HYSTER-YALE, INC. Q3 FY2025 earnings call

• Economic environment: Cautiously optimistic outlook faded due to tariffs, interest rates, and geopolitics; lift truck market demand declined globally. - Booking activity: Q3 bookings rose to $380 million, up from $330 million in Q2, led by EMEA and APAC; Americas stable. - Operational initiatives: Streamlining operations, manufacturing flexibility with module vehicle designs, deepening customer engagement, accelerating product innovation, and realigning global optimization. - Bolzoni: Revenues down but favorable product mix offset some impacts, operating profit affected by higher employee costs.

Lift Truck: Q3 revenues were $929 million, a 4% decline year-over-year due to lower truck volumes. Bolzoni: Q3 revenues were $87 million, dropping 11% year-over-year, primarily driven by phaseout of lower-margin legacy transmission components and softer lift truck demand in the U.S. Lift Truck's operating profit declined due to lower volumes and higher tariff costs, while Bolzoni's operating profit was impacted by higher employee-related costs.

• Q4 lift truck revenue expected to decline due to lower production rates and tariff headwinds, projecting a moderate operating loss. - Bolzoni revenues projected to slightly decrease, but operating profit modestly above Q3 due to product mix improvements. - Tariff assumptions: Chinese tariffs and Section 301 tariff exemption ending/extending impact financials; proactive sourcing and pricing actions to mitigate. - Long-term: $2.4 million invested in U.S. manufacturing footprint streamlining, with $3 million planned for Q4, expecting $30-40 million annualized savings by 2027.

• Tariffs: Impacting costs and dampening demand; ongoing policy uncertainty making financial impacts hard to predict. - Economic uncertainty: Volatile interest rates, inflation, and geopolitics influencing customer investment decisions. - Competition: Pressure from low-cost foreign competitors compressing margins in certain markets, especially Class 5.

Q: Chip Moore asked about demand uncertainty, how it compares to prior cycles and potential actions if macro downturn occurs.

A: Rajiv Prasad said market is active but slow decision-making due to environment volatility; if macro downturn, will take conservative posture and review cost structures.

Q: Edward Jackson inquired about vertical headwinds and auto exposure.

A: Rajiv Prasad said no specific material issues, slowdown in heavy manufacturing; auto sector impacted but retail and light manufacturing fine.

Q: Kirk Ludtke asked about automation pace and backlog.

A: Rajiv Prasad said automation interest is high but implementation slower; expect buildup then acceleration; backlog excess expected to be depleted by end of year.

Q: Jack Fitzsimmons asked about cancellations and tariff impact.

A: Rajiv Prasad said majority of cancellations behind us; $40 million tariff impact in Q3, mostly hit P&L with limited pricing offset.

Q: Eric Ballantine asked about backlog profitability and EBITDA.

A: Rajiv Prasad said untariffed covered backlog to be out by early next year; EBITDA likely to be lower in near term but focus on long-term success.