Slide 1: Q3 2021 Business Update
Q3 2021 BUSINESS UPDATE October 27, 2021
Slide 2: Q3 Performance Headlines
Q3 Performance Headlines ▪ Delivered strong financial results ▪ Managed spend to offset supply chain headwinds October 27, 2021 Conference Call Slide Presentation ▪ Provided execution proof points for The Hardwire ▪ Fighting against EU tariffs 2
Slide 3: Business Update Conference Call
Business Update Conference Call Q3 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 November 10, 2021. ID 9497968. CALL PARTICIPANTS
Slide 4: Consolidated – Motorcycles and Financial Services Segments Q3 2021
Consolidated – Motorcycles and Related Products and Financial Services Segments Q3 2021 Motorcycles Financial Svcs Results Total HDI 2 Segment Segment Revenue $1,365M $1,161M $205M % vs. PY 17% 20% 2% Operating Income $204M $98M $107M % vs. PY 48% 109% 17% Net Income $163M October 27, 2021 Conferenc
Slide 5: Consolidated – Year-to-Date 2021 Results
Year-to-Date Consolidated – Motorcycles and Related Products and Financial Services Segments Motorcycles Financial Svcs 2021 Results Total HDI Segment Segment Revenue $4,320M $3,724M $596M % vs. PY 30% 36% 0% Operating Income $831M $511M $320M % vs. PY 543% 4870% 169% Net Income $628M October 27, 20
Slide 6: Retail Sales and Inventory Units
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 Q3 YTD Motorcycles and Related Products Segment RETAIL SALES Worldwide Retail Sales (6%) 9% Down 57% since Q3 2019 North America 2% 25% 57
Slide 7: Q3 & YTD Total Motorcycles Segment Revenue Growth
Q3 & YTD Total Motorcycles Segment Revenue Growth Revenue Q3 Motorcycles Segment Revenue Growth Bridge Growth Motorcycles and Related Products Segment +9 pts +8 pts +2 pts +1 pts YTD Motorcycles Segment Revenue Growth Bridge October 27, 2021 Conference Call Slide Presentation +24 pts +9 pts +2 pts +
Slide 8: Q3 & YTD Operating Margin as % of Revenue
Q3 & YTD Operating Margin as % of Revenue Motorcycles Segment Margins Motorcycles and Related Products Segment 13.7% 9.1% 8.4% 4.4% 4.8% 0.4% October 27, 2021 Conference Call Slide Presentation Q3 YTD 2019 2020 2021 Gross Margin % 29.9% 29.8% 26.7% 30.3% 26.1% 30.6% Q3 Operating Margin improvement d
Slide 9: 2021 Inflation: Realized & Q4 Estimate
Supply Chain: Total Cost 2021 Inflation: Realized & Q4 Estimate Inflation of ~$3B 1 Comparison vs PY Other Description Q1 Q2 Q3 Q4 Estimate Duties, Tariffs Motorcycles and Related Products Segment More Logistics All freight and warehousing for +50% 2x 2x Motorcycles, P&A and GM than 2.5x Production
Slide 10: Financial Services Segment Operating Income
Financial OPERATING INCOME FINANCIAL SERVICES SEGMENT ($ millions) Services Segment Q3 +/- PY % vs. PY YTD +/- PY % vs. PY Revenue $205 $3 2% $596 $0 0% Financial Services Segment Interest Expense $45 ($23) $149 ($33) Provision for Credit Losses $11 $3 $5 ($173) Operating Expense1 $42 $7 $121 $5 Tot
Slide 11: Retail Credit Losses and Finance Receivables
Financial Realized Retail Credit Losses Retail Finance Receivables & Allowance Services Annual (FY) / Annualized (Q) $s in millions Segment Receivables Allowance Percentage $7,000 6.7% Average annual loss rate 1.87% 5.98% 5.92% $6,900 5.86% 2.00% 5.18% 5.7% 1.90% $6,800 4.96% 5.13% 5.08% Financial S
Slide 12: YTD Operating Cash Flow and Other Financial Metrics
Consolidated – Motorcycles and Related Products and Financial Services Segments Total H-D, Inc. YTD Operating Cash Flow Other H-D, Inc. Q3 Financial Metrics (millions) ▪ YTD Capital expenditures – $61M 1 ▪ Cash & cash equivalents – $2.1B ▪ YTD Dividends paid – $69M ▪ YTD Effective tax rate – 23% Oct
Slide 13: 2021 Guidance
Consolidated – Motorcycles and Related Products and Financial Services Segments 2021 Guidance Prior Current Motorcycles Segment Revenue Growth +30 – 35% +30 – 35% YOY Growth Motorcycles Segment Operating Income Margin 1 1 6 – 8% 6 – 8% % of revenue Financial Services Operating Income +75 – 85% +95 –
Slide 14: Q4 Considerations
Q4 Consolidated – Motorcycles and Related Products and Financial Services Segments Considerations Wholesale Shipments Q4 Considerations (Total Units in 000’s) 55 57 ▪ Model year shift to beginning of 48 calendar year ▪ Capital and expense spending higher 1 in 22 - 29 Q4 to support upcoming launches
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: 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. October 27, 2021 Conference Call Slide Presentation • Build a lifest
Slide 17: Riding Academy
Riding Academy +20% October 27, 2021 Conference Call Slide Presentation Riding Academy completion rates up 20% YTD over 2019 17
Slide 18: H-D Pan America 1250 Special
Pan America 1250 Special H-D PAN AMERICA October 27, 2021 Conference Call Slide Presentation 1250 SPECIAL #1 Selling Adventure Touring model in the United States! 18
Slide 19: Sportster S
Sportster S I think the Revolution Max might not just be my favorite Harley engine, it might be my new favorite motorcycle engine. - John Burns The Sportster S is a blacktop brawler that was unleashed on this planet to put smiles on October 27, 2021 Conference Call Slide Presentation faces and do no
Slide 20: H-D1 Customer Experience: Marketplace
H-D1 Customer Experience: Marketplace 20 October 27, 2021 Conference Call Slide Presentation
Slide 21: Inclusive Stakeholder Management
Inclusive Stakeholder Management 21 October 27, 2021 Conference Call Slide Presentation
Slide 22: 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 23: 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 24: 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 25: 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