Harley-Davidson, Inc.

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. Good morning, everyone, and thank you for joining today's call. In the fourth year of our hardwired strategy, we saw our performance being significantly impacted by continued cyclical headwinds for discretionary products, including the high interest rate and environment affecting consumer confidence and creating affordability issues for our customers. While we were unable to achieve our original guidance of 24, given the overall environment, we continue to make progress in the execution of the key elements of our strategic plan, that we believe will set the business up best for future profitable growth when the market turns. That said, in the fourth quarter, the macro environment contributed to a decline of 15% in global retail sales, our seasonally lowest quarter of the year, with North America posting a 13% decline, and our other international regions declining a combined 17%. For the full year, we ended 24, with a global retail sales decline of 7%. In the face of industry headwinds, the launch of our new model year 24 street glide and road glide touring motorcycles contributed to near 5% growth in the U.S. touring segment and drove Harley-Davidson's share to almost 75%, an increase of 3.5% since 2023. It's worth noting that over the year, Harley-Davidson was the only manufacturer to gain meaningful touring segment market share in the U.S., with our share of the overall 601 plus CC market being slightly up, based on the segment that we compete in. Nearly 12 months after the launch of our model year 24 touring motorcycles, we continue to receive very positive feedback from customers, media, and dealers. In December, Cycleworld voted the CBO Road Glide ST the best cruiser of 24. Also in December, Motorcycle.com voted the Street Glide as the best bag of 24. The launch of these touring motorcycles was one of the primary product strategies within our profit-focused pillar of hardwire, and our volume and financial results would have been dramatically impacted negatively without them. Through the fourth quarter, we continued to trim inventory by reducing the motorcycle production wholesale significantly, ending the year slightly below 23 year-end levels. We believe this has set us up well for further significant inventory reduction, especially in the first half of the year that Jonathan will walk you through in a little bit. Providing more detail on our delivery against our hardware pillars for the year. Eyeing to profit focus, we've continued to emphasize our core products while investing in key product segments for the future. These actions are underpinned by our belief that focusing on our most profitable categories and geographies, emphasizing innovation and evolving the customer experience with our dealers, will continue to yield benefits to the business and set the business up for long-term value creation. 24 can be seen as a year of two halves. Retail sales of the touring segment was up 18% in the first half of the year, led by the redesigned touring platform in North America. Despite the decline of 4% for overall retail sales in North America for the full year, retail sales of the touring segment finished the year up more than 8%. As mentioned earlier, we've taken share within Turing, with Harley-Davidson achieving 74.5% market share in the Turing segment in the U.S., the highest number since 2019. Turing is the heart of Harley-Davidson and our mission of the timeless pursuit of adventure. Remember, back in 2020, there was no plan for Turing, nor for any other core product segment. We quickly took the decision to change that, with Turing becoming part of the first pillar of our hardware strategic plan. To 24, we continue to invest in our strongest and most profitable motorcycle segments, and we are planning for more impactful and new products to hit the market every year from here on that were originated as part of our strategy. It's important to recognize that the decisions we've taken as part of our hardware strategy have allowed us to reestablish our profitability while ensuring we have the right product pipeline for years to come. Without the hardware and its priorities, we would currently be faced with a portfolio of uncompetitive products with a vast majority of our motorcycles achieving negative operating income margins, with the motor company likely having little to no profitability. Selective expansion and redefinition underpins our desire to win in attractive markets and motorcycle segments where we are focused on building our leadership. We are investing and have ambitions for our entry-level motorcycle offering in select markets and the small cruiser segment starting next year. Adventure Touring was also a new segment for the company aligned to this strategic initiative. We believe the segment has future growth potential for us and we are committed to continue to innovate with the platform. A proof point being the recently launched Pan America ST that will be landing in dealerships shortly ahead of its debut in the Marvel Studios Thunderbolts film premiering May 2nd. Turning to growth beyond bytes, we are committed to creating products, services, and experiences that inspire our customers to discover adventure and live the Harley-Davidson lifestyle. 24 saw a build-out of capabilities for our custom-built apparel, ensuring that our dealers are able to access the best in custom apparel from Harley-Davidson. Looking ahead, we expect for these capabilities to reach our international network this year. Leveraging the power of the Harley-Davidson brand in 24, we are also proud to partner with Champion for the second time in the company's history. Looking forward, we will continue to look for brand collaborations that will connect with our customers and communities, while at the same time expanding on our licensing opportunities globally as a brand. Creating integrated customer experiences ensures our customers have a seamless experience with our brand. In 2024, we've continued our digital investments, adding more impactful features and benefits on new models, combined with an all-new digital experience on HD.com, focused on improving engagement, lead capture, and ultimately with the intention of driving more traffic to our dealers. These efforts led to a 177% increase in the number of engagements with motorcycle patients for the model year 25 launch. Turning to the physical experience that is integral to the brand, we've continued to invest in our experiences offering by strengthening our events across the globe and better aligning our efforts with those of our dealers. In 2024, we held our second annual homecoming event in Milwaukee with over 60,000 riders, fans, and motor enthusiasts joining us to celebrate the Harley-Davidson brand. We're looking forward to homecoming 25th of July with an incredible talent lineup. The Harley Davidson Riding Academy, or HDIA, is an important initiative for the company, operating in 225 dealerships across 43 states, making it the largest rider training network in the US and the only nationwide rider licensing program sponsored by a motorcycle manufacturer. In 24, we were proud to hit 1 million riders trained, celebrating the 25th anniversary this year. Promoting rider education and training for both experienced and new riders is an important part of the overall riding ecosystem. At Harley-Davidson, we are committed to building ridership and deepening our connection with customers, ultimately reinforcing our position as the most desirable motorcycle brand in the world. Turning to cost productivity, as we covered with Q3 earnings, we've taken further steps to tighten OPEX across the organization without negatively impacting demand driving initiatives for our core segments. One example of this is difficult choices we've made in headcount. Comparing end of Q4-24 to the end of Q4-23, accelerate headcount is down by 7%. While 24 includes employee severance expense, this run rate favorability will display itself more fully in 25. In addition, Jonathan will cover our cost productivity performance for the year, and we continue to execute very well in that area. Since announcing that focus, we achieved $257 million in productivity savings. Cost productivity continued to be a positive contributor to cash flow. We remain pleased with the cash flow generation of Harley-Davidson, delivering operating cash flow well over $1 billion in 2024, nearly a 40% increase from prior year. 2025, we plan to display further cost progress across the P&L. We believe OPEX productivity will allow us to run with flats to slightly down OPEX, even after an increased focus on marketing, continued product investment. Additionally, we expect our cost productivity target to deliver approximately $100 million of additional savings in 2025. I would like to now comment on our new model year launch. With the 2025 model year campaign, we revealed all new and refreshed motorcycles for this year's lineup, with products released sitting squarely within our product focus and selective expansion strategic focus. Harley-Davidson Cruiser motorcycle lineup includes six new models with significantly improved performance and technology. Additionally, for 25, we updated the powerful Sportster S model. For its 26th year, we introduced the collection of limited production CVO motorcycles that includes four models. Lastly, New for this year are the Streetlight Ultra, a fully equipped long-haul touring model complementing our new touring lineup, as well as the previously mentioned Pan America's 1250 ST adventure sport motorcycle. Both incredible machines with visor down suggesting that the Harley-Davidson Streetlight Ultra might be the most capable American tourer on the market. We also continue to be excited about the adventure sport category and its application to racing. January, we celebrated John Pedrero's extraordinary performance in the Africa Eco Race, where he secured first place in the 1,000cc plus categories. This win is a groundbreaking moment that showcases the Harley-Davidson Pan America capability and versatility in a class of its own. Additionally, we were pleased to see team settlement Harley-Davidson rider Corey West take the 24th Super Hooligan Championship on his race-prepared Pan America 1250, showing the versatility of the platform. Performance and racing continue to be key differentiators across our product portfolio and will continue to expand on our racing efforts in the US and beyond. To support our model year launch, we've adapted our marketing approach specifically to drive dealership traffic and improve alignment on key messages within our dealer channel, rather than spending significant funds on teasing and pushing the global launch as we did before. For this reason, we launched the Marketing Development Fund, a new initiative designed to drive leads, foot traffic and customer transactions and conversions in our network. Driven by a desire to complement dealer marketing spend, adding additional financial support from the motor company, we believe the Marketing Development Fund will not only strengthen collaboration between the motor company and the dealer network, but also force the effective change management to drive growth. This commitment by Harley-Davidson represents the single largest marketing investment on behalf of the company on a per unit and absolute basis in our history. While it has only just been launched, we've seen strong uptake through the network. As we said previously, the health of the dealer network remains critical. We've taken many steps throughout 24 to support the network through this challenging environment. We're taking further actions into 25 to continue our support for the network. Jonathan will provide more detail on guidance. We are realistic and cautious, not having reliable signals yet in either direction as we start the year. Hence, our guidance to flat retail sales for the year, positive performance skewed towards the second half. I know that the decisions we've made and the bold actions we have taken as part of our hardwired strategy are continuing to strengthen our foundation for the future. The industry has faced many headwinds over the past couple of years, impacting at all levels, from OEM to dealer to customer. But we believe we are best positioned to take advantage of any uptick in consumption. Additionally, we will continue to explore any and all opportunities for transformational change, and we are committed to achieving our hardware profit targets over time, as soon as we are seeing tailwinds in consumption of discretionary products in the two-wheel and overall power sports industries. Doing a slightly improved outlook in 26, we expect to deliver solid improvement in margin performance. The actions that we've taken in 24 couple with expectations for 25. In 26, we expect to balance retail, production, and wholesale. We now expect that this will allow us to deliver double-digit margin in 26, climbing to our 15% target in the years following due to a combination of factors, including expected slight volume growth supported through exciting product portfolio launches every year. Lastly, tariffs are on everybody's mind. Without having a clear view of what is to come, when, and for how long, we've not yet incorporated any new tariffs in our outlook. We believe we have and are continuing to take all possible actions to mitigate the impact of tariffs and will continue to take precautionary measures where possible. That said, we have neither production in Canada nor Mexico, and 100% of our bikes in our core product segments are manufactured in the U.S. Those motorcycles manufactured in our U.S. plants and in partnership with our skilled union workforce account for the vast majority of our profits in the U.S. business, and most of our sourcing also being U.S.-centric. We'll provide more detail once we have a more complete tariff picture. Any discriminatory tariffs against Harley-Davidson, a great American icon, returning in Europe, we plan to fight aggressively with all means available and call for reciprocal treatment for all motorcycles imported into the U.S. Thank you, and I'll now hand it over to Karim for more detail on LiveWire.

Thanks, Johan. Good morning, everyone. LiveWire concluded 24 with an operating loss of 110 million and 612 revenue units, both within the range of our revised guidance. In the electric motorcycle segment, LiveWire's global retail performance grew by 46% year-over-year with LiveWire maintaining its leadership position with a 65% market share in the U.S. 50-plus horsepower on-road EV segment. Turning to our Stasic segment, despite the decrease in Stasic total unit sales in 24, driven largely by reduced sales to third-party distributors, the U.S. market saw significant growth. Stasic recorded a 21% increase in U.S. zero sales and a 20% increase in U.S. online sales. Strategic initiatives implemented during the year enabled the company to achieve a cash burn below target for 24. We expect these efforts to reduce 2025 total cash used by operating and investing activities by about 40%, which we expect to be 60 million or less. Looking ahead to 2025, Liveware entered the year with four models in the market, including three built on IS2 platform, and as announced at Techmind Q4, plans for an electric maxi scooter in the first half of 26, with a primary focus on the European market. The company's commitment to innovation and market expansion would be evident by planning new products from both the electric motorcycles and Stasic segments, designed to appeal to a broader global customer base. We believe these initiatives position the company to enter a new market segment and enhance its competitive edge. Now, I'll hand it over to Jonathan.