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Annual Shareholder MeetingMay 15, 2008
2
Forward Looking Statements & Non-GAAP Measures
The following presentation contains forward-looking information based on the current expectations of Terex Corporation. Because forward-looking statements involve risks and uncertainties, actual results could differ materially. Such risks and uncertainties, many of which are beyond the control of Terex, include among others: our business is highly cyclical and weak general economic conditions may affect the sales of its products and its financial results; our business is sensitive to fluctuations in interest rates and government spending; the ability to successfully integrate acquired businesses; the retention of key management personnel; our businesses are very competitive and may be affected by pricing, product initiatives and other actions taken by competitors; the effects of changes in laws and regulations; our business is international in nature and is subject to changes in exchange rates between currencies, as well as international politics; our continued access to capital and ability to obtain parts and components from suppliers on a timely basis at competitive prices; the financial condition of suppliers and customers, and their continued access to capital; our ability to timely manufacture and deliver products to customers; possible work stoppages and other labor matters; our debt outstanding and the need to comply with restrictive covenants contained in our debt agreements; our ability to maintain adequate disclosure controls and procedures, maintain adequate internal controls over financial reporting and file its periodic reports with the SEC on a timely basis; the previously announced investigations by the SEC and the Department of Justice; compliance with applicable environmental laws and regulations; product liability claims and other liabilities arising out of our business; and other factors, risks, uncertainties more specifically set forth in our public filings with the SEC. Actual events or the actual future results of Terex may differ materially from any forward looking statement due to those and other risks, uncertainties and significant factors. The forward-looking statements speak only as of the date of this presentation. Terex expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement included in this presentation to reflect any changes in expectations with regard thereto or any changes in events, conditions, or circumstances on which any such statement is based.
Non-GAAP Measures: Terex from time to time refers to various non-GAAP (generally accepted accounting principles) financial measures in this presentation. Terex believes that this information is useful to understanding its operating results and the ongoing performance of its underlying businesses without the impact of special items. See the Investors section of our website www.terex.com for a complete reconciliation.
3
Our Purpose
To improve the lives of people around the world
Our MissionTo delight construction, infrastructure, mining and other customers with value added offerings that exceed their current and future needsTo achieve our mission we must attract the best people by creating a Terex culture that is safe, exciting, creative, fun and embraces continuous improvement
Our VisionCustomer – to be the most customer responsive company in the industry as determined by the customerFinancial – to be the most profitable company in the industry as measured by ROICTeam Member – to be the best place to work in the industry as determined by our team members
4
USA30%
Other Americas8%
Europe / Africa / Middle East
48%
Asia / Australia14%
Strong and Diversified Revenue Base
2,817
3,9104,799
6,157
9,138 9,488
7,648
01,0002,0003,0004,0005,0006,0007,0008,0009,000
10,000
2002 2003 2004 2005 2006 2007 LTM Q12008
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Sales ($M) Operating Profit (%)
Income from operations for 2007 increased 36% versus 2006 on 19% higher salesIncome from operations for Q1 2008 increased 28% versus Q1 2007 on 17% higher salesSales are geographically diverse with almost 70% of 2007 sales generated outside of the USA
12 year compounded annual growth rate for Sales of 27%
5
Where We Are Today
$16.4
$9.5 $8.6 $7.7 $6.7 $5.1 $5.0 $5.0 $4.5 $4.4 $3.8
$29.4
TEREX is the 3rd largest manufacturer of construction equipmentin the world
Based on last twelve months of available Construction Equipment Sales ($’s in Billions)
(1) Represents total sales before Power Products and Financing and Insurance Services sales.(2) Represents Komatsu’s Construction and Mining Products segment as of December 31, 2007.
Exchange rate of 111.445 as of Dec 31, 2007(3) Exchange rate used as of December 31, 2007 of USD/JPY 111.445(4) Represents Volvo’s Construction segment as of Dec 31, 2007 plus prorated annual sales of $864
million acquired from Ingersoll Rand’s Roadbuilding business in May 2007 for the 4 months not owned in 2007 of approximately $300 million; Rate of USD/SEK 6.464
(5) Represents Deere’s Construction and Forestry segment as of January 31, 2008
(6) Represents 2007 Construction equipment sales of $1.5 billion based on exchange rate at December 31, 2007 of KRW/USD 936.07 plus estimated 2007 Bobcat sales of $2.9 billion
(7) Estimated, as these are privately owned companiesJCB: 2007 revenue of GBP 2.25 billion converted at Dec 31, 2007 GBP/USD rate of 1.9870Liebherr: 2006 Construction segment revenue of EUR 4.6 billion converted at a more current rate, using Dec 31, 2007 EUR/USD rate of 1.45983
(8) Represents CNH Global’s Construction Equipment Segment(9) Includes Access sales of $2.54 billion for the year ended September 30, 2007 plus Commercial
(concrete mixer trucks, concrete plants and refuse trucks/systems) sales of $1.25 billion.(10) Represents 2007 Mining & Construction sales converted at SEK/USD 6.46
Caterpillar (1) Komatsu (2) Terex Deere (5)Hitachi (3)Volvo (4) CNH Global (8) Oshkosh (9)Liebherr (7) JCB (7) Doosan (6)Sandvik (10)
6
A
A
Strong Market Presence
Mobile Crushing & Screening equipment
~$3.5 billion marketTerex is one of three major
global competitors
Aerial Work Platforms
~$ 6 billion marketTerex is one of two
major global competitors
Cranes~$14 billion market
Terex is one of three major global competitors
Utilities~$1 billion market (USA)
Terex is one of two major competitors
Material Handlers~$1.4 billion marketTerex is one of four
major global competitors
* Market size approximations based on internal estimates and data from Yengst and Off Highway Research
Approximately 75% of 2007 sales were generated in markets where Terex is larger than our competitors and/or Terex has a significant market presence
Hydraulic Mining Excavators
~$2.6 billion marketTerex is one of four
major global competitors
7
GOAL 2007 What we must accomplish
$12.0B in Sales $9.1B Implies 9.5% CAGR
12% Operating Margin 10.5% Execute on Supply Chain Management, Pricing Process Discipline & Lean Initiatives
15% W.C. to Sales 18.5% Optimize use of assets, particularly Inventory
Goals for 2010
“12 by 12 in ’10”is our medium term stretch goal
8
Terex Business Segments
• Aerial Work Platforms
• Construction
• Cranes
• Materials Processing & Mining
• Roadbuilding, Utility Products and Other
Slice 1Slice 2Slice 3Slice 4
Sales by Segment(Last 12 months thru Mar 31, 2008, $ in millions)
20%
25%
23%
7%
25%
AWP ConstructionCranes MP&MRBUO
$2,377
$1,949
$2,366
$2,261
$666
9
A
A
Aerial Work Platform Segment
Sales by Geography - 2007
48%35%
9%8%
USA Europe/Africa/Middle EastAsia/Australia Other Americas
Manufacturing by Geography - 2007
90+%
<10%Americas
Europe/Africa/MiddleEastAsia/Australia
HighlightsIncreasing labor rates and tightening worker safety regulations are driving demand in developing marketsMature market demand remains strong
OpportunitiesEuropean production capacity expansion => reduce transit time and inventory levelsChina manufacturing facility initially for sourcing
Manf. by Geography - Mid-term Goal
~30%~60%
Americas
Europe/Africa/MiddleEastAsia/Australia
~10%
10
A
A
Construction Segment
Sales by Geography - 2007
81%
3%5% 11%
USA Europe/Africa/M iddle EastAsia/Australia Other Americas
Manufacturing by Geography - 2007 p.f.
91%
9%
Americas
Europe/Africa/MiddleEastAsia/Australia
HighlightsEuropean focused businessLarge market potentialWeak dollar hurts N. American distribution
OpportunitiesSales/service focus in developing marketsEmphasis on sourcing and production in low cost countriesASV acquisition provides N. American distribution for compact equipment and global growth opportunity for compact track loaders
Manf. by Geography - Mid-term Goal
~40%
~30% Americas
Europe/Africa/MiddleEastAsia/Australia
~30%
11
A
A
Crane Segment
HighlightsStrong demand through 2010Market leader above 300 ton capacityPricing and volume leverage are driving margin improvement
OpportunitiesChinese investment for cost and strategic reasonsSelective expansion of manufacturing footprint
Sales by Geography - 2007
60%
6%
15%19%
USA
Europe/Africa/MiddleEastAsia/Australia
Other Americas
Manufacturing by Geography - 2007
~2 5 %
~6 5 %
~10 %
Americas
Europe/Africa/MiddleEastAsia/Australia
Manf. by Geography - Mid-term Goal
~50%
~25% Americas
Europe/Africa/MiddleEastAsia/Australia
~25%
12
A
A
Material Processing & Mining Segment
HighlightsStrong commodity demand through at least 2010Market leader: hydraulic shovels and mobile crushing & screening equipment
OpportunitiesManufacturing in India for Material ProcessingFocus on Aftermarket Growing installed base of shovels
Sales by Geography - 2007
35%
13%
32%
20%USA
Europe/Africa/MiddleEastAsia/Australia
Other Americas
Manufacturing by Geography - 2007
~3 %
~6 2 %
~3 5 %
Americas
Europe/Africa/MiddleEastAsia/Australia
Manf. by Geography - Mid-term Goal
~50%
~35% Americas
Europe/Africa/MiddleEastAsia/Australia
~15%
13
A
A
Roadbuilding, Utilities & Other Segment
Sales by Geography - 2007
3%14%1%
82%
USA Europe/Africa/Middle East Asia/Australia Other Americas
Manufacturing by Geography - 2007~1%
~9 9 %
Americas
Europe/Africa/MiddleEastAsia/Australia
HighlightsInadequate U.S. Government funding for infrastructureUnder-investment in fleet for many years by U.S. based utilities
OpportunitiesUtilize Roadbuilding manufacturing capacity for Construction Segment productsFocus on infrastructure with recent acquisition of HydraInternational potential for Utilities
Manf. by Geography - Mid-term Goal
~5%
~85%
Americas
Europe/Africa/MiddleEastAsia/Australia
~10%
14
Terex Product & Geographic Diversity
The Terex strategy of product and geographic diversity carriesacross the entire economic cycle with balance throughout
Early-Cycle
10% of Net Sales
Compact Construction Equipment (6%)Telehandlers & Concrete Mixers (4%)
Mid-Cycle
33% of Net Sales
Aerial Work Platforms (21%)Heavy Construction Equipment (12%)
Late-Cycle
34% of Net Sales
Cranes (26%)Light Construction (3%)Utility Equipment (3%)
Roadbuilding (2%)
Commodity driven based on Global Economics
Material Processing & Mining (23%)
Note: Percentages are based on 2007 sales
15
We Still Have Opportunities to Improve Margin
Ensure Terex is receiving appropriate value for its products
Offset rising commodity costs with commensurate pricing actions
Build a more sophisticated sales process through training and education
Lean initiatives
Optimize manufacturing footprint
Sales and production planning methodology
Coordinate supply efforts to leverage the scale of Terex
Coordinate common platform design
Sourcing centers – China and India
A 2-3% incremental margin improvement is a reasonable objective
Pricing
Supply Management
Productivity
16
The Terex Way
Our values are defined in The Terex Way, which is our collective commitment on what it means to be part of Terex
• Integrity: Honesty, ethics, transparency and accountability
• Respect: Concern for safety, health, teamwork, diversity, inclusion and performance
• Improvement: Elimination of waste & focus on continuous improvement
• Servant Leadership: Service to others, humility, authenticity and leading by example
• Courage: Willingness to take risks, responsibility, action & empowerment
• Citizenship: Social responsibility and environmental stewardship
17
Financial Overview
A
A
18
AWP Sales up 9%Backlog up 4%
Cranes Sales up 26%Backlog up 70%
Construction Sales up 18% Backlog up 48%
MP&M Sales up 38%Backlog up 27%
RBUO Sales down 23%Backlog down 2%
2007 Sales 2008 Sales 2007 Backlog 2008 Backlog$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
2008 Sales
2007 Sales 2008 Sales 2007 Backlog 2008 Backlog$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
12007 Sales 2008 Sales 2007 Backlog 2008 Backlog$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
1
Sales and Backlog – LTM through March 31, 2008
2007 Sales 2008 Sales 2007 Backlog 2008 Backlog$0
$500$1,000$1,500$2,000$2,500$3,000
1
2007 Sales 2008 Sales 2007 Backlog 2008 Backlog$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
1
* LTM stands for Last Twelve Months
$2,366
$2,261
19
Return on Invested Capital (trailing 12 months)
33.2%29.2% 27.8% 27.3%
24.9%
19.3% 18.7%
9.8%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Manitow oc Joy Global Caterpillar * Terex Deere * Bucyrus Astec OSK
LTM After-Tax ROIC – Construction Equipment
LTM After-Tax ROIC – Diversified Industrials
*Does not include finance arm of company
27.3%
20.2%
16.9%
13.7%12.4%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Terex UnitedTechnologies
Illinois Tool Works Dover Corp. Danaher Corp
Deere and Joy Global as of Jan 31, 2008
20
Inventory as % of Sales
0%
5%
10%
15%
20%
25%
30%
35%
Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Mar-07 Mar-08 Target
RAW WIP Finished Goods Aftermarket
Working Capital Opportunities
Working capital as a % of sales is comparable to our peers …
32.5%
22.6%23.3%
20.2%18.5% 18.7%
Competitor Working Capital as % of Sales
45.7%
31.4%28.5%
25.8% 24.9%21.3%
16.5%
10.8%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
JOYG**
Bucyru
s***
Caterpi
llar*
Astec
Terex
OSK
Manito
woc***
Deere*
* Excludes CAT and DE Finance arms** DE and JOYG as of Jan 31*** MTW and BUCY combine accounts payable and accrued
expenses, complicating a comparable analysis to peers
… but the opportunity exists to release hundreds of millions of dollars from inventory.
24.8%21.9%
15%
21
2008 Sales and EPS Guidance
$6,157$7,648
$9,138
$10,500to
$10,900
$0
$3,000
$6,000
$9,000
$12,000
2005 2006 2007 2008e
Sales Growth of 71% - 77%
Sales guidance is for a range of $10.5 - $10.9 billion
EPS guidance is between $6.85 - $7.15 per share
$1.84
$3.88
$5.85
$6.85to
$7.15
$0.00
$2.00
$4.00
$6.00
$8.00
2005 2006 2007 2008e
EPS Growth of 272% - 289%
22
A
A
Growth – Sales and ProfitLeveraging global presence, consolidating vendors and pricing actions
Continue the TEREX business system implementationLean manufacturing focus, customer-centric business approach, and human resource development
Developing market opportunitiesChina, India, Russia and Latin America
ROIC focus27.3% ROIC (after-tax) as of March 31, 20082008 after-tax ROIC target of 25.6%, excluding ASV effect
Investment PrioritiesReinvest in the businessOpportunistic and geographic acquisitions$700 million stock repurchase authorization; $218 million completed through Qtr 1 2008
Looking Ahead…….
23
Questions?