Kimberly-Clark (KMB) 23 Jan 182017 Q4 Earnings call transcript

Company Profile

Participants

Paul Alexander	VP, IR
Maria Henry	Senior VP & CFO
Thomas Falk	Executive Chairman & CEO
Michael Hsu	President, COO & Director
Ali Dibadj	Bernstein
Stephen Powers	Deutsche Bank
Jason English	Goldman Sachs
Lauren Lieberman	Barclays
Bonnie Herzog	Wells Fargo
Olivia Tong	Bank of America/Merrill Lynch
Wendy Nicholson	Citi Research
Jonathan Feeney	Consumer Edge Research
Andrea Teixeira	JPMorgan
Iain Simpson	Societe Generale
Kevin Grundy	Jefferies
Priya Ohri-Gupta	Barclays

Call transcript

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Operator

Ladies and gentlemen, thank you for your patience and holding. We now have your speakers in conference. Please be aware that each of your lines is in a listen-only mode. At the conclusion of this morning's presentation, we will open the floor for questions. At that time, instructions will be given as to the procedures to follow-up, if you would like to ask an audio question. pleasure today's my presenter now is to first introduce Mr. It Alexander. Paul

Paul Alexander

and Thank call. Welcome to morning, Kimberly-Clark’s everyone. you, good year-end earnings conference

the Chief are Mike morning Henry, call Chairman On CEO; and our Tom CFO. Hsu, Officer; Operating Falk, and and Maria President this

year for our full savings announcements restructuring of new results. the this review Q&A. agenda begin program a Tom then comment outlook will XXXX finish global our Mike cost call. morning target. the Here’s After multi-year and will that Maria with our of XXXX discuss ongoing we’ll also will a on and with

for usual, of and assumptions planning of XXXX. our presentation today’s our appendix have presentation for section That results Investors an includes the of XXXX As website. summary we with key materials a a in segment business

forward-looking further we a the Form Factors section reminder, As Report of our be discussion XX-K forward-looking Risk will on today. see Annual latest of for Please statements making statements.

referring and adjustments now, and release. it comparable to further Maria. turn these The about We news to will financial measures. information GAAP adjusted release morning's over exclude also outlook; certain reconciliations described this results I'll be has in items And both to

Maria Henry

our Good call Thanks, for Thanks morning, Paul. everyone. today. joining

discretionary shareholders. and our competitive significant returned to me previous fund broadly reduced capital Sales consistent cost help to Let outlook. FORCE and full with offset improved inflation investment, We headlines with spending start and efficiency the and cash of savings our results. commodity year earnings were we achieved and record

pretty improved were competitive Net were currency our environment product the organic some sales $XX.X improving increased organic Full the our net than reflecting cover sales similar sales down slightly. rate. sales. mix sales, On and of X%, and details volumes with Total in prices starting year-on-year. and, X% let's cases, selling more Now were both results, billion. year

topline sales volume of organic by rose developing and geography, growth Looking X%. at with X% the in emerging markets,

care outside developed South organic personal declined for the products America and big North was In in of decrease. key volumes fell In Latin increased China organic mid-single growth in XX% and X%. category In markets sales market, America, America, in of North consumer that decline Korea Europe. terms of nearly Eastern X%. diaper digits The driver sales in

Our market. impacted and results Volumes but benefited lower innovations, North organic K-C is competitive sales birthrate. were were activity Professional from In increased the what by relatively X% America, sluggish year-on-year. a similar in U.S. in

commodity was XX were $XXX on savings points Moving and to margin cost-savings Full to results. strong selling offset program those our year-on-year. headwinds, prices gross million year inflation. of basis XX.X%, $XXX record year down million. to reflects Full Helping lower profitability. That all-time deliver continued an FORCE

segment, basis points margins XX by consumer rose Personal tissue and points spending P&L, overhead. tightly as operating down fell down was Moving our Care pulp costs. points between-the-lines basis higher XX.X%, in XX net in as Professional. impacted were margin percent managed XX basis a K-C XXX of we were XX Margins sales basis By down and the basis points points. Adjusted business in

XXXX year-on-year. tax guidance be initiative. were XXXX October earnings adjusted year XX.X% that teams to line low of Full XX.X%, to good effective $X.XX our in share the rate a end of to up lower planning was our adjusted expect executing than Our did $X.XX was $X.XX, range. the per job our with at in X% rate was as That earnings

XX%. be points At expect about that's XX% earnings us. of adjusted is with outcomes cash turn how are flow, Before as to the and tax our rate. U.S. the pleased between will a ongoing us growth. six year-on-year equivalent tax meaningfully we lower impact we on Overall, changes will going I comment midpoint, me to In the let XXXX, rate give reform to

capital also cash flow to we our provides few years. significant fund ongoing flexibility shareholders, the We us increased program next reform. benefits while and annual capital also That to continue from allocate spending tax to restructuring anticipate over

cash reform impact flow shouldn't as result the I'll for Finally, us. tax significant of a be that note one-time

to cash flow capital turn provided XXXX. payments. operations driven $X.X flow in to XXXX billion Cash by in higher $X.X let's our billion expectations Now and and efficiency. by in decline was The compared tax with was line

cash in level. XXXX's be We will flow similar to expect XXXX

least cycle and balance on invested for seventh that's consecutive also dividends the sheet at XXXX, improved repurchases efficiency to we $XXX of repurchase $X.X adjusted million share capital capital to shareholders. by we by terms plan million stock. allocation, reduced conversion returned capital year XX of billion days to working we've totaled we $X Kimberly-Clark and primary billion, points. $XXX XXXX, In On cash In return six basis

and to we’re equal we All together, billion increasing to X% That's of share XXXX. addition, in X.X%. by increase our dividend capitalization. dividend. In expect consecutive between XXth annual more dividends in current our our $X.X That's billion repurchases $X.X the and market than to allocate

the delivered results I reduced ways. earnings turn cost before year. Tom? shareholder-friendly summarize significant let Tom, to So in savings, it allocate to capital in discretionary and and spending a continue sheet increased for our We challenging me balance we managed over our well environment, we

Thomas Falk

everyone. Thanks, morning, Maria. Good

program. comments and cost savings on focus on Paul my global our initiative mentioned, our restructuring ongoing new FORCE As I'll

me FORCE. start Let with

I'm made progress the with FORCE we've on years. over the last that So encouraged several

that tightly paying in investment our a supply is to organization was businesses to XXXX linked Our back create off. chain global

performance including generating in mentioned more we've visibility process the most more We our capability, And record have into more have got just XXXX. we future Maria opportunities. we discipline more savings, that and importantly, are

over we the new are to savings expect of that now. to I'll four ahead, next top the So which are as And talk is about we going more pipeline sign restructuring billion that significant we And from years. save of commitment and confidence, program, our X.X on savings forward. a than benefits those our expect a is initiative, healthy to establishing multiyear FORCE which looking continue this

for and over us a the and company have that know years. know execution shareholder adapted we stronger us you changes value. over actions significant of And a you that time. made our followed ongoing have announcing we've strategic we've of a track executing many you long and environments that challenging have while, record if as generated encountered much the strategies the appropriately to of These So

the optimistic And time. And brands, over on that our so a got is technologies emerging and in our strong markets. objectives remain have so announcement actions developing Global countries just taking XXXX Restructuring can and leading proactive our latest we create long-term marketplace long-term the got Toward our terrific our to our of to of We've in managing of top win these Program and today's to of return and portfolio categories accelerate and long-term approach example shareholder around delivering future. about capabilities many Kimberly-Clark growth world. strategic line in value. we participate very have in bottom growth significant potential, the major we We particularly we've the

program and program So in Global XXXX. we undertaken launched the stronger this make have program company our we since Business leaner, And will our faster. biggest restructuring is this Plan back

generated program than means help to increases restructuring handle by sales, the over of and the generate drive million have more from billion $XXX of that changes us FORCE and to to $X total we $XXX will improve We to And in end commodity margins. this XXXX. currency savings the expect time restructuring cost our savings period, million cost to and

over and focused be savings markets talkies strengthening investments effectively growth, environment line businesses, accelerating brands digital to two a that these about care share when our and be developing those we'll us improve market color can we our So key second, do more deliver to in we'll has and our the personal even to in allow our profit third, share and building or give shareholder Even attractive us growth to on things: more we'll in earnings And those and an will and maintain help following become position positions, more better will growth on drive the be will invest challenging time. need and particularly give years. or priority to our markets improve us margins. returns. our grow XXXX you investing slow-growth to outlook. over he know trends First, last in we you our our more to to behind key improve able compete able e-commerce is an capabilities. in emerging businesses, growing for core Mike further opportunities A priorities our will And be top conditions, our more little

more profit advantage to use overhead driven local our more how with of we'll the work manufacturing will discipline, routine simplify and And better restructuring shared-service terms supply regional locally also We'll and reside our with all technology. organization of help and including in and sharing centers. We'll achieve streamline accountability transactional operating and loss model, and scale At having will will of practices. opportunities we which process time, our activities best savings, to same we'll drive efficiency chain. shift teams. us So our take continue functions the

necessary to be facilities. spending us So the scale at even conjunction These chain about several reductions and to forward. to expected and those cost be benchmarks. with difficult other lower of range or the going manufacturing but will improve employees. will to program standpoint, in even an actions to X,XXX XX make Kimberly-Clark sell will expanded these stronger make us X,XXX close with are changes our industry competitive Workforce From are require overhead capacity of and supply restructuring more this a locations the in company facilities

to in our million cash long spending higher capital X.X% meaningful To billion we sales. investments X% concentrated We'll $X.X When spending of as expect of get range of consumer to will expect to about noted. $XXX Because $XXX be return million charges XXXX, and incremental expect including we tissue total that million and equal the to to And to also we the somewhat consists ways spending we shareholder-friendly restructuring, implement billion execute continue that will net just lower-margin term of long-term by of XXXX, target to of some more end repurchase and Maria we are the to divestitures our the in We restructuring or segment. and company to of exit our capital in pre-tax XXXX dividend the expect our in billion total and we X.X% of in capital XXXX restructuring. other divest expect And businesses sales, of long-term to to be our planned, increase target. got $XXX that stock, $X $X.X of allocate we've in than as approximately amounts spending. XXXX. those continue

more provide delivering summarize, savings and term. to to our over over our Global to margins. Business significantly flexibility long generate taking we next improve invest We'll company will return our Plan to substantial we're And the So our to objectives several aggressive improve the accelerate action time. years for

me let turn it Now Mike. over to

Michael Hsu

everyone. Tom. thanks, morning, Okay, Good

enthusiasm me optimism start long-term and our Let about future. expressing my by

about our We us categories effectively and are operate and Restructuring the bullish help Program Global more efficiently. will

XXXX Now let me turn our outlook. to

to we similar we're growth planning activity better competitive In will past the were pretty remain XXXX terms for another we this XXXX. and be of market inflation. year cost We're than assuming of And expect expect slightly conditions, will only category year, commodity rates elevated.

invest we However, brands XXXX, and also success. results to deliver more long-term ensure to our in in expect our better we'll

acquisition about the year's Taking of we're X%. should into to our for in growth of X% JV sales organic India, account in targeting or On expectation growth. similar total That's market our grow currency top and rates overall XXXX net line, sales last X%.

let few growth three our a mentioned. Tom priorities Now about spend talking just minutes me that

core The expect our grow better in to and In priority XXXX. is we businesses. American first products, North consumer performance strengthen

in improving spending targeted more to ensure support the items, less reducing as investments in We productive on training strong time, every be Near-term and have include efficiencies major on new We media. our lineup Depend At non-work are Huggies in will brand innovations and adult and same make would marketplace. diapers and baby a wet we to by will these pants, teams wipes, competitive wipes. Kleenex such Poise launches care upgrades business. and innovation that activity Pull-Ups the

team that priority feminine our Overall, personal build demand we'll our and improve on has is modestly programs. and will includes and In innovations quarter. innovations category Eastern momentum we’re premium. in second our care In in XXXX in growth optimistic launch starting China, In diapers, we D&E and winning The Category important in to in year, and first care year. phase markets. growth will number with Latin commercial we young Argentina of In the have accelerate Europe, fem continue on-trend diapers, throughout progress stabilized, America, will on the good Huggies Kotex will our in in we've this late care adult that our and key business markets. on strengthen in a Brazil care. we'll leverage cautiously to Russia, made innovations the focus their conditions entrants

build is our out digital and capabilities. The third to further priority e-commerce

making sales XX% We high sales than and and are XXXX well-positioned company were Online good e-commerce. progress already a of year-on-year. single-digit percentage more in increased in

We more to make in expect progress XXXX.

We improve to consumers will programs. direct continue relationships also digital through our with marketing our

We help are investing improve in of cost programming. and tools to speed, the our effectiveness

important XX our points. our sales, of profit basis midpoint that of to our about guidance, At the operating to margin by Cost adjusted is grow X% beyond will savings be performance. in of an plan to Moving continue driver improvement implies X% XXXX.

come approximately of selective to offset deliver million. inflation. commodity FORCE the increases will Those help in we that That includes planning is we which in said, from half inflation, More businesses wide cost projected consumer XXX in million expected this in market. than are market. between restructuring. XXX targeting in for and point, XXX be million Our to DNA taken XX have to teams our to increases XX some spread and international million of anticipate the will or That us of price KCP million and savings take savings are selling in businesses. because we our At inflation

of XX% adjusted and that's of that earnings includes bottom tax share X.XX year-on-year the growth to the line, Maria On we're benefit described. XX% X.XX, approximately rate to targeting per

commodity that XXXX, In our expected terms second the reflects of phasing profile earnings initiatives and in some higher half. primarily year earnings in the savings of second expect the will compared to we of in of first and, benefits secondarily, be cost from half moderation the and growth costs half,

about long-term optimistic So future. to we're summarize our our outlook,

shareholder year for up take and Kimberly-Clark to stronger planning to We’re our begin wraps better long-term a to and make remarks, we’re questions. taking prepared enhance we'll XXXX, in important steps That value. your now

Operator

first comes Dibadj Our with from [Operator question Ali Instructions] Bernstein.

Ali Dibadj

new similar call up now, I the the costs what's P&G have to rarely would and going want to around between I the increasing from things that. offset And of views trying categories We a know, driving how and really retailers' you asked is want because commodity price That's much I'm And much is saying, a prices question. competition this coming with kind actually realization just to much difference of start kind up really on pricing that. lack question how to I've certainly of going fighting, how is love it perspective. seen just inability understand consumer our you it changing a of understand I to that or it commoditized. take relatively power of to is of if these see slow reality? first kind growth forward the environment, are see just

Thomas Falk

maybe have on take I'll a things. of big-picture I’ll set Prices and couple a are Mike expectations. on. my I mean That's can also question, you good give pile

going we on why our as look it's it And moderate a the how in quite expectations that is at surpassed market, the the at even says forecast of should up what's So year at pulp it's if bit. some level. in quick it this look and on you later gone frankly

don't you energy category spend and particular to off want commodity give you then back careful price the to trying in take a you've and so too also be little got it that to falls a And much some. than

of where commodities bit over a there moderate running a is for our to bit so is ahead And that expectations. of time. expectation are And that

part of it. So that's

with markets, tough. is category that it's you I think negative point raised, low or growth, particularly in other developed relatively the

said chasing negative projecting of in the going it's our got number price. lot You've XXXX. news was in more a you competitors different tougher some also volume it can not ways target. same the of be Having are we there's categories. least pricing guidance, there's on XXXX to that, a positive At as In get

growth way else sales, on Mike, net And more you businesses. or and trade the see to on between to what some those getting another whether that's getting revenue you that? to want to maybe that's But lines, more get the some between so in add other efficient try to of efficient want

Michael Hsu

companies worked any commoditized far in I've being at from and Ali, categories, commoditized we other Yes, in very and are categories.

us put every is are think I achieve experiences perfect. I of think innovate. great product we've markets the about for of the for pretty and there a I there's product, of experience got on opportunity a runway think they room long our in and one emerging growth, good for not today, still Underwear reasons while, you developed lot developing that to know, and in are both a us And perfection. the - the these is And And of to products, markets. still to Depend it's once but I think

And way are saw that's competitive partners bring and just we be competitive categories be so back is, focus going we be on the to marketing value do these and what are not to America. us we undersold, going innovation grow you North our are is And to to retailer in so to in half what category. to there. going want promotion, we hey, expand to drive create the way are in and But the the going want and our we to

Ali Dibadj

that so - piece I do depends should in the on further my like try and maybe I research…

Thomas Falk

got dose store Ali, at that with here equipment. so closed, Kimberly-Clark, We Mike his think fun office group I had the

Ali Dibadj

context. helpful Look,

that that why you do legged and doing looks say, you has yet. are it So great, right? lot I doing several can cost like trajectory, years. now drive it But is but past for back do FORCE innovation haven't the right? actually far growth you been plan, you do which guys over that, innovation think shown we okay, long-term you like sure, take or think reinvesting will how talk about you you of you then sounds an a saving If incremental the mean so have that

in that reinvestment just long about spending struggling let's lot back of you as you're get and mix cost five think confidence and ROI more gosh, isn't term different achievable, to to a cutting this to I'm So three saying, pack. to a seem have opposed

So with do going you're perspective a aligned to really cost-saving that are from reinvestment?

Thomas Falk

well. certainly and markets. as being U.S. the say, in being start on fair. negative moms let those I’d developed factors markets XXXX, mean, than and birthrate use a Korea I'll like some we you diapers That's the in more expected again pile Mike encourage I more can't babies born had that aren't the in in where to

the in still look Eastern do believe growth we Mike XXXX. we can being and penetration space. strong about of more. in about on add can and positive economic in of the And were Europe XXXX. have the Mike, a the had hand, on category there's tough huge that And as and world places, our around So you And opportunity Latin But the turning also conditions board the in category beginning still that across that other more we in markets put markets bit years you maybe where some maybe at most XXXX. there than kind it. something other we opportunities we there's opportunities our see more talk We see America in of

Michael Hsu

goals. current microeconomic to also is believe business. and going to political, slowdown we'll plans it get that to to our of drive global some is long-term both the in the need need improvement and and the social. and we back we're I us cyclical support And the Ali, get or help our do brands margin there investments to fuel believe growth I fully restructuring

competitive a of And again you And why if through not some competitive. some is of good think real dynamics, it of that's occurring. reason there's the

which and in focusing the business, as the of mentioned. But I so situations And things the cycle I studied on back and to going as drive one, history to think the takeaways, grow that our that And thing these through think growth the plans, are is I before. in already get focus we've is Tom our important to and in think out and and I three which real that strengthen been we'll been investments I our areas mentioned I core. our them

markets. to We've I a we're of and the into early And baseball value-added innovation e-commerce development. game become or of categories. use got of data I bring long-lasting very to to more what stages and left early think there's and a the runway really innings efficient And our relationships. opportunity analogy, us lot in change in these room given lot much developing create very think think of emerging I consumers and the customers and global with digital relationship then transformative and a that lastly,

Ali Dibadj

of question those update along increased macro penetration last volume there, from just what a an And Can a also China, Thanks price give seeing us share, you lot. lines the I the on combining had just you're is, and two. of kind and Brazil perspective?

Thomas Falk

there. hard Yes. a aggressively we're focus that's the single-largest heard It growth continue going and to and and growth the obviously, and opportunity can our too. And our competitors Ali, and as innovation there dynamic in China see yes, and near both potential capture is remains see on to the term term. you probably long plan platform, still high-impact strong market,

in price factor, a a albeit lower major been price has has and situation I at level. the think XXXX So stabilized,

term our do done growth job driver to innovation higher our even think never product and innovations. at not But margins I and continues lower-price phenomenal our cost of think this is programs has but the have and quality in a long team China I price, been product with be level. it

expecting protection, be but we're digit for the to care, be phasing late low bringing. year up first a yet, going expecting going sales, we brand care a of better volume are about even quarter. We're and great in in coming China in improved year on then They about talk throughout but about baby about fem formula, to the that it even we and And we're That's positioning. not a got last in has in year, year strong to and the so winning very growing really single premium double-digits to were that's continue. we're And tiers. and the comfort excited fit innovation ready the child

Operator

Our next with Powers Stephen question comes Bank. the from Deutsche

Stephen Powers

a guess I forward price. looking on on Ali's So bit building question

do Just see relief of given prove your enough, detriment mean, you've XXXX backdrop that likely prospects the or any I you pricing volumes without margin input competitive implied intense doesn't to is outlook guidance? that to in called conservative outlook out, in a if risk the cost

Thomas Falk

don't expect XXXX, got little have get trade revenue efficiency. teams that regenerate this, embedded can other’s We've price much but maybe Mike Mike in give bit be plans will taking in that on And there change, the you other in are Argentina, carry there’s can color build environment. on to I so but we that our to where some will more list we guidance is pricing markets big that some that. increases in in some pretty like know price over. ways are there our then improvement got XXXX a

Michael Hsu

normalization brands going particularly selective to have that with harder in got of we China bringing price because and a hitting are tell America, we’re Latin a in though some is mentioned, our innovation advertising. bringing. we then the Brazil, and a XXXX messaging out, pipeline that of innovation pricing and the lot U.S., we’re reason investing bit we're increases markets. is Tom better of in in perhaps why stronger more a As you I in We've a be of some key assuming some businesses. our in will perhaps And

Stephen Powers

range to appreciating commodities that pipeline you the wider midpoint of upside input there's I'm understanding think given likely like that what to is direction risk for cost to input allowing is risk And actually margins? a least prices mean, risk just just relief, I'm pricing trying upside do I or guidance does competitive that I if external at manifest, guess logic your a contemplates of I backdrop, below spot costs. at get not the and But, at that the and the guess really I of innovation test guiding forecast,

Thomas Falk

commodity we last have when the we're of we've Well, list swings will not much look get inflation cycles you of year prices commodity we'd change, are so you for and seen in say, seen typically, you And I've at afraid sharper if that that commodities, sharp in some XXXX, forecasting that. big range cost.

I what going move probably much in and environment, the list this we price needle think that's to in it's given on most swing the that just that expect, places. we've seen not

Stephen Powers

just question, tact. different And one last

new program, costs to the projected programs relative and And potentially relative restructuring workforce to in the seem seem On cash achieve the reductions to X,XXX-plus past the just disruptive. high savings.

trying as kind aggregate risks programs? program, this associated just relative assessing the undertaken? do it of underneath execution you're get to there of how more you So past this view Is financial uncertainty comparable program to you've that or to initiatives with past

Maria Henry

give you when examples. on expensive and restructuring. shutdown. Yes, I'll facilities factories, I’ll the the two moving includes comment on are that is shutting doing are there equipment One costs the cash cost. This program you and down And with a and number are activities of associated more

on plant to and shutdown, tend So when run include restructuring side. on cost the the to they more expensive tend

a business we it, platform out, standard are paying we are are work. position And think about for and full services do load hiring our the on the paying the are full And we on services we back in labor up productivities benefit. amount shared center. severance cost, that getting you're the and arbitrage The taking a role to the that we that global you different that severance and a is when are role other transactional more that, XXX% and same that on some on you're only not so our side are probably moving picking thing in location you in is that removing we of country, when

across that for at supply you two tell in as us higher very restructuring our will the is structure, our and our future. the the are the that we well cost chain our involved can restructuring What across So programs overhead and are position program. tends I end on have also returns to though those look weight of factors strong of they the that strong,

Stephen Powers

program. program, there I restructuring in gain the expect that's sell, forecast to to the to XX benefits question with The in on assets? up clarify. just clean that for or is those a the close guess of you, any there last the sales is potentially One you facilities associated Maria,

Maria Henry

not. it is No,

Operator

Our Goldman English Sachs. Jason from next question comes with

Jason English

to to quick try questions. two mine I'll keep

seeing First, of of to and expectation is kind course albeit neutral contrast I in kind next pricing last Is this normalization there for In word in guidance think sort credible? competitors the your in a markets you tangible back that the kind of we you the moving year, are other as anything pricing year feel throughout on the year? direction of any more pricing, is just us of this trajectory makes you sort the used, up little for of commentary year. improved some does expectation you wrapped of posture, we've a market of as words, that into of seeing give can is come it been evidence kind there

Thomas Falk

we level. Yes, to implies would stabilization better a say stay should some there. normalization assuming return Jason, the versus I I level, normalization, I think that to maybe are word right will But chosen have because now, I dropped is think it's

executed in plans them. the of I And hey, America like and the dynamic the on is because spending that, said June and levels I about their has year. and in we were team competitive we think, felt of strengthened maybe a in you beginning the do more tuned and maybe little competitive year North last beaten we I know, getting promotion last I'll fine think talk think we're marketplace achieve of promotion

in I And going we so family the get are performance. degrees fine-tune. to in think continue the third some improved In in not have some to fourth quarter, did But quarter, we to particularly takeaway. do the care,

And to want in do bring overall to down categories. on so drive innovations in We we and the value want don't our focus our added.

And so looking market we better word, to, are maybe stabilize. the for a

Jason English

are there, market think And to bullish not in talk GDP you picture is in when categories pretty sorry think in, solid, I And your flattering a solid, question, and bigger the yields figure your section sort to I concisely. or quite in get category of I pretty And the use we frankly which term. your isn't a we've exist want out, think, long a very the all bit whopping to if little by long all globally, growth. solid, exit go about growth you then you're choppy of to got But revenue X% income saying sort we pretty growth to global growth. system but more of gave here a the all that growth, growth. Michael, environment inflation they and

do you is think you sort growth of more I would we can me between holding with tissue, the trajectories us Where give terms is? be if Care at So and professional the X% think And long-term? we with sort growth that color in how Thank your do where you think What are today your do Personal of back? comments diverging bullish you. helpful. of

Thomas Falk

Yes.

feel we for path. market I And to this I North we to think, got prospects and need major what back growth we is, a to do think about the that one, America better we’ve in got year. our get

has categories diapers, Pull-Ups tissue, and the think bath front major in the both, team innovation very strong I I Kleenex, adult care. mentioned, plans in as on all got

And about so innovation. strong feel we the very

we years a could probably we that that, decline step. was so grow. last think for involved the market that’s fundamentally year I And America first and in the versus North a business number personally that's and I will improve our believe of

key probably step. or couple in And either And so first then we've situations of markets. had emerging micro in that's our and competitive a developing situations the markets, economics

I back in - mid-single America, forward I situation grew think economic we've think on that. perhaps then were to expecting modestly it's we and conditions so have a in and digits has faster-growth I looking I excited trajectory we said, bit big in of year. market the innovation think in we're last earlier great a then for our improved that us will a we're I think remarks to And again, stabilized, and and are been competitive that situation. going in get And And we an us product China, Latin think, modestly saying diapers. coming some improve we this we that think performance a year, been

Operator

question with next Our Lauren from Barclays. Lieberman comes

Lauren Lieberman

considerably business these the lot of getting talk needle. and moves days, Consumer to the that’s Tissue, big still air a little wanted that's a very it's I on about time but bit

pretty trend more So margin first, low right? some sales volume had sustained it bit than can the organic talk North this driven just pricing. the America, lot of talk you so negative in you in if about growth a by year. We've exit. restructuring, little A also then about And - with

and exits coming from, around particular. and performance Thanks. that thought those North America plans process tissue improving in So a dynamics bit little where that, in are about

Thomas Falk

share that we X% North with maybe it, tell some So to able able until But appropriately going deal sales, of of because than about with won’t so exit the America not our Mike right way. to dynamics again not be that the be farther to start and much part, it's effected are now Lauren, going very either to those details Then the on it's maybe going you we’re I'll on a get there. be comment big business. less can into

Michael Hsu

Jason will have net America competitive our the but drove were are I and X%. decline the about innovation, recall product and a quarter, think, in improved of previous up I North what our earlier, telling quarter, third X. sales volume competitiveness volume market you the in And QX say remain, which conditions we we promotion think is think was expect news I price expecting behind our advertising. tissue, X% Lauren, our I consumer improved tissue I of to programs, down what was and in in both stronger that performance differentiated we if

ready we we was the quarter, what of and because occasions takeaway consumer to And a but their softer remain do it and the we’re will going versus us expand bath. it's about I were than lead retailers going iconic soft, to to I that's we're our differentiate had better. expect It's achieved very which bringing bringing other thicker launch. be lower label. private so We're share same an excited big merchandising and category brand and fourth We expected. And think XXXX our extra wipes about us, for to we merchandising exactly disappointed brand helping in kind us what competitive on extend are making here Cottonelle, to on superiority that bath wet a not got got is promotion, you we're news is important and tissue, but, I've the lot since which great for in for big most In and there. yet, Kleenex, K-C. product I've the and had course, innovation But news business probably that of at then of stay with got, for we've tell been is our the is balanced difference also we've

on lot They've then a great got realized not strong fourth advertising and were that. these thing quarter other I is that. support the team we've as And to the and advertising be, this excited need has as we affected hard-hitting So products. that good to year the we very think and of coming I that learned got launches our think about we're

Lauren Lieberman

there coming business, an attention diapers, what something regard a out having that's more more pricing late? you're giving challenge of to more in on little then certainly lot terribly of about there's in what radar in your that's it. consumers you're I their seeing of private label private talk or terms a of guess, just your incremental activity to pressure been tissue and really in not bit impact, private-label being retailers open labels, from with seeing own as screen And you to Can both talk in terms

Michael Hsu

the this and spot that's over say years. in category. which private-label and long-term advertising, year-to-year. I reason to care big some way our depends, and the But you from Yes, in down I in and increases term, I'd why general, I we only the longer Lauren, programs. seeing penetration yes have in for key that's increases more been has And no, the But a say if drive categories, think private we're differentiation over five on guess, probably tissue, our focused categories, look label year, we’re very little health a it think us in I'd had growth on personal some because last

Lauren Lieberman

the My had understanding one a being as commerce going of forward on then And you you're where bit that a reinvest. and final so and to just mentioned priorities much but a of U.S. reverse bit of you question, of a and penetration and were to was is up in very China key digitally-only and where of the leader data in were, else everyone need been terms catch kind it's the in a e-commerce leader, case the you going

penetration today So positions on planned you U.S., at in share start a And market are versus where of online about the XXXX? your and for where could e-commerce you you talk concrete your offline? versus little the bit were XXXX relative anything

Thomas Falk

ago we China And markets Yes, fast. so in we've They're both a us. major and been got slow but in we’re off strong to would the up start catching Korea. leaders U.S., e-commerce for I years say

I double-digit it. reason describe our actually overall, and all very us, we used it's about double-digit share think for think growth, that years. online but frequently we've in a growth What And we've I very our it, have categories in had And three think so categories, about straight to categories, Lauren, are think, its or it's high how I categories across share position. while excited I we strong for the uniquely we’re for had strong don't fair why many And some the years our of involvement know U.S. growth. why these important in in are are years cases, for consumers important many, I

model kind pays change partners to online commerce, and in e so with then got advertising our relationship I us, access And the of more our much and make an it consumers. for and with effective have to the analytics, and our with long-term it advances we've think happening what's efficient opportunity an And retail really with consumers. data

Operator

Herzog next Our Wells from question with Fargo. comes Bonnie

Bonnie Herzog

to label. for quick wondering private I'm manufacturing a past the the your in follow-on overall question have expand on you private-label I have mentioned think than guys footprint? less guys plans sales. accounts it X% Just that had of if you

if curious any you plans just So increase have to that?

Thomas Falk

the needle private No, less is and of overall didn't still really X% in sales our significantly move than label quarter. the

Bonnie Herzog

private with categories we've your seen up, step plans label some some given no that some of in comments? just forward developments of and going of And your to

Thomas Falk

label not to to trying to but advantages private it We are we branded street. amount primarily sell our think a overall down with we them, everybody specific the manufacturer limited do customers label are out a where relationship and we and private up of

Bonnie Herzog

your move China wanted And business there. and to over I to just

hoping innovation drill your launch Procter's diaper could do then stabilize other of going highlight to further key you your again than market business business plan pulling in the touched that seen there? the a following summer. on on changes the little really Just some you've other and you what you guys levers forward, down that in on, And

Thomas Falk

Procter talk feel say, overall, impacted I they line business felt to the Obviously, by can our I'd our up. I don't was think them good very you went But product. we about launch the think overall. significantly how Yes, about product that in

impacted I is stick that our lose are little the in it have don't some an this that and I business gained trial trial we long guided some primarily bit. in how impacted some well don't they share going, brands but did have how and to trial. we that, we a know who because But on that see players getting And think going year. by have data is online diapers repeat increase has local

great products Our this focus got are out we've coming we to have the better product going products there are very on out is making there year. out that we best and and throughout confident

Operator

comes Olivia with Tong Lynch. America/Merrill from of question Bank next The

Olivia Tong

outlook, in Do or margins just first First, first more half particularly versus expect in second do moving are. just said Can clarity in that actually mean half? the the up the you is then half a half half. on little granularity model and your you you margins you down on second half. as many in typically the more EPS how in bit some I you the growth clarity cadence, on versus you for in absolute second Thanks. there better do give earnings be And to then out, think earnings first the the deliver because parts

Thomas Falk

the we year on margin about going or rate be business. XX per right way quarterly half that the will points the half the aren't for se. just of second versus to it and we per second half probably larger share we in say so profile. weren't earnings growth first basis referring you earnings we'd the then give And absolute the say half, Yes, think than first is manage the to the I'd size the profitability and

Olivia Tong

your then with more more And just about entering categories my question secondly, their own and largest brands is of Amazon as before.

Now Bear. you've got Presto!, Mama

Before that there was that many Kirkland and before others.

where isn't around. know this retailer bit you've different certainly it time a time this you've wear the relationship first had little had we So a different but to seems hats,

previous can perhaps, So a versus it around time this you differently instances? talk bit approached little about, how you

Thomas Falk

their don't kind about And I mean, conversations making talk customers Mama let don't then with customers. we few haven't we we talk business Olivia, talk we of we a those with and Bear, and those confirmed that them are private it. about about private-label some really so and do any are relationships we

two we or much with to we our brands do strategic so pretty we the does do business and as that with putting to and And label, would that strategy, that day I their challenge an next customer from key are accounts then what fit the brand and years. that's say trying bring sell our category innovation can with and is overall inherent just plan together there over what our a every retailer so standpoint. have teams And drive their the three every is to discussion private how that they

Olivia Tong

Just product in also Amazon’s with you’re terms competing them I well. more obviously your they're of as meant but selling but to product also a clarify, that retailer,

clarify So that. just to wanted

Thomas Falk

retailer with, I in I Like every think we form. mean, on do everybody some shelf business other the private label has

it. got And so makes that them and the news that bring we've about then and them with and ideas business drive to innovation excited

Olivia Tong

may of the back of And then year, some as you originally how the opposed challenging to restructuring increase have much a just the progressed? is planned XXXX, year shelved as build a then a lastly, more got to of bit for that but as for potentially bit of had related this things program the new CapEx things got

Thomas Falk

say would is further and to I want all it related to Maria that. maybe program, that I the you restructuring comment on mean, of

Maria Henry

incremental Yes, and restructuring will we the XXXX. number gave think in that CapEx I related an spent to portion program, get a clearly of

as on across went comment and opportunities last chain we have make our the The would other And our itself, that the lot is overheads. looking restructuring that year. program in into at earlier work we that supply started in as to the well a year, that I of effort

that on our take portion delaying have would the XXXX we a until in they the our of were to to going had total optimize the teams spent that chain had were we've were of we working actions overall footprint. so view how And restructuring, CapEx imagine they some as of supply to

on there catch-up teams as got some were projects from also there's that on XXXX working delayed restructuring. the imagine would I So our

Operator

The Bernstein. Dibadj next with question from Ali comes

Ali Dibadj

I to in is a understand of I certainly... mean wanted So I private but label, it's you and bit drill the terms little cagey further caution on talking about it. wrong have word, the

Thomas Falk

pretty I I'm that going transparent not about talk been I’m not have to cagey, Ali, this.

Ali Dibadj

but just trying the relationship you're well. retailers word, That’s the as wrong these word, the to with wrong manage

that detail Amazon. much it. evidence give that about get So you're with generally I experimenting But preponderance can’t too is of

something probably know that doing I Walmart, sure on be might although You with don't for one.

for small, private percentage of right, double label the probably that’s X% with of most so the U.S. As but that, sales? work on almost retailers and you sounds in your

Thomas Falk

And you be. of on be would X%. big way it might I It's less than think how estimate high your

Ali Dibadj

not X%. it's So

Okay.

that talk bit you way more some that we for talk can context somewhere, on Just the are you So with when and the a the what label you one it margins the as either for and the you about questions helping a it relationship. you of the retailer? were start like answering small impact in feel you about like generally more you have would it - do relationship? mentioned helps kind about like be retailers although feels of of looks private when more interaction and and look, only you doing Can great. You terms little your

Thomas Falk

you maybe of bit want to little on that. general Mike a can give I build think I color Yes, just might and

have relationships it but are their for about retailers business been for I've we relationship. and in. ever, is private-label goes on the strategic I and done test that product. few of around the we It's long think with with want a care people. a it customers name involved private are And it label; intimate time, serious haven't lot lot make the done it's is you it what their the their materials how They in to They a brand; package. They about pretty a a it.

for. dedicated put working their we do. relationship and it to is be business that to looking willing If parties. it's not a on a we’re relationship people their quarter low much And profitable going we've that partner business, of kind good business bidder brand they auctioned going get for partner care the if that's retail be that, can a that and the both ever that so shows And as about the to retailer's the every as business to gets got the like

there's that I add know, So that. Mike, don't to anything you want if to

Michael Hsu

our us be to think Well, business, the because it's of is, capacity-constrained. I it's yes, Ali, growth I things not small add it's not a driver strategic only piece going would a because for mostly two we’re

as is so and customers a good we it job Tom we will private-label about want our lot have And what what good want care and work like do at to small have for we mentioned, capacity to we we about there. reason everything we to of why bring do, the amount. we a to because just we quality care I relationship may it the say, good do, don't give do. And a a we we do out to

sets growth selected a forward. going us actually out primary significant for few where there the with you're it's got a relationships different not customers. we and so of And But again, - driver

Ali Dibadj

And we does look, typically space tell to category? push be private come big do further? you the from when want label And they this of shelf they the about, private-label where

Thomas Falk

Yes.

retailers with shelf category - category And this talk to brick-and-mortar and I would typically going working are a is about challengers go. their over true and is to the most where world So formats. captains across say retailers typically most in

shelf So share space often typically preferred over allocate and label. relative private space they to private give to to label

And are brands the for that they their the well. know spot so as fighting in shelf

line retailer And innovation. to estate when the going you've get category got you justify why real got you what reviews, for to and with justify do need when do it's you that You to it.

Operator

Nicholson comes next Citi question Our Wendy Research. from with

Wendy Nicholson

wondering. just I'm

your comment the decision all, process not First of you're as private-label you're say feature facilities in with XX the just to S. heard much sure of all, I that manufacturing, U. not shut restructuring, of going part in that sort that on first is but you're how versus to regard of outside? capacity-constrained the of

Thomas Falk

works asking other we that phase color of not I say also And in are where Yes, point think give capacity the things. make the to can't and consults consultation the building would constrained, I where said XX you didn't various we that's XX headed. going secondly, probably affects we're really couple where private-label, combination be I of say which unions with are. of guess, about we the a me the and announcement I just this But any facilities because phase facilities then things, at someone region. more and I every to are was

Wendy Nicholson

private-label it growth capacity the like categories of talked in in have don't to, because manufacturers I one some America. first just the I your Because held guess their actually North is sounds blush have that they back we've concern particularly is being

private-label who part logic against that those might players, those going the give you? my Is that of to part? you to it oxygen are if there's crazy manufacturers be to plants sort of of So worried sell me that's competing some on

Thomas Falk

say the would tree you're there. I at barking wrong

closed be the being sold. versus I think most of will plants

Wendy Nicholson

then And you going away X% back high-level, second X% the revenue don't just question, to from want kind my sounds to to long-term of back like target.

sized than seen, it's is up your years the how program we you've four, restructuring meet peers, point my over commented EBIT the question margins is, that five you expansion But much also you to one to your ones cover and assume margin true I gone enable more last much target. anyway. So at have the

expand? long-term reinvest and fuel wondering, that faster XXXX, so but really make Does for guidance program I restructuring this do margins current maybe earning to growth that but get longer the and have to you restructuring program there And and is your line growth, that margins to enough can kind I term, fuel it, is stay think heard expansion? is so margin more top Or that risk some a you sense? of actually reflect margins over flat. designed your

Thomas Falk

complicated is think speculating. a the are we so I when That's We that think calculus answer.

feel the efficient, like us more so restructuring And the a will effective program business. way more give run we to

cyclical the some the swing way other in point years. We of are at kind at the may intervening and over that cycle peak commodity well

several that that, also last previous And for so had realize we've costs and than commodity in while we not are we counting XXXX higher years. year projected both on we the had

to level growing and we right And possibility and we believe plan is view it is have Basically, that business get moving do direction. get is that we that our so at see. the that in the will our us to this

Operator

question Research. next with Consumer Edge from Our comes Jonathan Feeney

Jonathan Feeney

ask question. like the major this. restructuring standpoint genesis I broadly. your about planning one wanted the I mean around restructuring for and of Just long-term to in inside company

bandwidth and How are how two had of are a XX years period roughly maybe the if of and time? And we of were how of sort are like, much that digging can whether much couple not all management this past results of you could do speaking, redundancies headcount. this three or just and You're maybe this into expect but about, and real of ahead? and have identified have to the so you it things the in to only costs of talking plants, of technological should ago, really this, much certain you really, much. talked of changes much things would you XX% quickly could you addressed is you about to very specifically timing really thing say whatever, changes to I'm in you’d the have or in prefer marketplace no, Thanks do, understand the you’re years? years deeper changing going more trying

Thomas Falk

I be question, that. a tell adding be, it the your company years. you me think have our not would every we're kind had will think a process. And we Jonathan. to expand little proven point restructure let I I'll great of tell investor That's the CPG I But once first every Maria if capable would restructure of I gosh, we've could bit five on thought didn't that great in avoid cost historically probably we place that so it. he

Mike, think I it. on little and lead process and On excellent I piece comment team how you the got program the our why help other we Maria, hand, was But bit a work Maria restructuring and and by this an here. of don't

Maria Henry

to start by understand But as house. say, both I'd a with years I teams a a and team it, overhead so lined place chain coming us Yes, could spend. in the a foundational good a into of three ago. consistent up in our work lot identify a XXXX, have lot and what lot put way seen and on leader FORCE our think you Actually, visibility I'd side started, better that information And ago. through few IT of we it she up We gave to to hired that with a think global did better global doing into finance say, the our done work about if savings. delivered SG&A assess pointing teams supply years in footprint work leading work a couple couple work the of been has they've of along of opportunities back a I'd over the And we of get and on mills the last team years you've teams that our years. their and cost that

did process. up And set our But upfront program us for reduction people good help from textbook were had XXXX, approach. it's a used work things though were a this to that and work get to we cost isn't firm the we're position a opportunities ahead just plan; in where identify on a across-the-board taken consulting in a we was We work. structure. at structured several launch expensive to BBB comprehensive doing lower-cost it structure. The look to us. we're function-by-function do we involved look our our actually a at in that very not doing, to the in So run fundamentally an hundred went there can and really benchmarks say we the the how go to had provide to to governance, program business that actions process differently. lens order to We teams Really

view were went took all into what together, on returns, baseline, of our side, what that we belief optimization affirmation view the the business opportunities the also with need and commitment have the classified work algorithm our keep that you then well our of whiteboard and restructuring as these comprehensive our But his to doing because our work really our differentiated looking so a talk That running for have the types our together our global as enabled position, the network a and as growth what of in scale the competitive program same we to chain activities. comprehensive up on the of spend team more the G&A cost Mike the of say advantage to differentiated activities the We on supply table announced FORCE going let versus really do take in time restructuring at our I the rate, well innovation reduce our chain identify were teams best get money long-term are guidance on the and the a ways prioritize and combination that growth on of is on to globally. we that longer-term our at then on XXXX extensive outlook. activities. have from do would work that hard wanted supply stakes the then of investments. capabilities work markets, in SG&A taking fresh programs minute. and side, And growth are the invest free of our on, do as global a us teams category pipeline, our the chain, that to coming was approach activities on we our more the done what's side, in about accelerate all global I'll supply And to and work assessment And Mike operating an the target the

Michael Hsu

Yes, with we to process includes talk achieve also and we that going best to we technology, this position hey, get ourselves but our e-commerce we’re that also the do growth concurrent is technologies NE and a and maybe to, technology, do growth North how about a we’re our from strategically what and where in restarting, our went how the through by growth, and that leveraging work lot both effectively. of drive America, that we own more digital accelerating product-making

as do we process company at kind our of I we on think do of And be And worked of came do want what we scale agile an want we kind are so where we same we went leverage said that again smarter to better low also faster. we our out effectively to I through some the we time, how kind to a think, place be mentioned, organization. And bets. and means words the want to And cost, and and that’s we the to evolve and over done simplifying smarter more by we our of want faster and work Maria are are we want locally. could means means empowered, we locally over organization,

we’re this and excited in think program very the I So looking about returns. development forward to

Operator

JPMorgan. next question Our from comes Andrea with Teixeira

Andrea Teixeira

be rather pricing appreciate saying will pulp, estimate, understand go commentary, I for U.S. but before into where Just we I pulp mix than in innovation. you're pricing we your the on the and more

U.S. basis, to taking you comparable prices the in not just a So correct? are on

Thomas Falk

point changes. In opportunities there that but terms could like time, lot price price forecasting, I list doesn't That of in that, or things a price that promoted will don't major with talk mean or at we be be this again, don't list trade won't think be points factor. there a about

Andrea Teixeira

ahead. - up and go Yes, sorry, following then

Thomas Falk

we at like saying have tuning. fine efficient Andrea into to proverbial that And we use opportunity just just to lot that our is goes of that with that. the still we a think be we No, better get more trades, and work

Andrea Teixeira

that that, sense. understand makes I

looking that On spot the to put it now are it pulp understand, change, right? get from in you X,XXX. I I And saying average, may year, as though, it to pulp are But the obviously X,XXX think you prices on X,XXX throughout side you are what the closer I guidance. at the

beginning the of below you're So thousand be you're to of though will I’m will you down the even - the an go you that average at year saying, that so number, be believe expecting to end. expecting

any indication that So So seeing can down as year of cadence pulp. the of are the for thousand? kind like back Is will end year the the be you you if break estimate? of that help there below me that

Paul Alexander

this Andrea, is Paul.

set level So to just everyone.

industry on Our outlook on pulp is forecasters tell solely what the based us.

So I late year. I a and And half that their period any what below see would the the into time QX there forecast XXXX. see But slight then terms outlook show is starting don't be the different about when you don't if believe you'd think any $XXXX for we the in think supposed cadence, calling than back some moderation are of ask to I one of ton. that's it

Andrea Teixeira

kind of For assuming, using external, And oil, external… the you're right? same for oil, I'm

Thomas Falk

Yes.

Operator

with Generale. question comes Societe from next Our Iain Simpson

Iain Simpson

please. me, for questions of couple A

extra thanks mid-single-digit China in Firstly, growth see the very it's color. for encouraging to and

the in diaper And on Just the pretty respect. in birthrates you diaper, what's what is could I the is is second, China a you've bit everywhere tissue on pretty had already, category. for in questions world now? but online much a both in consumer China is comment a The commodity U.S. on of and consumer know And unique doing market? it few percentage that tissue little sorry you

a pricing consumer just it everywhere we're are So they you the like world? is U.S. tissue, tissue becoming And seeing U.S. in gives confidence commodity doing, input what in what consumer looking else even with structural? about this doing that thanks. what is in costs Many

Thomas Falk

million and that’s I Yes, verse think the Again, the improve estimate, trajectory driven over overall. the we first, based we about saw good cell expect XX I some category do pretty But the was category to this on China, think just dynamics. say, that I'd double-digit of growth on just time. competitive we in year underperformed that on

are. The where question and online second of we part was your

got we the our the online. great sold capability. currently relationships with Over XX% great China. all business of we leaders in e-commerce players We've major in think I believe e-commerce are and is

Michael Hsu

relative probably to bit. a are We category over-indexed the

Thomas Falk

Yes.

Michael Hsu

terrific decent U. places, in specific specific tougher question, last maybe where well markets. and would space. in K. strong your like I and Latin I markets in others the and at category debate good where have then a we margins good, dispute conditions in we a around consumer don't brand we've that I But XX think say, very loyalty, I got profit little some trading opportunities to bit. We've commodity and are brand a category Korea high strong mean, not Australia. brands positions specific And share, tissue in branded I'll I is markets very got innovate got America will that. our in Hendricks look There as other in

probably margin I commodity I think sometimes a I from am, so from long category. standpoint, but but And a be it's way may a biased, tougher

Operator

with question Grundy from next comes Jefferies. Kevin Our

Kevin Grundy

in for Thanks M&A. for My your question squeezing to appreciate it. me and I appetite relates

a less active So it tend space, you've companies in the number find and on to been less that struggling to those of than CPG discuss are front obviously this growth. particularly

history? this order does to for lend are given categories interest, a top be actively from than So may we that, about around slowing cetera. looking at these cash a difficult So greater development M&A geographies growth? flows strong more itself Would the all to at can appreciate build et to but the talked any you number some questions business, need that Is line you capabilities? assets? how and of with that, your less perhaps of recent categories, environment, albeit lot in out business diversify What away of we the openness

be would there commentary helpful. any you. So Thank

Thomas Falk

Yes, hasn't create that We've thing best for like growth opportunity had typically in changed. the chase, say to opportunity and us sure. the was the I felt enough we was long-term portfolio shareholder organic to value. our that would view right

we of that things 'XXs most the we a lot those left done and around the of would M& are of we of kinds partner. to that that picked our create that in the be our highly Having been of in of XXXXs. American be bunch a in about other said last our Latin value. early We bought business ago years of know business late able likely M&A, partner. built We the that India There enough I've to world half opportunities Israel aren't be our other and small half in a So bought from long shareholder couple up integrated we've that, our many A from opportunities. business through year

that do, that's small of a some there So just think and how think of know are we haven't those core we our those of out value are creating. opportunities space that is we types lot sense. there we that But seen in make shareholder things to

Kevin Grundy

explore a ones et scale, it you're higher-growth out it's And can want seem that don't of fair a and priority. seem to doesn't to and personnel fair? build big you or view like have Is where categories and don't or expertise appreciate the lot cetera, I categories priority capabilities, a the participating go to big that doesn't like to you but otherwise in. background into say it's overpay

Thomas Falk

That's correct.

Operator

with Our next Barclays. question comes Ohri-Gupta from Priya

Priya Ohri-Gupta

that split Just on housekeeping. one of tell fund we secondly, given non-cash going a the year? some then portion couple of you Could that year? years, particularly to cash And this with fund your charges just plan the us how this restructuring quick should be plans are to associated the think cash needs next you you. expected Thank incurred be the about have of added the to that’s versus on over

Maria Henry

Sure.

be a For more for XXXX this them cash of charges little half than will the charges, year. of

Thomas Falk

also of in on it, then expectations funding cash comment terms And and maybe forth. so you’d flow

Maria Henry

Sure.

similar we expect year, to spend be will got to to that operations the fund of commented restructuring. cash that the terms we've cash I next XXXX. we in flow for cash on from Included In there,

of line, cash flow tax we'll XXXX we out cash that have And restructuring with charge there cash get operating for tax are us net also take, tax XXXX. benefit that flow reform. similar as know, benefits we you the the the in to On that

we did capital that, give spending. Beyond higher for the expectation

would we would And to on take get XXXX that debt we so the expect fund some we additional as CapEx. into higher

Priya Ohri-Gupta

the higher more should And Thank terms of that debt, CP something through anticipate in being you. related, we longer or term?

Maria Henry

Yes. We plan on capacity rate will very to of more we've a benefit front. of the the That got do use And that low we’re getting make CP have that. of lot the CP. give us on

Operator

Iain Generale. Simpson from comes with question next Our Societe

Iain Simpson

that of could acquisitions us Mexico Just much bear you on all have? you is you've you obvious as kind your should anything we that? were comment just I make pretty on mind recently any Thank buying be I of. the should mean if you in that done highlighted M&A any there you. one just to but aware we comments, is And wondered Could were of businesses minorities. what the out remind with minorities there

Thomas Falk

we're Other other is own one we small XX% in complicated. the be Mexico, than that, little is minority interest the very, a of America. bit company, more XX% there so a minority, a publicly shareholder very traded that In that Central won’t and

owns operations I business, think pretty and that investment. of it I seems got family we've a about it's the happy less the And that with and Korean in Korea than left X% that it's out a minority that’s XX% of of there. terms in what's partner think

Operator

next Teixeira Andrea from Our question with JPMorgan. comes

Andrea Teixeira

to expenses and - back into financial about into explanation the I your Maria's just layer want guidance.

debt, to take on expenses. you assuming Is hedging, guiding the I’m aware debt, or that I lower but you would be not As for, you anything financial are a as you we related you're because bridge want that something saying. taking just assuming that may lower XX% more gap? more much are rate for were

Maria Henry

for some took the should much expense out, Sure. interest We've they to vehicle. of due, tax the In a with or I high bonds lower coupon the came done - XXXX, as say lower work interest company. lot expense replaced we some

and coupon out be also a as due $XXX X%, expected we we going XXXX. year tax debt an on as euro For example, bond very below November that's this with And closed in originally of summer, out reform high to this priced come, we to was took that of million took example.

took that So arbitrage and there. on we tax get in out rate pay benefits to the December the

replace high lower then the coupon retirement vehicles interest in So the early and took the actions expense for low of debt the we XXXX been what's November to interest bond have and XXXX. taking with driving is

Thomas Falk

A maybe rating increases then And are add, and just for to debt fairly expect to the we maintain historical modest relative us. so to the standards

Andrea Teixeira

rate average? interest average how if average or expense the the you much, share XXXX can is interest the against So

Maria Henry

I is down. we Yes. think It share the don't specific.

Thomas Falk

math We weeks of probably do you the in say in and couple should a can footnote. the

Operator

other this At queue. we time no have in questioners the

Paul Alexander

conclude All Tom. with for We right, comment from thank we everyone questions will and Bob. your a

Thomas Falk

of lot a Kimberly-Clark. news again for Once

another execute to plan are support. We in appreciate year got XXXX. better We've and an expecting go your aggressive we

your for today. much with very you thank us So time

Paul Alexander

you. Thank

Operator

concludes gentlemen, presentation. this and that Ladies morning's

phone us lines. joining your you for You may And disconnect thank morning. this

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