Hyster-yale, Inc. · NYSE:HY
Hyster-yale — Hyster-Yale Materials Handling — Investor Presentation (November 2017)
49 slides from Hyster-yale's investor presentation, Nov 6, 2017
Slide 1: Investor Presentation November 6, 2017
Investor Presentation November 6, 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. _____________________ EBITDA and ROTCE are non-GAAP
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 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 Ha
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: Six Key Perspectives to Emphasize
Six Key Perspectives to Emphasize Global market unit levels expected to be relatively strong at a high level for next several years Strong recovery underway in key markets and segments that have been depressed 7% operating margin at properly balanced HY factory-produced 115,000 units in this cycle r
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: A Positive Profitability Trend
A Positive Profitability Trend ($ in millions) 7% OPERATING PROFIT MARGIN TARGET 4.0% Gap 3.1% Gap Key Variables Impacting Performance Impact on HY 2016 2017 Market Cycle by Country _ + Market Size by Industry _ + Market Size by Product _ = / + Commodity Prices = _ Pricing _ + Strength of Dollar _ =
Slide 10: Lift Truck Business Target Economics
Lift Truck Business Target Economics Goal and Gap to Target Achieve 7% operating profit margin target at the next mid-cycle Target Economics gap closure can be achieved with unit volume… Stronger Industry + Share Growth = Volume Leverage LTM 9/30/17 Gap to Target Economics Actual Lift Truck Operatin
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: Hydrogen-Powered Lift Truck Advantages & Opportunities
Hydrogen-Powered Lift Truck Advantages & Opportunities 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 DOE reported N. America Constant power As quick as 3 minute refuel Operator productivity
Slide 13: Companies Using Hydrogen Fuel Cells in Forklift Operations
Companies Using Hydrogen Fuel Cells in Forklift Operations Amazon Walmart Sysco Foods Ace Hardware Associated Wholesale Grocers Baldor Specialty Foods BMW Bridgestone Canadian Tire Carter’s Central Grocers Coca-Cola CVS EARP Distribution FedEx General Motors Golden State Foods The Home Depot Honda I
Slide 14: The Nuvera Story
Purchased for a small investment Investing pre-tax expense dollars to commercialize fuel cell technology Solutions span Hydrogen Value Chain Strong IP / Patent portfolio Pipeline of new technologies Provides strong base for entry into other industries Nuvera’s association with HY provides: Industry
Slide 15: Business Reconfiguration – Fuel Cell Lift Truck Business
Business Reconfiguration – Fuel Cell Lift Truck Business 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 Compression Technology & Products Design of BBR and Integrated So
Slide 16: The Nuvera Plan
The Nuvera Plan 2018 + Development of supply chain Increase Mean Time Between Failure (MTBF) to industry leading levels Ramp up in fuel cell stack and engine production Launch of Orion® 2 fuel cell stack with increased power density and lower cost Execute partner opportunities Expansion into EMEA an
Slide 17: Bolzoni
Bolzoni Bolzoni is one of the worldwide leading manufacturers of lift truck attachments, forks and lift tables with an extensive product range LTM Q3 2017 Sales by Region Managed as separate business segment Separation to maintain OEM information integrity 2016 CUSTOMER MIX Lift Truck Manufacturers
Slide 18: HY Path for Future Growth
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 Fuel Cells Automation Telematics
Slide 19: 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 Special Truck Engineering for rapid product customization Industry / Customer Focus
Slide 20: Lift Truck Volume Leverage & Target Economics
Lift Truck Volume Leverage & Target Economics Incremental Units Produced +5,000 Trucks Sales $156m Gross Profit $34m Operating Expenses $10m Operating Profit $24m Incremental Operating Profit % 15.2% As we make progress toward the 115,000 unit production levels, the Lift Truck business will generate
Slide 21: 2017 Third Quarter and Outlook
2017 Third Quarter and Outlook 2017 Third Quarter Highlights 2017 Third Quarter LTM 9/30/17 Results Margins $ / % r from Q3 16 Results Margins Consolidated Revenue $691.1(1) 100.0% $61.8/ 9.8% $2,780.3(1) 100.0% Consolidated Operating Profit $17.9 2.6% $12.5 / 231.5% $68.0 2.4% Consolidated Net Inco
Slide 22: 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 2015 2016 YTD 2017 Annual Dividends (1) $18.4m $1.14/share $19.2m $1
Slide 23: 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 24: 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 25: 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 26: Financial Appendix
Financial Appendix Appendix
Slide 27: 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 28: 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 29: Non-GAAP Reconciliation (continued)
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 not be considered as a substitute fo
Slide 30: 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 31: Cash Flow before Financing Calculation
Cash Flow before Financing Calculation .. Consolidated ($ in millions) Year Ended December 31 Qtr. Trailing 12 Months 2013 2014 2015 2016 9/30/17 9/30/17 Reconciliation of Cash Flow before Financing Net cash provided by (used for) operating activities $152.9 $100.0 $89.4 $(48.9) $17.0 $85.5 Net cash
Slide 32: Supplemental Information
Supplemental Information Appendix
Slide 33: 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 34: 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 35: Lift Truck Overview and Sources of Revenue
Lift Truck Overview and Sources of Revenue 2016 Worldwide Sales by Product _____________________ Represents Hyster-Yale North American Lift Truck unit shipments by industry. Includes Big Truck sales that represent 10.9% of total sales. Bolzoni revenues of $115.6 million included in parts. A leading
Slide 36: Historical Consolidated Revenue
Historical Consolidated Revenue ’04 – ’16: 1.9% CAGR ($ in millions)
Slide 37: Lift Truck Unit Class Shipments
Lift Truck Unit Class Shipments Class 3 Electric 34% Class 3 Electric 29% Solutions that DRIVE Productivity Class 1 Electric 20% Class 2 Electric 10% Class 3 Electric 7% Class 4 ICE 13% Class 5 ICE 50% Industry Units by Geography Europe 34% Americas 22% China 27% Japan 6% Asia- Pacific 7% Middle Eas
Slide 38: 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 39: Our Long-Term Philosophy
Our Long-Term Philosophy Solutions that DRIVE Productivity 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 40: Product Philosophy
Product Philosophy Guiding Product Philosophy Guiding Product Philosophy Product Portfolio Focus Product Portfolio Focus Solutions that DRIVE Productivity • Full product line • Segmented solutions • Scalable modular platforms • Leverage core assets • Technology partners • Fit for market and applicat
Slide 41: Core Strategic Initiatives Update
Core Strategic Initiatives Update Highlights Initiative Highlights Strategic Objective Strategic Objective Initiative Solutions that DRIVE Productivity • Provide the right product and solution to meet the specific needs of different customers by industry segments • Understand industry trends, key dr
Slide 42: 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 43: 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 44: 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 Expanding industry-f
Slide 45: 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 46: 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 47: Areas of Focus
Areas of Focus Telematics Internet of Things Asset management Fleet and truck data Use of telematics Partnered approach 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 cell Battery Box
Slide 48: 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 49: LTM Q3 2017 Bolzoni Revenue by Product Line
LTM Q3 2017 Bolzoni Revenue by Product Line € 152,8 M Other Revenues* € 5,3 M 3% Forks € 20,0 M 13% Lift Table € 8,6 M 6% Attachments € 118,9 M 78% ___________ * Other Revenes – Rental business and Customer care. Note – Revenue by product line and percentages presented represent LTM Q3 2017 revenues
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