Morningstar | TEX Updated Forecasts and Estimates from 05 Apr 2019
Terex is a global manufacturer of lifting and materials processing equipment that was previously a division of General Motors that built construction and mining equipment. After being sold by GM in 1981, Terex assembled a broad product portfolio through several acquisitions, including more than 50 in the past two decades. After several divestures, Terex was left with three primary segments: aerial work platforms, materials processing, and corporate, which includes elements of its former crane segment. These businesses are cyclical as they are tied to nonresidential construction. Recently, management has focused on streamlining operations by reducing duplicative manufacturing operations, standardizing ERP systems, and through a global strategic sourcing initiative. As a result, it has reduced its manufacturing footprint by 27%, or 2.6 million square feet. Terex's former crane segment produced approximately 25% of revenue. About one third of its crane operations is scheduled to be sold in 2019. Historically, this segment has competed against American and European crane manufacturers such as Manitowac and Leibherr. Recently, there has been growth in Chinese construction equipment manufacturers’ crane offerings. This has hampered Terex’s ability to gain a foothold in China.The aerial work platform segment generates approximately 50% of company revenue. Terex’s Genie brand is an industry leader in aerial lifts and telehandlers, and commands a second-place global market share next to Oshkosh’s JLG brand. As with its cranes business, it faces significant competition in China from domestic manufacturers. The company’s principal strategy has been to introduce innovative products, such as those with electric drives for indoor use, and increase the working height range of these products.Terex’s materials processing business generates the remaining 25% of company revenue. Its crushing, screening, and concrete products are tied to construction, while other products handle biomass and recycling and are less cyclical. Terex’s strategy for its MP products focuses on increasing the breadth of the product line while producing products that increase labor and fuel efficiency.Terex is a global manufacturer of aerial work platforms, materials processing machinery and cranes. The company has two segments: Aerial Work Platforms, which designs, manufactures, services and markets aerial work platform equipment, utility equipment, telehandlers and light towers, including portable material lifts, self-propelled articulating and telescopic booms, scissor lifts, and trailer-mounted light towers as well as, their related components and replacement parts; and Material Processing, which designs, manufactures and markets materials processing and other equipment, including crushers, washing systems, apron feeders, conveyors, and their related components and replacement parts.
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