Slide 1: 2016 First-Quarter Earnings Review
2016 FIRST-QUARTER EARNINGS REVIEW APRIL 26, 2016 0 FIRST-QUARTER EARNINGS PRESENTATION 2016 | WHIRLPOOL CORPORATION
Slide 2: Whirlpool Corporation Additional Information
WHIRLPOOL CORPORATION ADDITIONAL INFORMATION 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
Slide 3: 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 business”(1) measures: Ongoing business operating profit (loss), ongoing business operating margin, ongoing business earnings (loss) before income taxes, ongoing business
Slide 4: Overview
OVERVIEW Jeff M. Fettig Chairman and Chief Executive Officer 3 FIRST-QUARTER EARNINGS PRESENTATION 2016 | WHIRLPOOL CORPORATION
Slide 5: 2016 First-Quarter Highlights
2016 FIRST-QUARTER HIGHLIGHTS • Solid first-quarter performance in-line with expectations • Reaffirming full-year guidance • Ex-currency revenue growth and record ongoing earnings performance • Integration plans firmly on track: delivering cost synergies • Operational execution more than offset curr
Slide 6: 2016 First-Quarter Results
2016 FIRST-QUARTER RESULTS Net Sales Ongoing Diluted EPS Free Cash Net Sales (Excluding Business (GAAP) Flow(2) Currency) Diluted EPS(1) 2016 $4.6B $4.9B $1.92 $2.63 $(739)M 2015 $4.8B $4.8B $2.38 $2.14 $(651)M $(0.2)B $0.1B $(0.46) $0.49 $(88)M Change $(5)% $1% $(19)% $23% STRONG EXECUTION LED TO O
Slide 7: 2016 Financial Guidance
2016 FINANCIAL GUIDANCE GAAP Diluted EPS $11.25–$12.00 Ongoing Business Diluted EPS(1) $14.00–$14.75 Free Cash Flow(2) ~ $700–$800 million REAFFIRMING GUIDANCE BEHIND STRONG PLANS 6 FIRST-QUARTER EARNINGS PRESENTATION 2016 | WHIRLPOOL CORPORATION
Slide 8: 2016 Capital Allocation Strategy
2016 CAPITAL ALLOCATION STRATEGY Priorities Guidelines Fund the Business • Capital investment: 3.5% of sales Targeted Capital Structure • Approximately 1.5x Debt / EBITDA target Dividends • 25 – 30% trailing 12 month earnings (guideline) • 11% dividend increase Share Repurchase • $225M repurchased i
Slide 9: 2016 Business Priorities
2016 BUSINESS PRIORITIES • Revenue growth and margin expansion through • Continued focus on integration efforts to deliver cost synergies • Global brand and product innovation • Driving growth in adjacent businesses • Robust ongoing cost productivity programs • Strong focus on free cash flow generat
Slide 10: Regional Operations Overview
REGIONAL OPERATIONS OVERVIEW Marc Bitzer President and Chief Operating Officer 9 FIRST-QUARTER EARNINGS PRESENTATION 2016 | WHIRLPOOL CORPORATION
Slide 11: North America First-Quarter Results
NORTH AMERICA FIRST-QUARTER RESULTS FIRST QUARTER BETTER/(WORSE) (USD in millions) 2016 2015 2015 % Net Sales $ 2,410 $ 2,341 $ 69 3% Operating Profit (GAAP) $ 250 $ 276 $ (26) (10)% Operating Margin (GAAP) 10.4% 11.8% (1.4) pts Ongoing Business Operating Profit(1) $ 253 $ 230 $ 23 10% Ongoing Busin
Slide 12: North America 2016 Operations
NORTH AMERICA 2016 OPERATIONS Business Priorities Revenue growth and margin expansion Drive growth through innovative new products Continued ongoing cost productivity programs Growth in adjacent businesses Factors Impacting Operating Margins + Industry guidance of 5 to 6% – Currency impact +
Slide 13: North America Product Leadership
NORTH AMERICA PRODUCT LEADERSHIP PERFECT CYCLE FOR THE PERFECT CLEAN Industry’s first intuitive touch front controls on the lid allow you to create customized cycles to care for clothing FILL AND FORGET Skip adding detergent to every load with the Load & Go™ bulk dispenser* INDUSTRY’S LARGEST CAPACI
Slide 14: EMEA First-Quarter Results
EMEA FIRST-QUARTER RESULTS FIRST QUARTER BETTER/(WORSE) (USD in millions) 2016 2015 2015 % Net Sales $ 1,173 $ 1,273 $ (100) (8)% Operating Profit (GAAP) $ 55 $ 17 $ 38 nm Operating Margin (GAAP) 4.7% 1.3% 3.4 pts Ongoing Business Operating Profit(1) $ 58 $ 35 $ 23 66% Ongoing Business Operating Mar
Slide 15: EMEA 2016 Operations
EMEA 2016 OPERATIONS Business Priorities Continued focus on integration activities to deliver synergy benefits Ongoing cost productivity programs Growth in adjacent businesses Product and brand innovation Factors Impacting Operating Margins =/+ Industry guidance of flat to +2% – Currency imp
Slide 16: EMEA Product Leadership
EMEA PRODUCT LEADERSHIP IMPROVED EXPERIENCE Assisting consumers with cycle selection, energy utilization and inventory management FREEDOM & FLEXIBILITY Providing remote control access, reminders and tips on how to improve performance PEACE OF MIND Delivering performance and maintenance information E
Slide 17: Latin America First-Quarter Results
LATIN AMERICA FIRST-QUARTER RESULTS FIRST QUARTER BETTER/(WORSE) (USD in millions) 2016 2015 2015 % Net Sales $ 705 $ 899 $ (194) (22)% Operating Profit $ 42 $ 59 $ (17) (30)% Operating Margin 5.9% 6.6% (0.7) pts DRIVERS + Price / mix − Currency impact + Benefit of cost and capacity reductions − Bra
Slide 18: Latin America 2016 Operations
LATIN AMERICA 2016 OPERATIONS Business Priorities Execute previously announced cost-based price increases Drive ongoing cost productivity / maintain right size fixed cost structure Continued acceleration of new product innovation Factors Impacting Operating Margins + Ongoing cost productivity
Slide 19: Latin America Product Leadership
LATIN AMERICA PRODUCT LEADERSHIP EASY TO USE Cook with confidence on high quality burners that are modern and durable EASY TO CLEAN Wipe cooktop and oven messes away easier than ever before EASY TO COOK Deliver precise results using touch timing controls CONSUL BRAND: RANGES THAT MAKE COOKING AND CL
Slide 20: Asia First-Quarter Results
ASIA FIRST-QUARTER RESULTS FIRST QUARTER BETTER/(WORSE) (USD in millions) 2016 2015 2015 % Net Sales $ 371 $ 378 $ (7) (2)% Operating Profit (GAAP) $ 25 $ 24 $ 1 5% Operating Margin (GAAP) 6.9% 6.4% 0.5 pts Ongoing Business Operating Profit(1) $ 27 $ 26 $ 1 4% Ongoing Business Operating Margin(1) 7.
Slide 21: Asia 2016 Operations
ASIA 2016 OPERATIONS Business Priorities Continue to facilitate growth through distribution expansion Innovative new product launches Ongoing cost productivity Factors Impacting Operating Margins = Industry guidance flat – China demand uncertainty + Favorable demand trends in India + Distribut
Slide 22: Asia Product Leadership
ASIA PRODUCT LEADERSHIP TOUCH CONTROL More convenient one-touch start control, easy cycle selection and water level adjustment DETERGENT DISPENSER Automatic detergent dispensing can be used for one month before refilling FABRIC PROTECTION Innovative wash technology to help reduce wear on delicate fa
Slide 23: 2016 Regional Margin Goals
2016 REGIONAL MARGIN GOALS North America Ongoing Operating Margin EMEA Ongoing Operating Margin 50% 2015A 2016 Guidance 27% 2015A 2016 Guidance net sales net sales 11.3% 11.5 – 12.5% 4.5% 7 – 8% Latin America Ongoing Operating Margin Asia Ongoing Operating Margin 16% 2015A 2016 Guidance 7% 2015A 201
Slide 24: Financial Review
FINANCIAL REVIEW Larry Venturelli Executive Vice President and Chief Financial Officer 23 FIRST-QUARTER EARNINGS PRESENTATION 2016 | WHIRLPOOL CORPORATION
Slide 25: First-Quarter Key Financial Metrics
FIRST-QUARTER KEY FINANCIAL METRICS FIRST QUARTER BETTER/(WORSE) (USD in millions) 2016 2015 2015 % Net Sales $ 4,616 $ 4,846 $ (230) (5)% Gross Margin 17.8% 17.6% 0.2 pts SG&A % 10.3% 10.3% 0.0 pts Restructuring $ 47 $ 33 $ (14) (44)% Ongoing Business Operating Margin(1) 7.3% 6.6% 0.7 pts Interest
Slide 26: 2016 Financial Guidance
2016 FINANCIAL GUIDANCE GAAP Diluted EPS $11.25–$12.00 Ongoing Business Diluted EPS(1) $14.00–$14.75 Free Cash Flow(2) ~ $700–$800 million REAFFIRMING GUIDANCE BEHIND STRONG PLANS 25 FIRST-QUARTER EARNINGS PRESENTATION 2016 | WHIRLPOOL CORPORATION
Slide 27: 2016 Ongoing Business EBIT Margin Expansion Drivers
2016 ONGOING BUSINESS(1) EBIT MARGIN EXPANSION DRIVERS (APPROXIMATE IMPACT) Full-Year Forecast 2015 Ongoing Business EBIT Margin 6.9% Price / Mix ½–1 Cost and Capacity Reductions ¾ Ongoing Cost Productivity 1½–2 Marketing, Technology and Product (½) Investments Currency (1) – (1 ½) 2016 Ongoing Busi
Slide 28: 2016 Timing of Earnings
2016 TIMING OF EARNINGS H1 H2 Volume Seasonality Cost Productivity Currency Cost and Capacity Reductions Price / Mix 27 FIRST-QUARTER EARNINGS PRESENTATION 2016 | WHIRLPOOL CORPORATION
Slide 29: Free Cash Flow Detail
FREE CASH FLOW DETAIL In Millions Q1 FY Estimate Free Cash Flow(2) $(739) $700 - $800 Inclusive of one-time items: Restructuring cash outlays $(41) $(200) EMEA legacy product warranty $(37) $(155) Q1 Capital Allocation Capital Expenditures $ 85 Dividends Paid $ 69 Share Repurchases $ 225 PLANS DELIV
Slide 30: 2016 Acquisition / Restructuring Update
2016 ACQUISITION / RESTRUCTURING UPDATE ~$250M* ~$175M $58M $47M Q1 FY 2016 Q1 FY 2016 Expenses Benefits * Of the ~$250M expense, cash impact up to $200M PLANS FOR 2016 EXPENSES AND BENEFITS ON TRACK 29 FIRST-QUARTER EARNINGS PRESENTATION 2016 | WHIRLPOOL CORPORATION
Slide 31: Closing Remarks
CLOSING REMARKS 30 FIRST-QUARTER EARNINGS PRESENTATION 2016 | WHIRLPOOL CORPORATION
Slide 32: 2016 Business Priorities
2016 BUSINESS PRIORITIES • Revenue growth and margin expansion through • Continued focus on integration efforts to deliver cost synergies • Global brand and product innovation • Driving growth in adjacent businesses • Robust ongoing cost productivity programs • Strong focus on free cash flow generat
Slide 33: Achieving the Vision
ACHIEVING THE VISION • Very strong EPS and FCF growth through 2018 and beyond The Best • Strong global footprint • World class employee engagement • #1 in 3 of 4 regions Global • #1 western company in Asia • #1 in 13 large appliance countries • Brands targeting >90% of consumers Branded • #1 global
Slide 34: Appendix
APPENDIX 33 FIRST-QUARTER EARNINGS PRESENTATION 2016 | WHIRLPOOL CORPORATION
Slide 35: Index of Supporting Data
INDEX OF SUPPORTING DATA Slide # Slide Title & Description Source 12 North America Product Leadership *Up to 14 loads (14lbs) per month **Up to 3.7, 7–lb baskets 34 FIRST-QUARTER EARNINGS PRESENTATION 2016 | WHIRLPOOL CORPORATION
Slide 36: 35 FIRST-QUARTER EARNINGS PRESENTATION 2016 | WHIRLPOOL CORPORATION
35 FIRST-QUARTER EARNINGS PRESENTATION 2016 | WHIRLPOOL CORPORATION