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. Whirlpool recently 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.
As part of its efforts to improve efficiencies, the company shuttered a microwave oven manufacturing facility in the EMEA region in 2014.
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.
In fiscal 2013 the company spent about $304 million on advertising, up 11% from $273 million spent in 2012.
The company's revenues have been relatively stable during the economic recovery. After experiencing a 2% dip in sales in 2012 (due to the unfavorable impact of foreign currency and lower unit shipments), revenues grew 3.5% to $18.8 billion in 2013. The improvement was led by higher unit shipments that year as well as tax credits earned under Brazil's export incentive program; however, foreign currency rates once again had a negative impact on revenues. Higher unit sales led to improvements in North America (6% growth) and EMEA (5% growth).
Net income more than doubled in 2013 to $827 million as a result of higher revenues and a decline in restructuring costs incurred previously. Cash flow from operations also rose dramatically that year, growing 81% to $1.3 billion due to higher profitability and a change in the company's working capital.
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. For example, in 2014 the company shuttered a microwave oven manufacturing facility in the EMEA region. It has also closed some domestic facilities in the past few years.
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 $582 million in 2013, compared to $553 million in 2012, $578 million in 2011, and $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 is looking for longer-term growth to come from certain emerging markets -- China and India in particular. 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. 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.
Also in 2014, the company acquired a majority stake (66.8%) in Italian manufacturer Indesit for approximately $1 billion. The deal broadened Whirlpool's presence in the EMEA region.