Hyster-Yale, Inc. · NYSE:HY
Hyster-Yale — Hyster-Yale Materials Handling — Investor Presentation (May 2017)
60 slides from Hyster-Yale's investor presentation, May 5, 2017
Slide 1: Investor Presentation May 5, 2017
Exhibit 99 Investor Presentation May 5, 2017 Solutions that DRIVE Productivity
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: 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. Q1 2017 Sales by Segment Separate lift truck, attach
Slide 4: Hyster-Yale is a Full-Line Lift Truck Supplier
Hyster-Yale is a Full-Line Lift Truck Supplier… CLASS 1 CLASS 2 CLASS 3 CLASS 4 CLASS 5 Electric Internal Internal Electric Narrow Electric Hand Counterbalanced Combustion Engine Combustion Engine Aisle Trucks Trucks Rider Trucks (cushion tire) (pneumatic tire) 1.0T to 5.5T 1.5T to 6.0T 1.5T to 8.0T
Slide 5: With a Broad Range of Power Options, Attachments and Solutions
…with a Broad Range of Power Options, Attachments and Solutions Power Options Attachments CLASS 1, 2 & 3 CLASS4 & 5 Clamps Forks Push Pulls Multipallets Electric Counterbalanced Rider Trucks Rotators Internal Combustion Engine (cushion tire) Electric Narrow Aisle Trucks Internal Combustion Engine (p
Slide 6: Five Key Perspectives to Emphasize
Five Key Perspectives to Emphasize Globalmarketunit levelsexpectedto berelativelystrongat a highlevelfor nextfew years Recoveryunderwayin keymarketsandsegmentsthat havebeendepressed 7%operatingmarginat properlybalancedHYfactory-produced115,000unitsin this cycleremainsLift Truck business target Progr
Slide 7: Lift Truck Industry Overview
Lift Truck Industry Overview Global Lift Truck Industry Size Global Lift Truck Industry Breakdown (Units) (units in thousands) Middle East & Long-term CAGR (2004 2016) – = 4.4% Asia-Pacific 7% Africa 4% 1,200 Japan 7% 900 600 Europe 34% Americas 23% 300 872 547 794 975 944 1,010 1,094 1,100 1,182 1,
Slide 8: Global Lift Truck Market Rates of Change
Global Lift Truck Market Rates of Change ( 3 & 12 months rate of change trend) North Latin America America Brazil (excluding Brazil) Western Eastern Middle Europe Europe East & Africa Asia (excluding Japan China China & Japan) _____________________ Source: WITS. Bookings Reports. Solutions that DRIV
Slide 9: Factors Impacting Near-Term Lift Truck Profitability
Factors Impacting Near-Term Lift Truck Profitability Key Market Uncertainty Customer Mix Changing ($ in millions) 7% OPERATING PROFIT MARGIN TARGET Brazil, Turkey & $145.0 7.0% South Africa 5.0% 2.0% 6.0% 3.5% $120.0 Gap Commodity Prices Shifting Product Mix Gap(1) 5.0% Fluctuating/Moving Up ICE to
Slide 10: Volume of 115,000 Units from HY Factories Required to Achieve 7% Target
Volume of 115,000 Units from HY Factories Required to Achieve 7% Target Additional units to fill each assembly line …should increase operating profits to target levels by: 7,900 12,500 12,000 500 Increasing unit product profit Class 1 and 2 Class 3 Class 4 and 5 trucks Decreasing manufacturing truck
Slide 11: Share Gain Drives Our Economic Engine
Share Gain Drives Our Economic Engine Hyster-Yale’s economic engine is driven by increasing unit volume and economies of scale. Core strategic initiatives were designed to drive the economic engine by increasing share... Worldwide Geographic Volume Distribution and Product Economies Strength to Driv
Slide 12: Core Strategic Initiatives Update
Core Strategic Initiatives Update Initiative Strategic Objective Highlights Understand • Provide the right product • Product fit for application and solution to meet the • Premium, Standard and Utility products Customer Needs specific needs of different • Unique innovations customers across multiple
Slide 13: Core Strategic Initiatives Update
Core Strategic Initiatives Update Initiative Strategic Objective Highlights Enhance • Develop the strongest • Significant strengthening in core U.S. market Independent independent, • Growth of dual-brand coverage exclusive dealer Distribution network • New dealers appointed in EMEA • Enhanced dealer
Slide 14: Core Strategic Initiatives Update
Core Strategic Initiatives Update Initiative Strategic Objective Highlights • Expand market • Enhancement of dealer network and Succeed in Asia direct-selling capabilities penetration throughout Asia • Development of long-term strategic partnerships • Development of right local products • Establishm
Slide 15: Core Strategic Initiatives Update
Core Strategic Initiatives Update Initiative Strategic Objective Highlights Strengthen Sales • Strengthen and align • Smaller sales management areas and Marketing sales and marketing • Implementing new sales approach to enhance Organization organization in all solutions selling skills geographic reg
Slide 16: Hydrogen-Powered Lift Truck Opportunities & Advantages
Hydrogen-Powered Lift Truck Opportunities & Advantages N. America Population of Fuel-Cell Powered Lift Trucks in 150,000+ Growing sales pipeline: North America 35,000 electric trucks sold • Large pipeline of opportunities 30,000 per year • More than 500 units in final 25,000 Global stages of sales p
Slide 17: Growth Strategy – Where Will Fuel Cells Be Used
Growth Strategy –Where Will Fuel Cells Be Used Gen1 • Convert existing fuel cell users - Promote the Nuvera benefits vs competition Fuel Cell Hybrid Truck Engine / • Increase market penetration in Integrated Solution existing lead-acid battery users - Promote the performance and convenience of Nuver
Slide 18: Separating Core Competencies and Responsibilities
Separating Core Competencies and Responsibilities Battery-Box Replacement/Integrated Solution Lift Truck Business – Power design, manufacture Electronics BBR/Integrated and sales/marketing Enclosure Solution for Vehicle of battery-box replacements (BBR) and and integrated Counterweight Hybrid soluti
Slide 19: Nuvera / Hyster-Yale Competitive Advantages
Nuvera / Hyster-Yale Competitive Advantages Orion® Fuel-Cell Stack ALL-IN FUEL CELL Nuvera® Fuel-Cell System (BBR/Integrated Solution) SOLUTION Nuvera® Hydrogen Generator Hydrogen Refueling Patentedfuel-cellstackdesign– performance& cost TECHNOLOGY Technology roadmap –leverage development and volume
Slide 20: The Nuvera Plan
The Nuvera Plan Current Phase Next Phase 2017 2018+ • Successfully shipped product to launch customer • Launch of Orion® 2 with increased power density and greater fuel efficiency • Current generation BBR production at Nuvera® • Rapid ramp up in production of BBR and integrated • Focus on reducing c
Slide 21: Bolzoni
Bolzoni JAPIC 5.4% Bolzoniis one of the worldwide leading manufacturers of lift truck attachments, forks and lift tables with an extensive product range America 34% • Managed as separate business segment 18.6% • Separation to maintain OEM information integrity 66% EMEA MARKET I–NDUSTRIES 76.0% Logis
Slide 22: HY Path for Future Growth Includes Other Important Elements
HY Path for Future Growth Includes Other Important Elements… Through Investment in New Technologies Through Partnership Through Acquisition Through Core Lift Truck Business Share Gain Solutions that DRIVE Productivity 22
Slide 23: Strategy Roadmap for Share Gain Through New Account Acquisition
Strategy Roadmap for Share Gain Through New Account Acquisition Products & Share Gain Drivers Solutions Facilitating Structures Focus One-by- • Account Identification teams One in each region Geographic Industry Focus Customer • New CRM/CPQ global tool Focus Focus • Application Centers • Industry St
Slide 24: HY Volume Leverage & Target Economics
HY Volume Leverage & Target Economics Lift Truck Incremental Units Produced +5,000 Trucks Lift Trucks Sold 124,000 Lift Trucks Produced in HY plants 115,000 Sales $162m Revenues $3,590 Gross Profit $35m Gross Profit $640 OperatingExpenses $11m Operating Expenses $390 Operating Profit $24m Operating
Slide 25: 2017 First Quarter Highlights
2017 First Quarter Highlights ($ in millions) 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) $8
Slide 26: 2017 Earnings Perspective
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 ga
Slide 27: Hyster-Yale Use of Cash Priorities
Hyster-Yale Use of Cash Priorities Investments in Core Lift Truck Business Strategic initiatives to accelerate growth or enhance margins Investments in Share Gain Programs Investments to commercialize Nuvera’s technology Investments in Hydrogen Power Business Acquisitions of technologies and other f
Slide 28: In Summary, Over the Next Few Years
In Summary, Over the Next Few Years…. Get to approximately $3.6 billion by selling and HY Lift Truck producing segment revenue through Which leverages to 115,000 Significant Technology Fill existing HY-factory irrespective of share accelerators and assembly growth business line trucks industry size
Slide 29: Valuation Approach Needs to Vary By Business
Valuation Approach Needs to Vary By Business Lift Truck and Attachment Businesses Hydrogen Power Business Mature Cyclical Industry Developing / Technology Industry Distinct Technology / Patents in Fuel Cell Market Leading Products and Position and Hydrogen Generation Operating Cash Invested in New P
Slide 30: A Solid Investment Option
A Solid Investment Option Leading Products & Customer Focused & Market Position Solutions Oriented Cash Generation & Strategies to Gain Share Commitment to in all Segments & Shareholder Return HYSTER-YALE Markets Strong Balance Investment & Growth in Sheet Game Changing Strong Return Technologies on
Slide 31: Appendix
Appendix Appendix that DRIVE Productivity Solutions
Slide 32: Non-GAAP Disclosure
Non-GAAP Disclosure AdjustedLift TruckBusinessOperatingProfit, EBITDAand return on total capital employedare not measurementsunder U.S.GAAP,should not be consideredin isolation or as a substitute for GAAPmeasures,andare not necessarilycomparablewith similarlytitled measuresof other companies.Hyster-
Slide 33: Non-GAAP Reconciliation
Non-GAAP Reconciliation Trailing 12 ($ in millions) Year Ended December 31 Qtr. 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)
Slide 34: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) ($ in millions) Trailing 12 Year Ended December 31 Qtr. 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) Noncontrollinginterest income - - - - - Income tax benefi
Slide 35: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) ($ in millions) Reconciliation of Return on Total Capital Employed (ROTCE) (1) Consolidated Lift Truck Nuvera Bolzoni LTM LTM LTM LTM 3/31/17 3/31/17 3/31/17 3/31/17 AverageStockholders' Equity(3/31/17,12/31/16,9/30/16,6/30/16and3/31/16) $489.6 $525.0 $12.9 $101.3
Slide 36: Cash Flow before Financing Calculation
Cash Flow before Financing Calculation Consolidated ($ in millions) Year Ended December 31 Trailing 12 Qtr. Months 2012 2013 2014 2015 2016 3/31/17 3/31/17 Reconciliation of Cash Flow before Financing Netcashprovidedby(usedfor)operatingactivities $128.7 $152.9 $100.0 $89.4 $(48.9) $102.0 $71.4 Net c
Slide 37: Supplemental Information
Appendix Supplemental Information that DRIVE Productivity Solutions
Slide 38: The History of Hyster-Yale and its brands
The History of Hyster-Yale and its brands NMHG, HY’s NMHG operating introduces the company, Company name Hyster introduces UTILEV ® lift acquires Nuvera Hyster founded in officially changed First Hyster the famous truck for the to enter the fast- Portland Oregon container Hyster acquired to Hyster M
Slide 39: Hyster-Yale's Global Footprint
Hyster-Yale’s Global Footprint Gävle, Sweden Järvenpää, Finland Frimley, UK Commercial Attachment Danville, Illinois Homewood, Illinois Irvine, Scotland Division Headquarters; Moscow, Russia Hebei, China Subsidiary Manufacture Parts Distribution Center European Administration Center Engineering Conc
Slide 40: Historical Consolidated Revenue
Historical Consolidated Revenue ($ in millions) $3,000 $2,824 $2,767 $2,720 $2,666 $2,679 $2,489 $2,541 $2,469 $2,578 $2,570 $2,400 $2,057 $2,000 $1,802 $1,475 $1,000 $0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 LTM Q1 2017 Solutions that DRIVE Productivity 40
Slide 41: Lift Truck Business Operating Profit Trends and % of Sales
Lift Truck Business Operating Profit Trends and % of Sales ($ in millions) 7% TARGET $160.0 7.0% Prior Cycle Mid-Cycle Market$151.0 $140.0 Market Peak (1) 6.0% $120.0 5.5% 3.5%Gap 2.4%Gap Closure 5.0% 5.0% Closure $100.0 4.8% 5.0% 4.5% $80.0 $134.4 $133.3 4.6% $60.0 (2) $128.1 $74.6 $89.4 4.0% $111.
Slide 42: Lift Truck Business Target Economics Goal and Gap to Target
Lift Truck Business Target Economics Goal and Gap to Target LTM 3/31/17 Gap to Target Economics Achieve 7% Target operating profit Actual Lift Truck Operating Profit Margin % 3.5% Economics gap margintarget at Margin Variances 0.7% closure can be Unit margin 1.0% achieved with mid-cycle unit volume…
Slide 43: Lift Truck Overview and Sources of Revenue
Lift Truck Overview and Sources of Revenue A leading global lift truck manufacturer in terms of units sold HY sales of 87,600 units Large installed base Additional >6,300 units #3 in LTM 3/31/17 (4) that drives parts sales 82,100units sold- producedin HY soldin Japan in 2016 Globally in 2015 Over 82
Slide 44: Lift Truck Unit Class Shipments
Lift Truck Unit Class Shipments Industry Units by Geography Industry Units by Class Industry Unit Revenue by Class Asia- Estimated Industry Revenue Mix Middle Pacific East & 7% Africa 4% Japan 7% Class 1 Class 1 Electric Electric Europe Class 5 Class 2 Class 2 17% 19% 34% ICE Electric Electric 35% 1
Slide 45: Shift in Market Balance from ICE to Electric
Shift in Market Balance from ICE to Electric Previous Peak Today 2007 DRIVERS: 2017 • Customer shift • Growth of warehousing and logistics Class 1 • Environmental, health and safety Class 1 Electric • Evolving technologies Electric 18% 17% Class 5 ICE Class 2 Class 2 Class 5 ICE 35% Electric Electri
Slide 46: Lift Truck Market Size Data
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
Slide 47: Distribution Channel Strength and Diverse Customer Base
Distribution Channel Strength and Diverse Customer Base National Accounts Profile 2016 Distribution Mix Blue Chip Customer Base • Focused on strategic customers with centralized National purchasing and geographically dispersed Accounts 17% operations across dealer territories • Fleet Management Prog
Slide 48: Our Long-Term Philosophy
Our Long-Term Philosophy Long-term Long-term Shareholder Senior Increase growth shareholders protection management shareholder value incentivized as Return on Capital long-term Employed and Market shareholders Share Increase focus Solutions that DRIVE Productivity 48
Slide 49: Product Philosophy
Product Philosophy Guiding Product Product Portfolio Focus Key Product Attributes Philosophy • Full product line • Support growth • Fit for market and application initiatives • Segmented solutions • Reliability and durability • Fill the factories • Scalable modular platforms • Energy efficiency • Di
Slide 50: Our Investment in R&D
Our Investment in R&D Lift Truck R&D Investment Full Product Line* % of Revenue 2.8% 2.6% 2.6% 2.7% 2.9% FULL $ in millions $71 $71 $69 $69 $68 MIN 2012 2013 2014 2015 2016 HY COMPETITORS * Full Product Line C – lass 1 through Class 5, including Big Truck Solutions that DRIVE Productivity 50
Slide 51: Segmentation – Expanding Standard Range
Segmentation –Expanding Standard Range Premium Critical Success Factors Standard Cost competitive (Targeting a 2-year Payback for Premium) Positioning right (Among Ours, Across Competition) Utility Global designs - localized (Manufactured in Key Regions) Cost Solutions that DRIVE Productivity 51
Slide 52: Cost of Operation / Hour
Cost of Operation / Hour Typical Truck Cost/Hour * Factors Impacting Low Cost of Ownership Service & Fuel Operator Lease Lease Repair 9% Service& Fleet Cost/hour Energy usage Productivity Repair optimization 11% Fleet Alternative Ergonomics/ Price Management powertrains fatigue Fuel Operator managem
Slide 53: Areas of Focus
Areas of Focus Telematics Alternative Power • Internet of things Battery Box Integrated • Asset management Solutions solutions • Fleet and truck data Diesel • Use of telematics Lead acid Automation LPG • Partnered approach Balyo, Seegrid Lithium ion • Camera and laser- Lithium ion based systems • Fo
Slide 54: Capturing More Lifecycle Value
Capturing More Lifecycle Value Lead-Acid Battery* Nuvera® Fuel-Cell System Solution* Energy Utility Company Utility Company Energy Fuel (Nuvera® Nuvera/Dealer Hydrogen Generator) HY/Dealer Maint Maint HY/Dealer Battery Supplier Batteries Charger & Nuvera® Fuel Nuvera Cell System Batteries $18-20k li
Slide 55: Developing Our Product Range
Developing Our Product Range Product available in all electric truck classes 48V 36V Minor modifications to address >70% of market 24V 1-3 3-10 10-20 Approximate Engine Power Requirement [kW] Solutions that DRIVE Productivity 55
Slide 56: Technology and Product Roadmaps
Technology and Product Roadmaps Advanced Technologies Next Generation Fuel Cells Hydrogen Generator Compression Technology • Improved power density • Higher capacity • Improved reliability • Fuel efficiency • Longer life • Smaller footprint • Lower cost • Improved efficiency • Quiet and efficient Pr
Slide 57: Bolzoni's Brands
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 c
Slide 58: Relationship and Approach with HY Lift Trucks
Relationship and Approach with HY Lift Trucks Stand-Alone Supplier Preferred supplier to HY Arms-length sales Part of Hyster-Yale Commercial confidentiality Key supplier partner Purchasing leverage Broader market access Solutions that DRIVE Productivity 58
Slide 59: LTM Q1 2017 Bolzoni Revenue by Product Line
LTM Q1 2017 Bolzoni Revenue by Product Line Other Revenues* Lift Table € 5,5 M Forks € 8,9 M 4% € 15,9 M 6% 11% € 143,1 M 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
Slide 60: Our Competitive Advantages
Our Competitive Advantages Global • Able to meet customers needs globally Customer Relationships • Global economies of scale • Long-term relationships • Able to meet most needs • National Account programs Full Product Line • Young/ fresh product line • Broad array of power options, including hydroge
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