Capital Equipment News September 2019

MS: You have also had a big people focus. What sort of initiatives have you put in place in that regard and why is the people factor so significant to the company? PD: We are always looking to upskill our team, not only in their core subject matter areas, but also in areas which focus on our core values of Safety, Quality and Environ- ment. A couple of examples include: Lean business training: we have em- barked on a series of Lean Business development programmes for a wide cross section of our team – shop floor and office based. We are training them in lean meth- odologies, and part of the training included live projects which will benefit the customer and the business. The Lean Business devel- opment is similar to general lean method- ologies and six sigma activities, where we now have team members trained at various “belt” levels (white, yellow, green) and continuing to progress. Led by our Quality function, this is a business-wide activity that will touch most of our team. CARE programme: This is a multi-faceted activity which will continue to move us on the journey of safety and quality, and also continue to develop our focus on our team members’ wellbeing, engagement and com- munication. The programme will run for sev- eral years, and includes four main elements – Engagement / Communications / Control method of work / Health & Wellbeing. With help from external experts, we have consulted with all of our team mem- bers and devised a programme under these four areas, where we will all participate, grow and develop to make safety, envi- ronment and quality always our primary focus. The other important dimension is the health and wellbeing of our team, and we recognise that we all need to learn and develop to look after our physical and mental health, and some of the people development is in these areas. MS: There has also been a massive investment in the product itself. Take me through some of the commitments in this regard. PD: The very first product launch under Volvo CE came in the form of the Gen 10 series, which we unveiled in 2016. With our undivided focus on the articulated hauler, the only product Terex Trucks manufactures, we have the competitive edge of being able to focus all our attention on this machine and that was demonstrated by the launch of the upgraded TA300 at bauma 2019. The design of the upgraded TA300 focused on lower total cost of ownership, which is an important parameter for our customers. A major talking point is the

across the world. We have been working hard to further capacitate our footprint, with several new dealers appointed recent- ly in some of the key territories. One of the developments that happened when Volvo CE acquired Terex Trucks is that we started sharing dealers in some regions. In total, we had 12 existing Volvo dealers taking on the Terex Trucks product. We have recently taken a deliberate, strategic move to separate the brands in territories where we shared dealers with our parent company. This is aimed at giving Terex Trucks a clean commercial break, to allow the brand to compete in its own right. We have already done that in 10 of the 12 territories. PD: My view is that it is very difficult to read the market at this stage, but the overall picture is that there is a general slowdown across board. Africa, for exam- ple, has been slow in recent months, with major markets like South Africa affected by declining coal prices. However, Europe has been level, with a slight growth recorded. On the other hand, the North American articulated market remains buoyant, with an 18% year-on-year growth in 2018. North America remains a very important market as it constitutes half of the global articulat- ed hauler market. In terms of size, the global articulated hauler is currently around 8,000 units per year, with North America taking about 3 900 units, translating into 49% of the global market. EMEA takes around 3 000 units per year, while Asia is about 1 000 units per year. MS: Just how important is the African market to Terex Trucks? PD: Africa is a very important market to Terex Trucks. We have had great success in southern Africa, where South Africa remains the main market in the region and the continent at large. We have also had pockets of success in markets like Botswa- na and Zambia. Elsewhere, Nigeria and Algeria have always been strong markets for us. In Algeria, we were the market leader in rigids when we still had the range. We are also rep- resented by a very strong dealer in the market. With a total of 12 capable dealers, we remain committed to the African market. With its busy infrastructure project pipeline and a big mining industry, we will further strengthen our presence in this key region and reinforce our commitment to customers to deliver reliable articulated haulers that get the job done. b MS: How are you finding the market at this stage?

5% improvement in fuel efficiency, as well as enhanced performance, productivity and operator comfort. It also now comes with long life transmission fluid, which has helped to increase the length of time between oil maintenance intervals from 1 000 to 4 000 hours. A key feature is the new EP320 trans- mission, which comes with two additional forward gears – eight in total – as well as four reverse gears. This helps to ensure smoother gear shifting and thereby greater operator comfort. The hauler’s maximum speed has also in- creased to 55 km/h, up from 50 km/h. This means that customers can now achieve faster cycle times, reduce their cost of operation per tonne and minimise their fuel consumption. PD: At Terex Trucks, we are fortunate to be part of Volvo CE, where resources are deployed to focus on key areas for future development. These include electromobili- ty, connectivity and autonomous machines. Leveraging Volvo Group's strengths and advances in these areas, we will consider how we can incorporate these technologies in our product development strategy, at the appropriate time. For us, in the immediate future, our focus is on connectivity. Electrification of equipment has been around for years, but the move towards battery-operated equipment is gathering pace and it’s the next step in every forward-thinking manufacturer’s journey. However, we will be a follower in that space. Another key area of immediate focus is the incorporation of Stage V engines for the European market. We have already made progress in that regard and we ex- pect to roll out some of our products pow- ered by these engines by mid-next year. From a product point of view, obviously we are thinking about the next generation of trucks. Obviously the key design focus areas will remain safety, environment, operator wellbeing and cost of ownership. We are also thinking about the sizing of our articulated haulers. What do our customers require from a size perspective? For example, we see a growing preference of the >40 ton articulated hauler as the move towards bigger sizes in the articu- lated hauler market gathers pace. We are investing in research and development to be able to respond to customer needs. MS: You have also had a big focus on your dealer footprint. Tell me more about it. PD: We currently have 87 dealer partners MS: What are some of the key focus areas of the future?

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