Equipment manufacturer Terex Corporation posted an increase in total backlog orders in 2022 as demand held steady across its aerial work platform and material processing segments.
The company reported a record $2.9 billion backlog for their aerial work platforms (AWP) to end 2022, up 26.8% year over year and exceeding current capacity. “We’re working with our customers, frankly, in the AWP segment, right now,” Chairman and Chief Executive John Garrison said during the company’s earnings call. “The customers are asking for more than we can currently deliver.”
The equipment manufacturer also reported a materials processing (MP) backlog of $1.2 billion, up 12.1% YoY, according to the company’s earnings call. “We’ve got almost three times the normal level of backlog in this business as we look forward into 2023,” Garrison said.
Total backlog at the end of 2022 was $4.1 billion, up 22.2% YoY, “demonstrating the strength of our end markets and giving us visibility into 2023,” Julie Beck, senior vice president and chief financial officer, said on the call.
The company’s visibility on its backlog extends into 2024, Garrison noted. “We have historically high backlogs as we go into the year; if you look at our coverage for 2023, our backlog stand is already $700 million for delivery in 2024,” he said. “A lot of that is associated with supply chain.”
Demand holds strong
Supply chain constraints and economic uncertainty have yet to dampen demand, Garrison said.
“We’re not seeing cancellations and pushouts,” he said. “We acknowledge there’s macroeconomic uncertainty out there, but despite that, we’re seeing strong bookings, great backlog and great visibility as we look into 2023 in the MP segment.”
Sales increased in the fourth quarter on the coattails of order backlogs, landing at $1.2 billion, an increase of 23% YoY, according to the company. Full-year sales clocked in at $4.4 billion, an increase of 13.7% YoY.
“The strength really comes from the global presence of the businesses,” Garrison said. “If we look at it, we’ve seen strong sales, healthy bookings, elevated backlogs.”
Investing in electrification
Terex “continued deployment of digital customer and dealer solutions” in 2022 and look to continue digitization investment in 2023, according to the earnings presentation.
“We’re going to invest in digitalization and we’re going to invest in people traveling again — trade shows and things like that,” Beck said. The worldwide data center construction market is expected to grow by more than $350 billion by 2030, according to Precedence Research.
Terex also plans to step up its investment in electrification and recently launched the first-of-its-kind, all-electric utility vehicle, according to the presentation.
“You’ll continue to see a transition to [the] electrical side; part of the investments that we made last year in Viatec and Acculon [Energy] were designed to help accelerate our electric offering as we go forward,” Garrison said on the call. “We’re going to see more of it in the current backlog, not substantially different than historical, but an increase in the electrical products.”
Shares of Terex Corp. [Nasdaq: TEX] were trading at $57.10 at market close today, down 1.48%, or $0.85, from market open. The company has a market capitalization of $3.719 billion.