Hyster-yale, Inc. · NYSE:HY
Hyster-yale — Hyster-Yale Materials Handling — Investor Presentation (November 2016)
63 slides from Hyster-yale's investor presentation, Nov 7, 2016
Slide 1: Solutions to DRIVE Productivity
Solutions to DRIVE Productivity Investor Presentation November 7, 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 at a Glance
Hyster-Yale at a Glance Hyster-Yale Materials Handling, Inc. (NYSE:HY) designs, engineers, manufactures, sells and services a comprehensive line of lift trucks, aftermarket parts and attachments. _____________________ (1) EBITDA and ROTCE are non-GAAP measures and should not be considered in isolati
Slide 4: Hyster-Yale is a Full-Line Lift Truck Supplier
Hyster-Yale is a Full-Line Lift Truck Supplier… CLASS 1 CLASS 2 CLASS 3 CLASS 4 CLASS 5 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 E
Slide 5: Full Range of Power Options, Attachments and Solutions
…with a Full Range of Power Options, Attachments and Solutions CLASS 1, 2 & 3 CLASS 4 & 5 Electric Counterbalanced Rider Trucks Electric Narrow Aisle Trucks Electric Hand Trucks Internal Combustion Engine (cushion tire) Internal Combustion Engine (pneumatic tire) Lead Acid Battery Fuel Cell Engine L
Slide 6: Five Key Perspectives to Emphasize
Five Key Perspectives to Emphasize Global market unit levels expected be relatively stable at a high level for next few years Current external environment for HY Lift Truck business is challenging 7% operating margin at properly balanced HY 115,000 units in this cycle remains HY Lift Truck business
Slide 7: Lift Truck Industry Overview
Lift Truck Industry Overview Global Lift Truck Industry Size North America Retail Lift Truck Below Peak Trend Lift Truck Industry – Unit Distribution by Class Global Lift Truck Industry Breakdown (Units) Class 3 Electric 34% (units in thousands) _____________________ Trend line represents 4.1% long-
Slide 8: Global Lift Truck Market Rates of Change
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) _____________________ Source: WITS. Bookings Reports.
Slide 9: Headwinds and Near-Term Challenges Impacting Lift Truck Profitability
Headwinds and Near-Term Challenges Impacting Near-Term Lift Truck Profitability Key Market Uncertainty Brazil, Turkey & South Africa Currency Strong U.S. Dollar Commodity Prices Fluctuating/Moving Up Shifting Product Mix ICE to Electric Customer Mix Changing Investments in Share Gain Programs ($ in
Slide 10: Volume of 115,000 Units Required to Achieve 7% Target
Volume of 115,000 Units from HY Factories Required to Achieve 7% Target …should increase operating profits to target levels by: Our objective is to sell 115,000 HY-plant units in 2018, but a more realistic timeframe may be 2019 - 2020 8,000 Class 1 and 2 trucks Big Trucks Additional units to fill ea
Slide 11: Share Gain Drives Our Economic Engine
Share Gain Drives Our Economic Engine Our strategies are designed to drive increased share, which in turn increases the lift truck population, which drives parts and service volumes. Improve Warehouse Position Succeed in Asia Solutions and Technology Drivers A large lift truck population base drives
Slide 12: Core Strategic Initiatives Update
Core Strategic Initiatives Update Strategic Objective Highlights Initiative Strategic Objective Implementation Highlights Initiative Share Growth Strategies Share Growth Strategies • Provide the right product and solution to meet the specific needs of different customers across multiple industries •
Slide 13: Core Strategic Initiatives Update
Core Strategic Initiatives Update Strategic Objective Implementation Highlights Initiative Strategic Objective Implementation Highlights Initiative Share Growth Strategies Share Growth Strategies • Develop the strongest independent, exclusive dealer network Enhance Independent Distribution • Strengt
Slide 14: Core Strategic Initiatives Update
Core Strategic Initiatives Update Strategic Objective Implementation Highlights Initiative Strategic Objective Implementation Highlights Initiative Share Growth Strategies Share Growth Strategies Succeed in Asia Enhance Big Truck Market Position • Expand market penetration throughout Asia • Increase
Slide 15: Core Strategic Initiatives Update
Core Strategic Initiatives Update Strategic Objective Implementation Highlights Initiative Share Growth Strategies Strategic Objective Implementation Highlights Share Growth Strategies Initiative Strengthen Sales and Marketing Organization • Strengthen and align sales and marketing organization in a
Slide 16: The Hydrogen-Powered Lift Truck Opportunities & Advantages
The Hydrogen-Powered Lift Truck Opportunities & Advantages Growing sales pipeline: • 5,000+ unit opportunities in sales pipeline • More than 1,000 units in final stages of sales process • Strong alignment with HY target accounts • Both existing and new users of fuel cells • Target 35-50% share N. Am
Slide 17: Nuvera / Hyster-Yale Competitive Advantages
Nuvera / Hyster-Yale Competitive Advantages TECHNOLOGY Patented fuel-cell stack design – performance & cost Technology roadmap – leverage development and volume Advanced compression and generation technology ALL-IN FUEL CELL SOLUTION Nuvera® Hydrogen Generator (formerly PowerTap®) Nuvera® Fuel Cell
Slide 18: Growth Strategy – Where Will Fuel Cells Be Used
Growth Strategy – Where Will Fuel Cells Be Used • Convert existing fuel cell users - Promote the Nuvera benefits vs competition • Increase market penetration in existing lead acid battery users - Promote the performance and convenience of Nuvera • Build new markets with existing ICE truck users - Hi
Slide 19: The Nuvera Plan
The Nuvera Plan • Develop Fuel Cell Power Systems for electric Class I-III lift trucks • Building organization capability • HY dealer engagement and demos • Nuvera® Fuel Cell System units shipped mid-2016 • Efficiency and durability improvements to Nuvera® Hydrogen Generator • Hercules and Orion ® 2
Slide 20: Bolzoni
Bolzoni Europe 70.2% 32% 68% 0% 0% Bolzoni is one of the worldwide leading manufacturers of lift truck attachments, forks and lift tables with an extensive product range 2015 Sales by Region • Managed as separate business segment • Separation to maintain OEM information integrity Q3 2016 CUSTOMER MI
Slide 21: Strategy Roadmap for Share Gain Through New Account Acquisition
Strategy Roadmap for Share Gain Through New Account Acquisition Facilitating Structures Account Identification teams in each region New CRM/CPQ global tool Application Centers Industry Strategies / Application Guides New STE (Special Truck Engineering) for rapid product customization One by One Cust
Slide 22: HY Path for Future Growth Includes Other Important Elements
HY Path for Future Growth Includes Other Important Elements… Through Core Lift Truck Business Share Gain Through Acquisition Through Partnership Through Investment in New Technologies
Slide 23: HY Lift Truck Incremental Volume Leverage & Target Economics
HY Lift Truck Incremental Volume Leverage & Target Economics Lift Trucks Produced in HY plants 115,000 Incremental Units Produced +5,000 Trucks Sales $158m Gross Profit $32m Operating Expenses $10m Operating Profit $22m Incremental Operating Profit % 14.2% As we make progress toward the 115,000 unit
Slide 24: 2016 Third Quarter Highlights
2016 Third Quarter Highlights 2016 Third Quarter Highlights LTM 9/30/16 3.8% LIFT TRUCK • Revenues down from lower shipments, primarily in Americas and EMEA, and deal-specific pricing, specifically in Americas • Bookings and backlog up substantially from Q3 2015 • Operating profit declines due to lo
Slide 25: 2016 and 2017 Earnings Perspective
2016 and 2017 Earnings Perspective LIFT TRUCK Q4 2016: • Expected increase in unit and parts revenues • Expected decrease in operating profit as revenue increase offset by lower product pricing and higher operating expenses • Decrease in net income, after excluding 2015 $7.5m unfavorable tax adjustm
Slide 26: Hyster-Yale Use of Cash Priorities
Hyster-Yale Use of Cash Priorities Return Cash to Stockholders Investments in Adjacent or Complementary Businesses Investments in Hydrogen Power Business Investments in Share Gain Programs Investments in Core Lift Truck Business Strategic initiatives to accelerate growth or enhance margins Acquisiti
Slide 27: Slide 27
Slide 28: Valuation Approach Needs to Vary By Business
Valuation Approach Needs to Vary By Business 28 Lift Truck and Attachment Businesses Lift Truck and Attachment Businesses Hydrogen Power Business Hydrogen Power Business • Board Oversight as Separate Businesses • Incentives Tied to Individual Businesses Strong Operating Cash Generation Market Leadin
Slide 29: A Solid Investment Option
A Solid Investment Option 29 HYSTER-YALE HYSTER-YALE Strong Balance Sheet Cash Generation & Commitment to Shareholder Return Investment & Growth in Game Changing Technologies Leading Products & Market Position Strategies to Gain Share in all Segments & Markets Customer Focused & Solutions Oriented S
Slide 30: Solutions to DRIVE Productivity Appendix
Solutions to DRIVE Productivity Appendix Appendix
Slide 31: Non-GAAP Disclosure
Non-GAAP Disclosure Adjusted Lift Truck Business Operating Profit, EBITDA and return on total capital employed are not measurements under U.S. GAAP, should not be considered in isolation or as a substitute for GAAP measures, and are not necessarily comparable with similarly titled measures of other
Slide 32: Non-GAAP Reconciliation
Non-GAAP Reconciliation _____________________ ($ in millions) Year Ended December 31 Qtr. Consolidated 9/30/2016 9/30/2016 Reconciliation of EBITDA Net income attributable to stockholders $ 98.0 $ 110.0 $ 109.8 $ 74.7 12.3 $ $ 47.8 Noncontrolling interest income (loss) 0.1 0.2 0.4 0.4 (0.3) (0.3) In
Slide 33: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) _____________________ ($ in millions) Qtr. Nuvera 9/30/2016 9/30/2016 Reconciliation of EBITDA Net loss attributable to stockholders $ (1.4) $ (14.6) (7.9) $ $ (19.7) Noncontrolling interest income - - - - Income tax benefit (0.8) (10.0) (5.0) (13.4) Interest expe
Slide 34: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) Actual return on capital employed percentage 10.8% 21.5% n/m 8.3% _____________________ Note: Return on capital employed is provided solely as a supplemental disclosure with respect to income generation because management believes it provides useful information wi
Slide 35: Cash Flow before Financing Calculation
Cash Flow before Financing Calculation Consolidated ($ in millions) Year Ended December 31 Qtr. Trailing 12 Months 9/30/2016 9/30/2016 Reconciliation of Cash Flow before Financing Net cash provided by operating activities $54.6 $128.7 $152.9 $100.0 $89.4 $45.8 $81.0 Net cash used for investing activ
Slide 36: Appendix: Supplemental Information
Solutions to DRIVE Productivity Appendix Supplemental Information
Slide 37: The History of Hyster-Yale and its brands
The History of Hyster-Yale and its brands Hyster founded in Portland, Oregon as the Willamette Ersted Company Company name officially changed to Hyster Company Yale Lock Mfg. broadens its scope into materials handling Yale forklift truck business merges with Eaton Mfg. Industrial Truck Division Yale
Slide 38: Hyster-Yale's Global Footprint
Hyster-Yale’s Global Footprint Ramos Arizpé, Mexico Fabrication Manufacture Sulligent, Alabama Component Manufacture Berea, Kentucky Lift Truck Manufacture Greenville, North Carolina Division Headquarters; Lift Truck Manufacture; Warehouse Development Center Cleveland, Ohio Corporate Headquarters Da
Slide 39: Historical Consolidated Revenue
Historical Consolidated Revenue ($ in millions) $2,057 $2,400 $2,489 $2,720 $2,824 $1,475 $1,802 $2,541 $2,469 $2,666 $2,767 $2,578 $2,524 $0 $1,000 $2,000 $3,000 LTM
Slide 40: Lift Truck Business Operating Profit Trends and % of Sales
Lift Truck Business Operating Profit Trends and % of Sales _____________________ (1) Lift Truck Segment Operating Profit, as reported (2) 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 s
Slide 41: Lift Truck Business Target Economics Goal and Gap to Target
Lift Truck Business Target Economics Goal and Gap to Target Achieve 7% operating profit margin target at mid-cycle Target Economics gap closure can be achieved with unit volume… Stronger Industry + Share Growth = Volume Leverage LTM 9/30/16 Gap to Target Economics Actual Lift Truck Operating Profit
Slide 42: Lift Truck Overview and Sources of Revenue
Lift Truck Overview and Sources of Revenue #3 Globally in 2015 Large installed base that drives parts sales Over 830,000 units worldwide HY sales of 86,900 units in 2015 81,500 units sold - produced in HY plants 5,400 units sold – produced by JV or other third parties Additional >4,700 units sold in
Slide 43: Lift Truck Industry Overview: Growth Rates by Region
Lift Truck Industry Overview EMEA JAPIC World Growth Rates by Region Year over Year (Units) Americas Q4 15 Q1 16 Q2 16 Q3 16 (5.0%) (3.7%) (1.6%) 9.7% Q4 15 Q1 16 Q2 16 Q3 16 9.6% 9.5% 10.6% 12.7% Q4 15 Q1 16 Q2 16 Q3 16 (8.8%) 2.4% (4.0%) 16.0% Q4 15 Q1 16 Q2 16 Q3 16 (1.2%) 3.7% 1.7% 13.2%
Slide 44: Lift Truck Unit Class Shipments
Lift Truck Unit Class Shipments China 23% Class 3 Electric 34% Class 3 Electric 31% Industry Units by Geography _____________________ Source: Company: LTM 9/30/16 Units Shipped Note: Units sold direct by SN JV are not included HY Lift Truck Units Sold by Geography _____________________ Source: WITS.
Slide 45: Shift in Market Balance from ICE to Electric
Shift in Market Balance from ICE to Electric Class 3 Electric 34% Class 3 Electric 27% Today _____________________ Source: WITS. Orders Reports. ICE = Internal Combustion Engine DRIVERS: • Customer shift • Growth of warehousing and logistics • Environmental, health and safety • Evolving technologies
Slide 46: Distribution Channel Strength and Diverse Customer Base
Distribution Channel Strength and Diverse Customer Base Blue Chip Customer Base Approximately 1,100 global dealer locations More than 2,800 application consultants Over 11,500 service technicians National Accounts Profile Independent Dealer Network • Focused on strategic customers with centralized p
Slide 47: 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
Slide 48: Core Strategies for Achieving Target are in Place
Core Strategies for Achieving Target are in Place – Understand Customer Needs – Low Cost of Ownership – Growth in Warehouse – Growth in Big Truck Business – Succeed in Asia – Strengthen Sales and Marketing – Enhance Independent Distribution – Solutions and Technology Drivers
Slide 49: Hyster-Yale Focus
Hyster-Yale Focus People Development Automation Modularization Telemetry HY Core Product Development Customized Manufacture in Market of Sale Alternative Power Fleet Management Understand Needs of Customers Low Cost of Ownership
Slide 50: Product Philosophy
Product Philosophy Guiding Product Philosophy Guiding Product Philosophy Product Portfolio Focus Product Portfolio Focus • Full product line • Segmented solutions • Scalable modular platforms • Leverage core assets • Technology partners • Fit for market and application • Reliability and durability •
Slide 51: Our Investment in R&D
Our Investment in R&D $61 $68 $69 $71 $69 Full Product Line* Lift Truck R&D Investment * Full Product Line – Class 1 through Class 5, including Big Truck 2.4% 2.8% 2.6% 2.6% 2.7% % of Revenue $ in millions COMPETITORS FULL MIN
Slide 52: Segmentation – Expanding Standard Range
Segmentation – Expanding Standard Range Cost Cost competitive (Targeting a 2-year Payback for Premium) Positioning right (Among Ours, Across Competition) Global designs - localized (Manufactured in Key Regions) Critical Success Factors Utility Standard Premium
Slide 53: Cost of Operation / Hour
Cost of Operation / Hour Fuel 11% Lease 9% Lease Fuel *Typical truck cost/hour for 5,000lb North American applications Operator 69% Service& Repair 11% Typical Truck Cost/Hour * Factors Impacting Low Cost of Ownership Ergonomics/ fatigue Auto functions Automated trucks Energy usage Alternative power
Slide 54: Modularization
Modularization …resulting in 40% reduction in truck system complexity Modularization reduces number of components in future … Side-stance Small 14*, 16 Large 16, 18, 21 Retail 14, 16 14 chassis variations New chassis New chassis Modular design with common interfaces - 4 variations Fore/aft - stance
Slide 55: Areas of Focus
Areas of Focus Telematics • Internet of things • Asset management • Fleet and truck data • Use of telematics • Partnered approach Balyo, Seegrid • Camera and laser- based systems • Focus on integration and value proposition Automation Alternative Power Lead acid Lithium-ion Fuel cell Diesel LPG Lith
Slide 56: Capturing More Lifecycle Value
Capturing More Lifecycle Value Truck Truck Hyster-Yale Maint Maint HY/Dealer Energy Energy Utility Company Fuel (Nuvera® Hydrogen Generator) Fuel (Nuvera® Hydrogen Generator) Energy Energy Utility Company Nuvera/Dealer Nuvera® Fuel Cell System Nuvera® Fuel Cell System Nuvera Maint Maint HY/Dealer Tr
Slide 57: Key Components Inside a Fuel Cell Engine
Key Components Inside a Fuel Cell Engine Power Electronics Hybrid Power System Stack Sub-System Engine Components Hydrogen Storage Thermal Management Fuel Cell Engine Enclosure and Counterweight
Slide 58: Developing Our Product Range
Developing Our Product Range Approximate Engine Power Requirement [kW] 24V 36V 48V 1-3 3-10 10-20 Product available in all electric truck classes Minor modifications to address >70% of market
Slide 59: Technology and Product Roadmaps
Technology and Product Roadmaps Fuel Cell Engines • Enhanced lift truck functionality • Integrated engines across multiple OEMs Next Generation Fuel Cells • Improved power density • Fuel efficiency • Lower cost Hydrogen Generator • Higher capacity • Longer life • Improved efficiency Automotive Refue
Slide 60: Bolzoni's Brands
Bolzoni’s Brands BOLZONI Founded in Italy in 1945, focus on lift truck attachments, forks and lift tables . A leading market position through the development of a worldwide network of subsidiaries and dealers, as well as strategic acquisitions. AURAMO Founded in Finland in 1947, focus on paper roll
Slide 61: Relationship and Approach with HY Lift Trucks
Relationship and Approach with HY Lift Trucks Stand-Alone Supplier Preferred supplier to HY Arms-length sales Commercial confidentiality Key supplier partner Purchasing leverage Broader market access Part of Hyster-Yale
Slide 62: 2015 Bolzoni Revenue by Product Line
2015 Bolzoni Revenue by Product Line Attachments € 111,3 M 80% * Other Revenues: Rental business and Customer care € 138,3 M Other Revenues* € 5,6 M 4% Forks € 13,7 M 10% Lift Table € 7,7 M 6%
Slide 63: 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, including hydrogen • Broad range of attachments • Source of aftermarket profitability • Barrier to entry Global Full Product Line Field Populatio
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