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Harley-Davidson offered its fourth quarter 2022 monetary outcomes, and the outcomes have been typically robust, however not with no few hiccups.
The quarter was robust, in comparison with the earlier yr, 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) exhibiting will increase in 2022. For the yr, 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 yr.
Motorbike shipments have been up 18% within the quarter and up 3% on the yr, regardless of a manufacturing stoppage in Might brought on by a regulatory compliance concern 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 attention-grabbing.
The LiveWire Group
The fourth quarter represented the primary full fiscal interval with LiveWire as its personal separate firm, with its numbers offered 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 steadiness 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 yr, nevertheless, LiveWire shipped 597 models, a 30% improve from the 461 bikes shipped in 2021, and properly above the model’s purpose of transport 500 fashions.
For 2022, LiveWire reported $47 million in income in comparison with $36 million within the earlier yr when it was nonetheless part of Harley-Davidson. Breaking off from the mum or dad model means having to rent extra folks and growing capabilities, plus including product growth 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 yr.
There was some dangerous information about LiveWire’s second mannequin, the S2 Del Mar. Ryan Morrissey, president of LiveWire, stated 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 provide between 750 and a pair of,000 bikes in 2023, with an anticipated working lack of $115-125 million. A whole lot 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 Using Academy, changing the discontinued Road 500. Zeitz stated Harley-Davidson has plans to increase the Using Academy program within the subsequent few years, with the X350RA taking part in an vital function.
Zeitz additionally confirmed that the X350 won’t be accessible for buy in North America, and can completely be used right here for the Using Academy. What he didn’t point out have been plans for the X350 in different markets. The small displacement mannequin was developed with the Qianjiang Group for Asian markets, with most of the elements shared with the 302S from the QJ-owned Benelli. In truth, Zeitz made no reference in any respect to QJ, which suggests the Chinese language model could also be spearheading the advertising and marketing of the patron mannequin internationally.
Efficiency in Worldwide Markets
Talking of worldwide markets, Harley-Davidson reported progress in retail gross sales within the Asia Pacific area. In truth, Asia Pacific was the one area that reported gross sales progress in 2022, with decreased unit gross sales reported in North America, Latin America and Europe, Center East and Africa (EMEA) areas.
Gina Goetter, Harley-Davidson chief monetary officer, stated Japan reported double-digit progress, now making it Harley-Davidson’s second largest market behind the US. China additionally noticed excessive single-digit progress to succeed in its highest gross sales quantity ever.
Mission Gas
Harley-Davidson supplied extra data on Mission Gas, a large-scale redesign of its dealerships and “redefine the Harley-Davidson buyer expertise”. Mission Gas is now in full swing globally, with 15% of the North American vendor community already signed on. The Mission depends on a variety of funding from sellers, so it is going to be attention-grabbing to see what number of extra will purchase in.
Revenue per Bike
Harley-Davidson’s presentation launched a brand new metric the corporate hadn’t utilized in earlier fiscal reviews, measuring what it calls Unit Profitability. Merely put, it’s the typical quantity of working revenue from gross sales of bikes, components and equipment, and attire, plus licensing, divided by wholesale shipments.
For the 2022 fiscal yr, 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 brought on by 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 yr in comparison with 2019, however is now making 2.7 instances extra working revenue per bike.
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