Whirlpool (WHR) 23 Jul 202020 Q2 Earnings call transcript

Company Profile

Participants

Roxanne Warner	Senior Director of Investor Relations
Marc Bitzer	Chairman and Chief Executive Officer
Jim Peters	Chief Financial Officer
Susan Maklari	Goldman Sachs
Curtis Nagle	Bank of America
Eric Bosshard	Cleveland Research
Michael Rehaut	JPMorgan
Sam Darkatsh	Raymond James
Marius Morar	Credit Suisse
David MacGregor	Longbow Research
Ken Zener	KeyBanc
Seldon Clarke	Deutsche Bank
Michael Dahl	RBC Capital Markets

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to Whirlpool Corporation’s Second Quarter 2020 Earnings Release Call. Today’s call is being recorded.

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

Roxanne Warner

Thank you, and welcome to our second quarter 2020 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 a on presentation Investors Our

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

could results these from discussed materially many other periodic statements XX-Q our latest differ and to reports. factors actual Our due in

may indicators We not operations. exclude believe these We includes non-GAAP also measures. they results of want to indicative as are be remind of important from you items business operations that that today’s presentation ongoing our measures our

highlight also provide measures. in baseline reconciliation of We our Also, think Listeners supplemental a GAAP the to our business the items what impact ongoing participants non-GAAP on potential posted results a will adjusted is are trends of today. the and in there company’s on most you the best Investor analyzing package of COVID-XX reflects this time, for uncertainty to directly section comparable At of know the are duration measures listen-only the business as information our discussion estimate website for the operations. the directed significant about Slide better mode. we COVID-XX our on X, on Relations based pandemic. we the Therefore, impact all of potential

prepared our analyst’s remarks, Following the call for will open questions. be

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

Marc Bitzer

healthy everyone. morning, safe good and you times. your are Roxanne, hope and Thanks, and families during these I staying

dedication through times. and extremely proud our difficult the and work unwavering all I’m throughout to employees this acknowledge want I their Whirlpool these year. our commitment to begin, hard I Before customers of of

and XXXX delivered challenges. discuss and ongoing North with turning an continued significant our results and we $X.XX, COVID-XX-related a expansion margins, EBIT diluted actions, per second and takeout. X, globally Now region a meaningful clear share the strong of strength margin despite highlights. points driving of Slide X.X%, XX of We indication Across quarter XX.X% decisive ongoing earnings and In resilient to cost of very levels basis a delivered took EBIT agility. of strong performance an we we globe, of America,

Lastly, free inventory. improvement strong of management, particularly to receivable capital working million year-over-year accounts $XXX due we in cash flow delivered and

Turning offset the to we North mix X, of points as EBIT by America. consumer show basis negatively second Price by Slide impacted management our promotion mix shifts quarter drivers effective in COVID-XX-related were due XX partially product purchases unfavorable to margins. margins

basis absorption, expansion, lower actions Our a cost COVID-XX XXX reduction. margin headwind and production basis inventory offsetting of takeout point fixed from delivered points partially approximately cost XXX driven by disruptions

margins Additionally, XXX approximately raw material points. benefited trends favorable continued by positively basis

offset quarter global to pandemic. results. over global model. difficult of This the resiliency region. now it cost operating impressively a demonstrates review execution very partially Lastly, of to business our teams most solid marketing and And discipline we’re in unfavorable and margins our impact primarily Overall, related strong currency and deliver of Latin the to America turn was to pleased Jim regional of our what investments, I’ll technology strong the undoubtedly our

Jim Peters

morning, Thanks, everyone. good Marc, and

region’s due as ability comparably lower I’ll Turning we shortages production decline Despite solid of Mexico. America the review pleased factories discipline revenue regions of of to America, better are the in supply our due quarter, year-over-year a disruptions out and strength with maintain and yield challenging U.S. states. double-digit due Overall, reduced an delivered North of revenue than in standpoint, operational This marketing XX.X% strong to to investments. quarter XX% remaining regional margins operational strong component X, channels home open. in other in to our demand From decline COVID-related disruptions Slide results. experience and EBIT In we reduced improvement continued recovery continue North cost resulted the to June approximately business demand, most eased to is second with margins in across and restrictions environment. we

X, Europe, our across negative for Middle demand second Slide Africa region results and drove region. across and Shutdowns review and I’ll to East April May results. weakness the quarter Europe Turning quarter second significant our in

month. However, sales by key in year-over-year all recovery growth countries, in year-over-year in driven in and June, share demand volume positive Russia, growth net resulted gains except in countries strong EBIT and the

a forward, year. region QX confidence with us ongoing half the combined the of strong efforts; Looking back into provide our profitability return in improvement extending order will the pipeline to

declined gains and net as positive region mitigated strong direct-to-consumer partially disruptions strong region offset share cost review I’ll our X, strong sales, for the throughout and declines. showing Brazil, Slide sales across X% June Mexico signs demand of EBIT with in a region. to devaluation. Demand takeout and Organic quarter second continued in America through Latin results our recovery. Turning approximately quarter the currency declined delivered margin, The strongly May COVID-related

Finally, XXXX in as our reminder, include will business comparison the quarter results. America’s This the final compressor which in will of a periods Embraco quarter the Embraco be results impact results. second Latin contain

review Turning the quarter results for I’ll Slide our Asia second to region. XX,

pleased from Overall, While challenges. has our net in April environment by resiliency EBIT COVID-XX. margin Whirlpool significant basis though the results a These declined approximately restrictions by delivered In impact point operational second cost stable, India, In we increasingly Operationally, level in X.X%, as and XXX offset have half to strategy quarter. EBIT the our of the are move we through global remains demand pleased results in the become takeout China, sales within of COVID-related macroeconomic given the sequentially shutdowns the were the ongoing business. are and Asia demand results as year. share growth our improved India we economic strongly June. quarter with May, of demonstrate rebounded was branded uncertainty impacted significantly in as eased. the across of

over begin. and Marc discuss I now will our I to updated turn XXXX. to XX, on Slide to Marc perspective Turning it will

Marc Bitzer

Jim. Thanks

the most the second one expected, pandemic business. the of difficult impact quarter the terms of in was on our As

I fundamental to we In expect the Based One, extending June with sell-through the Because QX, of to on the very uncertainties three on XXXX. our a line for time. demand shape want of this and update businesses current While of U-shaped recovery not encouraged discussions call, last earnings current this, but what’s seen guidance, rest during information recovery? the continue key full-year for you trends are the of significant year. to into we perspective we’re our an are our countries, provide remain at our which give available the again XXXX. on by we in reinstating questions the mindful in trends throughout want based the

look XX%, However, risk net from our previous expected a to of full-year into curve Overall, there XX% a net W-shaped fully particular, organic strong as QX. in demand a decline of is we we an sales perspective of X% due anticipate for sales. an to improvement a quarter XX%, to second

sustain our that we will confidence operating compared structural results provides Here, margin forward. clear sustain can the margins? and our financial margins profile improvement I in going us highlight healthy ability operating to crisis to by in Second, our business during XXXX our

track in Additionally, to we can more cost XXXX. deliver $XXX million are on or we firmly savings of confirm

which working Finally, withstand economic strong on enhanced face will liquidity capital liquidity supported and current position, us globe. discuss across our uncertainty the our enables clear Jim what’s position? management position the our cash Third, to disciplined we by focus

our Slide to highlight Turning updated U-shaped support data I’ll continues that XX, throughout the the recovery to of perspective XXXX.

provide we quarter, not but However, situation of the share this felt data proof given valuable beyond we do please impacts note data this as to of would all current COVID-XX. the this points intend that the uncertainty we assess and

each to on to economy the as countries, of pick this we even U-shaped demand from across related cases in and significantly to demand sales In mode demand recover to we continue consistent expect of leading XX%. We a development decline be the UK, the resulting government in the on consumers. COVID-XX demand organic our emerge timelines. the many continue up different seeing cases XXXX structured cases remains not declines As we have recovery. we a and level as experienced lockdowns the recovery retailers reopen. it��s pandemic yet throughout June result to In to of see and signs pent-up year cash continue economies key as have on countries broad of In key at the in seen key U.S., of offline-to-online. phases its COVID-XX is of crisis, in reduced across from patterns open with a seen remaining monitor impact reduce is Italy to reopens, This a notable previous on-date shift seeing U-shape demand COVID-XX we Based full net of China, believe different we’re appliance to a have clear begin the it demand impact the similar and if to countries. other trends we and of X% are the transfers

XX, Turning I’ll margin Slide position. discuss structure our to improved

with the before call, Contrast during quarter dropped During crisis. X.X% a we decisive healthy second the in is of EBIT our profile meaningful In margins what last this results EBIT our trough around sharply indicating last effectiveness margins X%. financial highlighted and we’ve we our margin crisis taken. results where XXXX, and earnings we current proof the at above negative period provide These related saw bottoming COVID to point which delivered crisis. actions demonstrate a sustain ongoing and can the X% strong margins of we out throughout

$XXX in put our towards response million the of the I’ll on-track takeout more part second half discuss XX, realize cost Slide to more this of approximately delivered Turning the we’ve actions remainder in cost sustain Year-to-date takeout the to COVID-XX near-term year. to margins we’re place in million, of of savings over as detail. $XXX place well plan. Overall our the or delivering of in actions

continue we market. raw to we on on ensuring material focus First, the capitalize deflationary

reduce and both Second, spending. discretionary we to structural continue significantly

implement quarter, took steps we large initial to the majority call. we QX of outlined During actions a our the on the

measures a to actions second the year. from half these of we and As cost of completed throughout result, are the XX% see today, resulting savings expect as these accelerate

across our focus Third, in strict on the ensuring inventory we’ve proper levels capital risk-mitigation are plans have working globe. the management we and managing appropriately our maintained place

Naples’ actions reduction our announced $XXX workforce of U.S. restructuring original charges $XXX we actions, in restructuring million cost total Inclusive of plan continued million. efforts. expect charges reduction anticipated our XXXX, of for $XXX U.S. we and part million a our additional above the now of Finally, guidance recently to as

turn Moving lead crisis. XX, and now this out to to Jim navigate of to I’ll to position financial highlight ability Slide our overall it and over ultimately

Jim Peters

Marc. Thanks

overall to a our liquidity to liquidity and ample with As strong withstand needs, continued remains economic efforts of support position result uncertainty. flexibility current our financial the

position cash credit current a very approximately $X.X have and of position as we evidenced our remaining First, liquidity facilities. available committed billion billion strong with by $X.X

Within issued short-term executed the committed leveraged million our billion compared Subsequently additional liquidity. bond adding to quarter, new $XXX $X borrowings proceeds and we and position down quarter. the facility, of long-term pay bond the to a $XXX the a of credit we used from XX-year maintaining facility revolving credit under credit facility XXX-day $X billion our first million

in our Second, to ample three impacting currently buffer interest debt to we approximately a withstand times and requires our From ratio at negatively earnings of without covenants. XX minimum continue currently we above times. our X.X, maintain we are is while X.XX, reduction are covenant perspective, debt-to-capitalization limit and increased coverage or a a

second no we strong the additional continued Third, investment position to million. maintain only our of remind It strong strive bond we XXXX, quarter through grade maturities financial which our I’d like have credit is actions until to our and $XXX that is that rating. approximately everyone

remains liquidity operations effect. temporary of in liquidity revised plan that allocation debt-to-EBITDA mention our needed clear, times. towards Lastly, Until focused we suspension during future to of repurchases this I’d remain become will this our our goal and unchanged our our share we are like confident time. crisis capital at Overall, needs the long-term gross two have on support remain progressing that to

on turn it Now summarize key to messages. our to I’ll over XX, back Marc slide

Marc Bitzer

Thanks, Jim.

COVID strong highlighted globe teams delivered operating resiliency decisive our the loss demonstrated as helped crisis. across ensure sustain business believe performance we undoubtedly The global to future. quarter significant we continue our second period trough we the model the is in strong actions Our in what execution and and a of of took margins volume of we the margins mitigated healthy

firmly remain leverage we strong towards maintain our very committed Xx to goal and Additionally, over continue driving business of position a long-term. the liquidity to our

year-to-date economic our As it recovery. to win for priorities in performance we invest And continue and give journey, our eventual our we questions. operational and positioning now and transformation formal These long-term to remarks shareholders. we investments will in us end digital resilient ability the continued ourselves in for up are drive value to confidence open

Operator

Susan Instructions] with Goldman [Operator Certainly. Sachs. Maklari

Your line open. is

Susan Maklari

and done morning, Good quarter, for the you. well Thank guys.

Marc Bitzer

Thanks, Susan.

Jim Peters

Thank you.

Susan Maklari

question is maybe actions mentioned color you are with give maybe how that on just, it that plan a the to My XX% first much going you versus think about you done rolling we we us is thinking into how you about especially the And of Marc, that through, more be discretionary? XXXX? trajectory, bit Can take. margin as should structural cost maybe

Marc Bitzer

And you to in is that asked for. the exactly what because Susan. particularly breaks XX Yes, I slide refer Page to what would like down presentation,

million remarks, total wouldn’t which million roughly there’s takeout are non-structural, of for there’s $XXX also mitigate like actions Yes, comparison running year first in so as had XXXX. calendar travel more, cost expense which refers a implemented of there’s a for mind or half. that. So a $XXX of an a of call $XXX of I remaining And which by a which our of definition, $XXX structural prepared on said quarter, million in but in all, raw year. is you we we million And structural are QX, material. second is structural. we have very keep we’re the the large into fact but already largely But of XX% to, in reduction. $XXX million, impact or action, of carryover that that just the impact that’s furloughs in impact will million, second be, the a actions, about confident some non-structural what some the course XXXX, next will that the There $XXX impact,

$XXX So, probably yes, million XXXX. carryover of of a into over structural million in actions, the to carried there’s impact ballpark which $XX a

Susan Maklari

COVID maybe saw given shift of movements bit perhaps to you little some share seems then, that That’s of parts now give COVID, as market operating in we’ve you the that? And that Okay. helpful. there quarter, to Thank just of more emerged us it some a key as from the stable of And and of real like sense relates kind how environment. you. especially we kind this to it are kind to Can happened. of a trend was expect some talk getting

Marc Bitzer

or you Susan, North globally? referring to are America

Susan Maklari

Yes. Yes. I’m sorry, North America.

Marc Bitzer

Yes.

highlighted of that’s America, other less a cash all, remarks, consumers in frankly North having in remaining So, market around entire quarter, and government we the the and challenges saw as the first And world. benefiting program in we with impact with particular, throughout also result of our demand also was key just available. any pronounced stimulus from the open, when

six the our it, in weeks the chain a It supply comes to how had solid and to challenges in for you in out of flare-ups, kept led we the other supply to could demand temporary relatively mind, on back we have last of less impact factories through quarter factory had of factories running second distancing last loss and you in the in quarter, relevant. we impact severe particularly share were stores second combination because factories, weeks Mexico. and open of over With remaining than have a markets. of America. prepare a six that that you So of quarter, the led COVID social entire even probably shutdown market component coming the North though that mind, With also is and constrained –

certain long out risk of want challenges of supply remain the is us, also to way but around and confident through as as us work we’re it, We the is is are behind we them there as COVID in long be existing year to a around of our chain. will working the the mindful and that but the get risk on of will us. We throughout COVID rest as I

Operator

Curtis Nagle America. with Bank of

Your open. line is

Curtis Nagle

taking for questions. my very Thanks much morning. Good

you to breakout million And and question for little cost how related a of taken out a you So, it could that America? maybe If bit much was North COVID-XX the much attributable would just, give restructuring, in could Jim, bucket maybe what we how terms to you. are detail to in the stripped out reducing the of were fixing, more words, these year? and cost that things front onetime of the they being costs or your in in of half why structure? quarter exactly attributable are And to, for at kind least either the $XXX

Jim Peters

Yes.

portion. globe, to on, in this Naples closure we event talking you’re EMEA type are that the different equal about across the our I amount in volume need of than things. initial is see. kind the the you a originally which of at obviously The the costs restructuring Curt, a terms we within the a around and and of and are. we almost anticipated. I want that mainly to couple at you an ratably structure the look this significantly We did about is where restructuring majority are These you level believe was pretty it, it doing people our a as and that, Most in had of that the things. So, pandemic these these because onetime mean, added globe, across were reduce incremental implemented of related factory revenues we $XXX the of about what had, just to incremental if a other reduction few of that’s is cost downturn costs being the higher actions are, happens million think the

process. program we the early then some throughout also we that layoffs had discretionary retirement a ran involuntary is U.S. the Here additionally, one, did within we

across those it. everywhere to actions what to see got as the even that taken are bring see globe those because think I risks we’ve we And said, the year add the for business It’s up costs with tools, going those most forward. this of our and just there. in line about both we volume of using you pretty potential So to

Curtis Nagle

Understood. Okay.

think I environment. back kind to shifting maybe of just the quick a promotional the U.S. one, and

As I was subdued. it, pretty it understand

in obvious see of of and are in risks the you environment to intensity kind promotional there in some for of could demand competitors? normalizes, similar operational lower from demand. reasons terms forward what of as going volume any you think pickup XQ kind think I you competition a the your kind saw Did or of

Marc Bitzer

Marc. it’s Curt,

no promotion not in that be – decided on what we’re we which because, know, point don’t in least QX don’t freezers – why extent. subdued. far some products say I would a you doing. competitors drive unusual, environment, Plus, I forward-looking at environment statements you situation. addition, as a know in So promotional that’s making very and case, will towards promotional QX available for et cetera. is our there’s And you had promoting There’s demand have fridges, peculiar to was the

that in throughout So nothing QX, also QX normal it’s there in in QX. keep will – respect. be was constraints supply mind,

not So normalized environment. I’m sure environment, of market would promotion broader I quite a QX take as a representative

Operator

Research. Eric Cleveland Bosshard with

is Your line open.

Eric Bosshard

morning. Thank Good you.

Marc Bitzer

Good morning.

Jim Peters

Eric. morning, Good

Eric Bosshard

revenue to previously? second exclusively you had year, full revenue sounds the why a XQ haven’t follow-up on what the not? outlook the view saying half you to attributed guess On that expectations. like that is, I the the I the within from that adjustment it said side, better And you’d Am right different than

Marc Bitzer

to in to in The and want my out and in this are color we July good prepared one we before, and we came to Eric, very the what remarks, QX August. I feel provide about stronger. fundamentally, laid yes, similar alluded numbers addition,

about know it react We the September, consumer of July as much we happens uncertainty to June. August the be stimulus unemployment strong know people dealt demand. don’t But in once demand. too happens December. tapers don’t how will with as just and consumer We will remains are how how There’s COVID So government’s off. form what cautious what impacts and and

caution it The we’re So news half in it it will yes, a pretty certain better. and in is looks August, – July way, good. outlook. doesn’t good in second then be yes, we that factored If actually materialize, our

Eric Bosshard

what I’m and to place? your point now at limitations, in the doing supply the are in has to are your that’s but the and in can I able of in you in supply the at be related of what supply chain, chain speed be fully you guess, then whole And full terms chain sure point industry? better will participate where to do participating you’re industry demand, industry that, others taking terms Or industry got you running recovery limitations

Marc Bitzer

the So Eric, U.S. factories. first all, And about we shut down never our of I’m talking factories.

Because flaring slightly even you have you you because of to make and up distancing, you of right run higher can of line, part spacing which as are That’s as run every in at because frankly, the experiencing we it you line because never an or of to absenteeism, you certain assembly in if COVID-safe What can’t XXX% factory social cetera. capacity. you is case with et world locations, course, the now, – risks, safe a of So understand, need factories can fundamentally COVID. physically extend also when the which you of simple hovering on the have reality of factory, different. the

components, states even In we’re – addition, because to operate delivered individual U.S. factory of factory, And stop in – because the delegated we health can drove which a complicated decision Mexico a lot just about or situation of some the the goes. more not into to inspectors. challenges is Mexico that had far our delegated is and the are Mexican of if and

only fundamental would these not – impacts are before, elements it’s industry. you But one. impacting us, in this As it’s the it said two assume entire I the

second quarter, now issues, based down. we have QX, them I face we may the to seen similar issues, QX working in in should are right as So we expect, and and we through what But known better. manage said it’s and getting we’ve on the again, will before,

Jim Peters

our of by, add say as Yes. demand. week And orders throughout situation. know through just suppliers’ that our the a ability same each to we improvements see And are there ability our of in that. meet and goes upcoming that But the Eric, point, quarters. Marc’s I’d to maybe, the we also backlog that is many competitors we just in And work to

So but the to we it where been. are up has is catching still improving, demand

Operator

Rehaut with Michael JPMorgan.

is line Your open.

Michael Rehaut

Good and the a on environment. congrats morning tough Yes. in results

Marc Bitzer

you. Thank

Michael Rehaut

guys the which referenced kind mix. reduction mix half? of the of you headwind that How quarter purchases the promotions, for First sense are change back the question you initially the North of on checks kind the partially does this quarter How Obviously, mix in despite thinking I you thinking stimulus makes in some real quarter a influence had by back being particularly backdrop throughout and in in as that of by such? or last was second you lower freezers end offset or quarter. about helped perhaps are second about the seeing you half America getting that in how

Marc Bitzer

over as our points. so referred we negative Michael, XX quarter was price/mix to basis earlier,

thing got And lot down answers was June. the a May And and pandemic is was, getting important a negative or mix the product mix refrigerators, from is, see as remains. that in The microwaves, long we COVID. very saw significant of then and you June in late of and in beginning in late et that your cetera. better the a particular And particular, in heavy mix probably what better gradually amount low-end is, as partially is April that May, there question a

and kitchen, the consumers. people in just the rediscover time there’s ovens, available mean with cookers. cash Now I the they spend

that driving ultimately better mix. starts So now

was promotional expect points, so better the we XX forward. saw that’s more mix why – have the which we June entire probably probably certainly what investments, of than less the And X our basis for reflective going might addition, we that’s quarter. just In June negative is

Michael Rehaut

in any maybe How is way little think encouraging, it. about you about flat in we the there’s track XQ, half million. more million turning the positive XQ? I or quarter, question terms appreciate of big obviously, in cadence, $XXX part on as if $XXX that story. mix previously, talk Maybe should cost $XX a said break million XQ, a – appreciate of very How I’d the XQ? second remaining You that, of that, first margin part or there the out combined. And about second second there’s Marc. to should But talked on

Jim Peters

Yes.

basis So throughout this leaves XXX of Mike, the rest think million. materials And remaining the about that million it $XXX way, points $XXX year year you a quarter. if for at the ratable in is about the pretty about

to coming of QX, begin you maybe million that that that’s to think build. net all actions in $XX comes million of as XX% cost about this the half the another $XX back And year, could of of takeout which approximately million the that leaves our cost time. as So can these $XXX would up, be XX% in that probably think the about then you ramp coming be in QX amount may seasonality and actions of remaining how logical within

best it. the about way I that’s think think So to

Operator

Raymond with Darkatsh James. Sam

Your open. line is

Sam Darkatsh

morning, Good well. you both are I Jim. Marc. Good hope morning,

Marc Bitzer

Good Sam. morning. you, to Same

Jim Peters

Same you. to

Sam Darkatsh

My two questions.

that as its are are free stand back Whirlpool flow X% flow the million range, quarter? I cash First, in $XXX you’re, XX% think, knowing that sales positive – half for you’re you anticipating you generates we whole the half. down cash typically, the to seasonally, the somewhere in Knowing year, second second that in expecting all after still

Jim Peters

Yes, Sam.

this right I free were what at we would a $XXX we we’re compared receivables our where Here’s we’ve now within of are our volumes. payables inventories, last but sold lower are feel is cash about point cash lot year significantly usage to definitely year. compared product in even years flow inventories say at capital a the little where prior good our come from cash out very last our down levels terms than time. almost you to of year, – because positive a better And are lower. look XXX We as working and bit million in expecting flow of And we’re perspective. of the lower our production have Obviously, our are if

do expect we year. we more And fourth we So up as in cash expect the cash. throughout seasonality pick a that of to do the sales quarter, see same normal collect

probably benefit some I’d projects thing you’ll back the also the capital in more been add the other the and there in half year see of of of – delaying. of the So is within we’ve

to throughout As in out outflow you due much year, half. have expenditures look capital as we the won’t the back

Marc Bitzer

Sam, just only maybe the comment. additional

the the we’re impact full year the which, adding cash flow quarter one as – of particular, working saying I’m yes, everything inventory, know, are in a year. pleased And Despite with last we the do enormous how reason number of So you just capital, seasonality, else. unusual. is why that next to the cash very improvement mistake given very this in second flow, don’t manage

We the have second ever your you cash amount you that flow. has capital, inventory in when of certain rebuild working and impact reduction the And inventory, negatively basically quarter. a highest

rebalancing back firmly a bit do absolutely But inventories. completed there’s be year-end, expect more we track before around little do or this we so on to this less should a to normal the we’re get positive I flow, So cash expect of and a situation. on one.

Sam Darkatsh

quarter sell-through the My worsened late and revolves status. U.S. and AHAM quarter, in as Obviously, demand their yet uneven progressed. really second retailer question improved the around inventories was

category-by-category of and view trying a basis, sense are get to retailer kind if Just also could? what of you they’re in they you on shape a inventories – where

Marc Bitzer

low. some to the Sam, I terms, impacted again, such, very as the general in entire retailers. extent, and have because low, unusually somewhere also And retail extent, describe the between large inventory industry a would constraints low the it’s mean, and I supply to frankly,

retail starting the inventories, the a inventory. in have board, low. keep but So U.S. amount the of is across not – different also They – levels in has the inventory is trade every point mind, the

Operator

with Credit Baumgarten Adam Suisse.

Your line open. is

Marius Morar

actually Adam. is Marius Hi. for This

Just restructuring a on the quick question costs.

And in half. we’re the come – that North are just are the most going they to in costs the of well? America. mostly going to North the they wondering mention remaining did of be costs America if for You as Are second in

Jim Peters

we or as year said, the the the that’s primarily the then Well, $XXX EMEA. million across we in that take ones globe. said the million about $XXX back you we of the ratable And half additional were that actually, added, first in if

said I America earlier. So that close business it’s you XX% the on just based could assume falls what within to North approximately, of

Marius Morar

right. most that do expect quarter? And the you come to of third All in

Jim Peters

fourth fourth come that, expect the many come third in I those for. execution the the it, add actions on that to rules on or we an incremental either given timing charge we depending the we really how haven’t recognize you of the amount of here would but also throughout and in quarter, taken and split already the third accounting did around we’ve say the the a quarter and quarter, it’ll it because second

Operator

Research. Longbow with MacGregor David

line Your open. is

David MacGregor

Yes. Good morning, everyone.

Marc Bitzer

David. Good morning,

David MacGregor

a Analyst kind restoring Day your of European and that you and the a America, North lot Yes. reductions back for Europe job environment. encouraging of this It quarter from were quarter talked the kind the underway. profitable kind Turkey through as that maybe or was profitable Congratulations, there talked to your really want to let’s those the Marc. comments, June, of to goal I the profitable your sort could longer-term difficult year this good and as about you get about and out hear cost once a guess, business. where some I to I of that in the on thought you And you about that X% margins. Nice to – talk regain journey profitability a the mess in the fourth stop expectations fixed be to ability volumes comments, of of about second consequence gone guess, in go sounds you’re before of to X% whole though feeling get first were half.

guess back I’d in of, and right key getting about on getting to needing of love mix should X% So direction. to some thinking up, How I of these in be X% to based be we at reestablished balance least your your see kind retailers trade to now longer-term back your the terms moving thoughts towards kind goal? with to patient progress get getting of that

Marc Bitzer

Yes.

European recall, particularly pretty So COVID numbers you David if and saw also the certainly come to a by ago, you year on until the referred QX February. around to and year the we’re QX starting encouraged before much we saw we European what in as finally last

we’ve two that that we trending the a we quarter way COVID Now of was so right COVID kind in and course trend had yet, don’t all just of frustrating know the quarters hit. Brazil, half to make then it America other shutdown. hit or way countries entire what retailer the and event had essentially a Europe you a strong similar very in seen hard because lot and North in India in and markets

devastating the did cost we despite cost. May and fixed from very limited April revenues we the on frankly was So had bottom line because we what the and had

off in And entire you April – above earlier or given we way a fully yet – haven’t terms see not when to not numbers why we year-over-year also need numbers. take really to and August impact run expect breakeven profitable, do we being profit So milestone was maybe that’s we into also guidance profitable reasonable a factor make solid a continue have very and also QX demand we we in but XXXX XXXX X%, look a but to these XXXX. of for knowing good. But COVID in than QX. towards were I out rate yet just question will that and will and in X% see way To the July, solid certain mentally on about results. the quarter the frankly, your was these subsequently at be but and mean XXXX, comparison June we in May Jim in worse and to said

David MacGregor

Okay.

market over built of there about the Second you years, a able indicators be just to the and the business, positive the that residential guess of lot through your the us we’re in few of demand, should this channel we residential past builder just the second question, remind nice seeing been that a and maybe the Could about American you’ve into from business, how contribution construction talk around around builder kind potential business North I thinking share size you parameters the half of business of that channel. profitability gain year?

Marc Bitzer

focus lot builders as from business. is known. well of a of in with the these suppliers. you two typically exclusive course either and channel. about And or kind the channel contracts multi-year builders, talking on go a are particular talking the are It they the David which were we can maximum of I’m builder So, builders us time smaller improvement which peculiar home spend about national both national the

kind long lower of purely are but and good gross channel are the running are these bring a profitable So little very they good to which on effect. margin because are little us serve bit channel contract, cost And of certain very us. the for for technically continuity bit there and lower,

you and very say bit, of builders was February, momentum, on the May there slowdown the seen of rest the coming and the June, as also little as on but would April, Now was we’ve not surprisingly strong. builder I in a think year know, I March, which out side

the to because our still And low nesting positioned. so the I rates, on cautiously, spells you’re think which we consumers, in builder optimistic, under we well supplied in combination optimistic news I across which are for markets refer mortgage builders, am broader about business when of see I channel and of rest trend the the good very

thing I last value at always the impact one, builder. the pick the which of we’re very to of keep model that, of this the chain in What mean are a appliances mind tail-end you a As a between appliance us call I the into six revenues to nine down news the road. months, the that’s seeing house, typically the know goes housing is of start good very would there but and I so

Operator

KeyBanc. with Ken Zener

Your line is open.

Ken Zener

everybody. morning, Good

Marc Bitzer

Ken. Good morning,

Ken Zener

to might my you might were talk North America business, down, to have volumes margins chain think obviously it issues, your your sales question. affirmed much believe this into guys very about that chain were say certainly the the, I But within don’t by a pricing it’s your is I competitive and sounds then want for Can talk and discipline related fair you wow! go have second to American about how considering up American more, you if you not can Oh North EMEA had supply for supply like environment just but issue, shortfall, solid, quarter. the want your generally North

about talk can good margins is like if margins? the and the – issues impacting why were conviction in August it actually having to in around industry so shortfall and So context. like short is you on of how just July good? trying supply the backlog terms you’re pricing Is these I’m The that of shortfall, put X% in the chain not shortfalls kind is sales necessarily supply?

Marc Bitzer

strong business there. very wow”. So and Ken, I just of Because numbers think team of impressive are of like model quote the all our any and by I your strong for American first “Oh, our are definition North execution testimonial

supply the question mind in your of the to back about constraint, specific that particularly the Now impacted half quarter. keep

board which to some demand starting in April So were the demand had when in with And supply declines, the May. faced then we you across just was and is constraints. June, recover,

say just related than an around So of few XX%. was you June, America one A or But, April entire I was down demand half. certainly would revenue and were North drop slowed is which was May. which less in but percentage XX% to saw supply, There hampered. industry points

constraints. these So seen revenue” yes, better without had even have we “a could

think to strong to margin I combination you, which the the and of promotional we past strategy, net measures a the basically the but we lot margin quarter, And XX.X%, the the a talked strong answers lot strong in but all not it where the have things also is If execution. margins, as manage trough a people are but a always throughout what – margins? that trough expenses, very on how altogether again ask put only not had of of there’s good cost, we peak we of see On questions. then And taken of side, strong about think, and margins. rev which costs. a you in we now the business necessarily turn, in I that’s decisive be that’s North by America us, testimony yes, with on cost we’re It gen the and response constraints, a discipline to terms supply saw very travel the very

Jim Peters

Yes.

this and said to like the in had really deal little we’ve way years think Just situations a over changes point the bit, especially to to years. lot this structural we good highlight of to Marc of have what put add there made manage be able costs fixed kind with that the the business a position I over and

Ken Zener

Yes. you’re it’s margins. up year-over-year amazing just I mean, that on

I Europe XX.X%. EBIT in margins with XX% margins points range on North to that it misunderstand confirm the that considering assume for obviously up did to XQ, you still second et a reasonable there don’t is basis year-over-year, may first, commentary believe, – a profitable mean, I America, question it of handle in is a what year’s second given I that. big just expected that I last albeit to have want it there’s I savings, so guess is cetera, my expand actually be So only is cost I will And type realistic the you half in that but it? XX on

do will North think So you this it? year’s America have a handle in EBIT on still XX%

Marc Bitzer

QX. don’t quarterly and to Europe in Ken, having just guidance said second we know, quarterly and give you half, said so only particularly we regional but expect we QX profitable reconfirm, that, as yes not to guidance be

margin we with solid we performance kinds strong in positive you revenue these and XX.X% expect a or North as America Europe so performance such have will of And all also more in a QX, again, would also in down August. give not you – not bit guidance, I quarterly we feel and going to think I’m specific heard a July very but are about To be QX. good before QXand a little and

good. very be will margins company August and July Our

December, uncertainties We just October, we’re short-term but certain yet very means still horizon is September, what it there us, and all for are around not November about bullish. macro

Jim Peters

the in to the strong. said, the in June the And half reason orders look has we order the add very maybe or QX XX% early pipeline May declines, the the Ken, in order revenues. then down And April you biggest pipeline of Marc been is on EMEA when back at piece as the and have year were confidence and

the that actions half year. amount of back the cost implement to the the there we due in taking just are takes it to come time more Additionally, of

begin feel why again. we in confident QX, we that’s show So will profit to

Operator

Seldon with Bank. Deutsche Clarke

open. is line Your

Seldon Clarke

good Hey, Thanks the for morning. question.

So full I you understand unchanged line than how either thinking quarter, for the the are trends perspective given the you and mentioned line uncertainty basically just margins expected top year? now here. from in the the half in back-half guidance But decremental being back strong the top or second underlying about

Jim Peters

what volume you incremental is, a say would the look see throughout has recovering, demand again, always we year well, XX% as begin the about to impact Yes, and out back that half of it. Seldon on said I we’ve

you Now the that a the savings our that’s we can that’s we of offsetting of that, assume and cost more of earlier. the volume down. of half than cost are the kind think in seasonality of the back take as said, year impact thing But about at look key it. the as when And the lot savings to we that about I think there talked

So from did, again, have around will should an that. but how quarter a second think at – of – our significant the nothing’s obviously not look you we the the assumptions year half as second be back as of changed impact the

Seldon Clarke

Okay.

so full-year you to number about breakdown the you cost same of the takeout, $XXX still your the framework call, of that provided if the look it at million is I So then, And structural. okay. guess half last on

environment? the not know you’ve normalize guidance, but in anything takeouts where actions think this you’re we relates I reverse as about again non-structural normalized margin say margin how these fair COVID, structural? next should learned the giving in do scenario. So do things and of at more material can beyond in this if terms XX% XXXX? Or the those could XXXX cost of travel more to scenario that year raw it just so profile How could business of about $XXX is And some potentially that a point think under million be there people it profile costs that that we to and start of or items to discretionary Is normalize? potentially

Marc Bitzer

point years, prior would referring we as of probably happen seen to don’t repeat in et maybe have maybe the nature back, we the it’s expect we��ve that different guess not – cetera, to that what full I come next behaviors. furloughs, will your don’t Seldon to extent will it’s non-structural travel And actions I’m year. fully expenses again, them expect because people

actions these and to ideas, ultimately large in extent a do structural actions. cost will yes structural of one $XXX comes that with will the next might So position a behind it are be, we for at were creative point million, repeat Structural of then extent better provide expect part as Yes, yes, also not out to cost actions. cost some a year, terms of restructuring developing but over which of our we’re that carry company. us be on counting just could which that we be experience one

better for maybe better certain levels XXXX to in structure. yes, a year hitting not fully way structurally cost we next revenue line a back expect So

Jim Peters

Yes.

revenue to had other we’ve I discretionary I with the think that agility our as add maybe dealing to and that and base. the with is, deal declines, to swift we’ve thing that volume cost learnings would had

I think times is a that in when there, the pull ability we’ll the need demonstrates continue we in, to make return, provide adjust it not when we the have will back times some investment in to to return because of it. that

ability of over they are demonstrated control control to things have those are we So while our non-structural, these costs. and think we’ve quickly and react some I

Operator

RBC with Markets. Michael Capital Dahl

open. is Your line

Michael Dahl

questions Good helpful lot far. my for morning, and of a color thanks taking so

outlining Just chain back some revenue dynamics, American side. the the helpful North supply on the of

about what chain headwind much partially that the as think still was yields into half. that point of related going XXX forward the in of split issues margin the carry cost we dynamic second some if the the think was I which offset the margin is other to XQ, how directly in to production was supply by look of we went at bridge actions, part basis that and

Jim Peters

at basis So, Jim. look think XXX is you Mike as that I point, this

we of point to a trends think million at we way levels we safety I our in requirements, put were in at XXX about second our thing the actually But prime issues by that reduced to QX look all talked supplier had season. million numbers difference. basis the had portion you that quarter a QX, the to it, that we due about and reducing put big is due about due XXX inventory context, we our the and as it and before, had $XXX constraints, inventory on think as to inventory If it��s in we into our numbers to supply and in that a to build year-over-year look head the in production levels easiest inventory Marc about basis typically impact

that’s significant to begins back So out. causes build to wash And impact. that that inventory normal, what as you

Michael Dahl

Got it.

graph may slide And to of then the at clarify, then not deck second the four follow-up have a sell-out in better North charts those were, – versus just and just on of kind better the shown those to on the sell-in last whether to would weeks the U.S., there looking whether in five when or kind trends the were quarter, specifically your or sell-out trends wanted but America we’re sell-out suggest? than constraints bit some a you question, – Okay. the sorry, Thanks, the selling-in sell-in. still those Jim. of quick than sounds still the despite complaint despite seen It like

Jim Peters

they our I’d about it’s probably the actually, as Marc what was their about the talked sell-in it’s down opposite were sell-out that constraints with No, were levels below Retailers, and Mike inventory had. say increased and what earlier, one supply going because we them their selling-out. into mainly actually

excess about of we we to if So that of we’re normal working that have backlog through to anything, that’s right a now have. orders the provide number talked might an also we customers, our significant

in believe if of also confident was in we and stronger And than anything, we’re why seeing do we’re So orders and August seeing. that’s the sell-out sell-in the quarter. July I amount and we’re demand believe here within the

Marc Bitzer

Q&A. me So up wrap maybe the and let up wrapping here

all First you of all, thank joining. for

about, proud our think as think margins we’re crisis. despite that business by of how you us talking our impacted strong what the proud we I of kind expected but actually got heard I of we’re from you’ve delivering impact also pandemic. with managed course sense company, And were people the was our today pandemic about through

business we’ve well in done we’ve in manner. of on agile this management back-half, what think of what QX terms I for done and positions more the a in cost both actions very us

to September and you through heard looking very looking just how forward but call. talk that’s bit well-positioned, until the go in how our I earnings to has rest the to about we’re you this little develop which cautious And year. you And prudence, crisis. today December. happens feel as what next at company also We’re very positioned of good we’re But I’m

a So lot. stay safe Thanks healthy. and

Operator

This concludes earnings your second the XXXX We Corporation’s for you participation. thank Whirlpool quarter release call.

You may now disconnect.

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.