Slide 1: First-Quarter 2019 Earnings Review
First-Quarter 2019 Earnings Review Tuesday, April 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 First-Quarter 2019 Earnings Review 2
Slide 3: 2019 First-Quarter Highlights
2019 FIRST-QUARTER HIGHLIGHTS ▪ Record first-quarter ongoing EPS(1) of $3.11 ▪ Revenue impacted by industry weakness and unfavorable currency ▪ Solid margin expansion of 30 bps driven by price/mix progress and fixed cost discipline ▪ Very strong margin expansion in North America, despite weak industry
Slide 4: Progress Toward Long-Term Goals
PROGRESS TOWARD LONG-TERM GOALS Profitable Growth Margin Expansion Cash Conversion Long-Term Goals 3-5% 10% 5-6% Annual Organic Net Sales Growth EBIT Margin FCF as % of Net Sales YoY Ongoing YoY Free FCF as % Net Sales Change EBIT Margin(1) Change Cash Flow(2) of Net Sales Q1 2019 $4.8B (3)% 6.3% ~0.
Slide 5: Q1 2019 Ongoing EBIT Margin Drivers
Q1 2019 ONGOING EBIT MARGIN(1) DRIVERS (Approximate impact) Q1 2018 Ongoing EBIT Margin 6.0% Price / Mix 3.00 Net Cost (excluding Raw Material/Tariff Inflation)* -0.50 Raw Material/Tariff Inflation -1.50 Marketing & Technology Investments -0.25 Currency -0.50 2019 Ongoing EBIT Margin 6.3% *Inclusive o
Slide 6: Regional Overview
REGIONAL OVERVIEW Jim Peters Executive Vice President and Chief Financial Officer 6 Whirlpool Corporation - Confidential First-Quarter 2019 Earnings Review 6
Slide 7: North America First-Quarter Results
NORTH AMERICA FIRST-QUARTER RESULTS ▪ Very strong EBIT growth despite a ~7% decline in U.S. industry ▪ Positive price/mix more than offset industry weakness and continued cost inflation ▪ Cost inflation includes ~$25M in raw material/tariffs and ~$10M in freight Whirlpool Corporation - Confidential Fir
Slide 8: EMEA First-Quarter Results
EMEA FIRST-QUARTER RESULTS ▪ Unit volume growth of ~5%, in-line with expectations (revenue up ~2% ex-currency) ▪ Improvement actions on track; Turkey operations and Hotpoint small appliance exits complete by Q2 ▪ Inventory liquidation in Turkey unfavorably impacted EBIT by ~$6M Whirlpool Corporation
Slide 9: Latin America First-Quarter Results
LATIN AMERICA FIRST-QUARTER RESULTS ▪ Revenue growth of ~7% ex-currency despite Mexico industry demand weakness ▪ Positive price/mix more than offset currency of ~$10M ▪ Prior-year favorably impacted by ~$22M due to the monetization of certain tax credits Whirlpool Corporation - Confidential First-Qu
Slide 10: Asia First-Quarter Results
ASIA FIRST-QUARTER RESULTS ▪ Strong India performance with solid ex-currency revenue growth and continued share gains ▪ China underperformance driven by significant industry demand weakness and increased brand transition investments Whirlpool Corporation - Confidential First-Quarter 2019 Earnings Revi
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 First-Quarter 2019 Earnings Review 11
Slide 12: 2019 Guidance Remains Unchanged
2019 GUIDANCE REMAINS UNCHANGED Profitable Growth Margin Expansion Cash Conversion Long-Term 3-5% Revenue Growth and Cash Conversion In-Line with Long-Term Goals; Margin Goals 10% 5-6% Annual Organic Net Sales Growth EBIT Margin FCF as % of Net Sales Expansion Behind Actions in Place to Improve YoY O
Slide 13: 2019 Ongoing EBIT Margin Guidance Progression
2019 ONGOING EBIT MARGIN(1) GUIDANCE PROGRESSION (Approximate impact) Current Previous Comments 2018 Ongoing EBIT Margin 6.3% 6.3% • Carryover effect of 2018 price/mix actions Price / Mix +1.50 +1.50 • Previously announced U.S. kitchen and Brazil pricing effective Q1 2019 • Revised expectations driv
Slide 14: 2019 Regional Guidance
2019 REGIONAL GUIDANCE NAR Previous Current EMEA Previous Current EBIT%(3) ~12%+ ✓ EBIT%(3) 0 – 1% ✓ Industry 0 – 1% (2) – 0% Industry (1) – 1% ✓ Asia Previous Current LAR Previous Current (3) EBIT%(3) 5 – 6% ✓ EBIT% 6%+ ✓ Industry 1 – 2% ✓ Industry ~5% ✓ Whirlpool Corporation - Confidential First-Qu
Slide 15: 2019 Free Cash Flow Drivers Are Unchanged
2019 FREE CASH FLOW(2) DRIVERS ARE UNCHANGED (Approximate impact in millions) 2018 2019F Comments Cash Earnings / Other Operating $1,450 $1,475 • Margin expansion partially offset by sale of Embraco Capital Expenditures $(590) $(625) • Continued innovation funding Working Capital Improvement $355 $2
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 Explore value-creating M&A to • Close on Embraco sale in Q2 2019 Mergers & Acquisitions accelerate strategy • Continue to be opportunis
Slide 17: Q&A and Closing Remarks
Q&A AND CLOSING REMARKS Whirlpool Corporation - Confidential First-Quarter 2019 Earnings Review 17
Slide 18: Summary of Key Messages
SUMMARY OF KEY MESSAGES ▪ Record first-quarter ongoing EPS(1) and solid margin expansion ▪ Successful execution of cost-based price increases continues to drive positive price/mix ▪ North America on track to deliver strong margin expansion, despite weaker industry ▪ Continued execution of strong acti
Slide 19: Whirlpool Corporation - Confidential
Whirlpool Corporation - Confidential
Slide 20: Appendix
APPENDIX Whirlpool Corporation - Confidential First-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 $(200)-(250)M Restructuring Costs $247M $100M Interest Expense $192M $210M Adjusted Tax Rate 6.6% 15-20% Weighted-Average Diluted Shares Outstanding 67.2M 64.4M* Cash Flow Statement FY
Slide 22: 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) • ~$50M paid in Q1 2019 and the remainder in Q2 U.S. Pension Pre-Funding $(350) $0 $350 • Opportunistic pension pre-funding in Q3 2
Slide 23: Revenue Reconciliation
REVENUE RECONCILIATION (Approximate impact in billions) 2018 2019F Change Comments Net Sales $21.0B $20.3B ~(3)% Less: Embraco Net Sales $(1.2) $(0.3) • 2019 guidance includes ~4 months of net sales • Exit of Turkish domestic sales operations, Hotpoint branded Less: EMEA Business Exits $(0.2) $(0.1)
Slide 24: 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 25: 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 net sales, ongoing earnings per diluted share, earnings before interest and taxes (EBIT), EBIT margin, ongoing EBIT, ongoing EBIT margin, ongoing seg