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Julie Beck

Thank you, Simon, and good morning, everyone. Looking at our fourth quarter financial results filed on slide 10. Total net sales of $1.2 billion were up slightly versus the prior year due to the addition of ESG. Sales in the legacy segments were down 17% and largely in line with our expectations due to industry-wide channel adjustments.
Gross margin of 19% reflects lower year-over-year margins in the legacy segment, partially offset by accretive margins from ESG. Volume, unfavorable manufacturing variances and mix in the legacy segments were partially offset by cost reduction actions. We reduced legacy SG&A expenses by $14 million or 10.4% year-over-year as we executed cost reduction actions and lowered incentive compensation. Operating profit was $97 million or 7.8%. Interest and other expense was $39 million, $24 million higher than last year due to interest on acquisition-related financing.
The fourth quarter effective tax rate was 10.9% compared to 18.7% in the fourth quarter of 2023 due to favorable jurisdictional mix and discrete onetime items. Earnings per share for the quarter was $0.77, and EBITDA was $114 million. Free cash flow for the quarter was $129 million compared to $135 million in the fourth quarter of 2023.
Turning to slide 11 for the full year results. Total net sales of $5.1 billion were generally aligned with 2023 as the fourth quarter addition of ESG offset a 4.9% decline in legacy revenue. Gross margin of 21.7% was 120 basis points lower year-over-year as volume and unfavorable mix in the legacy segment were only partially offset by cost reduction actions and the fourth quarter accretion from ESG.
We reduced legacy SG&A expenses by $18 million or 3.4% for the full year through cost reduction actions and lower incentive compensation. Operating profit was $582 million or 11.3%. Interest and other expense was $83 million, $20 million higher than last year due to interest on acquisition-related financing. The full year effective tax rate was 17.2%, 100 basis points better than the prior year due to favorable geographic mix.
Earnings per share for the year was $6.1. As Simon mentioned, that is the second highest in Terex history and EBITDA was $642 million or 12.5%. Free cash flow of $190 million was down from last year due to lower net income, including higher interest expense, increased net working capital and a onetime benefit in the prior year associated with the sale of the Oklahoma City facility.
Please turn to slide 12 to review our segment results, starting with AWP. AWP sales of $3 billion for the year represents 3% growth compared to 2023 with similar growth rates in Aerials and Terex Utilities. The year was characterized by a return to seasonal delivery pattern which we expect to be the norm going forward.
During this market transition, we were encouraged to see market share gains resulting from new products and other customer-focused improvements made by the team. Full year AWP operating margin was 11.6%, consistent with our third quarter outlook, fourth quarter margins were impacted by aggressive production cuts, product modes and unfavorable mix in aerials. The Genie team continues to optimize manufacturing footprint, drive operational efficiency and introduce a host of new products that maximize return on investment for customers.
Please turn to slide 13 to review MP performance. Full year sales of $1.9 billion were 14.6% lower than the prior year due to industry-wide channel adjustment. Combining with challenging macroeconomic factors in Europe, especially in the second half. On the aggregate side, we saw machines on rent longer than usual, impacting dealers' replenishment of new units.
The European market was weak all year, which was initially impacted material handling, cranes and eventually aggregates. Our US concrete and India aggregates businesses were bright spots, both growing in the fourth quarter. MP solid 13.6% full year operating margin was impacted by lower volume and unfavorable product and geographic mix, partially offset by cost reduction actions.
Please turn to slide 14 to review ESG. We were very pleased with the ESG's performance following the October 8 close. The business achieved 21.9% operating margin on net sales of $228 million representing meaningful growth and profitability improvement over the prior year period. Operational initiatives on both collection vehicle and compactor production contributed to the margin expansion. EBITDA in the period was $51 million or 22% of sales.
We are very excited about ESG's 2025 and future contributions to tariff. Please turn to slide 15. In the fourth quarter, we funded the ESG acquisition at favorable rates and terms and maintained our corporate rating. We continue to maintain a solid balance sheet and flexible capital structure with the right mix of secured and unsecured debt and variable versus fixed rates.
We can prepay or reprice a significant portion of the debt, and we do not have any maturities until 2029. We continue to have ample liquidity with a year-end leverage ratio of 2.6 times based on the calculation in our credit agreement. We plan to deleverage in future periods as we generate increased cash flow from operations and take advantage of cash tax benefits associated with the acquisition.
We will also continue to invest in our businesses, fueling organic growth and profitability improvement. We reported a return on invested capital of 19.4%, well above our cost of capital. Returning capital to shareholders remains a priority. In 2024, tariffs returned $92 million to shareholders through share repurchases and dividends more than offsetting equity compensation dilution.
We have $86 million remaining under our share repurchase authorization, and we will continue to buy back shares. Terex is in a strong financial position to continue investing in our business and executing our strategic initiatives while returning capital to shareholders. Turning to bookings and backlog on slide 16. Our current backlog of $2.3 billion includes a very healthy $520 million for ESG and $1.8 billion for our legacy businesses which is in line with historical pre-COVID norm.
As expected, we saw booking trends return to our historical patterns with the fourth quarter traditionally being a seasonally strong bookings period. Book-to-bill for the legacy business was 116%, led by Aerial's component of AWP at 153% as rental customers ramped up orders for 2025. We Moreover, the Genie team has secured sizable additional 2025 commitments from large customers in January.
We expect book to bill of greater than 100% and again in the first quarter, providing further support for our aerial 2025 outlook. MP has returned to its traditional book-to-bill cadence supported by reliable lead times with backlog coverage of approximately three months. ESG backlog of $520 million heading into 2025 is up 16% from the prior year.
Strong fourth quarter bookings of $255 million represents 112% book-to-bill supporting our growth outlook for ESG. Now turn to slide 17 for our 2025 outlook. We are operating in a complex environment with many macroeconomic variables and geopolitical uncertainties, and results could change negatively or positively.
With that said, this outlook represents our best estimate as of today and does not include the impact of any new tariffs or trade policy changes that are not currently in effect. We expect overall growth in 2025 with the full year contribution of ESG, anticipating net sales of approximately $5.4 billion, with a segment operating margin of about 12% and EBITDA of roughly $660 million.
Interest and other expenses will increase compared to 2024 due to acquisition-related financing to an expected full year total of about $175 million. We expect 2025 earnings per share of between $4.70 and $5.10 on lower legacy volume partially offset by accretive ESG growth. From a quarterly perspective, we anticipate a slower start to the year, delivering about 10% of our full year earnings per share in the first quarter as we continue to execute the corrective actions we deployed in the fourth quarter to set us up for the longer term.
We expect about 2/3 of the full year earnings per share over the middle two quarters. We expect a significant increase in free cash flow compared to 2024, anticipate between $300 million and $350 million in 2025 and driven by working capital reduction and a full year of ESG cash generation while continuing to invest in our businesses with expected CapEx of approximately $120 million.
Looking at our segments. During the first quarter, ESG was combined with Terex Utilities to create environmental solutions or ES. MP is unchanged and Aerials, which is our Genie business, will be reported stand alone. We will provide historical comparative information when we release our first quarter 2025 results.
Let's start with Aerial. We expect sales to be down low double digits compared to $2.4 billion in 2024. Excluding first quarter one-timers, we expect full year 2025 margins to be consistent with our 25% decremental targets. As a result, and consistent with historical seasonal patterns, we expect the second and third quarters to be the highest margin quarters. We expect MP sales to be down high single digits compared to the prior year.
Europe to remain generally weak, with North America starting slowly, then picking up steam as the year unfolds.
We anticipate MT to achieve decremental margins well within our 25% target. ESG had a strong fourth quarter, and we expect that momentum to carry into 2025, combining with utilities to generate mid-single-digit sales growth for the ES segment. IL RCV demand remained strong, and the Marathon team has implemented several commercial excellence programs that continue to drive growth in compactors.
Utility demand remained strong with backlog stretching into 2026. The 2024 comparable baseline for ES is revenue of $1.5 billion with an operating profit of 17%. We anticipate continued strong margin performance for ES in 2025 through new product introductions, operational improvements and synergy capture. With that, I will turn it back to Simon.

Simon Meester

P Thanks, Julie. I will now turn to slide 18. Terex is very well positioned to deliver long-term value to our shareholders. we have a strong portfolio of industry-leading businesses across a diverse landscape of industrial segments with attractive end markets. We will continue to demonstrate improved through-cycle financial performance as we integrate ESG and realize synergies across the company.
As always, I want to close by thanking our team members around the world. We have made great strides together, and we will continue to grow our company together. I am very excited about the road ahead for Terex. And with that, I would like to open it up for questions. Operator?

Question and Answer Session

Operator

(Operator Instructions) Jerry Revich, Goldman Sachs.

Jerry Revich

Congratulations on strong ESG performance out of the gate, what really stood out was the margin performance in the quarter and the year-over-year growth. Can you just talk about the sustainability of the margin performance we saw in the quarter, whether there's any payroll mix or any other pieces because that was -- look to be up significantly year-over-year as we come out the outlook heading into next year.
And the other dynamic is Hao has picked up significant share over the past post-COVID cycle. It looks like based on the bookings, it looks like that momentum is continuing, but wondering if you could just double-click on that for us, if you don't mind?

Simon Meester

Yes. No, thanks for the question. No, other than just they're firing on all cylinders. It's been a record year for them in terms of bookings, sales, deliveries new product introductions, throughput, they basically -- they can turn a bear chassis into a full-blown refuse collection trucking less than 60 days, which gives a big net working capital advantage to their customers.
So it's just an all-out success story, nothing really that helped them in terms of mix other than just great performance, and we see that carry over into 2025. They're literally firing on all cylinders. So we're very pleased with, obviously, ESG joining the Terex family, and we're very excited about 2025.

Julie Beck

And then really strong bookings in the quarter that points to a really strong 25% as well, Jerry. Very excited.

Jerry Revich

Super. And can I share let me just give you an opportunity to comment on the company's ability to move around the sourcing given every two days, we're looking at a different potential tariff picture. I think initially, when you were contemplating changes in the footprint you were targeting significantly more than 25% cost savings to make the investment move. So I'm wondering if you could just flesh that out for us, it's been a key topic over the past couple of weeks.

Simon Meester

Yes. Are you asking particularly about North America? Or what kind of tariff.

Jerry Revich

Yes, I apologize. Yes, the tariff picture in North America, given potential for tariffs to be implemented on Mexico and Canada. I just wanted to give you a platform to expand on what the company can do.

Simon Meester

Yes. Hopefully, it's been a bit of a roller coaster in the last couple of weeks. But yes, overall, I said that this in my opening remarks, at the end of the day, we're still a US-based manufacturer at the tariff level, we have 11 factories in the United States, one in Mexico, one in Canada. So the lion's share of what we sell in the United States we make in the United States.
But having said that, we have a lot of optionality to be very honest with you, Jerry, is no matter kind of what the outcome will be, if anything, will change. We run single shifts in most of our US factories. We can reroute demand across our factories. We source from the Monterrey facility from other facilities as well. So we have a dual source setup that we can play with. So we have a lot of optionality, but we're still very pleased with our Monterrey facility.
It's a world-class facility, state-of-the-art manufacturing, and we can use that facility no matter kind of what happens with the US landscape. But we like where we are from a -- from a competitive standpoint, the optionality that we have, we have multiple mitigation plans ready to go if the situation would change. And we think that if something like were to happen, that we would be able to mitigate most of it, and it wouldn't make a significant impact on our guidance either way. Thanks for the question.

Operator

Steven Fisher, UBS.

Steven Fisher

Best wishes, Julie. Congratulations Jen. I just want to start off by asking about the AWP order trends, how they came in relative to your expectations for the quarter? And kind of what you see your customers doing with their fleets this year? Is this sort of just a replacement year? Is it a bit of a shrinking? How do you kind of frame that?
I know you said you've secured some additional commitments in January. So like how important is the first quarter relative to sort of the seasonal picture of bookings? Was there something of more clarity that the industry got in January that enable those commitments?

Simon Meester

Great question. We're just going back to kind of normal pattern. So typically, we take most of our annual agreements in Q4 and in some and that's kind of where we're going back to. So in Q4, we secured a 153% book-to-bill. Very pleased with the order intake.
And then again, in Q1, we expect to be north of 10% so we feel really good about our sales outlook for aerials. And other than in terms of kind of the seasonality, we expect in 2025 to Q2 and Q3 to go back to being the -- traditionally the strongest quarters like it was pre-COVID.
And in terms of what our customers are telling us, yes, it is mostly replacement demand, to your point. But fleet utilization, still healthy levels. Fleets are not -- that age anymore, so where they need to be, but they have a strong project pipeline. They've been very transparent with us on kind of what they need and at what time they're going to need their product. So we just see the year going back to normal, if you will, and we're very pleased with our backlog and our coverage for the year.

Steven Fisher

Okay. That's very helpful. And then, I guess, on Europe, can you just give us a sense of kind of momentum there? Is it -- is it still getting weaker? Is it stabilizing? And any sense of what it will take to get that going a little bit more positively?

Simon Meester

Are you referring to Tier 2 general or aerials?

Steven Fisher

In general, across the business.

Simon Meester

Yes. Our expectation is that Europe is going to continue to stay soft in 2025. We do see some pickup. Some fleets are starting to age, for example, in handling some of our crushing and screening fleets start to age. So there's going to be some demand around replacement. But generally speaking, we are assuming a soft market for 2025. In terms of resi and commercial construction for sure, there's a little bit of pickup in civil in some of the European markets.
But overall, we see that the market will continue to stay soft. Now having said that, there are a couple of businesses that are showing signs of bottoming for example, we see some pickup in our cranes business. We see some positive quoting activity. We see some positive bookings. And then there are some bright spots like Saudi is a bright spot for us. So there are some markets that are doing slightly better. But as a general statement, we expect Europe to remain soft in 2025.

Operator

Tami Zakaria, JPMorgan.

Tami Zakaria

My first question is on the ESG outlook, up mid-single-digit percent you're expecting this year, which seems a bit lower than the high single-digit CAGR that business has seen historically. So what's driving that outlook? Is it including the legacy tax utilities business or just the ESG portion. Any color there would be helpful.

Simon Meester

It does include utilities. So those two businesses combined. And if you break it apart in ESG, as I said, firing on all cylinders to Julie's point, we have strong a record backlog coverage actually for ESG going into 2025. And then in utilities, we're still a little bit constrained on supply. So we're actually expanding capacity because we're now starting to quote into 2026 for our utilities business. So our focus on 2025 will be to just continue to ramp up production on the utility side, and that might just drive a little bit of caution in our revenue guide for ESG overall, but it's not because of ESG.

Tami Zakaria

Got it. That's very helpful. And then the other question is, I think I heard you say the first quarter EPS would be about 10% of the full guide. So could you just give us some pointers on how to model the first quarter in terms of the segments, especially AWP, I'm just trying to understand how to get to that 10% EPS for the three segments?

Julie Beck

Yes. So what we would expect, first of all, for the first quarter, again, 10% of our earnings per share would be in that first quarter. And we would think -- say that the revenues in our aerials business would be seasonally lower in the first quarter and as well we took production down in the fourth quarter, which impacted margins.
And Simon refers to it as a speed bump like -- and we will continue to do that in Q1 to more -- to match production with our demand. So production will be lower in the first quarter for our Aerials business. MP it will have a lower first quarter as well. They will continue to improve throughout the year and they'll perform well within our 25% decremental targets.
And the ESG business is just going to be strong and steady throughout the year, consistent performance throughout the year. So that's how we expect to see the year unfold and particularly but Q1 will primarily be impacted by some lower volumes, both in MP and the aerial segments and some lower production volumes.

Operator

Steve Volkmann, Jefferies.

Steve Volkmann

All right. Just to follow on Tammi's question there. Julie, your comments about lower you talking about lower year-over-year in the 1Q? Or is it actually sequentially lower than the fourth?

Julie Beck

Yes. So we are going to be lower year-over-year and fairly consistent from Q4 to Q1 in terms of production.

Steve Volkmann

Okay. Great. And then maybe, Simon, a couple of kind of real bigger picture questions. I'm curious if you have any comments to what you think is happening with the AWP cycle? Are we in sort of a lull here and it starts to regrow going forward? Or do we have sort of a more protracted downturn, just any kind of views from your seat would be great.

Simon Meester

Yes. So obviously, we're not ready to guide for anything beyond 2025. So I'm mostly going to talk about 2020 -- sorry, 2025, we can't -- we're not ready to talk about 2026, but overall, we're seeing US to remain resilient in Europe and the rest of the world to remain soft. That's the story for us, 2025 megaprojects, main tailwind in the US.
We do see spending on the large projects continue to grow, although at a lower pace, but infrastructure and now with manufacturing onshoring will continue to be a tailwind for us, and that will carry forward. We see positive customer sentiment, strong project pipeline but yes, there could be upside if interest rate will come our way in private, more local, smaller projects will start to pick up again. But for 2025, it's mostly replacement demand, and that's what drives our kind of compressed outlook for aerials. And then we'll have to see what happens going into 2026.

Operator

Jamie Cook, Truist.

Jamie Cook

I guess just two follow-up questions. One, just on ESG. Just trying to understand how you're thinking about the accretion of ESG in 2025 relative to when you announced the deal. And you talked about double-digit accretion. It doesn't sound like anything's changed given the performance in the quarter and what you've seen in bookings, but I just want to clarify that because it's hard to back into it the way you guided and then I guess just my second question on the Aerials business understanding.
You had strong orders, I think you said in January, and we expect normal seasonality and Simon, just trying to understand to what degree. How you're thinking about pricing and giving yourself flexibility, I guess, if we do get into a situation where tariffs become an issue. I mean, I think tariffs under Trump's last administration managed very well in terms of like price cost and managing that, but just wondering how you're thinking about managing the business and getting these orders with tariffs potentially on the come.

Simon Meester

I'll let Julie take the first part, and then I'll take the second part.

Julie Beck

So the ESG again, great fourth quarter performance. We expect and there's no change from when we announced the ESG and brought them in, in October. We expect continued solid performance for ESG and then to be a accretion to our earnings, and we expect them to do really, really well, and nothing has changed. We even feel better because of the great performance in the fourth quarter and going into 2025.

Simon Meester

Yes. And on the tariff pricing side, if tariffs were to come our way and -- that's obviously a big if, and we can only speculate. But our aim would be to mitigate this ourselves first and foremost. That would be that would be the angle. And we think we can mitigate a big piece of it depending on what kind of tariffs we will have to deal with.
So our aim will be to obviously stay disciplined on pricing. We aim to be price cost neutral and there's still inflation other than tariffs in our industry, material, freight and labor -- so we want to stay disciplined on pricing. But when it comes to tariffs, our first approach will be to mitigate as much of it ourselves.

Jamie Cook

And before you cut me off, Julie, I just wanted to say thank you for all your help, and congrats on a great performance and congrats to whatever is ahead. Thank you.

Operator

David Raso, Evercore ISI.

David Raso

Congratulations, Julie. I don't want to make this a math question, but given the moving parts, the lack of the restate, I apologize in advance for the math here. Can you -- I don't understand the decremental margin commentary on the segments, the down within our 25% target. To help me get a better sense how that's possible, what is the operating margin you're assuming ESG Dover has, the stand-alone business, don't blend it with the utility. So the business that just reported 21.9% for the quarter, I know it was a stub quarter, what are you thinking that business stand-alone EBIT margin would be for '25?

Julie Beck

David, we would expect ES margins to be -- the ESG merchants to be comparable in 2025 split of 2024 with the stub number,

David Raso

With that stub number?

Simon Meester

Yes.

David Raso

Okay. So again, I apologize in advance, but we have a lot of moving numbers here. We don't have normal detail. If you strip out ESG Dover, you have 2024 revenues, $4.9 billion and take out the $50 million of EBIT, right? So the EBIT is 532, 10.9% margin. I want to look at legacy-legacy. Then we have a guide of $5.4 billion, but roughly $900 million is ESG Dover.
So legacy-legacy, it's $4.9 billion of revs going to $4.5 billion. If I look at the EBIT implied for 25 all in, right, 12% margins on the 5.4, take out the $75 million of corporate expense. So we're at $573 million of EBIT all in. But if you pull out the $900 million of revenue from Dover and pull it out at a 21.9% margin it's implying the legacy company had decrementals of 39. So how does AP and MP, say, we're 25% decremental margins? So again, I apologize for all that math. But again, the decrementals legacy appear to be closer to 40% than the 25% you're implying. And again, I apologize, but that is the math. So I'm just trying to understand.

Julie Beck

So David, thanks for the question. So what we're talking about and what we had in our remarks is that again, we have some spillover into Q1 in our aerials business where we're taking production down to meet demand. And what I indicated is that from Q2 to Q4, that business will be within our 25% decremental margin targets from Q2 to Q4. As far as our MP segment, they will be well within our 25% decremental for 2025.

David Raso

Okay. So AWP decrementals for the full year, and again, I know it's just a bad start, but for the full year, they're down whatever, 50% decrementals for the year. It's just saying, hey, all that pain is in the first quarter, and then we kind of get within our normal trajectory of decrementals after that. That's the key wrinkle there.

Simon Meester

We don't get those numbers -- but directionally, you're correct.

David Raso

Okay. Really appreciate. And lastly, on the orders for '25 on AWP any sense of price or even price cost? Just trying to get a sense of the comfort of improving those margins after the first quarter. just a better sense of why the decrementals would be so much better the rest of the year.

Simon Meester

Yes. Just it's obviously a big volume tailwind Q2, Q3. That's where most of the margin improvement will come from. We expect to be in the double-digit range again in both in Q2 and Q3 and a lot of that will be volume. But when it comes to pricing, we obviously don't call out specifics, but the aim is always and will be -- and will continue to be price cost neutral and that's where we want to be for 2025 as well.

Operator

Mig Dobre, Baird.

Mig Dobre

Julie, all the best to you going forward. I want to ask an MP question here. When I was looking at your outlook, one of the things that stood out to me is that you expect MP to decline less than AWP, but arguably speaking, to orders and backlog pressure is maybe even greater here in MP.
So I guess what I'm wondering is, why is that the case? How do you think about demand, just outright customer demand as the year progresses? It seems like you might have some improvement baked in here? And then on Q1, how should we think about this segment relative to what you were -- you put up in Q4 from a margin standpoint?

Simon Meester

All right. I'll take the first part of the top line and then I'll let Julie talk about the bottom line. So a good question, Mig. Yes, backlog coverage compared to the other two legs of the stool, seems a little less favorable. But don't forget, it's mostly a dealer model. So we have pretty, pretty strong forward in NPE. So we're pretty strong forward visibility. And historically, has been, if compared to the other two segments. More of a book-to-bill business with one quarter forward visibility.
But what we do see is I mentioned that Europe is soft in United States has more upside for us. We do see some more positive quoting activity we do see a pickup in orders actually going into the first quarter. We do see fleet utilization is still high in the EMP fleet and fleets are aging.
So if you just combine all those elements, underlying demand is strong, inventories where they need to be fleet utilization is still high, fleet starting to age, combined with what our dealers are telling us and what our quote activity and our bookings are saying go into Q1, we feel comfortable with the guidance we have on MP. But yes, in terms of backlog coverage, the lowest of the three segments that we have.

Julie Beck

And from a margin perspective, maybe the MP business in 2024, down 15% in sales and maintained 13.5% margins their margin performance continues to be strong. In terms of Q1, I would -- the margins will be fairly consistent with Q4. That's what I would use for modeling purposes going forward. And we expect them to do really well in this year again to be well within the 25% decremental.

Simon Meester

I would just add one more point there. Thanks, Julie. Is that the current guide kind of assumes MP bottoming in Q1 and then sequentially improved every quarter throughout 2025. That's the current model for MP.

Mig Dobre

Okay. That's very helpful. My follow-up goes back to the discussion around tariffs. And I guess the way I kind of interpreted your comments was that you would be looking at potentially changing your manufacturing footprint as a result. If that's the case, I do wonder what that does structurally for your margins because as I understood it, your investment in Mexico was really kind of the fundamental for improved margins in AWP longer term. Is that no longer the case?

Simon Meester

I didn't mean to imply that we were going to change our footprint. We might -- we have multiple options one of them being to repurpose the facility. One could be to ramp up, just ramp up shifts in -- or double -- go to double shifts in the United States. Another could be to reroute demand. So I didn't mean to imply that we're changing anything on our footprint.
We just have the optionality to move production around to move demand around and to flex productivity in each of our facilities in terms of phone to double shifts or single shift. So it didn't mean to imply that we're going to change any brick-and-mortar or not.

Mig Dobre

But what about the margin issue here?

Julie Beck

I mean, so Mig, the Aerials team is working on all sorts of initiatives today. New products productivity improvements, footprint optimization, cost out actions that continue to improve margins long term as well. And that the Monterrey facility is certainly -- is a lower-cost facility and has performed really well for us and we would continue to use that facility and just use it for other regions if -- depending upon what happens, we're just scenario planning here but we would continue to be a part of our footprint.

Simon Meester

It's a very competitive facility and we can serve other pockets of the world from Monterrey if need to.

Operator

Kyle Menges, Citigroup.

Kyle Menges

Congrats, Julie. I just wanted to dive deeper into the ESG margin comments. So if I heard you guys correctly, it sounded like ESG margins guiding to kind of flat year-over-year. So I'm just confused, I guess, like why it wouldn't be a bit better if you're assuming growth for ESG and then some synergies as well. I guess what synergies are embedded in the guidance? And has the magnitude or timing of synergy capture changed at all since you announced the deal?

Julie Beck

Yes. So thanks for the question, Kyle. So first of all, we remain very confident and pleased with the ESG acquisition, really, really pleased with our performance. And we talked about that we would have $25 million of run rate synergies as we exit 2026. And so that we are still well on target for that.
We have visibility to that, and it's very early in our teams are working together. There are eight teams, as Simon mentioned, working on integration, we're really pleased, but it's early for us to come out and change synergies. I'll say that we're very pleased and things are on track. And so I can comment that on synergies. And then for the ESG segment going forward, we're talking about continued strong performance in 2025 and really strong operating margins for the full year.

Kyle Menges

Okay. And then just a quick math follow-up question, apologies in advance, but just looking at the guidance. So if I take the I guess, the midpoint of revenue and op margin guidance, I'm getting to, I think, adjusted operating margin around [$575 million] and then adding back the D&A, I'm getting to EBITDA around [$735 million] versus the EBITDA guide of $660 million. So is that $660 million number for EBITDA and unadjusted number? Or is that kind of the delta that I'm missing?

Julie Beck

The $660 million would be an adjusted number.

Operator

Tim Thein, Raymond James.

Tim Thein

Great. Maybe just -- we'll wrap it up in two combined questions on the ES business that was just acquired. So the high-end business. The first is just from a customer mix standpoint, and I forget if this came up when you announced the deal on the call. But post COVID, it seems that bulk of the deliveries in terms of -- on the refuse side have been tendered more into the big four major players.
And I'm just wondering as chassis availability improves, is there more of a broadening out in terms of -- from a customer mix perspective, does that benefit the company in terms of potentially shifting more to local refuse operators in terms of who's getting those deliveries. So maybe that's question one on the customer mix.
And then on the technology, it seems, at least from what we've heard from the operators that this third eye technology is really well regarded and respected I'm wondering if there's opportunities for Terex to potentially leverage that across other parts of the organization. I don't know if that's feasible, but just curious if that's something that you've explored since taking over the business.

Simon Meester

Yes, great question. So the first part, yes, we don't see a meaningful change in customer mix in 2025. Chassis do become more available and most of our customers buy their own chassis, and they don't -- they're not part of -- they are not on our balance sheet. So one of the things that the Ohio team is really great at is turning that around, as I mentioned in my -- I think earlier on in the Q&A into a workable product in this list less than 60 days, which is a real competitive advantage and particularly, that helps with the larger customers.
But overall, I don't see a meaningful change in customer mix in 2025. Yes. And then on third -- I mean it's a great product. It's a differentiated product. We have great adoption of it, and there are a lot of opportunities to replicate that across the Terex portfolio. As a matter of fact, we are working on that right now. We make concrete mixers and we make utility trucks. And all of those have use cases and applications where we can where we can deploy the third eye solution. So yes, very much so a synergy opportunity for Terex across our entire portfolio. Thank you.

Tim Thein

Best wishes to you as well, Julie

Operator

That concludes our Q&A session. I will now turn the conference back over to Simon Meester for closing remarks.

Simon Meester

All right. Thank you, operator. If you have any additional questions, please follow up with Julie or Derek. Thank you for your interest in Terex. With all the weather, especially here on the East Coast, I hope you stay safe and warm. And with that, operator, please disconnect the call.

Operator

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.