Whirlpool 2011 Annual Report Download - page 6

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driver of our growth — as it has been for the last century
— and we invest more than $500 million annually in
Research & Development. We have seen time and time
again that, while competitive price promotions may
deliver short-term market share gains, only strong,
preferred brands with consumer-relevant innovation win
in the long term.
We are increasingly able to leverage the strength of our
global brand names by expanding into higher-margin,
faster-growing product lines that complement our core
appliance business. Today, branded consumer product
businesses outside our traditional core — including
garage organization, countertop appliances and water
filtration — represent approximately 22 percent of our
annual revenues and are growing at a double-digit pace.
In addition, we expect to see growth in emerging markets
as more consumers are able to purchase appliances and
benefit from the quality and convenience they provide.
The potential in developing countries is tremendous if we
consider the population and economic growth trends as
well as the very low appliance penetration levels.
We believe people everywhere deserve a comfortable
place to call home with access to fresh food, clean
clothes and drinking water. Whether it is to provide basic
refrigeration to a consumer in India or a water- and
energy-efficient laundry pair to a consumer in Germany,
we stand ready to improve the lives of consumers each
and every day all around the world.
2012 PRIORITIES
We are executing robust initiatives to continue to improve
operating margins in 2012 through a strong cadence of
innovation, capacity and cost-reduction initiatives,
ongoing productivity programs and previously announced
price increases.
The restructuring actions we announced in October are
on track to substantially reduce our structural fixed costs
in order to strengthen our business and deliver value-
creating results for our customers and shareholders.
We expect to realize $200 million in fixed cost savings in
2012, and an additional $200 million in 2013, or $400
million in annualized cost savings in 2013 and thereafter.
In addition, we expect to return to more normal levels of
positive net productivity. Driving lower costs and higher
product quality across our global operations allows for
additional resources to invest in the critical innovation
needed to fuel the business.
In the second half of 2011, we started to realize benefits
from previously announced cost-based pricing actions.
Momentum will continue and margins are expected to
expand as these price increases carry into 2012, and we
see the results from additional cost-based price
increases that went into effect in January of this year in
several other markets.
Collectively, these priorities, despite a still-weak global
economy, will enable us to have a strong year of operating
performance improvement.
RIGHT FOUNDATION FOR SUCCESS
As we begin 2012 — and our second century of operations
— I am optimistic about the opportunities we have created
at Whirlpool Corporation to deliver positive results and win
in the marketplace. We are positioned to drive sustained
future growth and create value for our shareholders, our
employees and the consumers who use our products in
their homes every day.
We have empowered our people to do what no other
appliance company can match — to
Improve Lives …
One Home, One Family at a Time … through World-class
Products and Services.
We make household chores easier
so that families can spend more time together. This clear
sense of purpose unifies our global workforce and inspires
the society-transforming innovations that ultimately drive
profitable growth and create shareholder value.
Sincerely,
Jeff M. Fettig
Chairman of the Board and Chief Executive Officer
Commitment