Slide 1: 2023 Earnings Review and 2024 Perspective
2023 Earnings Review and 2024 Perspective TUESDAY, JANUARY 30, 2024
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: Non-GAAP Measures
Non-GAAP Measures This presentation includes certain non-GAAP financial measures. 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, inc
Slide 4: 2023 Earnings Review and 2024 Perspective
2023 Earnings Review and 2024 Perspective Whirlpool Corporation Confidential Marc Bitzer Jim Peters CHAIRMAN AND EXECUTIVE VICE CHIEF EXECUTIVE PRESIDENT AND CHIEF OFFICER FINANCIAL OFFICER
Slide 5: Agenda
Agenda Fourth-quarter 2023 results 2024 Guidance Europe transaction update 5
Slide 6: Fourth-Quarter 2023 Results
Fourth-Quarter 2023 Results PROFITABLE GROWTH Net Sales YoY Change ● Net sales growth over 3% with 1pt North America share gains $5.1B 3.4% (0.3)% organic ● 170 basis points of year-over-year ongoing EBIT margin expansion MARGIN EXPANSION ○ Cost actions delivered ~$800M full-year benefit Ongoing EBIT
Slide 7: North America Fourth-Quarter Results
North America Fourth-Quarter Results NET SALES ($B) EBIT ($M) EBIT MARGIN 1% 46% 2.6pts Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 ● Over 1 point of Q4 and full-year share gains; U.S. industry up ~2% in Q4 ● Consumer discretionary spend pressure negatively impacting price/mix ● ~260 basis point
Slide 8: EMEA Fourth-Quarter Results
EMEA Fourth-Quarter Results NET SALES ($B) EBIT ($M) EBIT MARGIN -3% nm 3.7pts Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 ● Continued demand weakness across key countries ● Cost take out actions and held for sale benefits driving ~4pts of Q4 margin expansion ● Continue to expect Europe transacti
Slide 9: Latin America Fourth-Quarter Results
Latin America Fourth-Quarter Results NET SALES ($B) EBIT ($M) EBIT MARGIN 17% 18% 0.1pts Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 ● Excluding currency, net sales increased ~13% year-over-year, with strong industry in Brazil and Mexico ● Continued share gains in Brazil ● Solid EBIT margins fro
Slide 10: Asia Fourth-Quarter Results
Asia Fourth-Quarter Results NET SALES ($B) EBIT ($M) EBIT MARGIN 9% -50% -1.4pts Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 ● Increased volumes from share gains and improving industry ● Margins impacted by unfavorable price/mix partially offset by cost take out actions ● Intention to sell up to
Slide 11: Agenda
Agenda Fourth-quarter 2023 results 2024 Guidance Update on Europe transaction 11
Slide 12: 2024 Guidance
2024 Guidance Assumes Europe transaction closes by April 2024 PROFITABLE GROWTH MARGIN EXPANSION CASH CONVERSION LONG-TERM GOALS 5-6% 11-12% 7-8% ONGOING EARNINGS BEFORE INTEREST FREE CASH FLOW ANNUAL ORGANIC NET SALES GROWTH AND TAX, % OF NET SALES AS % OF NET SALES Net Sales YoY Change Ongoing EBI
Slide 13: Full-Year 2024 Ongoing EBIT Margin Guidance
Full-Year 2024 Ongoing EBIT Margin Guidance (Approximate impact) EBIT Margin Comments 2023 Ongoing EBIT Margin 6.1% • Promotional environment normalized in H2 Price/Mix -1.5 to -1.75 2023; carryover impacting H1 • Cost actions expected to deliver $300 - $400M Net Cost* +1.75 benefit • Expect minimal
Slide 14: Continue to Have Significant Cost Take Out Opportunity
Continue to Have Significant Cost Take Out Opportunity ~$2.5B Cost Increase in 2021 and 2022 $300-$400M Cost Takeout in 2024 $2B ~$100M Carryover of 2023 actions Net Cost & RMI ($M) $1B Manufacturing & supply $100M-200M chain productivity $0B SG&A reductions from a ($1B) 2021 2022 2023 2024F ~$100M s
Slide 15: New Segments Reflect Transformed Portfolio
New Segments Reflect Transformed Portfolio PREVIOUS REPORTING SEGMENTS 2024+ FUTURE REPORTING SEGMENTS North America MDA Major Domestic Appliances Small Domestic Appliances North America MDA EMEA Europe Major Domestic Appliances (Only Q1*) Small Domestic Appliances MDA Latin America Latin America Maj
Slide 16: 2024 Segment Guidance
2024 Segment Guidance Industry EBIT % MDA 0 - 2% ~9% North America MDA 0 - 3% ~6.5% Latin America MDA 4 - 6% ~3% Asia SDA Global* 2 - 4% ~15.5% MDA Q1 (8) - (6)% ~1.5% Europe Total ~0 - 2% ~6.8% 16
Slide 17: Solid U.S. Industry Replacement Demand
Solid U.S. Industry Replacement Demand Potential upside from new construction and existing home sales driving discretionary demand Components of Demand ● Strong replacement demand continues throughout 2024 Replacement (~60%)* ○ 2015 - 2017 install base growth (4-5%) driving 2024 replacement volumes
Slide 18: Perspective on 2024
Perspective on 2024 FIRST HALF SECOND HALF vs. Prior Year vs. Prior Year Demand Price / Mix Net Cost SDA Global 25% 75% Earnings Seasonality 18
Slide 19: 2024 Free Cash Flow Guidance
2024 Free Cash Flow Guidance (Approximate impact in millions) 2023 2024 Comments $1,100 - Cash Earnings and Other Operating Items $910 • Earnings improvement $1,200 • Innovation, digital transformation and Capital Expenditures $(549) ~$(600) capacity investments Working Capital $37 ~$100 • Inventory
Slide 20: Well Positioned to Deliver 2024 Capital Allocation
Well Positioned to Deliver 2024 Capital Allocation 2024 Cash Expectations Clear Capital Allocation Priorities Cash on Hand ~$1.6B 1● Expect dividends of ~$400M* 2024 FCF $0.55 - $0.65B 2● Expect $500M debt reduction Proceeds from $0.4 - $0.5B ● Limited share buyback to 3 Asset Sales offset share dilu
Slide 21: Expect to Return Net Debt Leverage to 2x by 2026
Expect to Return Net Debt Leverage to 2x by 2026 Expect to reduce debt in 2024 by over $1B vs. 2022 $8 $(1)B $6 Acquisition Related Debt Senior Notes $4 2019 2020 2021 2022 2023 2024F 2025F 2026F Year-End Net Debt Leverage: 1.5 1.1 0.8 3.1 3.6 < 3.5 < 3.0 ~ 2.0 21
Slide 22: Agenda
Agenda Fourth-quarter 2023 results 2024 Guidance Update on Europe transaction 22
Slide 23: Update on Europe Transaction
Update on Europe Transaction We are Here DEFINITIVE STRATEGIC REGULATORY TRANSACTION VALUE CONTRIBUTION REVIEW REVIEWS CLOSE TIMING CREATION AGREEMENT Announced April ’22 Entered January ‘23 Competition Close by April 2024 Increased Margins Authorities Reviews and Free Cash Flow Underway ● European
Slide 24: Executive Summary
Executive Summary ● Expect significant cost take out $300M - $400M ● Continue to expect EMEA transaction to close by April 2024 delivering margin expansion as expected ● Commitment to improving debt leverage through strong free cash flow and India share sale 24
Slide 25: Join us for our Investor Day on February 27th
Join us for our Investor Day on February 27th Decisive transformation initiatives creating a very different portfolio Well-positioned value creating MDA North America and KitchenAid SDA businesses Introducing 2026 value creation goals 25
Slide 26: Closing Remarks and Q&A
and Q&A Closing Remarks Whirlpool Corporation Confidential
Slide 27: Full-Year 2023
Full-Year 2023 PROFITABLE GROWTH Net Sales YoY Change ● Net sales decline of ~1% $19.5B (1.4)% ○ 1pt of year-over-year share gains in North America (3.8%) organic ○ Normalized promotional environment MARGIN EXPANSION ● Full year North America margins of ~10% Ongoing EBIT YoY Change Margin 6.1% (0.8)
Slide 28: 2024 Guidance Bridge
2024 Guidance Bridge Q2-Q4 2023 2023 As 2023 Like for 2024 MDA Reported Like Guidance Europe* Net Sales (in billions) $19.5 ~$2.6 ~$16.9 $16.9 Ongoing EBIT (in millions) $1,191 ~$33 ~$1,158 ~$1,150 Ongoing EBIT Margin 6.1% ~1.3% ~6.8% ~6.8% MDA Europe Q1 2024 Expectations ● Net Sales of ~$700M ● Ong
Slide 29: EMEA Transaction Delivering 100+ bps Margin Lift
EMEA Transaction Delivering 100+ bps Margin Lift 2023 As FY MDA 2023 Pro Reported Europe* Forma Net Sales (in billions) $19.5 ~$3.4 ~$16.1 Ongoing EBIT (in millions) $1,191 ~$28 ~$1,163 Ongoing EBIT Margin 6.1% ~0.8% ~7.2% 100+ bps EMEA Transaction Margin Lift *Q1-Q3 historical segment financial data
Slide 30: 2023 Ongoing EBIT Margin Drivers
2023 Ongoing EBIT Margin Drivers (Approximate impact) Q1 Q2 Q3 Q4 FY 2022 Ongoing EBIT Margin 9.4% 9.0% 5.5% 3.5% 6.9% Price/Mix -2.75 -3.50 -3.75 -4.50 -3.75 Net Cost* -0.75 +1.25 +3.25 +5.50 +2.25 Raw Material Inflation +0.50 +1.50 +3.00 +1.50 +1.75 Marketing & Technology Investments -0.75 -0.50 -0
Slide 31: Key Assumptions - Guidance
Key Assumptions - Guidance Income Statement FY2023 FY2024E Raw Material (Inflation)/Deflation $460M nm Restructuring Costs* $16M $50M Corporate Center $200M ~$250M (Q1 is ~35% of full year expectations) Interest Expense $351M ~$350M Adjusted Effective Tax Rate (6.7)% ~0% Weighted-Average Diluted Shares
Slide 32: Interest and Sundry (Income) Expense
Interest and Sundry (Income) Expense Q4 Full Year (Approximate impact in millions) 2022 2023 2022 2023 Comments • Includes foreign exchange and hedge Net Foreign Exchange $57 $4 $85 $26 (gain)/loss Interest (Income) Expense/Other (30) (10) (104) 45 Equity Method Investment Income 12 25 19 28 (Loss)*
Slide 33: Restructuring Cash Outlays
Restructuring Cash Outlays (Approximate impact in millions) 2022 2023 Comments COVID-19 Related Actions $10 $20 Naples Closure 3 - • Naples, Italy manufacturing facility Other Initiatives 27 12 • Primarily previously executed actions Total $40 $32 Note: Numbers may not reconcile due to rounding 33
Slide 34: Clear Capital Allocation Strategy
Clear Capital Allocation Strategy 1. Fund Innovation and Growth Target/Update Capital Expenditure Invest ~3% of net sales Research and Development Invest ~3% of net sales Mergers & Acquisitions Pursue opportunistic M&A with high ROIC 2. Return to Shareholders Target/Update ~30% of trailing 12-month
Slide 35: Hotpoint brand ownership note
* Whirlpool Corporation ownership of the Hotpoint brand in EMEA and Asia Pacific regions is not affiliated with the Hotpoint brand sold in the Americas