Slide 1: Second-Quarter 2019 Earnings Review
Second-Quarter 2019 Earnings Review Tuesday, July 23, 2019 Whirlpool Corporation - Confidential First-Quarter 2019 Earnings Review 1
Slide 2: Global Overview
GLOBAL OVERVIEW Marc Bitzer Chairman and Chief Executive Officer 2 Whirlpool Corporation - Confidential Second-Quarter 2019 Earnings Review 2
Slide 3: 2019 Second-Quarter Highlights
2019 SECOND-QUARTER HIGHLIGHTS ▪ Raising full-year ongoing EPS guidance significantly to $14.75 to $15.50 (versus prior $14.00 to $15.00) ▪ Record second-quarter ongoing EPS(1) of $4.01, ~25% increase versus the prior-year period ▪ Ongoing EBIT margin expansion to 7.0% (up ~30 bps), driven by strong
Slide 4: Progress Toward Long-Term Goals
PROGRESS TOWARD LONG-TERM GOALS Profitable Growth Margin Expansion Cash Conversion Long-Term ~3% ~10% 6%+ Goals Annual Organic Net Sales Growth Ongoing Earnings Before Interest Free Cash Flow as % of Net Sales Excluding Currency and Tax, % of Net Sales YoY Ongoing YoY Free FCF as % Net Sales Change E
Slide 5: Q2 2019 Ongoing EBIT Margin Drivers
Q2 2019 ONGOING EBIT MARGIN(1) DRIVERS (Approximate impact) Q2 2018 Ongoing EBIT Margin 6.7% Price / Mix 2.50 Net Cost (excluding Raw Material/Tariff Inflation)* -0.50 Raw Material/Tariff Inflation -0.75 Marketing & Technology Investments -0.75 Currency -0.25 2019 Ongoing EBIT Margin 7.0% *Inclusive o
Slide 6: Regional Overview
REGIONAL OVERVIEW Jim Peters Executive Vice President and Chief Financial Officer 6 Whirlpool Corporation - Confidential Second-Quarter 2019 Earnings Review 6
Slide 7: North America Second-Quarter Results
NORTH AMERICA SECOND-QUARTER RESULTS ▪ Solid revenue growth from share gains (T-6) with stable U.S. industry demand in the second quarter ▪ Strong price/mix and focused cost discipline driving EBIT margin expansion ▪ Margin continues to be negatively impacted by cost inflation during the quarter Whir
Slide 8: EMEA Second-Quarter Results
EMEA SECOND-QUARTER RESULTS ▪ Exited Turkey sales operations/Hotpoint small appliances; announced sale of South Africa operations* ▪ Unit volume growth in remaining business of ~3%, with share gains in most countries ▪ Excluding currency, total region net sales were approximately flat ▪ Fixed-cost re
Slide 9: Latin America Second-Quarter Results
LATIN AMERICA SECOND-QUARTER RESULTS ▪ Excluding currency, net sales increased ~10% driven by both industry growth and share gains in Brazil ▪ Positive price/mix more than offset currency and cost inflation ▪ Prior-year EBIT negatively impacted by Brazil trucker strike (-$20M), partially offset by ta
Slide 10: Asia Second-Quarter Results
ASIA SECOND-QUARTER RESULTS ▪ Sales excluding currency ~5%; strong India results driven by double-digit revenue and EBIT growth ▪ China performance impacted by continued industry weakness and increased brand investments ▪ Discrete items positively impacted prior-year EBIT by ~$15M Whirlpool Corporat
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 - Confidential Second-Quarter 2019 Earnings Review 11
Slide 12: 2019 Guidance Revised Upward
2019 GUIDANCE REVISED UPWARD Profitable Growth Margin Expansion Cash Conversion Long-Term ~3% ~10% 6%+ Goals Annual Organic Net Sales Growth Ongoing Earnings Before Interest Free Cash Flow as % of Net Sales Excluding Currency and Tax, % of Net Sales YoY Ongoing YoY Free FCF as % Net Sales Change EBIT
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 +1.50 +1.75 • Previously announced U.S. kitchen and Brazil pricing effective Q1 2019 Net Cost (excluding Raw Mat
Slide 14: 2019 Regional Guidance
2019 REGIONAL GUIDANCE Industry EBIT % Previous Current Previous Current North (2) – 0% (2) – 0% ~12%+ ~12%+ America Europe, Middle (1) – 1% (1) – 1% 0 – 1% ~0% East & Africa Latin ~5% ~5% 6%+ 6%+ America Asia 1 – 2% 1 – 2% 5 – 6% ~3% Total ~Flat* ~Flat* 6.5 – 6.8% ~6.8% *Weighted average Whirlpool
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 • Increased $25M from first-quarter estimates Capital Expenditures $(590) $(625) • Continued innovation funding Working Capi
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 • Continue to be opportunistic Re
Slide 17: Q&A and Closing Remarks
Q&A AND CLOSING REMARKS Whirlpool Corporation - Confidential Second-Quarter 2019 Earnings Review 17
Slide 18: Summary of Key Messages
SUMMARY OF KEY MESSAGES ▪ Raising full-year ongoing EPS guidance significantly to $14.75 to $15.50 (versus prior $14.00 to $15.00) ▪ North America continues to deliver solid revenue growth and EBIT margin expansion ▪ Continue to execute strong actions in EMEA to restore profitability ▪ Completed sale
Slide 19: Whirlpool Corporation - Confidential
Whirlpool Corporation - Confidential
Slide 20: Appendix
APPENDIX Whirlpool Corporation - Confidential Second-Quarter 2019 Earnings Review 20
Slide 21: 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 64.4M* Cash Flow Statement FY2018A
Slide 22: Revenue Reconciliation
REVENUE RECONCILIATION (Approximate impact in billions) 2018 2019F Change Comments Net Sales $21.0B $20.6B ~(3)% Less: Embraco Net Sales $(1.2) $(0.6) • 2019 guidance includes 6 months of net sales (Jan-June) • Exit of Turkish domestic sales operations, Hotpoint branded Less: EMEA Business Exits $(0
Slide 23: 2019 Ongoing EPS Drivers with Q2 Updates
2019 ONGOING EPS DRIVERS WITH Q2 UPDATES Whirlpool Corporation - Confidential Second-Quarter 2019 Earnings Review 23
Slide 24: Interest and Sundry (Income) Expense
INTEREST AND SUNDRY (INCOME) EXPENSE Q2 YTD (Approximate impact in millions) 2018 2019 2018 2019 Comments As Reported $90 $(63) $82 $(193) • French Competition Authority (FCA) FCA Expense $(114) $0 $(114) $0 settlement Brazil Indirect Tax Credit $0 $53 $0 $180 • Recovery of certain taxes (ICMS) • Ad
Slide 25: 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 26: 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 27: 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, ongoing segment EBIT, ongoing