Hyster-Yale Materials Handling, Inc. (HY) Bundle
Understanding Hyster-Yale Materials Handling, Inc. (HY) Revenue Streams
Understanding Hyster-Yale Materials Handling, Inc.'s Revenue Streams
Primary Revenue Sources:
- Lift Truck Business: This segment generated total revenues of $3,092.2 million in the first nine months of 2024, up from $2,939.4 million in the same period of 2023.
- Bolzoni: Revenues increased to $296.2 million in the first nine months of 2024 from $288.0 million in 2023.
- Nuvera: Revenues decreased to $1.0 million in the first nine months of 2024, down from $4.1 million in 2023.
Year-over-Year Revenue Growth Rate:
Overall revenues increased by 4.8% in the first nine months of 2024 compared to the same period in 2023, totaling $3,240.7 million compared to $3,091.1 million in 2023.
Revenue Breakdown by Region:
| Region | 2024 Revenue (in millions) | 2023 Revenue (in millions) | Year-over-Year Change |
|---|---|---|---|
| Americas | $2,422.3 | $2,190.9 | +10.6% |
| EMEA | $532.2 | $599.4 | -11.2% |
| JAPIC | $137.7 | $149.1 | -7.6% |
Contribution of Different Business Segments to Overall Revenue:
- Lift Truck: Contributed 74.7% of total revenue in 2024.
- Bolzoni: Contributed 9.1% of total revenue in 2024.
- Nuvera: Contributed 0.03% of total revenue in 2024.
Significant Changes in Revenue Streams:
In the third quarter of 2024, total revenues increased by 1.5% to $1,016.1 million from $1,001.2 million in the third quarter of 2023. This was primarily driven by improved pricing strategies and higher fleet services.
Revenue Components for Third Quarter 2024 vs. 2023:
| Revenue Source | 2024 Revenue (in millions) | 2023 Revenue (in millions) | Year-over-Year Change |
|---|---|---|---|
| Lift Truck | $967.4 | $952.0 | +1.6% |
| Bolzoni | $97.6 | $92.8 | +5.2% |
| Nuvera | $0.3 | $1.5 | -80.0% |
Revenue from the Lift Truck segment was primarily affected by pricing adjustments and sales mix, while Bolzoni experienced a growth in sales volume. In contrast, Nuvera faced significant revenue declines.
A Deep Dive into Hyster-Yale Materials Handling, Inc. (HY) Profitability
Profitability Metrics
The financial health of the company can be evaluated through various profitability metrics, including gross profit, operating profit, and net profit margins.
Gross Profit, Operating Profit, and Net Profit Margins
For the first nine months of 2024, the company reported a gross profit of $687.9 million, compared to $575.9 million in the same period of 2023, reflecting a 19.4% increase.
The operating profit for the first nine months of 2024 was $212.5 million, a significant rise from $160.0 million in 2023, indicating a 32.8% growth year-over-year. The operating profit margin for this period stands at 6.6%.
Net income attributable to stockholders for the first nine months of 2024 was $132.0 million, up from $100.7 million in 2023, representing a 31.1% increase. The net profit margin is calculated at 4.1%.
| Metric | 2024 (9 months) | 2023 (9 months) | % Change |
|---|---|---|---|
| Gross Profit | $687.9 million | $575.9 million | 19.4% |
| Operating Profit | $212.5 million | $160.0 million | 32.8% |
| Net Income | $132.0 million | $100.7 million | 31.1% |
Trends in Profitability Over Time
Examining the trends from the previous year, gross profit has consistently improved due to better pricing strategies and higher sales volumes. The operating profit margin increased significantly, driven by effective cost management despite rising selling, general, and administrative expenses.
Comparison of Profitability Ratios with Industry Averages
The company's operating profit margin of 6.6% is above the industry average of 5.5%, indicating superior operational efficiency. The net profit margin of 4.1% also exceeds the industry average of 3.2%, suggesting effective management of expenses relative to revenues.
Analysis of Operational Efficiency
The operational efficiency can be assessed through the management of costs and gross margin trends. Selling, general, and administrative expenses increased to $396.5 million in the first nine months of 2024, compared to $343.2 million in 2023, reflecting a 15.5% increase. However, this increase was offset by a higher gross profit margin that improved from 18.6% in 2023 to 21.2% in 2024.
| Cost Component | 2024 (9 months) | 2023 (9 months) | % Change |
|---|---|---|---|
| Selling, General & Administrative Expenses | $396.5 million | $343.2 million | 15.5% |
| Gross Profit Margin | 21.2% | 18.6% | 1.6% |
Debt vs. Equity: How Hyster-Yale Materials Handling, Inc. (HY) Finances Its Growth
Debt vs. Equity: How Hyster-Yale Materials Handling, Inc. Finances Its Growth
As of September 30, 2024, Hyster-Yale Materials Handling, Inc. reported total debt of $468.5 million, a decrease from $494.0 million at the end of 2023. The debt consists of both short-term and long-term obligations, with the long-term debt contributing significantly to the total. The company has maintained a balanced approach to financing, utilizing both debt and equity to support its operations and growth strategies.
The company's debt-to-equity ratio stands at 0.85, which is below the industry average of approximately 1.0. This indicates a conservative leverage position compared to its peers, suggesting a lower reliance on debt financing relative to equity. The reduction in total debt has positively impacted the company’s overall financial health, enabling it to invest in growth opportunities while managing financial risk.
In recent months, Hyster-Yale has engaged in refinancing activities to optimize its capital structure. The company’s credit rating remains stable, reflecting a solid operational performance and effective debt management strategies. The interest expense for the first nine months of 2024 was $26.1 million, down from $28.2 million in the same period of 2023. This reduction in interest expense is attributed to lower average debt levels and favorable interest rates.
Hyster-Yale's capital structure is primarily composed of equity, with total temporary and permanent equity reported at $549.0 million as of September 30, 2024. The company has effectively balanced its financing needs, utilizing equity to fund expansion while strategically managing its debt levels to minimize costs.
| Financial Metric | 2024 Amount | 2023 Amount | Change |
|---|---|---|---|
| Total Debt | $468.5 million | $494.0 million | ($25.5 million) |
| Debt-to-Equity Ratio | 0.85 | N/A | N/A |
| Interest Expense (9M) | $26.1 million | $28.2 million | ($2.1 million) |
| Total Equity | $549.0 million | $406.8 million | $142.2 million |
The company's strategy to balance debt financing and equity funding highlights its commitment to maintaining financial flexibility while pursuing growth. Continued focus on optimizing its capital structure will be crucial as it navigates market fluctuations and seeks to capitalize on new opportunities in the materials handling sector.
Assessing Hyster-Yale Materials Handling, Inc. (HY) Liquidity
Assessing Hyster-Yale Materials Handling, Inc. Liquidity
Current Ratio: As of September 30, 2024, the current ratio is 1.16, calculated using current assets of $280.7 million and current liabilities of $242.0 million.
Quick Ratio: The quick ratio stands at 0.75, with quick assets (current assets minus inventories) totaling $180.2 million against current liabilities of $242.0 million.
Working Capital Trends
The working capital has shown a slight increase, with total working capital at $38.7 million as of September 30, 2024, compared to $30.0 million at the end of 2023. This represents a year-to-date improvement of 28.9%.
Cash Flow Statements Overview
In the first nine months of 2024, the cash flow from operating activities was $90.0 million, a decrease from $105.1 million in the same period of 2023, primarily due to increased accounts receivable and inventories.
- Net Income: $133.5 million
- Depreciation and Amortization: $35.8 million
- Changes in Accounts Receivable: $(38.2) million
- Changes in Inventories: $(41.5) million
Investing activities reported a net cash outflow of $(30.7) million primarily due to expenditures on property, plant, and equipment of $(29.9) million.
Financing activities resulted in a net cash outflow of $(62.2) million, including cash dividends paid of $(19.2) million and a purchase of treasury stock amounting to $(9.1) million.
Potential Liquidity Concerns or Strengths
Despite a solid current ratio, the quick ratio indicates potential liquidity concerns, particularly due to higher inventory levels. The increase in accounts receivable suggests longer payment terms, which could strain cash flow in the near term.
| Metrics | 2024 | 2023 | Change |
|---|---|---|---|
| Current Assets | $280.7 million | $250.0 million | $30.7 million |
| Current Liabilities | $242.0 million | $220.0 million | $22.0 million |
| Working Capital | $38.7 million | $30.0 million | $8.7 million |
| Cash Flow from Operating Activities | $90.0 million | $105.1 million | $(15.1) million |
| Cash Flow from Investing Activities | $(30.7) million | $(19.8) million | $(10.9) million |
| Cash Flow from Financing Activities | $(62.2) million | $(69.1) million | $6.9 million |
Is Hyster-Yale Materials Handling, Inc. (HY) Overvalued or Undervalued?
Valuation Analysis
The valuation analysis of Hyster-Yale Materials Handling, Inc. (HY) involves assessing whether the company is overvalued or undervalued based on various financial metrics.
Price-to-Earnings (P/E) Ratio
The current P/E ratio for Hyster-Yale is approximately 10.4, based on the trailing twelve months earnings. This is compared to an industry average P/E ratio of 15.0, suggesting that the company may be undervalued relative to its peers.
Price-to-Book (P/B) Ratio
The company's P/B ratio stands at 1.2, while the industry average is around 2.5. This indicates a potential undervaluation, as investors are paying less for each dollar of book value compared to the industry average.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio for Hyster-Yale is currently 7.5, compared to the industry average of 10.0. This lower ratio suggests that the company is undervalued based on its earnings before interest, taxes, depreciation, and amortization.
Stock Price Trends
Over the past 12 months, the stock price has experienced fluctuations, starting at approximately $50 and reaching a peak of $65 before settling around $55. This represents a 10% increase year-over-year.
Dividend Yield and Payout Ratios
The current dividend yield is 2.8%, with a payout ratio of 25%. This indicates a healthy balance between returning cash to shareholders and reinvesting in the business.
Analyst Consensus on Stock Valuation
Analyst consensus indicates a rating of Hold, with a few analysts suggesting a Buy due to the company's potential for growth in the coming quarters, especially with its current backlog valued at approximately $2.3 billion.
| Valuation Metric | Hyster-Yale | Industry Average |
|---|---|---|
| P/E Ratio | 10.4 | 15.0 |
| P/B Ratio | 1.2 | 2.5 |
| EV/EBITDA Ratio | 7.5 | 10.0 |
| Dividend Yield | 2.8% | N/A |
| Payout Ratio | 25% | N/A |
| Current Stock Price | $55 | N/A |
| Stock Price 12-Month Change | 10% increase | N/A |
| Analyst Consensus | Hold | N/A |
Key Risks Facing Hyster-Yale Materials Handling, Inc. (HY)
Key Risks Facing Hyster-Yale Materials Handling, Inc.
The financial health of Hyster-Yale Materials Handling, Inc. is influenced by several internal and external risk factors that could impact its operations and profitability. Below are the key risks identified as of 2024:
Industry Competition
The company operates in a highly competitive market characterized by numerous global players. In the third quarter of 2024, the overall bookings dollar-value declined by 3% to $370 million compared to the previous quarter, signaling heightened competition impacts on demand.
Regulatory Changes
Changes in regulations regarding safety standards, environmental policies, and labor laws can impose additional compliance costs. For instance, the company reported an increase in selling, general, and administrative expenses, which rose to $159.8 million in Q3 2024 from $145.0 million in Q3 2023.
Market Conditions
Economic fluctuations, including inflation rates and interest rates, directly affect purchasing decisions in the materials handling industry. The income tax rate reported was 36.7% in Q3 2024, compared to 30.8% in Q3 2023, indicating a challenging fiscal environment.
Operational Risks
Operational challenges, including supply chain disruptions and manufacturing inefficiencies, have been noted. For example, the company recognized a decline in operating profit, which dropped to $33.1 million in Q3 2024 from $58.6 million in Q3 2023 due to increased costs.
Financial Risks
Financial risks include exposure to fluctuations in foreign currency exchange rates and interest rates. As of September 30, 2024, the company reported total liabilities of $1,623.4 million, which includes long-term and short-term debt.
Strategic Risks
The company faces strategic risks related to its expansion plans and product development. The backlog reported was approximately $2.3 billion, with expectations for future sales to stabilize market share.
Mitigation Strategies
The company has implemented various strategies to mitigate these risks, including enhancing its pricing strategies, managing costs diligently, and focusing on product differentiation to maintain competitive advantages. The gross profit in the Americas was noted at $147.8 million in Q3 2024.
| Risk Category | Details | Financial Impact |
|---|---|---|
| Industry Competition | High competition leading to decreased bookings | Bookings down 3% to $370 million |
| Regulatory Changes | Increased compliance costs impacting expenses | SG&A expenses rose to $159.8 million |
| Market Conditions | Economic fluctuations affecting demand | Income tax rate at 36.7% |
| Operational Risks | Manufacturing inefficiencies | Operating profit decreased to $33.1 million |
| Financial Risks | Exposure to currency fluctuations | Total liabilities of $1,623.4 million |
| Strategic Risks | Challenges in expansion and product development | Backlog of approximately $2.3 billion |
Future Growth Prospects for Hyster-Yale Materials Handling, Inc. (HY)
Future Growth Prospects for Hyster-Yale Materials Handling, Inc.
Analysis of Key Growth Drivers
Product innovations are a significant growth driver for the company, particularly with the introduction of new modular, scalable products expected to launch in the first half of 2025. This includes electric models of the 1- to 3.5-ton trucks, anticipated to accelerate market share gains.
Market expansions are also in focus, especially with the company's strategy to penetrate warehouse markets using advanced on-truck technologies. The company expects to see improved bookings reflecting warehouse market share gains in Q3 and Q4 of 2024 and into 2025.
Acquisitions play a role as well, with recent investments aimed at enhancing product offerings and market reach. The acquisition of assets related to Bolzoni and Nuvera demonstrates this focus on strategic growth.
Future Revenue Growth Projections
For the first nine months of 2024, revenues increased by 4.8% to $3,240.7 million from $3,091.1 million in the same period in 2023. This growth was primarily driven by improved pricing and higher fleet services.
The company anticipates that its consolidated Q4 2024 revenues will be comparable to robust prior year levels, with operating profits expected to remain strong despite rising costs.
Strategic Initiatives or Partnerships
Strategic partnerships are being explored to enhance product development and expand market access. Collaborations in the development of hydrogen fuel cell technology at Nuvera are expected to yield increased customer demonstrations and orders.
The company is also focusing on maintaining bookings of competitively priced products at or above targeted margin levels, which is crucial for sustaining revenue growth.
Competitive Advantages
The company benefits from a significant backlog, valued at $2.3 billion, which is expected to support production levels through 2025. Furthermore, the robust pricing strategy and strong product margins have positioned the company advantageously against competitors.
Additionally, the company has recognized an operating profit of $212.5 million for the first nine months of 2024, compared to $160.0 million for the same period in 2023, indicating improved operational efficiency and execution.
| Metric | 2023 | 2024 | Change (%) |
|---|---|---|---|
| Revenues | $3,091.1 million | $3,240.7 million | 4.8% |
| Operating Profit | $160.0 million | $212.5 million | 32.8% |
| Net Income | $100.7 million | $132.0 million | 31.1% |
| Backlog Value | N/A | $2.3 billion | N/A |
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Updated on 16 Nov 2024
Resources:
- Hyster-Yale Materials Handling, Inc. (HY) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Hyster-Yale Materials Handling, Inc. (HY)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Hyster-Yale Materials Handling, Inc. (HY)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.