Terex’s Environmental Solutions Group exceeded first-year integration targets, delivering above $25 million in run-rate synergies, driven by refuse truck production, the company reported in a Q4 2025 investor call.
The specialty equipment manufacturer’s Environment Services segment generated $1.7 billion in 2025 full-year sales with 18.8% operating margins on an adjusted basis, CFO Jennifer Kong-Picarello noted, a 220-basis-point improvement year over year on a pro forma basis.
Integration synergies
Terex acquired ESG in July 2024 in a $2 billion all-cash transaction.
Simon Meester, Terex CEO, said the synergies created through the acquisition have catalyzed momentum in the segment, adding that the company doesn’t anticipate it “slowing down anytime soon.”
“In waste and recycling, growth is fueled by population and recycling trends coupled with ongoing replacements,” he told investors. “Customers also accelerate upgrades to unlock the value of new vehicle innovations and digital solutions where we are the clear industry leader.”
Meester noted the segment did an “outstanding job” increasing throughput for refuse vehicles and reducing lead times to pre-COVID backlog levels.
The company normalized lead times to three to four months of forward visibility. For 2026, the company anticipates roughly flat sales on ESG, with upside potential in a second-half prebuy as the industry receives word on fleet requirements regarding EPA’s emission regulations, he reported.
Merge and accelerate
Building on the ESG integration momentum, Terex closed its merger with REV Group in early February.
The combination creates an expanded specialty equipment platform serving emergency services, waste and recycling, utilities and construction markets, positioning itself to serve nearly every US municipality, a $100 billion annual market, according to Terex.
“It’s only been a few days since closing, but the teams are already working hand in hand to execute our integration and synergy plans. We completed the ESG integration in 2025 and captured synergies ahead of expectations,” Meester said, adding that the company will be utilizing the same integration strategy for the REV deal.
“The integration will be straightforward. REV businesses are joining Terex Corporation as a standalone operating segment with no organizational changes outside our corporate functions,” he said.
The merger is anticipated to bring in approximately $2.5 billion in annual revenue, with $75 million of run-rate value in 2028, meeting 50% within 12 months of closing.
Earning Highlights:
Q4 revenue: $1.318 billion, up from $1.241 billion YOY
Q4 adjusted operating EBITDA: $141 million
Q4 net income: $63 million
Q4 free cash flow: $172 million
Full-year revenue: $5.4 billion
Full-year operating margin: 8.8% and 10.4% as adjusted
Full-year free cash flow: $325 million
