Harley-Davidson, Inc.

Thank you for standing by and welcome to the Harley-Davidson 2022 Second 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 Q2 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 the 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. With that, let me turn it over to Jochen.

Thank you, Sean. Good morning, everyone, and thank you for joining us today. It's been a few months since I last saw many of you at our Investor Day in our hometown, Milwaukee, where we talked about the transformation we are on, where we're headed, what the opportunities are, and how we plan to accelerate as a company and brand. all with the ambition in mind for Harley-Davidson to be the most desirable motorcycle and lifestyle brand in the world, building upon a 119-year history and leading motorcycle culture into the future. At our investor day, as part of our plans for future growth, we announced Hardwire Stage 2, an acceleration plan building on our Hardwire priorities while tuning the engine of our business for improved acceleration and increased performance. And despite the macro uncertainty, forex and inflationary pressure and supply chain issues, we expect to deliver on our hardwire ambitions. We believe that the hardwire strategy is working. We're making significant progress and transforming our business. And now is the time to elevate our ambition beyond the current environment. Before I provide some more detail on delivery of our strategic initiatives for Q2, I would like to comment briefly on the suspension of production and shipments that we experienced in the quarter. The decision we took to temporarily close our production facilities and suspend vehicle shipments was taken out of an abundance of caution and related to a regulatory compliance issue with the brake hoses provided by a Tier 2 to our Tier 1 suppliers. We continue to work through the knock-on effect of this action. We've ramped up production and we believe that we'll be able to make up for the lost production throughout the remainder of the year. As Gina will explain in more detail, we are therefore not changing our guidance for the full year. Now I'd like to look at some of the highlights of the quarter. As part of the hardwire, we made the commitment to invest for growth within our core categories. Aligned to pillar one, profit growth, we're strategically investing into touring, where we believe we can capture growth. This investment is driven by the opportunity in our stronghold categories and most profitable segments at the core of our business. We expect to invest $300 million over the next five years in innovation to reinvent, reimagine, and reinvigorate in key categories where we see the potential to grow our leadership, namely touring, cruiser, and trike. Within these core segments, we know that our community wants elevated design, performance, and premium quality. With our new enthusiast offering that we launched in June, we are delivering on all of these. The enthusiast collection is an ongoing series of Harley-Davidson motorcycles featuring special edition paint created to celebrate the unique backgrounds, stories, and special interests of riders within the Harley-Davidson community. Each enthusiast collection design will be launched annually, available in limited quantities across a curated selection of motorcycle models. For 22, our debut enthusiast collection features a Pan America 1250 Special GI and a Triglide Ultra GI, both showcasing an all-new paint color created especially for this collection, paying homage to the olive drab paint used on Harley-Davidson WLA models and completed with service-inspired graphics. The enthusiast collections complements our Harley-Davidson icons as a limited edition collection designed to celebrate the unrivaled history and heritage of Harley-Davidson. Having a strong presence in adventure touring and sport is a focus of Pillar 2 of our hardware strategy, selective expansion and redefinition. And after our successful product launches this and last year, we will continue to focus on delivering long-term profitable growth with both adventure touring and sports segments, utilizing our RedMax platform. Sport is a great example of this strategy. With sport, we know that the category skews younger. We're seeing a higher proportion of new-to-the-brand riders in this section, in addition to it playing an important role as an incremental bike for existing and new customers. Delivering new-to-sport riders is part of our objectives to attract new customers to the brand, in addition to expanding the garage of our existing riders. With this in mind, in April, we started a new chapter in the Sportster story with the launch of Snydster. Building on the 65-year legacy of Sportster, with Nightstar, we wanted to push both our performance and design capabilities, while ensuring the bike was an entry point to Harley-Davidson motorcycling and our brand. Capitalizing on market trends, taking inspiration from our community, and recognizing our riders' desire to make their Harley-Davidson uniquely theirs, with Nightstar, we created a canvas for creativity and personalization. This was the theme of our launch campaign, Instrument of Expression, which for the first time ever in the history of the company presented five bike builders from around the world that put their incredible talent to work to showcase their individual artistic expression or factory model at launch. If you hadn't had a chance to see the launch video, I'd encourage you to take a look. It really demonstrates the level of personalization that can be experienced. Looking ahead, we plan to continue to tap into the RevMax platform. using modularity to explore new segments for the company. Leading in electric, pillar three of our hardwire strategy is another focus for both Harley-Davidson and Livewire. In May, at our investor day, we also revealed the S2 Del Mar, a new addition to the Livewire portfolio, and the first bike to feature the new S2 arrowed architecture. The launch featured an addition of 100 units built to order and serialized as the Del Mar launch edition models. The reception to the launch edition was exceptional, with 100 reservation deposits selling out in 18 minutes. As part of the journey of Livewire becoming the first publicly traded all-electric motorcycle company in the U.S., yesterday the SEC declared our S4 registration statement effective. Due to quarterly fiscal accounting, we now expect that Livewire will go public on September 26, which will be the start of both Livewire and Harley-Davidson's fiscal fourth quarter. And as part of this process, we expect that AEA Bridges will hold its shareholder meeting to approve the transaction the week of September 12th. And now I'll hand over to Gina.