Hyster-Yale Materials Handling, Inc.

Good morning, ladies and gentlemen, and welcome to the Hyster Yale Inc. Fourth Quarter and Full Year 2024 Earnings Costs Call. At this time, our lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you need assistance, please press star zero for the operator. This call is being recorded on Wednesday, February 26, 2025. I would now like to turn the conference over to Andrea Saba. Please go ahead.

Good morning, and thank you for joining us for Hyster Yale's 2024 Fourth Quarter Earnings Call. I'm Andrea Saba, Director of Investor Relations and Treasury. Joining me today are Al Rankin, Executive Chairman, Rajiv Prasad, Chief Executive Officer, and Scott Minder, Senior Vice President, Chief Financial Officer, and Treasurer. During our call, we will be discussing our fourth quarter and full year 2024 earnings release issued yesterday. you can find the earnings release and replay of this webcast on the Hyster Yale website. The replay will remain available for approximately 12 months. Today's conference call contains forward-looking statements which are subject to risks that could cause actual results to be materially different from those expressed or implied. These risks are described in greater detail in the earnings release and in our reports filed with the SEC. On this call, we will be discussing our adjusted results. We believe that these are useful in evaluating the company's operating performance. Reconciliation of adjusted operating profit, net income, and earnings per share to the most directly comparable GAAP financial measures can be found in the company's earnings release and investor presentation filed with the SEC. With the formalities out of the way, Let me turn the call over to Rajiv to begin.

Thanks Andrea, and good morning everyone. I'll start by providing my operational perspective and some commentary on our markets. Scott will follow with our detailed financial results and outlook. Al will close the call with his perspective, and then we'll open it up for your questions. As we close out 2024, I'd like to start by recognizing our global team for delivering another solid quarter and a strong finish to an already exceptional year. In quarter four, we generated higher revenue and improved adjusted operating profit versus the prior year and the prior quarter. These strong results were led by the performance of our America's lift truck business. I'm pleased to report that we made significant progress on our strategic initiatives in the quarter. We began execution on the footprint optimization programs that we shared with you in our quarter three earnings call. These programs are designed to streamline our manufacturing network and optimize our operations. These programs should lower our costs and reduce our inventories and product lead time. As a result of these actions, we incurred a $21 million. The costs were primarily initiated in the fourth quarter to streamline our manufacturing footprint and optimize operations. As we further deploy these programs in 2025 and 2026, we expect additional implementation costs ranging from $8 to $16 million in each of the years. These programs are designed to reduce the negative impact from market cyclicality on our business over time. Program benefits are expected to begin in late 2025, but will be offset by operational inefficiencies due to lower total production. Driven by decreased market demand, benefits in 2026 are expected to be small as we finalize the program. Savings are expected to accelerate generating $30 to $40 million in annual income and cash benefits starting in 2027. In the Americas, we are focused on programs to right-size the company's production footprint, enabled by our expanding lineup of modular products. We'll take advantage of manufacturing synergies created by these designs to further enhance profitability. Executing these programs helps to reduce cost and improve cost absorption rates in our factories, particularly in periods of lower demand. In our EMEA and JPEG regions, these optimization programs would help streamline cost structures and better position these businesses for long-term profitable growth. Turning to our views on global demand, the global lift truck bookings market continued in its decline in quarter four. Compared to prior year as expected, lower demand and order cancellation each played a role. This ongoing market correction is in response to significantly above trend industry bookings rates in 2022 and 2023. While the booking market declined in 2024, Our extended backlog allowed us to maintain strong production rates. Accordingly, our shipments exceeded our bookings in each of the quarters of 2024. As a result, our backlog reached near normal levels by year-end, faster than our initial plans. Due to our lower bookings and reduced backlogs, we've adjusted our production cadence to maintain a more consistent backlog. one that better aligns with market demand. Operating our factories at this purposeful pace will help to reduce inventories, improve delivery consistency, and ultimately improve customer satisfaction. As market demand improves and our market share is expected to increase across 2025, we expect to gradually increase our production rate. When we do, inventory will increase to support higher production, but are from a lower base with improved efficiency. Early 2025 bookings provide encouraging signs, particularly in our EMEA and JEPIC regions. This elevated activity gives us some confidence that the bookings market will improve across 2025. While there is early optimism, our market outlook could be impacted by ongoing uncertainty created by potential tariffs and trade wars. If the bookings market on our expected market share gain fails to meet expectations, our global production levels will moderate in the second half of the year. Despite this uncertainty, we continue to focus on booking units with margin at or above target levels. New product introduction technologies are increasing the potential revenue per unit. Our expanding lineup of modular and scalable models increases our ability to provide customers with products that solve their challenges while also improving our unit economies. Countering these high-STL specific opportunities is a more competitive market. As demand declined in 2024, competitive intensity picked up, we expect this dynamic to continue in 2025 until bookings return to more normal pace. As a result, we expect our strong product margins to decline in 2025 but remain above target levels. Economic uncertainty created by potential tariffs imposed by the U.S. and others remains a key area of concern. We'll remain agile with our pricing strategy, responding quickly if our cost structures are negatively impacted. Now I'd like to discuss our focus for 2025. First, I'll start with the lift truck business. The lift truck business launches modular, scalable two to three ton internal combustion engine trucks in 2024. These products are now available globally and shipments are increasing. The range will expand with cushion tire, combustion engine trucks, and electric platforms planned for 2025 and 2026. This approach enhances efficiency by integrating ICE and electric trucks on the same production lines, optimizing manufacturing processes. By using these designs, the company can meet customer demand while reducing operational costs and improving working capital. Automation is a key area of development for us. In 2024, we began customer testing for Yale Relay and ISO Atlas forklifts. By early 2025, a new platform for automated lift trucks and an intuitive porter will be launched, simplifying setup and reducing the need for custom programming. This will help warehouses cut labor costs and software expenses. The enhanced lift truck lineup offers significant value to warehouse customers. We have developed strong technology adoption strategies and specialized training for our dealers. We saw modest market share gains in 2025 and are poised for above market growth. The lift truck business aims to leverage electric truck advancements in areas once dominated by combustion trucks. We continue to expand the electrification of our internal combustion engine counterbalance products using both lithium ion batteries and fuel cell engines with certain economic specific applications. These projects capitalize on the company's long history of developing Next, I'll discuss Bolzoni. Bolzoni aims to lead the attachment business by delivering innovative, customized solutions to address specific material handling needs. Bolzoni is dedicated to driving growth through core projects beyond the lift truck market. Bolzoni is committed to designing products that enhance safety, reduce damage from incorrect handling, and improve efficiency. This includes incorporating advanced technologies, components such as sensors, lasers, cameras, and optical readers. To expand its industry reach, Balzoni is working with leading companies in the automated guided vehicle or AGV sector to offer customized attachments, often with embedded technologies to facilitate better overall performance. These efforts are expected to increase volume systems where batteries fall short. The early adopter applications are anticipated to have near-term adoption potential. During 2025, Nuvera looks to expand hydrocharge, a mobile power product providing clean off-grid power for rapid electric vehicle charging and clean energy genset applications. In the near term, mobile power generation appears to have the greatest opportunity for commercial application. This supports a number of applications where diesel or battery power generation will not work effectively. Nuvera is now undertaking a focused study on the size and timing of a mobile power strategy. Now I'll turn the call over to Scott to provide more detailed financial results and output. Scott?