Slide 1: Third-Quarter 2019 Earnings Review
Third-Quarter 2019 Earnings Review Wednesday, October 23, 2019 1
Slide 2: Global Overview
GLOBAL OVERVIEW Marc Bitzer Chairman and Chief Executive Officer 2 Whirlpool Corporation Third-Quarter 2019 Earnings Review 2
Slide 3: 2019 Third-Quarter Highlights
2019 THIRD-QUARTER HIGHLIGHTS ▪ Very solid global performance with ongoing EBIT(1) margin at 7.2% (up 100 bps) ▪ Impressive North America EBIT(3) margin of 12.8% (up 80 bps) ▪ Significant year-over-year and sequential improvement in EMEA results (near break-even) ▪ Trending towards high end of full-y
Slide 4: Progress Toward Long-Term Goals
PROGRESS TOWARD LONG-TERM GOALS Profitable Growth Margin Expansion Cash Conversion Long-Term ~3% ~10% 6%+ Goals Ongoing Earnings Before Interest Annual Organic Net Sales Growth Free Cash Flow as % of Net Sales and Tax, % of Net Sales YoY Ongoing YoY Free FCF as % Net Sales Change EBIT Margin(1) Chang
Slide 5: Q3 2019 Ongoing EBIT Margin Drivers
Q3 2019 ONGOING EBIT MARGIN(1) DRIVERS (Approximate impact) Q3 2018 Ongoing EBIT Margin 6.2% Price / Mix 1.50 Net Cost (excluding Raw Material/Tariff Inflation)* 0.25 Raw Material/Tariff Inflation -0.25 Marketing & Technology Investments -0.50 Currency - 2019 Ongoing EBIT Margin 7.2% *Inclusive of Fix
Slide 6: Regional Overview
REGIONAL OVERVIEW Jim Peters Executive Vice President and Chief Financial Officer 6 Whirlpool Corporation Third-Quarter 2019 Earnings Review 6
Slide 7: North America Third-Quarter Results
NORTH AMERICA THIRD-QUARTER RESULTS ▪ Revenue growth despite continued industry demand weakness in Canada ▪ Record EBIT performance driven through strong price/mix and focused cost discipline ▪ Awarded five-year exclusive supplier relationship with DR Horton; effective January 2020 Whirlpool Corporat
Slide 8: EMEA Third-Quarter Results
EMEA THIRD-QUARTER RESULTS ▪ Excluding MEA, core unit volume growth of 5%, driven by continued momentum in key countries ▪ Excluding currency, total regional sales were approximately flat ▪ Significant EBIT recovery driven by cost reduction initiatives ▪ Strategic actions to restore profitability fully
Slide 9: Latin America Third-Quarter Results
LATIN AMERICA THIRD-QUARTER RESULTS ▪ Unit volumes negatively impacted by temporary trade inventory timing ▪ Organic net sales(4) growth of approximately 4% ▪ EBIT margin impacted by lower fixed cost leverage and currency devaluation in Argentina Note: Embraco compressor business sale complete as of
Slide 10: Asia Third-Quarter Results
ASIA THIRD-QUARTER RESULTS ▪ Strong India results driven by double-digit revenue and EBIT growth ▪ China results impacted by weak industry demand and brand investments ▪ Whirlpool brand transition in China on track Whirlpool Corporation Third-Quarter 2019 Earnings Review 10
Slide 11: 2019 Outlook
2019 OUTLOOK Updated Picture TBD Marc Bitzer Jim Peters Chairman and Executive Vice President Chief Executive Officer and Chief Financial Officer Whirlpool Corporation Third-Quarter 2019 Earnings Review 11
Slide 12: 2019 Guidance Reaffirmed
2019 GUIDANCE REAFFIRMED Profitable Growth Margin Expansion Cash Conversion Long-Term ~3% ~10% 6%+ Goals Ongoing Earnings Before Interest Annual Organic Net Sales Growth Free Cash Flow as % of Net Sales and Tax, % of Net Sales YoY Ongoing YoY Free FCF as % Net Sales Change EBIT Margin(1) Change Cash
Slide 13: 2019 Ongoing EBIT Margin Guidance Progression
2019 ONGOING EBIT MARGIN(1) GUIDANCE PROGRESSION (Approximate impact) Previous Current Comments 2018 Ongoing EBIT Margin 6.3% 6.3% • Carryover effect of 2018 price/mix actions Price / Mix +1.75 +2.00 • Previously announced U.S. kitchen and Brazil pricing effective Q1 2019 • Fixed and ongoing cost re
Slide 14: 2019 Regional Guidance
2019 REGIONAL GUIDANCE Industry EBIT % Previous Current Previous Current North (2) – 0% Unchanged ~12%+ 12%+ America Europe, Middle (1) – 1% Unchanged ~0% Unchanged East & Africa Latin ~5% 3 – 4% 6%+ ~6% America Asia 1 – 2% Unchanged ~3% Unchanged Total ~Flat* Unchanged* ~6.8% 6.8%+ Note: EMEA reflec
Slide 15: 2019 Free Cash Flow
2019 FREE CASH FLOW(2) (Approximate impact in millions) 2018 2019F Comments • Margin expansion partially offset by sale of Embraco Cash Earnings / Other Operating $1,450 $1,500 • No change from second-quarter estimates Capital Expenditures $(590) $(625) • Continued innovation funding Working Capital
Slide 16: Disciplined Capital Allocation Strategy
DISCIPLINED CAPITAL ALLOCATION STRATEGY Fund the Business Target Status/Expectations Capex: ~3% of net sales • On-track Capex/R&D R&D: ~3% of net sales • On-track Opportunistic M&A with high • Closed on Embraco sale in July 2019 Mergers & Acquisitions ROIC threshold • Closed on South Africa sale in
Slide 17: Current Planning Assumptions for 2020
CURRENT PLANNING ASSUMPTIONS FOR 2020 Guidance Component Expectations • Global industry growth ~flat Industry Growth • North America ~flat as modest U.S. growth offset by soft Canada demand RMI/Tariff • Unfavorable tariff impact offset by favorable material costs Inflation • Expected to be ~flat Depreci
Slide 18: Q&A and Closing Remarks
Q&A AND CLOSING REMARKS Whirlpool Corporation Third-Quarter 2019 Earnings Review 18
Slide 19: Executive Summary
EXECUTIVE SUMMARY ▪ Very solid momentum in our global business with significant global margin expansion ▪ Strong fundamentals in North America leading to continued margin expansion ▪ Strategic actions to restore EMEA profitability fully on track ▪ Significant progress towards long-term Gross Debt/EBITD
Slide 20: Whirlpool Corporation
Whirlpool Whirlpool Corporation
Slide 21: Appendix
APPENDIX Whirlpool Corporation Third-Quarter 2019 Earnings Review 21
Slide 22: 2019 Guidance Components (Approximate Impact)
2019 GUIDANCE COMPONENTS (APPROXIMATE IMPACT) Income Statement FY2018A FY2019E Raw Material/Tariff Inflation $(300)M $(150)M Restructuring Costs $247M $200M Interest Expense $192M $200M Adjusted Tax Rate 6.6% 15-20% Weighted-Average Diluted Shares Outstanding 67.2M 64.2M* Cash Flow Statement FY2018A
Slide 23: Q3 Organic Net Sales Reconciliation
Q3 ORGANIC NET SALES(4) RECONCILIATION (Approximate impact in millions) Q3 2018 Q3 2019 Change Comments Net Sales $5,326M $5,091M (4.4)% Less: Embraco Net Sales $(266) $0 • Embraco sale completed July 1, 2019 Add-Back: Currency n/a $50 • EUR and GBP Organic Net Sales $5,060M $5,141M 1.6% Whirlpool C
Slide 24: Full-Year Organic Net Sales Reconciliation
FULL-YEAR ORGANIC NET SALES(4) RECONCILIATION (Approximate impact in billions) 2018 2019F Change Comments Net Sales $21.0B $20.6B (2.1)% Less: Embraco Net Sales $(1.1) $(0.6) • 2019 guidance includes 6 months of net sales (Jan-June) Add-Back: Currency n/a $0.4 • BRL, EUR and GBP Organic Net Sales $1
Slide 25: Q3 Organic Net Sales Reconciliation Latin America Region
Q3 ORGANIC NET SALES(4) RECONCILIATION LATIN AMERICA REGION (Approximate impact in millions) Q3 2018 Q3 2019 Change Comments Net Sales $878M $632M (27.9)% Less: Embraco Net Sales $(266) $0 • Embraco sale completed July 1, 2019 Add-Back: Currency n/a $5 • Currency had an immaterial impact in the quar
Slide 26: Embraco Compressor Business Historical Financials / Gain Calculation
EMBRACO COMPRESSOR BUSINESS HISTORICAL FINANCIALS / GAIN CALCULATION As disclosed in quarterly reports on Form 10-Q: (In USD millions) Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Net Sales $296 $285 $266 $288 $312 $323 EBIT $7 $9 $21 $17 $24 $23 ● On April 24, 2018, entered purchase agreement wi
Slide 27: Interest and Sundry (Income) Expense
INTEREST AND SUNDRY (INCOME) EXPENSE Q3 YTD (Approximate impact in millions) 2018 2019 2018 2019 Comments ● Includes foreign exchange (gain)/loss and Net Foreign Exchange $17 $(12) $(1) $(25) hedge (gain)/loss Interest Income/Other $7 $(17) $4 $(17) ● Primarily interest income Sub-Total $24 $(29) $3
Slide 28: Free Cash Flow One-Time Items
FREE CASH FLOW(2) ONE-TIME ITEMS (Approximate impact in millions) 2018 2019 Impact Comments • French Competition Authority (FCA) settlement FCA Payment $0 $(100) $(100) • Final payment made in Q2 2019 U.S. Pension Pre-Funding $(350) $0 $350 • Opportunistic pension pre-funding in Q3 2018 Payment Timi
Slide 29: Cautionary Statement
CAUTIONARY STATEMENT This presentation contains forward-looking statements about Whirlpool Corporation and its consolidated subsidiaries ("Whirlpool") that speak only as of this date. Whirlpool disclaims any obligation to update these statements. Forward-looking statements in this presentation may i
Slide 30: Use of Non-GAAP Financial Measures
USE OF NON-GAAP FINANCIAL MEASURES This presentation includes certain non-GAAP financial measures, which we refer to as “ongoing” (1) measures: Ongoing earnings per diluted share, earnings before interest and taxes (EBIT), EBIT margin, ongoing EBIT, ongoing EBIT margin Other non-GAAP financial measure