Terex's Strategic Moves: A Path to Resilience and Growth

As Terex Corporation (NYSE: TEX) wraps up its fourth quarter and full-year 2024 earnings, investors are eager to understand the strategic moves that have positioned the company for resilience and growth. In this article, we will delve into the key factors driving Terex's performance, the impact of its strategic acquisition, and the outlook for 2025.



Terex's strategic acquisition of Environmental Solutions Group (ESG) in October 2024 has proven to be a significant catalyst for growth and financial accretion. The acquisition, which closed on October 8, 2024, contributed strongly to Terex's fourth-quarter results, fulfilling the commitment of being financially accretive from day one. This strategic move has helped Terex achieve its second-highest adjusted earnings per share of $6.11 in the company's history, reflecting the strength of its portfolio and ability to perform better throughout the cycle than in the past.

Looking ahead to 2025, Terex expects ESG to continue to grow and carry strong momentum. The company anticipates 2025 net sales of $5.3 to $5.5 billion, earnings per share between $4.70 and $5.10, and free cash flow of $300 to $350 million. This positive outlook is partly driven by the integration of ESG and the expected growth of Terex Utilities, which is also expected to perform well in 2025.



In the fourth quarter of 2024, Terex's net sales increased by 2% compared to the same period in 2023, primarily due to the addition of ESG, which partially offset declines in Materials Processing (MP) and Aerial Work Platforms (AWP). Adjusted income from operations was $97 million, or 7.8% of net sales, compared to $133 million, or 10.9% of net sales, during the prior year. The year-over-year change was primarily due to lower sales volume, lower production resulting in unfavorable manufacturing variances, and unfavorable mix in the legacy businesses, partially offset by cost reductions, lower incentive compensation, and ESG accretion.

Terex's full-year 2024 operational and financial highlights also reflect the positive impact of the ESG acquisition. Net sales were down slightly compared to 2023, primarily driven by industry-wide channel adjustments in MP, offset by modest growth in AWP and the fourth quarter addition of ESG. Adjusted income from continuing operations was $413 million, or $6.11 per share for the full-year 2024, compared to $482 million, or $7.06 per share, in the prior year. The effective tax rate was 17.2% for the full-year 2024, compared to 18.2% in the prior year.

Terex's strategic acquisition of ESG has had a positive impact on its financial performance and growth trajectory, contributing to strong results in the fourth quarter of 2024 and setting the stage for continued growth in 2025. As the company navigates industry-wide channel dynamics and integrates ESG, investors can expect Terex to maintain its resilience and continue to execute its strategic plan.

In conclusion, Terex's strategic acquisition of ESG has proven to be a successful move, driving growth and financial accretion in 2024 and positioning the company for continued success in 2025. As Terex continues to execute its strategic plan and integrate ESG, investors can expect the company to maintain its resilience and deliver strong financial performance.