Slide 1: 2017 Third-Quarter Earnings Review
2017 THIRD-QUARTER EARNINGS REVIEW October 24, 2017 2017 | Whirlpool Corporation Third-Quarter Earnings Review
Slide 2: 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 document may inclu
Slide 3: 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 operating profit (loss), ongoing operating margin, ongoing earnings per diluted share, earnings before interest and taxes (EBIT), EBIT margin, ongoin
Slide 4: Global Overview
GLOBAL OVERVIEW INSERT PHOTO HERE Marc Bitzer Chief Executive Officer 2017 | Whirlpool Corporation Third-Quarter Earnings Review 4
Slide 5: 2017 Third-Quarter Highlights
2017 THIRD-QUARTER HIGHLIGHTS Revenue growth in-line with our long-term goals Solid free cash flow(2) improvement of ~$120M driven by working capital optimization Operating margin impacted by raw material inflation and slow progress on EMEA integration Announced global cost-based price incre
Slide 6: Progress Toward Long-Term Goals
PROGRESS TOWARD LONG-TERM GOALS Profitable Growth Margin Expansion Cash Conversion 3-5% 10%+ 5-6% Annual Organic Net Sales Growth EBIT Margin (by 2020) FCF as % of Net Sales (by 2018) Revenue Ongoing YoY Free FCF as % Net Sales Growth EBIT Margin(1) Change Cash Flow(2) of Net Sales Q3 2017 $5.4B 3.2
Slide 7: Q3 2017 Ongoing EBIT Margin Drivers
Q3 2017 ONGOING EBIT(1) MARGIN DRIVERS Approximate Impact Actual vs. Expectation Q3 2016 Ongoing EBIT Margin 7.4% Price / Mix -1.5 Behind Net Cost Takeout (inclusive of raw material inflation) +1 Behind Marketing, Technology and Product Investments 0 On-Track Currency -0.25 Behind Q3 2017 Ongoing EB
Slide 8: Key Performance Driver: Product Price/Mix
KEY PERFORMANCE DRIVER: PRODUCT PRICE/MIX Region Q3 Full-Year Full-Year Drivers Total Company -1.5% Down • Strong Maytag brand growth North America Flat Slightly Down • Ongoing promotional intensity • Price/mix pressure in Russia and the U.K. EMEA Down Down • Continued obsolete inventory reduction •
Slide 9: Key Performance Driver: Cost Takeout
KEY PERFORMANCE DRIVER: COST TAKEOUT (Approximate Impact in USD millions) Net Cost Takeout of $75M ~$450 ~$375 $237 $200 $125 $75 H1’17 Q3 ‘17 FY’17 E Restructuring Benefits Cost Productivity Raw Material Inflation Announced New Fixed Cost Reduction Initiative of $150M Impacting 2018 2017 | Whirlpoo
Slide 10: Regional Overview
REGIONAL OVERVIEW INSERT PHOTO HERE Jim Peters Executive Vice President and Chief Financial Officer 2017 | Whirlpool Corporation Third-Quarter Earnings Review 10
Slide 11: North America Third-Quarter Results
NORTH AMERICA THIRD-QUARTER RESULTS Net Sales ($B) Operating Profit ($M) Operating Margin +5% +1% -0.4pts $2.9 $3.0 $346 $350 12.1% 11.7% Q3 2016 Q3 2017 Q3 2016 Q3 2017 Q3 2016 Q3 2017 Margin in-line with guidance, driven by unit volume growth in the core business Continued market share gains,
Slide 12: EMEA Third-Quarter Results
EMEA THIRD-QUARTER RESULTS Ongoing Operating Ongoing Operating Net Sales ($B) Profit(1) ($M) Margin(1) -4% -77% -2.9pts $1.3 $1.3 $48 3.7% $11 0.8% Q3 2016 Q3 2017 Q3 2016 Q3 2017 Q3 2016 Q3 2017 Slow Indesit integration progress Margin compression in the U.K. due to British Pound devaluation ve
Slide 13: Latin America Third-Quarter Results
LATIN AMERICA THIRD-QUARTER RESULTS Net Sales ($M) Operating Profit ($M) Operating Margin +6% +15% +0.5pts $800 $849 $53 5.8% 6.3% $46 Q3 2016 Q3 2017 Q3 2016 Q3 2017 Q3 2016 Q3 2017 Solid industry growth in Brazil in-line with prior guidance Price/mix pressure as industry demand shifted away fr
Slide 14: Asia Third-Quarter Results
ASIA THIRD-QUARTER RESULTS Ongoing Operating Ongoing Operating Net Sales ($M) Profit(1) ($M) Margin(1) +5% -88% -4.3pts $338 $357 $17 4.9% $2 0.6% Q3 2016 Q3 2017 Q3 2016 Q3 2017 Q3 2016 Q3 2017 Strong performance in India with unit volume growth, share gains and margin expansion Significant pri
Slide 15: Financial Overview
FINANCIAL OVERVIEW INSERT PHOTO HERE Jim Peters Executive Vice President and Chief Financial Officer 2017 | Whirlpool Corporation Third-Quarter Earnings Review 15
Slide 16: 2017 Guidance
2017 GUIDANCE Current Change from Guidance Previous Guidance Ongoing EBIT Margin(1) ~6.5% ~(0.8)% Expected Tax Rate ~16% ~4% GAAP EPS $11.10 - $11.40 ~$(1.40) Ongoing EPS(1) $13.60 - $13.90 ~$(1.00) Free Cash Flow(2) ~$900M ~$(100)M 2017 | Whirlpool Corporation Third-Quarter Earnings Review 16
Slide 17: 2017 Free Cash Flow Drivers
2017 FREE CASH FLOW(2) DRIVERS Current Change from Guidance Previous Guidance 2016 Free Cash Flow $630M - Cash Earnings - ~$(150)M Working Capital ~$300M $50M Capital Expenditures ~$(25)M - 2017 Free Cash Flow ~$900M ~$(100)M 2017 | Whirlpool Corporation Third-Quarter Earnings Review 17
Slide 18: 2017 Capital Allocation Strategy
2017 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 Utilize value-creating M&A Mergers & Acquisitions to accelerate strategy • On-track: Yummly acquisition (2017) Return to Shareholders Target Status 25-30
Slide 19: Global Summary
GLOBAL SUMMARY INSERT PHOTO HERE Marc Bitzer Chief Executive Officer 2017 | Whirlpool Corporation Third-Quarter Earnings Review 19
Slide 20: 2017 Business Priorities
2017 BUSINESS PRIORITIES Drive above-industry growth • Innovative new product launches On-Track • Strong adjacent business growth Deliver EBIT margin expansion • Continue cost takeout to offset raw material inflation Behind • Realize integration benefits in EMEA • Execute previously and recently-ann
Slide 21: Q&A and Closing Remarks
Q&A AND CLOSING REMARKS 2017 | Whirlpool Corporation Third-Quarter Earnings Review 21
Slide 22: Summary of Key Messages
SUMMARY OF KEY MESSAGES Continued revenue growth and free cash flow(2) improvement Plan to continue returning strong levels of cash to shareholders; expect to continue repurchasing shares in the fourth quarter Announced global cost-based price increases and a new fixed cost reduction initiativ
Slide 23: 2017 | Whirlpool Corporation Third-Quarter Earnings Review
2017 | Whirlpool Corporation Third-Quarter Earnings Review 23
Slide 24: Appendix
APPENDIX 2017 | Whirlpool Corporation Third-Quarter Earnings Review 24
Slide 25: 2017 Guidance Components
2017 GUIDANCE COMPONENTS Income Statement FY2017E FY2016A Net Cost Takeout (inclusive of raw materials) $75M $550M Cost Productivity $350M $234M Restructuring Benefits $100M $216M Raw Material Inflation $375M $(100)M Restructuring Expense $200M $173M Interest and Sundry (Income) Expense $110M $93M I
Slide 26: Index of Supporting Information
INDEX OF SUPPORTING INFORMATION Slide # Slide Title & Description Source 14 ASIA THIRD-QUARTER RESULTS 2017 operating margin shown for Asia is ongoing segment operating margin. Ongoing segment operating margin is calculated by dividing ongoing segment operating profit (loss) by ongoing segment net s