Terex (TEX) Q3 2024 earnings summary

Executive summary

• Q3 2024 net sales were $1.21B, down 6% year-over-year, with adjusted EPS of $1.46 and adjusted EBITDA of $141M; AWP sales grew 2.4% while MP sales declined 17.9%.

• ESG acquisition completed in October 2024, expanding into waste and recycling, reducing cyclicality, and expected to add $40M in Q4 EBITDA.

• Backlog remains elevated at $1.6B, though down from prior year, reflecting normalization in ordering patterns.

• Integration of ESG is underway, with $25M in run rate synergies targeted by end of 2026 and some synergies expected to begin in 2025.

• Free cash flow for Q3 was $88M; total liquidity at quarter-end was $952M.

Financial highlights

• Q3 adjusted operating margin was 10.5%, with gross profit margin at 20.5%.

• Adjusted EBITDA was $141M; Q3 net income was $88M, with adjusted EPS of $1.46.

• Free cash flow for Q3 was $88M; YTD free cash flow reached $200M.

• Return on invested capital (ROIC) was 23.7% as of September 30, 2024.

• Net leverage at 0.4x as of September 30, 2024; expected to rise to ~2.5x by year-end due to ESG acquisition.

Outlook and guidance

• Full-year 2024 adjusted EPS outlook is $5.85 to $6.25; net sales guidance is $5.0B–$5.2B.

• Full-year EBITDA forecasted at $635M–$670M, with $40M from ESG in Q4.

• ESG expected to contribute ~$200M in sales, ~18.5% operating margin, and $40M EBITDA post-acquisition.

• Segment outlook: MP net sales ~$1.9B, margin 14.1%; AWP net sales ~$3.0B, margin 11.5%–11.8%.

• Free cash flow forecast for 2024 is $200M.