Slide 1: Second-Quarter 2020 Earnings Review
Second-Quarter 2020 Earnings Review Thursday, July 23, 2020
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT This document 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 document may include,
Slide 3: Global Overview
GLOBAL OVERVIEW Marc Bitzer Chairman and Chief Executive Officer 3 Whirlpool Corporation Second-Quarter 2020 Earnings Review 3
Slide 4: Second-Quarter Results Highlights
SECOND-QUARTER RESULTS HIGHLIGHTS Profitable Growth ▪ Very resilient overall performance despite significant COVID-19 impact YoY Net Sales Change $4.0B (22.1)% ▪ Delivered solid ongoing EPS(1) of $2.15 and ongoing EBIT margin(1) of (13.8)% organic(4) 5.2%, despite organic net sales(4) decline of 13.8%
Slide 5: Q2 2020 Ongoing EBIT Margin Drivers
Q2 2020 ONGOING EBIT MARGIN(1) DRIVERS (Approximate impact) Q2 2019 Ongoing EBIT Margin 7.0% Price / Mix -0.75 Net Cost (excluding Raw Material/Tariff Inflation)* -1.50 Raw Material/Tariff Inflation +1.00 Marketing & Technology Investments +0.25 Currency -0.75 2020 Ongoing EBIT Margin 5.2% *Inclusive
Slide 6: Regional Overview
REGIONAL OVERVIEW Jim Peters Executive Vice President and Chief Financial Officer Whirlpool Corporation Second-Quarter 2020 Earnings Review 6
Slide 7: North America Second-Quarter Results
NORTH AMERICA SECOND-QUARTER RESULTS ▪ COVID-19-related sales impact less than other regions, with early signs of recovery in June ▪ Improved EBIT margin despite COVID-19 impact, due to cost takeout and reduced marketing investments ▪ Supply constraints due to reduced production yield in U.S. factor
Slide 8: EMEA Second-Quarter Results
EMEA SECOND-QUARTER RESULTS ▪ Negative Q2 results entirely driven by April/May shutdown ▪ June sales growth and positive EBIT, driven by demand recovery and share gains ▪ Strong order pipeline extending into Q3 Whirlpool Corporation Second-Quarter 2020 Earnings Review 8
Slide 9: Latin America Second-Quarter Results
LATIN AMERICA SECOND-QUARTER RESULTS ▪ Q2 revenue decline due to Embraco divestiture, currency devaluation and COVID-19 disruptions ▪ Organic net sales decline of ~4% as share gains and increased D2C sales partially offset demand decline ▪ Positive EBIT margin as cost takeout offset COVID-19 impact
Slide 10: Asia Second-Quarter Results
ASIA SECOND-QUARTER RESULTS ▪ Q2 revenue significantly impacted by India lockdown in April/May ▪ EBIT declined as strong cost takeout was offset by significant demand weakness across the region ▪ Whirlpool branded share growth in China Whirlpool Corporation Second-Quarter 2020 Earnings Review 10
Slide 11: 2020 Perspective
2020 PERSPECTIVE Marc Bitzer Jim Peters Chairman and Executive Vice President Chief Executive Officer and Chief Financial Officer Whirlpool Corporation Second-Quarter 2020 Earnings Review 11
Slide 12: Update on Key Questions for 2020
UPDATE ON KEY QUESTIONS FOR 2020 Topic Current Perspective Status ● Continue to expect U-type recovery throughout 2020, but Shape of the uncertainty remains Recovery ● Expect organic net sales(4) decline of 7-12% (prev. 10-15%) Sustaining Operating ● Confident in our ability to sustain solid operatin
Slide 13: Regional Trends Continue to Point to a U-Shaped Demand Pattern
REGIONAL TRENDS CONTINUE TO POINT TO A U-SHAPED DEMAND PATTERN Source: Johns Hopkins Coronavirus Resource Center; Whirlpool sell-out data provided by external retailers Whirlpool Corporation Second-Quarter 2020 Earnings Review 13
Slide 14: Confident in Our Ability to Sustain Solid Operational Margins
CONFIDENT IN OUR ABILITY TO SUSTAIN SOLID OPERATIONAL MARGINS Ongoing EBIT(1) % Quarters following crisis start Crisis start: Q3 2008 / Q1 2020 Note: 2008 - 2010 margin data represents Operating Profit + Interest and Sundry Income (Expense) Whirlpool Corporation Second-Quarter 2020 Earnings Review 14
Slide 15: On Track to Deliver >$500M in Net Cost Takeout
ON TRACK TO DELIVER >$500M IN NET COST TAKEOUT ▪ Capturing raw material deflation opportunities ▪ Significantly reduced structural and discretionary costs (actions 80% implemented) ▪ Continue to effectively and efficiently manage working capital ▪ Cost actions expected to result in 2020 restructuring ch
Slide 16: Ample Liquidity to Cope With Any Scenario
AMPLE LIQUIDITY TO COPE WITH ANY SCENARIO ● $2.5B cash as of 6/30/20 Liquidity ● $2.5B available under committed credit facilities ● Ample buffers to withstand multiple scenarios Financial Covenants ○ 0.65 Debt/Capitalization maximum limit; ~0.5 as of 6/30/20 ○ 3x Interest Coverage minimum limit; >1
Slide 17: Executive Summary
EXECUTIVE SUMMARY ▪ Very resilient Q2 performance despite significant COVID-19 impact ▪ Took decisive actions to mitigate volume loss and sustain operating margins ▪ Strong financial position with ample liquidity to weather this crisis ▪ Well-positioned to win in the economic recovery ▪ Confident in ou
Slide 18: Q&A and Closing Remarks
Q&A AND CLOSING REMARKS Whirlpool Corporation Second-Quarter 2020 Earnings Review 18
Slide 19: Whirlpool Corporation
Whirlpool Whirlpool Corporation
Slide 20: Appendix
APPENDIX Whirlpool Corporation Second-Quarter 2020 Earnings Review 20
Slide 21: Q2 Organic Net Sales Reconciliation
Q2 ORGANIC NET SALES(4) RECONCILIATION (Approximate impact in millions) Q2 2019 Q2 2020 Change Comments Net Sales $5,186 $4,042 (22.1)% Less: Embraco Net Sales $(323) $0 • Embraco sale completed July 1, 2019 Add-Back: Currency n/a $149 • Primarily BRL Organic Net Sales $4,863 $4,191 (13.8)% Whirlpoo
Slide 22: Q2 Organic Net Sales Reconciliation Latin America Region
Q2 ORGANIC NET SALES(4) RECONCILIATION LATIN AMERICA REGION (Approximate impact in millions) Q2 2019 Q2 2020 Change Comments Net Sales $888 $434 (51.1)% Less: Embraco Net Sales $(323) $0 • Embraco sale completed July 1, 2019 Add-Back: Currency n/a $108 • Primarily BRL Organic Net Sales $565 $542 (4.
Slide 23: Embraco Compressor Business Historical Financials / Gain Calculation
EMBRACO COMPRESSOR BUSINESS HISTORICAL FINANCIALS / GAIN CALCULATION As disclosed in respective reports in Forms 10-Q and 10-K: (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 a
Slide 24: Interest and Sundry (Income) Expense
INTEREST AND SUNDRY (INCOME) EXPENSE Q2 (Approximate impact in millions) 2019 2020 Comments ● Includes foreign exchange and hedge Net Foreign Exchange $(10) $(7) (gain)/loss Interest (Income)/Other $- $(8) ● Primarily interest income Sub-Total $(10) $(15) One-Time Items: ● Gain related to recovery o
Slide 25: Q2 2020 Ongoing EBIT Margin Drivers
Q2 2020 ONGOING EBIT MARGIN(1) DRIVERS +1.50 Structural and Discretionary Cost Takeout -3.00 COVID-19 Related Production Impact -1.50 Total Net Cost Whirlpool Corporation Second-Quarter 2020 Earnings Review 25
Slide 26: Breakdown of $500M Cost Takeout Program
BREAKDOWN OF $500M COST TAKEOUT PROGRAM (Approximate impact in millions) Total Raw Material Deflation $150 Non-Structural Actions $100 Structural Actions $250 Total Cost Takeout $500 ● The $500M cost takeout program includes $150M related to raw material deflation ● Of the remaining $350M, ~30% is non
Slide 27: COVID-19 Response Plan Summary
COVID-19 RESPONSE PLAN SUMMARY Sustain Operating Margin Protect Liquidity Win the Recovery ● Stronger Margin Profile Leading Into ● Ample Liquidity to Cope With Any ● Rebound Actions Crisis Scenario ○ Operations positioned for swift ramp up ○ Took strong actions in prior cycles ○ Strong Liquidity Pos
Slide 28: Earnings Before Interest and Taxes Reconciliation
EARNINGS BEFORE INTEREST AND TAXES RECONCILIATION Note: a reconciliation of ongoing earnings before interest and taxes (EBIT) to net earnings (loss) available to Whirlpool for Q1 2019 - Q2 2020 can be found in the supplemental information pack on the investor relations website. Whirlpool Corporation
Slide 29: 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