Slide 1: Third-Quarter 2020 Earnings Review
Third-Quarter 2020 Earnings Review Thursday, October 22, 2020
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT We supplement the reporting of our financial information determined under U.S. generally accepted accounting principles (GAAP) with certain non-GAAP financial measures, some of which we refer to as "ongoing" measures, including earnings before interest and taxes (EBIT), EBIT margi
Slide 3: Global Overview
GLOBAL OVERVIEW Marc Bitzer Chairman and Chief Executive Officer 3 Whirlpool Corporation Third-Quarter 2020 Earnings Review 3
Slide 4: Third-Quarter Results Highlights
THIRD-QUARTER RESULTS HIGHLIGHTS Profitable Growth ▪ Organic net sales growth of 7% driven by solid global industry demand YoY Net Sales Change ▪ Exceptional execution of early, decisive actions resulted in: $5.3B 3.9% 7.0% organic(4) ✓ Ongoing EPS(1) of $6.91 Margin Expansion ✓ Ongoing EBIT(1) margi
Slide 5: Q3 2020 Ongoing EBIT Margin Drivers
Q3 2020 ONGOING EBIT MARGIN(1) DRIVERS (Approximate impact) Q3 2019 Ongoing EBIT Margin 7.2% Price / Mix +2.75 Net Cost (excluding Raw Material/Tariff Inflation)* +2.00 Raw Material/Tariff Inflation +1.50 Marketing & Technology Investments -0.50 Currency -1.00 2020 Ongoing EBIT Margin 12.0% *Inclusive
Slide 6: Regional Overview
REGIONAL OVERVIEW Jim Peters Executive Vice President and Chief Financial Officer Whirlpool Corporation Third-Quarter 2020 Earnings Review 6
Slide 7: North America Third-Quarter Results
NORTH AMERICA THIRD-QUARTER RESULTS ▪ Revenue softness due to COVID-related supply constraints, while order backlog remains elevated ▪ Record EBIT performance driven by flawless execution of go-to-market and cost takeout initiatives ▪ Gradual supply chain improvements on-track Whirlpool Corporation T
Slide 8: EMEA Third-Quarter Results
EMEA THIRD-QUARTER RESULTS ▪ Year-over-year volume growth of 6.5% with double-digit growth in key countries ▪ Significant EBIT improvement (+$47M) as increased demand and cost actions offset currency headwinds ▪ Strategic actions continue to drive progress towards long-term goals Whirlpool Corporatio
Slide 9: Latin America Third-Quarter Results
LATIN AMERICA THIRD-QUARTER RESULTS ▪ Revenue increase due to industry growth and share gains in Brazil and Mexico ▪ EBIT growth driven by increased demand and disciplined go-to-market actions ▪ Significant EBIT margin despite currency headwinds in Brazil and Mexico Whirlpool Corporation Third-Quarte
Slide 10: Asia Third-Quarter Results
ASIA THIRD-QUARTER RESULTS ▪ Strong India performance with share gains, despite significant COVID-related disruptions ▪ Demand softness drove negative EBIT in China ▪ Whirlpool branded share growth in China on-track Whirlpool Corporation Third-Quarter 2020 Earnings Review 10
Slide 11: 2020 Guidance
2020 GUIDANCE Marc Bitzer Jim Peters Chairman and Executive Vice President Chief Executive Officer and Chief Financial Officer Whirlpool Corporation Third-Quarter 2020 Earnings Review 11
Slide 12: 2020 Guidance Overview
2020 GUIDANCE OVERVIEW 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 Net Sales Ongoing YoY Free FCF as % YoY Change EBIT Margin(1) Change Cash Fl
Slide 13: 2020 Ongoing EBIT Margin Guidance Progression
2020 ONGOING EBIT MARGIN(1) GUIDANCE PROGRESSION (Approximate impact) Current Comments 2019 Ongoing EBIT Margin 6.9% • Go-to-market actions mitigating the negative mix impact Price / Mix +0.75 from COVID-19 • Structural and discretionary cost takeout mitigating the Net Cost (excluding Raw Material/T
Slide 14: 2020 Free Cash Flow
2020 FREE CASH FLOW(2) (Approximate impact in millions) 2019 2020F Comments Cash Earnings / Other Operating $1,540 $1,650 • Driven by margin expansion Capital Expenditures $(532) $(475) • Investments in innovation and digital transformation Working Capital $14 $(40) • Sustained, low working capital
Slide 15: 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 Mergers & Acquisitions • Continue to be opportunistic ROIC threshold Return to Shareholders Target Status/Exp
Slide 16: Eight Consecutive Years of Dividend Increases
EIGHT CONSECUTIVE YEARS OF DIVIDEND INCREASES Dividends Paid Dividend Target is ~30% of Trailing 12-month Ongoing Net Earnings Whirlpool Corporation Third-Quarter 2020 Earnings Review 16
Slide 17: Executive Summary
EXECUTIVE SUMMARY ▪ Early, decisive actions coupled with exceptional execution led to record Q3 results ▪ Cost takeout program fully on-track ▪ Well-positioned to capture structural growth related to positive housing and consumer ‘nesting’ trends ▪ Reinstated very strong guidance for full-year 2020
Slide 18: Q&A and Closing Remarks
Q&A AND CLOSING REMARKS Whirlpool Corporation Third-Quarter 2020 Earnings Review 18
Slide 19: Whirlpool Corporation
Whirlpool Whirlpool Corporation
Slide 20: Appendix
APPENDIX Whirlpool Corporation Third-Quarter 2020 Earnings Review 20
Slide 21: Key Assumptions - Guidance
KEY ASSUMPTIONS - GUIDANCE Income Statement FY2019A FY2020E Raw Material/Tariff Inflation $(125)M ~$150M+ Restructuring Costs $188M ~$300M Interest Expense $187M ~$195M Adjusted Tax Rate 15.3% 23-25% Weighted-Average Diluted Shares Outstanding 64.2M 63.3M* Cash Flow Statement FY2019A FY2020E Capital
Slide 22: Interest and Sundry (Income) Expense
INTEREST AND SUNDRY (INCOME) EXPENSE Q3 (Approximate impact in millions) 2019 2020 Comments ● Includes foreign exchange and hedge Net Foreign Exchange $(12) $(7) (gain)/loss Interest (Income)/Other $(17) $(15) ● Primarily interest income Sub-Total $(29) $(22) One-Time Items: $- $- Divestiture relate
Slide 23: Free Cash Flow One-Time Items
FREE CASH FLOW(2) ONE-TIME ITEMS (Approximate impact in millions) 2019 2020 Impact Comments • French Competition Authority (FCA) settlement FCA Payment $(100) - $100 • Final payment made in Q2 2019 • Cash payment related to settlement of trade customer Claim Settlement - $(60) $(60) insolvency claim
Slide 24: Q3 Organic Net Sales Reconciliation
Q3 ORGANIC NET SALES(4) RECONCILIATION (Approximate impact in millions) Q3 2019 Q3 2020 Change Comments Net Sales $5,091 $5,291 3.9% Less: Embraco Net Sales n/a n/a • Embraco sale completed July 1, 2019 Add-Back: Currency n/a $157 • Primarily BRL and ARS Organic Net Sales $5,091 $5,448 7.0% Whirlpoo
Slide 25: FY Organic Net Sales Reconciliation
FY ORGANIC NET SALES(4) RECONCILIATION 2019 Comments GAAP Net Sales (% decline) 5% - 7% Less: Embraco Net Sales ~(3)% • 2019 results include 6 months of net sales (Jan-June) Add-Back: Currency ~(3)% • Primarily BRL and ARS Organic Net Sales (% decline) 0% - 1% Whirlpool Corporation Third-Quarter 202
Slide 26: 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, and ongoing EBIT margin Other non-GAAP financial mea