Harley Investor Day Update - Hardwire Stage II
Held May 10 at the Harley Museum in Milwaukee, Chairman, CEO and President Jochen Zeitz restated the forecast results contained in its 2022 Q1 results posting and addressed the Hardwire Strategic Plan progress to date, issuing updated guidance beyond 2022.
"We have a clearly defined vision and strategy that we believe will capture profitable growth opportunities. Despite the macro challenges, we are already seeing the proof points of The Hardwire, and now we are taking it to the next level.
Jochen Zeitz: "We have a clearly
defined vision and strategy that we believe will capture profitable
growth opportunities. Despite the macro challenges, we are already
seeing the proof points of The Hardwire, and now we are taking it to the
next level."
"In motorcycling, when you want to get more out of an engine, you upgrade it by adding a Stage II kit, that is what we are doing with our Hardwire strategy, tuning the engine of our business for improved acceleration and increased performance."
Zeitz reaffirmed the 2022 outlook, reiterating its initial full year guidance, with Harley continuing to expect HDMC revenue growth of 5 to 10%; operating income margin of 11 to 12%; HDFS operating income to decline by 20 to 25% and Capital investments of $190m to $220m.
The "Hardwire Stage II" financial targets 2021-2025E include:
- HDMC revenue growth (CAGR/Compound Annual Growth Rate) from 2021 to 2025E of between +5% to +7%
- Operating margin of 15% by 2025
- HDFS operating income growth (CAGR) from 2021 to 2025E of -3% to -5%
- Operating income growth from 2022E to 2025E of +3% to +5%
This HDMC revenue 2021-2025E guidance excludes LiveWire One branded motorcycles and includes H-D branded Motorcycles, Parts, Accessories, Apparel, Licensing and Experiences.
In addition, the "Hardwire Stage II" includes consolidated financial targets at Harley-Davidson, Inc. (HDI) for 2021-2025E of:
- Revenue CAGR for combined HDMC & LiveWire: +9% to +11%
- Operating margin for combined HDMC & LiveWire: 12% by 2025
- Capital expenditures for HDMC & LiveWire: $250 - $300m per year
- Targeting $400m of cost productivity for HDMC by 2025