Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - WHIRLPOOL CORP /DE/ | d249888d8k.htm |
 WHIRLPOOL
CORPORATION
1
November 2011
Exhibit 99.1 |
 COMPANY
OVERVIEW 2
World’s #1 major appliance company
$18+ billion in revenue
Products sold in more than 130 countries
Every Home…Everywhere |
 #1
Major
Appliance
Company
Strongest
Brand
Portfolio
Best
Distribution
Leading
Scale
3
STRONG FOUNDATION
+
GROWTH
= Long-Term Value Creation
Geographic expansion
Product innovation
Adjacent Businesses
Product line/
Channel share
growth |
 SIGNIFICANT
OPPORTUNITY TO GROW CORE PRODUCT LEADERSHIP AND EXPAND ADJACENCIES
4
EXTEND THE CORE
EXPAND BEYOND THE
CORE
Products or services that are
dependent on and related to
our core business
Stand-alone businesses that
leverage our core
competencies and core
business infrastructure
LEADING GLOBAL BRANDED CONSUMER PRODUCTS COMPANY
GROW THE CORE
T-12 major appliances |
 GLOBAL SHARE
WITH BROAD DISTRIBUTION #1 North America
#1 Latin America
#2 India
#3 Europe
5
0%
2%
4%
6%
8%
10%
12%
14%
16% |
 GLOBAL
LEADER MORE DIVERSIFIED THAN EVER BEFORE
2014 (est.)
2005
6 |
 SIGNIFICANT
GROWTH OPPORTUNITIES Current Average Penetration %
Global Appliance Market ~$120 Billion
7
77%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
United
States
Western
Europe
Middle East
Central &
Eastern
Europe
Mexico
Latin
America
China
India |
 UNMATCHED U.S.
CONSUMER REACH HIGHER
LOWER
Willingness to pay
Consumer Target Segment % of Total
5%
30%
21%
9%
22%
Whirlpool Corporation’s Brand Portfolio Can Reach More Than
85% of Consumers, Most Consumer-Preferred Brands
8 |
 STRONG
INTERNATIONAL ASSETS Leading brand portfolio
Leading emerging market position
#1 in Latin America appliance
#1 in Global Compressors
#2 in India
Platform for growth in China
Superior economies of scale
Leveraging global capabilities in local regions
Strong local management base
We have developed local capabilities to win
9 |
 STRONG AND
GROWING PRESENCE IN EMERGING MARKETS
2006
2011 YTD
Nearly 2/3 of International Revenue is
Derived From Emerging Markets
10 |
 Whirlpool
Confidential Q3 2011 REVIEW
Slowing global economy …
weakening global demand
U.S. consumer confidence declined to 2009 levels
European financial crisis has deepened
Slowdown in emerging markets
Elevated raw material prices …
reached record levels during quarter
Implementing cost and capacity reduction initiatives
11 |
 Whirlpool
Confidential BUSINESS PRIORITIES
Expand operating margins
Accelerate innovative new product launches
Reduce structural costs and production capacity
Implement previously announced cost-based price increases
Fair trade actions
12
Positioning the company for margin
expansion
in a volatile demand environment |
 Sales
Diluted EPS
(GAAP)
Adjusted
Diluted EPS*
Free Cash
Flow YTD**
2011
$4.6B
$2.27
$2.35
$(0.7)B
2010
$4.5B
$1.02
$2.22
$(0.0)B
Change
$0.1B
$1.25
$0.13
$(0.7)B
Q3 2011 RESULTS OVERVIEW
13
*
Adjusted EPS is a non-GAAP measure. See appendix slide 22 & 23
**
Free Cash Flow is a non-GAAP measure. See appendix slide 25
|
 Comprehensive
global review of our operations, products and manufacturing locations
Targets high-cost locations with product segments that have low profitability
Concentrates production in best-cost locations
Positions company to achieve long-term operating margin target
STRUCTURAL COST REDUCTION ACTIONS
14
14 |
 STRUCTURAL
COST REDUCTION ACTIONS 15
Implementation has begun
15
Reduce Fixed Costs 2012 -
2013
Workforce Reduction
>5,000
Manufacturing Capacity Reduction
~6 million units
Restructuring Charges Q4 2011 –
2013
~$500 million
~$400 million |
 ~$87M
~$237M
~$109M
~$18M
~$43M
~$6M
$-
$50
$100
$150
$200
$250
$300
Q411
2012
2013
Non-Cash Charge
Cash Charge
~$105M
~$280M
~$115M
COST & CAPACITY REDUCTION INITIATIVES
16
~$500M restructuring expense |
 $-
$50
$100
$150
$200
$250
$300
$350
$400
2012
2013
Annualized
EFFICIENCIES OF COST & CAPACITY REDUCTION
INITIATIVES
17
•
>5,000 headcount reduction
•
~6 million unit capacity reduction
•
~$400M annualized cost reduction |
 LONG-TERM
VALUE CREATION TARGETS 18
Macroeconomic assumptions are critical
elements
in setting our long-range financial goals
Shareholder Value
Creation Targets
+5 –
7% Revenue Growth
8% Operating Margin
+10 –
15% EPS Growth
4 –
5% FCF % to Sales |
 Fixed cost
and capacity reduction initiatives announced today Ongoing productivity
initiatives Improved price mix driven by innovation and cost-based price increases
Adjacent business growth
Pace of industry demand recovery
OPERATING MARGIN DRIVERS
19 |
 2011 EARNINGS
GUIDANCE 20
$7.25 -
$8.25
$4.75 -
$5.25
~$ –
Incremental
Restructuring
Offset by
Non-Operating
Items*
Global Industry
Demand
Productivity
Cost Take-out
(Conversion Cost
Impacted by
Lower Demand)
Country and
Product Mix
Previous
Guidance
Latest
Guidance
~$(0.55)
~$(0.90)
~$(0.80)
*
Supplier Recovery, Curtailment Gain and Foreign Currency
(Provided 10/28/11) |
 APPENDIX
21 |
 The
reconciliation provided below reconciles the non-GAAP financial measures adjusted operating profit,
adjusted earnings before tax and adjusted diluted earnings per share, with the most directly
comparable GAAP financial measures, reported operating profit, earnings before income
taxes and other items, diluted earnings per share available to Whirlpool common
stockholders, for the three-months ended September 30, 2011. Adjusted
operating margin is calculated by dividing adjusted operating profit by net sales. ADJUSTED OPERATING PROFIT, ADJUSTED EARNINGS
BEFORE TAX, ADJUSTED DILUTED EARNINGS PER SHARE:
22
Reported GAAP Measure
136
$
58
$
2.27
$
Embraco
Antitrust
Matters
(a)
-
6
0.08
Adjusted Non-GAAP measure
136
$
64
$
2.35
$
Three-Months Ended
September 30, 2011
Operating Profit
Earnings Before
Tax
Diluted Earnings
Per Share |
 The
reconciliation provided below reconciles the non-GAAP financial measures adjusted operating profit,
adjusted earnings before tax and adjusted diluted earnings per share, with the most directly
comparable GAAP financial measures, reported operating profit, earnings before income
taxes and other items, diluted earnings per share available to Whirlpool common
stockholders, for the three-months ended September 30, 2010. Adjusted
operating margin is calculated by dividing adjusted operating profit by net sales. ADJUSTED OPERATING PROFIT, ADJUSTED EARNINGS
BEFORE TAX, ADJUSTED DILUTED EARNINGS PER SHARE:
23
Reported GAAP Measure
234
$
76
$
1.02
$
Embraco
Antitrust
Matters
(b)
-
93
1.20
Adjusted Non-GAAP measure
234
$
169
$
2.22
$
Three-Months Ended
September 30, 2010
Operating Profit
Earnings Before
Tax
Diluted Earnings
Per Share |
 2011 OUTLOOK
- ADJUSTED DILUTED EARNINGS PER SHARE:
24
Current GAAP Guidance
4.75
$
-
5.25
$
Brazilian Collection Dispute
3.70
-
3.70
Embraco Antitrust Matters
1.13
-
1.13
Supplier Quality Issue Recovery
(0.06)
-
(0.06)
Adjusted Non-GAAP Measure
9.52
$
-
10.02
$
2011 Outlook
Adjusted Diluted EPS |
 As defined by
the company, free cash flow is cash provided by operating activities after capital expenditures
and proceeds from the sale of assets/businesses. The reconciliation provided below
reconciles actual nine-month 2011 and 2010 and projected 2011 full-year free
cash flow with actual and projected cash (used in) / provided by operating activities,
the most directly comparable GAAP financial measure. FREE CASH FLOW (Actual and 2011
Outlook): 25
* Includes 2011 Brazilian collection dispute payment.
(millions of dollars)
2011*
2010
Cash provided by / (used in) operating activities
(342)
$
377
$
Capital expenditures
(417)
(387)
Proceeds from sale of assets
20
9
Free Cash Flow
(739)
$
(1)
$
$ (150) -
20 -
Nine Months Ended
September 30,
$ 430 -
(600) -
2011 Outlook
400
(625)
25
( 200) |
 FOOTNOTES:
26
2011
a)
During the September 2011 quarter, we recognized an increased accrual of $6 million related to
the ongoing Embraco antitrust matters. The diluted earnings per share impact is
calculated based on an associated income tax impact of $0 due to the
non-deductibility of the expense for income tax purposes.
During
the
September
2010
quarter,
we
recorded
an
accrual
of
$93
million
related
to
antitrust
plea
agreements
entered
into
by
a
compressor
subsidiary
with
the
U.S.
government
and
with
the
Canadian
government.
The
diluted
earnings
per
share
impact
is
calculated
based
on
an
associated
income
tax
impact of $0 due to the non-deductibility of the expense for income tax purposes.
b)
2010 |
 WHIRLPOOL
ADDITIONAL INFORMATION: 27
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, but are not limited to, statements regarding
expected earnings per share, cash flow, productivity and material and oil-related prices. Many risks,
contingencies and uncertainties could cause actual results to differ materially from
Whirlpool’s forward-looking statements. Among these factors are: (1) intense
competition in the home appliance industry reflecting the impact of both new and
established global competitors, including Asian and European manufacturers; (2)
Whirlpool’s ability to continue its relationship with significant trade customers and the
ability of these trade customers to maintain or increase market share; (3) changes in
economic conditions which affect demand for our products, including the strength of the
building industry and the level of interest rates; (4) litigation and legal compliance
risk and costs, especially costs which may be materially different from the amount we expect to incur
or have accrued for; (5) the effects and costs of governmental investigations or related
actions by third parties; (6) the ability of Whirlpool to achieve its business plans,
price increases, productivity improvements, cost control, leveraging of its global
operating platform, and acceleration of the rate of innovation; (7) fluctuations in the cost
of key materials (including steel, oil, plastic, resins, copper and aluminum) and components
and the ability of Whirlpool to offset cost increases; (8) product liability and
product recall costs; (9) the ability of Whirlpool to manage foreign currency
fluctuations; (10) global, political and/or economic uncertainty and disruptions,
especially in Whirlpool’s significant geographic regions, including uncertainty and
disruptions arising from natural disasters or terrorist attacks; (11) inventory and
other asset risk; (12) the ability of suppliers of critical parts, components and
manufacturing equipment to deliver sufficient quantities to Whirlpool in a timely and cost-
effective manner; (13) health care cost trends, regulatory changes and variations between
results and estimates that could increase future funding obligations for pension and
post retirement benefit plans; (14) Whirlpool’s ability to obtain and protect
intellectual property rights; (15) information technology system failures and data
security breaches; (16) the impact of labor relations; (17) our ability to attract, develop
and retain executives and other qualified employees; and (18) changes in the legal and
regulatory environment including environmental and health and safety regulations.
Additional information concerning these and other factors can be found in Whirlpool
Corporation's filings with the Securities and Exchange Commission, including the most recent annual
report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form
8-K. |
 28
|