2020 Letter to Shareholders
Dear Fellow Shareholders,
As you know, 2020 was an unprecedented year for all of us as the world dealt with the impacts of the COVID-19 pandemic. In early March, most of our office team members started working from home; with the exception of a temporary suspension of production, our factory teams remained working on the assembly lines, with safeguards in place to ensure we continued building the world’s best motorcycles for our riders around the globe.
I’ve been very impressed with the resilience of our team and our dealers. They have shown agility and perseverance amid the many challenges of living and working through this global pandemic. Their passion for the Company and the brand is helping propel us forward and I believe we will come out of this crisis stronger than ever before.
About a year ago, I became CEO and initiated The Rewire, a critical overhaul of our business designed to set us up for future success. In 2020, as a result of The Rewire, we:
- Reduced complexity and increased speed, with a new operating model and organizational structure across every function to provide agility and efficiency;
- Reset our global business, resourcing and prioritizing markets with the highest potential;
- Expanded our focus beyond motorcycles, with a strong commitment to our Parts & Accessories and General Merchandise businesses;
- Streamlined our product portfolio and rebuilt our go-to-market efforts for maximum impact; and
- Enhanced and protected the value and desirability of our products by changing the approach to
These Rewire actions are expected to deliver ongoing gross cash savings of approximately $115 million starting in 2021. I am confident the substantial changes we made in 2020 have set us up for success. We are now a leaner, more aligned, and less complex organization, and we are making decisions faster. The right structure, leadership, and principles are in place as we begin to execute our strategic plan, The Hardwire, and continue our H-D#1 cultural journey to become a high-performing Company.
2020 Financial Highlights
Twenty-twenty was an extraordinary year for Harley-Davidson and we rose to the challenge. Our team successfully managed COVID-19 impacts, protecting liquidity and achieving significant cash savings, while keeping community well-being at the forefront.
Our full-year results reflect the continued execution of our deliberate supply and inventory management approach, which we implemented starting in the second quarter, as well as the impact of the first year of the reset of our new model year. On a full-year basis, we finished with consolidated operating income of $9.6 million and full-year earnings per share of $0.10 per share. For the full year, we aggressively managed costs including our efforts to reduce planned non-capital spending as part of our COVID-19 pandemic response and recovery actions.
We’ve started to execute The Hardwire, our five-year strategic plan, rooted in desirability and guided by our vision to build our legend and lead the motorcycle industry through innovation, evolution, and emotion. The Hardwire has six strategic priorities that guide our work:
- Profit Focus: investing in our strongest motorcycle segments that drive growth and profit;
- Selective Expansion and Redefinition: focusing on opportunities in profitable segments, aligned with brand capabilities;
- Lead in Electric: a dedicated investment in innovation and the electric market, to deliver the most desirable electric motorcycles in the world;
- Grow Beyond Bikes: growing our complementary businesses, both product and lifestyle experiences;
- Customer Experience: putting customers, riders and non-riders, at the forefront of Harley-Davidson's products, experiences, and investments; and
- Inclusive Stakeholder Management: people, planet, and profit - delivering long-term value for all stakeholders.
You can learn more about The Hardwire at https://www.harley-davidson.com/us/en/about-us/company.html. We are not including the information available through our website as a part of this Proxy Statement.
We believe we are on the right track to reignite the spirit of Harley-Davidson and return to winning in 2021, delivering the timeless pursuit of adventure and freedom for the soul for our customers around the world.
On behalf of everyone at Harley-Davidson, thank you for your investment and continuing to ride with us.
President and Chief Executive Officer
Chairman of the Board