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Q1 2025 Results Thursday, May 1, 2025
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Q1 2025 RESULTS – EARNINGS CALL 2 Call Participants ▪ Jochen Zeitz, Chairman, President and CEO ▪ Jonathan Root, Chief Financial Officer and President, Commercial ▪ Karim Donnez, CEO – LiveWire (NYSE: LVWR) ▪ Shawn Collins, Director Investor Relations
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3 ▪ Delivered diluted EPS of $1.07 ▪ HDMC operating income margin of 10.8 percent ▪ HDFS operating income margin of 26.1 percent ▪ Global motorcycle retail sales down 21 percent year-over-year, driven by a volatile macro environment and overall consumer uncertainty ▪ HDMC revenue down 27 percent year-over-year, primarily due to a planned decrease in motorcycle shipments ▪ Repurchased $87 million of shares (3.4 million shares) on a discretionary basis Q1 2025 PERFORMANCE HEADLINES
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NEW MODEL YEAR 2025 SOFTAIL MOTORCYCLE LAUNCH 4 ▪ Initial response to new cruisers has been very positive ▪ Launch included six new cruiser models featuring: ▪ New Milwaukee-Eight 117 powertrains designed to match each bike’s unique personality and customer ▪ Three ride-modes (Road/Rain/Sport) ▪ New front and rear suspension ▪ New hand controls ▪ New instrument display and LED lighting ▪ A greatly improved rider experience Cycle World “Although H-D has opted for evolutionary updates to the cruiser lineup, they shouldn’t be diminished in light of how much better and more fun to ride these bikes are. Taken individually, the improvements may seem incremental, but when you look at the resulting package, the stepping-up in performance and safety is an impressive—and necessary—move.” Ultimate Motorcycling “The 2025 Harley-Davidson Softail Cruisers are a massive upgrade over the previous editions, delivering improved performance and handling across the range. The motor has impressive grunt, especially in the sweet spot between 1800 and 2500 rpm.”
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CONSOLIDATED – Q1 2025 RESULTS Q1 2025 Results1, 2 ($ millions, except earnings per share) HDMC HDFS LiveWire Total HDI Revenue $1,082 $245 $3 $1,329 % vs PY -27% -2% -42% -23% Operating Income (Loss) $116 $64 ($20) $160 Margin % 10.8% 26.1% NM 12% % vs PY -51% 19% 32% -39% Net Income Attributable to HDI $133 Margin % 10% Diluted EPS $1.07 % vs PY -38% 1 “NM” means non-meaningful 2 “Q1 2025” represents the period January 1 to March 31 5
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HARLEY-DAVIDSON WORLDWIDE RETAIL SALES AND INVENTORY 6 Harley-Davidson Retail Sales Retail Motorcycle Sales of H-D Motorcycles (vs. PY) Q1 2025 Q1 2024 North America -24% 6% EMEA -2% -11% Asia Pacific -28% -12% Latin America -6% 2% Worldwide -21% 0% Dealer Inventory Units Worldwide Harley-Davidson Dealer Inventory Units (Thousands) Market Share New 601+CC Market Share Q1 2025 FY 2024 H-D U.S. Share1 36% 37% - H-D U.S. Touring 75% 74% - H-D U.S. Total Cruiser 2 53% 50% H-D Europe Share1,3 2% 5% 55 69 48 56 Q1 '23 Q1 '24 Q4 '24 Q1 '25 -19% vs. Q1 ’24 End of Year level 1 Source: Motorcycle Industry Council (MIC) for U.S. share and Management Services Helwig Schmitt GmbH for Europe share 2 Total Cruiser category includes both Large Cruiser category (1201+cc) and the Small Cruiser category (601-1200cc) 3 New motorcycle registrations used in the calculation of Europe market share include motorcycles registered prior to December 31, 2024 to qualify the motorcycles for retail sale after December 31, 2024 under the new Euro 5+ emissions standard. This resulted in higher registrations in Q4-24 and lower registrations in Q1-25. Refer to the Harley-Davidson Inc. 2024 Annual Report on Form 10-K and Q1-25 Form 10-Q (to be filed later this month) for additional information.
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HDMC REVENUE BRIDGE 7 -30% 2% 2% -1% -27% Volume Pricing Mix FX Total Q1 2025 HDMC Revenue Bridge1 1 Q1 2025 HDMC Revenue Bridge compares Q1 ‘25 revenue to Q1 ‘24 revenue on a year-over-year basis 2 Pricing changes in Q1 ‘25 reflect the net effect of: a) global pricing actions on Model Year 2025 line-up and b) impact of sales incentives 3 Mix changes in Q1 ’25 reflect the net effect of: a) different product mix, b) product program changes, and c) product options 2 Revenue decline driven largely by corresponding lower volume, partially offset by higher pricing and favorable mix 3
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Q1 2025: HDMC OPERATING INCOME MARGIN 8 16.2% 10.8% Q1 2024 Q1 2025 Operating Income Margin Q1 2024 Op Income Margin $238 mm 16.2% Volume ($140) -6.6 Pts Pricing $23 1.9 Pts FX $0 0.1 Pts Mix $12 0.7 Pts Manufacturing & Other ($41) -3.6 Pts Operating Expenses $24 2.1 Pts Q1 2025 Op Income Margin $116 mm 10.8%
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HDMC: TARIFF UPDATE 9 US-Centric Manufacturing Footprint 1) Motorcycle Final Assembly for NA - York, PA 2) Powertrain Operations – Menomonee Falls, WI 3) Injection Molding and Paint, Tomahawk, WI 4) Motorcycle Final Assembly for APAC/EMEA - Rayong, Thailand US Market Sales ▪ 100% of core product (Touring, Trike, CVO, Softail) manufactured in US ▪ ~95% of motorcycle revenue from US customers is from motorcycles manufactured at our York, PA final assembly plant US-Centric Sourcing Approach ▪ For the US ~75% of $’s are sourced from US-based production facilities US Administration on Trade ▪ Harley-Davidson is grateful to the US Administration and US Congress for continuing to listen to input from the Harley- Davidson organization Q1 2025 new tariff impact has been minimal at $9 million; we expect tariff impact will increase starting in Q2 but environment remains volatile Current Tariff Picture (as of April 29, 2025) Country Tariff % $ Millions China 145% $75 - $ 100 mm Mexico 25% $15 - $25 mm Canada 25% ~$20 mm European Union 31% $0 - $5 mm Rest of World 10% - 25% $15 - $20 mm Steel & Aluminum 25% ~$5 mm Net new 2025 tariff headwind $130 - $175 mm 1 Net new 2025 tariff headwind includes direct tariff exposure (H-D importing / exporting product), as well as indirect tariff exposure from suppliers. Excludes pricing mitigation actions
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HDFS SEGMENT: Q1 2025 RESULTS 10 Summary Financials ($ millions) Q1 2025 + / - PY % vs. PY Revenue $245 ($4) -2% Interest Expense $89 $ - 0% Provision for Credit Losses $53 ($8) -13% Operating Expense $39 ($6) -14% Total Expenses $181 ($14) -7% Operating Income $64 $10 19% Margin % 26.1%
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HDFS SEGMENT PERFORMANCE 11 Annualized Retail Credit Losses1, 2 2.7% 1.5% 1.8% 3.2% 3.7% 3.8% Q1 '20 Q1 '21 Q1 '22 Q1 '23 Q1 '24 Q1 '25 Retail Finance Receivables & Allowance $6.4 $6.3 $6.5 $6.7 $6.8 $6.7 $6.5 4.4% 5.9% 5.0% 5.1% 5.4% 5.7% 5.7% CECL 1/1/20 Q4 '20 Q4 '21 Q4 '22 Q4 '23 Q4 '24 Q1 '25 Receivables ($B) Allowance Percentage 12021 and 2022 results were impacted by federal stimulus payments and a high volume of COVID-19 pandemic related retail loan payment due date extensions for qualified customers 2 Q1 represents the three-month period from January 1 to March 31 and the corresponding annualized credit losses for each period shown
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LIVEWIRE SEGMENT: Q1 2025 RESULTS1, 2,3 12 ▪ Operating loss decrease of $9 million driven by a decrease in selling, administrative and engineering expense. ▪ Revenue decline due to decrease in sales of electric motorcycles resulting from overall market volatility and decrease in sales of STACYC bikes due to supply chain issues offset by: ▪ Reduced selling, administrative and engineering expense of $7 million from initiatives taken in the later half of 2024 to streamline headcount and other costs. $ millions Actual Units Q1 2024 Q1 2025 % vs PY Motorcycle Units 117 33 -72% Electric Bike Units4 2,932 1,970 -33% Revenue $5 $3 -42% Operating Loss ($29) ($20) 32% 1 Represents results of the LiveWire reportable segment as determined in accordance with ASC 280 Segment Reporting, which may differ from LiveWire Group, Inc. results 2 Unit sales comprise both wholesale units to dealers and direct on-line sales to consumers 3 Revenue is comprised of both LiveWire electric motorcycles and STACYC electric balance bicycles 4 Comprised of electric balance bike units and electric bike units
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CONSOLIDATED – Q1 2025 RESULTS 13 HDI Operating Cash Flow ($ millions) $104 $142 Q1 2024 Q1 2025 HDI Financial Metrics 1 Includes $1.7 million of capital implementation costs incurred in connection with cloud computing arrangements 2 As of March 31, 2025 ▪ Capital Investments1 – $32 million ▪ Effective Tax Rate – 27% ▪ Cash & Cash Equivalents2 – $1.9 billion ▪ Dividends Paid – $23 million ▪ Shares Repurchased on Discretionary Basis – $87 million (3.4 million shares)
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SHARE REPURCHASES / DIVIDENDS 14 $1.5 Billion in Total Capital Returned $1.2B of Shares Repurchased2 + $304M in Cash Dividends 34.5 Million Shares Repurchased 22% of Shares Outstanding 1,2 1 This calculation is based on 153.6M shares outstanding on December 31, 2021 2 This represents discretionary share repurchases and does not include non-discretionary repurchases related to shares tendered to the Company by employees to cover tax withholding obligations upon the vesting of restricted stock units and performance share units 3 For comparison, in Q1 2024 we returned $123 million of capital, which consisted of $98 million in shares repurchased and $24 million of cash dividends paid 4 See press release dated July 25, 2024. In Q3 ‘24, Q4 ‘24, and Q1 ‘25 combined, we have re-purchased 10.5 mm shares on a discretionary basis or $337 mm of HOG stock (towards the $1B target) $418 $446 $541 $110 2022 2023 2024 Q1 2025 Cash Dividends (in $ millions) Shares Repurchased (in $ millions) 8.4 10.2 12.5 3.4 2022 2023 2024 Q1 2025 Shares Repurchased (in $ millions) In July 2024 Harley-Davidson Announced Plan to Repurchase $1 Billion of Its Shares Through 2026 4
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FORWARD LOOKING STATEMENTS Cautionary Note Regarding Forward-Looking Statements 15 The Company intends that certain matters discussed in this presentation are “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such by reference to this footnote or because the context of the statement will inc lude words such as the Company “believes,” “anticipates,” “expects,” “plans,” “projects,” “may,” “will,” “estimates,” “targets,” “intends,” "forecasts," “seeks,” "sees," “should,” “feels,” "commits," "assumes," "envisions," or words of similar meaning. Similarly, statements that describe or refer to future expectations, future plans, strategies, objectives, outlooks, targets, guidance, commitments or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially, unfavorably or favorably, from those anticipated as of the date of this presentation. Certain of such risks and uncertainties are described below. Shareholders, potential investors, and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this presentation are only made as of the date of this presentation, and the Company disclaims any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances. Important factors that could affect future results and cause those results to differ materially from those expressed in the forward-looking statements include, among others, the Company’s ability to: (a) execute its business plans and strategies, including without limitation the Hardwire strategic plan, each of the pillars, and the evolution of LiveWire as a standalone brand; (b) manage supply chain and logistics issues, including without limitation quality issues, unexpected interruptions or price increases caused by supplier volatility, raw material shortages, inflation, war or other hostilities, including the conflict in Ukraine, or natural disasters and longer shipping times and increased logistics costs; (c) manage and predict the impact that new, reinstated or adjusted tariffs may have on the Company's ability to sell products domestically and internationally, and the cost of raw materials and components, including tariffs recently imposed or that may be imposed by the U.S. on foreign goods or rebalancing or other tariffs recently imposed or that may be imposed by foreign countries on U.S. goods; (d) accurately analyze, predict and react to changing market conditions, interest rates, and geopolitical environments, and successfully adjust to shifting global consumer needs and interests; (e) accurately predict the margins of its segments in light of, among other things, tariffs, rebalancing trade measures, inflation, foreign currency exchange rates, the cost associated with product development initiatives and the Company's complex global supply chain; (f) maintain and enhance the value of the Harley-Davidson brand, including detecting and mitigating or remediating the impact of activist collective actions, such as calls for boycotts and other brand- damaging behaviors that could harm the Company's brand or business; (g) manage through changes in general economic and business conditions, including changing capital, credit and retail markets, and the changing domestic and international political environments, including as a result of the conflict in Ukraine; (h) successfully access the capital and/or credit markets on terms that are acceptable to the Company and within its expectations; (i) successfully carry out its global manufacturing and assembly operations; (j) develop and introduce products, services and experiences on a timely basis that the market accepts, that enable the Company to generate desired sales levels and that provide the desired financial returns, including successfully implementing and executing plans to strengthen and grow its leadership position in Grand American Touring, large Cruiser and Trike, and grow its complementary businesses; (k) perform in a manner that enables the Company to benefit from market opportunities while competing against existing and new competitors; (l) manage the impact that prices for and supply of used motorcycles may have on its business, including on retail sales of new motorcycles; (m) prevent, detect and remediate any issues with its motorcycles, or any issues associated with the manufacturing processes to avoid delays in new model launches, recall campaigns, regulatory agency investigations, increased warranty costs or litigation and adverse effects on its reputation and brand strength, and carry out any product programs or recalls within expected costs and timing; (n) successfully manage and reduce costs throughout the business; (o) continue to develop the capabilities of its distributors and dealers, effectively implement changes relating to its dealers and distribution methods, including the Company's dealer footprint, and manage the risks that its dealers may have difficulty obtaining capital and managing through changing economic conditions and consumer demand; (p) realize the expected business benefits from LiveWire operating as a separate public company, which may be affected by, among other things: (i) the ability of LiveWire to execute its plans to develop, produce, market and sell its electric vehicles; (ii) the demand for and consumer willingness to adopt two- and three-wheeled electric vehicles; and (iii) other risks and uncertainties indicated in documents filed with the SEC by the Company or LiveWire Group, Inc., including those risks and uncertainties noted in Risk Factors under Item 1.A of LiveWire Group Inc.'s most recent Annual Report on Form 10-K; (q) manage the quality and regulatory non-compliance issues relating to the brake hose assemblies provided to the Company by Proterial Cable America, Inc. in a manner that avoids future quality or non-compliance issues and additional costs or recall expenses that are material; (r) maintain a productive relationship with Hero MotoCorp as a distributor and licensee of the Harley-Davidson brand name in India; (s) successfully maintain or achieve a manner in which to sell motorcycles in Europe, China, and the Company's Association of Southeast Asian Nations (ASEAN) countries that does not subject its motorcycles to incremental tariffs; (t) manage its Thailand corporate and manufacturing operation in a manner that allows the Company to avail itself of preferential free trade agreements and duty rates, and sufficiently lower prices of its motorcycles in certain markets; (u) retain and attract talented employees and leadership, and eliminate personnel duplication, inefficiencies and complexity throughout the organization; (v) accurately estimate and adjust to fluctuations in foreign currency exchange rates, interest rates and commodity prices; (w) manage the credit quality, the loan servicing and collection activities, and the recovery rates of Harley-Davidson Financial Services' loan portfolio; (x) prevent a ransomware attack or cybersecurity incidents and data privacy breaches and respond to related evolving regulatory requirements; (y) adjust to tax reform, healthcare inflation and reform and pension reform, and successfully estimate the impact of any such reform on the Company’s business; (z) manage through the effects inconsistent and unpredictable weather patterns may have on retail sales of motorcycles; (aa) implement and manage enterprise-wide information technology systems, including systems at its manufacturing facilities; (bb) manage changes, prepare for, and respond to evolving requirements in legislative and regulatory environments related to its products, services and operations, including increased environmental, safety, emissions or other regulations; (cc) manage its exposure to product liability claims in a manner that avoids or successfully mitigates the impact of substantial jury verdicts, including the successful resolution or appeal of the verdict in the product lawsuit against the Company in which, in August 2024, a jury awarded approximately $288 million in damages to the plaintiffs, which was subsequently reduced to $81 million, and manage exposure in commercial or contractual disputes; (dd) continue to manage the relationships and agreements that the Company has with its labor unions to help drive long-term competitiveness; (ee) manage risks related to outsourced functions and use of artificial intelligence; (ff) achieve anticipated results with respect to the Company's preowned motorcycle program, Harley-Davidson Certified, the Company's H-D1 Marketplace, and Apparel and Licensing; and (gg) optimize capital allocation in light of the Company's capital allocation priorities; (hh) manage impacts of activist shareholders or activist campaigns; (ii) manage the Company’s share repurchase strategy; and (jj) manage issues related to climate change and related regulations.
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FORWARD LOOKING STATEMENTS CONTINUED 16 The Company’s ability to sell its motorcycles and related products and services and to meet its financial expectations also depends on the ability of the Company’s dealers to sell its motorcycles and related products and services to retail customers. The Company depends on the capability and financial capacity of its dealers to develop and implement effective retail sales plans to create demand for the motorcycles and related products and services they purchase from the Company. In addition, the Company’s dealers and distributors may experience difficulties in operating their businesses and selling Harley-Davidson motorcycles and related products and services as a result of weather, economic conditions, or other factors. HDFS' retail credit losses have normalized in recent quarters to higher levels after a period of historically low levels of credit losses. Further, the Company believes that HDFS's retail credit losses will continue to change over time due to changing consumer credit behavior, macroeconomic conditions, including the impact of inflation and HDFS's efforts to increase prudently structured loan approvals to sub-prime borrowers. In addition, HDFS’s efforts to adjust underwriting criteria based on market and economic conditions and the actions that the Company has taken and could take that impact motorcycle values may impact HDFS's retail credit losses. The Company's operations, demand for its products, and its liquidity could be adversely impacted by tariff impacts, inflation, work stoppages, facility closures, strikes, natural causes, widespread infectious disease, terrorism, war or other hostilities, including the conflict in Ukraine, or other factors. Refer to Risk Factors under Item 1.A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 for a discussion of additional risk factors and a more complete discussion of some of the cautionary statements noted above.