Hyster-yale, Inc. · NYSE:HY
Hyster-yale — Hyster-Yale Materials Handling — Q2 2016 Earnings Presentation
47 slides from Hyster-yale's earnings presentation, Aug 8, 2016
Slide 1: Investor Presentation August 8, 2016
Exhibit 99 Investor Presentation August 8, 2016 Solutionsto ENHANCE Performance
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 do not conform with accounting principles generally accepted in the United States of America (GAAP). Refer to Hyster-Yale’s
Slide 3: Hyster-Yale Snapshot
Hyster-Yale Snapshot Hyster-Yale Materials Handling, Inc. (NYSE:HY) designs, engineers, manufactures, sells and services a comprehensive line of lift trucks and aftermarket parts. Separate lift truck, attachments and fuel cell power solutions segments. Headquartered in Cleveland, Ohio Approximately
Slide 4: Bolzoni Transaction
BolzoniTransaction • Q2 2016 - HY acquired an approximately 94% ownership stake in Bolzoni S.p.A., a leading worldwide producer of attachments, forks and lift tables under the Bolzoni Auramo and Meyer brand names • Early July 2016 - remaining interest in Bolzoni acquired and Bolzoni delisted from th
Slide 5: Bolzoni Acquisition – Rationale
BolzoniAquisition– Rationale External Expand global reach Enhance solutions capabilities Closer to our customers Internal Insource components Leverage excess capacity Accretive to earnings Solutionsto ENHANCE Performance 5
Slide 6: Our Businesses
Our Businesses Our Core Lift Truck Business Our Hydrogen Power Business Organic growth through market share gain Rapid growth in emissions free customer applications Our Attachment Business Growth through targeting new markets Solutionsto ENHANCE Performance 6
Slide 7: 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 Internal Electric Narrow Electric Hand Counterbalanced Combustion Engine Combustion Engine Aisle Trucks Trucks Rider Trucks (cushion tire) (pneumatic tire) 1.0T to 5.5T 1.5T to 6.0T 1.5T to 8.0T
Slide 8: …with a Full Range of Power Options, and…
…with a Full Range of Power Options, and… CLASS 1 CLASS 2 CLASS 3 CLASS 4 CLASS 5 Electric Electric Internal Electric Internal Combustion Counterbalanced Narrow Combustion Engine Hand Engine Rider Trucks Aisle (cushion tire) Trucks (pneumatic tire) Trucks Lead Acid Lithium Ion Fuel Cell LPG & Bi-fue
Slide 9: … with a Broad Range of Attachments
… with a Broad Range of Attachments Clamps Multipallets Sideshifters Push Pulls Lifting Tables Rotators Fork Positioners Forks Solutionsto ENHANCE Performance 9
Slide 10: 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 2015) – = 4.1% Asia-Pacific 8% Africa 4% 1,200 Japan 7% 900 600 Europe 34% Americas 300 25% 872 547 794 975 944 1,010 1,094 1,100 1,115 0
Slide 11: Lift Truck Business Target Economics Goal and Gap to Target
Lift Truck Business Target Economics Goal and Gap to Target LTM 6/30/16 Gap to Target Economics 7% Goal Target Achieve minimum Actual Lift Truck Operating Profit Margin % 4.1% Economics gap Margin Variances (0.5%) closure can be operating profit Unit margin (0.5%) achieved with margin of 7% at the u
Slide 12: Leverage Gained from Moving Volume to Full Manufacturing Capacity
Leverage Gained from Moving Volume to Full Manufacturing Capacity Capacity At Full Capacity: 115,000 units / year Expected over next 3 4– years 24% 76% 28,500 Used Unused units of additional volume $30 -$35 million fixed cost absorption by moving from current capacity utilization to full utilization
Slide 13: Over the Remainder of this Market Cycle, Target Volumes Driven by…
Over the Remainder of this Market Cycle, Target Volumes Driven by… Growth of 10-15% by 2019-2020** Growth of 5-10% by 2019-2020** EMEA Industry Americas Industry 500 300 400 250 200 300 150 200 100 Actual Prior Peak Actual Prior Peak 100 50 2009 2010 2011 2012 2013 2014 2015 2016* 2009 2010 2011 201
Slide 14: Hyster-Yale’s Economic Engine & Core Strategic Initiatives
Hyster-Yale’s Economic Engine & Core Strategic Initiatives 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 Econo
Slide 15: Core Strategic Initiatives – Stages of Momentum
Core Strategic Initiatives Stages – of Momentum Our core strategic initiatives are in various stages of maturity. Share gain is expected to take place as they gain Achieved momentum… Early Stage Mid-Stage Breakthrough Understand Customer Needs Low Cost of Ownership Enhance Independent Distribution I
Slide 16: Core Lift Truck Strategic Initiatives Update
Core Lift Truck Strategic Initiatives Update Initiative Strategic Objective Implementation Highlights Key Elements Understand • Provide the right product • Increasing penetration of the Metals, • Segmentation of products and and solution to meet the Trucking and Paper segments industries Customer Ne
Slide 17: Core Lift Truck Strategic Initiatives Update
Core Lift Truck Strategic Initiatives Update Initiative Strategic Objective Implementation Highlights Key Elements Enhance • Develop the • Completed a major restructuring of part of the • Develop all dealers strongest North America network that included a • Appoint / convert successful dealers Indep
Slide 18: Core Lift Truck Strategic Initiatives Update
Core Lift Truck Strategic Initiatives Update Initiative Strategic Objective Implementation Highlights Key Elements Succeed in Asia • Expand market • 2 new dealers appointed in China since • Organic growth through penetration throughout the beginning of 2016 development of dealer network Asia • Direc
Slide 19: Core Lift Truck Strategic Initiatives Update
Core Lift Truck Strategic Initiatives Update Initiative Strategic Objective Implementation Highlights Key Elements Strengthen Sales • Strengthen and align sales • Recruited experienced individuals with • Greater accountability for and Marketing and marketing organization deep knowledge of the lift t
Slide 20: Nuvera Hydrogen Power Business
Nuvera Hydrogen Power Business Initiative Strategic Objective Implementation Highlights Key Elements Commercialize • Commercialize Nuvera’s • Secured first total power solution • Enables active participation in Nuvera’s Fuel technology through agreement in Q4 2015 the growing hydrogen and fuel Cell
Slide 21: Hydrogen Power for Lift Trucks
Hydrogen Power for Lift Trucks Hyster-Yale acquired Nuvera in December 2014 and intends to use the technology to offer its customers a unique and value-creating packaged total power solution. Advantages and Opportunities Limited Maintenance Rapid Refueling Emissions Free Emerging Market Scalable Sol
Slide 22: The Hydrogen Power Market
The Hydrogen Power Market Fuel Cell Power penetration projected to triple by 2025 N. America Lift Truck Market 150,000+ Estimated up to electric trucks sold 25-50% per year can benefit from Fuel Cell solutions Global Lift Truck Market 650,000+ electric trucks sold per year Productivity Increase Asse
Slide 23: The Nuvera Total Power Solution
The Nuvera Total Power Solution PowerTap ® Hydrogen Generation PowerEdge ®Fuel Cell Low fixed costs ideal for Engine small to medium size fleets Hydrogen Refueling Scalable Onsite generation Orion® Fuel Cell Engine Current: ideally suited to Total Power lift truck customer Next Generation: Leap in S
Slide 24: Capturing More Lifecycle Value
Capturing More Lifecycle Value Lead Acid Battery* PowerEdge ®Solution* Energy Utility Company Utility Company Energy Fuel (PowerTap®) Nuvera/Dealer HY/Dealer Maint Maint HY/Dealer Battery Supplier Batteries Charger & PowerEdge® Nuvera Batteries $18-20k lifetime Eligible for Hyster-Yale Truck spend (
Slide 25: The Nuvera Story
Our Hydrogen Power Business The Nuvera Story • Purchased for a small investment • Nuvera’sassociation with HY provides: • Investing pre-tax expense dollars to Industry and customer expertise commercializefuel-celltechnology Leverage strong distribution channels • Solutions span Hydrogen Value Chain
Slide 26: The Nuvera Plan
The Nuvera Plan Phase 1 Phase 2 Phase 3 2016 2016 –2017 2017 –2018 • Develop PowerEdge ® units for electric • Hyster-Yale dealer engagement (launched • Break-even operating profit at 700 lift trucks to sales force in April 2016) PowerEdge ® and 10 PowerTap® units per quarter at target margins • Buil
Slide 27: 2016 Second Quarter Highlights
2016 Second Quarter Highlights ($ in millions) 2016 Second Quarter LTM 6/30/16 Consolidated Revenue $645.6 100.0% $2,546.9 100.0% Lift Truck Operating Profit 19.0 2.9% 102.7 4.1% BolzoniOperating Profit 0.7 0.1% 0.7 - Nuvera OperatingLoss (8.3) (1.3)% (27.1) (1.1)% Consolidated Operating Profit $11.
Slide 28: Valuation Approach By Business
Valuation Approach By Business Lift Truck and Attachment Businesses Hydrogen Power Business Mature Cyclical Industry Developing / Technology Industry Distinct Technology / Patents in Fuel Cell Market Leading Products and Position and Hydrogen Generation Operating Cash Invested in New Product Strong
Slide 29: Our Competitive Advantages
Our Competitive Advantages Global Customer Relationships • Long relationships • Able to meet customers needs globally • Able to meet most needs • Global economies of scale • National Account programs Full Product Line Dealer Relationships • Young/ fresh product line • Independent distribution model
Slide 30: A Solid Investment Option
A Solid Investment Option Leading Products & Customer Focused & Market Position Solutions Oriented Cash Generation & Strategies to Gain Commitment to HYSTER-YALE Share in Growth Shareholder Return Segments & Markets Strong Balance Investment & Growth in Sheet Game Changing Technologies 30 Solutionst
Slide 31: Hyster-Yale Use of Cash Priorities
Hyster-Yale Use of Cash Priorities Investments in Core Lift Truck Business Strategic initiatives to accelerate growth or enhance margins Investments in Share Gain Programs Investments to commercialize Nuvera’s technology Investments in Hydrogen Power Business Acquisitions of technologies and other f
Slide 32: Appendix
Appendix Solutionsto ENHANCE Performance
Slide 33: Non-GAAP Disclosure
Non-GAAP Disclosure AdjustedLift TruckBusinessOperatingProfit, EBITDAand return on total capital employedare not measurementsunder U.S.GAAP,should not be consideredin isolation or as a substitute for GAAPmeasures,andare not necessarilycomparablewith similarlytitled measuresof other companies.Hyster-
Slide 34: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in millions) Trailing 12 Year Ended December 31 Qtr. Months 2012 2013 2014 2015 6/30/2016 6/30/2016 Reconciliation of EBITDA Net income attributable to stockholders $ 98.0 $ 110.0 $ 109.8 $ 74.7 $ 8.3 $ 56.4 Noncontrolling interest income 0.1 0.2 0.4 0.4 - 0.1 Income taxes
Slide 35: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) ($ in millions) Reconciliation of Return on Total Capital Employed (ROTCE) LTM 6/30/16 Average Stockholders' Equity (6/30/16, 3/31/16, 12/31/15, 9/30/15, and 6/30/15) $472.2 Average Debt (6/30/16, 3/31/16, 12/31/15, 9/30/15, and 6/30/15) 73.5 Average Cash (6/30/16
Slide 36: Cash Flow before Financing Calculation
Cash Flow before Financing Calculation Trailing 12 ($ in millions) Year Ended December 31 Months 2011 2012 2013 2014 2015 6/30/2016 Reconciliation of Cash Flow before Financing Net cash provided by operations $54.6 $128.7 $152.9 $100.0 $89.4 $69.3 Net cash used for investing activities (15.9) (19.5)
Slide 37: Supplemental Information
Supplemental Information Solutionsto ENHANCE Performance
Slide 38: The History of Hyster-Yale and its brands
The History of Hyster-Yale and its brands 1875 Yale Lock Mfg. broadens its scope into materials handling 1929 Hyster founded in Portland, Oregon as the Willamette Ersted Company 1944 Company name officially changed to Hyster Company 1963 Yale forklift truck business merges with Eaton Mfg. Industrial
Slide 39: Hyster-Yale Global Footprint (excludes Bolzoni locations)
Hyster-Yale Global Footprint (excludes Bolzoni locations) Solutionsto ENHANCE Performance 39
Slide 40: Bolzoni Global Footprint
BolzoniGlobal Footprint 7 Manufacturing plants 11 Commercial branches 1 Financial Holding 3 affiliated company …. and more than 20 distributors Solutionsto ENHANCE Performance 40
Slide 41: Historical Consolidated Revenue
Historical Consolidated Revenue ($ in millions) $3,000 $2,824 $2,767 $2,720 $2,666 $2,541 $2,469 $2,578 $2,547 $2,489 $2,400 $2,057 $2,000 $1,802 $1,475 $1,000 $0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 LTM 2016 Solutionsto ENHANCE Performance 41
Slide 42: Lift Truck Business Operating Profit Trends and % of Sales
Lift Truck Business Operating Profit Trends and % of Sales ($ in millions) 7% TARGET $150.0 7.0% Prior Cycle Market Peak Mid-Cycle Market $151.0 2.9% Gap (1) Closure $125.0 6.0% 5.5% 5.0% 5.0% $100.0 4.8% 5.0% 4.5% 4.1% $75.0 $134.4 $133.3 (2) $128.1 4.0% $111.7 $102.7 $50.0 $57.5 3.0% 2.1% $25.0 2.
Slide 43: Our Business Has Been Transformed
Our Business Has Been Transformed Product Range Manufacturing Comprehensive, updated product line Globally integrated, lean operations with economies of scale Average product age since last upgrade – less than 4 years Assembled in market of sale Designed to meet customer needs Continuous efficiency
Slide 44: Our Business Has Been Transformed
Our Business Has Been Transformed Supply Chain Quality Aftermarket Centralized supply chain Customer driven programs High first time fill % management North America’s product Comprehensive all makes Highly flexible low cost supply quality has steadily parts program chain improved over the last five
Slide 45: Lift Truck Overview and Sources of Revenue
Lift Truck Overview and Sources of Revenue Key Highlights • Leading global lift truck manufacturer in terms of units sold • Diverse customer and application base – #3 globally in 2015 • Global independent dealer network – Large installed base that drives parts sales • Comprehensive, updated global p
Slide 46: Distribution Channel Strength and Diverse Customer Base
Distribution Channel Strength and Diverse Customer Base National Accounts Profile Distribution Mix Blue Chip Customer Base • Focused on strategic customers with centralized National Accounts purchasing and geographically dispersed 16% operations across dealer territories • Fleet Management Program p
Slide 47: 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 Solutionsto ENHANCE Performance 47
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