Hyster-yale, Inc. · NYSE:HY
Hyster-yale — Hyster-Yale Materials Handling — Global Hunter Securities Conference (September 2014)
38 slides from Hyster-yale's conference presentation, Sep 4, 2014
Slide 1: Global Hunter Securities Conference
Exhibit 99.1 Global Hunter Securities Conference September 4, 2014 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement The following information includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended,andSection21Eof theSecurities Exchange Actof 1934,asamended.Anyandallstatements regardingtheCompany’s expected future financial position, re
Slide 3: Hyster-Yale Snapshot
Hyster-Yale Snapshot Hyster-Yale Materials Handling, Inc. (NYSE:HY) Leading global designer, manufacturer and marketer of lift trucks and provider of aftermarket parts and support Headquartered in Cleveland, Ohio Over5,200employees globally LTM6/30/14Revenue – $2.7billion LTM6/30/14Netincome- $104.2
Slide 4: Industry Overview
Industry Overview Global Lift Truck Industry Size Global Lift Truck Industry Breakdown (Units) (units in thousands) Middle East & Africa Asia Pacific 6% Long-term CAGR (2003 2013) – = 5.3% 7% Japan Europe 1,200 1,056 975 1,009 8% 30% 951 944 872 900 794 600 547 Americas 300 24% China 0 25% 2007 2008
Slide 5: Economic Engine is Driven by Unit Volume
Economic Engine is Driven by Unit Volume Drivers of long term competitive advantage Worldwide Geographic Volume Distribution and Product Economies Strength to Drive Balance of Scale Basic Business Areas Market Share Design Component Commonality Supply Chain Manufacturing Quality Marketing Parts Infr
Slide 6: Operating Profit Trends
Operating Profit Trends Operating Profit $ and % of Sales ($ in millions) Prior Cycle Market Peak Mid-Cycle Market $150 5.3% 6.0% 5.0% $145.6(1) $125 4.5% 4.7% $100 $134.3 4.0% $127.9(2) 2.1% $75 $111.7 2.0% $50 $57.3 $25 0.0% 2007 2012 2013 LTM 6/30/14 _____________________ (1) Operating Profit as
Slide 7: Gap to Target Economics
Gap to Target Economics Goal is to achieve minimum operating profit margin of 7% at mid-cycle and to achieve 7% operating profit margin at the peak of the current market cycle 6/30/14 LTM Gap to Target Economics Target Economics gap closure Margin variances: +0.1% can be achieved by: – Unit margin (
Slide 8: Volume Leverage on Manufacturing Capacity
Volume Leverage on Manufacturing Capacity 100% 80% 31% 33% 25% 48% 60% Unused Capacity 40% Unit Volume 20% 0% 2010 2011 2012 2013 2016-2017 Approximately $125m manufacturing fixed cost – Ability to produce 115,000* units annually – At capacity Approximately $30m additional fixed cost absorption Oper
Slide 9: Over the Remainder of this Market Cycle, Target Volumes Driven by…
Over the Remainder of this Market Cycle, Target Volumes Driven by… 500 EMEA Industry Americas Industry 200 400 150 300 200 100 Actual Prior Peak Actual Prior Peak 100 50 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 Growth of 20-25% by 2017 Growth of 10-15% by 2017 Asia Industry 450 Share growth
Slide 10: Enhanced Understanding of Customer Needs to Drive Tailored Solutions
Enhanced Understanding of Customer Needs to Drive Tailored Solutions Strategic Objectives Progress and Expectations Segment the global market Segmentation Best product fit for customer application – Additional standard and utility models Develop solutions for major segments – Separated standard/prem
Slide 11: Masters of the World of Low Cost of Ownership
Masters of the World of Low Cost of Ownership Strategic Objectives Progress and Expectations Revenue growth by delivering lowest cost of Cost of truck/lease ownership in target applications – Supplier Day programs at each factory Expand fleet management – Attractive lease rates through improved unde
Slide 12: Succeed in Asian Markets
Succeed in Asian Markets Strategic Objectives Progress and Expectations Enhanced dealer organization and structure Established new office in Malaysia Add new products tailored to needs of Asian markets Sales and marketing resources added Strengthened local presence in Asia and India Continued develo
Slide 13: Enhanced Independent Distribution
Enhanced Independent Distribution Strategic Objectives Progress and Expectations Recruit/develop strongest dealers Enhanced sales specialization Opportunity for dealers to make strong returns Dedicated dealer development team on investment Combine dealer entrepreneurship and 25 dual-brand dealers, 1
Slide 14: Significantly Improve Warehouse Business Position
Significantly Improve Warehouse Business Position Strategic Objectives Progress and Expectations Gain share in faster growing segment of market Investment in specialist talent Improve dealer value proposition Engage dealers in developing capabilities New product launches Product gap closure Global p
Slide 15: Supplemental Initiatives and a Facilitating Program
Supplemental Initiatives and a Facilitating Program Big Trucks Brazil – Growth opportunity – New manufacturing facility – Additional resources – Strengthened management team Global team – Expand local production Focus on industry and – Enhanced distribution customer solutions – Tier 4 leadership Sal
Slide 16: Economic Engine is Driven by Unit Volume
Economic Engine is Driven by Unit Volume Drivers of long term competitive advantage Worldwide Geographic Volume Distribution and Product Economies Strength to Drive Balance of Scale Market Share Basic Business Areas Leaders in Design Independent National Understand Needs of Distribution Accounts Com
Slide 17: Positive Environment for Hyster-Yale to Gain Share and Margin Performance Over Next 3-5 Years
Positive Environment for Hyster-Yale to Gain Share and Margin Performance Over Next 3-5 Years Product gaps filled to position Hyster-Yale in most application segments and improve margins Low-cost manufacturing base relative to German-centric and Japanese-centric competitors Second-tier competitors i
Slide 18: Historical Revenue
Historical Revenue Revenue ($ in millions) $3,000 $2,720 $2,824 $2,666 $2,723 $2,400 $2,489 $2,541 $2,469 $2,057 $2,000 $1,780 $1,802 $1,475 $1,000 $0 (1) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 LTM _____________________ (1) As of June 30, 2014. 17
Slide 19: Q2 2014 Highlights
Q2 2014 Highlights Q2 2014 Results Hyster-Yale Outlook Short – Term ($ in millions)2014 Second Quarter 6/30/14 LTM Global lift truck market expected to grow moderately in remainder of 2014, generally concentrated in Western developed markets and China. Revenue $684.7 100.0% $2,722.5 100.0% Operating
Slide 20: Strong Free Cash Generation and Conservative Capital Structure
Strong Free Cash Generation and Conservative Capital Structure Strong cash generation with $436 million cumulative cash flow before financing from 2009 to 2013 Conservative capital structure as of 6/30/14 with debt of $41.7 million and cash of $98.6 million (1) Cash Flow before Financing (2) Debt /
Slide 21: Rationale for Investing in Hyster-Yale…
Rationale for Investing in Hyster-Yale… 1) Leading position in growing industry benefiting from globalization and worldwide economic recovery and development 2) Premier brands, comprehensive global product line andglobal exclusive, independent distribution network 3) Strong economic engine driven by
Slide 22: Appendix
Appendix | HYSTER-YALE MATERIALS HANDLING
Slide 23: Non-GAAP Disclosure
Non-GAAP Disclosure EBITDAand returnon totalcapitalemployedarenotmeasurements underU.S.GAAP,shouldnotbe considered in isolation or as a substitute for GAAP measures, and are not necessarily comparable with similarly titled measures of other companies. Hyster-Yale defines each as the following: EBITD
Slide 24: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in millions) Trailing 12 Year Ended December 31 Qtr. Months (1) (1) 2009 2010 2011 2012 2013 6/30/14 6/30/14 Reconciliation of EBITDA Net income (loss) attributable to stockholders ($43.1) $32.4 $82.6 $98.0 $110.0 $32.9 $104.2 Noncontrolling interest (income) loss (0.1) (0
Slide 25: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) ($ in millions) Reconciliation of Return on Total Capital Employed (ROTCE) 6/30/14 LTM LTM Average Stockholders' Equity (6/30/14, 3/31/14, 12/31/13, 9/30/13 and 6/30/13) $443.1 LTM Average Debt (6/30/14, 3/31/14, 12/31/13, 9/30/13 and 6/30/13) 80.2 LTM Average Cas
Slide 26: Cash Flow before Financing Calculation
Cash Flow before Financing Calculation ($ in millions) Trailing 12 Year Ended December 31 Months 2009 2010 2011 2012 2013 6/30/14 Reconciliation of Cash Flow before Financing Net cash provided by operations $115.9 $47.5 $54.6 $128.7 $152.9 $99.2 Net cash provided by (used) for investing activities 5
Slide 27: Supplemental Perspective
Supplemental Perspective | HYSTER-YALE MATERIALS HANDLING
Slide 28: Mission Statement
Mission Statement Be a leading globally integrated designer, manufacturer and marketer of a complete range of highquality,application-tailored lifttrucks,offering the lowest cost of ownership, outstanding parts and service support and the best overall value 27
Slide 29: Hyster-Yale Overview
Hyster-Yale Overview Key Highlights Global Footprint Leading global lift truck manufacturer in terms of units sold – #3 globally in 2013 – Large installed base that drives parts sales – Over 815,000 units worldwide – Sales of more than 85,500 units in 2013 – Sales of >4,200 units at SN JV in Japan &
Slide 30: Hyster-Yale’s Global Manufacturing Footprint
Hyster-Yale’s Global Manufacturing Footprint Strategically located fabrication and assembly footprint using lean processes Danville, Illinois Irvine, Scotland Frimley, Surrey UK Shanghai, China (JV) Fairview, Oregon Americas parts European administrative Divisional Assembly of lift trucks Global exe
Slide 31: Comprehensive Updated Global Product Line
Comprehensive Updated Global Product Line Class Capacity Range Description / Illustrative Application Electric counterbalanced trucks used in warehousing and manufacturing operations where noise or fuel emissions are undesirable Class I 1 ton – 5.5 tons A distribution center customer uses a Class I
Slide 32: Distribution Channel Strength and Diverse Customer Base
Distribution Channel Strength and Diverse Customer Base National Accounts Profile Blue Chip Customer Base Focused on strategic customers with centralized purchasing and geographically dispersed operations across dealer territories Fleet Management Program provides customers with value-added services
Slide 33: Parts and Service Contribution to Hyster-Yale’s and Dealers’ Profitability
Parts and Service Contribution to Hyster-Yale’s and Dealers’ Profitability Growing unit field population of approximately 815,000 units globally at 12/31/13 Hyster-Yale realizes significant additional margin from service parts over the life of the truck Also critical to the success of our Independen
Slide 34: Ongoing Transformation of Business
Ongoing Transformation of Business Comprehensive, updated global product line Product Development focus on delivering Low Cost of Ownership based on customer applications: Deliver Tier 4 solutions Products Electric product with “ICE Like” performance Integrate advanced technology solutions: Lithium
Slide 35: Ongoing Transformation of Business
Ongoing Transformation of Business Warranty Costs (% of Sales) 50% decrease in standard warranty costs in North America 3.0% since 2009 2.0% Quality Initial quality has improved in North America by >40% since 2009 1.0% Model year update to ensure smooth implementation of upgrades 0.0% 2009 2010 2011
Slide 36: Hyster-Yale – Industry Sales Growth
Hyster-Yale – Industry Sales Growth Hyster-Yale Sales vs. Global Lift Truck Industry (units in thousands) 45% 41.0% 35% 25% 22.8% 15% 6.9% 8.0% 8.9% 3.8% 5% -5% -3.2% -2.8% FY-11 FY-12 FY-13 Q2-14 WITS Orders Hyster Yale - Revenue Key Themes Hyster-Yale sales grew faster than industry through 2013 s
Slide 37: Key Initiatives Drive Sustainable Long Term Growth
Key Initiatives Drive Sustainable Long Term Growth Leaders in Independent Distribution National Accounts Understand Needs of Customers Crack the Code in Warehouse Strong Dealer and Customer Loyalty driving a Low Cost of Ownership growing population, increased service and parts revenue and strong pro
Slide 38: Key Investment Highlights
Key Investment Highlights Leading Market Share in Materials Comprehensive Handling Global Product Line High-Impact Large Installed Strategic Initiatives Base Worldwide Modest Leverage Established & Strong Brand Strength Cash Flow Global Experienced Independent Dealer Management Team Network Highly F
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