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

Good morning, everyone. I am Christina Kmetko, and I handle the Investor Relations for Hyster-Yale. Thank you so much for being here. It's wonderful to see everybody and be back in person, it's so much nicer. So before I turn the floor over to Rajiv for our official welcome, I want to provide some logistical information. First, our event is expected to run about 3 hours. It will include a 10-minute break and -- about halfway through and approximately 50 minute Q&A session at the end. So please accumulate your questions, and we'll do all that at the end. All of our slides have been made available on our website, and we are simultaneously webcasting this meeting with synchronized slides for those watching the webcast. We've also provided a survey at everyone's seat for those individuals participating in person today. If you did provide an e-mail address through the webcast, we will also e-mail one to you. Your feedback would be greatly appreciated. On the tables are a few black tents that give the Wi-Fi code. But for those that are not near a tent, the password is, stayconnected, all lower case. And then finally, I would like to ask everyone to please silence your cell phones. This is our safe harbor standard forward-looking slide. I won't read it, but it is in the presentations at your desks as well as in the presentation on the website. And then finally, for those participating via the webcast, here's an e-mail to submit questions. Please put Investor Day question in the subject line. And when we get to the Q&A, I will include any of those questions in the queue. And with that, I will turn the presentation over to Rajiv. Thank you.

Good morning, everyone, and welcome to our Investor Day. I'm Rajiv Prasad, CEO of Hyster-Yale Materials Handling. Let me first start by either introducing or reintroducing our company to you. We're one company with 3 businesses. Each business has a full line of product and services to serve our customers. The 3 businesses are our Lift Truck business, which is the core, then we have our Bolzoni attachment business, which is closely associated with lift trucks. And then we have our Nuvera fuel cell business, which is the decarbonization, green power solution that we're developing for forklift trucks, but it can also be deployed across associated industries, and we'll touch on that as we go through the presentation. Just to get our heads around the numbers, in the last 12 months, our revenues have been just over $4 billion with an operating profit of $180 million, net income of just over $100 million. We've come a long way from our last 2 years, which were affected by having a large backlog and pretty high inflation that impacted us. We're through that period now. And you've seen over the last 4 quarters, things are a little different. In terms of how we participate in the market, America continues to be our largest market, followed by EMEA. We think Nuvera, JAPIC and Bolzoni provide great growth opportunities for us along with the EMEA and Americas. In terms of what you're going to hear from us today, I'm going to walk through the strategy for all 3 businesses. Then we'll have Tony walk you through the Lift Truck business, and David walk through our emerging technologies platform and systems that are being developed and introduced in the marketplace. Roberto will then talk about Bolzoni and Lucien about Nuvera. Both of those guys run each of those businesses. And then Scott will come on, who is our CFO and tie all together and talk about some of the strategies and models that we use in finance, but also give you some view of what we're thinking about the future. I will this summarize, wrap up and take us into Q&A. We have a pretty unique business model. It's really built around efficient capital deployment and targeting high returns on those capital deployed. What we spend our money on is ensuring that we have the right product and the infrastructure to serve the customers -- and some of the areas where we've deployed our capital recently has been developing our modular scalable platform. You're going to hear a lot about that over this presentation. We continue to optimize our manufacturing footprint. So you can have products as a customer quickly from us. And then we're partnering with what we call our center of gravity supplier, pulling them closer to our manufacturing locations and so that we can kind of take working capital out of the system. In parallel to that, we have an independent, exclusive dealer network. They are the investors, those entrepreneurs are the investors in our distribution. So that keeps capital low for the distribution system for us. As I said, we have independent suppliers. We manufacture the critical components of what makes a lift truck, a lift truck, mast, frame, some of the drive systems. But then we have independent suppliers who provide the rest. And then we also have a number of joint ventures. We have a finance joint venture with one of our leading banking partners. And we also have, for instance, a long-term relationship with Sumitomo in Japan over 50-year, 50-50 joint venture, I think is the longest running joint venture between a Japanese and an American company, which is 50-50. So we're good at partnering. We believe that that's going to be a core competency of ours. So all of that brings us to what we target. And our primary target is to make sure that we're getting very high return, top quartile return and definitely leading in our business -- in our industry of greater than 20% return on total capital employed. Supporting that is ensuring that we're getting to 7% operating profit. So -- and Scott will come back and talk about how that model works for us and what it means. The vision of the company, as we move forward, is to transform the way the world moves material from port to home. Port to home is picking up the material from port and through the manufacturing process, combining it with local material through distribution, delivery systems to your home to serve consumers. So we're looking at that end-to-end chain. And what does the transformation mean? The transformation means that we want to lessen the impact of moving materials on people, on the environment and also on the economy. And we want to do that really engaging the imagination and creativity of our people. And it applies to our attachment business, our Lift Truck business and Fuel Cell business. So it's across each of the 3 businesses with the same vision. Supporting the vision are 2 clear missions, built around promises that we want to make our customers again for all 3 businesses. The first one is, we want to understand our customers' applications and provide them with the optimal solution. And if we can do that, they will get the productivity they need at the lowest cost of ownership. We call that our optimized solution. Each of the businesses have their own variation of that, but ultimately, that's how we want to provide the right solution to our customer. The second part of the promise is once you're a customer, we will not let you down. Throughout the ownership cycle of owning our product and then when it comes to replacement, we'll work hard to create increasing value for those customers through that transition to the next ownership experience. Supporting these missions are our values, what we call our I-Care values. And you can see those at the bottom of the side, integrity, commitment, accountability, respect and excellence. That's what drives that, that's what likes the fire inside us to serve our customers. So to support that mission, we're also building and -- we've built and continue to evolve an operating structure. It's developed to deliver this customer-centric solution and it's there for all 3 businesses. The first one is around customers. We are a global -- for each of the businesses -- our global businesses, they have a full line of product. Now the products continue to evolve. We're focused on solving the biggest problems of our customers with optimal solutions for them and then provide the care they need through their ownership experience. In that process, we have partners if that distribution is exclusive, independent dealers. Some of these dealers have been our partners for a long, long time. And we go to market as one. There isn't the dealer in Hyster-Yale, There's Hyster-Yale, dealer, dealer, Hyster-Yale. We go to market as one. I think is to understand that. The other thing is in each of the region, the top 1,000 customers, we deal directly with. Of course, we engage our dealers in that process. but we take accountability for those relationships with those top customers. Typically, it's that way because they have a footprint bigger than our typical dealer and they need that direct relationship with the OEMs. This distribution is focused on share growth, and we've evolved from thinking about unit share to really is dollar share of the market because we have quite a wide range of -- when I talk about our full product line, it goes from trucks that are $4,000 or $5,000 to ones that are $0.5 million. And so in that spectrum, we want to make sure that the focus is on serving customers with the right product. And so the share -- dollar share growth is important in that. And then we want to capture the aftermarket, the full potential of the aftermarket as the trucks are used. Then we're building internal capabilities. As I said, you'll hear a lot about our modular scalable platform. The reason for that is, I think, it's a very sustainable competitive advantage for us. Our competitors don't have that solution. It's not easy to put it in place. You pretty much have to revise all your platforms to do it, and it has to be well thought through. So that's a critical part of our solution set, and it's really built to support this promise that will give you an optimal solution, we can configure the right truck just for you as a customer. We've talked about the center of gravity suppliers. They're a critical part of our value system and optimizing our footprint. We continue to bring down the breakeven point for each of our plants. So we don't have a lot of manufacturing variance during the low cycles of the economy. And then the last one is building an infrastructure to support customer care. If you look -- if you go around the market, let's say, in Americas and ask how good is Hyster-Yale at serving their customer, you'll find us near the top, both on the solutions side and the service side and caring for customers. But what we're finding is the place we are going to, that's not good enough. We need to push that envelope higher and really get to a point where customers feel cared for and not let down. This is not possible without the culture of disciplined people, disciplined thought and disciplined actions. We're a problem-solving company and to have that disciplined culture is critical to our success, and that's what we continue to evolve and build on. So that's a little bit about the company. What's going on in the marketplace. And these are some of the trends that are driving our market. The first one is search for productivity. Productivity is critical for our customers because they're facing space limitations, SKU growth, time limitations. To solve that and create new value, you have to have high productivity. And we're developing solutions that support that. In that process, when the pace is high and turnover in your employee base is also high, that's a recipe for safety issues in your operation. And we're developing solutions where that can be mitigated with our operator assist systems and AGVs. AGVs are also a big solution to labor shortages. I'm sure as you've gone around you've heard from the other participants in the market that labor shortage is one of the key drivers, probably for your own companies as well. That's a big thing in -- for our customers and also for us. And so automation is a big part of our future. We're automating our forklift trucks, but also automating other processes in our solution system. Electrification is a big part of our journey. We own a fuel cell company. That's because to electrify big trucks, and we want to electrify the full range of our product solution. We're still committed to providing the customer what they need, and if they need diesel engines, we have -- we will be providing them. But there are many customers who are looking for a decarbonized green solution and fuel cells are a critical part of that and so are smart batteries. And that's a big focus for us. Information continues to be important, driven by data. Our telemetry systems and data solutions are key to enabling that for our customers, and then we've seen an emergence of low-cost competitors, predominantly coming from China and our modular scalable platform with starting at these high-value solutions is as a way to solve for that and go straight ahead against these competitors, and Tony will talk more about that. So now to follow these trends and to develop solutions for them, we have long-term strategies that will drive growth in our business. And I'll come to those strategies in a moment. But these strategies are built around enabling us stock -- kind of stakeholders that includes our customers and dealers, suppliers and our employees and, of course, our shareholders. That's done through some of the core initiatives we have in place. I've touched on a few of those, the modular scalable platforms, the solution-based industry approach to going to market. And these are built to generate cash in the core part of the business. That cash is then deployed to get additional capabilities. We've added attachment capabilities to our portfolio through buying Bolzoni. We've developed our own technology solutions such as OAS, telemetry, our green solution and automation. And we believe that, that deployment of capital is positioning us for the future. We're just focused on deploying capital where we have to -- we're asking our partners to deploy their capital alongside us such as our dealers and our supplier partners. And we're investing in some of the strategic initiatives that we'll talk about in a moment. And then the special focus on -- we're in the commercializing phase of our fuel cell and that's a key requirement for us. So these are long-term strategies. You'll also find that our reward program for our leaders in the company are also long term. They're tied to the benefits that our shareholders have, essentially, they are long-term shareholders in the company. So we want to make sure that all of that is aligned. So this is our economic engine for the company. It's really built on having a large lift truck population if you look at the bottom, and with that population, we want ourselves and our distribution to serve those customers to providing them parts and service. And if there's volume there, that will generate the cash and the resources to make sure that we grow our worldwide footprint and strengthen our solution set, and that will drive market share for the company. That will give us more balance. You've seen our skew to Americas that will continue to balance our business geographically, but also across product lines, whether we're talking about industrial trucks, warehouse products or our new solution set or big trucks. In the middle are accelerators for -- these are the strategies that will accelerate this virtuous circle that we have. And it's built around making sure we have the right product for our customers' application, providing them the lowest cost of ownership. It's built around having independent distribution and also being a leader in delivery of industry solutions. The fuel cell and the attachment business also want to be leaders in their part of the market. Those strategies feed into projects. And these are the -- on the right, you'll see the key projects that are being driven, reviewed by our Board to execute these strategies. You can take these projects and other projects that we have in the company and really kind of bind them into the value chain of the company, but also into the functions of the company. And I've got some examples here. For instance, if you think about revenue growth, what will drive revenue growth, again, modular scalable and the industry approach will drive market growth and also our technology innovation. Our profit growth is our pricing strategies, plans and tools and also our technology solution, which attract higher margin than our core truck, so that will drive increased profitability. For cash generation, we've said we are very careful where we invest our money. So central gravity suppliers are critical to that and optimizing our manufacturing footprint, which will really reduce working capital and deployment of cash internally. And that will produce the cash to grow the business. And then as we've already said, we're very careful about where we deploy money, making smart investments, so independent distribution and collaborative partners enable that. These programs or projects really form a ticket of activities that gives us sustainable competitive advantage. They also drive our culture through problem-solving and disciplined execution. The synergy in the projects, if you start putting some of these together in your mind, each one individual will bring growth, but the combination is a large accelerator and builds momentum in our business. And then it's about executing every day. Our missions, if you think about it, aren't possible without this relentless pursuit of serving the customer and excellence. And that's what these projects drive within our company. So we want to -- we call this out one of our superpowers, and it's really easy to think about what it is. It's very difficult to deploy it across the company and sustain it over a long period of time. Let me just talk about each of the businesses and the leaders will cover that in more detail. But our core business on the lift truck side is built on an industry that's growing a little faster than GDP. That's why we call it GDP+. The reason is in the business of moving material. Material movement is critical to economic growth, and it's actually a little stronger than the economic growth you get, that creates the platform for providing existing and new services to our customers that can improve their product activity and drop their cost of operations. On top of that -- and that's an evolutionary growth. On top of that, we have revolutionary growth through our technology solutions, and David will talk more about that. So you can see how we can go from GDP+ to GDP++, and Scott will come back and show you what that means for us. In terms of the Bolzoni business, think of the lift truck as a body, and the lift truck comes with 2 fingers, the forks, but really Bolzoni gives us hands. And just imagine now the productivity you can create once you have hands attached to a body. And so that's why we bought Bolzoni. And we're just at the start of creating value through that integration of attachments and lift trucks. Nuvera, we think that over the next 2 or 3 years, we'll have electrified solution across our complete range of products, all the way up to our biggest truck. When we thought about this back in the 2010s we felt the only way this was possible because certainly, batteries aren't a solution for those big trucks, was to have fuel cells. And we felt that if we could deploy fuel cells for ourselves, which are very heavy-duty applications, then it will be beneficial for adjacent industries. And that's how it's panning out. And Lucien will talk about that, but that's why we acquired fuel cell capability within the company. So as I end here, you can see we're 1 company with 3 synergistic businesses, but each business also has other parts to growth. But they have some things -- some strategies in common. They're all central and reasonably structured. They're all following modular scalable platforms to find the right solution for the customer. They're going to market with an industry approach. They're working on the most difficult problems our customers have today and in the future, and they're leveraging our HY distribution, which is our other superpower. So whether we talk about lift trucks, Bolzoni or Nuvera, each of those are deploying those strategies. So I've given you a feel for how each of the businesses are common. Now I'll ask Tony to talk to us about the Lift Truck business. Thank you.

Thank you, Rajiv. All right. Good morning. My name is Tony Salgado. I'm the Chief Operating Officer for our Lift Truck business. Today, what I'd like to do is, first and foremost, just to give you an overview of our Lift Truck business where we sit today, give you some context and some direction on the industry that we participate in, the very exciting and growing Lift Truck industry. And then talk to you a little bit about the investments that we have been making over the last several years, many of which we've talked to the investor group about for these last several investor presentations, and share with you how they've been maturing and putting us into a position now where we can compete with a new set of capabilities in the market ahead of us to continue to drive sustainable value for our shareholders and customers over time. So we'll start with just a quick look at the business that we have in the Lift Truck Group. We are a comprehensive, integrated and very well established global leader in the lift truck solutions business in the design, the manufacture, sales and service of the solutions that we bring to market. We're deep-rooted history in the Lift Truck business with well over 100 years and establishing a very strong foundation, a very deep and vast number of relations with customers across the globe that serve as a platform and allowing us to deliver continued value in today's market, but also a great platform to leverage off into the future, which we'll talk about. As Rajiv had noted, we go to market through an industry lens. That is an approach we feel is pretty unique in the market. We have coverage across over 120 countries globally. We cover all 22 of the industry segments within the Lift Truck business. We do so through one of the broadest portfolios of products in the industry across all classes 1 through 5, with a growing set of technologies that are integrated into our lift trucks, attachments, as Rajiv had noted, and a new and value-add services that we're bringing to the market. We have a strong global presence. We have 7 design centers, which are focused on different aspects of our product line and technologies that are located strategically across the globe. We have individual production plants and parts distribution facilities located across every region to deliver the value, deliver over 100,000 units of shipments into our markets every year and to service and support nearly 1 million units in operation. As I said, we go to market through an independent distribution model, again, one of the key strengths and differentiators for us. We have over 300 exclusive dealer ownership groups across the globe with over 900 different branch locations to serve our customers locally. And with these dealers and our combined Hyster-Yale groups we have, roughly about 3,400 sales professionals who translate our value into the market and over 11,000 different service technicians who are trained in the specific industries that support our fleets and our customers worldwide through the life cycle of their business. Now this is touchy, isn't it, Rajiv. So it wasn't just you. All right. So this -- the market we operate in is actually very exciting. And you may not have heard the Lift Truck industry described this exciting before, but we're finding it to be very exciting. It's a growth market. And it is essential in enabling the movement of all goods globally. And as Rajiv noted, the different dynamics of demographics, the growth in population, the changing of the age demographics and the expansion of the economic power across the middle class globally is really driving the growth of goods and will far into the future. But on top of that, the enablers of technology have driven this to be global purchasing with local delivery with high expectations for the size of the deliveries and the speed of the delivery, which drive a much higher demand for the lift truck equipment that support that. And when you look at our growth in the industry -- not our growth but the industry growth, lift truck shipments over the last 20 years, they've actually outpaced the global GDP growth annually by 1.5 percentage points. And in the last 6 years, they've grown at 8.6% of the -- or 8.5% of the annual growth rate and really driven in large part by the surge in demand post-COVID, which has really benefited the industry. Now when you look at the distribution of the Lift Truck sales globally, we're seeing it become much more balanced with the growth in the China domestic and China export and the growth in the lower-value Class 3 powered pallet trucks. Hyster-Yale plays very strongly in this market with over 100,000 unit shipments with Hyster-Yale Maximal brands and another 8,000 with our Sumitomo brand in Japan and Southeast Asia region. For Hyster-Yale, we still predominantly play, as you can see in the Americas market with nearly 60% of our shipments into Americas market, which is a validator actually, of the fact that when we have a mature and highly capable distribution network. When we have the right products that are fit for market and when we have the commercial capabilities, both in our network and with the Hyster-Yale Group, we can deliver some powerful performance. In China, we remain focused on the higher value segments because it's a very low value segment market there. But Asia Pacific and Europe, we'll talk more about. There's significant opportunity there as we scale up on our capabilities across the globe. Now on top of the Lift Truck growth, Rajiv indicated that there is opportunity for significant revenue generation with the advent of technology and expanded services. When you think about where our customers' demands are going, it's really becoming more intense in the delivery of performance across their operations over time. In addition to that, they've got increasing ESG requirements from their shareholders and stakeholders, which really drive a new dimension to delivery of performance in their operations. And then with the evolution of technology, it presents opportunities that didn't exist before to solve these problems, which actually puts a lot of pressure on these organizations to close those gaps. So what we see our customers are doing is really coming to us now and wanting to work with us on what these solutions are, how they can apply technology within their operations. And when you look at the market, the forecast is that the revenue associated with the technology and the additional services are expected to grow at nearly 4x the rate of the already growing Lift Truck market. So I mean, that's a very exciting opportunity for one. And we'll -- I'll talk more about it, and David certainly will talk more about that. Now the good news is that we have positioned ourselves to play very strong, not only in today's Lift Truck market, but in the spaces of technology and the service value growth. We'll highlight some of them. But as Rajiv said, one of the biggest things that we're doing in the Lift Truck growth area is the modular scalable approach. You're going to hear this probably no less than a dozen times between Rajiv and I because it is so important. It is a differentiator. When you look at the service, we talked about the high care services, promise not to let you down, very hard to do. But it is a differentiator, and it's one that we are we're working to develop experiences, formalize and bring to the market. And the technology, again, one of the most exciting areas in our business right now, and I wish I got to talk about it. David really gets to talk about it in depth, but it is essential to enabling our customers in a very different dimension. And we'll talk more about what that's going to do for us. Now we've established the fact that there is significant growth opportunity and we're well positioned to grow within not just the Lift Truck market, but the advancing technology markets. But when we look at -- so where are we going to grow? Well, in addition to just growing generally across the board, we have some significant opportunities in 2 dimensions. The first of which is regional. In the U.S., in the North American market, 1 out of every 5 trucks installed is a Hyster-Yale brand truck. That is the power of having the brand equity, right, having the very strong and capable distribution network, having the right trucks for the market, the right products and the right solutions and having a very mature and continuing developing set of competencies across our commercial groups, both in the Hyster-Yale Group as well as our distributors. But when we look in and compare that to the EMEA and the APAC markets, you can see that there is significant opportunity to scale up what we're doing here and apply that over there. Well, the good news is, that's what we've been working on for the last few years, right? The modular and scalable approach allows us now to design globally fit-for-market trucks with a highly configurable platform that allows us to put the trucks into the market to meet the specific market needs, but at the right price and the right margins for us, okay? And additionally, we are becoming a more and more global company every day. We're globalizing our processes, our best practices. We're globalizing certain functions so that we can quickly deliver best practices and level up across the -- all of our operations globally. This is going to enhance our ability to win in EMEA and the JAPIC markets. And then finally, we're working very hard and making good progress in developing our networks in these other regions where we've lagged to where we stand today in the Americas. And we've seen great consolidation opportunities and growth across key markets with strong business partners. So we expect that we're going to be able to see an advantage in these 2 markets as we move forward here over the next several years. The other dimension is an industry. When you look at -- if you divide the entire industry into the 12 industrial segments and the 10 warehouse segments, you'll see that Hyster-Yale is placed significantly higher in the industrial segments, nearly 5 points higher on average. And that is due to the fact that we have an incredible brand. The Hyster brand is -- stands for tough trucks, trucks that can meet the demanding needs of manufacturing, mining, metals, paper industries, the ports and terminal industries. We have dealers who -- this is their core competency. They know the industrial markets. They go in there with an expertise to solve our customers' problems. And at the end of the day, you look at the warehouse, and we're not there yet. However, again, the good news is, is what we've put -- so the position we put ourselves over the last several years of investments in developing capabilities, we've now taken that next step, and we've relaunched the Yale brand as the Yale Lift Truck technologies, the package, the capabilities that we have with the full range of the warehouse products, the Class 1, 2 and 3 electric products, which are highly capable in this space. We've worked to really blueprint and map out these industries and put in place playbooks and specialized training for our dealers. And at the end of the day, again, we believe and feel very strongly that we're more capable than we've ever been to grow our share and scale up what we've accomplished in the industrial segments. Now as Rajiv had noted in his economic engine here, there we go. There's 3 key areas that we're -- we bucket all of our strategies into the -- the first is to develop solutions that drive productivity and drive the lowest cost of ownership for our customer operations. The next is to really go to market with an industry-focused approach, so that we can understand what our customers' needs are and connect them with the right solution. The final one is to translate all that value through an independent distribution model. So in the area of the solutions, we've got an expanding set of solutions across our global industry requirements. And we have one of the broadest portfolios of product lineup across the Class 1 through 5. And it's critical because most of our large customers have multiple applications. right? They need different types of trucks from pallet trucks to large capacity trucks to move containers. So they want to work with a supplier who can meet their full range of needs. But the most important thing we're doing now and what's really changing the game is an inflection point for us and the differentiator is the modular and scalable again. Because what this is doing now, and let me just walk you through -- the modular is not a new concept, okay? The automotive industry does it, other lift truck manufacturers do it, but they haven't created a module design concept across an entire family of products in the way that our team has done and spent an enormous investment to accomplish this. But what this essentially allows us to do is assemble a whole range of trucks and capacities across less than a dozen modules of systems and components, right, which are interchangeable to allow us to simplify our manufacturing operations reduce our supply chain, just down to those core supplier groups and then reduce the number of components in our SKU and that support our operation. This simplicity lowers our overall cost of conversion as we move forward. But then even on top of that, the real winner is the scalability. So within those modules, we've designed it such that we have multiple levels of options at different cost and performance capabilities, which allows us to configure a truck exactly to what a customer needs at the price they need it, but allowing us to still extract the full margin on those products. That is what's critical. It also allows us not to have to discount higher-value premium trucks to put into a lower operation where there's a mismatch in value. So this is a real big differentiator and a driver of sustainable margin and profitability for our company as we move forward. And leveraging that even further as we work to support our customers and the electrification of their fleets, particularly their current industrial internal combustion engine fleets, with this concept of modular scalable, we're able to bring on electrified motive power options to traditional IC trucks in a way that it's simply an option on the line and not a whole another truck configuration. And then finally, and David will talk about the technology side again. But I'll just note that the way we're designing the technology is such that it is going to be built in as, again, modular and scalable options that a customer can select on their truck, which really drives on the practicality of it, right? It was made and fit for that truck and for delivering value through that platform. And two, the adaptability of it is made very easy not only by the fact that it's a system option, but also by the way we're designing it so that it can be installed and supported by our dealer network and not some sophisticated trained MIT grad, okay? So it's a fantastic approach, and we're very excited about it. The next area is the industry focus. So when we say industry focus, if you think about it, this is our way of formalizing and institutionalizing customer focus. We've really methodically developed the 22 industries. We blueprint these industries through a deep understanding of those, take the learnings from that blueprint and put it into playbooks that can be used by frontline sales people. What we learned, we build back into our product development processes through a very organized and formal format. And then we roll this all out through training and specialization across our organization. So on a macro level, I'll go back to the example on the rollout of the Yale Lift Truck Technologies brand. I mean this is really defining for us and defining for the market that we're moving into this market to win now. We've got a package set of capabilities across our products, very applicable technologies with the operator assist system, the telemetry and the automation that can deliver real differentiating value in this space to compete with the very few incumbents in this space today in each of the markets. So we're very excited about this. And it's -- the warehouse market actually makes up 60% of the overall market, and it's going to outpace the growth of the industrial markets as we move forward. So it's very important that we're in the space with capabilities. And then the final of the 3 strategies is our independent distribution model. It's how we are working in a very different way to translate the value of industry focus and the solutions focus into meaningful commercial engagement with our customers. The independent distribution model is different than a wholesale model. And that it is, as Rajiv said, it is a true synergistic partnership with OEM and with our independent exclusive dealers. At the core of it, it is our independent distribution for a very good reason because they're the best at what they do. They are close to that customer. They have an intimate relationship and dependency on that customer satisfaction in a way that an OEM can't replicate, right? We're moving and progressing very well towards getting a more consolidated ownership group structure across the globe where they're well capitalized and aligned. And at the end of the day, they're investing their capital in the front-end retail distribution and which allows us to then, as an OEM to refocus our capital and our resources on developing solutions, deeper understandings of the industry and enabling our distribution through the training, through the specialization, through the playbooks and augmenting them by deploying our own sales force to help them win the major accounts that go across multiple regions and global, right? So together, we combine our strengths in a way that an OEM owned distribution can't conquer, a typical wholesale can't conquer but we can differentiate. Now -- we talk about a lot of capabilities, and I said from the beginning that these are maturing. And we're starting to gain increasing confidence in the value of these capabilities through actual wins and experiences in the market today. One example I'll give you, and it's one that I think you're probably well aware of if you watch the media because over the last couple of years, our significant win by unseating a real strong incumbent in the warehouse space to win business with one of the largest retail e-commerce companies globally. They had a significant issue with safety in their powered industrial truck equipment is what they call it. And they came to us to say, how can you help us solve this problem? Well, we had a developing technology that we were able to engage them with, which today we call our OAS or reaction in Reliant operator assist systems. And through the deployment of this technology, they've been able to significantly improve their performance and safety. As a matter of fact, I've reviewed the letter today with David Furman from their safety directors saying that across 10 of 11 sites, they've actually reduced their safety incidence to 0 for fork truck-related incidents. They've gone to market because they were notoriously known for their safety challenges in these plants, and we help them solve their problem. And now they want to grow their business with us because we're able to differentiate. We've also exercised the early stages of our high care because introducing these new technologies is not easy to do. Change is tough. But we've exercised a very close and intimate customer care process that's helped them move through that so that they can do so successfully in operating plants and in greenfields. So it's been a great win. We have many of these and what we're doing, and we're able to do because of the operating structure we have now globally is to get these scaled up so that we can run them across all of our divisions and attack the markets with these new competencies that we're building. So all of this has come together to really put us in a strong position as we come out of the post-pandemic time frame when there's a surge in demand, we were able to participate very strongly in that build an enormous backlog as a result of our performance and grabbing share and participating in the market. And with our recovery and stabilization in the supply chain and production, we've been able to drive an increasing level of shipments year-over-year now for the past several years and delivering record levels of revenue over the last 12 months, it's been great. It's been across all of our regions. Our mix of products going out are still heavily weighted towards the counterbalanced products, particularly IC products, you can see is again, nearly 60% because that's where we play strong today. We've got a growing percent in the electric counterbalance, which is very important and the market shifting in that direction. But you can see very clearly a Class 2 and 3, only 18% of our mix is in that market, yet that makes up nearly 50% of the global market. So that's opportunity, and we're ready and prepared to take advantage of that. Now when you look at the operating profit, everybody is aware of and Rajiv touched on the fact that coming out of the post-pandemic time frame, we had a surge in demand, which was, of course, favorable. We took that on. We have had a large growth in the backlog, but then we had ensuing inflation, which really put most of that backlog in a very unfavorable position. And you can see that in our results from 2021 to early '22. However, we've learned a lot from that to immediately put in place a restructuring where pricing processes. We work diligently across our OpEx and other parts of the business to reduce our breakeven point. And we've been making great headway in stabilizing and restoring our production processes and as I think we've indicated to our investor group, we were going to come out of this strong, and we have. We've come out of it very strong financially. And not only from an operating profit standpoint, but delivering the free cash flow that is so important to our business. So when we look at that, I mean, let's talk about what are we doing with that. There's a lot of things we need to do with that in the near term. But we never stopped investing in the company. That's a factor in this time frame. We focused our investments on the things that were most critical. But now as we come out of this with the cash to move forward, we're going to, as we always historically have been extremely diligent in how we allocate our resources and our capital to invest. And we've got a strong focus as we move forward now on the revenue generation, margin enhancement, making sure that we continue to lower that breakeven point and then making our working capital more efficient and optimized. Now we've got some top investment categories here, which I think are worth noting. One of the key areas is we're going to continue to focus on development. That's our role as an OEM in this, make sure that we're always out front in bringing the greatest and best solutions to our customers. The modular and scalable is one of those that we're more than 2/3 through our investment on this and rolling the products out for several families right now, and we'll continue to invest in that as we move forward because it's absolutely critical to us. Technology, we've worked a lot with partners, learned a lot, but our organic technology development is increasing, and our investment in this area is going to be commensurate with that. And then the design capabilities that we've developed in the emerging markets has really benefited us. Not just to put out what was traditionally a lower-value truck, but now as we move forward, it is really the genesis of a lot of our lower scalability options within our truck to help us get that full breadth of scalability to configure trucks into the market. So it's a fantastic area to allocate our capital. From a lowering our breakeven point, we are working to continually optimize our footprint in manufacturing, working to move further into the global shared services that we've done with our partners in India and globalize a lot of our functions. And then we'll continue to focus on investing in the sales area. We feel as an OEM partner, there's a lot that we can do to enable our distribution network as well as to augment them with the large major accounts. One good example, and again, this is one that I was checking in today. So I stood in front of the investor group, and I think it was May of 2018 and introduced you to our investment in Hyster-Yale Maximal, which is a Chinese OEM that designed and manufactured and exported and sold into the domestic market with extremely strong value product lineup. So at that time, our investment objectives were to: one, secure a strong production capability in that APAC region as well as to take on board and exploit a real strong value portfolio of products. I'm happy to say we've gone far beyond that now with this investment. The production plan itself is now becoming 1 of our 3 key global production facilities, producing not only the lower value-add trucks, but localizing all of our standard and premium trucks for the region as well. And we continue to localize product and develop new opportunities to use the factory and all the skills that we have there. From a design standpoint, we've actually built more capability around their design group there to help us to accelerate the development of lower cost innovation for scalability into our trucks moving forward. And they've also produced a great opportunity for us to consolidate the JAPIC region and make that whole operating structure more efficient and more capable. Apologize here. The -- all right. I'm going to land on this slide here. I do apologize. Here we go. So this is an important slide. I wouldn't want to miss it because it tells an important story. One, we've found ourselves now back in a very strong position and not by accident, right? We've moved through the post-pandemic period. We've leveraged our capabilities, and we're delivering strong performance, but it's important for us to sustain that performance going forward. It's also important that we never put ourselves in a position, again, we are so exposed to the dynamics of the market, but we learned a lot during this time frame. The modular scalable, and this will be the last time I say that word today, but the modular and scalable is one of the key factors that allows us to build a robustness into our operation, not just because it is a global -- globalizes the way we roll out our products so that we have redundancy, we've got less suppliers who have invested in redundant supply chains for us, but also because as we move forward, we're so much more agile and dynamic to add different capabilities to our product in step so that we can deliver value to the market. Labor has been a challenge across all of our suppliers in our market as well as for us, and we are increasing our automation in order to mitigate that challenge. We put in place a global sales and operations planning process, which is helping us now to synchronize demand with our supply chains to make sure that we can not only be agile to the demand of the market, but also optimize our working capital in the meantime. And the last thing I'll tell you here is on the pricing side, we've learned a lot about the pricing. We've always had pretty good intelligence on pricing. We've really expanded those capabilities now for real-time pricing understanding of the market and the ability to now price with great agility and with added protections in the event that costs change dramatically and quickly. So altogether, we're in a much more robust position to not only weather the tough times, but to take advantage of the good times and to sustain our performance over time. So I will -- I am over time, and I apologize, just too excited about talking about this stuff. Okay. Well, I don't have my last slide here, but let me just wrap it up here. So basically, I mean, in summary, we are a well-established lift truck presence in the market. We've got a very strong customer base. We've got incredible capabilities that are expanding across all of our regions. And it serves as not only a strong platform for continuing to grow with the lift truck market, but an incredible platform to really take advantage of the opportunities and technology and added value to drive additional revenue into the business. And so with that, I'm going to turn it over to David, who is going to -- David is our President of our Global Technology Solutions, and he's got the great opportunity to talk about the most exciting part of the business, the technology. So thank you, David.

Thank you, Tony. So good morning. I'm going to take just a few minutes to provide a little bit more detail on how we're going to drive that accelerated growth agenda using technology solutions that, as Tony and Rajiv alerted to, these solutions are truly providing step change value to our customers. They're definitely hitting on the stuff they most care about, and we'll take a quick look at that solution set as we go forward. Now we've been developing and deploying technology in our trucks to differentiate them for many years. That effort, frankly, has gone to the point where a lot of the solutions in value-added go beyond the trucks themselves, and it's captured in the agenda of the solution set and the technologies that we have in place. We started that journey quite a while ago with the introduction of our telemetry solution, which connected our trucks digitally. They allowed our customers to collect valuable productivity and safety data, that solution has been very popular. It's been widely adopted by our customers, and it continues to grow at growth -- at really good rates as we're helping our customers use that information better and better in deploying in their operations. Now from connected trucks, we moved our solution set to smart connected trucks, and we added the solution set called OAS that you've heard about. The OAS was really part of introducing a series of technologies that are dynamically sensing a range of unsafe operating conditions of the truck. And as it does that, automatically adjust the operating envelope of the truck until the safe conditions return. And it's been a remarkable technology. It's been deployed and hardened with the most sophisticated warehouse customer here. We'll show some information on that. It is very much in big, broad scaling mode right now. We have a couple of videos on that, a short one to give you a better sense of that functionality and a little bit broader one at the end of the break. From providing solutions for smart connected trucks for manual operation, we shifted and expanded the solution set for full robotic solutions to our customers, as Rajiv said, really to help them address their most -- one of their most acute problems with labor challenges. We do have a very broad and deep experience base on that. We have an impressive portfolio of deployments. We'll see a couple of examples of that, and you'll see really what that foundation of the exciting growth that we think going forward is. Shifting gears a little bit. We'll also want to give you a glimpse of some of our big truck electrification solutions. I think a lot of folks here know Hyster-Yale working with Nuvera has really been a leader in zero-emission solutions on the fuel cell side and also on the other electric powertrain options that are there. Initially, again, as Rajiv alluded to, we focus that kind of effort on fully industrializing the zero-emission technologies on smaller trucks. And as that was done a couple of years ago, we shifted our attention to the big trucks, where they're very much on the clock and to meet government mandates in California and other places over the next couple of years. So we want to talk about that initiative because it's particularly critical for many of our customers' products right now. Now moving beyond just the technology set. The company has worked very hard in building and deploying the various other and very critical elements to drive successful technology adoption. And if we want to grow, we've got to have these elements in place to do that and do that well. So as Tony alluded to, we've got a very segmented approach of customers that's built as deep domain knowledge and unique knowledge of our customers' applications. It's -- when you're deploying a robot, it's just simply not enough to have a robot go from point A to point B, you got to know how the work gets done in order to make that deployment effective, repeatable and scalable. And we've done that in spades. At the same time, if you want to scale that solution across a broad range of customers, you've got to have a cost-effective service network in place, both to hold hands of our customers in that early adoption phase as they need help, but also to keep the trucks running because at the end of the day, these are vehicles, and they need maintenance and very few technology companies really can combine that. And finally, for the end-use customer, we've got to ensure that a lot of these hard one best practices on these deployments, they scale effectively across their networks. This is something that goes from this plant and then across our networks, both in the U.S. and of course, globally. So we think we've built a strong set of complementary capabilities that very few competitors can match to really drive technology adoption to the potential that we think it can be. I'd say just one small last area on this as we think about driving technology, growing the business at scale that we need it to be. It really kind of turns us back on are our solutions really hitting on the things that our customers most care about. That's a theme that runs through our business. And I think as you see in the chart on the left, we believe that absolutely is true. These are solutions that are top of mind for customers. These are solutions that we think help customers finally get full value and hit potential of smart connected machines and the Internet of Things, help people do easy deployable, effective ROI-driven automation solutions. And then as we've spoken about, really deal with the most difficult to decarbonize sections in zero emissions. One of the themes, it's been mentioned here, it's about easy to deploy, knowing very specific use cases allows us to develop solutions that are as close to out of the box as they can be. But that, again, allows us to scale to do that process well, means we've got to be very discriminate on those initial users and the early adopters, so that is bulletproof as we go forward. And then underlining all of that is at every point look to really leverage the core infrastructure, which we think is extremely strong and frankly, a set of capabilities that very, very few people can match in terms of rolling out this technology. So let's take a look at some of these solutions, this is critical. The first, we're going to take a look at is operate or assist, as we said, we branded Yale, Reliant Hyster reaction, if you can play that video now. What you're going to see is an animation, and we'll have another video a little bit later that just shows the range of capabilities that this technology can provide. Some of it is familiar and some of it very, very different. But at the end of the day, extremely powerful, add great value to our customers, avoiding collisions of all types of people, a product, truck, lowering cost of ownership, lowering product damage and having breakthrough safety results as Tony referred to. So it's been, as I said, an incredibly breakthrough product. It's been widely -- the additional adoption is with Amazon. We'll show you a video with Amazon that's quite remarkable going forward, and we're in the scaling mode now rapidly beyond that. Next we want you to look at is in robotics, if you want -- show the video on robotics here. This is an example of some of our deployments. It really does almost capture that future lights-out warehouse application. This is deployment at one of the world's largest consumer goods company. This has been an extremely effective deployment, where it's lowered their labor cost by over 80% in their operations. You can see some of the metrics on the left-hand side of that screen there. We're in full deployment mode now in terms of taking that best practice solution and bringing it across their networks, both in the U.S. and around the world. Now just a quick glimpse at our big truck zero-emission solution. If you want to play this. This is an example of a top loader. We have commissioned at the Port of L.A. Port of Long Beach. It's been in operation since January, unique in many, many ways, and it's been extremely well received. It's actually super critical. So the segment and our customers for this type of product frankly, are under California mandates to start transitioning their diesel fleets as soon as '25 and '26. These customers are on the clock right now. And that transition curve is not abrupt. It's not step chain, but it starts, and this customer -- this business segment is very much on the clock. The segment itself is, I think, produces meaningful volumes for the company. But this, in many ways, given that it's a closed-loop type of system environment is a real beachhead application for a big truck or diesel transitions going forward. So it's a very exciting piece of work going on there that we expect to leverage. Okay. So just in wrapping, I hope you got a sense that the technology solutions set that we have is far more than an exciting engineering agenda. And it is cool stuff in every sense of the word. But we also expect that to be a huge driver of our business growth. We think that also is going to drive huge differentiation of our brand. As the charts below give you a glimpse of, we fully expect this area of our business to drive growth, drive margins and drive market share as we move over time. This is going to end the formal segment that we have. We're going to go into break. As we do that, we're going to show a couple of videos. One, how Amazon has deployed our OAS system in their site. And then a second one on Facebook Meta, how they've deployed one of our robotic solutions. They're a little bit long. We're on break. So you can see as much as you want to. We use those videos with their permission. So the break is going to be about 10 minutes long. And we'll see you after the break. [Break]

Good morning to everybody. I am Roberto Scotti, President and CEO of Bolzoni. I would like to start with my presentation, giving you some hint about Bolzoni, where we are as a company. We have 7 manufacturing plants, 3 in Europe and EMEA, and their quarter is in Piacenza, that nearby to Milan. And then we have -- in that plant, we are making a lot of different attachment. And let me say, the new technology, machine attachment for the AGV. Then we have a plant in -- Auramo in Finland. Auramo is specialized in the paper. We bought Auramo in 2001, has been a quite great acquisition because it is quite a well-known in the market really well respected. And Auramo has been found -- has been set up in 1947. The third plant we have is in Germany in -- is a Meyer. Meyer also in this case, it's specialized in the beverage industry with the double-pallet handler. And Meyer has been set up in 1953, and we bought this company in 2006. Then we have in Americas, Sulligent in Alabama is where -- it's a new plant where we are introducing the, of course, we are building, of course, attachment, but also we are building legacy that [indiscernible]. And then we have the last plant that we build up is in Brazil in 2019. And also -- because also the South America is quite important, at least in the future. And then we are thinking that to be there is important for us. And we have other 2 plants in China. We are there since 2011. We set up 2 plants. 1 plant in Hebei Province, where we are manufacturing forks. Last year, we manufactured 0.5 million forks there. It's been quite a successful plan. And Wuxi, where we are manufacturing attachment for the JAPIC market, but also attachment and the component for the other factories of the group. We have -- beside the manufacturing plant, we have a 7 commercial branches, mostly in Europe, but also we have in Canada, we have in Australia. We have 25 independent dealers. The strategy here where the market is important, or the perspective is important, we want to be there directly. Where the market is quite low, at that point, we are working, let me say, with dealers. Our sales, as you can see, is about $380 million. And of course, in 2020, we had a problem as everybody. Now we are, let me say, recovering. And if you look at the net sales by product line, we have 53% of our turnover is related to the attachment, 37% in legacy and component, 8% forks and 2% lifting table. The operating profit is at 3.9%, but frankly speaking, I have to say that if you don't consider the legacy because legacy is a product that we are providing to Hyster at a very low price and very low margin is intercompany, but this is affecting a little bit our operating profit. This -- the legacy is going to phase out in the next couple of years, and they're going to be replaced by attachment with a higher marginality. So in other words, our operating profit is much higher than that if we are not considering, let me say, legacy. And looking at our position, and we truly believe that there is a lot of opportunities to grow. We are #1 in EMEA. We are #1 in EMEA, and we are doing really fine. And our focus today because we have -- we want to expand the market, is in Americas and in JAPIC. And we have, as an industry focus, I mean, we are really well respected in the market. And we want to work more and more on the new technology because automation is something that [indiscernible] areas are, let me say, very, very important. And when you talk about expanding market share. We are talking about Americas because we have tremendous connections with Hyster-Yale. So Hyster-Yale is a leader in this market and the fact that we can be the hand, talking about the attachment. And we are a first-class product we have -- that can allow us to get upon the market recognition that we are really absolutely a player. We are manufacturing here, so this mainly -- manufacturing here, we are close to the customers. So we are able to supply, let me say, service and we can expand our business with the OEMs because it's another opportunity for us. We want to also on the other side to expand the sales of the cylinder because there is also this production in Sulligent. And I truly believe that today, we are supplying Hyster-Yale, but I truly believe in the market, there is an ample possibility to grow with, let me say, with the cylinder. And considering the fact that we are working more and more with the dealer of Hyster-Yale, creating a great opportunity for us. JAPIC is basically the same. We are manufacturing there. And we have a low cost, of course. We are also working with the OEMs there to expand the business, and technically, it's quite important for us, our plant we have there because they can supply, as I said before, also component to other factories out the group. One of the things that represent for us opportunities, everyone that is manufacturing attachment, they have some sort of premium line, and they have only the premium line, one type of product. But we introduced a second line of product and then we call the Silver Line. Silver Line is made according with some design that has been made by our operation in Germany. We bought this design in China, and we localize the production there. And at that point, we got a quite robust product. For this reason, we provide a warranty of 3 years like the Premium and is ready. The product is -- we can deliver from the shelf. The customer has not to wait. And one of the most important point is the fact that the price is at 25%, 30% less than the Premium. So we are very -- let me say, it's a great opportunity in the market because we are -- in this way, Bolzoni is the only one that is able to provide 2 different products, but the second product, having a big advantage due to the price, the fact of the delivery, and this is very good for the rentals, also secondhand, also to sell directly and also recycling all this kind of, let me say, of the industry. Here, we are talking about driving growth, industry by industry. And we are working specifically. Of course, we are working on the 22 industry that we have in the market. But we are really focused on 4 industry because there is a lot of users of the attachment in this area. The beverage, and we have a Meyer that is providing double-pallet handler, and Meyer invented the double-pallet handler. For this reason, this is really well recognized around the world. We have the major beverage industry that approved and want to buy the attachment for Meyer. Bolzoni is providing many different type of attachment, but we are specialized in the carton clamp for the home appliances and on the automation, the AGV attachment. And then we have the pulp and paper. Auramo, since has been set up in 1947, this company just work in providing the best paper or clamp and bale clamps in the market. And then we have automotive and 3PLs. We have a clamp for tire. We have a fork positioner for these kind of things. All in all, this is an area where we are quite successful because historically, we -- the attachment were sold to the dealers than the OEMs. And we open also this channel to sell the attachment directly to the big industries. We want see if we can, let me say, take all the opportunities in the market. So we train our assessment to go and visiting customers and to see the new material handling opportunity or applications. And this when collect the data, come back, our marketing department understand if that application is just a stand-alone. There is no market for that or there is potential in market. If this is true, there is a potential in market, at that point, we go through the research and development in order to provide solutions, and we have a new product or innovation product that to put, let me say, in the chain and again and again. So -- because we want to be innovative in what we do. For this reason also, we are very keen on the future development, providing automation AGV -- for the JV, and we are working. And a couple of years ago, we set up a new center, research and development center, just to promote all these type, let me say, of attachment. And there is a clear path to achieving profitability goals. So we want to increase America and JAPIC market participation and share. That is absolutely out of question because it's where we can. We can also work on the technology because when you work on the technology, the margin that you can have, it's always a bigger because we are selling also the technology, let me say that. And then we want to improve the efficiency and create the synergies, and we want to continue to work with, let me say, the OEMs. In fact, our turnover you can -- is split among 3 or 4 important OEMs. We have 31%, 23%, 22%, 14% of our business to these OEMs. And this is -- we are turning to strategic multiplier. Because Bolzoni and Hyster-Yale, they met -- they complete, one the attachment, the other one, the lift truck and together. So we want to grow the market to have an expansion on the margin to support the Hyster-Yale goal because we are the same family. We want to announce the market above board in Europe because in Europe, we are quite strong and working together, we can do -- we can have a, let me say, success. But we want to work also with other OEMs because there is a lot of business there. And then we have to continue working in that. And we should also have a very disciplined execution and operation effectiveness that, let me say, is important in order to increase, improve the working capital and the cash. But to do that, also, we should have a talent that, let me say, can manage a little bit the company. Talent is very important, absolutely. And then we are working in order to get the talent on board with Bolzoni. So the key takeaway expanding market presence and outside Europe, investing in customer-driven product innovation and accelerating financial results with ongoing margin expansion opportunities. Thank you very much. Okay. Now let me introduce Lucien Robroek, President and CEO of Nuvera and friend of mine.

Thank you, Roberto. Thank you for the introduction. Thank you for being able to speak here. We've been talking about fuel cell quite a while in various presentations. So I would like to make sure that there is no misunderstanding what the fuel cell is. Actually, we call it a fuel cell engine like on this picture. So what it does on board of a vehicle is it actually produces electric power. So not like a battery where you store it, where you charge it and store it, but it produces electric power during the operation of the vehicle. So if -- hopefully, it works, yes. And Hyster-Yale, although our, say, most beloved customer is not only -- our only customer. There are many applications where we deploy this fuel cell. It's especially important where you have heavy duty operations. So you need a lot of power to execute what you're going to do with that vehicle or that piece of machinery. On the graph, you'll see, on the top right-hand side, it kind of a schematic, don't take it too literally. What it actually shows you where a fuel cell is really competitive with alternatives. The traditional alternative is a diesel engine, a combustion engine but that is being phased out. So very depending on local regulations, on actually strategies of larger companies that want to be green. That is driving where that competitiveness is against the original diesel engine. Now a vehicle needs to be electrified first. It doesn't matter if you need batteries, or you need to -- or you want to put a fuel cell to it. So our other competitor to some extent, is an electrified vehicle, but then only using batteries. The problem with heavy duty though, is that depending on the duty cycle, you cannot carry all the batteries on board just to perform the same shift that you originally would do with your diesel engine, meaning that it will become either way too heavy or too bulky or simply too costly if you would do that. Now adding a fuel cell to the system takes out the majority of the batteries. You can use it to charge the remaining batteries or you can actually use it to directly drive your electric propulsion. So where is that competitive with plug-in batteries, that is, again, where you don't have the time to charge all of those batteries or where it becomes too heavy, and I'll show you that in a minute. There are downsides to fuel cells. It needs fuel. So you have a fuel tank on board where you store hydrogen gas. And hydrogen gas is not as readily available as diesel, for instance, so that industry is developing and needs to mature. Fortunately, a lot of the governments see this in Europe, in Asia, in Americas, and they are stimulating the buildup of that infrastructure. So hydrogen production, especially green hydrogen, but also logistics around it, including fuel cell stations. And what I'm showing you in this graph, and I don't have any newer information, but it shows the acceleration of that kind of industry in the hydrogen gas sector. So the gray area is all the announced projects in '22, the green area is the only announced projects in the first month of this year. So my expectation is that if we would show you this next year, there will be a huge increase of these projects. Now the problem, obviously, is that these projects take time. They take a couple of years before they will end up in having that additional production of hydrogen because of permits, because of simply lead times of a lot of things. So we expect that it will take 2 to 4 years to really see that hydrogen availability go up. The cost of hydrogen go down and the acceptability of hydrogen taking to the next phase. But equally along the development of the applications takes time. So always Nuvera playing into all of this. First of all, I have to mention that Nuvera is not a new company. We were founded in 2000 from parties that were already in hydrogen gas processing and fuel cell manufacturing. But what we had in those first years, say, the first 15 years before Nuvera bought Nuvera -- sorry, before Hyster-Yale acquired Nuvera is that we were executing projects, projects for larger companies to see what a fuel cell could do or one of the other applications. After we were acquired, we very much focused on having products, having those fuel cell engines available to drive these vehicles that were coming up in the market, and we're already seeing the issues with batteries. So that's what we've been doing. We're putting all of that expertise and actually also the IP, which is very important to us into -- making it into product, in developing production capabilities, in developing testing capabilities. Now we know that is not enough. 5, 10 years from now, fuel cell might become more a commodity like diesel engine is today. And we need to have a very special place in that area. So our focus is already on our unique selling points, and they are fuel efficiency and compactness of the engine. So we not only do we have product available, you can order them today. We also have the most fuel-efficient solution there, and we also have very compact engines. And that -- those are not the words that I make up. Those are the words of customers that choose Nuvera. Now I don't expect you to understand completely the graph there, but it shows actually the results, the test results of our fuel cell generations. Actually, it says that there is a penalty to pay. If you want to have more compact engines, you will lose efficiency. While we managed in our latest generation to make that line more flat, that's the upper light blue line, more flat and also at a higher efficiency. And that is what we're working on. Now stacks are modular. You can build more stack, you can build more cells in the stack, and you can build larger stacks, giving you more power. What we also do is that the products that we have available right now, and we keep expanding is we can multiply that with our customer in 1 vehicle or 1 application. That makes it extremely, again, scalable and modular. And that helps us to address many more markets than just, say, the port equipment or something else. We can build those. And I'm showing you this graph that the dark green areas are actually our focus area, or I shouldn't say focus, are addressable markets, and they already add up in an addressable market in 2030 that we expect is well above $20 billion. And I'm not even including the automotive market because we consider passenger cars, not heavy duty. Yes, there are fuel cell cars already running around. But eventually, we think that battery technology will continue to develop and might have a much more solid place there. But never say never. So what are we focusing on? We still focus on on-road vehicles, but those vehicles that need more than to go from A to B, they do more on commuting, they need to do some work while they are underway. In many occasions, going from A to B is not even the most important thing for them. Off-Road, probably easier to understand because heavy machinery difficult to charge them often in places where you do not have a connection to the electric grid, and they need a lot of power. And then port equipment, you've already seen a couple of examples, and I'll show you a couple more in the next slides, but it's a very interesting area because ports are -- although we have limited hydrogen availability, they are the drivers of having that availability at the location. And they have chemical industry, they have shipping, they have logistics. So we feel that ports will be the beach had of these fuel cell applications. I'll go into marine and stationary and portable power generation a little later because we -- those markets actually we see as upcoming that we didn't expect as soon as that we now see coming. Now the next 3 slides are an array of pictures. Pictures of applications that we are working with our customers in. So not just illustrations. These are real life applications. I have to explain that you see in some of these pictures, this green kind of dot there with an H2 logo on it. That means that those applications are not only being worked on, but they are operational, they work, and in most of the cases, they are being used as demo units to convince their customers in the ramp up. So you'll see buses. Originally, we started in buses for on-road, but you also see some other applications like refrigerated trailer. Actually, that needs to have a dot already. But by the time -- at the time that we made this presentation, it was not yet operational, but it is operational today. I just got confirmation. The other interesting is a prototype car that -- yes, we don't expect a lot of volume with racing cars on-road but it's a typical example of how our customers are trying to get expertise and this particular customer has the medium-duty trucks as a target for on-road trucks. Off-road already mentioned, a big issue with Off-road again, is charging and having that onboard charger fuel cell on board will definitely help progress the electrification of this difficult to electrify industry. Now port vehicles and equipment. I won't say too much about the top left 3. They are all with Hyster-Yale, including the terminal tractor that you see there. But there are many more pieces of equipment running around imports. If you have hydrogen and if you go to electrification and especially if you have the authorities saying that you need to be zero emission by a certain year, then you better work on electrifying those as well. It doesn't really matter how big that market is. Marine is very interesting. I already mentioned that. We still expect that ships will take a long time, first of all, to be replaced, but also to be changed in the guts of the ships. I mean, you have to imagine that we go all electric. That means there are no access there, all the diesel equipment is gone. It's a completely different way of operating a vehicle or a ship in this case. So they go lower risk. They first go with electrification of their auxiliary power, their AC systems, if you talk about ferries and then they go to the main propulsion. But we see partners and we're working with partners that actually are aiming at both in a very thoughtful way of introduction of that. And by the way, the marine power pack, you see there on the right top-hand side is also operational, and I'll come back to that because we actually use it also as -- or a customer is also using it as a power generator on this slide. So it's the same one that you see top -- bottom right, the blue box there, that says E-60 twin. That's another application where we use more than 1 engine in that application. We're also building larger engines. So the next engine, the EN-125, is 125-kilowatt output and an E-60 as the name says a 60-kilowatt or 59. That new engine, again, for its compactness has more than doubled the power, but -- and we'll have it in the market in '25, but we already know it's not going to be much larger than half of the E-60. So -- I mean the E-60 plus half, let me be sure, so 150%. It's not double the size. That's what I'm saying. Mobile power generations are great. If you do battery electric vehicles, that's great for us. We know you will have a charging issue. If we all go and drive electric cars, where we're going to charge those, especially in the first few years. And I'm sure there will be some solutions in the future. But right now, we already see the demand and our customers see demands for mobile power stations that you can use to charge electric cars great for us. And then larger power generators. I want to draw your attention to the one in Italy, where we've built a power generator that is actually almost 0.5 megawatt, that is powering a neighboring factory and is connected to the Italian grid to deliver electricity there. Now back to why I'm showing you this. I'm showing you this because there is a long road to volume for us. We know we were scaling up, but it takes a lot of steps for our customers to go through in order to reach that scale. If you go in this graph from left to right, from exploration to scale. There are different phases that we typically see. First, they need to electrify their vehicle. Once they've done that, or while they're doing that, we try to convince them that a fuel cell actually makes sense in that application, and they make a decision to do that. Then, obviously, they need to decide for Nuvera. We want to sell an engine to them. So we send quotes and hopefully, we'll win the business. And then it doesn't stop. We help them build a successful engine and successful integration in that electrical system and make sure that they reach a demo phase because they need to convince their customers and often their customers' customers to go that way. It's a very new approach. So everybody is trying to minimize the risk. And then you go to perhaps a demo fleet of 10, which for us means you start scaling up. So the numbers you see are the customers we have in these different phases. The idea, of course, is that we get all these customers to the right-hand side to the scaling phase. Every customer will have a potential of volume that they target to sell or will sell. For us in the beginning, these are one-offs, but we are very, very kind of keen on making that progress go faster. Again, in the blue on the bottom, very important. The last time we were face-to-face, we only had 2 active applications, one was Hyster-Yale, which we still have. The other one was ERG in China on the buses, which we also still have. That took much longer for all kinds of reasons. Hydrogen, one of them, but also all of the environments. I think the key fact is that right now, we have over 100 of these customer engagements. We have more than 20 active applications in operation, and those are facts. Now we do try to accelerate that. Obviously, we -- what we can do, we will do. I already mentioned that adding more products to the product line, but also seeing what we can do to help them build these engines into their vehicles. So we have stacks. From stacks, we build subsystems and what we sell actually are engines. But what we try to do now is together with the partners we already have or customers that have been successful is add a step in between level 2 and level 3. And that is showing new customers what systems they might use for integrating a fuel cell into an electric system because you need tanks, you need a power intake, you need electronics. That is actually what we're trying to do. And that's not so much to generate more revenue because we could decide are we going to be a middleman in selling these components, we can, and in fact, Hyster-Yale is doing it for some of their applications as well, but it's merely to speed up for Nuvera. Now what we do, do more on broadening our say, addressable market is we're not ignorant of things happening around us. We are focused on the markets that I already mentioned, but we do see that a lot of customers, new customers are starting to pull at us. Now because of the fact that it's modular and scalable, it's easy for us relatively easy to accommodate those customers. And again, you've already seen a picture of a locomotive. This is another one. This is a Shunt locomotive in Italy. We're -- even in Europe, can you imagine what is the opportunity in the U.S., but even in Europe, there are many places where the trains are not electrified, already have duty cycles that cannot be electrified. And they all run by diesel locomotives right now. Now there are already electric locomotives. So you don't have to electrify, you should just pick another one, but you need to have a source of electric power and it cannot be the overhead grid. Adding a fuel cell or even a cart with additional hydrogen tanks next to or behind that train is a relatively low-risk demo for those companies. That's what we're working on. Marine. We have our first engines certified for Marine in Europe, very important. It is a different industry. We're not used to that, where we have great partners that help us modularize that, and they actually will be the ones going to market. Again, we work with them. We build our -- we help them build our systems in that, and then we work with them to distribute that, a great potential. Cranes is a very interesting one. These big cranes, again, port equipment, they are quite often already electric, but they carry a diesel generator on their back. Now for us, a power generator is pretty easy. It's -- so you don't have to fit it into a specific space. You just make sure you have all the components there. So that's what we are doing with cranes there within a project in the U.S. And then power generators. Again, we see a lot of these things happening in Europe. We see lots of that in the U.S. And obviously, that again has to do with costs right now. But we also see applications where you really need zero emission power generator. And this green thing on wheels, that's what we're building with -- or have built actually because it works with an electronics partner of us. We are now kind of seeing if we can bring it to market as our own product, whether that's Nuvera or whether that's Hyster, starting in the U.S. And that is taking out one of those steps that is holding our scaling up back. So we are looking for ways that we can influence to speed up the application of fuel cells, and these are a couple of those. Now what I want you to take away from this presentation is that, first of all, fuel cell engines are real. They are there. You might not see them in the streets right now, but they definitely are there, and it's growing. It's growing across a lot of markets. It also takes a lot of time to be ready for that. So if you decide now to all let's do fuel cells, I can guarantee you that will take a long time. So the entry -- so competition entry is very difficult, and we see that already, that market is immense. So we feel that with Nuvera fuel cell, Hyster-Yale is already a leader in that zero-emission powertrain solution, and we can bring that to market together as one of the clear examples that it can be successful. Thank you for your time. And now I want to introduce Scott Minder, our CFO and Treasurer, for wrapping up this section.

Thanks, Lucien. Nuvera has got some great technology, and it's a real opportunity for Hyster-Yale moving forward. So as Lucien said, my name is Scott Minder. I'm honored today to be on stage as the CFO of Hyster-Yale. I joined the company about a year ago and what a great year it's been, record production, record revenues and record profits. And I really think this company is in the early stages of what it can accomplish. So with that, let's jump into the financials. I'm going to cover where we've been, where we're heading and give you a framework for how to think about our future financial results. So it starts with our recent past, and that puts our current situation into the right context. These charts here look at 4 income statement and cash flow metrics over time. They start with 2018 on the left, and they go through the last 12 months ended Q3 2023 on the right for each. And 2 things stand out for me here. We turned the corner in late 2022, and we haven't looked back. We've had 4 profitable quarters in a row, and we've moved the needle on all these other metrics. And I think just as importantly, we're ahead of where we were in 2018 and 2019 on each one of these metrics. So the recovery and growth here are pretty impressive. But what matters is how do we get here? And ultimately, how are we going to sustain that performance. So like many industrial companies in 2020, 2021, we faced material cost inflation. We put 5 price increases into the market to offset that. And I can tell you, year-to-date, we've offset accumulated inflation in our business, and we have also developed the pricing agility that Tony referred to that's going to benefit us going forward. Also like many industrial companies, we had to reduce cost in 2020 as the market shrank. Not only did we reduce the temporary cost, we took a look at the fixed cost structure to lower the breakeven point, and it ultimately gave us better flexibility moving forward. So a couple of examples. We increased the size and scope of our shared services, operations in India, and we also combined overlapping regional teams in areas like marketing and pricing, not only to be more cost efficient, but also to be ultimately to be more effective. So good progress there, but more work to do. And you've heard a lot about the strategic initiatives today. Those played in here as well, modular scalable trucks, industry specific approach to products and sales, those are going to continue to benefit us as well. So these things really helped us turn the corner, but they also lay the foundation for continued progress toward our long-term objectives. Speaking of long-term objectives, you've heard a lot about them today, but I wanted to clearly lay them out for you on a single page. So on the far left, we have GDP++ growth. Now that's a term we've coined here. But I think as Rajiv explained, we expect the materials handling industry to outpace GDP. Why? Because of e-commerce growing in size and scope and supply chain localization efforts going on around the world. And we think Hyster-Yale can even grow faster than that. We've talked a lot about increasing share with our new products. We've talked about increasing revenue with our new technologies. And as Lucien laid out, Nuvera provides us with a really unique opportunity in hydrogen fuel cells. The next box speaks to our operating margins. We intend to earn 7% operating margins over time. We've moved the needle a lot in 2023, and we're going to continue to do that as the revenue base grows. The strategic initiatives have helped us get there, and they're going to help sustain that going forward. But I think the technology applications, combined with our new products can be a real game changer for Hyster-Yale over time. And we're going to keep working on reducing that breakeven and making our cost structure more flexible. The next box over, we aim to have working capital at 15% of sales. We all know that cash generation starts with working capital efficiency. And if you take that 15% number and multiply it by our LTM revenue, it's a $150 million opportunity for more cash from operations. It's a huge opportunity. And the good news is we've operated at that level in the past. So it's getting back to where we were. And we've got a lot of opportunity in our supply chains with modular scalable products. And we've got new tools that we've put in place over the last 1.5 years or so to really better align inventory and production rates in a dynamic environment. And last, on the far right side of the page, you have our goal to have at least a 20% return on total capital employed. And that's really a culmination of the other 3 metrics here. Profitable growth is going to expand your numerator. Working capital efficiency, along with capital spending discipline is going to optimize your denominator. And when you work on both at the same time, you have significant opportunities here. So I've covered where we've been, and I've laid out our long-term financial goals. Now I'm going to paint the picture where we're headed by combining the 2. So this is a familiar slide with a couple of key differences. First, the graphs are now the metrics you saw on the last page. So these are how we've been performing since 2018 to the middle of each chart to the last 12 months. So you see the same improvement trends, both to the most recent periods, but you also see improvements versus 2018 and 2019 on all but working capital, and that's getting close, right? It's improving, but we're not there yet. So the so-what on this page really becomes the far right bar on each one of these graphs. And that's the goal that I laid out on the last page. So we've made a strong rebound, but there's a big opportunity ahead between the current performance and that long-term goal. So I'll summarize the actions to get us there and keep us there. So I can't say enough how important our modular and scalable products are for us. They're going to help with profitable market share expansion increasing the top line as well as reducing working capital with fewer suppliers and a more tight supply chain, optimizing the bottom line. So really moving our return on capital forward. Our industry-specific approach to product and sales, we're going to deliver a capable lift truck with a specific attachment for our customers' needs and their industry needs. And I think that's really important. And it's a value proposition, I think we can really price for over time. We're going to add those emerging technologies to our trucks. And I think this can revolutionize our business, both with expanding revenue, but bringing in new recurring revenue streams into the business that we haven't had in the past. And of course, we're going to keep working and with the pricing agility that we've developed over the past couple of years. So getting to the targets as part of the story, staying there is the other part of the story. So those 4 things that I just covered are going to help us get there and stay there. But we're confident that our end markets are going to grow. And I think we've laid out a case for our ability to grow faster than our end markets. And we're going to become more leaner in our operations and our supply chains, ultimately building more trucks with less working capital over time. So we're lowering that breakeven point to absorb cyclicality in our business. When we do these things, I think free cash flow becomes more significant and more consistent for our business. So last 3 slides really talked about how we're going to achieve our long-term goals and sustain that performance. This lays out our cash allocation framework. So there's really 3 sections to this slide. The top part talks about how we're going to increase more operating cash, and it starts with using our fixed assets more effectively, running our factories optimally. The middle box really talks to how we're going to better align our working capital, our inventory with our production. And then last box talks about applying that same discipline to all of our other investments, getting the most out of our people and our technologies as we move forward. So the bottom -- the middle and the bottom section of the graph really talk about our cash usage. And the middle section talks about our more foundational cash usage. Not that the dollars are set, but these are consistent uses of our capital over time. So we're going to -- as many in the room, happy to hear, we're going to maintain our debt. We're going to pay our debt to our banks. We're also going to routinely maintain our factories. This is important for us. We're also going to invest in our products. Now I've separated evolutionary R&D to revolutionary R&D. And here, I'm talking about evolutionary R&D, making sure our products are fresh, and they can deliver what our customers need. And last, and really important to us is providing a reliable dividend to our shareholders. We paid a quarterly dividend every quarter since we became a public company in 2012. And it's our intent to continue to do this throughout the business cycle. We think that's important. And the final section on this page really says, what are we going to do with the excess free cash flow that's left after that middle section. And we'll start on the left. We're going to reduce leverage. We think it's important for a company like ours to use our ABL sparingly to not at all in the up cycle and then to use it reasonably in the down cycle to sustain our business. We're also going to fuel growth. We're going to do that organically by investing in revolutionary R&D, the type of R&D that brought you the modular and scalable products as well as the new technologies that we've talked about. And we're also going to invest in making our factories more efficient and our supply chains more effective. The next box speaks to inorganic. We can invest M&A to acquire capabilities or to accelerate development of capabilities, accelerating the results and the financials. And then after reasonably filling up those 3 buckets, we'll return excess free cash to our shareholders over time. And we'll keep one thing in front of us at all times, and that's that bottom number on the chart. We do all of this allocation with a return on capital of at least 20% in mind. So I'm going to wrap up with this slide. I think I'm pretty lucky. I get to take all the hard work of my prior presenters, and I get to roll it up into a single capstone slide, sort of all the how's and what's on a single page. So it starts on the left with our last 12-month financials, and we've talked about these already. But just to put into context, these are significantly better than they were in 2020, 2021, but also better than they were in 2018 and 2019. So we're starting from a position of strength. In the middle, you have the goals that I just walked you through. GDP++ growth, 7% operating profit and 15% of sales for working capital. I think I've made a compelling case or we've made a compelling case for achieving and sustaining of these across the business cycle. And if we do that, we're going to generate cash, and we've talked about how we're going to deploy it, accelerating the momentum in our flywheel. So moving from the first column to the middle column, it's just math. We're going to be a $5 billion company, generating $350 million of operating profit. We're going to turn $300 million of that into cash from operations. We're going to do all that while achieving at least a 20% return on capital. And we think that's important. And I think that's really the message for you to walk away with today. But there's one important detail left to go. And that's the far green box that represents Nuvera. Today, Nuvera is more financially akin to a start-up business, strong technology and growing market momentum. And this business isn't where we thought it would be when we bought it. However, we're closer than ever to achieving our objectives. Our customers are more interested in hydrogen today, and we have more customers as Lucien laid out. And we can really combine the experience of a vehicle OEM and the leading technologies of hydrogen and bring that together into a very powerful proposition for the market. So the bottom line, we've got 2 great mature businesses with outsized opportunities in their markets. And we've got a dynamic green energy business with demonstrated technologies and a growing customer base. So we think 1 and 1 make 3, and we hope we made a compelling case for you to feel the same way. With that, I'm going to hand the floor over to Al Rankin, our Chairman, to conclude and take us into Q&A.

In summary, we believe that we have sound long-term core strategies, that those strategies are backed by key projects. Those projects have a clear path to completion that they're being executed in a very disciplined manner and that individually, in some cases, and certainly collectively that they give us differentiation from our competitors. We expect those to lead to revenue growth, profit growth, cash generation and to do that on the back of a low capital intensity approach to the business. We believe that these strategies and projects can support a 20% or more return on total capital employed. And by that, we mean our investors' capital and our debt, which is -- and that 20% would be backed by a 7% operating target. And it would also include a sound and growing fuel cell business over time. We would suggest that there are several key takeaways. First, we have attractive global markets that support a solid long-term growth potential in all of our 3 businesses. Second, we have technology-enabled materials handling solutions that are designed to solve our customers' most difficult problems. Third, we have hydrogen fuel cell solutions, which can provide the energy sources of the future for a significant set of applications, which include lift trucks. And fourth, we have accelerating financial results. We've come out of the difficulties of the COVID period with strong returns on capital and supported by strong P&L results. We further believe that when you stand back from all this, that Hyster-Yale is a solid long-term investment option. It's an innovative, disciplined, long-term focused company with a core Lift Truck and attachment business that's in an established industry that provides substantial growth and consistent growth potential. It has high barriers to entry, good profit generation from new products, technology and market penetration and very strong operating cash generation potential. It also has a fuel cell business. That's an emerging business in a technology area that we believe will provide really significant long-term growth opportunities. It's the next-generation technology, which is backed by patents that are very substantial in the fuel cell area, and we're building for the future, but we're doing that with a clear focus on increasing revenues in the near term. We think that all of this combines innovation and disciplined execution to create strong outcomes and can lead to increasing shareholder value off of a base that we think is undervalued and under recognized at the moment. And it gives us a lot of potential both from an operating and a profit perspective as we look forward. And with that, we'll now turn to a question period. And I believe that the presenters will all come up to the front, and we'll be happy to answer any questions that you may have.

While everybody is moving upfront, and we're getting situated, I just wanted to say a couple of reminders. Please complete the survey that is at your desk and leave it on the registration desk when you do leave here today. And also, we have provided box lunches for everybody in attendance. So please feel free to grab one of those as you leave once we are done with our event. And thank you so much.

We will get started here in just a second. Do we have enough microphones up there? Okay. All right. Do we have questions?

Okay, I've got 3 questions for you. I'm going to start with Lift Truck. There was a good discussion with regards to Maximal, and now it's outperformed the expectations since you got involved with it. And so my question...

You bring your mic up just a little bit.

Can you hear me? I'm a really loud speaker. I want to talk about JAPIC. And so I mean, really where I'm getting at it is it's a business that has been running at an operating loss. You have the Chinese Lift Truck business that's outperforming. And so I guess my question is, at what point do we see that portion of the Lift Truck business for Hyster-Yale move into a positive operating margin?

Yes. So maybe I'll take that one and then pass it to Tony. So what -- you heard Tony say that we're localizing more and more of the product that JAPIC needs into our Fuyang facility. So if you look -- as you're looking at the results of today, what you're seeing is significant import from EMEA and Americas into that market. Within the next couple of years, they'll have everything they need localized, so I think that's the time frame we should be looking for them to be sustainably profit -- profitable. But Tony, what else do you want to add to that?

Yes. I would say part of it is how we do our management reporting in reality. There's a significant amount of export to our other sales divisions where we recognize a good portion of the revenue and profit for those products. So as an entity in that region, it is very accretive to our business right now and adding value not just in the products but in the continual development of that scalability that we talked about. So I think Rajiv noted that we are going to see the growth in the region from the volumes driven by the localized product. We've got the OpEx base that will support that today. So we'll be leveraging that OpEx base that we have there today. And so I think that we'll be seeing that in the not-so-distant future.

My second question is on Nuvera. I would just like a little more color. You highlighted the 2.5 level. And I'm just kind of curious as you work and try to bring the other parts of the solution that need to happen for implementation. Are you working with specific partners to bring in the tanks and all the things that bring that 2.5 level, or you doing it yourself? I mean kind of how is that strategy evolving and playing out?

Yes. So maybe, again, I'll say a few words and then Lucien can build on it. So what we've found -- one of the elements that's taken us more time than we expected is the immaturity of the supply chain. A lot of the components we use outside the fuel cell are emerging components, whether we're talking about tanks, DC to DC converters, some of the power electronics that goes with it or even some of the components such as electrified air compressors at high voltage. So those are coming along. And certainly, we've -- we are integrating those into our trucks, and that provides a component base. But then Lucien can talk about the other places we have those components maturing.

Okay. Thank you, Rajiv. Hyster-Yale, obviously, is the most progressing one, also easy for us to access. We have orders. Thank you for the question because I forgot to thank Deco as an important automotive supplier for providing a level 2.5 drawing. We are working with them as an example because there are orders of companies that are reinventing themselves. They see electrification happening. So mature traditional company system suppliers that are reinventing in themselves. And they are investing in this area, and they can do that much better than we. They already have the distribution channels and the relations and all of that. So we're very lucky that we can use those kind of partners. We have urban mobility systems in Europe. They actually do already convert diesel power products into a small series of electrified products. They've done it always with batteries. They now recognize that, hey, a fuel cell, that would be great. So we have a collaboration agreement with them. Power Innovations, which is on the electronics side that we actually kind of work together with on that trailer with a power generator and a couple more. So yes, there -- we are fortunate that we are seeing and noticed in the market and that takes away a lot of our kind of burden because we want to be focused on that fuel cell business. We want to be the best. That's why they came to us in the first place, but we are not blind for future opportunities in that area.

And then my last question, Scott, I'm not going to leave you out. On the long-term financial goals, $5 billion in revenue, 7% operating margins. I mean, is there any time line you want to put around it?

Maybe we could start with now kind of giving us his thoughts on that?

Well, I think we have a very long-term perspective. But if you look at the nature of the strategies and the programs that were laid out and take an execution period over the next very few years, the platform is laid to accomplish those objectives. In the near term, unless we have an unexpected event, like a steep downturn, in which case you have to adjust for that. That's not something we can control. Frankly, we don't see that now. We were more worried, as I think many people were just a few months ago about a steeper downturn. On the other hand, historically, it has been a cyclical business. We do think with some of the characteristics we have today will be a less cyclical business going forward than we were in the past because some of these technological innovations that David and Tony described are going to provide an underpinning for the business that's quite different from just the original unit business. And I think it's very significant that we've demonstrated that even at 5% that we can generate, the 20% or so return on total capital employed. That's a substantial achievement to -- again, it's not just the investors' equity. It's also the debt that we have, the total capital employed. It's one of the reasons that I think Scott can summarize the business the way he did is a real cash flow generator when we operate at those levels. So I think that what that leads to is a sense that we have the capabilities now and we can drive it further in the near term rather than the long term assuming the economy continues to be supportive. Rajiv, you want to add to that?

Sure. I think our focus is to continue to execute our initiatives that we've walked you through. We know with our financial planning that those -- pretty much bring us those results. The only variable is will the market -- how the market will behave. So timing is difficult to predict, but sooner rather than later.

I'd just like to give a lot of credit to the team that you heard today. I think we've demonstrated that we are willing as a company and have been willing over time to take a very long-term, steady, consistent view. It's hard to describe the magnitude of the undertaking involved and a complete set of modular scalable products that we outlined. Rajiv and his team and the product development side had that vision, and they really put it in place. There were parts of it that were quite agonizing in the early days as we've done something that we believe none of our competitors have come close to. And that's a linchpin to providing cost-effective solutions for our customers. So a lot of this is -- what you heard, I think, is about laying the groundwork over a long term -- over a long period of time for future results that are -- we think are now starting to come to pay off for us.

I want to follow up on that one on absorbing cyclicality and good to hear you're more optimistic than perhaps a couple of months ago. Just with your backlog position, $3.5 billion and some of the initiatives you've taken, maybe talk about how you've lowered breakeven, and how you would perform if we did go into a bit of a deeper downturn.

Yes. I mean even if there is -- of course, this is projection. But from everything we are seeing, if there is a downturn, we don't expect it to be very big. Because there is a huge amount of upward pressure on the economy just purely on demographics. The Gen Y, Gen Z generations really haven't got to their peak spending yet. But if we do have a recession, we have that backlog. It will act as a shock absorber. It'll allow us to adjust. We're pretty much tracking things by production line -- product line. And as the lead times come down, we are adjusting our -- the way we go to market on those products to add to the backlog at the rate we need it. So I think that's the strategy we'll pursue, and we're feeling pretty confident that we'll get through that well.

I think the only thing I would add to that is that -- and again, it's both the right thing to do from the business point of view, but it's also a contingency. It addresses the contingency of a downturn. And that is that we still have very substantial excess inventory as Scott really outlined in his discussion of working capital. We think we can bring in 2024 that working capital way down. And that puts us in a very good position to get our returns in the face of some of these difficulties. We've stabilized production. At this point, our suppliers are now pretty supportive. We have worked through labor shortage issues in our various plants. And I think that lays the groundwork for a different kind of improvement in 2024, but a really important one in terms of our returns on capital and being prepared if the markets don't perform the way that we think they should. So 2024 should be a year of very significant cash generation.

Maybe a follow-up. You talked about footprint optimization. I guess where do you stand on that journey longer term? And what's sort of contemplated in that long-term model on that side?

Yes. I think we're, I would say, kind of in the early stages of that. You've heard that we've expanded Fuyang, that was critical. We'll further expand Fuyang to produce big truck for our JAPIC market as well as some of our other emerging markets. And then you heard Tony say that we want to produce our internal combustion engine trucks and electric trucks on the same line. Today, that's not the case either in Europe or North America. The plan is to do that, that will further aggregate that counterbalance production line, and then we'll go from there. So we think, I would say, by the end of 2026, we'd have pretty much implemented all the changes.

And maybe 1 last 1 on Nuvera. Maybe just talk about that chicken and egg problem more broadly. I think you talked about '25, '26, some mandates in California, when would customers need to place orders there, talk about the hydrogen hubs and some of that investment and just hydrogen in general.

Yes, it's always difficult to predict. I mean, we've seen it in the past. Things are being delayed, but it's now so overwhelming. So I always say that I mean, Nuvera's been there when there were hypes around hydrogen, and they came and they went. But what is different today, and we see it -- first of all, it's global. I mean, you see it all over the world. It's global. It's not just 1 region. We're not dependent on California or 1 particular place. You see a difference in attitude from governments. They cannot just be more green, one by the other, but also traditional companies. So it's taking seriously. What we see now is an eagerness to get into that business that we haven't seen before. It always was a niche, now that you see the market trying to find the most kind of prosperous and good players there. Where the politics go, I cannot tell you, we hear all kind of different kind of new parties say, no, we shouldn't be going as fast, others say we need to go faster. So I don't do any prediction on that. We just keep our focus on the longer-term strategy. And up to now, it has been paying off because changing the strategy is something that we are kind of not doing right now.

One thing that we've seen is that you have to -- on these heavy trucks, you have to experience the pain of trying to do it with batteries first before you realize that's not going to get the job done. Now we've told people that, but it looks like you have to feel the pain before you get the religion of finding the next -- the right solution and somewhat, we've done that ourselves. If you look at our medium-sized trucks, they're all lithium-ion batteries. That's because we don't have the right size fuel cell for them. But we know as soon as we have that, we're going to turn them into fuel cell trucks because battery alone is difficult for our customers to handle. So as we get into medium-duty trucks, for instance, especially medium-duty trucks that have some form of accessory whether it's a dump truck, whether it's a refrigerated truck, traction is not the only demand. It has ancillary power. It's going to be impossible to just work on battery. So I think that's still for the market to learn because we've had dialogue with all of these people and they think, well, -- we think we can make it work. And then sooner or later, they realize it won't and then they look to fuel cell.

And that's the inflection point right there. When they realize that it won't work and instead of thinking they're going to get half or 2/3 battery of one of these heavy-duty applications. They switch to 2/3 fuel cell, 1/3 battery or whatever the numbers may turn out to be. And that's the moment when we think demand will rise very rapidly. And hopefully supported by the hydrogen infrastructure that Lucien outlined and the timing of that fits that profile pretty well.

One real quick request from the stage. When you ask a question, can you let us know who you are and where you're from, that would be helpful.

Brian Sponheimer from Gabelli Funds. Just a question. If I were to go back 5 years and look at your 2018 day, the targets then were for an 8% operating margin as well. Obviously, while inflation has played a role from a purchase component standpoint and labor as well. You put together a terrific day where there's an obvious value proposition for your customers. I guess why wouldn't the potential profitability for this business to be closer to some other specialty equipment manufacturers in the 9%, 10% range? Is there anything holding you back from a pricing perspective there? And can you talk about the pricing and the backlog, the dynamics there?

Yes. I don't recall I said having an 8% target has been 7%, yes, it continues to be 7%. And I think part of the issue is what I talked about that we only manufacture the critical components that make a lift truck. As I've said, those are chassis and those are masts and we buy everything else. Now a lot of our competitors and adjacent companies when you think about some of the agriculture companies or construction companies, they make a lot more of the truck themselves. They have to deploy a huge amount of capital to do that. So the way we would really like you to think about our company is we are very capital efficient. That does hold us back on the return on sales in our operating profit because we're also using suppliers who need to make their own -- we want sustainable suppliers that need to be profitable. Whereas a number of our competitors and adjacent, they really build up that profitability because they make a lot more of the component. They also own their networks, which is we know is a profitable portion. But also, again, you need to deploy a lot of cash.

So let me take it one step further, if I could. I think if you reflect back on the presentations that were made right from the very beginning and throughout the presentation and then particularly in the summary financial presentation that you heard. The return capital came first. And if you look at those same competitors that you're describing with a higher return and operating profit, the returns on capital employed are really low. And so that's the trade-off, and it's a very practical one. And so from our point of view, they are getting a good return for their shareholders' money and even at those higher operating profit levels. So we think the 7% is well integrated with the 20% and with the capital deployment concept that everyone has described and that Rajiv just went through.

I appreciate that color. Just one question, though. Parts. What percentage of parts -- are your revenues are parts that go out to your independent dealers? Is there an opportunity there?

Yes. I think a high care platform or our customer care platform that we're building is to increase both part penetration into our network. I mean we're already doing very well, but there's definitely room for us to provide all their parts they need and also on the service side, more of the services around digitization, automation, the OAS system. And so I think those are all good opportunities for parts and service support.

Is any part of the tech subscription system?

It's going to be a fair bit of that. Yes.

I think we've moved away from -- we are moving away from the terminology of parts to aftermarket. And that's really what Rajiv was describing is no longer going to be just parts, but a whole variety of services and follow-on capabilities and regular recurring revenues from some of them like telemetry, for example, and others.

I have a question actually from the webcast. This is from Steve Ferazani at Sidoti. Says, how focused are you now on gaining share in the U.S.? Have you ramped up introduction of entry-level trucks in the U.S. to gain share?

Yes. In terms of gaining share, we're very focused. Now we have to talk about our -- the way our lead time is, where kind of we're still kind of leading in -- on the pricing side as well because if you have that long lead time, you want to be very careful what you're adding to your backlog because, again, we don't know what will happen to inflation. In terms of introducing the -- in our value trucks. We're moving ahead with that. In fact, we've already introduced it in each of the markets. There is going to be a big drive for both the lift truck business as well as Bolzoni globally to push the value truck as well as the Silver Line attachments, and they actually go very well together.

Tony, why don't you outline with how you see the timing of all that coming together in the Americas in terms of playing out here in the next year or so, both with regard to the backlog and how the new trucks come in to position us for share?

Yes. I think a couple of things. One is as we look to our focus on share, it's not just a general quest for share. It's a very focused, a targeted understanding of where we're going to get the share and that's the value of the industry-focused approach. We know the customers that we're going to get share from. And we know exactly what solutions we're going to bring to do so. And of course, the value products that we're talking about from Fuyang not just to serve a low-cost market. There's actually many of our customers today who have operations that and applications that don't need a standard premium level truck. They're low usage, low-duty applications that are really fit for the products that we're going to bring in from Fuyang and that scalability. So as we look from a timing perspective, those are actually the type of applications and customers we're focused on now because the availability of those trucks are far shorter than what we have in our other U.S. and EMEA plants. So we are in the position now we're transitioning from what we had called the UT/UX product that was produced in our Fuyang plant to moving all the scalability on to our recently launched [indiscernible] platform, which is going to further enhance the competitiveness of that product line because it's part of the family. It's got the look, the feel of the other -- the rest of the lineup of that product, which is really going to be beneficial for our customers and for our sales teams.

Just as sort of a follow-up. And it ties to an earlier question with regard to the Maximal business. If you go back 15 to 20 years ago, there was no truck that was designed to serve the lower intensity use products that Tony just described. There were only standard and premium trucks in the marketplace by and large. And that existed over the period when Japan came into the market and challenged the rest of the world in the forklift truck business and move from Japan to Korea. When it moved to China, the game changed. Because the market potential was so enormous but also the applications in China tend to be low intensity. And so the economy of scale structure for building low-intensity trucks emerged in China. And it's the only place to really have those skills and that kind of cost-effective solution for what has now become a global need, but it couldn't become a solution until the Chinese created the market volumes to sustain and support that kind of -- that kind of a truck. And so from our point of view, the acquisition of Maximal was certainly about doing better and covering the losses we were incurring in Asia Pacific with our existing standard and premium lines. But it was really about making sure that we were able to compete in the developed world as those application needs change. So it's a global business and this is just one more if somewhat different manifestation of that.

Follow-up on share question, but a little different spin. Where are we in the robotics evolution for lift trucks? What kind of share do you think automated trucks could hold 5 to 10 years in the future? And are you using partners to develop this technology?

So right now, that market is extremely fragmented. There's probably 20 different players that all have very low single-digit percentages of that market, 1% or 2%, something to that, magnitude. We're a little bit higher than that with what we have in place right now. As we start that scaling process, we think we have a very unique opportunity in terms of not just the technology, but all the things to deploy and deploy at scale, which has really been difficult for everyone else to do. There's so much handholding that has to get done. There's so much ongoing support that the distribution network combined with the real application, intensity, focus of the business just leaves us unique. So from that base, we really think we'll separate scale the way a few other people have been able to do. And we think that, over time, that market space can be as much as very high single digits to 10% of the units sold over the long haul.

Yes. I think it also depends on the infrastructure. We expect there to be continued shortage of labor, especially for this type of work. And so I think at a minimum, I think -- if we think about 10 years from today, what's my expectation? I think if you leave out the lower-end Class 3 trucks, the pedestrian Class 3 trucks. I won't be surprised if in 10 years, 25% of the trucks we're shipping are automated.

David say a little bit, if you would, about the relative -- about the evolution that we're focused on toward easily implementable solutions as opposed to complex custom solutions.

Yes. So I guess the prior comment was about having all the pieces in place to scale. But then the technology this year, we'll be implementing a next-generation technology that we think is really going to make the ease of installation, a whole another thing. Yes, you need a lot of handholding, but the next-generation technology is going to make deployment radically easier. We know the commissioning process is going to be third expensive and that's important. But just as important, any lift truck that you have, a great performance might be 97%, 98% missions complete. There's always some contingency that happens that will freeze a truck and that needs to be rescued. That ease of installation just as critically as ease of rescue. So if a truck happens to stop, somebody can jump on it and get it going in no time at all. It's going to help drive adoption in a very, very market way.

And at this point, we think that our strategy is relatively unique that others are not moving in that direction as fast as we are. David, is that correct?

Yes, that's right. I mean I think most of the competitors are smaller technology companies and when you look at their deployments, they are very bespoke. They're not really designed for kind of broad scalability. They're trying in that. They're being mostly in that proof-of-concept mode, but they're not really designing for scale. And that's really where we started our position from the very, very beginning, and that's what -- again, just one more factor of why we think that's going to drive that forward.

If I could just add one thing to that. I think many of the competitors in the space are these smaller automation companies that are typically acquiring a chassis from a lift truck company. They don't know the material handling industry. They don't know how to integrate into the lift trucks very well and they certainly don't have a presence in the market nor a distribution network to support it. So while there are a lot of players and everybody is out there marketing and trying to position and develop. At the end of the day, I think it's the OEMs that are going to be in the best position to deploy what is essentially just an automated lift truck. And we're already in that industry. We have the network to drive it. We know our customers. We know the problems, we know how to solve it. Right? And when we look across our other competitors, they're not taking the same approach that we are to making this a very practical and easily adoptable and deployable technology. I think that's the advantage. So it's going to grow and when it does, I think we're going to be in a very strong position.

I think you have to look at the path to get an understanding of the future. So we were here, I mean, for -- on telemetry in 2012, 2013, and there were at least 80 companies in North America that were developing some form of telemetry for lift trucks. And we talked to all of them and we were -- there was a lot of fear from all of them. And in the meantime, we tied up with a partner, implemented our own telemetry and 95% of those companies no longer exist, whereas we have over 65,000 telemetry systems in service. And now we're selling around 25,000 a year. So I think, as I said earlier in the presentation, our distribution is one of our super powers. Anything we do that doesn't enable those 3,500 salespeople and 11,000 technicians globally, is not leveraging our superpower. And that's what we -- that's why we've had to develop our own automation. That's why we've had to develop our own operator assist system, our own telemetry because they're all designed to leverage that superpower.

Any more questions in the room?

Yes, Justin Landzberg, Brightline Capital. So you talked, Tony, about modularity, fewer parts, all of that with the latest generation that you're trying to phase in of electrified stuff and all of that. That's all great. I was just thinking like, is there a possibility that there is -- with the older generation of stuff that's out there right now, less aftermarket intensity with this -- with the new electrified units? There are just fewer parts. You're saying -- someone mentioned [indiscernible] or something like that. So is it possible that you just see not quite as high touch potentially and that just reduces the frequency of your aftermarket throughput?

Yes. That's certainly a concern as you electrify because if you just take parts, that's not the full aftermarket, right? But part, certainly, electric trucks consume about 2/3 of the parts that internal combustion engine because the rest of the trucks still a lift truck, right, still has a pretty big hydraulic system. There's still seals, hoses, tires, so that's true. But then when you put smart batteries in, when you put fuel cells in, then that's where the service opportunities are. You sell those with service support, maintenance, data provision to make sure that those batteries, it's very easy to kill a lithium-ion battery. And so those are the aftermarket potential. And then you go to OES systems and automation, they'll also come with service charges.

Telemetry.

Yes, telemetry, there's a monthly charge.

Can we get a little bit more expansion on that from maybe a tech perspective? I don't know if David can do that? Just not quite understanding what that actually look like.

Whenever you put in the telemetry solution and OES solution. There's a lot of infrastructure that goes into that deployment. So for example, you saw a lot of the Amazon warehouses, deployment centers, fulfillment centers doing that. In order to put in place the wideband solutions and all of the beacons to make that technology happen, there's a whole frame of infrastructure. It's got to be in place. And we provide that from a full project management standpoint to deploy that into these sites. So that's a big element of -- beyond the actual device and truck. And then as others have said, there's a connectivity piece of it where the communications part of telemetry is a very robust and profitable monthly service stream for those pieces. So it's connectivity. It's also site level infrastructure to make those technologies happen, which generally centers around some level of connectivity and power management, be it lithium-ion charging, hydrogen fueling stations and the like.

So just to give us some tangibility in terms of telemetry, it's not just about the data that's gathered and communicated over the network that David was describing. So what do you do with it? Which operators are causing -- are getting into collisions or going too fast. Telemetry will tell you that. Telemetry will tell you when certain components are starting to fail or when there's a need for -- to do certain kinds of maintenance. The opportunity that lies ahead to enhance our customers' productivity by really analyzing that data and helping them get better solutions is very significant and there'll be up charges and all the telemetry as we provide more solutions through the telemetry to those customers. So maybe that gives you a little feel for how that business could grow and why we have to think about that aftermarket business in a much broader way than simply the parts of old and really enhance our overall position.

And I was just going to say and what all described is really converted into a monthly service revenue that comes part of that stream.

Maybe just take the simplest one, right, moving electric truck to lithium-ion batteries. A lot of our customers would like our telemetry system to track how the battery is doing both from a just day-to-day charge, discharge cycle to what's the quality of the battery, what actions can they take to enhance the life of the battery, those are all going to be services that we provide our customers with a charge.

Yes. And one last one for me, Domino Hawks. Capital spend journey, where are you guys on your automation of your footprint right now, like percent progress?

Yes. I mean, right now, our focus is to automate majority of the welding and painting we do. So -- that's where we're investing the most money, then it's going to be around material handling. We will generally move to more kitting and delivering material to the side of the line through automation. We're testing these at some of our plants. Assembly is always going to be manual intensive, but we are taking our modular approach. We are trying to break out sub-assemblies, which can be assembled with a person and a cobot, so we're kind of experimenting with that. So that's kind of the journey. And we'll see, I would say, within the next 3 years, majority of our welding, painting will be automated, and we'll start to see some assembly with cobot assist.

And we shouldn't expect like a major step-up or ratching up of spend to accommodate those last few legs of it.

No, just generally what we've guided is our capital investment each year.

I can't let you guys go to waste. I want to keep going on the technology and automation and the customers and such. Obviously, that's where the market is going. And as you go to that front, how does it apply to your dealer network to your distribution? I mean, something that you're going to have challenges with in terms of bringing them along with this? Is this something that you're going to sidestep them and just take it on your own?

Let me start and let you complement that. So it's a very integrated approach. So the very initial deployments -- take a look at -- or consider Amazon's fulfillment centers that you saw, there's dozens of those around the U.S. that's really occupied us for the last couple of years. The very first few of those, we did ourselves harden the solution. By the end of our deployments, that's really 75% dealer, 25%. As we will -- as the solutions evolve, we'll always be doing and hardening the initial deployment and having that bulletproof and then we'll systematically bring the dealers along and get them engaged to scale. So that operators is an example where that's about 75% to 80% now deployed by dealers telemetry, it's probably 95% on that.

What kind of -- I mean, is it -- is there a new skill set that they need? It's not like those guys fixing engines and stuff?

It's -- yes, well, it's a different skill profile, right? So it's folks that are more comfortable engaging with various connectivity elements and electronics of the product rather than more the engine side of it. So it is a slightly different skill set, but it's a skill set that the dealer base makes rather seamlessly. They understand how that works.

Well, the other -- sorry, the other thing is the mantra that I preach to the teams are, if you think it's simple enough, simplify it some more. So part of it is we need to bring down the complexity of what's required to install these systems. And that's the key reason why we're doing these ourselves because that's not what's happening in the marketplace. Marketplace is going the other way. And so as I keep repeating and I'll keep repeating it until -- no, I'll just keep repeating it. Our network is our superpower. And if we can't enable that, we're wasting our time. So we have to do that.

Yes. I guess just to build off of that. I mean our dealers, one from a technician standpoint, they're challenged to bring on the technicians. They need to because most technicians now don't want to be working on the internal combustion engine trucks. They want to be in this technology space. So our dealers are -- they're eager to be bringing on the type of talent that's going to help them move into this next level of material handling. And they themselves are very eager to see the model continue to evolve. There -- they themselves are exploring how they're going to apply further technology in their businesses to try to drive value to the customer. And it's our job to provide that leadership there. So we've got a good partnership and they're ready to work with us along the way.

So I'd add one thing that I think is extremely important to that. And that is -- that, as Tony has suggested, we're very, very aware of what those capabilities need to be in our dealers. And Tony outlined our movement to dual ownership of the Hyster-Yale brand and consolidation of dealers. The consolidated dealers are larger. They have more financial strength. They run their businesses more professionally. And probably that goes along with the talent that is needed to drive those organizations to do the job. In that sense, I'd say that the day of the small mom-and-pop dealer to the extent they still exist in our network in some areas, particularly in Asia Pacific it's gone in the sophisticated areas and it's moving away in all areas around the world because this is the future that David and Tony outlined, and we have to have the capability from our dealers. And the good wins can -- and the big ones can do it.

My next question, just didn't want to leave Bolzoni out of the whole equation. You commented in your presentation about you had a bunch of -- I think the term was legacy products or revenue that was lower margin. And over time was going to be moved over to higher-margin stuff. I wonder if you could spend a little time talking about what's going to be happening with regards to your revenue mix that's going to drive your margins higher? What are you shedding and what are you replacing it with?

Okay. Legacy, when we start the operations in Sulligent legacy was already in place, of course, transmission to either axle, to supply to Hyster-Yale directly.

I think maybe, Roberto, I'll just give you a quick background. So Sulligent was a Hyster-Yale plant. And it made transmissions, axles, steer axles, cylinders. When we bought Bolzoni, we felt the cylinders were a good fit for Bolzoni and we also felt they needed a big plant in the U.S. And we -- and our new design at that time, which was -- is now the ANN was going to move the axles away elsewhere and move the transmissions to the assembly plant. So that's why we moved Sulligent to Bolzoni. But along with that, went to legacy transmissions and axles, which we asked Bolzoni to continue producing. Now they don't get a lot of margin for that because it was all designed by Hyster-Yale, was being produced by Hyster-Yale and Bolzoni just took it over. The last -- for 1 to 3.5 ton internal combustion engine truck, which is around 2/3 of the legacy product will be out of production by the end of 2024. Please continue.

No. Just to make a kind of valuation -- if you -- we don't consider our operations here in the United States in terms of impact on our business. The Bolzoni Group, except Americas, we have an EBIT of 9.7% because the margin that we are able to generate in the attachment is quite good. Said that, I'm very more than happy with this change here in, let me say, in United States because I am here. I set up the company, United States in 1989 and then was struggling. Also we start to manufacture in Chicago so on and so on. But finally, right now, we are the real chance to be successful because working with Hyster-Yale, working with the organization they have here, talk about independent dealers. They are moving a lot of attachment. And then Hyster-Yale is supporting Bolzoni to gain business inside these organizations and this is going to change completely our future. The legacy are going to phase out, more business about the customers are coming in with a very good margin and this is going to be -- to realize the dream, that was my dream when I set up the company here many years ago. Finally, dream may become true.

Yes. So we expect the legacy products to phase out. An additional attachment business to come in. Some of it will be from Hyster-Yale. For instance, Bolzoni is going to produce the carriages that go on the ANN platform. They're going to produce the -- some of the mass components for our reach truck, but also for other people but then on top of that is the attachment growth potential that you saw on the graph.

One last question to wrap up this Q&A session. Thank you, everybody, for all the great questions. So Rajiv, how are you managing this growth now versus what we saw back in 2018 and 2019? Back in those years, we were only at 3%, whereas now we're closer to 5%.

Yes. I think it's the strategic initiatives. I think we've touched on it. We are bringing our breakeven point down. That's through SG&A control, which is something that we talked about. We are really very conscious of the work that's done locally, globally and then what can be offshored. So we're trying to do the right work at the right place at the right cost. And then we continue to do -- optimize our global footprint. The other thing is when you have scalability in products, as Tony said, you're not selling your premium products at standard or value application at a discount. Our customers are very wise. They know what they need and they go, "hey, we love your premium trucks, but we can't pay you the premium money. Actually, our application is low and so that's what we can pay for. And under those circumstances, we get a lot of margin compression. But when you have full scalability, you can position the right truck at the right price with the right margin. And that really kind of inflate -- support the full margin. Now ANN is new but in the heart of our market, we've had scalability now for the last 3 or 4 years with premium trucks were the FT/VX, our standard trucks were the XT/MX and our value trucks were the UT/UX. The unfortunate thing was they're on 3 different platforms. Moving forward, all those 3 will be on the one platform, [indiscernible]. So that's how it's happened and how more of it's going to happen.

Well, thank you. That ends our program. Thank you to the panel. Thank you for everybody attending. As I said, lunch is available as you walk out. We really appreciate you guys being here.