Earnings call transcript Q4 2022

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Operator

Good morning and welcome to Whirlpool Corporation's Third 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 and welcome to our fourth quarter and full year 2022 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 wolffilcorp.com. remarks a on presentation Investors Our

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

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

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

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

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

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

a As that no ask questions. to than participants two more we reminder, ask

With call Mark. over that, the to turn I'll

Marc Bitzer

morning, Thanks, good everyone. and Korey

our stubbornly Two unfavorable midst demand an to announced And inflationary recessionary results. and remained high. 'XX half ago, on context Turning preliminary alongside reflect conclusion preview I At and of we cycle. consumer 'XX in of This starting preview XXXX during expectations. the we same the concerns. second on the review a our EMEA time, to with each, weeks of of XXXX, A pressures continued strategic were we additional morning, the sentiment macro discuss will results Slide what we our provide will a agenda today. X. of will short-term

QX. of is temporary unusual down, demand it during our impact historically While best rather results up negatively combination the it did for cost

impacted but execution has quarter. XXXX supply the been Jim later in not provide resolved on factories. to call. our where North our be was addition, chain number supply This since one-off of the issue a it American expected fourth that negatively to will In we information due was in more a

XXXX, Needless into headwinds felt few tailwinds during end the to the slowly is tail timing QX year. foresee as macro the of this the progresses. turn cycle ahead first late to Looking expect months expect QX. into say negative year to happen would macro we predict of to We macro to towards do the this it shift difficult but be that the we the or exact cycle early of in

levers we volatility, we Given our this business which focused And the demand can medium-term are intact. the fully control. confident business we on that of remain relentlessly remain drivers

$XXX supply cost Our to be flawless and operational of of million our cost we priorities of After will X increases, takeout. XXXX deliver will very $XXX years delivery of chain execution significant cost inflationary in the total targets. million

We confidence have this high degree a in of delivering target.

Looking cost delivering expected our record America a of to In managing of material and with cost than early reduced results. of high we responded cost back decisive actions entered on We our year. million. the we million reductions. in inflation more as XXXX strong we level $XXX $XXX inflation fixed this XXXX, XXXX, successfully substantial raw and by North record and cycles for In history, delivering Whirlpool has challenging

just not we're importantly, cost More January starting new initiative in this XXXX.

of we initiated XXXX. have the mentioned calls, this in earnings during prior our half As second

advanced underlying thus degree significantly, a high us the of cost of a the confidence in maturity actions As targets. has giving result, the of delivery

it creation review high-margin of have on portfolio update of the would I our turning we and to a our EMEA fits portfolio XXXX, I outlined transformation Now an Whirlpool's will value business. and multiyear transaction provide strategic transformation. been EMEA context our with journey high-growth, X. broader am very the how continue of discussing. we Wolford Slide April into how happy that of we In into its transforming

me remind are transforming we our portfolio. you why first Let

focused today, we a is Global the world the diminishing XX mindset bar world. European the time, into appliance high-margin, our portfolio we in with raised past domestic to apparent of scale we a strong agreeing and creation. from less brand and Recent was this has As major but The portfolio global we a our Whirlpool [indiscernible] value here assess include have local actions that even entity now or into business. newly significant are ago. formed very is scale were our operating a become contribute with sit already long-term and experiencing high-growth years are It different It compelling. on benefits just than XX regional ourselves and in critically more Arcelik. that. adding to we for At transforming same we're business advantages

growing have can we and portfolio As shareholder time. you over positioned see, significant well have us is the made delivering confident ongoing these transformation value to I'm actions progress.

our XXXX. result will in As flow XXXX, we of executed increase transactions a in we a million cash an $XXX reminder, in see approximately free of as

X, business. range share with options a of about assessed of the goal of We and consumers. Slide more our review turning employees value a Now I to shareholders, maximizing strategic will our for EMEA

major of to outcome entity appliance contribute are business newly We to pleased European appliance agreement a European the domestic an formed Arcelik. with with our

with know we executed number well, them. company a where transactions of a is Arcelik having

consumers the offerings manufacturing. will from brands Our broad sustainable together attractive as product and we best the innovation, of benefit best service bring and

new expected It regulatory is annual new KitchenAid of expect €X to important with billion EMEA of to We €XXX over we over company company of approvals. ownership retaining business. of a are synergies. that cost, during half have will note close transaction approximately sales XX% the subject million the second to own our and of is The we our XXXX, to

Appliance Small profile. business global pillars structurally with strong business value-creating the is Our a of attractive our X of X model KitchenAid margin

have actions Slide taken X, in the the our to discuss value we from Turning EMEA creation I region. will expectations

generate, in already upon productivity building company capabilities We established the the sustained and sustainability. including to design, innovation purchasing product commitment participate to expect significant continued will new efficiency and

monetize ability value minority of to a creation have an unlock We present at our our to potential million. $XXX net for interest value estimated long-term

a though shareholder exit relationship a envision with after profitable parameters agreement Even X includes Arcelik, years. at of options number we long-term a predetermined

we generate executed future deferred brand up XX-year predictable flows more of million agreement to licensing Whirlpool net to our the through million previously flows. divestiture we $XXX Our Russia $XXX will million cash expect of Separately, expect payments. Overall, than year. present $XX value of of business, continue per cash

results. our Now, I'll turn review to Jim over quarter it fourth to

Jim Peters

and Thanks, morning, everyone. Mark good

Slide X. to Turning

one-off North want in on inflation. our cost quarter Despite and cost America Our remain disruption actions fourth I supply by this, performance was elevated highlight a that to chain initiated track. impacted previously

improvement. to beginning Additionally, raw elevated remain costs we but material are see

In of effective fourth ongoing EPS X%. ongoing $X.XX year tax quarter, as results the full and of margins delivered a rate of benefited adjusted we X.X% from

results for Slide to review I'll XX. region. North our Turning America

environment inflation. expected, the pricing increasing cost-based As elevated actions demand offset rates interest continue inflationary and cost to partially on weigh and

as were disruption platform and manufacturing previously involves production committed one-off was had chain a mentioned volumes resolved mid-January. impacted common This one also before. for locations of This to parts providing X% holiday by due a mix promotions. multiple anticipation and we disruption supplier investments approximately of products Our impacted supply critical price in in negatively as disruption value-creating

situation. not any share ongoing supplier we of additional nature this confidential will with the the discussions about the information Given

in supply challenges the Even recent with we successfully quarterly the sequential quarter, share our faced maintained gains.

America that we strength business. the in confident of in are win have North structural to place the We we our positioned and actions put us remain confident

review I'll XX. Slide our Middle our region. to Turning Africa East Europe, results and for

divested ongoing actions Whirlpool revenue margins during and Excluding quarter EMEA. mentioned, the in our was The Until will the be we impact Marc strategic close breakeven included region Russia as to volumes pricing cost the cost-based the and delivered of the And as business, currency transaction, approximately results. completed continue offset of X%. down quarter EMEA's inflation. foreign lower fourth of EBIT our performance review

cost-based region strong were the demand Turning resulted declines and declines to the America revenue XX. compared flat quarter. for actions Slide quarter. margins Latin region's The for the moderate pricing solid results review The saw during EBIT region. cost that experienced and to third steep I'll in our

basis, On continued revenue cost year by business results pricing EBIT of currency, grew actions Slide Asia demand in impact Turning to China foreign full and and were XX. inflation Cost-based the our X%. region. an weaker for I'll approximately review the excluding by X.X%. more a resulting of offset than margin

to it XXXX. Now, I'll over on perspective Marc to turn discuss our

Marc Bitzer

Thanks, Jim.

by elevated marked I current Turning environment we costs still but XXXX. to and expect to impact softer operating Slide share demand XX. will how the easing

X% to to to the will beginning demand year, consumer with is As And to continue improve expect of half we we more This impact XXXX quarter volumes. enter we flat year, negatively and down be sentiment demand. to exit be by to new each first expected at the pronounced the the demand XX%. expect industry

term. construction mortgage very has mid- short term, long will drive the remains has to been increase in strong. In long-term consumer and sales demand oldest in in in stock rates the strongly and home We it sharp believe tailwinds the aging America. mid- existing expect in undersupplied the we North The ever is new the demand housing this suppressed favorable particular but equity

use consumers a sustained house a particular. a level differently, new may to strong reluctant balance the in will activities Putting but we of home. kitchen and the in it home remodel the buy to in term, As expect short high do their they result, remodeling the sheet be

of XXXX, seeing From materials promotional have have significantly at easing below to half material to see levels in year. of throughout to XXXX. rates promotional second come raw benefits this as started Also to expect pre-pandemic environment our Steel raw the we similar levels. we remain a the the the the and expect be From down perspective, we continue contracts. looking a we go-to-market of costs annual activity perspective, spot XXXX second half

components ocean the improvements and are see freight. in of such where also persistent number high commodities same levels. as nickel with still strategic there are resins time, cost a We faced and we At

Turning to Slide XX.

are priorities XXXX Our clear. operational

execution our me than First, a done. flawless chain. supply execution out we easier And let said for start stating by aim of flawless is

a supply us cope model many over Our and served of it resilient and percentage supply low-cost historic parts to chain has sourcing. with characterized countries, efficient decades is not long single cost well has but the efficiency but degree high very cost COVID-related is been enough driven model lanes transportation disruptions. unprecedented chain high a volatility from This model of by complexity chain supply

over past have slightly more well to complexity parts. active X our active parts parts XX,XXX we reduced the Over from years, XXX,XXX than

but to In put priority our do this on dual chain single supply a the long tail will to the still years. come parts see we derisking this below months XX,XXX sourcing have part components and expanded a same our be that sourcing. and the strategic in significantly coming source. parts. lower-value high-value time, in focus number midterm, are of We At our drive have we way path This a of and single end we well from parts our

before, a is to mentioned cost second $XXX $XXX million. As operational million our reduction priority of

over XXXX. will takeout already and throughout headcount the management. be X% expect remain cost net deliver chain of $XXX salaried from actions continuing workforce our supply down of inefficiencies and in disciplined by in costs Compared current to our to disciplined is global our We summer to and XXXX, very million removing we million spending and premium by operations $XXX discretionary

$XXX total takeout million In million material $XXX expect $XXX addition cost raw to million we cost to in these million do to target. adding reductions to cost $XXX actions, up net

of As towards of you the reduction, is look that second seasonality skewed cost XXXX. it more the half note will you at this

which are There X seasonality explaining QX. impacts specifically factors the

this in a raw we because easing inventory creating it normally effect inventory, First, X higher our where differently, cost P&L. it's XXXX, costs have materials. of as reflected takes lagging to even coming months see down we though important about remember Putting to are it of enter fully

we're lower periods cost XXXX. increases peaked year-over-year of inflation third of lapping Second, in quarter the as

of and may durations recall, Third, material a a have creates which quarterly with lanes somewhat as annual we lack. contract you variety of

deliver to contract million XXXX. many of we benefit our in to million $XXX line of have with now annual $XXX complete, Now of cost raw material sight negotiations

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

Jim Peters

a of expect softer Thanks, review North X% to reflect and notably EMEA, we current decline X%, as demand to Marc. given XXXX cycles. America our half sentiment, XXXX, of first continues the in most especially I'll full year macro XXXX the In guidance. consumer and revenue

we expect structure, deliver to million As our we margins X.X% cost EBIT reset free expand $XXX in and ongoing approximately cash to approximately flow.

region. the of delivery transaction alongside of seasonality of from flow cash impacted free could Our cash the generation significantly be by the the timing the EMEA close

our which expect from XX% $XX a represents EPS the rate incremental cost and This be to Insyncrator year the $XX. full tax ongoing ongoing approximately reflects We million our to acquisition. debt interest be of XX% $XXX to range to

We drivers EBIT show to XX. our of Turning the guidance. Slide ongoing full year margin

We by points. basis impacted price/mix negatively be expect XXX to

expect As in by driven our new mix value-creating positive participate lineup availability improves, promotions of by product introductions. to we a offset partially strong

Next, the point execute material $XXX cost XXX million positive impact as strong to benefits, a takeout margins. throughout we we basis of raw year, alongside actions expect

and Continued investments technology expected by negatively basis points. in marketing currency impact are alongside headwinds margins to XXX

year. in we As our our an decisive approximately the actions, easing expect takeout navigate earnings XX% declines, execute first XX% of we deliver demand inflationary and temporary cost to of to environment half the

and the X.X% deliver that are have we place macro confident right navigate to in environment margins. EBIT approximately actions We this

regional industry year. show year subdued we by expect the still by during guidance of sentiment our as be the to particularly for consumer demand, continue the impacted XX, Turning part demand to a most macro the our first is regions with environment. we Starting of environment, Slide to impacted

In to expect Despite industry particularly we expect expect we America, a be a contraction volumes, contraction accelerate In America, declines, by X%. X% EMEA, in we to X%. North above to North XXXX And approximately we X% to and of X%. X% Latin Asia, levels. industry expect in X% of to the expected America

expansion tailwinds. our takeout driven as expect We cost strong well across margin EBIT regions, all raw by material as inflation actions

exiting to XX%, the the with deliver of approximately approximately year with In margins of margins region North America, year XX%. expect we full

We geopolitical demand. as expect margins. and approximately to we deliver X% X.X% EBIT deliver are America, margins volatility actions expect to approximately Latin partially offset EMEA takeout of continued In cost impacting macroeconomic by

EBIT approximately cost of X.X% strong expect takeout driven we Lastly, actions. by growth in Asia, and line margins top

our remain capital XX. discuss priorities which unchanged. turning Now to I'll Slide allocation

high-margin expenditures research have to a the development over deliver and X invested business. We capital in $X over last high-growth, years, commitment and our billion reflecting

a dividends. During returned that the shareholders, have buybacks XXth year dividend of billion and million $X $XXX increase consecutive and our we in representing of XX% tenth cash year of to same over time period, paying increases dividend, the XXXX including quarterly straight nearly in

billion InSinkErator prioritizing are strength driving like XXXX, maintaining flexibility of continued the us The our balance capital XXXX. of given optionality our credit value-creating strong In rating. of opportunities $X optimal the at sheet investment-grade acquisition and the pursue cash has year, and with an of in the repayment end structure we to debt

Now, call I'll Marc. turn to the over

Marc Bitzer

Thanks, Jim.

Turning to Slide XX.

our record through Let we track me close with have proven a in margin few remarks. XXXX. and a successfully operating deliver history, to in ability cycles challenging expansion XXX-year confident our of In macro built we're

benefit. while to expected flawlessly deliver supply We million initiatives, chain $XXX reset will $XXX on our our execute structure is of million to cost

portfolio addition transformation In these profile. the our to ongoing and will value actions, unlock enhance financial

is deliver XXXX. improvement transaction approximately to point to to alone expected basis of XXX ongoing improvements, of MEA improvement a flow EBIT addition a MEA expect to cash These of invested balance incremental return free along the in With shareholders. incinerator XXX and foundation a cash we basis $XXX The at to divestiture, the million of in healthy returning a point coupled on margin. with firm our sheet commitment capital. deliver

me XX% represents to dividend of Let a quarterly consecutive increase our our XXXX remind increases tenth year dividend. you with

in billion shareholders. to cash while in continue sheet in of to solid shareholders. Additionally, future, a shares, returns Also, we will the providing to total we a $X.X attractive our million $XXX balance returning repurchased our maintain

to demand We industry. and well positioned to share tailwinds benefit will competitively, trends long-term market from seeing continue are favorable our

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

Operator

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

David MacGregor

can On Second after just that setting of X-part EBIT Slide And promotionally. part, question. a -- to kind really fourth lot you happened that are yourself a the that XX% goal? quarter is programs a XXXX, of I to kind there. progress XXXX. about are you in or There just sort talk view just can I'm you margins? XX, you comment wondering, on of guess ongoing like to you you towards by providing feel you I want what make of high-level get XX% think

You've expect pre-pandemic to activity said you promotional to past, don't in the revert levels.

be what view You that And expectations? confidence so, true? you still your price/mix are in that in feel this second half you if gives to seeing

Marc Bitzer

Obviously, address just So first David, let me giving question. first we're the for 'XX. guidance

will there's So it's for too a which you're a positive that, elements guidance 'XX. in come in I bit little through early read give of to that Having 'XX. a the said think correct lot

First of will and will is much as that North structurally there's stronger as only believe exits know, housing housing there's America because, U.S. head which of fundamentally not point to at heard undersupplied but lot demand you all, as prepared from North in materialize. years it in X America remarks, consumer reason you particularly a into my market

the well that's heavy cost which base lifting demand on doing on we're the for set 'XX. our very up cost side, So will which we us will the now side. reset reduction, on cost Also with a

we elements. addition, In have other

as full You definition, the cash we flow flow. have can that European transaction, integrator on And by margins total the and the cash that of additional will an lift assuming look give margins contribution company. and you on at on close its the on own

heading we set would mind, So towards long-term in in I value 'XX, of these confident much all yes, targets more say, out. creation that where shareholder with we're we're which

this 'XX So will pretty -- proof from that we're at be that. and a towards point, critical think perspective I and confident point

expected in always would absent it related pretty was half and of quite we second still important was large as anticipated, the note it to 'XX, 'XX, say, a a expected higher i.e., back previous half which absorbed question even back of I promotion we a by entire we saw and much where your to less level was promotion. to promotion, we And David, it's bit completely what we than pre-COVID. that period the of But essentially as

right we faced also we environment expect promotional what similar you with a were moderate call a would I heard as remarks, it So And we from 'XX. now, in from my look environment. prepared

Operator

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

Sam Darkatsh

to Two, I guess, questions. my themes

around First would be EMEA.

is in of profitable it the I I'm than EMEA half entirety in the much think including year. I to the second normally, you're more going half. And is occur like it first assuming EMEA 'XX looks the also. that's think throughout seasonally

you likelihood for has the back So guidance close Mark, to years. the after X the the if Arcelik of profitable also options the quantification filings. what's then as EMEA or dilution of EPS the in incremental from I could the in does expect transaction what's general if absence half? see a that you talk the about didn't terms And it

to a an get Just $XXX million of likelihood ascertain a million trying $XXX the or PV? transaction sense to

Marc Bitzer

be Let on guidance me closure address what and the by impacted first the first in is the the how might the of guidance transaction. one

First it will never that's level much cash half. build historically, parts and of high the year then regional on other cash timing less driven extent keep by to the than too moving simple. the we cash of There towards cash and to drain all, the probably big cash just a on show more more is a back more this The volatility transaction flows pretty impact but flow. the i.e., flow much regions, EPS is European

cash impact that it, flow when on on an a on much more close impact has of depending we EPS. less and So

Europe very appliance of mind, QX here America QX And QX similar and keep small the but in the North driven profit is and share skewed that heavy is has by to sales. business seasonality a KitchenAid bit principal more which On domestic a profitable little yes, largely also QX. towards

closes, EPS keep us, mind So stays in the not business the that with if of transaction that impact much. that part should a

that's potentially and which see don't a by So I QX major you on also depending -- close on probably today. whatever, it where everything impact or from EPS expect we

exit we I the multiple shareholder all the including me relates transaction, discussed after you, your you opportunities as reveal the to as transaction terms particular where multiple EBITDA To defined. potential will will the not assure shareholder defined but years, in X think details agreement, the agreement, question of understand second terms, we what of the a it let are

the or way also I a us, long-term of could remarks prepared see a earnings and So to in clear want it's we are But exit But is said the up my terms terms At expect that's by in value this be. XXX-millimeter predefined various of time is a potential in mines. -- as underline the course, what predetermined. why have behind profitable valuation same and of discounted would what the potential in what I you pretty relationship you X-year. there

there down negotiation So is no road. the

Sam Darkatsh

the question is sneak the to variable million resins steel steel other the million sure $XXX If variable your million oil having I But lines? below another there rows, could contract a the another something year. to $XXX and you play identified. as $XXX to those million that, it variables more along $XXX that this into as relates of that's off Typically, such you've that contract are and role plus could I'm on are intra-year tailwind i.e., and biggest above or being

Marc Bitzer

At forecast. and successfully in you Having But certain a of amount let volatility have question. point know said that or always me uncertainty Sam try it. your that in anyhow, this to view, sneaked well. of you very address third a

big item pretty And are annual XX, steel. today, as here procured Steel on contracts. we have biggest is much regions contracts. we're sitting January Our on all closed

has contract bit of little a technically effect. expires lag which X there's Now a in QX which

a So we are see for a gives as us high hedging well X-year this that on steel side, contract which, confidence terms they contract, major surprises. and contractual very defined is know, not shouldn't you the but that

overall item spot on impact very a again, our of P&L. in terms move. But that's a element bit and rates smooth little a lagging You always have a the smooth

would our you rightly contracts, is quarterly I contracts say, annual out, ultimately oil is, loosely price. correlated the as typical which Resins, point with

looks see right I now, to benefits. commodities still not benefits you we higher stable. elements it QX, as couple there cetera moving -- some saw Having mean, more still the side. to spot much parts But bit some impacted little lithium, frankly, that number is pretty also that, they're are by has We now out of it's and also there's moving there a that that there's largely which certain impact glass. already, smaller a of right know, on Glass said So in which uncertainty. total, resin items always wide variation. trying us price but buy is a subject et in a amount drives a of which

If total our many would zoom completely we you rate out, of we years, where now $XXX XX% to given years. actions in Sam year, high XX% actually and have of you've which for million, are compared is other observed to us the to fill say million a $XXX I pretty a right

feel, confidence today, high this we we a million of as to degree $XXX hit we million. with So sit will $XXX here

Jim Peters

XXXX. to Yes. a actions bit executed are comes just confidence we to due add from Sam, during says of little maybe to many what of is that these Mark some

rate. year. pretty And so good will estimate if right And we've what environment, environment run last best to we're putting in couple as said, for additionally, is of this been and do around Mark but see then years beginning you material a materials volatile at now think the already estimate our an our in that we exit the the over at look

So we all good numbers. those feel of about

Operator

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

Mike Rehaut

think sometimes here, break acquisitions. a prior assumptions XXXX billion been making upcoming impact year very of divestitures I quarterly and to on InSinkErator. it be the helpful. you're the First, in I of dive XXXX kind a I But the the us think, out acquisition to investors for would the have sometimes would little in acquisitions, more and bit is for that purchase the little understand contribution love I'd hesitant sense on in a margins to in be doing, a to expected really $X very, sales to helpful give given what know price, in is basis of how for

Jim Peters

talked benefits, acquired above about grow interest I'd expect margins revenues million the having And total InSinkErator, and we our basis, $XXX with We've when it said in and is it. continue it margins and and it expect of us we the business. the as go we cash. And part a everything and the also a that's but cash additional tax very this consistent this net also of plus with good million flow that a bought strong generator EPS gives consistent but we to above Mike, we thing free gives into we are average that think us $X But very it reason continue is we it very about of Jim. start to about On of that. and of XXXX. range maybe $XXX performer why

And we of into headed right our months XXXX in now we've what expect so that's seen what X ownership. on first based

Marc Bitzer

And Michael, Marc. it's

from an in it's this would say, first Just X all, our one. environment, It's to add ownership of incinerator plays kitchen major appliances. we to this one. now X of as the or months have where same have we I

So applies same described the also external we to earlier which that environment segment.

pickup half very and we -- soft this half. or the thing, -- demand last will be and high-margin and a the the months and of some impressive both for X that, most of the environment said margins, first the X all sustainability Having in business first So stability 'XX. the expect months important back saw the first is of in the we 'XX month

major good. there April, innovation a of very May. every then an and a year is looked product in generation but coming is major March there's product from more So And don't segment, innovations you have operational perspective,

I honestly, excited from garbage outside, disposal but be And could thought you about never I did.

month. further out It brings April, a us So but also not in product cost which a May. very consumer that exciting only benefits is comes very, reduction high this

point, So one a the up run rate structural very pipeline and will we from at which will this business business. it from do housing strong particularly we a product like feel picks really about once this

Mike Rehaut

I you going about appreciate any in Slide of margins fourth first How then I improvement want I make see kind I look have cost we year-over-year. to takeout But and to gave you believe, do should be a benefits. in earnings I until incremental half. EBIT also, not in terms think on have your to versus heard basis sequentially? margin of XX I first I quarter expect at quarter that guidance, and it. XX% guess, material or When quarter, type first should significant out being headwinds, raw I I Okay, that start you're secondly, you're benefits really And flattish XQ the not lastly, think having see the saying XX% sure of would any right. the if of to just

North You talked not at equal, I'm correctly. not sure else know you're XXXX. of talking America just a starting I but understand to being the comment that all you're year. for XXXX the XX% I be that about XX% yet by could say intending about if making sure that point just end

Jim Peters

Michael, benefit first as through months you of of we our to into Jim Yes, I'll close inventory in right get is of now. and the QX. of layer QX X XX, begin it. and let think to quarter and system what if have cost what one, seasonality But when that on the the Mark a inventory quarter first the this referencing add the That's to then you and we on higher year remember cost to lower I'll hand, just kind through we then is, the at look will you realize started, in you're have Slide work exit about if have material you of

So yes, expect to we your margin that. see sequential improvement, question on

early in put our I mentioned, cost Second place programs XXXX. more we many to in is, reduction as XXXX place put were in in continue but of

the So you'll cost the savings additional will see that of margin. materials beyond help ramp-up a

we it at again, year. the looked half year. earnings XX% about of as drivers it the And are out then said, of big XX% first the think we and the comes to in that So later those take in the

and We also year-over-year environment more the year. second the little bit year-over-year the be year half the expect of in basis the more in demand a to then negative on a stable half of first

we do on expect the a impact we've question your about, things margins different too, you does so margins, whether throughout up To significant the it's the on think those ramp the that to year. if about talked have material, NAR NAR,

dealing first have that say a issues were just they resolved are the January. tail had in we of in the you in behind small but QX us some we now of quarter, with Additionally,

but So that in it year. began on throughout to an improve NAR also margins the have impact the will then

Marc Bitzer

course, me Michael, America on North specifically So of may And just add margins. margins America the let drive the margins. the company North

full you XX%. and a XX.X% towards last basis, year guide had As margin pointed in we year, America out, rightfully North now on we

last couple which years, base, given all right on now, probably the a sequential So it makes a for move. But look opposed full sense doesn't year of volatility of the big like view to more it's we experienced a as year-over-year.

are on representative had which sequential said our of we structural basis, in we always So not QX, rate. X.X% a run

behind about issue. in One The important X to, a roughly $XXX had explained alluded Put specific last the And was tail was these thing in supply that's we number is this elements earnings the our which a one-off what we profit QX Jim of million margin. ones, end production impact. still two, reduction call.

by So X have absence of should QX. you in this the definition,

you get we and So then X-plus advise of margin margin a the to percent. probably to had which

internal To what be guidance not but that's a our expect that's clear, from and would should this what we expect run is rate. you

in, So see XX, start sequential you again kicking exit our which then on margin QX raw we throughout year value material the we rate to every Page explained long-term closer been has expansion as in targets. would as a quarter, a and much sequentially the run significant improvement with see margin creation benefits getting will

Operator

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

Unidentified Analyst

Are there those orders? built is just other regain think -- how And your just shelf space and today look do brands? customers you disruption were given about the that quarter with back? backlog? there Or retailers the fourth your a should world to has how retail like contracts curious Like lost in relationships in XXXX that market get assumptions? we in share fulfill now the then you with can built-in there I'm your what

Marc Bitzer

me in guess America, respond Liz, was had let this In the particle to me I QX, in we market QX relates So much identical to particularly U.S., pretty a particular share market so the question share. U.S. let which North

in sequential again, products gain. we QX. little which of in picked a progress market made further QX, And QX a share up share, we in reminder, we to expand basically bit did As how by constraint we're so we coming not Honestly, the but expected stable. had internally, we back supply but it's

January, we I and retail. U.S., do all, happening of what kind relationship that's now got plan. for expect right mean and QX, always margin builder particularly only but you in not right differentiate with to is now we So And all the in margin traditional between subsequently, see first of retail, sequential, market what gains also we particular share

housing as above The the builder made that expanding on market we're you we tremendous XX% side, now year, point, segment. that have is because that will not progress we just the well our over years, share at in of definition, suppressed explained constraints probably as last -- last segment and right QX we in us. issues now fully QX and the kind benefit but housing one By and

lost retail we not also but with we of retailers sell. which the our can clear. space to it's the We've side, On today, provide floor as products traditional got have

a a have innovations top brand-new dishwasher program, and a in which the the Mate launched is lot X We load PET pipeline, be architecture. of X of the it and fantastic

sell So we will We that know floored know we fulfill we need. it's can and supply more.

Operator

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

Mike Dahl

Home at wondering, question on conviction to But by indicators, first end be started have the these I'm all And these why prices home in we a think that mid-XXs When down you housing. the Mark, views It's the months, single-family your thought permit XX% sales guess the soften it's look be will landscape I I color last If of at challenging. the far. are of the half that is out appreciate the year-on-year. we Jim, changing so leading X understand a quickly can right? I the are year. this I I headwinds back today, visibility all long-term everyone so guess still behind environment. all look housing

Marc Bitzer

Yes.

probably So sites. Michael, U.S. address housing the in can I particular

we expect As first we a X months housing, in the U.S. year. before, this of don't uplift major said

expect However, and do recovery. of see and long probably I some term kind post summer, the even

and That's numbers run you've home home to kind X of sustainable of mean, of high the existing is to if of construction. decades differentiate sales million. run million slightly just all, rate look the new sales, of a got existing go below The last from The effect such below rate the it's mortgage months the see low probably rate. elements. First to at got home a with to any shocks prices. And which X now couple fell you X you've more million. €X below ultimately back home slightly level several I coupled than

actually improve started what earlier because existing as a long-term is affordability. price home home sales down, point, news good home said at leading coming indicator, So you for price it X the that will

that look to you had the those Last most mortgage rate, people come the between high is down. observed who year, spread expect we and people That if bonds. Also, at time. spread and unusually mortgage over a XX-year for would longer high for rates treasury

to rates get back stabilize believe Fed though down, not So the and that spreads. may there's even mortgage long-term come to historic will the rates reason

that progresses trigger expect will as housing improve existing that do sales. affordability year we the and will So home ultimately home

same apply. can On right mean, thing, you the industry But now, factors the for to many new sources. I multiple home construction, talk most important

of there's million about look the at homes. a unit rate. people supply you normal new run last If most about a at X agree, would XX, That X-year undersupply is XX years,

stretch you forever. undersupply that okay? probably experienced is probably which point, reported market and of But since it supply been also will from it last 'XX? No ever triggered, if market will all and not one this not happen be it's has back housing happen -- -- has at entirely in history, Will go will So 'XX. been the longest

Jim Peters

thing Michael, I'd XXXX, industry industry XXXX, much XXXX a replacement. back significant large to declining rebounded. the that have our is you there flat. was and you the if pretty is of growth it replacement And see add about to to in to go industry started some was as is XX% But say other in business remember in in our you it

could that have And when entering XX you very back so are that favorable period where look we're replacement a you really trends years, now underlying.

consumers doing the to are things as Additionally, existing with is today, you in mortgage their to homes rates, be look more may not remodel. kitchen do remodels. times, it if lead moving of X consumers their low does stay And they many at they want what the many other

and can be do that us. that for there So there we are out see other trends be will positive

Mike Dahl

it. Got

that. I again, And Okay. appreciate

like some timing from of a rather those I probably standpoint. are think seems absolute than still our things question debate and

assumption my your margin from volumes assuming So you're of the by little think year-on-year as a get of gain, help a capability side I that like share volume assumptions, an year the seems the it year, volume own like half progresses. be in growth some will to for that follow-up the industry there's closer second things would so for the potentially drive

or decrementals, demand through how as moving given as come margin the if think about in the around the pieces second side lot we side impacts cost So expected there's doesn't should of half, obviously well. a

isolate be volume into and kind plays of thinking we're how how it, if the to side trying should that? we So that about

Marc Bitzer

right just to top mind minus it's We maybe America a guide this assumption in Keep -- North -- again, our down America we minus a presentation, 'XX. on Page -- of on comes now. about and X% North X.X% full X% talk for in Michael, in we or XX base. our is So only our that on in -- year on market

So market. are floor at a to Jim's markets you Replacement point, is XX%. already now just replacement earlier one what reach point, of

now doesn't further arguments call housing about by your to yes, we of a consumer to about, the a market. strong it are made people To probably say it and the the long-term move, ones. purchase. at fact that downside upside fairly is earlier U.S. the bet can a from of want can against if level all mid- discretionary point there's risk, lot recovery. right And fundamentals small. just the that all, wouldn't X change low see be I more argue perspective, would I At timing slow realistically recovering. at It today's risk which start will but I a i.e., such point, pieces is you're risk would the So

long-term the will housing recover. we very So market be strong one it, do that and is U.S. a believe fully

Operator

Sachs. from the Our from of next line question Susan comes Maklari Goldman

Susan Maklari

and outlined in do the opportunities think time. given that How to is, business experience of the you opportunity about some hit your that your today, there regions challenges background question those North over first faced you American different operationally, My operations with in initiatives the the comments? and various have

Marc Bitzer

horizon. decisions parts which I think and very firm believer an we and pretty all macro of that's But fundamentals plan big actually way with time America, would with what our portfolio a position question back South I strong in our North Susan, to long-term am exceptionally coupled of obviously a market have both a in we the the with transformation I world. come

The -- the our America the I've because market. we the still responsible health long-term I change North it. market again, my health been which go But post some demonstrate driven we're our largely will of since for of cohort world and was doesn't this are in living shock, So XXXX. position North deliver about market. deliver it market fundamental cycles perspective interest will a yes, in And it rate margins for ever the observing or XXXX ability strong to and in the will America we very it's long-term

downs and ups housing the of seen I've So the market.

don't it the bit household our demographics there's XX and numbers have I the you interest access will And but of quite demographics, the is solid point, or a X think undersupplied and pent-up housing rates good recover formation because we years I has ignore won't pretty market that for demand. been the can't North one of of market; impact X in to America okay? at think

why myself long-term I'm explains know so and met but on America. of North optimism that mid- I'm I the prospects and fundamentally -- So repeating bullish

Susan Maklari

Yes.

promotionally categories or that. demand can see the one impacting product necessarily more year over you years, pre-COVID and they appreciate is consumer in to having in say of is things are we Would that X exposed that range we've the be the something then this And and driven And not effect they're the other that dynamics you I seen of you're last promotions the did seeing that some as your level think just promotions that Okay, similar COVID. how to relative the on industry? pre norms? same incentives the the of the could of

Marc Bitzer

world in can promotion good have own and particular plans you're is COVID very I to by what hindsight, this looked But 'XX, the or think on to hindsight always, so somewhat a question mean, look market would on because because or replace in responsive promotion by tap smaller. changed also I comment replaced. too in where And it as think, definition, I'd the the and needs don't forward. definition, be on replacement big whatever you historically share to traditional market smaller, particular, not we kind way I much people has just going at Susan, at product the raising price observation. of comment Replacement in in because post-COVID how as elasticity very not through such is environment its a we into that you very promotion and is responsiveness or has an much promotions part of fact discretionary with

of in So much replacement environment. probably a the less what in in responsiveness And case, our explains promotions was it that's than by again, where share to described that a be traditional pre-COVID driven you market may higher largely market.

Operator

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

Eric Bosshard

Two things.

about targeted First expected. you half. all, as in There 'XX, a the price/mix, the down pretty talked promotions what were in was half price/mix second on the meaningfully you of from step second of the

a mix asking see assuming but I'm with about, that also more down on accepted cost that, I'm basis so you're I of within we're I it seeing come down. bit curious, you've the base going as trade price for costs a up some points XXX-some in guided consumer. there's down like curious retailers favorable cautious 'XX. return know increases a what way now seems who it on And

in context mix less downside on And with is, or with the to moving that XXX so you some price question negative basis there that? more perspective is pieces? look more point so And the at or upside as that that are X what

Marc Bitzer

as X of got of you're you've in first Eric, we keep rounds look mind So lapping 'XX, to all, now against increases. that in price

the so So the increases. go just in definition, in 'XX, which levels to back by are you're time, will, X definition, At by same kind mix year significant factored do the because against to and is prior the where levels in of mixed operational have positive in because promotional we similar comparing of you X we the look the fully which if Also we our us mix incorporated. business believe value you at on opportunities. strongly What at we didn't that's deliver price see which from our down perspective, point, the QX of have supply nonpromoted know items when and side we particular, mix guys your high is we lack particularly items. couldn't QX help we which products had

So similar that sequential in we the half to into we 'XX. to look back be opportunity there improvement 'XX 'XX do expect, environment -- and promotional in taking will you come while, particular, as a account into of that's QX of QX, pricing as from protect of our QX, mix also course,

competitive So and several playing the environment into we highly took think I a in there road. is assumption again, This reasonable are factors this.

Eric Bosshard

think, would that is to, you changes the a of present at took business that Slide question and $X portfolio level divestitures What compelling improvement. X, the add on not does flows. creation, today? that up anticipated the future if is curious a current I future snapshot we And of cash what for the of like second value On then look Jim. value about the performance slide pretty be the I'm of which math billion a from look the it that

Jim Peters

the would would if back the we I had would cases. and partnership. and strategic And from we types improvements as require keep investments looked looked snapshot that out potential what say then say, is what any of of if we have required maybe at the business margins a an is roll had make us that would cash of allowed as that said, it we give And we of a type and and buyers significant this have to that of we options still even return highest would those And looked from at today investment lower I the value. there. would it we of internal improve kind that, different and Yes. through option, multiple the present alternatives I reason went mean, a took had and while at And if you process, for we I the of on this investment upfront amount upfront cash net us.

keeping is upside allows we by participate significantly it which generated more thing our than in could XX% own. Now a the do that we to have can in us on this believe stake business, be other

Mark about long-term when And the so creation comes earlier transaction, talked remarks, of do at where we you in the have believe at in we that's look is But potentially And some really in or his partnership. realize this time, part from. then opportunity this value and of in monetize that participate the of point to that business. the some health that this business

Marc Bitzer

-- last today. the given this So I was think we which covered question

me So up wrap here. just close up let and

-- of parts Europe. joining for the of just strategic is is us all, year, still April of will review alluded is here but there to lot First a a We items. what we today. you said last Europe. thanks do critical to moving Obviously, we in I transaction remind in want One X

at creative option which strongly going Jim, We this heard and all business looked the I we is the of think we our all value-creating options. as believe strongest from you at most looked forward.

some step, So of be around QX. And that we set good closed that kind which we we feel a will time we very we be still needs significant to signed doing. now obviously, expect

saw There On very down and heard it's heard the Typically, us, outside you for for expect hoping strong is accountable 'XX, some 'XX. yes, be last entire don't demand expect business operating The we cost QX betting will that target second we improvement. in need these which long. for have us do because of don't unfavorable feel also carryover the behind historically of taking Europe, environment, very or but into given is to from we the the to an half that we're still 'XX. of as we've you driver unusual last to kind because ultimately an that situations cost $XXX you up. million before And somewhat million $XXX you to on But actions. beyond underlying the particular had hold extra when environment our a which one guidance

at looking between. that, with forward earnings call or next you in in talk the So conferences to to respective

again thanks joining us. So for

Operator

Ladies that our and fourth XXXX call. quarter Corporation earnings gentlemen, Whirlpool concludes conference

You may now disconnect.

Whirlpool (WHR) 31 Jan 222022 Q4 Earnings call transcript