Slide 1: Q2 2021 Business Update
Q2 2021 BUSINESS UPDATE July 21, 2021
Slide 2: Business Update Conference Call
Business Update Conference Call Q2 2021 Financial Results & Strategic Plan Review This presentation supports the audio call. The audio playback for today’s call will be available at Harley- Davidson.com, or call (855) 859-2056 or (404) 537-3406 until August 4, 2021. ID 6190286. CALL PARTICIPANTS ▪ J
Slide 3: Q2 Performance Headlines
Q2 Performance Headlines • Delivering strong financial results • Managing through the pandemic July 21, 2021 Conference Call Slide Presentation • Overcoming supply chain challenges • Providing execution proof points for The Hardwire • Fighting against EU tariffs 3 3
Slide 4: Q2 2021 Consolidated Results
Q2 2021 Consolidated – Motorcycles and Related Products and Financial Services Segments Results Motorcycles Financial Svcs Total HDI Segment Segment Revenue $1,532M $1,332M $201M % vs. Q2 2020 77% 99% 2% 1 % vs. Q2 2019 (6%) (7%) 1% Operating Income $280M $186M $95M % vs. Q2 2019 1, 2 9% 3% 25% Net
Slide 5: Year-to-Date 2021 Consolidated Results
Year-to-Date Consolidated – Motorcycles and Related Products and Financial Services Segments 2021 Results Motorcycles Financial Svcs Total HDI Segment Segment Revenue $2,955M $2,564M $391M % vs. YTD 2020 37% 45% (1%) 1 % vs. YTD 2019 (2%) (3%) 1% Operating Income $627M $413M $213M % vs. YTD 2019 1,
Slide 6: Worldwide Retail Sales, Inventory and Market Share
Worldwide Retail Sales H-D NEW RETAIL MOTORCYCLE SALES WORLDWIDE H-D NEW RETAIL MOTORCYCLE DEALER QUARTER END INVENTORY and vs. Prior Year (thousands) Inventory Q2 YTD Motorcycles and Related Products Segment RETAIL SALES Worldwide Retail Sales 24% 18% North America 43% 38% INVENTORY UNITS EMEA (7%)
Slide 7: Q2 & YTD Motorcycles Segment Revenue Growth
Q2 & YTD Total Motorcycles Segment Revenue Growth Revenue Q2 Motorcycles Segment Revenue Growth Bridge Growth +81 pts Motorcycles and Related Products Segment +13 pts +1 pts +5 pts YTD Motorcycles Segment Revenue Growth Bridge July 21, 2021 Conference Call Slide Presentation +33 pts +8 pts +1 pts +3
Slide 8: Motorcycles Segment Margins
Q2 & YTD Gross Margin as % of Revenue Operating Margin as % of Revenue Motorcycles Segment Margins Motorcycles and Related Products Segment July 21, 2021 Conference Call Slide Presentation Gross and Operating Margins driven by stronger volume, favorable unit mix and lower operating expense, partiall
Slide 9: Financial Services Segment Operating Income
Financial Services OPERATING INCOME Segment FINANCIAL SERVICES SEGMENT ($ millions) Q2 YTD Financial Services Segment 2020 Operating Income $5 $28 Net Interest Income $13 $- Provision for Credit Losses (retail & wholesale) $75 $177 Operating Expenses1 ($3) $1 All Other $5 $7 July 21, 2021 Conference
Slide 10: Financial Services Segment
($ millions) Services Segment Financial (millions) 10 July 21, 2021 Conference Call Slide Presentation Financial Services Segment
Slide 11: HDFS Retail Motorcycle Loan Performance
Financial HDFS RETAIL MOTORCYCLE LOAN PERFORMANCE Services Segment Q2 30+ Day Delinquencies 4% 3 .16% 3 .25% 3 .33% 3 .09% 3% Financial Services Segment 2 2 .21% 1 2% 1 .75% 1% '16 '17 '18 '19 '20 '21 3% Annualized Q2 Loss Experience July 21, 2021 Conference Call Slide Presentation 1 .82% 1 .87% 2%
Slide 12: H-D, Inc. Q2 Financial Metrics
H-D, Inc. Consolidated – Motorcycles and Related Products and Financial Services Segments YTD Operating Cash Flow Other H-D, Inc. Q2 Financial Metrics (millions) ▪ YTD Capital expenditures – $38M 1 ▪ Cash & cash equivalents – $1.7B ▪ YTD Dividends paid – $46M ▪ YTD Effective tax rate – 25% July 21,
Slide 13: Guidance
2021 2021 Guidance Revenue Growth Operating Margin (as of 7/21/21) Motorcycles Segment Motorcycles Segment 1 2 +30% - 35% 6% - 8% 7% - 9% With EU tariffs If EU tariffs mitigated Operating Income Growth Capital Expenditures Financial Services Segment +75% – 85% $190 – 220M 1 Assumes the EU tariffs re
Slide 14: Expected Motorcycles Segment Revenue & Op Margin Phasing
Expected Motorcycles Seasonality and model year launch timing impacting phasing of revenue & margin Segment Revenue & ~60% Op Margin Motorcycles and Related Products Segment Phasing ~40% Mid-Teens July 21, 2021 Conference Call Slide Presentation Negative Mid Single Digits 2 Revenue as % Total 2021 R
Slide 15: The Hardwire: 2021-2025 Strategic Plan
The Hardwire: 2021-2025 Strategic Plan Enhance our position as the most desirable motorcycle brand in the world PROFIT FOCUS GROWTH BEYOND BIKES Investing in our strongest Expanding complementary businesses motorcycle segments and engaging beyond product SELECTIVE EXPANSION AND CUSTOMER EXPERIENCE R
Slide 16: Vision, Mission & Culture
Building our legend and leading our Our industry through innovation, evolution and Vision, vision emotion Mission & Culture More than building machines, we stand Our for the timeless pursuit of adventure. Freedom for the soul. mission July 21, 2021 Conference Call Slide Presentation Our H-D#1 - Comm
Slide 17: Desirability
Desirability A motivating force driven by emotion – it’s in our DNA. Embedded in our vision, at the heart of our mission, part of our 118-year legacy. 17 17
Slide 18: Our Strategic Ambition
H A R L E Y - DAV I D S O N Our strategic as the most desirable ambition motorcycle brand in the world. • Design, engineer and advance the most desirable motorcycles in the world, reflected in quality, innovation and craftsmanship. • Build a lifestyle brand, valued for the emotion reflected July 21,
Slide 19: The Icons Collection
THE ICONS COLLECTION 19 19 July 21, 2021 Conference Call Slide Presentation
Slide 20: July 21, 2021 Conference Call Slide Presentation
July 21, 2021 Conference Call Slide Presentation
Slide 21: Selective Expansion: Pan America
“And yet, here we are. Harley-Davidson hasn’t just made a good adventure bike, it has made a bloody great one. And it is going to have a lot of rusted-on adventure riders swallowing their words.” Dylan Ruddy: bikesales.com.au Selective Expansion: “Harley-Davidson’s Pan America is astonishing. It is
Slide 22: Selective Expansion: Sportster S Reveal
“This is a watershed moment for one of motorcycling’s great icons. Meet the 2021 Harley-Davidson Sportster S, a liquid- cooled, 121-horsepower reincarnation of the Sporty’s design and purpose.” Selective Expansion: “Sporty and beefy, yet slim and rugged, • 127M the new Sportster S looks like it’s re
Slide 23: Launch Electric: Invest in LiveWire ONE
™ Launch Electric: Invest in LiveWire ONE 23 July 21, 2021 Conference Call Slide Presentation
Slide 24: Growth in Complementary Businesses: H-D x Momoa Collection
Growth in Complementary Businesses: H-D x Momoa Collection July 21, 2021 Conference Call Slide Presentation 24
Slide 25: Customer Experience: H-D1 Marketplace
H-D1 Customer Experience: Marketplace 25 July 21, 2021 Conference Call Slide Presentation
Slide 26: The Hardwire: 2021-2025 Strategic Plan
The Hardwire: 2021-2025 Strategic Plan Enhance our position as the most desirable motorcycle brand in the world PROFIT FOCUS GROWTH BEYOND BIKES Investing in our strongest Expanding complementary businesses motorcycle segments and engaging beyond product SELECTIVE EXPANSION AND CUSTOMER EXPERIENCE R
Slide 27: Non-GAAP Measures
Non-GAAP This presentation includes financial measures that have not been calculated in accordance with U.S. generally accepted accounting principles Measures (GAAP) and are therefore referred to as non-GAAP financial measures. The non-GAAP measures listed below are intended to be considered by user
Slide 28: Reconciliation of GAAP to Non-GAAP Amounts
Non-GAAP Measures RECONCILIATION OF GAAP TO NON-GAAP AMOUNTS This presentation contains non-GAAP measures related to net income and diluted earnings per share that exclude restructuring plan costs and the impact of EU tariffs. Reconciliations of GAAP amounts to non-GAAP amounts are included below. (
Slide 29: Tariff Update
Tariff Update Communicated With Q1 Q2 Update Earnings All BOI's revoked on product from Continued actions taken across Key Messages Thailand to Europe legal and political fronts 31% effective April 19th 31% effective April 19th EU Tariff Rates Increase to 56% on June 1st Increase to 56% on hold unti
Slide 30: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements The company intends that certain matters discussed in this presentation are “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-look