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| 8-K - FORM 8-K - HYSTER-YALE MATERIALS HANDLING, INC. | d51444d8k.htm |
 Investor Presentation
February 24, 2016
Solutions to
ENHANCE Performance Exhibit 99 |
 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 Hyster-Yale’s reports filed on Forms 8-K (current),
10-Q (quarterly), and 10-K (annual) for information on
factors that could cause actual results to differ materially from
information in this presentation and for information reconciling
financial measures to GAAP. Past performance may not be representative
of future results.
Guidance noted in the following slides was effective as of the company’s
most recent earnings release and conference call (February 17,
2016). Nothing in this presentation should be construed as
reaffirming or disaffirming such guidance. This presentation is
not an offer to sell or a solicitation of offers to buy any of Hyster- Yale’s securities. 2 Solutions to
ENHANCE Performance |
 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 and fuel cell power solutions
segments. Headquartered in Cleveland, Ohio Approximately 5,500 employees globally LTM 12/31/15 Revenue – $2.6 billion LTM 12/31/15 Net income – $74.7 million LTM 12/31/15 EBITDA (1) – $136.6 million 12/31/15 Net cash – $102.0 million LTM 12/31/15 ROTCE (1) of 20.2% (Net cash basis) (1) EBITDA and ROTCE are non-GAAP measures and should not be considered in isolation or as a substitute for GAAP measures.
For discussion of non-GAAP items and the related
reconciliations to GAAP measures, see information in the Appendix starting on page 32. 3 Solutions to
ENHANCE Performance |
 Bolzoni Transaction – Acquisition Plan PENTA HOLDING • On February 14, 2016, signed agreement to acquire Penta S.p.A., a majority stakeholder (50.4%) of Bolzoni
S.p.A., an Italian-listed public company and leading worldwide producer of
attachments, forks and lift tables under the Bolzoni
Auramo and Meyer brand names • Purchase price of Penta – EUR 53.5 million • The closing of the Penta transaction is expected during the 2 nd quarter of 2016, subject to legal and regulatory conditions* • Acquisition of Penta is the first step in the process to acquire 100% of Bolzoni
S.p.A. • Following the closing of the Penta transaction, HY will launch a mandatory tender offer for all of the remaining
outstanding shares of Bolzoni
at the cash price of EUR 4.30 per share (inclusive of Bolzoni’s
2015 consolidated net
income) • Acquisitions funded by HY’s cash on hand and borrowings under HY’s existing credit facility
*There
can be no assurance that all conditions will be met, that acquisition of Penta (and indirectly of Bolzoni S.p.A.) will occur or that the anticipated benefits and effects of the transaction will be realized. Solutions to
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 PENTA HOLDING External Internal Insource components Leverage excess capacity Accretive to earnings Closer to our customers Enhance solutions capabilities Expand global reach Bolzoni Transaction – Rationale Solutions to
ENHANCE Performance 5 |
 Our
Businesses Organic growth through market share gain
Rapid growth in emissions free customer applications
Our Core Lift Truck Business
Our Hydrogen Power Business
Solutions to
ENHANCE Performance 6 |
 Hyster-Yale Is a True Full-Line Lift Truck Supplier…
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 Electric Pallet Trucks Stackers Very Narrow Aisle Trucks Order Pickers Reach Trucks Internal Combustion Engine ICE CB Laden Container Handlers Big Trucks Empty Container Handlers Forklifts Reach Stackers CLASS 1 CLASS 2 CLASS 3 CLASS 4 CLASS 5 1.0T to 5.5T 1.5T to 6.0T 1.5T to 8.0T 1.0T to 7.0T 1.0T to 52.0T Warehouse Equipment Over 260 different truck models available 7 Solutions to
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 …with Full Range of Power Options
Electric Counterbalanced Rider Trucks Electric Narrow Aisle Trucks Electric Hand Trucks Internal Combustion Engine (cushion tire) Internal Combustion Engine (pneumatic tire) CLASS 1 CLASS 2 CLASS 3 CLASS 4 CLASS 5 Lead Acid Battery Fuel Cell Engine LPG & Bi-fuel Diesel Tier 3 / Stage III LPG & CNG Diesel Tier 4 / Stage IV Photo Photo Photo Lithium Ion Battery Solutions to
ENHANCE Performance 8 |
 (units in thousands) _____________________ Trend line represents 4.1% long-term CAGR Average Industry Size. Source: WITS. Represents order intake.
_____________________
Source: WITS. LTM 12/31/15 and LTM 12/31/14 order
intake. Lift Truck Industry –
Unit Distribution by Class
_____________________
Source: WITS. LTM 12/31/15 Orders Reports.
ICE = Internal Combustion Engine
Total Industry = 1,100k
Units _____________________ Source: Internal Company estimates Market Size - Size Estimated Industry Revenue Mix Long-term CAGR (2004 – 2015) = 4.1%
Europe 33% China 22% Americas 25% Japan 7% -Pacific 8% Asia Middle East & Africa 5% 951 872 547 794 975 944 1,010 1,094 1,100 2007 2008 2009 2010 2011 2012 2013 2014 2015 Class 1 Electric 18% Class 2 Electric 10% Class 3 Electric 32% Class 4 ICE 3% Class 5 ICE 37% -44% -7% Change over Prior Year Total Americas Brazil EMEA JAPIC +1% +8% +6% Class 4 ICE 5% Market Size - $ Class 5 ICE 57% Class 1 Electric 19% Class 2 Electric 10% Class 3 Electric 9% Global Lift Truck Industry Size Global Lift Truck Industry Breakdown (Units) Lift Truck Industry Overview Solutions to ENHANCE Performance 9 0 300 900 1,200 600 Global Lift Truck Industry Size |
 Lift Truck Business Target Economics Goal and Gap to Target
7% Goal Achieve minimum operating profit margin of 7% at the peak of the current market cycle and 7% at mid-cycle of the next market cycle Target Economics gap closure can be achieved with unit volume… Stronger Industry + Share Growth = Volume Leverage LTM 12/31/15 Gap to Target Economics Actual Lift Truck Operating Profit Margin 5.0% Margin Variances (0.6%) Unit margin (0.4%) Parts/other (0.2%) Volume Variances 2.6% Manufacturing variances/other 1.5% Operating Expenses 1.1% Lift Truck Operating Profit % Gap 7.0% 10 Solutions to
ENHANCE Performance |
 Solutions to
ENHANCE Performance Leverage Gained from Moving Volume to Full Manufacturing Capacity 28,000 units of additional volume $600 - $700 million of additional revenue & $70 million of operating profit $30 - $35 million fixed cost absorption by moving from current capacity utilization to full utilization of our manufacturing capacity $35-$40 million by meeting target economics in standard margin net of increased SG&A spread over more units At Full Capacity: 115,000 units / year Expected over next 3 – 4 years 11 76% 24% Used Unused Capacity |
 12 Over the Remainder of this Market Cycle, Target Volumes Driven by…
Share growth of approx. 1.9% pts
> Strategic initiatives
> Share growth is expected to be
approximately 70% of volume
increase required
100 200 300 400 500 2009 2010 2011 2012 2013 2014 2015 EMEA Industry Actual Prior Peak 50 100 150 200 250 300 2009 2010 2011 2012 2013 2014 2015 Americas Industry Actual Prior Peak Growth of 10-15% by 2019-2020** Growth of 5-10% by 2019-2020** 150 250 350 450 2009 2010 2011 2012 2013 2014 2015 Asia Industry Actual Prior Peak Growth of 10-15% by 2019-2020** **Growth is from 2015 levels 12 Solutions to
ENHANCE Performance |
 13 Solutions to
ENHANCE Performance Hyster-Yale’s Economic Engine & Core Strategic Initiatives
Basic Business Areas Our strategies are designed to drive increased share, which in turn increases the lift truck population, which drives parts and service volumes. 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 Commonality Supply Chain Manufacturing Quality Marketing Parts Infrastructure Capital Requirements Improve Warehouse Position Enhance Independent Distribution Enhance Big Truck Market Position Strengthen the Sales and Marketing Organization Low Cost of Ownership Understand Customer Needs 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... Commercialize
Nuvera’s
Technology
A large lift truck population base drives parts and service volume
resulting in enhanced profitability for dealers and Hyster-Yale Succeed in Asia Solutions to
ENHANCE Performance 13 |
 14 Solutions to
ENHANCE Performance Our core strategic initiatives are in various stages of maturity. Share gain is expected
to take place as they gain
momentum… Core Strategic Initiatives – Stages of Momentum Solutions to
ENHANCE Performance 14 Understand Customer Needs Low Cost of Ownership Enhance Independent Distribution Improve Warehouse Position Succeed in Asia Enhance Big Truck Market Position Strengthen Sales and Marketing Organization Commercialize Nuvera’s Fuel Cell Technology Early Stage Mid Stage Achieved Breakthrough - |
 15 Solutions to
ENHANCE Performance Core Lift Truck Strategic Initiatives Update Strategic Objective Implementation Highlights Provide the right product and solution to meet the specific needs of different customers across multiple industries Increasing penetration of the Metals , Trucking and Paper segments Gained conquest business at three large trucking accounts Introduced efficient battery extraction solutions for electric truck applications Strengthening competency for special engineered solutions through dedicated resources Initiative Understand Customer Needs Strategic Objective Implementation Highlights Deliver lowest cost of ownership for all of our customers based on their specific application Initiative Low Cost of Ownership Two straight years of triple digit growth in telematics sales Launched additional Tier 4 compliant fuel efficient engines Improved energy efficiency and controllability of electric trucks Industry's first UL rated Lithium Ion battery for pedestrian pallet trucks Outcome: Win in Targeted Major Accounts and Applications Outcome: Competitive Advantage across Product Segments Key Elements Segmentation of products and industries Development of Utility, Standard and Premium products Range of options to match needs of different industries Targeted sales and marketing effort Key Elements Understand major cost drivers: Direct (truck price, fuel, service, operator, uptime) Indirect (safety, litigation, pollution) Implement right solutions for lower costs Automated product solutions Solutions to
ENHANCE Performance 15 |
 Core Lift Truck Strategic Initiatives Update
Strategic Objective
Implementation Highlights
• Develop the strongest independent, exclusive dealer network Initiative Enhance Independent Distribution Strategic Objective Implementation Highlights • Strengthen penetration of the growing warehouse segment Initiative Improve Warehouse Position • Completed a major restructuring of network in North America that included a competitor dealer conversion • Growth of our dual brand coverage in North America • 6 new dealers appointed in EMEA since the beginning of 2015 and 3 new dealers appointed since the beginning of 2016 • Resources: Adding industry-focused direct salespeople
and solutions and application center expertise
• Capability: New products, enhanced selling tools and trained dealers • Products: Targeted solutions for retail applications to
enhance productivity and operations
• Results: Winning business in 5 out of the top 10 US
retailers’ distribution centers
Outcome: Best Distribution Channels in the Industry
Outcome: Be a Top Tier Global Competitor in Warehouse
Key Elements
• Develop all dealers • Appoint / convert successful dealers • Expand number of dual line dealers • Enhance dealer value proposition • Combine dealer entrepreneurship with OEM support Key Elements • Enhance product ranges • Unique innovations • Continuous quality improvement • Develop stronger direct sales capabilities • Develop dealer resources and specialization • Enhance marketing services and support 16 Solutions to
ENHANCE Performance |
 Core Lift Truck Strategic Initiatives Update
Strategic Objective
Implementation Highlights
Initiative Succeed in Asia Strategic Objective Implementation Highlights Initiative Enhance Big Truck Market Position • 5 new dealers appointed in 2015 • Direct sales support on large accounts • Additional Big Truck sales by leveraging global metals industry expertise • Launched additional UTILEV products • Conquest accounts won • Enhanced dealer support capability • EMEA had a record year in Container Handler and Reachstacker bookings and a significant increase in bookings from the Steel Industry • Expand market penetration throughout Asia • Increase leading market position and become vendor of choice in Big Truck segment Outcome: Increase Share and Strengthen Distribution at Accelerated Pace
Outcome: Enhance leading market position in Big Trucks
Key Elements
• Organic growth through development of dealer network and direct selling capabilities • Development of long-term strategic partnerships • Development of right products • Development of support infrastructure Key Elements • New products • Business unit concept in each region • Global team coordination • Focus on industry and solutions • Success with large port operators • Comprehensive Tier 4 offering 17 Solutions to
ENHANCE Performance |
 Core Lift Truck Strategic Initiatives Update
Strategic Objective
Implementation Highlights
Initiative Strengthen Sales and Marketing Organization • Recruited experienced individuals with deep knowledge of the lift truck business • Added expertise in dealer management, account identification and coverage, financial merchandising and solutions development • Added expertise to focus on implementing standard sales processes in our independent dealers • Expanded investment in National and Major Account sales and support - winning conquest accounts • Increased global collaboration to maximize efficiencies and effectiveness • Strengthen and align sales and marketing organization in all geographic regions Outcome: Gain momentum leading to higher unit volumes and enhanced market share
Key Elements
• Greater accountability for results through smaller sales management areas • Leaders provided with new tools and enhanced reporting capabilities • Solutions Organization integrates Engineering and Special Product Engineering (SPED) function with Sales and improves Technical Sales Support • Major focus on account identification and coverage • Implementing new sales approach with appropriate tools to enhance solutions selling skills Solutions to
ENHANCE Performance 18 |
 Nuvera Hydrogen Power Business 19 Strategic Objective Key Elements Initiative Commercialize Nuvera’s Fuel Cell Technology • Enables active participation in the growing hydrogen and fuel cell market • Integration of Nuvera’s technology into Hyster-Yale’s lift truck product range • Supports other key strategic initiatives: meeting customer needs, providing lowest cost of ownership, enhancing independent distribution & increasing presence in the warehouse products market, all of which are designed to help gain share in the lift truck business Outcome: Successfully create an integrated fuel cell power solution option for customers
• Commercialize Nuvera’s technology through introduction of new fuel cell and improved hydrogen generation products to enhance our lift truck business value proposition and to support other share gain initiatives • Expand power solution options for customers Implementation Highlights • Secured first total power solution agreement with a customer in Q4 2015 • Shipment of PowerEdge ® units, lift trucks and PowerTap ® system expected in mid-2016 • Early stages of PowerEdge ® unit production began in late 2015 • Exploring other complementary market opportunities, including automotive, construction equipment, aerospace and seaports 19 Solutions to
ENHANCE Performance |
 20 Solutions to
ENHANCE Performance 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
Emissions Free
Scalable Solution
Constant Power
Rapid Refueling
Emerging Market
Adoption by Major
Users Solutions to
ENHANCE Performance 20 |
 The Hydrogen Power Market
25-50%
Short Term Target
N. America Lift Truck Market
electric trucks sold
per year 140,000+
Estimated up to
can benefit from
Fuel Cell solutions
Source: David Greene et. al., Status and
Outlook for the U.S. Non-Automotive Fuel Cell Industry: Impacts of Government Policies and Assessment of Future Opportunities, Oak Ridge National Laboratory, May 2011 (ORNL/TM-2011/101). Fuel Cell Power penetration projected to triple by 2025 ling and changing batteries Constant Power Power throughout shift and improved truck electronic life * Depending on application Economics Significant ROI* Productivity Increase Time saved refueling and changing batteries Constant Power Power throughout shift and improved truck electronic life Environmentally Clean Minimal carbon footprint and zero indoor emissions Floor Space Utilization Recapture battery storage and charging floor space 21 Solutions to
ENHANCE Performance |
 22 Solutions to
ENHANCE Performance The Nuvera Total Power Solution PowerTap ® Hydrogen Generation PowerEdge ® Fuel Cell Orion ® Fuel Cell Engine Hydrogen Refueling Low fixed costs ideal for small to medium size fleets Scalable Onsite generation Current: ideally suited to lift truck customer Next Generation: Leap in power density & efficiency opens opportunities Total Power Solution Solutions to
ENHANCE Performance 22 Engine |
 23 Solutions to
ENHANCE Performance Capturing More Lifecycle Value Truck Truck Hyster-Yale HY/Dealer Utility Company Utility Company Nuvera/Dealer PowerEdge® PowerEdge® Nuvera HY/Dealer Truck Truck Hyster-Yale Lead Acid Battery* PowerEdge ® Solution* Batteries & Charger Batteries & Charger Battery Supplier Eligible for 30% US Tax Credit (1) Eligible for 30% US Tax Credit (1) _____________________ (1) Currently set to expire on 1/1/17 Batteries $18-20k lifetime spend ($12k for 3 batteries / $6-8k for 1 charger) Solutions to
ENHANCE Performance Energy Maint Energy Fuel (PowerTap®) Maint 23 *Representative Total Cost of Operation based on NREL 2013 report |
 24 Solutions to
ENHANCE Performance Why Hydrogen Purchased for a small investment amount Investing pre-tax expense dollars to break-even Solutions across Hydrogen Value Chain Strong IP / Patent portfolio Pipeline of new technologies and solutions Rapid usage development in major user fleets Only one main competitor in lift truck space Developing turnkey option for lift truck customers Provides strong base for entry into other industries Becoming core power source alternative for lift trucks Our Hydrogen Power Business 24 Solutions to
ENHANCE Performance The Nuvera Story |
 25 Solutions to
ENHANCE Performance The Nuvera Plan Develop PowerEdge ® units for full range of electric lift trucks Build selling capacity First order for PowerEdge ® units booked in Q4 2015 Mean time between failure (MTBF) improvements to PowerTap ® PT 50 Hercules ® and Orion ® 2 technology development Hyster-Yale dealer engagement “Try-to-buy” PowerEdge ® program Turnkey Total Power Solution Build customer based industry and application solutions Hercules ® and Orion ® 2 product development Cost reduction engineering to meet target costs PowerTap ® PT 250 development Phase 1 2015 - 2016 Phase 1 2015 - 2016 Phase 3 2017 – 2018 Phase 3 2017 – 2018 Phase 2 2016 – 2017 Phase 2 2016 – 2017 700 PowerEdge ® and 10 PowerTap ® units per quarter at target margins achieves break-even operating profit performance Develop incremental partner opportunities in other industries Launch Hercules and Orion ® 2 Integrated fuel cell engines for full range of Hyster-Yale products Capture full aftermarket potential PowerTap ® PT 250 launch Solutions to
ENHANCE Performance 25 |
 26 Solutions to
ENHANCE Performance 2015 Fourth Quarter Highlights • Lift truck segment revenue decline driven by significant unfavorable currency, lower unit volumes and a shift in mix to lower-priced trucks Decrease in lift truck operating results from: - Lower volumes, a shift in sales to lower-margin products and lower prices + Lower product costs & lower freight, as well as lower operating
expenses • Nuvera spend was on target with original guidance given 2015 Fourth Quarter Highlights Short-term Outlook ($ in millions) • Global lift truck markets expected to be roughly stable, driven positively by the Western European market, with a moderating Americas market and weakening JAPIC market Operating profit and net income expected to be lower with increases in sales and parts volumes offset by higher operating expenses and shift in sales mix to lift trucks with lower average profit margins. Lower operating profit in first half of the year with improvements coming during the second half • Nuvera operating loss expected to be $23 - $26 million in 2016 Consolidated Revenue Lift Truck Operating Profit Nuvera Operating Loss Consolidated Operating Profit Consolidated Net Income EBITDA 2015 Fourth Quarter LTM 12/31/15 $645.0 32.3 (6.1) 26.2 17.2 $36.3 100.0% 5.0% (0.9)% 4.1% 2.7% 5.6% $2,578.1 128.1 (24.6) 103.5 74.7 $136.6 100.0% 5.0% (1.0)% 4.0% 2.9% 5.3% Solutions to
ENHANCE Performance 26 |
 27 Solutions to
ENHANCE Performance 27 Valuation Approach By Business Lift Truck Business Lift Truck Business Fuel Cell Business 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 Valuation Model of EBITDA Multiple on a Net Debt Basis Developing / Technology Industry Distinct Technology / Patents in Fuel Cell and Hydrogen Generation Operating Cash Invested in New Product Commercialization / Ramp Up Value as Venture Business with Developed Technology |
 28 Solutions to
ENHANCE Performance Our Competitive Advantages Able to meet customers needs globally Global economies of scale Young/ fresh product line Broad array of power options Fuel-cell power options Source of aftermarket profitability Barrier to entry Global Full Product Line Field Population Dealer Relationships Independent distribution model Exclusive distribution Combine OEM excellence with entrepreneurial distribution focused on customer Long relationships Able to meet most needs National Account programs Customer Relationships High performance metrics Large fleet program Aftermarket Support Employee Relationships Engaged workforce Experienced leadership Equal treatment High return for our stockholders Low capital employed structure Partnership relationships to limit capital needs Strong Return on Capital Solutions to
ENHANCE Performance 28 |
 29 HYSTER-YALE HYSTER-YALE A Solid Investment Option Strong Balance Sheet Cash Generation & Commitment to Shareholder Return Investment & Growth in Game Changing Technologies Leading Products & Market Position Strategies to Gain Share in Growth Segments & Markets Customer Focused & Solutions Oriented 29 Solutions to
ENHANCE Performance |
 30 Solutions to
ENHANCE Performance 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 Acquisitions of technologies and other forklift-related businesses 2013 2014 2015 Annual Dividends (1) $16.7m $1.00/share $17.8m $1.10/share $18.4m $1.14/share 2012 to 2014 Share Buyback $49.8m / 694,653 shares of Class A common stock n (1) Dollars represent total dividends paid during calendar year, while dividend per share represents the annualized dividend rate after each
May increase in 2014 and 2015 Investments to commercialize Nuvera’s technology |
 Solutions to
ENHANCE Performance Appendix |
 Non-GAAP Disclosure
Adjusted Lift Truck Business Operating Profit, 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 following: Adjusted Lift Truck Business Operating Profit is defined as Lift Truck Operating Profit, as reported, adjusted for the pre-tax effect of the $17.7 million gain on sale from the Brazil land and facility in 2014; EBITDA is defined as income before income taxes and noncontrolling interest income (loss) plus net interest expense and depreciation and amortization expense; Return on total capital employed (“ROTCE”) is defined as net income before interest expense, after tax, divided by average capital employed. Average capital employed is defined as average stockholders’ equity plus average debt less average cash. For reconciliations from GAAP measurements to non-GAAP measurements, see the following pages. 32 Solutions to
ENHANCE Performance |
 Non-GAAP Reconciliation
Year Ended December 31 2011 2012 2013 2014 2015 Reconciliation of EBITDA Net income attributable to stockholders $82.6 $98.0 $110.0 $109.8 $74.7 Noncontrolling interest income (loss) – 0.1 0.2 0.4 0.4 Income taxes provision 18.9 7.0 17.2 39.9 29.4 Interest expense 15.8 12.4 9.0 3.9 4.7 Interest income (1.8) (1.5) (1.8) (1.1) (1.5) Depreciation and amortization expense 31.3 28.0 30.2 29.7 28.9 EBITDA $146.8 $144.0 $164.8 $182.6 $136.6 ($ in millions) _____________________
Note: EBITDA in this investor presentation is
provided solely as a supplemental disclosure with respect to operating results. EBITDA does not represent net income, as defined by U.S. GAAP and should not be considered as a substitute for net income or net loss, or as an indicator of
operating performance. The Company defines EBITDA as
income before income taxes and noncontrolling interest income (loss) plus net interest expense and depreciation and amortization expense. EBITDA is not a measurement under U.S. GAAP and is not necessarily comparable
with similarly titled measures of other companies.
33 Solutions to
ENHANCE Performance |
 34 Solutions to
ENHANCE Performance Non-GAAP Reconciliation (continued) ($ in millions) _____________________ 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 cost of capital employed, which includes both equity and debt securities, net of cash. Reconciliation of Return on Total Capital Employed (ROTCE) 2015 2015 Average Stockholders’ Equity (12/31/15, 9/30/15, 6/30/15, 3/31/15, and 12/31/14) $449.7 2015 Average Debt (12/31/15, 9/30/15, 6/30/15, 3/31/15, and 12/31/14) 44.1 2015 Average Cash (12/31/15, 9/30/15, 6/30/15, 3/31/15, and 12/31/14) (114.3) 2015 $379.4 2015 Net income $74.7 Plus: 2015 Interest expense, net 3.2 Less: Income taxes on interest expense, net at 38% (1.2) Actual return on capital employed = actual net income before interest expense, net, after tax
$76.7 Actual return on capital employed percentage 20.2% average capital employed |
 Cash Flow before Financing Calculation
($ in millions)
Year Ended December 31 2011 2012 2013 2014 2015 Reconciliation of Cash Flow before Financing Net cash provided by operations $54.6 $128.7 $152.9 $100.0 $89.4 Net cash used for investing activities (15.9) (19.5) (26.1) (44.4) (31.3) Cash Flow before Financing $38.7 $109.2 $126.8 $55.6 $58.1 Solutions to
ENHANCE Performance 35 |
 Supplemental Information Solutions to
ENHANCE Performance |
 37 Solutions to
ENHANCE Performance The History of Hyster-Yale and its brands Hyster founded in Portland, Oregon as the Willamette Ersted Company 1929 1944 Company name officially changed to Hyster Company 1875 Yale Lock Mfg. broadens its scope into materials handling 1963 Yale forklift truck business merges with Eaton Mfg. Industrial Truck Division 1971 Yale forges a partnership with Sumitomo Ltd 1989 1989 Hyster and Yale merge to form NACCO Materials Handling Group (NMHG) 2012 2012 1985 Yale acquired by NACCO Industries 1989 Hyster acquired by NACCO Industries Hyster-Yale formed as independent public company following spin-off by NACCO
2011 2011 NMHG introduces the UTILEV lift truck for the utility segment of the market 2014 2014 NMHG, HY’s operating company, acquires Nuvera to enter the fast-growing hydrogen fuel
cell market 2016 2016 NMHG renamed Hyster-Yale Group 37 Solutions to
ENHANCE Performance |
 Solutions to
ENHANCE Performance Hyster-Yale Global Footprint 38 |
 39 Solutions to
ENHANCE Performance Historical Consolidated Revenue ($ in millions) 39 $0 $1,000 $2,000 $3,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Solutions to
ENHANCE Performance $2,057 $2,400 $2,489 $2,720 $2,824 $1,475 $1,802 $2,541 $2,469 $2,666 $2,767 $2,578 |
 _____________________
(1) Lift Truck Segment Operating Profit, as reported (2) Adjusted Lift Truck Segment Operating Profit, which excludes a $17.7 million pre-tax gain on the sale of the Brazil land and
facility, is a non-GAAP measure and should not be considered in isolation or as a substitute for the GAAP measure. Management believes that this measure assists the investor in understanding the results of operations. For discussion
of non-GAAP items and the related reconciliations to GAAP measures, see information in the Appendix starting on page 32. ($ in millions) 2.0% Gap Closure Prior Cycle Market Peak Mid-Cycle Market Lift Truck Business Operating Profit Trends and % of Sales 7% TARGET 40 $57.5 $111.7 $134.4 $133.3 $128.1 2.1% 4.5% 5.0% 4.8% 5.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% $25.0 $50.0 $75.0 $100.0 $125.0 $150.0 2007 2012 2013 2014 2015 $151.0 (1) (2) 5.5% $151.0 5.5% Solutions to
ENHANCE Performance |
 41 Solutions to
ENHANCE Performance Our Business Has Been Transformed Comprehensive, updated product line Average product age since last upgrade – less than 4 years Designed to meet customer needs and provide low overall cost of ownership Multiple power solutions to meet performance, cost, and environmental needs Product Range Product Range Manufacturing Manufacturing Globally integrated, lean operations with economies of scale Assembled in market of sale Continuous efficiency improvements DFT implementation globally 41 Solutions to
ENHANCE Performance |
 42 Solutions to
ENHANCE Performance Our Business Has Been Transformed Centralized supply chain management Highly flexible low cost supply chain 30%+ low cost country sourcing Concentrated supplier base Intense focus on supplier quality Supply Chain Supply Chain Aftermarket Aftermarket Quality Quality Customer driven programs North America’s warranty rates reduced significantly over the last five years Model Year upgrades High first time fill % Comprehensive all makes parts program Strong Fleet management program Telematics solutions across product line Solutions to
ENHANCE Performance 42 |
 43 Solutions to
ENHANCE Performance Lift Truck Overview and Sources of Revenue • Leading global lift truck manufacturer in terms of units sold – #3 globally in 2014 – Large installed base that drives parts sales – Over 830,000 units worldwide – Sales of 86,900 units in 2015 – Sales of >4,700 units at SN JV in Japan & Asia in 2015 2015 Worldwide Sales by Product 2015 Sales by Geography 2015 Retail Shipments by End Market (1) Key Highlights • Diverse customer and application base • Global independent dealer network • Comprehensive, updated global product line • Globally integrated operations with economies of scale • Experienced management team Europe, Africa & Middle East 24% Asia- Pacific 8% Americas 69% Electric Units 30% Parts 13% Other 5% Internal Combustion Engine Units (2) 52% Freight & Logistics 11% Home Centers/ Retail 18% Rental 9% Paper 5% Other 9% Manufacturing 23% Wholesale Distribution 13% Food & Beverage 12% Solutions to
ENHANCE Performance 43 _____________________ (1) Represents Hyster-Yale North American unit shipments by industry. (2) Includes Big Truck sales that represent 12.3% of total sales. |
 44 Solutions to
ENHANCE Performance Distribution Channel Strength and Diverse Customer Base Blue Chip Customer Base Over 1,000 global dealer locations More than 2,000 application consultants Over 11,000 service technicians National Accounts Profile National Accounts 16% Independent Dealers 84% Solutions to
ENHANCE Performance 44 Independent Dealer Network Distribution Mix • Focused on strategic customers with centralized purchasing and geographically dispersed operations across dealer territories • Fleet Management Program provides customers with value-added services that include service, aftermarket parts and comprehensive management of materials handling needs • Two brand network strategy optimizes local presence and customer reach • Key differentiating factors: • Long-term relationships with dealers • Territorial exclusivity encourages strong, long-term relationships with customers • Brand exclusivity ensures dealers’ selling efforts focused on Hyster-Yale products |
 45 Solutions to
ENHANCE Performance Positive Environment to Gain Share and Margin Performance Over Next Two Years
Product gaps filled to position Hyster-Yale in most application segments
and improve margins
Second-tier competitors in the ICE segment more vulnerable due to their
weak economies of scale position
Key warehouse segment competitors are regional
Key Big Truck segment competitors are niche
Over the longer-term, as core strategic initiatives are executed and mature,
share gains are expected to occur Solutions
to ENHANCE Performance 45 |
 46 Solutions to
ENHANCE Performance 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 Solutions to
ENHANCE Performance 46 |