With brand names recognized by just about anyone who has ever separated dark colors from light, Whirlpool is one of the world's top home appliance makers. It specializes in laundry appliances, refrigerators and freezers, cooking appliances, dishwashers, and compressors. They're sold under a bevy of brand names, including Whirlpool, Amana, KitchenAid, Maytag, Jen-Air, and Roper. The company markets and distributes these major home appliances in North America, Latin America, EMEA (Europe, the Middle East, and Africa), and Asia. It has manufacturing operations in more than a dozen countries. Major customers include retailers Lowe's, Home Depot, Sears, and Best Buy.
Whirlpool operates four geographic business segments: North America, which accounted for 51% of sales in 2015 and includes appliances sold in the US under the Whirlpool, Maytag, KitchenAid, Jenn-Air brands; EMEA (26% of sales), which counts appliances sold in the EMEA region under the KitchenAid, Whirlpool, Indesit, and Hotpoint brands; Latin America (16% of sales), which sells appliances under the Consul, Brastemp, Whirlpool, and KitchenAid brands; and Asia (7% of sales), which sells appliances across China, India, the Oceania region, Southeast Asia, and Japan.
By product line, Laundry Appliance, and Refrigerators & Freezer sales each made up nearly 30% of the company's total sales during 2015, while Cooking Appliances generated another roughly 20%.
Whirlpool's manufacturing plant in Cleveland, Tennessee is the world's largest premium cooking plant, and produces cooking products, including ranges, ovens, and cooktops. Whirlpool also sells home appliances in China through a strategic alliance with Suning Appliance Co., Ltd.
Whirlpool sells its products globally, and has some 70 manufacturing and technology research centers throughout the world. About 44% of Whirlpool's revenue came from sales in the US during 2015, while sales in the Europe, Middle East, and Africa (EMEA) region brought in another 26%. Other large markets include Latin America (16% of total sales, with more than half of that coming from Brazil) and Asia (7% of sales).
Sales and Marketing
Whirlpool distributes its products to several big-name retail customers, including: Lowe's, Sears, Home Depot, Best Buy, IKEA, Hhgregg, and Alno. In North America, the company sells products to other manufacturers, distributors, builders, and retailers for resale under those manufacturers' and retailers' brand names.
The company spent $310 million on advertising in 2015, up from the $269 million and $304 million spent in 2014 and 2013, respectively.
The manufacturer's revenues and profits have been steadily rising over the past few years as it's continued to expand its global distribution with acquisitions and cut its operating expenses.
Whirlpool's net sales climbed 5% to $20.89 billion during 2015 despite unfavorable foreign exchange rates and weakened demand in emerging markets, mostly thanks to higher sales volumes from acquisitions and a favorable product price/mix. A 43% rise in EMEA segment sales drove most of the growth, with the acquisition of Indesit and a favorable product mix in the region to thank. North American sales were up 1% on higher unit sales volumes and favorable product/price mix, while sales in Asia spiked 74% thanks to the Hefei Sanyo acquisition. Sales in Latin America plummeted 29% as it sold 20% fewer units and suffered from unfavorable foreign currency exchange rates.
Strong revenue growth in 2015 drove Whirlpool's net income up 20% to $783 million. The company's operating cash levels slipped 17% to $1.23 billion due to unfavorable working capital changes related to the timing of payments, and because the company spent $72 million to fund its US qualified pension plans.
The company is looking to improve its operating margins and earnings by implementing cost-based price increases, initiating cost reduction efforts, and making productivity improvements. During 2015, the company spent $201 million toward restructuring its operations after spending $136 million in 2014, which included the shuttering of a microwave oven manufacturing facility in the EMEA region. It has also closed some domestic facilities in the past few years. For 2016, it plans to spend another $200 million on restructuring to boost operating efficiency.
At the same time, these cost savings are intended to allow the company to spend more on R&D for new product innovation and the improvement of existing products. Indeed, Whirlpool spent $579 million on R&D in 2015, up from $532 million in 2010. In 2014, the company launched a new sustainable product, its Whirlpool HybridCare clothes dryer, which features a ventless heat pump dryer that uses less energy. Whirlpool is also implementing the usage of energy-efficient insulation from Honeywell in the production of its domestic refrigerators and freezers.
Whirlpool plans to pursue longer-term growth from certain emerging markets -- China and India in particular -- by making strategic partnerships and acquisitions to expand its global manufacturing centers. It recently entered into a strategic alliance with China's Suning Appliance Co. to sell home appliances there. As part of the agreement, Whirlpool enjoys access to some of China's smaller, fast-growing cities through Suning's national distribution network of 1,700 retail outlets. Its 2014 acquisitions of manufacturers Hefei Sanyo and Indesit strengthened the company's distribution reach even further in China and the EMEA region, respectively.
Mergers and Acquisitions
In July 2015, the appliance manufacturer expanded its commercial laundry lines after buying privately-held American Dryer Corporation, which manufactured coin-operated, on premise industrial and specialty laundry equipment.
In December 2014, the company acquired a majority stake in Italian manufacturer Indesit for approximately $1.4 billion. The deal broadened Whirlpool's production presence in the EMEA region.
In October 2014, Whirlpool acquired a majority stake in Hefei Sanyo, Sanyo Electric's joint venture based in Hefei, China. The move made Whirlpool a 51% shareholder and further strengthened its production presence in sought-after China.