Hyster-yale, Inc. · NYSE:HY
Hyster-yale — Hyster-Yale Materials Handling — Investor Presentation (May 2016)
46 slides from Hyster-yale's investor presentation, May 12, 2016
Slide 1: Investor Presentation May 12, 2016
Investor Presentation May 12, 2016 Exhibit 99
Slide 2: Safe Harbor Statement & Disclosure
Safe Harbor Statement & Disclosure 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 America (GAAP). Refer to Hyste
Slide 3: Hyster-Yale Snapshot
Hyster-Yale Snapshot Hyster-Yale Materials Handling, Inc. (NYSE:HY) designs, engineers, manufactures, sells and services a comprehensive line of lift trucks and aftermarket parts. Separate lift truck and fuel cell power solutions segments. Headquartered in Cleveland, Ohio Approximately 5,500 employe
Slide 4: Bolzoni Transaction – Acquisition Plan
Bolzoni Transaction – Acquisition Plan PENTA HOLDING On April 1, 2016, HY’s indirect wholly-owned subsidiary, HY Italy, acquired Penta S.p.A., a majority stakeholder (50.4%) of Bolzoni S.p.A., an Italian-listed public company and leading worldwide producer of attachments, forks and lift tables under
Slide 5: Bolzoni Transaction – Rationale
Bolzoni Transaction – Rationale PENTA HOLDING Expand global reach Enhance solutions capabilities Leverage excess capacity Insource components Closer to our customers Accretive to earnings External Internal
Slide 6: Our Businesses
Our Businesses Our Core Lift Truck Business Organic growth through market share gain Our Hydrogen Power Business Rapid growth in emissions free customer applications
Slide 7: Hyster-Yale Is a True Full-Line Lift Truck Supplier
Hyster-Yale Is a True Full-Line Lift Truck Supplier… Electric Counterbalanced Rider Trucks Electric Narrow Aisle Trucks Electric Hand Trucks Internal Combustion Engine (cushion tire) Internal Combustion Engine (pneumatic tire) Electric CB 3 wheel Electric 4 wheel Electric Pallet Trucks Stackers Very
Slide 8: …with Full Range of Power Options
…with Full Range of Power Options Electric Counterbalanced Rider Trucks Electric Narrow Aisle Trucks Electric Hand Trucks Internal Combustion Engine (cushion tire) Internal Combustion Engine (pneumatic tire) CLASS 1 CLASS 2 CLASS 3 CLASS 4 CLASS 5 Power Options Lead Acid Battery Fuel Cell Engine LPG
Slide 9: Lift Truck Industry Overview
Lift Truck Industry Overview (units in thousands) Global Lift Truck Industry Size _____________________ Trend line represents 4.1% long-term CAGR Average Industry Size. Source: WITS. Represents order intake. Global Lift Truck Industry Breakdown (Units) _____________________ Source: WITS. LTM 12/31/1
Slide 10: Lift Truck Business Target Economics
Lift Truck Business Target Economics Goal and Gap to Target 7% Goal Achieve minimum operating profit margin of 7% at the peak of the current market cycle and 7% at mid-cycle of the next market cycle Target Economics gap closure can be achieved with unit volume… Stronger Industry + Share Growth = Vol
Slide 11: Leverage Gained from Moving Volume to Full Manufacturing Capacity
Leverage Gained from Moving Volume to Full Manufacturing Capacity 28,000 units of additional volume $600 - $700 million of additional revenue & $70 million of operating profit $30 - $35 million fixed cost absorption by moving from current capacity utilization to full utilization of our manufacturing
Slide 12: Over the Remainder of this Market Cycle, Target Volumes Driven by…
Over the Remainder of this Market Cycle, Target Volumes Driven by… Share growth of approx. 1.9% pts > Strategic initiatives > Share growth is expected to be approximately 70% of volume increase required Growth of 10-15% by 2019-2020** Growth of 5-10% by 2019-2020** Growth of 10-15% by 2019-2020** *
Slide 13: Hyster-Yale's Economic Engine & Core Strategic Initiatives
Hyster-Yale’s Economic Engine & Core Strategic Initiatives Basic Business Areas Our strategies are designed to drive increased share, which in turn increases the lift truck population, which drives parts and service volumes. Geographic and Product Balance Worldwide Distribution Strength to Drive Mar
Slide 14: Core Strategic Initiatives – Stages of Momentum
Early Stage Mid-Stage Achieved Breakthrough Understand Customer Needs ü Low Cost of Ownership ü Enhance Independent Distribution ü Improve Warehouse Position ü Succeed in Asia ü Enhance Big Truck Market Position ü Strengthen Sales and Marketing Organization ü Commercialize Nuvera’s Fuel Cell Technol
Slide 15: Core Lift Truck Strategic Initiatives Update
Core Lift Truck Strategic Initiatives Update Strategic Objective Implementation Highlights Provide the right product and solution to meet the specific needs of different customers across multiple industries Increasing penetration of the Metals , Trucking and Paper segments Gained conquest business a
Slide 16: Core Lift Truck Strategic Initiatives Update
Core Lift Truck Strategic Initiatives Update Strategic Objective Implementation Highlights Develop the strongest independent, exclusive dealer network Initiative Enhance Independent Distribution Strategic Objective Implementation Highlights Strengthen penetration of the growing warehouse segment Ini
Slide 17: Core Lift Truck Strategic Initiatives Update
Core Lift Truck Strategic Initiatives Update Strategic Objective Implementation Highlights Initiative Succeed in Asia Strategic Objective Implementation Highlights Initiative Enhance Big Truck Market Position 5 new dealers appointed in 2015 Direct sales support on large accounts Additional Big Truck
Slide 18: Core Lift Truck Strategic Initiatives Update
Core Lift Truck Strategic Initiatives Update Strategic Objective Implementation Highlights Initiative Strengthen Sales and Marketing Organization Recruited experienced individuals with deep knowledge of the lift truck business Added expertise in dealer management, account identification and coverage
Slide 19: Nuvera Hydrogen Power Business
Nuvera Hydrogen Power Business Strategic Objective Key Elements Initiative Commercialize Nuvera’s Fuel Cell Technology Enables active participation in the growing hydrogen and fuel cell market Integration of Nuvera’s technology into HY’s lift truck product range Adds another power solution to robust
Slide 20: Hydrogen Power for Lift Trucks
Hydrogen Power for Lift Trucks Hyster-Yale acquired Nuvera in December 2014 and intends to use the technology to offer its customers a unique and value-creating packaged total power solution. Limited Maintenance Emissions Free Growing industrial demand for high performance, zero emission solutions C
Slide 21: The Hydrogen Power Market
The Hydrogen Power Market 25-50% N. America Lift Truck Market electric trucks sold per year 150,000+ Estimated up to can benefit from Fuel Cell solutions Source: David Greene et. al., Status and Outlook for the U.S. Non-Automotive Fuel Cell Industry: Impacts of Government Policies and Assessment of
Slide 22: The Nuvera Total Power Solution
The Nuvera Total Power Solution Fuel PowerTap® Hydrogen Generation PowerEdge® Fuel Cell Orion® Fuel Cell Engine Total Power Solution Hydrogen Refueling Low fixed costs ideal for small to medium size fleets Scalable Onsite generation Current: ideally suited to lift truck customer Next Generation: Lea
Slide 23: Capturing More Lifecycle Value
Capturing More Lifecycle Value Truck Hyster-Yale Maint HY/Dealer Energy Utility Company Fuel (PowerTap®) Energy Utility Company Nuvera/Dealer PowerEdge® Nuvera Maint HY/Dealer Truck Hyster-Yale Lead Acid Battery* PowerEdge® Solution* *Representative Total Cost of Operation based on NREL 2013 report
Slide 24: The Nuvera Story
The Nuvera Story Our Hydrogen Power Business Why Hydrogen Purchased for a small investment amount Investing pre-tax expense dollars to break-even Solutions across Hydrogen Value Chain Strong IP / Patent portfolio Pipeline of new technologies and solutions Rapid usage development in major user fleets
Slide 25: The Nuvera Plan
The Nuvera Plan Develop PowerEdge® units for electric lift trucks Build commercial capabilities Build strong links to HY distribution First order for PowerEdge® units expected to be shipped mid-2016 Mean time between failure (MTBF) improvements to PowerTap® PT 50 Hercules® and Orion® 2 technology de
Slide 26: 2016 First Quarter Highlights
2016 First Quarter Highlights Lift truck segment revenue decline driven by significant unfavorable currency, lower deal-specific selling prices and a shift in mix to lower-priced trucks, partly offset by higher unit volumes Decrease in lift truck operating results from: Higher selling, general and a
Slide 27: Valuation Approach By Business
Valuation Approach By Business Lift Truck Business Hydrogen Power 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 Valuation Model of EBITDA
Slide 28: Our Competitive Advantages
Our Competitive Advantages Able to meet customers needs globally Global economies of scale Young/ fresh product line Broad array of power options Fuel-cell power options Source of aftermarket profitability Barrier to entry Global Full Product Line Field Population Dealer Relationships Independent di
Slide 29: A Solid Investment Option
HYSTER-YALE A Solid Investment Option Strong Balance Sheet Cash Generation & Commitment to Shareholder Return Investment & Growth in Game Changing Technologies Leading Products & Market Position Strategies to Gain Share in Growth Segments & Markets Customer Focused & Solutions Oriented
Slide 30: Hyster-Yale Use of Cash Priorities
Hyster-Yale Use of Cash Priorities Strategic initiatives to accelerate growth or enhance margins Acquisitions of technologies and other forklift-related businesses 2014 2015 2016 Annual Dividends (1) $17.8m $1.10/share $18.4m $1.14/share $4.7m YTD $1.18/share 2012 to 2014 Share Buyback $49.8m / 694,
Slide 31: Appendix
Solutions to ENHANCE Performance Appendix
Slide 32: Non-GAAP Disclosure
Non-GAAP Disclosure Adjusted Lift Truck Business Operating Profit, EBITDA and return on total capital employed are not measurements under U.S. GAAP, should not be considered in isolation or as a substitute for GAAP measures, and are not necessarily comparable with similarly titled measures of other
Slide 33: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in millions) _____________________ Note: EBITDA in this investor presentation is provided solely as a supplemental disclosure with respect to operating results. EBITDA does not represent net income, as defined by U.S. GAAP and should not be considered as a substitute for n
Slide 34: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) ($ in millions) _____________________ 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 comparabl
Slide 35: Cash Flow before Financing Calculation
Cash Flow before Financing Calculation ($ in millions) Year Ended December 31 Trailing 12 Months 20 1 1 201 2 201 3 201 4 201 5 3/31/16 Reconciliation of Cash Flow before Financing Net cash provided by operations $54.6 $ 128.7 $1 52.9 $ 100.0 $89.4 $ 74.5 Net cash used for investing activities (15.9
Slide 36: Supplemental Information
Supplemental Information Solutions to ENHANCE Performance
Slide 37: The History of Hyster-Yale and its brands
The History of Hyster-Yale and its brands Hyster founded in Portland, Oregon as the Willamette Ersted Company 1929 1944 Company name officially changed to Hyster Company 1875 Yale Lock Mfg. broadens its scope into materials handling 1963 Yale forklift truck business merges with Eaton Mfg. Industrial
Slide 38: Hyster-Yale Global Footprint
Hyster-Yale Global Footprint (excludes Bolzoni locations)
Slide 39: Historical Consolidated Revenue
Historical Consolidated Revenue ’04 – ’15: 2.1% CAGR ($ in millions)
Slide 40: Lift Truck Business Operating Profit Trends and % of Sales
_____________________ Lift Truck Segment Operating Profit, as reported Adjusted Lift Truck Segment Operating Profit, which excludes a $17.7 million pre-tax gain on the sale of the Brazil land and facility, is a non-GAAP measure and should not be considered in isolation or as a substitute for the GAA
Slide 41: Our Business Has Been Transformed
Our Business Has Been Transformed Comprehensive, updated product line Average product age since last upgrade – less than 4 years Designed to meet customer needs and provide low overall cost of ownership Multiple power solutions to meet performance, cost, and environmental needs Product Range Manufac
Slide 42: Our Business Has Been Transformed
Our Business Has Been Transformed Centralized supply chain management Highly flexible low cost supply chain 30%+ low cost country sourcing Concentrated supplier base Intense focus on supplier quality Supply Chain Aftermarket Quality Customer driven programs North America’s warranty rates reduced sig
Slide 43: Lift Truck Overview and Sources of Revenue
Lift Truck Overview and Sources of Revenue Leading global lift truck manufacturer in terms of units sold #3 globally in 2015 Large installed base that drives parts sales Over 830,000 units worldwide Sales of 86,900 units in 2015 Sales of >4,700 units at SN JV in Japan & Asia in 2015 2015 Worldwide S
Slide 44: Distribution Channel Strength and Diverse Customer Base
Distribution Channel Strength and Diverse Customer Base Blue Chip Customer Base Over 1,000 global dealer locations More than 2,000 application consultants Over 11,000 service technicians National Accounts Profile Independent Dealer Network Focused on strategic customers with centralized purchasing a
Slide 45: Positive Environment to Gain Share and Margin Performance
Positive Environment to Gain Share and Margin Performance Over Next Two Years Product gaps filled to position Hyster-Yale in most application segments and improve margins Second-tier competitors in the ICE segment more vulnerable due to their weak economies of scale position Key warehouse segment co
Slide 46: Our Long-Term Philosophy
Our Long-Term Philosophy Long-term growth Long-term shareholders Shareholder protection Senior management incentivized as long-term shareholders Increase shareholder value Return on Capital Employed and Market Share Increase focus
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