Slide 1: 2022 Earnings Review, Portfolio Transformation Update & 2023 Perspective
2022 Earnings Review, Portfolio Transformation Update & 2023 Perspective TUESDAY, JANUARY 31, 2023
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: 2022 Earnings Review, Portfolio Transformation Update & 2023 Perspective
2022 Earnings Review, Portfolio Transformation Update & 2023 Perspective Whirlpool Corporation Confidential Marc Bitzer Jim Peters CHAIRMAN AND EXECUTIVE VICE CHIEF EXECUTIVE PRESIDENT AND CHIEF OFFICER FINANCIAL OFFICER
Slide 4: Agenda
Agenda Portfolio Transformation: EMEA Agreement to Unlock Significant Value Creation 2022 Fourth Quarter Results Well Positioned to Deliver Solid 2023 4
Slide 5: Significant Portfolio Transformation Well Underway
Significant Portfolio Transformation Well Underway THREE STRONG PILLARS Value Creating Milestones SMALL APPLIANCES MAJOR APPLIANCES COMMERCIAL APPLIANCES (GROW, ALSO INORGANICALLY) (STRENGTHEN + REFOCUS) (GROW, ALSO INORGANICALLY) 2018 2019 2021 2022 2023 ● More global in nature ● Invest in ‘Win Amer
Slide 6: Successfully Completed Strategic Review of Our EMEA Business
Successfully Completed Strategic Review of Our EMEA Business Transaction Details Divested Businesses* ● Retaining 25% stake(1) in a newly formed European appliance company ~$3.5 BILLION ~(3)% EBIT in sales in 2022 EBIT Margins in 2022 ● $750M+ net present value of predictable cash flows of Whirlpool
Slide 7: Unlocking Significant Long-Term Value Creation
Unlocking Significant Long-Term Value Creation Description Value EMEA Divestiture Value Creation Potential future monetization of minority interest, Minority Interest ~$500M after 5 years Brand Licensing ~$250M Annual royalty of $20M+ through 40-yr Whirlpool brand licensing agreement Total Value Crea
Slide 8: Agenda
Agenda Portfolio Transformation: EMEA Agreement to Unlock Significant Value Creation 2022 Fourth Quarter Results Well Positioned to Deliver Solid 2023 8
Slide 9: 2022 Fourth-Quarter Results Impacted by Macro Cycle & One-Off Supply Chain Disruption
2022 Fourth-Quarter Results Impacted by Macro Cycle & One-Off Supply Chain Disruption PROFITABLE GROWTH Net Sales YoY Change ▪ Q4 results impacted by industry demand decline and inflationary cost $4.9B (15.3)% pressure, as well as one-off supply chain disruption (4) (10.8)% organic ▪ Strong cost actio
Slide 10: North America Fourth-Quarter and Full-Year Results
North America Fourth-Quarter and Full-Year Results NET SALES ($B) COMMENTARY ▪ Price/mix actions partially offset cost inflation ▪ Maintained recent sequential EBIT(5) ($M) quarterly share gains ▪ One-off supply chain disruption impacting revenue and EBIT EBIT MARGIN(5) 10
Slide 11: EMEA Fourth-Quarter and Full-Year Results
EMEA Fourth-Quarter and Full-Year Results NET SALES ($B) COMMENTARY ▪ ~9% organic net sales(4) decline ▪ Continued demand weakness across key countries EBIT(5) ($M) ▪ Break-even Q4 EBIT driven by cost-based pricing, offset by lower volumes and inflation ▪ Concluded strategic review EBIT MARGIN(5) 11
Slide 12: Latin America Fourth-Quarter and Full-Year Results
Latin America Fourth-Quarter and Full-Year Results NET SALES ($B) COMMENTARY ▪ Brazil and Mexico demand showing signs of improvement ▪ Flat revenue driven by cost-based pricing actions EBIT(5) ($M) ▪ Solid EBIT margins impacted by cost inflation, partially offsetting strong cost actions EBIT MARGIN(5)
Slide 13: Asia Fourth-Quarter and Full-Year Results
Asia Fourth-Quarter and Full-Year Results NET SALES ($B) COMMENTARY ▪ Full-year organic net sales(4) growth of 5% ▪ Demand negatively impacted EBIT(5) ($M) by consumer sentiment, partially offset by cost-based pricing actions ▪ EBIT impacted by lower volumes and cost inflation EBIT MARGIN(5) 13
Slide 14: Agenda
Agenda Portfolio Transformation: EMEA Agreement to Unlock Significant Value Creation 2022 Fourth Quarter Results Well Positioned to Deliver Solid 2023 14
Slide 15: Perspective on External Environment in 2023
Perspective on External Environment in 2023 FIRST HALF SECOND HALF ● Remains subdued; demand (5) - (10)% ● Underlying strong fundamentals to become visible with exit flat to 2022 DEMAND ● Expect promotional environment similar to second half 2022, below pre-pandemic levels ● Expect promotional enviro
Slide 16: Our 2023 Operational Priorities Are Clear
Our 2023 Operational Priorities Are Clear COST STRUCTURE RESET DELIVERING $800 - $900M BENEFIT Responsive & Adaptive Supply Chain Substantial Cost Reduction in 2023 $500M ● Flawless execution of supply chain Net Cost & RMI ($M) ● Aggressive expansion of dual sourcing $0M ● Strong focus on complexity
Slide 17: 2023 Guidance
2023 Guidance 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 EBIT YoY Change Free FCF as % of Margin(2) Cash Flo
Slide 18: Full-Year 2023 Ongoing EBIT Margin Guidance
Full-Year 2023 Ongoing EBIT Margin(2) Guidance (Approximate impact) Current Comments 2022 Ongoing EBIT Margin 6.9% • Moderate promotional investments partially offset by positive Price/Mix -2.25 mix • Strong cost takeout actions in place, delivering ~$500M Net Cost* 2.50 benefit • Expect ~$300 - $400M
Slide 19: 2023 Regional Guidance
2023 Regional Guidance Industry EBIT % North (6) - (4)% ~12% America Europe, Middle East (6) - (4)% ~2.5% & Africa Latin (3) - (1)% ~7% America Asia 2 - 4% ~5.5% Total ~(3)% ~7.5% 19
Slide 20: Capital Allocation Strategy Remains Unchanged
Capital Allocation Strategy Remains Unchanged 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 traili
Slide 21: Executive Summary
Executive Summary ▪ Clear 2023 operational priorities to deliver sustained margin expansion ○ Flawless supply chain execution ○ High confidence in delivering $800 - $900M overall cost takeout ▪ Portfolio transformation and 2023 actions position Whirlpool well to… ○ …deliver towards long term value cr
Slide 22: Closing Remarks and Q&A
and Q&A Closing Remarks Whirlpool Corporation Confidential
Slide 23: Full-Year 2022
Full-Year 2022 PROFITABLE GROWTH Took early and decisive actions in a volatile environment Net Sales YoY Change ▪ Organic net sales(4) decline of 6% $19.7B (10.3)% ▪ $1B in cost-based price actions largely offsetting cost inflation (6.0)% organic(4) ▪ Synchronized global production with demand MARGIN
Slide 24: 2022 Ongoing EBIT Margin Drivers
2022 Ongoing EBIT Margin(2) Drivers (Approximate impact) Q1 Q2 Q3 Q4 FY Comments 2021 Ongoing EBIT Margin 12.4% 11.4% 11.1% 8.6% 10.8% Price/Mix +6.00 +6.75 +5.50 +2.00 +5.00 • Cost-based price increases • Increased logistics and energy cost; ~$0.5B non-structural inefficiencies, temporary Net Cost *
Slide 25: 2023 Free Cash Flow Guidance
2023 Free Cash Flow(3) Guidance (Approximate impact in millions) 2022 2023 Comments Cash Earnings and Other Operating Items $1,236 ~$1,400 • Innovation, digital transformation and Capital Expenditures $(570) ~$(600) capacity investments Working Capital $194 ~$25 • Sustained low working capital level
Slide 26: Key Assumptions - Guidance
Key Assumptions - Guidance Income Statement FY2022A FY2023E Raw Material (Inflation) / Deflation $(1.5)B ~$300 - $400M * Restructuring Costs $15M Interest Expense $190M ~$325M Adjusted Effective Tax Rate 4.4% 14 - 16% Weighted-Average Diluted Shares Outstanding 56.5M 55.1M* Cash Flow Statement FY2022A
Slide 27: Interest and Sundry Income Expense
Interest and Sundry (Income) Expense Q4 FY (Approximate impact in millions) 2021 2022 2021 2022 Comments • Includes foreign exchange and hedge Net Foreign Exchange $(1) $57 $(22) $85 (gain)/loss Interest (Income)/Other (18) (30) (139) (104) • Elica PB India* and LAR tax credit** Equity Method Invest
Slide 28: Restructuring Cash Outlays
Restructuring Cash Outlays (Approximate impact in millions) 2022 2023E Comments COVID-19 Related Actions $10 $15 Naples Closure 3 - • Naples, Italy manufacturing facility Other Initiatives 27 10 • Primarily previous executed actions Total $40 ~$25 Note: Numbers may not reconcile due to rounding 28
Slide 29: Whirlpool Organic Net Sales
Whirlpool Organic Net Sales(4) Q4 (Approximate impact in millions) 2021 2022 Change Net Sales $5,815 $4,923 (15.3%) Less: Russia Divestiture 145 - Less: Currency - (136) Total $5,670 $5,059 (10.8%) Full-Year (Approximate impact in millions) 2021 2022 Change Net Sales $21,985 $19,724 (10.3%) Less: WH
Slide 30: Regional Organic Net Sales
Regional Organic Net Sales(4) EMEA Q4 (Approximate impact in millions) 2021 2022 Change Net Sales $1,412 $1,028 (27.2%) Less: Russia Divestiture 145 - Less: Currency - (128) Total $1,267 $1,156 (8.8%) Asia Full Year (Approximate impact in millions) 2021 2022 Change Net Sales $1,239 $1,100 (11.2%) Le
Slide 31: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures This presentation includes certain non-GAAP financial measures, some of 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 finan
Slide 32: Whirlpool ownership of the Hotpoint brand in EMEA and Asia Pacific regions
* Whirlpool Corporation ownership of the Hotpoint brand in EMEA and Asia Pacific regions is not affiliated with the Hotpoint brand sold in the Americas