Slide 1: Third-Quarter Earnings Review
Third-Quarter Second-Quarter2018 2018 Earnings Earnings Review Review 2018 | Whirlpool Corporation Third-Quarter Earnings Review
Slide 2: Global Overview
GLOBAL OVERVIEW Marc Bitzer President and Chief Executive Officer 2018 | Whirlpool Corporation Third-Quarter Earnings Review 2
Slide 3: 2018 Third-Quarter Highlights
2018 THIRD-QUARTER HIGHLIGHTS ▪ All-time record ongoing EPS of $4.55 and EBIT margin expansion in 3 of 4 regions ▪ Very strong price/mix improvement; positive in all regions ▪ North America delivered strong revenue and share growth with ongoing EBIT margin expansion to 12% ▪ Announced new strategic
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 Q3 2018 $5.3B (2)% 6.2% (0
Slide 5: Q3 2018 Ongoing EBIT Margin Drivers
Q3 2018 ONGOING EBIT MARGIN(1) DRIVERS (Approximate impact) Q3 2017 Ongoing EBIT Margin 6.6% Price / Mix +2.50 Net Cost (excluding Raw Material/Tariff Inflation)* +0.25 Raw Material/Tariff Inflation -1.75 Marketing & Technology Investments -0.75 Currency -0.50 2018 Ongoing EBIT Margin 6.2% *Inclusiv
Slide 6: Key Performance Driver: Product Price/Mix
KEY PERFORMANCE DRIVER: PRODUCT PRICE/MIX Region Q3 2018 Q3 2018 Drivers Total Company +2.5% • Benefits of price/mix actions North America Up • Launch of Whirlpool brand connected kitchen products EMEA Up • Benefits of price/mix actions across the region Latin America Up • Benefits of price/mix acti
Slide 7: Regional Overview
REGIONAL OVERVIEW Jim Peters Executive Vice President and Chief Financial Officer 2018 | Whirlpool Corporation Third-Quarter Earnings Review 7
Slide 8: North America Third-Quarter Results
NORTH AMERICA THIRD-QUARTER RESULTS Net Sales ($B) Ongoing EBIT(3) ($M) Ongoing EBIT Margin(3) +5% +7% +0.2pts $2.9 $3.0 $336 $360 11.8% 12.0% Q3 2017 Q3 2018 Q3 2017 Q3 2018 Q3 2017 Q3 2018 ▪ Strong top line growth driven by positive price/mix and share gains, despite soft industry demand ▪ Record
Slide 9: Launch of Innovative New Products Across North America
LAUNCH OF INNOVATIVE NEW PRODUCTS ACROSS NORTH AMERICA New Connected Kitchen New Connected Front Load New Connected Top Load • Integrated with Yummly Guided • Includes connected, All-in-One • New consumer-relevant innovation Cooking and Voice-Enabled devices Washer/Dryer and aesthetics across mass a
Slide 10: EMEA Third-Quarter Results
EMEA THIRD-QUARTER RESULTS Net Sales ($B) EBIT(3) ($M) EBIT Margin(3) -11% nm -3.2pts $1.3 $1.1 -$2 -0.2% -$39 -3.4% Q3 2017 Q3 2018 Q3 2017 Q3 2018 Q3 2017 Q3 2018 ▪ Volume declines lessened in the quarter, but continued to negatively impact productivity ▪ Continued raw material inflation unfavorab
Slide 11: Actions to Refocus EMEA Business
ACTIONS TO REFOCUS EMEA BUSINESS Major Appliance Business Stabilize Volumes While Sustaining Price/Mix Unit Volume Change vs 2017 • Restore trade relationships and recover lost flooring H1 Q3 Q3 Q4 Est. • Refocus marketplace investments to most profitable segments -8% -12% • Realize benefits from ne
Slide 12: Latin America Third-Quarter Results
LATIN AMERICA THIRD-QUARTER RESULTS Net Sales ($M) Ongoing EBIT(3) ($M) Ongoing EBIT Margin(3) -9% +11% +1.3pts $966 $61 7.0% $878 $55 5.7% Q3 2017 Q3 2018 Q3 2017 Q3 2018 Q3 2017 Q3 2018 ▪ Strong improvement in home appliance EBIT margin ▪ Solid share gains and ex-currency revenue growth of ~2% ▪ P
Slide 13: Asia Third-Quarter Results
ASIA THIRD-QUARTER RESULTS Net Sales ($M) EBIT(3) ($M) EBIT Margin(3) -9% +46% +1.4pts $373 $13 3.8% $339 $9 2.4% Q3 2017 Q3 2018 Q3 2017 Q3 2018 Q3 2017 Q3 2018 ▪ Strong EBIT improvement in China, despite weak industry demand ▪ Solid margin performance in India tempered by short-term industry deman
Slide 14: 2018 Guidance
2018 GUIDANCE Marc Bitzer Jim Peters President and Executive Vice President Chief Executive Officer and Chief Financial Officer 2018 | Whirlpool Corporation Third-Quarter Earnings Review 14
Slide 15: 2018 Guidance Overview
2018 GUIDANCE OVERVIEW 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 FY 2018 ~$21.2B Flat ~6.4% Flat ~$6
Slide 16: 2018 Ongoing EBIT Margin Guidance Progression
2018 ONGOING EBIT MARGIN(1) GUIDANCE PROGRESSION (Approximate impact) Current Previous Comments 2017 Ongoing EBIT Margin 6.4% 6.4% Price / Mix +2.0 +2.0 • Global price/mix actions on-track • Fixed cost reduction fully-implemented and on-track Net Cost (excluding Raw Material/Tariff Inflation)* +0.75
Slide 17: 2018 Regional Guidance
2018 REGIONAL GUIDANCE NAR Current Previous EMEA Current Previous Ongoing EBIT%(3) (2) – (3)% ~(1)% ~12% Unchanged EBIT%(3) Industry 1 – 2% Unchanged Industry ~1% 1 – 2% ASIA Current Previous EBIT%(3) ~5% Unchanged LAR Current Previous Industry 2 – 4% Unchanged Ongoing ~6% Unchanged EBIT%(3) Industr
Slide 18: 2018 Free Cash Flow Drivers
2018 FREE CASH FLOW(2) DRIVERS (Approximate impact) Current Previous Comments 2017 Free Cash Flow $707M $707M • Continued business weakness in EMEA Cash Earnings ~$50M ~$150M • Raw material/tariff and freight headwinds Working Capital ~$125M ~$125M • Significant inventory reduction in NAR and EMEA •
Slide 19: 2018 Capital Allocation Strategy
2018 CAPITAL ALLOCATION STRATEGY Fund the Business Target Status • On-track Capex: ~3.5% of net sales Capex / R&D R&D: ~3% of net sales • On-track Explore value-creating • Embraco sale, expected closing 2019 Mergers & Acquisitions M&A to accelerate strategy • Continue to be opportunistic Return
Slide 20: Current Planning Assumptions for 2019
CURRENT PLANNING ASSUMPTIONS FOR 2019 Guidance Component Expectations • Modest global industry growth of 0-2% Industry Growth • U.S. Industry growth of approximately 1% • Sustained (but not increasing) raw material/tariff inflation headwinds of Cost Inflation approximately $300M • Previously-announc
Slide 21: Q&A and Closing Remarks
Q&A AND CLOSING REMARKS 2018 | Whirlpool Corporation Third-Quarter Earnings Review 21
Slide 22: 2018 | Whirlpool Corporation Third-Quarter Earnings Review
2018 | Whirlpool Corporation Third-Quarter Earnings Review 22
Slide 23: Appendix
APPENDIX 2018 | Whirlpool Corporation Third-Quarter Earnings Review 23
Slide 24: 2018 Guidance Components
2018 GUIDANCE COMPONENTS (APPROXIMATE IMPACT) Income Statement FY2018E FY2017A Raw Material Inflation $(350)M $(350)M Restructuring Expense $250M $275M Interest Expense $190M $162M Adjusted Tax Rate ~10.5% 14.7% Weighted-Average Diluted Shares Outstanding 68.1M* 74.4M Cash Flow Statement FY2018E FY2
Slide 25: 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 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 net sales, ongoing earnings per diluted share, earnings before interest and taxes (EBIT), EBIT margin, ongoing EBIT, ongoing EBIT margin, ongoing seg