Terex Q1 2025 slides: Environmental Solutions shines amid segment challenges

Terex Corporation (NYSE:TEX) reported mixed first-quarter 2025 results on May 2, with its Environmental Solutions segment delivering strong growth while the Aerials and Materials Processing segments faced significant headwinds. Despite these challenges, the company maintained its full-year outlook, suggesting confidence in recovery during upcoming quarters.

Quarterly Performance Highlights

Terex reported Q1 2025 sales of $1.229 billion, down 4.9% compared to $1.292 billion in Q1 2024. Adjusted operating profit fell to $111 million from $163 million a year earlier, with operating margin decreasing to 9.1% from 12.6%. Adjusted earnings per share declined to $0.83 from $1.74 in the prior-year period.

As shown in the following financial summary from the presentation:

Despite the overall revenue decline, Terex highlighted several positive indicators, including a strong Q1 book-to-bill ratio of 124% and sequential backlog growth of $292 million (13%) to $2.6 billion. Free cash flow also improved to $(55) million from $(69) million in Q1 2024.

The company returned value to shareholders through $32 million in share repurchases (approximately 12 times more than Q1 2024) and $11 million in dividends, representing a yield of approximately 1.8%. Additionally, Terex invested $36 million in capital expenditures to support future growth.

Segment Analysis

The company’s three segments showed dramatically different performance trajectories in Q1 2025. The Environmental Solutions (ES) segment, which includes the acquired ESG business, was the standout performer with 10.5% year-over-year sales growth and significant margin expansion.

As illustrated in the ES segment financial highlights:

In stark contrast, the Aerials segment experienced a 27.8% year-over-year sales decline, with operating margin falling to 3.0% from 14.9% in Q1 2024. However, the company noted a strong Q1 book-to-bill ratio of 144% for this segment and expects a return to double-digit margins in Q2 on seasonally higher sales and production volume.

Similarly, the Materials Processing (MP) segment saw sales decrease by 26.5% year-over-year, with operating margin declining to 10.0% from 14.0%. The company attributed this performance to challenging European market conditions, though it highlighted that the segment maintained double-digit margins despite lower sales.

Strategic Initiatives

Terex emphasized its strategic priorities centered around execution, innovation, and growth. The company is leveraging its Terex Operating System to optimize its global footprint and reduce fixed costs, while simultaneously investing in new product development, digital efficiency, and robotics.

The company’s strategic framework is outlined in this slide:

Terex also highlighted its commitment to U.S. manufacturing, noting that approximately 75% of its products sold in America are made in America. This positioning could prove advantageous amid ongoing global trade tensions and tariff concerns.

The company’s market analysis identified strength in waste and recycling, utilities, and infrastructure sectors, supported by government spending programs like IIJA (Infrastructure Investment and Jobs Act) and IRA (Inflation Reduction Act). However, it also acknowledged challenges including economic weakness in Europe, slow permitting processes, and potential IRA re-prioritization.

As shown in the market analysis slide:

Forward Outlook

Despite the mixed Q1 results, Terex maintained its full-year 2025 outlook, projecting net sales of $5.3-$5.5 billion, segment operating margin of approximately 12%, EBITDA of around $660 million, and EPS of $4.70-$5.10. The company also forecasts free cash flow of $300-$350 million with a conversion rate of approximately 120%.

The detailed 2025 outlook is presented in this slide:

The company’s backlog and bookings trends suggest a return to more normal seasonality, with sequential growth in both metrics providing support for the maintained outlook. The backlog coverage is described as consistent with historical norms.

Terex positioned itself for long-term value creation by highlighting its portfolio of market-leading businesses, reduced cyclicality through the ESG acquisition, balanced segments with strong synergies, and a new Operating System driving operational excellence.

The company’s stock was trading up 4.12% in premarket trading at $37.90, reflecting a positive market reaction to the maintained outlook despite the mixed quarterly results. Terex shares have traded between $31.53 and $68.08 over the past 52 weeks.

Full presentation:

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