Hamilton Beach 2007 Annual Report Download - page 16

In addition, in 2007, Consolidated NMHG delivered return
on equity(1) (“ROE”) of 7.9 percent compared with 7.7 percent
in 2006, and a return on total capital employed (“ROTCE”)
of 6.8 percent in 2007 compared with 6.9 percent in 2006 –
levels still well below NMHG’s longer-term objectives. (See
reconciliations of non-GAAP ROTCE on page 43.)
Vision and Goals
NMHG’s vision is to be a leading globally integrated
designer, manufacturer and marketer of a complete range of
high-quality, application-tailored lift trucks, offering the lowest
cost of ownership, outstanding parts and service support and
the best overall value. NMHG Wholesale’s established financial
objectives are to achieve an operating profit margin of 9 percent
and to generate substantial cash flow before financing activities.
NMHG also remains focused on reaching break-even results
in its owned retail operations while developing strengthened
market positions.
Industry Trends
Lift truck customers increasingly require more dependable
lift trucks and greater levels of service and expect manufacturers
and dealers to deliver both at competitive prices. Therefore,
maintaining low costs as well as outstanding quality, timeliness
and reliability are critical for competitiveness. Because greater
economies of scale produce lower product costs, the industry is
led by large, global manufacturers with an increasingly global
supply base. While China and other low-cost countries are
emerging as more reliable sources for low-cost components,
costs for commodities, such as steel, oil, lead, rubber and copper,
continue to rise globally and place pressure on profit margins for
all manufacturers. Lift truck companies also face uncertainties
in the U.S. economy, which could affect key customers’ capital
equipment purchasing levels and timing. In this environment,
continual improvements in manufacturing and supply chain
efficiencies are vital to improve financial performance.
In most regions around the world, customers desire
specialized solutions for their materials handling needs.
Manufacturers must strike the right balance between the number
of models and options offered and the volume required to
maintain efficiencies and economies of scale. In addition, newer
lift trucks must address evolving end-user needs, which have
led, for example, to more environmentally friendly products,
such as lift trucks using fuel cell technology, and increased
demand for electric-powered lift trucks, especially those for
use in warehousing operations. Since sophisticated customers
increasingly look beyond the initial purchase price of a lift
truck to consider the total cost of operation of the equipment,
manufacturers must design and build products that deliver a
low cost of ownership over the life of the product.
Successful lift truck companies and dealers foster strong,
lasting customer relationships by utilizing highly professional
personnel and business processes. As logistics efficiency grows
in importance to end users, the overall product and service
needs of these customers have become more sophisticated.
Manufacturers face increasing demand for enhanced service
[12]
(1) ROE = The respective year’s net income divided by that year’s average equity (a five-point average of equity at December 31 of the previous year and each of the respective
year’s quarter ends).
Below left to right: The Yale® Veracitor® GP 60VX pneumatic tire internal combustion lift truck, with a lifting capacity of up to 6,000 pounds, provides excellent performance
for standard and medium-duty applications. The Yale® MPW 60E Walkie Motorized Hand Pallet Truck, with a carrying capacity up to 6,000 pounds, has ergonomically
designed handles to put full control at the operator’s fingertips and has a tapered fork design that provides excellent pallet entry and exit for low-level warehouse operation.
The Yale® ERC-HH cushion tire electric rider lift truck, for demanding applications in warehouse environments, has lifting capacities from 7,000 to 12,000 pounds and is
extremely maneuverable with high stacking ability.