Hyster-yale, Inc. · NYSE:HY
Hyster-yale — Hyster-Yale Materials Handling — Investor Day (September 2016)
170 slides from Hyster-yale's investor day presentation, Sep 13, 2016
Slide 1: Solutions to DRIVE Productivity Investor Day
Solutions to DRIVE Productivity Exhibit 99 Investor Day September 13, 2016
Slide 2: Welcome & Introduction
Christina Kmetko I nvestor Relations Welcome & Introduction
Slide 3: Safe Harbor Statement & Disclosure
Safe Harbor Statement & Disclosure This presentation includes forward-looking comments subject important risks and uncertainties. Any and all statements regarding Hyster-Yale’s expected future financial position, results of operations, cash flows, business strategy, budgets, projected costs, capital
Slide 4: Today's Presenters
Today’s Presenters Christina Kmetko Investor Relations Alfred Rankin Chairman, President and Chief Executive Officer, Hyster-Yale Materials Handling Colin Wilson President and Chief Executive Officer, Hyster-Yale Group Rajiv Prasad Senior Vice President, Global Product Development, Manufacturing and
Slide 5: Agenda
Agenda 9:00 - 9:05 Welcome and Introduction 9:05 – 9:25 Our Business 9:25 – 9:55 Our Markets and Growth Strategies 9:55 – 10:30 Our Products, Technologies, Supply Chain & Manufacturing 10:30 – 10:35 Share Gain Summary 10:35 – 11:00 Questions 11:00 – 11:30 Nuvera 11:30 – 11:55 Bolzoni 11:55 – 12:15 F
Slide 6: E-mail for Questions Submitted by Webcast Audience
6 E-mail for Questions Submitted by Webcast Audience investor@hyster-yale.com
Slide 7: Our Business
Alfred Rankin Chairman, President and Chief Executive Officer Hyster-Yale Materials Handling Chairman Hyster -Yale Group Our Business
Slide 8: Our Businesses
Our Businesses Our Core Lift Truck Business Organic growth driven by market share gain Our Hydrogen Power Business Rapid growth in emissions-free customer applications Our Attachment Business Growth through targeting new geographic markets
Slide 9: Our Products & Solutions
Our Products & Solutions Lift Trucks Aftermarket Parts Attachments Hydrogen Power Financing Telematics Fleet Management
Slide 10: Hyster-Yale at a Glance
Hyster-Yale at a Glance Key Metrics In millions (except employee data) LTM 6/30/16 FY 2015 Lift Trucks Nuvera Bolzoni Hyster-Yale Materials Handling, Inc. (NYSE:HY) designs, engineers, manufactures, sells and services a comprehensive line of lift trucks, aftermarket parts and attachments. __________
Slide 11: 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 12: Lift Truck Overview and Sources of Revenue
Lift Truck Overview and Sources of Revenue #3 Globally in 2015 Large installed base that drives parts sales Over 830,000 units worldwide HY sales of 86,900 units in 2015 81,500 units sold - produced in HY plants 5,400 units sold – produced by JV or other third parties Additional >4,700 units sold in
Slide 13: Five Key Perspectives to Emphasize Today
Five Key Perspectives to Emphasize Today Global market unit levels expected be relatively stable at a high level for next few years 7% operating margin at properly balanced HY 115,000 units in this cycle remains HY Lift Truck business target Current external environment for HY Lift Truck business is
Slide 14: Our Agenda and Presenters Today
Our Agenda and Presenters Today Alfred Rankin Introductory outline Colin Wilson Market perspective and outline of programs to achieve Lift Truck business target of 115,000 units Rajiv Prasad Detail of products and technology, supply chain and manufacturing program elements of growth strategy Colin W
Slide 15: Market Expected to Be Relatively Stable at a High Level
Market Expected to Be Relatively Stable at a High Level Growth in Europe Weak Brazil market North America at new peak Recovery in China Warehouse product growth Decline in Middle East & Africa markets Decline in demand for Big Trucks Mix Shift from ICE to Electric (units in thousands) Moderate Growt
Slide 16: HY Faces Headwinds and Challenges Near Term
However, HY Faces Headwinds and Challenges Near Term Key Market Uncertainty Brazil, Turkey & South Africa Currency Strong U.S. Dollar Commodity Prices Fluctuating/Moving Up Shifting Product Mix ICE to Electric Customer Mix Changing Investments in Share Gain Programs
Slide 17: Factors Impacting Near-Term Lift Truck Profitability
These Factors are Having an Impact on HY’s Near-Term Lift Truck Profitability ($ in millions) 2.9% Gap Prior Cycle Market Peak 7% OPERATING PROFIT MARGIN TARGET 2.0% Gap $57.5 $128.1 $102.7 2.1% 5.0% 4.1% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% $20.0 $45.0 $70.0 $95.0 $120.0 $145.0 LTM 2016
Slide 18: Committed to Our Lift Truck Target Margin
We are Committed to Our Lift Truck Target Margin Operating profit margin With adequate volume growth, the Lift Truck business can achieve
Slide 19: The Economy of Scale Logic of Economic Engine
The Economy of Scale Logic of Hyster-Yale’s Economic Engine…. A large lift truck population base drives parts and service volume resulting in enhanced profitability for dealers and Hyster-Yale Geographic and Product Balance Worldwide Distribution Strength to Drive Market Share Parts and Service Volu
Slide 20: Volume of 115,000 Units Required to Achieve 7% Target
Volume of 115,000 Units from HY Factories Required to Achieve 7% Target 8,000 Class 1 and 2 trucks 12,000 Class 3 trucks 13,000 Class 4 and 5 trucks Big Trucks Additional units to fill each assembly line 33,500 additional units needed to achieve target Note: 115,000 units does not include volume fro
Slide 21: The Addition of 33,500 Trucks
The addition of 33,500 trucks… …should increase operating profits to target levels by: Increasing unit product profit Decreasing manufacturing variances Leveraging relatively stable SG&A
Slide 22: Core Strategies for Achieving Target are in Place
Core Strategies for Achieving Target are in Place – Understand Customer Needs – Low Cost of Ownership – Growth in Warehouse – Growth in Big Truck Business – Succeed in Asia – Strengthen Sales and Marketing – Enhance Independent Distribution – Solutions and Technology Drivers
Slide 23: Deployed in Combination with Our Competitive Advantages
Deployed in Combination with Our Competitive Advantages… • Able to meet customers needs globally • Global economies of scale • Young/ fresh product line • Broad array of power options, including hydrogen • Broad range of attachments • Source of aftermarket profitability • Barrier to entry Global Ful
Slide 24: Timing of Reaching Target Cannot Be Predicted with Specificity
Timing of Reaching Target Cannot Be Predicted with Specificity Our objective is to sell 115,000 HY-plant units in 2018, but a more realistic timeframe may be 2019 - 2020 Developing relationships with new customers takes time New customers often test and phase in products New dealers and dealer impro
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Slide 26: HY Path for Future Growth Includes Other Important Elements
HY Path for Future Growth Includes Other Important Elements… Through Core Lift Truck Business Share Gain Through Acquisition Through Partnership Through Investment in New Technologies
Slide 27: Lift Truck Performance Supplemented by Recent Acquisitions
With Lift Truck Performance Supplemented by Recent Acquisitions…. Expected to move from significant loss to significant profitability in long-term, with quarterly breakeven target sometime in 2018 Expected to develop into larger, long-term business through growth in lower share markets and integrati
Slide 28: Objective Consistent with Our Values
Objective is to do this in a Manner Consistent with… INTEGRITY INTEGRITY To be a leading globally integrated designer, manufacturer and marketer of a complete range of high-quality, application-tailored lift trucks, attachments and alternative power solutions, offering the lowest cost of ownership,
Slide 29: Consistent with Our Long-Term Philosophy
And Consistent with Our Long-Term Philosophy Long-term growth Long-term shareholders Shareholder protection Senior management incentivized as long-term shareholders Increase shareholder value
Slide 30: Our Markets and Growth Strategies
Colin Wilson President and Chief Executive Officer Hyster-Yale Group Our Markets and Growth Strategies
Slide 31: 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 Counterbalanced Rider Trucks Electric Narrow Aisle Trucks Electric Hand Trucks Internal Combustion Engine (cushion tire) Internal Combustion Engine (pneumatic tire) Electric CB 3 wheel Electric 4 wheel E
Slide 32: A Full Range of Power Options
…with a Full Range of Power Options… CLASS 1 CLASS 2 CLASS 3 CLASS 4 CLASS 5 Electric Counterbalanced Rider Trucks Electric Narrow Aisle Trucks Electric Hand Trucks Internal Combustion Engine (cushion tire) Internal Combustion Engine (pneumatic tire) Lead Acid Battery Fuel Cell Engine LPG & Bi-fuel
Slide 33: A Broad Range of Attachments
…and with a Broad Range of Attachments… Clamps Multipallets Rotators Sideshifters Fork Positioners Push Pulls Lifting Tables Forks
Slide 34: Offering a Broad Range of Solutions
…Offering a Broad Range of Solutions…
Slide 35: Enabled by an Advanced Technology Infrastructure
…Enabled by an Advanced Technology Infrastructure
Slide 36: Lift Truck Unit Class Shipments
Lift Truck Unit Class Shipments Europe 34% China 22% Class 3 Electric 34% Class 3 Electric 31% EMEA 28% Industry Units by Geography _____________________ Source: Company: LTM 6/30/16 Units Shipped Note: Units sold direct by SN JV are not included HY Lift Truck Units Sold by Geography _______________
Slide 37: Lift Truck Unit Class Revenue
Lift Truck Unit Class Revenue Class 3 Electric 9% Class 4 ICE 14% _____________________ Source: Internal Company estimates Estimated Industry Revenue Mix Industry Unit Revenue by Class HY Lift Truck Unit Revenue by Class Class 1 Electric 19% Class 2 Electric 12% Class 4 ICE 5% Class 5 ICE 55% Class
Slide 38: Shift in Market Balance from ICE to Electric
Shift in Market Balance from ICE to Electric Class 3 Electric 27% Class 3 Electric 34% Today _____________________ Source: WITS. Orders Reports. ICE = Internal Combustion Engine DRIVERS: • Customer shift • Growth of warehousing and logistics • Environmental, health and safety • Evolving technologies
Slide 39: Global Lift Truck Market Rates of Change
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. Bookings Reports.
Slide 40: Lift Truck Industry Overview
Lift Truck Industry Overview Americas EMEA JAPIC World Growth Rates by Region Year over Year (Units) Q3 15 Q4 15 Q1 16 Q2 16 5.0% (5.0%) (3.7%) (1.6%) Q3 15 Q4 15 Q1 16 Q2 16 1.9% 9.6% 9.5% 10.6% Q3 15 Q4 15 Q1 16 Q2 16 (11.4%) (8.8%) 2.4% (4.0%) Q3 15 Q4 15 Q1 16 Q2 16 (2.9%) (1.2%) 3.7% 1.7%
Slide 41: Share Gain Drivers
Share Gain Drivers Products & Focus Industry Focus Geographic Focus
Slide 42: Share Gain Drives Our Economic Engine
Share Gain Drives Our Economic Engine Our strategies are designed to drive increased share, which in turn increases the lift truck population, which drives parts and service volumes. Improve Warehouse Position Succeed in Asia Solutions and Technology Drivers A large lift truck population base drives
Slide 43: Our Different Businesses
Our Different Businesses Lift Truck Business Attachment Business Hydrogen Power Business
Slide 44: Core Lift Truck Business
Core Lift Truck Business Big Truck Business Warehouse Business Counterbalanced Business Key Industries Manufacturing, Trucking Key Industries Warehousing, 3PL Key Industries Ports, Steel, Oil & Gas
Slide 45: Our Counterbalanced Business
Driving Our Economic Engine… Highlights Strategies for Share Growth • Market leadership in U.S.: heavy duty industries e.g. Paper • New heart-of-market XT/MX ICE lift truck • Multiple powertrains • Growing success in trucking industry • Enhance product range • Unique innovations • Premium, Standard
Slide 46: Our Warehouse Truck Business
Driving Our Economic Engine… Highlights Strategies for Share Growth • Major wins in marquee accounts • New products, enhanced selling tools and trained dealers • Adding industry-focused sales people and Application Center expertise • Enhance product ranges • Unique innovations • Continuous quality i
Slide 47: Our Big Truck Business
Driving Our Economic Engine… Highlights Strategies for Share Growth • New products • Business unit concept in each region • Global team coordination • Focus on industry and solutions • Comprehensive Tier 4 offering • Leveraging Euro cost position in US dollar markets • Dedicated Customer Experience
Slide 48: Enhance Independent Distribution
Driving Our Economic Engine… Highlights Strategies for Share Growth • Significant strengthening in core US market • Growth of dual-brand coverage • New dealers appointed in EMEA and Asia • Enhanced dealer profitability • Excellence programs in all theaters • Develop all dealers • Appoint / convert c
Slide 49: Strengthen Sales and Marketing
Driving Our Economic Engine… Highlights Strategies for Share Growth • Greater accountability for results through smaller sales management areas • Leaders provided with new tools and enhanced reporting capabilities • Solutions Organization integrates Engineering and Special Truck Engineering function
Slide 50: Succeed in Asia
Driving Our Economic Engine… Highlights Strategies for Share Growth • New dealers in China • Increased China local production • Licensees in India • Long-term JV in Japan • Leveraging Big Truck success • Growing success in Korea • New UTILEV products launched • Organic growth through development of
Slide 51: Solutions & Technology Drivers
Driving Our Economic Engine… Highlights Strategies for Share Growth • Acquisition of Bolzoni • Acquisition of Speedshield distribution (telematics) • Development of Nuvera fuel cell engines and hydrogen generation units • Partnership with BALYO (automation) • Relationship with Electrovaya (Lithium-I
Slide 52: Our Products, Technologies, Supply Chain & Manufacturing
Rajiv Prasad Senior Vice President, Global Product Development, Manufacturing and Supply Chain Strategy Hyster-Yale Group Our Products, Technologies, Supply Chain & Manufacturing
Slide 53: Trends Impacting Business
Trends Impacting Business Increasing complexity Robotics / Automation Internet of things War for talent Competitors & emerging markets Green/ Environment
Slide 54: Product Philosophy and Portfolio Focus
Product Philosophy Guiding Product Philosophy Guiding Product Philosophy Product Portfolio Focus Product Portfolio Focus • Full product line • Segmented solutions • Scalable modular platforms • Leverage core assets • Technology partners • Fit for market and application • Reliability and durability •
Slide 55: Our Investment in R&D
Our Investment in R&D $61 $68 $69 $71 $69 Full Product Line* Lift Truck R&D Investment * Full Product Line – Class 1 through Class 5, including Big Truck 2.4% 2.8% 2.6% 2.6% 2.7% % of Revenue $ in millions HY COMPETITORS FULL MIN
Slide 56: Hyster-Yale Focus
Hyster-Yale Focus Understand Needs of Customers Low Cost of Ownership People Development Automation Modularization Telemetry Core Product Development Customized Manufacture in Market of Sale Alternative Power Fleet Management
Slide 57: People Development
People Development Talented People = Innovative Products and Success How we are winning the war for talent Retain Top Talent Promote from within and inject expertise through external hires Accountability Drive Platform Leaders closer to customers Baby Boomer to Millennial Transition Focus on college
Slide 58: Understand Needs of Customers
Highlights Strategies for Share Growth Driving Our Economic Engine… • Tailored products • Best fit solutions • Solve application issues • Drive best practices • Emerging trends • Special Truck Engineering • Application Center success in Trucking, Paper and Steel industries • Modular/scalable designs
Slide 59: Core Product Development
Core Product Development Requirements Detailed Design Analysis Prototyping Validation Pilot Production Engineering Methods • Innovation • System development • Truck programs Customer Focus • Safety • Ergonomics • Cost • Durability • Fit for application • Energy efficiency Product Development Process
Slide 60: Customized Solutions
Customized Solutions Unmet needs Unseat competitors Unique solutions Turtle traction system Variable pallet handling Shortened chassis Point Holistic solution Special handle Moveable load backrest Lithium ion battery Result DSD* truck package Issue Tailgate delivery at retail store * Direct to Store
Slide 61: Segmentation – Expanding Standard Range
Segmentation – Expanding Standard Range Cost Cost competitive (Targeting a 2-year Payback for Premium) Positioning right (Among Ours, Across Competition) Global designs - localized (Manufactured in Key Regions) Critical Success Factors Utility Standard Premium
Slide 62: Manufacture in Market of Sale
Manufacture in Market of Sale Supply • Source in region of sale • Low cost country sourcing • High quality parts Manufacturing • Centers of excellence for key systems • Process to determine core competencies • Globally deployed HY production system Truck Assembly • Source at lowest cost for each loc
Slide 63: Modularization
Modularization …resulting in 40% reduction in truck system complexity Modularization reduces number of components in future … Side-stance Small 14*, 16 Large 16, 18, 21 Retail 14, 16 14 chassis variations New chassis New chassis Modular design with common interfaces - 4 variations Fore/aft - stance
Slide 64: Low Cost of Ownership
Driving Our Economic Engine… Highlights Strategies for Share Growth • Reduce life cycle costs • Electric & hybrid drivetrains • Fleet management • Telemetry / Fuel cells • Increase service intervals • Supply chain / Quality component • Improved fuel / energy consumption • Engine to electric conversi
Slide 65: Cost of Operation / Hour
Cost of Operation / Hour Fuel Lease Fuel 11% Lease 9% Factors Impacting Low Cost of Ownership *Typical truck cost/hour for 5,000lb North American applications Ergonomics/ Fatigue Auto functions Automated trucks Operator Energy usage Alternative powertrains ICE to ER Mode control Cost/hour Fleet Mana
Slide 66: Fleet Management
Fleet Management 50,000+ assets under management 11,000+ dealer-based technicians Service & support for all makes and models Global deployment in progress
Slide 67: Telematics
Telematics Key Elements Internet of things Asset management Fleet and truck data Use of telematics
Slide 68: Automation
Automation Partnered approach Balyo, Seegrid Camera and laser-based systems Focus on integration and value proposition
Slide 69: Alternative Power
Alternative Power Lead acid Lithium-ion Fuel cell Lithium-ion Fuel cell Diesel LPG Battery Box Solutions Integrated solutions
Slide 70: Share Gain Summary
Colin Wilson President and Chief Executive Officer Hyster-Yale Group Share Gain Summary
Slide 71: Share Gain Drivers One by One
Share Gain Drivers One by One Customer Focus Industry Focus Industry Focus Products & Focus Geographic Focus
Slide 72: 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 New STE (Special Truck Engineering) for rapid product customization • • • • • Indus
Slide 73: Achieving Our Target
Achieving Our Target Gain Share Fill the Production Lines Achieve Revenue $ Target Achieve 7% Operating Profit Margin Target
Slide 74: Questions?
74 Questions? investor@hyster-yale.com
Slide 75: Nuvera
Jon Taylor President and Chief Executive Officer of Nuvera Fuel Cells Nuvera
Slide 76: Why Hydrogen and Fuel Cells?
Why Hydrogen and Fuel Cells? Hydrogen is abundant, simple, clean electron proton Hydrogen stores energy Hydrogen is electricity… …with the convenience of fuel + – Hydrogen is portable electricity
Slide 77: The Nuvera All-In Fuel Cell Solution
The Nuvera All-In Fuel Cell Solution PowerTap ® Hydrogen Generation PowerEdge ® Fuel Cell Orion ® Fuel Cell Stack All-In Fuel Cell Solution Hydrogen Refueling Low fixed costs ideal for small to medium size fleets Scalable Onsite generation Current: ideally suited to lift truck applications Next Gene
Slide 78: The Hydrogen-Powered Lift Truck Opportunity
The Hydrogen-Powered Lift Truck Opportunity Growing sales pipeline: • 3,000+ unit opportunities in sales pipeline • Almost 1,000 units in final stages of sales process • Strong alignment with HY target accounts • Both existing and new users of fuel cells • Target 35-50% share Growing sales pipeline:
Slide 79: Value Drivers
5 Value Drivers PRODUCTIVITY WORKPLACE SUSTAINABILITY SPACE SAVINGS ENERGY SUPPLY TOTAL COST OF OWNERSHIP Realize space savings Gain control over energy supply Elevate truck & labor utilization Advance corporate initiatives Improve facility health VS VS VS Tools to compare TCO
Slide 80: Well-to-Wheel Energy Efficiency from Fuel Cells
Well-to-Wheel Energy Efficiency from Fuel Cells Battery Charger PowerEdge® PowerTap® Grid Plant Energy (Gas) 14kWh 6.6kWh Lead-Acid Battery Fuel Cell Engine 74% SAVINGS in electricity $1.71 @ wheels $3.00 @ wheels Illustrative only. Actual results will vary dependent on cost of electricity, grid eff
Slide 81: How is the Nuvera Fuel Cell Different?
How is the Nuvera Fuel Cell Different? Seals Seals Seals Open flow fields: Free-breathing higher power density Uniform MEA support higher durability Land-channel flow fields: Oxygen-limited lower power density Non-uniform membrane support lower durability Conventional Architectures
Slide 82: Key Components Inside a Fuel Cell Engine
Key Components Inside a Fuel Cell Engine Power Electronics Hybrid Power System Stack Sub-System Engine Components Hydrogen Storage Thermal Management Fuel Cell Engine Enclosure and Counterweight
Slide 83: Developing Our Product Range
Developing Our Product Range 24V 36V 48V 1-3 3-10 10-20 Product available in all electric truck classes Approximate Engine Power Requirement [kW] Minor modifications to address >70% of market
Slide 84: Building a Strong Business Foundation
Building a Strong Business Foundation PhD 11% • Staff increased 40% since acquisition • Focus on developing strong Sales, Marketing and Operations teams • Continued growth in R&D team with strong engineering and educational background Chemical 19% Mechanical 43% Electrical 18% Other 20% Engineers by
Slide 85: Building Our Competencies
Building Our Competencies
Slide 86: What Does a PowerTap Hydrogen Generator Do?
1 2 3 What Does a PowerTap® (Hydrogen Generator) Do? Water and Gas Purification Hydrogen Purification Steam Reformer INPUT: CH + H + electricity OUTPUT: H Remote Monitoring Fleet management 100% H 2 availability at the pump Robust Reformer Durability Compact Purifier Easy installation
Slide 87: Why Generate Hydrogen On-Site?
Why Generate Hydrogen On-Site? Continuous production at point-of-use On-road delivery to point-of-use Centralized Production & Delivery Distributed Production Current Installations Planned Installations
Slide 88: Nuvera / Hyster-Yale Competitive Advantages
Nuvera / Hyster-Yale Competitive Advantages INDUSTRIALIZATION Demand Flow / Lean Manufacturing Supply Chain expertise & Quality Management systems Validation and reliability growth testing TECHNOLOGY Patented fuel-cell stack design – performance & cost Technology roadmap – leverage development and v
Slide 89: Nuvera / HY Strategy
Nuvera / HY Strategy Manufacturing Technology Product Supply Chain Manufacturing Distribution Aftermarket Customer Experience Our strategy and organizational strength address key issues HY Support and Financial Strength
Slide 90: Growth Strategy
Growth Strategy Existing Fuel Cell Users • Ace Hardware • Baldor Specialty Foods • BMW • Bridgestone-Firestone • Canadian Tire • Central Grocers • Coca-Cola • CVS • EARP Distribution • East Penn Manufacturing • FedEx • Golden State Foods • Home Depot • Honda • IKEA • Kimberly-Clark/GENCO • Kroger Co
Slide 91: Nuvera's High Efficiency Fuel Cell Solutions
Nuvera’s High Efficiency Fuel Cell Solutions Fuel Cell 1kg 17kWh/KG Typical Fuel Cell Engine Fuel Cell 1kg 14kWh/kg H2 Supply +15-20% Efficiency • Lower fuel costs • Lower labor costs • Improved asset utilization Source: Internal company estimates
Slide 92: Dealer Engagement
Dealer Engagement
Slide 93: Deployment and Proof of Performance
Deployment and Proof of Performance • Targeted customers • Multiple classes of products • Increased acceptance • Efficiency verification
Slide 94: Launch Customer
Launch Customer Martignetti Companies - Taunton, MA • Leading distributor of wines and spirits in New England • 7th largest distributor in the country • LEED certified 680,000 ft greenfield site • Opened August 2016 • 39 Nuvera® Class I, II, III fuel cell units for Hyster® truck fleet • Nuvera® on-s
Slide 95: Complete Financing Solutions
‘Complete Financing Solutions Discover the addition ofthe Nuvera® brand 3) = Salter halt Sales materia under Product > Maver a Toots, Resources Expense TO HELP You BLD [NSTRONGER BUSINESS ()) HYSTER-YALE
Slide 96: Targeted Awareness Campaigns
Targeted Awareness Campaigns Encourage potential fuel cell customers to consider Nuvera Motivate existing fuel cell customers to consider Nuvera Convince HY customers interested in H² to choose Nuvera Advance dealer adoption to push fuel cell technology Drive dealer adoption and promotion of All-In
Slide 97: Where Will Nuvera Fuel Cells Be Used?
Where Will Nuvera Fuel Cells Be Used? Gen1 Battery Box Replacement Gen2 Integrated Fuel Cell Hybrid Truck
Slide 98: Where Can the Technology Be Deployed?
Where Can the Technology Be Deployed? 24V 36V 48V 80V 600V+ 1-3 3-10 10-20 20-30 30-50 50-150 300V Battery Box Replacement Integrated Fuel Cell Engines Approximate Engine Power Requirement [kW]
Slide 99: Technology and Product Roadmaps
Technology and Product Roadmaps Fuel Cell Engines • Enhanced lift truck functionality • Integrated engines across multiple OEM’s Next Generation Fuel Cells • Improved power density • Fuel efficiency • Lower cost Hydrogen Generator • Higher capacity • Longer life • Improved efficiency Automotive Refu
Slide 100: The Nuvera Plan
The Nuvera Plan • Develop Fuel Cell Power Systems for electric Class 1 to 3 lift trucks • Building organization capability • HY dealer engagement and demos • Fuel Cell Power Systems shipped mid-2016 • Efficiency and durability improvements to PowerTap ® PT 50 • Hercules™ and Orion ® 2 technology and
Slide 101: Bolzoni
Roberto Scotti President and Chief Executive Officer of Bolzoni Bolzoni
Slide 102: Bolzoni at a Glance
Bolzoni at a Glance Key Metrics 2015 In millions (except employee data) Europe 70.2% Bolzoni is one of the worldwide leading manufacturers of lift truck attachments, forks and lift tables with an extensive product range _____________________ (1) EBITDA and ROTCE are non-GAAP measures and should not
Slide 103: Our Attachment Business
Our Attachment Business Bolzoni Today • Aggregate Purchase Price - €108.9 million (approx. $123.1 million) • Primary market is attachments for Class 1 and Class 5 products • Majority of revenues generated primarily in Eastern & Western Europe. Secondary presence in North America. • Managed as separa
Slide 104: Bolzoni Market and Customers
Bolzoni Market and Customers CUSTOMERS: Lift Truck Manufacturers – OEM Dealers of Lift Trucks & Material Handling END USERS (Logistics, Industrial, Large Retail Companies) MARKET - INDUSTRIES LOGISTICS AUTOMOTIVE FOOD & BEVERAGE PULP & PAPER APPLIANCES & ELECTRONICS OTHER MATERIAL HANDLING
Slide 105: Bolzoni Product Lines
Bolzoni Product Lines Attachments € 111,3 M 80% *Other Revenues: Rental business and Customer care € 138,3 M Lift Table € 7,7 M 6% Forks € 13,7 M 10% Other Revenues* € 5,6 M 4%
Slide 106: Net Sales Trend
37.4 41.8 53.2 76.2 78.9 75.1 84.0 94.7 107.1 145.6 141.1 76.9 93.5 115.8 119.1 121.2 119.9 138.3 (1) (2) Net Sales Trend (in euros) 1998 – 2008 +14% 2009 – 2015: +10% (3) (1) Includes (for 10 months) the acquisition of the Finnish company Auramo OY, a leading manufacturer of Lift Truck attachments
Slide 107: 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
Slide 108: Bolzoni Global Footprint
Bolzoni 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 Danville
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Slide 110: Intelligent Lift Truck Attachments
4-stage valve pressure regulation system Hydraulic weight detecter system Advanced ultrasonic volumetric system Innovative laser sensors volumetric system CTX-G3 Automatic clamping force control system Force Matic Paper Roll Clamps Carton & Home Appliance Clamps Clamps with Intelligent Systems Intel
Slide 111: Main Products
Main Products
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Slide 114: Lifting Tables
LIFTING TABLES
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Slide 116: Main Production Plants
Main Production Plants Italy Piacenza Finland Järvenpää Germany Salzgitter USA Homewood - Illinois China Longhua - Hebei District China Wuxi - Shanghai District
Slide 117: Bolzoni Key Competitive Advantages
Bolzoni Key Competitive Advantages OEM, Dealer & Customer • Long-term relationships • Presence in key markets worldwide • Global sales network Focused Factories • Expertise and specialization of the factories in specific product lines • Factories located in the most important markets to be close to
Slide 118: Relationship and Approach with HY Lift Trucks
Relationship and Approach with HY Lift Trucks Stand-Alone Supplier Preferred supplier to HY Arms-length sales Commercial confidentiality Key supplier partner Purchasing leverage Broader market access Part of Hyster-Yale
Slide 119: Synergy Opportunities as Part of HY
Synergy Opportunities as Part of HY Growth of Attachment Business in Americas • Leveraging HY strength in core industries Bolzoni as global supplier of forks & basic attachments to HY globally • Convert business from other suppliers to Bolzoni Component resourcing and purchasing leverage • Reduce pu
Slide 120: Net Sales Breakdown: Q2 2015 vs. Q2 2016
Net Sales Breakdown: Q2 2015 vs. Q2 2016 (in euros) -1,6% 24.5 25.7 6.0 5.7 4.8 3.4 34,7 35,3 Q2 2015 Q2 2016 EUROPE NORTH AMERICA REST OF THE WORLD
Slide 121: Revenue and Net Income
Revenue and Net Income (in euros) 0.0 1.0 2.0 3.0 4.0 5.0 6.0 Revenue Net Income
Slide 122: Financial Overview & the Path to Target Economics
Ken Schilling Senior Vice President and Chief Financial Officer Hyster-Yale Materials Handling Hyster-Yale Group Financial Overview & the Path to Target Economics
Slide 123: Results for 2016 YTD Consolidated
HY HY HY Lift Truck Nuvera Bolzoni 2016 H1 2015 H1 Variance Results for 2016 YTD Consolidated ($ in millions) Revenues $1,210.4 $0.5 $38.9 $1,249.8 $1,281.0 ($31.2) Gross Profit $200.1 ($1.0) $12.8 $211.9 $213.5 ($1.6) Operating Expenses ($165.3) ($13.4) ($12.1) ($190.8) ($165.2) ($25.6) Operating P
Slide 124: Lift Truck Results for 2016 YTD
HY HY Lift Truck Lift Truck 2016 H1 2015 H1 Variance Lift Truck Results for 2016 YTD Revenues $1,210.4 $1,279.4 ($69.0) Gross Profit $200.1 $214.7 ($14.6) Operating Expenses ($165.3) ($154.5) ($10.8) Operating Profit $34.8 $60.2 ($25.4) Net Income $26.8 $43.7 ($16.9) EBITDA $49.9 $74.7 ($24.8) Reven
Slide 125: EMEA Headwind From Currency
EMEA Headwind From Currency Declining support to EMEA from maturing foreign currency contracts. Contracts delayed impact of the $ € conversion which was $1.33 €1 in 2013-2014 and is now $1.10 to €1. 8.2 3.0 2.5 4.5 1.7 2.6 0.6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Est. $ millions Benefit to EMEA from F/X Contracts
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Slide 128: Key Financial Metrics
Key Financial Metrics Reported 6/30/16 Less: Bolzoni Acquisition Impact Without Acquisition Year Ended 12/31/15 Working Capital, Cash Flow and Capitalization Working Capital (1) $367.1 $32.3 - $334.8 $333.3 YTD Cash Flow before Financing (2) $(122.6) $(6.9) (4) $128.8 $13.1 $58.1 Cash $51.5 $7.8 $85
Slide 129: Hyster-Yale Use of Cash Priorities
Hyster-Yale Use of Cash Priorities Return Cash to Stockholders Investments in Adjacent or Complementary Businesses Investments in Hydrogen Power Business Investments in Share Gain Programs Investments in Core Lift Truck Business Strategic initiatives to accelerate growth or enhance margins Acquisiti
Slide 130: Key Capital Investments
Key Capital Investments 130 0.0 10.0 20.0 30.0 40.0 50.0 60.0 Est. 2016 Bolzoni Nuvera New Brazil Plant SAP & CRM/CPQ Core Forklift Investments Continued capital expenditures to support key HY lift truck initiatives along with development of Nuvera and Bolzoni products and facilities
Slide 131: Dividend Growth
Dividend Growth $4.8 to be paid 9/15/16 $17.8 $18.4 $9.5 $1.06 $1.08 $1.10 $1.12 $1.14 $1.16 $1.18 $1.20 $5 $8 $11 $14 $17 $20 YTD 2016 Annual Dividends Amount Paid in Total and Annualized $ Per Share (total $ in millions) ($ per share annualized) Share Repurchase Program: Approximately 694,700 Clas
Slide 132: 2016 Earnings Perspective - Forklift Truck Business
2016 Earnings Perspective - Forklift Truck Business 132 Unit and Parts Volumes H2 : Comparable revenue to H2 2015 - Expected increase in unit and parts share gain + sales from strategic initiatives mostly offset by shift in mix of products FY 2016 : Revenues down modestly compared with 2015, influen
Slide 133: 2017 Earnings Perspective - Forklift Truck Business
2017 Earnings Perspective - Forklift Truck Business 133 Unit and Parts Volumes Americas market continues at high level with recovery beginning in Brazil EMEA and JAPIC continue to grow modestly Units and parts volumes up modestly from 2016 due to share and global market growth unless share gain prog
Slide 134: 2016 Earnings Perspective - Nuvera Fuel Cell Business
2016 Earnings Perspective - Nuvera Fuel Cell Business Revenues H2 : PowerEdge® product shipments began in July 2016, expected to generate modest revenues with gradual growth during rest of 2016 PowerTap ® installations expected to grow Net Loss/ EBITDA FY 2016 : Net Loss is estimated to be $16m to $
Slide 135: 2017 Earnings Perspective - Nuvera Fuel Cell Business
2017 Earnings Perspective - Nuvera Fuel Cell Business Revenues Revenues will build from sales growth in PowerEdge® and PowerTap® units as key accounts are secured Net Loss/ EBITDA 2017 Net loss is estimated to be $15m EBITDA is expected to be slightly less than operating losses Income Taxes US-based
Slide 136: 2016 Earnings Perspective - Bolzoni
2016 Earnings Perspective - Bolzoni Revenues H2: Growth to primarily follow strengthening EMEA market in new Class 1, 4 and 5 forklift installations Continued sales support from all OEM and dealer channels Net Income/ EBITDA H2: Drivers consistent with Operating Profit, exclusive of estimated purcha
Slide 137: 2017 Earnings Perspective - Bolzoni
2017 Earnings Perspective - Bolzoni Revenues Continuing growth in sales following current market trends for Class 1, 4 and 5 trucks Additional growth from affiliation primarily in North America and Asia and globally with forks Net Income/ EBITDA Higher Operating Profit driving Net Income growth Purc
Slide 138: Lift Truck Business Operating Profit Trends and % of Sales
Lift Truck Business Operating Profit Trends and % of Sales ($ in millions) $57.5 $128.1 $102.7 2.1% 5.0% 4.1% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% $20.0 $45.0 $70.0 $95.0 $120.0 $145.0 LTM 2016 2.9% Gap Prior Cycle Market Peak 7% TARGET 2.0% Gap
Slide 139: Lift Truck Business Target Economics Goal and Gap to Target
Lift Truck Business Target Economics Goal and Gap to Target Achieve 7% operating profit margin target at mid-cycle Target Economics gap closure can be achieved with unit volume… Stronger Industry + Share Growth = Volume Leverage LTM 6/30/16 Gap to Target Economics Actual Lift Truck Operating Profit
Slide 140: HY Lift Truck Incremental Volume Leverage
HY Lift Truck Incremental Volume Leverage Incremental Units Produced +5,000 Trucks Sales $160m Gross Profit $33m Operating Expenses $11m Operating Profit $22m Incremental Operating Profit % 13.6% As we make progress toward the 115,000 unit production levels, HY Lift Truck will generate significant i
Slide 141: Target Economics at 115,000 Units
Lift Trucks Produced in HY plants 115,000 Target Economics Lift Trucks Sold 124,000 Revenues $3,590 Gross Profit $640 Operating Expenses $390 Operating Profit $250 Operating Margin 7.0% HY Lift Truck Target is to move from significant loss to break even in a 2018 quarter then on towards significant
Slide 142: Our Long-Term View
Alfred Rankin Chairman, President and Chief Executive Officer Hyster-Yale Materials Handling Chairman Hyster -Yale Group Our Long-Term View
Slide 143: Five Key Perspectives We Emphasized Today
Five Key Perspectives We Emphasized Today Global market unit levels expected be relatively stable at a high level for next few years 7% operating margin at properly balanced HY 115,000 units in this cycle remains HY Lift Truck business target Current external environment for HY Lift Truck business i
Slide 144: Long-Term Focused, not Short-Term Oriented
Long-Term Focused, not Short-Term Oriented Leverage, but also control, our expense structure HY is investing wisely in the future With the ability to
Slide 145: Committed to Lift Truck Target Margin
Committed to Lift Truck Target Margin Operating profit margin With adequate volume growth, the Lift Truck business can achieve
Slide 146: Lift Truck Performance Supplemented by Recent Acquisitions
With Lift Truck Performance Supplemented by Recent Acquisitions…. Expected to move from significant loss to significant profitability in long-term, with quarterly breakeven target sometime in 2018 Expected to develop into larger, long-term business through growth in lower share markets and integrati
Slide 147: Valuation Approach Needs to Vary By Business
Valuation Approach Needs to Vary By Business 147 Lift Truck and Attachment Businesses Lift Truck and Attachment Businesses Hydrogen Power Business Hydrogen Power Business • Board Oversight as Separate Businesses • Incentives Tied to Individual Businesses Strong Operating Cash Generation Market Leadi
Slide 148: A Solid Investment Option
A Solid Investment Option 148 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 Focused & Solutions Oriented
Slide 149: Questions?
149 Questions? investor@hyster-yale.com
Slide 150: Appendix
Solutions to DRIVE Productivity Appendix Appendix
Slide 151: 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 152: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in millions) Year Ended December 31 Qtr. Qtr. Consolidated 6/30/2015 3/31/2016 6/30/2016 6/30/2016 Reconciliation of EBITDA Net income attributable to stockholders Noncontrolling interest income (loss) Income tax provision (benefit) Interest expense Interest income (1.5) D
Slide 153: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) Qtr. Bolzoni (1) (2) 6/30/2016 Reconciliation of EBITDA (€ in millions) ($ in millions) Net income attributable to stockholders € 4.9 0.1 $ Noncontrolling interest income 0.1 0.1 Income tax provision 2.1 0.1 Interest expense 1.7 0.4 Interest income (0.3) - Depreci
Slide 154: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) Actual return on capital employed percentage 13.5% 20.6% n/m 8.3% _____________________ Note: Return on capital employed is provided solely as a supplemental disclosure with respect to income generation because management believes it provides useful information wi
Slide 155: Cash Flow before Financing Calculation
Cash Flow before Financing Calculation Consolidated Bolzoni (1) ($ in millions) Year Ended December 31 Qtr. Trailing 12 Qtr. Months 6/30/2016 6/30/2016 6/30/16 Reconciliation of Cash Flow before Financing Net cash provided by (used for) operating activities $54.6 $128.7 $152.9 $100.0 $89.4 $(4.6) $6
Slide 156: Biography
Biography Alfred M. Rankin, Jr. Chairman, President and Chief Executive Officer of Hyster-Yale Materials Handling Chairman, Hyster-Yale Group Mr. Rankin became Chairman, President and Chief Executive Officer of Hyster-Yale Materials Handling, Inc. in September 2012 and has been Chairman of Hyster-Ya
Slide 157: Biography
Biography Colin Wilson became President and Chief Executive Officer of Hyster-Yale Group in September 2014 and is charged with providing the strategic vision and global leadership that keeps Hyster-Yale Group moving forward, a role for which he has spent much of his career preparing. Mr. Wilson has
Slide 158: Biography
Biography Rajiv K. Prasa d Senior Vice President, Global Product Development, Manufacturing and Supply Chain Strategy As Senior Vice President, Global Product Development, Manufacturing and Supply Chain Strategy, Mr. Prasad guides all aspects of the Hyster-Yale Group product development, manufacturi
Slide 159: Biography
Biography Jon Taylor President and Chief Executive Officer of Nuvera Fuel Cells Mr. Taylor became President and Chief Executive Officer of Nuvera Fuel Cells in April 2015. Previously, Mr. Taylor was the Interim CEO of Nuvera from December 2014 and Vice President, Business Development and Financial P
Slide 160: Biography
Biography Roberto Scotti President and Chief Executive Officer of Bolzoni Roberto Scotti obtained his high school diploma in mechanical engineering in 1970. From 1970 to 1973 he attended the faculty of Mechanical Engineering at the University of Milan. From 1973 to 1979 Mr. Scotti was Sales Manager
Slide 161: Biography
Biography Kenneth C. Schilling Senior Vice President, Chief Financial Officer Mr. Schilling oversees public financial reporting, accounting, tax compliance and strategies, treasury activities and investor relations at Hyster-Yale. Most recently, Mr. Schilling was Vice President and Chief Financial O
Slide 162: Biography
Biography Suzanne S. Taylor Senior Vice President, General Counsel and Secretary Ms. Taylor is the chief legal officer of Hyster-Yale and its subsidiaries, with global responsibility for all legal, corporate and ethics compliance, corporate secretarial, compensation and benefits activities. She has
Slide 163: Biography
Biography Lauren E. Miller Vice President, Chief Marketing Officer Ms. Miller is responsible for leading the implementation of global best practices in sales and marketing and has oversight responsibility for Corporate Financial Planning, Analysis and Reporting at Hyster-Yale Materials Handling's op
Slide 164: Biography
Biography Scott Blanchet Chief Development Officer, Nuvera Mr. Blanchet currently serves as Chief Development Officer with responsibility for Nuvera’s technology and product platforms. He became Nuvera’s Vice President of Product Management in February and served as Nuvera’s Vice President of Techno
Slide 165: Biography
Biography Warren Brower Chief Sales and Marketing Officer, Nuvera Mr. Brower currently serves at Chief Sales and Marketing Officer responsible for all customer facing activity and support. He joined Nuvera in January 2016 as Vice President of Marketing and Business Development. Over the past 16 year
Slide 166: Biography
Biography Christina Kmetko, CPA, IRC Investor Relations Ms. Kmetko is the Principal of Evergreen Consulting & Associates, L.L.C., formed in January 2010, which provides investor relations support to Hyster-Yale Materials Handling, Inc. and NACCO Industries, Inc. (Hyster-Yale’s previous parent compan
Slide 167: The History of Hyster-Yale and its brands
The History of Hyster-Yale and its brands Hyster founded in Portland, Oregon as the Willamette Ersted Company Company name officially changed to Hyster Company Yale Lock Mfg. broadens its scope into materials handling Yale forklift truck business merges with Eaton Mfg. Industrial Truck Division Yale
Slide 168: Nuvera History
Nuvera History 2004 2012 2000 2016 2008 Headquarters, Billerica MA EU Offices and Testing Facilities, San Donato and Osio, Italy • Formed April, 2000 • Over years of hydrogen and fuel cell experience • Certified: ISO 9001, 14001, OHSAS 18001 Hess buys out Arthur D. Little Renault invests Hess buys o
Slide 169: Bolzoni History
Bolzoni History 50s 1960-1975 Bolzoni foundation (focus on agricultural machinery production) Attachments market entrance (brick fork & fork lift truck attachments) Foreign market entrance (first branch opened in France) Merging with Teko (lifting tables and hand pallet trucks) USA market Entrance (
Slide 170: The Bolzoni Team
The Bolzoni Team Roberto Scotti President & Chief Executive Officer Worldwide Staff direct branches with approximately 800 employees and independent dealers “Motivating our employees, training them to be skillful and reliable, requiring them to be honest and dedicated workers, well-trusted by our cu
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