Harley-Davidson introduced its fourth quarter 2022 monetary outcomes, and the outcomes had been typically robust, however not with no few hiccups.
The quarter was robust, in comparison with the earlier 12 months, with revenues ($1.14 billion vs $1.02 billion), working revenue (revenue of $4 million vs lack of $7 million) diluted earnings per share ($0.28 versus $0.14) displaying will increase in 2022. For the 12 months, Harley-Davidson reported revenues of $5.76 billion in comparison with $5.34 billion in 2021, and an working revenue of $909 million in comparison with $823 million within the earlier 12 months.
Motorcycle shipments had been up 18% within the quarter and up 3% on the 12 months, despite a manufacturing stoppage in May attributable to a regulatory compliance subject with brake traces from a 3rd occasion provider.
Harley-Davidson’s full fourth quarter outcomes can be found on its Investor Relations web site, however there have been some key takeaways from the corporate’s presentation that we discovered significantly fascinating.
The LiveWire Group
The fourth quarter represented the primary full fiscal interval with LiveWire as its personal separate firm, with its numbers introduced individually from the remainder of Harley-Davidson’s bikes. Harley-Davidson nonetheless owns a 89.4% stake in LiveWire Group, which incorporates each electrical bikes plus STACYC electrical stability bikes, so the model was nonetheless closely featured within the firm’s report.
LiveWire shipped 69 bikes within the quarter, down from 186 models in the identical quarter of 2021. For the 12 months, nonetheless, LiveWire shipped 597 models, a 30% enhance from the 461 bikes shipped in 2021, and properly above the model’s objective of transport 500 fashions.
For 2022, LiveWire reported $47 million in income in comparison with $36 million within the earlier 12 months when it was nonetheless part of Harley-Davidson. Breaking off from the father or mother model means having to rent extra folks and growing capabilities, plus including product improvement prices, so regardless of the rise in income, the LiveWire Group reported a bigger working lack of $86 million in comparison with $68 million from the earlier 12 months.
There was some unhealthy information about LiveWire’s second mannequin, the S2 Del Mar. Ryan Morrissey, president of LiveWire, mentioned the corporate needed to push again the launch of the Del Mar to the second half of 2023 from the unique plan of a spring launch.
LiveWire has accordingly adjusted its forecast, now anticipating to supply between 750 and a couple of,000 bikes in 2023, with an anticipated working lack of $115-125 million. Loads of the expansion will come from Europe, which LiveWire will formally enter in 2023, with retailers already lined up in France, Germany, the Netherlands, the U.Ok., and Switzerland.
Harley-Davidson X350RA
The presentation marked the primary formal acknowledgement of the Harley-Davidson X350RA. Jochen Zeitz, Harley-Davidson chief govt officer, formally confirmed the launch of the X350RA as the brand new bike for the corporate’s Riding Academy, changing the discontinued Street 500. Zeitz mentioned Harley-Davidson has plans to increase the Riding Academy program within the subsequent few years, with the X350RA taking part in an essential position.
Zeitz additionally confirmed that the X350 is not going to be obtainable for buy in North America, and can solely be used right here for the Riding Academy. What he didn’t point out had been plans for the X350 in different markets. The small displacement mannequin was developed with the Qianjiang Group for Asian markets, with lots of the elements shared with the 302S from the QJ-owned Benelli. In reality, Zeitz made no reference in any respect to QJ, which suggests the Chinese model could also be spearheading the advertising and marketing of the patron mannequin internationally.
Performance in International Markets
Speaking of worldwide markets, Harley-Davidson reported development in retail gross sales within the Asia Pacific area. In reality, Asia Pacific was the one area that reported gross sales development in 2022, with decreased unit gross sales reported in North America, Latin America and Europe, Middle East and Africa (EMEA) areas.
Gina Goetter, Harley-Davidson chief monetary officer, mentioned Japan reported double-digit development, now making it Harley-Davidson’s second largest market behind the United States. China additionally noticed excessive single-digit development to succeed in its highest gross sales quantity ever.
Project Fuel
Harley-Davidson supplied extra data on Project Fuel, a large-scale redesign of its dealerships and “redefine the Harley-Davidson customer experience”. Project Fuel is now in full swing globally, with 15% of the North American vendor community already signed on. The Project depends on quite a lot of funding from sellers, so it is going to be fascinating to see what number of extra will purchase in.
Profit per Bike
Harley-Davidson’s presentation launched a brand new metric the corporate hadn’t utilized in earlier fiscal experiences, measuring what it calls Unit Profitability. Simply put, it’s the common quantity of working revenue from gross sales of bikes, components and equipment, and attire, plus licensing, divided by wholesale shipments.
For the 2022 fiscal 12 months, Harley-Davidson says it made a revenue of $3,500 per bike shipped. That places it someplace between the figures reported in 2014 and 2015 and a big enchancment from 2019’s revenue of $1,300 per bike, and 2020’s working lack of $700 per unit attributable to COVID-related shutdowns and the beginning of Harley-Davidson’s Rewire actions.
The metric is important when you think about Rewire included the elimination of a number of fashions and the exit from some low-performing markets. Harley-Davidson says it shipped 23,000 fewer models final 12 months in comparison with 2019, however is now making 2.7 instances extra working revenue per bike.
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Source: www.bike.com