Whirlpool (WHR) 24 Oct 192019 Q3 Earnings call transcript

Company Profile

Participants

Roxanne Warner	Senior Director, Investor Relations
Marc Bitzer	Chairman and Chief Executive Officer
Jim Peters	Chief Financial Officer
David MacGregor	Longbow Research
Megan McGrath	Buckingham Research
Curtis Nagle	Bank of America/Merrill Lynch
Mike Rehaut	JPMorgan
Sam Darkatsh	Raymond James
Alvaro Lacayo	Gabelli Research
Mike Dahl	RBC Capital Markets
Ken Zener	KeyBanc

Call transcript

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Operator

Good morning and welcome to Whirlpool Corporation’s Third Quarter 2019 Earnings Release Call. Today’s call is being recorded.

For opening remarks and introductions, I would like to turn the call over to Senior Director of Investor Relations, Roxanne Warner.

Roxanne Warner

Thank you and welcome to our third quarter 2019 conference call.

Joining me today are Marc Bitzer, our Chairman and Chief Executive Officer and Jim Peters, our Chief Financial Officer.

with website available at track section the today our of whirlpoolcorp.com. remarks the on presentation Investors Our

Before we forward-looking begin, expectations. we you conduct I understanding will remind call in will you we be Corporation’s making Whirlpool statements assist this to future that as

actual We from statements important want includes you today’s many differ to due of XX-K and non-GAAP materially our operations our as that our results items be presentation believe of are discussed remind indicators in latest could these measures. other operations. results to business Our exclude these from factors periodic measures ongoing not We reports. that they may indicative

are on for the the most measures. think section baseline trends ongoing also directly website directed for the We of supplemental GAAP our analyzing Listeners our to package information to Investor measures a the will items the comparable Relations posted provide you in reconciliation better operations. adjusted non-GAAP of business

listen-only At this time, all in participants mode. are

remarks, the opened our for Following call prepared questions. analyst be will

a call ask With turn we will more I that, than two the questions. As that to no ask Marc. over participants reminder,

Marc Bitzer

delivered thanks ongoing we solid margin compared as quarter. momentum We represent morning were expansion and year. long-term pleased Slide towards We our of with On we global our goals. performance prior year and These and results basis this the global Well, consecutive our that to third X.X%, highlights. positive XXXX our half continue results everyone. first third full quarter progress show with a of EBIT quarter increase margin X, XXX good very point

we near as cost price year-over-year and delivered for breakeven discipline. ongoing we strong our expansion drove improvement. right-size In actions momentum business America, stabilize strategic from strong North results to mix, volumes our execution In sequential margin EBIT and focused drove and Europe, impressive

range of strong ongoing are $XX.XX. high-end $XX.XX the that share performance full earnings are of year our we we expect continue, confident our to trending per Given which year-to-date we towards to

our target $X resulted we approximately our leverage very In long-term X.X. term Lastly, in with progress loan, our are paid which down of pleased August, year-to-date. momentum we billion towards in significant total,

Slide excludes basis slightly sales of to currency Ongoing price/mix X, impact We points will Embraco positive our which year-over-year of net X.X% lower XXX growth, unit cost volumes. more discipline delivered offset a detail. EBIT of third-quarter results as organic the approximately for Turning and the in was I increase margin the impact quarter, and focused discuss of than X%. more

X-month Competition our usage Our to seasonality planned cash Embraco. by the reflects from taxes sale payment free and cash cash flow of was of settlement impacted French normality Authority and paid

as to points details delivered actions. Slide regions our basis we performance. expansion positive Three third of to we of our announced realize the margin approximately X, continued of the carryover benefit XXX of price/mix show four in margin resulting previously quarter Turning pricing

expect more segment last to benefit kitchen continue at the in year fourth as price/mix from year’s through however quarter pricing margin U.S. Brazil. compare against moderated actions and We cost-based level we end a

initiatives deliver takeout impact of resulting continue expansion a the in favorable margin points. cost benefit basis from all we see across Additionally, our to regions, XX

margin points. neutral improving for continued currency costs strong and results partially investments. Overall, the in impact with quarter. were outside offset resulting America an in materials deliver of continuation pleased are and headwinds XX proactively unfavorable of hedging was North Lastly, and trends of tariff global ongoing macroeconomic manage product scale, partially basis margin marketing net very raw leverage the ability to The These impact of technology volatility. increased global drive innovation, by we benefits despite offset our our

to it turn And over I to our results. will review Jim now, regional

Jim Peters

everyone. good and morning, Marc Thanks,

financial strong revenue America North the X, results will a Turning in region. I third quarter our very weak for industry growth with Slide We performance Canada. despite demand review to delivered

Additionally, North volumes our This expansion continued fundamental unit takeout offset highlighting price/mix execution lower quarter strength record disciplined of cost America strong inflation. business. EBIT margin freight the marks as in the of and and we delivered eighth consecutive

we excited network are DR largest relationship further customers awarded a States. beginning United we in with to to bring were product Lastly, announce XXXX. X-year supplier we winning portfolio brands, This of January more that strength homebuilder the and exclusive relationship the reinforces products the Horton, logistics our as

highlighted was strategic East business and Russia, significant results year-over-year continues for core momentum Slide UK, continued volumes. weakness our growth and to sales others. improvements Africa Investor X% currency actions Middle the East net Turning demand. following of impact This the and key profitability by Middle we the weak volumes the growth East although SDA, delivered we Italy business to exits, review previous the and Middle Turkey, sequential flat ongoing essentially our exit in and cost Poland fixed XXXX restore Unit of and the region. our Africa X, and to for quarter our reduction to quarter. impact At in across offset excluding regaining results. were by EBIT Day, near Africa, as improving European We breakeven the EMEA: third from among Despite Europe, with increased led Hotpoint drive of actions South Africa

we that are fully say to pleased track. are We on

small sales domestic well exited our business. operations appliances as Turkish Hotpoint branded We our have fully as

Africa improvements We and also sale are to region. completed of the in deliver the operating continuing structural our operations South

retailer. a for Slide review volumes X to key trade turn our temporary negatively we were America Now results the Latin Brazilian adjustments impacted by Unit region. quarter third to inventory at

demand. in X%. volumes Mexico raw temporary weak see EBIT unit We quarter offset of Organic exclude material than impact as margins and have to fourth net sales, which unit quarter customer to currency expect and favorable currency was approximately the to positive by timing, in lower the in volumes in increased devaluation contracted early recover Argentina and levels and inventory and volume already price/mix inflation related year. more next Embraco normalized trade return to the begun

we Embraco in consolidated Embraco reminder, X, XXXX sale Embraco to Embraco’s quarter our this of schedule a will XXXX our regional of on July the of results. a meaning half business as without for completed appendix our is quarterly business. compressor compressor results unit the and continue include Reference results. first first the business our Finally, impact the

We now on turn to the third are XX. shown for Slide quarter results Asia which region, our

gains. revenue Excluding the Strong continued India increased business currency, sales our EBIT alongside delivering X%. impact continued growth of and net share momentum in double-digit

strategy unit of for track Although margin the pressure. first with brand the increased cost Sanyo is China resulted brand the brand initiative brands during the elevated exceeding quarter. of time China, said our transition in volumes in on transition share Whirlpool the value in That

on financial a Before we year. I to compared our move regarding quarter guidance, consolidated want our to comments prior to third results full make year few

income Our in $XX Latin approximately sundry interest hedging in from favorability statement The and million favorability driven America. earnings primarily income throughout approximately SG&A our gains. is was due million, the in net was to of currency hedging and primarily by currency Favorability and $XX actions strategic EMEA of impact results. in currency-related immaterial

review would to like Marc to our to Now, guidance. turn back it over I

Marc Bitzer

continued businesses. in as Slide Revenue guidance moderate our On we XXXX. by softness of Mexico ongoing unchanged billion some assumption Canada, the is for offset Thanks, $XX.X and remains improvement at reaffirming our Jim. in European exit U.S. guidance are XX, of

ability solid with performance year-to-date now deliver guidance margin results and or is our fourth our above in full year slightly reflecting EBIT to in commitments. X.X% our confidence Our quarter line

guidance the quarter, our and to liability trending deliver cash which and In gain-on-sale toward remains repayment, our our we goals. GAAP flow total, of full million, are through ongoing confident proceeds expenses additional free strategy full-year are actions unchanged. by calculation. sales offset decreased guidance $XXX have related we Our will third product Embraco strong range approximately year progress partially earnings With our warranty the high-end share and Embraco momentum as includes continued and term toward was per long-term loan of adjustments

Turning volumes. XX, benefits points improvement slightly We related have basis price/mix as impact show Slide by drivers ongoing expect offset reduced XXX unit Net of cost ongoing points by now margin actions to XXXX. to been lower productivity the in basis of XX EBIT the guidance. cost of our we are benefits

of these over year basis continue With least improvement we at points revisions, to XX year. expect margin

and Now, regional guidance cover cash Jim priorities. our will

Jim Peters

Slide X% the region. America, our we XXXX. we continue improvement Mexico global On approximately the total, In for year. range second quarter to consecutive revised for weakness EMEA remain confidence to unchanged. In Latin moderate North guidance the year. for Industry our guidance to guidance on In we Marc. demand saw weigh America, the regional providing expectations environment for growth and our X% expectations continues for Asia we flat Thanks, industry in to XX, demand forecast show in full the U.S. as

and expansion. expect our drive the actions that revised to margin temporary of was continue Latin region’s America full inventory X%, have EBIT are In EMEA, and continued our confident we in right to for restore to EBIT reflecting approximately weaker-than-expected of guidance, margin Mexico the executing ability the adjusted are confidence the year. guidance Regarding impact breakeven North XX%-plus, profitability we into America, demand. trade taking In our account meaningful to to approximately moves we

In and guidance remains results. continue basis to XX margin drive Asia least our global margin year-to-date we as unchanged. strong our of points momentum total, at for leverage expect we Lastly, improvement

our and we flow With lower expect We free and reaffirm drivers $XXX of We approximately to reaffirm strong our we Turning restructuring our million, loan will capital. continue the capital proceeds cash focused of on discuss free of cash momentum to Embraco. expectations strong sale expenditures and net the Slide and driving deliver to earnings. XX, related year-to-date cash sustainably to repayment assumptions, I results, term XXXX flow. working including are the global our

French restructuring region, Competition optimization of Italy approximately Naples, made restructuring And in $XXX our manufacturing plant. reflects in we inclusive payments million. to guidance first European mentioned, to previously netted As our our of the which the ongoing half, Authority asset

$X puts gross previously August target approximately the Slide from us the sale provide well capital update off for to Embraco brings of an on XX, on and pay X.X our to complete as priorities now year. is were our we This our business our allocation sale to The of used loan billion long-term which proceeds unit debt-to-EBITDA track we the in term toward our Turning communicated. X.X.

EMEA forward to Additionally, region the we Africa completed operations, our which in to step of plan restore profitability. sale is the South another our

shares Lastly, $XX levels going and at forward. to moderate repurchasing continue expect of repurchased million shares we

initial assumptions for Turning XX, highlight would I to Slide planning to like our XXXX.

America growth The material flat anticipating cost. are year. and of and Brazil in We Mexico by is unfavorable We easing for North China. softness tariffs expected the in Canada, expense to globally amortization impact be continued anticipate industry in growth depreciation and of modest approximately previously announced as approximately is U.S. by offset the offset and flat full

to million call. of detail $XX million approximately be on on our XX% to XX%. be go-forward expense to $XXX restructuring guidance expect effective will an and XXXX earnings our January rate a tax we Lastly, basis provided Further on

Now, will up formal and open questions. it for our end remarks we

Operator

[Operator Instructions] comes the Your question of Longbow first MacGregor David Research. from Please go ahead. line from

David MacGregor

everyone. morning, Good

Marc Bitzer

morning, Good David.

David MacGregor

EMEA, question profit EMEA you the on South and can and exiting from First Hotpoint just just remind then SDA us on Africa? Turkey the benefit

Marc Bitzer

it’s David, Yes, Marc.

As combination profit. you the run said recall, SDA, a actions, may a the rate laid we Turkey, well, these out annualized pretty about we cost million everything else exiting when of action much is and Hotpoint fixed year $XX ago,

the having would of say of now volume gave pretty share the have there. solid that, back key much you growth leverage. thoughtfully we net got some kind in benefit top And I additional on us in the markets, of which of So quarter, core in the

would actions, of comes strategic improvement I the fundamental back strategic our pretty actions. half So much say from

markets, from and came see – part back our that’s other core some growth we The healthy. in

David MacGregor

North on mass America kind out the able bucket value and volume premium? are to just And of that declines you across

Marc Bitzer

Yes, Marc. David, it’s

– didn’t all, or which wouldn’t First SDA from SDA almost America much the I It’s just X%. an market and volume. but weakness, overall North we industry too the decline, slightly into minus weakness, lose X.X% volume share, of Canadian the entirely or coming KitchenAid frankly, read is it’s

up mean, on are still period. promotion last the week’s, know, heavily through a didn’t At you end kind core were majors business, flat have a of I impact. a And we October business of you our revenue, September – essentially SDA the to when As the whenever the an moves day, QX-focused have volumes, – America slightly down. And based North have X trade that inventory can very is KitchenAid with X.X%.

So we didn’t see that kind impact. of

David MacGregor

Great. Marc. Thanks,

Operator

of McGrath comes Please next Your Buckingham Research. from ahead. question from go the Megan line

Megan McGrath

Good morning.

Jim Peters

Good morning.

Megan McGrath

just – color. your for little tell much I more RMI XXXX to are – on comments But as wanted year? us commodity contracts. want heading you us give that I about next you week thinking to a you follow-up color I bit on taking are year. give sort your are you could into How assumptions account little know don’t or in prices that assume of negotiation for of into assuming you process this you next Are a

Jim Peters

Megan, what the where and Yes. start with we we the period And going are that into negotiate prices really consideration. this into today contracts is is look again, at Jim. to we begin where take

at tariffs we have year, into still play, the that Additionally, come this that and play estimate into could out. look come those and

at the that material expect January as for that call, think So we next to we’ll will get materials. year offset this unfavorable and time, we much do be at detail tariffs point to year. partially point once by more, said, full be really feeling we where a in favorable costs the have But have on we we’ll better then earnings

Marc Bitzer

echo Megan, side, some much a material we That outlook color, in we now, see out certainly of certainly saying cumulative a lay levels, a for all, point-in-time was pretty additional just And material on assumption. that change see do give have see mind still perspective, the and Jim raw in first – have a RMI. inflation years well it’s what Marc. when in But a we today, of we right we to moderation from positive but raw until slightly – of two moderation. what our end keeping January. – baseline, of we could Maybe that’s –

been even not Jim’s There yet not carryover further effect to in for have tariffs because full is hand, now, take tariffs. has right into account implemented, year. point, we currently were other will And which announced of slightly to headwind. the element On have all but be we what a

be but moving and the I here. now them parts January pretty some expect between themselves two will net out, of So much would there

Megan McGrath

sort helpful. expense the quarter. unexpected in Thanks. And That to of on follow-up That’s really there. want was I costs warranty the an

So color could any anticipated that? And on cash give you any from more $XXX the impact million?

Jim Peters

is identified right at time, we final product to this lot will and rectify a issue on an we are I be the sell that’s is put again, and the would a we the we to terms to identify we with, best these we of we in out will look estimate there work Megan what And have when it’s something said are process a begin cash – remedies from in and the there Jim. And in Yes, our component-related be. type that. cost of as that kind To at with expect impact If this estimate now, unfolding see early that going we of is of middle what a have this it an of will actions issue speak. it more next-year as as of flow of perspective, EMEA.

Megan McGrath

you. Thank

Jim Peters

Thanks, Megan.

Operator

go America/Merrill ahead. from Please Lynch. Your question line from of of next Nagle Curtis comes the Bank

Curtis Nagle

guys. Good Thanks morning, questions. for taking my

turnaround, progress implied quick negative I a think I a something one Looking guess, from I quarter? where are made margin, a for although, in uplift X% terms pretty EMEA margin, guess, confidence you in significant at of, some XQ, now. another which around what’s just this So is it’s

So that? could you have in right I achieve now, what place you confidence gives guess just think, help in you you like what

Marc Bitzer

Marc. Curtis, Yes. it’s

that’s I way this we’ve our not QX that the I of I it’s which above a where you will X%. that fully – – in pretty we that a call European am is in would the – of but QX. be will very year-over-year with positive sure but from we have up little improvement still much toward normal on separately normal would Having But this QX, one, regions, put money, I the to encouraging business, follow on sign a bit are said quite to million but magnitude are we is X%, in agree the – pretty a fully to And move. seasonality, seasonality math losing and not and First breakeven. of that probably are big and is no breakeven I all, on see close look would it in track. the are positive can our more we with place at a territory come $XX skewed we be actions matter

Curtis Nagle

thanks Okay, very much.

Operator

next Your JPMorgan. the comes from Please from question line Mike of go Rehaut ahead.

Mike Rehaut

Good everyone. morning, Thanks.

Marc Bitzer

Good morning, Mike.

Jim Peters

Good morning.

Mike Rehaut

I bit of if effectively third bit kind of some competitive this that than the their particularly, results, a were wanted strong if Samsung there very terms if backdrop to for or on drill And little in drivers you in a North in improvement, LG little the of American have as margins changes the there? price/mix answer, was own the focus as And were been we that other if looking down more could you a could any minute was also it at production I all curious facilities? for. drivers and of address part ramping year quarter,

Jim Peters

Michael, me of commentary start strong Marc Jim. off too. But and then is will a Yes. as very more this North it again this, was some America, to add And kind let look quarter. we here, at

price all benefits increases recent launches We as of are product as have from continuing mix that that. coming and seeing taken, well we many of the

Obviously, it to moderate was to be have well cost of So America, cost as that’s material has continue drivers we costs. year-over-year we’ve increase, North the a one headwind freight but as started talked that bigger costs within been some, that see. a tariffs about whether

healthy. very with able have we we as business of But the said, also, to the that, price we offset increases is obviously, took. been our So mix

normal is Day, again see expected. we of outside the some levels competition, not of what would environment, of not Labor outside through we say did our what of level increased and competitive terms In I

when we balance very right now, look period, we Black And track we the where think participate toward will promotional the obviously of see do that. in create an they we be business the continuing said have the North to in record Friday and within of are had we But indicator margins a good all past, As that value. that things I have holiday versus as promotions America periods.

Marc Bitzer

an we America. mean Michael, I entire outside. sideways the additional I bit moving Yes. of environment day, demand of a the North from give where lot not been much but color this a frankly the on it’s Maybe pretty industry QX the just year. to get want At is the end help Marc. do has not year, entire

We tariffs have fully and point, me how this strong have for business momentum, good costs. delivered we in the basically the look XX.X% production, really shape and logistic cost your and business. have and we at no To and Samsung, and we inflation which yet really, EBIT margin, America LG North we are matter lot business, a in of very a you confidence that is tells

Mike Rehaut

earlier months, there. into lot kind still should that we now, steps the recapturing of you and new business of kind or you could XX is another an achieve, where just think appreciate driving us you right share plans backdrop profitability remind of region And product we next given challenging. of next us – in to you two the look terms was obviously, breakeven, initiatives day, you how some expect the or if to you’re EMEA Is of all some terms much or as laid of of or driven overall a I it I you next a of update or you of the the region. year guess gains, you retailing are in wins things how Europe essentially of more And out on think just at maybe two hope particularly about a by in those of about big and in the some progressing on great. plus introductions minus hoping two or I to front at improvement if of somewhat the and the secondly, turnaround that is your analyst still and the that. it lot how the give – could out XX are the improved for That’s three revisit that should profitability Right year question next an two. over quarter

Jim Peters

day. you talked off this Michael, Yes. that. about start Marc implemented the with were talked is them look we And these think to actions yes. this we at need and talked earlier, investor those Jim. Remember, is I’ll way it about about I and the on

So having benefits and takeout. year you into out of the Turkey, of being of Africa cost South disposed business of us of of going have of carryover us next that, the

that have to just gain lost then, we about costs. where there takeout lot we’re You’ll the mean next the see the because into a a talk But business. focusing do and EMEA continued expect within business, that some done adjust we actions, also as back of a lot X% it share we’ve countries core on the of continue our Again, year in we we it. level of to continue cost within big other to growth doesn’t we things that of don’t

to So coming that – volume it’s balance of cost of in we takeout be a an a with stability incremental to business. year next due again, going

Operator

go from Sam James. comes question the Darkatsh ahead. Please of from Raymond next Your line

Sam Darkatsh

are Good morning, How morning, you? Marc. Jim. Good

Marc Bitzer

Good.

Jim Peters

Good morning.

Sam Darkatsh

questions. of couple A

looking regarding down XXXX, Was you about versus volumes production your you I’ll quarter? how being a into in with shipment be America specifically for you are X%, First, production? of from And standpoint? North shipments and are where then feeling want the line are to start you also, What light this expecting inventories? there. in production

Marc Bitzer

are inventories pretty we are be want where In that. shape. Sam, little in to bit it’s you in actual – Give we color, Marc. a more our good short, our

domestic that. we a but part, As well pretty we’re our production and the pretty I particular on in good on you us The being bringing which dealt spent now there. volume the have hurt inventories in feel but about a would down In more out the we and QX, of this was where right bit lot early to small of inventories referring time leverage, trade earlier, inventories describe obviously, behind track, lot low. I much trade with know, little year we’ve even the important a year, as that’s you units fairly

is and we’re for see important majors sell-through, pretty Now on shape. domestic, both gives thing more we that stores the confidence small we feel QX. the us what very and in for the in us i.e. good lot sellout And on a of the good,

Sam Darkatsh

And a RMI. then my question is follow-up follow-up prior inquiry a about actually on

moderate by amount You on mentioned though the as from only confusion expect steel tariffs. that you is why you. obviously fair tailwind with the what tailwind aluminum a raw based moderate copper of we to have and materials and next markets that There year, offset perhaps can is what and a see

So why get I steel sense what letting on Do wondering to of and why year? you, your trying only what have more this purchases plastics longer based we purchases of dated of it’s hedges float Were a see have moderate. base for your might can that some just metals am you you and be of externally?

Marc Bitzer

it’s Sam, Marc.

try me take Let to one. this maybe

particular of as our as policies reminder, can steel both or base guidelines. we hedge know, metals, to we either in you on very all, as much and First as and a within buy long try

our times means versus books we rate. in The never us. buy impacts quite the discount have by spot in raw at usually during material particular, So the prices, definition, a flip elevated bit of spot we And side barely a of spots.

the big they bought certainly year, the should see down, current of contracts, So may to get in puts the not of the a January. negotiations. it’s spot, by momentum that. you’re the until position know us negotiated we really raw end will And you the are as a toward below probably and materials, that, full-year end spot referring year. But toward But certainly are the encouraged know by good coming we think what contract I are in prices. also next spots our and – good these Having shape, momentum encouraged steel costs – below trends that such, early we said yes, we are again,

out little you that typically bit go in plastics. have can’t We big, plastics, With a a It’s element materials. and moves raw faster, long.

We you even term cannot because go simply will or shorter buy typically quarterly long.

any XXXX. oil that certainly plastics. back on may in So still have even volatility guide reflects little is ultimately, you prices most for was in And uncertainty cases, volatility bit in on on good though the a us that

Sam Darkatsh

both. you Thank

Marc Bitzer

Thanks, Sam.

Operator

from next line comes Alvaro Please Lacayo question ahead. from Research. Gabelli go of Your the

Alvaro Lacayo

you then give to Good morning. with on things in driven It between by maybe was which start looks out the maybe some if sequentially, price/mix is could North I wanted to for I that assume to and an parse like America. you maybe there try acceleration, talk call forward? of mix? out color And to price and high mix how you going doing from mix some expect evolve drive here and are mix,

Marc Bitzer

first maybe Alvaro, take And me let it’s Marc. that.

don’t just revenue and in – decline down the appliance most business our volume, take take unit all, high. we North what North that people to very should again price/mix because that’s had which it’s is for slightly America. where the America assume On avoid that we try above X.X% and First QX, entire to communicated price/mix then price/mix the major domestic of flat revenue had not we basically of indicative favorable was is we had in We that. growth, and company, to a have

to tells In and good QX feel if out the against price/mix new price from with running extent, into pretty to get we’re should which some America basically price about in very mix led increase not all execute particular, the increases what some good of of a but management, the last products we but year’s account we announced North combination both a is also and that, we you take it, we’re came already rolling that’s extent, So performance. which how kind that markets. we and

the mix. good pretty about we So feel

Alvaro Lacayo

Okay.

give for mean all regards overall win, And you to a – does do If XXX% this the categorize Now talk your this you you be Horton this would us can going with or would Would DR color? XXXX? you One, little you include or do could that be more already bit then major incremental? DR similar with Horton all currently accretive, into that appliances? does about what how margin? business

Jim Peters

major is Jim. I us. a probably will appliances. again, comments with will This win we’re for all of Marc start very about. excited And and this involve new big it’s it And Alvaro, a to that is It Yes. our add it. customer can some domestic

the And norms look overall not so this, of margin as outside it increase us business. our the in forward of margin the It’s of of year the increase is for again, a next terms an and we to volume of business.

So good again, very we it. feel about

Marc Bitzer

Marc. obviously, we won’t Alvaro, is the the incremental. get in about Yes. volume XXX% the details and but it margins, it’s And

I us. exclusive the with more North America, Horton about it. want very the DR won thing in a It’s proud important and are housing years a talking won to of is have to contract. to leader the part happy homebuilder big highly focus for market. respected We more think And an company. have we on have is been – this we the

deal for a us. it’s So big

Alvaro Lacayo

thank Okay, you.

Marc Bitzer

Thanks.

Operator

from question Please comes the RBC Markets. Capital of Dahl next from line Your Mike go ahead.

Mike Dahl

questions. my taking for Thanks morning. Good

Jim Peters

Good morning, Mike.

Mike Dahl

we being of you just little on volume, sense, called revenue understand better back a Canada standpoint. from North makes headwind. out a that as the last a more And is X% just to wanted that but Canada Marc, because business I American only that saw,

overall struggling any decline. the to understand of explain really X% So the majority I how guess could decline still I’m

maybe you little and KitchenAid what more when color the contributed? timing, that exactly a So about talk that, on

Marc Bitzer

earlier. to whereas market a in The lot happens got is Again, happening on sellouts can small is trade mean that of year and we only Mike, the majority But inventory to QX, there around to the and you in feel what have decline now so be appliances. has Yes, appliance. down largely sell-through. right small domestic October every low. appliance now, vast keep inventories the our September, repeat Canada small mind volume of due domestic domestic Canada fairly that about been I I right I are moves said in good industry,

North in X.X% one these At showed nervous about overly not with the of growth day, of America I’m margins. this of despite So the it. all we kinds end revenue

major in all So we not volumes I our any domestic knowing these that am not nervous particular lose did and share. appliances, about at

very about we feel good So that.

Mike Dahl

the tariffs. Okay, then And the second is got a on question follow-up it.

I numbers able on provide And website, in X, been guys basis, and a think tariff of Lists the monthly around have happens, and and XXXX you if and/or been consider posted just is can X all to your a of current tariffs given you has carryover proposed the you but List there year incremental the monthly X could impacted impacts. that mean if incremental of around much it just step-up lot X have on to a List ‘XX? this give quantify commentary X? ‘XX into commentary then earlier we what to the what’s effect increases us and implemented – how truly what XXXX, Just kind

Marc Bitzer

Yes. Mike, it’s Marc.

again, point, already where your tariffs have implemented the carryover. So we certain a to there of is element

now and how import. range $XX year, $XX As we to every you much million of about and depending have volume how also million of talk recall, much may roughly about you the at beginning month, million, talked on $XX the we in we the

a can now, end around prudent, then and but that of put bit course, recognize details. headwind. we the the little of is but tariffs will additional of more. element it element an of implemented. we, But take and a behind announced we right account, Maybe number have the have you carryover, actual into more that know it’s But small the all we there is additional course, of So implementation a not January, at as to more. uncertainty million, $XX And around probably is provide

Mike Dahl

Okay, you. thank

Marc Bitzer

Thanks Mike.

Operator

ahead. next go line Please KeyBanc. Ken question of comes from Your from Zener the

Ken Zener

Good morning, gentlemen.

Marc Bitzer

Ken. morning, Good

Jim Peters

morning, Good Ken.

Ken Zener

of asked. lot a questions So

step year just a could at looking take we obviously. you was back. well I guidance pretty for last presentation year your XQ where did and if you guys So gave this

start at switched look you parts we the If around. XQ, seeing where can

which For example, your hurt we had net costs. lower volume,

by your the got You favor. price/mix better bit tariff. a and RMI little moved That in

mean is play that does kind that mean one-off So next occur for given much? about because down, when But happen tend capabilities, offset volume kind I by moving. which of cost what my a We once variety that out clearly, to come hurt net experienced? of the first that basically kind does RMI out? RMI guys modest is year. question. tailwind that a inflation things your That’s you’re went how was drops How of so down does first was RMI. just or that have dramatically often of you But year? talking I something situation that normal

Jim Peters

you I Yes. the expect pressure not it’s obviously also norm. would that say – and do of When come down look and costs – on the not all at and when terms you would say to to norm demand it, I commodity would say, come that volumes the in it’s Ken, down, – it’s would that.

guidance we earlier, got we And are look yet have really what that’s guidance quarter at get necessarily year, to this we about just point once we a – indications as when time next the to third giving moving why parts understanding in last January what versus we So on or lot on a of the see would materials much January, Marc giving on but to we because talked again still. we’re forward as like there better year this we year. have not in

Marc Bitzer

Ken, turn increases, starting is of we have to additional deal news actions. announced good on of company and obviously, business color, the some cost now side. corner to cost the on benefit The come And a Marc. the previously we entire to really are this end with Maybe riding heavily as we it’s inflation. year, price cost our price we still also this was Yes, year, pricing the had

So good news. that’s

will no, of don’t I two year So drivers. these one in reliant we be think a on now, from

bit expect RMI. in should little into when you a cost course tailwind more from as think of more you anniversary us price you the particular of by takeout And I you less from run definition, have get will increase, mind QX, gives QX said opportunity. a also of mix a a our us year, always have play of Having which lot significant product into pricing. business innovation we in and QX next that, into lot keep coming in

So entirely on reliant in short, I don’t think we be pricing. will

more details costs. we will You in give should expect from more January. But

Ken Zener

Understood.

but America am to think you lot for don’t good obviously year Now product a and are U.S. share. it that with assuming seeing the Does that your but in initial how all there to North you of flat? was volume that are related is you does where up – of given What was the I your mind that expectations you’re the I that people some the as implying seem trading strange lose volume, opposed flat is innovation, is yet to it Marc growth? that consumer sink does mean, volume volume I – price/mix the up, mix – is mixing in

Marc Bitzer

sure think – Ken, don’t am that the we up. I I consumers would the I total is industry or and quite said not mixing

up good our products mixing been in has business Our with business.

Ken Zener

Right.

Marc Bitzer

So I would...

Ken Zener

yes, exactly, your yes. yes, business, Yes,

Marc Bitzer

Yes.

is have good business we – really a of Our mix opportunity.

we As an introduced entire kitchen range. you Whirlpool know,

next have, brand which dishwasher will really be will We year, new in the superior marketplace. platform

a We vertical business, is loader, our of introducing comes part which are a new out QX. top significant which in

So I entire I that the for not is the entire in am say the to of pretty market, then up flat. mix sure pay product market. it. gives power is quite the us consumer The innovation would much marketplace reflective and

Ken Zener

could, very India. one comment question, I you Okay, on much. Thank last if

Jim Peters

significant strong there. India to within India we growth business seeing a be India, very margins continues for the are Again, us. strong very market,

different we different. do and continues to but the performing that business significantly in, that one good so maintaining spots it see bright we have very Again, be share well there that And standpoint, continue from are of to results. and we countries within the gaining nothing

Marc Bitzer

business, do very Ken, us on we’re certainly of. But it’s India because on let proud something good really it’s that a I end you positive appreciate Marc. note a

well, to end now, the come of So we’ve Q&A. our

on some just messages Slide our key me let So maybe of summarize XX.

cost America, global exited And us at initiatives. in executed again, delivered and takeout to countries the strategic continued momentum economic sold the strong very laid and it, look the in we’re have strategic now that of for X.X% As North be having across landscape, we returning performance. margin now businesses break-even at volatile to Europe, expansion change trade an you’ve our and seen, basis. And for have out see eight has macro-environment. results we’re year And allowed strong key on margin our pleased to year consecutive it’s our from date. delivered volume our ongoing margin to level certainly And is QX a matter unprofitable very ongoing And profitability. we despite no how have initiatives various business since you agile delivered we time, Europe we’ve since quarters. In North a expansion in a EBIT moment fundamentals our pretty much region business regained and pleased American in we in initiatives. been competitive successfully with And near our

completed commitment Embraco to and So debt-to-EBITDA toward of to out reflect pay environment, also we that highlights X.X. significant overall, our the I would unit down the I goal and outstanding laid making like think proceeds business plans, term progress the society key executing few our our governance mention our a loan start issues. results. gross seeing and sale we the we’re of plans to according to used we And now additionally, and

the on for XXXX Dow named Practices Inclusion and were North Index. America, in we Index Jones the company named a are XXXX Diversity We Best Sustainability leading

we’re with quarter priorities today, call joining confident pleased us forward to our just we you I’m very right late I’m I January. globe. across date. our And year on So for operational to the fourth to the want thank and look with performance in speaking again on executing earnings you

Operator

Thank you. concludes for call. today’s participating. this gentlemen, conference you Ladies and Thank

You may now disconnect.

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