Terex reported a challenging Q2 2020 with revenue down 47% year-over-year due to COVID-19 impacts, but markets stabilized and began to recover. The company achieved a 20% decremental operating margin through aggressive cost reduction actions and generated positive free cash flow of $71 million. Terex is focused on maintaining liquidity and managing costs in line with customer demand.
Second quarter sales stabilized, but were below pre-COVID-19 levels.
Terex delivered strong overall decremental margin performance of approximately 20%.
Over $40 million of SG&A costs were taken out in the second quarter, down 30% year-over-year.
Positive free cash flow of $71 million was generated in the quarter through net working capital reduction.
Terex expects revenue over the second half of 2020 to be approximately the same as the first half of this year. The company remains fully committed to aggressively managing its overall cost structure in line with reductions in customer demand, such that we maintain our decremental margin target of 25% for the full year for the Company as a whole and for each of our segments. Based upon current customer demand outlook and cost reductions, Terex expects to be free cash flow positive for calendar year 2020.
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