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Whirlpool (NYSE: WHR) — один из ведущих мировых производителей бытовой техники, selling under his own brand Whirlpool, Maytag, KitchenAid, Brastemp, Consul и Indesit. Whirlpool was founded in 1911 as a small company in Benton Harbor., Michigan.
About company
At the end of the year, in the structure of revenue, product lines occupied as many:
- cooling - 31%;
- wash - 29%;
- food preparation - 24%.
Largest regions of revenue: North America - 58% and Europe, Middle East and Africa - 22%.
Revenue structure, million dollars
| Revenue | Percentage of total | |
|---|---|---|
| Washing | 5675 | 29,17% |
| Cooling | 6058 | 31,14% |
| Food preparation | 4782 | 24,58% |
| Dishwashing | 1605 | 8,25% |
| Spare parts and warranties | 913 | 4,69% |
| Other | 423 | 2,17% |
| Total | 19 456 | 100,00% |
Revenue
Washing
5675
Cooling
6058
Food preparation
4782
Dishwashing
1605
Spare parts and warranties
913
Other
423
Total
19 456
Percentage of total
Washing
29,17%
Cooling
31,14%
Food preparation
24,58%
Dishwashing
8,25%
Spare parts and warranties
4,69%
Other
2,17%
Revenue by region, million dollars
| Revenue | Percentage of total | |
|---|---|---|
| North America | 11 210 | 58% |
| Latin America | 2592 | 13% |
| Europe, Middle East and Africa | 4389 | 22% |
| Asia | 1265 | 7% |
| Total | 20 718 | 100% |
Revenue
North America
11 210
Latin America
2592
Europe, Middle East and Africa
4389
Asia
1265
Total
20 718
Percentage of total
North America
58%
Latin America
13%
Europe, Middle East and Africa
22%
Asia
7%
Financial indicators
11 Whirlpool releases full year 2020 financials on Feb..
Consolidated net sales in 2020 decreased by 4,7% - up to 19.45 billion dollars. The fall is due to the high base effect: the company sold Embraco in 2019, which was partially offset by the favorable impact of product prices in 2020.
Operating profit increased by 3,2% - up to 1.6 billion dollars, margin increased by 0,7 percentage point by reducing the cost of goods sold, general and administrative expenses and sales expenses.
Whirlpool posted net income of $ 1.1 billion, or 17,07 $ per share. Free cash flow increased by 36,6% due to the growth of profit from operating activities. The company expects, that in 2021 will receive an earnings per share of 17.8-18.8 $.
Financial performance of the company by year, million dollars
| Revenue | Operating profit | Operating margin | Net profit | free cash flow | |
|---|---|---|---|---|---|
| 2016 | 20 718 | 1368 | 6,6% | 888 | 0,630 |
| 2017 | 21 253 | 1136 | 5,3% | 350 | 0,707 |
| 2018 | 21 037 | 279 | 1,3% | −183 | 0,853 |
| 2019 | 20 419 | 1571 | 7,6% | 1184 | 0,912 |
| 2020 | 19 456 | 1623 | 8,3% | 1081 | 1,246 |
Revenue
2016
20 718
2017
21 253
2018
21 037
2019
20 419
2020
19 456
Operating profit
2016
1368
2017
1136
2018
279
2019
1571
2020
1623
Operating margin
2016
6,6%
2017
5,3%
2018
1,3%
2019
7,6%
2020
8,3%
Net profit
2016
888
2017
350
2018
−183
2019
1184
2020
1081
free cash flow
2016
0,630
2017
0,707
2018
0,853
2019
0,912
2020
1,246
Balance sheet and leverage
Assets grew by 8,3% compared to the previous year due to the growth in the volume of money and cash equivalents. Capital increased by 18,9% due to the growth of retained earnings.
Total debt increased by 7% — up to 5.3 billion — due to the growth of long-term debt.
In February, Whirlpool completed a €500 million bond offering at 0,5% maturing in 2028. In May, the company issued $500 million worth of bonds at 4,6% maturing in 2050.
Most of the payments on the company's debt obligations are for the period after 2025. Most debt repayments are denominated in US dollars at rates ranging from 0,63 to 4,6%. Net debt decreased by 19,59% — up to $2.4 billion — due to the growth in the volume of cash and cash equivalents.
Balance sheet and leverage, billion dollars
| Assets | Capital | Total debt | net debt | |
|---|---|---|---|---|
| 2016 | 19,153 | 4,773 | 4,470 | 3,385 |
| 2017 | 20,038 | 4,198 | 5,218 | 4,022 |
| 2018 | 18,347 | 2,291 | 6,027 | 4,529 |
| 2019 | 18,881 | 3,195 | 4,993 | 3,041 |
| 2020 | 20,436 | 3,799 | 5,369 | 2,445 |
Assets
2016
19,153
2017
20,038
2018
18,347
2019
18,881
2020
20,436
Capital
2016
4,773
2017
4,198
2018
2,291
2019
3,195
2020
3,799
Total debt
2016
4,470
2017
5,218
2018
6,027
2019
4,993
2020
5,369
net debt
2016
3,385
2017
4,022
2018
4,529
2019
3,041
2020
2,445
Market
The global home appliance market has long been established, and the key players on it have not changed for a long time. Major players: Whirlpool, Samsung Electronics, Bosch, Haier Smart Home.
In 2020, COVID-19 disrupted the global appliance and electronics supply chain. China is one of the largest consumers and producers of products, as well as an exporter of raw materials for the production of finished products. The stoppage of production in China forced companies in the US and Europe to suspend the production of finished products, and this has led to a widening gap between supply and demand.
Technological advances like the Internet of Things have led to the development of smart home appliances. The need for comfort and consumption drives the purchase of new, smarter versions of household appliances.. Experts expect, that the smart home appliance market will grow by $31.66 billion in 2020-2024 at a CAGR of over 16%.
Generally, according to forecasts, home appliances market to grow by $21.76 billion in 2020-2024, while the average annual growth rate will be almost 1% during the forecast period. The fastest growing market will be the Asia-Pacific region. You can expect, that Whirlpool's revenue won't change much in the long run.
Competitors
Whirlpool Leads in ROE. The company's revenue growth rate is negative, like most competitors, - it proves, that the home appliance market is almost stagnant, and high growth of key indicators of the company can not be expected.
Revenue in billion dollars, growth rate and ROE
| Growth rate | ROE | Revenue 2016 | Revenue 2020 | |
|---|---|---|---|---|
| Whirlpool | −1,26 | 30,91 | 20,72 | 19,45 |
| Samsung Electronics | 3,25 | 9,99 | 201,8 | 236,81 |
| Bosch | −0,92 | 5,05 | 101,76 | 97,16 |
| Haier Smart Home | 11,26 | 15,02 | 138,2 | 235,64 |
| Electrolux | −0,85 | 19,33 | 121,09 | 116,03 |
Growth rate
Whirlpool
−1,26
Samsung Electronics
3,25
Bosch
−0,92
Haier Smart Home
11,26
Electrolux
−0,85
ROE
Whirlpool
30,91
Samsung Electronics
9,99
Bosch
5,05
Haier Smart Home
15,02
Electrolux
19,33
Revenue 2016
Whirlpool
20,72
Samsung Electronics
201,8
Bosch
101,76
Haier Smart Home
138,2
Electrolux
121,09
Revenue 2020
Whirlpool
19,45
Samsung Electronics
236,81
Bosch
97,16
Haier Smart Home
235,64
Electrolux
116,03
Dividends and buyback program
Whirlpool's dividend yield for 2020 was 2,6%, and the total profitability — 4,01%.
The company has been actively buying back its shares in recent years.: Whirpool bought back $121 million in shares in 2020, at the same time, dividend payments amounted to 311 million. This year, the company announced a new $2 billion share repurchase program.. This is in addition to the unused portion of the previous $531 million share buyback program as of December 2020.. This is quite a significant amount.: she is 17% from the current capitalization of Whirlpool at 13.9 billion.
Average total return on Whirlpool shares over the past 5 years was 8,49% with an average annual growth rate of dividends 6,63%.
Company dividends
| Dividend per share | Payout ratio | Dividend yield | Buyback Yield | Total return | |
|---|---|---|---|---|---|
| 2016 | 3,90 $ | 34% | 2,15% | 4,06% | 6,21% |
| 2017 | 4,30 $ | 92% | 2,55% | 5,07% | 7,62% |
| 2018 | 4,55 $ | — | 4,26% | 18,92% | 23,18% |
| 2019 | 4,75 $ | 26% | 3,22% | 1,46% | 4,68% |
| 2020 | 4,85 $ | 28% | 2,69% | 1,32% | 4,01% |
Dividend per share
2016
3,90 $
2017
4,30 $
2018
4,55 $
2019
4,75 $
2020
4,85 $
Payout ratio
2016
34%
2017
92%
2018
—
2019
26%
2020
28%
Dividend yield
2016
2,15%
2017
2,55%
2018
4,26%
2019
3,22%
2020
2,69%
Buyback Yield
2016
4,06%
2017
5,07%
2018
18,92%
2019
1,46%
2020
1,32%
Total return
2016
6,21%
2017
7,62%
2018
23,18%
2019
4,68%
2020
4,01%
Company multipliers
Most of Whirlpool's multiples point to a discount in its share price to its peers..
But, considering the key multiplier P / E and share price dynamics in recent years, the relationship until 2021 can be noted. Now the blur between the indicators has increased - this may indicate the activity of speculative participants.
They reacted violently to the company's positive news: double-digit revenue growth based on results 1 quarter of 2021 and an approved share buyback program.
This limits growth potential, based on multiplier analysis. Usually, such gaps in indicators close over time - this leads to a decrease in the share price or to a revaluation of the multiplier.
Company multipliers
| P / E | P / BV | P / S | EV / EBITDA | |
|---|---|---|---|---|
| Whirlpool | 12,72 | 2,99 | 0,59 | 5,95 |
| Samsung Electronics | 21,04 | 2,06 | 2,32 | 6,85 |
| Bosch | 94,85 | 4,66 | 4,71 | 42,66 |
| Haier Smart Home | 18,44 | 3,20 | 0,79 | 12,46 |
| Electrolux | 12,49 | 3,56 | 0,59 | 5,65 |
| Mean | 31,91 | 3,29 | 1,80 | 14,71 |
| Growth potential | 151% | 10% | 205% | 147% |
P / E
Whirlpool
12,72
Samsung Electronics
21,04
Bosch
94,85
Haier Smart Home
18,44
Electrolux
12,49
Mean
31,91
Growth potential
151%
P / BV
Whirlpool
2,99
Samsung Electronics
2,06
Bosch
4,66
Haier Smart Home
3,20
Electrolux
3,56
Mean
3,29
Growth potential
10%
P / S
Whirlpool
0,59
Samsung Electronics
2,32
Bosch
4,71
Haier Smart Home
0,79
Electrolux
0,59
Mean
1,80
Growth potential
205%
EV / EBITDA
Whirlpool
5,95
Samsung Electronics
6,85
Bosch
42,66
Haier Smart Home
12,46
Electrolux
5,65
Mean
14,71
Growth potential
147%
What's the bottom line?
Whirlpool was relatively painless 2020 year of the pandemic. The company noted a positive effect, caused by an increase in demand and prices for its products, which can continue. In general, the global home appliances market is a weakly growing market., which does not imply a significant increase in the company's key financial indicators in the future. At the same time, the company's dividend history and massive buyback program make Whirlpool an attractive buy..
They are suitable for value investors, who take a conservative approach. Whirlpool shares look interesting for medium-term investments and dividends, but there is a possibility of price decline.
