Solutions to ENHANCE Performance
2015 Annual Report
Hyster-Yale maintains leading market share
positions in the Americas and worldwide
Contents
About the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Selected Financial and Operating Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Letter to Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Form 10-K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Corporate Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inside Back Cover
Mission Statement: To be a leading globally integrated designer, manufacturer
and marketer of a complete range of high-quality, application-tailored lift trucks,
offering the lowest cost of ownership, outstanding parts and service support and
the best overall value.
2015 Annual Report
About the Company
Hyster-Yale Materials Handling, Inc., including its operating subsidiary, Hyster-Yale
Group, Inc., is a leading globally integrated designer, engineer, manufacturer, seller
and servicer of a complete line of electric, warehousing and internal combustion
engine lift trucks and aftermarket parts marketed globally primarily under the
Hyster® and Yale® brand names, mainly through independent Hyster® and Yale®
retail dealerships. Lift trucks and component parts are manufactured by the
Company in the United States, Northern Ireland, Mexico, the Netherlands,
the Philippines, Italy, Japan, Vietnam, Brazil and China.
Hyster-Yale also owns Nuvera Fuel Cells, an alternative-power
technology company with locations in Billerica, Massachusetts, and
San Donato, Italy. Nuvera is focused on fuel-cell stacks and related systems,
as well as supporting on-site hydrogen production and dispensing
systems that are designed to deliver clean energy solutions to customers.
The Company’s economic engine is driven by unit volume, and its
worldwide distribution strength drives market share, total volume,
economies of scale and installed truck population. The Company has an
estimated installed population base of approximately 830,000 lift trucks
in operation at the end of 2015 in more than 750 industries worldwide.
This population, in turn, generates profitable aftermarket revenue.
The Company’s objective is profitable growth by increasing volumes,
primarily by gaining market share, to drive improved margins on lift truck
units. The Company plans to accomplish these objectives by implementing
core strategic initiatives:
• Enhancing Understanding of Customer Needs
• Driving for Lowest Cost of Ownership
• Strengthening Independent Distribution
• Improving the Company’s Warehouse Position
• Focusing on Increased Success in Asia
• Enhancing the Company’s Big Truck Market Position
• Strengthening the Sales and Marketing Organization
• Commercializing Nuvera’s Hydrogen Power Technologies
Total Revenues
(in billions)
$2.7
$2.8
$2.6
$2.5
$2.5
11
12
13
14
15
EBITDA*
(in millions)
$182.6
$164.8
$146.8
$144.0
$136.6
11
12
13
14
15
$3.0
$2.0
$1.0
$0
$200
$150
$100
$50
$0
* See page 3 for the calculation of EBITDA, the discussion of non-GAAP items and the related reconciliations to U.S. GAAP measures.
1
Hyster-Yale Materials Handling
Selected Financial and Operating Data
Year Ended December 31
2015 2014 2013 2012(1) 2011(1)
(In millions, except per share data)
Operating Statement Data:
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable
to noncontrolling interest . . . . . . . . . . . . . . . . . . . . .
Net income attributable to stockholders . . . . . . . . .
Basic earnings per share
attributable to stockholders . . . . . . . . . . . . . . . . . . . . .
Diluted earnings per share
attributable to stockholders . . . . . . . . . . . . . . . . . . . . .
$ 2,578.1
$ 103.5
$ 75.1
$ 2,767.2
$ 148.8
$ 110.2
$ 2,666.3
$ 134.3
$ 110.2
$ 2,469.1
$ 111.7
$ 98.1
$ 2,540.8
$ 110.0
$ 82.6
(0.4)
$ 74.7
(0.4)
$ 109.8
(0.2)
$ 110.0
(0.1)
$ 98.0
—
$ 82.6
$ 4.58
$ 6.61
$ 6.58
$ 5.84
$ 4.93
$ 4.57
$ 6.58
$ 6.54
$ 5.83
$ 4.91
Balance Sheet Data December 31:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 155.1
$ 1,095.9
$ 19.6
$ 460.8
$ 111.4
$ 1,120.8
$ 12.0
$ 454.5
$ 175.7
$ 1,161.3
$ 6.7
$ 449.8
$ 151.3
$ 1,064.4
$ 106.9
$ 341.3
$ 184.9
$ 1,117.0
$ 54.6
$ 296.3
Cash Flow Data:
Provided by operating activities . . . . . . . . . . . . . . . . . . . .
Used for investing activities . . . . . . . . . . . . . . . . . . . . . . . .
Cash flow before financing activities(2)
$ 89.4
$ (31.3)
$ 58.1
$ 100.0
$ (44.4)
$ 55.6
$ 152.9
$ (26.1)
$ 126.8
$ 128.7
$ (19.5)
$ 109.2
$ 54.6
$ (15.9)
$ 38.7
Used for financing activities . . . . . . . . . . . . . . . . . . . . . . . .
$ (7.1)
$ (110.5)
$ (104.4)
$ (144.4)
$ (19.5)
Other Data:
Cash dividend paid pre-spin to
NACCO Industries, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . .
$ —
$ —
$ —
$ 5.0
$ 10.0
Per share data:
Cash dividends(3)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Market value at December 31(3) . . . . . . . . . . . . . . . . . . . . . .
Stockholders’ equity at December 31(3) . . . . . . . . . . . . .
Actual shares outstanding at December 31(3) . . . . . .
Basic weighted average shares outstanding . . . . . . .
Diluted weighted average shares outstanding . . . .
Total employees at December 31(5) . . . . . . . . . . . . . . . . .
$ 1.130
$ 52.45
$ 28.23
16.324
16.307
16.355
5,400
$ 1.075
$ 73.20
$ 27.98
16.241
16.607
16.675
5,400
$ 1.000
$ 93.16
$ 26.91
16.714
16.725
16.808
5,100
$ 2.250
$ 48.80
$ 20.40
16.732
16.768
16.800
4,900
16.767
16.815
4,800
(1 ) As a result of Hyster-Yale’s spin-off from NACCO Industries, Inc. and the distribution of one share of Class A common stock and one share of Class B common stock for each
share of NACCO Industries, Inc. Class A common stock and NACCO Industries, Inc. Class B common stock on September 28, 2012, the earnings per share amounts and the
weighted average shares outstanding for the Company have been calculated based upon doubling the relative historical basic and diluted weighted average shares
outstanding of NACCO Industries, Inc.
(2) Cash flow before financing activities is equal to net cash provided by operating activities less net cash used for investing activities.
(3) This information is only included for periods subsequent to the spin-off from NACCO Industries, Inc.
(4) Includes an extraordinary dividend of $2.00 per share and a regular quarterly dividend of $0.25 per share paid to stockholders of the Company during the fourth
quarter of 2012.
(5) Excludes temporary employees.
2
2015 Annual Report
Year Ended December 31
2015 2014 2013 2012 2011
(In millions)
Calculation of EBITDA(6)
Net income attributable to stockholders . . . . . . . . . . . . .
Noncontrolling interest income . . . . . . . . . . . . . . . . . . . . .
Income tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization expense . . . . . . . . . . . . .
EBITDA(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 98.0
0.1
7.0
12.4
(1.5)
28.0
$ 144.0
$ 109.8
0.4
39.9
3.9
(1.1)
29.7
$ 182.6
$ 110.0
0.2
17.2
9.0
(1.8)
30.2
$ 164.8
$ 74.7
0.4
29.4
4.7
(1.5)
28.9
$ 136.6
$ 82.6
—
18.9
15.8
(1.8)
31.3
$ 146.8
(6) EBITDA in this Annual Report is provided solely as a supplemental disclosure with respect to operating results. EBITDA does not represent net income, as defined by U.S. GAAP,
and should not be considered as a substitute for net income or net loss, or as an indicator of operating performance. The Company defines EBITDA as income before income
taxes and non-controlling 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.
Calculation of Return on Capital Employed:(7)
Average stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Average debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Average cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Average capital employed, net of cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to stockholders, as reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plus: Interest expense, net, as reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Income taxes on interest expense net, at 38%*** . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual return on capital employed = actual net income before interest
expense, net, after tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual return on capital employed percentage(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual return on equity percentage(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
$
$
Year Ended December 31
(In millions, except percentage data)
2015*
2014**
$
$
$
$
449.7
44.1
(114.3)
379.4
74.7
3.2
(1.2)
76.7
20.2%
16.6%
468.7
42.8
(118.2)
393.3
109.8
2.8
(1.1)
111.5
28.3%
23.4%
(7) 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.
(8) Return on equity is defined as net income divided by average stockholders’ equity.
***2015 Average stockholders’ equity, debt and cash are calculated using 12/31/14 and each of 2015’s quarter ends.
***2014 Average stockholders’ equity, debt and cash are calculated using 12/31/13 and each of 2014’s quarter ends.
***Tax rate of 38% represents the Company’s target U.S. marginal tax rate compared with the effective income tax rate of 28.1% and 26.6%, in 2015
and 2014, respectively.
3
Hyster-Yale Materials Handling
To Our Stockholders
Introduction
The year ended December 31, 2015 was a very active and solid year for Hyster-
Yale. The Company made progress on many of its core initiatives, opened a new plant
in Brazil and successfully integrated the Nuvera business under the Hyster-Yale
umbrella. The Company also maintained its strong balance sheet and generated a
substantial amount of cash. However, revenues decreased compared with 2014. The
strong U.S. dollar, primarily through its effect on translating global sales into U.S.
currency, the impact of the Brazil plant transition, which reduced shipments for a full
Hyster-Yale operates two different
businesses: its core lift truck business and
its Nuvera hydrogen power business
quarter, and slowdowns in several key
markets led to a 7 percent decline in
Hyster-Yale’s consolidated revenues
from $2.8 billion in 2014 to $2.6 billion
in 2015.
The Company operates two
different businesses: its core lift
truck business and Nuvera, an alternative-power technology company focused on
fuel-cell stacks, hydrogen generation and related systems, which was acquired on
December 18, 2014. In 2015, Hyster-Yale generated consolidated net income(1) of
$74.7 million, which included a loss from Nuvera of $14.6 million resulting from
expense investments made to begin the commercialization of Nuvera’s technologies.
The lift truck business had net income of $89.3 million. While lift truck net income
declined from the prior year, Hyster-Yale’s success in developing innovative products
and solid execution of its strategic initiatives resulted in an increased operating profit
margin, after excluding the prior-year gain on the sale of the Company’s former
Brazil facility.
In February 2016, to further enhance the Company’s ability to grow by meeting
the demands of the customers it serves, Hyster-Yale announced its intention to
acquire Bolzoni S.p.A. through a series of transactions. Bolzoni is an Italian-listed
publicly traded company and a leading worldwide producer of attachments, forks
and lift tables marketed under the Bolzoni Auramo and Meyer brand names. The
first of those transactions began on February 14th, when the Company entered into
an agreement to acquire all of the outstanding shares of Penta Holding, which holds
(1) For purposes of this annual report, discussions about net income refer to net income attributable to stockholders
4
2015 Annual Report
an approximately 50.4 percent stake, or approximately 13.1 million shares, of Bolzoni.
The cash purchase price for Penta, which is approximately EUR 53.5 million, includes
the value of the majority stake of Bolzoni (inclusive of Bolzoni’s 2015 consolidated net
income), Penta’s other assets and liabilities and consideration for the non-compete
undertakings of Penta’s shareholders. The Penta transaction is expected to close
during the second quarter of 2016, subject to customary closing conditions.
Once the Penta transaction
closes, Hyster-Yale will launch a
mandatory tender offer for all of the
remaining outstanding shares of
Bolzoni, approximately 12.9 million
shares, for a cash price per share of
EUR 4.30, which is inclusive of
Proposed Bolzoni acquisition expected to
enhance ability to meet customers’ needs
with a wider spectrum of products
Bolzoni’s 2015 consolidated net income. In the event that Bolzoni’s board of directors
recommends a dividend be paid to Bolzoni’s shareholders in connection with
approving Bolzoni’s 2015 financial statements, the price per share in the mandatory
tender offer may be reduced proportionally. The proposed transaction is expected to
add a wider spectrum to Hyster-Yale’s suite of products, which should enhance the
Company’s ability to better meet customers’ needs, provide an important platform
for additional growth, and provide the opportunity to improve profitability by
absorbing Bolzoni’s unused capacity.
Our Lift Truck Business
The Company’s vision is to continue to be a leading globally integrated designer,
manufacturer and marketer of a complete range of high-quality, application-tailored
lift trucks, offering the lowest cost of ownership, outstanding parts and service
support and the best overall value.
The Company has been positioning itself for share growth and operating profit
margin improvement since before the Great Recession. Initially, this process was
focused on strengthening the Company’s products and cost position. Over this
period, Hyster-Yale substantially upgraded its comprehensive global product line and
introduced new models not previously in the line, including its utility truck brand,
UTILEV®. The Company also further rationalized its global manufacturing footprint
around assembly of lift trucks largely in the market of sale and completed the
implementation of a modern, lean and flexible manufacturing system. As a result
of these changes, the Company enhanced throughput capabilities, which increased
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Hyster-Yale Materials Handling
effective capacity by over 30 percent from current levels, with fewer plants. The
Company also re-engineered its products to utilize common components across
multiple lift truck classes to reduce costs and complexity, improve quality, capture
procurement cost savings, increase manufacturing efficiency and allow for faster
design upgrades, in addition to centralizing its supply chain management to
leverage best practices and gain economies of scale. Certain components were
outsourced to achieve high quality at lowest cost. Further, improvements in product
development, engineering, manufacturing and sourced components have led to
higher levels of quality, resulting in significantly reduced warranty costs and enhanced
customer satisfaction. More recently, the Company has focused on strengthening its
independent dealer network by increasing the number of dual-brand dealers,
converting strong competitor dealers, combining and strengthening existing dealers,
helping dealers strengthen specialized capabilities for serving their customers and
increasing coverage through direct sales to major accounts, including improved
account identification and coverage processes. All of these efforts continue to gain
momentum with the focus now shifting to continuous improvement.
Hyster-Yale’s economic engine is driven by unit volume. Increased volumes
generate greater economies of scale, resulting in more favorable operating margin
leverage in all areas of the business, particularly in manufacturing overhead and
operating expenses. These higher volumes ultimately result in a larger installed lift
Organization focused on increasing
market share growth and generating
greater volume economies of scale
truck population base, which is
estimated at 830,000 units at the end
of 2015. This growing installed base
generates a large, profitable parts
business, which is a key element in
total operating profit margins. The
Company’s current goal is to achieve
annual sales of 115,000 lift truck units over the next three to four years. At this
volume level, the Company expects to be able to achieve its 7 percent operating
profit margin target through improved fixed manufacturing capacity utilization and
leverage of the Company’s selling, general and administrative costs.
The Company continues to invest in broadening its product range to ensure it
meets the needs of its customers with different materials handling needs across a
wide spectrum of market segments. The Company has long had a reputation for
offering outstanding premium products. Over the past five years, it has enhanced this
reputation by adding standard and utility products to create a more comprehensive
6
2015 Annual Report
product line. Hyster-Yale has made significant progress in broadening its utility truck
product range and expects to do the same for its standard truck product range in
2016-2017. Having the right product at the right price for each application will permit
the Company to focus on delivering products that meet the specific and varied needs
of customers, at appropriate margins.
Hyster-Yale’s product portfolio spans all five major product classes. Significant
investment has been made to enhance the Company’s electric truck portfolio of
Class 1, 2 and 3 products. In many markets around the world, electric trucks are
gaining in popularity, due in part to
environmental concerns but also due
to growth of the retail, warehousing
and distribution markets. These
markets and customers are a major
growth target for Hyster-Yale. The
Company also continues to invest in
Significant investments made
in all five major product classes of
Hyster-Yale’s product portfolio
maintaining its leading position in Class 4 and 5 internal combustion engine (“ICE”)
truck markets through new product introductions and continuous improvement of
current products.
During 2015, the overall global lift truck market stabilized – growing less than
1 percent to just under 1.1 million units. The Europe, Middle East and Africa (“EMEA”)
region experienced solid growth of 6 percent, driven primarily by strong Western
Europe growth of almost 12 percent. The Americas market grew 4 percent during
the year, as growth of 8 percent in North America and Latin America was partially
offset by a decline in the Brazil market of over 44 percent due to Brazil’s significantly
depressed economy. The Japan, Asia-Pacific, India and China (“JAPIC”) region, which
grew at a rate above 10 percent in 2014, declined 7 percent in 2015 primarily because
of reduced demand in the China market, which decreased 12 percent from the
prior year.
Looking forward to 2016, the global market is expected to remain relatively
stable, driven positively by the Western European market, with a moderating
Americas market and a weakening JAPIC market. Given this market environment,
Hyster-Yale is optimistic it can grow in 2016 through expected market share increases.
To achieve its long-term financial target through unit volume, which is driven
substantially by market share growth, the Company is focused on executing its
core strategic initiatives: (1) enhancing its understanding of customer needs at the
product and aftermarket levels, (2) providing the lowest cost of ownership to create
7
Hyster-Yale Materials Handling
a differentiated competitive position, (3) strengthening its independent distribution,
(4) improving its position in the warehouse market, (5) focusing on increased success
in the Asian markets, (6) enhancing its Big Truck market position, (7) strengthening its
sales and marketing organization in all geographic regions and (8) commercializing
Nuvera’s technologies. These core strategic initiatives, which are discussed in further
detail on the following pages, are expected to help Hyster-Yale gain sufficient market
share to generate the volume necessary to achieve its profitability targets. Good
progress was made on these long-term strategic initiatives in 2015.
Our Hydrogen Power Business
The Company’s acquisition of Nuvera in late 2014 was driven by its view that
having fuel-cell power options, specifically for industrial mobility markets, can be
a product differentiator and that the hydrogen fuel-cell market for lift trucks has
significant growth opportunities. This view has been reinforced by the strong
interest being shown in Nuvera’s products by its customers, dealers and potential
partners. The Company is focused on commercializing Nuvera’s technologies
through the introduction of new fuel cells, fuel-cell engines and improved hydrogen
generation products. The Company believes the commercialization of the Nuvera
fuel-cell-related technologies is an investment that will reinforce the Company’s
core strategies and help drive further lift truck unit market share growth, as well as
meet customer needs. It also provides the Company with the ability to expand its
offering of best-in-class energy solutions to customers by integrating fuel cells
with lift trucks in a way that is expected to optimize the performance and energy
efficiency of the combined system. This, in conjunction with the Company’s
capability to provide full life cycle maintenance, service and fueling requirements,
is expected to provide Hyster-Yale with an opportunity to meet customers’ needs,
drive market share, enhance Hyster-Yale’s margins and offer a low overall cost of
ownership alternative.
In addition to helping meet customer needs and driving market share more
effectively, the Company expects that participation in the fuel-cell market will add
a value chain profit margin opportunity for sales and margins of fuel-cell and
hydrogen-supply products, unlike the battery and engine businesses today.
Hyster-Yale believes the combination of Nuvera’s technology and innovative
culture with the lift truck business’ supply chain, manufacturing and distribution
expertise will help ensure the rapid commercialization and production ramp-up
of Nuvera’s products, as well as help reduce the manufacturing costs per unit as
8
2015 Annual Report
production increases. The ability to guide the development and integration of the
fuel-cell technology to meet the rigorous needs of lift truck customers is expected
to ensure a best-in-class solution that will help drive volume for both Nuvera and the
lift truck business, as well as provide additional growth opportunities for Hyster’s and
Yale’s independent dealers.
Looking Forward
Hyster-Yale’s value creation
strategy encompasses both of its
business units. The lift truck business,
which is in a mature, cyclical industry
Addition of a fuel-cell engine power
option expected to have a synergistic
impact on lift truck volume
where the Company has a leading market position and strong operating cash
generation, is focused on creating value by increasing unit volume and market share
through the execution of its core strategic initiatives. These strategic initiatives are
expected to lead to achieving the Company’s financial targets and gaining significant
aftermarket parts business over the longer term as a result of the continued increase
in the Company’s installed lift truck population base.
At Nuvera, the Company’s focus is on commercializing Nuvera’s products, which
are complementary and additive to the lift truck business. The use of hydrogen as
an alternative and clean energy source is growing and Nuvera aims to be a key player
in this industry. The Company believes Nuvera has substantial growth potential,
which it expects to attain by leveraging its significant patent portfolio and a ready
market in core Hyster® and Yale® forklift trucks. Nuvera’s products are also likely to
be used across a very broad spectrum of industries and applications where constant
power and emissions-free solutions are required, and Nuvera intends to enter into
partnerships with third parties as appropriate to leverage these opportunities.
With the solid performance the consolidated Company achieved in 2015, and
additional momentum from the execution of the core strategic initiatives, we believe
Hyster-Yale is poised to grow through the rest of this market cycle by focusing on
increasing market share to reach its long-term financial goals. While the Company’s
2015 lift truck business operating profit margin of 5 percent was still below its target
to acheive 7 percent operating profit margin at the peak of this cycle, which is
nearing, and at the mid-point of the next cycle, Hyster-Yale believes this gap can be
closed mainly by increasing unit volumes through improved market share, but also
modestly from market growth. Continued focus on these initiatives will be key
to achieving the Company’s operating profit margin goal.
9
Hyster-Yale Materials Handling
We believe that the execution of our value-creation strategy, combined with a
strong balance sheet, financial flexibility, a strong cash position and high returns on
capital employed, make Hyster-Yale a compelling long-term investment opportunity.
By clearly articulating and executing our core strategies in both businesses, we believe
the Company can achieve an enhanced market multiple valuation in the future.
The Company increased its annual dividend 4 percent to $1.14, or $0.285 per
share per quarter, during 2015, and will continue to evaluate its dividend level in 2016.
Overall, the Company expects continued strong cash generation in 2016 and
beyond. The Company expects to continue to focus on utilizing its cash to support its
strategic growth initiatives and fund related strategic acquisitions should opportunities
arise, and then, as appropriate, return capital to its stockholders through dividends.
The Company will also consider additional share repurchases at prices attractive to
its stockholders.
We have great confidence in the ability of our management team to achieve the
Company’s market share and financial objectives in the years ahead as our many
experienced and highly motivated professionals build on the Company’s solid 2015
financial results.
n n n
We would like to recognize Michael E. Shannon, who chose to retire from the
Hyster-Yale Board this past May, after serving for 12 years. He also served as chair of our
Audit Review and Nominating and Corporate Governance Committees. Mike brought
unique and valuable perspectives to the Board from his experiences in corporate
finance. We appreciate his many contributions and wish him well in retirement.
Finally, we would like to take this opportunity to thank all of the Company’s
customers, dealers and suppliers and all of the Hyster-Yale stockholders for their
continued support. We also want to thank our employees for their hard work and
commitment to achieving our long-term goals. We have a strategic plan we are
excited about executing and a decades-old business with strong brands that have
earned the trust of our customers who depend upon the performance of our
products every day. We look forward to building successfully on this legacy for
many years to come.
Alfred M. Rankin, Jr.
Chairman, President and Chief Executive Officer,
Hyster-Yale Materials Handling, Inc. and
Chairman, Hyster-Yale Group, Inc.
Colin Wilson
President and Chief Executive Officer,
Hyster-Yale Group, Inc.
10
2015 Annual Report
1
GROWING MARKET SHARE – OUR GROWTH STRATEGIES
Enhancing Understanding of Customer Needs
Hyster-Yale is focused on meeting customers’ needs and providing solutions
that add value, including solving issues that are preventing customers from moving
goods in a more efficient and cost-effective manner. Hyster-Yale aims to create and
provide a full range of differentiated products and develop service solutions for
specific industry applications that consistently meet those needs and lower total cost
of ownership. The Company’s product pipeline is expected to provide a continuous
stream of new product innovations over the next several years aimed at addressing
these needs in virtually all major market segments. To meet the specific application
needs of its customers, the Company has focused on designing or developing utility,
standard and premium products for its electric-rider, warehouse, ICE and Big Truck
product lines in all appropriate market segments. Utility trucks are for low-intensity
needs, especially in developing markets. Standard trucks are for medium-intensity
applications in both the developed and developing markets, and the Company’s
traditional premium Fortis®, Fortens® and Veracitor® trucks are for higher-intensity
applications. The Company offers over 260 different lift truck models with a full range
of power options, including lead acid and lithium ion batteries and fuel-cell engines
for its electric trucks, and liquid propane gas, compressed natural gas, gasoline and
diesel fuel, which meet global emissions requirements, for its internal combustion
engine trucks. A key new product in the internal combustion engine standard
product line is expected to be launched in mid-2016.
One of Hyster’s premium trucks, the
S120FT Fortis® internal combustion engine
cushion tire “Cool” truck, has a lifting
capacity of up to 12,000 pounds and was
designed to specifically meet the needs
of customers in the paper industry.
This truck is shown with a Bolzoni Auramo
paper clamp attachment.
11
Hyster-Yale Materials Handling
2
Driving for Lowest Cost of Ownership
The Company is focused on providing products that deliver the lowest cost of
ownership to its customers, by reducing the life cycle cost of operating its trucks.
The Company has been successful in reducing fuel consumption, a significant direct
cost for its customers, on certain internal combustion engine truck models by up
to 20 percent, and it has improved the energy efficiency and controllability of its
electric trucks, which also reduces customers’ direct costs. The Company is introducing
automation and telemetry capabilities in its lift trucks to reduce operating costs
further. Telemetry delivers additional information and value to customers, allowing
them to monitor the use of trucks and ensure they are being properly operated and
serviced in a timely manner, thereby reducing lifetime maintenance costs. Telemetry
options have been well received by the Company’s customers, and Hyster-Yale has
seen triple-digit growth in telematics sales over the past two years. Finally, as the
quality of the Company’s trucks has improved, warranty costs have decreased. The
Company can also offer attractive lease rates for its customers through an improved
understanding of applications and operating costs.
A Yale Vision telematics solution shown
mounted on a Yale® lift truck. The Yale
Vision tracks over five usage meters,
including impact sensing, access control
A service technician attaches a diagnostic cable to a Hyster® Reach truck
and preventive maintenance and,
prior to performing maintenance. Hyster-Yale’s advanced diagnostic
ultimately, helps promote both operator
capabilities allow technicians to fine-tune and adjust the parameters of
safety and increased productivity.
the truck for different customer applications.
12
Strengthening Independent Distribution
2015 Annual Report
3
The Gregory Poole Discovery Drive branch in Raleigh, North Carolina. Gregory Poole became a new Hyster® and Yale® dual-line
dealer in 2015 and covers parts of the Mid-Atlantic and Southeastern United States.
The Company continues to believe that having entrepreneurial, exclusive
independent dealers that are committed to customer satisfaction is a competitive
advantage. Hyster-Yale works with its dealers on excellence programs aimed at
enhancing their capabilities and allowing for mutual profitable growth. The Company
continues to strengthen and enhance its exclusive, independent distribution network
by adding strong independent dealers, encouraging, where appropriate, more dual-
brand ownership by dealers and attracting best-in-class dealers from competitors.
During 2015, the Company completed a major restructuring of part of its North
American dealer network, which included a large competitor dealer conversion and
expansion of its dual-brand coverage. The Company is also working to improve its
Asian and European distribution and, during 2015, it was successful in adding six new
dealers in EMEA. The Company continues to provide programs aimed at strengthening
dealers and broadening account coverage, including helping dealers identify accounts,
increasing sales specialization and improving sales messaging. These programs
helped generate new account coverage in 2015.
13
Hyster-Yale Materials Handling
4
Improving Our Warehouse Position
The Company is focused on strengthening its warehouse market position
through enhancing dealer and customer support, adding products and implementing
programs to increase focus on key customers. Strong demand exists for warehouse
and distribution industry applications in both North America and Western Europe,
and orders for warehouse trucks were approximately 57 percent of total lift truck
orders in these markets in 2015. Sales of electric lift trucks accounted for 30 percent
of Hyster-Yale’s revenues in 2015 compared with 28 percent in 2014. As part of the
Company’s efforts to penetrate the growing warehouse equipment market more
deeply, the Company has been focusing on upgrading its warehouse and electric-
rider product lines, helping dealers strengthen specialized capabilities for serving this
segment and increasing coverage through direct sales to major accounts, as well as
improving account identification and coverage processes. As a result of these efforts,
the Company has been successful in winning business in five out of the top ten
U.S. retailers’ distribution centers. The Company has also achieved early success in
developing automated products using its own resources and in combination with
partners. In addition, the Company expects that the acquisition of Nuvera will help
the Company penetrate heavy-duty warehouse applications, which are ideal
customers for lift trucks with fuel-cell power solutions.
The newly introduced
Yale® MPR100VG
enclosed end-rider truck,
designed for use in
warehouse applications,
has a carrying capacity
of up to 10,000 pounds
and can move a number
of pallets at one time
to increase worker
productivity. It is
shown here moving
three pallets.
14
Focusing on Increased Success in Asia
2015 Annual Report
5
Dilok and Sons Co. Ltd.’s new Mahachai dealership in Thailand. Dilok and Sons has been a Hyster® dealer in Thailand since 1988.
The Asia-Pacific market continues to grow, and the Company is focused on
expanding in this market area by offering a broader range of products aimed at the
needs of these markets and by enhancing distribution excellence. The office in
Malaysia, opened in 2013, was put in place to spearhead sales efforts in the Asia
region. In addition, the Company has added more sales resources and appointed five
new dealers in 2015. Also, the Company is continuing to focus on strategic alliances
with local partners in China and Japan and, using local partners, is continuing to
expand the product range in India. Hyster-Yale’s efforts are focused on achieving
growth in all key markets and in all major market segments in the JAPIC region given
the importance of this market area. To achieve this, the Company is making additional
investments in products and its organizational capabilities.
15
Hyster-Yale Materials Handling
6
Enhancing Our Big Truck Market Position
Overall, the Company has a leading market position in Big Trucks but believes
there is significant growth potential remaining. In 2015, the Company was awarded
one of its largest single Big Truck orders, a 31-unit order from Pacific National, one of
Australia’s largest rail companies. The Company will continue to introduce additional
new Big Truck products, providing a comprehensive Tier 4 engine offering. Further,
Hyster-Yale has already gained Tier 4 engine emission leadership by achieving
substantial improvements in fuel efficiency with these new engines. The Company
has expanded its global Big Truck team and is highlighting its Big Truck global
capabilities to customers who need global coverage and specialized application
sales capabilities, as well as working closely with its dealers to drive growth plans.
Hyster-Yale’s Big Truck efforts are focused on both container handling equipment
and the many industries requiring products using forks or special attachments.
Increasing specialization allows Hyster-Yale to increase penetration in all industries
more effectively.
In 2015, Hyster Company
was awarded a 31-unit Big
Truck order by Pacific
National, one of Australia’s
largest rail companies.
The deal included 21
Hyster® ReachStackers,
shown at right.
The Hyster® RS46-41XLS,
with a 7500mm/295 Inch
wheelbase and stabilizers,
can be equipped with a tool
changer, so it can switch
between a c-hook for coil
handling and a spreader for
container handling.
16
Strengthening the Sales & Marketing Organization 7
2015 Annual Report
The Company has strengthened its sales and marketing organization structure
in all geographic regions and has continued to add talent to enhance its capabilities
in this restructured organization. To improve the Company’s awareness of new
business in the marketplace and boost its participation in new business proposals,
the Company has increased its focus on account identification and coverage,
including through focused organizational teams. In addition, to help provide
enhanced product application capabilities for customers, the Company has created
Solutions Groups that are focused on developing specialized solutions for customers’
industries. This new sales structure also places accountability closer to the customer
level through smaller sales management areas and provides leaders with new tools
and enhanced reporting capabilities. The Company has also added expertise to focus
on implementing standard sales processes at the Company’s independent dealers.
These changes are gaining momentum within the organization and are expected
to help the Company obtain higher unit volumes and market share over time.
Hyster-Yale’s Frimley, UK, offices, which house the marketing and sales operations for Hyster® and Yale® in Europe, as well as
the EMEA Divisional headquarters and Engineering Concept Center.
17
Hyster-Yale Materials Handling
8
Commercializing Nuvera’s
Hydrogen Power Technologies
Nuvera is a stand-alone business under the Hyster-Yale umbrella and has the
goal of being a significant profit generator once its technology is fully commercialized
and programs are fully rolled out into the market. Nuvera was acquired to be an
accelerator for many of the Company’s other strategies discussed previously, but also
has longer-term application across a broad spectrum of industries and applications.
Nuvera’s initial and primary goal is to be a major supplier of fuel-cell engines
to power lift trucks. Substantial progress toward commercialization of Nuvera’s
An employee installs a PowerEdge® battery-box replacement in a Hyster® 4-wheel electric truck.
18
2015 Annual Report
PowerEdge® units, which can be substituted
for lead-acid batteries in Class 1, 2 and 3 lift
truck models, was made in 2015, and early
stages of PowerEdge® unit production began
in late 2015. Nuvera is working to ensure these
products meet the demanding requirements
of lift truck customers. These units are
undergoing full reliability growth testing and
validation processes that are used for all new
products introduced from Hyster-Yale’s
development and testing facilities. In the
fourth quarter of 2015, Nuvera secured its
first Total Power Solution agreement with a
customer and expects to begin shipping
PowerEdge® units to this customer in the first
half of 2016, along with lift trucks and a
A Hyster® fuel cell-powered lift truck with a Nuvera
PowerEdge® unit refuels at a hydrogen dispenser.
PowerTap® hydrogen generation system, including a full-service solution on both
PowerEdge® and PowerTap®.
Nuvera is preparing for increased volume production, which is expected to ramp
up throughout 2016 as additional sales of PowerEdge® units are secured. Significant
investments to automate production, testing and quality verification have been put
in place and will continue throughout the year. In conjunction with the planned
production ramp-up, Nuvera is also expanding commercial efforts, including enhancing
its sales, marketing and business development teams, to prepare for a broad roll-out
of its products. Nuvera aims to provide a world-class field service experience, and
has a growing team of internal field service professionals. These professionals are
leveraging the resources of Hyster-Yale and its dealer networks to ensure products
meet the demanding and rigorous needs of lift truck customers.
As Nuvera continues to execute its commercialization strategy and its products
are moving toward commercial release, these products are generating considerable
interest from some of the largest users of lift trucks in the warehousing and distribution
industries. There is also growing interest in Nuvera’s fuel-cell solutions from other
19
Hyster-Yale Materials Handling
industrial equipment manufacturers, as well as from major third parties in
the hydrogen supply business. Both are attracted to the unique combination
of strong innovation, technology development and solutions from Nuvera,
combined with the global strength of the Hyster-Yale manufacturing and supply
chain organizations. In addition to the commercialization of the PowerEdge®
units, Nuvera is seeing a growing demand for its PowerTap® units, which are
already in commercial production.
Finally, in addition to its existing technology, Nuvera has continued to invest
in its other innovations, with several new technologies showing significant progress
toward breakthrough improvements in the use and distribution of hydrogen in
industrial applications.
Assembly of the PowerEdge battery-box replacement prototype units at Nuvera’s Billerica, Massachusetts, facility.
20
Directors and Officers
Directors and Officers of Hyster-Yale Materials Handling, Inc.
Directors:
Officers:
J.C. Butler, Jr.
Senior Vice President-Finance, Treasurer and
Chief Administrative Officer, NACCO Industries, Inc.
President and Chief Executive Officer of
The North American Coal Corporation
Carolyn Corvi
Retired Vice President and General Manager –
Airplane Programs of The Boeing Company
John P. Jumper
Retired Chief of Staff, United States Air Force
Dennis W. LaBarre
Retired Partner, Jones Day
F. Joseph Loughrey
Retired Vice Chairman of Cummins, Inc.
Alfred M. Rankin, Jr.
Chairman, President and Chief Executive Officer of
Hyster-Yale Materials Handling, Inc.
Chairman of Hyster-Yale Group, Inc.
Chairman, President and Chief Executive Officer of
NACCO Industries, Inc.
Claiborne R. Rankin
Manager of NCAF Management, LLC, the managing member
of North Coast Angel Fund, LLC
John M. Stropki
Retired Executive Chairman of Lincoln Electric Holdings Inc.
Britton T. Taplin
Self-employed (personal investments)
Eugene Wong
Professor Emeritus
of the University of California at Berkeley
Officers of Hyster-Yale Group, Inc.
Alfred M. Rankin, Jr.
Chairman
Colin Wilson
President and Chief Executive Officer
Charles A. Bittenbender
Senior Vice President, General Counsel and Secretary
Gregory J. Breier
Vice President, Tax
Brian K. Frentzko
Vice President, Treasurer
Amy E. Gerbick
Associate General Counsel, Director of Corporate Compliance
and Assistant Secretary
Jennifer M. Langer
Vice President, Controller
Lauren E. Miller
Senior Vice President, Chief Marketing Officer
Charles F. Pascarelli
Senior Vice President, President, Americas
Rajiv K. Prasad
Senior Vice President, Global Product Development,
Manufacturing and Supply Chain Strategy
Alfred M. Rankin, Jr.
Chairman, President and Chief Executive Officer
Colin Wilson
President and Chief Executive Officer,
Hyster-Yale Group, Inc.
Charles A. Bittenbender
Senior Vice President, General Counsel and Secretary
Gregory J. Breier
Vice President, Tax
Brian K. Frentzko
Vice President, Treasurer
Amy E. Gerbick
Associate General Counsel, Director of Corporate Compliance
and Assistant Secretary
Jennifer M. Langer
Vice President, Controller
Lauren E. Miller
Senior Vice President, Chief Marketing Officer
Kenneth C. Schilling
Senior Vice President and Chief Financial Officer
Suzanne S. Taylor
Vice President, Deputy General Counsel
and Assistant Secretary
Victoria L. Rickey
Senior Vice President, Business Development
Stephen J. Karas
Vice President, Global Supply Chain
Anthony J. Salgado
Senior Vice President, JAPIC
Harry Sands
Senior Vice President, Managing Director, Europe,
Middle East and Africa
Kenneth C. Schilling
Senior Vice President and Chief Financial Officer
Gopichand Somayajula
Vice President, Global Product Development
Jon C. Taylor
President and Chief Executive Officer
of Nuvera Fuel Cells, LLC
Suzanne S. Taylor
Vice President, Deputy General Counsel
and Assistant Secretary
Mark H. Trivett
Vice President Finance, Europe, Middle East and Africa
Raymond C. Ulmer
Vice President Finance, Americas
Corporate Data
C
Annual Meeting
The Annual Meeting of Stockholders of Hyster-Yale Materials
Handling, Inc. will be held on May 4, 2016, at 9:00 a.m. at
the corporate office located at: 5875 Landerbrook Drive,
Cleveland, Ohio 44124
Form 10-K
Additional copies of the Company’s Form 10-K filed with the
Securities and Exchange Commission are available free of charge
through Hyster-Yale’s website (www.hyster-yale.com) or by
request to:
Investor Relations
Hyster-Yale Materials Handling, Inc.
5875 Landerbrook Drive, Suite 300
Cleveland, Ohio 44124
(440) 229-5168
Stock Transfer Agent and Registrar
Stockholder Correspondence:
Computershare
P.O. Box 30170
College Station, TX 77842-3170
Overnight Correspondence:
Computershare
211 Quality Circle, Suite 210
College Station, TX 77845
(877) 373-6374 (U.S., Canada and Puerto Rico)
(781) 575-2879 (International)
Legal Counsel
Jones Day
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Independent Registered Public
Accounting Firm
Ernst & Young LLP
950 Main Avenue, Suite 1800
Cleveland, Ohio 44113
Stock Exchange Listing
The New York Stock Exchange
Symbol: HY
Investor Relations Contact
Investor questions may be addressed to:
Investor Relations
Hyster-Yale Materials Handling, Inc.
5875 Landerbrook Drive, Suite 300
Cleveland, Ohio 44124
(440) 229-5168
E-mail: ir@hyster-yale.com
Hyster-Yale Materials Handling, Inc. Website
Additional information on Hyster-Yale
may be found at the corporate website,
www.hyster-yale.com. The Company
considers this website to be one of the
primary sources of information for investors
and other interested parties.
Hyster Global:
www.hyster.com
Yale Global:
www.yale.com
www.yale.com
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Environmental Benefits
This Annual Report on Form 10K is printed using postconsumer waste recycled paper and vegetablebased inks.
By using this environmental paper, HysterYale Materials Handling, Inc. saved the following resources:
27 trees pre
served for the
future
79 lbs. water
borne waste
not created
11,505 gal.
wastewater
flow saved
1,273 lbs.
solid waste
not generated
2,506 lbs. net
greenhouse
gases prevented
19,184,500
BTUs energy
not consumed
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5875 Landerbrook Drive, Suite 300
Cleveland, Ohio 44124
www.hyster-yale.com
An Equal Opportunity Employer