Whirlpool Corporation

Welcome to the Whirlpool Corporation's first quarter 2021 earnings conference 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, Roxanne Warner.

Thank you and welcome to our first quarter 2021 conference call. Joining me today are Matt Bitzer, our chairman and chief executive officer, and Jim Peters, our chief financial officer. Our remarks today track with a presentation available on the investor section of our website at WopoCorp.com. Before we begin, I remind you that as we conduct this call, we will be making forward-looking statements to assist you in understanding Wopo Corporation's future expectations. Our actual results could differ materially from these statements due to many factors discussed in our latest 10-K and other periodic reports. We also want to remind you that today's presentation includes non-GAAP measures. We believe these measures are important indicators of our operations as they exclude items that may not be indicative of results from our ongoing business operations. We also think the adjusted measures will provide you a better baseline for analyzing trends in our ongoing business operations. Listeners are directed to the supplemental information package posted on the investor relations section of our website for the reconciliation of non-GAAP items to the most directly comparable GAAP measures. At this time, all participants are in a listen-only mode. Following our prepared remarks, the call will be open for analyst questions. As a reminder, we ask that participants ask no more than two questions. With that, I'll turn the call over to Mark.

Thanks, Roxanne, and good morning, everyone. Before we discuss our first quarter business results, I'd like to take a moment to discuss the volatile industry dynamics and our decisive response plan. In the first quarter, global semiconductors and resin shortages amplified existing supply constraints and thus impacted our product availability. Further, we are faced with rapidly rising inflationary pressures, primarily in steel and resins. To address these issues, we swiftly responded with necessary actions to protect margins and product availability. We announced significant cost-based price increase in various countries across the globe, ranging from 5% to 12%. Additionally, we reset our supply chain model to a constraint-driven logic that constantly adjusts production based on component availability. I strongly believe that we have the right actions in place to protect our operating margins. These actions propelled our Q1 results. and give us high confidence to significantly increase our full-year ongoing earnings per share guidance by 18% to a range of $22.50 to $23.50. Now turning to our first quarter highlights on slide five. We delivered strong revenue growth at 24% driven by sustained consumer demand and previously announced cost-based pricing actions. Additionally, we delivered record ongoing EBIT margin of 12.4%, the third consecutive quarter of double-digit margins. Further, we generated positive free cash flow of $132 million as a result of strong earnings and lower working capital levels. Lastly, we successfully delivered on our long-term gross debt leverage target of two times. Turning to slide six, we show the drivers our first quarter EBIT margin. PriceMix delivered 575 basis points of margin expansion driven by reduced promotions and previously announced cost-based pricing benefits. Additionally, we delivered margin improvement 375 basis points from net cost related to a carryover impact of structural cost takeout actions and higher volumes as we begin to compare against the impact of COVID-19 in the prior year. These margin benefits were partially offset by raw material inflation, particularly steel and resins, resulting in an unfavorable impact of 225 basis points. Lastly, increased investments in marketing and technology and continued currency devaluation in Latin America impacted margins by a combined 125 basis points. Overall, we're very pleased to be delivering on our long-term EBIT margin commitment, and we're confident this positive momentum will continue to drive outstanding results throughout 2021. And now I'll turn it over to Jim to review our regional results.