Slide 1: Second-Quarter 2018 Earnings Review
Second-Quarter 2018 Earnings Review 2018 | Whirlpool Corporation Second-Quarter Earnings Review
Slide 2: Global Overview
GLOBAL OVERVIEW Marc Bitzer President and Chief Executive Officer 2018 | Whirlpool Corporation Second-Quarter Earnings Review 2
Slide 3: 2018 Second-Quarter Highlights
2018 SECOND-QUARTER HIGHLIGHTS ▪ Ongoing EBIT margin expansion despite challenging cost environment ▪ Significant price/mix improvement year-over-year and sequentially; positive in all regions ▪ Following weak EMEA results, taking strong actions to restore profitability in second half ▪ North Americ
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 Q2 2018 $5.1B (4)% 6.7% 0.
Slide 5: Q2 2018 Ongoing EBIT Margin Drivers
Q2 2018 ONGOING EBIT MARGIN(1) DRIVERS (Approximate impact) Q2 2017 Ongoing EBIT Margin 6.5% Price / Mix +2.0 Gross Cost Takeout* +0.25 Raw Material Inflation -1.25 Marketing & Technology Investments -0.50 Currency -0.25 2018 Ongoing EBIT Margin 6.7% *Inclusive of Fixed Cost Takeout, Ongoing Cost Pr
Slide 6: Key Performance Driver: Product Price/Mix
KEY PERFORMANCE DRIVER: PRODUCT PRICE/MIX Region Q2 2018 Q2 2018 Drivers Total Company +2.0% • Benefits of price/mix actions in the U.S. North America Up • Recently-announced cost-based price increase in Canada EMEA Up • Benefits of price/mix actions • Benefits of price/mix actions Latin America Sli
Slide 7: EMEA Business Update
EMEA BUSINESS UPDATE Weak Business Performance Indesit Integration Complete Taking Strong Actions • Integration challenges • Factory optimization 1. Stabilize volumes while sustaining price/mix • Operational execution issues • Platform & system integrations 2. Redefine business strategy • Macroecono
Slide 8: Regional Overview
REGIONAL OVERVIEW Jim Peters Executive Vice President and Chief Financial Officer 2018 | Whirlpool Corporation Second-Quarter Earnings Review 8
Slide 9: North America Second-Quarter Results
NORTH AMERICA SECOND-QUARTER RESULTS Net Sales ($B) EBIT(3) ($M) EBIT Margin(3) -2% -1% +0.0pts $2.8 $2.8 $336 $331 11.9% 11.9% Q2 2017 Q2 2018 Q2 2017 Q2 2018 Q2 2017 Q2 2018 ▪ Revenue decline driven by temporary U.S. industry demand weakness of (5)% ▪ Strong EBIT margin(3) despite raw material inf
Slide 10: EMEA Second-Quarter Results
EMEA SECOND-QUARTER RESULTS Net Sales ($B) EBIT(3) ($M) EBIT Margin(3) -9% nm -2.1pts $1.2 $1.1 -$2 -0.2% -$25 -2.3% Q2 2017 Q2 2018 Q2 2017 Q2 2018 Q2 2017 Q2 2018 ▪ Price/mix improvement more than offset by unit volume declines ▪ Raw material inflation unfavorably impacted EBIT(3) by ~$20M or 200
Slide 11: Latin America Second-Quarter Results
LATIN AMERICA SECOND-QUARTER RESULTS Net Sales ($M) EBIT(3) ($M) EBIT Margin(3) -2.0pts -14% -43% $986 $57 5.8% $852 $33 3.8% Q2 2017 Q2 2018 Q2 2017 Q2 2018 Q2 2017 Q2 2018 ▪ Price/mix improvement more than offset by unit volume declines ▪ EBIT(3) impacted by Brazil trucker strike (~$20M) and weak
Slide 12: Asia Second-Quarter Results
ASIA SECOND-QUARTER RESULTS Ongoing Net Sales(1) ($M) Ongoing EBIT(3) ($M) Ongoing EBIT Margin(3) +6% nm +7.6pts $405 $428 $43 10.1% $10 2.5% Q2 2017 Q2 2018 Q2 2017 Q2 2018 Q2 2017 Q2 2018 ▪ Double digit volume growth and continued share gains in India ▪ Discrete items positively impacted ongoing E
Slide 13: Guidance
2018 GUIDANCE Marc Bitzer Jim Peters President and Executive Vice President Chief Executive Officer and Chief Financial Officer 2018 | Whirlpool Corporation Second-Quarter Earnings Review 13
Slide 14: 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 ~$21.3B Flat ~6.9% ~0.5pts
Slide 15: Ongoing EBIT Margin Guidance Progression
2018 ONGOING EBIT MARGIN(1) GUIDANCE PROGRESSION (Approximate impact) Revised Previous Comments 2017 Ongoing EBIT Margin 6.4% 6.4% Price / Mix +2.0 +1.25 • Global price/mix actions on-track • Fixed cost reduction fully-implemented and on-track Gross Cost Takeout* +1.25 +2.0 • Volume weakness impacti
Slide 16: Regional Guidance
2018 REGIONAL GUIDANCE NAR Revised Previous EMEA Revised Previous EBIT%(3) ~12% ~12%+ EBIT%(3) ~(1)% ~2% Industry 1 – 2% 2 – 3% Industry 1 – 2% 1 – 2% ASIA Revised Previous EBIT%(3) ~5% ~5% LAR Revised Previous Industry 2 – 4% 2 – 4% EBIT%(3) ~6% ~7% Industry ~1% 1 – 2% Strong Performance in NAR and
Slide 17: Free Cash Flow Drivers
2018 FREE CASH FLOW(2) DRIVERS (Approximate impact) Revised Previous Comments 2017 Free Cash Flow $707M $707M • Business weakness in EMEA and increased raw material Cash Earnings ~$150M ~$325M inflation expectations impacting global earnings • Significant inventory reduction in North America and Wor
Slide 18: Capital Allocation Strategy
2018 CAPITAL ALLOCATION STRATEGY Fund the Business Target Status Capex: ~3.5% of net sales • On-track 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 to S
Slide 19: Q&A and Closing Remarks
Q&A AND CLOSING REMARKS 2018 | Whirlpool Corporation Second-Quarter Earnings Review 19
Slide 20: Summary of Key Messages
SUMMARY OF KEY MESSAGES ▪ Global margin expansion despite challenging cost environment ▪ Significant global price/mix improvement ▪ Strong performance in North America; U.S. industry growth expected in second half ▪ Taking strong actions to restore profitability in second half following continued we
Slide 21: 2018 | Whirlpool Corporation Second-Quarter Earnings Review
2018 | Whirlpool Corporation Second-Quarter Earnings Review 21
Slide 22: Appendix
APPENDIX 2018 | Whirlpool Corporation Second-Quarter Earnings Review 22
Slide 23: Guidance Components (Approximate Impact)
2018 GUIDANCE COMPONENTS (APPROXIMATE IMPACT) Income Statement FY2018E FY2017A Net Cost Takeout $(75)M $100M Gross Cost Takeout* $275M $450M Raw Material Inflation $(350)M $(350)M Restructuring Expense $200M $275M Interest Expense $190M $162M Adjusted Tax Rate ~20% 14.7% Weighted-Average Diluted Sha
Slide 24: 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 25: 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