Whirlpool 2004 Annual Report Download - page 23

19
Financial Summary
The following is a summary of the Company's financial
condition and results of operations for 2004 and 2003. For a
more complete understanding of the Company's financial
condition and results, this summary should be read together
with the Company's Consolidated Financial Statements and
related notes, and the “Management's Discussion and
Analysis.” This information appears in the Financial
Supplement to the Company's Proxy Statement and in the
Financial Supplement to the 2004 Annual Report on Form
10-K, both of which are available through the Internet at
www.whirlpoolcorp.com.
Executive Level Overview
Whirlpool Corporation is the largest global manufacturer of
major appliances worldwide with 2004 revenues of $13.2 billion
and net earnings of $406 million. The Company's four
reportable segments are based on geography and consist of
North America (61% of revenue), Europe (23% of revenue),
Latin America (13% of revenue), and Asia (3% of revenue). The
Company is the market share leader in North America and Latin
America and has significant market presence in Europe, India
and China.
The Company's growth strategy over the past several years has
been to introduce innovative new products, strengthen customer
loyalty for its brands, continue to expand its global footprint,
add or enhance distribution channels and, where appropriate,
make strategic acquisitions which enhance the Company's inno-
vative global product offering.
The Company monitors country economic factors such as gross
domestic product, consumer interest rates, consumer confidence,
housing starts, existing home sales and mortgage refinancing as
key indicators of industry demand. Management also focuses on
country, brand, product and channel market share, average sales
values, and profitability when assessing and forecasting financial
results. The Company intends to leverage its global manufactur-
ing, procurement and technology footprint to strengthen
Whirlpool's brand leadership position in the global appliance
industry.
Overall Results of Operations
Net Sales
The total number of units sold in 2004 increased 4.9% over
2003. Consolidated net sales increased 8.6% over 2003, which
includes a positive impact from currency fluctuations. Excluding
currency, net sales increased approximately 6%. Total number of
units sold in 2003 increased 5.6% over 2002. Consolidated net
sales increased 10.5% over 2002, which includes a positive
impact from currency fluctuations. Excluding currency fluctua-
tions and the acquisitions of Vitromatic (“Whirlpool Mexico”)
and Polar, the total number of units and dollars sold increased
approximately 4% and 5%, respectively.
Significant regional trends were as follows:
In 2004, North American unit volumes increased 4.6% ver-
sus 2003 due to higher Whirlpool and KitchenAid brand
growth, combined with strong Canadian performance. Sales
improved 4.8% to a record $8.3 billion. Currency did not
materially impact sales comparisons. In 2003, North
American unit volumes increased 7.5% versus 2002. Volume
increases were driven by the full-year acquisition impact of
Whirlpool Mexico, strong performance in Canada and vol-
ume gains in Whirlpool and KitchenAid brands. Excluding the
acquisition of Whirlpool Mexico, North American unit vol-
umes increased 5%. The North American net sales increase
adjusted for the acquisition and currency impact was slightly
greater than growth in unit volumes due to favorable brand
mix as well as the introduction of higher sales value innova-
tive products.
Record European unit volumes increased 4.4%, ahead of
industry growth, when compared to 2003, driven largely by
strong Whirlpool brand performance and expansion of the
Company's built-in appliance business. European net sales
increased 13.8% and were approximately 3% higher, exclud-
ing currency. Overall market share improved due to
Whirlpool brand performance and the introduction of new
products. During 2003, European unit volumes increased
5.1% versus 2002. Excluding the acquisition of Polar, unit
volumes increased 4%. Net sales increased 22.4%, due pri-
marily to positive currency impact. Excluding currency
impact and the Polar acquisition, net sales increased approxi-
mately 3%, lagging unit growth due to marketplace pricing
pressures. The region experienced improvement in industry
volumes as overall economic indicators and consumer confi-
dence edged up in several key markets within the region.