Terex order backlog drops but remains at 3x historical average
Materials processing backlog fell 35%
Equipment manufacturer Terex trimmed its order backlog in 2023 by 18% but the company’s surplus of orders still outweighs its supply.
Overall order backlog at the end of the fourth quarter was $3.4 billion, according to the equipment OEM’s earnings presentation. But that’s still three times as high as the company’s historical average, the company said.
“Overall, our backlog and booking trends are positive and give us a strong outlook for 2024,” Terex Chief Executive Simon Meester said in its earnings call, noting that its aerial work platforms (AWP) business “logged strong bookings in the quarter with a book-to-bill ratio of 129%. Overall, our backlog and booking trends are positive and give us a strong outlook for 2024 and our AWP business,” Meester said.
Backlog by the numbers
- Order backlog for the AWP business fell 9% YoY in Q4, to $2.6 billion.
- Materials processing (MP) backlog was down 35% annually to $767 million.
Annual sales jump
Q4 sales were consistent with Terex’s expectations, reflecting “healthy demand for our products as strength in North America offset some softening in European markets and deliveries returned to a more normal seasonal pattern, Senior Vice President and Chief Financial Officer Julie Beck said on the company’s earnings call.
- AWP annual sales were up 18% YoY;
- Terex Corp.’s overall sales were up 17% YoY to $5.2 billion.
- MP sales were up 14% YoY to $2.2 billion.
Looking ahead
Terex expects “healthy momentum” in 2024 due to a “strong order book” and lack of order cancelations, Meester said.
“Our sales outlook incorporates healthy volumes supported by customer demand, but also reflects caution around supply chain and labor constraints, as well as softening in Europe,” Meester said, noting that supply chain disruptions are “greatly improved” compared to the beginning of 2023.
“North America[n] underlying demand [is] very, very strong. in terms of activity. Our large customers in North America, they’re all very bullish,” he said. “They all feel that 2024 is another strong year.”
Shares of Terex [NASDAQ: TEX] were trading at $59.20 per share as of market close Monday, up roughly 0.6% or $.35 since market open. The company has a market cap of $4.3 billion.
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