Whirlpool Corporation · NYSE:WHR
Whirlpool — Q4 2021 Earnings Presentation
31 slides from Whirlpool's earnings presentation, Jan 27, 2022
Slide 1: 2021 Earnings Review
2021 Earnings Review THURSDAY, JANUARY 27, 2022
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: Global Overview
Global Overview Marc Bitzer CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Slide 4: Executive Summary
Executive Summary ▪ Record setting 2021 with very strong revenue growth and margin expansion ▪ On path to yet another record year of performance in 2022 ○ Robust demand driven by consumer trends and strong replacement market ○ Supply constraints and inflationary pressures will persist ○ Actions and p
Slide 5: A Record Setting Full-Year 2021
A Record Setting Full-Year 2021 PROFITABLE GROWTH Net Sales YoY Change Demonstrated agility in any operating environment ▪ Executed cost-based price increases across the globe $22.0B 13.0% ▪ Fully offset $1B in inflation (500 bps) (12.3% ex-currency) Drove fourth consecutive year of record performance
Slide 6: Fourth-Quarter Results Highlights
Fourth-Quarter Results Highlights PROFITABLE GROWTH Net Sales YoY Change ▪ Delivered record revenue, with 8% growth compared to 2019 $5.8B 0.3% (0.9% ex-currency) ▪ Ongoing EBIT margin(1) of 8.6%, largely offsetting over $500M of inflation MARGIN EXPANSION led by raw material cost increases Ongoing EB
Slide 7: Regional Overview
Regional Overview Joe Liotine PRESIDENT AND CHIEF OPERATING OFFICER
Slide 8: North America Fourth-Quarter and Full-Year Results
North America Fourth-Quarter and Full-Year Results NET SALES ($B) COMMENTARY ▪ Strong consumer demand and cost-based price increases drove record Q4 revenue and EBIT(3,5) ($M) 11% full-year revenue growth ▪ Strong EBIT performance led by price/mix actions EBIT MARGIN(3,5) ▪ Constraints remain elevat
Slide 9: EMEA Fourth-Quarter and Full-Year Results
EMEA Fourth-Quarter and Full-Year Results NET SALES ($B) COMMENTARY ▪ Strong revenue growth led by key countries EBIT(3) ($M) ▪ EBIT margin expansion of 190 basis points despite negative impact of inflation ▪ Long-term turnaround is on EBIT MARGIN(3,5) track 9
Slide 10: Latin America Fourth-Quarter and Full-Year Results
Latin America Fourth-Quarter and Full-Year Results NET SALES ($B) COMMENTARY ▪ Revenue driven by cost-based price increases EBIT impacted by inflation EBIT(3) ($M) ▪ and supply constraints, full-year offset by cost-based price increases and strong topline EBIT MARGIN(3,5) ▪ Strong EBIT margin performa
Slide 11: Asia Fourth-Quarter and Full-Year Results
Asia Fourth-Quarter and Full-Year Results NET SALES ($B) COMMENTARY ▪ Full-year revenue growth of 16% excluding Whirlpool China divestiture* EBIT(3) ($M) ▪ Successful completion of Whirlpool China divestiture* and Elica PB India acquisition** EBIT MARGIN(3,5) ▪ Uncertainty remains in India as COVID-
Slide 12: Shareholder Value Creation
Shareholder Value Creation Marc Bitzer Jim Peters CHAIRMAN AND EXECUTIVE VICE PRESIDENT CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
Slide 13: 2022 Guidance
2022 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(1) Cash Flo
Slide 14: Full-Year 2022 Ongoing EBIT Margin Guidance
Full-Year 2022 Ongoing EBIT Margin(1) Guidance (Approximate impact) Current Comments 2021 Ongoing EBIT Margin(5) 10.8% • Previously announced cost-based price increases coupled with the disciplined execution of go-to-market actions Price/Mix +6.00 • Positive consumer trends and product launches driv
Slide 15: 2022 Regional Guidance
2022 Regional Guidance Industry EBIT % North 2 - 3% ~16% America Europe, Middle East 0 - 2% ~3% & Africa Latin (4) - (2)% ~8% America Asia 5 - 6% ~8% Total ~2% ~10.5% 15
Slide 16: 2022 Free Cash Flow Guidance
2022 Free Cash Flow(2) Guidance (Approximate impact in millions) 2021 2022 Comments Cash Earnings and Other Operating • Driven by increased earnings $2,264 $2,450 Items • Innovation, digital transformation and Capital Expenditures $(525) $(700) capacity investments Working Capital $68 $(200) • Moder
Slide 17: Shareholder Returns Led by Strong Cash Generation
Shareholder Returns Led by Strong Cash Generation ADJUSTED FREE CASH FLOW(2) ($B) STRUCTURALLY HIGHER CASH CONVERSION Cash conversion fueled by: ● Accelerated growth and strong margins ● Unique cash uses in line with long-term expectations of $50M-$100M ● Continued investment in innovation, capacity
Slide 18: Positioned to Grow our Business and Drive Shareholder Returns
Positioned to Grow our Business and Drive Shareholder Returns STRONG BALANCE SHEET WITH INCREASED GROWTH INVESTMENTS AND SIGNIFICANT CASH GENERATION HEALTHY SHAREHOLDER RETURNS ✓ Gross debt leverage below target Fund the Business: of 2.0x ○ Increased investments to ✓ Free Cash Flow(2) of $1.5B in ‘2
Slide 19: Executive Summary
Executive Summary ▪ Delivered record results for the fourth consecutive year ○ Double-digit revenue growth of 13% and record ongoing margins of 10.8% ○ $1.4B cash returned to shareholders ▪ On path to yet another record year of performance in 2022 ○ Robust demand driven by consumer trends and strong
Slide 20: Closing Remarks and Q&A
Closing Remarks and Q&A
Slide 21: Benton Harbor, Pero (Milan), Hong Kong, São Paulo
BENTON HARBOR, MICHIGAN PERO (MILAN), ITALY HONG KONG, CHINA SÃO PAULO, BRAZIL * * Whirlpool Corporation ownership of the Hotpoint brand in EMEA and Asia Pacific regions is not affiliated with the Hotpoint brand sold in the Americas
Slide 22: Appendix
Appendix
Slide 23: 2022 Capital Allocation Strategy
2022 Capital Allocation Strategy 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 trailing
Slide 24: Key Assumptions – Guidance
Key Assumptions – Guidance Income Statement FY2021A FY2022E Raw Material (Inflation) / Deflation $(1.0)B ~$(1.0) - (1.25)B *** Restructuring Costs $38M Interest Expense $176M ~$175M Adjusted Effective Tax Rate 23.5% 24-26% Weighted-Average Diluted Shares Outstanding 62.9M 60.2M* Cash Flow Statement FY2
Slide 25: 2021 Business Drivers
2021 Business Drivers (Approximate impact) Q1 Q2 Q3 Q4 FY Comments 2020 Ongoing EBIT Margin(5) 6.2% 5.0% 11.9% 11.4% 9.0% • Previously announced cost-based price Price/Mix +5.75 +6.00 +6.00 +6.00 +6.00 increases coupled with the disciplined execution of go-to-market actions • 2020 cost program carry
Slide 26: Free Cash Flow Historical Summary
Free Cash Flow(2) Historical Summary (Approximate impact in millions) 2019 2020 2021 2022F Adjusted Free Cash Flow $912 $1,246 $1,963 $1,550 Less: Sale of Assets/Business $140 $166 $302 $50 Less: Changes in restricted cash $40 $(10) $10 $- Free Cash Flow $732 $1,090 $1,651 $1,500 Note: Free Cash Flo
Slide 27: Interest and Sundry (Income) Expense
Interest and Sundry (Income) Expense Q4 FY (Approximate impact in millions) 2020 2021 2020 2021 Comments • Includes foreign exchange Net Foreign Exchange $(7) $- $(29) $(20) and hedge (gain)/loss • Elica PB India*, LAR tax Interest (Income)/Other (24) (12) $8 $(130) credit, and interest income Inter
Slide 28: Restructuring Cash Outlays
Restructuring Cash Outlays (Approximate impact in millions) 2021 2022 Comments COVID-19 Related Actions $61 $15 Naples Closure 69 10 • Naples, Italy manufacturing facility Other Initiatives 16 25 • Primarily previous executed actions Total $146 ~$50 28
Slide 29: Cash Flow from Sale of Assets/Business
Cash Flow from Sale of Assets/Business (Approximate impact in millions) 2021 2022 Comments Real Estate Optimization/Other $16 $50 • Continuation of real estate optimization strategy Sale of China Business 193 - • Sale of majority stake in Whirlpool China Sale of Turkey Business 93 - • Sale of Turkis
Slide 30: Asia Net Sales Reconciliation
Asia Net Sales Reconciliation (Approximate impact in millions) FY 2020 FY 2021 Change Comments Net Sales $1,265 $1,239 (2.1)% • Partial tender offer for Whirlpool China closed Less: Whirlpool China Divestiture 318 139 - May 6, 2021 Net Sales less divestiture $947 $1,100 16.2% (Approximate impact in m
Slide 31: Use of Non-GAAP Financial Measures, GAAP Accounting Changes and Additional Items
Use of Non-GAAP Financial Measures, GAAP Accounting Changes and Additional Items 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 EBI