Hyster-yale, Inc. · NYSE:HY
Hyster-yale — Hyster-Yale Materials Handling — Baird 2018 Industrial Conference
56 slides from Hyster-yale's conference presentation, Nov 7, 2018
Slide 1: Baird 2018 Industrial Conference
Baird 2018 Industrial Conference 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: Key Perspectives
Key Perspectives Global markets expected to be strong for next several years Investments to expand HY’s product and solutions portfolio and geographic breadth and depth Core lift truck programs aim to trigger organic growth through intensified industry and product focus Nuvera remains a venture busi
Slide 4: 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 5: Products for All Needs
Forklifts Internal Combustion Engine Lithium-Ion Reach Stackers Big Trucks Very Narrow Aisle Trucks Products for All Needs… Electric Counterbalanced Rider Trucks Electric Narrow Aisle Trucks Electric Hand Trucks Internal Combustion Engine (cushion tire) Internal Combustion Engine (pneumatic tire) 3-
Slide 6: A Broad Range of Power Options, Attachments and Solutions
…with a Broad Range of Power Options, Attachments and Solutions Push Pulls Lifting Tables 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 Fuel Cell Engine LPG
Slide 7: Global Industry Remains Strong
Long-term CAGR (2004 – 2017) = 5.4% _____________________ Source: ITA. Represents quarterly order intake. Global Industry Remains Strong (units in thousands) Global Lift Truck Industry Size _____________________ Trend line represents 5.4% long-term CAGR Average Industry Size. Source: WITS. Represent
Slide 8: A Positive Profitability Trend Despite Strengthening Headwinds
A Positive Profitability Trend Despite Strengthening Headwinds Key Variables Impacting Performance Impact on HY 2017 2018 Market Cycle by Country + = Market Size by Industry + + Market Size by Product = / + = Commodity Prices/Tariffs _ _ Pricing + = / - Strength of Dollar = _ Operational Effectivene
Slide 9: 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 over the medium term Achieve ROTCE > 20% Target Economics gap closure can be achieved with unit volume… Stronger Industry + Share Growth = Volume Leverage LTM 9/30/18 Gap to Target Economics Actual
Slide 10: Trends – Product & Solutions
Trends – Product & Solutions Workforce availability Faster response Lower costs Environment Automation robotics Electrification Alternative energy Wireless communications Modular platforms Big Data analytics TREND DRIVERS
Slide 11: Our Strategies address Changing Landscape and will Drive Our Economic Engine
Our Strategies address Changing Landscape and will Drive Our Economic Engine Basic Business Areas Geographic and Product Balance Worldwide Distribution Strength to Drive Market Share Parts and Service Volume Large Lift Truck Population in Service Volume Economies of Scale Design Component commonalit
Slide 12: #1: Leadership in Delivering Industry- & Customer-Focused Solutions
#1: Leadership in Delivering Industry- & Customer-Focused Solutions LOGISTICS FOOD & BEVERAGE MANUFACTURING NATURAL RESOURCES & MATERIALS DURABLE GOODS SHORT-TERM RENTALS CONSUMER & BUSINESS TRADES Government Warehouse Counterbalanced Source: 2017 ITA Market Size and Mix by Vertical and Segment
Slide 13: Sales Deployment
Sales Deployment Top Buyers ~200 accounts Industry Leaders ~1600 Accounts Rest of the Market 35% 40% Committed to customer-obsessed, industry-specific, strategic partnerships ~200 designated accounts with annual purchases of ~60,000 units and high market share Over 2,400 Customer and Dealer Visits p
Slide 14: #2: Delivering Low Cost of Ownership & Enhanced Productivity for Customers
#2: Delivering Low Cost of Ownership & Enhanced Productivity for Customers New RS45 Reachstacker Segmentation – Right Product at Right Price Leads to Lower Cost of Ownership Constant power and refuel as quick as 3 minutes No batteries or battery charging rooms Environmentally clean Fuel Cell-Powered
Slide 15: #3: Leader in Attachments Business
#3: Leader in Attachments Business A complete range of attachments to serve material handling industries in the area of forest products, food and beverage, white goods, logistics, chemistry, automotive and many others… Synergy Opportunities Growth of Attachment business in Americas Growth of Lift Tr
Slide 16: Bolzoni Strategy
1. Expand in US market Bolzoni Strategy: Expand sales volumes Enhance people capabilities Produce a complete range of attachments Enhance local design capability Expand production capacity Increase spare parts management Grow the customer base Create specific marketing plans by customer segment Clea
Slide 17: #4: Leader in fuel cells and their applications
#4: Leader in fuel cells and their applications 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 Solutions R
Slide 18: Lift Truck Power System Optimization: Cost and Robustness
Lift Truck Power System Optimization: Cost and Robustness Target Product Cost and Robustness Approximately 40% reduction in costs by 2019 Double MTBF (mean time between failure) Driven by Strengthening supply chain Internal process improvements Product design and architecture
Slide 19: Non-Lift Truck Growth Opportunities
Non-Lift Truck Growth Opportunities Heavy duty applications Port equipment n Delivery vehicles n Buses China market entry Market research n Two agreements signed n Other opportunities in evaluation n Low cost sourcing
Slide 20: #5: Grow in Emerging Markets
#5: Grow in Emerging Markets MATURE MARKETS 835,050 EMERGING MARKETS 698,620 M A R K E T S I Z E S U B – T O T A L S Indicative Map Only: Company’s estimate of market type Emerging versus Mature Lift Truck Market Size (Last 12 months) Top Global Manufacturers are increasing product depth into utilit
Slide 21: Hyster-Yale Maximal Acquisition and Synergy Plan
Best Value n Best Fit n Best Potential Management Culture Local market experience Production and design capability Facilities and location Brand and distribution network Utility Counterbalance forklifts Big Trucks Rough Terrain forklifts Side Loader forklift Organization Product People Acquired a 75
Slide 22: #6: Leader in Independent Distribution
#6: Leader in Independent Distribution Enhancing performance Dealer Excellence programs Dealer incentives Term-based contracts 1,000+ global dealer locations 2,000+ application consultants 11,000+ service technicians Independent n Exclusive n Entrepreneurial n Profitable n Committed partner n Dual-l
Slide 23: Results for Q3 2018 Consolidated vs. Q3 2017
Results for Q3 2018 Consolidated vs. Q3 2017 Hyster-Yale’s business units are at different stages, which makes the variance best understood by individual business unit ($ in millions) _____________________ These entities are presented on a stand-alone basis, and as such, do not sum to the Consolidat
Slide 24: 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 Investments to commercialize Nuvera’s fuel cell technology 2016 2017 YTD 2018 Annual Dividends (1) $19.2m $1.18/share $19.8m $1.21/share
Slide 25: Valuation Approach Needs to Vary By Business
Valuation Approach Needs to Vary By Business Lift Truck and Attachment Businesses Fuel Cell 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 Traditional
Slide 26: One Set of Strategies, Different Priorities for Execution
One Set of Strategies, Different Priorities for Execution Americas HYG Position: Strong Full execution of strategies Significant investment to enhance share Increased dual-brand coverage Europe, Middle East, Africa HYG Position: Moderate Industry and customer solutions Low cost of ownership Distribu
Slide 27: Key Developments Over Past Months
Key Developments Over Past 18 Months Nuvera strategy implementation – clear focus Bolzoni fully integrated and performing well Developments in automation and key product platforms Industry focus with new sales and marketing organizations Solid base for expansion in developing markets being establish
Slide 28: In Summary, a compelling investment scenario over the next few years
by selling and producing 115,000 HY-factory trucks (excluding HY Maximal) In Summary, a compelling investment scenario over the next few years 28 Get to approximately $4 billion HY Lift Truck segment revenue irrespective of industry size and maintain ROTCE >20% to Fill existing assembly line capacit
Slide 29: Financial Appendix
Financial Appendix (i) HYSTER-YALE Solutions that DRIVE Productivity 2 MATERIALS HANDLING
Slide 30: Non-GAAP Disclosure
Non-GAAP Disclosure 30 EBITDA and return on total capital employed are not measurements under U.S. GAAP, should not be considered in isolation or as a substitute for GAAP measures, and are not necessarily comparable with similarly titled measures of other companies. Hyster-Yale defines each as the f
Slide 31: Non-GAAP Reconciliation
Non-GAAP Reconciliation 31 _____________________ Note: EBITDA in this investor presentation is provided solely as a supplemental disclosure with respect to operating results. EBITDA does not represent net income (loss), as defined by U.S. GAAP and should not be considered as a substitute for net inc
Slide 32: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) 32 _____________________ Note: EBITDA in this investor presentation is provided solely as a supplemental disclosure with respect to operating results. EBITDA does not represent net income (loss), as defined by U.S. GAAP and should not be considered as a substitute
Slide 33: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) 33 _____________________ Note: Return on capital employed is provided solely as a supplemental disclosure with respect to income generation because management believes it provides useful information with respect to earnings in a form that is comparable to the Comp
Slide 34: Cash Flow before Financing Calculation
Cash Flow before Financing Calculation 34 Consolidated ($ in millions) Year Ended December 31 Qtr. Trailing 12 Months 2013 2014 2015 2016 2017 9/30/2018 9/30/2018 Reconciliation of Cash Flow before Financing Net cash provided by (used for) operating activities $152.9 $100.0 $89.4 $(48.9) $164.7 $40.
Slide 35: Supplemental Information
35 Supplemental Information
Slide 36: The History of Hyster-Yale and its brands
Hyster founded in Portland, Oregon as the Willamette Ersted Company 1929 1944 1959 Company name officially changed to Hyster Company First Hyster container handling trucks 1875 1920 Yale Lock Mfg. broadens its scope into materials handling Yale and Towne launched a new battery powered low-lift platf
Slide 37: Hyster-Yale's Global Footprint
Hyster-Yale’s Global Footprint 37 Ramos Arizpé, Mexico Fabrication Manufacture Sulligent, Alabama Component Manufacture Berea, Kentucky Lift Truck Manufacture Greenville, North Carolina Division Headquarters; Lift Truck Manufacture; Warehouse Development Center Cleveland, Ohio Corporate Headquarters
Slide 38: Overview and Sources of Revenue
Overview and Sources of Revenue 38 2017 Worldwide Sales by Product _____________________ Units sold by Hyster-Yale Maximal since acquisition on June 1, 2018. Includes Big Truck sales that represent 12.6% of total sales. Represents Hyster-Yale North American Lift Truck unit shipments by industry. A l
Slide 39: Historical Consolidated Revenue
Historical Consolidated Revenue 39 ’04 – ’17: 2.6% CAGR ($ in millions)
Slide 40: Industry Units by Geography
Industry Units by Geography Lift Truck Unit Class Shipments _____________________ Source: Company: LTM 9/30/18 Units Shipped Note: Units sold direct by SN JV are not included HY Lift Truck Units Sold by Geography _____________________ Source: WITS. LTM 9/30/18 Orders Reports. _____________________ S
Slide 41: Secular Shift in Product Mix
Secular Shift in Product Mix Market 2017 _____________________ Source: WITS. Orders Reports. ICE = Internal Combustion Engine Utility = HYG Estimates DRIVERS: Customer shift Growth of warehousing and logistics Environmental, health and safety Evolving technologies Growth in emerging markets Previous
Slide 42: 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. 42
Slide 43: Lift Truck Market Size Data
Lift Truck Market Size Data 43
Slide 44: Our Long-Term Philosophy
Our Long-Term Philosophy 44 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 45: Our Investment in R&D
Our Investment in R&D Lift Truck R&D Investment 2.6% 2.7% 2.9% 2.9% 2.7% % of Revenue $ in millions Product Development Target - 2.5% of Sales Actions to Achieve Target Increase revenue Modular architecture India and China development centers Process automation Co-located suppliers 45
Slide 46: Hyster-Yale Maximal Forklift [Zhejiang] Co., Ltd.
Source: Audited 2017 financials, Chinese statutory report for all except bookings growth, which is unaudited Established in 2006 in Fuyang District / Founder: Mr. JinHong Lu 600 employees and 1.4 million ft2 office and factory Original Equipment Manufacturer with design, manufacture, sales and servi
Slide 47: Near Term Synergy Plan
Near Term Synergy Plan 47 Consolidate existing China operations Insource and expand manufacturing Leverage low cost sourcing Introduce HY expertise Implement HY best practices Emerging Market Development Center Fuyang, China HY Independent Global Distribution Maximize coverage Maintain two channels
Slide 48: Projected Investment Return Summary
Projected Investment Return Summary 48 October 2018 updated estimate based on: 2018 YTD performance, including purchase price accounting adjustments Confirmation of additional global synergies October ‘18 Estimate Impact on Annual Global Hyster-Yale Earnings May ‘18 Investment Case *Graphic does not
Slide 49: Bolzoni Revenue by Product Line
Bolzoni Revenue by Product Line – LTM Q3 2018 49 Other Revenues 5% Forks 15% Lift Table 5% Attachments 75% $199.7M
Slide 50: Bolzoni Customer Mix and OEM Strategy
50 Lift Truck Manufacturers – OEM Lift Truck & Material Handling Dealers 2017 CUSTOMER MIX Bolzoni Strategy: Enhance Strong OEM Relationships Managed as separate business segment Separation to maintain OEM information integrity Sales outside of Italy = 86.5% of 2017 Global Sales
Slide 51: Bolzoni Strategy: Synergies with HY
Bolzoni Strategy: Synergies with HY 51 Develop Bolzoni as global supplier of attachments & forks to HY globally Accelerate growth of attachment business in North America Leverage Bolzoni manufacturing capacity Achieve procurement and logistics cost savings Increase sales of HY forklift & Bolzoni att
Slide 52: Fuel Cell Solution Growth Opportunities
Fuel Cell Solution Growth Opportunities 52 N. America electric trucks sold per year 175,000+ 25-50% Estimated up to can benefit from fuel cell solutions Global 850,000+ electric trucks sold per year DOE reported North America (1) Population of Fuel Cell Powered Lift Trucks in North America Trend in
Slide 53: Nuvera Business Development Approach
Integrators OEM’s Speed to Market Close to customer Quality Control Control of IP Long term partnership Custom design and development IP Transfer/ sharing Economies of scale 53 Business Development Approach Nuvera L3 Fuel Cell Hybrid Vehicle L2 Fuel Cell Engine L1 Fuel Cell Module L0 Fuel Cell Stack
Slide 54: Expansion of Product Line
Expansion of Product Line 54 Demonstration in critical port application in California Performance benefits Metal plates – higher durability High power density Open flow field – improved fuel efficiency Modular, easily integrated solution 2019 Heavy duty engine Leverage experience from HY supply Scal
Slide 55: China Market Research and Engagement
China Market Research and Engagement 55 Engaged China-based market research and segmentation study Significant government incentives driving market interest Several companies are early entrants, but market open to other partners Nuvera technology is a strong fit at a competitive cost Engaging with t
Slide 56: A Solid Investment Option
A Solid Investment Option 56 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
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