Simon Meester: We do expect to have upside in our capacity, yes.
Steve Barger: Can you frame magnitude at all?
Simon Meester: No, I can’t.
Steve Barger: Okay.
Julie Beck: I mean, we think about it, Steve, that we have the ability to add shifts, et cetera, so capacity can go in step functions as well. So, it’s not always easy to review that…
Simon Meester: Yeah. I mean, we’re running single shifts in most, if not all of our facilities, But I can’t give you a hard number now.
Julie Beck: And when we think about it, Steve, we have strong years in 2023 and 2024. And as Simon indicated, customers are talking about 2025.
Steve Barger: Right. Okay. And if we step back from near-term margin issues that you talked about, if revenue runs in this low to mid $5 billion range, what kind of margin expansion can you drive from efficiency programs? And again, I understand the near-term issues, but do you think there is 50 basis points of productivity or 10 basis points or 100 basis points? What’s achievable from continuous improvement?
Julie Beck: So, Steve, as part of a manufacturing company, continuous improvement needs to be part of our DNA. And when we talk about, we gave out some pretty nice investor targets of where our margins improved from 2022 and we’re at this point, as we said in our prepared remarks, we’re slightly ahead of our Investor Day target, so we — at this point in time. So, we continue to think that we can have sequential margin improvement as we grow.
Steve Barger: Understood. Thank you.
Simon Meester: Thank you.
Operator: Your next question comes from the line of Tim Thein with Citigroup. Your line is open.
Tim Thein: [Technical Difficulty] On the impacts from pricing and what do you expect in 2024, I guess relative to cost and what that — how you expect that fares relative to what you experienced in 2023?
Simon Meester: Yeah. Thanks, Tim. Yeah. So, we still see inflation in 2024, although lower inflation levels that in 2023. Our position is still the same. And obviously, we’re staying very close to our customers on this. We stay very transparent. But our goal is to stay price/cost neutral, to keep pushing ourselves on continuous cost-out to ease the impact on our customers also — but also to continue to improve our operating margins. And so, we do see some inflation, although lowering, but especially in — actually, across the board, steel, labor, integrated components, but also logistics, we definitely still see inflating input cost for 2024, although at a lower level than in 2023.
Tim Thein: Okay. But — okay. Presumably, it was a — was it a tailwind for Terex in 2023 or is that just…
Julie Beck: So, Tim, we would say that we’re price/cost neutral and then the other margin improvement comes from cost-out and continuous improvement.
Tim Thein: Okay. Understood. And then maybe just on MP, I don’t think we — there were any comments just on the largest business with aggregates. Just what the outlook — what you have in terms of what’s assumed in 2024? There’s always — there can be some movement there in terms of whether the dealers are adding or shrinking their rental fleets. So, maybe just a comment or two in terms of the outlook for aggregates, which I know is more of a global business, but how you see that shaping up in ’24? Thanks.
Simon Meester: Yeah. Thanks for the question. Definitely strong tailwinds in North America for our aggregates business, a little bit of headwinds in Europe. But with the spending in infrastructure, with the construction going on in North America, definitely benefits our aggregates business in North America, but a little bit of slowdown in Germany and UK is working against it.
Tim Thein: All right. Thank you.
Julie Beck: Thanks, Tim.
Operator: Your next question comes from the line of Jerry Revich with Goldman Sachs. Your line is open.
Jerry Revich: Yes. Hi, good morning, everyone. And Simon, congratulations again.
Simon Meester: Thanks.
Jerry Revich: Simon, I’m wondering if we could just go back to your comments earlier on the call around M&A parameters. You folks have been looking for additional bolt-ons within MP for a couple of years, and you haven’t been able to find anything that matches the value proposition for you folks. How’s the approach for evaluating M&A today compared to what we’ve been looking at over the past couple of years? It sounded like you alluded to potentially a few additional product lines. I’m wondering, can you just expand on your prior comments in terms of what’s — how do you view what’s accretive and the parameters of what you folks are evaluating going forward.
Simon Meester: Yeah. I mean, if I look at our portfolio today, we have a portfolio of market-leading businesses around the globe, diverse, definitely strengthening each other. Strong operating margins, all of our businesses pretty much run into double digits now. Strong balance sheet, so obviously, that gives us the optionality. We’re looking at anything that would make us stronger, would — as I mentioned earlier, would make us more synergistic, would widen our moat, would help us grow faster, but it’s going to be opportunistic in nature. It needs to be actionable, needs to be affordable, needs to be financially accretive. And then again, I want to reemphasize, we also still have a lot of opportunities to look just organically at expanding our businesses, because we still have a lot of addressable market that we can go after with our existing portfolio.
