Harley-Davidson, Inc.

Thank you. Good morning. 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 the Harley-Davidson Investor Relations website. As you might expect, 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 today's earnings release. and in our latest filings with the SEC. Joining me for this morning's call are Harley-Davidson Chief Executive Officer Jochen Zeitz, also Chief Financial Officer Jonathan Root, and we have Livewire's Chief Executive Officer Karim Denez. With that, let me turn it over to our CEO Jochen Zeitz. Jochen?

Thank you, Sean, and good morning, everyone. Thank you for joining us for our Q1 2024 results. Harley-Davidson delivered a good start to the year in line with our expectations. Looking at retail for the quarter, we are pleased with our delivery of 6% growth in North America, our largest and most important region. In Q1, we continue to see the impacts of the high interest rate environment on both consumer confidence and affordability, However, it is positive to see customer enthusiasm for motorcycles despite this challenging environment. Outside of North America, both the Europe and APEC regions were soft, mainly due to regional macroeconomic conditions. However, it is also worth noting that our 24 product only started to arrive in the international regions in March and is just now making its way into most international markets. And as the riding season is starting to get into gear, we're excited for our riders and fans both inside and outside of North America to get to experience the next era of Harley-Davidson touring motorcycles. As usual, I will now briefly address select Hardwire strategic pillars and our delivery of them, starting with Pillar 1, Profit Focus. When we announced our Hardwire strategy back in 2021, we made a commitment to invest in our core categories. And building on that commitment, this year we ushered in a new era of motorcycle touring by reimagining two of the most iconic motorcycles in history, the Harley-Davidson Street and Road Glide, with the most comprehensive product redevelopment in well over 10 years. Overall, we are very pleased with our new model year launch and in particular our new touring lineup, which is being received very positively by customers, dealers and media alike. One outlet summarized the launch particularly well. The motor company took the motorcycling world by surprise with the release of the revamped versions of the Road Glide and Street Glide, completely different from their predecessors, a more modernized approach that made them superior to the previous generation in nearly every facet. The all-new Street Glide and Road Glide models have set a new standard for the industry and the future of touring and adventure on two wheels with exceptional performance, cutting edge innovation and bold new design representing the largest investment made by the motor company into a single platform. We believe that by elevating every aspect of performance, technology, comfort and style we have without question created the most enticing touring motorcycles ever offered by Harley-Davidson. We continue to see significant positivity for the product across the network We are now excited for our riders to have full access to the lineup as the riding season gets underway. Included in our 24 launch and designed to celebrate 25 years of custom vehicle operations, our CVO lineup expanded with the introduction of the all-new CVO Road Light ST, representing the pinnacle of bagger performance and the CVO Pan America fully kitted out for extraordinary adventures. The CVO Road Glide ST is the lightest, fastest and most sophisticated performance bagger ever produced by Harley-Davidson. Taking from our popular Lowrider ST offering, the CVO Road Glide ST combines West Coast custom style and the performance trend that we've been fueling with the King of the Bagger Racing Series. To quote another outlet, the CVO ST is the best motorcycle Harley-Davidson has ever put out. For 24, we also repriced both the CVO Street and Road Glide models that we introduced during homecoming last year in exciting new color options. The CVO Pan America is another new vehicle and the CVO program's first adventure touring motorcycle. All of the features that have made the Pan America 1250 special a leading choice among discerning global adventure touring riders have been retained with the CVO Pan America being kitted out with an additional host of rugged accessories selected to enhance the journey. With the Hardwire, we also 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. With that in mind, this February during Daytona Bike Week, we revealed the latest additions to our limited edition Harley-Davidson icons and the limited run enthusiast collection. For the 24 icons models, this year we launched the Hydra Glide Revival, celebrating the 75th year of this iconic motorcycle. The release was inspired by the look of the motorcycles written in the area of the upcoming film, The Bike Riders, which follows the rise of a Midwestern motorcycle club as seen through the lives of its members. Coming to your screens this summer, the film is scheduled to be released in the United States on June 21st. For the 24 Enthusiast Offering, we celebrated both music and motorcycles with the release of the Tobacco Fate Enthusiast motorcycle collection available across three models, the Lowrider SD, the Ultra Limit and the Tri-Glide Ultra. Again, we've seen a very positive response from customers to these offerings just in time for the rising season to get well underway. Pillar 3, Leading in Electric. Livewire continued to pioneer the EV segment with the launch of the S2 Mulholland all-new electric cruiser, the second bike on the S2 platform. The bike has been met with a very positive response in the industry, as Karim will detail shortly. We are also very pleased that Livewire has become the market leader for on-road EV motorcycles in the US this past quarter. And with the company increasing its focus on vehicle and operational costs, it will also consolidate its operations in Milwaukee at Harley-Davidson's historic headquarter at Juneau Avenue. Turning to Pillar 4, growth beyond bikes. In February, through HDFS, we launched Harley-Davidson Flex Financing. For the first time in our history, this innovative loan option provides an alternate way to purchase a Harley-Davidson motorcycle. By combining the benefits of attractive monthly payments, shorter terms, and greater flexibility throughout the loan period, the product offers customers the ability to return the motorcycle at the end of the term, ready to replace or upgrade into their next Harley-Davidson purchase. We are committed to putting customers at the forefront of our products and experiences. HDFlex does just that. while providing them with another innovative financing option to make Harley-Davidson motorcycle ownership fit their individual budget and lifestyle. Pillar 5, Customer Experience. We are just under 100 days to go. Our second annual homecoming event will be taking place July 25 to 28. And last week we announced the full roster of performers with headliners including the Red Hot Chili Peppers, Jelly Roll and Hardy. Tickets are now on sale, and we look forward to coming together with our community of fans, writers, and their families to celebrate our brand of motor culture and music. And I hope to see many of you there. And lastly on pillar six, inclusive stakeholder management. We are looking forward to formally unveiling the new community park at our Juneau Avenue headquarters on June 24th. The project, which has been pioneered by the Harley-Davidson Foundation, will look to further connect the company our brand and our employees to the local community, reinforcing our commitment to our hometown Milwaukee. We could not be more excited to show you our neighborhood on the near west side. Before I hand over to Karim to cover Livewire, I would like to cover our outlook for the rest of the year. As we said earlier in the year, for HDMC, we expect retail units to be flat to up 9%. From an inventory point of view, we believe dealers are appropriately positioned with the riding season getting into swing, and we continue to expect that wholesale unit shipments will move together with dealer retail sales on a balanced basis by the end of 2024. This range would equate to wholesale unit shipments being down between 1% and 10% versus prior year. This would result in HDMC revenue coming in flat to down 9%. We expect HTMC operating income margin of 12.6% to 13.6%. This is flat to down 100 basis points from the 23 level. Let me mention the specific drivers of this again. Negative operating leverage due to low wholesale volumes, foreign currency, which we expect to be a headwind, NICs, which we expect to be slightly favorable, Pricing, which we expect to be slightly down as we eliminated the surcharge and fine-tuned our pricing strategy. And lastly, we expect some additional manufacturing costs as we realign factory processes in the initial year of production of the new streetlight and roadlight motorcycles. At HDFS, we expect operating income to be flat to up 5%, reflecting retail and wholesale portfolios and customers settling into the existing macroeconomic backdrop. As you will hear from Karim now, for the full year, Livewire is revising its operating loss guidance and now expects an improved operating loss of $105 to $115 million from previous guidance of an operating loss of $115 to $125 million. Lastly, I would like to reinforce our commitment to returning access-free cash flow to our shareholders. We plan to continue to optimize our returns through share repurchases and appropriate dividend payments. You can see our commitment to capital returns since 2022 on page 15. Since the beginning of 22 and through Q1 24, we've bought back $773 million in shares and paid out $214 million in dividends. This equates to almost $1 billion in capital return to shareholders since 22 and a share buyback amounting to 14% of our outstanding shares. We are planning to remain on a similar trajectory to this annualized rate throughout 24. Thank you, and now I'll hand it over to Karim.

Thank you, Yochanan. Good morning, everyone. We are happy to report on a successful launch of the S2 Mulholland in both the United States and Canada. This is the second motorcycle built on the Livewire-developed S2 platform following the S2 DELMA. This brings our lineup to three bikes, expanding the choices available to Livewire riders. The response from the market has been positive, with riders, retailers, and media responding to the Mulholland styling and the option to choose a bike with a lower riding position. In the first quarter, Livewire reported sales of 117 units, an 86% increase over the first quarter of 2023. Our retail sales outpaced wholesale as Del Mar made its way into the channel, making, as Johan mentioned, Livewire, the number one on-road electric motorcycle in the U.S. In Europe, we began shipping S2 Del Mar to our four priority countries at the end of the quarter, with products now available across our network in the region. We have similar plans for SpaceX, with the first bikes being shipped to Europe as we speak. While we plan to expand our market leadership, our teams are working on design, engineering, and sourcing initiatives to reduce the cost of our products. We are also planning to reduce spent and closely managed cash across the operation to get the most out of our strategic investments. To that effect, we will centralize all of our operations in Juneau Avenue in Milwaukee, including the relocation of LiveWire Lab operations from California to enable synergies and efficiency. We will take this opportunity to streamline and revisit the organization structure to achieve simplicity in everything we do. While we maintain the outlook for the revenue unit We now expect a $10 million improvement in operating costs while continuing to focus the larger portion of expenses on product innovation and market development. Livewire is fully committed to the electrification of the sport by building the best products and delivering an unmatched customer experience. Thank you. And now, I'll hand it over to Jonathan.