Terex Corporation — Third Quarter 2026 Earnings Summary

Financial Performance:

• Consolidated sales reached $2.2 billion, representing a 12% year-over-year increase; on a proforma basis, sales grew 11.6% ($229 million) as growth in Aerials, MP, and SV offset lower sales in ES.
• Adjusted EBITDA rose 14% on a proforma basis to $286 million, with an adjusted EBITDA margin of 13.0% compared to 12.8% in the prior year.
• Adjusted diluted EPS was $1.50.
• Operating cash flow was $241 million, and free cash flow was $209 million.
• Net working capital decreased to 15.0% of sales from 18.1% a year ago on a proforma basis, driven by lower inventory and the merger with REV Group.
• Net debt stood at $2.2 billion at quarter-end, including $407 million in cash on hand, resulting in a net leverage ratio of 2.3x net debt to 12-month adjusted EBITDA on a proforma basis.
• Capital expenditures were $32 million for the quarter.
• The company returned $91 million to shareholders, comprising $72 million in share repurchases and $19 million in regular cash dividends, while paying down $113 million of debt.

Guidance and Future Outlook:

• Full-year 2026 proforma sales outlook is refined to a range of $8.0 billion to $8.2 billion, reflecting typical fourth-quarter seasonality.
• Full-year 2026 adjusted proforma EBITDA is expected to be between $930 million and $960 million, representing an 11.7% EBITDA margin at the midpoint.
• Full-year 2026 EPS is projected to be between $4.80 and $5.00.
• Free cash flow outlook for 2026 is raised to a range of $360 million to $400 million.
• Full-year 2026 capital expenditures are now expected to be $145 million.
• The effective tax rate for the full year is now 19%.
• Interest and other expenses are anticipated to be approximately $180 million based on average debt outstanding of $2.6 billion.
• The outlook includes approximately $28 million of realized synergies.
• Order activity showed a 53% year-over-year increase on a proforma basis, with consolidated book-to-bill at approximately 103%.
• Consolidated backlog reached $7 billion.

Business Segments and Product Lines:

• Environmental Solutions (ES): Sales decreased 8.0% year-over-year to $400 million; adjusted EBITDA margin was 15.3%, down 390 basis points. Bookings increased 14% year-over-year to $445 million, with ESG bookings reaching a seven-quarter high. Utilities demand remains healthy, though production ramp-up inefficiencies continue.
• Materials Processing (MP): Sales grew 11.3% to $434 million; adjusted EBITDA margin expanded 530 basis points to 19.3%. Bookings grew 41% to $511 million, and backlog nearly doubled to $676 million, a two-year high.
• Specialty Vehicles (SV): Sales rose 8.1% to $657 million; adjusted EBITDA margin improved 300 basis points to 16.0%. Bookings increased 30% year-over-year to $665 million, with backlog growing despite an 8% increase in throughput and sales.
• Aerials: Sales grew 32.0% year-over-year to $709 million; adjusted EBITDA margin was 8.7%, up 300 basis points sequentially but down 180 basis points year-over-year. Bookings surged 194% year-over-year to $646 million, with backlog increasing to $852 million.
• Product Launches: Heil introduced a next-generation automated side loader for residential refuse collection; Finlay launched the "Elektro" range of hybrid crushing equipment.
• Brand Milestones: Celebrated the 60th anniversaries of Powerscreen and Genie, and the 50th anniversary of Road Rescue ambulances.
• Portfolio Simplification: Exited the Capacity and Laymor businesses to reduce complexity and cyclicality.

Market and Competitive Landscape:

• Demand drivers remain attractive across infrastructure, utilities, power, and data centers.
• Municipal replacement demand supports fire and emergency equipment in the United States.
• U.S. commercial and residential construction remain below historical levels but have largely stabilized; Europe shows mixed results.
• Refuse collection vehicle demand is improving sequentially.
• Aerials growth was driven by national account demand in the U.S. associated with large infrastructure projects.
• MP demand was supported by healthy equipment utilization, particularly for mobile crushers and screeners in the U.S.

Risks and Challenges:

• Tariffs and inflation continue to create meaningful pressure across the industrial sector.
• ES segment profitability was negatively impacted by unfavorable mix from higher Utilities sales, production ramp-up inefficiencies at Waukesha, and lower-volume absorption.
• Aerials margin was partially offset by unfavorable customer mix, tariffs, and inflationary pressures.
• Forward-looking statements are subject to risks that could cause actual results to differ materially, as detailed in SEC filings.

Management Commentary and Tone:

• CEO Simon Meester stated that the company delivered higher sales, adjusted EBITDA, and cash flow while expanding margins and strengthening the balance sheet.
• Management noted that integration activities are maturing, shifting focus toward value capture, operational improvement, and synergy realization.
• The tone regarding the Aerials separation process is confident, with active engagement with multiple strategic counterparties and a focus on maximizing shareholder value.
• Management expressed confidence in the long-term opportunity to accelerate earnings in ES despite near-term ramp-up inefficiencies.
• The company emphasized a commitment to product development, innovation, and simplifying the portfolio to direct investment toward businesses with stronger market positions.

Analyst Questions and Answers:

• No specific analyst questions or answers are included in the provided press release text.

Other Key Points:

• The Board approved a new $500 million share repurchase authorization, bringing total repurchase capacity to $611 million ($111 million remaining from the prior authorization plus the new $500 million).
• The Aerials separation process has moved from evaluating inbound interest to active engagement with multiple strategic counterparties; no specific timeline or counterparty details were provided.
• The company is expanding capacity at the Brandon facility for SV, with the first units expected to ship in the fourth quarter to reduce lead times.
• The Waukesha facility is transitioning from a service center to a full installation facility.
• Genie's next-generation slab scissor lifts were named product of the year in the scissor lifts and vertical masts category.