Harley-Davidson, Inc.

Thank you for standing by, and welcome to the Harley-Davidson 2021 Fourth Quarter and Year-End Investor and Analyst Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Sean Collins. Thank you. Please go ahead.

Thank you. Good morning, everyone. This is Sean Collins, the Director of Investor Relations at Harley-Davidson. You can access the slides supporting today's call on the internet at InvestorHarleyDavidson.com. Our comments will include forward-looking statements that are subject to risks that could cause actual results to be materially different. Those risks include, among others, matters we have noted in our latest earnings release and filings with the SEC. Harley-Davidson disclaims any obligation to update information in this call. Joining me this morning are CEO Jochen Zeitz, and CFO Gina Getter. In addition, Chief Commercial Officer Adele O'Sullivan will join for the Q&A. Jochen, let's get started.

Thank you, Sean, and good morning, everyone. Thank you for joining us today. As we conclude the first year of the hardwire, our five-year strategic plan to drive profitable growth, Harley-Davidson delivered a strong finish to 2021. We are very pleased with our performance, especially in light of the many challenges that 21 brought us. We are particularly encouraged that the proof points of our delivery against the strategic pillars of the hardwire are visible across the board. We anticipate the momentum from a strong 21 to continue into 22, and I'm very optimistic about the great potential of Harley-Davidson in the coming years, especially when we look to what we achieved with rewire and our delivery of our hardwire milestones over the past year, as part of the huge transformational journey the company is on. However, we are mindful of the significant supply challenges that we expect to continue to impact the industry. With REWIRE, we realigned our organization, creating a culture of performance, efficiency, focus, and speed. In unlocking this potential, we set the company's foundation for success, built around a completely new leadership team. And building on Rewire in February 2021, we launched the Hardwire. This positioned Harley-Davidson with capabilities, assets, and a legacy unmatched by any competitor as the most desirable motorcycle brand in the world, backed by the leading positions in the most profitable segments. Rooted in desirability, the Hardwire continues to strengthen and build the brand, deepening loyalty, creating value, and driving engagement across both existing and new consumers. I will briefly address our strategic pillars and our delivery against them over the past year. Profit focus. We are committed to strengthening and growing our position in our strongest motorcycle segments in touring, large cruiser, and trike. Not only are these segments the most profitable in the market globally, but we also believe these segments offer untapped potential to inspire more engagement while compelling new customers and riders to choose Harley-Davidson. Our data shows that in 2021, the touring segment grew thanks to our strong performance in this category. And as we look ahead, we will continue to focus on growing our stronghold segment. With the hard wire, we made a commitment to introduce a series of motorcycles that align with our strategy to increase desirability and to drive the legacy of Harley-Davidson. In this context, we launched our icons collection. Our new limited edition series of extraordinary adaptations of production motorcycles, which look to our storied past and bright future. The collection debuted with the electric light revival, the ultimate tribute to our heritage and grand American touring with production selling out from launch. Selective expansion. We are committed to focusing on opportunities and profitable segments aligned with our capabilities and that offer a clear path to market leadership. 2021 saw the launch of Pan America, our first adventure touring motorcycle. From the outset, we saw the potential of the adventure touring category. As of today, it is the second fastest growing category in North America. The immediate success of Pan America resulted in selling out our allocation throughout the production year and has led to Pan America becoming the number one selling adventure touring motorcycle in the US in 2021. Not only has this product outperformed, but it has also redefined its category, with its riders customizing their Pan Americas in ways only Harley-Davidson can deliver. We continue to see the potential for Pan America across the globe, especially in Europe, the largest market for adventure touring, building on our RevMax platform. 21 also saw the launch of Sportster S, a bike that has brought the Harley-Davidson brand to a greater customer set beyond our stronghold segments like no other. With sport as the fastest growing category in North America, we realized the potential of the Sportster S to engage and bring new riders to the Harley-Davidson brand. As we look at our delivery against selective expansion, we successfully launched two bikes that were amongst the fastest selling motorcycles in our portfolio against the backdrop of acclaim and overwhelming positive media coverage with waiting lists extending into this year. Importantly, Both these launches were delivered with a strategically streamlined portfolio aligned to our hardwire goals that saw model and SKU count reduced by 40% since 2020, allowing us to focus on the very best that Harley-Davidson has to offer. Looking forward, we'll continue to test further avenues for desirable long-term growth. Lead in electric. Electric motorcycles are important to Harley-Davidson's future, and we remain committed to staying at the forefront of electric motorcycle technology. In 2021, we not only stood up Livewire as a standalone brand, but we also announced that through a business combination agreement with AEA Bridges Impact Corp., Livewire would become a publicly traded company on the New York Stock Exchange. The transaction is expected to close in the first half of this year, and we are very excited about the potential for Livewire to be the most desirable electric motorcycle company in the world. The Livewire team began scaling the retail network in the back half of 2021, building on our 12 original partners. The network has grown from 20 retailers at the end of Q3 to 49 retailers as of February 1. We're also looking forward to introducing the first product on Livewire's new Arrow architecture in the second quarter of this year. We believe that Livewire will drive incremental business and help us to expand our reach and business in the coming decades through pioneering the electric motorcycle market and developing the technology of the future. For Livewire, this is just the beginning. Growth beyond bikes. Harley-Davidson Financial Services, HD1 Marketplace, Parts and accessories and general merchandise are important drivers of the company's future success as a global lifestyle brand, providing untapped potential to grow our customer base and add to customer lifetime value. HDFS is an important asset to Arla Davidson from both a brand and revenue point of view. And as we look ahead, we look forward to widening our HDFS offering to new markets. In 21, we also launched HD1 Marketplace, the ultimate destination for pre-owned Harley-Davidson in America, backed by the strength and scale of our dealer network and enhanced by the Harley-Davidson certified program for extra peace of mind. The HD1 Marketplace platform is connecting our customers, community, and our strong dealer network. HD One Marketplace is just the first step towards our ambitious transformation of HD.com into the leading online destination for everything Harley-Davidson. And as we look to the future, we want our online presence to connect and support our HD network from enhanced online experiences, unique community engagement, to exclusive content and learning. With personalization at the heart of motor culture and the Harley-Davidson brand, Parts and accessories is now a growth area for the business. Last year, revenue grew 13%, and we believe there's potential to continue that growth trajectory as more riders look to make the Harley-Davidson uniquely theirs. We feel very positive about the performance of our general merchandise business with 23% growth for the year. Last week, we announced the strategic rename of our general merchandise business to apparel and licensing, with the appointment of a senior executive and creative director to help build the business. The potential to grow both our apparel and licensing businesses leveraging the power of the Harley-Davidson brand across the globe is huge. The potential of the Harley-Davidson brand beyond bikes is significant. We're one of the most recognizable brands in the world. And as we grow our lifestyle products to reach wider audiences, we know that people who want to be part of our brand be through the strengthening of our retail product, our online community, and our loyal riding communities. Customer experience. By putting customers at the forefront of our products, experiences, and investments, we are able to define customers as people who simply love our products. Whether they don't ride but love our brand, those who may dream of motorcycling but have just learned to ride, or the way to committed riders who are deeply passionate about and invested in our unique lifestyle brand and culture. We continue to invest in and redefine our overall customer experience to our dealerships and especially in our online presence, as we know many customers start their journey with Harley-Davidson online. Our e-commerce functionality has been improved to include customer notifications on restocking and now features our bike builder platform for select motorcycles. Looking ahead, we will continue to invest in our digital capabilities, ensuring the best-in-class customer experience. And lastly, inclusive stakeholder management. Our approach to optimize long-term value for all stakeholders, we view inclusive stakeholder management in the context of people, planet, and profit, with all three deeply embedded in the past and future success of the Harley-Davidson brand and company. 21 saw us implement the Hardwire ground. For the first time in our company's history, all our employees around the world, including at our factories, became shareholders in our company. demonstrating a renewed commitment to Harley-Davidson as not only a great brand, but a great company and a great employer. Now I'll hand over to Gina to run through the numbers.