“We made significant progress in 2012. Our primary goals were margin improvement, cash generation and the integration of Demag Cranes AG. We made excellent advancement in these areas and more during the year,” commented Ron DeFeo Terex Chairman and CEO. “We were impacted in the second half of the year by challenging end markets in Europe and Asia but we still meaningfully improved our profitability, generated approximately $554 million of free cash flow, restructured and reduced our debt, and began to realize integration savings as planned.”
Mr. DeFeo continued, “We are optimistic about our business as we begin 2013. We are seeing improvements in many of our end-markets and believe the macro-economic uncertainty that affected our fourth quarter performance will abate by the middle of 2013. Three segments performed well in 2012 and we expect this to continue in 2013. Our Aerial Work Platforms (AWP) segment is continuing to benefit from North American rental channel demand. Cranes performance is expected to remain strong in North America and in certain developing market regions. The Materials Processing (MP) segment performance remains solid. Both the Cranes and MP segments delivered double digit operating margin in the fourth quarter of 2012.”
“The remaining two segments did not perform as well in 2012. We have made good progress with the integration of our Materials Handling & Port Solutions (MHPS) segment. Full year 2012 EBITDA as adjusted for MHPS was approximately $101 million. Benefits are expected from cost synergies globally to help offset weak European markets. In 2013, we expect to exceed the originally targeted $35 million in annual savings and weak markets should stabilize later in the year. The benefits of the big port projects we have won are also expected to be seen in our results in the back half of 2013 and 2014.
“We continue to take strategic actions in our Construction segment. We recently announced an agreement to sell or exit the majority of our roadbuilding product lines. In addition, we plan to exit a number of compact construction component manufacturing businesses in Germany. Many of these businesses were generating poor returns and we expect these actions to improve operating results as the year progresses. We will continue to rationalize costs in our Construction businesses while pursuing non-traditional distribution channels such as the recently announced supply agreement with Takeuchi.”