Slide 1: Fourth Quarter 2020 Earnings Review
— | Fourth Quarter 2020 Earnings Review THURSDAY, JANUARY 28, 2021 RATION
Slide 2: Forward-looking statements
This document 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 document may include, but are not limited t
Slide 3: Global Overview
Global Overview Q EE Marc Bitzer CHAIRMAN AND CHIEF EXECUTIVE OFFICER Whirlpool
Slide 4: Profitable Growth, Margin Expansion, Cash Conversion
PROFITABLE GROWTH ▪ Organic net sales growth of 10% driven by solid global industry demand (+10.3% organic(4)) ▪ Significant EBIT margin(1) expansion of 410 bps to 11.3% MARGIN EXPANSION ▪ EBIT(3) improvement in all regions, led by double-digit margins in North America Region and Latin America Region
Slide 5: Full-year profitable growth, margin expansion and cash conversion
PROFITABLE GROWTH We took early, decisive actions in a challenging environment ▪ Prioritized the health and safety of our employees ▪ Delivered cost take-out program (+1.1% organic(4)) ▪ Flawlessly executed go-to-market actions MARGIN EXPANSION We are delivering on our long-term value creation targe
Slide 6: Ongoing EBIT Margin bridge 2019 to 2020
2019 Ongoing EBIT Margin 7.2% 6.9% Price/Mix Net Cost* Raw Material/Tariff Inflation Marketing & Technology Investments Currency 2020 Ongoing EBIT Margin 11.3% 9.1% *Inclusive of Fixed Cost Takeout, Ongoing Cost Productivity (Including Conversion and Freight & Warehousing), Volume Deleveraging and Res
Slide 7: Regional Overview
Regional Overview Jim Peters EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
Slide 8: North America: strong consumer demand driving revenue growth
▪ Sustained strong consumer demand driving solid revenue growth ▪ Record EBIT performance driven by flawless execution of go-to-market and cost takeout initiatives ▪ Gradual supply chain improvements on-track 8
Slide 9: Europe, Middle East & Africa: share gains in key countries
▪ Share gains in key countries ▪ Strong EBIT improvement (+$29M) fueled by demand and cost actions ▪ Full-year EBIT positive as strategic actions continue to drive progress towards long-term goals 9
Slide 10: Latin America: organic net sales growth of 28%
▪ Organic net sales growth of 28%, driven by strong industry growth in Brazil ▪ EBIT growth driven by increased demand and disciplined execution of go-to-market actions ▪ Strong EBIT margin performance despite currency headwinds in Brazil and Argentina 10
Slide 11: Asia: solid India results and demand recovery
▪ Solid India results led by demand recovery in the region ▪ Strong EBIT improvement in China driven by cost productivity actions ▪ Whirlpool branded share growth in China on-track 11
Slide 12: 2021 Guidance
2021 Guidance Marc Bitzer Jim Peters CHAIRMAN AND EXECUTIVE VICE PRESIDENT CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
Slide 13: 2021 guidance: ongoing EPS, margin, cash conversion
PROFITABLE GROWTH MARGIN EXPANSION CASH CONVERSION *Does not include the impact of currency Full-year ongoing EPS range of $19.00 - $20.00 13
Slide 14: 2021 Ongoing EBIT Margin bridge
(Approximate impact) 2020 Ongoing EBIT Margin • Disciplined execution of go-to-market actions and recently Price/Mix announced price increases • Product launches and positive consumer trends driving price/mix • 2020 cost program carryover, cost reduction initiatives and volume Net Cost* leverage • E
Slide 15: 2021 regional net sales and margin outlook
North 4 - 6% 15%+ America Europe, Middle East 2 - 4% 2.5%+ & Africa Latin 2 - 4% 7%+ America Asia 6 - 8% 2%+ Total ~4% 9%+ 15
Slide 16: Free Cash Flow
(Approximate impact in millions) Cash Earnings and Other Operating Items $1,954 $1,950 • Driven by sustained EBIT margin • Innovation and digital transformation Capital Expenditures $(410) $(600) investments Working Capital $(358) $(175) • Moderate inventory build Restructuring Cash Outlays $(196) $
Slide 17: Capital allocation
Capital Expenditure Invest ~3% of net sales Research and Development Invest ~3% of net sales Mergers & Acquisitions Pursue opportunistic M&A with high ROIC Dividends ~30% of trailing 12-month ongoing net earnings Share Repurchase Moderate share repurchases; ~$530M authorization remaining Targeted Ca
Slide 18: Summary: delivering on long-term value creation targets
● We are delivering on our long-term value creation targets with record 2020 results and significant progress on our ESG commitments ● Expect sustained strong demand trends and go-to-market actions to offset cost inflation and supply challenges in 2021 ○ Increased disposable income, a shift towards nes
Slide 19: Closing Remarks and Q&A
Closing Remarks and Q&A
Slide 20: Whirlpool
Whirlpool
Slide 21: Appendix
Appendix
Slide 22: 2019 to 2020 Ongoing EBIT Margin by quarter
(Approximate impact) Q1 Q2 Q3 Q4 FY Comments 2019 Ongoing EBIT Margin • Go-to-market actions and Price/Mix product launches Net Cost (excluding Raw Material/Tariff • Significant Covid-related Inflation)* production impact in H1 • Favorable RMI trends, primarily Raw Material/Tariff Inflation steel and res
Slide 23: Income Statement and Cash Flow Statement FY2020A and FY2021E
Income Statement FY2020A FY2021E Raw Material (Inflation) / Deflation $250M $(250) - (300)M Restructuring Costs $288M ~$100M Interest Expense $189M ~$190M Adjusted Effective Tax Rate 26.3% 24-26% Weighted-Average Diluted Shares Outstanding 63.3M 63.9M* Cash Flow Statement FY2020A FY2021E Capital Expend
Slide 24: Interest and Sundry (Income) Expense
Q4 FY (Approximate impact in millions) 2019 2020 2019 2020 Comments ● Includes foreign exchange and hedge Net Foreign Exchange $(10) $(7) $(35) $(29) (gain)/loss ● Primarily banking fees and interest Interest (Income)/Other 4 24 (12) 8 income; pension settlement in Q4 2020 Sub-Total (6) 17 (47) (21)
Slide 25: Restructuring cash outlays
(Approximate impact in millions) 2020 2021 Comments COVID-19 related actions $115 $105 Naples closure 24 70 • Naples, Italy manufacturing facility Other initiatives 57 50 • Primarily previous year actions Total $196 ~$225 25
Slide 26: Other items in free cash flow
(Approximate impact in millions) 2020 2021 Impact Comments Claim Settlement $(60) - $60 • Trade customer insolvency claim in EMEA • EMEA-produced product warranty recall Washer Recall (50) - 50 expense • Primarily cash tax credits gained through the Cash Tax Credits 200 - (200) production of energy
Slide 27: Q4 organic net sales reconciliation
(Approximate impact in millions) Q4 2019 Q4 2020 Change Comments Net Sales $5,382 $5,798 7.7% Less: Embraco Net Sales - n/a • Embraco sale completed July 1, 2019 Add-Back: Currency n/a 138 • Primarily BRL and ARS One-Time Items $5,382 $5,937 10.3% 27
Slide 28: Full-year organic net sales reconciliation
(Approximate impact in millions) FY 2019 FY 2020 Change Comments Net Sales $20,419 $19,456 (4.7)% Less: Embraco Net Sales (635) n/a • Embraco sale completed July 1, 2019 Add-Back: Currency n/a 551 • Primarily BRL and ARS One-Time Items $19,784 $20,007 1.1% 28
Slide 29: Non-GAAP financial measures
This presentation includes certain non-GAAP financial measures, some of which we refer to as “ongoing”(1) measures: Ongoing earnings per diluted share, earnings before interest and taxes (EBIT), EBIT margin, ongoing EBIT, and ongoing EBIT margin Other non-GAAP financial measures included in this prese