1. Bank of America 38th Annual Investment
Conference
September 17, 2008 Robert Isaman
President, Terex Construction
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.
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3. Who is Terex?
Terex is one of the Largest Manufacturers of
Construction Equipment in the World
Materials Processing &
Aerial Work Platforms Cranes
Mining
Roadbuilding & Utility
Construction
Products
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4. Who is Terex?
Our Purpose
To improve the lives of people around the world
Our Mission
To delight construction, infrastructure, mining and
other customers with value added offerings that exceed their current and
future needs
To 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 Vision
Customer – to be the most customer responsive
company in the industry as determined by the customer
Financial – to be the most profitable company in the
industry as measured by ROIC
Team Member – to be the best place to work in the
industry as determined by our team members
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5. Where We Are Today
• Leader In Our Categories and Our Industry
• Leveraging the Power Of One Company
• Well Positioned for Continuing Long - Term Trends
$30.4
$19.0
$10.1 $9.1 $8.7 $8.1
$5.2 $5.1 $4.9 $4.5 $4.4 $3.7
Caterpillar (1) Hitachi (3) Volvo Liebherr (7) CNH Global (8) Sandvik (10) Deere (5) JCB (7) Doosan (6)
(4) Oshkosh (9)
Komatsu (2) Terex
Based on last twelve months of available Construction Equipment Sales ($’s in Billions)
(6) Represents 2007 Construction equipment sales of $1.5 billion based on exchange
(1) Represents total sales before Power Products, Financing and Insurance Services sales
rate at December 31, 2007 of KRW/USD 936.07 plus estimated 2007 Bobcat sales of
for the 9 months ended March 31, 2008 plus Building Construction Products, EAME
$2.9 billion
Operations, Heavy Construction & Mining and Infrastructure Development sales for the 3
(7) Estimated, as these are privately owned companies:
months ended June 30, 2008.
JCB: 2007 sales of GBP 2.25 billion converted at Dec 31, 2007 GBP/USD rate of
(2) Represents Komatsu’s Construction and Mining Products segment as of March 31,
1.9870
2008.
Liebherr: 2007 Cranes/Mining/Construction sales of EUR 5.5 billion converted at Dec
Exchange rate of 99.691 as of Mar 31, 2008
31, 2007 EUR/USD rate of 1.4598
(3) Exchange rate used as of June 30, 2008 of USD/JPY 106.18
(8) Represents CNH Global’s Construction Equipment Segment as of June 30, 2008
(4) Represents Volvo’s Construction segment as of June 30, 2008. Rate of USD/SEK
(9) Represents Access & Concrete Placement equipment sales for the 9 months ended
6.0241
June 30, 2008 plus Access & Commercial (both concrete & refuse trucks) for the 3
(5) Represents Deere’s Construction and Forestry segment as of April 30, 2008
months ended Sep 30, 2007.
(10) Represents 2007 Mining & Construction sales converted at SEK/USD 6.46
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6. Goals for 2010
“12 by 12 in ’10”
is our medium - term stretch goal
• $12.0B in Sales
• 12% Operating Margin
• 15% Working Capital to Sales
GOAL June 30, 2008 LTM* What we must accomplish
$12.0B in Sales $10.1B Implies 7.2% CAGR
12% Operating Margin 10.9% Execute on pricing process discipline, supply chain
management, & TBS initiatives
15% Working Capital to Sales 22.1% Optimize supply chain planning and execution
* LTM = Last Twelve Months
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7. Segment and Geographic Diversity
2007 SALES BY GEOGRAPHY 2007 SALES BY BUSINESS
RBU
7%
Developing
AWP
Markets
25%
22% W. Europe
Construction
37%
21%
Japan / ANZ
7%
USA / Cranes
MP&M
Canada 24%
23%
34%
Terex has Portfolio Diversity…
… Balanced by business; Balanced geographically
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8. Terex Construction Segment
Material
Compact Heavy Off-Road
Handling
Equipment Equipment Trucks
Robust Filling Global
1 of 4
Portfolio Gaps Growth
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9. Terex Construction: Segment Update
CONSTRUCTION RESULTS
$B
• Sales up 14% since
30%
$2.0 2004 (CAGR)
25%
• US and W. Europe
$1.5 20%
soft, but global
15%
growth solid
$1.0
10%
• Strengthening/
$0.5
improving
5%
performance in
0%
$0.0
advance of recovery
2004 2005 2006 2007 Q2 '08
(ltm)
Sales Gross Margin Op. Margin
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10. Terex Construction Segment Mix
PRODUCT MIX ($) GEOGRAPHIC MIX ($)
13%
17% 20%
28% 1%
1%
19%
13%
65%
17% 28% 63%
42% 36%
21% 16%
2004 2008 Q2 YTD 2004 2008 Q2 YTD
Developing Markets
Trucks
Japan / ANZ
Material Handling
W. Europe
Heavy
USA / Canada
Compact
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11. Terex Construction: Key Focus Area
Supply chain efficiency
Production effectiveness
Margin expansion/
Pricing
productivity
Acquisition integration
Regionally focused product/service innovations
Marketing effectiveness – closer to the customer
Growth
Aftermarket investments
BRIC+ 7 expansion
Asset velocity
Cash generation Working capital
Fixed asset productivity
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12. Terex Construction:
Process Improvement Focus
North America Western Europe
*Source MAPI 2008
North America & Western • Demand weaker
Europe Geographies Soft • Volume and material costs impacting margin
Developing Market • Excellent growth in Eastern Europe, Africa, Middle East and other
developing geographies
Geographies Strong
• China, India, and South America are continuing opportunities
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13. Terex Construction:
Process Improvement Focus
MOTHERWELL, SCOTLAND – ARTICULATED AND RIGID TRUCKS
Before After After
• Integration of TA30 and TA40 articulated truck lines into a single, mixed model line
• Cycle times reduced by 38%
• Lead time reduced by 20 – 30%
• Released $750k of work in process inventory
Higher Quality and Shorter Delivery Times through
implementation of Leader Standard Work
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14. Terex Construction:
Customer Value Progress
Customer Value
Customer Value
Proposition
Proposition
•• We will “never leave aa
We will “never leave
customer with aaproblem”
customer with problem”
•• We will drive down the
We will drive down the
total lifecycle cost of
total lifecycle cost of
ownership
ownership
•• Focusing on building
Focusing on building
products that increase
products that increase
jobsite productivity
jobsite productivity
High local machine population drives both
higher Customer Value and dealer ROIC
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15. Terex Construction:
Dealer Development and Support Focus
3 Crown: Measuring Dealer Performance/ Implementing
Best/ Improving Capabilities
Dealer Capabilities include…
•Staffing
3 Crown
•Training
•Marketing
•Service Infrastructure
•Parts Infrastructure
2 Crown Performance Metrics include…
•Business Management
•Facility • Market Share
• Customer satisfaction
• Number of Terex lines carried
1 Crown
• Parts sales
• Equipment sales
• Year over year growth
• Utilization of Terex Financial Services
0 Crown
“Qualifying”
• Rental
Investing in Support Systems to Improve our Channels
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16. Terex Construction: Emerging
Emerging Markets Update
Markets Focus
Russia/
Russia/
South Africa China India Latin America
South Africa China India Latin America
Eastern Europe
Eastern Europe
• Commodities,
• Significant heavy • Strengthening
• Largest • Transition of
energy, and
position in
developing Eastern equipment
infrastructure-
backhoes
country for European market with
driven growth
Terex economies opportunities to
• Opportunity to
Construction penetrate
• Large, multi-
penetrate in
• Affinity for
other categories year projects in
• Promising Western • Emerging
pipeline (e.g.,
as strong
future outlook European opportunities in
Panama)
market growth
products compact
continues
• Excellent growth
to date
Emerging markets helping to sustain business as
developed markets soften
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17. Terex Construction: Improvement
Roadmap
1 2 3
Build-out long-
Build around the
Optimize the profitability term through
strongest and most attractive
a repeatable
of the current portfolio
businesses
system
Fix the overall costDevelop and expand • Roll-out winning
• •
winning, repeatable models organically
and asset structure
business model for across best markets
• Implement
our strongest
redesigned business • Evaluate and pursue
markets
processes focused M&A targets
• Evaluate a disruptive that leverage and
• Focus investments
business model in enhance our best
and redesign around
attractive market geographic, product,
stronger/attractive
areas where you are and customer
markets and
weaker/not present segments
products
today
Three phase path toward achieving full potential…
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18. Terex Construction: Improvement
Roadmap
40 % of Total
Manufacturing
Footprint
EMEA
30 % of Total
Manufacturing
Footprint
30 % of Total
Americas
Manufacturing
Asia
Footprint
Sourcing
Manufacturing
Engineering
…future Operations Footprint aligned with Markets
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19. Terex Construction: Summary
• $1.9 B* provider of construction-related equipment
• On-going operations and market-based transformation
• Near term performance is challenging but long-term potential
has never been higher
Recent addition of acquisitions furthers an already strong growth
platform in compact
High growth in scrap, quarries, and other segments where Terex
products create unique value
Continuing opportunity to change the game in more crowded, heavy
equipment categories
• Positioning Terex for segment and geographic leadership as
conditions improve over the coming 2-3 years
* Last 12 months through June 30, 2008 19
