Harley-Davidson
In 1903, out of a small shed in Milwaukee, Wisconsin, four young men lit a cultural wildfire that would grow and spread across geographies and generations. Their innovation and imagination for what was possible on two wheels sparked a transportation revolution and lifestyle that would make Harley-Davidson the most desirable motorcycle brand in the world. Today, we continue to define motorcycle culture and lifestyle, evoking soul-stirring emotion reflected in every product and experience we deliver - like we have for well over a century and will for generations to come.
We are redefining our culture to reignite the company’s soul and spirit. We are calling our cultural journey “H-D#1” represented by our recognizable #1 logo, introduced in 1969 to celebrate a National Racing Championship. The #1 logo is uniquely ours - an iconic symbol of winning and the hard work it takes to get there. Our employees and dealers are rallying around ten H-D#1 leadership principles to become a winning, high-performing company.
The H-D#1 Leadership Principles
Communication - Communicate with purpose, structure, facts and inspiration
Agility - Accelerate, innovate and thrive in a rapidly changing environment
Impact - Focus on impact, not process, and be outcome driven
Simplicity - Pursue the simplest path to achieve each outcome
Speed - Don’t let perfection get in the way of process and pace
Culture - Be fair, honest, positive and creative. Strive to win and have fun.
Courage -Take risks and go against the norm
Judgment -Think strategically and make informed decisions
Focus - Focus on a short list of meaningful opportunities that build desirability
Lean - Maximize impact with limited resources
“By unlocking our full potential, prioritizing profit through leadership and fueling our lifestyle brand with an enhanced product offering and leading digital capabilities, The Hardwire will drive the desirability of Harley-Davidson for all.”
Desirability is a motivating force driven by emotion. Harley-Davidson has long been associated with igniting desirability - it’s in our DNA and it is embedded in our vision; it is at the heart of our mission and it is part of our 118-year legacy.
To enhance our position as the most desirable motorcycle brand in the world, we will:
Harley-Davidson will invest significant time and resources on strengthening and growing its leadership positions in its strongest, most profitable motorcycle segments: Touring, large Cruiser and Trike. These segments are the most profitable and demonstrate steady aggregate demand* of new and used sales. We will deliver products in these attractive segments that live up to our vision for market-leading innovation, evolution and emotion and inspire repurchase while compelling new customers to join Harley-Davidson.
*Total demand based on Used and New vehicles data in the U.S. Used volumes based on IHS Markit Used Registrations data for U.S. motorcycles from 2015-2019 for On Highway and Dual motorcycles of 1201cc+ for models classified by Harley-Davidson as Touring and Large Cruiser. New motorcycle information reflects sales data from MIC.
The company plans to selectively expand into and within motorcycle segments, focusing on segments that are profitable and aligned with our product and brand capabilities, such as Adventure Touring and middleweight Cruiser.
We have redefined our geographic footprint with a focus on global markets that matter most to our future growth. Priority markets include US, DACH (Germany, Austria, Switzerland), Japan, China, Canada, France, UK, Italy, Australia, and New Zealand.
We will also continue to test further avenues for desirable long-term growth through premium low displacement partnerships.
Electric motorcycles are important to Harley-Davidson’s future and we are committed to and passionate about leading the electric motorcycle market.
We are proud to be the pioneers in this space through LiveWire®, widely regarded as the leading electric motorcycle in the world. As part of our commitment to lead in electric, we are creating a separate division solely dedicated to delivering the most desirable electric motorcycles in the world.
At Harley-Davidson, we strive to deliver long-term value to all stakeholders - people (employees, dealers, customers, suppliers, investors, society), planet, and profit. Inclusive Stakeholder Management is the unifying theme for how we think about our role in society, giving us purpose beyond financial performance.
Our inclusive stakeholder management efforts include:
• Creating a high-performing, engaged, and diverse workforce
• Creating an inclusive community with a strong dealer network and a supply base focused on ethical, sustainable and equity-based purchasing and sourcing practices
• Driving towards a net zero environmental impact
• Closely aligning the rewards of our employees with our shareholders
The Hardwire is targeting profitable growth on the top and bottom line through 2025. Financial results are expected to demonstrate progress in several critical areas, including revenue, operating margin, driven by investments, increased efficiencies across operations and leverage within SG&A as the company maintains a lean cost structure. The Hardwire financial targets through 2025:
For more information about Harley-Davidson, Inc., visit our investor relations website.
Investor RelationsCautionary Note Regarding Forward-Looking Statements
The company intends that certain matters discussed on this webpage 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 include words such as the company “believes,” “anticipates,” “expects,” “plans,” “may,” “will,” “estimates,” “targets,” “intend,” “is on-track” 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 February 2, 2021. 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 webpage are only made as of February 2, 2021, 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 following: (i) the COVID-19 pandemic, including the length and severity of the pandemic across the globe and the pace of recovery following the pandemic and (ii) the company’s ability to: (A) execute its business plans and strategies, including The Hardwire, successfully execute its remodeled approach to supply and inventory management, and strengthen its existing business while allowing for desirable growth; (B) accurately analyze, predict and react to changing market conditions and successfully adjust to shifting global consumer needs and interests, including successfully implementing a distributor model in fifteen international markets; (C) successfully access the capital and/or credit markets on terms that are acceptable to the company and within its expectations; (D) successfully carry out its global manufacturing and assembly operations; (E) 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 Touring, large Cruiser and Trike, and growing its complementary businesses; (F) perform in a manner that enables the company to benefit from market opportunities while competing against existing and new competitors; (G) 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; (H) manage supply chain issues, including quality issues and any unexpected interruptions or price increases caused by raw material shortages or natural disasters; (I) manage the impact that prices for and supply of used motorcycles may have on its business, including on retail sales of new motorcycles; (J) realize expectations concerning market demand for electric models, which will depend in part on the building of necessary infrastructure; (K) successfully manage and reduce costs throughout the business; (L) manage through changes in general economic and business conditions, including changing capital, credit and retail markets, and the changing political environment; (M) continue to develop the capabilities of its distributors and dealers, effectively implement changes relating to its dealers and distribution methods and manage the risks that its independent dealers may have difficulty obtaining capital and managing through changing economic conditions and consumer demand; (N) develop and maintain a productive relationship with Zhejiang Qianjiang Motorcycle Co., Ltd. and launch related products in a timely manner; (O) develop and maintain a productive relationship with Hero MotoCorp as a distributor and licensee of the Harley-Davidson brand name in India; (P) manage and predict the impact that new or adjusted tariffs may have on the company’s ability to sell products internationally, and the cost of raw materials and components; (Q) successfully maintain a manner in which to sell motorcycles in the European Union, China, and the company’s ASEAN countries that does not subject its motorcycles to incremental tariffs; (R) 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; (S) accurately estimate and adjust to fluctuations in foreign currency exchange rates, interest rates and commodity prices; (T) retain and attract talented employees, and eliminate personnel duplication, inefficiencies and complexity throughout the organization; (U) prevent a cybersecurity breach involving consumer, employee, dealer, supplier, or company data and respond to evolving regulatory requirements regarding data security; (V) manage the credit quality, the loan servicing and collection activities, and the recovery rates of HDFS' loan portfolio; (W) 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; (X) manage through the effects inconsistent and unpredictable weather patterns may have on retail sales of motorcycles; (Y) implement and manage enterprise-wide information technology systems, including systems at its manufacturing facilities; (Z) manage changes and prepare for requirements in legislative and regulatory environments for its products, services and operations; (AA) manage its exposure to product liability claims and commercial or contractual disputes; (BB) continue to manage the relationships and agreements that the company has with its labor unions to help drive long-term competitiveness; (CC) accurately predict the margins of its Motorcycles and Related Products segment in light of, among other things, tariffs, the cost associated with product development initiatives and the company’s complex global supply chain; and (DD) successfully develop and launch the pre-owned motorcycle program, Harley-Davidson Certified.
The company’s operations, demand for its products, and its liquidity could be adversely impacted by work stoppages, facility closures, strikes, natural causes, widespread infectious disease, terrorism, or other factors. Other factors are described in risk factors that the company has disclosed in documents previously filed with the Securities and Exchange Commission. Many of these risk factors are impacted by the current changing capital, credit and retail markets and the company's ability to manage through inconsistent economic conditions.
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 independent dealers to sell its motorcycles and related products and services to retail customers. The company depends on the capability and financial capacity of its independent 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 independent 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, the impact of COVID-19, or other factors. In recent years, HDFS has experienced historically low levels of retail credit losses, but there is no assurance that this will continue. The company believes that HDFS' retail credit losses may increase over time due to changing consumer credit behavior and HDFS' efforts to increase prudently structured loan approvals to sub-prime borrowers, as well as actions that the company has taken and could take that impact motorcycle values. Refer to "Risk Factors" under Item 1A of the company's Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 19, 2020 and Part II, Item 1A of any subsequently filed Quarterly Report on Form 10-Q, for a discussion of additional risk factors and a more complete discussion of some of the cautionary statements noted above.
