Business Overview Hyster-Yale's origins trace back to 1913 when NACCO Industries, Inc. was founded. The company's involvement in the lift truck industry began in 1929 with the establishment of the Willamette-Hyster Company in Portland, Oregon. In the 1930s, the company started manufacturing lift trucks and quickly gained prominence in the industry. A significant milestone occurred in 1944 when the company changed its name to Hyster Company.
In 1989, NACCO Industries acquired Hyster Company, integrating it into the larger NACCO conglomerate. This acquisition provided Hyster with access to additional resources and scale, enabling continued innovation and expansion of its product offerings to meet evolving customer needs in the material handling sector.
A pivotal moment in the company's history came in 2012 when NACCO Industries spun off its lift truck business, creating Hyster-Yale Materials Handling, Inc. as a separate publicly traded entity. This strategic move allowed Hyster-Yale to focus exclusively on the lift truck industry and operate as a more agile and entrepreneurial organization. The company's Class A common stock began trading on the New York Stock Exchange under the ticker symbol "HY".
In 2017, Hyster-Yale made a significant step towards expanding its global presence by acquiring a majority stake in Hyster-Yale Maximal Forklift Zhejiang Co., Ltd. This joint venture has enabled the company to strengthen its position in the rapidly growing Chinese material handling market.
Over the years, Hyster-Yale has expanded its global footprint, with manufacturing and assembly facilities strategically located across the United States, Northern Ireland, China, the Netherlands, Mexico, the Philippines, Brazil, Japan, Italy, and Vietnam. This extensive global reach allows the company to serve its diverse customer base efficiently and respond to regional market dynamics.
The company's product portfolio encompasses a diverse range of lift trucks, including internal combustion engine and electric models, as well as specialized equipment for various applications. Through its two primary brands, Hyster and Yale, the company has established a strong presence in the Americas, EMEA, and JAPIC regions, catering to a wide array of industries, from manufacturing and logistics to retail and government agencies.
In addition to its core lift truck business, Hyster-Yale operates two complementary segments: Bolzoni and Nuvera. Bolzoni is a leading worldwide producer and distributor of attachments, forks, and lift tables, while Nuvera is an alternative-power technology company focused on the design, manufacture, and sale of hydrogen fuel cell stacks and engines.
Financial Performance and Outlook Hyster-Yale has demonstrated a strong financial track record, with consistent revenue growth and profitability. In the fiscal year 2024, the company reported revenues of $4.31 billion, a 5% increase over the previous year. This top-line growth was driven by the company's successful execution of its strategic initiatives, including the introduction of new product offerings and the expansion of its global footprint.
The company's adjusted operating profit for the full year 2024 stood at $267 million, representing a significant improvement of nearly $60 million compared to the prior year. This robust financial performance translated into an adjusted operating profit margin of 6%, the strongest full-year result in Hyster-Yale's history. The company's adjusted net income for 2024 was $159 million, increasing 26% from the strong prior year period.
For the most recent quarter (Q4 2024), Hyster-Yale reported revenue of $1.07 billion, a 3.9% increase compared to Q4 2023. Net income for the quarter was $10.3 million. The increase in revenue was primarily due to higher lift truck revenues from improved pricing and product mix.
Looking ahead, the company expects a more challenging market environment in 2025, as the global lift truck market is anticipated to experience a cyclical downturn. Hyster-Yale anticipates a significant year-over-year decline in both revenues and operating profits, as the lift truck business grapples with lower production levels and increased market competition.
For 2025, Hyster-Yale expects a significant year-over-year revenue decrease in both Q1 and the full year, due to an anticipated decrease in lift truck production levels. Lift truck gross profit margins are likely to decline toward target levels due to the negative effect from reduced volumes and increased market competitiveness. Operating expenses are expected to increase year over year in 2025 to support long-term profitable growth initiatives.
As a result of the lower revenues, margin decline, and increased expenses, Hyster-Yale expects Q1 and full-year 2025 operating profit to be significantly below the exceptionally strong 2024 performance. The company anticipates its 2025 effective tax rate to be elevated largely due to the ongoing capitalization of R&D costs and its valuation allowance position.
To mitigate the impact of this cyclical headwind, Hyster-Yale has undertaken strategic initiatives to streamline its manufacturing footprint and optimize its operations. These programs, which include restructuring and cost-saving measures, are expected to generate substantial income and cash benefits of $30 million to $40 million annually starting in 2027.
Liquidity As of December 31, 2024, Hyster-Yale reported cash and cash equivalents of $96.6 million. The company's debt-to-equity ratio stood at 0.93, indicating a balanced capital structure. Hyster-Yale's current ratio was 1.46, and its quick ratio was 0.71, suggesting adequate short-term liquidity.
The company has a $300 million secured, floating-rate revolving credit facility that expires in June 2026, with $242.7 million of availability as of December 31, 2024. This provides Hyster-Yale with additional financial flexibility to support its operations and strategic initiatives.
Hyster-Yale expects cash generated from operations in 2025 to be comparable to strong 2024 levels as working capital improvements generally offset the net income decline. Capital expenditures for 2025 are expected to range between $40 and $80 million, reflecting the current economic and geopolitical uncertainty.
Competitive Landscape and Growth Strategies Hyster-Yale operates in a highly competitive global materials handling industry, facing off against several established manufacturers and niche players. The company's key competitors include Jungheinrich, Kion Group, Toyota Industries, and Mitsubishi Logisnext, among others.
To maintain its market leadership and drive long-term growth, Hyster-Yale has implemented a multi-faceted strategy. The company's focus on product innovation, with the introduction of new modular and scalable lift truck models, has allowed it to cater to evolving customer needs and gain market share, particularly in the warehouse and automation segments.
Furthermore, Hyster-Yale's investment in advanced technologies, such as automation, telematics, and hydrogen fuel cell solutions, positions the company to capitalize on the industry's shift towards more sustainable and efficient materials handling solutions. The company's strategic partnerships, including its joint venture with Wells Fargo for dealer and customer financing, further strengthen its value proposition and customer relationships.
Product Segments and Performance Hyster-Yale operates through three main product segments: the Lift Truck business, Bolzoni, and Nuvera.
The Lift Truck business is the largest segment, accounting for 95% of total revenues in 2024. This segment designs, engineers, manufactures, sells, and services a comprehensive line of lift trucks, attachments, and aftermarket parts, primarily under the Hyster and Yale brand names. The lift truck business operates through three geographic segments:
1. Americas: This segment includes the U.S., Canada, Mexico, Brazil, and Latin America. It generated $3.22 billion in revenues in 2024, up 11% year-over-year. 2. EMEA: Covering Europe, the Middle East, and Africa, this segment reported revenues of $707.6 million, down 14% due to lower unit volumes. 3. JAPIC: Including Asia and the Pacific regions, this segment saw revenues decline 9% to $183.7 million.
Gross profit for the lift truck business increased 15% in 2024 to $819.7 million, driven by higher pricing that more than offset lower unit volumes and higher freight costs. Operating profit rose 20% to $276.7 million as higher selling, general, and administrative expenses and restructuring charges partially offset the gross profit improvement.
The Bolzoni segment is a leading worldwide producer and distributor of attachments, forks, and lift tables, marketed under the Bolzoni, Auramo, and Meyer brand names. Bolzoni also produces components for lift truck manufacturers. In 2024, Bolzoni generated $379.1 million in revenues, a 1% increase, and $85.4 million in gross profit, up 4%. However, operating profit declined 41% to $9.1 million due to $4.3 million in restructuring and impairment charges.
Nuvera is an alternative-power technology company focused on the design, manufacture, and sale of hydrogen fuel cell stacks and engines. Nuvera's revenues decreased from $4.3 million in 2023 to $1.4 million in 2024, while its operating loss widened from $36.4 million to $41.0 million as the company increased research and development expenses for new product development.
Risks and Challenges As with any industrial conglomerate, Hyster-Yale faces a range of risks and challenges that could impact its future performance. The cyclical nature of the materials handling industry, coupled with macroeconomic factors such as global trade tensions, inflation, and interest rate fluctuations, can contribute to volatility in the company's financial results.
In addition, Hyster-Yale's global operations expose it to various operational risks, including supply chain disruptions, currency fluctuations, and regulatory changes across different jurisdictions. The company's ability to successfully navigate these challenges and adapt to shifting market dynamics will be crucial in maintaining its competitive edge.
Industry Trends The materials handling equipment industry has seen moderate growth, with a compound annual growth rate (CAGR) of around 3-5% over the past several years. Key trends shaping the industry include increasing automation, connectivity, and a growing focus on sustainability. Hyster-Yale's investments in advanced technologies and sustainable solutions align well with these industry trends, positioning the company to capitalize on emerging opportunities.
Conclusion Hyster-Yale, with its rich history, innovative product portfolio, and global reach, is well-positioned to navigate the cyclical headwinds facing the materials handling industry. The company's commitment to operational excellence, strategic initiatives, and technological advancements positions it for long-term success, despite the near-term challenges it may face.
As Hyster-Yale continues to evolve and adapt to the changing market landscape, investors should closely monitor the company's ability to execute its growth strategies, optimize its operations, and capitalize on emerging industry trends. With a focus on delivering value to its customers and shareholders, Hyster-Yale remains a versatile and compelling player in the dynamic materials handling market.