WHR - Earnings call 4 2023 | Whirlpool Corporation

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Korey Thomas

Good morning, and welcome to Whirlpool Corporation's Fourth Quarter 2023 Earnings Call. Today's call is being recorded.

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

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

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

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

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

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

posted our to [Operator section Investor Listeners are on GAAP directly directed the website non-GAAP items the to of reconciliation the of most measures. comparable package Relations Instructions] the for information supplemental

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

Marc Bitzer

Today year, that call morning, earnings marks good first and will attention XXXX. everyone's I Korey, and perspective be on everyone. Thanks, for our our new do the in appreciate

look However, and opportunity to the last at to take reflect want year. I back

portfolio is expected in a opportunities what we more cost During marked able EMEA share value. the X success had in this with there when a our gained which been is net to of to started point $XXX were we're great products clear milestone And our we past transaction of million, major and the proud This we Two, significant the three, One, of to of in have achievements our unlock our signing market is base America. marketplace. in of. by of North provide number a year, we mind year. than transformation testimony brands and reduce Arçelik

our time, intensity short promotional margin enough, there we EBIT able is to year of flow. areas same And is on point number our be. which of to put where earlier which solid, fast are own than X pre-COVID our not impacted The negatively reversed environment, we EBIT it while cash wanted our full expectations. inventories fell than full of anticipated were X.X% of pressure short a to our reduce still margins. At more And we back where the

these resulted mortgage The sales still Obviously, rates by and results impacted a in home housing a unfavorable existing in decades. in were existing to lowest freeze essentially of the increase home Ultimately, cycle almost of this U.S. led sales. XXXX. steep rapid X

and strong which existing demand sales, be slowed the the sales historical by mitigated sales are to which tends discretionary between This correlation appliance home down replacement appliance And strong attractive given significantly. was margin view continue margin cycles, to trend shorter our These favorable strong more leading intensive less future. replacement a attractive. of appliances replacement of foreseeable in to confirmed patterns expect we which use sales

X key on market does for housing what bullish is me million by this for million macro the long-term all Now mean has Let the cycle. remain We to over a the question housing on and X units. The undersupplied cycle. been decade mid- XXXX? start

will demand point, The occur the rebalancing but short term. in and of supply long not overdue at very one

these catalyst to will to year return moderate be into hand, need appliance new can other unfreeze. lower a we a see catalyst turn and The the on market, to That need of we as progresses. only already and rates months expect steady trends which X home mortgage know all a recovery to orders to gradual starts, we X that sales. the While existing sales home typically

discipline be will and expansion. we XXXX? will in how all margin position ourselves cost So it Essentially, around

deliver in actions cost in savings. million put have $XXX we side, million $XXX cost the place On to to

any factoring While in XXXX, than raw savings. lower number may not we're appear this material

all are cost million So structural with actions. to takeout million $XXX $XXX

approach The by will as essentially on promotions EMEA driven very the transaction as margin disciplined after refocused well only completion a of product benefits expansion mix. a of focused the portfolio be value-creating and

You impact pricing, effects. entirely carryover is this in negative full of see presentation to related year a but later will pricing our

we it this expect as relates closure, Lastly, to in And changing by are segments. EMEA we our to reporting transaction portfolio our anticipation continue transformation, to April. of close transaction our

appliance to We our only not America, our provide appliance but visibility KitchenAid highlight Latin business. America North small will domestic also major business Asia, and domestic in global

our KitchenAid positions is am us of the in actions I shareholder portfolio and a that free for XXXX. continued improving margins, component at confident value business strong refocused our and critical small cash portfolio, With appliance product consumers. our creation brand cost improving for domestic life generation home flow

first occurring exited the free later of Slide fourth than shipments XXXX tax I expected. share We the $XXX share cash to over of provide costs. Ultimately, by conversion normalize the expect reduced Europe America, impacted Now growth, with which X of delivered year-over-year and We X. Working $XXX of XXXX. of mostly million $X.XX, an coupled of our supported X% with by delivered in we over overview inventories, to results. of quarter per North customer quarter gains capital flow will revenue including turning earnings trade in elevated was million in to quarter point transaction. benefits we related ongoing

results over plans EMEA announced it to our to transaction. perspective and proceeds I a including the review And for regional recently QX turn XXXX, will on of now our Jim

James Peters

Good Marc. Thanks, everyone. morning,

driven Sales share fourth America I'll X, revenue X improved points growth introductions product execution. resulting over from North gains for X% delivered review results Slide of growth to new Turning was of margin and basis our chain We and year-over-year XXX by business. quarter supply point of expansion.

environment, was additionally, resilient X%. normalized industry this replacement by promotional a partially lifted U.S. offset the demand While

sales. by home Overall, existing reduced mortgage negative Fourth delivered discretionary price the due normalized quarter demand and offset environment region margin margins promotional lower quarter. rates expansion by the slowing from to was driven cost, mix significantly X.X% XXXX, a partially consumer in higher down for

consumer Europe, actions I'll Revenue X. business. benefits cost approximately our expansion from of demand sentiment. Strong year-over-year review held-for-sale the for drove Middle accounting Turning margin and region results basis see X%. Africa to and to down East XXX points takeout to negative continues was nearly year-over-year as X% weakness our Slide

continue and April to call, guidance XXXX We later in close expect by additional to our impact the XXXX, free will the flows. into cash to expected Europe provide I transaction insights the and

flat With Turning region and excluding to from costs approximately currency review business. as gains in region laundry negative factory. currency, ramping related Slide the up our America the and Argentina devaluation sales, X, to industry throughout for demand results losses of year our Brazil, mix delivered Overall, X%, cost I'll to in net offset by share margins and the solid to last EBIT actions increased Latin The price XX%. new were strong

EBIT Slide gains review driven I'll industry. and and to negative improving with X% actions by mix. for of Turning by cost results our the price Asia XX, of offset takeout more share growth X.X% The business. saw margins region than

As interest. you our while intention Whirlpool sell XX% we may retaining a announced of to to up majority India's seen, recently have outstanding shares

India to public both truly has Whirlpool. financial At strong attractive market growth outlook of in growth is margins long-term created a making local in one India. valuation. are high the of for Whirlpool operate digits, It We trajectory profile same of the in. very for single very the India's opportunities time, the and strongest believe long-term this

will major XXXX review the only the which XX. domestic Slide business Turning to first our of appliance includes I for guidance, the quarter Europe year.

XXXX. $XX QX appliance and have of billion EBIT, major from approximately creating Europe provided for a reset domestic results, of for business QX million XXXX We excludes baseline a baseline The sales comparison through XXXX. approximately like-for-like $X.X excluding our reset net

margin sales a basis, $XX.X approximately billion of On X.X%. like-for-like XXXX were ongoing with net EBIT

net like-for-like sales EMEA from million business appliance QX year-over-year of expect $XXX on We margin sales, the flat major basis. and a XXXX including domestic the EBIT in flat

of flow XX% We XX% working expect million, improved capital driven to $XXX a increase XXXX to $XXX and million free earnings by reduction. cash

expect per by to increase approximately of including impacts earnings rate adjusted X%, tax $X. which XXXX $XX, We earnings $XX year full to effective share an share an per of and XXXX compared ongoing

Slide the our EBIT year Turning ongoing drivers full XX, we margin guidance. to show of X.X%

XXX of expect half the basis negative in environment half as the promotional the XXXX. reflects a normalized price This second of mix. of effect to impact carryover first XXX from XXXX We points

continuing mix sales, home and existing expect discretionary offset new low partially the historically from also XXXX demand introductions. We softer of in product first by half

cost XXX takeout As further actions. approximately we $XXX of drive reductions to net cost to from we basis million points structure, margin million $XXX benefit cost expect our of

to commodity and trends We supply EBIT on based to agreements. materials impact recent no expect year margins this raw minimal executed from

XX We continue impacting investments with new margins of to a introductions strong in technology and marketing approximately cadence product points. basis by plan

margin of our expect major newly XX business provide domestic formed contribute we improvement margin-dilutive we the to points portfolio European the appliance transformation as basis to approximately company. Finally,

opportunity. cost were to cost I On which Slide significant XXXX, our is will takeout approximately and $X.X structure. drive We significant we in XX, on a experienced step provide unprecedented million inflation resetting In $XXX context cost in cost able takeout XXXX. XXXX billion of of our

by to further We to expect million $XXX reduce our million costs $XXX year. this

from cost benefit taken $XXX last year. will actions million XXXX of

simplify to And with portfolio ongoing half $XXX from reduce of million complexity ongoing as second our initiatives operating we $XXX $XXX and we expect our productivity enter our supply of allows also additional takeout organizational cost to XXXX. us million benefiting chain expect as operations, We transformation and million manufacturing model. benefit

Slide XX. January to segment XXXX. introduce reporting new structure I Turning effective X, will our

the reporting our anticipated closure transaction. updated Europe the with have structure We of

they domestic included Our appliance regional results historically small our segments operating the in. regions of operated KitchenAid in business geographical the

the within report businesses only domestic now respective will We regions. major appliance their

SDA laundry premium global and now for also will with a has perfectly business, a iconic as fitting quality, vision company. appliance domestic our of separate an small brand business our performance segment. as reputation being and best and kitchen We This the KitchenAid report products known

domestic synergies to small domestic have and appliance portfolio. continue will product We appliance strong major between brand the

XX our for provided quarterly businesses we with its through quarter The the Investor Relations points billion XX%-plus reported regional results to figures our basis as than its have X-K, SDA third On website reporting SDA segment. reflecting will previously to $X profiles, and XXXX the lower XXXX XX of margins. own business due MDA margin and have strong recast yesterday's

X%. review flat I guidance. to with segment up XX, dynamic to our a industry global expect be to demand, new Turning we Slide Starting will industry

be that continuing expect in U.S. for replacement elevated similar impacted slightly mortgage as also a discretionary slightly America sales. by North we to to demand rates positive. driving be the footing down demand the with industry XXXX, see to flat half America demand second positive expect consumer Overall, existing expect the as to volumes saw in industry to Latin MDA be of we and home well solid We to MDA resilient creating we trends flat

Asia MDA by expect volumes we and globally, X%. rates to to growth fastest accelerate industry the of one has India X%

we also in is we expect premium to SDA up this the industry to be largely guidance with X% the not the that segment global and present While X%, preface to want all in SDA categories. KitchenAid fact

negative consumer sentiment. first MDA Finally, we of X% expect X% contraction in negative Europe quarter demand for continued the from to

we MDA carryover with full expect year channel For and of margins impacting first half elevated North America, to negatively X%, demand. margins inventories promotional impacting first approximately deliver quarter

to basis XX margin expansion approximately XX%. of margins of EBIT XX expect with and every exit sequential to points quarter approximately XXXX We

of For and MDA consumer Latin improved X.X%, expect margins strong EBIT and actions takeout with we cost sentiment. America, expansion

we expansion to approximately X% EBIT margins. For expect MDA margin Asia,

EBIT we of very For margins attractive expect Global, approximately SDA XX.X%.

quarter X.X% approximately of and expect EBIT we deliver Lastly, to margins overall first expect total in margin an Europe X.X%. the ongoing MDA

to Slide XX. Turning

X replacement installed you shrinking to additional trend nearing that this demand with XXXX our XX% coupled elevated average drove approximately expectations. continue XXXX, into with growth of U.S. of industry usage volumes. replacement. XXXX detail last grew is of we years appliances, demand X% and Replacement XXXX. on X% the and is historical provide in driving me This The expect life Let through industry to an base to from industry is

demand. half higher starts disproportionately We Whirlpool benefit expect construction the to from to of second is continue trending to With housing XXXX. gain in drive positioned XXXX, in value-creating share new

mid-single-digit XXXX half XXXX second the benefiting for likely growth in low housing in Whirlpool for calling are XXXX. starts, Forecast to most or of

share. new For $XXX builder every leading see X% could with construction, increase million we in approximately impact our

demand, improve worst to since off are discretionary for interest accounts industry expected volumes XX% are their of which and is approximately existing back half by XXXX the sales Finally, total of moderate. home year rates as in coming which XXXX driven

Turning to further perspective Slide XXXX. XX. I will on share

We retail the weigh and expect impact levels to of inventory soft with expectations a QX. higher discretionary total first on on demand in more half pronounced XXXX, industry

of half to half creating to XXXX, at activity the the as of promotional levels year. We XXXX expect similar be a second the margin first headwind

to while of the first cost We half expect ramp XXXX, benefit XXXX up. actions additional cost from actions

our and small XX% the demand deliver domestic the demand gifts of varies of year. increased business fall as earnings seasonality our Overall, XX% major year and in approximately XX% of appliance the from first Additionally, domestic the holiday appliances of to to second approximately It half favoring global its with profitability in consumers season. SDA activities the delivers every business. in our we and expect half of baking and earnings

to XX. guidance. free provide I Turning our will Slide flow drivers of the cash

expect billion $X.X to We earnings improved $X.X billion. cash approximately of

working largely conversion $XXX million, inventory including new plans capital to continue expenditures capital in expect We of We products through our approximately launch fund million XXX products invest organic to over growth, we reductions. $XXX approximately and by our as XXXX. improve in plan our to

prior million cash Overall, to to the approximately million charges. million cash simplified after the of outlays consumption business related flow MDA of or $XXX cash model complexity to operations approximately executed closure Europe of to for reduction sales, free X.X% We onetime expect million to million our previously Europe and transaction. expect restructuring with approximately and including $XXX organizational $XXX $XX deliver $XXX net actions of we

Turning deliver allocation to how to XXXX will priorities. positioned our are capital I we Slide XX, well review

divest balance million million on sheet flows free XXXX to cash solid to from a anticipated $X.X have plus We million with billion sell our $XXX $XXX expected hand proceeds with in million of of cash interest a previously filtration we $XXX water to our signed and India of coupled of $XXX business announced portion to as recently Whirlpool agreement of our Brastemp intention Brazil. of sales in branded an asset

positioned we clear see, well deliver capital can to priorities our you As for allocation are XXXX.

$XXX XXth to a from marked of Whirlpool. consecutive dividend million. year expect or Subject year approximately steady approval, increasing Last we the Board dividends of

least committed our additional credit to and $XXX maintaining investment-grade at are an reducing our million. We strong rating debt by

offset to buybacks share limited expect We share dilution.

to are sales. expenditures net innovation approximately committed we of Finally, with capital growth and of research development and funding plus X%

to Turning Slide XX.

our see commitment can You our to sheet. balance deleveraging

in InSinkErator Compared billion reminder, term billion value-creating $X.X $X we debt year. acquisition the with the business, at by XXXX, increased a As our debt in of end the to by XXXX, loans. we expect of of this reduction least

in to the earnings the our product free With benefits of are the the of confident full combination year in XXXX. realize transaction following to strong reduce by in the first expected free net our cash beginning approximately Europe Xx flows XXXX and and adjusted debt of close flow leverage delivering our effective expansion cash further we ability innovations our tax rate, to

turn call Now back Marc. will to I over the

Marc Bitzer

Jim. Thanks,

XX. Turning to Slide

transaction. Let me provide on update Europe our an

our I transaction. European Authority conducting in major and As X in of Austria the the mentioned we with the from review approvals and passed earnings process a the U.K.'s of Markets third China. call, regulatory Germany, Commission, Competition Phase The milestones quarter is

will close about the April. the dialogue with We by continue we will newly are benefit the CMA to formed And expect a transaction constructive consumers. continuing company that

Slide XX. Turning to

what me today. Let recap heard you

improve We cost million cost to confident our our in takeout. will to deliver ability $XXX are and further $XXX million of structure

Our higher-margin portfolio to progress. to transformation continues business a higher-growth,

Europe accelerate to million our free XXXX. The flows $XXX meaningfully transaction cash by will structural in million approximately $XXX

generation. of billion including with with We debt confident trajectory deliver flexible of returns. have portfolio a We're sustained to XXXX business and clear our allocation reducing strong strong the cash leverage, $X.X by supported balance along hand, shareholder transformation priorities, our sheet dividends and capital in on cash

to our review and our join Investor Exchange. opportunities portfolio New at excited forward growth towards growth is America very transformation to and XX Day with Stock York our will a North We're Investor since We Whirlpool, close the at invitation look first I different Slide business. February Day XXXX, plan to higher-margin to positioning us on creating how us we margin higher our an MDA Finally, hosting for XXth XXXX and our business. expansion review on

We value-creation to in history remainder introducing you hope SDA our of business KitchenAid goals. XXXX will addition highlight the to Premium We rich see there. the our of

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

Operator

first James. [Operator question Instructions] from Your Raymond from the of Darkatsh line Sam comes

Sam Darkatsh

Two questions.

material The second margins. will the major be around and America raw assumption the appliance question first North around

raw steel you're a neutral year-on-year that up basis. on around meaningfully of the Obviously, see it's first, materials, So be a is we can to saying going on and -- cold-rolled basis. late year-on-year

So how steel spend this of your is contract much on year?

And guidance? there you're seeing steel? your of that is sort markets what there assumption prices on are versus offsets from into here baked fall in an we're help Just reconcile your to RMI. what steel seeing the what Or

Marc Bitzer

Marc. Sam, it's

then maybe first NA material the the take question, me can question. to raw we margin Let come

all, broad well aware you're audience. of the know I for but First more

#X Our and resins is in then smaller up all raw #X material split elements. it in forms steel; can

we know, 'XX, no got materials. one. effect a And in now, pretty raw right you tailwind much As from almost guiding we're of this for

as is with formal you which And are an they material, a mentioned, with contracts. also Raw basically so on steel, Europe, in -- have don't the for no there contract you again, is America contracts I steel but regional. much you #X annual pretty U.S., driver. hedging have basis, And typically annual are steel less suppliers, have in Latin certainly individual

and that's locked a in confidence very material in of high have why largely contracts, degree assumption, raw we now. annual they These are

of and flow So typically, a these CRU price, kind certain done And of on averages more happen and they're on-the-spot not done that November, line. assumptions about spot December, kind of rolling in negotiations color. time they're

steel price fully the these we majority America, variation, is these contracts in little. the of very, place, expect very a the with So Latin exception of again, with all of which from contracts,

certainty. component, very high on have a why that's the of #X we degree So

is resins, obviously, about steel, a you variation. element there, in oil relative it's The which have smaller. more to a base. price quarterly again, more there they're on assumptions bit little component, And an it's But #X much

Sam, protected feel assumption contractually I year. full or right in now, we think for have we certainly these on So plastics, again, reasonable we're a X we components, have,

Sam Darkatsh

And American the then question. North it. Got margin

quarter guide? So X% America margin, American what rate versus the appliances? what exit 'XX North 'XX major for North assumed fourth annual was excluding the appliances small your And is

Marc Bitzer

basis margin and And impact QX we in so points year a America. full -- X.X%, on base, has where about margin our roughly Sam, North typically an KitchenAid the North posted we XX referred to America business in of

little with a of little that's towards skew -- KitchenAid heavy bit and seasonality Now bit there's in a a QX QX.

be that point pretty the you're transparency. where -- excluding in wanted talked, you I expect to take roughly, we North X% So North margin. guide that's which, prepared about XX% We as KitchenAid And to all equation, we X%. referring 'XX good year out below where America were in the remarks, we of around also exiting on to 'XX, our a we're full think exiting much we in American around margin, with exit

Operator

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

Michael Rehaut

point on a in of share promotions the play to versus to negative was the sense First, MDA regain America that that of expect the price/mix the which trying I be the you're question how to to and half thinking and -- interplay guess is you of know to desire how of it highlighted just would promotional manage say, in and progresses. in kind how to, first to manage about as North back sense in and as out I But get a gains, continue the 'XX term, how share part in the backdrop half. expect of of cadence to that between your increase flat managing get expect quarter the the a I progresses. And to continue love you you of backdrop near fourth consolidated basis, that do highlighted terms the share. I you 'XX extent let's here kind in to promotional another you you'd hoping

Marc Bitzer

Mike, it's Marc.

opportunities first much I 'XX. North it. on a rear little And as bit a of think mirror try to and let have. because lot address on me direction that talk, And highlights the challenges we in we I take which can let QX America, me can you as a then give broader So the

pre-COVID. we've very So down big are discretionary -- if America, you not unusual look back it in promotion demand put that the marketing the comes at the of to North The on ultimately, QX difference dollars and of absolute amount compared in limited. was was market amount lift particular the 'XX, to

way So did ultimately, on ROI we in the not hindsight, some of the the promotions work expected. out

focused just limited, in the in erosion these of So because repeatedly we got It's that know, discretionary the whole creation equation a and meet so market then to not value did demand led QX. of some we about, as benchmark. promotions discretionary you hindsight, And in promotions. was the some talked margin pool of unbalanced demand on

But as levers As we comments look 'XX, expansion, that's expansion. focus deploying our any how which exit That's disposal. our takeout, I cost margins are we know, below want as pricing, is where and I a all new also we it said at don't on you mix, on manage manage obviously said, give forward-looking I we the the introduction. now, pricing, focus we margin how to cetera. into mentioned product are be. our Right et on margin is

are where come that on and expansion. in right now, from we is is base, feel expansion, focused and at for will the -- a future, margin share solid gives about on focus good we the foreseeable level gains. will, of our us context of the margin And But share we least

Michael Rehaut

terms and just in you the get Great. something profits -- love or apologize I comments, of segment there. X But supplemental you're half, if just back to comparable a that margin XXXX thinking the some in but profit about to a size. in in about I the 'XX, the quarter were the just cadence, first know detail how for a is or half. talked quarters the in maybe where overall the and margins guess little missed the that. get appreciate more of on this other FDA I I of I that

Marc Bitzer

take -- at this. rate, a on can time time of bit from I spend the of will of the show And margin that a a first Day more all, Mike, -- we Investor to history supplement, little a lot our you seasonality. apart of lot run KitchenAid, Yes, February XX

lot So more color to will your there be question. a

-- you to So seasonality similar described. what is it's on a high the level, right now,

more So some KitchenAid skew around back manage even there there always for towards the we which is holidays. first half the But the -- are important like and accordingly. holidays, half, in matter

margins, and that again, look The slightly it higher which even is the we typically in will soon the show one. broader to margin, supplement, the I are if XX% 'XX a than which EBIT. guide around 'XX hovers you see SDA XX.X%, will multiyear But at KitchenAid we

margin forward. very a more want going for which, to So significantly business it's solid course, of we us, and grow accretive

James Peters

Michael. Yes,

materials the plus XX.X%. historical $X been I the you'll of billion see the around if has in look to it really, other we provided business, and you thing supplemental run think highlight, is all at the rate

on in what within we of the is the information when of say did benefit we're And some why that or has the so the all and a COVID. there have of that representative benefited that provide growth that on period business there. from more But been that going trend margins we were size -- showed the that time the about I'd some today, and excited during obviously trends Marc highlighted in really and business

Operator

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

Susan Maklari

this the take actions is cost to first year. expect of mentioned My that $XXX you million $XXX to you million question

you cost about to closer to business relative structure, are you think ability the targets goals? and that to that those continue you reduce As to to have initiatives the the the long-term growth get balancing how the

James Peters

Susan. Yes,

look think we invested our walk. to the you this overall I products, and at is thing we and takeout and in saw Jim. So talk this about as got with, in to saw the that And cost in year technology you engineering there is you've begin our significantly

savings already to if really of you how just million that in we are $XXX $XXX down, so $XXX is that implemented and to the this our drive look cost don't ability year million areas million first breaks innovation. that And at affect grow that

that within talk more how are to our have our of get $XXX just to efficient really in supply we how chain, million in efficient efficiency the we factories terms within the that about that's to more become manufacture Then consumers our from in much and we ongoing or both there, we maybe $XXX comes much end. product and next that initiatives million driving

And so areas, don't investments not that make. those affect again, those are we the

if third think there a us about effective? just a a then That we've how do we it, how much also And we past do organizational you simplify talked operate how company we bucket EMEA, at larger operated that the the SG&A looking simplified business, with as about from reductions is really model. make is and we how including in it more

be Our even up to investments within this our relatively actually will products, year. whether it be capital engineering consistent or

affect we we're innovation. those actually and where ability that not can -- we're what investing the areas so costs is deliver cutting areas areas our other to So invest in in reducing are We're are cost growth the areas. more we

Marc Bitzer

in -- crystal to will we have So marketing Jim year, will echo what and really we points is all products to invest steadily brand despite and new we and Susan, continue the pressure, we new more product technology. Last invested investments. into just saying to clear, XX be and basis

capital also continue lifeblood from invest our We company And we so creates future do of prepared seen ultimately growth. the new products. are as to in That's in and you've plans, 'XX. to will

relooking for mindful transaction simpler come Jim's is these the And great actions, very get fund to a we terms Europe take also we we're a advantage from business And of the at after funds, structure. time, will same of frankly, have what globally the much we all in a need advantage its that where point, carryover they current to simpler and take of business, they how closed, manufacturing that. we SG&A At in we and efficiency. easier come can now have is our from don't complexity base

Susan Maklari

helpful then cash Okay. thinking is my about the And second question That's color. flows. very

than what higher the thoughts you that might generation on mean of year? timing for and that you that year this the of with bit You came down had what back a mentioned anticipated. Any the into cash cadence working inventories the

James Peters

listen, Yes. talked is for about this the I capital reduce flow at about say, Susan, by working is here's will million so what Jim. the $XXX would that overall guidance year minimum. a And we our cash within numbers,

retailer I within year already talk beginning just higher you'll were second look did of quarter as anticipated. things is the than inventory some see that are come see probably because think at of that we what the third more and about where you'll levels the we we at

obviously, And pressure we we first of sure shipments believe in line goal that put to make and the in inventories some so our is our will year the keep with half on but as the in we ramp also as have the a reduce to sales bit begin inventories the then later opportunity, little expect shipments, up then but see those we year. to

in say is first to the necessarily but more you the in should of would when I not inventories. middle quarter, year half the So us expect reducing see

Operator

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

David S. MacGregor

mesh during the the incremental do or different with been And a was right market about of what consumer and doing or consumer price the terms up some just really this have now might point? with the a mixing does it bit of of And kind how all down? different this price mixing share in what a at is that you you think gains you share the Or lost little talk pandemic? of Can points? recovery

Marc Bitzer

So mean, product were thing or of be full X is -- David, the categories. America and North good to in precise, gains year across the multiple first they're spread I point X.X point all,

product of to category board. where a and Obviously, introductions supported share weakness. So there's helped new point we across growth. share number a basically not product that single grew We would the

had of not partially other a in The broader element, but national obviously, is gains. but significant because helped, we fully visible, growth yet not big builder business. share yet soft, still which market source the But is showing, it's that fully share that's the

point I specific point. So much it's price across to pretty board. the wouldn't

total than impacted lower only are than by in discretionary market, past, is the X slightly of it sales which this last dimensions broader Now for rush, earnings right against comes comes so markets, demand. which or also now what of what make think decisions, have is a the mentioned just so of the XX% a with inherently a because market, market to is in X it's a context days margin I of now either the specific profile much typically consumers to replacement again, with heavily they back and our is more profile. replacement The market, call. or margin lower a look we that and nature at coming

the but price where previous point to being compared wouldn't broader so help I market share from heavily price that So a necessarily periods. you gain market specific replacement-driven, mix points doesn't we to

David S. MacGregor

This number... Got material it. really reductions. million the clarification. a is I to a your and number, non-raw $XXX other And cost costs question then to $XXX guess words, million back any It's follow-up, want is your of net fixed just go a variable to costs? net as I gross inflation my right? In in

James Peters

put always we net a the on number, like net cost is line. This Yes.

it yes, our higher-growth to in emerging areas million. inflation net actions And in get to as in this outside million certain and some have this takes to U.S., especially $XXX the of markets $XXX number to offset we so but gross a again, is more

Operator

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

Michael Dahl

build? the year? retail far guess, industry And as the industry specific saw terms shake the position kind to was in the X-part out ended as inventory at comment any do of category think effectively you When versus ended growth that do a you in How an Is of there where now market than then So line Whirlpool-specific outsized that with Is you comment? on question. inventory a think the inventory you that comments. need inventory up, Whirlpool follow-up look where you work inventory down? I

James Peters

Yes.

start it's saw year-end, different. from look kind as I'll was of differentiate I would in kind I'd and that across I'll Michael, we the categories, I little So holiday perspective, got of say, you bit through out sell-through one here, begin to across where many see let Marc the it I could of can't and then with, a call in the say where and But significantly any category environment, it. broader Again, it's color to categories. a -- add say we of

big there's us there. think So differentiation for that I don't a

have of seen, of levels you're story than similar hearing a to seems seeing things, the as look everyone that not expected. already then this And think is entire right Whirlpool-only competitors have you inventory a many as look across our now, Whirlpool-only And is about you industry across talking environment is now you've it issue? retailers I started out again, said, a the issue. you there as a retail higher and that

at So problem the just us. out based information it's don't that public, a disproportionately believe affects that in I least on

Marc Bitzer

little sell-through you bit give back Mike, to comes the discretionary higher of as the to just it I amount maybe as there And out and when That most led it in North the on promotions to, yes, industry And QX Essentially, inventories color investment more retailers expected, led of than was attractive. softer not coming was before. what sales okay? was both the you we back what two, mentioned back just people in the mind at demand market America, a industry high expected. to people to and not return through. relative had also look

now, industry overhang And the broader the inventory again, This work through. means board. a we a from in And we bit was think data right just certainly but impact of lesser a QX, will shipments but and that industry, a sellout Jim in of issue. QX to not we somewhat we we which And earlier, as little from mentioned industry was from maybe shipments, have will see everything. from Whirlpool-specific extent yes, I the course, don't as across it precise competitors, enter it QX, the everything that

Michael Dahl

or Jim, operating in Yes. Marc cash if at to Helpful. second cash either earnings 'XX. free items, flow That And the is and fiscal I makes guide. around sense. expectation specifically, billion billion $X.X look My $X.X question, is the

that -- is like unchanged earnings be It seems in to at number, you're billion. $X.XX cash interest your did flat expense expecting of did about you EBIT XXXX. $XXX million On You year-on-year.

Your cash tax is unchanged year-on-year.

unchanged cash And which year-on-year, in a bridge of what number EBIT? higher in is earnings items earnings so to if you your terms are actual 'XX to relative the conversion cash getting EBIT is higher

James Peters

Yes.

to look is make accounts X other really employee actual flat, earnings, operating sense. spend, kind other the areas. such your line. which, a from the on that compensation lot as for Michael, balance are as as components at of And there's other in our relatively So for of really, out, are It's that such one into And go Jim. hard does outside sheet, this and is that promotional you always that's that accruals that then accruals we have pointed

XXXX when it a come have payout from negative we a payouts this flow the beginning positive is year versus you of operating that in those areas, at a year, as higher what the XXXX, XXXX we because the And actually, year of you of you next of when end saw some some areas a look strong of had perspective. within a you cash of those really was versus lot the that end the gives affects end through negatively XXXX don't And cash. high an year on in that

that in become just that's a bucket biggest see. don't question the items you sit working capital. there. types that necessarily affect Then those good that's will noncash But in that apparent, year, are accruals it's changes here really there other the throughout it biggest differently the So driver that the within that some that also but in driver, doesn't and of

Operator

Jason question from from of comes Bank Haas next America. Our line the of

Jason Haas

if curious could and about any, you the container Red just Sea if from seen costs global disruptions starting impacts, the in to you've increase talk here. what I'm

Marc Bitzer

Jason, Marc. it's

shipments, our in the time. Americas Yes, obviously, in not in less some particular much the there some the is impacts with of so cost, more little bit is Americas, -- So for footprint impact heavy on it a East Coast

X impacting the European time. supply or X in that chain, uncertainty in and we're business. European brings will to But the start weeks could much North of shape for Europe. pretty good America now, extent It there's supply less Right much, So later obviously, more chain. still

so us. Keep environment the rates now have been bit pretty limited. costs mix compared of normalized excessively container also and production we mind, more to and America the stable any Again, of more context, in are The And put much broader far impact Americas came is high in our COVID North rates. post-COVID they a also from of for the to based. and competitors,

less So relatively cost than of whole the impact a container our most is speaking, lot competitors.

Jason Haas

the were China. I'm question, on a placed we you would then had sourcing to industry and us Got if your could what you tariffs business the impact to any higher it. to as And if is China, your see And on curious follow-up remind exposure be overall? if what thoughts

Marc Bitzer

Yes.

there's some import So Europe. is all, and products, some into our first there's pieces, and of exposure We food into into Europe finished refrigerators X products the Americas microwave finished I components. combination relatively mean, and Jason, split also On dishwashers into and small.

finished China, particular, electronics, not like or not exposure it's So it's to particular, would number. say, Components everybody a products, on else actually, you in cetera. in Americas, I also have just broader because Thailand, China very frankly, Asia, in et big Vietnam,

we're electronics where from to sourcing of our and in on long least the strong earlier except just footprint shot, because the And historic in Americas, our for limited to a comments, the supply my by China. exposed Again, landscape, Americas. in focus competitive back Americas have producing a just base Americas, it's you in

Operator

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

Eric Bosshard

Two both questions. you. give the I'll to

XX% is earnings. that moving that slide? just that fits the the first in relates, the flow little $XXX that that margin the where of is other within alluded that you is within then million usage question, margin cash free if aspiring and is about exactly just know of The focus and the to see I flat aiming long-term number the half question I pieces. And you're understand context XX% the to to to to this bit the a guess core second of Marc, bridge you the don't talked it million give margin you on wanted X.X%. of to. a have the us in lot progress, I to $XXX still Can guide, cash still that, Related the just Europe cash

James Peters

Yes.

liabilities $XXX EMEA. on due whether within question EMEA has through business. it's start cash and legacy Jim, consumed operations And if I'll restructuring, full there the your some this the to of typically, due you'd past over and first matters and year the of years is it's million a around So some with looked to Eric, of

Now the quarter cash typically, occur earlier they in in the cash much throughout would then that actually the flow as year, of to gain we transaction close did year and year. look negative the the

the start as a with to cash build capital. with, year So flow working to they begin negative some begin they

But that comes we that, are this and transaction. of other as piece along -- The this to with capital as financing programs various related working also then to have are there we accounts business exist type the receivable need to And things through that do will we company, second things unwind contribute will that as that some within within this other though, unwind some there. we the we there we new just process. that it be go might there, of things is

we'll having at that closer $XXX get update possibly on million. flow So once right at for the cash now, our least But is the to we number. of look we $XXX it impact negative million to a year an close,

Marc Bitzer

what a to it To to maybe put elements. these just $XXX $XXX capital financing cash essentially have some activities million unwind to on Eric, that's means, comment excluding on it million we simply, Europe normalized into working a adding because other basis translate Jim's the and flow, And point. will $XXX-million-plus,

what that's it really So means.

to again, why reason point -- give are segment any creation where have I our we pre-COVID absolutely second which value see said margins don't the not the long-term sight. consistent about update your we But margin to what And and mid- goals. and in in we Eric, that's upcoming we short the before, our Day, want highlight progress. an Now to also with about Investor

in and i.e., see America, certainly North and have what that's North XX-plus years, we we particularly we for margin So -- absolutely America, XX% at or percent for operating operating possible. been

million sales can by working existing the is in we're to a heavily mean, now, from X-plus it's sales impacted of our negative as XX and Right you existing all I -- through home industry macro home course units months cycle. I went see, million. mean very X.X

reestablish But we, them again, confident much more time, So us. why to perspective we before. Day. this our But the through we Investor we're at very work that that's cycles, and these experiencing how margins over one know that's were can as impacting on

pretty with come to much we've guess end of our I that, the session.

what First of good is share joining for mean I really, we feel market And all hopefully, our heard you thank perspective. to from want us I you where today. I all, are -- think about we

about take frankly out costs feel also step-by-step, balance we, we sheet as about where We ability funding good demonstrate 'XX feel are we 'XX we from and how and to and a restrengthen for good our balance are we in as comping sheet perspective. our broader

QX. set through come elements a extent to look we have the these right up some QX to also all negatively we again, half of also certainly We in at to 'XX, business. think, the industry actions the a have, and cycles, from see as it. probably But place you back the I work strong for cycle, -- very think attractive particularly -- I very know in and us well platform. That's we going all which very through working impact we a macro how

and didn't of our lot I perspective, bit a that our balance quite where remind we a again, want North particularly everybody, KitchenAid which business, see you about will about about put That's didn't will you mind, And with sheet America talk lot business, or So in to flow also SDA we a more cash development. lot. February show XX. in a historically light particular on

XX, you Thank all. forward to we're seeing looking So again, and February you.

Operator

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

You may disconnect. now

Whirlpool (WHR) 30 Jan 242023 Q4 Earnings call transcript