 Friday,
August 24, 2018 Seaport Global
Roadshow Exhibit 99 |
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2 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 (August 1, 2018).
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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Hyster-Yale at a Glance
3 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) 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 Financial Appendix starting on page 28. (2) Includes 600 employees from HY Maximal, acquired by the Company on June 1, 2018.
Key Metrics In millions (except employee data) LTM 6/30/18 Lift Truck Bolzoni Nuvera Revenue $2,867.3 $197.4 $1.4 Operating Profit (loss) $96.4 $9.5 ($41.5) Net Income (loss) $57.4 $6.5 ($28.9) EBITDA (1) $157.0 $20.1 ($35.2) ROTCE (1) (Net debt basis) 17.0% 4.4% n/m Net Debt at end of period $92.8 $28.0 n/m Approximate # of Employees (globally) 6,500 (2) 900 200 LTM 6/30/18 Sales by Segment Separate lift truck, attachment and fuel cell segments Americas 62.6% EMEA 25.3% JAPIC 6.4% Bolzoni 5.6% Nuvera 0.1% |
 Forklifts Internal Combustion Engine Lithium-Ion Reach Stackers Big Trucks Very Narrow Aisle Trucks Products for All Needs… 4 Electric Counterbalanced Rider Trucks Electric Narrow Aisle Trucks Electric Hand Trucks Internal Combustion Engine (cushion tire) Internal Combustion Engine (pneumatic tire) 3 wheel Electric 4 wheel Electric Pallet Trucks Stackers Order Pickers Reach Trucks Empty / Laden 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 Warehouse Equipment Over 290 different truck models available Electric CB Electric CB Container Handlers Internal Combustion Engine Counterbalance Solutions that DRIVE Productivity |
 …with a Broad Range of Power Options, Attachments and
Solutions 5
Push Pulls Lifting Tables Electric Counterbalanced Rider Trucks Electric Narrow Aisle Trucks Electric Hand Trucks Internal Combustion Engine (cushion tire) Internal Combustion Engine (pneumatic tire) CLASS 1, 2 & 3 Fuel Cell Engine LPG & Bi-fuel Diesel Tier 3 / Stage III LPG & CNG Diesel Tier 4 / Stage IV Lithium-ion Battery CLASS 4 & 5 Clamps Multipallets Rotators Sideshifters Fork Positioners Forks 45,000+ assets under management Power Options Attachments Solutions Solutions that DRIVE Productivity |
 Key Perspectives
6 Global markets expected to be strong for next several years Investments to expand HY’s product and solutions portfolio and geographic breadth and depth Core lift truck programs aim to trigger organic growth through intensified industry focus Nuvera remains a venture business with developed technology; break even by late 2019 Lift Truck business objective of 7% operating profit margin in the medium term, with an added focus on progressive revenue growth and achieving ROTCE above 20% Solutions that DRIVE Productivity |
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Long-term CAGR (2004 –
2017) = 5.4%
_____________________
Source: ITA. Represents quarterly order intake.
Global Industry Remains Strong
(units in thousands)
Global Lift Truck Industry Size
_____________________
Trend line represents 5.4% long-term CAGR Average Industry Size.
Source: WITS. Represents annual order intake. North
America Retail Lift Truck at Peak Trend Lift Truck Industry
– Unit Distribution by Class
_____________________
Source: WITS. LTM 6/30/18
Orders Reports.
ICE = Internal Combustion Engine
Total Industry = 1,502k Units
Class 4 ICE 4% Market Size - $ _____________________ Source: Internal Company estimates Market Size - Units Class 5 ICE 56% Class 1 Electric 19% Class 2 Electric 11% Class 3 Electric 10% Estimated Industry Revenue Mix _____________________ Source: WITS. LTM 6/30/18 Orders Reports. Global Lift Truck Industry Breakdown (Units) Trend
Upper
Limit Lower
Limit NA 7 Class 1 Electric 17% Class 2 Electric 9% Class 3 Electric 36% Class 4 ICE 2% Class 5 ICE 36% Europe 32% Americas 22% China 29% Japan 6% Asia-Pacific 7% Middle East & Africa 4% 872 547 794 975 944 1,010 1,094 1,100 1,182 1,395 1,502 0 300 600 900 1,200 1,500 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 LTM2018 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 |
 A
Positive Profitability Trend Despite Strengthening Headwinds
8 Key Variables Impacting Performance Impact on HY 2017 2018 Market Cycle by Country + = Market Size by Industry + + Market Size by Product = / + = Commodity Prices/Tariffs _ _ Pricing + = / - Strength of Dollar = _ Operational Effectiveness + + Core SG&A Expenses _ _ ($ in millions) 7% LIFT TRUCK OPERATING PROFIT MARGIN TARGET 4.1% Gap 3.6% Gap Solutions that DRIVE Productivity $57.5 $72.4 $96.4 2.1% 2.9% 3.4% 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 2016 LTM Q2 2018 |
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Lift Truck Business Target Economics Goal and Gap to Target
Achieve 7% operating profit margin target over the medium term Achieve ROTCE > 20% Target Economics gap closure can be achieved with unit volume… Stronger Industry + Share Growth = Volume Leverage LTM 6/30/18 Gap to Target Economics Actual Lift Truck Operating Profit Margin % 3.4% Margin Variances 1.7% Volume Variances* 1.9% Manufacturing variances/other 0.2% Operating Expenses 1.7% Lift Truck Operating Profit Margin % Gap 3.6% Lift Truck Operating Profit Margin % Target 7.0% *Expected to achieve with annual sales of 115,000 HY-produced lift
truck units, excluding trucks sold by Maximal.
9 |
 Our Strategies address Changing Landscape and will Drive Our Economic Engine
Basic Business Areas Geographic and Product Balance Worldwide Distribution Strength to Drive Market Share Parts and Service Volume Large Lift Truck Population in Service Volume Economies of Scale Design Component commonality Supply Chain Manufacturing Quality Marketing Parts Infrastructure Capital requirements Leader in Independent Distribution Grow in Emerging Markets Leader in Delivery of Industry- & Customer-Focused Solutions Leader in Fuel Cells & Their Applications Low Cost of Ownership & Enhanced Productivity for Customers Hyster-Yale’s economic engine is driven by increasing unit volume and economies of scale. Core strategic initiatives are
designed to drive the economic engine by increasing market
share... Leader in the
Attachments
Business
A large lift truck population base drives parts and service volume resulting in enhanced profitability for Hyster-Yale and dealers 10 Solutions that DRIVE Productivity |
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#1: Leader in Independent Distribution
11 Enhancing performance Dealer Excellence programs Dealer incentives Term-based contracts 1,000+ global dealer locations 2,000+ application consultants 11,000+ service technicians Strengthening the distribution footprint Sales and Service territories (SSTs) Competitor conversions In-territory acquisitions Independent Exclusive Entrepreneurial Profitable Committed partner Dual-line or single Solutions that DRIVE Productivity |
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#2: Leadership in Delivering Industry-
& Customer-Focused Solutions
12 Solutions that DRIVE Productivity LOGISTICS MANUFACTURING DURABLE GOODS FOOD & BEVERAGE NATURAL RESOURCES & MATERIALS CONSUMER & BUSINESS TRADES SHORT- TERM RENTALS Source: 2017 ITA Market Size and Mix by Vertical and Segment Warehouse
Counterbalanced |
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Sales Deployment
13 Top Buyers ~200 accounts Industry Leaders ~1600 Accounts Rest of the Market 35% 40% • Committed to customer-obsessed, industry-specific, strategic partnerships
• ~200 designated accounts with annual purchases of ~60,000 units and high market share • Over 2,400 Customer and Dealer Visits per year • Committed to working with dealers to identify, serve needs of large
“Industry Leader” accounts • Develop and execute “Account Development Plans” and enhance the
knowledge /skills of dealer sales personnel
• Create “why change, why now, why us” messaging • Area Business Managers • Field-Based Specialized Sales Support • Inside Sales Support • Field Parts Sales Support • Financial Services Managers • Regional Aftermarket Managers • Field Service Engineers High Value 25% Percentage of Lift Truck Market and Market Share Performance Solutions that DRIVE Productivity |
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#3: Delivering Low Cost of Ownership & Enhanced Productivity for
Customers 14
New RS45 Reachstacker
Segmentation –
Right Product at Right Price
Leads to Lower Cost of
Ownership Constant power and refuel as quick as 3 minutes No batteries or battery charging rooms Environmentally clean Battery Box Replacements Balyo Collaboration Automated Reach Truck Internally Developed Automation (IDA) HY Automation with Dual-Mode Operation Lithium Ion Solutions Battery Box Replacement Trucks Lithium-ion Ready • Food and beverage • Paper industry • Automotive • Cold storage Integrated Lithium-ion Truck ICE like Performance • High-voltage powertrain • Excellent productivity • 6-9T capacity • Fast charge Solutions that DRIVE Productivity |
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#4: Grow in Emerging Markets
15 MATURE MARKETS 817,880 EMERGING MARKETS 683,980 M A R K E T S I Z E S U B – T O T A L S Indicative Map Only: Company’s estimate of market type Emerging versus
Mature Lift Truck Market Size (Last 12 months) Top Global Manufacturers are increasing product depth into utility and standard product line-up Lift Truck
Competition is
Repositioning Premium Sub-Utility Standard Utility Top Chinese Manufacturers are increasing quality and specification of Utility & Standard product line-up NORTH AMERICA 283,370 WESTERN EUROPE 400,650 PACIFIC 25,600 JAPAN 88,320 MIDDLE EAST & AFRICA 46,170 INDIAN SUBCONTINENT 15,000 ASIA 67,370 CHINA 428,180 EASTERN EUROPE 86,650 LATIN AMERICA 24,400 BRAZIL 16,210 MEXICO 11,580 SOUTH AFRICA 8,360 Solutions that DRIVE Productivity |
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16 Best Value Best Fit Best Potential • Management • Culture • Local market experience • Production and design capability • Facilities and location • Brand and distribution network • Utility Counterbalance forklifts • Big Trucks • Rough Terrain forklifts • Side Loader forklift Organization Product People Acquired a 75% Interest in Hyster-Yale Maximal Forklift [Zhejiang] Co., Ltd.
Rationalize Operations Leverage Cost Advantage Improve Operations Enhance Development Expand Products Optimize Distribution Near Term Synergy Plan Solutions that DRIVE Productivity |
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#5: Leader in Attachments Business
17 A complete range of attachments to serve material handling industries in the area of forest
products, food and beverage, white goods, logistics, chemistry, automotive and
many others… Synergy Opportunities
• Growth of Attachment business in Americas • Growth of Lift Truck business in Europe • Utilize Bolzoni’s excess capacity Stand-Alone Supplier Preferred supplier to HY Arms-length sales Commercial confidentiality Key supplier partner Purchasing leverage Broader market access Part of Hyster-Yale One of the worldwide leading manufacturers of lift truck attachments, forks and lift tables Solutions that DRIVE Productivity |
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#6: Leader in fuel cells and their applications
18 High technology fuel cell company Integrator of fuel cell engines into lift trucks Solutions that DRIVE Productivity Design of BBR and Integrated Solutions Reliability Growth Engineering Manufacture of BBR and Integrated Solutions Sales & Marketing Product Support in Field Design of Fuel Cell Stacks and Engines Reliability Growth Engineering Manufacture of Fuel Cell Stacks and Engines Sales & Marketing to OEM’s and Partners Development of Hydrogen Compression Technology & Products |
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Future Non-Lift Truck Growth Opportunities
19 Heavy duty applications Port equipment Delivery vehicles Buses China market entry Market research First agreement signed Other opportunities in evaluation Low cost sourcing Solutions that DRIVE Productivity |
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HY
HY
HY
Lift Truck (1) Bolzoni (1) Nuvera (1) Q2 2018 Q2 2017 Variance LTM 6/30/18 Revenues $720.1 $52.5 $0.4 $765.6 $685.5 $80.1 $3,040.4 Gross Profit $110.3 $16.8 ($0.7) $126.2 $121.7 $4.5 $513.1 Operating Expenses ($93.0) ($13.6) ($8.8) ($115.4) ($104.2) ($11.2) ($449.3) Operating Profit (Loss) $17.3 $3.2 ($9.5) $10.8 $17.5 ($6.7) $63.8 Net Income (Loss) $11.0 $2.1 ($6.9) $5.6 $16.4 ($10.8) $34.6 EBITDA (2) $26.7 $5.5 ($10.1) $21.9 $31.2 ($9.3) $141.3 Results for Q2 2018 Consolidated vs. Q2 2017 Hyster-Yale’s business units are at different stages, which makes the variance best understood by individual business
unit ($ in millions)
20 _____________________ (1) These entities are presented on a stand-alone basis, and as such, do not sum to the Consolidated financial
information. (2)
EBITDA is a non-GAAP measure 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 Financial Appendix starting on page 28. Q2 2018 Trends • Revenue improvement on increased volumes, currency translation and Maximal acquisition • Gross profit percent declined due to unit margin compression related to material price inflation • Operating expenses continue to grow consistent with strategic programs 2018 Outlook • Lift Truck:
Expected FY increase in units and parts revenues, but modest decrease in
FY operating profit as H2 improvements driven by price increases gaining
traction not expected to fully offset H1 declines from material
cost inflation and higher SG&A. Absence of 2017 unfavorable
tax adjustments expected to lead to higher net income.
• Bolzoni: Revenues,
operating profit and net income expected to increase
• Nuvera: Operating
loss expected to modestly decrease & net loss comparable to 2017 |
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Hyster-Yale Use of Cash Priorities
21 Return Cash to Stockholders Investments in Adjacent or Complementary Businesses Investments in Fuel Cell Business Investments in Share Gain Programs Investments in Lift Truck & Attachments Businesses Strategic initiatives to accelerate growth or enhance margins Acquisitions of technologies and other forklift-related businesses Investments to commercialize Nuvera’s fuel cell technology 2016 2017 YTD 2018 Annual Dividends (1) $19.2m $1.18/share $19.8m $1.21/share $10.1m $1.24/share 2012 to 2014 Share Buyback $49.8m / 694,653 shares of Class A common stock |
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Valuation Approach Needs to Vary By Business
22 Lift Truck and Attachment Businesses Lift Truck and Attachment Businesses 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 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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One Set of Strategies, Different Priorities for Execution
23 Americas HYG Position: Strong Full execution of strategies Significant investment to enhance share Increased dual-brand coverage Europe, Middle East, Africa HYG Position :Moderate Industry and customer solutions Low cost of ownership Distribution enhancements JAPIC HYG Position: Varies Acquisition and partnership Emerging Market Development Center Distribution strengthening |
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Key Developments Over Past 18 Months
24 Nuvera strategy implementation – clear focus Bolzoni fully integrated and performing well Improved financial performance in core lift truck business Developments in automation and key product platforms Industry focus with new sales and marketing organizations Solid base for expansion in developing markets being established |
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A Compelling Investment Scenario over the Next Few Years
25 Core lift truck business poised for strong revenue and income growth • Aggressive investments in share gain • New product platforms under development Core lift truck business poised for strong revenue and income growth • Aggressive investments in share gain • New product platforms under development Bolzoni business has significant upside • Additional products under review • Americas growth potential Bolzoni business has significant upside • Additional products under review • Americas growth potential Nuvera business currently having a significant impact on current valuation, but:
• Solid path for profitability established • Partner established in China, others in process Nuvera business currently having a significant impact on current valuation, but:
• Solid path for profitability established • Partner established in China, others in process |
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by selling and
producing 115,000 HY-factory trucks by selling and producing 115,000 HY-factory trucks In Summary, Over the Next Few Years…. 26 Get to approximately $4 billion HY Lift Truck segment revenue irrespective of industry size and maintain ROTCE >20% Get to approximately $4 billion HY Lift Truck segment revenue irrespective of industry size and maintain ROTCE >20% to Fill existing assembly line capacity through Significant share growth Which leverages Technology accelerators and business acquisitions Get Bolzoni operating profit margins to
7% Move Nuvera
to break- even by late 2019
then on toward profitability |
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27 Financial Appendix |
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Non-GAAP Disclosure
28 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: EBITDA is defined as income (loss) before asset impairment charges, 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), as reported, before interest expense, after tax and before the impact of U.S. Tax Reform legislation, divided by average capital employed. Average capital employed is defined as average stockholders’ equity plus average debt less average cash. Adjusted Cash Flow before Financing is defined as cash from operating activities less cash from investing activities, excluding the approximately $80m impact of an unplanned systems-related acceleration of supplier payments in December 2016. For reconciliations from GAAP measurements to non-GAAP measurements, see the following pages. |
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Non-GAAP Reconciliation
29 _____________________ Note: EBITDA in this investor presentation is provided solely as a supplemental disclosure with respect to operating results.
EBITDA does not represent net income (loss), as defined by U.S. GAAP and should not be considered as a substitute for net income or net loss, or as an indicator of operating performance. The Company defines
EBITDA as income (loss) before asset impairment charges, income taxes and
noncontrolling interest income (loss) plus net interest expense and depreciation and amortization expense. EBITDA is not a measurement under U.S. GAAP and is not necessarily comparable with similarly titled measures of other companies.
($ in millions) Year Ended December 31 Qtr. Qtr. Consolidated 2013 2014 2015 2016 2017 6/30/2017 6/30/2018 6/30/2018 Reconciliation of EBITDA Net income attributable to stockholders $ 110.0 $ 109.8 $ 74.7 $ 42.8 $ 48.6 16.4 $ 5.6 $
$ 34.6
Nuvera asset impairment
-
-
-
-
4.9 - - 4.9 Noncontrolling interest income (loss) 0.2 0.4 0.4 (0.5) 0.3 - 0.1 0.4 Income tax provision (benefit) 17.2 39.9 29.4 (4.0) 44.9 1.9 3.8 45.5 Interest expense 9.0 3.9 4.7 6.7 14.6 2.6 4.0 18.2 Interest income (1.8) (1.1) (1.5) (2.0) (3.6) (0.5) (1.0) (4.6) Depreciation and amortization expense 30.2 29.7 28.9 39.1 42.8 10.8 9.4 42.3 EBITDA $ 164.8 182.6 $ 136.6 $ 82.1 $ 152.5 $ 31.2 $ 21.9 $ 141.3 $ Trailing 12 Months ($ in millions) Year Ended December 31 Qtr. Qtr. Lift Truck 2013 2014 2015 2016 2017 6/30/2017 6/30/2018 6/30/2018 Reconciliation of EBITDA Net income attributable to stockholders $ 110.0 $ 111.2 $ 89.3 $ 66.9 $ 71.8 23.8 $ 11.0 $ $ 57.4 Noncontrolling interest income (loss) 0.2 0.4 0.4 (0.5) (0.4) (0.2) - (0.2) Income tax provision 17.2 40.7 39.4 12.2 59.4 5.1 5.2 56.9 Interest expense 9.0 3.9 4.7 6.9 13.9 2.4 3.8 17.5 Interest income (1.8) (1.1) (1.5) (3.0) (3.7) (0.5) (1.0) (4.7) Depreciation and amortization expense 30.2 29.6 27.3 28.1 29.6 7.6 7.7 30.1 EBITDA 164.8 184.7 159.6 $ 110.6 170.6 38.2 26.7 157.0 Trailing 12 Months $ $ $ $ $ $ $ |
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Non-GAAP Reconciliation (continued)
30 _____________________ 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 asset impairment charges, 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.
($ in millions)
Qtr. Qtr. Nuvera 2014 2015 2016 2017 6/30/2017 6/30/2018 6/30/2018 Reconciliation of EBITDA Net loss attributable to stockholders $ (1.4) $ (14.6) $ (23.8) $ (26.7) (6.3) $ (6.9) $ $ (28.9) Nuvera asset impairment - - - 4.9 - - 4.9 Noncontrolling interest income - - - - - - - Income tax benefit (0.8) (10.0) (15.8) (15.3) (4.2) (2.6) (12.6) Interest expense - - - - - - - Interest income - - - - - - - Depreciation and amortization expense 0.1 1.6 1.5 2.0 0.4 (0.6) 1.4 EBITDA (2.1) $ (23.0) $ (38.1) $ (35.1) $ (10.1) $ (10.1) $ (35.2) $ Trailing 12 Months Year Ended December 31 ($ in millions) Bolzoni 2016 2017 6/30/2017 6/30/2018 6/30/2018 Reconciliation of EBITDA Net income attributable to stockholders $
(0.3) 3.9
$
(0.1)
$
2.1
$
6.5
$
Noncontrolling interest income
-
0.7 0.2 0.1 0.6 Income tax provision (benefit) (0.4) 1.0 0.3 0.8 1.4 Interest expense 0.8 0.8 0.2 0.3 0.9 Interest income - - - (0.1) (0.1) Depreciation and amortization expense 9.5 11.2 2.8 2.3 10.8 EBITDA 9.6 $
17.6
$
3.4
$
5.5
$
20.1
$
Trailing 12
Months 9 Months Ended December 31 Year Ended December 31 Qtr. Qtr. |
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Non-GAAP Reconciliation (continued)
31 _____________________ 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.
(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 $80.4 million in Nuvera. Investment numbers are based on a 5-point average. Reconciliation of Return on Total Capital Employed / Adjusted Return on Capital Employed (ROTCE) Consolidated Lift Truck (1) Nuvera Bolzoni LTM 6/30/18 Average Stockholders' Equity (6/30/18, 3/31/18, 12/31/17, 9/30/17 and 6/30/17)
$559.4
$619.0
$18.1
$126.7
Average Debt (6/30/18, 3/31/18, 12/31/17, 9/30/17 and
6/30/17) 288.3
245.3
1.3 47.9 Average Cash (6/30/18, 3/31/18, 12/31/17, 9/30/17 and 6/30/17) (215.7) (383.9) (0.1) (11.5) Average capital employed $632.0 $480.4 $19.3 $163.1 Net income (loss) $34.6 $57.4 $(28.9) $6.5 13.6 12.8 - 0.8 Less: Income taxes on interest expense, net at 38% (5.2) (4.9) - (0.3) Actual return on capital employed = actual net income (loss) before interest expense, net, after tax
$43.0 $65.3 $(28.9) $7.0 Plus: Income tax expense impact of U.S. Tax Reform 38.2 36.4 1.6 0.2 Less:
U.S. Tax Reform impact on equity earnings
(19.8)
(19.8)
-
- Adjusted return on capital employed = Actual return on capital employed less impact of U.S. tax reform $61.4 $81.9 $(27.3) $7.2 Actual return on capital employed percentage 6.8% 13.6% n/m 4.3% Adjusted return on capital employed percentage 9.7% 17.0% n/m 4.4% ($ in millions) Plus: Interest expense, net |
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Cash Flow before Financing Calculation
32 Consolidated ($ in millions) Year Ended December 31 Qtr. Trailing 12 Months 2013 2014 2015 2016 2017 6/30/2018 6/30/2018 Reconciliation of Cash Flow before Financing Net cash provided by (used for) operating activities $152.9 $100.0 $89.4 $(48.9) $164.7 $23.5 $76.4 Net cash used for investing activities (26.1) (44.4) (31.3) (145.1) (47.3) (82.5) (114.1) Cash Flow before Financing $126.8 $55.6 $58.1 $(194.0) $117.4 ($59.0) ($37.7) Impact of accelerated supplier payments - - - 80.0 (80.0) - - Adjusted Cash Flow before Financing $126.8 $55.6 $58.1 $(114.0) $37.4 ($59.0) ($37.7) |
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33 Supplemental Information |
 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 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 34 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) June 2018 June 2018 HY acquires a 75% interest in Zhejiang Maximal Forklift Company Limited – renamed HY Maximal Solutions that DRIVE Productivity |
       Hyster-Yale’s Global Footprint
35 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; European Warehouse Development Center 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 Centre 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 Fuel Cell 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/Sydney, Australia Commercial Subsidiary Warrington, UK Commercial Subsidiary Montcarda/Reixac, Spain Commercial Subsidiary Forbach, France Commercial Subsidiary Prato, Italy Attachment Manufacture Lublin, Poland Commercial Subsidiary Moscow, Russia Commercial Subsidiary Korschenbroich, Germany Commercial Subsidiary Gävle, Sweden Commercial Subsidiary Helmond, Netherlands Commercial Subsidiary Lift Truck Business locations Fuel Cell Business (Nuvera) locations Attachment Business (Bolzoni) locations Global Headquarters LEGEND: Tyler, Texas HY Telematics Chessy, France Commercial Offices Neu-Isenburg, Germany Commercial Offices Weeze, Germany Experience & Test Center Hangzhou, China (JV) Lift Truck Manufacture (Maximal) Solutions that DRIVE Productivity |
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ICE Units 48% Electric Units 29% Bolzoni 5% Aftermarket 13% Service, Rental & Other 5% Overview and Sources of Revenue 36 2017 Worldwide Sales by Product _____________________ (1) Represents Hyster-Yale North American Lift Truck unit shipments by industry.
(2) Includes Big Truck sales that represent 12.6% of total sales. A leading global lift truck manufacturer in terms of units sold 2017 Retail Lift Truck Shipments by End Market (1) #4 Globally in 2017 Large installed lift truck base that drives parts sales Over 830,000 units worldwide at 12/31/17 HY sales of ~ 96,600 lift truck units in LTM 6/30/18 ~89,000 units sold –
produced in HY plants
~ 7,600 units sold – produced
by JV or other
third parties
Additional >
6,800 lift truck units sold in Japan in 2017 Direct sales by JV partner (2) National Accounts 17% Independent Dealers 83% 2017 Lift Truck Distribution Channel Mix Manufacturing 13% Consumer and Business Trades 13% Durable Goods 11% Natural Resources & Materials 14% Short-term Rental 12% Food and Beverage 23% Logistics 14% |
 Solutions that DRIVE Productivity
Historical Consolidated Revenue
37 $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 $2,885 $3,040 $0 $1,000 $2,000 $3,000 $4,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 LTM 6/30/18 ($ in millions) |
 Lift Truck Unit Class Shipments
38 Industry Units by Geography _____________________ Source: Company: LTM 6/30/18 Units Shipped Note: Units sold direct by SN JV are not included HY Lift Truck Units Sold by Geography _____________________ Source: WITS. LTM 6/30/18 Orders Reports. _____________________ Source: WITS. LTM 6/30/18 Orders Reports. ICE = Internal Combustion Engine _____________________ Source: Company: LTM 6/30/18 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 (1) _____________________ Source: Internal Company estimates Industry Unit Revenue by Class HY Lift Truck Unit Revenue by Class (1) _____________________ Source: Company: LTM 6/30/18 Unit Revenues (1) Graphs exclude the 600 units sold by Hyster-Yale Maximal in June 2018.
Class 1 Electric 21% Class 2 Electric 9% Class 3 Electric 7% Class 4 ICE 12% Class 5 ICE 51% Europe 32% Americas 22% China 29% Japan 6% Asia- Pacific 7% Middle East & Africa 4% Americas 62% EMEA 31% Asia- Pacific/ Japan 4% China 3% Class 1 Electric 17% Class 2 Electric 9% Class 3 Electric 36% Class 4 ICE 2% Class 5 ICE 36% Class 1 Electric 20% Class 2 Electric 9% Class 3 Electric 30% Class 4 ICE 9% Class 5 ICE 32% Class 1 Electric 19% Class 2 Electric 11% Class 3 Electric 10% Class 4 ICE 4% Class 5 ICE 56% Solutions that DRIVE Productivity |
 Secular Shift in Product Mix
Today 2017 _____________________ Source: WITS. Orders Reports. ICE = Internal Combustion Engine Utility = HYG Estimates DRIVERS: • Customer shift • Growth of warehousing and logistics • Environmental, health and safety • Evolving technologies • Growth in emerging markets Previous Peak 2007 39 Class 1 Electric 17% C1/2 Utility 1 % Class 2 Electric 10% Class 3 Electric 27% C3 Utility 0% Class 4 ICE 3% Class 5 ICE 32% C5 Utility 10% Class 1 Electric 14% C1/2 Utility 3% Class 2 Electric 10% Class 3 Electric 29% C3 Utility 5% Class 4 ICE 3% Class 5 ICE 18% C5 Utility 18% Solutions that DRIVE Productivity |
 Solutions that DRIVE Productivity
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. 40 |
 Solutions that DRIVE Productivity
Lift Truck Market Size Data
41 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 2017 2018E Europe 351,441 357,452 387,905 412,642 457,333 509,157 540,000 North America 181,191 200,939 219,444 235,128 240,836 266,543 280,000 Total Americas 229,565 252,930 267,546 277,315 280,827 315,395 330,000 A/P, China and Japan (1a) 363,399 399,395 438,510 409,923 443,938 570,443 590,000 Global Market 944,405 1,009,777 1,093,961 1,099,880 1,182,098 1,394,995 1,460,000 (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 Industry
forecast (light blue columns) – source: Derived from DRI-WEFA and Oxford Economic Forecasts 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: Lift truck market size history – source: Industrial Truck Association, Japan Industrials Vehicle Association ("JIVA"), European Federation of 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: Americas
- North America & Government - Retail bookings Americas - Latin America - Factory bookings Europe & Japan - Factory shipments A/P & China - Factory bookings |
 Solutions that DRIVE Productivity
Our Long-Term Philosophy
42 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 that DRIVE Productivity
Our Investment in R&D
Lift Truck R&D Investment
$71 $70 $72 $78 $83 2014 2015 2016 2017 Est. 2018 2.6% 2.7% 2.9% 2.9% 2.7% % of Revenue $ in millions • Product Development Target - 2.5% of Sales • Actions to Achieve Target Increase revenue Modular architecture India and China development centers Process automation Co-located suppliers 43 |
 Solutions that DRIVE Productivity
44 Source: Audited 2017 financials, Chinese statutory report for all except bookings growth, which is unaudited • Established in 2006 in Fuyang District / Founder: Mr. JinHong Lu • 600 employees and 1.4 million ft 2 office and factory • Original Equipment Manufacturer with design, manufacture, sales and service operations
• Full production capabilities including fabrication, weld, paint & assembly
• Domestic and export sales, with globally respected product, brand and distribution
2017 Performance
Volume: 6,765 units Revenue: $77M Op Profit: 4.2% 13% Growth in Revenue 25% Growth in Bookings Building a Platform to Grow in Emerging Markets with Hyster-Yale Maximal Forklift [Zhejiang] Co., Ltd.
On June 1, 2018, invested $90 Million
for 75% controlling interest
• 25% ownership remains with seller and new company CEO • HY will pay up to an additional $10 Million after 3 years as incentive to the seller • With increased China presence, HY is also Establishing a China-based Emerging Market Development Center Impact of Investment: • Contributed $7.2m in sales and generated a $0.2m loss since acquisition
• Expand low-cost, global manufacturing capabilities • Enhance access to competitive component sourcing • Strengthen utility and standard product portfolio • Enhance presence in China market and global utility and standard segments
• Increase core brand share, and global group unit volume • Deliver accretive earnings by 2020 and contribute to Company’s achievement of 7% operating profit margin* *Estimate does not include the impact of the $10M incentive payout or any potential purchase price accounting
adjustments recorded after acquisition. |
 Solutions that DRIVE Productivity
Near Term Synergy Plan
45 • Consolidate existing China operations • Insource and expand manufacturing • Leverage low cost sourcing • Introduce HY expertise • Implement HY best practices Rationalize Operations Leverage Cost Advantage Improve Operations Enhance Development Expand Products Optimize Distribution Emerging Market Development Center Fuyang, China HY Independent Global Distribution • Maximize coverage • Maintain two channels to target diverse markets • Optimize product line-up • Apply Hyster-Yale expertise to enhance dealer performance Maximal Global Distribution OPERATIONS DEVELOPMENT DISTRIBUTION Leverage local design expertise and regional supply base to deliver right specification at right price Product Development for: • Emerging markets • Global utility and standard product segments |
 Projected Investment Return Summary 46 Upside Case Investment Case 2016 2017 2018 2019 2020 2021 2022 Impact on Global Hyster-Yale Earnings Investment case to deliver accretive earnings with upside potential *Graphic does not include impact of the $10M incentive payout or any potential purchase price accounting adjustments
recorded after acquisition.
Upside Opportunities
• Expand export and aftermarket opportunities Investment Case Synergy Considerations • Rationalize China production and purchasing • Include integration investments Solutions that DRIVE Productivity |
 Bolzoni Revenue by Product Line – LTM Q2 2018 47 Other Revenues 4% Forks 15% Lift Table 5% Attachments 76% $197.4M |
 Solutions that DRIVE Productivity
TOP 5 OEM CUSTOMERS
48 2017 CUSTOMER MIX Bolzoni Strategy: Enhance Strong OEM Relationships Managed as separate business segment
Separation to maintain OEM information
integrity ASIA 6% OEM SALES BY REGION Sales outside of Italy = 86.5% of 2017 Global Sales Sales outside of Italy = 86.5% of 2017 Global Sales 57% 43% AMERICAS 36% EUROPE 58% OEM 4 16.0% OEM 1 29.4% OEM 2 26.7% OEM 3 21.5% OEM 5 3.6% |
 Solutions that DRIVE Productivity
Bolzoni Strategy: Expand Rapidly in US market
49 Enhance people capabilities Produce a complete range of attachments Enhance local design capability Expand production capacity Increase spare parts management Grow the customer base Create specific marketing plans by customer segment BOLZONI AURAMO – USA |
 Solutions that DRIVE Productivity
Bolzoni Strategy: Synergies with HY
50 Develop Bolzoni as global supplier of attachments & forks to HY globally Accelerate growth of attachment business in North America Leverage Bolzoni manufacturing capacity Achieve procurement and logistics cost savings Increase sales of HY forklift & Bolzoni attachments by creating high-quality product package GROWTH Promote through HY distribution system |
 Solutions that DRIVE Productivity
Fuel Cell Solution Growth Opportunities
51 6,087 8,255 9,053 11,715 16,518 21,700 - 5,000 10,000 15,000 20,000 25,000 2012 2013 2014 2015 2016 2017 Population of Fuel Cell Powered Lift Trucks in North America Trend in population of fuel cell powered lift trucks in North America expected to continue (1) Source: DOE Hydrogen and Fuel Cells Program Record. Record #17003. May 25, 2017 (2) 2016 is the most recent DOE data available at time of publication. 2017
totals are company estimate.
(2) Global 850,000+
electric trucks sold
per year N. America electric trucks sold per year 175,000+
25-50%
Estimated up to
can benefit from fuel
cell solutions
DOE reported North America
(1) |
 Solutions that DRIVE Productivity
Lift Truck Power System Optimization: Cost and Robustness
52 2017 1H-18 2H-18 1H-19 2H-19 Cost MTBF Target Product Cost and Robustness • Approximately 40% reduction in costs by 2019 • Double MTBF (mean time between failure) Driven by • Strengthening supply chain • Internal process improvements • Product design and architecture |
 Solutions that DRIVE Productivity
Integrators OEM’s • Speed to Market • Close to customer • Quality Control • Control of IP • Long term partnership • Custom design and development • IP Transfer/ sharing • Economies of scale L1 Fuel Cell Module L0 Fuel Cell Stack L1 Fuel Cell Module L0 Fuel Cell Stack 53 Business Development Approach Nuvera L3 Fuel Cell Hybrid Vehicle L3 Fuel Cell Hybrid Vehicle L2 Fuel Cell Engine L2 Fuel Cell Engine |
 Solutions that DRIVE Productivity
Expansion of Product Line
54 Demonstration in critical port application in California Performance benefits • Metal plates – higher durability • High power density • Open flow field – improved fuel efficiency Modular, easily integrated solution 2019 Heavy duty engine Leverage experience from HY supply Scale up manufacturing capability Planned localization for China market (post-2019) Shown: Hyster 1150HD CH ICE configuration |
 Solutions that DRIVE Productivity
China Market Research and Engagement
55 Engaged China-based market research and segmentation study • Significant government incentives driving market interest • Several companies are early entrants, but market open to other partners • Nuvera technology is a strong fit at a competitive cost Engaging with the Chinese Hydrogen Fuel Cell Industry and Businesses China Central Government Roadmap 2020 2025 2030 Vehicles Deployed 5,000 Public Transport 50,000 Public Transport Private Application 1 million Total Units Hydrogen Fueling Stations 100 300 1,000 • Attended the Second China International Hydrogen & Fuel Cell 2017 Conference and Exhibition
• Attended the 8 th China International New Energy Vehicle 2018 Forum |
 Solutions that DRIVE Productivity
At At Lift Truck Business
The Nuvera Plan 2018 +
56 • Further develop engines for the lift truck market • Utilize Reinstated US Tax Credit • Introduce higher-power engines to enter new markets • Leverage EU growth opportunities • Leverage OEM / Integrators opportunities in China • Strengthen backlog • Further develop supply chain • Introduce higher power engines to enter new markets • Launch Orion® 2 fuel cell stack with increased power density and lower cost • Target break even by late 2019 • Achieve profitability at or above Hyster-Yale target economics over longer term • Complete product line-up of Battery Box Replacements (BBR) • Integrate FC engines into higher-capacity lift trucks • Start production at Greenville, NC plant • Continue to engage independent dealers in sales, marketing and service • Continue to focus on reducing product costs to target • Expand into EMEA and JAPIC markets • Achieve profitability at or above Hyster-Yale target economics over longer term |
 Solutions that DRIVE Productivity
A Solid Investment Option
57 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 |