Slide 1: Fourth-Quarter 2019 Earnings Review
Fourth-Quarter 2019 Earnings Review Tuesday, January 28, 2020 1
Slide 2: Global Overview
GLOBAL OVERVIEW Marc Bitzer Chairman and Chief Executive Officer 2 Whirlpool Corporation Fourth-Quarter 2019 Earnings Review 2
Slide 3: 2019 Fourth-Quarter Highlights
2019 FOURTH-QUARTER HIGHLIGHTS Profitable Growth Net Sales YoY ▪ Significant ongoing EBIT(1) Margin expansion of 100 bps to 7.2% Change $5.4B (4.9)% (+1.2% organic(4)) ▪ All regions profitable, with North America delivering record EBIT(3) margins of 13.3% Margin Expansion Ongoing YoY EBIT Margin(1) Cha
Slide 4: 2019 Full-Year Highlights
2019 FULL-YEAR HIGHLIGHTS Profitable Growth Delivered very strong results which exceeded previous guidance YoY ▪ Ongoing EPS(1) of $16.00 Net Sales Change ▪ Ongoing EBIT(1) margin expansion of 60 bps $20.4B (2.9)% (+1.6% organic(4)) ▪ Free Cash Flow of $912M Margin Expansion We took decisive actions
Slide 5: Strong Margin Expansion in 2019
STRONG MARGIN EXPANSION IN 2019 (Approximate impact) Q4 FY 2018 Ongoing EBIT Margin 6.2% 6.3% Price / Mix +1.00 +2.00 Net Cost (excluding Raw Material/Tariff Inflation)* +0.75 - Raw Material/Tariff Inflation +0.25 -0.50 Marketing & Technology Investments -0.50 -0.50 Currency -0.50 -0.25 2019 Ongoing E
Slide 6: Regional Overview
REGIONAL OVERVIEW Jim Peters Executive Vice President and Chief Financial Officer 6 Whirlpool Corporation Fourth-Quarter 2019 Earnings Review 6
Slide 7: North America Fourth-Quarter Results
NORTH AMERICA FOURTH-QUARTER RESULTS ▪ Stable revenue despite continued industry demand softness ▪ Record EBIT performance driven through strong price/mix and cost productivity ▪ 9th consecutive quarter of margin expansion Note: 2018 represents Ongoing EBIT(3) Whirlpool Corporation Fourth-Quarter 20
Slide 8: EMEA Fourth-Quarter Results
EMEA FOURTH-QUARTER RESULTS ▪ Excluding business exits, unit volumes were approximately flat with growth in key countries ▪ Positive EBIT driven by cost reduction actions and strategic initiatives ▪ $75M full-year EBIT improvement vs prior-year Whirlpool Corporation Fourth-Quarter 2019 Earnings Revie
Slide 9: Latin America Fourth-Quarter Results
LATIN AMERICA FOURTH-QUARTER RESULTS ▪ Brazil demand recovery offset by industry weakness in Mexico ▪ Organic net sales(4) growth of approximately 17%, driven by Brazil share gains and increased D2C sales ▪ EBIT margin impacted by currency devaluation in Brazil and Argentina Note: 2018 represents On
Slide 10: Asia Fourth-Quarter Results
ASIA FOURTH-QUARTER RESULTS ▪ Strong India results driven by revenue and EBIT growth ▪ China results impacted by soft industry demand and brand transition investments ▪ Whirlpool brand transition in China on track Whirlpool Corporation Fourth-Quarter 2019 Earnings Review 10
Slide 11: 2020 Outlook
2020 OUTLOOK Updated Picture TBD Marc Bitzer Jim Peters Chairman and Executive Vice President Chief Executive Officer and Chief Financial Officer Whirlpool Corporation Fourth-Quarter 2019 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 YoY Ongoing YoY Free FCF as % Net Sales Change EBIT Margin(1) Change Cash Fl
Slide 13: 2020 EBIT Margin Guidance Progression
2020 EBIT MARGIN(1) GUIDANCE PROGRESSION (Approximate impact) Current Comments 2019 Ongoing EBIT Margin 6.9% • Carryover effect of 2019 price/mix actions Price / Mix +0.25 • Innovative product launches driving price/mix actions • Fixed and ongoing cost reduction including global Net Cost (excluding
Slide 14: North America Product Leadership
NORTH AMERICA PRODUCT LEADERSHIP PREMIUM TOP LOAD LAUNDRY ● Replaces entire premium Top Load laundry ● Deliver Load and Go™ bulk dispense and WiFi connectable units ● Expect to drive positive price/mix in the laundry category Driving Product Leadership In Connected Appliances Whirlpool Corporation F
Slide 15: Global Product Leadership
GLOBAL PRODUCT LEADERSHIP DISHWASHER ARCHITECTURE CONSOLIDATION ● Introduces true global architecture across all regions ● Deliver full-size third rack with full functioning spray arm ● Expect major growth in mass and premium segments Delivering Consumer Relevant Innovation While Reducing Complexity
Slide 16: 2020 Ongoing EPS Drivers
2020 ONGOING EPS(1) DRIVERS *Includes the unfavorable impact of the Embraco sale of ~$0.60 Whirlpool Corporation Fourth-Quarter 2019 Earnings Review 16
Slide 17: 2020 Regional Guidance
2020 REGIONAL GUIDANCE Industry EBIT % North (1)– 1% ~13% America Europe, Middle 1 – 2% 1.0 –1.5% East & Africa Latin 3 – 4% ~6% America Asia (1)– 1% 3 – 4% Total ~Flat ~7.5% Whirlpool Corporation Fourth-Quarter 2019 Earnings Review 17
Slide 18: 2020 Free Cash Flow
2020 FREE CASH FLOW(2) (Approximate impact in millions) 2019 2020F Comments Cash Earnings / Other Operating $1,540 $1,690 • Margin expansion partially offset by sale of Embraco Capital Expenditures $(532) $(550) • Continue funding innovation and digital transformation Working Capital Improvement $14
Slide 19: 2020 Capital Allocation Strategy
2020 CAPITAL ALLOCATION STRATEGY Fund the Business Target Status Capex: ~3% of net sales • On-track Capex/R&D R&D: ~3% of net sales • On-track Opportunistic M&A with high • Continue to be opportunistic Mergers & Acquisitions ROIC threshold Return to Shareholders Target Status ~30% of trailing Divide
Slide 20: Q&A and Closing Remarks
Q&A AND CLOSING REMARKS Whirlpool Corporation Fourth-Quarter 2019 Earnings Review 20
Slide 21: Executive Summary
EXECUTIVE SUMMARY ▪ Strong momentum provides confidence in 2020 guidance and long-term goals ▪ Clear focus on operational priorities ○ Targeted cost takeout ○ Continue track record of launching innovative products ○ Restore profitability in EMEA and China ▪ Driving value through our strategic imperati
Slide 22: Whirlpool Corporation
Whirlpool Whirlpool Corporation
Slide 23: Appendix
APPENDIX Whirlpool Corporation Fourth-Quarter 2019 Earnings Review 23
Slide 24: 2020 Guidance Components (Approximate Impact)
2020 GUIDANCE COMPONENTS (APPROXIMATE IMPACT) Income Statement FY2019A FY2020E Raw Material/Tariff Inflation $(125)M $100M Restructuring Costs $188M ~$100M Interest Expense $187M ~$175M Adjusted Tax Rate 15.3% 20-25% Weighted-Average Diluted Shares Outstanding 64.2M 63.7M* Cash Flow Statement FY2019A
Slide 25: Q4 Organic Net Sales Reconciliation
Q4 ORGANIC NET SALES(4) RECONCILIATION (Approximate impact in millions) Q4 2018 Q4 2019 Change Comments Net Sales $5,660M $5,382M (4.9)% Less: Embraco Net Sales $(288) $0 • Embraco sale completed July 1, 2019 Add-Back: Currency n/a $53 • BRL and EUR Organic Net Sales $5,372M $5,435M 1.2% Whirlpool C
Slide 26: Q4 Organic Net Sales Reconciliation Latin America Region
Q4 ORGANIC NET SALES(4) RECONCILIATION LATIN AMERICA REGION (Approximate impact in millions) Q4 2018 Q4 2019 Change Comments Net Sales $990M $782M (21.0)% Less: Embraco Net Sales $(288) $0 • Embraco sale completed July 1, 2019 Add-Back: Currency n/a $37 • Primarily BRL Organic Net Sales $702M $819M
Slide 27: Full-Year Organic Net Sales Reconciliation
FULL-YEAR ORGANIC NET SALES(4) RECONCILIATION (Approximate impact in billions) 2018 2019 Change Comments Net Sales $21.0B $20.4B (2.9)% Less: Embraco Net Sales $(1.1) $(0.6) • 2019 results include 6 months of net sales (Jan-June) Add-Back: Currency n/a $0.4 • BRL, EUR and GBP Organic Net Sales $19.9
Slide 28: Embraco Compressor Business Historical Financials / Gain Calculation
EMBRACO COMPRESSOR BUSINESS HISTORICAL FINANCIALS / GAIN CALCULATION As disclosed in quarterly reports on Form 10-Q: (In USD millions) Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Net Sales $296 $285 $266 $288 $312 $323 EBIT $7 $9 $21 $17 $24 $23 ● On April 24, 2018, entered purchase agreement wi
Slide 29: Interest and Sundry (Income) Expense
INTEREST AND SUNDRY (INCOME) EXPENSE Q4 FULL-YEAR (Approximate impact in millions) 2018 2019 2018 2019 Comments Net Foreign Exchange $(8) $(10) $(9) $(35) ● Includes foreign exchange and hedge (gain)/loss Interest (Income)/Other $21 $5 $4 $(10) ● Primarily interest income Sub-Total $13 $(5) $5 $(45)
Slide 30: 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 31: 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 32: 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 Other non-GAAP financial measure