Terex Mining Investor Meeting Dortmund, Germany

Transcription

1 Terex Mining Investor Meeting Dortmund, Germany March 25, 2009 Phil Widman Senior Vice President & Chief Financial Officer Terex Corporation Harry Bussmann Vice President, Terex Mining

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 for a complete reconciliation. 2

3 Materials Processing & Mining $B $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 30% 25% 20% 15% 10% 5% 0% Sales Gross Margin Op. Margin Materials Processing Current Environment Leading global market position in mobile products Accelerated global downturn in back half of 2008 Long-term growth expected in developing markets Terex Response Production and head-count reductions Temporary factory shutdowns Rescheduling/delaying of raw material deliveries Continued TBS / improvement initiatives Sales by Product 40% Sales by Geography 33% Mining Strong global market position (top 3) Significant commodities volatility 11% 26% Some rescheduling / cancellations of order backlog 14% 35% 15% 26% Terex Response Reconfirming backlog and delivery schedules More stringent production scheduling 2008 Materials Processing Drills/ Other Trucks Shovels 2008 Developing Markets Japan / ANZ W. Europe USA / Canada Increased emphasis on customer support for installed base (parts & service) Continued TBS / improvement initiatives 3

4 Terex Mining In Summary ~ $ 1.5 billion provider of mining equipment solutions sold to mining, quarrying, and construction customers worldwide Full solution for the 3 main production processes in opencast surface mining i.e. drilling, digging and hauling Solid foundation of products, geographic presence and team member talent Profitable growth from machinery and aftermarket business Undertaking actions to accelerate growth and better serve our customers 4

5 Annual Mining Equipment Industry of $20 B Discontinuous Mining $ B Continuous Mining $ B Blast hole Drill 1.4 Bucket Wheel Excavators, etc. 2.0 Hydraulic Excavators 1.7 Surface Miners (Easy Miners) 0.2 Electric Mining Shovel 1.3 Highwall Miners 0.1 Surface Mining Wheel Loaders (large) 0.5 Trucks 2.5 Tractors (Dozers) 1.0 Draglines 0.3 (44%) 8.7 (12%) 2.3 Development & Production Drill (Ore) 1.5 Long wall Face Support 2.0 Load Haul Dump (LHDs Ore) 2.0 Long wall Face Conveyor (AFC) 1.3 Underground Mining Continuous Miner / Roadheader 0.6 Long wall Shearer 0.7 Shuttle Car (Coal) 0.6 (20%) 4.7 (24%) 4.0 Focus is on highest value adding surface mining processes of drilling, digging, and hauling 2007 Data: International Press, Mining Companies, OEMs, Goldman Sachs; Analysis: RWTH Aachen, BGMR 5

6 Terex Mining Products Surface Mining Drills Mining Excavators Mining Trucks Top 3 Top 3 Top 3 Highwall Miners Parts/ Tools # 1 Good Margin Industry leading range of equipment for construction, mining and infrastructure industries 6

7 Rotary Blasthole Drills Highly successful rotary drilling products for past 50 years Range of drills customizable for specific applications ranging from quarries to large open cast mines Lower operating costs as a result of reduced cycle time between holes and minimal moving parts Increased productivity and uptime through field serviceability and operator friendly features Highly productive and efficient in the most difficult applications 7

8 Hydraulic Excavators Superior mobility as compared to an electric rope shovel Leadership position in electric drive Well suited for rapid mine start-ups Selective digging capabilities Largest hydraulic excavator with bucket size up to 50 cubic meters Hydraulic excavators beginning to replace electric rope shovels Higher mobility provides greater flexibility in mining operations 8

9 Full Range of AC Drive Hauling Solutions Leadership position in high efficiency AC drive trucks Higher up time Lowest Total Cost of Ownership Higher payload Better operating performance compared to mechanical drive in starting torque travel speed braking 120 ton to industry leading 400 ton capacity AC electric drive trucks Lower total cost of ownership and superior performance 9

10 Highwall Mining System Unique technology to profitably mine abandoned coal seams Consistently mines 40 to 100 thousand tons per month Quick return on capital investment Low labor requirements - three to four man crew Crew safely works from the surface Growing global footprint with systems operating in Australia and Russia and targeting China and India Cost effective solution at any stage of the business cycle 10

11 100% Growth In Large Size Machines World Market Excavator Units by Class World Market Excavator $ Sales by Class Units Mil USD t 160 t 240 t 350 t 500 t 700 t 100 t 160 t 240 t 350 t 500 t 700 t World Market Mining Truck Units by Class World Market Mining Truck $ Sales by Class Units Mil USD t 140 t 170 t 190 t 220 t 290 t 327 t 110 t 140 t 170 t 190 t 220 t 290 t 327 t Terex is well positioned for market needs 11

12 Mining New Product Introductions SK-L Electric Drive MT 6300 Large capacity drill to complement large haul and shovel products Electric drive option to lower fuel cost Work in progress on automation Increased focus on electric drive excavators to lower operating cost Launched the first Electric Drive RH 400 in South Africa (Mar 2009). Won bid against competing electric rope shovels Work in progress on automation Ultra-capacity truck (400 t) Built with Terex-designed drive system Trucks in operation in Australia and Canada 12

13 Mining Product Mix Industry Source : Parker Bay , 2008 Data until June. Terex ( Mining Trucks, Hydraulic Excavators, Electric.Shovels & Wheel Loaders) ( Mining Trucks and Hydraulic Excavators) Tools, 20% 4 Years 4 Years 4 year average 4 year average Trucks, 46% Drills, 13% Wheel Loaders, 6% Electric Shovels, 1% Hydraulic Excavators, 15% One loading tool is required for every three or four trucks Move towards hydraulic excavators due to flexibility of electric or diesel power depending on mine requirement. Tire capacity constraints has moderated growth of large surface mining equipment during past four years Highwall Miners, 2% Tools, 4% Trucks, 21% Drills, 17% Hydraulic Excavators, 56% Industry leading performance and strong global channel driving excavator sales Truck volume growing in line with channel improvements Addition of drills, tools, and high wall miner business provides total solutions offering 13

14 Mining End Market Equipment Usage Industry Terex ( Mining Trucks, Hydraulic Excavators, Electric.Shovels & Wheel Loaders) ( Mining Trucks and Hydraulic Excavators) 4 year 4 Years average 4 year 4 Years average Oil Sands, 5% Iron Ore, 13% Other, 16% Gold, 11% Coal, 38% Copper, 16% Equipment investment focused in surface mining industry Market growth from $ 6 B in 2005 to $ 9.6B in 2007 Beginning of shift from underground to surface mining coal production in China Demand from developing world driving investments in coal, iron ore, and copper Oil Sands, 1.3% Source : Percentage of units shipped by end market, Parker Bay , 2008 Data until June. Iron Ore, 19% Other, 16% Gold, 11% Copper, 7% Coal, 46% 85+ % of Terex mining equipment used by large multinational companies or large state owned companies Current offering well suited for metal and coal production Focused penetration of oil sands underway 14

15 Mining Sales By Region Industry Terex ( Mining Trucks, Hydraulic Excavators, Electric.Shovels & Wheel Loaders) ( Mining Trucks and Hydraulic Excavators) Africa 10% 4 year 4 Years 4 Years average 4 year average Asia 6% Australia/ Indonesia 26% Africa 14% Asia 15% North America 27% Latin America 17% Europe 9% Russia/CIS 5% North America 19% Latin America 13% Russia/CIS 7% Europe 2% Australia/ Indonesia 31% North America and Australia continue to be significant market for mining equipment Significant growth in Africa, Latin America and Asia Solid strength in largest mining equipment markets Opportunity to grow the business in Americas Source : Percentage of units shipped by end market, Parker Bay , 2008 Data until June. 15

16 Terex Mining Sales Network Locations: Terex Mining Near our customer locations in all major market areas 16

17 Terex Mining Sales Network Locations: Terex Mining Mining Channel partners Near our customer locations in all major market areas 17

18 Mining: Manufacturing Footprint Hammer & Bits, UK Drills & Tools, USA Mining Trucks Acuna, Mexico High Wall Miners, USA Excavators Germany New Factory Excavators Tianjin, China New Factory Crushing and Screening Products Hosur, India Adding small excavator capability in China Evaluating acquisitions to accelerate global progress 18

19 Customer Focus Actions The goal of Terex is to provide our customers with the lowest Total Cost of Ownership Lowest Total Cost of Ownership is the prime driver for improving existing and developing new products and services Establish resources in growth regions for superior customer support, focusing on highest availability and longest Mean Time Between Failures (MTBF) Enhance Terex Mining Distribution Network Upgrade the selling and support skills of all our dealers Create a more integrated channel-to-market that is capable of selling the Terex solutions package of drills, excavators and trucks Focused actions for taking advantage of available opportunities Source : Agricultural production statistics, International Monetary Fund 19

20 Distribution & Customer Support Priorities OBJECTIVES Strengthen Global Distribution Upgrade selling and service skills Improve dealer and end user training capabilities Extend into new geographies Installed base continues to grow, driving parts sales and service opportunities EXAMPLE: HYDRAULIC EXCAVATOR INSTALLED BASE Strengthen customer support Improve over the counter availability of parts Improved installed base monitoring and periodic audits Add/improve maintenance & service capabilities

21 Mining Industry Outlook Commodity prices under pressure due to sudden decrease in demand Early signs of recovery in copper and iron ore prices Gold likely to stay strong Thermal coal demand will help maintain price levels Some delay of mine expansions and Greenfield projects Most of the mining regions are affected except India and China Mining industry still looking forward to uptake in 9 15 months 21

22 Commodity Price Trends $1,003 $956 All Time High $8,940 Dec-05 $517 Mar-09 $4,395 $3,999 $3,256 $224 $190 $64 $60 $50 $59 $971 $1,105 Gold Thermal Coal Met Coal Copper Platinum ($USD/TROY OZ) ($USD/TON) ($USD/TON) ($USD/TON) ($USD/TON) ($USD/TROY OZ) Commodity prices are down, but generally near or above 2005 levels Developing Markets still driving demand even with lower GDP rates Source : Infomine.com, Energy Information Administration, International Monetary Fund 22

23 Terex Mining In Summary ~ $ 1.5 billion provider of mining equipment solutions sold to mining, quarrying, and construction customers worldwide Full solution for the 3 main production processes in opencast surface mining i.e. drilling, digging and hauling Solid foundation of products, geographic presence and team member talent Profitable growth from machinery and aftermarket business Undertaking actions to accelerate growth and better serve our customers 23

24 Questions?