Whirlpool Corporation (WHR) Earnings Call Transcript & Summary

Good afternoon. We're going to start, if at all possible, right on time, if not a minute early, because we've got a lot to cover this afternoon. I'm Sam Darkatsh. And on behalf of Raymond James, I would like to welcome you to the Whirlpool Corporation presentation. Ticker WHR. With us today from Whirlpool is Executive Vice President and President of North America, Joe Liotine; and Director of Investor Relations, Lara Mordoh. For reference, Whirlpool is the world's leading kitchen and laundry appliance company, approximately $19 billion in annual sales, 78,000 employees and 57 facilities worldwide. Company markets under brand names including Whirlpool, KitchenAid, Maytag, Consul, Brastemp, Amana, Bauknecht, Jenn-Air, Indesit, among others, and sells product in nearly every country throughout the world. The format of today's presentation will be as follows: the company will have perhaps 15, 20 minutes or so of prepared introductory remarks, followed by a fireside chat Q&A session, which I will host. If you would like to submit a question, you may do so using the Q&A feature in the webinar system. With that, Joe, Lara, thank you for joining us today, and the floor is yours.

Thank you, Sam. It's a pleasure to be here today. I'm going to go ahead and advance the slides to our presentation. And as I jump into things, really, the very first slide is what you'll see here, and this is what's most important to Whirlpool, which is constant pursuit of improving life at home. And you'll see throughout our presentation why that's important to us and why we think we're uniquely positioned to do that well. So from a company composition standpoint, we're the leading kitchen and laundry appliance company. We have global scale, leading global scale. We're #1 in 6 of the top countries. We have a brand portfolio that Sam talked about that is unparalleled, unmatched by others. We have luxury brands such as Jenn-Air and Brastemp. We have mass premium brands such as KitchenAid and Whirlpool, Maytag, Amana, Hotpoint, all great brands, 5 of which are billion-dollar brands in the marketplace. In addition, we have a proven track record of innovation. Picture here is our new global platform on dishwashing, which essentially has a top level rack, a third level rack, where you can wash cups, bowls legitimately on top of the other 2 racks that really just differentiate our products above and beyond competition and really deliver on what consumers are looking for at home by their products and their brands. We've won countless awards from innovation design, and even industry awards. And then lastly, our best cost position. We have a strong track record of cost productivity. Combine that with global scale, and we're the #1 leading kitchen and appliance company in the world. From a regional standpoint, each of the regions presents opportunities for growth. In North America, our track record of profitable growth over the last 5, 6 years has been tremendous, 20% CAGR. In EMEA, we have the #1 position in 3 of the top 4 markets: France, Italy, Russia, well positioned for significant growth in that market. And then in Latin America, we have great brands like Brastemp and Consul. Brastemp is the #1 brand, and frankly, one of the strongest brands in the country across any industry. And in Consul, 1 of the top 3 brands, very positioned for growth as well in Latin America. And then lastly, in Asia, specifically in India, a lot of growth is available to us in terms of penetration. That market has different characteristics that present opportunities for us. Washers are only 14% penetrated; refrigerators, 33%; and microwaves, 2%. In addition, our manufacturing footprint in China offers excellent, cost-efficient manufacturing and scale for us. If we look at our track record of delivering strong results, you'll see from 2018 and 2020, a lot of great progress. From an ongoing EBIT standpoint, 280 basis points improvement over that time period. From an EPS standpoint, 3 consecutive years of records, an 11% CAGR. And then related to our shareholder return, 18% over 3 years and outpacing the household durables index by 6.6 points over that same time period. And then cash flow growth, 21% CAGR. And then return on invested capital, an increase or an improvement of 250 basis points. All just fantastic results, really showing our track record and consistency over the last few years. From a guidance standpoint in 2021, we're affirming our 2021 guidance. We're really looking to deliver on our long-term value creation targets. In the top section, you'll see those targets, 3% organic growth, ongoing; 10% -- approximately 10% EBIT percent rate; and then cash conversion of greater than 6% is kind of our long term aspirations. Our 2021 guidance is revenues of $20.6 billion, an increase of approximately 6% year-over-year; EBIT of 9-plus percent, the small increase up to 25 basis points year-over-year; and then $1 billion-plus of cash flow; and approximately 5% conversion, free cash flow to net sales. Full year expected ongoing EPS range of $19 to $20. From a net sales growth drivers, in 2021, we expect share growth in a strong demand environment. Sustained strong global demand led by increased focus on the home, we've seen that consistently around the globe in terms of time people are spending in their home, how much it matters and how important appliances are in that experience. In addition, we've seen a robust housing demand market. We expect that to continue, and we're encouraged by that. In addition, we're leveraging our global brands and product portfolio to gain share in all regions. What we've launched from a brand portfolio standpoint and a product portfolio standpoint is really exciting. I touched on one earlier with our dishwashers, but there are many more in the regions that really give us optimism on growing. And then lastly, our U.S. supply chain recovery expected by the end of Q2. We experienced disruptions in 2020. We've been consistently revolving around those -- and evolving those such that we're progressing out of them. We have good confidence that by the end of Q2, our back orders and our pent-up orders will be relieved. From a 2021 margin enabler standpoint, we're leveraging a resilient business model in an inflationary environment. We have very disciplined execution of go-to-market strategy and have done so for quite a few years. In addition, we're consumer-focused, and we're launching innovative products that mean a lot to consumers into our trade base. We've taken cost-based price increases already in countries such as Brazil, Russia and India. And lastly, we're delivering cost efficiencies through advanced productivity tools. We're employing various tools across our supply chain and value chain and ensuring the most efficient and effective supply chain possible and really getting the benefits of that both in 2020 as well as go forward in 2021. From a long-term growth and margin expansion standpoint, there are 3 main buckets to look at. The first is direct-to-consumer. We've been growing that business over the last couple of years pretty consistently and look forward to doing that in the future. We're launching things that are direct to consumer and really fit in with our IoT products. So in this first picture, you'll see, early this year, we launched SWASH detergent. It's an end-to-end experience. You can replenish it via your bulk dispense in your washer. You can order it via your app, and you can have it fulfilled via Amazon or some other party, really entering into other segments, not just direct-to-consumer from an MDA standpoint, but also all the ecosystem partners that present itself. In addition, I touched on the international growth. We have ample opportunity for international growth consistently across the globe. And then lastly, cost productivity, something we've done very well over decades, really continued that progression. We're looking at sophisticated tools and methods via world-class manufacturing and digitization of our value chain to really become more efficient and more effective in everything we do, and we're very confident in these long-term growth and margin expansion levers long term. From a 2021 capital allocation standpoint, essentially, we have 2 main buckets: How do we fund our innovation and our growth; and how do we return value back to shareholders. In the first bucket, we want to invest approximately 6% into our capital expenditures and our research and development. In addition, we want to invest behind our direct-to-consumer capabilities and our world-class manufacturing discipline around our production systems. In addition, we're going to opportunistically pursue M&A with high ROIC. And then in the second bucket, the return to shareholders. From a dividend standpoint, 2021 marks the 75th consecutive year of paying dividends. It's also an increase in dividend for 8 consecutive years. And then we focus on 30% trailing of 12-month ongoing net earnings. From a share repurchase standpoint, we repurchased $1.4 billion of share repurchases since 2018. In 2020, we expect to have moderate repurchases. We have approximately $530 million in authorization remaining in terms of share repurchase. And then lastly, our targeted capital structure. We ended 2020 with a gross debt leverage of 2.3x. And in 2021, we expect to get to 2x leverage. So with that, this concludes the high-level remarks, Sam. So I'd like to turn things back over to you for the Q&A and fireside chat.

Okay. Excellent. Obviously, you and the industry have had severe capacity and supply chain constraints, and lead times have been extended since last spring. You talked about that to an extent in the prepared remarks. Talk about where lead times are right now for Whirlpool compared to the 8 weeks seen in the third quarter and the fourth quarter of last year? And how do those lead times compare for the retailers versus the homebuilders?

Yes. In terms of lead times, we experienced a sharp uptick as a consequence of all the COVID-related disruptions really in Q2 and Q3, and they generally persisted into Q4, although they got better. And that improvement is really a function of our ability to stabilize our supply base, stabilize our labor and our own facilities and actually increase capacity and output across both our supply base and our own facilities. And we've invested in additional tools and equipment. We've invested in suppliers. We've also invested in labor. All that now is essentially exceeding current need states, and so we're able to chip away at the back order position or the lead time position. And so the way to think of it is by the end of Q2, we expect that to return to, I'll say, historical levels. Not every category, exactly the same across each week, but pretty consistently. The improvements happen in a kind of prorated approach across the first half. They're not big bang in Q1 or in Q2. It's kind of week-by-week with improvements, and we've already seen those. Our positions are moving in the right direction, and then you follow that on by retailers. The retailer versus the builder experience on availability or lead times is a little different only because of the cycle in which you know you have a building coming due in 6 months, you know exactly where it is, you know exactly the products that it would be. There isn't a lot of variation because by builder, there's usually predefined models that we sell them. And so it's not exactly open to every SKU combination available. So they can be a lot more planful. And frankly, we can be a lot more planful with them. So the characteristics across the 2 different segments of distribution can vary quite a bit. I would say our disruptions are improving consistently. So are some others. I think those who experienced disruption in the U.S. and Mexico, our competitive set, would have had similar, I think, experiences. And so that's also improving. So in general, if you look in the retail landscape, I think that's getting better en masse across everyone, but maybe not exactly the same by segment, by manufacturer in a consistent way. I feel very good about our improvements, and we're looking forward to getting back to where we were at the end of Q2 from an availability standpoint and execution standpoint. And then we enter into the back half with, frankly, a bit more capacity and flexibility than we would have had otherwise, which is also a positive sign.

So if I'm to paraphrase, if you were at, let's call it, 8 weeks of lead time in the fourth quarter or so, maybe a week or 2 improved from that. And every couple 2, 3 weeks, another week or 2? Is that one way to think about it until you get to the normal 1 to 2 weeks?

Yes. I think, generally, I would look at it in that way, kind of linear fashion, that's about right.

And so who do you figure in the industry? And it very well might be Whirlpool. Who do you figure the industry gets to normalized lead times first that is able to really gain a fair amount of market share as a result?

I mean as far as Whirlpool stands, we do expect to normalize all these operational disruptions, create more capacity, so we can be more flexible and then recoup what we lost in 2020. So that's certainly our intent, and I think we're on the right path there. I think anyone else who produced in the U.S. would have had some of that sharp disruption and a recovery. Maybe at the same rate, maybe not. I can't speak to that. And then anyone who would have produced from Asia, frankly, would have had pretty different characteristics in terms of how their supply chain was affected. So I would put them in slightly different buckets, maybe less by manufacturer, more by supply chain.

Got it. And then same sort of thinking there. So you have vocalized expectations of gaining share this year. And I'm specifically talking about North America, although I could say that around the globe, but specifically to North America. Would that be in the first quarter, too, especially knowing that many of the Asian players may be struggling getting finished goods into the country? Would you be able to gain share, you think, here in the first quarter? Or would that be more of a second half issue once you go up against the easy market share comparisons?

Yes. I mean from your question on share from an enterprise standpoint, we absolutely -- we have intentions to grow share, not just in North America, frankly, in EMEA as well, in Latin America and Asia as well. So that's a consistent directive. And then in terms of North America, essentially, the way I would look at it, we've not disclosed necessarily what we think we're going to gain, by how much and when and where exactly. But we are looking to unwind a lot of that pent-up order demand. And so by doing so, we would be gaining back some of the businesses that we lost without giving exact numbers or indications of what that means, but we expect to outpace the industry and then make up the pieces that we missed in the first half by the end of Q2.

Got you. Raw material inflation, obviously, a prevailing theme. You've called out expectations of, call it, $250 million to $300 million in RMI company-wide, especially in steel and resins. Steel and resins and base metals continue to rise, obviously. How much risk would there be potentially to that $250 million to $300 million estimate, especially knowing that I don't think you've called out base metals originally as a source of pressure? And then I have a follow-up question around freight out costs. Let's start there.

Yes. In terms of the overall guidance of what we said in terms of RMI, it's the $250 million or $300 million, as you cited. And principally, we did refer to steel, resins and even freight in those early discussions. For us, there's a couple of things to note. Our steel contracts, and we've shared this before, are more on an annual basis. So even the volatility we're going to experience is going to be a little different than what you see in the spot market. It also matters on when it commences and when it anniversaries. So not everything is January 1, December 31. So that's a bigger element than people sometimes understand. From a resin standpoint, it's more of a 2- to 3-month window, but the same characteristics. It's not exactly every month on the beginning of the month and close it every second month or third month. So that's a factor in there. Not as long, not as long cycle as steel. And then freight has been something we're watching, and that also has been elevated. If you think about our costs, essentially steels, 8% or 9% of cost. Resin is a similar number, 8% or 9%. And then freight, a number more like 9% or 10% of our total costs. So that's kind of the magnitude of what that impact is. In terms of what could happen the remainder of the year, we're certainly watching it closely. There's a lot of different things happening. We don't have a new projection or a risk number per se to share, but we're certainly watching it closely. I would say, at the same time, we have lots of tools. We've demonstrated over a long period of time, we're adept at managing cost and managing -- how to do that both from a from a mitigation standpoint or end-market standpoint. And so just as we have $250 million to $300 million planned of elevated RMI, we also have $250 million to $300 million planned of cost takeout, productivity, across all of our cost buckets. And so we're actively and aggressively pursuing all those opportunities. And then in addition, we'll always look at go-to-market actions as well to see what needs to make sense to make sure the entire business kind of works the way it should, and we're generating the right amount of profit across our businesses. So it's something that will be really monitored very closely here as things continue to change.

And as a reminder, when you're saying 8% to 9% of cost, is that cost of sales? Or is that total cost between the sales and EBIT line?

It's cost of goods.

Cost of goods, right. I'm just making sure we understand that. The promotional environment at retail has been virtually nonexistent really for the past 2, 3 quarters or so. Based on the long lead times, based on the fact that we've had a lot of nondiscretionary replacement, based on the fact that a lot of retailers don't necessarily want high-traffic levels in the store. It's been -- to that extent, at least, it's been a terrific backdrop. Once industry lead times normalize and discretionary replacement returns, there's an argument to be made that the promotional activity will resume as well. And I think one of your competitors, Electrolux, has already cited expectations that the promotional environment is going to return in the back half. First off, do you think that is the most likely scenario? And how will Whirlpool react if industry pricing gets more aggressive, especially in light of the inflationary environment?

Yes. I mean that question related to promotion for Whirlpool is kind of answered in a very consistent fashion, which is we have a toolkit, we have a set of frameworks. If we think that promotion is going to drive value for the company and it's accretive, we're going to consider it certainly after we have the appropriate inventory levels and that kind of thing and not before, but that's how we look at it. If it arises or not, and we've been in a very competitive environment for decades. And if you look at the North American business, in particular, over the last 5 or 6 years, we've increased EBIT margin every year even with that highly competitive dynamics. So the promotional side of things, I think, always needs to be considered. They're certainly opportunistic by nature, and so we'll see those potentially come back in. And Whirlpool will be very structured about what makes sense and what adds value and what doesn't. When that happens, hard to predict what others will do. Whirlpool thinks of it in a very kind of regimented way.

Why didn't you raise price in the beginning of this year? You normally -- if you do raise price, typically, it's early on in the calendar year. Based on the lead times, based on the demand, based on inflation, why the decision this year not to do so?

Yes. I mean I think you're speaking specifically for North America. We did raise prices in many other countries, but North America has not.

Right, sorry. Yes.

Same -- again, same framework for us in terms of what we can mitigate, what we can manage with go-to-market actions and when to do it. At this point in time, we've not announced any price increases. We'll always evaluate that and make sure we're thinking things through. We've not always done it Jan 1, though, to be honest. We've done it broad Jan 1. We've done it broad in the middle of the year and partial year. We've done it nuanced, by segment or by brand. So we've really designed the pricing tool and even the promotion tool to as specific as we can to get as much value out. And so for us, it's not January 1 or not. It's not all or nothing. It really does depend on the characteristics of the landscape, and we design our approach based on that. I think that's the clearest way to think of it.

The largest retailer in the U.S., the brand [ Blue ] is increasingly going to an EDLP pricing strategy, at least for the entirety of their box. Do you think that affects things promotionally at retail or wholesale for the major appliance category?

Yes. For those who've been maybe around longer, remember different stories that have happened in the past. So I would say in all industries, CPG, durables, some of those stuff kind of comes and goes depending on where we are in the cycle of things. And then -- so that's maybe one theme from a time horizon. The second one is, by category or by brand, EDLP or high/low or UMRP also exists at all periods in time. So the value segment normally has more of those characteristics anyway even if it's not announced or disclosed. And then maybe the medium, the mass and the premium has less of it. So the fact that Lowe's is investigating or others are investigating certain things, I'm not sure that's a direct implication to anything based on how they go-to-market anyway. And some of that is them and some of that is a consequence of manufacturers, but I don't think that's a pass-through concept.

From a demand standpoint, again -- we'll stay with North America since that's your bailiwick. From a demand standpoint, in 2020, I mean, I think, pretty clearly, it was almost virtually entirely nondiscretionary replacement both because of extreme usage, because of the inclination of a consumer to want maybe a second refrigerator or a second freezer in their garage and also because contractors weren't largely allowed into the home or at least permitted into the home, and so large-scale kitchen remodel jobs were not really the case. One would imagine that would have meant pull forward of demand. But on the other hand, the good news is that now you have all this potential discretionary replacement coming as the economy opens up. What kind of analysis have you folks done in terms of how much nondiscretionary demand in 2020 might have accelerated the replacement cycle? I mean I've got my own ideas, but you folks have far better data than we would externally. And then what -- if the kitchen remodel activity really does step on the accelerator, what does that do for your business in terms of volume, in terms of mix, in terms of margin, what have you? I know it's a long-winded question, but it's a pretty important dynamic, I think, with what's happening in this country.

Yes, Sam. There are a lot of points there. Maybe I'll go back a step and just remind everyone, for those who maybe aren't as close to it. The composition of our business is essentially 55% annually is duress and let's say 15%, builder. Those are kind of the easiest ones to maybe put a fence around. The discretionary in the middle gets a little bit muddled when you talk about multiple SKUs, remodel and all that. We think the duress absolutely had some impact in it in terms of people being home more throughout the year and wear out, usage, things like that. We think the building outlook is pretty favorable depending on multifamily, single-family, where you're looking exactly, what geography, but generally pretty favorable. If I look at 2020, how Q2 started, the very first thing we saw was almost an inorganic event around people changing the appliance needs based on their buying patterns, freezers, second refrigerators and maybe even microwaves because they needed some quick ability to do things in their apartment or whatever it might be. And early on, that was -- that spiked. But as the 2020 progressed, that really didn't stay elevated. It kind of moved into a more normal mix, a more normal segment across both brands and product categories. And so what that tells me is it's much more about the consumer being home all day, cooking all day, taking care of their family, using their products much more frequently than they ever have. And as a consequence, maybe some wear and tear or maybe they were -- it was more important to get exactly what they wanted out of their dishwasher or their oven or whatever it is. So I think that feels like that's what we saw from consumers. That's what we learned through research. I don't necessarily think a lot of it is pull ahead, to use some of the terms that I've heard, because consumers are still at home. It's still really important to take care of your family. We also don't believe there is data that says consumers will kind of snap back and revert back to where they were pre-COVID. I think a lot of behaviors have changed. Will they go back to some degree because they'll work maybe a bit more in the office or they'll go back a little bit closer to where they work? Yes, for sure. But will people be back in the office the same way as they were before? Will people be not in their home the way they were? Did they build any new habits or any new passion areas or any new ways of caring for their family? We really think that's going to carry forward more than it would have before pre-COVID. So for us, you layer in that dynamic, you layer in how we feel about housing, we really think that it's positive. And so our outlook for 2021 in North America specifically is 4% to 6%. We don't have a crystal ball. We'll see how it progresses. But I would say, early on, we'd say that's a good number at this point. And we have no reason to believe any snapback or any pull ahead is going to transpire. And then maybe your last point around remodel and mix implications and things like that. Remodels generally are favorable for good businesses and good brands, meaning you'll sell not just one product, you might sell more than one. The person is really kind of investing for the next 5 or 10 years. So it might even move up a price point. Whereas in a replacement, they might just get what they could and what they can afford. In a remodel, they're kind of building for the future. So normally, those characteristics are a bit more favorable. That's not exactly true, but it's more generally true. And so if the case is we had pent-up missed opportunities on remodel, and I'm not sure it's true, but if it is true, then that would be a favorable move from mix and, frankly, even just sell-through.

Whirlpool has been on the forefront of the smart or connected appliances theme for a number of years now. How much growth do you anticipate coming from these products? And how large is that business now for Whirlpool?

Yes. I mean we're targeting to have 5 million connected products in the next couple of years, and we're on track to do that. That's globally, across all of our business segments. In North America, we've launched some amazing front-load connected product and top-load connected product that essentially, going back to the SWASH detergent comment that I made, has bulk dispensing, can count how many cycles you've used, ping you via notifications of the app or otherwise, to say, "Hey, order more," and then we can actually fulfill that with Amazon or other providers with our own detergent or even someone else's. In addition, in the kitchen, we have more and more growth with connected products, specifically our Yummly brand. We just launched in the latter half of last year a wireless meat or a protein probe that essentially interacts with the Yummly app. You can pick doneness levels. You can pick the type of meat. You can pick even how you want to cook it, and it will engage with you to make sure it's cooked perfectly to the recipe that you had and even provoke you to flip it or not or how long you make it rest. And so you'll see more and more integration with peripheries and hardware and apps really removing friction out of the kitchen, really making the food journey come to life and making people cook at just a better level and/or with less steps to where they care. And by doing that, we open up all kinds of replenishment opportunities, periphery opportunities, even services opportunities long term. So we're really excited about where we're going. We have real proof points in market with SWASH and Yummly Pro, not just strategy or theory, and that's evolving very quickly. And with the next couple of years, 5 million units in market, I mean, that's a very significant amount of product in market. And what it does is it opens up a door to have a lifetime relationship with consumers across many categories, and that's something we have always had directly as the manufacturer, and so we're excited about that.

From a platform to platform basis, where are your primary new products coming out this year and next and the timing therein?

Globally, we have a mix. We just launched some really successful French door refrigerators out of China, but they're also being launched in EMEA, in North America, and even in some cases, Latin America. So that's really exciting. It's our Jupiter platform. It's done very well. In EMEA, we're launching a lot of cooking technologies and built-in, and that's really central to being successful from a mix standpoint in EMEA. And sometimes there's a trickle-down into the United States for our higher-end cooking brands there. We launched midyear or late in the year laundry products in 2020 that will actually have probably the biggest benefit in 2021. We're right now launching a top-load product that essentially is both a high-efficiency washer and an agitator washer, agitator-based washer, you can remove it. It's called a 2-in-1, to remove the agitator for big garments or you can put it back in and get a different cleaning performance and cycle. And so we're the only ones to have this removable agitator, that's really exciting. And then, again, maybe the detergent and the probe. And frankly, our D2C business has been growing quite nicely. We're about $1 billion globally in direct-to-consumer businesses, and we expect that to continue to be fuel for both our growth and our overall margin profile.

Has new product development been impaired at all or pushed back at all with COVID and also the capacity constraints?

I wouldn't say it was impaired at all. But I think in some cases, when we launched things last year, and let's say retailers were closed, it didn't get on the floors as fast as it normally would. The associates didn't get trained on it and consumers couldn't see it real life, so it may be stunted a little bit of its launch. That was true for the laundry products I cited, and that's kind of why we're so excited about 2021, because all that is incremental for 2021. And that's true for our dishwashers that we launched, our laundry machines, even our probe, to be honest, was launched midyear at some retailers who were essentially partially closed. So all those, I think, are going to be a benefit to 2021 and, frankly, help our mix projections on how we're going to drive mix ongoing in the future. Nothing really was turned off or canceled as a consequence from an innovation standpoint.

I've got some questions from the field. What are the remaining levers in terms of operational efficiency?

The remaining levers -- I mean, I'll take us back to world-class manufacturing, which is the method, our production system, and it covers really all facets of our industrial supply chain. It's really driving a lot more transparency and data, a lot more measurement from an analytics standpoint, a lot more automation from either materials management or even online, a lot more testing that drives higher quality. So those are really big levers. We've been on a multiyear journey. But there's a few years left before we hit, I'll say, maturity on some of these disciplines. As we're digitizing the entire value chain, you get speed benefits as a consequence of that, and you get, frankly, capital investments as a consequence of that. Because you're not investing in hard tools every time you have an idea. And so you can do a lot more in a 3D manner than you could historically. And so those are, I think, more ahead of us than behind us.

You've given '21 guidance for segment margins. In North America, call it, 15%; Europe, call it, 2.5%; Lat Am, 7%; Asia, 2%. As we look out 3 to 5 years from now, how should investors think about likely margin targets for each of those segments realistically?

Yes. I mean what I would say is what we accomplished in 2020 and what we guided for 2021 should be the reason we have confidence in the achievability of what we shared as long-term plans at our last Investor Day. And so we're still not there yet in every instance, but we're absolutely on track or on our way, and these last couple of years should give us the confidence to say that, yes, that's feasible. That's achievable given our trajectory. And so that's kind of where we're pointing at. We're pointing at achieving what we depicted just a couple of years ago in 2019.

So -- right, but you're right now operating at or at a level that is exceeding that in at least North America. So over the next few years or so, what would be a sustainable margin for the North American business? I'll keep it with North America since, obviously, that's where you spend all of time. But you'll do a 15% this year. What's a realistic sustainable number for that, though?

Yes. I mean we think 14% to 15% is probably the right expectation for North America at this point in time. 15% in 2021 and 14% to 15%, I'll say, immediately thereafter. Until we kind of come back and really like think about that and provide new long-term guidance, that's probably the right expectation.

Last question, M&A. You mentioned it in the prepared remarks in terms of being opportunistic. There's clearly some international opportunities that you might be able to plug and play. In the States, your market share is such where it becomes a bit more challenging, at least for large-scale M&A. What sorts of things, either bolt-ons or maybe ancillary or tangential businesses, that might be interesting to you, Joe?

Yes. I mean we're constantly scanning the landscape to say what's available, what do we have interest in, more importantly, where are we going, does anything fit. So it's kind of hard to throw out potential targets. Really can't do that. But I would say it's across all those dimensions that you would think they are. We just -- we'll wait to see until we find a target that we like. But it doesn't mean to be necessarily North America. It could be anywhere across the globe or it could be North America. I mean there's no limiters there. The MDA side of acquisition in North America would be trickier, but there are many other parts of our business that are not just MDA in terms of what we do. We have a full breadth of business. We have small domestic. We have major domestic. We're now in detergent. We have filters. We have a fresh brand and the cleaners it goes with. We have our luxury brand, Jenn-Air. We have our commercial laundry business. We have our service business, our home delivery business. So I mean there's a multitude of different segments that still could be growth for us even in North America.

And with that, I think we're out of time. Joe, Lara, this was terrific. Thank you so much, as always, for participating in our conference. And good Lord willing, we'll be doing elbow bumps in person in Orlando again next year.

Great. Thank you for having us. Pleasure.

Very good. Be well, both of you. Take care.