Slide 1: 2016 Second-Quarter Earnings Review
2016 SECOND-QUARTER EARNINGS REVIEW JULY 22, 2016 0 SECOND-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 per diluted share, ongoing business EBIT, ong
Slide 4: Overview
OVERVIEW Jeff M. Fettig Chairman and Chief Executive Officer 3 SECOND-QUARTER EARNINGS PRESENTATION 2016 | WHIRLPOOL CORPORATION
Slide 5: 2016 Second-Quarter Highlights
2016 SECOND-QUARTER HIGHLIGHTS • Strong ex-currency revenue growth and record earnings performance • Integration plans firmly on track: delivering cost synergies • Operational execution more than offset currency challenges and global volatility • Adjusting full-year guidance to $14.25 - $14.75 after
Slide 6: 2016 Second-Quarter Results
2016 SECOND-QUARTER RESULTS Net Sales Ongoing Diluted EPS Free Cash Net Sales (Excluding Business (GAAP) Flow(2) Currency) Diluted EPS(1) 2016 $5.2B $5.3B $4.15 $3.50 $(547)M 2015 $5.2B $5.2B $2.21 $2.70 $(619)M $(0.0)B $0.1B $1.94 $0.80 $72M Change $(0)% $3% $88% $30% STRONG EXECUTION LED TO 30% ON
Slide 7: 2016 Financial Guidance
2016 FINANCIAL GUIDANCE GAAP Diluted EPS $11.50–$12.00 Ongoing Business Diluted EPS(1) $14.25–$14.75 Free Cash Flow(2) $700–$800 million RAISING GUIDANCE FOLLOWING STRONG FIRST-HALF EXECUTION 6 SECOND-QUARTER EARNINGS PRESENTATION 2016 | WHIRLPOOL CORPORATION
Slide 8: 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 9: 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% increase in quarterly dividend in 2016 Share Repurchase
Slide 10: Regional Operations Overview
REGIONAL OPERATIONS OVERVIEW Marc Bitzer President and Chief Operating Officer 9 SECOND-QUARTER EARNINGS PRESENTATION 2016 | WHIRLPOOL CORPORATION
Slide 11: North America Second-Quarter Results
NORTH AMERICA SECOND-QUARTER RESULTS SECOND QUARTER BETTER/(WORSE) (USD in millions) 2016 2015 2015 % Net Sales $ 2,760 $ 2,687 $ 73 3% Operating Profit (GAAP) $ 340 $ 287 $ 53 19% Operating Margin (GAAP) 12.3% 10.7% 1.6 pts Ongoing Business Operating Profit(1) $ 340 $ 290 $ 50 17% Ongoing Business
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 New Whirlpool® French-Door Bottom Mount Refrigerator AWARD WINNING INNOVATION Keeping foods organized, visible and ready to eat STORERIGHT™ SYSTEM DUAL COOLING Allows fresh and frozen foods to be maintained at perfect temperatures PANTRY-INSPIRED LAYOUT Expansive lay
Slide 14: EMEA Second-Quarter Results
EMEA SECOND-QUARTER RESULTS SECOND QUARTER BETTER/(WORSE) (USD in millions) 2016 2015 2015 % Net Sales $ 1,296 $ 1,334 $ (38) (3)% Operating Profit (GAAP) $ 46 $ 51 $ (5) (9)% Operating Margin (GAAP) 3.5% 3.8% (0.3) pts Ongoing Business Operating Profit(1) $ 60 $ 56 $ 4 7% Ongoing Business Operating
Slide 15: Europe Performance and Actions
EUROPE PERFORMANCE AND ACTIONS First-half Performance Drivers Second-half Actions ❶ Integration on track: fully expect to Deliver 2016 planned synergies deliver synergy targets evenly in Q3/Q4 ❷ Negative currency impact in the Execute previously announced U.K. and Russia cost based price increases ❸
Slide 16: 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 Realize benefits of previously announced cost-based price increases to offset currency impact Factors Impacting Oper
Slide 17: EMEA Product Leadership
EMEA PRODUCT LEADERSHIP New Built-in Kitchen Suite AWARD WINNING DESIGN GLASS AND STEEL IN HARMONY TECHNOLOGY FOR BEST RESULTS Built-in oven won prestigious High quality materials throughout Integrated heat distribution and award for contemporary aesthetic entire kitchen built-in suite master chef r
Slide 18: Latin America Second-Quarter Results
LATIN AMERICA SECOND-QUARTER RESULTS SECOND QUARTER BETTER/(WORSE) (USD in millions) 2016 2015 2015 % Net Sales $ 826 $ 854 $ (28) (3)% Operating Profit $ 50 $ 36 $ 14 40% Operating Margin 6.1% 4.2% 1.9 pts DRIVERS + Price / mix − Currency impact + Benefit of cost and capacity reductions − Brazil de
Slide 19: Latin America 2016 Operations
LATIN AMERICA 2016 OPERATIONS Business Priorities Execute previously announced cost-based price increases Drive ongoing cost productivity / leverage right-size fixed cost structure Continued acceleration of new product innovation Factors Impacting Operating Margins + Ongoing cost productivity
Slide 20: Latin America Brand Leadership
LATIN AMERICA BRAND LEADERSHIP AWARD-WINNING BRAND Recognized in a nationwide study as Brazil’s most engaging and preferred consumer appliance brand BRASTEMP BRAND: INSPIRATIONAL PERFORMANCE AND SUPERIOR DESIGN FOR SIX DECADES 19 SECOND-QUARTER EARNINGS PRESENTATION 2016 | WHIRLPOOL CORPORATION
Slide 21: Asia Second-Quarter Results
ASIA SECOND-QUARTER RESULTS SECOND QUARTER BETTER/(WORSE) (USD in millions) 2016 2015 2015 % Net Sales $ 363 $ 381 $ (18) (5)% Operating Profit (GAAP) $ 16 $ 27 $ (11) (41)% Operating Margin (GAAP) 4.4% 7.1% (2.7) pts Ongoing Business Operating Profit(1) $ 29 $ 31 $ (2) (6)% Ongoing Business Operati
Slide 22: Asia 2016 Operations
ASIA 2016 OPERATIONS Business Priorities Continue to drive 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 + Distribution g
Slide 23: Asia Product Leadership
ASIA PRODUCT LEADERSHIP New Front-Load Whirlpool Washer ADVANCED PERFORMANCE Professional stain removal performance with low vibration and low noise for a peaceful environment MODERN STYLE DESIGN Industry-leading door width for easy loading and unloading of large items REMOVES COMPLEXITY Auto deterg
Slide 24: 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% 12 – 12.5% 4.5% 5.5 – 6% Latin America Ongoing Operating Margin Asia Ongoing Operating Margin 16% 2015A 2016 Guidance 7% 2015A 201
Slide 25: Financial Review
FINANCIAL REVIEW Larry Venturelli Executive Vice President and Chief Financial Officer 24 SECOND-QUARTER EARNINGS PRESENTATION 2016 | WHIRLPOOL CORPORATION
Slide 26: Second-Quarter Key Financial Metrics
SECOND-QUARTER KEY FINANCIAL METRICS SECOND QUARTER BETTER/(WORSE) (USD in millions) 2016 2015 2015 % Net Sales $ 5,198 $ 5,208 $ (10) (0)% Gross Margin 18.6% 17.4% 1.2 pts SG&A % 10.4% 10.7% 0.3 pts Restructuring $ 40 $ 58 $ 18 31% Ongoing Business Operating Margin(1) 8.4% 6.8% 1.6 pts Interest & S
Slide 27: Currency Trends
CURRENCY TRENDS Q2 Changes in Major Currencies Compared to Q1 2016 BRL GBP EUR CAD MXN WHR Basket • Guidance assumes $(2.00) EPS impact and basket of currencies remains within range • Previously announced cost-based price increases in place to offset currency impacts • Ongoing hedging programs to re
Slide 28: 2016 Acquisition / Restructuring Update
2016 ACQUISITION / RESTRUCTURING UPDATE $200M*(-$50M) $200M*(+$25M) $120M $87M YTD FY 2016 YTD FY 2016 Expenses Benefits * Of the $200M expense, cash impact up to $200M INTEGRATION ON TRACK: INCREASED BENEFITS IN 2016 27 SECOND-QUARTER EARNINGS PRESENTATION 2016 | WHIRLPOOL CORPORATION
Slide 29: 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 0–½ Cost and Capacity Reductions 1 Ongoing Cost Productivity 1½–2 Marketing, Technology and Product (½) Investments Currency (1) 2016 Ongoing Business EBI
Slide 30: Second-Half Timing of Earnings
SECOND-HALF TIMING OF EARNINGS Q3 Q4 Volume Seasonality Cost Productivity Currency Cost and Capacity Reductions Price / Mix 29 SECOND-QUARTER EARNINGS PRESENTATION 2016 | WHIRLPOOL CORPORATION
Slide 31: Free Cash Flow Detail
FREE CASH FLOW DETAIL (USD in Millions) YTD FY Estimate Free Cash Flow(2) $(547) $700 - $800 Inclusive of one-time items: Restructuring cash outlays $(64) $(200) EMEA legacy product warranty $(83) $(155) Capital Allocation YTD Capital Expenditures $206 Dividends Paid $145 Share Repurchases $325 PLAN
Slide 32: 2016 Financial Guidance
2016 FINANCIAL GUIDANCE GAAP Diluted EPS $11.50–$12.00 Ongoing Business Diluted EPS(1) $14.25–$14.75 Free Cash Flow(2) $700–$800 million RAISING GUIDANCE FOLLOWING STRONG FIRST-HALF EXECUTION 31 SECOND-QUARTER EARNINGS PRESENTATION 2016 | WHIRLPOOL CORPORATION
Slide 33: Closing Remarks
CLOSING REMARKS 32 SECOND-QUARTER EARNINGS PRESENTATION 2016 | WHIRLPOOL CORPORATION
Slide 34: 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 35: 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 36: Appendix
APPENDIX 35 SECOND-QUARTER EARNINGS PRESENTATION 2016 | WHIRLPOOL CORPORATION
Slide 37: Index of Supporting Data
INDEX OF SUPPORTING DATA Slide # Slide Title & Description Source 34 Achieving The Vision •Based on 2015 data 36 SECOND-QUARTER EARNINGS PRESENTATION 2016 | WHIRLPOOL CORPORATION
Slide 38: 37 SECOND-QUARTER EARNINGS PRESENTATION 2016 | WHIRLPOOL CORPORATION
37 SECOND-QUARTER EARNINGS PRESENTATION 2016 | WHIRLPOOL CORPORATION