Whirlpool Reports Q2 Results, Delivers In A Challenging Environment – QNT Press Release


  • GAAP net loss margin of (7.3)% and GAAP loss per diluted share of $(6.62) impacted by non-recurring charges of $747 million, largely driven by loss from sale of Russia business and EMEA asset impairment
  • Delivered ongoing (non-GAAP) EBIT margin(2) of 9.0% and ongoing (non-GAAP) earnings per diluted share(1) of $5.97, despite elevated cost inflation and demand slowdown
  • North America region delivered strong results with EBIT(3) margin of 14.1% led by previously executed cost-based price increases offset by lower volumes and elevated cost inflation
  • Returned ~$400 million in repurchases and dividends in the quarter, on track with commitment to return over $1.5 billion to shareholders in the year
  • Progressed EMEA strategic review and global portfolio transformation with the agreement to sell the Whirlpool Russia business
  • Revised full-year 2022 guidance to $9.50 to $11.50 earnings per diluted share on a GAAP basis and $22.00 to $24.00 on an ongoing basis(2), cash provided by operating activities of $1.85 billion and free cash flow(4) of $1.25 billion

BENTON HARBOR, Mich., July 25, 2022 /PRNewswire/ — Whirlpool Corporation (NYSE:WHR), committed to being the best global kitchen and laundry company, in constant pursuit of improving life at home, today reported second quarter 2022 financial results.

"We delivered 9% ongoing(2) EBIT margins globally and 14% in North America – this is further proof of our more profitable and agile business model," said Marc Bitzer, chairman and chief executive officer of Whirlpool Corporation. "Moreover, long-term fundamentals of demand remain strong and we continue to progress our portfolio transformation to position ourselves to drive long-term value."

MARC BITZER

KEY RESULTS

Second Quarter Results

2022

2021

Change

Net sales ($M)

$5,097

$5,324

$(227)

(4.3) %

Net sales excluding currency ($M)

$5,203

$5,324

$(121)

(2.3) %

GAAP net earnings (loss) available to Whirlpool ($M)

$(371)

$581

$(952)

nm

Ongoing EBIT(2) ($M)

$461

$607

$(146)

(24.1) %

GAAP earnings (loss) per diluted share

$(6.62)

$9.15

$(15.77)

nm

Ongoing earnings per diluted share(1)

$5.97

$6.64

$(0.67)

(10.1) %

CASH FLOW

Year-to-Date Free Cash Flow

2022

2021

Change

Cash provided by (used in) operating activities ($M)

$(180)

$646

$(826)

Free cash flow(4) ($M)

$(397)

$462

$(859)

QUARTERLY HIGHLIGHTS

  • Net sales decline of (4.3)%, or (2.3)% excluding currency, impacted by supply chain disruptions and demand slowdown, partially offset by favorable product price/mix
  • Go-to-market actions delivered 675 basis points of price/mix with previously announced cost-based pricing actions fully in place across the globe

"In Q2, we returned approximately $400 million to shareholders while continuing to fund innovation," said Jim Peters, chief financial officer of Whirlpool Corporation. "Our strong balance sheet positions us well to invest in high margin and high growth businesses and deliver on our commitment to return $1.5 billion to shareholders in 2022."

JIM PETERS

REGIONAL REVIEW

North America

Q2 2022

Q2 2021

Change

Change
excluding
currency
impact

Net sales ($M)

$2,964

$3,042

(2.6) %

(2.3) %

EBIT(3) ($M)

$417

$557

(25.1) %

  • Industry volumes down 6 percent year over year, largely offset by execution of cost-based pricing actions
  • EBIT margin(3) of 14.1 percent, compared to 18.3 percent in the same prior-year period, despite cost inflation increases peaking

Europe, Middle East and Africa

Q2 2022

Q2 2021

Change

Change
excluding
currency
impact

Net sales ($M)

$1,008

$1,250

(19.4) %

(10.3) %

EBIT(3) ($M)

$2

$31

(93.5) %

  • Demand negatively impacted by war in Ukraine; revenue decline, excluding currency, of 10.3 percent
  • EBIT margin(3) of 0.2 percent, compared to 2.5 percent in the same prior-year period, impacted by lower volumes and cost inflation, partially offset by cost-based pricing actions

Latin America

Q2 2022

Q2 2021

Change

Change
excluding
currency
impact

Net sales ($M)

$787

$763

3.1 %

(0.5) %

EBIT(3) ($M)

$57

$74

(23.0) %

  • Revenue growth driven by cost-based price increases, fully offsetting industry decline
  • EBIT margin(3) of 7.2 percent, compared to 9.7 percent in the same prior-year period, impacted by cost inflation partially offset by cost-based pricing actions

Asia

Q2 2022

Q2 2021

Change

Change
excluding
currency
impact

Net sales ($M)

$338

$269

25.7 %

30.5 %

EBIT(3) ($M)

$23

$4

403.4 %

  • Revenue increase driven by strong volume growth compared to prior year's Covid-related shutdowns in India
  • EBIT margin(3) of 6.8 percent, compared to 1.7 percent in the same prior-year period, driven by top-line growth and cost-based pricing actions, fully offsetting inflation

FULL-YEAR 2022 OUTLOOK

  • Expect full-year 2022 revenues of approximately $20.7 billion (down approximately 6 percent)
  • Reduced earnings per diluted share from $24.00 to $26.00 to $9.50 to $11.50 on a GAAP basis and $22.00 to $24.00 on an ongoing basis(2)
  • Reduced cash provided by operating activities to $1.85 billion from $1.95 billion; free cash flow(4) of $1.25 billion remains unchanged
  • Updated GAAP and adjusted tax rate (non-GAAP) from 24 to 26 percent to a GAAP tax rate of 34 to 36 percent and an adjusted tax rate (non-GAAP) of 21 to 23 percent

(1) 

A reconciliation of ongoing earnings per diluted share, a non-GAAP financial measure, to reported net earnings (loss) per diluted share available to Whirlpool and other important information, appears below.

(2) 

A reconciliation of earnings before interest and taxes (EBIT) and ongoing EBIT, non-GAAP financial measures, to reported net earnings (loss) available to Whirlpool, and a reconciliation of EBIT margin and ongoing EBIT margin, non-GAAP financial measures, to net earnings (loss) margin and other important information, appears below.

(3)

Segment EBIT represents our consolidated EBIT broken down by the Company's reportable segments and are metrics used by the chief operating decision maker in accordance with ASC 280. Consolidated EBIT also includes corporate "Other/Eliminations" of $(785) million and $53 million for the second quarters of 2022 and 2021, respectively.

(4) 

A reconciliation of free cash flow, a non-GAAP financial measure, to cash provided by (used in) operating activities and other important information, appears below. Adjusted free cash flow of $769 million for the second quarter of 2021 has been restated to $462 million free cash flow measure to conform with current year presentation.

ABOUT WHIRLPOOL CORPORATION

Whirlpool Corporation (NYSE:WHR) is committed to being the best global kitchen and laundry company, in constant pursuit of improving life at home. In an increasingly digital world, the company is driving purposeful innovation to meet the evolving needs of consumers through its iconic brand portfolio, including Whirlpool, KitchenAid, Maytag, Consul, Brastemp, Amana, Bauknecht, JennAir, Indesit and Yummly. In 2021, the company reported approximately $22 billion in annual sales, 69,000 employees and 54 manufacturing and technology research centers. Additional information about the company can be found at WhirlpoolCorp.com.

WEBSITE DISCLOSURE

We routinely post important information for investors on our website, WhirlpoolCorp.com, in the "Investors" section. We also intend to update the "Hot Topics Q&A" portion of this webpage as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor the "Investors" section of our website, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our webpage is not incorporated by reference into, and is not a part of, this document.

WHIRLPOOL ADDITIONAL INFORMATION

This document contains forward-looking statements about Whirlpool Corporation and its consolidated subsidiaries ("Whirlpool") that speak only as of this date. Whirlpool disclaims any obligation to update these statements. Forward-looking statements in this document may include, but are not limited to, statements regarding future financial results, long-term value creation goals, portfolio transformation, restructuring and repurchase expectations, productivity, direct-to-consumer sales growth, raw material prices and the impact of COVID-19 and the Russia/Ukraine conflict on our operations. Such statements can be identified by the use of terminology such as "may," "could," "will," "should," "possible," "plan," "predict," "forecast," "potential," "anticipate," "estimate," "expect," "project," "intend," "believe," "may impact," "on track," and similar words or expressions. Many risks, contingencies and uncertainties could cause actual results to differ materially from Whirlpool's forward-looking statements. Among these factors are: (1) the ongoing Russian invasion of Ukraine and related conflict and sanctions; (2) COVID-19 pandemic-related business disruptions and economic uncertainty; (3) intense competition in the home appliance industry reflecting the impact of both new and established global competitors, including Asian and European manufacturers, and the impact of the changing retail environment, including direct-to-consumer sales; (4) Whirlpool's ability to maintain or increase sales to significant trade customers and the ability of these trade customers to maintain or increase market share; (5) Whirlpool's ability to maintain its reputation and brand image; (6) the ability of Whirlpool to achieve its business objectives and leverage its global operating platform, and accelerate the rate of innovation; (7) Whirlpool's ability to understand consumer preferences and successfully develop new products; (8) Whirlpool's ability to obtain and protect intellectual property rights; (9) acquisition, divestiture and investment-related risks, including risks associated with our past acquisitions; (10) Whirlpool's ability to navigate risks associated with our presence in emerging markets; (11) risks related to our international operations, including changes in foreign regulations; (12) Whirlpool's ability to respond to unanticipated social, political and/or economic events; (13) information technology system failures, data security breaches, data privacy compliance, network disruptions, and cybersecurity attacks; (14) product liability and product recall costs; (15) the ability of suppliers of critical parts, components and manufacturing equipment to deliver sufficient quantities to Whirlpool in a timely and cost-effective manner; (16) our ability to attract, develop and retain executives and other qualified employees; (17) the impact of labor relations; (18) fluctuations in the cost of key materials (including steel, resins, copper and aluminum) and components and the ability of Whirlpool to offset cost increases; (19) Whirlpool's ability to manage foreign currency fluctuations; (20) impacts from goodwill impairment and related charges; (21) triggering events or circumstances impacting the carrying value of our long-lived assets; (22) inventory and other asset risk; (23) health care cost trends, regulatory changes and variations between results and estimates that could increase future funding obligations for pension and postretirement benefit plans; (24) litigation, tax, and legal compliance risk and costs, especially if materially different from the amount we expect to incur or have accrued for, and any disruptions caused by the same; (25) the effects and costs of governmental investigations or related actions by third parties; (26) changes in the legal and regulatory environment including environmental, health and safety regulations, and taxes and tariffs; (27) Whirlpool's ability to respond to the impact of climate change and climate change regulation; and (28) the uncertain global economy and changes in economic conditions which affect demand for our products. Additional information concerning these and other factors can be found in Whirlpool's filings with the Securities and Exchange Commission, including the most recent annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. Price increases and/or actions referred to throughout the document reflect previously announced cost-based price increases.

 

WHIRLPOOL CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF INCOME (LOSS) (UNAUDITED)

FOR THE PERIODS ENDED JUNE 30

(Millions of dollars, except per share data)

Three Months Ended

Six Months Ended

2022

2021

2022

2021

Net sales

$       5,097

$        5,324

$       10,017

$         10,682

Expenses

Cost of products sold

4,200

4,234

8,269

8,444

Gross margin

897

1,090

1,748

2,238

Selling, general and administrative

461

509

837

1,002

Intangible amortization

7

10

16

27

Restructuring costs

5

8

10

28

Impairment of goodwill and other intangibles

384

384

(Gain) loss on sale and disposal of businesses

346

(120)

346

(120)

Operating profit

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