Hyster-Yale, Inc. (HY) Earnings Call Transcript & Summary

Good morning, everyone. I am Christie Kmetko, I handle the Investor Relations for Hyster-Yale. I would like to welcome you to the 2021 Hyster-Yale Virtual Investor Day, and thank you so much for attending. While we would clearly prefer doing this presentation in person with all of you, given the pandemic and the timing of this event, it was the best option for us to do this virtually for the health and safety of all involved presenters as well as the participants. Since this event is only a webcast, we will hold our Q&A session at the very end of the presentation, and I will give you a few more details about our question-and-answer format in a moment. But for right now, let's talk about the formalities. On your screen, you should see our safe harbor statement. I will spare you by not reading all of this, but I would welcome you to read it on your own. Just to let you know, the presentation will be run simultaneously as the speakers present, but the presentation is also available on our website. So that -- and there's more information in there than what is being presented today, including our detailed risk factors as well as the reconciliations to the various non-GAAP measures that we will be discussing during our presentation. This morning, we will be updating you on the strategic initiatives we have in place and our path to achieving our long-term financial objectives. Let me quickly walk you through the agenda and who you will be hearing from over the course of the next 2 hours. Al Rankin, Chairman and Chief Executive Officer of Hyster-Yale, will provide a strategic overview. Once Al has spoken, you will hear from Rajiv Prasad, President. Rajiv will give you an update on our products and our operations. Rajiv is then followed by Tony Salgado, our Chief Operating Officer of Hyster-Yale Group, which is our operating business. Tony will give you an update on what we are doing in our commercial operations. Once Tony has gone, Ken Schilling will provide some information on our lift truck financials. And after Ken and Tony, we will give you a break from the slides and the commentary and show you a short video that summarizes what we have covered in the first part of our presentation, and that will wrap up the first hour. After the video, you will hear from Roberto Scotti, President and CEO of our Bolzoni Group. Roberto will provide an update on the strategic programs that Bolzoni has in place. And then Lucien Robroek, President and CEO of Nuvera, will give you an update on the activities taking place at Nuvera. I should point to both Roberto, who is based in Italy, and Lucien, who is in Boston, were not able to join us here in Cleveland because of the pandemic. So they are doing their presentations from their home bases. Finally, once you've heard from all the businesses, Ken Schilling will provide an update on our consolidated financials as well as where we are with our strategic objectives and meeting our financial objectives. And then Al Rankin will come on and provide a summary of our day, and then we will open it up for questions through the Q&A session. Just to give you a little bit of information on how the Q&A format will work. The Q&A will be moderated by me. There is not a dial-in. So on the top left-hand box in your screen, you will see a chat box. Please, throughout the presentation, send in your questions. The questions will remain anonymous. I will accumulate those. And then when we begin the Q&A session, I will moderate those. I will ask the questions of the speakers. Generally, the questions will be directed to Al and Rajiv, first. But when you provide your comments, please let me know if there's someone you want to hear from directly. And with that, I would like to -- it's my pleasure to introduce Al Rankin, Chairman and CEO.

As I think all of you know, Hyster-Yale Materials Handling is one company with 3 distinct businesses. Our core forklift truck business is Hyster-Yale Group, our attachment business is Bolzoni, and our fuel cell business is Nuvera. Each of those businesses is managed very separately. It has a separate Board of Directors, Chief Executive Officer, P&L and a balance sheet and tailored incentive plans for that particular business. If you take a quick look at Hyster-Yale in total, from a geographic point of view, the forklift truck business is focused in the Americas with about 65% of the business; Europe, Middle East and Africa, about 22%; the JAPIC: Japan, Asia Pacific, India and China, about 7%. Bolzoni, 5%; and Nuvera is our start-up venture business. From a financial point of view, if you look at the numbers for the 12 months ending March 31 of this year, the forklift truck business had revenue of about $2.6 billion; operating profit of $70 million; net income of $51 million; earnings before interest, taxes and depreciation, amortization of $105 million; net debt of $164 million, and it has about 6,200 employees. Bolzoni, $275 million; breakeven at operating profit over that COVID period; net income was a loss of $2 million; EBITDA about $11 million; and net debt of $17 million; 1,300 employees. Nuvera, our venture business, nominal revenue; loss of $36 million; EBITDA, a loss of $30 million; approximately 200 employees. Each of these businesses is really focused on achieving very specific financial targets over the next few years. The lift truck business and Bolzoni are focused on achieving operating profit of 7%, return on capital employed greater than 20%. And Nuvera, our venture business, is focusing on increasing sales in the near term and then reducing the losses and moving to profitability over time. The company has a number of core strategies, which are designed to drive our economic engine by increasing market share. We're focused particularly on ensuring that we have strong worldwide distribution that can drive market share, can do that in a way that provides geographic and product balance around the world. If we do that, in a significant way, we can have volume economies of scale, which leads to a large lift truck population, significant parts and service volume, which is a very profitable aspect of the business, which strengthens our dealers and then strengthens us in what amounts to a virtuous circle of activity. This set of processes is supported by 4 forklift truck business key strategies: being the leader in independent distribution; providing the lowest cost of ownership while enhancing productivity for our customers; being the leader in the delivery of industry and customer-focused solutions. And then we have a focus on Nuvera being a leader in the fuel cell business and their applications, and Bolzoni being a leader in the attachment business. Each of those 6 strategies is then supported by very specific projects to bring them to fruition. 64 in lift truck business, 18 at Bolzoni and 25 at Nuvera. Each of them has very high priority projects, and I'll just touch on a few of those. In the forklift truck business, on the product portion of the business, we have a new set of modular products that are coming to market. We're focused on optimizing our plant footprint on a new line of low-intensity products, an enhanced warehouse range and expansion of that business, electrification of our internal combustion engine products, integrated fuel cell solutions and automation solutions. On the commercial side, to bring those to an enhanced market share position for the business, we have an industry strategy focus and increased direct selling activity to support that industry strategy focus, digital initiatives in sales and service and a high-impact pipeline management activity. Our attachments business is, again, has key projects. That business has been in the main 3 separate companies. It's shifting to be one company with 3 brands so that the full power of Bolzoni can be brought to all of those product lines; expanding in North America; an enhanced and expanded silver line set of products. Those are lower cost but very effective products; an industry focus; and expansion in the JAPIC region. Our fuel cell business, sales of the certified -- newly certified 45-kilowatt and 60-kilowatt engines that are brought to market really in the main as fuel cell range extenders for heavy-duty applications; expansion of our fuel cell engine range; and battery box replacement sales through the lift truck business. Each project has specific focus, actions, timing and expected results. And the timing of completion is expected to occur over the next 2 to 5 years, with the impact of the results beyond this time horizon as we move forward. These strategic projects are really gaining traction as we see it. We have, as an example, a set of very tailored solutions that meet critical industry needs, industry by industry. We can achieve those in the marketplace through our new modular and scalable platform, and we can do that in an economic way because it's all structured to fit together. And then bringing those products to the market with an industry best solution selling system. Nuvera has a distinctive place within Hyster-Yale. All of you are well aware that the hydrogen fuel cell market is growing very rapidly, and it provides opportunities for Nuvera to add significant value to Hyster-Yale. It is a venture business with strong commercialized products and focused on gaining share. The important supplier fit as part of Hyster-Yale's focus is on a broad range of alternative power systems for forklift trucks, but with a very significant market opportunity outside of the forklift truck market. Key sales and profitability milestones are established, but the timing for achieving them really can't be predicted with precision. And despite the losses that are being incurred at the present time, Hyster-Yale believes that Nuvera is creating a very significant value for Hyster-Yale's shareholders. We do have a time frame for achieving our objectives. In the forklift truck business, we have a plan that is designed to achieve those objectives within 5 years. And our current focus is really on trying to accelerate the impact of these projects as a result of the intense focus on the ones that I've just been through and achievement of the business' long-term objectives. At Nuvera, we're aiming to reduce the losses over the next 2 years and achieve breakeven in 3 years or so. When you put all this together from an investor perspective, we think that the valuation approach should vary by business. The lift truck and the attachments business, our mature businesses, they have market-leading products and market position, they generate significant cash, and we think they should be valued using traditional valuation models of EBITDA multiple on a net debt basis. We do think that, that multiple should reflect superior return on investment characteristics of our business, which are due to the fact that Hyster-Yale does not own its distribution, which is a very capital-intensive business. In our fuel cell business, it is, as I've noted, a venture business and a technology -- high-technology industry. It has a very distinct technology. Many patents in the fuel cell area. Operating cash is invested in new product commercialization and the ramp-up. And we value it as a venture business with developed technology. Now I'll turn the platform over to Rajiv Prasad.

Thank you, Al. I'm Rajiv Prasad, President of Hyster-Yale, and President and CEO of the Hyster-Yale Group, which is our operating division. I'm going to talk to you about the lift truck business, and it's a great business linked to the economy. The industry grows as material movement increases with the economy, but our industry is also going through a lot of change. There is the global supply chain, which is evolving all the time. There's the emerging and growing e-commerce, which is having a huge impact on both elements of material flow. Then customers are always looking for productivity and more recently, sustainability and improvement in those areas. That's a really rich environment to innovate and solve customers' problems, which is our ultimate basic strategy. What we want to do is understand the needs of our customers, and I'm talking about deep seated needs, not just the superficial needs. And then construct a set of solution and a way to go to market so we can meet those needs. COVID has definitely been a challenge but also an opportunity. First of all, I'd like to thank our associates around the world for helping us get through this difficult period. Thank you. But on the opportunity side, we've seen certain industries really grow during this period. A good example of that is the retail and e-commerce industry. And I'll give you a couple of examples of how we've seen that as an opportunity. So here, on the left, you'll see a warehousing environment. And we've worked with one of our largest customers in that space to understand the issues they were having around having people type and goods and lift trucks tightly packed in spaces. And we worked with them to implement solutions where the awareness of the operator increased, and that had a benefit on the safety and the productivity of the operation. On the right, we have an application where it's an electric application, but we've used advanced energy to provide a more productive and capable solution for this high productivity application. I'll talk more about that later in the presentation. Al talked about our core strategies and on the forklift truck side, we have 4 key strategies. Associated with those are 64 projects. Each of those projects bring their own benefit to the -- to both the company and customer. But the real benefit of those are, they're actually complementary and they build on each other. And it's that synergy that has the real benefit of accelerating growth. The -- those strategies are aligned by functions. So as I move forward in the presentation, you'll see strategies around our commercial activities, our product activities, our supply chain, manufacturing as well as our service and support activities. So it's a comprehensive set of projects. Among them are this idea of creating tailored solutions. In fact, that is the ultimate objective, to understand the needs of our customers and then have the solutions to be able to configure ideal solutions and products, which will give them the productivity they need at the lowest cost of ownership. That's the mission of these projects. And then take it to market and be successful in the market in implementing it. So the way our strategies work and the strategies are there to drive growth, it starts with understanding customers and their needs, their operations, their applications and understand what is required for them. Those are used to then construct a set of product and technology solutions, and you'll see this throughout our presentation. The primary strategy we've adopted to creating solutions is modular and scalable. What does that do for us? It allows us to do mass customization, to create very specific solutions for each customer that optimizes their productivity and gives them the lowest possible cost of ownership. But just creating the product is not enough. You need the right manufacturing platform and supply chain to get the components that are required for it, and we're working on enhancing those. And finally, you have to take it to the market. Tony will cover that in more detail. So as we talk about our product and technology, it starts with this modular scalable platform. What that allows us to do is create the brace product solution, which has the right truck at the right price. For some customers, all they need is a simple truck. And therefore, we're enhancing and have launched a set of low-intensity products for these simple low-intensity applications. For sustainability, we're launching a new set of electrified solutions for our traditional internal combustion engine trucks, which have the productivity of the internal combustion engine truck but obviously, zero emission using advanced powertrains and energy solutions. One of those is fuel cells for really productivity-oriented applications, which are multi-shift. Telemetry then allows us to produce -- provide the data. And then I'll talk about operator assist system, which is better operator awareness in tight operations, and then ultimately, automation where the trucks can drive themselves. These things work together to offer the right solution, with the right productivity, at the right cost so that customers can have the productivity they'll need at the lowest cost of ownership. Our whole solution is based on this idea of modular scalable platforms. And what does that really mean? Well, modularization is a way so we can put system elements in a set of geographically adjacent modules, which then connect together to create the truck. The scalability is where we can take a system from a simple system, all the way up to a high-performance system, which provides the productivity. Now not all customers need to be one end or the other of those systems. So the scalability and the modularity allows you to connect different capability systems together to create enormous infinite variety of trucks. What that allows us to do is match requirements to solutions. And if you can do that, you'll get the productivity you need with the cost of ownership and the lowest possible cost of ownership. So that's the way the scalable modular architecture works. And our plan is to get most of our product platforms onto this strategy over time, the first of which have just very recently been introduced in Europe. And as I said, for some people, all they need is a simple truck. You think about a simple, low-hour, low-intensity application. They just need a reliable, robust truck with the right support infrastructure, and we've launched a range of low-intensity product that fulfills that need. And we'll continue to add to this range at specific product points. For sustainability, there's more and more interest in electrification and what we're doing here is taking high-performance solutions and matching the electric systems to ICE systems. So there's no loss in productivity. Just elimination of emission. This range of product will go all the way from our smaller truck to the largest trucks we make. And here are some examples going from a 2-ton product with integrated lithium-ion to all the way up to a 16-ton product with lithium-ion solution. These have the performance of their internal combustion brothers with zero emission. So that's the electrification part. For customers who need the ultimate productivity and multi-shift operations where refueling has to be done in minutes, the right solution is fuel cell. And again, we're using both a combination of battery box replacements for our smaller trucks and then integrated fuel cell solutions for our larger trucks. And here, in the picture on the left, you see one of our container handlers with the fuel cell engines. In fact, it has 2 of those integrated. These are about to go to customers to go through an evaluation at a port in North America. So that's how we are using fuel cells to extend the capability of electrification. Data is becoming increasingly important for our customers to make operational decisions. A telemetry system has the capability to provide data about the truck, the operator, the operations itself, so customers can make data-based decisions on productivity and cost of ownership. This is becoming a critical part of industry and warehouse 4.0, and we're leading in this area in North America and deploying it globally. So I've shown this before, our operator assist system. As I said, space is becoming limited for our customers and the concentration of goods, the warehouse infrastructure or manufacturing infrastructure, the lift trucks and people is tighter. So you need higher awareness. We're using sensors and software to understand where the trucks are, where these entities are within the warehouse environment, and then warn and take some action to improve the awareness of the operators and therefore, improve safety. We've worked with one of our key customers to develop this solution. We're implementing it in multiple warehouses as we speak, and then we'll roll it out to the same and adjacent industries where this makes a lot of sense, and we have a huge amount of interest from our customers. Finally, on the product side, I'll talk about automation. This is a journey we've been on initially with partnership with JBT and Balyo, but also developing -- internally developed solution using automotive technology and again, a modular and scalable approach where installation of these solutions are very simple. We're kind of eating our cooking first on this. So we're applying it to our own plant initially, and the first trucks are going into the new line that produces the new truck I just talked about, our A and N series. Our plan is to roll this across our facilities over 2021 and 2022 and then introduce it through our dealers to the marketplace in 2022. So that's the product. Our manufacturing strategy is pretty straightforward. We want to build trucks in the market of sale. Now there are some exceptions to this. Our big trucks, for instance, are mostly built in Nijmegen, Netherlands, and our low-intensity products are built in our China facilities. So the other element is that we want to be responsive to the market. We're in order to delivery operation and so responsive to the marketplace is a critical element of our DFT manufacturing system. So we're always working on improving the footprint to provide that responsiveness as well as lean strategies to get the productivity we need so we can have the right cost structure. So this is a constantly improving area that requires continuous improvement. Manufacturing with our supply chain is not feasible. So we have a supply -- a pretty robust supply chain. We -- as we evolve this, we're using this concept called the center of gravity suppliers. The idea here is that we have a small set of suppliers and who are aligned to us. They're empathic to our business. They understand it. We have the agreements with them to support us as a priority, and it's a global network. So suppliers have the ability to provide the right cost but at the same time, provide resiliency and flexibility. So that is the supply chain that we're evolving to support our operation and the new platform of trucks. In summary, I'll say that we have a wide and deep kind of product range, supported by technology that drives both productivity and sustainability and then a way to configure these to match the needs of our customers. Tony will now tell you a little bit more about how we go to market and how do we work with our customers. Thank you.

Thank you, Rajiv. My name is Tony Salgado. I'm the Chief Operating Officer at Hyster-Yale Group. I'd like to take a few moments to build upon the Hyster-Yale strategic direction that Al and Rajiv had introduced earlier and to expand a little more deeply into the commercial objectives, strategies and progress that we're making within Hyster-Yale. To understand this, I'd like to first look at how the macro trends that are affecting our customers and their businesses are shaping our commercial objectives. Our customers are increasingly looking at ways to solve for challenges within their work environment, such as the changing demographics, the tightening workforce and labor and workplace safety. They're looking to better serve their customers in a growing global market with e-commerce and intensifying demands on lead time. They're looking to become more competitive with the introduction of emerging technologies such as automation. And as their fleets grow and the number of locations grow and the demands on their business grow and they are leaning towards more data-driven decision-making, they're looking to work with smarter, more engaged OEM partners. So informed by these macro trends and driven by our objectives for profitable growth, Hyster-Yale is working to transform our commercial competitiveness in this evolving market. We're looking to dramatically change the results we deliver by reengineering our commercial operations to better understand our customers' unique industry requirements and to connect those with our transformative and innovative solutions that Rajiv was describing earlier. We're looking to do this through the deployment of roughly 23 different strategic initiatives that are grouped into 5 primary maturing strategic commercial projects that are driving our transformation. These initiatives seek to change the way we perform and the way we approach the different elements of our commercial processes. Starting with the way we understand our customers and give definition to customer focus through what we call an industry-focused approach and how we grow our participation by operationalizing our sales management and how we better connect with our customers to deliver our message through advanced selling systems. And then how we shape and form the experience and the outcomes of our customers in their operations by delivering increased aftermarket solutions. And then how we remain connected with our customers throughout the entire journey to make sure that we are having a greater influence on the entire customer experience, outcomes and driving loyalty for the long term. Behind all this is Hyster-Yale's commitment to take a greater leadership role, moving from the more common OEM marketing bias to getting more directly involved in the full sales connectivity with our customers, ensuring that side-by-side with our dealers, we are driving the customer experience and driving our performance in the market. So first, I'd like to talk to you about the industry focus. Our industry focus specialization aims to create a very differentiated value. We're looking to move from a more general approach to market to a highly competitive customer focus on the unique requirements and problems that need to be solved within their industry. We've proven that this approach works with our exceptional share performance in a few key industries such as paper, metals and most recently, our retail industries, where we've really submerged ourselves as a company into understanding those particular industries, understanding their applications, driving a specialization, tailored solutions and tailored aftermarket programs that set us apart from the competition. So we look to expand on that as we move forward across all 22 industries and to accelerate and deepen our current blueprinting process where we dive into the applications, identify those toughest problems that need to be solved, develop innovation, sales playbooks and tailored aftermarket programs that will give us a differentiated value to our customers. And the continued nature of this program gives us confidence that we'll continue to become more competitive in these various industry segments while, at the same time, helping our customers keep pace with a changing and evolving market. One of the ways that we intend to realize industry-focused approach is through the highly competitive and highly customizable product, modular and scalability concept that Rajiv introduced earlier. In 2018, we made a significant investment in China, which has opened up the opportunity to introduce a new line of products that targets a segment of specifications ideal to driving our performance in emerging markets as well as providing a competitive solution for our customers and some of their lower-intensity applications in the developed markets. We're seeing this to prove to be very effective in growing our participation and our ability to compete. But more importantly is that we're developing the capability to leverage this concept of scalability to tailor our solutions in the marketplace. And this is particularly important because as we expand on this concept and introduce an entirely new line with a very infinite configurability in the A and N series that Rajiv talked about, we're well positioned to exploit the potential of this product to increase our competitiveness in the market. We also look to realize our industry-focused approach through enhanced commercial capabilities in delivering emerging technologies. One of the key challenges our customers have, while they're looking to adopt these new technologies is concern and apprehension about the risk and uncertainty of how to apply these products, how to develop business cases for these products and how to support them and realize the full benefit. Several years ago, we introduced the emerging market technologies division, which is focused on partnering with our traditional sales and aftersales groups to help our customers, to understand how to apply these technologies in their applications, to develop those business cases side-by-side with them and then to work with them throughout the entire process of installation and setup and realizing the value with after service and support. This approach has proven to be a competitive advantage for us and is going to provide a vehicle for us to introduce these technologies very effectively as we move forward with an expanding line of emerging solutions and emerging technology solutions going forward. The second set of initiatives is focused on growing our participation in the market, and we intend to do this first through enhanced distribution capabilities, which are intended to increase our competitive capabilities and advantages. One of the core ways we intend to do this is through our leadership and taking a stronger level of participation in the -- driving the customer experience and the customer outcomes in partnership with our dealers to provide a seamless experience that we call the As One customer experience. One of the core ways we intend to do this is to continue to work through our strong and capable independent dealer network, which is heavily invested in growing their capabilities in sales and service, in growing their business and is very competitive in being able to address the market with their local knowledge and entrepreneurial approach. At the same time, we're looking to further shape our distribution by growing their capabilities and their size and their ability to support the emerging needs market and Hyster-Yale's evolving strategies. But the most important part of this process is Hyster-Yale's commitment to engage much more directly in the entire commercial process, taking a direct ownership for the participation with our largest customers, global and regional across the industries, while working to augment and work closely with our dealers in the participation, competition and servicing of the rest of the market. The second element to this growth in participation comes through evolving our sales management systems, which are designed to expand our market engagement, which we intend to do by operationalizing our sales management processes, with a strong focus on location growth and sales strategy as well as a buyer focused connectivity. To address the largest customers in a market, which we estimate to make up about 60% of our global market, less than 2% of our total number of accounts, we are professionalizing our sales and pipeline management processes. And this starts with a structured approach to identifying across the different industries, the accounts, the locations and the key customers, which we're now able to do with the addition of business development and inside sales groups around the different regions. Furthermore, we're committed to growing our coverage and our account-based accountability for engaging with each and every one of these accounts and locations, which we've done through a restructuring of our sales organization and a closer alignment with our dealer sales teams. And then finally, we've digitized our pipeline management process, which has added a great deal of discipline and accountability to assure that we've got a performance management system around growing our participation. For the balance of the market, which is often represented by smaller, more transactionally minded customers, we are putting a strong focus on developing our lead generation and management capabilities so that our customers can find us. And once they have, we've now enhanced and launched new website presence for our Hyster and Yale companies, which helps the customer on their buyers' journey to better understand who we are, what solutions they need by an industry-based focus and eventually will allow a greater level of e-commerce capability. And finally, these customers in this segment are often very interested in very short lead times. So we've now launched and are deploying a market-leading inventory management system that assures that we have the right products, the right quantities at our dealer locations globally to serve these short lead time needs. The second element to growing our share, and in complementary to participation, is our ability to increase our closure through high-impact selling systems that we've designed to optimize the sales engagement. We're doing this through deploying best practice selling systems that are designed to help our salespeople partner with the customers in understanding their toughest problems and connecting those to the solutions that are available. This high-impact selling system is a tool and a process that we've launched nearly 3 years ago and has been maturing. And it focuses on engaging with the right people within our customers at the right time, early in the process to start to develop a business case for why change now and why choose us as your trusted partner going forward. This has proven to be increasingly successful but now as we shift to an industry strategy and focus, this becomes a great platform to deploy our specialization. And it's important now that we standardize and ensure effective deployment, which we've done through a strong training and certification program across all of our internal and dealer salespeople. And we've tied this entire process to a digital workflow within our CRM system that deploys the marketing tools, sales presentations and solutions materials directly to our salespeople when they need it, where they are in the field. And as the participation, industry focus and closure drive the top end of the engine, ultimately, our development of after-sales solutions designed to deliver enhanced customer value helps us realize the full benefit of that economic engine. We're intending to continue to drive and now accelerate the development of tailored programs to address the needs of our different industry customers, both large and small and from those who want empowered self-service to those who want more management fleets and eventually variable ownership. We're working to do this by amplifying our current legacy capabilities in both Hyster-Yale and the dealers through a major project to digitally connect Hyster-Yale, our dealers, our customers and their products, which will put us in place to support our largest customers and their fleets with a strong fleet management portfolio of offerings and consultative services to drive the total cost of ownership and productivity as well as with our smaller self-serve and empowered customers with greater connectivity with the dealer and the OEM, virtual service and support tools and a growing portfolio of e-commerce to help them support their fleet needs. And as we do this, we'll begin to aggregate a greater level of data that will allow us to more directly drive predictive maintenance and inform our innovation so that we can provide increasing value to our customers over time. This process is extremely important for us as we believe that the customers' operational experience with our products and achieving their desired outcomes is how we build long-lasting and repeatable business with our customers. The last set of initiatives is really focused on driving highly connected customer experience, intended to increase customer loyalty. This begins with the way we've deployed systems and connectivity within our own operations to ensure that we can deliver a consistent and seamless value to our customers. But more importantly, it's through the deployment of different digital systems to interface with our customers, which are linked together to provide an entire customer experience from lead generation and helping customers find us to the new website presence, which are heavily industry-focused that help our customers learn about their industries, the solutions and why we're the right partner for them to ultimately helping our customers to design their own trucks, configure their own trucks online side-by-side with our dealers in a very automotive, visual and virtual build that is going to be very innovative in our industry. And then to have a seamless transition into the after sales value after our order is taken. All of this together allows us, most importantly, to have strong engagement and influence with our customers throughout the entire process, working side-by-side with our dealers to dramatically change the level of experience and outcomes for our customers. Now the maturing of the system-wide new and enhanced commercial operations are intended to deliver growth and participation and competitiveness over time, but we're seeing the early results, which are confirming that our commercial strategic direction is effective. Through our efforts to better connect with our customers, we've seen lead generation grow dramatically over the last 2 years. And through our efforts to work through both our dealers and get more engaged directly in the marketplace, we've seen our sales activity increase nearly 300% since 2019, which has allowed us to engage and participate with quoted pipeline that has grown nearly 50% over the same period. And although we're in a unique market with explosive growth, we've seen strong global growth, region by region, relative to the market in our bookings, which is an early indication that our direction is going to be very promising for us and our shareholders. In summary, we feel we are progressing well with our commercial transformation, which is designed to deliver sustainable revenue growth. We've taken a strong leadership role in driving the desired customer experiences and outcomes. We've put a great emphasis on our industry-focused strategy and driving sales operational excellence, which we believe will create a robust market differentiation as we move forward, driving sustainable profitability for our shareholders and stakeholders. Thank you. Now I'd like to turn it over to Ken Schilling for a financial review.

Hello. My name is Ken Schilling. It's my pleasure to serve as the CFO of our lift truck business as one of my roles. Today, I'm going to walk you through the financial results for the lift truck business, both 2020 full year and first quarter. When you look at our revenue line, we were down 14% year-over-year as a result of the COVID event as units, parts and attachments were down. This was partially offset by improved price as we were able to raise price at the end of 2019 that carried through the year. Gross profit was down because of reduced volume, but we were able to offset that with reduced operating expenses, primarily related to our CV-19 cost containment actions. That really resulted in an operating profit that was consistent with 2019 and net income that was slightly ahead due to lower taxes and interest. EBITDA came in at [ $190 million ] for the year. And our key profit metrics, we did see an improvement in operating profit margin, although that, again, was in part due to our CV-19 cost actions. And we worked strongly on improving liquidity by reducing working capital. And while the backlog story is a varying story as you work through the year, we essentially walked out of 2020 with a backlog that was -- what was very comparable to the backlog we began the year with just 600 trucks lower. Now I'm going to walk you through the first quarter results for 2021. We did see unit production restricted by severe supplier and freight logistic constraints. That reduced our revenue by $57 million. Gross profit declined due to that lower volume, mainly in the Americas due to reduced manufacturing absorption. We also had higher freight and components cost as many of our peers have also reported. Our operating expenses were lower, and that was due to the retention of our CV-19 program, certain of those programs as well as we did restore incentive comp, which really shows the benefit of those programs were even greater than the $2.3 million shown on the slide. Operating profit declined to $15.8 million and net income declined by $12 million, which was lower mainly due to the operating profit reduction and some lower interest and taxes offsetting that. Operating profit margins declined during the quarter compared to the prior first quarter, which again was relatively unaffected or lightly affected by the COVID event. Net working capital was still lower than the first quarter of last year. But the backlog is really the big story coming out of the first quarter. We have a record 60,000 units in backlog worth $1.5 billion in future sales. At this time, I'd like to introduce a video that shows the transformation in our Yale brand. And then following that, Roberto Scotti, will present the Bolzoni portion of today's event. [Presentation]

Welcome to the Bolzoni presentation. I am Roberto Scotti, President and Chief Executive Officer, of Bolzoni S.p.A. Let me introduce you in -- let me say, Bolzoni world. Here, we have all our plants around the world. And one of the reason why we have all this plant in many different areas because we want to be close to the customers. We want to be there in order to provide the support, in order to having the customer that feel Bolzoni has taken care about him. The first plant that we have is in Italy and is our headquarter, in Piacenza town. And then Piacenza is about 30 miles south of Milan. Then we have our plant in the U.S.A., Salinger in Alabama. And here, we are manufacturing attachment and cylinder for America. The plant we have in Finland, Jarvenpaa, nearby Helsinki, it's the plant of Auramo. Auramo, we bought Auramo in 2001. Auramo has been set up in 1947 and then is specialize in the paper mill in the [ base land ]. And this is one of the reasons why we have this plant in Scandinavia. Because there, there are a lot of paper mill, there are a lot of forests. Germany is the Meyer plant. And in Germany, we are specialized in the beverage. Meyer is an old German company set up in 1953. And we bought this company in 2007. And then it's important for us to be in Germany. Because in Germany, there are a lot of OEMs. We have a lot of customers there. It's the biggest market in Europe. And this, of course, we are taking advantage to have a decent size and strong presence there. We go to Brazil, and this is the last manufacturing plant that we set up. Unfortunately, that area is -- they have a lot of problem today, but I am expecting to have in the near future quite interesting growth. Because this is going to be like a hub, not only working with Brazil, but working also with Argentina and Chile, so to have a significant presence of our company in South America. China, we have 2 plants in China, 1 in Wuxi and 1 in Hebei. And this we set up this plant in 2000. We decided to set up this plant in 2010. It was also, I would say, quite a brave decision because after 2009, that, of course, we had a lot of problem as all the industry around the world has a problem. We decided to make big investment. And then we set up these 2 companies in 2011, Wuxi manufacturing attachment, Hebei manufacturing forks. Now let me go inside a little bit our attachment business. We are one of the world-leadings manufacturer of lift truck attachment, forks and lift tables, cylinder and transmission, with the most extensive product range, leading global market share. Why attachment? Because attachment increase dramatically the productivity when you are handling a load, and also increase very much the safety. Can you imagine how you can move a big roll that can have -- a paper roll that can be 6 tonnes as a weight and then keeping this vertical, having to move horizontal? This plant can do that. And also when you have the double pallet handler, we are able to carry 1, 2, 3 up to 6 pallet, increasing dramatically the productivities in the business. And we have every type of product, we have the -- exactly good attachment. And if you look at our portfolio products, 47% are represented by attachment. And you have 13% that is represented by cylinder, transmission are 30%, fork 7%. This is [ a little bit ] our portfolio product, also with the lifting table that has 3%. And to complete a little bit the information about Bolzoni. Bolzoni is a group of 18 companies spread in 5 continents. We are manufacturing more than 3,000 products. We have 1,300 employees. And then where we saw before, we have 7 product plants. And then you can see on the map, they -- basically, the red are the production site, the blue are the commercial subsidiary of Bolzoni that are based in the most important countries worldwide. When you have a country that is not so important economically speaking, we are going to have independent, let me say, distribution. Now we are talking about our core strategies, multiple dimension of growth opportunities. And the first one is the Bolzoni transformation. We want to transform our companies from 3 brands in 3 companies in 3 brands in 1 company. We want to exploit all the synergy that we can have in Americas and in China because these 2 areas are very important, let me say, for the business. Hyster-Yale and Bolzoni, this cooperation, can bring a lot of opportunities to us. We have a very strong relationship with the OEMs. We start many years ago, and this has continued to be quite interesting for us. And we want to also to be on the forefront of the technology with the AGV vehicle, automatic guided vehicle. And we have targeting new customer. That is a commercial strategy, very effective. We want to talk later about this. We have the Silver Line product that another important product in the market, and we want also to increase our rental and second hand activity as attachment. All this strategy brought to have a very good financial number. The Bolzoni transformation, transformation, as I mentioned before, when we bought a company like Meyer, Auramo, with a very long tradition, we told to the Managing Director, work has -- you should be the entrepreneur here be independent, do what you believe is correct for the company. This brought a lot of success to Bolzoni. But this framework is a little bit [ at hained ]. Now we have to compete worldwide and we have to have quite strong at the helm of company, of Bolzoni. So this could allow us to have alignment among the companies, one solid and committed team, fix a common target, share best practices, allocate and coordinate resources where needed, new common talent approach, market unification, gain speed in the market. So all this activity can be carried out if you have, let me say, a very solid group. The biggest opportunity we have are in Americas and in JAPIC area. And this is the plant that we have in America that is in Alabama, in Sulligent. And here, we are going to make a localization of all the product that we are selling in America. And we want to expand our range in order to be able to serve the customers, all the customer that we can have in America. And it's important for us to cover the North American market and Latin America. Furthermore, there is also the possibility to expand our business, because this plant is manufacturing also cylinder. And there is a lot of opportunity in America for this expansion. A lot of companies that need the cylinder, and we truly believe that this can be a success for our companies. The other area, as I mentioned, is China. In China, we have the Wuxi plant where we localize all the product that we are selling in JAPIC. We have a very competitive price and a quick delivery time. This is one of the reasons of our success there. But also, we are manufacturing attachment that are sold in other parts of the world. It can be in Europe or can be in United States. And also, we are manufacturing part and component for the factory, all the factory that we have around the world because, of course, it's a matter of we want to be -- keep our cost down. The fork plant has been very successful, I have to say. Last week, for example, in 1 week, we sold 16,000 forks. That is amazing. So this plant is going to deliver between 400,000 and 500,000 forks this year. And this plant started in 2011 and are considering after a few years to be able to deliver such a big amount of product. The synergy with Hyster-Yale are, in my opinion, a great, great opportunities in many places. In Americas, we have rededicated 5 salesmen to support the Hyster-Yale organization in United States to promote our business inside directly the national accounts, inside the dealers. But also we have a program in the EMEA, we have a program in China, Asia Pacific. We have a program as a factory [ fit ] combination between our attachment and the Hyster-Yale forklift truck in the AGV. And all these actions are going to bring a big increase of our sales in the near future. The relationship with the OEMs has been, let me say, fantastic. We start beginning of 1990s, exactly 1991. And then we got the most important year after year, the most important producer of the forklift truck in the world. And this company gave us a lot of business from one side. From the other side, they gave us a lot of visibility because the dealer are getting -- they totally track or [ they see oh, he's ] installing the Bolzoni attachment. Oh, he's installing a Bolzoni attachment. And this, of course, creates a lot of opportunity inside the market. We are selling in terms of -- to the OEMs of 58% in Europe, 33% in America and JAPIC is 9%. And mostly the product that we are selling are the integrals like shifters, carriages, attachment, the forks and the hook-on side shifter. So -- but we want to be on the forefront of the technology. So cooperating with AGV producer to develop, design, manufacture, specialized attachments for AGV applications. AGV means automatic guided vehicle. It's a driverless vehicle that has to be - it's quite sophisticated. For this reason, also our attachment has to fit in this scenario. And it's the -- our know-how can be quite high. And then the fact that we are able to increase the Bolzoni know-how with this -- in this industry, it can be good for the company because we can transfer this know-how to the other product of the companies. Targeting new customer strategy. This is a strategy that is related to 4 areas: white goods, beverage, pulp and paper, 3PLs/automotive. In this area, there is a lot of -- they are consuming a lot of attachment. And it's important to be in this area. And we selected the biggest company worldwide, the company that are working in these 4 areas. And with our strong sales team, we are chasing all the plan that they have around world, creating connection, creating reference and creating approval for our attachments. So tomorrow, one of these companies buying the forklift truck, okay, what can be A,B,C, but they can say, okay, I would like to have the Bolzoni attachment. And this is something that is very important. Because if you look at our statistics, our sales, you can see that we are increasing our market share in these areas. You see the beverage. It's in -- just recently, we have been awarded a preferred strategic supplier status at a major beverage customer. We are working with many very big customers in the beverage industry. And do you know why? Because if you look at the double pallet handler, that can carry 1, 2, up to 6 pallets and then reducing -- or increasing very much the productivity, reducing the time to transport the goods. This clamp has been invented by Meyer years ago. So we have a history behind us. That allowed us to go in the market with this history and to be recognized as the best-in-class. With the home appliance, also here, it's carry-on washing machine or TV, they are quite fragile for this reason. We are able to provide attachment that we call intelligent clamp, that automatically can set the pressure required for the different type of load, for the different weight of load, for the different dimension of the load. And this is a great help to reduce the damage of the product. And the same can be in pulp and paper. Auramo is well known around the world because since 1947 it continued manufacturing paper clamp and base clamp for this kind of thing. Also, he developed intelligent clamp that can set the pressure and not have their rolls go out of roundness. And they're saving a lot of money. Because if you put in a printer machine, a roll that is not perfectly round, you cannot -- it doesn't work. And you can spend a lot of money because you have a lot of damage for that. Another area where we are very strong is automotive and 3PLs. 3PLs is gaining ground because it's -- e-commerce is more and more popular. But also as automotive we have been selected as a preferred supplier by several customers in automotive industry, because we provide a good product, very solid product. And after they test our product, they gave us, let me say, the approval. Silver Line is a unique product offering and unique attachment manufacturer. We, as a Bolzoni, we are the only one in our industry that is offering 2 line of product: the Premium Line and the Silver Line. The Silver Line range has been designed in Germany, but is manufactured in Wuxi, completely in Wuxi. And there's been a -- it is sold on a worldwide market. And also, we made stock centralizations in Europe and United States in order to deliver the product because the product is coming out on the shelf directly. You also have to consider that this clamp, the Silver Line, cost about 30% lesser than, let me say, the Premium Line or 30% less of our competitor. So it's a very strong clamp with a very good price. The delivery is immediately -- immediate. These, of course, features brought this clamp to be very successful worldwide. And we want to be in touch with the market. Also rental is a good way to be in touch with the market. And we want to increase our activities in the area because it's a good business. But of course, I would like, again, to offer the support to the customers, the customers to see Bolzoni as a provider of good product quality, service and support. Okay. Now we are talking about the Bolzoni summary. We divide our sales between our core business and legacy business. You can see that, in 2020, our sales has been reduced 18% and basically was due to the COVID that impacted our business. And as operating profit, we have a lower margin due to the volume decrease, offset by we try to make a saving, cost reduction, short working time. And we didn't hire person. And then also, we have a cost reduction during -- due to the factors we have our consolidations for the benefit of the employees. If you look at the quarter, first quarter 2021 against 2020, also here, the core business is in line with last year. What is down is the legacy business. And the legacy business was impacted by the fact that we had problem getting the materials from India, from China, due to the transport not available. And this created, let me say, some problem. In terms of the core business, the fact that we are at the same number of last year, but in reality, the order intake in the first quarter is very, very high. We have a quite big backlog. And then I'm sure that, in the next, Q2, Q3, we can do quite a good month because we have the orders. We must transform the orders in, let me say, in invoice. Considering the operating profit, we have a decrease of $1.9 million. That's from lower sales volume, increased material and freight cost and manufacturing efficiency, restatement of prepandemic employees compensations. Of course, the net income followed the operating profit trend. Our commitment is a long-term goal to achieve 7% operating profit target. Thank you very much.

Thank you, Roberto. That was Roberto from Milan. Now I will introduce Lucien Robroek, President and CEO of Nuvera, to provide an update on Nuvera.

Good morning, good afternoon. Thank you for giving me the opportunity to give you an update on Nuvera fuel cells. Last time I talked in this Investor Day meeting for Hyster-Yale Group, I told you that I felt that the hydrogen market is not just a hype. We see a lot of investment coming from all kinds of angles, governments, infrastructure and obviously also systems and vehicles. But right now, the expectation and the forecast that we are getting is even more brighter. The expansion of the market is really, really going on. And we believe the inflection point actually is now. Now if you look at the numbers, where today we're still only a couple of billion dollars in that market of hydrogen vehicles. The total addressable market that we see forecasted in 2030 is almost $100 billion. And sure, most of that will come from the passenger cars, the automotive section. That is because of the sheer size of that vehicle market. Many of those passenger cars will still be fully battery-driven with a plug-in solution, but we believe that the top 3 that you see here are the ones that give us the first adoption. So commercial transport, buses, delivery vans, vehicles, light trucks. But also, material handling will continue, and that is already the most mature market today in fuel cell engine-driven vehicles. But there are many other heavy-duty vehicles that we see coming up and are really accelerating in their developments. Now why is that? How do we see that first adoption coming? If you look at this slide, it is a comparison between the traditional combustion engine in these heavy vehicles and light vehicles. And on the vertical axis is the competitiveness versus fully battery power-driven electric vehicles, which is the alternative for green energy of combustion engines. Now fully battery power here means that you still have to charge it and you need to have chargers and infrastructure. And that is where these sweet spots, this green box, comes into play. That right-hand upper quadrant is really focusing on heavy-duty vehicles that don't have the option of using batteries only that you plug in and charge. First of all, the number of batteries and the weight of the batteries would be way too excessive to carry -- be carried in that kind of a vehicle. But secondly, they're typically also used for heavy-duty operations, meaning that they need a 24/7 availability, and they don't always have a well-scheduled time to charge. So fuel cell engines as an onboard charger is the real solution for these electric vehicles. So how is Nuvera playing in that mobile market of fuel cell energy? We have launched in 2020 our E-45, our 45 net power engine, and launched it fully. But also, we launched our E-60, a more powerful engine that can be used for the Chinese market and is in accordance of the Chinese subsidy rules that have changed. Now the engine controls are something that make our engine unique. We've used our 20 years of experience in many applications and broad applications to optimize how to control the fuel cell stack. And we've come up with an engine control that is tested extensively in our hundreds of units that we have in the field today in Materials Handling. The second point that we feel is very important, that is easy to integrate into the electric system of electric vehicle there. And it makes sure that not only the engine is well used, but we also have an optimal battery life that goes with that engine. Third point I want to make is that we are using a state-of-the-art telemetry that will be going into our engines towards the end of the year. And that will make sure that the engine is controlled and monitored well, and we can even make adjustments where that is required during the life of the engine. Now the core of our engine is really our fuel cell stack, and that's where the uniqueness of the Nuvera design comes in. But we are already in our eighth generation, moving to the ninth. And we feel we have a very unique design that is giving us a very high power density that's really state-of-the-art and market-leading there. What it does to us and to our users is that it gives us a high performance while the design is very compact. It also increases fuel efficiency, and we feel that not only having an engine, but having the most fuel-efficient engine in the market is something that will become more and more important going forward in the vehicles there. The third point is that it's very scalable, and that is nothing new to fuel cell stack, but also modular and scalable in not only in the number of cells, but also in the active area that, that fuel cell stack can use. And that gives us design freedom, design freedom to package the stack and also gives design freedom back to the OEM builder that needs that space to optimize its vehicle design. Now we've put a lot of effort in making these engines and technologies durable. First of all, working with our suppliers that the components that we get are well controlled in quality and are protected during transport until they are safely embedded in our engine. Our own quality control in the factory is second to none. We're putting a lot of efforts in testing the cells, the stacks and each engine and make sure that we have that data passing well before we will be shipping out our product. That will give us an extended stack and engine life. And how do we know that? Well, I'll give you 2 examples. What you see here on the right-hand side is one of our engines on a shaker table. And that table is really mimicking all the shocks and vibes that, that engine might be seeing in its life and even a little bit more. And mind you, we designed these engines and they are being used right now in materials handling heavy container handlers. And those units are very tough on whatever goes into a product. There's no suspension, and there is no air tires on those vehicles. So we feel that a bus and a truck and any on-road vehicles in a much lighter shock and vibe application than this engine is designed for. Now on the left-hand side, you see that we have a test facility, in this case in Italy, where multiple engines at the same time will be tested and are being tested 24/7 each at their own duty cycle that we need to provide there. And that gives us a lot of confidence in what we put out there in the field. Now having the right technology is not only -- and the best technology is not the only thing. We need to make sure it can be used with our users and also that it's easy to use, like I said before. The core of our engine in this kind of onion model is our Level 0 and Level 1, where the fuel cell stack gets some added components for the gas control and sensors. And that system is being sold to customers that have a lot of experience with fuel cell technology, because it's not easy to use a stack alone. That's why we've designed the fuel cell engine on the Level 2, the one that I just talked about. Because that's way easier to integrate into a vehicle, and basically mimics the idea of a combustion engine where the vehicle builder still needs to add a fuel system, air systems and radiators and connect it to the vehicle. All of that will lead to Level 3. That is obviously the total vehicle there. Now it's not as easy as I just mentioned. If you go through the whole phase of getting to such a vehicle, there are multiple steps that we've learned are very important and take time. So going from left to right, I'll explain what we see as the customer journey. First of all [ up is ], and most of our vehicle builders are already there, the decision to go electric. That takes time. The electrification is changing many of the mechanical parts into electric drives and electric controls and batteries and all of that. Then you come to the point where batteries -- plug-in batteries only is not going to do the job if you want to make it easier for the end user of the vehicle. And you need a fuel cell range extender that we talked about. That in itself needs integration. And by then, obviously, we're working to make sure that, that customer will choose Nuvera as its fuel cell engine supplier. Well, after that, that typically is a purchase of 1 or 2 units, they will go into demo vehicle, conduct a demo, test it, being certified before they even get to a decision of series volume. Now this is a very lengthy process. It can take 1 to 3 years if you -- is our experience, if you go the full way from left to right here. Now fortunately, it's -- many of the customers are already somewhere in the middle, and we can shorten that cycle. And on our side, we have put teams in place that will make a customer going through the cycle faster and easier. Our application design engineering groups, where we have people in every region, but also very strong central team, will help the customer integrate, design and test the demos up to their series volume. We do that through working with integration, engineering consultants across all of the global areas in the world, but also advising component suppliers and working with them to make the best of all of these units. And I'll give you a couple of examples of actual customer engagements and programs that we're working on. We have many more that we'll talk about a little later, but where we cannot disclose the name. But for these ones, we can. So going from top left to right, the first thing I want to point out here is the mobile power station that we're working on the concept with Dannar. Then on the bottom left, the capacity terminal tractors, which is a new program that together with Hyster-Yale we're exploiting. I have a separate slide on that. There, we are already integrating the fuel cell engine in their electric system. Then the midsection, the most obvious one right now, is our Hyster Toploader, the heaviest piece of equipment that Hyster is currently providing in the container business. And we just entered the demo phase and the testing phase there. And on the right-hand side, a picture that I've shown last time, that's the certification. In this case, in China, with our KingLong bus with our Chinese partners. This bus has an E-45 engine in it. But because of the changing subsidy rules last year, we now are in the process of certifying an E-60 engine in the same kind of bus with the same system so that, that will be well taken care of. So all of these different phases of the customer journey are being covered not only by these customers, but by many more. Capacity terminal tractors. Again, this is a program that we're doing together with Hyster-Yale. And jointly, the 3 of us are making sure that by the end of this year we target to have 1 or 2 prototypes being tested. There's a lot of push on it because these vehicles are very well suited to work in large warehouses. They're currently obviously also working in container ports. And they play an important role in distribution. Now why is this unit so important? And that is because here many of the advantages of hydrogen and fuel cell engines come into play. It's a unit that is being used 24/7, heavy duty, no time for charging and still going green with an electric vehicle. Now another advantage that this has is that the adoption is easier because the fuel station can be located in the area where this vehicle is driving. It's actually towing these containers from one area to the other area. But because it's now emission-free, it might also change the way of how we think about logistics in the warehouse, because this one can also drive inside. Now we are ready for the customers that are already asking for this product with our series production. On the right-hand side, you see our automated stack building in a fancy picture in our clean room. I'll have more on that. And on the left-hand side, our series lean manufacturing that we are installing and training our operators on, to make sure that we have that series production ready. The automated production that we have for stacks, and here you see 2 duplicate production systems, are designed to -- up to 10,000 units a year in double shift. Again, we have 2 of those, and it's clear that we don't need that capacity right now. So we use 1 of the 2 to make sure that we are optimizing the system. And it's ready to go to whatever area we need to produce close to the consumer market. And that's most likely China first. But again, that is not a given yet. What this automated stack-up does is not only provide capacity, but also make sure that we have a very well-documented quality control for each cell component. In fact, each of these stackers can reject a component that goes through this line and doesn't look like it should. And it's all automated. It's just being rejected and replaced by a different piece of that component. And it records every specific data point of that stack before it's going into the end-of-line testing. We use the best possible components for feeding those lines. That means that we do a lot of continuous improvement in evaluation and testing, like you can see in this picture, in small stacks, in real-size stacks and even in engines. However, we know that we need to vertically integrate to in-source some of the major steps in that component production. We do that for cost. We do that for quality control. But we also do that because we have some of these production steps that are very typical for Nuvera that we don't want to share with our suppliers; obviously to protect our intellectual property, but also the secret sauce that goes in the manufacturing here. Having said that, we are ready to exploit all of that, and that brings me to perhaps the biggest change, visible change that we've made in the past year. So despite COVID and all the limitations, we've made major changes in the way that we participate in the market. In the past, we were more focused on the Hyster-Yale programs that are still ongoing and use China as a focal point to reach volume required for the cost reduction and the ramp-up phase. But what this area shows is all the countries that we're currently really engaged with customer programs. So these bubbles basically not only depict the countries, but also the size of the opportunity that we're working with that customer on. What we did is we put regional leadership in place. First of all, in Europe, where we now have a business development team, that is supported through our global application development team, centrally but also locally. And in China, we did the same. We're not only working through the partnerships we've put in place there, but we're also going direct and finding other applications in China. That started at the beginning of this year. Now in North America, we are basically reproducing that system because it's turning out to be very successful in Europe and Asia. And that is going on right now. So how does that play out? If you look at the chart that gives the number of customer engagements, I think it tells the story. So even in these past, say, 5, 6, 7 months that we've started to make these changes, we see an enormous acceleration of our participation. First of all, it will give you a better glance of how we're balancing the customer engagements across the world. We're way less dependent on China and what we do there. And even Europe is really, really growing fast here. North America as a market, I mean, hydrogen is lagging, but we see a huge acceleration and level of interest everywhere. And again, these are real customer engagements. It's not just a phone call or trying to get in touch with the customer. And the way how we follow them and how we know that is, if you look at it this way. So you see the same customer engagements, where then in a split where they are in the customer journey with Nuvera. The yellow bar is basically the left-hand side of the customer journey that I showed. It's where we are working with them to get Nuvera in their design. And then we'll move into the green section where eventually they will get to a demo vehicle proposal and a quote from Nuvera to that end customer. Now it's paying off. It's not only increasing the customer engagement, where we're getting the first orders in the past 2 months outside of our Hyster-Yale programs and outside of the China bus manufacturing. And mind you, we're just at the beginning of what the market is expecting there. So if you look at '21, where we are in total for the global demand for fuel cells, both in units and in revenue and what is expected to be there in 2030, you'll understand that the big uptick still needs to come. Well, we're ready for it. We're ready for volume in our production, in our aftermarket, in our parts support. And we feel that we've made great strides in being ready and being able to expand that participation of Nuvera in that market size. Obviously, we will be adding more products to the portfolio, so ranging not only from the 8-kilowatt BBR we have today, but well above the dual-engine solution we have on the 90-kilowatt that we're using for our reach stackers and top loaders. But if you look at the financials here, it's obvious that we are in that middle area of years where the revenues still need to grow. And we are making a lot of investment in all the areas that I just said. So compared to 2019, the revenues went a little bit -- went down. That is because we basically are ending and finishing the engineering programs that we traditionally were executing for third parties. What we haven't picked up on are volume yet. It's still only kind of one-offs, two-offs that we're actually selling there. And you'll see that back in our operating profit. However, we did manage to cut back in our expenses. That is because we put a lot of efficiency programs in place. And the other thing we manage is that we kept our R&D expenses up, as you can see in this slide. Now the first quarter of this year is not that different from last year. It's a continuation of the strategy that we've put in place, with one exception on this chart. And that is that we sold part of the shares that we have in 1H2, which is the gas production and distribution company that took over some of our [ R/P ] on gas production. But we feel that we're well positioned right now to -- within coming years to keep investing not only in product, but also in technology and on the customer side in the sales volume. So we feel very confident about the future. And with that, I want to invite you to ask any more questions in our Q&A session.

Hello. My name is Ken Schilling. I'm not only the CFO of our lift truck business, but I'm also the CFO of the public company, Hyster-Yale Materials Handling. Today, I'm going to walk you through our financial results for the year, the quarter. We're going to talk about target economics, and we're also going to look at our outlook for the business for the second quarter as well as longer term. First, I'd like to thank you for participating in our event today. We do appreciate your enthusiasm for our company and are happy to answer the questions that you present to us. I'd also like to thank, as Rajiv had, our employees for their dedication during this COVID event. Without them, we would not have done as well as we have. Now moving on to the key drivers over the last 5 quarters. When you look at 2020, you can really divide it into 2 periods. During that early first and second quarter period, we really saw the severe impact of COVID-19. During that point in time, our orders began to decline. We needed to make decisions in terms of using our backlog to keep our plants operating at lower but efficient levels. And we did implement CV-19 actions that enhanced liquidity and reduced costs, but focused on triaging only those programs that were -- needed to be strategically funded at that time. As we moved on to Q3 and Q4, kind of that mid-pandemic stage, we saw a steady recovery in bookings. We were able to balance manufacturing to restore that backlog we burned, primarily in the second quarter, and also increase the manufacturing production levels in our plant. And we also continue to fund future growth programs through the back half of the year. Now as we entered into 2021, we saw kind of a change as the recovery is beginning. We are seeing very strong backlogs, in fact, record backlogs. We are seeing renewed challenges in our supply chain, both from logistics and from just getting suppliers to provide us with the components we need to continue to assemble in efficient way. We've restored our growth programs, and we partially restored our CV-19 cost-reduction actions. And then core, CV-19 still remains a significant challenge in certain countries around the world, and we're keeping our eye on that to be aware of what -- where the emerging threat may be. As we looked at the full year 2020 results, you've seen the lift truck, Bolzoni and Nuvera, financial results for this period in prior slides in today's presentation. They add up to the full year column with consolidating adjustments. And of course, we're now comparing them to the full year public company numbers as of 2019. For revenues, we were down $480 million. That's a 15% COVID-driven revenue reduction as units, parts and attachments as well as lower fuel cell engine sales really were offset only by improved prices that we were able to put in place before the year 2020 began. Our cost-containment actions offset the gross profit loss from that reduced margin, so that our operating profit was moderated to nearly the same levels as we saw during the 2019 full year. Net income was actually a small amount better by $1.3 million. And that's primarily due to lower taxes and lower interest. EBITDA for 2020 came in at just under $100 million. When you look at the key financial metrics as we work through the COVID year, our net working capital and our long-term -- our last 12 months cash flow from financing were enhanced by our cost and liquidity programs that successfully reduced working capital and increased cash flow from operations. This is really a direct result of that effort by the company. That resulted in increased cash and reduced debt as net debt came in at roughly a $90 million reduction year-over-year due to those capital programs, as well as lower capital expenses due to the triaging we did to focus on the key strategic programs. During this period, equity grew by $74 million, which meant that debt to total cap actually was reduced by 2%, going from 33% to 31% as we moved through 2020, the COVID year. Frankly, we came out of 2020 in a better position on liquidity than we entered it, and we're really clearly in a strong position to fund revenue growth and working capital use as we go through the post-COVID expansion. If you look at the level of uncertainty, we continue to see high levels of uncertainty and new and increasing headwinds that are presenting new challenges to us. We've seen an enhancement in the level of supplier component issues. We have identified many logistic delays and capacity constraints in the logistics supply chain to deliver components to our plants. And frankly, that component cost is going up due to material cost inflation in commodity prices. We are paying expedited freight and premium freight when we need to, to get parts to our plants to build trucks on schedule. And of course, we do see nonrenewal of U.S. tariff exclusions as being an issue to us, as approximately half of our Chinese imports we pay tariffs on, but approximately half in the past have been able to receive exclusions, which now is not being considered by the current administration. And then finally, the timing of price increases compared to the cost increases that we're realizing is an item that we have to monitor, and we expect to see margin compression during a portion of 2021, but then improving as we leave the year. When we look at the consolidated results, now considering those new headwinds in the first quarter of 2021, we'll see that revenue has declined by about $54 million, primarily from the severe supplier and logistics issues we discussed. That lower volume, which mostly affected the Americas, reduced manufacturing absorption, and we incurred higher freight and component costs. Operating expenses were favorable by $1.2 million. In other words, they were lower. And in fact, we had $9 million of incentive comp in the first quarter of 2021, whereas in the first quarter of 2020, we did not have an incentive comp accrual. So the cost constraint -- the cost-management programs that we have in place are generating roughly a $10 million benefit. And then as you look at our net income, it really did follow our operating profit, but it was partially offset by the 1H2 stock sale at Nuvera, as well as lower interest and taxes as we look at the -- the net income results for the company. EBITDA for Hyster-Yale came in at $23 million for the first quarter. When you look at the trends that affected the lift truck business during this COVID event, there's kind of 2 quarters that really stand out: the second quarter of 2020, where the peak of the COVID event really did impact our booking volume and constrained our plants and activities, and also the first quarter of 2021. In the second quarter of 2020, we obviously saw a reduction in booking volume. Our manufacturing volume needed to be adjusted, and we began to burn backlog to do that. We did have some supplier and freight constraints, but they were matched up against that lower level of manufacturing volume. Our commodity and freight inflation was not present at that time. And then U.S. tariffs were only at half of the level that we expect going forward if the administration's flight path continues. And of course, we did have stronger prices coming into 2020 due to the price increases we took in prior periods. When you move through the middle quarters there, Q3 and Q4, you're beginning to see booking volume improve. We were able to improve our manufacturing volume, but we did begin to see supplier and freight constraints begin to appear in the fourth quarter. And of course, also the commodity and freight inflation began to appear in the fourth quarter. And tariff exclusions were beginning to drop off in the -- towards the end of 2020 and beginning in 2021. Now you get to kind of that second quarter where we have a severe COVID impact. And here, it's really an opposite story. We have incredible levels of booking volume, but we're restricted by what we can produce, by what we can receive from our supply base. We are beginning to see higher commodity and freight inflation. And the tariff exclusions, again, are beginning to lag off as the renewals are not being processed by the administration. And then going forward out of 2021 Q1 into the remainder of the year, we see booking volumes stay strong, but begin to taper back to long-term levels, matching the economic performance. Our manufacturing volume, we expect to improve as the logistics and component constraints by our suppliers ease. We do expect to see commodity and freight inflation stay at levels, but then begin to taper off as we move through the year. A level of margin compression, we expect to see in Q2 and Q3, but then easing off by the time we get to the end of the year, where the price increases that we announced early in this year will begin to take hold over a larger portion of the backlog that will produce. When you look at our liquidity, we did focus on maintaining high levels of liquidity during this COVID event. We did have unused borrowing capacity of $265 million and $103 million of cash on our balance sheet at the end of the first quarter. And we are keeping certain cost-containment actions in place until we feel we're comfortably clear of the COVID event. We are investing in our fuel cell business to commercialize our fuel cell technology. We're focused in the lift truck business on expense and capital investments in our strategic programs to accelerate growth and enhance margins. And then finally, in the attachment business, we're investing expense and capital in strategic programs to accelerate growth and enhance margin, and that's primarily a geographic story. But after we've considered the investment in our business, we do return to our shareholders. As you can see, we have a dividend that is regularly paid. We have increased the dividend, although at a slower rate during this COVID event. Our Board recently announced the dividend for the second quarter and increased it for that quarter. Obviously, the Board will decide the appropriate dividend on a quarter-by-quarter basis. But year-to-date, the dividend is $1.29 per share. We have had share buyback programs in the past. At this point in time, I don't believe it's high on our list of sources -- or uses of cash in our outlook. Now as we work through the COVID event, we did identify that we needed to reduce capital expenditures and R&D expenditures from our initial 2020 expectations. And as you can see in the boxes, both in capital expenditures and R&D, the reductions we put in place. When you look at capital expenditures, though, we did continue to invest in our strategic programs in 2020. And we actually pulled ahead investments in programs related to digital marketing to assist our sales activity during the COVID event, where social distancing required us to sell in some situations in a different way than we had in the past. R&D expenditures were also reduced in 2020 from our original expectation. But now in 2021, we're back to 2019 levels and moving forward with the programs that are going to affect the future of our company. Now we hold ourselves to a level of profitability that we call target economics, and it's the goal that we work towards. We look at our plants and identify the production that we can produce. And going through the worldwide plant structure, we identified that we can produce 140,000 units. We do sell some third-party trucks. That represents approximately another $9,000 truck -- 9,000 trucks. Selling 149,000 trucks will generate $4.5 billion of revenue, along with parts and other service activities that we perform in the lift truck business. The gross profit from those revenues is $840 million at those levels and margins. Our operating expenses will come in at about $525 million. And our operating profit will result from that level of economic activity of $316 million. Now that represents a 7% operating profit margin on that $4.5 billion of revenue. So our target economic gap can be closed by increased unit volume at the appropriate margin level for our products. But it's not just a story about one snapshot in time. It's really about moving our sales forward and adding incremental sales. And for example, as we add 5,000 more trucks to our production, we enhance our sales by $155 million, which then, through this mathematics, will generate an operating profit of $24 million or an incremental operating profit contribution of approximately 15%. When you look at where we are today on target economics, our actual lift truck operating profit margin for the last 12 months was 2.7%. 0.6% of our variance relates to our margin being lower than targeted margin on units. That 0.6% can be mostly attributed to the impact of U.S. tariffs on Chinese components. So we think we're very close to being on track for margins of our products. Our real issue is volume. And as we fill the plants, we will be able to spread costs, both manufacturing and operating expense costs over a larger base. They, in turn, will generate a volume variance of 3.7% and really is the main driver of closing the 4.3% gap to our 7% operating profit target. As Al had mentioned, we have not only a 7% operating profit target for the Lift Truck business, but we also have a target to achieve a greater than 20% return on total capital employed. Bolzoni has similar targets to meet, 7% operating profit as their programs mature and they expand their geographic footprint and they transition out of their legacy products into more attachment sales. And then Nuvera's target is to grow revenue and subsequently move to breakeven and then on towards significant profitability in the long term. When you look at our earnings perspective for the second quarter of 2021, we do see increasing unit volume, but that's dependent upon supplier production of components and the resilience of the supply chain to deliver those components to our plants. Our operating profit improvement from our expected higher volume will be partially offset by higher material cost. Inflation, obviously driven by those commodities that underlie those components. Higher freight costs and a slow increasing of U.S. tariffs as more of our components now are not eligible for the exclusion. We also have higher employee-related costs due to the COVID actions that we had in place in the second quarter of last year that now have been fully reversed in the second quarter of 2021. Our net income will follow the operating profit trend. We expect to have higher income tax rates and a slight increase in the cost of borrowing, which will also drive improved EBITDA. Bolzoni is going to continue along with the global recovery of the counterbalance lift truck market, which is where most attachments and their OEM sales are really directed towards. That operating profit improvement from increased volume will more than offset the increased material freight and U.S. tariff costs. The net income will follow that operating profit trend, but we will have increased borrowing costs, which will also drive improved EBITDA for Bolzoni. Nuvera is really focused on sales prospect development for certified fuel cell engines, leading to committed sales transaction. Its operating profit will continue to be determined by product and sales development spend and a limited amount of SG&A expenses. Those -- the net income at Nuvera will really follow that operating profit/loss levels, but will sporadically be offset by the sale of noncore asset distributions -- dispositions where appropriate. And then finally, when we look at our long-term perspective for our business, the transformational programs at the Lift Truck business, most importantly, the modular scalable program, the introduction of new low-intensity truck models and the sales development activities that Tony described are really expected to drive volume increase and enhance part sales. The modular scalable program and low-intensity truck programs are expected to drive the right truck at the right price and cost to enhance operating profit and increase manufacturing volumes. Net income and EBITDA are expected to follow off profit trends and provide for the optimal capital structure to drive a targeted profitability and also achieve our ROTCE target. Bolzoni's transformation programs to enhance its Americas and JAPIC capabilities, along with the alignment of 1 company and 3 brands, will -- initiatives will drive enhanced revenue growth. This enhanced volume and the appropriate scale operations in each geographic region are expected to lead to improved manufacturing absorption and increased operating profit levels. Bolzoni is going to transition from producing legacy products for the Lift Truck business into producing more attachments over a period of time. Net income and EBITDA is expected to follow the operating profit trend at Bolzoni to drive towards targeted profitability and that targeted ROTCE for Bolzoni. And Nuvera, we expect to see the continued introduction of fuel cell engines and stack products that will accelerate the fuel cell as the fuel cell market is expected to drive increased top line revenue growth. The sale of those fuel cell engines and stacks products at industrial OEM component margin levels will drive increasing gross profits. And in time, those gross profits will offset our operating expenses. On a long-term basis, we expect move towards breakeven and ultimately profitability as production ramps to meet market demands. At this time, I'd like to reintroduce Al Rankin, who will provide you with some summary comments. While Al is -- while we're transitioning to Al, we'd like to request that you begin to submit your Q&A questions for the team. Thank you very much.

We're very excited and enthusiastic about the investment potential of Hyster-Yale. We hope that you are as well. We think that the potential is reflected by the presentations that you've just listened to. We have really been transforming our business and are at the beginning of a journey that we think is going to make a enormous difference in the company and in the financial -- and the achievement of our financial targets. We have, as you know, 6 strategic initiatives that are supported by a very large number of key strategic projects. At the Lift Truck business, we have our transformative products, modular and scalable, low intensity. We have technological accelerators, the electrification, fuel cell telemetry automation and web presence that you heard about earlier. We have our transformation of our sales approach, really a series of programs all built around industry expertise at Bolzoni. We have a shift from being loosely 3 companies to 1 company with 3 brands to take full effect of the potential for driving the overall capabilities of the company and the success in their various markets. And that's supported by growth programs for the Americas with our locally produced products, for Europe with our smart products and for Asia with the Silver Line. At Nuvera, we have a commercialization program for the E45 and the E60 engines that's now a global program, as you've heard. And we have the development of our commercial partnerships, including deep top-level partnerships to supplement the ongoing normal customer support activities. In doing all this, we're long-term focused. We're not short-term oriented. We think these projects will pay off over the next few years in a very significant way for the company. And with that, we'll now turn to your questions.

Thank you. Hello, everyone. This is Christie Kmetko. And as I mentioned at the beginning of the presentation, I will be moderating today's question-and-answer session. Thank you to everyone that has already submitted questions. We have a number that have come in. And to the extent that they are similar, I am going to combine duplicative questions so we can get through as many of the questions submitted as possible. If you have a question, please input any questions you have in the question box on the left of your screen. With that, I will get started. I'm going to start with questions we've received about our Lift Truck business. And our first question from the audience is with regard to the potential market size for automated products and how big is that? How are you thinking about costs and margins for these products?

Maybe you want to take that.

Yes, I'll take that one. This is a part of the market that's starting to emerge. Certainly, we've had some successes with key customers. For me, it's really focused on multi-shift operations and which can operate in what we call lights out. So -- and that, we feel that somewhere in the 25% to 30% of the market eventually once this technology matures. But that's probably a long journey. So we think there's going to be a ramp, probably slower at the beginning as the technology becomes more understood and adopted and then I think over the next 3 to 5 years, they'll then start accelerating. So ultimately, we think it's somewhere around that 25% of the high-intensity application.

And Rajiv, I suppose also a ramp from less sophisticated automation solutions to more comprehensive automation solutions as part of that.

Sure. I think it will probably go in both directions, Al. I think you're right, the more productivity-oriented solutions will get more complicated. But part of the reason we're developing IDA, the Internally Developed Automation, is that dealers can install them in simple, straightforward applications where automation is doing a part of the operation, not the complete operation.

Okay. How quickly can you ramp up the low-intensity products? And any risk of -- is there any risk of cannibalizing our higher-priced lines?

So maybe I'll take the first part of that, and Tony, maybe you could take the second part. The first part is, once we acquired Maximal, we put that program in place to start converting some of the -- those -- that low-intensity design to [ high-steel ] products, and we have started rolling that out about 2 years ago with a select group of products, and then slowly expanding the range that it covers. We feel good now that we are covering some of the key segments of the market. Our plan is, over the next 3 to 5 years, to completely fill out that range across all product segments. So the rollout started. The important products are already in place and then additional products will be rolled out. But Tony, maybe you could talk about how it is doing in the marketplace.

Yes. So we've been very intentional about the way we brought this new product range to market. It had a very targeted focus on becoming the standard product, the right product at the right price for emerging markets, but also just as importantly, to be a product range targeted at low-intensity applications within the developed markets. By nature of this, we did expect to see some cannibalization in our emerging markets in particular, where we're replacing standard level trucks with these lower-intensity emerging market-focused trucks and the customers experience a better product at the right price for themselves and we're experiencing and our dealers are experiencing a much improved margin. So we've seen tremendous growth and the ramp-up is moving very swiftly beyond our expectations at this point as we learn more and more how to apply these to increase our participation in the market and be more competitive.

Okay. The forklift business has a massive backlog opportunity with $1.5 billion in potential sales. But previously, we've given guidance that price increases aren't reflected in this backlog. How do you think about the margin that you'll be able to capture on the sales relative to what you've done historically baking in cost inflation and the supply chain disruption we faced? Can you provide support as to when you expect these headwinds to subside? Is it third quarter? Fourth quarter? What steps are we taking to minimize these issues in the [indiscernible] aside from price increases? What price increases have we done? And what will cause freight and supply chain prices to fall as the year ends? I know that's long, but it covers everything.

Yes. I think I'll take that. So let me start by saying that what we've seen is we expected some inflation coming out of the pandemic. And so -- and we expected that to be North America heavy from an inflationary point of view. And that's how it's turned out. And we've taken a number of price increases in North America since the fourth quarter of 2020. We took one at the end of the year, another one at the midway through the first quarter and then another one just at the beginning of this month. And there was also some surcharges put in place. But at the end of the day, a lot of our backlog has some elements of that price increase, but not all of it. And so that is going to be a challenge from a margin point. We'll see some margin pressure, especially in North America. Now that inflation is also now moving across the rest of the world. And we are putting price increases in place everywhere else as well to match the inflation we're seeing. Also in our plan, we had baked in some inflationary plans. So that's incorporated but not to cover the extent we've seen. So we will see some margin in a kind of compression in the second and third quarter. And then we'll come out of it with our newer pricing that better matches the cost to price as we go into the fourth quarter and 2022. In parallel to that, we are approaching some of our supply chain to talk about how do we get through this period. So that may be a potential opportunity as well.

I might comment on when we see some of these pressures abating, probably in the early part of next year.

Yes. I mean, I think that's really difficult to predict. We've been predicting that it was going to be a pulse that we would happen. And the inflation is broad-based. In all types of commodity, obviously, steel hits us the most, but we are also impacted by rubber, copper. And what we've seen is inflation go up pretty quickly along with the recovery from the pandemic. But the -- we expected a pretty quick return as well as capacity came up online to meet the needs, and we've seen that slow up. And so we think we're going to have a bit of a broader kind of going back to normalization of commodity prices, right? I think sometime next year, kind of late first quarter, early second quarter to midyear is when we think things will start to normalize more.

While we're talking, I think it would -- might be important too to just reemphasize the points on the supply chain disruption in terms of deliveries of components and how those issues are being managed by your team.

Sure. So of course, as we announced, we're about 4,000 units behind our build plan in the first quarter. If I think about the way, early in the quarter, the team was handling hundreds of suppliers, thousands of components. That improved as we went through the quarter. Certainly, the issues in India has -- and some of the freight constraints, especially around the shipping lines and container availability, have created almost a second inflection. But now we feel we're in a much better situation. Now we're chasing tens of suppliers and hundreds of parts. So hopefully, that gives you a bit of a scale for our issues. We're still having some disruption in our plants due to component availability, but it's much more under control. And we feel, by the third quarter, we should be in good shape.

The process that Rajiv has just outlined, it really has taken a tremendous amount of very focused energy. Our supply chain team, I think you could really say, is in a war room focus in terms of the nature of their activities, the hourly involvement as they deal with it component by component, supplier by supplier. And we're really pleased with the tremendous effort that they made.

And now one other comment just in kind of, again, thanking our manufacturing teams. They've been very adaptable in mixing what they can build with 1-day notice based on the component availability. So they've also done a great job. But thank you, Al.

Did you talk about the price increases that we -- that are currently in our backlog?

Yes, he did.

How well positioned is Hyster-Yale to transition customers from Class 4 and 5 trucks where the company has very strong market share into electric and fuel cell solutions? Where do you see your end markets currently positioned in the technology adoption life cycle? And how do you see the pace of transition from ICE to electric or fuel cell playing out over the next 5 to 10 years? And what are the key inhibitors and catalysts of the pace of that transition?

All right. Another long question, and I'll try and kind of handle it at a high level. So number one, there is absolutely a transition in process right now. Faster in some areas than others of the world. What's required is ensuring that we have the solutions where the customers don't have to compromise on their operations. So we get the right productivity at the right cost of ownership, which is basic principles that we're applying to developing solutions that I talked about. We've got a set of high-performance trucks being rolled out, starting with our kind of the 2- to 3.5-ton truck, which you saw where there's fantastic operator ergonomics and usability of the truck, to 7- to 9-ton trucks and then 8 to 16-ton trucks that basically look like their ICE variants and have the same performance capability. So those are being rolled out. We talked about fuel cell application, both in a smaller truck in the shape of the battery box replacement where you can recharge or refill the hydrogen in minutes and get back to productivity. Some customers have absolutely loved that. And I don't see it will part back to using any other way. It really drives their application and their productivity. In terms of how the progression, I think it will continue to accelerate. I think the transition will continue to accelerate as we put the right solutions in place that the customers can use. I don't know if Tony...

Let me just add 1 point to sort of clarify, if you will, the way that we want to focus on the question. I think the question was framed in terms of electric products. But the shift that we're talking about here is from 4-wheel internal combustion engine trucks to largely 4-wheel electric trucks. We have a very good market position in 4-wheel electric trucks, just as we do in 4-wheel internal combustion engine trucks. It's in some of the other areas like the Class 2 warehousing trucks where we have somewhat lesser position than we do in the so-called counter -- 4-wheel counterbalance side of the business. So we feel very confident that we can do well in that market and in that evolution. And secondly, with the -- a follow-on of the Iris -- or the modular scalable products that are coming along, as we look forward, we'll be applying those in the electric 4-wheel counterbalanced area as well.

Right. Thanks, Al.

There's a couple of questions here, so I'll combine them. At our 2019 Investor Day, we talked about our Lift Truck margin goals, that they were a few years away. Now they are 5 years away. And so the audience member was wondering why has the margin target been continuously pushed out. But along with that, given our tariff and cost issues, what is a reasonable time frame for achieving that target operating profit margin for both the Lift Truck and the Bolzoni businesses?

Yes. So go ahead.

Well, let me just sort of frame the issue as we see it. We're quite comfortable on the margin side that we'll be in the right position with our products in a relatively near term when we get through the immediate inflationary complications and as our new products come out. What is harder to predict with assurance is the strength of the market, but more importantly, the pace of our share gain programs. And so we are very encouraged at the pace that those are coming along, but it's difficult to predict exactly when that would happen. So what we may say over a longer term, over to 5 years, you can be assured that we have a near-term focus for trying to get to the number of units that Ken outlined in his presentation.

Yes. I think that's the key thing. There's 2 elements to hitting our model that we share. The first one is, are we getting margins on trucks individually. And we're pretty close to that. We will go through a period where that's going to get squeezed, but we've already taken the actions to bring that back in line as we get into 2022. The second, the bigger element, is volume. As stated in our -- in economic engine, volume is a major player. And so that's the piece that Al was talking about, where we start to gain traction on some of our strategic projects and gain market share, some of which we've already seen at the start of this year. Then we will start approaching that -- the numbers we need, these 140,000 trucks now that we've added capacity in China. So that's basically the...

So an important thing to keep in mind is that we're leveraging 2 types of fixed costs, and this has a very significant impact as you gain additional volume. And Ken pointed that out in his presentation. On the one hand, there -- we have the capacity in place to produce these vehicles. Secondly, we have the SG&A levels significantly in place. There's an element that increases as we increase our volume. But the incremental return on the trucks that we sell is very significant. And I would keep in mind that it's not simply one long-term goal that's achieved all of a sudden. Ken outlined in his presentation, I believe, the impact of incremental 5,000 unit increases and the incremental margin that, that generates. And so that's the key to thinking about that question in our minds.

Yes. I think the point I made was we're able to really realize a 15% incremental margin due to those fixed costs and OpEx and in our manufacturing plants with that incremental volume. So that's a big driver in our story.

Okay. Those were all the lift truck questions that we received. We'll turn to Bolzoni. And this question has been directed to Roberto, but I'll send it to you guys first. Roberto mentioned that there were 3,000 products, and that seemed like a lot. Have we seriously analyzed eliminating a large number of less profitable product lines to improve efficiency and improve overall profitability at Bolzoni?

Yes. So maybe I'll say a few words and then Roberto can talk in with more knowledge and more detail. But when we talk about 3,000 products, these are variants, they're base platforms where you can create these variants, and those are around the primary products, such as paper roll clamp or multipallet handlers or side shifters. And so -- and then there's a huge amount of variation you need depending on the load and the type of product you're managing, even type of paper, tissue paper is very different to kind of heavier gauge, more magazine type papers. But I'll hand over to...

Before we hand over to Roberto, just one other comment as a general high-level comment. I really think it's important not to look at that as a disadvantage. That is a real key to sustainable competitive advantage for Roberto's team. It's very hard for a new entrant to come into the market and have the breadth of applied products as Rajiv outlined that the market needs. Roberto, would you like to add anything?

I can add something, but basically, you already answered. Because our activity is quite customized, the market is requiring customization. If you take, for example, the paper roll plant, we have 512 different type of paper roll plant, but not because Bolzoni is thinking in a wrong way, because Bolzoni is one to follow the customers and serving the customers. And as Al said, this is also -- it's very difficult to get in this business because the variations, the investment, the technology that we have to develop is very high. The threshold is quite high. That's not one want to come in making an attachment. For these reasons, the players in this business model [ are as Al was saying ].

Thank you, Roberto. So one last -- excuse me, Bolzoni question. This one is twofold. Can you talk about how your project to develop the business in the Americas is coming along? And with that, can you explain the difference between the core and the legacy businesses? This is the first time you've used this terminology, and I was wondering if that was related to the cylinder business you added from Sulligent.

Maybe we should ask Roberto to address that. Roberto, would you comment on that question?

Yes. When to cover this plant a couple of years ago, this plant was fully dedicated to manufacture product transmission, drive [ axis ] support Hyster-Yale, and we call this a legacy. But because Hyster-Yale is involved in new projects on truck, the new forklift truck and so on and so on, this means that we are going to phase out this kind of product. And in the meantime, because we see Sulligent has the great opportunities, we want to introduce the fabrication of the attachment and the benefit could be quite interesting for the group Bolzoni because the margin that we have on the attachment is by far higher than the margin that today we have on the legacy product. For this reason, now if the situation is a bit difficult because we have to manage a quite big plant, having a good part of the product that we are going to phase out in the next year, but we have to phase in the new product presented by Bolzoni. And then I think it's a great opportunity because you have to consider, United States is the biggest market when we talk about attachment. And now we just scratch a little bit, let me say, the skin of this market. And there is a lot of determination in order to become a real player also with the help of Hyster-Yale because this could means a lot in having this operation to be very successful.

Thank you. Those were Bolzoni questions. Moving to Nuvera. So we have got a number of questions around valuation of Nuvera, partnership opportunities, external investors. So I've done my best to distill this down into one question. In order to accelerate Nuvera's commercial success, how much external capital do you think you will be required? Do you plan any partnerships to help Nuvera move to breakeven and reach success?

I'll answer that question in the first instance and perhaps, Rajiv would want to supplement that answer. As we look to the future, we think there are likely to be many options for Nuvera. And we think that, in fact, the acquisition itself is working out in a well beyond the opportunities that we saw when we made the acquisition a number of years ago. You can be sure that our Board is really -- is and will be considering the options that Nuvera has in-depth. And as always, in our company with a view toward building a strong business, toward financing it wisely and creating value for our shareholders. So there is a medium-term perspective that has -- that we expect to proceed along those lines. But in the near term, our focus is really on commercializing our proven products and developing a strong, thoughtful and reasonable business -- forward business plan. And we think that will include not only focus on seeking out, developing and responding to customer opportunities in the marketplace, but also developing top-level business relationships that meet the evolving customer and market needs. As Lucien outlined in his presentation, we've already moved along that path in a significant way. We've got our Hyster-Yale port oriented equipment. We have the capacity joint activity between Hyster-Yale Group and Nuvera in developing fuel cell trucks for terminal use and other potential use. So those are deep comprehensive relationships that are under active development. We expect that to expand along with these more regular business opportunities. And we'll address the issues, the more strategic issues, with our Board as effect -- as they become appropriate in the time cycle of the evolution of our commercial activities. Rajiv, do you want to add anything to that?

No, I think that's really well covered, Al. I think that's our plan. Our short-term focus is getting the right product, creating the right relationship with customers and taking them on that journey that Lucien talked about. And then the medium term is what is the best way to develop Nuvera. We know that having business partnership with key customers is going to be -- and collaborators is going to be a key part of that.

Thank you. Nuvera has a great product and promising capabilities, but a slightly different strategy from other fuel cell providers with regard to hydrogen infrastructure. How are you planning to increase sales volume substantially without providing a turnkey hydrogen solution to the customers? And how do you convince customers to buy the solution if you don't have capabilities to provide the hydrogen infrastructure?

Yes. Rajiv, do you want to...

I'll take this and maybe Lucien can comment on this also. So initially, when we bought Nuvera, of course, it had the fuel cell business and the hydrogen business. We felt that the hydrogen business was a much broader kind of solution set with many partners involved. And so we found a way to collaborate with people and also kind of take that -- some of that technology and involve it in that situation. But what we wanted to do was clear the deck for Nuvera to just focus on being a fuel cell stack and engine provider, because that's what we saw was the primary scalable future that we could influence and that Nuvera could drive. So that's why we've done what we've done. We are sure there's a good hydrogen business out there, and we are partnering with all the key hydrogen players to provide the right solution for our customers. We think that's a very different type of business.

I would just add to that, that we are -- we would expect that, to some degree, working with Nuvera, but in the main, our customers are the ones who are going to want to develop the right hydrogen solution for that particular customer's own particular needs. And if you think about it, that's exactly what we're doing in our own situation with Hyster-Yale Group in the forklift truck market. We have a number of options that we work with to provide hydrogen. They include the one that we have an investment in. But as you look to other situations, for example, ports and terminals, they'll be a centralized, larger-scale hydrogen supply. There are many suppliers that may provide that capability, and it will be the port or terminal that really thinks through the answer to that question. So that from Nuvera's point of view, that's not really the key to getting to market effectively.

Yes. Maybe Lucien can comment on some of the recent discussions he's had with customers about hydrogen and fuel cell application.

Yes. Thank you. Happy to add to that. And you're right, let's not forget Nuvera is playing very globally right now. And each of the regions and even countries have very different stages of development of their infrastructure of hydrogen. What we do with hydrogen here is basically what we do with all the partners you need in kind of getting to fuel cell engines and deploying them is teaming up with regional partners that are much better than us, capable of finding the best solution for that specific customer. So we do have multiple connections and programs, and I have to admit, in some cases, they're becoming more and more complicated because you have so many players that need to come together to make it a success for the end user that, again, for us, it's much better to have these relationships and deploy them and advise where we need them. So yes, we do have networks. We do have, say, complex collaborations where we are providing, sometimes proposing, but often taking them along hydrogen suppliers. And I feel that's much better than what we could ever do given the size of the company we're in and let us focus on being the best fuel cell stack, an engine provider, an integrator, but looking at the big picture of making the customer successful in this deployment in their testing.

Thank you, Lucien. We do have a follow-up question to the first question I asked you with regard to Nuvera. With the unique asset we have built over the years in Nuvera and in line with our view that the valuation approach should vary by business, would you consider a tracking stock for Nuvera or floating a small, like 5% of it, on public markets to assist with value transparency for this asset?

As I said in my earlier comments, the Board is and will be considering a broad range, essentially every option for developing the business. There are the 3 components. There is ensuring we have a strong long-term business. There's financing it in the best manner and then creating value for our shareholders. They're all, in some ways, tied together. And we're -- the Board, I'm sure will be open to considering all opportunities. But at this point, we wouldn't comment specifically on any one or another. We'll look at them all.

What is the cost comparison of hydrogen fuel cells to the equivalent electric battery pack?

That's a difficult question to answer because the applications are so different. But fuel cell is much earlier in this kind of technology scale than -- I assume when people talk about battery, they're generally thinking about lithium-ion batteries. So lithium-ion batteries are probably about 5 to 7 years ahead on the commercialization curve. We expect fuel cell to follow a very similar curve. So if you look at it in a moment in time, there is a difference in -- the fuel cell is, per kilowatt, is more expensive. But we expect -- and so was lithium-ion 5 years ago, and so we expect that to go down the same curve as technology scales up, volume scales up, both for systems as well as components. There's nothing -- there is a bit of platinum in the fuel cell, but through design, that's being reduced. But apart from that, there isn't anything in a fuel cell that has a particularly bottleneck from a cost perspective path to getting competitive. And if you look at some of the models that are out there for the long term, they are very competitive with some of the advanced batteries.

Rajiv, you might add to that sort of a description of how fuel cells and batteries are interrelated on their own. That it's a symbiotic relationship. And I think that's a very important thing, which is missed in a lot of the discussion in this area.

Yes. So if we just take our own solution, the one we've talked about, which is the container handler, that actually has both fuel cells and lithium-ion batteries. There's a small amount of lithium-ion battery that drives the truck and the fuel cell basically charges the lithium-ion batteries on the fly. And then from time to time, you have to replenish the hydrogen in the truck. So that's how it works. We call it a series hybrid. And we think the corner of the market that Lucien talked about, that top right, those are going to be mostly -- we feel the right solution for those is a series hybrid. Now as you start to come down that curve with lighter vehicles, in the longer term, they may be a little different. They may be more parallel or fuel cell-only type of solutions. But in the short term, the market is there on the top right. We think that's where our focus is. And lithium-ion batteries really aren't a viable solution there, as Lucien said, and fuel cells are the right solution for that part of the market. But I don't know if Lucien has some comments in this area as well.

Yes. I think the answer is -- I wouldn't say the question is wrong, but the answer is that battery-only, so plug-in battery and fuel cell chargers in what basically are battery vehicles, they have different applications and that application where that sweet spot is will differ depending on the cost. So it's not about the cost of a battery versus the battery or versus a fuel cell engine. It's looking at the application where at some occasions, so the early adopters are really using fuel cell engines where you cannot get your operation going with a fully battery solution. On top of that, it's -- and that's a black and white thing. And the gray area, you look at the total cost of ownership. Yes, you can add more vehicles to your fleet, you could even decide to put infrastructure like grid enhancements in to charge it. But in the end, it's the total solution that counts. And right now, we see that shifting. Yes, fuel cell engines because they're newer, they will drop faster in costs than batteries because they're already down that road. Will they ever catch up on the cost? That's difficult to say right now, but it's about the total usage of the solution. So again, if you cannot do the job with battery only, if you can't charge your fleet, or we have customers that are thinking half of their fleet can be fully battery-driven, plug-in battery and the other half needs a fuel cell range extender. And that's how fleet owners are starting to look at that. And I think that's the right way. So it is symbiotic. They will have their own sweet spots, and there will be a middle section where you might be kind of influenced by the cost of it. But I think the most important thing is that we go electric, and how we keep the electric vehicle running is then the second question on the operational side.

So Lucien used the words early adoption. It's really key to understanding how Nuvera is focusing itself in the marketplace. We are not putting energy into applications that will mature years out in front of us. We're trying to deal with those that fit the criteria that Lucien just outlined for early adoption. We think that gives us a lot more focus in the business, and those upper right-hand corner applications that he talked about are the place to be in terms of focusing the business and having it gain near-term commercial opportunities.

I think we just have a few more questions. Does Nuvera expect to receive orders from Chinese bus customers in 2021?

I think Lucien is probably best to answer this question. Again, for us, being a Tier 1 supplier, Nuvera is -- we keep confidential information related to our customers. Maybe Lucien can address this.

Thank you, Rajiv. The short answer is yes, we expect orders from bus companies in China. But I want to expand a little bit. Like I said, we've seriously changed our way to go to market, meaning that we have multiple routes into whatever application, including buses but also light trucks, which is seen as an even brighter spot in China right now. And you see it coming in Europe. It already has a long tradition of electric and also fuel cell buses. And eventually, it will be North America. Again, the timing is very difficult to say, always something that we might have underestimated in the past, so we don't want to make too big of a promise. But we -- yes, we are talking with some users of fuel cell engines in buses.

The next question is a twofold question. Are the Nuvera fuel cells compatible with other OEMs or are they sold as a hydrogen solution with Hyster-Yale equipment? And then if they are sold to other OEMs, what is the percent of current Nuvera fuel cells sold with Hyster-Yale equipment versus other forklift manufacturers?

Yes. Maybe I'll address this first, and then Lucien can comment on it. Again, as Lucien showed, we are very early in our commercialization process. Majority of the work to date since we acquired Nuvera has been to develop the technology, the products, and then apply them under conditions that we've wanted to create for those fuel cells to test their robustness, their applicability, in that journey. And we feel we're at the end of that phase. We got to the end of that phase in 2020, early 2020. And that's when we put out the E45 engine, which is actually 2 of those are in that container handler that's been shown both by me and Lucien. So now we're in the commercialization phase. We've built the commercialization process and the team. That will continue to build as we move forward. But now we're putting those products into the marketplace. There is no market close for Nuvera, it's available to anybody. It's open market. So, Lucien, can you talk a little bit about how you're commercializing moving forward?

Yes. Obviously, we've had a great kind of learning school with the [ dual ] handling solutions for Hyster and Yale. That, I think, makes us -- made us work and learn on the toughest application -- or one of the toughest applications that we've seen right now for hydrogen. It's obvious that other material handling companies have interest as well. We, like Rajiv said, we're in acting independently. We need to make sure that we carefully keep that separated. But yes, there are a couple of material handling applications that we're -- we have in those 150 customer engagements. So it's actually a very interesting thing because it's difficult to enter. The volumes are far less interesting than all the fuel cell companies that go after buses and trucks and even lighter vehicles. But being grown up with these heavy-duty applications, we do feel that we have a great product to add to that market as well.

It's useful to, I think, note that the forklift truck industry itself has light-duty and heavy-duty applications. There are certain segments of that, I think you would agree, Rajiv, that our product is not really focused on serving. And so we're -- we focus more on the heavier end of forklift trucks and even look to build our volume and those very heavy-duty applications that Lucien has been talking about. That's the -- where our technology at the moment works best. There will be applications for other markets in the longer term. We have a very reliable and capable heavy-duty product that we can apply. You want to add anything to that, Rajiv?

No, I think that's right. That's where our focus has been, that the technology is capable of addressing the whole market, but we think that's where the market will emerge first, and that robustness is going to be a key element of the market as this [ tendency ]...

That's where our products are focused at the current time.

Exactly. Yes.

Great. You've talked a little bit about the valuation of Nuvera and what we -- as far as our long-term view of it. Once Nuvera becomes profitable, how long do you expect to -- it will take to make up the operating losses that have been incurred since we acquired Nuvera?

I think that's not perhaps the best way to think about the equation. As we've said in our recent earnings releases and we said in this presentation, we're trying to build shareholder value. That doesn't always show up in the P&L. It can show up in the value of the business. And so what we want to make sure is that Nuvera is well positioned to be a successful company in fuel cells over the long term. As I said, properly financed and bringing shareholders excellent long-term value. So that's really our focus. And -- but you have to keep in mind, this is not a traditional industrial mature company. This is a venture business that generates losses in anticipation of building a position long term in a new industry.

I mean just as a quick reminder, we acquired Nuvera for a modest amount. We've invested to develop the technology. And in that process, what we are creating is a company. So I think that's the way to think about it.

We do try to keep a very modest G&A expense structures. It's the development activity that's really creating that future asset, and that's where the majority of the OpEx spend is really devoted towards.

Okay. So we've had some great questions from the audience. Before I ask my very last question, I just wanted to thank everyone for participating in today's Investor Day broadcast, both the presenters and the audience. And with that, Al and/or Rajiv, what do you think will be our most significant driver of our growth over the next few years?

I think if we just go back to the slide that I used in my opening comments and this question section, that's the transformative nature of the key strategic initiatives and the significant number of supporting projects in each of those initiatives that are driving what we think will be a significant change in the next few years at our Lift Truck business, at Bolzoni and at Nuvera, each of them tied to a distinctive and transformative strategy for that particular business

Thank you for participating.

All right. I think Al had it covered. So I would just like to thank everybody for participating and for your questions, for your engagement. And again, I want to -- a heartfelt thanks to our Hyster-Yale associates out there for getting us through a very difficult time frame. We're still in the middle of a difficult time frame in terms of building this large backlog of trucks that we've talked about and getting lead times, et cetera, where they need to be. So there's still a lot of work to do for us. But we're very excited about the future.

And I think our whole team is excited about the future. We think, as I said earlier, that there's a really terrific investment potential for Hyster-Yale overall, and that's what everybody is coming together to achieve.

Thank you for coming today. Christie will be able to direct any future questions you have. Please use our [email protected] to forward your additional questions you may have coming out of this event. And thank you. Christie?

Have a great day. Thank you, everybody.