WHR - Earnings call transcript Q1 2022

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Operator

Good morning. And welcome to Whirlpool Corporation's First Quarter 2022 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, Korey Thomas.

Korey Thomas

Thank you. first call. our to welcome quarter conference And

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

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

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

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

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

you provide a business measures adjusted better our for trends the think also operations. analyzing ongoing in baseline We

of referenced posted this Additionally, price cost-based supplemental Listeners previously increases pricing time, price the to measures. reconciliation or are listen-only the on all this directly Investor mode. website information call reflect comparable to At in most announced throughout section GAAP of non-GAAP are our the package for items directed participants the increases. actions Relations

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

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

Marc Bitzer

everyone. business provide our perspectives transform some for Thanks, better. to discuss intend my and to continue quarter the morning, is to Korey. the Good first pleasure how It date results of to our for to we

Turning business. to our

deliver levels volatility. inflation, chain higher supply relentlessly Over of the cost quarter, disruption we strong results rising to despite worked and

we to of our strongest XX external grapple In history with. company the factors the fact, many this top among in was despite had the that quarter

a from seen stronger organization, very of robust pre-pandemic. business to obviously it very our effort than where tough year. saw entire growth. in XXXX, comparison We Relative a however, to faced relentless Thanks record stood we growth the period our performance the last also remains

years the significant but placed We performance the margins To see is growth I few levels you of have we remainder the in macroeconomic in a quarter team the very last very the separate the exiting ago, remains well. a our and second I'm management emphasis still to on reflection confident and expect another higher Whirlpool interconnected that even tough continued half strong two my also robust guidance We're environment. release, a years emphasize, mind, further perform structurally over go-forward strong sustaining merely undented. we're I'm ability taking and and and to efforts operating for underlying are performing few a Today's well strong change, are announcing on Our environment. year. stronger higher brands and pleased structurally footing, function to fundamentals put improving of announce growth belief as in press That quarter a our initiatives. in this the our just are first in highly the committed is and of volatility for we business, future. in the this of remain our

a First, portfolio also have a that, the the help that conducting growth to we're high made business. transform will decision high of we business. an the review embark us overall Reflective review margin company and on of EMEA into strategic

years two recovery enjoyed solid segment EMEA and over despite headwinds. significant has COVID turnaround Our the past

EMEA. it's time the now the in operational decided improvement region, our long-term to value have creation assessment of we the in significant conduct that strategic Given right

with you an give conclusion the the of by of to this end update review expect QX. We

both areas organically opportunities and You continue in will this be we hearing strategic inorganic select more from as on interest. grow of us evaluate to

in year, business is by business years stronger strength and company brands. last more but up We committed be fundamentally of confident believe the pre-pandemic detail, a confident of than down and the quarter more to last couldn't us in actions of $X.XX XX% quarter EPS This a levels. the first remain our our get Whirlpool's up to that XX% in the all-time and $X.XX, versus I strength against the delivered and with by are record continuing we quarter solid businesses made demonstrates over deliberate of today. XXXX. first We into Whirlpool ongoing against our have that several improve To XXXX stronger

this, North America full year cost actions we inflation strength the took, and increased levels cost We of X% earnings XX% of business, to Despite the industries of we the fourth have persist again cost face now sold. over margins expect billion. the margins year over by throughout in other margins observed delivered our goods As EBIT million $X.X or increase our the region inflation industry historical EBIT million quarter, transforming approximately over higher of ongoing and in to demonstrating on $XXX inflation, $XXX and our over we XX% most levels a and years. the expectations

We also contribution price price a recently of additional increases. higher announced as expect a mix result

deliver offsetting confident our other actions. 'XX, currently there's a words, second are inflation. with exiting lag between cost a catch-up in in strong the second half but and year half expect and In positioned of to we inflation the We remain actions pricing, fully

ongoing $XX first us half full $XX. revise disruptions accelerated inflation cost of to from to now guidance XXXX, previously led impacting shipments the supply $XX $XX However, EPS year our in alongside to

in have year-over-year to investments of we continue confidence our This and we And a year. return approximately sheet, quarterly cash in growth business on XX% expected shareholders cash and balance to our in increase our the dividend. billion $X.X and the we in are capital shareholders. innovation to strength and track the return in to a fund XX% with increase Lastly, includes

our Now EPS we and we'll first demonstrated the highlights turn ongoing quarter EBIT Again, X.X%. performance $X.XX on quarter, of delivering to X. margin Slide solid of during ongoing first

of inflation the in €XXX Our over million successful actions every in offset region go-to-market quarter. partially

buybacks dividend for cash returned with million level we the a of increased year. our consecutive XXth of Lastly, significant $XXX and to shareholders

Turning to show first we of margin. Slide our quarter the drivers X, EBIT

region still the delivered number As strong a within margin the across extraordinary were execution points, the by driving actions Price XXX by conflict. by evident, expansion delivered margin. we positive XXX negatively mix. pricing margin basis globe, increased of in items intensified which mix of price the and driven Net and basis our cost costs, EBITDA by largely led successful of points each quarter impacted logistics energy Russia-Ukraine

a negatively Additionally, significant inflation be by continues raw basis material impacting XXX headwind, margin points. year-over-year to

a marketing and our remain basis deliver what in to future. sustain the ability strong our and challenging confident to XX and Lastly, grow technology Overall, related solid very we're to environment positively in points. pleased margins margin in remains by discipline impacted investments margins operating

it turn review I'll our results. regional to Joe, Now over to

Joe Liotine

morning, everyone. good Thanks, Mark. And

X, increases. review cost-based region. North Turning billion I'll American to by delivered results our $X.X price We of revenue for Slide previously announced our driven

industry despite intact. continue the demand industry strength on believe these supply record quarters of to grow inventory record production negatively low disruptions. chain, quarter represent one levels by will We strongest impacted First consumer trends remains of being as constrained fundamental ultimately beyond the shipments levels and the

inefficiencies pandemic, strong base higher over fixed entered increased volume deleveraging. very a the quarter, of the During temporary impact sustaining inflation level delivered and fundamentally we EBIT the to experienced demonstrating cost We XX%, margins at operational from region. in when the addition the than negative we lower

and us we are online fully inflation cost the announced coming pricing QX position in on actions previously are that to our year. offset exit Lastly, track as

levels. has beyond are the Turning context point housing these needed share sustained fully large demand to well for to still historical recover the approximately remained more financial units catch alone at growth X to with that indicators that and levels This in over to I'll is to due Demand by housing all a yet Slide fact multiyear is, demand over needed strong industry the This case of seeing from play indicate X.X% X, supply. Historical million structurally with great crisis the and which constrained in today, about the remains region. out decade. that well below levels is up. we growth part,

years usage our in daily. remained against the the confident well see further consumers expectation grow. summary, We industry remain when X%. in our combined In unwavering COVID equally appliances, demand a we of to needs of multiyear in period consumers consumers' has add XX expansion have remain of and approximately demand Next, confidence room as that cycles elevated lockdowns. as at we Then strong after with this the strength millions from replacement its even emerged serve higher compare which of We America. ago, brands the grew business North in strong of

impacted was had review as and the and negative confidence. XX. for Slide I'll and the revenue demand on impact decline to East region. consumer region's impact currency Turning Middle Africa it our volume Europe, in war reduced results the subsequent is in attributed region to The from Ukraine the by

offset almost of of Excluding the currency, entirely the actions impact price negative the impact demand. region's mix

For the so impact concern operations the the address of many having in devastating decline from in resulted Russia to It EBIT in the this approximate is million a quarter, time, pause it an impact that $XX and people. At Ukraine want the for time is of it's see war year-over-year. and and to I our lives Ukraine. us great on all,

its We safety Our Ukraine and colleagues remain hopeful people. for primary communities, of and the we remain is and of resolution. their peaceful well-being and our focus a supportive

refugees. to of We support teams provided have are the proud our

to cost-based effect increased the will through of came continue including for margin our overall into result the partially was support colleagues offset closing, price inflation, increases, We EBIT In situation. that actions this much. contraction very region, by

America industry of despite inflationary strong driven of results margins for to The price review EBIT region delivered our by cost-based region. Slide Latin expected growth offsetting increases, I'll current Turning the Net environment. XX. X.X% sales weakness. X%,

XX. region. to revenue to divestiture. China The I'll largely region's our of is Turning Slide the Asia decline the attributed results Whirlpool review

X% year-over-year. EBIT region delivered cost-based region by inflation. and of by revenue The Excluding offset lower this, by pricing the driven declined actions, X.X% margins

began India Lastly, COVID-related ease in the lockdowns disruptions quarter. we as to and exited

our XXXX. Jim Slide on XX, perspective I'll discuss over Now it on to turn to

Jim Peters

morning, Joe. Thanks, everyone. good And

review perspective have in a environment year place actions Slide the with Now to I'll turning to what XX. second the external our half. strong on we exit and

First, remain strength that even greater years. multiple spillover constraints from consumer will continued effects concerns about stemming the We of and demand. alongside from and fundamental demand let trends us demand address the Underlying disruptions over remain supply intact events. strong misconceptions the confident very consumer geopolitical with market remained impact

the is here reorientation see and their is supported to and appliances hybrid higher the strength home reopening, consumers continue we towards rates. post sustained demand This as stay. much work With the at models, to underlying using

historic of levels us year. logistics materials, energy impact and the throughout Next, raw notably will inflation, in

at are the action impact increase In for we and low levels. inflation as dishwashers continue cost pricing we offset to our $XXX actions year-over-year. in built-in exit the announcing track However, remain announced strong investments projects, million to automation, and our on driving supply we chain cooking fully Disruptions to total, position our capacity expect again, support products. to refrigeration us in over increased taken demand But previously inventories have capacity investments capital by and XX% year. innovation, the

We confident have place demand the strength. right consumer actions are underlying the in in and

Now Slide discuss our on year guidance. full XXXX XX, I'll

inflation X.X% our We XXXX absorb full to increased approximately now expect experienced quarter. first margins industry to we expect the have and alongside guidance ongoing of X% to the revised year X% that revenue in we growth year. the reflect disruptions We for EBIT the

range sales. free X.X% $XX. of EPS of Next, or billion net full flow we cash of year to $XX This $X.XX represents a expect

We ongoing additional to been announced. deliver points, already XX. XXX points guidance. our by the now an price increases price Slide of expect We to mix, basis basis led drivers Turning have that of margin XXX year show full EBIT increase of

takeout raw cost We fully points negatively billion initiatives. $X.X raw component points partially XXX driven led inflation. by margin of price material to material basis billion point XX our net Next, and to our higher is impacted now ongoing full points, largely On by by to offset cost increased and expect basis $X.XX resin actions. offset increase by business energy basis, a expect XXX This we mix increase, be logistics our basis negatively a XXX by impact basis by or costs, in year costs. an inflation is reduction

expect impact a longer we currency. marketing Next, XX as basis points business, negative we technology, and in investments we our no of continue to invest from expect in and increased

place. in We as expect with actions exit earnings we the of the our deliver XX% our second in to to year half fully XX%

our deliver in and a confident are approximately and supply-constrained We again ongoing navigate ability environment X.X% margin. EBIT to inflationary

Turning regional to we Slide year. our guidance the XX, show for

along the We our constraints in have in expectations with supply consumer growth North EMEA, sentiment to America. aligned global reflect current

cycle. be of to for very trends industry America the and of year. North We by and industry approximately fundamentals the flat North in confident demand housing recovers expect on undersupplied growth expectations the war in reduction impact the of a strength confident basis half Ukraine. We supported year replacement the negative a strong and our remain the the significant as broader to have nesting X% the as Russia. remain in in a our second and its America, result full demand equally a to market includes of reduced In home environment from X% in EMEA, brands. the This We business Ukraine broader we negative

industry remain guidance. previous our expectations Asia from and America unchanged Latin Lastly,

we EMEA Latin EBIT be approximately by resulting million in margins as margins of results expect to XX% approximately a unchanged. Regarding very margins $XXX in our to offset percent. deliver by EBIT from expectation of is Russia full EMEA, deliver half a low-single year we in Ukraine for second digits, expect our full of price approximately strong recover the zero inflation. year revenue. margin In North mix guidance, America impacted partially our expect and X% we On operations approximately basis, to to in our remains In America, to positive

achieve line to in margins inflation. expect X% approximately partially by Asia, top by offset we of EBIT Lastly, driven growth,

XX. Slide to Turning

We free XXXX will cash our of discuss flow. the drivers

to our due $X.X approximately earnings have expectation mentioned We to cash previously reduced factors. billion

and $XXX constraints, transformation invest continue fund products organic These capital remain our million products in investments unlocking digital include as Our investment capacity our furthering unchanged innovative journey. growth. expectations we and launching at to

X.X% particularly minimal flow plan for billion to anticipate inventory to we a been cash largely the inventory continue States. sales. $X.XX build have we We activities restructuring these completed. of or related position, to begin approximately as recover as deliver moderate in Overall, outlays our United We or cash free expect to of post-integration

to healthy, continue remains future. sheet the we balance in very this and Our expect

you've Now let me recap what the past few over heard minutes.

we improved matter Our first different Whirlpool, no a environment. quarter structurally are delivering the that results demonstrate operating margins EBIT

right including X% have increases price in inflation the announced a XXXX, to globe. We actions cost-based the to place solid deliver previously our XX%, addressing across of

provide balance in The of generation demand Next, remains strength unchanged. the significant and expectations us strong trends cash consumer our sheet strength with our optionality.

actions have shareholder to commitment to invest and innovation business the demonstrate billion continue our shareholders. confidence the to business and will accelerated We in in $X.X returning support we while approximately growth cash in to strong value. our These drive

to Slide Now transformation, Marc our XX, I including our will it review to discuss the portfolio over on turn of strategic EMEA business.

Marc Bitzer

Thanks, Jim.

future. transformation. XX, are how quarter, I portfolio with are only positioned in begin Now done past rapid on the will past Slide global the why of global we businesses environment profound our in assessment over changes this discussing we've macro and to a but during Not win years, respective

rising operating a As it a XX are and any global inflation in we is consequences sit reaching far just we short, we has here high along tensions vulnerabilities company, are obviously logistic world a geopolitical freight supply experiencing world for different today, with a trade fundamental costs. and we very global where ago. less which chain than decoupling, and global from In world were global years with

by positions. emphasize global and the ago, same of our in become have scale we years more structurally regional time, October scale. differently, were benefits now At a even trends of unfavorable long-term in the bar of XX at position businesses creation, value which benefits diminishing time, asset weaker than the be share structurally stronger compelling the macro position. advantage and same 'XX. businesses we're global and Put more we While raised have that regional utilization local for announced a of are the importance experiencing are Whirlpool of significant, At that leading in global will scale the advantages a impacted strategic the it

cash It X% that our creation previous expect X% XX% profitably We high all our growth we value and doubling and EBIT to businesses. value flow businesses critically this to assess XX% free growing criteria target our conversion. margins almost of with support with to is growth, creation

XX, to overall our I will portfolio moving transformation. Now Slide discuss

have growth margin them, This and also impact or divestitures. of higher higher portfolio on M&A restructuring We trends the will but businesses. our towards allocation potential capital absence or will accelerate and transformation far-reaching in

We pillars. three refocus strengthen success will our appliances achieve with strong major business. and One,

distant position positioned North the to as our India will leverage then will to among high growth. we across strength Americas. will And regional and profitable and rates be well not are our growth We penetration India At time, Americas America number prioritize business in the America markets same win largest one too the our investments in the and drive Latin we and three win in global there. future, and accelerate

to with and transforms consumer build upon continue leading and engagement experiences innovation increases with business will develop appliances. direct our We consumer our that

led will this our domestic EBIT the distribution grow in business appliance margin, will strength at profitably nature grow place at We is business. XX% in small structure America to to an North over with of both global do more we by Two, rate. continue business. outpaced This our

brand, With driving innovative of our KitchenAid our appliance With and we domestic options are the we further to our journey. [Indiscernible] launch in of most accelerate desired presence do inorganic the over cooking XX%. pursuit in back the full world XXXX, growth will that KitchenAid portfolio the leading to we're time, assessing brand small our positioned of same own accretive dates this and by margins in position consumers serving organic growth. we the At

XX% Third, somewhat flow healthy natural be business technology business. nature residential in cash and flow not well free three company our the opportunities clearly this significant years high coupled cash our EBIT, opportunity has synergies What have the a appliance America. available years progress ago. of the attractive the attractive this row record this all-time with segment The and smallest of conversion a would transformation. laundry level business. The than as in also us pillars, a profile grow that portfolio as across of cascaded makes on XX to earnings is inherent North provides is of and embark It business. stable four of of to transformation commercial position date, put can commercial this these to in now been countercyclical of our To more margin with with us

strategic acquisitions We have M&A selective to a value very creating only business. long-term disciplined to remain approach for and make our that pursue sense

the will a require is recognize about I'm to energized work, and hard I'm and in not short-term first path that While of transformation the this one us. excited frankly, front

demonstrated more the Whirlpool different today have We create past. stronger the very from and future. valuable positions will ourselves an is that This company and Whirlpool the a for of even

in Now structural on I in result cost And actions 'XX. significant loss-making it our business based on in growing products. brands of discuss countries undergone leading This and strategic business. business a strong That positions a implemented to business two where from and has and is highly XXXX a With consumers profitable to and growth successfully growth of in. the built-in to the XX Slide last margins of we we turn higher in share have love key gains profitable EMEA will have a changes. years, review focus taken contracting from of

this to do date. in performance so we our As Ukraine including at and we war the with both evolving external business, landscape the look

business to line confidence that acknowledge margins, these this have EBIT anticipated. we While achieve longer to time levels than attractive can may margin take that the have continue achieve we to

will take. Slide Now explain we actions any continuing XX, expectations our surrounding may I to

EMEA, and is ownership the Ultimately, are for most Again, Europe. the success value We in creates creation the clear, is what as options Whirlpool are including value for in required Corporation being option what to we opportunities continuing future today. be assessed. of are all reviewing long-term assessing

a world. fundamentally this as a half. We to I just And to and and quarter, course, in who conclude optionality Are with strong Of strong, well in delivered well never in consumers end few by this of with provides actions portfolio to levels now that our businesses, deliver expect our second balance third remarks strong dynamic positioned operating We're first focus the sheet profitable, stronger high-margin another a company appliances. are. world? quarter we're a the with We we operating to accelerate we businesses, will close been with review a than of different the in year. us this for place positioning pre-pandemic very my future high-growth engage very Whirlpool have leading prepared different comments.

Operator

line the [Operator Instructions] from Maklari Your first Goldman question of comes from Susan Sachs.

open. is line Your

Susan Maklari

morning, Thank everyone. you. Good

Marc Bitzer

Good morning, Susan.

Susan Maklari

guidance first parts despite incredibly no the in mean, impressive the is I of you margin and goes unexpected moving I was we despite the America events, for My that XX% your North of and deed for this obviously, region. unpunished, well question year And where guess spirit good were. ahead all the left quarter the the

have a through drive So about that several be you quarters? little the thinking what would that? the margin of that to out talk about thinking can how next potentially the And of go you're there? you as should guide bit any cadence upside we we relative How

Joe Liotine

that This period We the Susan. of I American really in we've strong of positive. continues over the healthy, our feel feel a about Joe Liotine. is mean, and go-to-market value which about executed is actions that is also terms long business, a really remain demand consumer how positive. time. Hi, to good creating we North Yeah, And

had that lot of price announced different of overall of margin, we January factors mitigate again, elements. were lot a the playing helped there. actions did in us In that We X cost terms a effective

of We a we a base, inflated kind our are disruption bit cost, line growth. still are top bit quite of our quite limiting in still seeing of and seeing supply

for target And at so North XX% on we that this still the approximate be time. balance, year, feel business the American for EBIT appropriate the

Marc Bitzer

[ph] is guiding XX% also, X.X%. and QX And Maybe The question we're way NA same towards full of X.X% to a I XX% margin turn had at year it, positive. it's just your the Marc. we're Susan, globally, look guidance. at

run-rate, have our right the said Joe's the point, on right So which Having now, at for derisks action would we look significantly the the we know outlook us at I we're volatility obviously to further et all there's with raw already announced. still will material cetera. that, But prices, it there That price out already year. on help is way upside.

appropriate us protection it deliver think gives I out. really necessary So and margins we the the which to laid

Susan Maklari

Okay.

I question, a just is sequential follow-up of as there on we margins of be that, the the update in helpful. but have in That's the we first, America anything thinking model? should cadence about do Okay. North terms

Marc Bitzer

Susan, -- about be it's for model, the your in QX, probably stable. pluses moving had is again. some would it keep Marc all we And out. I again, good pretty you and we stable. it's laid as always There parts, pretty pretty despite will where but QX, minuses, steady feel

So has I really margins. job very a think the stable and managing towards good team done sustainable

Susan Maklari

I that that, while you year we able detail obviously, benefit keep regions guess there? follow-up so, of of noting or just out financially opportunities last thinking operations. kind more on about the of you kind from brand a the where transactions Can you of have are Obviously, a some the in and that to my kind sort on your of then announced options strategic bit potential do And how you all business derisking us you're And Okay. table review Whirlpool within are of give for is, EMEA the set the the interesting certain bit. seen you. over

Or the what opportunity of this? just So are can there? a potential sort out about you talk that's within sets whether

Marc Bitzer

portfolio today announced a our of we obviously, transformation. broader yesterday, acceleration already Susan, Yeah.

loss our we have and Europe is, fit really and with moving many also but we've last Europe, we looking from we done grow alluded portfolio parts, two progress question our just business. we're growing. into to there's to making over broad three of not And years, earlier, as particular we're business profitable obviously, a in bar where review the turning reemphasize, raised course, can the European or how performance. in inorganically. the after now, organically been for good a of strategic But can So into Again, I

answer there, our is question out Europe. what best the Whirlpool really such greatest as business delivers Corporation, the so what improving in is structural but to And the value also to

are business. I So literally the in the mean I that and on to all table. context retaining options refer

to there you hybrid similar what referred but also changing out. We in laid solutions be to ownership, could between also

through it answer, a we in by process an maybe answer a the but end we're pursue we and how expect in again, QX. terms of not So mind an going of and have will what completion,

Operator

from comes the question MacGregor David from line Research. of next Your Longbow

open. line is Your

David MacGregor

everyone. Good morning, Yes.

Marc Bitzer

Good morning, David.

David MacGregor

Yeah, good portfolio ask I just morning. wanted transformation. to the additionally on

As you need can businesses, your capital about into much you feel transform And portfolio additional ROICs? how higher-margin you targeted deploy? the do talk to may you

Marc Bitzer

Yeah.

new -- invest in ongoing products. where transformation first be the Americas first I mean, is, announced the So There about will of David, by company. a all, as more portfolio resource shift it we capacity ultimately of the And we can frankly, driven levels. multiple think -- put all, capital already we year, this

dimension should and put to invest we in rather going forward, restructuring, you dollars the business. behind less -- the high-margin business probably is As ever want growing

which sheet in balance in and stronger something optionality strong is in us much our there, to underlying earnings, available a about didn't a external a When of of which I opportunities, we out firepower So suggest, terms more internal not call specific ago. an talk refer general resources. just let's which there in X more and years potential terms of premature is a point, combination call lot a it but we XX about shift have of, would earning company a it, ones, to give of or actual talk it's obviously, us to

a there. balance look very in all sheet terms critical fairly it and we're levels. gives We earnings said us that, and we is between multiple So again, at of not in But of our capacity -- going options Having consistent to mindful lot will stay power, significant. consistent opportunities overspend. out

Jim Peters

could Jim, forward, invest David, pretty a continue the is we the But think, think going the a size remain capital capital level. additional that. in And we're in we go is I businesses, to type this then invest of it And to be amount business those. all of we've level of had some on at that invest always consistent also, and as to way our as that about will same in based of

you on thing other The ROIC. asked

look be in in Our at contribute ROIC them, then all. synergies changed as target do things, looking the acquisitions below And will obviously they that where And at ROIC the ROIC. we forward at increase our to obviously these perform targets ones level. are of at initially, assessing generate and you ROIC work of may some you we're then businesses that's as future our not if but we see go haven't doing, portfolio that level, term grow longer that we're

David MacGregor

as sense. just cooking refrigeration being about makes And you And us. a size you you commercial in a you But laundry eventually you build business stronger do in player? just comment an in niche Or do thinking realize a profitable. can leadership for That appliances? the sort And see opportunities commercial position really maybe see of appliances. presence you that Yeah. is a you existing on strong and categories? Whirlpool are And follow-up, have could Thanks. commercial then I holding

Marc Bitzer

inherently based ongoing laundry. not only business. margin little business it's say parts not laundry. pretty couple bit David, It's again, a started we, like repeat are a spare to segment. so, elements the to all, very to business. countercyclical kind yield. But why That's we flow of sales a first want That's business. this our of an And certain where you also of let business frankly, experience. me strong ago, stable only that's commercial why And a if it's initial small and acquire why own commercial cash business for high our believe It a residential it’s years on sales, is attractive fleet again, we when by support very

cooking and have know, segment, is as than bigger might you laundry commercial the kitchen segment. commercial We even

So that business we will to through where acquisitions. be a have grow would

our may it’s it Now it’s want its regional for list. as we where we mature to or high very talk about actually not. of grow, But what area to on kind business, super target some it bit more is priority global an what it’s a but the is again, -- nature, very than in little it’s a less one. But attractive other of

Operator

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

open. is line Your

Sam Darkatsh

are Joe. well. Good hope morning, Jim, each I you of Marc,

Marc Bitzer

Good morning, Sam.

Sam Darkatsh

to the questions A couple of getting European strategic review. back

about first talked a and past. we've lot Marc, in the The -- obviously, this,

know potentially and control and I technology the of of Has was think that was clearly as what issue some well. to possibility? minority a Whirlpool the those it sell of all but Or a amount business are on there options business, prior and brand to managing that reticence table, guess a looking retain I your realistically, an is shared the is fair more R&D potentially monetizing of of I'm was sale at getting specific? I stake changed any assets? the entire you're is off the

Marc Bitzer

trivial So contracts Sam, is decoupling relevant raise a not Europe options you repeat would to for put But or again, potential places of I points. our partial indirect a what assure where all on matter. controllable can technology have can table, It's in the either I only or brand. you decoupling brands control we

there are look and of long-term some global completely sale. getting not these also interest, clear we've stem which are impact, And you we much options some global but really to we elements, here how scale mean, want a ensure one, solutions of Technology still our can are I is losing the certain synergies to them. certain as a a limit a there that have control. the element big keep the and at. in which setup our So also

Sam Darkatsh

operation And are separable? be more of there would the transaction? that is EMEA business type of business that and mostly holistic a parts a are any higher the of Or it margin monolithic

Marc Bitzer

but lot out Sam, of or I argue, whatever. can you a would of partial kind pieces, of easily cut just there's not

such, a certain countries So of because as Europe of like can individual base And from not the technology you more one separate rest and it’s piece it there’s the fairly with a business. base. connection a is strong supply

the So in about talking I EMEA you’re total. a think region overall

Operator

Rehaut Your from line the comes next question JPMorgan. Michael from of

line open. Your is

Michael Rehaut

Thanks Good Thanks. everyone. morning, my for questions. taking

industry X%. volumes wanted back for down a just switch I First, America bit. with to volume, segment the to Obviously North

continue positive six into this down It quarters appears and accelerated guys -- the quarter, despite appears chain, your and share that losses little challenges that these probably we're You you continue to supply four but solid or obviously, challenges. a mix. bit with -- have price to supply maybe chain revenue -- X%

we and I issue bigger two, one, half this ongoing And of -- quarters? this back several factor the So resolving terms capacity sense, investment over challenges chain how that about should ultimately increased if expansions. the I ongoing supply think number losses But some alluded last kind of about in just to been to appear to share number the get have this was a you the in quarter? wanted in correct thinking directionally

Marc Bitzer

Marc. Michael, So it's

Let me it. just address

side, North strong, that clarify on want you all, I in and demand things. like may to demand demand the we it What -- fact, semantics, Consumer to supplied. is of the sound very in see strong. of still couple there's a is X% refer minus but First America,

a for clear, that some that a situation continue supply several it's very outstrips have quarters, to but and margin, has going will by where up demand You and extent. wide been

long-term Page shows refer in which demand underlying but we the to you also is strong. which are the very strong, X, the really have So trends. this just presentation, demand to want They we

you it's versus course, but people still last XXXX and technically QX if versus compare down. Most XXXX. lose year, XX% Of it, slightly up QX

strong. is So housing will Replacement and is We see strong demand also don't strong. away. be going it this

in on the that partly have the wave produced what we We're we as So our constraints investing in in U.S. the of not because sell the capacity, been combination back a still appears And production ultimately are capacity. the our XX% the in of shot, more a constraints in COVID That's disadvantage Asia. started of in our issue, supplier Asia even through slightly been Asia up comes And of by are, shifting number our was throughout been side. also the in it simple demand now, And that because than to start in we this But now in today, easing has seeing fairly American orders. also slight North capable catching only less it -- is a pandemic, pandemic has disadvantaged we North as QX matching biggest was production. is. America. there long producer supply right U.S. and also sizable production. that about It tide we And supply not have or talked our own but capacity back we

So will light it is not but magically appears go it overnight, shifting. away

ramp So supply. we're actually can remain confident that up But volatile our environment. reasonably we frankly, will it a still

least choppy just But is right at QX it turns out So better. what seeing now, to the we're there.

Jim Peters

this say, And is Jim too. I'd Yeah. Michael,

and that that mentioned, despite still we're inefficiencies generating has it's point things us, out within Just is the caused Marc despite all margins to America. fact those North XX%

we our right a to the manage and so And issues margins not our chain -- way are supply all dealing in that it's now. impacting business the we're with but constraints, able

Michael Rehaut

little just strategic further Understood. Appreciate portfolio on also some and of -- I guess the transformation a clarity that. of Europe. bit review

the or kind look to Obviously, you're back and broader are you're fact of business the business that of as decouple a of said for a achieve But portfolio standpoint. in various you take it's way. -- step apart talked at If you the all before, what being hard break trying kind substantive EMEA. to options any I of the components kind from assessed about

of again, does and less fit. business. that all elements, Americas a the maybe the Whirlpool and EMEA, maybe more margin doesn't obviously, is kind of most of India, retaining peg in that that some when some -- outright that transaction. while you the a it so talk options, It about smaller appear But assessing investing you're facets an pillars just brand, kind in or obviously, ownership sale of your And appears three higher

of sounds effect, terms And you're And large appear sure in sale that or us, that saying. least of so most make like though, does assets at that two, number to least understanding just trying a I'm such we correctly it different repurchase? in share inorganic that it to to the at of it what should reinvestment a Is that? highlighted think the be opportunities? of proceeds of from of more growth think an about transaction, trying to there proceeds. element going Should redeployment how you the be reinvestment Just

Marc Bitzer

all, Michael, I realistic conclusion more not regards or jump to realistic. any yet is less Europe, first to what about would of with

earlier, have So what easy not course, but it's it's the trusted it's said it's side other transaction partner when to I of lot a troubled, a on a doable. is the easier, doable. And decoupling but of

way to possible. which and So baseline, sale margin point, levels and in also the assess options. an about at which opportunities yes, then look some this require to objective include not at. the at, at is we and pros to certain It's again of business. cons, really from got own go an will options I we compare which But of all assessment we retain options need the our one to does we outright with the it That's we any and drive would up look how other stack how and so exclude a

Jim Peters

now. and capital on Yeah. strategy And question the right at very -- in look I'd say, change early we're think at in growth I now, if this Michael, And even that, focused, about our but balance we you our again, on of proceeds allocation doesn't we've your looking process, the inorganic been as on obviously, earlier, strength cash to are Marc opportunities. recently talked we've sheet But talked shareholders. the returning about with this

and but And part capital the so have. change areas be those it more It doesn’t our of we business. growth that higher two priorities of invest allocation are high-growth over going to gives us balance, in time, just to or the strategy potential

Operator

comes question the next Company. line Cleveland Research Your Eric of from from Bosshard

line Your is open.

Eric Bosshard

Good you. morning. Thank

Marc Bitzer

Eric. morning, Good

Eric Bosshard

A and question a follow-up. then

ago, to industry or down number, relative demand all, just to and out of First XX to trying took looks X% to flat. you consumer different? shipment shipments, up X% figure separate what days from The

changed, it case. caused what I changed you to if with to -- like out that that's consumer while understand the you But clarity demand. indeed greater sounds then wanted different just trying have that's to that revise secondly, so figure anything And that? with I And

Marc Bitzer

it. take can I Eric,

reflected had has been supply the In had and mind biggest QX, in think see which we forecast. in we I mind. than and in the change, industry entire which probably shorter was

read entirely So industry the QX that's supply we of -- does. industry the I know and the our constraints. mean, numbers, number why down put know We would obviously, to can we own what rest shipment chain I

to throughout growth X% up yes, rest catch full will year. at look guidance that's we're the supply rest year, growth lost industry the think for see So in means, reflected But we percent the of don't you year there. what the for we basically because zero what this roughly the planning way QX of

Eric Bosshard

Okay. the industry lowered guidance, numbers. And shipment within then you the secondly,

raw the the it bit held. guidance than versus wider was the yet number, You've raised your material is margin a industry is performance and

offset And two better are worse? three is these things within or what so business other or within to profitability the that

Jim Peters

this is I'd Eric, you if Jim. Yeah. and -- say,

take business. the quarter. you additional increase second pricing X.X%. see our to running that materials at look a that first this now the margin for in slightly the If is it, the And we announced that the within biggest significant the did But the will thing reduce throughout offsets and third quarter we guidance in

margin things catching and as obviously. of just materials, accelerated now also seen. we cost the And we that. and to been why it's the as with and timing higher it's our year. costs slightly we seen costs about price thought as were costs, all that, energy such continue increases material that's at we earlier, significantly a is logistics would greater It's not to rate have And increases on to than of reduced higher offset take on that they we've just some so originally year the matter up this talked for we've the that And reflect cost-based pricing a it's down

Operator

question Suzuki line of America. Bank from next the from comes Liz of Your

open. is line Your

Liz Suzuki

Thank Great. you.

production quarters So the is is last expected words, like workers other in mean of and been layoff million issues Or how had per dropped that reduction quarter quarter in plant percent how how ease? Clyde? as lowest back pretty constraints the sustainable six temporary to was much SG&A it's $XXX a the much transitory in in and as much of factors of the decades. the cost SG&A sharply of that in been sales, of running I in result above and and for reduction supply first come

Jim Peters

is Liz. Yeah, This Jim.

in then the reduce has you were take half is we expect a and globe us to technology that. the it, more Two, at which that we -- there year. and back as quarter, partially, within there look from from dollars in translation translate invest our we helped everything the walk, if think of marketing this lower benefit year-over-year I a we in about into investments, talk step currency back around but

driver. big another that's So

those Ukraine. things sale, the in The but this we but we SG&A And on gain of year. such in be continue like in there, of moving the that is in as debt in reserves -- in, bad significant there then last those rate then that a cost because don't amount business full now that's ongoing and past, had China we anymore. year also can places to us in coming And small business out run third consolidate by smaller it. we benefit that got parts that reductions see have a in a we've of had thing offset structurally We've property talked a some the about some increases partially

things, lot a a of of like is marketing would I is have reduction factors that to look just that is probably investments. think and maybe half as what run-rate at of least and other the I there, say and plus said, technology say structural but you there's I in timing at So

Liz Suzuki

through some we helpful. follow-up be second favorable Could -- -- that catch half? And be considering? really from question if about That's XXXX should versus increases Okay. to pricing the then 'XX in are up there's a to able XXXX is price inflation just there inflation by flow

Marc Bitzer

first screen. by will war side, before environment which is the is the our definition, of pricing have rate but side, radar volatile, be now now spill quarter, said will massive didn't in material even then raw further moving put right 'XX. parts, do the what have on happen we on But current so on we but volatility having over entering we that, QX, side. have shocks all place, 'XX. now, in coming to also should right the But actions Marc. there's in we with of a Absent honest, exit The a again, supply which the I I of think which, out run have caution strong very particularly on lot This

just very so environment. exit said will a them to for strong everything. put major And very absent we And to got we've having very, is But this that, have prepare run-rate. dynamic the on of shocks,

Operator

of the from line next comes Suisse. Your Credit Dan question Oppenheim from

Your line is open.

Dan Oppenheim

and call. much very taking for Thanks the Great. thanks

course you of year. a Just Later, the terms here terms difficulty shifting of increase the sort initially, the wondering second over XX% CapEx issues in in of in supply the talked that the about about spoken talk you've in and of quarter. some the the there's in of

significant that think sense terms sort if better but benefiting progress in as sort that in in and how the what a through? in get on being with as of terms saying that to later or of then comes that of of year more easing we terms trying Just is the the of CapEx you're meaningful about should

Joe Liotine

Yeah, is Joe Dan. This Liotine.

give QX. QX lot factors indications better, optimism to into us some that improvements and performance And a here, we little QX. we better. So about be and continue did improvement of in There's It's actual talk how more kind seen slightly a a performed March of but that then expect in QX. we've and seen a of already a that slight ramp meaningful bit going bit we've into

opportunity shows have but And and in that really kind so that QX QX been QX us growth combination improvement, back the bigger QX and exit share ramp an discussing. get happens kind with have forth to rate in sets that the the going to we back of of that's

Dan Oppenheim

And inventory about And just cash just flow what this into come year, in year? secondly, to investment? of the for out levels what course when think terms the goes about over Great. they -- of how then wondering free overall the that

Jim Peters

And -- Jim. is this Dan Yeah.

slightly just as what that get network in think our a some be try I level We the And year as And in a to level supply to our will we're I working expect now we areas shouldn't be pointed significant it we some do logistics that and we as guiding inventories right of the biggest to million we go capital. there of about in inventories. mentioned, our as fulfill be, healthy but begin backlog later within stock increase portion out see year. $XXX own orders. of to of certain build chain, as in year-over-year of the begin year, out the to the throughout we recovery for

next So increase supply own to step us chain. of the is the our to continue health for

Operator

Your next of RBC Capital. line Mike question from Dahl comes from the

line is Your open.

Unidentified Analyst

for Mike. Chris for Thanks questions. actually taking It's our calling on

on any the future? question, state a an For I you update of your my first there could operations current us today. potential was divestitures EMEA is give the in hoping presence to going Russian And maintaining complicate

Marc Bitzer

Yeah, I can this one. take

So have which Russia, local for Russia. about of as a in we historically published, satisfied in our or volumes we production -- XX% we local XX%

a many the another factor and what in reason We broader in of our a the possible I Russia maintain importing on It's sites but why companies market Russia in low very from in look keeping are lights in and carefully sustainable goods strategic basically other we consider into Russia, the Is review European not forward. level the the that's over but out, been want to production, that everything look is we our factory. review. it probably course, at fully we not point volume, It's important strategic will, a now, Europe. reason all us, long-term time? why has Russia at or compliant the not. Europe, else. like to of course, But with right keep going not for landscape we equation is strategically certain not Russia sanctions and running good of possible

Unidentified Analyst

you're just North to there's leading forward. clearly, remain second and Understood. demand America, in the demand around strong starting half, are indicators back turning though And to decelerate to even more your housing going outlook uncertainty demand in expecting

at and I making this rationale for want get to on confidence your point. So that assumption around this sense

Marc Bitzer

have It's demand. strong has accelerate the and years Marc. further appliance. Replacement In years and And and all hybrid still basically will clearly also as confirmed replacement supply honesty, two because the we more now more earlier, margin. a see you pandemic I for don't the uncertainty that of wide as last I the of ever models two outstripped see see usage the even higher pandemic. you said where the into by demand a and work is COVID

our So America been. as fundamental in are as on trends North long-term the ever we've bullish outlook consumer

we're I just So slowing side, mortgages. on just that honestly, down. I see know don't Also about talking the housing

demand bet of about housing. you out at fundamental the long-term the very stock, housing U.S. age certainly we're housing optimistic the look If trends, I there, the And trends. demographic wouldn't U.S. against the

Okay.

to the So looks like of end Q&A coming it with that, we're session. the

So for joining all, today. us you first all of thank

good you've seen As QX, environment QX. just lot we of yet very you around the demonstrated the of I about, quarter and pointed solid moving a of feel parts, us. lot heard, again, think out and challenges. can Obviously, as we've deal very a we some with in But

as particular, very, With the we comes updated right strong transformation, the place joining in actions earnings in we portfolio very come again we third will And mind, have and in to the after call have second us, think thanks keep quarter. have for I that put once the day. a to all a you wonderful half. it to

Operator

call. and Ladies today's gentlemen, conference concludes that

You may disconnect. now

Whirlpool (WHR) 26 Apr 222022 Q1 Earnings call transcript