Chairman of the Board, Chief Executive Officer at Whirlpool
Thanks, Jim. I want to spend a bit of time to demonstrate our strong track record of successfully operating for various economic cycles. Turning to Slide 17. You see that when faced with inflation across the board from materials to logistics and energy, we have responded early and decisively with cost-based pricing actions. Our strong execution of seven cost-based pricing actions and smart value-creating promotional activity has driven positive price/mix in nearly every quarter since 2019. With broad-based cost-based pricing actions across the globe in nearly every product category and channel, we have delivered a cumulative price mix impact of 13%.
Turning to Slide 18, I will discuss our significantly reduced fixed cost base. This chart shows the total of our SG&A factory and logistic costs over the past six years. Despite the inflation, which we also experienced in parts of our fixed costs, such as logistics or salaries, we've been able to reduce the fixed cost by approximately $700 million or around 3% net reduction every year.
In response to the current macroeconomic challenges, we have initiated an over $500 million cost takeout program that will further reduce our fixed and variable costs in 2023. As a result of these actions, we have drastically reduced our breakeven point, which will benefit us once industry volumes recover from current temporary weakness. It is an important step in structure improving our long-term margins.
As mentioned before, Whirlpool has a history of proactively responding to challenges we are facing, in particular during these past years. And we've been usually successful in managing through the headwinds over the past years as evidenced by the financial results as shown on Slide 19. Our multiyear financial performance shows our structure improved business with expanding EBIT margins, significant EPS growth and strong ROIC. Our ongoing EBIT margin has improved with a compound annual growth rate over 4% and our ongoing earnings per share with a compound annual growth rate of approximately 13%, alongside strong returns on invested capital with a 6 point improvement since 2010.
Now turning to Slide 21, I want to address how we are well positioned to benefit from long-term demand tailwinds. While we are experiencing short-term demand softness, but at the same time, very optimistic about the mid and long-term demand trend, in particular in North America. Let me start by giving you a more detailed perspective on the U.S. appliance demand.
As discussed in previous earnings calls, it has two fundamental components: replacement demand, which currently represents 55% of our total market; and the discretionary demand. With the trough of a 2008 to 2011 replacement cycle now behind us, replacement demand has been very stable and even growing. And we do expect further momentum on the replacement side of the demand due to a significantly increased appliance usage over past years as evidenced in the data which we see from our connected appliances. What has still not fully recovered from a great recession in 2008 is the discretionary demand side, which ultimately is driven by the housing market.
Moving to Slide 22, you can clearly see the strong connection between existing home sales and overall appliance demand. Existing home sales were slowly recovering from the great recession, but still haven't reached prerecession levels. At the same time, over appliance demand is also slowly recovering to essentially prerecession levels.
Turning to Slide 23, we show the same data in a bit of a more granular view as well as our prediction over the next two years. Obviously, existing home sales declined sharply in 2022, reflecting the mortgage rate shock, keeping both new buyers away from the market as well as keeping prospective sellers from selling due to existing fixed mortgage rates which are significantly lower than current mortgage rates. However, that doesn't change the fact that there's compounded pent-up demand for millennials as they reach prime homebuying years. We do expect home price appreciation to slow down and housing inventory to slowly improve to more historic levels. And ultimately, existing home sales returning back to historical averages of above 6 million units per year.
Now turning to Slide 24, I will share my perspective on new housing in the U.S. and its impact on Whirlpool. New housing contributes approximately 15% of appliance demand in the U.S. New housing construction significantly lagged historical averages for more than a decade. For perspective, consider this. From 1968 to 2008, a 40-year span, there was only one year in which fewer than 1.2 million in new housing inventory were build. But much of appeared between 2010 and 2017 was below this level, leading to the oldest U.S. housing stock in the country's history. In total, we estimate an undersupply of housing of approximately 3 million to 4 million units. While we do not expect new housing to reach what we call steady-state supply of 1.7 million to 1.9 million units in 2022 or 2023, we do expect 2024 to show meaningful progress towards this level.
Turning to Slide 25, I will share some perspective of our major appliance business outside of the U.S. We expect to win the Americas and accelerate our growth in India. India, in particular, has a very long runway for growth due to favorable demographics and a still very low client penetration rate. We also fully expect to capture replacement demand with our strong share positions in Canada, Brazil and Mexico. And in India, we recently expanded our offering with a majority stake in Elica of India in '21, and we just started the production of frontload washers in India, and we want to continue to invest in this business. Combined with the best portfolio of brands, including Consul and Brastemp each generating $1 billion in sales in Brazil, we are well positioned outside the U.S.
Let me now move on to our last agenda item and discuss our progress on our portfolio transformation towards a higher margin and higher growth business. As you can see on Slide 27, these efforts have been underway for some time. Since 2018, we have executed multiple steps to streamline and optimize our portfolio and are excited to add the InSikinerator business to the portfolio.
On Slide 28, I will remind you of the three strong pillars that will accelerate our portfolio transformation towards a higher margin and higher growth business. Our global small appliance business and our commercial appliance business both delivered strong margins of over 15%. And the addition of the InSinkErator, we have taken yet another significant step and strengthen our major appliance business, specifically in North America, bringing the iconic brand to Whirlpool. OneMed is the largest manufacturer of food waste disposals and instant hot water dispensers with more than 70% of the U.S. industry, adding approximately $1.25 EPS accretion in '23. As Joe mentioned, we expect the acquisition to close on October 31. We expect to continue to invest in building Whirlpool as a higher growth and higher margin business as we continue to deliver significant shareholder returns.
Now turning to Slide 29, I will provide an update on the strategic review of our EMEA business. We have been assessing a number of options for the business with a goal of maximizing long-term value. We have two guiding principles as we navigate this review: one, what creates the most value for Whirlpool Corporation; two, what is required for future success in Europe. We received significant interest from a number of parties and narrowed the discussions to the final negotiations with two strategic investors. Given the confidential nature of these discussions, we are unable to share further details but will provide an update no later than on our fourth quarter earnings call. Again, our focus is to ensure we have the strongest business for our shareholders and employees, further supporting our portfolio transformation towards a high-growth and high-margin business.
In parallel with reviewing external options, we also revisited our internal continuation plan. We have completed a pressure test of all our business segments and evaluated strategic alternatives. Additionally, we have worked diligently to develop a sustainable and attractive business case for our region. Ultimately, this will serve as a comparison and alternative path to any external option.
Now let me close with a few remarks and turn to Slide 30. We have a proven track record of successfully operating through cycles. And despite the significant industry headwinds we're facing, we still expect 2022 to be the second best year in our 111-year history. We have the right strategy and actions in place to navigate the current environment. With largely offset raw material inflation with decisive pricing actions, we have initiated cost actions which will deliver $500 million of benefit in 2023 and adjusted inventories to reflect the current demand. We are reiterating our long-term growth outlook and based on the initiatives we are taking, we believe that Whirlpool will exit the current and temporary industry low and high operating margin. At the same time, we continue to advance our portfolio transformation, leaving us well positioned to continue to deliver strong shareholder value.
Now, we will end our formal remarks and open it up for questions.