HYSTER-YALE, INC. Q2 FY2025 earnings call

• Economic Environment: Economic uncertainty, including fluctuating tariffs, impacts demand and cost structures. Hyster-Yale is monitoring these changes and maintaining transparency with dealers, adjusting prices monthly.
• Market Bookings: Second quarter Lift Truck bookings declined to $330M from $590M in Q1 2025, affected by softer demand in Europe and Americas, but Asia Pacific remained steady. Order backlog was $1.7B, down from $1.9B prior quarter.
• Customer Engagement: Prioritizing proactive customer engagement to understand evolving needs and create tailored solutions.
• Manufacturing Optimization: Optimizing global manufacturing footprint and modular vehicle design to control costs, balance production, and react to market changes. Long-term, aiming to reduce breakeven point for sustainable profitability.
• Strategic Initiatives: Focus on warehouse Lift Trucks, vehicle automation, energy solutions, and attachments as complementary growth opportunities to strengthen competitive position.

Lift Truck: Q2 revenues declined 19% year-over-year due to lower volumes across product lines and tariff-related economic uncertainty. Americas sales volumes decreased, especially for higher-value Class 4 and 5 internal combustion engine trucks; EMEA product revenues declined primarily due to lower Class 1 electric product sales. Sequentially, global revenues improved 5% with higher-value Class 4 and 5 internal combustion engine trucks seeing growth. Adjusted Q2 operating profit was $5M, a significant decrease from prior year, impacted by lower volumes and tariff-driven material/freight increases. Bolzoni: Year-over-year revenue declined as expected due to phaseout of lower-margin legacy products. Q2 adjusted operating profit was below prior year levels but sequential revenue grew due to higher volumes in Americas, driven by increased attachment and fork sales, with adjusted operating profit improving due to favorable product mix shift and operating expense control.

• Lift Truck: Expect second half revenue and production to outpace first half, but market uncertainties persist. Product margins expected to remain above targeted levels but decline YOY. Plan to maintain monthly price adjustments aligned with material costs. Capital expenditures for 2025 expected to range $50M-$60M. Full year 2025 operating profit anticipated to decline significantly compared to prior year, slightly below previous guidance.
• Bolzoni: Q3 revenues projected to improve modestly, operating profit to increase moderately. Full year 2025 revenues expected to decline YOY, operating profit projected below 2024 levels. Q3 adjusted operating profit expected to improve sequentially due to stronger sales and manufacturing efficiency.

• Tariff Volatility: Fluctuating tariff levels impact demand, cost structures, and pricing, creating uncertainty in decision-making for customers.
• Economic Uncertainty: Global economic conditions and geopolitical developments affect capital expenditure decisions and market demand.
• Global Trade Dynamics: Dependence on global component sourcing exposes the company to tariffs, with challenges in finding alternative cost-effective supply partners in the short term.

Q: Regarding seasonality in Americas and EMEA, can we expect typical seasonal trends?

A: For Americas, expect decisions on quotes/RFQs to be made as tariff volatility stabilizes. For EMEA, third quarter likely to be weakest from shipment perspective due to holidays and military spending impact.

Q: Thoughts on Toyota taking private and competitive environment?

A: Japan-focused effort, expect similar strategies in Lift Trucks like electrification and supply chain convergence, but no immediate market dynamic.

Q: Concerns on investing in autonomous Lift Trucks?

A: Launched automated solutions at ProMat show, CapEx north of depreciation/amortization, indicating investment in future technology.

Q: Backlog profitability and mix?

A: Pricing discipline good, margin profile helped by scalable product line. Tariff dynamic impacts profitability, but expected to stabilize. Average selling prices booked in quarter up nearly 10% YOY.

Q: Component sourcing from China/India?

A: Highly engineered components face capacity challenges in other regions; discussions ongoing with suppliers to transition. Low-engineered components being addressed but take time.

Q: Bolzoni product mix and legacy products?

A: Legacy products (transmissions, axles) will phase out, objective to be near zero by 2027, with cylinders remaining core.

Q: Warehouse market macro impact on market share?

A: Market size smaller but made progress in market share, pleased with traction in North America.

Q: Competitive landscape and Chinese impact?

A: Chinese competitors driving recalibration, traditional competitors disciplined, Chinese economy weak with government support leading to inventory buildup as disruptive factor.