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European Non-deal Road Show
November 2008
2
Terex NDRS Team
Ron DeFeo, Chairman & Chief Executive Officer
Tom Riordan, President & Chief Operating Officer
Phil Widman, Senior Vice President & Chief Financial Officer
Laura Kiernan, Director of Investor Relations
3
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.
Overview and Strategy
Ron DeFeoChairman & Chief Executive Officer
5
Who is Terex?
Purpose • To improve the lives of people around the world
Mission • To delight construction, infrastructure, mining and other customers with value-added offerings that exceed their needs
• To attract the best people by creating a culture that is safe, exciting, creative, fun, and embraces continuous improvement
Vision • To be the most responsive company in the industry as determined by the customer
• To be the most profitable company in the industry as measured by Return on Invested Capital (ROIC)
• To be the best place to work in our industry as determined by our team members
6
Who is Terex?
• Diversified Portfolio of Equipment Businesses• Positioned for Continuing Long - Term Trends• Leader In Our Categories and Our Industry• Leveraging the Power Of One Company
AERIAL WORK PLATFORMS
CONSTRUCTION
CRANES MATERIALS PROC. AND MINING
ROADBUILDING AND UTILITIES
7
Why Invest?
Diversified Portfolio of Equipment Businesses
Commodity Extraction Building and
IndustrialInfrastructure Construction
Mining
Residential Operations/ Maintenance
Matls. Proc.
Construction
Roadbuilding
Utilities
Cranes
AWP
X
X X
X X X
X
X X X
X
X XX X
X X X X
X
Exposure to Commodity, Construction, and Post - Construction Drivers
8
Why Invest?
$ 9.1 B$ 9.1 B
2007 SALES BY GEOGRAPHY2007 SALES BY BUSINESS
AWP 25%
Cranes 24%
MP&M 23%
Construction 21%
RBU 7%
$ 9.1 B$ 9.1 B
W. Europe 37%
USA / Canada
34%
Japan / ANZ 7%
Developing Markets
22%
Balanced by business; Balanced geographically
Diversified Portfolio of Equipment Businesses
9
Why Invest?
WORLD PRIMARY ENERGY DEMAND*
* Source: International Energy Agency
• Beneficial to multiple Terex categories
• Particularly positive for Cranes and Mining
Positioned for Continuing Long - Term Trends
10
EXAMPLE: NON-FERROUS METALS EXPLORATION (1989 – 2007), $B*
0
2
4
6
8
10
12
'89 '90'91 '92'93 '94'95 '96'97 '98'99'00 '01'02 '03'04 '05'06 '07
EXPENDITURES BY TOP 40 MINING COMPANIES
$75
$95
$125$134 $141
$176
020406080
100120140160180200
'02 '03 '04 '05 '06 '07
$28
$37
$51
0
10
20
30
40
50
60
'05 '06 '07
OPEX ($B)** CAPEX ($B)**
• Global consumption driving unprecedented levels of investment
• Outlook for mining equipment remains positive and the corresponding industrial growth is a driver for other businesses
* Source: Metals Economics Group; **Source: PWC: “Mine: As Good as it Gets?”, 2008 – capex excludes acquisitions
Why Invest?
Positioned for Continuing Long - Term Trends
11
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
'90'91 '92'93 '94'95 '96'97 '98'99 '00'01 '02'03'04 '05'06 '07'08 '09'10 '11'12 '13'14 '15'16
Infrastructure Industrial Other Non-residential
GLOBAL NON-RESIDENTIAL CONSTRUCTION (REAL 2007 $)*
$B
1.6 % CAGR
5.6 % CAGR
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
'90'91 '92'93 '94'95 '96'97 '98'99 '00'01 '02'03'04 '05'06 '07'08 '09'10 '11'12 '13'14 '15'16
Total Residential
GLOBAL RESIDENTIAL CONSTRUCTION (REAL 2007 $)*
$B
5.1 % CAGR
1.3 % CAGR
5.6 % CAGR
-0.8 % CAGR
4.4 % CAGR
• Global infrastructure construction growing, despite weakness in developed markets – not yet incorporated in the survey data above
• Terex well positioned to capitalize, with 22% of sales, over 4,000 team members, and more than 30 locations now in developing countries
* Source: Global Insights, July ‘08; 69 countries tracked by GI + 5% to account for rest of world … consistent with global GDP’s
Why Invest?
Positioned for Continuing Long - Term Trends
12
$19.7
$10.4 $9.1 $8.7 $8.1$5.1 $4.8 $4.5 $4.4 $3.7$5.2
$31.6
(1) Represents Machinery sales for the last twelve months ended Sep 30, 2008; excludes Engine and Financial Product sales.
(2) Represents Komatsu’s Construction, Mining & Utility Equipment segment as of June 30, 2008 converted at an exchange rate of JPY/USD of 106.18
(3) Exchange rate used as of June 30, 2008 of USD/JPY 106.18(4) Represents Volvo’s Construction Equipment segment as of Sep 30, 2008 converted at
an exchange rate of USD/SEK 6.9252(5) Represents Deere’s Construction and Forestry segment as of July 31, 2008(6) Represents 2007 Construction Equipment sales of $1.5 billion converted at an exchange
rate at Dec 31, 2007 of KRW/USD 936.07 plus estimated 2007 bobcat sales of $2.9 billion
(7) Estimated, as these are privately owned companies:JCB: 2007 sales of GBP 2.25 billion converted at Dec 31, 2007 GBP/USD rate of 1.9870Liebherr: 2007 Cranes/Mining/Construction sales of EUR 5.5 billion converted at Dec 31, 2007 EUR/USD rate of 1.4598
(8) Represents CNH Global’s Construction Equipment Segment as of Sep 30, 2008(9) Represents Access & Concrete Placement equipment sales for the 9 months ended
June 30, 2008 plus Access & Commercial (both concrete & refuse trucks) for the 3 months ended Sep 30, 2007.
(10) Represents Mining & Construction sales through Jun 30, 2008 converted at an exchange rate of SEK/USD 6.9252
Caterpillar (1) Komatsu (2) Terex Deere (5)Hitachi (3) Volvo (4) CNH Global (8) Oshkosh (9)Liebherr (7) JCB (7) Doosan (6)Sandvik (10)
Terex is one of the Largest Manufacturers of Construction Equipment in the World
Based on last twelve months of available Construction Equipment Sales ($’s in Billions)
Leader in Our Categories and Our Industry
Where We Are Today
13
Approximately 75% of 2007 sales were generated in markets where Terex has significant market presence
• Articulated boom lifts (top 2)• Telescopic boom lifts (top 2)• Scissor lifts (top 3)• NA Telehandlers (#2)
AERIAL WORK PLATFORMS
• Compact Track Loaders (#1)• Material Handlers (#2 or 3)
CONSTRUCTION
• All Terrain Cranes (top 2)• Rough Terrain Cranes (top 3)• Tower Cranes (#3)• Large Crawlers (#1)• Port Cranes (top 2)*
CRANES
• Hydraulic Excavators (top 3)• Mining Trucks (#3)• Surface Drills (# 3)• Crushing & Screening (#1)**• Highwall Miners (#1)
MP&M
• Front Discharge Mixers (#1)• Insulated Aerials (#2)
ROADBUILDING AND UTILITIES
* Including pro forma impact of Fantuzzi acquisition; ** Mobile Equipment
Why Invest?
Leader in Our Categories and Our Industry
14
Leader in Our Categories and Our Industry
• Better than diversified industrials with higher valuations
ROIC is calculated by dividing the sum of the last four quarters’ net operating income after tax by the average of the sum of total stockholders’ equity plus debt less cash and cash equivalents for the last five quarters ended. DE and JOYG as of Apr 30, 2008 and the remainder are as of Jun 30, 2008; OSK includes $175.2 million goodwill impairment charge incurred during their Q3 2008; *Does not include finance arm of company
Why Invest?
• In-line with larger, more vertically integrated competitors
2Q 2008 LTM After-Tax ROIC-Machinery Industry
2Q 2008 LTM After-Tax ROIC-Diversified Industrials
15
Leveraging the Power of One Company
• Our framework to build a stronger Terex
• Process improvements will assure long term success
Why Invest?
16
Tom Riordan, President & Chief Operating Officer
Phil Widman Senior Vice President & Chief Financial Officer
Tim Ford, President
Terex AWP
Bob Isaman, President
Terex Construction
Rick Nichols, President
Terex Cranes
Eric Nielsen, President
Terex MP&M
George Ellis, President
Terex RBU
Steve Filipov, President
Developing Markets
Why Invest?
Leveraging the Power of One Company
17
Summary of Overview & Strategy
Continue Building a Better Company• Improved capabilities• Diverse end market exposure• ROIC focused
Positioned for the Attractive Growth Opportunities• Right sectors and segments• Right geographies• Delivering unique value to customers• Targeted acquisitions
Execute, Execute, Execute• Do what we say• Overcome challenges that are often hard to predict
18
Supporting Profitable Growth
Phil WidmanSenior Vice President and Chief Financial Officer
19
• 5+ years of strong growth, driven by favorable market conditions and an increasingly robust portfolio
• Committed to core financial principles – Growth with modest debt leverage– Industry leading ROIC– Generate cash to enable capital investments, targeted
acquisitions and share repurchases
• Near term outlook is mixed but long term remains positive. Focus near term is on cash & liquidity, and cost reduction.
• Improving performance via core business initiatives that will enhance long-term results
Supporting Profitable Growth
20
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 Q3LTM
$0.0
$0.2
$0.4
$0.6
$0.8
$1.0
$1.2
Terex to Date: Consistent Sales Growth
Sales (USD billions) Operating Income (USD billions)
Sales growth from 2003 to 2007 was ~90% organic
Acquisitions: SimonO&K
PPM
Powerscreen, CedarapidsFermec
CMI, AtlasSchaeff, Demag, Genie
Reedrill
SHM
ASVHydra
21
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
2002 2003 2004 2005 2006 2007 LTM Q3 2008
Aerial Work Platforms Construction Cranes
Material Processing & Mining Roadbuilding, Utilities & Other
Terex to Date: Balanced Sales Growth
Sales balanced between segments
CAGR 26%
Sales (USD billions)
22
$0.0
$0.2
$0.4
$0.6
$0.8
$1.0
$1.2
2002 2003 2004 2005 2006 2007 LTM Q3 2008
Aerial Work Platforms Construction Cranes
Material Processing & Mining Roadbuilding, Utilities & Other
Terex to Date: Broad-based Profit Growth
Operating income growth outpacing sales growthIncreasingly evenly distributed (AWP, MPM, Cranes)
Operating Income (USD billions)
CAGR 82%
23
Terex to Date: Growth with Minimal Leverage
$1.9 $2.0 $1.8
$2.8
$3.9
$4.8
$6.2
$9.1
$10.4
$7.6
1999 2000 2001 2002 2003 2004 2005 2006 2007 Q3 2008*
Net DebtSales
($ in billions)
• Q3 2008 sales is based on last 12 months sales as of Sept 30, 2008; Net Debt is as of Sept 30, 2008• Net leverage ratio is defined as debt less cash and cash equivalents divided by last twelve months EBITDA
Net leverage of 1.0x in Q3 provides flexibility
24Free Cash Flow is defined as Cash from Operations less Capital Expenditures
Terex to Date: Cash Flow
• Consistent cash generation, with 2007 shift explained by utilization of tax loss benefits
• Targeting further improvement as our business continues to grow
• Working capital has remained consistent but presents a significant opportunity to improve
• Working capital (particularly inventory) should decrease with improved processes
0
20
40
60
80
100
120
140
Q4'03
Q2'04
Q4'04
Q2'05
Q4'05
Q2'06
Q4'06
Q2'07
Q4'07
Q2'08
Inventory Days Receivable Days Payable Days
WORKING CAPITAL DETAIL (DAYS)FREE CASH FLOW ($M)
0
50
100
150
200
250
300
350
400
450
2004 2005 2006 2007 Q3 '08 LTM
25
Priorities for Cash Utilization
Must consider current environment Near term focus is on cash, liquidity, and cost reduction
Internal investment• Manufacturing capability / footprint• Human capital• Systems
Value generating acquisitions Returning cash to shareholders
• Currently suspended share repurchase program, pending access to credit markets
• $1.2 billion authorized through June 2009 ($0.6 B to date)
26
35%
10%
14%
25%
29%
24%
3%
12%
21%
38%
43%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2003 2004 2005 2006 2007 Q3 LTM
Pre-tax ROICAfter-tax ROIC
ROIC growth driven by operating income growth faster than invested capitalRecent acquisitions of SHM and ASV dampen returns in the short term
ROIC is calculated by dividing the sum of the last four quarters’ net operating income after tax by the average of the sum of total stockholders’ equity plus debt less cash and cash equivalents for the last five quarters ended.
Terex to Date: Return on Invested Capital
27
Next four quarters net sales expectations beginning 4Q’08:
• Mining and Cranes continuing favorable trends
• AWP (30%-40%), Construction (25%-35%) and Materials Processing (15%-20%) negatively impacted by current market conditions
Material Cost pressure continues
Cost reduction actions underway to adjust to market expectations
Near Term Outlook
All EPS amounts are on a fully diluted basis
2008 sales $10.0 to $10.3 billion2008 EPS $5.69 to $5.79
28
Sales Growth Initiatives
Active and relevant in high growth markets
Doing business efficiently and effectively
Positioned to support product after sale
Clear product, service, or other advantages in all markets
Value-adding relationships with customers
Leveraging the Power of One Company
Aligned with local market needs
Delivered at local market price points
Optimized production with global supply chain
Global Market Participation
“Local” Products
Competitive Differentiation
29
Operating Income Initiatives
Ensure Terex is receiving appropriate value for its products
Optimize product mix
Offset rising commodity costs with commensurate pricing actions
Terex Business System (TBS) & Terex Management System (TMS)
Optimize manufacturing footprint
Sales and production planning methodology
Coordinate supply efforts to leverage the scale of Terex
Facilitate common designs and components
Sourcing centers – China and India
Pricing / Mix
Supply Management
Productivity
Goal: 2% - 3% margin improvement
30
Cash Flow Initiatives
Sales Growth
Enhance Profitability
Integrated and aligned approach to tax planning
More tax efficient business structure(s)
Processes and resources to assure tax minimization
Continued diligence - AP / AR
Aggressive inventory management
Capital expenditures to enhance profitable growth
Product Margin
Capital Efficiency
Tax Planning
15% working capital / trailing sales Capex between 1.5% and 2.0% of salesCash taxes will approximate tax expense
31
Enabling Initiative: Terex Financial Services (TFS)
’03 – ’05
• Limited Geography
• Low Coverage & Penetration
• Functions Outsourced
Launch
’06 - ’08
Transform
• Reflect Terex Global Footprint
• Segment Coverage & Penetration
• Influence Customer Experience
’09 +
ExpandImpact
• True Global Captive
• Enable Terex Growth Globally
• Optimize Partnerships
• Expand Customer Touch Points
Protect balance sheet while supporting growth of business, especially in developing markets
32
TFS: Path Forward
• Tap into Broader Risk Appetite from Multiple Sources
• Responsiveness – “Take the Deal Off the Street”
• Increase Avenues to Competitive Capital
Owning More of the Customer Experience
Dealer Finance
3rd PartyFunding
Originate& Sell
TFSOriginated
2004$0.5B
2007$1.3B
2010$2.5B
Dealer Finance
33
Tax Planning Objectives
36% 36% 35% 34% 33% 33% 32% 31%29% 28%
25% 25%23%
10%
0%
5%
10%
15%
20%
25%
30%
35%
40%
ASTE OSK DE JOYG TEX BUCY CAT KMT UTX MTW DHR PKI IR ETN
EFFECTIVE TAX RATE – TEREX VS. INDUSTRY PEERS
• Reduce effective tax rate in line with leading industry peers
• Industry-minimums only achievable through aggressive structural change, but meaningful improvement can come through improved processes and practices
TAX STRATEGIES
• Traditional Planning and Execution
• Statutory Rate Reduction
• Global Expansion and Optimization
• Operationally Aligned Tax Strategies (OATS)
34
• 5+ years of strong growth, driven by favorable market conditions and an increasingly robust portfolio
• Committed to core financial principles – Growth with modest debt leverage– Industry leading ROIC– Generate cash to enable capital investments, targeted
acquisitions and share repurchases
• Near term outlook is mixed but long term remains positive
• Improving performance via core business initiatives that will enhance long-term results
Summary Supporting Profitable Growth
35
Operations Overview
Tom RiordanPresident and Chief Operating Officer
36
Terex Lost Time Rate Trending(12 Month Moving Average)
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
TLTR
Cranes
Construction
MP&M
RBUAWP
Jan 07 Sept 08
Injury Statistics
Terex
37
Operational Update
• Progress towards an integrated operating company
• Integration examples
Customer Satisfaction
Supply Management
New Product Development
Terex Business Systems
• Challenging economic environment – actions we’re taking
• Other progress and path forward
38
Transformation Underway
Right Talent
Clear Metrics
OBJECTIVES
• Experienced leadership, driven to create change
• Resources and mandate required to succeed
GOALS
• Transitioning from a holding company to an operating company• Upgrading capabilities to drive business and functional performance
Good Process
Results
• Measurements defined and goals established
• Alignment within and across businesses
• Well defined and well executed business processes
• Systems that enable execution
• Clear, permanent shifts in performance
• Ability to sustain and improve
39
Progress Examples
• Customer Satisfaction
• Supply Management
• Product Development
• Terex Business System (TBS)
40
Customer Satisfaction: Objectives
• Ensure initial experience with products is positive
• Improve aftermarket service and support
• Deliver effectively through multiple channelsDistribution/ BranchesRentalDirect
• Build long-term value proposition
Vision: Most Responsive Company in the Industry as Determined by the Customer
“Relationships that I can depend on to help me ”
People to People SolutionsRelationships that I can depend
on to help me ”“Make it easy for me to run my
business”
Make My Job Easier“Make it easy for me to run my
business”“Deliver highly competitive entry,
operating and exit value”
Customer-Defined Value“Deliver highly competitive entry,
operating and exit value”
CUSTOMER ENABLERS
41
Customer Satisfaction: Actions
• Multiple activities in progress to:Understand customer purchase driversMeasure current levels of satisfactionIdentify improvement actions for TerexBuild meaning and value for the Terex brand
• Supporting changes are underway:Product/ offering developmentDistribution improvementGlobal aftermarket
• We have a long way to go but, increasingly, we have the right people and processes in place to deliver the results we are targeting
42
Supply Management: Objectives
2007 2008 2009
Build the Foundation
Expand the Core
Achieve Excellence
Establish consistent sourcing processes
Build the organization
Enhance sourcing tool set
Common objectives
International Sourcing Infrastructure
Drive savings and mitigate inflation
Deeper supplier integration
TBS initiatives
Continual focus on savings and mitigating cost inflation
2010
Create competitive advantage in the supply chain while minimizing the impact of rising material and component costs
43
Teams activity engaged in major material cost elements
Supply Management: Priorities
Size of bubble: Total spend of respective commodity
0%
5%
10%
15%
Expectedaverage savings
EasyDifficult Ease of Implementation
High prioritySecond
priorityThird priority
Engine,diesel
Other powerplants, IC engine
Axles
Motors,hydraulic
Transmissions,hydrostatic
Pumps & pumpassemblies, hydraulic
Gearboxes& gears
Otherpowertrain
Other hydraulic & pneumatic
components
Other running gear
Cylinders
Complexassemblies
Tire &wheel
assemblies
Otherelectrical & control
components
Cabs, accessories& ropes
Hoseassemblies
Otherhardware
Fittings & adaptors
Clamps, ties & straps
Fluid transfer& control,
non-hydraulic
Plastic,polymers& rubber
Valves, hydraulic
Othermech.
Fasteners & retainer rings
Paint & coatingsDocumentation
Aluminum
Other consumables,tools & dispatch kits
Machined components, steel
Bearings, bushings & accessories
Indirectspend
Product identification & labeling
Other structural fabricated components
Controllers, timers, control modules & PBC
Weldment,steel
Steel
Batteries
Castings &forgings
Tires,rubber
Crawler trackassemblies
Size of bubble: Total spend of respective commodity
0%
5%
10%
15%
Expectedaverage savings
EasyDifficult Ease of Implementation
High prioritySecond
priorityThird priority
Engine,diesel
Other powerplants, IC engine
Axles
Motors,hydraulic
Transmissions,hydrostatic
Pumps & pumpassemblies, hydraulic
Gearboxes& gears
Otherpowertrain
Other hydraulic & pneumatic
components
Other running gear
Cylinders
Complexassemblies
Tire &wheel
assemblies
Otherelectrical & control
components
Cabs, accessories& ropes
Hoseassemblies
Otherhardware
Fittings & adaptors
Clamps, ties & straps
Fluid transfer& control,
non-hydraulic
Plastic,polymers& rubber
Valves, hydraulic
Othermech.
Fasteners & retainer rings
Paint & coatingsDocumentation
Aluminum
Other consumables,tools & dispatch kits
Machined components, steel
Bearings, bushings & accessories
Indirectspend
Product identification & labeling
Other structural fabricated components
Controllers, timers, control modules & PBC
Weldment,steel
Steel
Batteries
Castings &forgings
Tires,rubber
Crawler trackassemblies
44
Product Development Status
• VP of Technology added in late 2007
• Launched New Product and Process Development Process in early 2008
• Roll-out of New Product Identification Process underway
• Actively migrating existing product programs to new process and new phase-gate discipline
• Upgrading engineering and cross-functional product development capabilities in parallel
• Realizing clear benefits as we go
45
Terex Business System (TBS)
The Terex Business System is our framework to build a stronger Terex
46
TBS: Objectives
• Improve margin from efficiency/productivity gains
• Increase production capacity within existing manufacturing footprint
• Improve customer satisfaction and reduce warranty costs due to improved quality
• Lower inventory, particularly raw materials and work-in-process, leads to improved cash flow
• More easily move or replicate production lines around the globe
• Empower team members, enriching their work experience
• Develop team member skill sets, knowledge, and capabilities
47
TBS: Recent Improvements
TEREX CRANES - WAVERLY, IOWA
• From poorly lit, inventory laden facility to a clean, transparent factory floor with flow and visual controls
• Increased throughput by 4 – 5 x
• Cut working capital days by 2/3
• Now turning inventory at 11-12 times per year vs. 2-3 at the beginning of 2005
Before After
TEREX UTILITIES – WATERTOWN, SD
• Moving line for Tree Trimmers and TL Mixed Model Line, designed for ergonomic build activity and attached to a moving line
• Parts Carts– Parts pulled and kitted prior to build– Visual Management for unit status and
identification of part shortages– Carts follow build sequence, adding a
visual quality step
• Andon System/ Escalation Procedure
• On-time delivery improved by 50%
After After
48
Material Processing – Omagh, N. Ireland
• Implement a factory wide system to smooth production levels to standard takt times and implement visual controls
• Additional improvements will now be based on the established standards
• Production increased almost 50% over two years within the existing manufacturing footprint
• Inventory turns improved 35% over a two year period to mid-teens
After Photo
Portable crane in use to rotate frame
Before After Before AfterNew “craneless” production line
Mining Trucks – Acuna Mexico
• Redesign of mining truck production line to dramatically increase throughput, on-time delivery and team member safety.
• Eliminated the use of cranes, improving productivity, quality and safety
• Monthly production levels increased by a factor of 4 times within existing manufacturing footprint
TBS: Recent Improvements
49
shipping
stock
MINING – PHASE I
MINING – PHASE I I
CRANES
CRANES
• Developing shared production campuses in India and China
45 acre site near Chennai, India currently under constructionScheduled to begin producing crushing equipment in early 2009Other products to follow in late 2009/ early 2010
Expansion of existing facility in Tianjin, ChinaWill produce crane and mining componentsProduction begins in 2010
• Each campus will house up to 3 Terex segments, leveraging shared capabilities
• Designing facilities from the ground-up based on TBS principles
• Using TBS to plan and execute line moves to replicate successes from other global locations
TBS and Global Manufacturing Footprint
50
TBS and Global Manufacturing Footprint
Improve effectiveness at existing locations – applying TBS to streamline operations
Rationalize developed market footprint
DEVELOPED WORLD DEVELOPING WORLD
Increase presence in developing countries
Leverage product and cost positions globally
• Significant progress is underway, but change will require investment
• Balancing opportunity for change with market and other factors
51
• Production level and headcount reductions
• Facility rationalization
• Segment realignment
• Capital spending delayed
• Material inflow constrained
Cost Reduction Activities
52
• Impossible to cover the amount of improvement underway at Terex in a short presentation
• Parallel progress continues on multiple fronts:Talent Recruitment and DevelopmentDiversity and InclusionTerex Management Systems implementationBranding/ Marketing/ and Customer Satisfaction Terex Financial ServicesGlobal LogisticsGlobal Service and Support
• Positioned to take our performance to the next level
Other Progress
53
• Continuing our journey to be an effective global operating company
• Significant talent now invested and beginning to deliver the results that we expect
• We are aggressively responding to changing market conditions – cash and cost focused
• We remain excited about the transformation that is underway in our company and about the value that it can deliver both near and long term
Terex Operations Summary
54
European Non-deal Road Show
November 2008