Hyster-Yale, Inc. · NYSE:HY
Hyster-Yale — Hyster-Yale Materials Handling — Investor Presentation (March 2017)
60 slides from Hyster-Yale's investor presentation, Mar 7, 2017
Slide 1: Investor Presentation March 7, 2017
Investor Presentation March 7, 2017 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) 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. _____________________ Bolzoni’s financial results re
Slide 4: Hyster-Yale is a Full-Line Lift Truck Supplier
Hyster-Yale is a 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 Narr
Slide 5: Broad Range of Power Options, Attachments and Solutions
…with a Broad Range of Power Options, Attachments and Solutions 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 Lead Acid Battery Fuel Cell Engine LPG & Bi-fue
Slide 6: Five Key Perspectives to Emphasize
Five Key Perspectives to Emphasize Global market unit levels expected to be relatively stable at a high level for next few years Current external environment for Lift Truck business is challenging 7% operating margin at properly balanced HY-produced 115,000 units in this cycle remains Lift Truck bus
Slide 7: Lift Truck Industry Overview
Lift Truck Industry Overview (units in thousands) Global Lift Truck Industry Size _____________________ Trend line represents 4.4% long-term CAGR Average Industry Size. Source: WITS. Represents order intake. North America Retail Lift Truck Below Peak Trend _____________________ Source: WITS. LTM 12/
Slide 8: 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.
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 from HY Factories Required to Achieve 7% Target
Volume of 115,000 Units from HY Factories Required to Achieve 7% Target 9,300 Class 1 and 2 trucks 500 Big Trucks Additional units to fill each assembly line 35,800 additional units needed to achieve target Note: 115,000 units does not include volume from non-HY manufacturing plants Increasing unit
Slide 11: Share Gain Drives Our Economic Engine
Share Gain Drives Our Economic Engine 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 Market Share Parts and S
Slide 12: Core Strategic Initiatives Update
Core Strategic Initiatives Update Highlights Initiative Highlights Strategic Objective Provide the right product and solution to meet the specific needs of different customers across multiple industries Product fit for application Premium, Standard and Utility products Unique innovations Automation
Slide 13: Core Strategic Initiatives Update
Core Strategic Initiatives Update Initiative Initiative Strategic Objective Highlights Develop the strongest independent, exclusive dealer network Enhance Independent Distribution Strategic Objective Highlights Strengthen penetration of the growing warehouse segment Improve Warehouse Position Signif
Slide 14: Core Strategic Initiatives Update
Core Strategic Initiatives Update Strategic Objective Highlights Initiative Succeed in Asia Strategic Objective Highlights Initiative Enhance Big Truck Market Position Expand market penetration throughout Asia Increase leading market position and become supplier of choice in Big Truck segment Outcom
Slide 15: Core Strategic Initiatives Update
Core Strategic Initiatives Update Strategic Objective Highlights Initiative Strengthen Sales and Marketing Organization Strengthen and align sales and marketing organization in all geographic regions Outcome: Gain momentum leading to higher unit volumes and enhanced market share Smaller sales manage
Slide 16: Hydrogen-Powered Lift Truck Opportunities & Advantages
Hydrogen-Powered Lift Truck Opportunities & Advantages N. America electric trucks sold per year 150,000+ 25-50% Estimated up to can benefit from Fuel Cell solutions Global 700,000+ electric trucks sold per year Internal company estimates DOE reported N. America Growing sales pipeline: 5,000+ unit op
Slide 17: 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 - High pro
Slide 18: Separating Core Competencies and Responsibilities
Separating Core Competencies and Responsibilities ECP STACK ENGINE BBR/Integrated Solution for Vehicle Stack Sub-System Engine Components Fuel Cell Engine Lift Truck Business – design + manufacture of battery-box replacements (BBR) and integrated solutions Nuvera – design + manufacture of fuel- cell
Slide 19: Nuvera / Hyster-Yale Competitive Advantages
Nuvera / Hyster-Yale Competitive Advantages Industrialization Demand Flow / Lean Manufacturing Supply Chain expertise & Quality Management systems Validation and reliability growth testing Technology Patented fuel-cell stack design – performance & cost Technology roadmap – leverage development and v
Slide 20: The Nuvera Plan
The Nuvera Plan Successfully shipped product to launch customer Current generation BBR production at Nuvera® Design, manufacturing and aftermarket responsibility for next generation BBR and integrated solutions transferred to Lift Truck business Nuvera® focus on development of ECP, fuel-cell stack a
Slide 21: Bolzoni
Bolzoni Bolzoni is one of the worldwide leading manufacturers of lift truck attachments, forks and lift tables with an extensive product range 2016 Sales by Region* Managed as separate business segment Separation to maintain OEM information integrity 2016 CUSTOMER MIX* Lift Truck Manufacturers – OEM
Slide 22: HY Path for Future Growth Includes Other Important Elements
HY Path for Future Growth Includes Other Important Elements… GROWTH Through Core Lift Truck Business Share Gain Through Acquisition Through Partnership Through Investment in New Technologies
Slide 23: 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 Industry / Cust
Slide 24: HY Volume Leverage & Target Economics
HY Volume Leverage & Target Economics Incremental Units Produced +5,000 Trucks Sales $159m Gross Profit $34m Operating Expenses $10m Operating Profit $24m Incremental Operating Profit % 15.4% As we make progress toward the 115,000 unit production levels, HY Lift Truck will generate significant incre
Slide 25: 2016 Fourth Quarter Highlights
2016 Fourth Quarter Highlights LIFT TRUCK Revenues up due to increased shipments, primarily in EMEA, offset by the unfavorable effect of deal-specific pricing in North America Bookings comparable to and strong yearend backlog up from Q4 2015 Operating profit declines due to the unfavorable effect of
Slide 26: 2017 Earnings Perspective
2017 Earnings Perspective LIFT TRUCK FY 2016 Lift Truck results significantly affected by up-front investments made to move forward share gain initiatives. Net income declined due to unfavorable effect of lower pricing, including deal-specific pricing, at less than target margins, reduced sales volu
Slide 27: 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, including Bolzoni Investments to commercialize Nuvera’s technology 2014 2015 2016 Annual Dividends (1) $17.8m $1.10/share $18.4m $1.14/
Slide 28: In Summary, Over the Next Few Years
by selling and producing 115,000 HY-factory trucks In Summary, Over the Next Few Years…. Get to approximately $3.6 billion HY Lift Truck segment revenue irrespective of industry size to Fill existing assembly line capacity through Significant share growth Which leverages Technology accelerators and
Slide 29: Valuation Approach Needs to Vary By Business
Valuation Approach Needs to Vary By Business Lift Truck and Attachment Businesses 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 Traditi
Slide 30: A Solid Investment Option
A Solid Investment Option 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 Strong Return on
Slide 31: Appendix
Ui) HYSTER-YALE MATERIALS HANDLING 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 _____________________ 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 income
Slide 34: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) _____________________ (1) Bolzoni’s financial results represent only nine months of activity from the acquisition date of April 1, 2016. Note: EBITDA in this investor presentation is provided solely as a supplemental disclosure with respect to operating results. E
Slide 35: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) _____________________ 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
Slide 36: Cash Flow before Financing Calculation
Cash Flow before Financing Calculation ($ in millions) 2012 2013 2014 2015 2016 Reconciliation of Cash Flow before Financing Net cash provided by (used for) operating activities $128.7 $152.9 $100.0 $89.4 $(48.9) Net cash used for investing activities (19.5) (26.1) (44.4) (31.3) (145.1) Cash Flow be
Slide 37: Supplemental Information
Supplemental Information Appendix
Slide 38: The History of Hyster-Yale and its brands
Hyster founded in Portland Oregon as the Willamette Ersted Company 1929 1944 1959 Company name officially changed to Hyster Company First Hyster container handling trucks 1875 1920 Yale Lock Mfg. broadens its scope into materials handling Yale and Towne launched a new battery powered low-lift platfo
Slide 39: Hyster-Yale's Global Footprint
Hyster-Yale’s Global Footprint Ramos Arizpé, Mexico Fabrication Manufacture Sulligent, Alabama Component Manufacture Berea, Kentucky Lift Truck Manufacture Greenville, North Carolina Division Headquarters; Lift Truck Manufacture; Warehouse Development Center Cleveland, Ohio Corporate Headquarters Da
Slide 40: Historical Consolidated Revenue
Historical Consolidated Revenue ’04 – ’16: 1.9% CAGR ($ in millions)
Slide 41: 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 42: Lift Truck Business Target Economics
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 FY 12/31/16 Gap to Target Economics Actual Lift Truck Operating Profit
Slide 43: Lift Truck Overview and Sources of Revenue
Lift Truck Overview and Sources of Revenue 2016 Worldwide Sales by Product _____________________ Represents Hyster-Yale North America lift truck unit shipments by industry. Includes Big Truck sales that represent 10.9% of total sales. 2016 data was not finalized as of the publication date of this pr
Slide 44: Industry Units by Geography
Industry Units by Geography Lift Truck Unit Class Shipments _____________________ Source: Company: FY 12/31/16 Units Shipped Note: Units sold direct by SN JV are not included HY Lift Truck Units Sold by Geography _____________________ Source: WITS. FY 12/31/16 Orders Reports. _____________________ S
Slide 45: Shift in Market Balance from ICE to Electric
Shift in Market Balance from ICE to Electric Today 2016 _____________________ Source: WITS. Orders Reports. ICE = Internal Combustion Engine DRIVERS: Customer shift Growth of warehousing and logistics Environmental, health and safety Evolving technologies Previous Peak 2007
Slide 46: Lift Truck Market Size Data
Lift Truck Market Size Data Lift Truck Market Size Data 2006 | 2007 ie ea eer 47 299 649 [ast 36,050] 168, esl tsar am zsl—at sol fez tls zor Heol tonsa satan |-sseaneltassao|sovona|_Zazael 27apal senza aos eal 314.102 & ay Sroast oh tte cours) sauce Dames son FOIWEFA and Ont Economie Forecasts () H
Slide 47: 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 Approximately 10,800 service technicians National Accounts Profile Independent Dealer Network Focused on strategic customers with centra
Slide 48: 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 49: Product Philosophy
Product Philosophy Full product line Segmented solutions Scalable modular platforms Leverage core assets Technology partners Fit for market and application Reliability and durability Energy efficiency Operator productivity Support growth initiatives Fill the factories Differentiation Innovation Guid
Slide 50: Our Investment in R&D
Our Investment in R&D Full Product Line* Lift Truck R&D Investment * Full Product Line – Class 1 through Class 5, including Big Truck 2.8% 2.6% 2.6% 2.7% 2.9% % of Revenue $ in millions
Slide 51: Segmentation – Expanding Standard Range Capability
Segmentation – Expanding Standard Range Capability 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 52: Cost of Operation / Hour
Cost of Operation / Hour Factors Impacting Low Cost of Ownership *Typical truck cost/hour for 5,000lb North American applications Lease Fleet optimization Service & Repair Cost/hour Fuel Energy usage Mode control Alternative powertrains ICE to ER Telematics Fleet Management Extended Warranty Residua
Slide 53: 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 Lithium ion Fuel ce
Slide 54: Capturing More Lifecycle Value
Capturing More Lifecycle Value Truck Hyster-Yale Maint HY/Dealer Energy Utility Company Fuel (Nuvera® Hydrogen Generator) Energy Utility Company Nuvera/Dealer Nuvera® Fuel Cell System Nuvera Maint HY/Dealer Truck Hyster-Yale Lead-Acid Battery* Nuvera® Fuel-Cell System Solution* *Representative Total
Slide 55: Developing Our Product Range
Developing Our Product Range Typical Truck Voltage 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 56: Technology and Product Roadmaps
Advanced Technologies Fuel-Cell Engines Enhanced lift truck functionality Integrated engines across multiple OEMs Product Roadmap - New Markets Next Generation Fuel Cells Improved power density Fuel efficiency Lower cost Hydrogen Generator Higher capacity Longer life Improved efficiency Automotive R
Slide 57: 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 c
Slide 58: 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 59: 2016 Bolzoni Revenue by Product Line
2016 Bolzoni Revenue by Product Line € 137,6 M Other Revenues* € 5,6 M 4% Forks € 15,1 M 11% Lift Table € 8,9 M 6% Attachments € 108.0 M 79% ___________ * Other Revenes – Rental business and Customer care. Note – Revenue by product line and percentages presented represent full-year 2016 revenues.
Slide 60: 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 Population Dealer Relationships Independent distri
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