Harley-Davidson, Inc.

Thank you for standing by, and welcome to the Harley-Davidson 2022 First Quarter 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. Welcome to our Q1 2022 Earnings Call. You can access the slides supporting today's call on the internet at investor.harleydavidson.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. Before we get into the quarter's results, I want to take a moment to recognize the devastating war that continues to unfold in Ukraine. On March 1st, following the invasion of Ukraine, Harley-Davidson announced that we were suspending our business in Russia. This remains unchanged. At Harley-Davidson, our response to the humanitarian crisis has been driven by the core element of our mission as a brand, freedom. Whether through the philanthropic donations we've made to organizations like United Way or through the efforts of our employees and the wider Hawk community, donating time, money, and resources to provide aid to those in need, it is that spirit of freedom underpinned by community that has driven our efforts. A key initiative pioneered by the company has been a fundraising T-shirt designed by our employees. We've partnered with two charities delivering aid to those in need, United Way and Open Mind. And we're committed to support these organizations and their incredible work as long as needed. With that, I'll move on to our results from the quarter. We started the fiscal year with good momentum across the business, underpinned by a strong global consumer demand for our products. First quarter consolidated revenue was up 5% to $1.495 billion, driven primarily by HDMC revenue growth. And while we're pleased with our start to 2022 and anticipate the momentum to improve during the year, it's important to acknowledge the significant supply challenges that we had to work through in Q1 and that we expect to continue to impact the industry. We are cautiously optimistic on improvements to the supply chain environment in the second half of the year, However, this remains difficult to predict with certainty. That said, the brand is getting stronger and more desirable as we continue our delivery and our hardwire milestones as part of the huge transformational journey the company is on. At the last quarter, we provided a comprehensive recap of our delivery against both the rewire and the hardwire, including the important realignment of our organization, creating a culture of performance, efficiency, focus, and speed. In unlocking this potential, we set the company's foundation for long-term success. In May, we will be presenting a comprehensive update to our hardwire strategy. So today, I will only briefly address some highlights from the quarter, aligned to our strategic pillars and our delivery against them. Profit focus. As you know, 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. With the Hardwire, we made a commitment to introduce a series of motorcycles that align with our strategy to increase desirability and to drive and build on the incredible legacy of Harley-Davidson. In this context, in January, at our further faster model year launch, we added extra performance and factory custom style to our 22 motorcycle lineup with the reveal of eight new models, each powered with the Milwaukee 8117, the most powerful factory-installed engine ever offered by Harley-Davidson for those riders who want nothing but the biggest and the best, building on our position as the most desirable motorcycle brand in the world. New models included the Street Glide ST, the Road Glider ST in the Grand American Touring Line, the more powerful Lowrider S and the new Lowrider ST Cruiser models, and four super premium models from Harley-Davidson Custom Vehicle Operations CVO. Since launch, the response to this performance-driven lineup has been very strong, and as the market leader, we look forward to building on our performance-driven legacy in these segments. We believe the demand that we are seeing is a good indicator of the desirability that we've been able to build for our brand and product. Lead in electric. Electric motorcycles are important to Harley-Davidson's future, and we're committed to staying at the forefront of electric motorcycle technology. Livewire continues on its mission to be the most desirable electric motorcycle company and brand in the world. Building on our announcement from last year, the Livewire transaction remains on track as we work towards a listing in Q2. We recently opened the first live wire experience center in Malibu with one of our first in-person events since the pandemic began. The consumer awareness to the brand is building and the interest in EV continues to grow. Growth beyond bikes. Harley-Davidson Financial Services, HD1 Marketplace, parts and accessories, apparel and licensing are important drivers of the company's future success as a global sport and lifestyle brand, providing untapped potential to grow our customer base. HDFS is an important asset to Harley-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. This quarter, we've seen retail credit losses begin to normalize, resulting in a higher provision for credit losses, partially offset by lower interest expense. This quarter saw particularly strong performance from parts and accessories, especially in North America. With personalization at the heart of motor culture and the Harley-Davidson brand, we believe parts and accessories is a long-term growth area for the business and that there is strong potential to continue a growth trajectory as more riders look to make Harley-Davidson uniquely theirs. This quarter is the first time we are reporting apparel and licensing as a separate business unit. The quarter saw modest growth in apparel against the challenging supply backdrop and strong growth in our licensing business. Looking ahead, We're excited at the potential to grow both apparel and licensing, leveraging the power of the Harley-Davidson brand across the globe. And lastly, this quarter saw the publication of our annual Inclusive Stakeholder Management Report, highlighting some of the key achievements by the company through inclusive stakeholder management in the context of people, planet, and profit. We continue to redefine and evolve our brand and company with inclusive stakeholder management as one of our six strategic priorities. The report's highlights include prioritizing people through the implementation of the Hardwire grant, preserving our planet through our commitment to reduce carbon emissions and creating a path to achieving net zero carbon emissions for Harley-Davidson by 2050 and for Livewire by 2035, and promoting social profit through the Harley-Davidson Foundation's investment into our home neighborhood in Milwaukee, making it not only a great place to work, but a great place to live and visit. We have much to be proud of and much to look forward to in the years ahead. And before I hand over to Gina, I want to reiterate that we are looking forward to welcoming many of you to Milwaukee on the 10th of May for our Harley-Davidson, our inaugural LiveWire investor sessions. But now I'll hand over to Gina to run through the numbers.