk about the bottom line. So good good question Mick.

Speaker Change: Do you expect <unk> to decline less than AWP, but arguably speaking the orders and backlog pressure is maybe maybe even greater here in N P. So.

Speaker Change: Backlog coverage compared to the other two legs of the stool seems a little less less favorable but that don't forget it's mostly a dealer model. So we had pretty pretty strong forward in M. P. So we are pretty.

Speaker Change: Guess, what I'm wondering is why is that the case.

Speaker Change: Do you think about demand just operate customer demand as the year progresses. It seems like you might have some improvement baked in here.

Speaker Change: Strong forward visibility.

Speaker Change: And historically <unk> has been if compared to the other two.

Speaker Change: And then on Q1, how should we think about this segment relative to what you were you put up in Q4 from a margin standpoint.

Speaker Change: Segments.

Speaker Change: More of a book to Bill business with one quarter forward visibility, but what we what we do see is.

Speaker Change: Alright, I'll take the first part the pulp line and then I'll, let Julie talk about the bottom line. So good good question Mick backlog coverage compared to the other two legs of the stool seems a little less less favorable but don't forget it's mostly in dealer model. So we had pretty.

Speaker Change: I mentioned that Europe was soft.

Speaker Change: United States.

Speaker Change: As more upside for us.

Speaker Change: We do see some more positive quoting activity.

Speaker Change: We do see a pickup in orders actually going into the first quarter.

Speaker Change: Pretty strong forward in M. P. So we are pretty.

Speaker Change: We do see fleet utilization is still high in the EMP fleet and fleets are aging. So if you just combine all those elements.

Speaker Change: Strong forward visibility.

Speaker Change: And historically <unk> has been if compared to the other two.

Speaker Change: Underlying demand is strong.

Speaker Change: Segments.

Speaker Change: <unk>, where they need to be fleet utilization is still high fleet starting to ache combined with what our dealers are telling us and what our quoting activity and our bookings are saying go into Q1, we feel comfortable with the guidance that we have on IMT EBITDA in terms of backlog coverage doesn't loews.

Speaker Change: More of a book to Bill business with one quarter forward visibility, but what we what we do see is.

Speaker Change: I mentioned that Europe was soft.

Speaker Change: The United States.

Speaker Change: As as more upside for us we.

Speaker Change: We do see some more positive quoting activity.

Speaker Change: Yes.

Speaker Change: And from a margin perspective may be you know the MTI business in 2024 down 15%.

Speaker Change: We do see a pickup in orders actually going into the first quarter.

Speaker Change: We do see fleet utilization is still high in the EMP fleet and fleets are aging. So if you just combine all of those elements.

Speaker Change: Sales in and maintained.

Speaker Change: 14, 5% margins.

Speaker Change: Their margin performance continues to be strong in terms of Q Q1.

Speaker Change: Underlying demand is strong.

Speaker Change: Inventories, where they need to be fleet utilization is still high fleet starting to ache combined with what our dealers are telling us and what our quoting activity and our bookings are saying go into Q1, we feel comfortable with the guidance that we have on IMT EBITDA in terms of backlog coverage doesn't loews.

Speaker Change: The margins will be fairly consistent with Q4, that's what I would use for modeling purposes going forward and we expect them to do really well this year again to be well within the 25% of that come out I would just I would just add one more point there. Thanks Julie.

Speaker Change: At the current guidance kind of assumes MP bottoming in Q1, and then sequentially improved every quarter throughout 2025, Thats the current model where etsy.

Speaker Change: Yes.

Speaker Change: And from a margin perspective, maybe into the MTI business in 2024 down 15.

Speaker Change: <unk> and sales and.

Speaker Change: Maintain 13, 5% margin there.

Okay. That's very helpful. My follow up.

Speaker Change: Margin performance continues to be strong in terms of Q Q1.

Speaker Change: Goes back to the discussion around tariffs and I guess.

The way I kind of interpreted your comments was that.

Speaker Change: The margins will be fairly consistent with Q4, and that's what I would use for modeling purposes going forward and we expect them to do really well and this year again to be well within the 25% of that come out I would just I would just add one more point there. Thanks Julie.

Speaker Change: You would be looking at potentially changing your manufacturing footprint as a result, if that's the case I do wonder what that does structurally for your margins because as I understood. It your investment in Mexico, There's really kind of the fundamental for improved margins in AWP longer term.

Speaker Change: Is that the current guidance kind of assumes MP bottoming in Q1, and then sequentially improved every quarter throughout 2025, Thats the current model or empty.

Speaker Change: Is that no longer the case.

Speaker Change: I didn't mean to imply that we were going to change our footprint, we might we have multiple options.

Speaker Change: Okay, that's very helpful.

Speaker Change: My follow up.

Speaker Change: One of them being to be repurposed.

Speaker Change: It goes back to the discussion around tariffs and and I guess.

Speaker Change: The facility one could be to ramp up just ramp up shifts in our doubled go to double shifts in the United States. Another could be to reroute demand. So I didn't mean to imply that we're changing anything on our footprint. We just have the optionality to move production around to move demand around.

Speaker Change: The way I kind of interpreted your comments was that you.

Speaker Change: You would be looking at.

Speaker Change: When should we changing your manufacturing footprint as a result, if that's the case I do wonder what that does structure before your margins because as I understood. It your investment in Mexico, There's really kind of the fundamental for improved margins in AWP longer term.

Speaker Change: And two clicks.

Speaker Change: Productivity in each of our facilities in terms of going to double shifts for single shifts. So it didn't mean to imply that we're gonna change any brick and mortar went up.

Speaker Change: Is that no longer the case.

Speaker Change: I didn't mean to imply that we were going to change our footprint, we might we have multiple options.

Speaker Change: But what about the margin issue here.

Speaker Change: One of them being to be repurposed.

Speaker Change: Yeah, So mig.

Speaker Change: Repurpose.

Speaker Change: The facility one could be to ramp up just ramp up shifts in our double go to double shifts in the United States. Another could be to reroute demand. So I didn't mean to imply that we're changing anything on our footprint. We just have the optionality to move production around to move demand around.

Speaker Change:

Speaker Change: Asia is the area of payments and working on all sorts of initiatives.

Speaker Change: Today, new products productivity improvements footprint optimize optimization cost out actions that continue to improve margins long term as well and destiny.

Speaker Change: The Monterrey facility.

Speaker Change: It certainly.

Speaker Change: And to flex.

Speaker Change: It's a lower cost facility in and it has performed really well for us.

Speaker Change: Productivity in each of our facilities in terms of going to double shifts for single shift. So it didn't mean to imply that we're gonna change any brick and mortar or we're not.

Speaker Change: And we would continue to use that facility and just use it for other regions.

Speaker Change: Depending upon what happens with <unk>.

Speaker Change: But what about the margin issue here.

Speaker Change: Scenario planning here, but we can we.

Speaker Change: I mean so.

Speaker Change: So mig.

Speaker Change: Continue to be a part of our of our footprint. It's a very competitive facility and we can serve other pockets of the world from from Entre of me too.

Speaker Change: Yeah.

Speaker Change: The team is working on all sorts of initiatives.

Speaker Change: Today, new products productivity improvements footprint optimize optimization cost out actions that continue to improve margins long term as well and certainly.

Speaker Change: Understood. Thank you.

Speaker Change: Thanks for the question.

Speaker Change: Your next question comes from the line of Count matches.

Speaker Change: The Monterrey facility.

Speaker Change: From Citigroup. Please go ahead.

Speaker Change: It certainly is.

Speaker Change: The lower cost facility than it has performed really well for us.

Thanks, and congrats Julie.

Speaker Change: I just wanted to dive deeper into the ESG margin comments. So if I heard you guys correctly it sounded like ESG margins guiding to kind of flat year over year. So I'm just confused I guess, it's like why wouldn't you.

Speaker Change: And we would continue to use that facility and just use it for other regions.

Speaker Change: Depending upon what what happens sooner.

Speaker Change: Scenario planning here, but we will continue to be a part of our of our outside right. It's a very competitive facility and we can serve other pockets of the world from from Entrees me too.

Speaker Change: Yes, a bit better if you're assuming growth for ESG and then some synergies as well I guess, what synergies are embedded in the guidance and cause the magnitude or timing of synergy capture it changed at all since you announced the deal.

Speaker Change: Understood. Thank you.

Speaker Change: Thanks for the question.

Speaker Change: Your next question comes from the line of Count matches from Citigroup. Please go ahead.

Speaker Change: Yeah. So thanks for the question Kyle So first of all.

We remain very confident and pleased with the Engie acquisition, you know really really are pleased with their performance and we talked about.

Speaker Change: Thanks, and congrats Julie.

Speaker Change: Just wanted to dive deeper into the ESG margin comments so if.

Speaker Change: Know that we would have $25 million of run rate synergies as we exit 2026, and so that we.

Speaker Change: I heard you guys correctly, it sounded like ESG margins guiding to kind of flat year over year. So I'm just confused I guess like why wouldn't.

Yeah, a bit better if you're assuming growth for ESG and then some synergies as well I I guess, what synergies are embedded in the guidance and because the magnitude or timing of synergy capture it changed at all since you announced the deal.

Speaker Change: We are still well on target for that we have visibility to that end and you know it's very early in in our or are our teams are working together. There are eight teams as Simon mentioned, we are working on an integration. We're really pleased but it is early for us to come out.

Speaker Change: Yeah. So thanks for the question Kyle.

Speaker Change: And changed our synergies I have to say is that we're very pleased and things are on track and so I can comment that on synergies and then for the Es.

Speaker Change: So first of all.

Speaker Change: We remain very confident and pleased with the <unk> acquisition, you know really really are pleased with their performance and we.

Speaker Change: <unk> talked about that.

Speaker Change: Segment going forward.

Speaker Change: We would have $25 million of run rate synergies as we exit 2026, and so that is.

Speaker Change: Talking about continued strong performance in 2025 mm and really a strong operating margins and for.

Speaker Change: We are still well on target for that we have visibility to that end.

Speaker Change: For the full year.

Speaker Change: Okay.

Simon: Very early in in our or our teams are working together there are eight teams as Simon mentioned working on an integration, we're really pleased but it's early for us to come out.

Speaker Change: Okay. Thanks, and then just a quick my follow up question, Paul apologies in advance, but I'm just looking at the guidance. So if I take the.

Speaker Change: I guess, the midpoint of revenue and op margin guidance I'm getting to I think our adjusted operating margin around 575.

Simon: And changed our synergies I also say is that we're very pleased and things are on track and so I can comment that on synergies and then for the Es.

Speaker Change:

Speaker Change: And then adding back the DNA I'm getting to EBITDA of around 735.

Simon: Segment going forward.

Simon: Talking about continued strong performance in 2025 mm and really <unk>.

Speaker Change: Versus the EBITDA guide of 660 or so.

Simon: <unk> operating margins and.

Speaker Change: Or is that 660 number for EBITDA, an unadjusted number or is that kind of the delta that I'm missing.

Simon: For the full year.

Simon: Okay.

Simon: Yeah.

Speaker Change: Okay. Thanks, and then just a quick my follow up question, Paul apologies in advance, but I'm just looking at the guidance. So if I take the.

Speaker Change:

Speaker Change: <unk> hundred 60 would be.

Speaker Change: And adjusted number so.

Speaker Change: No.

Speaker Change: I guess, the midpoint of revenue and op margin guidance I'm getting to I think our adjusted operating margin around 575.

Speaker Change: The 66 is an adjusted number.

Speaker Change: Okay. Thanks.

Speaker Change: Uh huh.

Speaker Change:

Speaker Change: Okay.

Speaker Change: And then adding back the DNA I'm getting to EBITDA of around 735.

Speaker Change: Your final question comes from the line of team is sang from Raymond James. Please go ahead.

Speaker Change: Versus the EBITDA guide of 660. So is there is that 660 number for EBITDA in the unadjusted number or is that kind of the delta that I'm missing.

Speaker Change: Oh, great. Thank you, maybe just we'll wrap it up and.

Speaker Change: And to combine questions on that.

Speaker Change: The Es business.

Speaker Change:

Speaker Change: It was just acquired so the <unk> business.

Speaker Change: 660 would be.

Speaker Change: And adjusted number so.

Speaker Change: The first is just from a customer mix standpoint, and I forget if this came up.

No.

Speaker Change: The 660 is an adjusted number.

Speaker Change: When you announced the deal on a call but.

Speaker Change: The post Covid it seems that the bulk of the deliveries in terms of.

Speaker Change: Okay. Thanks.

Speaker Change: Uh huh.

Speaker Change: On the rescue side had been entered more into the big four.

Speaker Change: Okay.

Your final question comes from the line of team is sang from Raymond James. Please go ahead.

Speaker Change: The major players and I'm just wondering as chassis availability improves is there more of a broadening out in terms of.

Oh, great. Thank you, maybe just we'll wrap it up it in.

Speaker Change: From a customer mix perspective does that does that benefit the company in terms of.

Speaker Change: And to combine questions on.

Speaker Change: The Es business is business that was just acquired so that the Ohio business.

Speaker Change: Potentially shifting more to the typical <unk>.

Speaker Change: Refuse operators in terms of who is getting those deliveries. So maybe that that's question one on the customer mix and then.

Speaker Change: The first is just from a customer mix standpoint, and I forget if this came up.

Speaker Change: When you announced the deal on a call but.

Speaker Change: On the on the technology it seems at least from what we've heard from the operators at this third eye technology is really well regarded and respected I'm wondering if there is opportunities for terex too.

Speaker Change: The post COVID-19 it it seems that the bulk of the deliveries in terms of.

Speaker Change: On the rescue side had been entered more into the big four.

Speaker Change: Major players and I'm, just wondering as chassis availability improves is there more of a broadening out in terms of.

Speaker Change: Potentially leverage that across other parts of the organization.

Speaker Change: I don't know if that's feasible but.

Speaker Change: Just curious if that's something that you've explored since taking over the business. Thank you.

Speaker Change: From a customer mix perspective does that does that benefit the company in terms of.

Speaker Change: That's a great question. So the first part yes, we don't see a meaningful change in customer mix in 2025 chassis do become more available and.

Speaker Change: Potentially shifting more to the typical refuse operators in terms of who is getting those deliveries. So maybe that's question one on the customer mix and then.

Speaker Change: On the on the technology it seems at least from what we've heard from the operators up. This third eye technology is really well regarded and respected I'm wondering if there is opportunities for terex too.

Speaker Change:

Speaker Change: Most of our customers are buying their own by their own chassis and they they don't they don't.

Speaker Change: <unk>.

Speaker Change: There are enough part of our there are not on our balance sheet. So one of the things that the Ohio. The Isle team is really great at is.

Speaker Change: Potentially leverage that across other parts of the organization.

Speaker Change: I don't know if that's feasible but.

Speaker Change: Just curious if that's something that you've explored since taking over the business. Thank you.

Speaker Change: Is turning that around as I mentioned in my I think earlier on the Q&A.

Speaker Change: That's a great question. So the first part yes, we don't see a meaningful change in customer mix in 2025 chassis do become more available and.

Speaker Change: Into.

Speaker Change: Workable product in his list less than 60 days, which is a real competitive advantage and particularly that helps with the with the larger larger customers but over.

Speaker Change: <unk> I don't see a meaningful change in customer mix in 2025.

Speaker Change:

Speaker Change: Most of our customers.

Speaker Change: Yeah, and then on third eye.

Speaker Change: By their own by their own chassis and they they don't they don't.

Speaker Change: It's a great product.

Speaker Change: It's a differentiated product.

Speaker Change: We have great adoption of it and there are a lot of opportunities to replicate that across the <unk> portfolio.

Speaker Change: Hum.

Speaker Change: There are enough part of our there are not on our balance sheet. So one of the things that the Ohio. The Isle team is really great at.

Speaker Change: As a matter of fact.

Speaker Change: We are working on that right now, we make concrete mixers and remakes utility trucks in and all of those use cases and applications wherever we can.

Speaker Change: Is turning that around as I mentioned in my I think earlier on the Q&A.

Speaker Change: Into.

Speaker Change: Workable product in his list less than 60 days, which is a real competitive advantage and particularly that helps with the with the larger larger customers, but overall I don't see a meaningful change in customer mix in 2025.

Speaker Change: Where we can deploy to third eye.

Speaker Change: The third is solution. So yeah very much so a synergy opportunity for terex across Oh.

Speaker Change: Cross our entire portfolio.

Speaker Change: Yeah, and then on third eye.

Speaker Change: Thank you and best wishes to you as well about Julie Thank you.

Speaker Change: It's a great product.

Speaker Change: It's a differentiated product.

Speaker Change: Hmm.

Speaker Change: Great adoption of it and there are a lot of opportunities to replicate that across the parex portfolios.

Speaker Change: That concludes our Q&A session I will now turn the conference back over to Simon Mr for closing remarks.

Speaker Change: As a matter of fact.

Speaker Change: We are working on that right now, we make concrete mixers and remakes utility trucks in and all of those use cases and applications wherever we can.

Speaker Change: Alright, Thank you operator.

Speaker Change: If you have any additional questions. Please follow up with Julie or Derek.

Speaker Change: Wherever we can deploy to third eye.

Speaker Change: Thank you for your interest in Terex with all the weather, especially here on the East Coast I Hope you stay safe and warm and with that operator. Please disconnect the call.

Speaker Change: Third eye solution. So yeah, very much so a synergy opportunity for terex across our across our entire portfolio.

Speaker Change: Ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.

Julie: Thank you and best wishes to you as well Julie Thank you.

Speaker Change: Hmm.

Simon: That concludes our Q&A session I will now turn the conference back over to Simon Mr for closing remarks.

Simon: Alright. Thank you operator, if you have any additional questions. Please follow up with Julie or Derek.

Simon: Thank you for your interest in Terex with all the weather, especially here on the East Coast I Hope you stay safe and warm and with that operator. Please disconnect the call.

Simon: Ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.

Simon: Yeah.

Simon: [music].