Slide 1: Q3 2023 Results
Q3 2023 Results Thursday, October 26, 2023
Slide 2: Q3 2023 Results – Performance Headlines
Q3 2023 RESULTS – PERFORMANCE HEADLINES ▪ Strategy remains grounded in desirability and profitability ▪ Successful launch of two new CVO motorcycles, CVO retail sales up +25%, with new features aligning with consumer preferences ▪ HDMC Gross Margin of 31.7% ▪ HDMC Revenue declined 9%, behind a 20% d
Slide 3: Q3 2023 Results – Earnings Call Participants
Q3 2023 RESULTS – EARNINGS CALL Call Participants ▪ Jochen Zeitz, Chairman, President and CEO ▪ Jonathan Root, Chief Financial Officer ▪ Edel O’Sullivan, Chief Commercial Officer ▪ Karim Donnez, CEO – LiveWire (NYSE: ‘LVWR’) ▪ Shawn Collins, Director Investor Relations 3
Slide 4: Hardwire Stage II Pillars
HARDWIRE STAGE II PILLARS 1 2 3 Profit Selective Lead in Focus Expansion & Electric Redefinition 4 5 6 Growth Integrated Inclusive Beyond Customer Stakeholder Bikes Experience Management 4
Slide 5: Consolidated – Q3 2023 Results
CONSOLIDATED – Q3 2023 RESULTS Q3 2023 Results1 Total ($ millions, except earnings per share) HDMC HDFS LiveWire HDI Revenue $1,297 $244 $8 $1,549 % vs PY -9% +15% -45% -6% Operating Income (Loss) $175 $59 ($25) $209 Margin % 13.5% 24.3% NM 13.5% % vs PY -37% -27% NM -38% Net Income Attributable to
Slide 6: Consolidated – Q3 2023 YTD Results
CONSOLIDATED – Q3 2023 YTD RESULTS YTD 2023 Results1 Total ($ millions, except earnings per share) HDMC HDFS LiveWire HDI Revenue $4,053 $707 $23 $4,783 % vs PY +2% +17% -39% +4% Operating Income (Loss) $705 $177 ($82) $800 Margin % 17.4% 25.0% NM 16.7% % vs PY -1% -30% NM -12% Net Income Attributab
Slide 7: Worldwide Retail Sales and Inventory
WORLDWIDE RETAIL SALES AND INVENTORY Excludes LiveWire Units Retail Sales Average Dealer Inventory Units Retail Motorcycle Sales of H-D Motorcycles (vs. PY) Worldwide Harley-Davidson Dealer Inventory Units (Thousands)2,3 Q3 YTD 2023 North America -15% -10% EMEA -13% -9% -21% vs. Q3 ‘19 Asia Pacific
Slide 8: HDMC Revenue Bridge
HDMC REVENUE BRIDGE Excludes LiveWire Results Q3 HDMC Revenue Bridge1 3% 6% 0% -9% -18% Volume Pricing Mix FX Total Q3 YTD HDMC Revenue Bridge1 5% 4% 2% -1% -6% Volume Pricing Mix FX Total 1 "Q3 HDMC Revenue Bridge” compares Q3 ‘23 results to Q3 ‘22 results on a year-over-year basis; “YTD HDMC Reven
Slide 9: Q3 2023: HDMC Operating Income Margin
Q3 2023: HDMC OPERATING INCOME MARGIN Excludes LiveWire Results for 2021-20231,2 Operating Income Margin3,4 Q3 2022 Op Income Margin $279 mm 19.6% 19.6% Volume ($92) -3.5 Pts FX ($19) -1.6 Pts 13.5% Motorcycle Mix $41 +2.2 Pts 9.9% Pricing $45 +2.9 Pts Supply Chain Costs ($54) -4.2 Pts 4.4% Operatin
Slide 10: YTD 2023: HDMC Operating Income Margin
YTD 2023: HDMC OPERATING INCOME MARGIN Excludes LiveWire Results for 2021-20231,2 Operating Income Margin3,4 YTD 2022 Op Income Margin $709 mm 17.9% Volume ($91) -1.3 Pts 17.9% 17.4% FX ($54) -1.2 Pts 15.1% Motorcycle Mix $83 +1.5 Pts 9.1% Pricing $199 +4.0 Pts Supply Chain Costs ($36) -0.9 Pts Oper
Slide 11: HDFS Segment: Q3 2023 Results
HDFS SEGMENT: Q3 2023 RESULTS Summary Financials Q3 +/- % vs. PY ($ millions) 2023 PY Revenue $244 +$32 +15% Interest Expense $84 +$23 +38% Provision for Credit Losses $61 +$24 +66% Operating Expense $40 +$6 +19% Total Expenses $185 +$54 +41% Operating Income $59 ($22) -27% Margin % 24.3% 11
Slide 12: HDFS Segment: Q3 YTD 2023 Results
HDFS SEGMENT: Q3 YTD 2023 RESULTS Summary Financials YTD +/- % vs. PY ($ millions) 2023 PY Revenue $707 +$101 +17% Interest Expense $244 +$93 +62% Provision for Credit Losses $170 +$76 +80% Operating Expense $116 +$8 +8% Total Expenses $531 +$178 +50% Operating Income $177 ($76) -30% Margin % 25.0%
Slide 13: HDFS Segment Performance
HDFS SEGMENT PERFORMANCE Realized Retail Credit Losses1, 2 Retail Finance Receivables & Allowance Annual (FY) / Annualized (Q) Receivables ($ mm) Allowance Percentage 5.9% 5.3% 5.4% 5.0% 5.1% 5.1% 4.4% $7.0 $7.0 2.7% $6.7 $6.7 $6.5 $6.4 $6.3 2.0% 1.9% 1.4% 1.2% FY '19 FY '20 FY '21 FY '22 Q3 '23 CEC
Slide 14: HDFS Funding Status
HDFS FUNDING STATUS HDFS Funding and Liquidity Position – as of end of Q3 2023 ▪ Completed four capital markets transactions in 2023: o $550M ABS in February o $700M 5-year MTN in March1 o €700M 3-year MTN in April (or $760M) o $500M ABS in September ▪ Paid a $200M inter-company dividend to HDI in S
Slide 15: LiveWire Segment: Q3 2023 Results and Expectations
LIVEWIRE SEGMENT: Q3 2023 RESULTS AND EXPECTATIONS1 ▪ 2023 LiveWire Guidance reaffirmed based on: $ millions Actual Units Q3 2022 Q2 2023 Q3 2023 ▪ Production commencing in Q3 on Del Mar, the first bike off the S2 platform with first deliveries at the end Motorcycle of the quarter 206 33 50 ▪ Expect
Slide 16: Consolidated – YTD Q3 2023 Results
CONSOLIDATED – YTD Q3 2023 RESULTS HDI Operating Cash Flow ($ mm) – YTD Q3 ’23 HDI Financial Metrics – YTD Q3 ‘23 $707 ▪ Capital Investments1 – $148 million $575 ▪ Dividends Paid – $73 million ▪ Shares Repurchased on Discretionary Basis – $226 million (6.1 million shares) ▪ Effective Tax Rate – 22%
Slide 17: Capital Allocation – Share Buybacks in 2022 & 2023 Q3 YTD
CAPITAL ALLOCATION – SHARE BUYBACKS IN 2022 & 2023 Q3 YTD $550 mm in Share Buybacks 14.5 mm Shares Repurchased or 9% of Shares Outstanding 1,2 $324 mm 8.4 mm 6.1 mm $226 mm 2022 FY 2023 Q3 YTD 2022 FY 2023 Q3 YTD 1 This calculation is based on 153.6 mm shares outstanding on December 31, 2021. 2 This
Slide 18: 2023 Harley-Davidson, Inc. Guidance
2023 HARLEY-DAVIDSON, INC. GUIDANCE HDMC HDFS LiveWire Revenue Growth Operating Income Y-o-Y LiveWire Units Flat to +3% Down 20 to 25% 600 - 1,000 Operating Income Margin Operating Loss +13.9 to 14.3% ($115M) to ($125M) Harley Davidson, Inc. Capital Investment $225M – $250M 18
Slide 19: HDMC Unit Profitability Returned to Historically Healthy Levels
HDMC UNIT PROFITABILITY RETURNED TO HISTORICALLY HEALTHY LEVELS Excludes LiveWire Results for 2020-2023 HDMC Unit Profitability1,2,3 Key Drivers Since 2019: • ~23,000 fewer Wholesale units driven by strategic ~$3,700/Unit ~$3,500/Unit market exits and model pruning • Improved profitability through r
Slide 20: Appendix: Supplemental Information
APPENDIX: SUPPLEMENTAL INFORMATION 20
Slide 21: Harley-Davidson Financial Reporting: Three Segments
HARLEY-DAVIDSON FINANCIAL REPORTING: THREE SEGMENTS1 New in Q4 Fiscal Year 2022 HDMC HDFS LiveWire Harley-Davidson Harley-Davidson LiveWire Motor Company2 Financial Services3 Group, Inc.4 Harley-Davidson Motorcycles, Financing for LiveWire Motorcycles, P&A, Apparel & Licensing Both HDMC and LiveWire
Slide 22: Forward Looking Statements
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
Slide 23: Forward Looking Statements Continued
FORWARD LOOKING STATEMENTS CONTINUED The Company’s ability to sell its motorcycles and related products and services and to meet its financial expectations also depends on the ability of the Company’s dealers to sell its motorcycles and related products and services to retail customers. The Company