• Total Net Sales: $5.1 billion for the full year 2024.
• Earnings Per Share (EPS): $6.11 for the full year 2024.
• Fourth Quarter Net Sales: $1.2 billion.
• Gross Margin: 19% for the fourth quarter; 21.7% for the full year.
• Operating Profit: $97 million or 7.8% for the fourth quarter; $582 million or 11.3% for the full year.
• EBITDA: $114 million for the fourth quarter; $642 million or 12.5% for the full year.
• Free Cash Flow: $129 million for the fourth quarter; $190 million for the full year.
• Interest and Other Expense: $39 million for the fourth quarter; $83 million for the full year.
• Effective Tax Rate: 10.9% for the fourth quarter; 17.2% for the full year.
• Backlog: $2.3 billion, including $520 million for ESG.
• AWP Sales: $3 billion for the full year, 3% growth compared to 2023.
• MP Sales: $1.9 billion for the full year, 14.6% lower than the prior year.
• ESG Sales: $228 million for the fourth quarter, with a 21.9% operating margin.
• 2025 Sales Outlook: Approximately $5.4 billion.
• 2025 EPS Outlook: Between $4.70 and $5.10.
• 2025 Free Cash Flow Outlook: Between $300 million and $350 million.

• Warning! GuruFocus has detected 3 Warning Sign with EFX.

Release Date: February 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Terex Corp (NYSE:TEX) reported the second highest full-year EPS in the company's history, reflecting the strength of its portfolio.
• The integration of ESG has been financially accretive from day one, with strong performance and a 22% EBITDA margin on $228 million in revenue.
• Approximately 25% of Terex Corp (NYSE:TEX)'s revenue now comes from waste and recycling markets, which are characterized by low cyclicality and steady growth.
• The company has a strong backlog of $2.3 billion, with significant commitments from large customers, particularly in the Aerials segment.
• Terex Corp (NYSE:TEX) is well-positioned to benefit from megatrends such as onshoring, technology advancements, and federal investments, with a $40 billion addressable market.

Negative Points

• Legacy segment sales were down 17% in the fourth quarter, largely due to industry-wide channel adjustments.
• The European market remains weak, impacting the company's performance, particularly in the MP segment.
• Interest and other expenses increased by $24 million year-over-year due to acquisition-related financing.
• The company anticipates a slower start to 2025, with only about 10% of full-year earnings per share expected in the first quarter.
• Elevated interest rates and uncertainty around the Fed outlook pose macroeconomic headwinds, impacting rate-sensitive private projects.

Q & A Highlights

Q: Can you discuss the sustainability of ESG's strong margin performance and the factors contributing to it? A: Simon Meester, President and CEO, explained that ESG's success is due to excellent performance across all areas, including bookings, sales, and new product introductions. The team can efficiently convert chassis into refuse collection trucks, providing a competitive advantage. This strong performance is expected to continue into 2025.

Q: How is Terex managing potential tariff impacts, especially concerning North America? A: Simon Meester stated that Terex is primarily a U.S.-based manufacturer with significant production in the U.S., Mexico, and Canada. The company has flexibility in its operations, allowing it to adjust production across its facilities to mitigate potential tariff impacts. Terex is prepared with multiple mitigation plans to handle any changes in the tariff landscape.

Q: What are the expectations for AWP order trends and customer fleet management in 2025? A: Simon Meester noted that AWP is returning to normal seasonal patterns, with strong order intake in Q4 and expected continued strength in Q1. The focus is on replacement demand, with customers maintaining healthy fleet utilization and a strong project pipeline. The year is expected to follow traditional seasonal patterns, with Q2 and Q3 being the strongest quarters.

Q: How is the European market performing, and what are the expectations for 2025? A: Simon Meester indicated that Europe is expected to remain soft in 2025, with some demand for replacement in aging fleets. While residential and commercial construction is weak, there are positive signs in certain areas like cranes and specific markets such as Saudi Arabia.

Q: What is the outlook for ESG's growth and synergies in 2025? A: Julie Beck, CFO, confirmed that ESG's performance is strong, with no changes to the expected synergies of $25 million by the end of 2026. The integration is progressing well, and ESG is expected to continue delivering strong operating margins and growth in 2025.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.