Whirlpool Corporation · NYSE:WHR
Whirlpool — Q1 2023 Earnings Presentation
32 slides from Whirlpool's earnings presentation, Apr 25, 2023
Slide 1: First-Quarter 2023 Earnings Review
First-Quarter 2023 Earnings Review TUESDAY, APRIL 25, 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: 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: First-Quarter Earnings & 2023 Perspective
First-Quarter Earnings & 2023 Perspective Whirlpool Corporation Confidential Marc Bitzer Jim Peters CHAIRMAN AND EXECUTIVE VICE CHIEF EXECUTIVE PRESIDENT AND CHIEF OFFICER FINANCIAL OFFICER
Slide 5: Table of Contents
Table of Contents Solid Q1 results, in line with expectations Business performance on track Well positioned to deliver 2023, reaffirming guidance Portfolio transformation towards a higher-growth, higher-margin business is well underway 5
Slide 6: 2023 First-Quarter Results
2023 First-Quarter Results PROFITABLE GROWTH ● Solid Q1 performance, in line with expectations Net Sales YoY Change $4.6B (5.5)% ○ Net sales decline of 5.5% driven by global demand softness (5.2)% organic ○ Cost take out actions largely on track MARGIN EXPANSION Ongoing EBIT YoY Change ● Sequential
Slide 7: Ongoing EBIT Margin Drivers
Ongoing EBIT Margin Drivers (Approximate impact) Q4 vs Q1 Q1 vs Q1 2022 Ongoing EBIT Margin 3.5% 9.4% Price/Mix +1.00 -2.75 Net Cost* -- -0.75 Raw Material Inflation +0.50 +0.50 Marketing & Technology Investments +0.50 -0.75 Currency -- -0.25 2023 Ongoing EBIT Margin 5.4% 5.4% *Inclusive of Fixed Cos
Slide 8: Operational Priority: Responsive & Adaptive Supply Chain
Operational Priority: Responsive & Adaptive Supply Chain Operational Target Actions Status De-risking, creating responsive and Flawless execution of supply chain ON TRACK adaptive supply chain Continue to expand dual supply Aggressive expansion of dual sourcing ON TRACK strategy Strong focus on comp
Slide 9: Substantial Cost Takeout Actions on Track
Substantial Cost Takeout Actions on Track $500M Net Cost & RMI ($M) $0M $800M - $900M $(500)M Cost structure reset expected to deliver $800M - $900M benefit 9
Slide 10: Table of Contents
Table of Contents Solid Q1 results, in line with expectations Business performance on track Well positioned to deliver 2023, reaffirming guidance Portfolio transformation towards a higher-growth, higher-margin business is well underway 10
Slide 11: North America First-Quarter Results
North America First-Quarter Results Sequential Year-over-Year NET SALES ($B) -3% -2% ● Sequential and year-over-year share gains of 1pt, offset by ~5.5% industry decline -40% 65% ● Solid margins of 10%; Significant EBIT ($M) sequential margin expansion of over 400 basis points -6.3pts ● EBIT impacted
Slide 12: Industry Trends Support Continued Growth
Industry Trends Support Continued Growth TRAILING 12 MONTH VOLUME BY QUARTER Remote and hybrid drive increased demand and appliance 3-4% CAGR usage expected in mid-term Record inflation ~4% growth driving and interest rates strong install base impact consumer sentiment 50,000 40,000 30,000 Note: Grap
Slide 13: EMEA First-Quarter Results
EMEA First-Quarter Results Sequential Year-over-Year NET SALES ($B) -13% -18% ● Continued demand weakness across key countries; organic net sales decline ~8% year-over-year nm nm EBIT ($M) ● Held for sale benefits and cost takeout actions driving positive EBIT 1.0pts 3.1pts ● EMEA transaction on trac
Slide 14: LAR First-Quarter Results
LAR First-Quarter Results Sequential Year-over-Year NET SALES ($B) -9% 0% ● Continued signs of demand improvement in Mexico, with softer demand in Brazil -20% -28% ● Flat net sales driven by EBIT ($M) cost-based pricing actions ● EBIT margins impacted by cost inflation and foreign currency EBIT MARGI
Slide 15: Asia First-Quarter Results
Asia First-Quarter Results Sequential Year-over-Year NET SALES ($B) 17% -10% ● Consumer demand not fully recovered; excluding currency, net sales decline ~3% -43% EBIT ($M) 33% ● EBIT impacted by negative price/mix and foreign currency -1.7pts ● Strong cost takeout actions EBIT MARGIN 0.4pts gaining
Slide 16: Table of Contents
Table of Contents Solid Q1 results, in line with expectations Business performance on track Well positioned to deliver 2023, reaffirming guidance Portfolio transformation towards a higher-growth, higher-margin business is well underway 16
Slide 17: 2023 Guidance Remains Unchanged
2023 Guidance Remains Unchanged 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
Slide 18: Balanced Capital Allocation Priorities
Balanced Capital Allocation Priorities 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 Dividends ~30% of tra
Slide 19: Table of Contents
Table of Contents Solid Q1 results, in line with expectations Business performance on track Well positioned to deliver 2023, reaffirming guidance Portfolio transformation towards a higher-growth, higher-margin business is well underway 19
Slide 20: Portfolio Transformation Well Underway
Portfolio Transformation Well Underway THREE STRONG PILLARS SMALL MAJOR COMMERCIAL APPLIANCES APPLIANCES APPLIANCES GROW, ALSO INORGANICALLY STRENGTHEN + REFOCUS GROW, ALSO INORGANICALLY More Global in Nature Win in Americas Structurally Attractive (#1 Position) & B2B Business Serve ‘Full’ Cooking A
Slide 21: Successful InSinkErator Integration
Successful InSinkErator Integration ACQUISITION ANNOUNCED CLOSED TRANSACTION INTEGRATION VALUE CREATION Announced Q3 2022 Completed Q4 2022 On Track Ongoing 70% Market Share 80+ 4%+ CAGR U.S. Food Waste Disposal Years of Experience Delivering Growth Market Share in 2022 in Food Waste Disposal Indust
Slide 22: The 'Next Generation' Launches Summer 2023
The ‘Next Generation’ Launches Summer 2023 NextGen Product Launch Redesigned Power and Advanced series disposers expected to launch in 2023 ● Up to 4 stages of Enhanced MultiGrind™ Technology ● SoundSeal™ Noise Reduction ● Induction Motor Driven ● Our Easiest Installation Ever ● Manufactured in Raci
Slide 23: EMEA Transaction Update
EMEA Transaction Update ● Regulatory process progressing ● Continue to expect closing in second half 2023 ● Retaining 25% stake(1) in a newly formed European appliance company ● $750M+ net present value of predictable cash flows of Whirlpool brand and potential monetization of minority interest 23
Slide 24: On Track to Deliver Strong Value Creation
On Track to Deliver Strong Value Creation ● Operational priorities are on track ○ NAR share gains driven by product innovations and improved supply chain execution ○ Cost takeout actions expected to deliver $800 - $900M ● Delivered strong sequential margin expansion ● Reaffirming 2023 guidance ● Portf
Slide 25: Closing Remarks and Q&A
and Q&A Closing Remarks Whirlpool Corporation Confidential
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 55.2M** Cash Flow Statement FY2022A
Slide 27: Ongoing EBIT Margin Guidance Remains Unchanged
Ongoing EBIT Margin Guidance Remains Unchanged (Approximate impact) Current Comments 2022 Ongoing EBIT Margin 6.9% • Promotional activities below pre-pandemic levels, partially Price/Mix -2.25 offset by mix Net Cost* +2.50 • Strong cost takeout actions delivering ~$500M benefit • Expect ~$300 - $400M
Slide 28: 2023 Regional Guidance Remains Unchanged
2023 Regional Guidance Remains Unchanged 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% 28
Slide 29: 2023 Free Cash Flow Guidance Remains Unchanged
2023 Free Cash Flow Guidance Remains Unchanged (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 workin
Slide 30: Interest and Sundry (Income) Expense
Interest and Sundry (Income) Expense Q1 (Approximate impact in millions) 2022 2023 Comments • Includes foreign exchange and hedge Net Foreign Exchange $14 $12 (gain)/loss Interest (Income)/Other (22) 65 • Legacy EMEA legal matters Equity Method Investment Income (Loss)* 5 (1) Interest and Sundry (In
Slide 31: 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 previously executed actions Total $40 ~$25 Note: Numbers may not reconcile due to rounding 31
Slide 32: Hotpoint brand ownership footnote
* Whirlpool Corporation ownership of the Hotpoint brand in EMEA and Asia Pacific regions is not affiliated with the Hotpoint brand sold in the Americas