Hyster-yale, Inc. · NYSE:HY
Hyster-yale — Hyster-Yale Materials Handling — Q1 2019 Earnings Presentation
57 slides from Hyster-yale's earnings presentation, May 17, 2019
Slide 1: Q1 2019 Investor Presentation
Q1 2019 Investor Presentation Solutions for a changing world 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: Our Businesses
Our Businesses Our Attachment Business Our Fuel Cell Business Our Core Lift Truck Business
Slide 4: Key Perspectives
Key Perspectives Global market growth expected to slow 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 customer focus Nuvera remains a venture business with developed t
Slide 5: 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. _____________________ Note: Throughout this investor
Slide 6: Full Lift Truck Product Line - Over 400 Different Truck Models
Reach Trucks Forklifts Internal Combustion Engine Lithium-Ion Reach Stackers Big Trucks Very Narrow Aisle Trucks Full Lift Truck Product Line - Over 400 Different Truck Models Available Electric Counterbalanced Rider Trucks Electric Narrow Aisle Trucks Electric Hand Trucks Internal Combustion Engine
Slide 7: 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 8: Global Industry Remains Strong, but Moderating
Long-term CAGR (2004 – 2018) = 5.7% _____________________ Source: ITA. Represents quarterly order intake. Global Industry Remains Strong, but Moderating (units in thousands) Global Lift Truck Industry Size _____________________ Trend line represents 5.7% long-term CAGR Average Industry Size. Source:
Slide 9: Lift Truck Business Target Economics
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 3/31/19 Gap to Target Economics Actual
Slide 10: Global Supply Chains Trends – Customer Demands Driving New Solutions
Global Supply Chains Trends – Customer Demands Driving New Solutions Workforce availability Faster response Lower costs Environment E-commerce Electrification Automation/robotics Low cost country sourcing Wireless communications Big Data analytics Alternative energy Modular platforms Global sourcing
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: Factors Impacting Cost of Ownership
Factors Impacting Cost of Ownership *Typical truck cost/hour for 5,000lb North American applications #1: Provide the Lowest Cost of Ownership, while Enhancing Productivity for Customers Lease Fleet optimization Service & Repair Cost/hour Fuel Energy usage Mode control Alternative powertrains ICE to
Slide 13: Key Focus Areas for Low Cost of Ownership and Enhanced Productivity
Key Focus Areas for Low Cost of Ownership and Enhanced Productivity 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 Batter
Slide 14: Be the Leader in Industry- & Customer-Focused Solutions
Top Accounts Market Plan Action Items Key Drivers Scorecards #2: Be the Leader in the Delivery of Industry- & Customer-Focused Solutions
Slide 15: Market Size and Mix by Vertical and Segment
Warehouse Counterbalanced Source: 2018 ITA Market Size and Mix by Vertical and Segment LOGISTICS & RENTALS INDUSTRIALS RETAIL & DURABLE GOODS FOOD & BEVERAGE Applying dedicated industry-focused resources to target segments
Slide 16: North America account structure and HYG sales approach
North America account structure and HYG sales approach Top Buyers ~ 200 Accounts Industry Leaders ~2,000+ Accounts 25% of Market 35% of Market Rest of the Market ~200,000 Accounts High Value National Accounts Team 40% of Market Dealer Sales Team Market Share HYG Sales Approach Industry Sales Team __
Slide 17: Be the Leader in the Attachments Business
#3: Be the Leader in the 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 Activities Growth of Attachment business in Americas Growth of
Slide 18: Bolzoni Core Strategies for Growth
AUTOMOTIVE Bolzoni Core Strategies for Growth North America expansion Industry focus BEVERAGE WHITE GOODS 3PLs PAPER Growth in AGV segment Enhance Strong OEM Relationships Managed as separate business segment to maintain OEM Information integrity of standard clamps Expansion of fork manufacturing ca
Slide 19: Be a Leader in fuel cells and their applications
#4: Be a Leader in fuel cells and their applications Design of Fuel Cell Stacks and Engines Manufacture of Fuel Cell Engines: strong focus on integration / performance Manufacture of Fuel Cell Stacks: strong focus on cost reduction and automation Sales & Marketing to OEM’s and Partners Reliability G
Slide 20: 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 Heavy duty applications Port equipment n Delivery vehicles n Buses
Slide 21: Grow in Emerging Markets
#5: Grow in Emerging Markets MATURE MARKETS 820,000 EMERGING MARKETS 708,000 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 22: Secular Shift in Product Mix
Secular Shift in Product Mix Market 2018 _____________________ Source: WITS. Orders Reports. ICE = Internal Combustion Engine Utility = Company Estimates DRIVERS: Customer shift Growth of warehousing and logistics Environmental, health and safety Evolving technologies Growth in emerging markets Prev
Slide 23: Acquired a 75% Interest in Hyster-Yale Maximal Forklift
Acquired a 75% Interest in Hyster-Yale Maximal Forklift [Zhejiang] Co., Ltd. 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 Ter
Slide 24: Be the Leader in Independent Distribution
#6: Be the Leader in Independent Distribution Enhancing performance Dealer Excellence programs Dealer incentives Term-based contracts 1,000+ global dealer locations 2,500+ application consultants 10,000+ service technicians Independent n Exclusive n Entrepreneurial n Profitable n Committed partner n
Slide 25: Only Major Manufacturer Committed to Exclusive and Independent Distribution
Only Major Manufacturer Committed to Exclusive and Independent Distribution HY Strong value proposition attracts successful, entrepreneurial dealers with long term outlook Limits HY capital requirements, lowers cost structure and drives high ROTCE Key dealer criteria: To be customer obsessed with in
Slide 26: Path to Execution of Strategic Initiatives
Path to Execution of Strategic Initiatives In total, Hyster-Yale projects maturing over the next 1 to 4 years are transformative and have the objective of driving revenue and profitability to target New Utility Products New Standard Products New Premium Products HY Maximal Integration BBR Range Expa
Slide 27: Results for Q1 2019 Consolidated vs. Q1 2018
($ in millions) Results for Q1 2019 Consolidated vs. Q1 2018 _____________________ These entities are presented on a stand-alone basis, and as such, do not sum to the Consolidated financial information. EBITDA is a non-GAAP measure and should not be considered in isolation or as a substitute for GAA
Slide 28: Hyster-Yale Use of Cash Priorities
Hyster-Yale Use of Cash Priorities Expense and Capital Investments in Strategic initiatives to accelerate growth or enhance margins Acquisitions of technologies and other forklift-related businesses Investments to commercialize Nuvera’s fuel cell technology 2017 2018 2019 Annual Dividends (1) $19.8m
Slide 29: 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 30: In Summary, a compelling investment scenario
by selling and producing 122,000* HY-factory trucks (excluding HY Maximal) In Summary, a compelling investment scenario with many projects coming to completion over the next few years Grow to approximately $4 billion HY Lift Truck segment revenue irrespective of industry size and maintain ROTCE >20%
Slide 31: Financial Appendix
Financial Appendix Solutions for a changing world
Slide 32: Non-GAAP Disclosure
Non-GAAP Disclosure EBITDA and return on total capital employed are not measurements under U.S. GAAP, should not be considered in isolation or as a substitute for GAAP measures, and are not necessarily comparable with similarly titled measures of other companies. Hyster-Yale defines each as the foll
Slide 33: Non-GAAP Reconciliation EBITDA
Non-GAAP Reconciliation EBITDA _____________________ Note: EBITDA in this investor presentation is provided solely as a supplemental disclosure with respect to operating results. EBITDA does not represent net income (loss), as defined by U.S. GAAP and should not be considered as a substitute for net
Slide 34: Non-GAAP Reconciliation EBITDA (continued)
Non-GAAP Reconciliation EBITDA (continued) _____________________ Note: EBITDA in this investor presentation is provided solely as a supplemental disclosure with respect to operating results. EBITDA does not represent net income (loss), as defined by U.S. GAAP and should not be considered as a substi
Slide 35: Non-GAAP Reconciliation ROTCE
Non-GAAP Reconciliation ROTCE _____________________ Note: Return on capital employed is provided solely as a supplemental disclosure with respect to income generation because management believes it provides useful information with respect to earnings in a form that is comparable to the Company’s cos
Slide 36: Cash Flow before Financing Calculation
Cash Flow before Financing Calculation Consolidated ($ in millions) Year Ended December 31 Qtr. Trailing 12 Months 2014 2015 2016 2017 2018 3/31/2019 3/31/2019 Reconciliation of Cash Flow before Financing Net cash provided by (used for) operating activities $100.0 $89.4 $(48.9) $164.7 $67.6 ($22.4)
Slide 37: Supplemental Information
Supplemental Information 9 9 (@) HYSTER-YALE Solutions for a changing world "MATERIALS HANOLING
Slide 38: The History of Hyster-Yale and Its Brands
Hyster founded in Portland, Oregon as the Willamette Ersted Company 1929 1944 1959 Company name officially changed to Hyster Company First Hyster container handling trucks 1875 1920 Yale Lock Mfg. broadens its scope into materials handling Yale and Towne launched a new battery powered low-lift platf
Slide 39: Hyster-Yale's Global Footprint
Hyster-Yale’s Global Footprint Ramos Arizpé, Mexico Fabrication Manufacture Sulligent, Alabama Attachment and Component Manufacture Berea, Kentucky Lift Truck Manufacture Greenville, North Carolina Division Headquarters; Lift Truck Manufacture; Warehouse Development Center Cleveland, Ohio Corporate
Slide 40: Overview and Sources of Revenue
Overview and Sources of Revenue 2018 Worldwide Sales by Product _____________________ Company estimate. Units sold by Hyster-Yale Maximal since acquisition on June 1, 2018. Includes Big Truck sales that represent 12.9% of total sales. Represents Hyster-Yale North American Lift Truck unit shipments b
Slide 41: Historical Consolidated Revenue
Historical Consolidated Revenue ’04 – ’18: 3.1% CAGR ($ in millions)
Slide 42: Industry Units by Geography
Industry Units by Geography Lift Truck Unit Class Shipments _____________________ Source: Company: LTM 3/31/19 Units Shipped Note: Units sold direct by SN JV are not included HY Lift Truck Units Sold by Geography _____________________ Source: WITS. LTM 3/31/19 Orders Reports. _____________________ S
Slide 43: Global Lift Truck Market Rates of Change
Japan Western Europe Eastern Europe Brazil North America Middle East & Africa Latin America (excluding Brazil) Asia (excluding China & Japan) China ( 3 & 12 months rate of change trend) Global Lift Truck Market Rates of Change _____________________ Source: WITS. Bookings Reports.
Slide 44: Lift Truck Market Size Data
Lift Truck Market Size Data Lift Truck Market Size Data L-teea7 sss | fes.s30 Ea 62 | 2E2soa eat | o24e| 200,114 314.162 se] 601,589] 704,210] Tie [ase [ave [ase [aor [soe aoe | {so0asol_siossl_235 28| aansna|—son.oo{ areaoe| 0.00 300.395 [aos ssl sano] —sonzal_saomne|_srdadal cou sse057| 942000 [7,
Slide 45: Our Long-Term Philosophy
Our Long-Term Philosophy 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 46: Our Investment in R&D
Our Investment in R&D Lift Truck R&D Investment 2.6% 2.7% 2.9% 2.9% 2.9% % 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
Slide 47: Building a Platform to Grow in Emerging Markets with Hyster-Yale Maximal
Building a Platform to Grow in Emerging Markets with Hyster-Yale Maximal Forklift [Zhejiang] Co., Ltd. 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 service ope
Slide 48: Near Term Synergy Plan
Near Term Synergy Plan 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 to
Slide 49: Projected Investment Return Update
Projected Investment Return Update Current estimate based on: 2018 after tax performance, including purchase price accounting adjustments 2019-2023 after-tax earnings with additional global synergies Current Estimate Investment Case *Graphic does not include impact of the $10M incentive payout Impac
Slide 50: Bolzoni Revenue by Product Line
Bolzoni Revenue by Product Line – LTM 3/31/19 Other Revenues 4% Forks 13% Lift Table 4% Attachments 63% $241.4M (1) Q1 2019 includes cyclinders and transmissions produced in the Sulligent, Alabama plant Cylinders and Transmissions 16%(1)
Slide 51: Bolzoni Strategy: Enhance Strong OEM Relationships
Separation to maintain OEM information integrity Managed as separate business segment Bolzoni Strategy: Enhance Strong OEM Relationships Lift Truck Manufacturers – OEM Lift Truck & Material Handling Dealers 2018 CUSTOMER MIX Sales outside of Italy = 87.3% of 2018 Global Sales
Slide 52: Bolzoni Strategy: Synergies with HY
Bolzoni Strategy: Synergies with HY 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 attach
Slide 53: Fuel Cell Solution Growth Opportunities
Fuel Cell Solution Growth Opportunities 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 pop
Slide 54: 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 Business Development Approach Nuvera L3 Fuel Cell Hybrid Vehicle L2 Fuel Cell Engine L1 Fuel Cell Module L0 Fuel Cell Stack L3
Slide 55: Expansion of Product Line
Expansion of Product Line 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 Scale u
Slide 56: China Market Research and Engagement
China Market Research and Engagement 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 the
Slide 57: A Solid Investment Option
A Solid Investment Option HYSTER-YALE Strong Balance Sheet Cash Generation & Commitment to Shareholder Return Investment & Growth in Game Changing Technologies Leading Products & Market Position Strategies to Gain Share in all Segments & Markets Customer Focused & Solutions Oriented Strong Return on
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