Whirlpool Corporation reports record year despite pandemic

Appliance manufacturer Whirlpool Corporation has announced record EBIT margin and cash flow.

10 Mar, 21

Appliance manufacturer Whirlpool Corporation has announced despite a dip in revenue, $19.5billion in 2020 against $20.4billion in 2019, EBIT margin was up a record 9.1% against 6.9% of 2019.

Whirlpool Corporation reports record year despite pandemic

Chairman and CEO of the Whirlpool Group Marc Bitzer

 

In addition, return on invested capital was up 10.9% against 9.5% of 2019 and free cash flow was a reported record of $1,246million in 2020, as opposed to $912million in 2019.

Chairman and CEO of the Whirlpool Group Marc Bitzer reported despite challenges the group did not have “significant” factory shutdowns and was still able to operate even during the peak of the pandemic.

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He stated: “The pandemic easily could have had devastating impacts on us from a financial perspective. Instead, what could have been a setback for us turned into the best year ever.

“COVID-related demand tailwinds, in particular during the second half of 2020 helped, but drove only a fraction of our outstanding financial results.”

EVP and chief financial officer Jim Peters reported the company’s COVID response strategy, which included a $500 million cost takeout program, “aggressively targeting” discretionary and structural costs, aided the results.

Jim Peters also pointed to “exceptional” performance in the North America and Latin America markets and “having exececuted our turnaround strategy” EMEA also resulted in postive EBIT for the year.

During the pandemic, Whirlpool Corporation donated masks, gowns and sanitisers to local hospitals and front-line workers and Whirlpool UK donated appliances to NHS hospitals.

It also supported services such as food banks, shelters and school meal programs.

Whirlpool Corporation continued to invest $850 million in capital expenditures and R&D and launched its connected laundry line in 2020.

It also introduced its global dishwasher platform, which “drives out cost and complexity in our organisation”, said Peters.

Marc Bitzer stated although the adoption rate of IoT-based products is still low, the company committed to developments in connectivity: “The launch of our Swash detergent, for example, coupled with the unique multi-dosing feature in select washers and our portfolio of IoT apps is a very encouraging innovation.”

Whirlpool Corporation also increased investment in the digitisation of its manufacturing and supply chain network.

Bitzer explained: “The advent of digital technologies has fundamentally changed both the consumer pre-buy process as well as the actual purchase process.

“The pandemic has been a significant accelerator in this space, and we have been hugely successful in capitalising on these trends—with our direct-to-consumer business rapidly approaching $1billion in sales.”

Leveraging its cash balance and existing credit facilities to  support  ongoing business and working capital needs, Peters said Whirlpool Corporation also benefited from an optimised debt ladder with no bond maturities until the second quarter of 2021.

Marc Bitzer commented: “Without a doubt, the early and decisive actions we took on the go-to-market and cost sides made all the difference. Many of these decisions were difficult and painful, yet necessary and impactful.

“Achieving an all-time record of ongoing earnings per share of $18.55 is certainly a remarkable accomplishment—and this makes the third consecutive year of all-time record earnings.

“We also made tremendous strides in delivering on our long-term value creation targets with an ongoing EBIT margin of 9.1% (against our long-term target of 10%) and a free cash flow of $1.2 billion (in line with our long-term target).

Looking ahead, Bitzer said: “It is increasingly clear that the pandemic won’t be over anytime soon and that we might have to cope with the related challenges for some time to come.

“Having said that, we are very encouraged by the strong momentum we have been building in our business over the past quarters and years.

“We are equally confident in the strong consumer demand trends throughout the world—there is no doubt that this pandemic has led consumers to fundamentally reorient toward house and home or what we call “investing in nesting.”

“Our company’s vision and purpose of “improving life at home” couldn’t be more fitting!”

 

 

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