Hyster-yale, Inc. · NYSE:HY
Hyster-yale — Hyster-Yale Materials Handling — Investor Presentation (August 2017)
54 slides from Hyster-yale's investor presentation, Aug 10, 2017
Slide 1: Investor Presentation August 10, 2017
Exhibit 99 Investor Presentation August 10, 2017 Solutionsthat DRIVEProductivity
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. Separate lift truck, attachment and hydrogen power s
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 Internal Electric Narrow Electric Hand Combustion Internal Combustion Counterbalanced Aisle Trucks Trucks Engine Engine (pneumatic tire) Rider Trucks (cushion tire) 1.0T to 5.5T 1.5T to 6.0T 1.5T to 8.0T
Slide 5: With a 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 CLASS4 & 5 Clamps Forks Push Pulls Multipallets Electric Counterbalanced Rider Trucks Rotators Internal Combustion Engine (cushion tire) Electric Narrow Aisle Trucks Internal Combustion Engine (p
Slide 6: Five Key Perspectives to Emphasize
Five Key Perspectives to Emphasize Globalmarketunit levelsexpectedto berelativelystrongat a highlevelfor nextseveralyears Strong recovery underway in key markets and segments that have been depressed 7%operatingmarginat properlybalancedHYfactory-produced115,000unitsin this cycleremainsLift Truck bus
Slide 7: Lift Truck Industry Overview
Lift Truck Industry Overview Global Lift Truck Industry Size Global Lift Truck Industry Breakdown (Units) (units in thousands) Middle East & Long-term CAGR (2004 2016) – = 4.4% Asia-Pacific 7% Africa 4% Japan 6% 1,200 900 600 Europe 34% China 26% 300 872 547 794 975 944 1,010 1,094 1,100 1,182 1,286
Slide 8: 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 Europe East & Africa Asia (excluding Japan China China & Japan) _____________________ Source: WITS. Bookings Reports. Solutionsthat DRIVE
Slide 9: A Positive Profitability Trend
A Positive Profitability Trend ($ in millions) 7% OPERATING PROFIT MARGIN TARGET $145.0 7.0% KeyVariablesImpacting Impact on HY 3.1% 6.0% $120.0 Gap Performance 2016 2017 4.0% Gap 5.0% 3.9% $95.0 Prior Cycle 4.0% Market Cycle by Country _ + Market Peak 3.0% $99.0 3.0% $70.0 2.1% $74.6 2.0% Market Si
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 Additional units to fill each assembly line …should increase operating profits to target levels by: 7,300 13,250 11,300 Increasing unit product profit Class 3 550 Class 1 and 2 Class 4 and 5 trucks Big Trucks Decreasing manufact
Slide 11: Share Gain Drives Our Economic Engine
Share Gain Drives Our Economic Engine Hyster-Yale’s economic engine is driven by increasing unit volume and economies of scale. Core strategic initiatives were designed to drive the economic engine by increasing share... Worldwide Geographic Volume Distribution and Product Economies Strength to Driv
Slide 12: Hydrogen-Powered Lift Truck Advantages & Opportunities
Hydrogen-Powered Lift Truck Advantages & Opportunities Benefits Growth Opportunities Population of Fuel Cell Powered Lift Trucks in • Constant power N. America North America 150,000+ 18,000 • As quick as 3 minute electric trucks sold 16,000 14,000 refuel per year 12,000 Global 10,000 • Operator prod
Slide 13: The Nuvera Story
The NuveraStory Fuel Cell The Story Gen1 Hybrid Truck Engine / Purchased for a small investment Integrated Investing pre-tax expense dollars to commercialize Solution fuel cell technology Solutions span Hydrogen Value Chain Strong IP / Patent portfolio Drop-In BBR / Pipeline of new technologies Inte
Slide 14: Business Reconfiguration – Fuel Cells
Business ReconfigurationFuel – Cells NUVERA BUSINESS LIFT TRUCK BUSINESS Fuel Cell Stacks & Engines and ECP BBR/Integrated Solution for Vehicle Design, manufacture and sales/marketing of fuel cell stacks Design, manufacture and sales/marketing of battery-box and engines, and continued development of
Slide 15: The Nuvera Plan 2018+
The NuveraPlan 2018 + Complete product line up of Battery Box Replacements (BBRs) Ramp up in production of BBR and integrated solutions at Greenville, NC plant to meet anticipated expanding demand Continued focus on reducing cost of product to target costs and achieving targeted fuel cell engine vol
Slide 16: Bolzoni
Bolzoni JAPIC 5.4% Bolzoniis one of the worldwide leading manufacturers of lift truck attachments, forks and lift tables with an extensive product range America • Managed as separate business segment 34% 20.3% • Separation to maintain OEM information integrity 66% EMEA 74.3% MARKET I–NDUSTRIES Logis
Slide 17: HY Path for Future Growth Includes Other Important Elements
HY Path for Future Growth Includes Other Important Elements… Fuel Cells Through Investment in New Technologies Through Partnership Automation Through Acquisition Through Core Lift Truck Business Share Gain Telematics Solutionsthat DRIVEProductivity 17
Slide 18: Strategy Roadmap for Share Gain Through New Account Acquisition
Strategy Roadmap for Share Gain Through New Account Acquisition Products & Share Gain Drivers Solutions Focus Facilitating Structures One-by- • Account Identification teams One in each region Geographic Industry Customer New CRM/CPQ global tool Focus Focus • Focus • Application Centers Industry / Cu
Slide 19: HY Volume Leverage & Target Economics
HY Volume Leverage & Target Economics Lift Truck Incremental Units Produced +5,000 Trucks Lift Trucks Sold 124,000 Lift Trucks Produced in HY plants 115,000 Sales $159m Revenues $3,590m Gross Profit $34m Gross Profit $640m OperatingExpenses $11m Operating Expenses $390m Operating Profit $23m Operati
Slide 20: 2017 Second Quarter and Outlook
2017 Second Quarter and Outlook ($ in millions) 2017 Second Quarter LTM 6/30/17 Results Margins $ / % from Q2 16 Results Margins Consolidated Revenue $685.5(1) 100.0% $39.9/ 6.2% $2,718.5(1) 100.0% Consolidated Operating Profit $18.3 2.7% $6.9/ 60.5% $55.5 2.0% Consolidated Net Income $16.4 2.4% $8.
Slide 21: Hyster-Yale Use of Cash Priorities
Hyster-Yale Use of Cash Priorities Investments in Core Lift Truck Business Strategic initiatives to accelerate growth or enhance margins Investments in Share Gain Programs Investments to commercialize Nuvera’s technology Investments in Hydrogen Power Business Acquisitions of technologies and other f
Slide 22: In Summary, Over the Next Few Years
In Summary, Over the Next Few Years…. Get to approximately $3.6 billion by selling and HY Lift Truck producing segment revenue through Which leverages to 115,000 Significant Technology Fill existing HY-factory irrespective of share accelerators and assembly industry size growth business line trucks
Slide 23: Valuation Approach Needs to Vary By Business
Valuation Approach Needs to Vary By Business Lift Truck and Attachment Businesses Hydrogen Power Business Mature Cyclical Industry Developing / Technology Industry Distinct Technology / Patents in Fuel Cell Market Leading Products and Position and Hydrogen Generation Operating Cash Invested in New P
Slide 24: A Solid Investment Option
A Solid Investment Option Leading Products & Customer Focused & Market Position Solutions Oriented Cash Generation & Strategies to Gain Share Commitment to in all Segments & Shareholder Return HYSTER-YALE Markets Strong Balance Investment & Growth in Sheet Game Changing Strong Return Technologies on
Slide 25: Financial Appendix
Appendix Financial Appendix Solutionsthat DRIVEProductivity
Slide 26: Non-GAAP Disclosure
Non-GAAP Disclosure AdjustedLift TruckBusinessOperatingProfit, EBITDAand return on total capital employedare not measurementsunder U.S.GAAP,should not be consideredin isolation or as a substitute for GAAPmeasures,andare not necessarilycomparablewith similarlytitled measuresof other companies.Hyster-
Slide 27: Non-GAAP Reconciliation
Non-GAAP Reconciliation Trailing 12 ($ in millions) Year Ended December 31 Qtr. Months Consolidated 2013 2014 2015 2016 6/30/17 6/30/17 Reconciliation of EBITDA Net income attributable to stockholders $ 110.0 $ 109.8 $ 74.7 $ 42.8 $ 16.4 $ 59.0 Noncontrolling interest income (loss) 0.2 0.4 0.4 (0.5)
Slide 28: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) ($ in millions) Trailing 12 Year Ended December 31 Qtr. Months Nuvera 2014 2015 2016 6/30/17 6/30/17 Reconciliation of EBITDA Net loss attributable to stockholders $ (1.4) $ (14.6) $ (23.8) $ (6.3) $ (27.2) Noncontrollinginterest income - - - - - Income tax benefi
Slide 29: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) ($ in millions) Reconciliation of Return on Total Capital Employed (ROTCE) (1) Consolidated Lift Truck Nuvera Bolzoni LTM LTM LTM LTM 6/30/17 6/30/17 6/30/17 6/30/17 Average Stockholders' Equity (6/30/17, 3/31/17, 12/31/16, 9/30/16, and 6/30/16) $495.4 $538.7 $20.
Slide 30: Cash Flow before Financing Calculation
Cash Flow before Financing Calculation Consolidated ($ in millions) Year Ended December 31 Trailing 12 Qtr. Months 2013 2014 2015 2016 6/30/17 6/30/17 Reconciliation of Cash Flow before Financing Net cash provided by (usedoperating for) activities $152.9 $100.0 $89.4 $(48.9) $38.3 $114.3 Net cash us
Slide 31: Supplemental Information
Appendix Supplemental Information Solutionsthat DRIVEProductivity
Slide 32: The History of Hyster-Yale and its brands
The History of Hyster-Yale and its brands NMHG, HY’s NMHG introduces operating the UTILEV® lift company, acquires truck for the Nuvera to enter the Hyster founded in Company name First Hyster Portland Oregon as officially changed container Hyster acquired utility segment of fast-growing the Willamet
Slide 33: Hyster-Yale's Global Footprint
Hyster-Yale’s Global Footprint Gävle, Sweden Järvenpää, Finland Frimley, UK Commercial Attachment Danville, Illinois Irvine, Scotland Moscow, Russia Hebei, China Homewood, Illinois Division Headquarters; Subsidiary Manufacture Parts Distribution Center Attachment Manufacture European Administration
Slide 34: Lift Truck Business Operating Profit Trends and % of Sales
Lift Truck Business Operating Profit Trends and % of Sales ($ in millions) 7% TARGET $160.0 7.0% Prior Cycle Mid-Cycle Market $151.0 $140.0 Market Peak (1) 5.5% 3.1%Gap 6.0% $120.0 Closure 5.0% 5.0% $100.0 4.8% 5.0% 4.5% $80.0 $134.4 $99.0 $60.0 $133.3 $128.1 4.0% $111.7 (2) $74.6 3.9% $40.0 $57.5 3
Slide 35: Lift Truck Business Target Economics Goal and Gap to Target
Lift Truck Business Target Economics Goal and Gap to Target LTM 6/30/17 Gap to Target Economics Achieve 7% Target operating profit Actual Lift Truck Operating Profit Margin % 3.9% Economics gap margintarget at Margin Variances 0.8% closure can be Unit margin 1.1% achieved with the next mid-cycle uni
Slide 36: Lift Truck Overview and Sources of Revenue
Lift Truck Overview and Sources of Revenue A leading global lift truck manufacturer in terms of units sold HY sales of 88,700 units Large installed base Additional >6,300 units #4 in LTM 6/30/17 that drives parts sales 82,600 units sold p- roduced in HY soldin Japan in 2016 Globally in 2016 Over 827
Slide 37: Historical Consolidated Revenue
Historical Consolidated Revenue ($ in millions) $3,000 $2,824 $2,767 $2,720 $2,666 $2,719 $2,541 $2,469 $2,578 $2,570 $2,489 $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 LTM Q2 2017 Solutionsthat DRIVEProductivity 37
Slide 38: Lift Truck Unit Class Shipments
Lift Truck Unit Class Shipments Industry Units by Geography Industry Units by Class Industry Unit Revenue by Class Asia- Middle Estimated Industry Revenue Mix Pacific East & 7% Africa 4% Japan 6% Class 1 Class 1 Electric Class 2 Electric Europe Class 5 17% 19% Class 2 34% ICE Electric 10% Electric 3
Slide 39: Shift in Market Balance from ICE to Electric
Shift in Market Balance from ICE to Electric Prior Cycle Market Peak Today 2007 DRIVERS: 2017 • Customer shift • Growth of warehousing and logistics Class 1 • Environmental, health and safety Class 1 Electric • Evolving technologies Electric 18% 17% Class 5 ICE Class 2 Class 2 Class 5 ICE 36% Electr
Slide 40: 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 41: Distribution Channel Strength and Diverse Customer Base
Distribution Channel Strength and Diverse Customer Base National Accounts Profile 2016 Distribution Mix Blue Chip Customer Base • Focused on strategic customers with centralized National purchasing and geographically dispersed Accounts operations across dealer territories 17% • Fleet Management Prog
Slide 42: 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 Solutionsthat DRIVEProductivity 42
Slide 43: Product Philosophy
Product Philosophy Guiding Product Product Portfolio Focus Key Product Attributes Philosophy • Full product line • Support growth • Fit for market and application initiatives • Segmented solutions • Reliability and durability • Fill the factories • Scalable modular platforms • Energy efficiency • Di
Slide 44: Core Strategic Initiatives Update
Core Strategic Initiatives Update Initiative Strategic Objective Highlights • Provide the right product • Product fit for application Understand and solution to meet the • Premium, Standard and Utility products Customer Needs specific needs of different • Unique innovations customers across multiple
Slide 45: Core Strategic Initiatives Update
Core Strategic Initiatives Update Initiative Strategic Objective Highlights Enhance • Develop the strongest • Significant strengthening in core U.S. market Independent independent, • Growth of dual-brand coverage exclusive dealer Distribution network • New dealers appointed in EMEA • Enhanced dealer
Slide 46: Core Strategic Initiatives Update
Core Strategic Initiatives Update Initiative Strategic Objective Highlights • Expand market • Enhancement of dealer network and Succeed in Asia direct-selling capabilities penetration throughout Asia • Development of long-term strategic partnerships • Development of right local products • Establishm
Slide 47: Core Strategic Initiatives Update
Core Strategic Initiatives Update Initiative Strategic Objective Highlights Strengthen Sales • Smaller sales management areas • Strengthen and align sales and marketing • Implementing new sales approach to enhance and Marketing solutions selling skills Organization organization in all • Major focus
Slide 48: Our Investment in R&D
Our Investment in R&D Lift Truck R&D Investment Full Product Line* % of Revenue 2.8% 2.6% 2.6% 2.7% 2.9% FULL $ in millions $71 $71 $69 $69 $68 MIN 2012 2013 2014 2015 2016 HY COMPETITORS * Full Product Line C – lass 1 through Class 5, including Big Truck Solutionsthat DRIVEProductivity 48
Slide 49: Cost of Operation / Hour
Cost of Operation / Hour Typical Truck Cost/Hour * Factors Impacting Low Cost of Ownership Service & Operator Lease Fuel Lease Repair 9% Service& Fleet Cost/hour Energy usage Productivity Repair optimization 11% Fleet Alternative Ergonomics/ Price Management powertrains fatigue Fuel Operator managem
Slide 50: Areas of Focus
Areas of Focus Telematics Alternative Power • Internet of things Battery Box Integrated • Asset management Solutions solutions • Fleet and truck data Diesel • Use of telematics Lead acid Automation LPG • Partnered approach • Camera and laser- Lithium ion based systems Lithium ion • Focus on integrat
Slide 51: Developing Our Product Range
Developing Our Product Range Product available in all electric truck classes 48V 36V Minor modifications to address >70% of market 24V 1-3 3-10 10-20 Approximate Engine Power Requirement [kW] Solutionsthat DRIVEProductivity 51
Slide 52: Bolzoni's Brands
Bolzoni’s Brands BOLZONI Foundedin Italy in 1945,focusonlift truckattachments, forksandlifttables.A leading marketpositionthrough the developmentof a worldwide network of subsidiariesand dealers,aswell asstrategicacquisitions. AURAMO Founded in Finland in 1947, focus on paper roll clamps,bale clamps
Slide 53: LTM Q2 2017 Bolzoni Revenue by Product Line
LTM Q2 2017 Bolzoni Revenue by Product Line Other Revenues* Lift Table € 5,3 M Forks € 8,7 M 4% € 17,6 M 6% 12% € 146.6 M Attachments € 115,0 M 78% ___________ * Other Revenes –Rental business and Customer care. Note –Revenue by product line and percentages presented represent LTM Q2 2017 revenues i
Slide 54: Our Competitive Advantages
Our Competitive Advantages Global • Able to meet customers needs globally Customer Relationships • Global economies of scale • Long-term relationships • Able to meet most needs • National Account programs Full Product Line • Young/ fresh product line • Broad array of power options, including hydroge
Hyster-Yale Materials Handling — Investor Presentation (August 2017) on 6ix