Hyster-yale, Inc. · NYSE:HY
Hyster-yale — Hyster-Yale Materials Handling — Q4 2019 Earnings Presentation
53 slides from Hyster-yale's earnings presentation, Mar 12, 2020
Slide 1: Q4 2019 Investor Presentation
Mass Customization Electrification Automation Globalization Digitization Q4 2019 INVESTOR PRESENTATION Exhibit 99
Slide 2: Safe Harbor Statement & Disclosure
Safe Harbor Statement & Disclosure Transforming the Future This presentation includes forward-looking comments subject to important risks and uncertainties. It may also contain financial measures that are not in conformance with accounting principles generally accepted in the United States of Americ
Slide 3: Our Businesses
Our Businesses Our Attachments Business Our Fuel Cell Business Transforming the Future Our Core Lift Truck Business
Slide 4: Hyster-Yale at a Glance
Hyster-Yale Materials Handling, Inc. (NYSE:HY) is a leading globally integrated, full-line lift truck manufacturer offering a broad array of solutions aimed at meeting the specific materials handling needs of its customers. Hyster-Yale at a Glance _____________________ Note: Throughout this investor
Slide 5: Full Lift Truck Product Line
Internal Combustion Engine Reach Trucks Counterbalance 4-wheel Diesel Forklift Port Machinery ICE Warehouse Equipment Electric Internal Combustion Engine Lithium-Ion Reach Stackers Big Trucks Very Narrow Aisle Trucks Full Lift Truck Product Line - Over 400 Different Truck Models Available Electric C
Slide 6: Broad Range of Power Options, Attachments and Solutions
…with a Broad Range of Power Options, Attachments and Solutions Push Pulls Lifting Tables Electric Counterbalanced Rider Trucks Electric Narrow Aisle Trucks Electric Hand Trucks Internal Combustion Engine (cushion tire) Internal Combustion Engine (pneumatic tire) CLASS 1, 2 & 3 Fuel Cell Engine LPG
Slide 7: Global Lift Truck Industry Remains Strong, but Moderating
Long-term CAGR (2004 – 2019) = 5.2% _____________________ Source: ITA. Represents quarterly order intake. Global Lift Truck Industry Remains Strong, but Moderating (units in thousands) Global Lift Truck Industry Size _____________________ Trend line represents 5.2% long-term CAGR Average Industry Si
Slide 8: Core Lift Truck Business as Foundation for Future Expansion
Core Lift Truck Business as Foundation for Future Expansion Opportunities Continually Improving, Strong Lift Truck Core Business Mature business model delivering significant market share in developed markets Broad and competitive product portfolio Strong suite of solutions to address industry needs
Slide 9: Lift Truck Business Target Economics
Lift Truck Business Target Economics Goal and Gap to Target Achieve 7% operating profit margin target over the medium term Achieve ROTCE > 20% FY 12/31/19 Gap to Target Economics Actual Lift Truck Operating Profit Margin % 2.7% Margin Variances – including impact of Tariffs 1.5% Volume Variances* Ma
Slide 10: Transformational Strategies and Projects
Transformational Strategies and Projects… Provide Lowest Cost of Ownership while Enhancing Productivity for Customers Be the Leader in the Delivery of Industry- & Customer-Focused Solutions Be the Leader in Independent Distribution Be the Leader in the Attachments Business Grow in Emerging Markets B
Slide 11: Lift Truck Synergy Amplification
Lift Truck Synergy Amplification Transforming the Future Synergy Provide Lowest Cost of Ownership while Enhancing Productivity for Customers Be the Leader in the Delivery of Industry- & Customer-Focused Solutions Be the Leader in Independent Distribution Grow in Emerging Markets China Sourcing Distr
Slide 12: Electrification
Electrification LITHIUM-ION LEAD ACID Using electric motive power strength as a gateway for truck sales and share growth HYDROGEN ? Transforming the Future Hydraulic pumps moved under stairs Hydrogen tanks horizontal and above flat battery pack 2 X Fuel cell engines including cooling Modular frame m
Slide 13: Globalization and Leveraging China Operations
Globalization and Leveraging China Operations to Expand Low-Intensity Offering Addressing key opportunities for global growth: Investing in High-Growth regions (Mexico, Brazil, India, Singapore & China) Lack of critical mass in Asia region Insufficient low-intensity product range China investment in
Slide 14: Distribution Engagement
Distribution Engagement Enhancing performance Dealer Excellence programs Dealer alignment Term-based contracts ~1,000 global dealer locations 2,700+ application consultants 11,000+ service technicians Independent n Exclusive n Entrepreneurial n Profitable n Committed partner n Dual-line or single St
Slide 15: Direct Customer Engagement
Direct Customer Engagement: Connecting Value to Requirements Evolving Business Needs HY Transformative Solutions HY Sales Transformation Enhanced Industry Sales Strategy Deploy Value Selling Process Increase Direct Engagement Focus on Customer Experience Commercialize Emerging Telemetry, IoT & Digit
Slide 16: Modular Solutions to Optimize Customer Productivity
LOW COST HIGH FUNCTION Operator Compartment Overhead Guard Basic Cab Premium Cab Powertrain Basic Electronic Advanced Steering Hydraulic Electric Electrical System Basic Full Featured + + + = + + = + Right Modules Right Cost Right Function Transforming the Future One Truck Multiple Configurations Mo
Slide 17: Automation Journey
Automation Journey Horizontal (Balyo) Vertical (JBT) Partner Solutions Modular, Scalable Internally Developed Automation … Transforming the Future Targeted Introduction of Initial Applications in 2021
Slide 18: Bolzoni at a Glance
Bolzoni at a Glance _____________________ Notes: Excludes $2.5 million of restructuring charges. EBITDA is a non-GAAP measure and should not be considered in isolation or as a substitute for GAAP measures. See non-GAAP explanations and the related reconciliations to GAAP measures in the Financial Ap
Slide 19: Bolzoni Core Strategies for Growth
Bolzoni Core Strategies for Growth Transforming the Future North American Expansion Enhance OEM Business Far East Expansion AGV Market Presence Expansion Industry Focus One Company, 3 Brands
Slide 20: Bolzoni - Investment in Growth
Transforming the Future Bolzoni - Investment in Growth New segment of standard attachments High quality Low price Manufactured in China for the international market Expand Asia Distribution Footprint Two production sites in China Distribution network in India and South East Asia Local production Imp
Slide 21: Nuvera is a Transformational Opportunity
Nuvera is a Transformational Opportunity Transforming the Future Leading, Patented Technology Strong and Growing Demand Successful Early Stage Adoption Entering Mass Commercialization Phase Expected Transformational Impact on Hyster-Yale Future Profitability Technology History 75+ engineers 8th gene
Slide 22: Strong Demand Growth for Fuel Cells
Strong Demand Growth for Fuel Cells Global mobility market is large and expected to grow fast Three main regions for growth Other regions have activity but small volume Source: FCEV Market Report 2025, GMI Inc. 2019. Transforming the Future
Slide 23: Nuvera Activity: Expand Battery Box Replacements
Nuvera Activity: Expand Battery Box Replacements 45kW engine and electrification of Big Trucks Market Trends / Nuvera Activity Europe Market Trend: City & Country bans on ICE Large push for public facing H2 stations Increasing focus on Bus (12 meter) Current activity focused on Auto, Materials Handl
Slide 24: Nuvera – Fuyang Location
Nuvera – Fuyang Location An Investment in Growth Transforming the Future Scalable stack production in the area of consumption Spare parts support Development of product and production Option to assemble and test engines Improved sales support with technical and engineering expertise Expanded service
Slide 25: Path to Execution of Strategic Initiatives
Path to Execution of Strategic Initiatives In total, Hyster-Yale projects maturing over the next 1 to 4 years are transformative and have the objective of driving revenue and profitability to target New Utility Products New Standard Products New Premium Products HY Maximal Integration BBR Range Expa
Slide 26: Current Lift Truck Business Target and Gap to Target
Current Lift Truck Business Target and Gap to Target Achieve 7% operating profit margin target over the medium term Achieve ROTCE > 20% FY 12/31/19 Gap to Target Economics Actual Lift Truck Operating Profit Margin % 2.7% Margin Variances – including impact of Tariffs 1.5% Volume Variances* Manufactu
Slide 27: Results for Q4 2019
($ in millions) Results for Q4 2019 Consolidated vs. Q4 2018 Q4 2019 Results Modest revenue decrease due to lower shipments caused by a moderating EMEA market, structural changes in JAPIC, continued supplier issues and unfavorable currency movements mostly offset by benefits from pricing actions Gro
Slide 28: Three- to Four-Year Objective: Volume and Profitability Enhancement
Three- to Four-Year Objective is Significant Volume and Profitability Enhancement HYSTER-YALE Strong Balance Sheet Commitment to Shareholder Return and Long-term Growth Leading Products & Market Position Strategies to Gain Share in all Segments & Markets Strong Return on Capital Investment & Growth
Slide 29: Priorities for Use of Cash
Return Cash to Stockholders Investments in Attachments Business Investments in Adjacent or Complementary Businesses Investments in Fuel Cell Business Investments in Lift Truck Business Hyster-Yale Priorities for Use of Cash Expense and capital investments in strategic initiatives and share gain proj
Slide 30: Valuation Approach Should Vary By Business
Valuation Approach Should Vary By Business Lift Truck and Attachment Businesses Fuel Cell Business Board Oversight as Separate Businesses Incentives Tied to Individual Businesses Strong Operating Cash Generation Market Leading Products and Position Mature Cyclical Industry Value using Traditional Va
Slide 31: Financial Appendix
ENTER SESSION TITLE HERE… Presenter Name FINANCIAL APPENDIX
Slide 32: Non-GAAP Disclosure
32 Non-GAAP Disclosure Transforming the Future EBITDA and return on total capital employed are not measurements under U.S. GAAP, should not be considered in isolation or as a substitute for GAAP measures, and are not necessarily comparable with similarly titled measures of other companies. Hyster-Ya
Slide 33: Non-GAAP Reconciliation EBITDA
Non-GAAP Reconciliation EBITDA _____________________ Note: EBITDA in this investor presentation is provided solely as a supplemental disclosure with respect to operating results. EBITDA does not represent net income (loss), as defined by U.S. GAAP and should not be considered as a substitute for net
Slide 34: Non-GAAP Reconciliation EBITDA (continued)
Non-GAAP Reconciliation EBITDA (continued) _____________________ Note: EBITDA in this investor presentation is provided solely as a supplemental disclosure with respect to operating results. EBITDA does not represent net income (loss), as defined by U.S. GAAP and should not be considered as a substi
Slide 35: Non-GAAP Reconciliation ROTCE
Non-GAAP Reconciliation ROTCE _____________________ Note: Return on capital employed is provided solely as a supplemental disclosure with respect to income generation because management believes it provides useful information with respect to earnings in a form that is comparable to the Company’s cos
Slide 36: Cash Flow before Financing Calculation
Cash Flow before Financing Calculation Consolidated ($ in millions) Year Ended December 31 2015 2016 2017 2018 2019 Reconciliation of Cash Flow before Financing Net cash provided by (used for) operating activities $89.4 $(48.9) $164.7 $67.6 $76.7 Net cash used for investing activities (31.3) (145.1)
Slide 37: Supplemental Information
ENTER SESSION TITLE HERE… Presenter Name Supplemental Information
Slide 38: Hyster-Yale’s Global Footprint
Hyster-Yale’s Global Footprint Ramos Arizpé, Mexico Fabrication Manufacture Sulligent, Alabama Attachment and Component Manufacture Berea, Kentucky Lift Truck Manufacture Greenville, North Carolina Division Headquarters; Lift Truck Manufacture; Warehouse Development Center Cleveland, Ohio Corporate
Slide 39: Overview and Sources of Revenue
Overview and Sources of Revenue 2019 Worldwide Sales by Product _____________________ Company estimate. Includes Big Truck sales that represent 11.4% of total sales. Represents Hyster-Yale North American Lift Truck unit shipments by industry. A leading global lift truck manufacturer 2019 Retail Lift
Slide 40: Industry Units by Geography and Class
Industry Units by Geography Lift Truck Unit Class Shipments _____________________ Source: Company: FY 12/31/19 Units Shipped Note: Units sold direct by SN JV are not included _____________________ Source: WITS. FY 12/31/19 Orders Reports. _____________________ Source: WITS. FY 12/31/19 Orders Report
Slide 41: Secular Shift in Product Mix
Secular Shift in Product Mix Market 2019 _____________________ Source: WITS. Orders Reports. ICE = Internal Combustion Engine low-intensity = Company Estimates DRIVERS: Customer shift Growth of warehousing and logistics Environmental, health and safety Evolving technologies Growth in emerging market
Slide 42: Global Lift Truck Market Rates of Change
Japan Western Europe Eastern Europe Brazil North America Middle East & Africa Latin America (excluding Brazil) Asia (excluding China & Japan) China ( 3 & 12 months rate of change trend) Global Lift Truck Market Rates of Change _____________________ Source: WITS. Bookings Reports. Transforming the Fu
Slide 43: Lift Truck Market Size Data
Lift Truck Market Size Data Transforming the Future
Slide 44: Key Capital Expenditures and R&D
Key Capital Expenditures and R&D Capital expenditures and R&D directed to support key HY lift truck product initiatives along with development of Bolzoni and Nuvera products and facilities (total $ in millions) * Estimated Capex R&D Transforming the Future (total $ in millions)
Slide 45: Life Cycle Costs
Life Cycle Costs *Typical truck cost/hour for 5,000lb North American applications Operator 69% Fuel 11% Finance 9% Service & repair 11% Typical Truck Cost/Hour* Factors Impacting Low Cost of Ownership Fleet optimization Price management Cost control Residuals Cost/hour Fleet management Extended warr
Slide 46: Emerging Market Development Center
Emerging Market Development Center Increasing speed to market by combining HY design discipline and low-intensity lift truck design focus Transforming the Future
Slide 47: Targeting Industry Sales Approach
Targeting Industry Sales Approach Enhanced Industry Sales Strategy Dealer Sales Team Industry Sales Team National Accounts Team MARKET SHARE HY SALES APPROACH TOP BUYERS 25% OF MARKET INDUSTRY LEADERS 40% OF MARKET REST OF THE MARKET 35% OF MARKET Transforming the Future
Slide 48: Transformative Sales System to Commercialize Emerging Technologies
Transformative Sales System to Commercialize Emerging Technologies Leverage successful technology commercialization models Industry sales approach to tailor solutions to applications Confidence in buying, installation, user, and service support Telemetry Solutions Power, Automation, Operator Assist…
Slide 49: Bolzoni – Sulligent Location
State of the art plant specialized in manufacturing quality cylinders for forklift truck companies Expansion opportunities also in other areas such as construction and agriculture equipment, etc. Significant opportunity to expand the business in North America Bolzoni – Sulligent Location A New Busin
Slide 50: Bolzoni: Enhance Strong OEM Relationships
Bolzoni: Enhance Strong OEM Relationships Transforming the Future OEM TOP CUSTOMERS(1) OEM SALES BY REGION(1) OEM SALES BY PRODUCT LINE(1)(2) STRONG AND LONG-TERM RELATIONSHIPS RESULTING IN BUSINESS GROWTH ACROSS ALL REGIONS For the 12 months ended 12/31/19 Excludes cylinder sales to HY
Slide 51: Nuvera: Robust Industrial Product
Nuvera: Robust Industrial Product Uncoated metal plates Superior resistance to shock and vibration Application-flexible architecture Cost-effective manufacture and rebuilds Active supplier development Scale-up and robustness of component chain Transforming the Future
Slide 52: Building Nuvera Product Portfolio
Building Nuvera Product Portfolio Automotive Lift Trucks Small Engines Industrial Fleets, HD Potential* Annual Volume Efficient Stack Performance Engine Integration Reliable Power Modules 100,000+ 10,000 – 50,000 3,000-10,000 *Company Estimates Customer/Market: Nuvera Unique Selling Point: Transform
Slide 53: Long-Term Focused, not Short-Term Oriented
Long-Term Focused, not Short-Term Oriented Transforming the Future Partners Shareholders Employees Dealers Suppliers Transforming the Future Customers
Hyster-Yale Materials Handling — Q4 2019 Earnings Presentation on 6ix