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TEREX CORP (TEX)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 net sales were $1.241B (+1.5% YoY), but margins compressed; GAAP EPS was -$0.03 vs $1.88 in Q4 2023, with adjusted EPS of $0.77 vs $1.41 a year ago .
  • ESG was immediately accretive, delivering $228M revenue and 21.9% adjusted operating margin in Q4, offsetting weakness in legacy AWP/MP businesses amid channel adjustments and production cuts .
  • 2025 outlook: net sales $5.3–$5.5B, EPS $4.70–$5.10, EBITDA ~$660M, FCF $300–$350M; segment view calls for Aerials down LDD, MP down HSD, Environmental Solutions up MSD .
  • Bookings/backlog catalysts: year-end backlog rose to $2.3B (ESG $520M); Aerials Q4 book-to-bill 153%, with Q1 expected >100%, supporting mid-year margin recovery trajectory .

What Went Well and What Went Wrong

  • What Went Well

    • ESG integration: “firing on all cylinders,” record bookings and rapid chassis-to-delivery throughput underpinned 21.9% adjusted operating margin in Q4; momentum expected into 2025 .
    • Backlog/bookings strength: $2.3B total backlog with ESG $520M; Aerials Q4 book-to-bill 153% and expected >100% in Q1, positioning for stronger Q2–Q3 margins and volumes .
    • Cost actions and liquidity: legacy SG&A cut $14M YoY in Q4; liquidity of ~$1.2B at year-end and clear deleveraging plan despite acquisition financing .

  • What Went Wrong

    • Margin compression in legacy segments: AWP Q4 OP margin fell to 3.1% (adj. 3.3%) and MP to 10.7% (adj. 10.9%) on aggressive production cuts, unfavorable mix, and lower volumes .
    • Interest/other expense step-up: Q4 interest and other expense rose to $41M and $14M respectively, largely tied to acquisition financing; full-year interest up versus 2023 .
    • Macro headwinds: Europe remained soft; rate-sensitive private projects weighed on demand and rental conversions, impacting MP dealer restocking and AWP deliveries .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Net Sales ($USD Billions)$1.223 $1.212 $1.241
GAAP Diluted EPS ($)$1.88 $1.31 -$0.03
Adjusted EPS ($)$1.41 $1.46 $0.77
Gross Margin % (GAAP)21.5% 20.2% 15.9%
Gross Margin % (Adjusted)21.8% 20.5% 19.0%
Operating Margin % (GAAP)9.5% 10.1% 4.3%
Operating Margin % (Adjusted)10.9% 10.5% 7.8%
EBITDA ($USD Millions)N/A$136 $88
EBITDA Margin % (GAAP)N/A11.2% 7.1%
Adjusted EBITDA ($USD Millions)N/A$141 $114
Adjusted EBITDA Margin %N/A11.6% 9.2%

Segment breakdown (Q4 2024 vs prior year):

SegmentQ4 2023 Net Sales ($MM)Q4 2023 OP Margin % (GAAP/Adj)Q4 2024 Net Sales ($MM)Q4 2024 OP Margin % (GAAP/Adj)
AWP$660 9.2% / 9.5% $573 3.1% / 3.3%
MP$555 15.1% / 16.2% $439 10.7% / 10.9%
ESGN/AN/A$228 5.3% / 21.9%

KPIs and balance sheet indicators:

KPIQ2 2024Q3 2024Q4 2024
Backlog ($USD Billions)$2.4 $1.6 $2.3 (ESG $0.52; legacy $1.8)
Aerials Book-to-Bill (%)N/ASeasonally lower 153%
ESG Book-to-Bill (%)N/A>100% recent quarters 112% in Q4
Liquidity ($USD Billions)$0.879 $0.952 $1.2
Long-term Debt ($USD Billions)$0.662 $0.624 $2.580

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales ($B)FY 2025N/A$5.3 – $5.5 New
Segment Operating Margin (%)FY 2025N/A~12% (ex Corp & Other ~($75)M) New
EBITDA ($MM)FY 2025N/A~$660 New
Interest/Other Expense ($MM)FY 2025N/A~$175 New
Tax Rate (%)FY 2025N/A~20% New
EPS ($)FY 2025N/A$4.70 – $5.10 New
D&A ($MM)FY 2025N/A~$160 New
Free Cash Flow ($MM)FY 2025N/A$300 – $350 New
Segment Net Sales OutlookFY 2025N/AAerials: down LDD from $2.410B; MP: down HSD from $1.902B; Environmental Solutions: up MSD vs $1.500B pro forma New
Quarterly EPS phasingFY 2025N/A~10% in Q1; ~2/3 in Q2–Q3 New
Dividend per shareQ1 2025N/A$0.17 payable Mar 19, 2025 New

Earnings Call Themes & Trends

TopicQ2 2024 (Prior-2)Q3 2024 (Prior-1)Q4 2024 (Current)Trend
ESG integration & accretionAnnounced ESG deal; accretive, ~$40M Q4 EBITDA expected post close Closed Oct 8; ~$200M Q4 sales; accretive from day one ESG delivered $228M sales, 21.9% adj OP margin; strong bookings; 2025 run-rate synergies ≥$25M by end-2026 Strengthening
AWP production/seasonalityMonterrey ramp; aiming for +200 bps H2 margin vs 2023; price-cost neutral Channel adjustments; Q4 sequential volume decline; margin pressure Aggressive production cuts drove Q4 margin compression; Q2–Q3 expected double-digit margins on volume normalization Near-term weak, mid-year recovery
MP demand & dealer inventoryEurope soft; dealer rebalancing; strong margins Continued softness; lower volume/mix; 13.3% OP margin Q4 OP margin 10.7% (adj 10.9%); model assumes bottom in Q1 then sequential improvement through 2025 Bottoming, gradual improvement
Tariffs/trade policy optionalityEU antidumping supportive; price leadership maintained Monitoring trade policy; US manufacturing mitigates exposure Multiple mitigation plans; routing/dual sourcing; expect minimal guidance impact if tariffs change Managed risk
Mega projects & AI/infrastructure tailwindsUS mega projects (data centers/semis) supportive Continued tailwinds; cautious local projects Emphasis on AI/data center demand; new all-electric refuse body; robotics/automation across operations Positive tailwind
Pricing disciplineAim for price-cost neutrality amid input inflation Same stance; cost inflation persists Maintain pricing discipline; mitigate tariffs internally first Stable

Management Commentary

  • CEO (Simon Meester): “ESG…firing on all cylinders…record year…we see that carry over into 2025” and “we fully expect…≥$25M in operational run rate synergies by the end of 2026” .
  • CFO (Julie Beck): “Q4 results were largely in line with our expectations…channel adjustments impacted our legacy businesses and ESG was immediately accretive” .
  • CEO on macro: “Europe…will continue to stay soft…mega projects…continue to be a tailwind in the U.S.” .
  • CFO on 2025 phasing: “about 10% of our full year EPS in the first quarter…about 2/3 over the middle 2 quarters” .

Q&A Highlights

  • ESG margins sustainability: Management expects ESG standalone margins comparable to the Q4 stub performance in 2025; strong bookings and backlog support .
  • Tariff mitigation: Extensive optionality across US/Mexico/Canada footprint; dual sourcing and shift flexibility expected to offset potential tariff impacts without significant guidance change .
  • AWP orders and fleet posture: Q4 book-to-bill 153%, Q1 expected >100%; demand primarily replacement; margins expected to improve with Q2–Q3 volumes .
  • MP trajectory: Bottoming in Q1 2025 with sequential quarterly improvement; Q1 margins similar to Q4; maintain decrementals within 25% target .
  • Financial framing: 2025 EBITDA guidance is adjusted; interest/other expense to ~$175M on acquisition financing; deleveraging planned as FCF improves .

Estimates Context

  • We attempted to retrieve S&P Global consensus estimates for Q4 2024, FY 2024, and FY 2025, but access was unavailable due to an SPGI daily request limit error; therefore, we cannot provide beat/miss versus Wall Street consensus at this time. We will update when SPGI access is restored. Values would be retrieved from S&P Global for estimate comparisons.*

Key Takeaways for Investors

  • ESG’s immediate accretion and strong backlog underpin the 2025 guide despite legacy cyclicality; the thesis is shifting toward a more resilient, less-cyclical portfolio mix .
  • AWP margin recovery is volume-driven and seasonally weighted to Q2–Q3; watch book-to-bill and Q1 production alignment to gauge decremental normalization .
  • MP appears near-cycle bottom with modeled sequential improvement; monitor European macro and US rental conversions as rate path clarifies .
  • Balance sheet flexibility and liquidity remain solid post-ESG; deleveraging plan and stronger FCF ($300–$350M guide) support capital returns and investment .
  • Tariff risk is being actively mitigated through footprint optionality and sourcing; pricing discipline remains price-cost neutral, reducing margin downside from policy shocks .
  • Dividend declared at $0.17 per share and remaining buyback authorization indicate continued shareholder return focus amidst integration and transformation .
  • Near-term trading: expect weak Q1 (≈10% of FY EPS) with improvement into Q2–Q3; medium-term thesis hinges on ESG/Utilities growth, mega-project tailwinds, and margin normalization .
Citations:  
Press release and 8-K: **[97216_20250206NY11950:0]** **[97216_20250206NY11950:1]** **[97216_20250206NY11950:2]** **[97216_20250206NY11950:6]** **[97216_20250206NY11950:9]** **[97216_0000097216-25-000007_terexearningsreleaseexq4-24.htm:1]** **[97216_0000097216-25-000007_terexearningsreleaseexq4-24.htm:2]** **[97216_0000097216-25-000007_terexearningsreleaseexq4-24.htm:5]** **[97216_0000097216-25-000007_terexearningsreleaseexq4-24.htm:6]** **[97216_0000097216-25-000007_terexearningsreleaseexq4-24.htm:7]** **[97216_0000097216-25-000007_terexearningsreleaseexq4-24.htm:9]** **[97216_0000097216-25-000007_terexearningsreleaseexq4-24.htm:10]**  
Q4 2024 call: **[97216_TEX_3414622_0]** **[97216_TEX_3414622_4]** **[97216_TEX_3414622_5]** **[97216_TEX_3414622_7]** **[97216_TEX_3414622_9]** **[97216_TEX_3414622_10]** **[97216_TEX_3414622_11]** **[97216_TEX_3414622_16]** **[97216_TEX_3414622_17]** **[97216_TEX_3414622_20]** **[97216_TEX_3414622_21]** **[97216_TEX_3414622_24]**  
Q3 2024: **[97216_0000097216-24-000151_terexearningsreleaseexq3-24.htm:0]** **[97216_0000097216-24-000151_terexearningsreleaseexq3-24.htm:4]** **[97216_0000097216-24-000151_terexearningsreleaseexq3-24.htm:5]** **[97216_0000097216-24-000151_terexearningsreleaseexq3-24.htm:6]** **[97216_0000097216-24-000151_terexearningsreleaseexq3-24.htm:8]**  
Q3 2024 call: **[97216_TEX_3404614_4]** **[97216_TEX_3404614_6]**  
Q2 2024: **[97216_0000097216-24-000131_terexearningsreleaseexq2-24.htm:0]** **[97216_0000097216-24-000131_terexearningsreleaseexq2-24.htm:4]** **[97216_0000097216-24-000131_terexearningsreleaseexq2-24.htm:7]**  
Q2 2024 call: **[97216_TEX_3395456_3]** **[97216_TEX_3395456_5]** **[97216_TEX_3395456_7]** **[97216_TEX_3395456_8]**  
Dividend: **[97216_20250206NY13962:0]**