25.10.2006

Terex group sales up 22 percent

The Terex group saw group revenues climb by over 22 percent in the first non months of 2006 reaching $5.6 billion, compared to $4.6 billion for the same period of 2005. Net income rose by around 95 percent to $299 million. The company now expects full year revenues to come in around $7.6 billion.

Ron Defeo Terex CEO said “We continue to be pleased with our results, and we remain optimistic about our performance going forward, the third quarter marks another modest step forward in our journey to become an industry leading company.

We reported operating margins that were 3.1% points greater than in the third quarter of 2005 and for the second consecutive quarter had an operating margin of at least 10.0%. But we also appreciate that these results highlight that there is much more potential in our business.

Terex will continue to make progress on our stated objective of improving our operations in a variety of areas, including supply chain management, distribution and lean process implementation.”

“In early 2004, we established stretch goals designed to transform Terex from an acquisition-driven holding vehicle into a true operating company that could grow dramatically without acquisitions while at the same time improving its margins and working capital ratios.

By the end of 2006, we expect that we will have substantially achieved these goals, although opportunities for improvement remain. We surpassed our $6 billion annual revenue goal for 2006 already last year, and we will significantly surpass that revenue goal for this year.

Even if we do not achieve our 10% operating margin goal in 2006, we still expect to exceed the earnings per share figure for 2006 that results from the objectives we set out in 2004. We also expect to continue to achieve 10% or greater operating margin in 2007. While our goal of attaining a working capital ratio of 15% of revenue appears challenging, we are working diligently to achieve this target,”

"This has not been easy work, but looking at our Company today we can see the opportunity for substantial margin, growth and productivity improvements ahead of us. The financial upside that still exists is sizable, and we will utilize our Terex Business System approach to continue to build our franchise.”

“Our Terex Aerial Work Platforms segment continued to have superb results, and we saw improvements in many of our other businesses. For example, the Terex Materials Processing & Mining and Terex Cranes segments continued to show rapidly improving results, reflecting the strength of global infrastructure demand, further aided by improved operating processes.

However, our Construction segment continues to lag behind our targets”.

“We have a mix of businesses that are less dependent on residential construction in the United States, where we anticipate at least several more quarters of decline. Many of our businesses depend on non-residential construction and are active within developing markets and the strengthening European countries. We feel that our product mix will help us deliver solid performance for several more years.