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HI

HYSTER-YALE, INC. (HY)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was a reset quarter: revenues of $910.4M (-14% YoY, -15% QoQ) and GAAP diluted EPS of $0.48 (adjusted $0.49), essentially inline on EPS but a miss on revenue versus S&P Global consensus; bookings strengthened, but tariffs and lower volumes pressured margins and profits . Consensus: revenue $947.8M*, EPS $0.49*; actuals revenue $910.4M and EPS $0.48 → revenue miss, slight EPS miss .*
  • Lift Truck bookings climbed to $590M (+48% QoQ, +13% YoY), backlog held at ~$1.9B; production expected to increase in Q2, but Q2 operating profit to decline moderately due to tariff timing and pricing lag .
  • Strategic realignment: Nuvera’s fuel cell business downsized; integrated energy solutions into Lift Truck with expected direct annualized cost reductions of $15–$20M beginning 2H25 and $15–$18M severance/impairment in Q2; capex guided to $40–$65M (reduced top end) .
  • Cash from operations was an outflow of $36.4M in Q1, reflecting lower net income and working capital, though inventory fell $69M YoY and net debt/Adj EBITDA stood at 1.6x (LTM Adj EBITDA $258.8M) .

What Went Well and What Went Wrong

What Went Well

  • Bookings momentum and stable backlog: “Bookings of $590 million increased 48% sequentially and 13% year-over-year… backlog remained stable at $1.9 billion” .
  • Product margins stayed above target despite volume-driven absorption pressure: “Product margins remained above targeted levels largely due to favorable pricing” .
  • Strategic pivot to energy solutions with explicit savings: “Direct annualized cost reductions of $15 to $20 million starting in the second half of 2025,” plus absorption of $10–$15M into Lift Truck to accelerate batteries and mobile charging .
  • Management quote: “Our book-to-bill ratio stood at 100%, reflecting early signs of a potential market demand turnaround” — Scott Minder .

What Went Wrong

  • Volume-driven revenue decline and margin compression: consolidated operating profit fell to $21.3M (75% YoY) on reduced volumes and absorption; EMEA swung to an operating loss .
  • Tariff headwinds and pricing lag to weigh on Q2: “Second quarter profitability will be adversely affected by the impact of tariffs and a temporary lag in the implementation of price increases” .
  • Cash outflow and leverage uptick: operating cash flow was -$36.4M; net debt rose to $406.8M, Net Debt/Adj EBITDA increased to 1.6x LTM .

Financial Results

Revenues and EPS vs Prior Periods and Estimates

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions) – Actual$1,016.1 $1,067.5 $910.4
Revenue Consensus Mean ($USD Millions)*$1,056.3*$1,022.3*$947.8*
Diluted EPS (GAAP, $) – Actual$0.97 $0.58 $0.48
Adjusted Diluted EPS ($) – Actual—$1.47 $0.49
Primary EPS Consensus Mean ($)*$1.99*$1.395*$0.49*

Values retrieved from S&P Global.*

Key deltas:

  • Q1 2025 revenue: $910.4M vs $947.8M consensus → bold miss. EPS: $0.48 vs $0.49 consensus → slight miss .*
  • Q4 2024 beat: revenue $1,067.5M vs $1,022.3M; adjusted EPS $1.47 vs $1.395 → bold beat .*
  • Q3 2024 miss: revenue $1,016.1M vs $1,056.3M; EPS $0.97 vs $1.99 → bold miss .*

Margins

MarginQ3 2024Q4 2024Q1 2025
Gross Margin %19.0% (192.9/1,016.1) 19.5% (207.6/1,067.5) 19.5% (177.7/910.4)
Operating Margin %3.3% (33.1/1,016.1) 3.0% (32.3/1,067.5) 2.3% (21.3/910.4)

Segment Revenue Breakdown

Segment Revenue ($USD Millions)Q3 2024Q4 2024Q1 2025
Lift Truck$967.4 $1,021.6 $864.4
Bolzoni$97.6 $82.9 $80.3
Nuvera$0.3 $0.4 $—
Eliminations$(49.2) $(37.4) $(34.3)
Total$1,016.1 $1,067.5 $910.4

Lift Truck Revenue by Region

Region ($USD Millions)Q3 2024Q4 2024Q1 2025
Americas$771.1 $800.2 $698.9
EMEA$145.0 $175.4 $118.2
JAPIC$51.3 $46.0 $47.3

KPIs

KPIQ3 2024Q4 2024Q1 2025
Bookings ($USD Millions)$370 $400 $590
Backlog ($USD Millions)$2,300 $1,930 $1,910
Net Debt ($USD Millions)$392.9 $344.1 $406.8
LTM Adjusted EBITDA ($USD Millions)$315.9 $320.2 $258.8
Net Debt / Adjusted EBITDA (x)~1.24x (calc) ~1.07x (calc) 1.6x
Cash from Operations ($USD Millions)$70 (quarter) $81 (quarter) $(36.4) (quarter)
Working Capital as % of Sales21% 18% 22%

Note: Inventory decreased by $69M YoY in Q1 2025 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated Operating ProfitQ2 2025Not specifiedExpected to decline moderately vs Q1 2025 due to tariff timing and pricing lag Lowered near-term
Consolidated Revenues/Production/ProfitsFY 2025“May be lower than 2024; operating profit significantly lower” Expected below robust 2024; modest sequential revenue growth in Q2 Maintained (clarified)
Lift Truck Operating ProfitQ2 2025Not specifiedDecline vs Q1 despite increased production; tariff impact Lowered near-term
Product MarginsFY 2025Decline vs 2024 but above target Decline vs 2024 but above target; price increases implemented Q1 to offset tariffs Maintained
Operating ExpenseFY 2025Increase YoY to support growth; run-rate similar to H2’24 Increase YoY to expand sales capacity/IT; partial offsets from shared services Maintained
Manufacturing Footprint CostsFY 2025–2026$8–$16M per year expected $8–$16M per year confirmed Maintained
Nuvera Realignment (Severance/Impairment)Q2 2025Not previously quantified~$15–$18M charges New (costs)
Nuvera Cost Reductions2H 2025 onwardNot previously quantifiedDirect annualized $15–$20M savings; additional $10–$15M costs absorbed by Lift Truck New (savings)
CapexFY 2025$40–$80M $40–$65M (top end reduced) Lowered
Bolzoni Operating ProfitFY 2025Comparable to 2024 adjusted Below 2024 adjusted due to lower demand; modest Q2 improvement Lowered
DividendQ2 2025$0.35/quarter $0.36/quarter (payable June 13, 2025) Raised

Earnings Call Themes & Trends

TopicQ3 2024 (11/5/24)Q4 2024 (2/26/25)Q1 2025 (5/7/25)Trend
Tariffs/MacroElevated freight costs; Red Sea disruptions; port strike rerouting Potential tariff uncertainty flagged; 2025 outlook to trough in H1 Tariffs a major headwind; price actions taken; explicit tariff assumptions Intensifying focus
Bookings/BacklogBookings $370M; backlog $2.3B; stabilization signals Bookings $400M; backlog $1.93B; normalized backlog entering 2025 Bookings $590M; backlog ~$1.9B; book-to-bill ~100% Recovery in Q1
Pricing/MarginsAbove-target product margins; competitive intensity rising Margins to decline toward target in 2025 Margins above target but pressured by volumes/tariffs Gradual compression
Manufacturing FootprintPrograms contemplated; charges to come $21M Q4 charges; $8–$16M implementation in 2025/26 Continuing execution; benefits late 2025 onward Execution phase
Energy Solutions/NuveraSlow adoption; increased losses HydroCharge demos; modest improvement expected Realignment; 125kW fuel cell focus; cost savings detailed Strategic pivot
Regional TrendsAmericas strength; EMEA weakness Americas +; EMEA operating loss Americas down on Class 4/5; EMEA loss; JAPIC mix helped Mixed; EMEA weak
Working Capital/InventoryInventory up QoQ; WC 21% Inventory down; WC 18% Inventory -$69M YoY; WC 22% (lower sales) Mixed progress

Management Commentary

  • Rajiv Prasad: “In quarter 1 2025, we adjusted our prices to address component inflation since our last broad pricing action in 2022 and to include known tariff-related cost increases” .
  • Scott Minder: “In Q1, we recorded bookings of $590 million… Our book-to-bill ratio stood at 100%, reflecting early signs of a potential market demand turnaround” .
  • Alfred Rankin: “Tariffs remain a large and important concern and the restructuring of our Billerica facility around energy solutions and away from fuel cells is key in today’s market environment” .
  • On long-term margin target: “The Company targets a 7% operating profit margin across the business cycle… During cyclically lower demand phases, the Company expects to remain profitable, likely generating operating profit margins below the 7% target” .

Q&A Highlights

  • No analyst Q&A was conducted on the Q1 2025 call; the call concluded without questions, suggesting limited incremental disclosures beyond prepared remarks .
  • Clarifications embedded in prepared remarks covered tariff assumptions, expected Q2 profitability decline, and the Nuvera realignment savings/charges roadmap .

Estimates Context

  • Q1 2025: Revenue $910.4M vs $947.8M consensus* → bold miss; GAAP EPS $0.48 vs $0.49 consensus* → slight miss .*
  • Prior quarters: Q4 2024 beat on revenue ($1,067.5M vs $1,022.3M*) and adjusted EPS ($1.47 vs $1.395*); Q3 2024 missed both revenue ($1,016.1M vs $1,056.3M*) and EPS ($0.97 vs $1.99*) .*
  • Implication: Consensus likely revises down near-term margins/earnings given tariff pass-through lag and lower volumes, while bookings improvement could support 2H’25/2026 recovery.

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Near-term caution: Expect Q2 operating profit down vs Q1 due to tariff timing and pricing lag; FY25 revenue/profit below 2024 despite bookings recovery .
  • Bookings inflection: $590M Q1 bookings and stable $1.9B backlog signal early demand stabilization; production rates to increase in Q2, supporting 2H’25/2026 setup .
  • Strategic pivot to energy solutions: Nuvera realignment should lower costs (direct $15–$20M annualized savings starting 2H25) and refocus on batteries/chargers/HydroCharge; expect Q2 charges of $15–$18M .
  • Margin discipline: Product margins remain above targets; competitive dynamics and tariffs imply modest 2025 margin compression vs 2024, mitigated by price actions and modular products .
  • Working capital focus: Inventory down $69M YoY; WC at 22% of sales indicates more progress needed; watch cash conversion after Q1 operating cash outflow .
  • Capital allocation: Capex trimmed to $40–$65M (from $40–$80M) amid uncertainty; dividend raised to $0.36, signaling confidence in liquidity and cash generation .
  • Trading setup: Near-term headline risk from tariffs and Q2 margin guidance; medium-term thesis anchored on bookings recovery, manufacturing footprint optimization, and energy solutions execution.

Appendix: Additional Data Points

  • Q1 2025 tax expense: $8.1M (effective rate higher due to R&D capitalization and valuation allowance) .
  • Lift Truck region profitability Q1: Americas OP $52.4M; EMEA $(14.9)M; JAPIC $(7.3)M; adjusted Lift Truck OP $30.4M .
  • LTM Adjusted EBITDA trajectory: $315.9M (Q3’24) → $320.2M (Q4’24) → $258.8M (Q1’25) .