Hyster-yale, Inc. · NYSE:HY
Hyster-yale — Q4 2019 Earnings Presentation
53 slides from Hyster-yale's earnings presentation, February 2020
Slide 1: Q4 2019 Investor Presentation
Mass Customization Q4 2019 INVESTOR PRESENTATION Electrification Automation Digitization Globalization
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 Attachments Business 3 Our Fuel Cell Business Our Businesses Transforming the Future Our Core Lift Truck Business
Slide 4: Hyster-Yale at a Glance
Hyster-Yale at a Glance Hyster-Yale Materials Handling, Inc. (NYSE:HY) is a leading Key Metrics In millions (except employee data) globally integrated, full-line lift FY 12/31/2019 Lift Truck Bolzoni Nuvera truck manufacturer offering a broad array of solutions aimed at Revenue $3,124.2 $345.4 $10.1
Slide 5: Full Lift Truck Product Line - Over 400 Different Truck Models Available
Full Lift Truck Product Line - Over 400 Different Truck Models Available Electric Counterbalanced Electric Narrow ICE Internal Combustion Engine (ICE) Electric Hand Trucks Rider Trucks Aisle Trucks (cushion tire) (pneumatic tire) CLASS 1 CLASS 2 CLASS 3 CLASS 4 CLASS 5 1.0T to 8.0T 1.5T to 6.0T 1.5T
Slide 6: …with a Broad Range of Power Options, Attachments and Solutions
…with a Broad Range of Power Options, Attachments and Solutions Power Options Attachments CLASS 1, 2 & 3 CLASS 4 & 5 Clamps Forks Push Pulls Multipallets Electric Counterbalanced Rider Trucks Internal Combustion Engine (cushion tire) Rotators Electric Narrow Aisle Trucks Internal Combustion Engine (
Slide 7: Global Lift Truck Industry Remains Strong, but Moderating
Global Lift Truck Industry Remains Strong, but Moderating Global Lift Truck Industry Size Global Lift Truck Industry Breakdown (Units) (units in thousands) Asia- Middle Long-term CAGR (2004 – 2019) = 5.2% Pacific East & 7% Africa Japan 1,500 3% 6% 1,200 900 Europe 32% 600 300 China 872 547 794 975 9
Slide 8: Core Lift Truck Business as Foundation for Future Expansion Opportunities
Core Lift Truck Business as Foundation for Future Expansion Opportunities Broad and competitive Global network of product portfolio Continually capable, independent dealer partners Strong suite of Improving, Strong solutions to address Mature business Lift Truck Core industry needs model delivering
Slide 9: Lift Truck Business Target Economics Goal and Gap to Target
Lift Truck Business Target Economics Goal and Gap to Target ($ in millions) $125 7% LIFT TRUCK OPERATING PROFIT MARGIN TARGET 7.0% Achieve 7% $100 6.0% 4.0% 5.0% operating profit $75 2.1% 2.7% 4.0% 2.3% margin target over $50 $110.1 3.0% 2.0% * Prior Peak $25 $67.5 $85.6 the medium term $57.5 1.0% *
Slide 10: Transformational Strategies and Projects…
Transformational Strategies and Projects… …expected to lead to significantly enhanced volume and financial results over the next three to four years Be the Leader in the Delivery of Industry- Modularity & Mass Customization & Customer-Focused Solutions Direct Customer Engagement Provide Lowest Cost
Slide 11: Lift Truck Synergy Amplification
Lift Truck Synergy Amplification E-commerce China Sourcing Be the Leader in the Operator Delivery of Industry- Distribution Engagement Assist Systems & Customer-Focused Solutions Direct Customer Electrification Engagement Provide Lowest Cost of Ownership while Synergy Enhancing Productivity for Cust
Slide 12: Electrification
Electrification Using electric motive 2 X Fuel power strength as a cell engines gateway for truck sales LEAD ACID including Modular cooling and share growth frame mounting for hydrogen Hydrogen and battery tanks LITHIUM-ION pack horizontal and above flat battery pack ? HYDROGEN Integrated Truck Hydr
Slide 13: Globalization and Leveraging China Operations to Expand Low-Intensity Offering
Globalization and Leveraging China Operations to Expand Low-Intensity Offering Addressing key opportunities for global growth: China investment in HY Maximal to drive share growth in: o Investing in High-Growth regions (Mexico, ✓ Greater Asia region and emerging markets Brazil, India, Singapore & Ch
Slide 14: Distribution Engagement
Distribution Engagement Independent ◼ Exclusive ◼ Entrepreneurial ◼ Profitable ◼ Committed partner ◼ Dual-line or single Strengthening the distribution Enhancing performance footprint Dealer Excellence programs Industry-focused sales support Dealer alignment Competitor acquisitions Term-based contra
Slide 15: Direct Customer Engagement: Connecting Value to Requirements
Direct Customer Engagement: Connecting Value to Requirements HY Sales Transformation Evolving HY Business Increase Direct Enhanced Deploy Value Focus on Transformative Commercialize Needs Engagement Industry Sales Selling Process Customer Emerging Telemetry, Solutions Strategy Experience IoT & Digit
Slide 16: Modular Solutions to Optimize Customer Productivity
Modular Solutions to Optimize Customer Productivity LOW COST HIGH FUNCTION + Operator Overhead Basic Cab Premium Cab Right One Truck Compartment Guard + Multiple Configurations Modules Powertrain Basic Electronic Advanced + Steering Hydraulic + Electric Right + + Cost Electrical Basic Full Featured
Slide 17: Automation Journey
Automation Journey Partner Solutions Modular, Scalable Internally Developed Automation Horizontal Vertical … (Balyo) (JBT) Targeted Introduction of Initial Applications in 2021 Transforming the Future 17
Slide 18: Bolzoni at a Glance
Bolzoni at a Glance Bolzoni, a stand-alone company within HY, is one of the leading, worldwide 2019 Customer Mix FY 12/31/19 Sales by Segment manufacturers of lift attachments, forks and lift tables, with the most Lift Truck Other revenue Forks 9% Manufacturers extensive product range in the market
Slide 19: Bolzoni Core Strategies for Growth
Bolzoni Core Strategies for Growth AGV North Enhance One Industry Far East Market American OEM Company, Focus Expansion Presence Expansion Business 3 Brands Expansion Transforming the Future 19
Slide 20: Bolzoni - Investment in Growth
Bolzoni - Investment in Growth Sulligent, Alabama: Expand Asia Local production Distribution Footprint Improved internal sales support with technical and engineering expertise Team stability Expanded service team New segment of standard Increased volumes and attachments products • High quality ❑ Two
Slide 21: Nuvera is a Transformational Opportunity
Nuvera is a Transformational Opportunity At a Glance: Application Portfolio Leading, Patented Technology Technology • Electric mobility • Highly diverse History applications Strong and Growing Demand • 75+ engineers • 8th generation of Fuel • High efficiency Fuel Cell concept Cell engine • 20 years
Slide 22: Strong Demand Growth for Fuel Cells
Strong Demand Growth for Fuel Cells 120,000 $9,000 200,000 Global Estimates Units/Revenue $14,000 Regional Estimates Units/Revenue 180,000 $8,000 (US Million) $12,000 100,000 (USD Million) 160,000 $7,000 140,000 $10,000 80,000 $6,000 120,000 $8,000 $5,000 60,000 100,000 $4,000 80,000 $6,000 40,000 $
Slide 23: Market Trends / Nuvera Activity
Market Trends / Nuvera Activity North America Market Europe Market Trend: China Market Trend: Trend: • City & Country bans on ICE • Government subsidy driving adoption • Currently dominated by Materials • Large push for public facing H2 • Early targets are Buses and Handling (>25k units) stations Co
Slide 24: Nuvera – Fuyang Location: An Investment in Growth
Nuvera – Fuyang Location An Investment in Growth Scalable stack production in the area of consumption Option to assemble and test engines Improved sales support with technical and engineering expertise Development of product and production Expanded service team Spare parts support Transforming the F
Slide 25: Hyster-Yale projects maturing over the next years are transformative
Hyster-Yale projects maturing over the next 1 to 4 years are transformative… …and have the objective of driving revenue and profitability to target Our Core Lift Truck Business Our Fuel Cell Business Our Attachments Business New Low-Intensity Products New Standard Products Increased Direct New Premi
Slide 26: Current Lift Truck Business Target and Gap to Target
Current Lift Truck Business Target and Gap to Target ($ in millions) $125 7% LIFT TRUCK OPERATING PROFIT MARGIN TARGET 7.0% Achieve 7% $100 6.0% 4.0% 5.0% operating profit $75 2.1% 2.7% 4.0% 2.3% margin target over $50 $110.1 3.0% 2.0% * Prior Peak $25 $67.5 $85.6 the medium term $57.5 1.0% ** Curre
Slide 27: Results for Q4 2019 Consolidated vs. Q4 2018
Results for Q4 2019 Consolidated vs. Q4 2018 HY HY HY HY (1) (1) (1) ($ in millions) Lift Truck Bolzoni Nuvera Q4 2019 Q4 2018 Variance FY 2019 FY 2018 Variance Revenues $798.2 $87.0 $1.0 $834.8 $840.8 ($6.0) $3,291.8 $3,179.1 $112.7 Gross Profit (Loss) $130.5 $14.0 ($3.6) $141.2 $121.9 $19.3 $541.8
Slide 28: Three- to Four-Year Objective is Significant Volume and Profitability Enhancement
Three- to Four-Year Objective is Significant Volume and Profitability Enhancement Leading Products & Customer Focused & Market Position Solutions Oriented Commitment to Investment & Growth in Shareholder Return and Long-term HYSTER-YALE Game Changing Technologies Growth Strategies to Gain Share Stro
Slide 29: Hyster-Yale Priorities for Use of Cash
Hyster-Yale Priorities for Use of Cash 2017 2018 2019 Investments in Fuel Cell Business Investments to commercialize Annual $19.8m $20.4m $21.0m Nuvera’s fuel cell technology Dividends (1) $1.21/share $1.24/share $1.27/share 2012 to 2014 Share $49.8m / 694,653 shares of Buyback Class A common stock
Slide 30: Valuation Approach Should Vary By Business
Valuation Approach Should Vary By Business Lift Truck and Attachment Businesses Fuel Cell Business Mature Cyclical Industry Developing / Technology Industry Distinct Technology / Patents in Fuel Cell and Market Leading Products and Position Hydrogen Generation Operating Cash Invested in New Product
Slide 31: Financial Appendix
FINANCIAL ENTER SESSION APPENDIX TITLE HERE… Presenter Name
Slide 32: Non-GAAP Disclosure
Non-GAAP Disclosure EBITDA and return on total capital employed are not measurements under U.S. GAAP, should not be considered in isolation or as a substitute for GAAP measures, and are not necessarily comparable with similarly titled measures of other companies. Hyster-Yale defines each as the foll
Slide 33: Non-GAAP Reconciliation EBITDA
Non-GAAP Reconciliation EBITDA ($ in millions) Year Ended December 31 Qtr. Qtr. Consolidated 2015 2016 2017 2018 2019 12/31/2018 12/31/2019 Reconciliation of EBITDA Net income (loss) attributable to stockholders $ 74.7 $ 42.8 $ 48.6 $ 34.7 $ 35.8 $ (1.2) $ 3.4 Nuvera asset impairment - - 4.9 - - - -
Slide 34: Non-GAAP Reconciliation EBITDA (continued)
Non-GAAP Reconciliation EBITDA (continued) ($ in millions) Year Ended December 31 Qtr. Qtr. Nuvera 2015 2016 2017 2018 2019 12/31/2018 12/31/2019 Reconciliation of EBITDA Net loss attributable to stockholders $ (14.6) $ (23.8) $ (26.7) $ (27.9) $ (25.2) $ (7.3) $ (7.3) Nuvera asset impairment - - 4.
Slide 35: Non-GAAP Reconciliation ROTCE
Non-GAAP Reconciliation ROTCE ($ in millions) Reconciliation of Return on Total Capital Employed / Return on Capital Employed (ROTCE) Consolidated Lift Truck(1) Nuvera Bolzoni FY 12/31/19 Average Stockholders' Equity (12/31/19, 9/30/19, 6/30/19, 3/31/19, and 12/31/18) $527.8 $628.2 $22.0 $140.7 Aver
Slide 36: Cash Flow before Financing Calculation
Cash Flow before Financing Calculation Consolidated ($ in millions) Year Ended December 31 2015 2016 2017 2018 2019 Reconciliation of Cash Flow before Financing Net cash provided by (used for) operating activities $89.4 $(48.9) $164.7 $67.6 $76.7 Net cash used for investing activities (31.3) (145.1)
Slide 37: Supplemental Information
SUPPLEMENTAL INFORMATION ENTER SESSION TITLE HERE… Presenter Name
Slide 38: Hyster-Yale's Global Footprint
Hyster-Yale’s Global Footprint Gävle, Sweden Järvenpää, Finland Homewood, Illinois Frimley, UK Commercial Attachment Danville, Illinois Inventory and Parts; Customer Irvine, Scotland Moscow, Russia Hebei, China Wuxi, China Division Headquarters; Subsidiary Manufacture Parts Distribution Center Servi
Slide 39: Overview and Sources of Revenue
Overview and Sources of Revenue A leading global lift truck manufacturer HY sales of ~ 100,300 lift Additional ~ 7,200 lift #3(1) Large installed population truck units sold in truck units in FY 12/31/19 Globally in 2018 that drives parts sales ~91,300 units sold – produced in HY plants 2019 by Sumi
Slide 40: Lift Truck Unit Class Shipments
Lift Truck Unit Class Shipments Industry Units by Geography Industry Units by Class Industry Unit Revenue by Class Middle Estimated Industry Revenue Mix Asia Pacific East & 7% Africa Class 1 Class 2 Japan 3% Electric Class 1 Electric 6% Class 5 16% 9% Electric 22% Class 2 Europe ICE Class 5 Electric
Slide 41: Secular Shift in Product Mix
Secular Shift in Product Mix Previous Peak Market C5 Low 2007 2019 Intensity C5 Low C1/2 Low 10% Intensity Class 1 Intensity Class 1 19% Electric 3% Electric C1/2 14% Class 2 17% Low Intensity Electric Class 2 1% 8% Class 5 Electric ICE 10% Class 5 ICE 32% 16% Class 3 Class 3 Electric Electric 29% 2
Slide 42: 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. Transforming the Fu
Slide 43: 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 44: Key Capital Expenditures and R&D
Key Capital Expenditures and R&D 60 Capex 140 R&D 50 Bolzoni 120 (total $ in millions) (total $ in millions) 40 Nuvera 100 80 30 New Brazil Plant Bolzoni 60 Nuvera 20 SAP & CRM/CPQ Core Forklift 40 10 Core Forklift 20 Investments 0 0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Capital expendit
Slide 45: Life Cycle Costs
Life Cycle Costs Typical Truck Cost/Hour* Factors Impacting Low Cost of Ownership Productivity Operator Ergonomics/ fatigue Auto functions 69% Automated trucks Energy usage Alternative powertrains Fuel Internal Combustion Engine to Electric Rider 11% Mode control Cost/hour Fleet management Service &
Slide 46: Emerging Market Development Center
Emerging Market Development Center Increasing speed to market by combining HY design discipline and low-intensity lift truck design focus Transforming the Future 46
Slide 47: Targeting Industry Sales Approach
Targeting Industry Sales Approach HY SALES APPROACH MARKET SHARE National Accounts Team 25% OF MARKET Enhanced Industry Sales TOP BUYERS Strategy Industry Sales Team 40% OF MARKET INDUSTRY LEADERS Dealer Sales Team 35% OF MARKET REST OF THE MARKET Transforming the Future 47
Slide 48: Transformative Sales System to Commercialize Emerging Technologies
Transformative Sales System to Commercialize Emerging Technologies Leverage successful technology commercialization models Telemetry Solutions Power, Automation, Operator Assist… Commercialize Emerging Telemetry, IoT & Digitization Technologies Industry sales approach to tailor solutions to applicat
Slide 49: Bolzoni – Sulligent Location: A New Business Line for Bolzoni
Bolzoni – Sulligent Location A New Business Line for Bolzoni State of the art plant specialized in manufacturing quality cylinders for forklift truck companies Expansion opportunities also in other areas such as construction and agriculture equipment, etc. Significant opportunity to expand the busin
Slide 50: Bolzoni: Enhance Strong OEM Relationships
Bolzoni: Enhance Strong OEM Relationships OEM OEM OEM TOP CUSTOMERS(1) SALES BY REGION(1) SALES BY PRODUCT LINE(1)(2) Other OEM 5 OEM 5% ATTACHMENTS 8% 16% ASIA 9% FORKS OEM 4 OEM 1 29% 9% 33% AMERICA EUROPE INTEGRAL SIDE OEM 3 34% 57% SHIFTERS & 12% HOOK-ON OEM 2 SIDE CARRIAGES 33% SHIFTERS 50% 5%
Slide 51: Nuvera: Robust Industrial Product
Nuvera: Robust Industrial Product Uncoated metal plates Application-flexible architecture Active supplier development Superior resistance to Cost-effective manufacture Scale-up and robustness of shock and vibration and rebuilds component chain Transforming the Future 51
Slide 52: Building Nuvera Product Portfolio
Building Nuvera Product Portfolio Potential* Annual Volume Nuvera Unique Customer/Market: Selling Point: Efficient Stack Performance Automotive 100,000+ Engine Integration Industrial Fleets, HD 10,000 – 50,000 Reliable Power Lift Trucks 3,000-10,000 Modules Small Engines *Company Estimates Transform
Slide 53: Transforming the Future
Long-Term Focused, not Short-Term Oriented Transforming Partners the Future Suppliers Shareholders Dealers Employees Customers Transforming the Future 53