Alessandro Marras, Whirlpool Corporation. Trends in home appliance segment and impact for galvanized material

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1 Alessandro Marras, Whirlpool Corporation Trends in home appliance segment and impact for galvanized material

2 AGENDA Whirlpool Corporation Steel in home appliances New products on the market: what steel is needed? Forecast for the years ahead Sourcing from outside, opportunities and logistics model

3 AGENDA Whirlpool Corporation Home appliance market overview New products on the market: what steel is needed? Forecast for the years ahead Sourcing from outside, opportunities and logistics model

4 WHIRLPOOL HISTORY s 1990s Single Product, Single Customer, No Brand Multi-Product and Whirlpool Brand Multi-Brand, International Expansion Globalization

5 WORLD LEADER IN DOMESTIC APPLIANCES WHIRLPOOL CORPORATION Operates in 170 countries 60% bigger than nearest competitor 100 years specialist in Home Appliances At Home in over 200,000,000 households worldwide

6 WHIRLPOOL CORPORATION TODAY Products: Full line of major home appliances 2010 sales: $18.4 billion 2010 net earnings: $ 619 million 2010 units shipped: 54,000,000 Manufacturing: 13 countries in 4 continents Marketing: 170+ countries Employees: approximately 71,000 worldwide Brands: Compelling portfolio of consumer preferred brands

7 WORLD LEADER IN DOMESTIC APPLIANCES NORTH AMERICA REGION ~$9.6B Sales 29,000 Employees EUROPE REGION ~$3.2B Sales 12,000 Employees LATIN AMERICA REGION ~$4.7B Sales 25,000 Employees ASIA REGION ~$900 M Sales 5,000 Employees LEADING A ~$120 BILLION INDUSTRY

8 WHIRLPOOL EMEA FOOTPRINT

9 WHIRLPOOL EMEA NET SALES TREND

10 R&D INVESTMENTS MILION $ - WHIRLPOOL CORP

11 AGENDA Whirlpool Corporation Home appliance market overview New products on the market: what steel is needed? Forecast for the years ahead Sourcing from outside, opportunities and logistics model

12 EUROPEAN APPLIANCE MARKET OVERVIEW Total Tot Europe EU 110 M Units mln tons 1.8M 1.2M SE 1.0M FI 1.3M PT Source: Ceced Sell-In 0.7M IR 8.9M E NO 13.5M 1.2M 0.3M UK DK Baltics 2.8M NL 1.8M 5.1M 15.4M BE PL D 2.1M 0.7M 13.0M 1.3M CZ SK 1.1M F 1.4M 0.3M AU 0.4M CH 1.4M RO SLO HR HU 11.6M IT 1.7M GR 1.3M UA 0.7M BG 10.8M RUS 5.9M TR Mkt Size 2009

13 SELL-IN INDUSTRY DEMAND 1H 2011 x % Var MDA Units YTD Q2 11/ 10 (T9) < -1% -1/+1% > 1% -3,4% (Tot WE) growth YTD Q2 11/10 +12,7% (Tot CE) growth YTD Q2 11/10-0,6% (Tot EU) growth YTD Q2 11/10 +0,5% UK -1,8% FR -2,7% Benelux +1,1% SW +0,8% Nordics +0,3% DE +2,8% PL -1,3% CZ -2,9% +1,0% AT HU +12,9% Baltics +16,3% SK -14,3% RO +12,9% UA +34,2% RU Source: Central Ceced Sell-In -20,4% PT -16,2% ES -5,0% IT -21,1% GR 1half 2011 Sell-in 11 vs 10 %

14 WHIRLPOOL GLOBAL STEEL CONSUMPTION Region Sub commodity North America South America Europe Asia World HRS 2% 2% 0% 0% 2% CRS 52% 44% 57% 39% 50% GALVANIZED 44% 28% 33% 19% 39% GALV Pre Painted 0% 27% 10% 39% 7% ALUMINIZED 3% 0% 0% 3% 2% World GALVANIZED; 39% GALV PP; 7% ALUMINIZED; 2% HRS; 2% CRS; 50%

15 AGENDA Whirlpool Corporation Home appliance market overview New products on the market: what steel is needed? Forecast for the years ahead Sourcing from outside, opportunities and logistics model

16 NEW AESTHETICS Freestanding appliances are enhancing their character by using innovative materials, finishes and colors Metallic look or metallic accents Transparency Personalization

17 GALVANIZED STEEL FOR NEW PRODUCTS Innovation in aesthetics might require high cost materials Stainless Steel, Glass, High Gloss Material Need to develop high quality, reliable and appealing solutions at a reasonable low cost Pre-coated materials provide a combination of: Aesthetics (external foil & top coat) Quality and reliability (corrosion resistant metallic coating) Cost (substrate) Low environmental impact Galvanized coatings are quite durable in most environments because they combine the barrier properties of a coating with the benefits of cathodic protection

18 GALVANIZED STEEL SOLUTIONS Galvanized steel can be a good trade-off cost vs performances especially with reference to: Corrosion resistance Appearance (due to the regularity of the zinc coating) Coating adhesion Compliance with environmental legislations Galvanized steel can provide value by combining Good aesthetical solutions With reliable product performances At the right Total Cost of Ownership

19 Mill Units ASV ( ) Mill Units ASV ( ) Mill Units ASV ( ) Mill Units ASV ( ) NEW PRODUCTS vs PRICE TREND NO FROST FS Cooling Multidoor Large capacity Front Loaders >= 7 Kg % +11% +2% +19% % % +15% +41% % +159% +54% +38% % +68% High energy efficient BI Dish AAA % +23% % +7% +29% Induction Hobs % +43% +31% +22% %

20 AGENDA Whirlpool Corporation Home appliance market overview New products on the market: what steel is needed? Forecast for the years ahead Sourcing from outside, opportunities and logistics role

21 : PURPOSE, VISION, MISSION Profitability in industry top quartile Leader in built-in segment Best-in-industry quality in every category Leadership factory Innovation/Product Leadership Grow 50% by 2014

22 THE PATH TO 2014 Today Leading Global Appliance Manufacturer Leading Global Innovative Products Company Leading Global Consumer Brand/Products Company GROW THE CORE + EXTEND THE CORE + EXPAND BEYOND THE CORE Water Direct sales Consumables T-12 major appliances Products or services that are dependent on and related to our core business High-margin, stand-alone businesses that leverage our core competencies and core business infrastructure

23 MAKE SUSTAINABILITY CENTRAL TO OUR BUSINESS MODEL We make more money by being sustainable and by investing it back into more growth our company becomes a magnet for people who want to drive sustainability Act Sustainably Sell Low Energy Products Reduce Energy, Reduce Waste Improve Mix Lower Cost Engage Our People, Attract Top Talent Invest For Growth Improve Profitability

24 DO THE RIGHT THING FOR PEOPLE, ENVIRONMENT & SOCIETY Cradle-to-grave Lifecycle Approach Assessment of Environmental Impact Example: Dishwasher Integrated Strategy Consumi Energy energetici Consumption 100% Inquinamento dell aria Air Pollution Inquinamento dell acqua 90% Water Pollution Rifiuti solidi 80% Consumo Solid d acqua Waste Water Consumption 70% 60% 50% 40% 30% 20% 10% 0% Production Production Distribution Use Use Disposal Source: European Communities, Green Kitchen Solution Savings

25 FORECAT FOR THE YEARS AHEAD: CHALLANGES New Aesthetics; Innovative solutions Environmental sustainability; Cost minimization Quality Leadership Fast, Lean New steel products???

26 AGENDA Whirlpool Corporation Home appliance market overview New products on the market: what steel is needed? Forecast for the years ahead Sourcing from outside, opportunities and logistics model

27 SOURCING FROM OUTSIDE: OPPORTUNITIES Europe, Middle East and Africa USA China Mexico India Brazil Total Whirlpool Consumption > 1 million m.ton

28 LOGISTICS MODEL IN SOURCING FROM OUTSIDE INFORMATION FLOW Bonded Warehouse Whirlpool Factory Local Service Center Supplier Consigment stock MATERIAL FLOW

29 e-kanban PRINCIPLE DESCRIPTION Material replenishment starts by consumption. Consumption is signaled by Kanban. Suppliers should not replenish parts until the factory stock is down to a defined trigger. Kanban is signal (card, an empty container, an electronic signal) for the customer to say I am ready for more. The color of the Kanban-light determines that the supplier Abnehmer Abnehmer Visualization of the current inventory situation Connection of the actual inventory levels with Kanban rules Delivery call-offs are replaced by a replenishment managed by the supplier Minimum Delivery Quantity Flexibility Stock Replacement Time Safety Stock Maximum Stock Upper Replenish Level Lower Replenish Level Safety Stock Level MUST NOT replenish. CAN replenish, but DOES NOT HAVE TO. Flexibility for Supplier MUST replenish.

30 Vendor Managed Inventory Concept (VMI) Whirlpool defines framework for deliveries Transport Network and Process Material master plan (based on production mix) Safety stock and supermarket space Inventory transparency via e-kanban tool Supplier must not deliver Supplier can deliver flexibility Supplier has to deliver Suppliers fully manage and optimize inbound supply chain Supplier Production Supplier s Finished Stock Inbound Transport Consignment Stock in WH The vendor-managed-inventory concept increases the delivery flexibility for the supplier and thus offers additional optimization potentials.

31 MANAGING VMI STEERING w/ OVERSEAS SUPPLIERS Supply chain Stock level reduction The VMI management of overseas deliveries ensures transparency and stability of the inbound material flow.

32 Whirlpool Corporation