Carolina Tang / Javier Bengoa Commercial Laundry Strategy

Agenda Whirlpool Background Industry Dynamics Growth Opportunities Competition Environment Segmentation Macro Micro

n n Administrative Center at Benton Harbor, Michigan, USA n n Founded in 1911 by Lou Upton at Benton Harbor n n Employees: 59,000 split into the following regions: – – NAR (North American Region) – – LAAG (Latin American Appliance Group) – – Whirlpool Europe – – WAAG (Whirlpool Asia Appliance Group) n n Manufacturing, Marketing and Sales of home appliances n n 25 brands world-wide (including affiliates) Whirlpool Corporation Whirlpool Background

#1 in North America #1 in Latin America #3 in Europe #1 Western white goods manufacturer Whirlpool’s global position today... Whirlpool Background

n North America17,755,000 units n Europe 9,774,000 units n Latin America 4,817,000 units n Asia 1,644,000 units n Others 42,000 units n Total34,032,000 units Whirlpool Corporation Units Shipped in 1998 Whirlpool Background

Unit Volumes Whirlpool Sales… Whirlpool Background

Net Sales Whirlpool Background Whirlpool Sales…

Every Home... Everywhere Every Home... Everywhere with Passion Performance Pride Whirlpool Vision…. Whirlpool Background

Agenda Whirlpool Background Industry Dynamics Growth Opportunities Competition Environment Segmentation Macro Micro

Industry Overview Commercial laundry is often a family owned business of highly independent entrepreneurs Very competitive industry. Price and margin erosion Manufacturers are focused on cost cutting and economies of scale Industry Dynamics

Industry Overview Customers do not perceive a compelling difference among manufacturers Price is still the main driver for making decisions Consumers do not request/ask for a particular brand of products No brand loyalty Low satisfaction / Low willingness to spend more money Industry Dynamics

Growth Potential Market for commercial laundry will remain stable in the future *# of households w/o washer remain stable *# of apt. units per machine served is slightly decreasing Slight growth in multi-housing offset by coin stores Breakthrough opportunities: *In-unit laundry offers clear consumer benefits (opportunities for domestic lease and/or pay per use domestic) *Pay per use domestic products attractive alternative to single households *Shifting life style encouraging outsourcing fabric care - Drop-off service for Laundromats Export opportunity a bonus Industry Dynamics

Competition Industry Dynamics

Agenda Whirlpool Background Industry Dynamics Growth Opportunities Competition Environment Segmentation Macro Micro

Macro Segmentation MHL Coin OPL Industrial Consumer Interface Low High Product Type Small LoadLarge Load Entering OPL (On Premise Laundry) and Industrial requires significant investment and produces less synergy with Brand Value Creation strategy Low risk approach is to enter and dominate MHL and Coin before entering OPL and industrial Segmentation

Micro Segmentation Familiar and non-chain laundromats Laundry owners who are the decision makers Laundromats with Domestic-type washing machines (non large chassis washing machines) Segmentation

Market Participants Manufacturer Route Operator Distributor Property Owner/ Management Property Owner Operated Ldy. Laundromats Multi-housing/ dormitories residents Single Family House Hold Trade PartnerCustomerConsumer Segmentation

Decision Makers Value from affordable high quality Speed, Large capacity Low acquisition cost Smart Cards & Coin scalability Low life-cycle cost. Fast repairing (15 min) Easy, fast service installation (12 minutes) Duraprint finish console (looks new) Complete support & Service for commercial trade partners Availability Segmentation

Coin Stores: 30,000 Laundromats 52 machines per store 1.6 to 1.8 million installed machines 7.5% to 15% replacement rate 150,000 to 200,000 units/year Market Size Segmentation

Coin Stores Total # of coin stores: 30,000-35,000 *Average turn per day: 4,7 *New construction slowed by heavy hook-up fees imposed by local government, increasing pressure on water reuse *National/Regional chain emerging with mixed result, multi store ownership increasing *Industry image improving, promoting as fabricare center, adding service such as drop-off, folding, etc… *Owners handle most of maintenance/services, good loyalty to distributors *Biggest problem: high utility cost (15-25% of total expense) Segmentation

Coin Store Product Mix Top load washer still biggest, but is losing quick Front load washer gaining share, leading by Maytag High Efficiency model Product mix varies across regions, with northeastern leading the trends to FL Whirlpool competes in top load, and #18 dryer market, total about 42% of installation and about 115K new purchase Front load Dryer Segmentation

Distribution Channel Market size: 200k Fragmented market, over 280 in total, mostly family owned Big companies trying to grow by consolidation/geographical expansion, resulting in increasing # of locations Exploring new opportunities such as domestic lease, Laundromat, distributorship Targeting owner operated laundry (20% of MHL) as growth opportunity Route Operator: Segmentation

Distribution Channel Very Fragmented market, about 350 specialized dealers, mostly family owned, local Some big retailers and multi-housing distributors carry commercial laundry products, competing more on owner operated segment Specialized dealers usually offer full service to customers, including arranging financing, design, location, selection, brokerage Strong customer loyalty to distributors Trade margin: TL 12-15%, FL 25-30% Segmentation

Positioning Statement Segmentation Whirlpool delivers long term performance through manufacturing quality. We provide value from affordable high quality, easy and fast installation setup and maintenance.

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