Hyster-yale, Inc. · NYSE:HY
Hyster-yale — Hyster-Yale Materials Handling — Non-Deal Roadshow (August 2018)
57 slides from Hyster-yale's roadshow presentation, Aug 24, 2018
Slide 1: Seaport Global Roadshow
Friday, August 24, 2018 Seaport Global Roadshow Exhibit 99
Slide 2: Safe Harbor Statement & Disclosure
Solutions that DRIVE Productivity 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
Slide 3: Hyster-Yale at a Glance
Solutions that DRIVE Productivity Hyster-Yale at a Glance EMEA 25.3% 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. _______
Slide 4: Products for All Needs
Products for All Needs… CLASS 1 CLASS 2 CLASS 3 CLASS 4 CLASS 5 Solutions that DRIVE Productivity Forklifts Internal Combustion Engine Lithium-Ion Reach Stackers Big Trucks Very Narrow Aisle Trucks Electric Counterbalanced Rider Trucks Electric Narrow Aisle Trucks Electric Hand Trucks Internal Combu
Slide 5: Broad Range of Power Options, Attachments and Solutions
…with a Broad Range of Power Options, Attachments and Solutions CLASS 1, 2 & 3 CLASS 4 & 5 Solutions that DRIVE Productivity Push Pulls Lifting Tables Electric Counterbalanced Rider Trucks Electric Narrow Aisle Trucks Electric Hand Trucks Internal Combustion Engine (cushion tire) Internal Combustion
Slide 6: Key Perspectives
Key Perspectives Solutions that DRIVE Productivity Global markets expected to be strong for next several years Investments to expand HY’s product and solutions portfolio and geographic breadth and depth Core lift truck programs aim to trigger organic growth through intensified industry focus Nuvera
Slide 7: Global Industry Remains Strong
Solutions that DRIVE Productivity Global Industry Remains Strong Global Lift Truck Industry Size North America Retail Lift Truck at Peak Trend Lift Truck Industry – Unit Distribution by Class Global Lift Truck Industry Breakdown (Units) Class 3 Electric 36% Long-term CAGR (2004 – 2017) = 5.4 % _____
Slide 8: A Positive Profitability Trend Despite Strengthening Headwinds
A Positive Profitability Trend Despite Strengthening Headwinds Solutions that DRIVE Productivity Key Variables Impacting Performance Impact on HY Market Cycle by Country + = Market Size by Industry + + Market Size by Product = / + = Commodity Prices/Tariffs _ _ Pricing + = / - Strength of Dollar = _
Slide 9: Lift Truck Business Target Economics Goal and Gap to Target
Solutions that DRIVE Productivity Lift Truck Business Target Economics Goal and Gap to Target Achieve 7% operating profit margin target over the medium term Achieve ROTCE > 20% Target Economics gap closure can be achieved with unit volume… Stronger Industry + Share Growth = Volume Leverage LTM 6/30/
Slide 10: Our Strategies Drive Our Economic Engine
Our Strategies address Changing Landscape and will Drive Our Economic Engine Grow in Emerging Markets Leader in the Attachments Business A large lift truck population base drives parts and service volume resulting in enhanced profitability for Hyster-Yale and dealers Solutions that DRIVE Productivit
Slide 11: #1: Leader in Independent Distribution
Solutions that DRIVE Productivity #1: Leader in Independent Distribution Independent Exclusive Entrepreneurial Profitable Committed partner Dual-line or single Solutions that DRIVE Productivity Enhancing performance Dealer Excellence programs Dealer incentives Term-based contracts 1,000+ global deal
Slide 12: #2: Leadership in Delivering Industry- & Customer-Focused Solutions
Solutions that DRIVE Productivity #2: Leadership in Delivering Industry- & Customer-Focused Solutions Solutions that DRIVE Productivity LOGISTICS MANUFACTURING DURABLE GOODS FOOD & BEVERAGE NATURAL RESOURCES & MATERIALS CONSUMER & BUSINESS TRADES SHORT- TERM RENTALS Source: 2017 ITA Market Size and
Slide 13: Sales Deployment
Solutions that DRIVE Productivity Sales Deployment 35% 40% High Value 25% Solutions that DRIVE Productivity Top Buyers ~200 accounts Industry Leaders ~1600 Accounts Rest of the Market • Committed to customer-obsessed, industry-specific, strategic partnerships • ~ 200 designated accounts with annual
Slide 14: #3: Delivering Low Cost of Ownership & Enhanced Productivity
Solutions that DRIVE Productivity #3: Delivering Low Cost of Ownership & Enhanced Productivity for Customers Battery Box Replacement Trucks Lithium-ion Ready Integrated Lithium-ion Truck ICE like Performance Solutions that DRIVE Productivity New RS45 Reachstacker Segmentation – Right Product at Righ
Slide 15: #4: Grow in Emerging Markets
Solutions that DRIVE Productivity #4: Grow in Emerging Markets MATURE MARKETS 817,880 EMERGING MARKETS 683,980 Solutions that DRIVE Productivity M A R K E T S I Z E S U B – T O T A L S Indicative Map Only: Company’s estimate of market type Emerging versus Mature Lift Truck Market Size (Last 12 month
Slide 16: Hyster-Yale Maximal Acquisition: Organization, Product, People
Solutions that DRIVE Productivity Organization Product People Acquired a 75% Interest in Hyster-Yale Maximal Forklift [Zhejiang] Co., Ltd. Rationalize Operations Leverage Cost Advantage Improve Operations Enhance Development Expand Products Optimize Distribution Solutions that DRIVE Productivity Bes
Slide 17: #5: Leader in Attachments Business
Solutions that DRIVE Productivity #5: Leader in Attachments Business One of the worldwide leading manufacturers of lift truck attachments, forks and lift tables Solutions that DRIVE Productivity A complete range of attachments to serve material handling industries in the area of forest products, foo
Slide 18: #6: Leader in Fuel Cells and Their Applications
Solutions that DRIVE Productivity #6: Leader in fuel cells and their applications Solutions that DRIVE Productivity Design of Fuel Cell Stacks and Engines Reliability Growth Engineering Manufacture of Fuel Cell Stacks and Engines Sales & Marketing to OEM’s and Partners Development of Hydrogen Compre
Slide 19: Future Non-Lift Truck Growth Opportunities
Solutions that DRIVE Productivity Future Non-Lift Truck Growth Opportunities Heavy duty applications Port equipment Delivery vehicles Buses China market entry Market research First agreement signed Other opportunities in evaluation Low cost sourcing Solutions that DRIVE Productivity
Slide 20: Results for Q2 2018 Consolidated vs. Q2 2017
Solutions that DRIVE Productivity HY HY HY Lift Truck (1) Bolzoni (1) Nuvera (1) Q2 2018 Q2 2017 Variance LTM 6/30/18 Results for Q2 2018 Consolidated vs. Q2 2017 ($ in millions) Revenues $720.1 $52.5 $0.4 $765.6 $685.5 $80.1 $3,040.4 Gross Profit $110.3 $16.8 ($0.7) $126.2 $121.7 $4.5 $513.1 Operat
Slide 21: Hyster-Yale Use of Cash Priorities
Solutions that DRIVE Productivity Hyster-Yale Use of Cash Priorities Return Cash to Stockholders Investments in Adjacent or Complementary Businesses Investments in Fuel Cell Business Investments in Share Gain Programs Investments in Lift Truck & Attachments Businesses Strategic initiatives to accele
Slide 22: Valuation Approach Needs to Vary By Business
Solutions that DRIVE Productivity Valuation Approach Needs to Vary By Business Lift Truck and Attachment Businesses Lift Truck and Attachment Businesses Fuel Cell Business Fuel Cell Business • Board Oversight as Separate Businesses • Incentives Tied to Individual Businesses Strong Operating Cash Gen
Slide 23: One Set of Strategies, Different Priorities for Execution
Solutions that DRIVE Productivity One Set of Strategies, Different Priorities for Execution Americas Full execution of strategies Significant investment to enhance share Increased dual-brand coverage Europe, Middle East, Africa Industry and customer solutions Low cost of ownership Distribution enhan
Slide 24: Key Developments Over Past Months
Solutions that DRIVE Productivity Key Developments Over Past 18 Months Nuvera strategy implementation – clear focus Bolzoni fully integrated and performing well Improved financial performance in core lift truck business Developments in automation and key product platforms Industry focus with new sal
Slide 25: A Compelling Investment Scenario over the Next Few Years
Solutions that DRIVE Productivity A Compelling Investment Scenario over the Next Few Years Bolzoni business has significant upside • Additional products under review • Americas growth potential Bolzoni business has significant upside • Additional products under review • Americas growth potential Cor
Slide 26: In Summary, Over the Next Few Years
Solutions that DRIVE Productivity by selling and producing 115,000 HY-factory trucks by selling and producing 115,000 HY-factory trucks In Summary, Over the Next Few Years…. Get to approximately $4 billion HY Lift Truck segment revenue irrespective of industry size and maintain ROTCE >20% Get to app
Slide 27: Financial Appendix
Solutions that DRIVE Productivity Financial Appendix
Slide 28: Non-GAAP Disclosure
Solutions that DRIVE Productivity Non-GAAP Disclosure EBITDA and return on total capital employed are not measurements under U.S. GAAP, should not be considered in isolation or as a substitute for GAAP measures, and are not necessarily comparable with similarly titled measures of other companies. Hy
Slide 29: Non-GAAP Reconciliation
Solutions that DRIVE Productivity Non-GAAP Reconciliation _____________________ Note: EBITDA in this investor presentation is provided solely as a supplemental disclosure with respect to operating results. EBITDA does not represent net income (loss), as defined by U.S. GAAP and should not be conside
Slide 30: Non-GAAP Reconciliation (continued)
Solutions that DRIVE Productivity Non-GAAP Reconciliation (continued) _____________________ Note: EBITDA in this investor presentation is provided solely as a supplemental disclosure with respect to operating results. EBITDA does not represent net income (loss), as defined by U.S. GAAP and should no
Slide 31: Non-GAAP Reconciliation (continued)
Solutions that DRIVE Productivity Non-GAAP Reconciliation (continued) Actual return on capital employed percentage 6.8% 13.6% n/m 4.3% Adjusted return on capital employed percentage 9.7% 17.0% n/m 4.4% _____________________ Note: Return on capital employed is provided solely as a supplemental disclo
Slide 32: Cash Flow before Financing Calculation
Solutions that DRIVE Productivity Cash Flow before Financing Calculation Consolidated ($ in millions) Year Ended December 31 Qtr. Trailing 12 Months 6/30/2018 6/30/2018 Reconciliation of Cash Flow before Financing Net cash provided by (used for) operating activities $152.9 $100.0 $89.4 $(48.9) $164.
Slide 33: Supplemental Information
Solutions that DRIVE Productivity Supplemental Information
Slide 34: The History of Hyster-Yale and its brands
The History of Hyster-Yale and its brands Solutions that DRIVE Productivity Hyster founded in Portland, Oregon as the Willamette Ersted Company Company name officially changed to Hyster Company First Hyster container handling trucks Yale Lock Mfg. broadens its scope into materials handling Yale and
Slide 35: Hyster-Yale
~ i HYSTER-YALE
Slide 36: Overview and Sources of Revenue Globally in 2017
Solutions that DRIVE Productivity Overview and Sources of Revenue Globally in 2017 Large installed lift truck base that drives parts sales Over 830,000 units worldwide at 12/31/17 HY sales of ~ 96,600 lift truck units in LTM 6/30/18 nits sold – produced in HY plants nits sold – produced by JV or oth
Slide 37: Historical Consolidated Revenue
Solutions that DRIVE Productivity Historical Consolidated Revenue $2,057 $2,400 $2,489 $2,720 $2,824 $1,475 $1,802 $2,541 $2,469 $2,666 $2,767 $2,578 $2,570 $2,885 $3,040 $0 $1,000 $2,000 $3,000 $4,000 LTM 6/30/18 ($ in millions)
Slide 38: Lift Truck Unit Class Shipments
Lift Truck Unit Class Shipments Class 5 ICE 51% Class 5 ICE 36% Class 3 Electric 30% Class 5 ICE 32% Class 5 ICE 56% Solutions that DRIVE Productivity Industry Units by Geography _____________________ Source: Company: LTM 6/30/18 Units Shipped Note: Units sold direct by SN JV are not included HY Lif
Slide 39: Secular Shift in Product Mix
Secular Shift in Product Mix Class 2 Electric 10% Class 5 ICE 32% Class 2 Electric 10% Class 5 ICE 18% Solutions that DRIVE Productivity Today _____________________ Source: WITS. Orders Reports. ICE = Internal Combustion Engine Utility = HYG Estimates DRIVERS: • Customer shift • Growth of warehousin
Slide 40: Global Lift Truck Market Rates of Change
Solutions that DRIVE Productivity 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. Boo
Slide 41: Lift Truck Market Size Data
Solutions that DRIVE Productivity Lift Truck Market Size Data Lift Truck Market Size Data WITS Orders Basis (1) Europe 265,896 278,024 312,455 327,173 380,557 445,583 411,107 222,883 299,387 368,286 North America 147,322 155,191 186,192 198,058 212,953 191,384 159,279 98,338 136,050 169,589 Total Am
Slide 42: Our Long-Term Philosophy
Solutions that DRIVE Productivity 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 43: Our Investment in R&D
Solutions that DRIVE Productivity Our Investment in R&D $71 $70 $72 $78 $83 Lift Truck R&D Investment Est. 2018 2.6% 2.7% 2.9% 2.9% 2.7% % of Revenue $ in millions • Product Development Target - 2.5% of Sales • Actions to Achieve Target Increase revenue Modular architecture India and China developme
Slide 44: Building a Platform to Grow in Emerging Markets with Hyster-Yale Maximal
Solutions that DRIVE Productivity Source: Audited 2017 financials, Chinese statutory report for all except bookings growth, which is unaudited • Established in 2006 in Fuyang District / Founder: Mr. JinHong Lu • 600 employees and 1.4 million ft 2 office and factory • Original Equipment Manufacturer
Slide 45: Near Term Synergy Plan
Solutions that DRIVE Productivity Near Term Synergy Plan • Consolidate existing China operations • Insource and expand manufacturing • Leverage low cost sourcing • Introduce HY expertise • Implement HY best practices Rationalize Operations Leverage Cost Advantage Improve Operations Enhance Developme
Slide 46: Projected Investment Return Summary
Projected Investment Return Summary Investment case to deliver accretive earnings with upside potential Upside Opportunities • Expand export and aftermarket opportunities Investment Case Synergy Considerations • Rationalize China production and purchasing • Include integration investments Solutions
Slide 47: Bolzoni Revenue by Product Line
Bolzoni Revenue by Product Line – LTM Q2 2018 Attachments 76% Other Revenues 4% Forks 15% Lift Table 5% $197.4M
Slide 48: Bolzoni Strategy: Enhance Strong OEM Relationships
Solutions that DRIVE Productivity Bolzoni Strategy: Enhance Strong OEM Relationships Sales outside of Italy = 86.5% of 2017 Global Sales Sales outside of Italy = 86.5% of 2017 Global Sales 57% 43% AMERICAS 36% EUROPE 58% OEM 4 16.0% OEM 1 29.4% OEM 2 26.7% OEM 3 21.5% TOP 5 OEM CUSTOMERS 2017 CUSTOM
Slide 49: Bolzoni Strategy: Expand Rapidly in US market
Solutions that DRIVE Productivity Bolzoni Strategy: Expand Rapidly in US market Enhance people capabilities Produce a complete range of attachments Enhance local design capability Expand production capacity Increase spare parts management Grow the customer base Create specific marketing plans by cus
Slide 50: Bolzoni Strategy: Synergies with HY
Solutions that DRIVE Productivity Bolzoni Strategy: Synergies with HY Develop Bolzoni as global supplier of attachments & forks to HY globally Accelerate growth of attachment business in North America Leverage Bolzoni manufacturing capacity Achieve procurement and logistics cost savings Increase sal
Slide 51: Fuel Cell Solution Growth Opportunities
Solutions that DRIVE Productivity Fuel Cell Solution Growth Opportunities 6,087 8,255 9,053 11,715 16,518 21,700 - 5,000 10,000 15,000 20,000 25,000 Population of Fuel Cell Powered Lift Trucks in North America Trend in population of fuel cell powered lift trucks in North America expected to continue
Slide 52: Lift Truck Power System Optimization: Cost and Robustness
Solutions that DRIVE Productivity Lift Truck Power System Optimization: Cost and Robustness 1H-18 2H-18 1H-19 2H-19 Cost MTBF Target Product Cost and Robustness • Approximately 40% reduction in costs by 2019 • Double MTBF (mean time between failure) Driven by • Strengthening supply chain • Internal
Slide 53: Nuvera Business Development Approach
Solutions that DRIVE Productivity Integrators OEM’s Business Development Approach Nuvera • Speed to Market • Close to customer • Quality Control • Control of IP • Long term partnership • Custom design and development • IP Transfer/ sharing • Economies of scale L1 Fuel Cell Module L0 Fuel Cell Stack
Slide 54: Expansion of Product Line
Solutions that DRIVE Productivity Expansion of Product Line Demonstration in critical port application in California Performance benefits • Metal plates – higher durability • High power density • Open flow field – improved fuel efficiency Modular, easily integrated solution 2019 Heavy duty engine Le
Slide 55: China Market Research and Engagement
Solutions that DRIVE Productivity China Market Research and Engagement Engaged China-based market research and segmentation study • Significant government incentives driving market interest • Several companies are early entrants, but market open to other partners • Nuvera technology is a strong fit
Slide 56: The Nuvera Plan 2018+
Solutions that DRIVE Productivity The Nuvera Plan 2018 + At At Lift Truck Business • Further develop engines for the lift truck market • Utilize Reinstated US Tax Credit • Introduce higher-power engines to enter new markets • Leverage EU growth opportunities • Leverage OEM / Integrators opportunitie
Slide 57: A Solid Investment Option
Solutions that DRIVE Productivity A Solid Investment Option 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
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