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A solution to more efficient Brice road de transport La Morandiere – CEO<br />
Unaudited<br />
2012 First Half Year Results<br />
Investor Presentation<br />
Willem de Vos – CFO
Key messages<br />
� Global macro-economic slowdown impacts strongly in emerging economies<br />
� Q2 volume in line with last 3 quarters<br />
� Negative FX impact (mainly India, Brazil)<br />
� Improved gross <strong>margin</strong>, above 2011, to 23.1%<br />
� Continue to focus on cost and revenue initiatives<br />
� Inherent competitive advantage remains strong<br />
- World leader in front end cylinders<br />
- Established leading position in all emerging economies<br />
� Financial strength with leverage & liquidity ratios well within covenants<br />
Unaudited<br />
1
Financial Results : 2012 first semester<br />
Unaudited<br />
2
Quarterly revenue<br />
US$ millions<br />
202<br />
20<br />
10<br />
33<br />
53<br />
86<br />
Unaudited<br />
228<br />
23<br />
10<br />
36<br />
68<br />
91<br />
2011 – 1H 2012 quarterly revenue<br />
2011<br />
168<br />
23 22<br />
10<br />
37<br />
60<br />
38<br />
34<br />
53<br />
1H 2012<br />
35 24<br />
53 64<br />
50 57 48<br />
Q1 Q2 FY2011 Q3 Q4 Q1 1H 2012 Q2<br />
169<br />
10<br />
176<br />
China EMEA India APAC Americas<br />
21<br />
10<br />
166<br />
Q2 volume in line with last 3 quarters<br />
19<br />
11<br />
Hook & skip<br />
loaders, 7%<br />
Cranes, 13%<br />
Tippers, 11%<br />
1H 2012 revenue by product<br />
Compactors &<br />
RCBs, 4%<br />
Tippers<br />
Others, 4%<br />
Hydraulics<br />
Hydraulics, 61%<br />
3
Operating performance<br />
US$ m<br />
Unaudited<br />
1H<br />
2011<br />
1H<br />
2012<br />
yoy %<br />
change<br />
Revenue 430 342 (20%)<br />
Gross Profit 98 79 (20%)<br />
<strong>margin</strong> 22.8% 23.1%<br />
SG&A (excl.<br />
acquisition costs)<br />
(41) (44) +7%<br />
Exceptional items 2 4 +100%<br />
Adjusted EBITA 59 39 (34%)<br />
<strong>margin</strong> 13.7% 11.4%<br />
Adjusted EBITDA 62 42 (32%)<br />
<strong>margin</strong> 14.4% 12.3%<br />
Profitability level still high, despite volume<br />
� FX movements in BRL and INR had a<br />
negative impact of 12.5% and 12.6 %<br />
against US dollar respectively<br />
� Revenue decline largely due to China<br />
(-17%) and FX (-5%), with the remaining<br />
regions increasing (+2%)<br />
� Gross <strong>margin</strong> improvement due to lower<br />
procurement costs and improved<br />
manufacturing productivity<br />
� SG&A increase was mainly higher with<br />
recruitments (one time), professional fees<br />
associated with cost reduction programs,<br />
sales & market investment in Brazil and<br />
India and investor costs<br />
4
Last Twelve Months performance<br />
US$<br />
millions<br />
1,000<br />
900<br />
800<br />
700<br />
600<br />
500<br />
400<br />
300<br />
200<br />
100<br />
-<br />
Unaudited<br />
LTM revenue and gross <strong>margin</strong> % LTM adjusted EBITA<br />
23.4%<br />
261<br />
383<br />
23.5%<br />
264<br />
503 488<br />
23.7%<br />
191<br />
FY10 FY11 LTM<br />
Ex-China China<br />
23.8%<br />
23.7%<br />
23.6%<br />
23.5%<br />
23.4%<br />
23.3%<br />
23.2%<br />
23.1%<br />
23.0%<br />
US$ millions<br />
120<br />
100<br />
80<br />
60<br />
40<br />
20<br />
0<br />
13.1% 12.9%<br />
84<br />
99<br />
11.6%<br />
EMEA<br />
FY10 FY11 LTM<br />
LTM revenue in line with 2010<br />
Gross <strong>margin</strong> improves in % due to cost reduction programs<br />
EBITA impacted by some one-time costs and structural improvements<br />
79<br />
China<br />
14.0%<br />
12.0%<br />
10.0%<br />
8.0%<br />
6.0%<br />
4.0%<br />
2.0%<br />
0.0%<br />
5
Working capital<br />
US$ millions<br />
Days<br />
Unaudited<br />
89<br />
47 47<br />
97<br />
39<br />
83 83<br />
Q1 Q2 FY2011 Q3 Q4 Q1 H1 2012 Q2<br />
Inventory in value is already below June 2011 level<br />
Low trade payables in 2012 explain high WC levels<br />
Notes:<br />
Working capital in Q1 and Q2 of 2011 were unusually low due to payables associated with the Acquisition. Therefore these period have been adjusted<br />
to a normalized level of working capital. The actual working capital for Q1 and Q2 2011 was US$ 52 millions and US$ 50 millions respectively before<br />
normalization. The actual sales days for Q1 and Q2 2011 is 27 days and 24 days respectively before normalization.<br />
40<br />
103<br />
49<br />
117<br />
57<br />
Days<br />
6
Net debt and liquidity<br />
Unaudited<br />
Leverage<br />
US$ m 30 June 2012<br />
Gross debt 396<br />
Cash (60)<br />
Net debt 336<br />
Net leverage 1 3.8x<br />
Interest coverage 2 2.8x<br />
Notes:<br />
1. Net leverage is defined as the ratio of Net Debt to Consolidated EBITDA<br />
2. Interest coverage is defined as the ratio of Interest to Consolidated EBITDA<br />
3. Available liquidity includes cash plus revolver and overdraft<br />
Liquidity<br />
US$ m 30 June 2012<br />
Available Revolver /<br />
Overdraft<br />
25.8<br />
Available liquidity 3 85.5<br />
Debt maturity profile 2016<br />
Leverage & liquidity ratios well within covenants<br />
Interest coverage impacted by EBITA decrease<br />
7
Credit statistics<br />
Unaudited<br />
3.1x<br />
2.8x<br />
1H 2011 1H 2012<br />
Net debt 1 / Consolidated EBITDA<br />
3.3x<br />
Net leverage<br />
Consolidated EBITDA / Interest expense (Consolidated EBITDA – Capex) / Interest expense<br />
3.8x<br />
1H 2011 1H 2012<br />
Interest coverage Interest coverage excl. Capex<br />
Notes:<br />
1. Net debt is defined as gross debt less cash<br />
2. Gross debt includes interest-bearing liabilities, finance leases and other debt-like items<br />
2.8x 2.8x<br />
1H 2011 1H 2012<br />
Interest coverage adjusted for Capex comparable to last year<br />
8
Strategy & Outlook<br />
Unaudited<br />
9
Economic growth in <strong>Hyva</strong>’s key end-markets<br />
� Economic de-acceleration continues to<br />
10.0%<br />
8.0%<br />
6.0%<br />
4.0%<br />
2.0%<br />
0.0%<br />
Unaudited<br />
dampen global growth in Q1 and Q2 of 2012<br />
Growth of Real GDP (yoy %) Growth of Fixed Investment (yoy %)<br />
8.9%<br />
5.3%<br />
8.1%<br />
5.6%<br />
7.6%<br />
5.7%<br />
1.4%<br />
0.8%<br />
1.1%<br />
0.8% 0.3% 0.0%<br />
1Q'11 2Q'11 3Q'11 4Q'11 1Q'12E 2Q'12E<br />
China India Brazil Europe<br />
Source: Broker reports; recent figures may be estimated due to lack of available actuals<br />
� Growth of Fixed Investment slowed particularly<br />
12.0%<br />
in Europe and Brazil in 1H2012<br />
9.0%<br />
6.0%<br />
3.0%<br />
0.0%<br />
-3.0%<br />
10.2%<br />
9.0%<br />
5.5% 5.3%<br />
4.7%<br />
1.4%<br />
0.9%<br />
2011 2012E<br />
China India Brazil Europe<br />
Trading conditions are expected to remain subdued in 2H 2012, with a potential pick-up in 2013<br />
-0.6%<br />
10
Heavy Duty Truck Market in China<br />
� Compounding impact of<br />
- Reduced volume of new infrastructure projects<br />
- Tighter financing for truck purchases<br />
- High inventory bodybuilders (OEM/dealer)<br />
Unaudited<br />
109<br />
67<br />
2012 tipper sales in China<br />
90<br />
57<br />
41 36 39<br />
Q1 Q2 Q3 Q4<br />
2011 2012<br />
2012 forecast<br />
41<br />
11
<strong>Hyva</strong> continues to roll out its strategy<br />
Unaudited<br />
Superior<br />
Organic<br />
Growth<br />
Optimze<br />
Cost<br />
Base<br />
Global and<br />
Collaborative<br />
Culture<br />
Focus area<br />
� Grow in new Geographies<br />
� Innovation<br />
� Leadership in Hydraulics<br />
� Develop Waste Handling &<br />
Cranes<br />
� Significant cost savings<br />
� Quality<br />
� ‘’Lean Manufacturing’’<br />
� Supply chain optimisation<br />
Acquisitions � Target list and priorities<br />
� Increase R&D and marketing<br />
� Leverage best practices<br />
� Human resources and team<br />
building<br />
2012 realisations (examples)<br />
� Russia increased coverage<br />
� Boltable hookloader<br />
� 11 project to enhance perforance<br />
� Build India & Brazil plants<br />
� 14%-19% achieved on 80m spend<br />
� DPPM : -50% Vs last year<br />
� In-source 2 major components<br />
� Asia lead time reduction (in progress)<br />
� Indonesia (bolt on)<br />
� Recruited CMO, new engineers<br />
� Company wide training NPD<br />
� Recruited CMO and HK office<br />
12
Outlook<br />
� H2 2012<br />
- Same macro-economic conditions in China, India, Brazil<br />
- Europe should slow down slightly<br />
- Accelerate cost reduction programs & WC reduction<br />
� 2013<br />
- Infrastructure, construction and mining should pick up in China (new<br />
leadership), India (2012 decisions), Brazil (World Cup & Olympics)<br />
- Prepare <strong>Hyva</strong> to be flexible and follow customer volume growth<br />
- New products will introduced<br />
- Expand purchasing savings & productivity programs<br />
- Reduce inventory level (regionalization of supply chain)<br />
Unaudited<br />
13
<strong>Hyva</strong>’s market leading position is<br />
underpinned by strong fundamentals<br />
6<br />
5<br />
Unaudited<br />
Resilient and<br />
cash generative<br />
Attractive<br />
end-markets<br />
1<br />
4<br />
No. 1 in front end<br />
cylinders<br />
Diversified<br />
earnings base<br />
2<br />
3<br />
Strong brand<br />
Global presence<br />
with local<br />
footprint<br />
14
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