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, 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 about a dozen countries. Major customers include retailers Lowe's, Home Depot, Sears, and Best Buy.
Whirlpool organizes its business segments by product line: Laundry Appliances, Refrigerators and Freezers, Cooking Appliances, and Other. To this end, net sales generated by each of these segments are well-distributed. North America accounts for more than half of its sales.
Whirlpool's largest markets are North America and Latin America. In North America, it sells some products to other manufacturers, distributors, and retailers for resale in North America under those manufacturers' and retailers' brand names. Whirlpool also boasts a significant presence in Europe and India. In 2012 Whirlpool opened a new $200 million manufacturing plant in Cleveland, Tennessee. The 1 million-sq.-ft. facility, which is the world's largest premium cooking plant, produces cooking products, including ranges, ovens, and cooktops. Previously, the company reopened a 500,000-sq.-ft. factory in Ottawa, Ohio, that it had acquired from defunct Canadian appliance maker W.C. Wood. Whirlpool also sells home appliances in China through a strategic alliance with Suning Appliance Co., Ltd.
Thanks to the unfavorable impact of foreign currency and lower unit shipments, Whirlpool logged a 2% revenue decrease in fiscal 2012 as compared to 2011. These declines were not offset, however, by favorable pricing and product mix. During the same reporting period, the company generated 48% of its sales from outside North America, including 27% in Latin America, 16% in EMEA, and 5% in Asia. Revenue in these three regions caused declines for Whirlpool due to the impact of unfavorable foreign currency. Profits rose nearly 3% in 2012 vs. 2011 as a result of the company's aggressive 2011 initiative to reduce costs and improve productivity. Whirlpool was further boosted by a $133 million income tax benefit it received during 2012.
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. The company shuttered its refrigeration manufacturing facility in Fort Smith, Arkansas, in mid-2012. In Germany, Whirlpool relocated its dishwasher production facility to lower-cost Poland in 2012. These two closures are expected to result in $400 million in annual cost savings by the end of 2013.
At the same time, these cost savings are intended to give the company some flexibility as it makes continued investments in new product innovation. Capital expenditures for R&D related to new product innovation and improvement of existing products are now holding steady after a few years of incremental increases, reaching approximately $553 million in 2012, compared to $578 million in 2011, $532 million in 2010, and $500 million in 2009.
Whirlpool is looking for longer-term growth to come from certain emerging markets -- China and India in particular. In 2012 it 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. 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 presence in sought-after China.
Sales and Marketing
Whirlpool counts several big-name customers among its list of clients. It serves Meritage Homes, Lowe's, Sears, Home Depot, Best Buy, Casas Bahia, IKEA, and Alno. In North America, the company sells products to other manufacturers, distributors, and retailers for resale under those manufacturers' and retailers' brand names.