Slide 1: Fourth-Quarter 2018 Earnings Review
Fourth-Quarter 2018 Earnings Review Whirlpool Corporation Fourth-Quarter 2018 Earnings Review
Slide 2: Global Overview
GLOBAL OVERVIEW Marc Bitzer Chairman and Chief Executive Officer Whirlpool Corporation Fourth-Quarter 2018 Earnings Review 2
Slide 3: 2018 Fourth-Quarter Highlights
2018 FOURTH-QUARTER HIGHLIGHTS Profitable Growth YoY ▪ All-time record ongoing EPS(1) of $4.75 Net Sales Change $5.7B 2.5% ▪ Significant price/mix improvement; positive in all regions ex currency Margin Expansion Ongoing YoY ▪ North America delivered 5% revenue growth and strong margin EBIT Margin(1
Slide 4: 2018 Full-Year Highlights
2018 FULL-YEAR HIGHLIGHTS Profitable Growth ▪ Overcame 200 bps of significant cost and currency challenges YoY Net Sales Change $21.0B (0.3)% ▪ Disappointing but improving performance in EMEA region ex currency Margin Expansion ▪ Strong actions to address global challenges: Ongoing YoY EBIT Margin(1
Slide 5: 2018 Ongoing EBIT Margin Drivers
2018 ONGOING EBIT MARGIN(1) DRIVERS (Approximate impact) Q4 FY 2017 Ongoing EBIT Margin 6.6% 6.4% Price / Mix 3.00 2.00 Net Cost (excluding Raw Material/Tariff Inflation)* -0.25 0.25 Raw Material/Tariff Inflation -1.50 -1.50 Marketing & Technology Investments -1.00 -0.50 Currency -0.50 -0.25 2018 On
Slide 6: Regional Overview
REGIONAL OVERVIEW Jim Peters Executive Vice President and Chief Financial Officer Whirlpool Corporation Fourth-Quarter 2018 Earnings Review 6
Slide 7: North America Fourth-Quarter Results
NORTH AMERICA FOURTH-QUARTER RESULTS Net Sales ($B) Ongoing EBIT(3) ($M) Ongoing EBIT Margin(3) +5% +8% +0.4pts $2.9 $3.1 $335 $362 11.4% 11.8% Q4 2017 Q4 2018 Q4 2017 Q4 2018 Q4 2017 Q4 2018 ▪ Solid revenue and margin growth driven by positive price/mix, despite soft industry ▪ Strong EBIT, despite
Slide 8: EMEA Fourth-Quarter Results
EMEA FOURTH-QUARTER RESULTS Net Sales ($B) EBIT(3) ($M) EBIT Margin(3) -10% $1.4 -1.8pts $1.2 nm $8 0.6% -$15 -1.2% Q4 2017 Q4 2018 Q4 2017 Q4 2018 Q4 2017 Q4 2018 ▪ Quarterly sequential improvement in EBIT and EBIT margin, in-line with guidance ▪ Raw material inflation and currency unfavorably impa
Slide 9: Latin America Fourth-Quarter Results
LATIN AMERICA FOURTH-QUARTER RESULTS Net Sales ($M) Ongoing EBIT(3) ($M) Ongoing EBIT Margin(3) -0.6pts -8% -16% $1,073 $990 $70 6.5% $59 5.9% Q4 2017 Q4 2018 Q4 2017 Q4 2018 Q4 2017 Q4 2018 ▪ Solid share gains and ex-currency revenue growth of 1.1% ▪ Positive price/mix more than offset raw material
Slide 10: Asia Fourth-Quarter Results
ASIA FOURTH-QUARTER RESULTS Net Sales ($M) EBIT(3) ($M) EBIT Margin(3) +4% -18% -0.8pts $358 $372 $10 2.7% $8 1.9% Q4 2017 Q4 2018 Q4 2017 Q4 2018 Q4 2017 Q4 2018 ▪ Currency adjusted revenue growth of 11% driven by market share gains in India ▪ Strong price/mix improvement more than offset raw mater
Slide 11: 2019 Guidance
2019 GUIDANCE Marc Bitzer Jim Peters Chairman and Executive Vice President Chief Executive Officer and Chief Financial Officer Whirlpool Corporation Fourth-Quarter 2018 Earnings Review 11
Slide 12: 2019 Guidance Overview
2019 GUIDANCE OVERVIEW Profitable Growth Margin Expansion Cash Conversion Long-Term Goals 3-5% 10% 5-6% Revenue Growth and Cash Conversion In-Line with Long-Term Goals; Margin Expansion Annual Organic Net Sales Growth EBIT Margin FCF as % of Net Sales Behind Actions in Place to Improve YoY Ongoing Y
Slide 13: 2019 Ongoing EPS Drivers
2019 ONGOING EPS DRIVERS $15.16 $14.00 - $15.00 $1.75 $0.85 $0.25 $1.00 $0.50 2018 Ongoing Embraco EBIT Interest 2018 Share 2019 Ongoing EPS Tax Rate Operations Margin Expense Repurchases Ongoing EPS 2018 6.6% Full-Year 6.3% $192M $1.2B Assumptions Not included in 2019 15 – 20% One Quarter 6.5 – 6.8
Slide 14: 2019 Ongoing EBIT Margin Guidance Progression
2019 ONGOING EBIT MARGIN(1) GUIDANCE PROGRESSION (Approximate impact) Current Comments 2018 Ongoing EBIT Margin 6.3% • Carryover effect of 2018 price/mix actions Price / Mix +1.50 • Previously announced U.S. kitchen and Brazil pricing effective Q1 2019 • Fixed and ongoing cost reduction actions on t
Slide 15: 2019 Regional Guidance
2019 REGIONAL GUIDANCE NAR 2019F EMEA 2019F EBIT%(3) 12%+ EBIT%(3) 0 – 1% Industry 0 – 1% Industry (1) – 1% ASIA 2019F LAR 2019F EBIT%(3) 5 – 6% EBIT%(3) 6%+ Industry 1 – 2% Industry ~5% Whirlpool Corporation Fourth-Quarter 2018 Earnings Review 15
Slide 16: Actions to Improve EMEA Business Are on Track
ACTIONS TO IMPROVE EMEA BUSINESS ARE ON TRACK Major Appliance Business Stabilize Volumes While Sustaining Price/Mix Unit Volume Change vs Prior Year • Restore trade relationships and recover lost flooring 5%+ H1 ‘18 H2 ‘18 Q1 ‘19 Q1 ’19 Est. • Refocus marketplace investments to most profitable segme
Slide 17: 2019 Free Cash Flow Drivers
2019 FREE CASH FLOW(2) DRIVERS (Approximate impact in millions) 2018 2019F Comments Cash Earnings / Other Operating $1,450 $1,475 • Margin expansion partially offset by sale of Embraco Capital Expenditures $(590) $(625) • Continued innovation funding Working Capital Improvement $355 $200 • Sustained
Slide 18: 2019 Capital Allocation Strategy
2019 CAPITAL ALLOCATION STRATEGY Fund the Business Target Status/Expectations Capex: 3%+ of net sales • On-track Capex / R&D R&D: ~3% of net sales • On-track Explore value-creating M&A • Close on Embraco sale in early 2019 Mergers & Acquisitions to accelerate strategy • Continue to be opportunistic
Slide 19: Q&A and Closing Remarks
Q&A AND CLOSING REMARKS Whirlpool Corporation Fourth-Quarter 2018 Earnings Review 19
Slide 20: Summary of Key Messages
SUMMARY OF KEY MESSAGES ▪ Encouraged by results of actions taken in 2018 ▪ Uncertain external environment and volatility expected to continue ▪ Confident strategy and actions will drive positive results in 2019 ▪ Committed to generating strong free cash flow and margin expansion ▪ Moderated level of
Slide 21: Whirlpool Corporation Fourth-Quarter 2018 Earnings Review
Whirlpool Corporation Fourth-Quarter 2018 Earnings Review 21
Slide 22: Appendix
APPENDIX Whirlpool Corporation Fourth-Quarter 2018 Earnings Review 22
Slide 23: 2019 Guidance Components (Approximate Impact)
2019 GUIDANCE COMPONENTS (APPROXIMATE IMPACT) Income Statement FY2018A FY2019E Raw Material/Tariff Inflation $(300)M $(300)M Restructuring Expense $247M $100M Interest Expense $192M $210M Adjusted Tax Rate 6.6% 15-20% Weighted-Average Diluted Shares Outstanding 67.2M 64.5M* Cash Flow Statement FY201
Slide 24: Free Cash Flow One-Time Items
FREE CASH FLOW(2) ONE-TIME ITEMS (Approximate impact in millions) 2018 2019 Impact Comments FCA Payment $0 $(100) $(100) • French Competition Authority (FCA) settlement U.S. Pension Pre-Funding $(350) $0 $350 • Opportunistic pension pre-funding in Q3 2018 Payment Timing No Free Cash $100Flow(2) Impa
Slide 25: Revenue Reconciliation
REVENUE RECONCILIATION (Approximate impact in billions) 2018 2019F Change Comments Net Sales $21.0B $20.3B ~(3)% Less: Embraco Net Sales $(1.2) $(0.3) • 2019 guidance includes ~1 quarter of net sales • Exit of Turkish domestic sales operations, Hotpoint branded Less: EMEA Business Exits $(0.2) $(0.1
Slide 26: 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 27: 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