Terex Corporation

Greetings and welcome to the Terex fourth quarter 2025 results conference call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. We do ask you to limit yourself to one question and one follow up. If you would like to ask a question, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Derek Everett, Vice President, Investor Relations.

Good morning and welcome to the Tarek's fourth quarter 2025 earnings conference call. A copy of the press release and presentation slides are posted on our Investor Relations website at investors.tareks.com. In addition, the replay and slide presentation will be available on our website. We are joined today by Simon Meester, President and Chief Executive Officer, and Jennifer Kong, Senior Vice President and Chief Financial Officer. Their prepared remarks will be followed by a Q&A. Please turn to slide two of the presentation, which reflects our safe harbor statement. Today's conference call contains forward-looking statements which are subject to the risks that could cause actual results to be materially different from those expressed or implied. These risks are described in greater detail in the earnings materials and in our reports filed with the SEC. On this call, we will be discussing non-GAAP financial information, including 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. Please turn to slide three. You'll hand it over to Simon Meester.

Thanks, Derek, and good morning. I would like to welcome everyone to our earnings call and appreciate your interest in Terex. Last week, we concluded our merger with RevGroup, the defining milestone in Terex's transformation. With this combination, we've created a leading specialty equipment manufacturer with premium brands across multiple industries, with a strong manufacturing footprint, a leading technology play, and clear, tangible synergies across the portfolio. What began with our 2024 acquisition of ESG, which delivered value immediately, is now being amplified by bringing Terex and REV together, creating greater skill and an even more resilient new company. REV generated approximately $2.5 billion of revenue and $230 million of adjusted EBITDA in its recently completed fiscal year, with the majority coming from essential low cyclical end markets. Beyond strengthening the predictability of our growing earnings and free cash flow, The merger also reduces our overall capital intensity, giving us greater flexibility to create additional shareholder value. I want to thank both the Terex and REF teams for their tireless efforts to close this transaction ahead of schedule. It's only been a few days since closing, but the teams are already working hand in hand to execute our integration and synergy plans. We completed the ESG integration in Q3 of 2025, and capture synergies ahead of expectations. We're using the same integration playbook for the merger with REV. The integration will be straightforward. REV's businesses are joining Terex as a standalone operating segment with no organizational changes outside our corporate functions. Our new specialty vehicle segment will include emergency vehicles and will continue to be led by Mike Vernick, and recreational vehicles, which will continue to be led by Gary Gunter. Both Mike and Gary bring deep rev experience, assuring continuity while driving further improvements. We expect to deliver roughly half of the $75 million run rate synergies within the next 12 months and the full amount by 2028. Most early savings will come from eliminating duplicate corporate costs. but the synergy potential goes much deeper. Over the last 16 months, we have reshaped the Terex portfolio, creating what I believe is the most intrinsically synergistic, resilient, and competitive portfolio in our history. We now have significant scale in specialty vehicles that share similar operational and go-to-market characteristics. This creates not only near-term efficiencies, but also meaningful opportunities for operational improvement and long-term growth across tariffs. With regards to the strategic review of the aerials business, which we announced during our last call, we have been receiving strong inbound interest from a number of interested parties. We're being deliberate in our evaluation of the interest and the best approach to maximize shareholder value. Turning to slide four. Combining with RID significantly shifts our end-market exposure. We now serve a large, diverse, addressable market with stable, attractive growth profiles. Customers across these verticals value lifecycle services, creating sizable opportunities to expand our aftermarket and digital offerings. Emergency vehicles benefit from stable and growing municipal budgets tied to maintaining required response times among the growing population. In waste and recycling, growth is fueled by population and recycling trends coupled with ongoing fleet replacements. Customers also accelerate upgrades to unlock the value of new vehicle innovations and digital solutions where we are the clear industry leader. Utilities are poised for strong growth from 2026 onward as demand on the U.S. electrical grid increases, particularly from data center expansion. Industry forecasts call for 8 to 15% annual CapEx growth through 2030. Altogether, we now have multiple channels into nearly every municipality in the United States, which collectively spend $200 billion per year on capital equipment, a tremendous long-term opportunity. In construction, we continue to see robust infrastructure activities supported by government funding. pipeline of megaprojects continues to expand, providing a tailwind through at least 2030. We're seeing momentum building in Europe, and strong growth continues in the Middle East and India, where MP already has a solid foundation. Let's move to a summary of our financial results on slide five before handing it over to Jen to go into more detail. I'm proud of our team for delivering on our 2025 expectations, navigating numerous challenges throughout the year. Their performance and the strength of our portfolio enabled us to deliver earnings per share of $4.93, consistent with our outlook, EBITDA of $635 million, or 11.7%, free cash flow of $325 million, and a cash conversion of 147% all in line with our expectations. Looking to 2026, we see positive momentum across most of our segments to varying degrees. Environmental solutions bookings grew 16% year-over-year in Q4, led by utilities. MP achieved its highest margins of the year in Q4 as efficiency and tariff mitigation initiatives took hold, and bookings accelerated particularly in aggregates and material handling. Aerials secured nearly a billion dollars of new orders in Q4, up 46% from the prior year, and specialty vehicles recorded strong bookings the last three months with a roughly two-year backlog coverage, coupled with strong momentum on margin expansion. This positions Erics for a strong 2026. And with that, I will turn it over to Jen.