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| 8-K - 8-K - HYSTER-YALE MATERIALS HANDLING, INC. | d386580d8k.htm |
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Productivity Investor Presentation
May 5, 2017 Exhibit 99 |
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Productivity 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 (May 2, 2017).
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. |
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Productivity 3 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.
_____________________
(1) Bolzoni’s financial results include pre-tax charges of $2.7 million of one-time purchase accounting adjustments and $6.4 million of
depreciation and amortization on acquired assets.
(2) EBITDA and ROTCE are non-GAAP measures and should not be considered in isolation or as a substitute for GAAP measures.
See non-GAAP explanations and the related reconciliations to GAAP measures in the Appendix starting on page 32. Key Metrics In millions (except employee data) LTM 3/31/17 Lift Truck Nuvera Bolzoni Revenue $2,519.9 $4.8 $157.2 Net Income (loss) $75.5 $(25.8) $1.2 (1) EBITDA (2) $128.5 $(41.4) $14.8 ROTCE (2) (Net debt basis) 18.6% n/m n/m (1) Net Debt at end of period $48.0 n/m $30.2 Approximate # of Employees (globally) 5,500 200 800 Q1 2017 Sales by Segment LTM 3/31/17 Sales by Segment Separate lift truck, attachment and hydrogen power segments Americas 65.0% EMEA 22.7% JAPIC 6.1% Bolzoni 5.8% Nuvera 0.4% Americas 64.1% EMEA 23.4% JAPIC 6.5% Bolzoni 5.9% Nuvera 0.1% |
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Productivity 4 Hyster-Yale is a 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 |
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Productivity 5 …with a Broad Range of Power Options, Attachments and Solutions 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 Lead-Acid Battery Fuel-Cell Engine LPG & Bi-fuel Diesel Tier 3 / Stage III LPG & CNG Diesel Tier 4 / Stage IV Lithium-ion Battery CLASS 4 & 5 Power Options Technology Architecture Solutions Attachments Clamps Multipallets Rotators Sideshifters Fork Positioners Push Pulls Lifting Tables Forks 55,000+ assets under management |
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Productivity 6 Five Key Perspectives to Emphasize Global market unit levels expected to be relatively strong at a high level for next few years Recovery underway in key markets and segments that have been depressed 7% operating margin at properly balanced HY factory-produced 115,000 units in this cycle remains Lift Truck business target Programs needed to achieve Lift Truck business target in place; timing of results cannot be forecast with specificity Recent acquisitions reinforce position in Lift Truck business and speed achievement to targeted 115,000 units |
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Productivity 7 Lift Truck Industry Overview (units in thousands) Global Lift Truck Industry Size _____________________ Trend line represents 4.4% long-term CAGR Average Industry Size. Source: WITS. Represents order intake.
North America Retail Lift Truck Below Peak Trend
Long-term CAGR (2004 –
2016) = 4.4% Lift Truck Industry
– Unit Distribution by Class
_____________________
Source: WITS. LTM 3/31/17 Orders Reports.
ICE = Internal Combustion Engine
Total Industry = 1,182k
Units Class 4 ICE 4% Market Size - $ _____________________ Source: Internal Company estimates Market Size - Units Class 5 ICE 55% Class 1 Electric 19% Class 2 Electric 12% Class 3 Electric 10% Estimated Industry Revenue Mix _____________________ Source: WITS. LTM 3/31/17 Orders Reports. Global Lift Truck Industry Breakdown (Units) Trend Upper
Limit Lower Limit NA - 50,000 100,000 150,000 200,000 250,000 300,000 : 872 547 794 975 944 1,010 1,094 1,100 1,182 1,239 0 300 600 900 1,200 2008 2009 2010 2011 2012 2013 2014 2015 2016 LTM Q1 2017 Europe 34% China 25% Americas 23% Japan 7% Asia-Pacific 7% Middle East & Africa 4% Class 1 Electric 17% Class 2 Electric 10% Class 3 Electric 35% Class 4 ICE 3% Class 5 ICE 35% Source: ITA. Represents order intake. |
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Productivity 8 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. |
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Productivity 9 Factors Impacting Near-Term Lift Truck Profitability 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 ($ in millions) 7% OPERATING PROFIT MARGIN TARGET 2.0% Gap 3.5% Gap (1) Prior Cycle Market Peak Start of Recovery in Core Industries (1) Q1 2017 Lift Truck Operating Profit Margin was 4.6%, representing a 2.4% gap to target $57.5 $128.1 $74.6 $89.4 2.1% 5.0% 3.0% 3.5% (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 2007 2015 2016 LTM Q1 2017 |
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Productivity Volume of 115,000 Units from HY Factories Required to Achieve 7% Target 7,900 Class 1 and 2 trucks 500 Big Trucks Additional units to fill each assembly line 32,900 additional units needed to achieve target Note: 115,000 units does not include volume from non-HY manufacturing plants Increasing unit product profit Decreasing manufacturing variances Leveraging relatively stable SG&A …should increase operating profits to target levels by: 12,500 Class 3 trucks 12,000 Class 4 and 5 trucks Developing relationships with new customers takes time New customers often test and phase in products New dealers and dealer improvement programs take time New products take time to reach full acceptance All projects tracked –
at different stages of maturity
Our objective is to sell 115,000 HY-produced units in 2018, but a more
realistic timeframe may be 2019 - 2020
|
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Productivity 11 Share Gain Drives Our Economic Engine 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 Succeed in Asia 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... Leverage Solutions
and Technology
Drivers A large lift truck population base drives parts and service volume resulting in enhanced profitability for Hyster-Yale and
dealers |
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Productivity 12 Core Strategic Initiatives Update Highlights Initiative Highlights Strategic Objective • Provide the right product and solution to meet the specific needs of different customers across multiple industries • Product fit for application • Premium, Standard and Utility products • Unique innovations • Automation & Telemetry • Leverage Bolzoni relationship • Market leadership in U.S., such as heavy duty industries, e.g. Paper • Growing success in trucking industry Understand Customer Needs Strategic Objective • Deliver lowest cost of ownership for all customers based on their specific application Initiative Low Cost of Ownership • Improved fuel / energy consumption • Engine to electric conversion • Expanding data services on growing number of telemetry systems (30K+) • Supplier quality, all-time high • Fleet management Outcome: Win in Targeted Major Accounts and Applications Outcome: Competitive Advantage across Product Segments |
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Productivity 13 Core Strategic Initiatives Update Initiative Initiative Strategic Objective Highlights • Develop the strongest independent, exclusive dealer network Enhance Independent Distribution Strategic Objective Highlights • Strengthen penetration of the growing warehouse segment Improve Warehouse Position • Significant strengthening in core U.S. market • Growth of dual-brand coverage • New dealers appointed in EMEA • Enhanced dealer profitability • Excellence programs in all theaters Outcome: Best Distribution Channels in the Industry Outcome: Be a Top Tier Global Competitor in Warehouse • Major wins in marquee accounts • New products • Enhanced selling tools and trained dealers • More dealer specialization • Adding industry-focused direct sales people |
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Productivity 14 Core Strategic Initiatives Update Strategic Objective Highlights Initiative Succeed in Asia Strategic Objective Highlights Initiative Enhance Big Truck Market Position • Expand market penetration throughout Asia • Increase leading market position and become supplier of choice in Big Truck segment Outcome: Increase Share and Strengthen Distribution at Accelerated Pace
Outcome: Enhance leading market position in Big Trucks
• Leveraging Euro cost position in U.S. dollar markets • Focus on industry and solutions • Increased success with large port operators • Successful new product launches • Heart-of-market products under development • Enhancement of dealer network and direct-selling capabilities • Development of long-term strategic partnerships • Development of right local products • Establishment of support infrastructure • Leveraging Big Truck success |
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Productivity 15 Core Strategic Initiatives Update Strategic Objective Highlights Initiative Strengthen Sales and Marketing Organization • Strengthen and align sales and marketing organization in all geographic regions Outcome: Gain momentum leading to higher unit volumes and enhanced market share
• Smaller sales management areas • Implementing new sales approach to enhance solutions selling skills • Major focus on account identification and coverage • Expanded direct-selling teams in all regions • Solutions organization links Engineering with Sales • Increased global account focus Leverage Solutions & Technology Drivers • Acquisition of Bolzoni • Acquisition of Speedshield distribution (telematics), strengthening HY’s telematics offering • Development of Nuvera fuel-cell engines and hydrogen generation units • Leverage expertise of HY and dealer channel • Partnership with BALYO (automation) • Relationship with Electrovaya (Lithium-ion battery) • Become a one-stop materials handling solutions provider Outcome: Increase business from existing customers and new customers attracted to HY’s integrated solutions
Strategic Objective
Initiative Highlights |
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Productivity 16 Hydrogen-Powered Lift Truck Opportunities & Advantages N. America electric trucks sold per year 150,000+
25-50%
Estimated up to
can benefit from
Fuel-Cell solutions
Global 700,000+
electric trucks sold
per year Growing sales pipeline: • Large pipeline of opportunities • More than 500 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 Population of Fuel-Cell Powered Lift Trucks in North America * __________ * 2015 is the most recent data available from the DOE at the time of publication of this presentation.
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5,000 10,000 15,000 20,000 25,000 30,000 35,000 2012 2013 2014 2015 2016 2017 2018 Internal company estimates DOE reported N. America |
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Productivity 17 Growth Strategy – Where Will Fuel Cells Be Used • Convert existing fuel cell users - Promote the Nuvera benefits vs competition • Increase market penetration in existing lead-acid battery users - Promote the performance and convenience of Nuvera • Build new markets with existing ICE truck users - High productivity in a clean energy solution - Address increasing emission regulations in certain applications and jurisdictions Gen1 Drop-In BBR / Integrated Solution Gen2 Fuel Cell Hybrid Truck Engine / Integrated Solution Approximate Engine Power Requirement [kW] 1-3 3-10 20-30 30-50 50-150 10-20 |
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Productivity 18 Separating Core Competencies and Responsibilities ECP STACK ENGINE BBR/Integrated Solution for Vehicle Engine Components Fuel Cell Engine Lift Truck Business – design, manufacture and sales/marketing of battery-box replacements (BBR) and integrated solutions Nuvera – design, manufacture and sales/marketing of fuel- cell stacks and engines and continued development of hydrogen generation appliance + electrochemical compressor (ECP) Power Electronics Hybrid Power System Stack Sub- System Engine Components Hydrogen Storage Thermal Management Fuel Cell Engine Enclosure and Counterweight Battery-Box Replacement/Integrated Solution Stack Sub-System |
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Productivity 19 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 volume Advanced compression and generation technology COMMERCIALIZATION Financially strong OEM ownership with long-term perspective Shift of BBR/Integrated Solutions production to Lift Truck business Leverage expertise of HY & dealer sales and service organizations Simplified transaction – single supplier, with financing options ALL-IN FUEL CELL SOLUTION Orion® Fuel-Cell Stack Nuvera® Fuel-Cell System (BBR/Integrated Solution) Nuvera® Hydrogen Generator Hydrogen Refueling |
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Productivity 20 The Nuvera Plan • Successfully shipped product to launch customer • Current generation BBR production at Nuvera® • Focus on reducing cost of product to target cost • Design, manufacturing and aftermarket responsibility for next generation BBR and integrated solutions transferred to Lift Truck business • Nuvera® focus on development of ECP, fuel-cell stack and engine • Nuvera® continued development of Nuvera® Hydrogen Generator and Hercules ECP • Leadership team enhanced and activities increased • Discussions underway with various partners interested in Nuvera® technology • Launch of Orion® 2 with increased power density and greater fuel efficiency • Rapid ramp up in production of BBR and integrated solutions at Greenville, NC plant to meet anticipated expanding demand • Continued focus on reducing cost of product to target costs and achieving targeted fuel-cell engine volumes • Expansion into EMEA and JAPIC markets • Execute partner opportunities • Achieve break-even per quarter at target margins sometime in 2018 • Profitability at /above HY target economics over longer term • Launch of hydrogen compressor technology beyond 2020 Current Phase 2017 Current Phase 2017 Next Phase 2018+ TM |
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Productivity 21 Bolzoni Bolzoni is one of the worldwide leading manufacturers of lift truck attachments, forks and lift tables with an extensive product range LTM Q1 2017 Sales by Region • Managed as separate business segment • Separation to maintain OEM information integrity 34% 66% 2016 CUSTOMER MIX Lift Truck Manufacturers – OEM Dealers of Lift Trucks & Material Handling MARKET – INDUSTRIES Logistics
Automotive Food & Beverage Pulp &
Paper Appliances & Electronics Other
Material Handling Synergy Opportunities
EMEA 76.0% America 18.6% JAPIC 5.4% |
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Productivity 22 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 |
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Productivity 23 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 Industry / Customer Focus • Industry cluster identification • Customers by cluster identification (80/20 rule) • Targeted messaging • Disciplined contact management • Established base position and grow penetration over time Products & Solutions Focus Industry Focus Industry Focus Geographic Focus One-by- One Customer Focus Share Gain Drivers |
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Productivity 24 HY Volume Leverage & Target Economics Incremental Units Produced +5,000 Trucks Sales $162m Gross Profit $35m Operating Expenses $11m Operating Profit $24m Incremental Operating Profit % 15.0% As we make progress toward the 115,000 unit production levels, HY Lift Truck will generate significant incremental operating profit contribution… Importance of volume growth to reaching target Target is to move from significant loss to break even in a 2018 quarter then to significant profitability in the long term Nuvera Expect to exceed 7% operating profit target as programs mature Bolzoni Lift Truck Lift Trucks Sold 124,000 Lift Trucks Produced in HY plants 115,000 Revenues $3,590 Gross Profit $640 Operating Expenses $390 Operating Profit $250 Operating Margin 7.0% |
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Productivity 25 2017 First Quarter Highlights LIFT TRUCK • Revenues up mainly from increased shipments in Americas, EMEA and JAPIC • Bookings and backlog up modestly compared with Q1 2016 • Operating profit increased substantially over Q1 2016 primarily as a result of improved gross profit, primarily in the Americas, resulting from increased unit and parts volumes, production efficiencies and improved pricing, net of material cost increases 2017 First Quarter Highlights 2017 First Quarter LTM 3/31/17 Consolidated Revenue $713.1 100.0% $2,678.6 100.0% Consolidated Operating Profit $23.4 3.3% $48.6 1.8% Consolidated Net Income $18.1 2.5% $50.9 1.9% EBITDA $36.3 5.1% $101.9 3.8% Lift Truck Operating Profit $30.6 4.6% (1) $89.4 3.5% Bolzoni Operating Profit $2.3 5.5% (1) $2.2 1.4% (1) Nuvera Operating Loss $(9.5) n/m (1) $(43.0) n/m (1) ($ in millions) BOLZONI • Incremental revenues of $41.6 million • Q1 operating profit includes $1.4m of amortization on acquired assets.
(LTM operating profit includes $2.7m of one-time purchase accounting adjustments and $6.4m of amortization on acquired assets.) NUVERA • Revenue of $2.6m • Increased losses due to ramp up of inventory for increased production, an
additional $1.7 million in development and production start-up expenses,
including unfavorable inventory adjustments to reflect selling
prices, and higher marketing and employee-related
costs. _____________________
(1) Operating Profit (Loss) Margin % is calculated based on the respective business segment’s revenues for the respective
period. (1) |
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Productivity 26 2017 Earnings Perspective LIFT TRUCK • Global lift truck market expected to grow modestly compared with 2016 • Sales volumes and unit and parts revenues expected to increase during remainder of 2017, full year increase anticipated to be more than
anticipated market growth due to anticipated share gains from new
products and continued implementation of other share gain initiatives
• Due to strong Q1 2017 revenue growth, Q2 2017 growth expected to be more modest, with expected growth increase again in H2
2017 •
Operating profit expected to increase over 2016 due to enhanced margins through
pricing, net of material cost increases, while maintaining headcount near current levels; but more modest improvement anticipated in H2 of 2017 due to substantial increase in Q1 2017 and expected soft
Q3. •
Full-year net income expected to increase moderately due to increase in
operating profit, partially offset by higher income tax rate in 2017 and absence of tax benefits recognized in 2016 NUVERA • Integration of Nuvera and Lift Truck business currently being implemented.
Nuvera to focus on core competencies of fuel-cell stack and engine manufacturing and development and commercialization of hydrogen-generation appliance and ECP. Next generation of
battery-box replacements and integration of fuel-cell
engines now the responsibility of Lift Truck business. •
Focused on lowering costs of manufacturing, with losses expected
to progressively decrease over 2017 and 2018, with objective of reaching break-evening during 2018 by achieving target costs and target fuel-cell engine volumes.
• Until target cost structure for fuel-cell engines is in place, inventory costs expected to result in continued inventory adjustments
to reflect current selling prices, but at a decreasing rate.
• The net impact of added operational expenses on the Lift Truck business is expected to be modest as existing resources are
re-deployed to focus on the sale, development and manufacture
of battery box replacements and integrated solutions.
BOLZONI • Revenues expected to increase modestly over LTM 3/31/17 revenues due to anticipated growth in EMEA market, recent major
customer commitments and
sales enhancement programs
• Implementation of key strategic programs expected to generate substantial growth in operating profit and net income compared with LTM
3/31/17 |
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Productivity 27 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, including Bolzoni Investments to commercialize Nuvera’s technology 2015 2016 YTD 2017 Annual Dividends (1) $18.4m $1.14/share $19.2m $1.18/share $4.9m $1.21/share 2012 to 2014 Share Buyback $49.8m / 694,653 shares of Class A common stock (1) Dollars represent total dividends paid during calendar year, while dividend per share represents the annualized dividend rate after each
May increase in 2015, 2016 and 2017 |
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Productivity 28 by selling and producing 115,000 HY-factory trucks In Summary, Over the Next Few Years…. to Fill existing assembly line capacity through Significant share growth Which leverages Technology accelerators and business acquisitions Get to approximately $3.6 billion HY Lift Truck segment revenue irrespective of industry size |
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Productivity 29 Valuation Approach Needs to Vary By Business 29 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 Leading Products and Position Mature Cyclical Industry Value using Traditional Valuation Model of EBITDA Multiple on a Net Debt Basis Multiple should reflect ROIC levels and growth prospects 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 |
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Productivity 30 A Solid Investment Option 30 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 Strong Return on Capital |
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Productivity Appendix Appendix |
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Productivity 32 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 $17.7 million gain on sale from the Brazil land and facility in 2014; EBITDA is defined as income (loss) before income taxes and noncontrolling interest income (loss) plus net interest expense and depreciation and amortization expense; Return on total capital employed (“ROTCE”) is defined as net income (loss) before interest expense, after tax, divided by average capital employed. Average capital employed is defined as average stockholders’ equity plus average debt less average cash. For reconciliations from GAAP measurements to non-GAAP measurements, see the following pages. |
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Productivity 33 Non-GAAP Reconciliation _____________________ ($ in millions) Year Ended December 31 Qtr. Trailing 12 Months Consolidated 2013 2014 2015 2016 3/31/17 3/31/17 Reconciliation of EBITDA Net income attributable to stockholders $ 110.0 $ 109.8 $ 74.7 $ 42.8 $ 18.1 $ 50.9 Noncontrolling interest income (loss) 0.2 0.4 0.4 (0.5) - (0.4) Income tax provision (benefit) 17.2 39.9 29.4 (4.0) 6.2 3.2 Interest expense 9.0 3.9 4.7 6.7 1.8 7.4 Interest income (1.8) (1.1) (1.5) (2.0) (0.3) (1.9) Depreciation and amortization expense 30.2 29.7 28.9 39.1 10.5 42.7 EBITDA $ 164.8 $ 182.6 $ 136.6 $ 82.1 $ 36.3 $ 101.9 ($ in millions) Year Ended December 31 Qtr. Trailing 12 Months Lift Truck 2013 2014 2015 2016 3/31/17 3/31/17 Reconciliation of EBITDA Net income attributable to stockholders $ 110.0 $ 111.2 $ 89.3 $ 66.9 $ 22.3 $ 75.5 Noncontrolling interest income (loss) 0.2 0.4 0.4 (0.5) (0.1) (0.5) Income tax provision (benefit) 17.2 40.7 39.4 12.2 9.4 20.2 Interest expense 9.0 3.9 4.7 6.9 1.6 7.4 Interest income (1.8) (1.1) (1.5) (3.0) (0.3) (2.9) Depreciation and amortization expense 30.2 29.6 27.3 28.1 7.2 28.8 EBITDA $ 164.8 $ 184.7 $ 159.6 $ 110.6 $ 40.1 $ 128.5 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 income or net loss, or as an indicator of operating performance. The Company
defines EBITDA as income (loss) 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.
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Productivity 34 Non-GAAP Reconciliation (continued) _____________________ ($ in millions) Year Ended December 31 Qtr. Trailing 12 Months Nuvera 2014 2015 2016 3/31/17 3/31/17 Reconciliation of EBITDA Net loss attributable to stockholders $ (1.4) $ (14.6) $ (23.8) $ (5.7) $ (25.8) Noncontrolling interest income - - - - - Income tax benefit (0.8) (10.0) (15.8) (3.8) (17.2) Interest expense - - - - - Interest income - - - - - Depreciation and amortization expense 0.1 1.6 1.5 0.5 1.6 EBITDA $ (2.1) $ (23.0) $ (38.1) $ (9.0) $ (41.4) Qtr. Trailing 12 Months Bolzoni 3/31/17 3/31/17 Reconciliation of EBITDA Net income attributable to stockholders $ 1.5 $ 1.2 Noncontrolling interest income 0.1 0.1 Income tax provision 0.6 0.2 Interest expense 0.2 1.0 Interest income - - Depreciation and amortization expense 2.8 12.3 EBITDA $ 5.2 $ 14.8 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 income or net loss, or as an indicator of operating performance. The Company
defines EBITDA as income (loss) 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.
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Productivity 35 Non-GAAP Reconciliation (continued) _____________________ 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)
Consolidated
Lift Truck
(1) Nuvera Bolzoni LTM 3/31/17 LTM 3/31/17 LTM 3/31/17 LTM 3/31/17 Average Stockholders' Equity (3/31/17, 12/31/16, 9/30/16, 6/30/16 and 3/31/16) $489.6 $525.0 $12.9 $101.3 Average Debt (3/31/17, 12/31/16, 9/30/16, 6/30/16 and 3/31/16) 144.1 111.5 2.4 57.1 Average Cash (3/31/17, 12/31/16, 9/30/16, 6/30/16 and 3/31/16) (76.7) (216.4) - (8.8) Average capital employed $557.1 $420.2 $15.3 $149.7 Net income (loss) $50.9 $75.5 $(25.8) $1.2 Plus: Interest expense, net 5.5 4.5 - 1.0 Less: Income taxes on interest expense, net at 38% (2.1) (1.7) - (0.4) Actual return on capital employed = actual net income (loss) before interest expense, net, after tax
$54.3 $78.3 $(25.8) $1.8 Actual return on capital employed percentage 9.7% 18.6% n/m n/m ($ in millions) (1) Lift Truck Return on capital employed excludes the average initial investment of $99.3 million for the acquisition of Bolzoni
and continuing average investments of $47.4 million in Nuvera. Investment numbers are based on a 5-point average. |
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Productivity 36 Cash Flow before Financing Calculation . Consolidated ($ in millions) Year Ended December 31 Qtr. Trailing 12 Months 2012 2013 2014 2015 2016 3/31/17 3/31/17 Reconciliation of Cash Flow before Financing Net cash provided by (used for) operating activities $128.7 $152.9 $100.0 $89.4 $(48.9) $102.0 $71.4 Net cash used for investing activities (19.5) (26.1) (44.4) (31.3) (145.1) (7.1) (154.0) Cash Flow before Financing $109.2 $126.8 $55.6 $58.1 $(194.0) $94.9 $(82.6) |
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Productivity Supplemental Information Appendix |
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Productivity 38 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 platform truck 1963 Yale forklift truck business merges with Eaton Mfg. Industrial Truck Division 1950 Yale added gas, LP gas and diesel-powered fork lift trucks to its range 1964 Hyster introduces the famous Monotrol® pedal 1971 Yale forges a partnership with Sumitomo Ltd 2011 2011 NMHG introduces the UTILEV ® lift truck for the utility segment of the market 2016 2016 1985 Yale acquired by NACCO Industries 1989 Hyster acquired by NACCO Industries NMHG renamed Hyster-Yale Group HY completes acquisition of 100% of Bolzoni S.p.A. The History of Hyster-Yale and its brands 1989 1989 2012 2012 Hyster-Yale formed as independent public company following spin- off by NACCO 2014 2014 NMHG, HY’s operating company, acquires Nuvera to enter the fast- growing hydrogen fuel cell market Hyster and Yale merge to form NACCO Materials Handling Group (NMHG) |
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Productivity 39 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 Danville, Illinois Parts Distribution Center Charlotte, North Carolina Experience Center Barueri, Brazil Brazil Marketing and Administration Center Itu, Brazil Lift Truck Manufacture; Parts Distribution Center Craigavon, N. Ireland Lift Truck Manufacture Nijmegen, Netherlands Lift Truck Manufacture; Big Truck Development Center; Parts Distribution Center Masate, Italy Lift Truck Manufacture Shanghai, China (JV) Lift Truck Manufacture; Parts Distribution; China Marketing and Administration Center Obu, Japan (JV) Lift Truck Manufacture; Parts Distribution Cavite, Philippines (JV) Fabrication Manufacture Irvine, Scotland European Administration Center Hanoi, Vietnam (JV) Component Manufacture Sydney, Australia Division Headquarters; Parts Distribution Pune, India Engineering, Supply Chain and Marketing Center Frimley, UK Division Headquarters; Engineering Concept Center Kuala Lumpur, Malaysia Asia Support Office Hefei, China Supply Chain Center Fairview, Oregon Counterbalanced Development Center; Administration Center San Donato, Italy European Offices; Research & Development; Testing Facilities Billerica, Massachusetts Hydrogen Power Business Headquarters; Research and Development; Manufacturing and Sales Homewood, Illinois Attachment Manufacture Piacenza, Italy Bolzoni Headquarters; Attachment, Lift Table and Fork Manufacture Järvenpää, Finland Attachment Manufacture Salzgitter, Germany Attachment Manufacture Wuxi, China Attachment Manufacture Hebei, China Fork Manufacture Pointe-Claire, Canada Commercial Subsidiary Prestons, Australia Commercial Subsidiary Warrington, UK Commercial Subsidiary Montcarda/Reixac, Spain Commercial Subsidiary Forbach, France Commercial Subsidiary Prato, Italy Commercial Subsidiary Lublin, Poland Commercial Subsidiary Moscow, Russia Commercial Subsidiary Korschenbroich, Germany Commercial Subsidiary Gävle, Sweden Commercial Subsidiary Helmond, Netherlands Commercial Subsidiary Lift Truck Business locations Hydrogen Power Business (Nuvera) locations Attachment Business (Bolzoni) locations Global Headquarters LEGEND: Tyler, Texas HY Telematics Chessy, France Commercial Offices Neu-Isenburg, Germany Commercial Offices |
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Productivity 40 Historical Consolidated Revenue $2,057 $2,400 $2,489 $2,720 $2,824 $1,475 $1,802 $2,541 $2,469 $2,666 $2,767 $2,578 $2,570 $2,679 $0 $1,000 $2,000 $3,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 LTM Q1 2017 ($ in millions) |
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Productivity _____________________ (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) 2.4% Gap Closure Prior Cycle Market Peak Mid-Cycle Market Lift Truck Business Operating Profit Trends and % of Sales 7% TARGET 3.5% Gap Closure $57.5 $111.7 $134.4 $133.3 $128.1 $74.6 $89.4 $30.6 2.1% 4.5% 5.0% 4.8% 5.0% 3.0% 3.5% 4.6% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 $160.0 2007 2012 2013 2014 2015 2016 LTM 3/31/17 Q1 Ending 3/31/17 $151.0 (1) (2) 5.5% |
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Productivity 42 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 3/31/17 Gap to Target Economics Actual Lift Truck Operating Profit Margin % 3.5% Margin Variances 0.7% Unit margin 1.0% Parts/other (0.3%) Volume Variances 2.8% Manufacturing variances/other 0.9% Operating Expenses 1.9% Lift Truck Operating Profit Margin % Gap 3.5% Lift Truck Operating Profit Margin % Target 7.0% |
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Productivity 43 Lift Truck Overview and Sources of Revenue 2016 Worldwide Sales by Product _____________________ (1) Represents Hyster-Yale North American Lift Truck unit shipments by industry.
(2) Includes Big Truck sales that represent 10.9% of total sales. (3) Bolzoni revenues of $115.6 million included in parts. (4) 2016 data was not finalized as of the publication date of this presentation.
A leading global lift truck manufacturer in terms of units sold
2016 Retail Shipments by End Market
(1) #3 Globally in 2015 (4) Large installed base that drives parts sales Over 827,000 units worldwide at 12/31/16 HY sales of 87,600 units in LTM 3/31/17 82,100 units sold - produced in HY plants 5,500 units sold –
produced by JV or other third parties Additional >6,300 units sold in Japan in 2016 Direct sales by JV partner (2) ICE Units 50% Electric Units 27% Parts 17% Other 6% (3) Manufacturing 21% Wholesale Distribution 18% Food & Beverage 12% Rental 10% Home Centers/ Retail 14% Freight & Logistics 13% Paper 3% Other 9% |
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Productivity 44 Industry Units by Geography Lift Truck Unit Class Shipments _____________________ Source: Company: LTM 3/31/17 Units Shipped Note: Units sold direct by SN JV are not included HY Lift Truck Units Sold by Geography _____________________ Source: WITS. LTM 3/31/17 Orders Reports. _____________________ Source: WITS. LTM 3/31/17 Orders Reports. ICE = Internal Combustion Engine _____________________ Source: Company: LTM 3/31/17 Units Shipped Note: Units sold direct by SN JV are not included ICE = Internal Combustion Engine Industry Units by Class HY Lift Truck Units by Class _____________________ Source: Internal Company estimates Estimated Industry Revenue Mix Industry Unit Revenue by Class HY Lift Truck Unit Revenue by Class _____________________ Source: Company: LTM 3/31/17 Unit Revenues Americas 64% EMEA 29% Asia - Pacific/ Japan 4% China 3% Class 1 Electric 19% Class 2 Electric 10% Class 3 Electric 30% Class 4 ICE 10% Class 5 ICE 31% Class 1 Electric 19% Class 2 Electric 10% Class 3 Electric 7% Class 4 ICE 14% Class 5 ICE 50% Class 1 Electric 19% Class 2 Electric 12% Class 3 Electric 10% Class 4 ICE 4% Class 5 ICE 55% Class 1 Electric 17% Class 2 Electric 10% Class 3 Electric 35% Class 4 ICE 3% Class 5 ICE 35% Europe 34% China 25% Americas 23% Japan 7% Asia - Pacific 7% Middle East & Africa 4% |
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Productivity 45 Shift in Market Balance from ICE to Electric Today 2017 _____________________ Source: WITS. Orders Reports. ICE = Internal Combustion Engine DRIVERS: • Customer shift • Growth of warehousing and logistics • Environmental, health and safety • Evolving technologies Previous Peak 2007 Class 1 Electric 18% Class 2 Electric 10% Class 3 Electric 27% Class 4 ICE 3% Class 5 ICE 42% Class 1 Electric 17% Class 2 Electric 10% Class 3 Electric 35% Class 4 ICE 3% Class 5 ICE 35% |
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Productivity 46 Lift Truck Market Size Data Lift Truck Market Size Data WITS Orders Basis (1) 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Europe 265,896 278,024 312,455 327,173 380,557 445,583 411,107 222,883 299,387 368,286 North America 147,322 155,191 186,192 198,058 212,953 191,384 159,279 98,338 136,050 169,589 Total Americas 158,388 168,471 206,225 221,155 242,186 234,353 200,178 118,835 180,903 224,501 A/P, China and Japan (1a) 138,452 155,094 185,530 201,062 232,438 271,018 260,246 205,114 314,162 381,795 Global Market 562,736 601,589 704,210 749,390 855,181 950,954 871,531 546,832 794,452 974,582 2012 2013 2014 2015 2016 2017E Europe 351,441 357,452 387,905 412,642 457,333 465,000 North America 181,191 200,939 219,444 235,128 240,836 210,600 Total Americas 229,565 252,930 267,546 277,315 280,827 251,600 A/P, China and Japan (1a) 363,399 399,395 438,510 409,923 443,938 444,338 Global Market 944,405 1,009,777 1,093,961 1,099,880 1,182,098 1,160,938 (1) In 2009, Hyster-Yale switched to tracking Industry data on a World Industrial Truck Statistics ("WITS") Orders Basis. WITS
statistics began in 2002. (1a) Beginning in 2014 includes
India local production 1992
1993 1994 1995 1996 1997 1998 1999 2000 2001 Europe (FEM/JIVA) (3) 150,250 121,922 135,318 152,667 174,953 176,294 187,902 219,615 227,697 274,681 North America (2) (3) 106,590 120,679 154,167 162,725 152,763 178,456 192,192 197,436 205,033 145,967 Total Americas (2) (3) 114,411 127,308 162,261 171,682 168,170 193,413 207,018 209,843 223,499 161,316 A/P, China and Japan (3) 134,635 123,913 119,733 135,050 148,135 148,441 111,848 104,781 122,354 123,780 2002 2003 2004 2005 2006 2007 2008 2009 Europe (FEM/JIVA) (3) 256,717 263,972 286,546 302,158 337,326 382,047 376,945 201,352 North America (2) (3) 144,529 151,911 182,450 194,475 207,919 185,726 149,863 95,562 Total Americas (2) (3) 156,702 166,328 203,552 218,908 238,141 229,509 192,134 115,752 A/P, China and Japan (3) 129,333 146,334 171,000 195,386 222,074 250,684 257,604 199,159 Non-WITS Prior Year Information: Materials Handling ("FEM"), World Industrial Truck Association (2) Total Americas numbers for 1992-2008 include North America Commercial, Government and Latin America. Prior years are
North America Commercial only.
(3) Industry information is based upon the reporting basis of each individual region,
which varies according to the industry trade groups in that
region: Europe & Japan -
Factory shipments A/P & China - Factory bookings Industry forecast (light blue columns) – source: Derived from DRI-WEFA and Oxford Economic Forecasts Lift truck market size history
– source: Industrial Truck Association, Japan Industrials Vehicle Association ("JIVA"), European Federation of Americas - North America & Government - Retail bookings Americas - Latin America - Factory bookings |
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Productivity 47 Distribution Channel Strength and Diverse Customer Base Blue Chip Customer Base Approximately 1,100 global dealer locations More than 2,800 application consultants Approximately 10,700 service technicians National Accounts Profile Independent Dealer Network • 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 National Accounts 17% Independent Dealers 83% 2016 Distribution Mix |
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Productivity 48 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 |
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Productivity 49 Product Philosophy • Full product line • Segmented solutions • Scalable modular platforms • Leverage core assets • Technology partners • Fit for market and application • Reliability and durability • Energy efficiency • Operator productivity • Support growth initiatives • Fill the factories • Differentiation • Innovation Guiding Product Philosophy Guiding Product Philosophy Key Product Attributes Key Product Attributes Product Portfolio Focus Product Portfolio Focus |
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Productivity 50 Our Investment in R&D Full Product Line* Lift Truck R&D Investment HY COMPETITORS FULL MIN * Full Product Line – Class 1 through Class 5, including Big Truck $68 $69 $71 $69 $71 2012 2013 2014 2015 2016 2.8% 2.6% 2.6% 2.7% 2.9% % of Revenue $ in millions |
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Productivity 51 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 |
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Productivity 52 Cost of Operation / Hour Factors Impacting Low Cost of Ownership Factors Impacting Low Cost of Ownership *Typical truck cost/hour for 5,000lb North American applications Operator 69% Fuel 11% Service& Repair 11% Lease 9% Lease Service & Fuel Operator Fleet optimization Price management Cost control Residuals Cost/hour Fleet Management Extended Warranty Telematics Energy usage Alternative powertrains ICE to ER Mode control Productivity Ergonomics/ fatigue Auto functions Automated trucks Typical Truck Cost/Hour Repair * |
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Productivity 53 Areas of Focus Telematics • Internet of things • Asset management • Fleet and truck data • Use of telematics • Partnered approach Balyo, Seegrid • Camera and laser- based systems • Focus on integration and value proposition Automation Alternative Power Lead acid Lithium ion Fuel cell Diesel LPG Lithium ion Fuel cell Battery Box Solutions Integrated solutions |
    Solutions that DRIVE
Productivity 54 Capturing More Lifecycle Value Truck Hyster-Yale Maint HY/Dealer Energy Utility Company Fuel (Nuvera® Hydrogen Generator) Energy Utility Company Nuvera/Dealer Nuvera® Fuel Cell System Nuvera Maint HY/Dealer Truck Hyster-Yale Lead-Acid Battery* Nuvera® Fuel-Cell System Solution* *Representative Total Cost of Operation based on NREL 2013 report Batteries & Charger Battery Supplier Batteries $18-20k lifetime spend ($12k for 3 batteries / $6- 8k for 1 charger) |
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Productivity 55 Developing Our Product Range Approximate Engine Power Requirement [kW] 24V 36V 48V 1-3 3-10 10-20 Product available in all electric truck classes Minor modifications to address >70% of market |
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Productivity 56 Advanced Technologies Fuel-Cell Engines • Enhanced lift truck functionality • Integrated engines across multiple OEMs Product Roadmap - New Markets Next Generation Fuel Cells • Improved power density • Fuel efficiency • Lower cost Hydrogen Generator • Higher capacity • Longer life • Improved efficiency Automotive Refueling • Higher capacity hydrogen generator • Ultra-high compression • Standard fueling station layout Compression Technology • Improved reliability • Smaller footprint • Quiet and efficient Technology and Product Roadmaps |
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Productivity 57 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 clamps, bale clamps and other
specialized handling attachments. The worldwide recognized paper handling specialist. AURAMO was acquired by BOLZONI Group in 2001. MEYER Founded in Germany in 1953, focus on a wide range of lift truck attachment industry.
The worldwide recognized multiple pallet handler
inventor. MEYER
was acquired by BOLZONI Group in 2006. |
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Productivity 58 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 |
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Productivity 59 LTM Q1 2017 Bolzoni Revenue by Product Line € 143,1 M Other Revenues* € 5,5 M 4% Forks € 15,9 M 11% Lift Table € 8,9 M 6% Attachments € 112,8 M 79% ___________ * Other Revenes – Rental business and Customer care. Note – Revenue by product line and percentages presented represent LTM Q1 2017 revenues in euros. |
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Productivity 60 • 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 Full Product Line Field Population Dealer Relationships • Independent distribution model • Exclusive distribution • Combine OEM excellence with entrepreneurial distribution focused on customer • Long-term 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 Our Competitive Advantages |