Hyster-yale, Inc. · NYSE:HY
Hyster-yale — Q3 2019 Earnings Presentation
57 slides from Hyster-yale's earnings presentation, October 2019
Slide 1: Investor Presentation Q3 2019
Investor Presentation Q3 2019 Solutionsfor Solutions foraachanging changingworld world
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: Our Businesses
Our Businesses Our Core Lift Truck Business Our Fuel Cell Business Our Attachment Business Solutions for a changing world 3
Slide 4: Key Perspectives
Key Perspectives Stable Market Foundation with Strong Growth Drivers: Automation, Alternative Energy & the Rise of E-commerce Core lift truck programs aim to Global market trigger organic growth moderating but remains through intensified at high level industry and customer focus Commodity pricing In
Slide 5: 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 Bolzoni Nuvera 0.3% offering a broad array of solutions aimed at meeting the specific materials handling needs of its customers. 5.1% Separate lift truck, attach
Slide 6: Full Lift Truck Product Line
Full Lift Truck Product Line - Over 400 Different Truck Models Available CLASS 1 CLASS 2 CLASS 3 CLASS 4 CLASS 5 Internal Electric Counterbalanced Electric Narrow Electric Hand Trucks Combustion Internal Combustion Engine Rider Trucks Aisle Trucks Engine (pneumatic tire) (cushion tire) 1.0T to 8.0T
Slide 7: Broad Range of Power Options, Attachments and Solutions
…with a Broad Range of Power Options, Attachments and Solutions Power Options Attachments CLASS 1, 2 & 3 CLASS 4 & 5 Clamps Forks Push Pulls Multipallets Electric Counterbalanced Rider Trucks Internal Combustion Engine (cushion tire) Rotators Electric Narrow Aisle Trucks Internal Combustion Engine (
Slide 8: Global Lift Truck Industry Remains Strong, but Moderating
Global Lift Truck Industry Remains Strong, but Moderating Global Lift Truck Industry Size Global Lift Truck Industry Breakdown (Units) Middle East & (units in thousands) Asia-Pacific Long-term CAGR (2004 – 2018) = 5.7% 7% Africa Japan 3% 6% 1,500 1,200 Europe 900 33% 600 China 300 30% 872 547 794 97
Slide 9: Lift Truck Business Target Economics Goal and Gap to Target
Lift Truck Business Target Economics Goal and Gap to Target YTD 9/30/19 Gap to Target Economics Target: achieve 7% Target Actual Lift Truck Operating Profit Margin % 2.9% operating profit Economics gap margin over the Margin Variances – including impact of Tariffs 2.0% closure can be medium term Vol
Slide 10: Significant Market Opportunities for Valued Added
Significant Market Opportunities for Valued Added Solid Core Market Increasing Value Added Technology Accelerators Clear Secular Growth Increasing Margins & Increasing Scope for Drivers Differentiation Differentiation & Share Gain Rise of e-Commerce Customer Economics Digital Transformation Redrawin
Slide 11: Our Strategies address Changing Landscape and Drive Economic Engine
Our Strategies address Changing Landscape and will Drive Our Economic Engine Hyster-Yale’s economic engine is driven by increasing unit volume and economies of scale. Core strategies are designed to drive the economic engine by increasing market share... Worldwide Geographic Volume Distribution and
Slide 12: #1: Provide the Lowest Cost of Ownership
#1: Provide the Lowest Cost of Ownership, while Enhancing Productivity for Customers Typical Truck Cost/Hour* Factors Impacting Cost of Ownership Service Operator Lease Lease Fuel 9% & Repair Service Fleet Cost/hour Energy usage Productivity & Repair optimization 11% Alternative Fleet Ergonomics/ Pr
Slide 13: Key Focus Areas for Low Cost of Ownership and Enhanced Productivity
Key Focus Areas for Low Cost of Ownership and Enhanced Productivity Next Generation Products Under Development Segmentation – Right Product at Right Price • Modular designs • Substantial expense and capital expenditures • Increased component commonality upfront with expected significant supply chain
Slide 14: #2: Industry- & Customer-Focused Solutions
#2: Be the Leader in the Delivery of Industry- & Customer-Focused Solutions Key Drivers Top Accounts Market Plan Action Items Scorecards Solutions for a changing world 14
Slide 15: Applying dedicated industry-focused resources to target segments
Applying dedicated industry-focused resources to target segments Warehouse Counterbalanced HYG Sales Approach Market Share RETAIL & LOGISTICS & FOOD & INDUSTRIALS DURABLE RENTALS BEVERAGE National Accounts Team GOODS 25% of Market Top Buyers ~ 200 Accounts Industry Sales Team 40% of Market Industry
Slide 16: #3: Be the Leader in the Attachments Business
#3: Be the Leader in the Attachments Business Pulp & Waste Paper Bale Clamps One of the Paper Roll Clamps Intelligent and worldwide leading standard Push Pulls manufacturers of lift truck attachments, forks and lift tables Carton Clamps Multi Pallet Intelligent and standard A complete range of attac
Slide 17: Bolzoni Core Strategies for Growth
Bolzoni Core Strategies for Growth BEVERAGE WHITE GOODS 3PLs Industry focus North America expansion PAPER AUTOMOTIVE Growth in AGV segment Enhance Strong OEM Expansion of fork of standard clamps manufacturing capacity Relationships Managed as separate business segment to maintain OEM Information i
Slide 18: #4: Be a Leader in fuel cells and their applications
#4: Be a Leader in fuel cells and their applications High technology fuel cell company Design of Fuel Cell Stacks Manufacture of Fuel Cell Manufacture of Fuel Cell Sales & Marketing to Reliability Growth and Engines Engines: strong focus on Stacks: strong focus on cost OEM’s and Partners Engineering
Slide 19: Non-Lift Truck Growth Opportunities
Non-Lift Truck Growth Opportunities Partnering with ZRHE (Runfeng) Heavy Heavyduty dutyapplications applications Nuvera 45kW Fuel Cell engines certified for China; vehicle testing in progress Port equipment Port equipment Delivery vehicles Delivery Buses vehicles Buses Discussions with va
Slide 20: #5: Grow in Emerging Markets
#5: Grow in Emerging Markets Emerging versus Mature Lift Truck Market Size (Last 12 months) Lift Truck Competition is Repositioning Top Global Manufacturers EASTERN EUROPE are increasing product depth 88,530 into low intensity and standard WESTERN EUROPE 402,504 product line-up Premium Manufacturers
Slide 21: Secular Shift in Product Mix
Secular Shift in Product Mix Previous Peak Market C5 Utility 2007 2018 C5 Utility C1/2 10% 17% Utility 3% Class 1 Electric Class 1 Electric 14% 17% C1/2 Utility 1% Class 2 Electric Class 2 Electric Class 5 Class 5 9% 10% ICE ICE 18% 32% Class 3 Electric Class 3 Electric 27% 30% DRIVERS: Class 4 ICE
Slide 22: Acquired a 75% Interest in Hyster-Yale Maximal Forklift
Acquired a 75% Interest in Hyster-Yale Maximal Forklift [Zhejiang] Co., Ltd. Best Value Best Fit Best Potential People Organization Product • Management • Production and design capability • Utility Counterbalance forklifts • Culture • Facilities and location • Big Trucks • Local market experienc
Slide 23: #6: Be the Leader in Independent Distribution
#6: Be the Leader in Independent Distribution Independent Exclusive Entrepreneurial Profitable Committed partner Dual-line or single Strengthening the distribution Enhancing performance footprint Dealer Excellence programs Sales and Service territories Dealer incentives Competitor conversi
Slide 24: Only Major Manufacturer Committed to Exclusive and Independent Distribution
Only Major Manufacturer Committed to Exclusive and Independent Distribution A True Partnership Limits HY capital requirements, HY teams incentivized on lowers cost structure and Independent retail sales performance, so drives high ROTCE aligned with dealer interests HY Dealer High ROTCE achieved des
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 Low-Intensity Products New Standard Products New Premium Products HY Maximal Integration BBR Rang
Slide 26: Synergy Amplification
Synergy Amplification E-commerce China Sourcing Be the Leader in the Delivery of Industry- Distribution & Customer-Focused Operator Engagement Solutions Assist Systems Automation Provide Lowest Cost of Ownership, while Synergy Enhancing Productivity for Customers Electrification Be the Leader in Tel
Slide 27: Results for Q3 2019 Consolidated vs. Q3 2018
Results for Q3 2019 Consolidated vs. Q3 2018 HY HY HY (1) (1) (1) ($ in millions) Lift Truck Bolzoni Nuvera Q3 2019 Q3 2018 Variance LTM 9/30/19 Revenues $725.3 $75.8 $2.4 $766.0 $783.9 ($17.9) $3,297.8 Gross Profit (Loss) $125.0 $13.0 ($3.1) $135.0 $117.7 $17.3 $522.5 Operating Expenses ($97.0) ($1
Slide 28: Hyster-Yale Use of Cash Priorities
Hyster-Yale Use of Cash Priorities Investments in Lift Truck & Attachments Businesses Expense and Capital Investments in Strategic initiatives to accelerate growth or enhance margins Investments in Share Gain Programs Investments to commercialize Nuvera’s fuel cell technology Investments in Fuel Cel
Slide 29: Valuation Approach Should Vary By Business
Valuation Approach Should Vary By Business Lift Truck and Attachment Businesses Fuel Cell Business Mature Cyclical Industry Developing / Technology Industry Distinct Technology / Patents in Fuel Cell Market Leading Products and Position and Hydrogen Generation Operating Cash Invested in Ne
Slide 30: In Summary, a compelling investment scenario
In Summary, a compelling investment scenario with many projects coming to completion over the next few years Grow to approximately $4 billion through Which leverages to by selling and HY Lift Truck Significant Technology Fill existing producing segment share accelerators and assembly revenue growth
Slide 31: Financial Appendix
Financial Appendix Solutions for a changing world
Slide 32: Non-GAAP Disclosure
Non-GAAP Disclosure EBITDA and return on total capital employed are not measurements under U.S. GAAP, should not be considered in isolation or as a substitute for GAAP measures, and are not necessarily comparable with similarly titled measures of other companies. Hyster-Yale defines each as the foll
Slide 33: Non-GAAP Reconciliation EBITDA
Non-GAAP Reconciliation EBITDA Trailing 12 ($ in millions) Year Ended December 31 Qtr. Qtr. Months Consolidated 2014 2015 2016 2017 2018 9/30/2018 9/30/2019 9/30/2019 Reconciliation of EBITDA Net income attributable to stockholders $ 109.8 $ 74.7 $ 42.8 $ 48.6 $ 34.7 $ 15.4 $ 12.8 $ 31.2 Nuvera asse
Slide 34: Non-GAAP Reconciliation EBITDA (continued)
Non-GAAP Reconciliation EBITDA (continued) ($ in millions) Trailing 12 Year Ended December 31 Qtr. Qtr. Months Nuvera 2014 2015 2016 2017 2018 9/30/2018 9/30/2019 9/30/2019 Reconciliation of EBITDA Net loss attributable to stockholders $ (1.4) $ (14.6) $ (23.8) $ (26.7) $ (27.9) $ (6.4) $ (5.8) $ (2
Slide 35: Non-GAAP Reconciliation ROTCE
Non-GAAP Reconciliation ROTCE ($ in millions) Reconciliation of Return on Total Capital Employed (ROTCE) Consolidated Lift Truck(1) Nuvera Bolzoni LTM 9/30/19 Average Stockholders' Equity (9/30/19, 6/30/19, 3/31/19, 12/31/18, and 9/30/18) $530.4 $624.3 $18.9 $136.6 Average Debt (9/30/19, 6/30/19, 3/
Slide 36: Cash Flow before Financing Calculation
Cash Flow before Financing Calculation Consolidated Trailing 12 ($ in millions) Year Ended December 31 Qtr. Months 2014 2015 2016 2017 2018 9/30/2019 9/30/2019 Reconciliation of Cash Flow before Financing Net cash provided by (used for) operating activities $100.0 $89.4 $(48.9) $164.7 $67.6 $53.6 ($
Slide 37: Supplemental Information
Supplemental Information Solutions for a changing world
Slide 38: The History of Hyster-Yale and Its brands
The History of Hyster-Yale and Its brands First Hyster NMHG, HY’s container NMHG introduces operating HY acquires a 75% handling trucks the UTILEV® lift company, acquires interest in Hyster founded in Company name truck for the Nuvera to enter the Zhejiang Maximal Hyster introduces Portland, Oregon
Slide 39: Hyster-Yale's Global Footprint
Hyster-Yale’s Global Footprint Gävle, Sweden Järvenpää, Finland Frimley, UK Commercial Attachment Danville, Illinois Homewood, Illinois Irvine, Scotland Moscow, Russia Hebei, China Wuxi, China Division Headquarters; Subsidiary Manufacture Parts Distribution Center Commercial Subsidiary European Admi
Slide 40: Overview and Sources of Revenue
Overview and Sources of Revenue A leading global lift truck manufacturer in terms of units sold HY sales of ~ 103,000 lift truck Additional ~ 7,100 lift #3(1) Large installed population truck units sold in units in LTM 9/30/19 Globally in 2018 that drives parts sales ~94,000 units sold – produced in
Slide 41: Historical Consolidated Revenue
Historical Consolidated Revenue ($ in millions) $4,000 $3,298 $3,179 $3,000 $2,824 $2,885 $2,720 $2,767 $2,666 $2,541 $2,578 $2,570 $2,489 $2,469 $2,400 $2,057 $2,000 $1,802 $1,475 $1,000 $0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 LTM 2019 Solutions for a changing
Slide 42: Lift Truck Unit Class Shipments
Lift Truck Unit Class Shipments Industry Units by Geography Industry Units by Class Industry Unit Revenue by Class Asia-Pacific Middle East Estimated Industry Revenue Mix 7% & Africa Japan 3% 6% Class 1 Class 1 Class 2 Electric Electric Electric 17% 21% 9% Europe Class 5 ICE Class 5 33% 34% ICE Clas
Slide 43: Global Lift Truck Market Rates of Change
Global Lift Truck Market Rates of Change ( 3 & 12 months rate of change trend) North Latin America America Brazil (excluding Brazil) Western Eastern Middle Europe East & Europe Africa Asia (excluding Japan China China & Japan) _____________________ Source: WITS. Bookings Reports. Solutions for a cha
Slide 44: Lift Truck Market Size Data
Lift Truck Market Size Data Lift Truck Market Size Data WITS Orders Basis (1) 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 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
Slide 45: Our Long-Term Philosophy
Our Long-Term Philosophy Long-term Long-term Shareholder Senior Increase growth shareholders protection management shareholder value incentivized as Return on Capital long-term Employed and Market shareholders Share Increase focus Solutions for a changing world 45
Slide 46: Our Investment in R&D
Our Investment in R&D Lift Truck R&D Investment • Product Development Target - 2.5% of Sales % of Revenue 2.6% 2.7% 2.9% 2.9% 2.9% 3.1% • Actions to Achieve Target $ in millions $98 Increase revenue $87 Modular architecture $78 $71 $70 $72 India and China development centers Process automati
Slide 47: Building a Platform to Grow in Emerging Markets with HY Maximal
Building a Platform to Grow in Emerging Markets with Hyster-Yale Maximal Forklift [Zhejiang] Co., Ltd. • Established in 2006 in Fuyang District / Founder: Mr. JinHong Lu • 600 employees and 1.4 million ft2 office and factory • Original Equipment Manufacturer with design, manufacture, sales and servi
Slide 48: Near Term Synergy Plan
Near Term Synergy Plan Rationalize Leverage Cost Improve Enhance Expand Optimize Operations Advantage Operations Development Products Distribution OPERATIONS DEVELOPMENT DISTRIBUTION • Consolidate existing China operations Leverage local design expertise HY Independent Global • Insource and expand m
Slide 49: Projected Investment Return Update
Projected Investment Return Update Impact on Annual Global Hyster-Yale Earnings Current Estimate Investment Case 2017 2018 2019 2020 2021 2022 2023 *Graphic does not include impact of the $10M incentive payout Current estimate based on: • 2018 after tax performance, including purchase price accounti
Slide 50: Bolzoni Revenue by Product Line – LTM 9/30/19
Bolzoni Revenue by Product Line – LTM 9/30/19 Other Revenues 3% Lift Table Forks 3% 9% Attachments 43% $345.5M Cylinders and Transmissions 42%(1) (1) LTM Q3 2019 includes cyclinders and transmissions produced in the Sulligent, Alabama plant Solutions for a changing world 50
Slide 51: Bolzoni Strategy: Enhance Strong OEM Relationships
Bolzoni Strategy: Enhance Strong OEM Relationships Managed as separate business segment Separation to maintain OEM information integrity 2018 CUSTOMER MIX 2018 OEM SALES BY REGION 2018 TOP 5 OEM CUSTOMERS ASIA OEM 5 6% 3.6% OEM 4 15.4% OEM 1 31.6% 57% AMERICAS 43% EUROPE 31% 63% OEM 3 20.9% OEM
Slide 52: Bolzoni Strategy: Synergies with HY
Bolzoni Strategy: Synergies with HY Increase sales of HY forklift & Develop Bolzoni Bolzoni attachments by creating as global supplier of high-quality product package attachments & forks to HY globally Promote through HY Accelerate growth of distribution system GROWTH attachment business in North Am
Slide 53: Fuel Cell Solution Growth Opportunities
Fuel Cell Solution Growth Opportunities Current Hydrogen and Fuel Cell Population of Fuel Cell Powered Lift Trucks N. America Applications in N. America (4) in North America 175,000+ >240 MW 30,000 (2) 27,500 (3) electric trucks sold Trend in population of fuel cell powered lift trucks in 25,400 Bac
Slide 54: Business Development Approach
Business Development Approach Integrators OEM’s • Speed to Market • Long term partnership • Close to customer • Custom design and development • Quality Control • IP Transfer/ sharing L3 Fuel Cell Hybrid Vehicle • Control of IP • Economies of scale L3 Fuel Cell Hybrid Vehicle L2 L2 Fuel Cell Engine F
Slide 55: Expansion of Product Line: 2019 Heavy duty engine
Expansion of Product Line 2019 Heavy duty engine Modular, easily integrated solution Leverage experience from HY supply Scale up manufacturing Performance benefits capability • Metal plates – higher durability Planned localization for • High power density China market • Open flow field – improved fu
Slide 56: China Market Research and Engagement
China Market Research and Engagement Engaging with the Chinese Hydrogen Fuel Cell Industry and Businesses • Signed agreement with Fuyang government to establish production in China • First OEM bus on the road powered by Nuvera FC engine, integrated by Chinese partner • Early commitments from multipl
Slide 57: A Solid Investment Option
A Solid Investment Option Leading Products & Customer Focused & Market Position Solutions Oriented Strategies to Gain Share Commitment to in all Segments & Shareholder Return HYSTER-YALE Markets Strong Balance Investment & Growth in Sheet Game Changing Solid Return on Technologies Capital Solutions