Whirlpool Corporation · NYSE:WHR
Whirlpool — Investor Day (May 2019)
88 slides from Whirlpool's investor day presentation, May 23, 2019
Slide 1: 2019 Investor Day
2019 Investor Day New York Stock Exchange // May 23, 2019 Whirlpool Corporation [Placeholder for Agenda Title] Investor Day ‒ May 23, 2019
Slide 2: Overview
OVERVIEW Welcome, Overview and Introductions M. Tunnicliff 9:00 am - 9:05 am Why Invest in Whirlpool? M. Bitzer 9:05 am - 9:10 am Our Unique Structural Position & M. Bitzer 9:10 am - 9:40 am Strategic Digital Transformation J. Liotine Regional Catalysts for Growth Regional Presidents 9:40 am - 10:20
Slide 3: Global Executive Team
GLOBAL EXECUTIVE TEAM Marc Bitzer João Brega Roberto Campos Liz Door Kirsten Hewitt Chairman & Chief EVP & President, Sr VP, Global Sr VP, Global Sr VP and Chief Executive Officer Whirlpool Latin America Product Organization Strategic Sourcing Legal Officer Jim Peters Joe Liotine Carey Martin Gilles Mor
Slide 4: 2019 Investor Day – Agenda
2019 INVESTOR DAY – AGENDA 1. Why Invest in Whirlpool? 2. Our Unique Structural Position & Strategic Digital Transformation 3. Regional Catalysts for Growth 4. Capital Allocation for Superior Value Creation 5. Q&A, Closing Remarks Whirlpool Corporation Overview [Placeholder for Agenda Title] Investo
Slide 5: Why Invest in Whirlpool? (1/2)
WHY INVEST IN WHIRLPOOL? (1/2) Best Kitchen and Laundry Company with a Unique Structural Position ● Global Leading Scale ● Track Record of Innovation ● Best Brand Portfolio ● Best Cost Position Regional Catalysts for Value Creation Strategic Digital Transformation ● North America: Superior margins i
Slide 6: Why Invest in Whirlpool? (2/2)
WHY INVEST IN WHIRLPOOL? (2/2) Long-Term Value Creation Goals Disciplined Capital Allocation 2018 Long-Term 2018 Long-Term Funding the EBIT* 6.3% ~10% ~3% ~3% business (Capex) Dividends 25-30% ~30% FCF ~4% 6%+ Share Repurchases $1.15B Continued ROIC 9.4% 12-14% Gross Debt Leverage 3.6x 2.0x M&A Stra
Slide 7: 2019 Investor Day – Agenda
2019 INVESTOR DAY – AGENDA 1. Why Invest in Whirlpool? 2. Our Unique Structural Position & Strategic Digital Transformation 3. Regional Catalysts for Growth 4. Capital Allocation for Superior Value Creation 5. Q&A, Closing Remarks Whirlpool Corporation Overview [Placeholder for Agenda Title] Investo
Slide 8: Our Unique Structural Position
OUR UNIQUE STRUCTURAL POSITION 1 2 3 4 Global Leading Best Brand Proven Track Record Best Cost Scale Portfolio of Innovation Position #1 in 7 of Our Six Brands with Launched ~100 Strong Track Record Top 10 Countries >$1B in Sales Products in 2018 of Cost Productivity Whirlpool Corporation Our Unique
Slide 9: Unique Structural Position: Global Leading Scale
1 UNIQUE STRUCTURAL POSITION: GLOBAL LEADING SCALE Leading Positions in the Most Attractive Marketplaces *Non-grey bar represents Whirlpool position #1 Position in 7 of Our Top 10 Countries Whirlpool Corporation Our Unique Structural Positionfor [Placeholder & Strategic Digital Transformation Agenda
Slide 10: Unique Structural Position: Best Brand Portfolio
2 UNIQUE STRUCTURAL POSITION: BEST BRAND PORTFOLIO % of Net Sales (2018) Premium (15%) Mass (75%) Value (10%) Brand Portfolio Targets Over 90% of Consumers and Includes Six Brands with >$1B in Sales Whirlpool Corporation Our Unique Structural Positionfor [Placeholder & Strategic Digital Transformati
Slide 11: Unique Structural Position: Proven Track Record of Innovation
3 UNIQUE STRUCTURAL POSITION: PROVEN TRACK RECORD OF INNOVATION 1911 1949 1961 1998 2006 2013 2018 First Electric First Side-by-Side First Self-Ventilated First Energy Efficient French-Door Built-In First Induction Dual Bulk Load and Wringer Washer Refrigerator Cooktop Top-Load Washer Refrigerator Dou
Slide 12: Unique Structural Position: Best Cost Position
4 UNIQUE STRUCTURAL POSITION: BEST COST POSITION Scale Leading Operations Advanced Productivity Tools Number of Key Global Factories Global Production System Embarked on our global World-Class Mega 6 Manufacturing initiative in 2017 Factory (>3M units) Product Architecture Large 17 Factory Step func
Slide 13: Our Digital Transformation Creates Tremendous Opportunities Across the Value Chain
OUR DIGITAL TRANSFORMATION CREATES TREMENDOUS OPPORTUNITIES ACROSS THE VALUE CHAIN 1 Leader in Connected Appliances and Services ● Incremental revenues from digital products and services ● Unique insights into actual consumer usage behaviors 2 Winning the Digital Consumer Journey ● Increased pre-buy
Slide 14: Leading in Connected Appliances - Laundry
1 LEADING IN CONNECTED APPLIANCES - LAUNDRY New Smart Front-Load Washing Machines Play Video Whirlpool Corporation Our Unique Structural Positionfor [Placeholder & Strategic Digital Transformation Agenda Title] Investor Day – May 23, 2019 14
Slide 15: Leading in Connected Appliances - Kitchen
1 LEADING IN CONNECTED APPLIANCES - KITCHEN Suite Featuring Oven with Smart Countertop Oven powered Connected Appliances accessories Yummly serves as the “operating system” for the full range of Whirlpool Corp. connected appliances and enables a wide array of compelling use cases, including personal
Slide 16: Leading in Connected Appliances - Kitchen
1 LEADING IN CONNECTED APPLIANCES - KITCHEN Constant Pursuit of Improving Life at Home Play Video Whirlpool Corporation Our Unique Structural Positionfor [Placeholder & Strategic Digital Transformation Agenda Title] Investor Day – May 23, 2019 16
Slide 17: Leading in Connected Appliances Through Our Yummly Recipe App
1 LEADING IN CONNECTED APPLIANCES THROUGH OUR YUMMLY RECIPE APP 26M+ 10M 9M 3M Registered Email Monthly Active Visitors per Users Subscribers Unique Users Week LEADING INNOVATION DATA DRIVEN Recipe App Leader with Android, Approach to Digital Apple, Webby & CES Kitchen & Food Accolades Content 2M+ r
Slide 18: Leading in Connected Appliances Through Our Yummly Pro Launch
1 LEADING IN CONNECTED APPLIANCES THROUGH OUR YUMMLY PRO LAUNCH Premium Talent Premium Recipes Immersive “Cooks-with” experience (“peloton style”) Richard Carla Daniel Jet Andrew Blais Hall Holzman Tila Zimmern Whirlpool Corporation Our Unique Structural Positionfor [Placeholder & Strategic Digital
Slide 19: Our Leadership in Connected Appliances Is Externally Validated (CES 2019)
1 OUR LEADERSHIP IN CONNECTED APPLIANCES IS EXTERNALLY VALIDATED (CES 2019) 15 Awards Consumer Electronics Show (CES) Top-Tier Media Mentions Home Appliance and Smart Home categories “This is better than other competitors. Perfect for Manhattan.” [regarding Whirlpool Smart Countertop Oven] – The New
Slide 20: Winning the Race Toward Installed Connected Base
1 ...AND WE ARE WINNING THE RACE TOWARD INSTALLED CONNECTED BASE Whirlpool Connected Products in the U.S. Cumulative # of installed connected products Whirlpool Corporation Our Unique Structural Positionfor [Placeholder & Strategic Digital Transformation Agenda Title] Investor Day – May 23, 2019 20
Slide 21: Launching an Innovative Product Range of Connected and Traditional Appliances
1 WE ARE LAUNCHING AN INNOVATIVE PRODUCT RANGE OF CONNECTED AND TRADITIONAL APPLIANCES Play Video Whirlpool Corporation Our Unique Structural Positionfor [Placeholder & Strategic Digital Transformation Agenda Title] Investor Day – May 23, 2019 21
Slide 22: Winning the Digital Consumer Journey
2 WINNING THE DIGITAL CONSUMER JOURNEY Initial ● Leveraging data from our Consideration marketing investments to reach consumers across all phases of the Consumer Decision Journey Post- Active Purchase Evaluation ● These investments enable DATA our brands to reach the right consumers with the right
Slide 23: Winning the Digital Consumer Journey
2 WINNING THE DIGITAL CONSUMER JOURNEY Big Data Analytics: Leveraging Our Tool Set Data Inputs Use Case Outputs Brand.com Properties Planning Clickstream, HVTs, purchase history ● Attracting new customers Whirlpool Marketing Technology Stack ● Growing existing relationships ● Brand building loyalty
Slide 24: Winning the Digital Consumer Journey
2 WINNING THE DIGITAL CONSUMER JOURNEY Big Data Analytics: Understanding Our Consumer While Respecting Consumer Privacy Pre-Buy Data Post-Buy Data Whirlpool Corporation Our Unique Structural Positionfor [Placeholder & Strategic Digital Transformation Agenda Title] Investor Day – May 23, 2019 24
Slide 25: Winning the Digital Consumer Journey
2 WINNING THE DIGITAL CONSUMER JOURNEY Enhancing the Pre-Buy Experience Targeted Send to owners with units 7+ years old, letting them know a new KitchenAid dishwasher Emails is now available Engaging Provide an interactive dishwasher landing experience to explore product features and Website learn a
Slide 26: Digitization of Our Value Chain for Productivity
3 DIGITIZATION OF OUR VALUE CHAIN FOR PRODUCTIVITY Driving Quality Improvements with Artificial Intelligence (AI) Machine Learning Technology Augmented Reality Significant ROI Quality and labor savings Guided Inspection Verification / Data Collection Pack-out Verification All Parts Present Quality inspe
Slide 27: Digitization of Our Value Chain for Productivity
3 DIGITIZATION OF OUR VALUE CHAIN FOR PRODUCTIVITY Driving Quality Improvements with “Big Data” Analytics In Development Key Benefits 01 Build diagnostic algorithms ● Reduce frequency of service visits ● Precise identification of part In Manufacturing replacement 02 Enhance in-factory product ● Instru
Slide 28: Digitization of Our Value Chain for Productivity
3 DIGITIZATION OF OUR VALUE CHAIN FOR PRODUCTIVITY Optimizing the Final Mile Delivery Opportunities 1 2 Online Purchase Customer Delivery Options 3 4 Actual Route Optimization Real-Time Route Visibility Costs Are Calculated for Each Step, Selecting Options Based on Profitability and Service Whirlpool
Slide 29: 2019 Investor Day – Agenda
2019 INVESTOR DAY – AGENDA 1. Why Invest in Whirlpool? 2. Our Unique Structural Position & Strategic Digital Transformation 3. Regional Catalysts for Growth 4. Capital Allocation for Superior Value Creation 5. Q&A, Closing Remarks Whirlpool Corporation Overview [Placeholder for Agenda Title] Investo
Slide 30: Driving Margin Expansion in All Regions
DRIVING MARGIN EXPANSION IN ALL REGIONS 2018 Long-Term Goal Revenue EBIT % Revenue EBIT % North $11.4B 11.8% 2–3% 13%+ America (CAGR) Europe, Middle $4.5B -2.3% 2–3% ~8% East & Africa (CAGR) Latin $3.6B 5.8% 5–6% 10%+ America ($2.5B ex Embraco) (CAGR) Asia $1.6B 5.2% 3–4% ~8% (CAGR) Total $21.0B 6.3
Slide 31: North America - Superior Value Creation in a Marketplace with Runway Left
NORTH AMERICA - SUPERIOR VALUE CREATION IN A MARKETPLACE WITH RUNWAY LEFT Long NAR 2018 Term Joe Liotine Revenue $11.4B 2–3% EBIT Margin* 11.8% 13%+ EVP and President, Whirlpool North America Share Position ~36% n/a Industry Size ~50M 2–3% *Ongoing EBIT Margin Whirlpool Corporation Regional[Placehol
Slide 32: Stable to Positive Industry Outlook
STABLE TO POSITIVE INDUSTRY OUTLOOK Industry Volume (000’s) Industry CAGR 1947 – 2018 ~3% 2019F (2)–0% 2020 – 2023F 2–3% Whirlpool Corporation Regional[Placeholder Catalysts forfor Growth ‒ North Agenda Title] America Investor Day ‒ May 23, 2019 32
Slide 33: Demand Buckets Shifting Favorably Over Time
DEMAND BUCKETS SHIFTING FAVORABLY OVER TIME Sub-Components of Demand Drivers ● Appliance replacement cycle ~10 years Replacement ● Increasing as a percent of total industry over time* (~55%) ● Steadily increasing installed base provides recurring purchase opportunities ● Current pace well below hist
Slide 34: Replacement Demand with Steady Outlook, but Future Upside
REPLACEMENT DEMAND WITH STEADY OUTLOOK, BUT FUTURE UPSIDE Demand Buckets: Industry Volume (in thousands) % of Industry: ~55% Replacement Demand Suggests Near-Term Stability with Future Upside Whirlpool Corporation Regional[Placeholder Catalysts forfor Growth ‒ North Agenda Title] America Investor Da
Slide 35: Discretionary Demand Expected to Remain Healthy
DISCRETIONARY DEMAND EXPECTED TO REMAIN HEALTHY Demand Buckets: % of Industry: ~30% Note: Discretionary includes existing home purchases and remodeling Economic Indicators Provide Support for Continued Discretionary Spending Whirlpool Corporation Regional[Placeholder Catalysts forfor Growth ‒ North
Slide 36: New Construction Still Far Below Historical and Needed Levels
NEW CONSTRUCTION STILL FAR BELOW HISTORICAL AND NEEDED LEVELS Demand Buckets: (in thousands) Each new home adds 4–5 appliances % of Industry: ~15% New Construction Trending Positive in the Near to Mid-Term Whirlpool Corporation Regional[Placeholder Catalysts forfor Growth ‒ North Agenda Title] Ameri
Slide 37: Very Solid Branded Share in a Changing Competitive Environment
VERY SOLID BRANDED SHARE IN A CHANGING COMPETITIVE ENVIRONMENT Whirlpool Corporation Regional[Placeholder Catalysts forfor Growth ‒ North Agenda Title] America Investor Day ‒ May 23, 2019 37
Slide 38: Successfully Navigating Significant Changes in the Retail Environment
SUCCESSFULLY NAVIGATING SIGNIFICANT CHANGES IN THE RETAIL ENVIRONMENT Key Actions ● Proactively managed Sears outlet decline over a multiyear period ● Maintaining balance of sale across large retailers Independent Retailers ● Properly resourcing D2C All Others capabilities for future growth D2C/Onli
Slide 39: Superior Value Creation and Confidence in Margin Expansion Abilities
SUPERIOR VALUE CREATION AND CONFIDENCE IN MARGIN EXPANSION ABILITIES Key Actions Drove Structural Improvement Levers to Expand Margins to 13%+ ● Drive positive price/mix through new product introductions ● Manage continued trade landscape shift ● Grow digital and direct to consumer business ● Invest
Slide 40: Europe, Middle East & Africa - Integration Complete and Turnaround on Track
EUROPE, MIDDLE EAST & AFRICA - INTEGRATION COMPLETE AND TURNAROUND ON TRACK Long EMEA 2018 Term Gilles Morel Revenue $4.5B 2–3% EBIT Margin -2.3% ~8% EVP and President, Whirlpool Europe, Middle Share Position ~13% n/a East & Africa Industry Size ~160M ~2% Whirlpool Corporation Regional Catalysts for
Slide 41: Complex Indesit Integration Complete
COMPLEX INDESIT INTEGRATION COMPLETE Key Integration Workstreams Pre-Integration Post-Integration Status Product Platform Consolidation ● Architectures 130 102 ● SKUs ~9K ~6K Footprint Consolidation 18 13 ● Factories ● Logistic Centers 44 28 ● Administrative Offices 67 40 IT Landscapes 3 1 95% Complet
Slide 42: Our Structural Position in Europe Is Strong
OUR STRUCTURAL POSITION IN EUROPE IS STRONG Leading Country Positions Leading Product Position Germany #2 U.K. #1 France #1 Russia #1 Italy #1 Spain #4 Poland #1 Whirlpool Corporation Regional Catalysts for Growth [Placeholder Europe,Title] for‒Agenda Middle East & Africa Investor Day ‒ May 23, 2019
Slide 43: Short-Term Margin Recovery, Long-Term Margin Expansion to Competitive EBIT Levels
SHORT-TERM MARGIN RECOVERY, LONG-TERM MARGIN EXPANSION TO COMPETITIVE EBIT LEVELS EMEA EBIT % 6 Competitor Benchmark 5 4 3 2 1 Whirlpool Corporation Regional Catalysts for Growth [Placeholder Europe,Title] for‒Agenda Middle East & Africa Investor Day ‒ May 23, 2019 43
Slide 44: Managing EMEA Footprint & Regaining Volumes
MANAGING EMEA FOOTPRINT & REGAINING VOLUMES Initiative Key Actions Exit Turkey Sales, ● Expect exit of Turkey & Hotpoint SDA to be completed by end of Q2 1 Hotpoint SDA & ● Continue to explore potential sale of South Africa operations South Africa ● Cost reduction actions on track 2 Reduce Fixed Cos
Slide 45: Prioritize Growth of Profitable Built-In Kitchen Business
PRIORITIZE GROWTH OF PROFITABLE BUILT-IN KITCHEN BUSINESS European Industry 5 6 Grow Built-In Kitchen and Premium Mix ● Dedicated premium launches with strong marketing investment support ● Focused product investments in built-in kitchen ~85% of ● Win across Pan-European kitchen trade Industry Profi
Slide 46: Latin America - Well Positioned for Brazil Demand Recovery
LATIN AMERICA - WELL POSITIONED FOR BRAZIL DEMAND RECOVERY Long LAR 2018 Term João Brega Revenue $3.6B 5–6% EBIT Margin* 5.8% 10%+ EVP and President, Whirlpool Latin America Share Position ~34% n/a Industry Size ~28M ~4% *Ongoing EBIT Margin Whirlpool Corporation Regional[Placeholder Catalysts forfo
Slide 47: Latin America Industry Is Poised for Growth
LATIN AMERICA INDUSTRY IS POISED FOR GROWTH Mexico Caribbean ● Industry size: ~1M units ● Industry size: ~7M units ● 2019–2022 CAGR: ~3% ● 2019–2022 CAGR: ~3% Colombia Brazil ● Industry size: ~13M units ● Industry size: ~1M units ● 2019–2022 CAGR: ~4% ● 2019–2022 CAGR: ~6% Argentina ● Industry size:
Slide 48: Brazil Demand Key to Regional Growth
BRAZIL DEMAND KEY TO REGIONAL GROWTH T9 Industry Volume (000’s) Indicators for Rebound Trending Favorably Whirlpool Corporation Regional[Placeholder Catalysts forfor Growth ‒ Latin Agenda Title] America Investor Day ‒ May 23, 2019 48
Slide 49: Combination of Exceptional Strong Brands
COMBINATION OF EXCEPTIONAL STRONG BRANDS Super Premium (~1%) Premium (2%) #1 Most Preferred Mass Premium Most preferred appliance brand in (15%) Brazil, recognized for iconic design Top 3 Most Preferred Mass Third most preferred appliance (45%) brand in Brazil, found in nearly 60% of Brazilian homes
Slide 50: ...and Strong Digital Marketing Capabilities
...AND STRONG DIGITAL MARKETING CAPABILITIES Understanding Complex Targeting Consumers Through Top 5 Companies in Consumer Purchase Journey Proper Channels D2C Appliance Sales Initial Consideration Set: Company 1 6+ Brands Company 2 6+ Brands Active Evaluation: 3 Leading Brands Company 4 6+ Brands M
Slide 51: ...Making Direct to Consumer Our Fastest Growing Business
...MAKING DIRECT TO CONSUMER OUR FASTEST GROWING BUSINESS Units (millions) Marketplace ● Retailer agency model Brand Store ● Brastemp/Consul e-commerce site ● Strong consumer value proposition including parts and service Compra Certa ● Member-based buying club Value Proposition by Channel Drives Sus
Slide 52: Asia - Strong Growth in India; Cost-Efficient Production in China
ASIA - STRONG GROWTH IN INDIA; COST-EFFICIENT PRODUCTION IN CHINA Long Asia 2018 Term Sam Wu Revenue $1.6B 3–4% EBIT Margin 5.2% ~8% EVP and President, Share Position ~6% n/a Whirlpool Asia Industry Size ~115M ~3% Whirlpool Corporation Regional Catalysts [Placeholder for for Growth Agenda ‒ Asia Tit
Slide 53: Focus on Strong Growth Potential in India
FOCUS ON STRONG GROWTH POTENTIAL IN INDIA China ● Industry size: ~65M units ● 2019–2022 CAGR: 0% ● ~90% appliance penetration Other Asia India ● Industry size: ~30M units ● 2019–2022 CAGR: 5% ● Industry size: ~20M units ● ~60% appliance penetration ● 2019–2022 CAGR: 9% ● ~20% appliance penetration N
Slide 54: Significant Value Creation in India
SIGNIFICANT VALUE CREATION IN INDIA Strong Revenue Growth Key Drivers Industry Growth ● Positive industry demand trends, particularly outside of laundry and refrigeration (T2) Strong Historical Performance ● T6 share position +3pts since 2017 and trending positive ● Strong Whirlpool brand awareness
Slide 55: We Brought Our China Business Back to Breakeven
WE BROUGHT OUR CHINA BUSINESS BACK TO BREAKEVEN Whirlpool China Co., Ltd. ...however, short-term margin expansion Operating Income (%) will remain limited ● Outlook on China industry demand is negative ● Significant brand investment related to Sanyo to Whirlpool brand transition Note: Whirlpool owns
Slide 56: China Provides Cost-Efficient Manufacturing
CHINA PROVIDES COST-EFFICIENT MANUFACTURING Utilizing Industry 4.0 practices as part of our global Manufacturing 2020 initiative ● Operational Execution Strong investment in smart robotics, augmented reality and IoT to enable real-time production planning and feedback ● Cost-Efficient Installed Capaci
Slide 57: 2019 Investor Day – Agenda
2019 INVESTOR DAY – AGENDA 1. Why Invest in Whirlpool? 2. Our Unique Structural Position & Strategic Digital Transformation 3. Regional Catalysts for Growth 4. Capital Allocation for Superior Value Creation 5. Q&A, Closing Remarks Whirlpool Corporation Overview [Placeholder for Agenda Title] Investo
Slide 58: Our Long-Term Value Creation Goals
OUR LONG-TERM VALUE CREATION GOALS Achieving these goals will drive significant levels of TSR Sales EBIT ROIC FCF (Annual Organic Net Sales Growth (Ongoing Earnings Before (Return on Invested (Free Cash Flow Excluding Currency) Interest and Tax, % of Net Sales) Capital) as % of Net Sales) 2018 -0.3%
Slide 59: Drivers of Our Ongoing EBIT Margin Goals
DRIVERS OF OUR ONGOING EBIT MARGIN GOALS Global Margin Expansion Drivers Regional Contribution to Global Margin Expansion Long-Term Goals Revenue 2–3% 2–3% 5–6% 3–4% ~3% EBIT % 13%+ ~8% 10%+ ~8% ~10% Whirlpool Corporation Capital [Placeholder Allocation forfor Superior AgendaValue Title]Creation Inv
Slide 60: Free Cash Flow Actions to Get to 6%+
FREE CASH FLOW ACTIONS TO GET TO 6%+ Key Actions ● Margin expansion expected to drive improved cash conversion ● Strong focus on delivering structural inventory improvement in all regions ● Continued progress on trade/vendor terms ● Anticipate lower non-structural items in the future (i.e., restruct
Slide 61: Step Change in ROIC Through Margin Expansion and Invested Capital Efficiencies
STEP CHANGE IN ROIC THROUGH MARGIN EXPANSION AND INVESTED CAPITAL EFFICIENCIES Key Actions ● Continued focus on working capital (“stretch to zero”) ● Boost product platform returns by scaling global design and harmonizing our manufacturing processes ● Continue reviewing core and non-core assets Sign
Slide 62: Disciplined Capital Allocation Strategy
DISCIPLINED CAPITAL ALLOCATION STRATEGY Fund the Business Target Capex/R&D Capex: ~3% of net sales; R&D: ~3% of net sales Mergers & Acquisitions Opportunistic M&A with high ROIC threshold Return to Shareholders Target Dividends ~30% of trailing of 12-month ongoing net earnings Share Repurchase Conti
Slide 63: Opportunistic M&A with High ROIC Threshold
OPPORTUNISTIC M&A WITH HIGH ROIC THRESHOLD M&A Criteria Capacity to Standalone Value Creation Strategic Fit Execute and Attractiveness Opportunity Integrate M&A Hurdles Strategic M&A Bolt-on M&A EPS Accretive Time Horizon ~15% ROIC 20–25% ROIC Year 1, 5–10 Years Long-term Payback Short-term Payback
Slide 64: Seven Consecutive Years of Dividend Increases
SEVEN CONSECUTIVE YEARS OF DIVIDEND INCREASES Dividends Paid ● Dividend target is ~30% of trailing 12-month ongoing net earnings ● Consistent annual dividend increases Whirlpool Corporation Capital [Placeholder Allocation forfor Superior AgendaValue Title]Creation Investor Day ‒ May 23, 2019 64
Slide 65: Continuing to Return Cash Through Share Repurchases
CONTINUING TO RETURN CASH THROUGH SHARE REPURCHASES Diluted Average Weighted Shares (Millions) * Expect to Repurchase ~$200–300M Annually (Near Term) Repurchased ~$2.7B of Stock Since 2015 * 2019 forecast is an estimated full-year weighted-average diluted shares outstanding inclusive of actual share
Slide 66: Targeting Gross Debt to EBITDA of 2.0
TARGETING GROSS DEBT TO EBITDA OF 2.0 Driving Leverage Improvement through Debt Repayment and Margin Expansion Whirlpool Corporation Capital [Placeholder Allocation forfor Superior AgendaValue Title]Creation Investor Day ‒ May 23, 2019 66
Slide 67: We Are Paying Our Leaders for Performance
WE ARE PAYING OUR LEADERS FOR PERFORMANCE Key Drivers of Shareholder Return Are Anchors of Compensation Short-Term Compensation Ongoing Free Cash Weights EBIT Flow 50% 50% Greater than 80% of executive Long-Term Compensation compensation is “at-risk pay” Cumulative ROIC Weights EPS 50% 50% Whirlpool
Slide 68: 2019 Investor Day – Agenda
2019 INVESTOR DAY – AGENDA 1. Why Invest in Whirlpool? 2. Our Unique Structural Position & Strategic Digital Transformation 3. Regional Catalysts for Growth 4. Capital Allocation for Superior Value Creation 5. Q&A, Closing Remarks Whirlpool Corporation Overview [Placeholder for Agenda Title] Investo
Slide 69: Q&A, Closing Remarks
Whirlpool Corporation Q&A, Closing [Placeholder Remarks for Agenda Title] Investor Day ‒ May 23, 2019 69
Slide 70: A Commitment to Shareholder Value Creation
A COMMITMENT TO SHAREHOLDER VALUE CREATION Best Kitchen and Laundry Company with a Unique Structural Position ● Global Leading Scale ● Track Record of Innovation ● Best Brand Portfolio ● Best Cost Position Regional Catalysts for Value Creation Strategic Digital Transformation ● North America: Superi
Slide 71: Thank You
THANK YOU JOIN THE CONVERSATION @WhirlpoolCorp #WhatMatters LinkedIn.com/company/Whirlpool-Corporation WhirlpoolCorp.com Whirlpool Corporation [Placeholder for Agenda Title] Investor Day ‒ May 23, 2019 71
Slide 72: Whirlpool Corporation
Whirlpool Whirlpool KitchenAid’ MAYTAG (j)iInDesit [iim Consul BRASTEMP AMANA JENNAI2Z Gauknecht acros? DIQUARE *Whirlpool Corporation ownership of the Hotpoint brand in EMEA and Asia Pacific regions is not affiliated with the Hotpoint brand sold in the Americas. Whirlpool Corporation
Slide 73: Appendix
APPENDIX Whirlpool Corporation 73
Slide 74: 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 75: 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” measures: Ongoing net sales, ongoing earnings per diluted share, earnings before interest and taxes (EBIT), EBIT margin, ongoing EBIT, ongoing EBIT margin, ongoing segment
Slide 76: Index of Supporting Information
INDEX OF SUPPORTING INFORMATION Slide # Slide Title & Description Source / Notes 6 WHY INVEST IN WHIRLPOOL? • EBIT margin, ROIC, free cash flow as a percentage of net sales and organic net sales growth are non-GAAP measures. • Reconciliation information is located in the supporting information sectio
Slide 77: Index of Supporting Information
INDEX OF SUPPORTING INFORMATION Slide # Slide Title & Description Source / Notes 24 WINNING THE DIGITAL CONSUMER JOURNEY Represents U.S. activities and capabilities conducted in compliance with U.S. data privacy regulations. Data - BIG DATA ANALYTICS: UNDERSTANDING analytics activities outside the U
Slide 78: Index of Supporting Information
INDEX OF SUPPORTING INFORMATION Slide # Slide Title & Description Source / Notes 39 SUPERIOR VALUE CREATION AND CONFIDENCE IN Ongoing EBIT margin is a non-GAAP measure. Reconciliation information is located in the supporting MARGIN EXPANSION ABILITIES information section of the presentation. 40 EURO
Slide 79: Index of Supporting Information
INDEX OF SUPPORTING INFORMATION Slide # Slide Title & Description Source / Notes 52 ASIA: STRONG GROWTH IN INDIA; COST-EFFICIENT • Euromonitor, internal research PRODUCTION IN CHINA • *T2 Share (2018) including China and India •**T2 Industry size (internal research); 2018–2023 Industry CAGR (Euromon
Slide 80: Index of Supporting Information
INDEX OF SUPPORTING INFORMATION Slide # Slide Title & Description Source / Notes 61 STEP CHANGE IN ROIC THROUGH MARGIN EXPANSION • ROIC is a non-GAAP measure. Reconciliation information is located in the supporting information AND INVESTED CAPITAL EFFICIENCIES section of the presentation. • *2011–20
Slide 81: Reconciliation of GAAP to Non-GAAP Financial Measures
RECONCILIATION OF GAAP TO 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, including earnings before inte
Slide 82: Ongoing Earnings Before Interest and Taxes (EBIT)
ONGOING EARNINGS BEFORE INTEREST AND TAXES (EBIT) The reconciliation provided below reconciles the non-GAAP financial measure ongoing earnings before interest and taxes, with the most directly comparable GAAP financial measure, net earnings available to Whirlpool, for the 12 months ended December 31,
Slide 83: Ongoing Earnings Before Interest and Taxes (Continued)
ONGOING EARNINGS BEFORE INTEREST AND TAXES (CONTINUED) More information on the items excluded from our ongoing results can be found in our quarterly and annual reconciliations on our IR website. Whirlpool Corporation Appendix Investor Day ‒ May 23, 2019 83
Slide 84: Return on Invested Capital
RETURN ON INVESTED CAPITAL The reconciliation provided below compares the non-GAAP financial measure Return on Invested Capital (ROIC) with the most directly comparable GAAP financial measure, Return on Assets (ROA), for the 12 months ended December 31, 2018, 2017, 2016, 2015, 2014, 2013, 2012 and 201
Slide 85: Ongoing Business Segment EBIT
ONGOING BUSINESS SEGMENT EBIT The reconciliation below reconciles the non-GAAP financial measure ongoing segment EBIT with reported EBIT, for the 12 months ended December 31, 2018. Ongoing segment EBIT margin is calculated by dividing ongoing segment EBIT by segment net sales. More information on the
Slide 86: NAR Ongoing EBIT
NAR ONGOING EBIT The reconciliation below reconciles the North American Region non-GAAP financial measure ongoing segment EBIT with segment EBIT, for the 12 months ended December 31, 2018. Ongoing segment EBIT margin is calculated by dividing ongoing segment EBIT by segment net sales. More informatio
Slide 87: Free Cash Flow
FREE CASH FLOW As defined by the company, free cash flow is cash provided by (used in) operating activities after capital expenditures, proceeds from the sale of assets and businesses and changes in restricted cash. The reconciliation provided below reconciles free cash flow with the most directly comp
Slide 88: Free Cash Flow Conversion
FREE CASH FLOW CONVERSION The reconciliation provided below calculates free cash flow conversion, which is calculated by dividing free cash flow by ongoing business earnings per diluted share and multiplied by average-weighted diluted shares outstanding. *The change in restricted cash relates to the p