Hamilton Beach 2011 Annual Report Download - page 11

mix to lower-margin markets and higher
marketing and employee-related costs.
The decrease in net income is expected to
occur primarily in the first half of the year,
with modest improvements expected in the
second half of 2012 compared with the
second half of 2011. Results are expected
to be down in all major markets except
Brazil. Significant improvements in Brazil
are expected to be offset by a decline in
the North America results. Cash flow before
financing activities for the full year 2012 is
expected to be higher than 2011 despite a
significant increase in capital expenditures
in 2012 compared with 2011.
Longer-Term Perspective
NMHG remains committed to its vision
of being 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
made significant progress in 2011 and
expects to continue that progress in 2012.
The company believes it is well-positioned
to maintain its global competitiveness.
However, as markets begin to moderate,
NMHG will be particularly focused on
achieving its financial targets and furthering
its global reach. As such, NMHG is focused
on five strategic goals which are designed
to enhance market share: (1) offering the
lowest cost of ownership, (2) understanding
customer needs at the product and after-
market levels, (3) further penetrating the
warehouse market, (4) achieving leadership
in independent distribution through broad
account coverage of the market and
strong dealers throughout the world, and
(5) expanding in Asia by offering lift trucks
that meet the needs of that market and
strengthening partner relationships.
The company’s product pipeline is
on track to produce a continuous stream
of new product innovations and product
introductions over the next several years
to meet customer needs and provide the
lowest cost of ownership. The products
in the pipeline are expected to enhance
NMHG’s competitiveness and market
share. In 2011, NMHG launched two new
electric-rider lift trucks and expects to
launch the final two models in this electric-
rider lift truck program in the first half of
2012. In addition, NMHG successfully
launched a new medium-duty internal
combustion engine lift truck in Europe in
the third quarter of 2011, complementing
a product launched in the Americas in
July 2010. In 2011, the company also
introduced, into selected Latin American
markets, a new range of UTILEV®brand
forklift trucks, which are basic forklift
trucks that meet the needs of low-intensity
users. This new internal combustion
engine series of utility lift trucks is expected
to be introduced into other global markets
in 2012. With the addition of the UTILEV®
forklift truck range, NMHG is now able
to provide coverage to all segments of
the market – utility, medium-duty and
heavy-duty.
NMHG currently has truck engine
systems that meet the emission require-
ments for the regions of the world in which
it does business. However, new, stricter
diesel emission regulations are currently
affecting all lift truck manufacturers, and
some of these new regulations go into
effect in 2012 in certain global markets.
NMHG has been working to ensure these
new requirements are satisfied in a cost-
effective manner, but the company expects
these new regulations will increase the cost
of the trucks, which in turn is likely to lead
to substantial price increases for certain
trucks beginning with 2012 deliveries. As
a result of the stricter regulations, NMHG
expects to launch a range of lift trucks in
2012, beginning with the Big Truck product
line, which will include engine systems that
meet the new emission requirements.
As part of NMHG’s efforts to further
penetrate the warehouse equipment
market, the company plans to focus on
direct sales to major accounts as well as
product enhancements in the Americas. In
addition, NMHG expects to launch a new
Reach Truck for the European warehouse
market in early 2013.
In the years ahead, the company
expects to continue to work aggressively to
meet evolving market requirements in all
product segments of the market and has
already begun making progress in achieving
its goals. In 2011, Hyster Company was
ranked No. 1 in brand satisfaction and
Hyster®lift trucks were ranked No. 1 in
the U.S. for lowest total cost of ownership
in two independent surveys conducted by
Peerless Media Research Group.
Overall, NMHG believes its products,
supply chain, manufacturing, quality, pricing,
distribution and sales and marketing
capabilities will position the company well
in the global lift truck market. NMHG’s
objective is to leverage this position to
increase market share and improve product
margins to target levels. NMHG anticipates
share gains over the next five years, which
are expected to move the company’s
financial performance in the next few years
toward its target level of an average mini-
mum operating profit margin of 7 percent
at the mid-point of the market cycle.
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