Slide 1: Q2 2022 Financial Results
Q2 2022 Financial Results THURSDAY, JULY 28, 2022
Slide 2: Call Participants
Q2 2022 FINANCIAL RESULTS – EARNINGS CALL Call Participants ▪ Jochen Zeitz, Chairman, President and CEO ▪ Gina Goetter, Chief Financial Officer ▪ Edel O’Sullivan, Chief Commercial Officer ▪ Shawn Collins, Director Investor Relations 2
Slide 3: Q2 2022 Performance Headlines
Q2 2022 PERFORMANCE HEADLINES ▪ HDMC Operating Income margin of 15.1%, up 1.2 points versus last year, despite lower than planned motorcycle wholesale shipments ▪ HDMC Revenue down 5%, despite greater decline in shipments, offset by favorable motorcycle pricing and growth in Apparel ▪ Motorcycle shi
Slide 4: Introducing: Hardwire Stage II
INTRODUCING: HARDWIRE STAGE II 2020 2021 2022 Accelerating core Hardwire initiatives and adding bold moves in spaces Rewire Hardwire Hardwire where Harley- Setting a new course Stage II Resetting our Davidson can win. business with focus for our success Accelerating core on immediate-term through 20
Slide 5: 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 5
Slide 6: Consolidated – Q2 2022 Results
CONSOLIDATED – Q2 2022 RESULTS Q2 2022 Results Total ($ millions, except earnings per share) HDMC1 HDFS2 HDI3 Revenue $1,266 $203 $1,469 % vs PY -5% 1% -4% Operating Income $192 $86 $278 Margin % 15.1% 42.4% 19% % vs PY 3% -9% -1% Net Income $216 Margin % 15% Diluted EPS – GAAP $1.46 % vs PY 10% 1 H
Slide 7: Consolidated – YTD 2022 Results
CONSOLIDATED – YTD 2022 RESULTS YTD 2022 Results Total ($ millions, except per share) HDMC1 HDFS2 HDI3 Revenue $2,570 $395 $2,964 % vs PY flat 1% flat Operating Income $395 $172 $567 Margin % 15.4% 43.7% 19% % vs PY -5% -19% -10% Net Income $438 Margin % 15% Diluted EPS – GAAP $2.91 % vs PY -3% 1 HD
Slide 8: Worldwide Retail Sales and Inventory
WORLDWIDE RETAIL SALES AND INVENTORY Retail Sales Average Dealer Inventory Units Retail Motorcycle Sales of H-D Motorcycles (vs. PY) H-D Worldwide Dealer Inventory Units (Thousands)2 Q1 Q2 YTD 2022 Down 63% since Q2 ‘19 North America -5% -28% -18% EMEA +28% -15% -1% 73 Asia Pacific +16% +1% +8% Lati
Slide 9: HDMC Revenue
HDMC REVENUE Q2 Motorcycles Segment Revenue Bridge 7% 2% -3% -5% -10% Volume Pricing Mix FX Total YTD Motorcycles Segment Revenue Bridge 7% 0% 0% -2% -4% Volume Pricing Mix FX Total 9
Slide 10: Q2 2022: HDMC Operating Income Margin
Q2 2022: HDMC OPERATING INCOME MARGIN Operating Income Margin1,2,3 Q2 2021 Op Income Margin 14.0% $186M Volume4 -2.1 Pts -$51M 15.1% 15.4% Motorcycle Mix +0.2 Pts $6M 14.0% 12.6% Pricing +6.1 Pts $89M Supply Chain Costs -5.1 Pts -$64M Operating Expenses +2.1 Pts $26M N/A Q2 2019 Q2 2020 Q2 2021 Q2 2
Slide 11: Financial Services Segment – Q2 2022 Results
FINANCIAL SERVICES SEGMENT – Q2 2022 RESULTS Summary Financials Q2 +/- % Change PY ($ millions) 2022 PY Revenue $203 +$2 +1% Interest Expense $48 -$1 -2% Provision for Credit Losses $29 +$13 +80% Operating Expense $40 -$1 -3% Total Expenses $117 +$11 +10% Operating Income $86 -$9 -9% Margin % 42.4%
Slide 12: Financial Services Segment – YTD 2022 Results
FINANCIAL SERVICES SEGMENT – YTD 2022 RESULTS Summary Financials YTD +/- % Change PY ($ millions) 2022 PY Revenue $395 +$4 +1% Interest Expense $90 -$15 -14% Provision for Credit Losses $58 +$64 nm1 Operating Expense $75 -$5 -6% Total Expenses $222 +$45 +25% Operating Income $172 -$41 -19% Margin %
Slide 13: Financial Services Segment – Performance
FINANCIAL SERVICES SEGMENT – PERFORMANCE Realized Retail Credit Losses1,2,3 Retail Finance Receivables & Allowance Annual (FY) / Annualized (Q) Receivables ($ mm) Allowance Percentage Average annual loss rate 1.9% 5.9% 1.8% 5.0% 5.0% 5.0% 1.9% 2.0% 4.4% $6.8 1.4% $6.5 $6.5 1.4% 1.2% $6.4 $6.3 FY '17
Slide 14: Consolidated – YTD 2022 Results
CONSOLIDATED – YTD 2022 RESULTS H-D, Inc. Operating Cash Flow ($ millions) - YTD YTD 2022 – H-D, Inc. Financial Metrics $644 ▪ YTD Capital Investments1 – $68 million ▪ YTD Dividends Paid – $47 million ▪ YTD Discretionary Shares Repurchased – $312 million (or 8.0 million shares) $244 ▪ YTD Effective
Slide 15: Confirming 2022 Harley-Davidson, Inc. Guidance
CONFIRMING 2022 HARLEY-DAVIDSON, INC. GUIDANCE 2022 Outlook ▪ 2022 on track to original guidance Motorcycle Segment Revenue Growth (HDMC) ▪ Expect Q2 wholesale unit shortfall to +5 – 10% YOY Growth be made up in back-half Motorcycles Segment Operating Income Margin (HDMC) 11 – 12% ▪ Supply Chain con
Slide 16: Supply Chain Outlook
SUPPLY CHAIN OUTLOOK 2022 Cost Inflation: Realized and Forecast 2021 Cost of Sales 2021 Q1 Q2 1H 2H $3.2B Actual Actual Actual Actual Estimated Tariffs, Duties, Other Logistics >100% ~+50% +7% +25% Flat Manufacturing +3% +7% +3% +4% +5% Materials +5% +4% +4% +4% +3% 16
Slide 17: HDMC 2022 Expected Phasing
HDMC 2022 EXPECTED PHASING HDMC Phasing 1H Actual / 2H Estimated 1H 2022A 2H 2022E 15.4% Actual ~ Low-to-Mid Double Digit ~ Mid Single Digit Flat Actual % Revenue Growth Operating Income Margin % Prior Year Operating Margin: • 1H 2021A Operating Income Margin = 16.1% • 2H 2021A Operating Income Marg
Slide 18: 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 19: 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
Slide 20: Harley-Davidson
HARLEY —- DAVIDSON’