Kimberly-Clark (KMB) 23 Apr 212021 Q1 Earnings call transcript

Company Profile

Participants

Paul Alexander	Investor Relations
Michael Hsu	Chairman and Chief Executive Officer
Maria Henry	Chief Financial Officer
Lauren Lieberman	Barclays
Dara Mohsenian	Morgan Stanley
Kevin Grundy	Jefferies
Steve Powers	Deutsche Bank
Andrea Teixeira	JP Morgan
Jason English	Goldman Sachs
Christopher Carey	Wells Fargo Securities

Call transcript

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Operator

Ladies and gentlemen, thank you for your patience and holding. We now have your presenters in conference. Please be aware that each of your lines is in a listen-only mode. At the conclusion of this morning’s short remarks, we will be opening the floor for questions. And at that time, instructions will be given as to the procedure to follow if you would like to ask a question. pleasure today’s my presenter, now is to first introduce Mr. It Alexander. Paul ahead Please go sir.

Paul Alexander

available good to first issued with everyone. in from quarter you Earlier share also Officer; Mike and morning Thank and Investors published moment All our Henry, Welcome and quarter news Chairman our Chief call. CFO. release am and we results your Maria take our remarks summarized outlook. a and we management then morning earnings our prepared documents I a Kimberly of that are the earnings joined section just Hsu, today we comments Mike website. this and Executive year full our conference first Maria Clark’s and will questions. few In opening will Mike

may adjusted and During further on annual latest forward-looking measures. morning’s forward-looking statements. information also this of comparable in release described see adjustments reconciliations GAAP We further of about news statements. to excludes report section Factors this release. the financial and has discussion results we That may make outlook to call both Risk certain our items Form these for XX-K Please refer

over to the Now turn I’ll call Mike.

Michael Hsu

would Paul. few like you, everyone. with start Good Thank today morning, brief the call Okay. to I the remarks.

and challenges results sharp taking the short the in with through rise input Our outlook by we supply I been and a not actions consumer face. our result have pleased decisive first chain quarter manage expected we impacted cost. outlook de-stocking term disruption, softer to tissue than on am are Well,

term increases At in good market shares price we start are with brands markets. and specially offset gains to in long we are a commodity in same our with term. time are XXXX capability able many selling rapidly to headwinds. the our key this the moving strong up year share to and in ensure both gained invest to continue in We We to grow and near commercial

this do underlying done strategies. in And and expect cycles and to in have the of We in growth health we brands now. again confident successfully this our commodity past remain our

operating continue for We’re through to will a very our this. with to stronger and environment. how know We success team in build manage will and excellence value company I’m a long-term execute creation. confident dynamic

that with happy questions. we’d your be Now take to

Operator

you. Our Thank and first gentlemen the from [Operator floor for Dara questions. Ladies Mohsenian Instructions] at comes open Stanley. Morgan time question this with your is

Michael Hsu

Good morning Dara.

Dara Mohsenian

Good morning guys.

So a couple of questions.

but you in meat price more terms in mentioned bone you First where to some U.S. categories you it timing, type the announced many were besides on point product I in other take know late Mike potential pricing vague March. that want any just where increases at likely? a Can this businesses already a additional across remarks maybe there international put as commentary in the countries little of of the magnitude published might about what of increases pricing think you in more is be you the prepared you on portfolio?

Michael Hsu

you, Thank Yes. Okay. Dara.

to It’ll business this and North price going rapidly cover couple announced tissue the Our the decisive personal be consumer is back overall towards across America, obviously. portfolio. over year to in actions many take digit businesses. and our mid In quarters. will in March additional of pricing have next of about of to moved very range our XX% typically the moves single made realize price those both teams effect and We our high end care

including Latin markets in other parts multiple Asia. in Europe, pricing America taking of and are We

inflation execution. again We incremental raw expect we’re this and productivity and inflation, pricing to the off material to offset material additional most of raw year

of We our have thus generally most moves announced far.

Dara Mohsenian

more it it XX% and other uncertain comes you Is you’re just timing think eventually? America helpful and do that for the point? in North That’s the at timing – and right Is Okay. waiting this

Michael Hsu

some and some effects do rolling say recognize might I we out little we Dara later. phase cover and and Yes. that for a bit obviously that and list so we’ll had count we’re plans you actions count would and so

Dara Mohsenian

looking it full to the softness year recovery Okay. the And that saw top at implies then pretty a guidance, QX. we line in of some robust relative

in comment So of factors? mentioned? it going the you’ve Thanks. look American particularly there North in consumer on market just increases and us category And in assumed a you sense driving the Is then are are of a wondering share as tissue the of there. also, personal give or assumptions other you price both some the on I’m for care confidence what balance what’s forward light can there, more year? recovery you just the what that

Michael Hsu

okay. Yes,

the first first the toward again, had March the I things of then on all think Just is -- end one year, the the around through high we of in maybe in the half the quarter quarterly phasing that demand in just and second that the outlook, started back of and quarter. unusually recognizing last

will -- that our difference a driving So that’s in really outlook.

adjusted maybe March. got data vaccination in down Dara, time was changing. to in it down that’s the well. pace do U.S. reasons think faster the looks the it seeing big climbed faster looked reduced in and February to see that a January that scanner faster January, and tissue, it consumer tissue, destock for mobility organically is and I a related was by in and a the it’s February, our and about -- XX% results is in to particularly I of destock the of track can in adjustment you mobility are outlook think like we as One being bath we we like and Interesting, faster XX% mobility

lot think of it of happening -- kind is So, a we’re again, it demand with tissue. I in the attracts does seeing what

Maria Henry

Mike supply as said other second then that’s had so impacted And you KCP the our the first of first any would mostly in you pick quarter and we half business versus comps, well. event. KCP sales. comps disruption expectations in business Yes. our effect easier with the that business our the also. areas, the if our shares, first the at quarter we half. market the underlying And at the look of expect chain And And look And around to a up the mobility, is performing underlying if get

Dara Mohsenian

Okay.

one Just Go ahead. clarification.

Sorry.

Michael Hsu

Go ahead.

Dara Mohsenian

was there more going the some of to or QX to I volume do going point? you sort recover just ask that is or recovery that the that of loss year at applies volume full is a any is loss, forward of

Michael Hsu

hoping we for stick think some Well, there quarter was recover that of it, the but the we’re pretty will to impact of big a year.

will goes and you little points our of and in constrain to growth, going conservatively back $X.XX our Dara, phasing, have in the more give It winter to and would America, going texture to QX about overall bit X would this shares just points personal it’s organic been a a would organic, our lot to which Let me this just also a on X touch quarter. care, the agreement growth note, be the it’s of volume North about to be QX. storm worth also America. share, particularly and on affect Important for also North in second

and U.S. based understand, in for but the So we XX Arkansas our network. -- impacted story tissue shut Southern facilities Oklahoma have and supply down you up the February really consumer that think is back hit Texas, It storm personal significantly I the may and and to care in large days.

and that sales business And two through sales supply been not affected Dara. continue affected us, producers the to I much, of should last why has to say. material affect hey, year, would more -- tight due our It’s a were to it a through or rolled already were supply. running would to flow because it COVID so than also so impacted down us, have in situation for raw that’s we did our say, sales. going Polymer Typically, impact I week and but

outages so, materials. having some some spot And we’re of

again, quarter. underlying bit so North brand to a expect, issues, overall, our And do we second been shares healthy, performance the soften very in has in of supply but because America

Maria Henry

a use our in basis. products on and Yes, and because consumption categories fixed are it’s so we tough daily people

outside go when on So shelf, to find if they’ll you we’re Clark. it not Kimberly buy the elsewhere, them, then

there And it’s little consumption. we quarter outages, that fixed tougher challenges, the given so given when It’s recover. look to typically in a the is would first

So, but reduction our factored year in impact into full is that outlook. our definitely top line

Dara Mohsenian

makes That Thanks sense. guys.

Michael Hsu

you Dara. Thank Okay.

Operator

you. Thank

Lieberman from question Lauren comes Barclays. with Our next

Michael Hsu

Good morning, Lauren.

Lauren Lieberman

Good morning. bit I a little talk hoping you was levels. could about spending

of Dara’s balance talked from cost into pricing unforeseen year that the the point the just the related to year I over So as question questions, a and deal this about in one kind then the up to the following gotten think just versus morning or on comment? time with here, you’re that about productivity going some with of basis also up to steps you the just of of And XQ clarification. of kind I’ve is on calendar just of thinking G&A of When balance to But was for XQ. degree most which inflation, you tap is to offsetting times spending -- investment couple people that a of the and headwinds. that commented

Maria Henry

Yes.

first between one back come the take me Let to then I’ll and last line. the

cover terms the outlook, then inflation are cover and So, the then is comes year additional items increased our by EPS look reasons of all the when savings would FORCE of belt it of that to to you outlook about the tightening around that, after have within discretionary down the will both get one you the way add in could additional Mike of talked look which the all that year if half that about. run-up portion inflation. volumes decline of we well And in reduction good at program in And we pricing. think at it cost on as just affected about the say, the you that a for you to on in as with

we’re then helpful. do we increases Paul, a recovered I price to half is fully So, within as and over increases commodity if saying pricing the combination about we think time, savings, expect cost recover of always through would and on year, that’s

Lauren Lieberman

yes. then and okay again, Definitely

Maria Henry

of will and that all I’m things to brand invest between I think as about investments, is continue means those we’ll our innovation have to way support behind paying continue we the first development K-C for year we been to for off continue the in foremost, will the strategy, capability invest XXXX us. and which our lines,

that we protected look then we’ll any year prioritize FORCE given look belt continuing on given are opportunities to savings conditions. try discretionary in year to So we to And this are hard overall have cost our year that there. to addition, and pull spending challenging there and I’d tighten investment. the well we savings, And costs, push certainly more at as productivity as find working as I outlook new into teams for the our mentioned, in the just this as upped and programs pressure our the

Michael Hsu

up share share points. points. up and I’ll like some despite Lauren. almost because to be are were important in really just were brands, able I’ll better CEE were feel are in markets over very India, us and globally are China believe we brands Argentina, investment that It’s X are Korea, around rattle well -- it’s may a very responding shares X advertising to execution in working share broadly to you all quality globally over Australia, these, working. in see for protect X.X well would just well I all key And up our American about the world. but add, investment the our what challenging and North off our X performing innovation in conditions. Definitely, Market I investments say would Peru diapers are some our almost we points shares

have our continue we digital products marketplace, we that. And feel execution support great teams in great and we especially great to want so again from marketing so like through the and to

Lauren Lieberman

I double single-digits storms offline chain which the to created follow up is can this is it up fair? personal check that And supply like if track on care was Paul but with just super Okay. quarter, low North my issues, wrong, America sounds like hadn’t be math, to

Michael Hsu

Lauren. That’s a assumption, reasonable

Lauren Lieberman

pass will I Thanks. it right. on. All Okay.

Operator

you. Thank

from Grundy Kevin Our next with question comes Jefferies.

Michael Hsu

Kevin Morning

Kevin Grundy

could that should on thanks. Great, March? of impact comment mobility K-C obvious guys. in evident of did February. unfavorable consumer of that one, be potentially again Mike, Professional. I two, wasn’t you in Did wanted somewhat your guess you a about be I pricing January had Quick expectations? quarter, line than volumes, hedge. up, bit pickup morning, looking number that tie with question the there there Because a business early some and business had And necessarily like month back natural but like March the the in demand the it business. but picking you prepared did took lower a in on up effects in year, a in was the the to looking then better Good quite of an some an see side was It remarks see in looks to seeing pick come month elasticity the which with street the modeled. of ways, social March? on in two to relative last effect

weakness So just hedging and demand then on on implications elasticity consumer would from the helpful. comments be side

Michael Hsu

mobility say Yes. short so I yet, say answer and about on is improvement down business. was the it’s core Kevin. XX% washroom the business was was washroom in I XX%, would regarding down improving. Great improvement been. America, not business more on but continued about questions, I safety did about guess organic where pickup the The wipers North with than and is that

just XX% events. offices improved So lodging, I being XX%. business January, think about March And high in business concentrated isn’t yet. to our like tends and and locations in your travel, down traffic refresh It through down sporting February our to to washroom to be it then memory, was again had flowing

may forward, to your these and had harder see up mobility that that that of lagging I great the that tend there pick play business pricing. side the think that’s some And gloves wipers, I will significant pricing out quarter. feel been of tend has a overall pricing. we think up momentum safety point go we some do we I start Kevin, bit. lot in strong to to So as the regarding in, the little lag been sectors were but on the business. a double-digits our in We safety about of driven

unusual elasticity there we unusually coming on wouldn’t that high in has pricing, It’s side. just So say as some it’s is I -- the probably safety pricing planned. been

Kevin Grundy

just Mike Got it. Maria one in as Very helpful. is squeeze more. This well. and could you If I for

and bit, less pressure, really of be your has environment pulling advertising Just building considering think, commodity to of a context,, went making sort the and is and question. the on, ROI visibility there’re questions this since Can been costs. given over. I’ll cost commodity The decision this marketing which how decide among on. some Thank Lauren’s what’s terms these investment do yours Mike, maybe big discussions balance given about arguably community, levels, may and a company just on have the visibility little levels, increased taking like into maintain the on bit feel the course, an back ROI whether that to you internally those went of a that I would the volatile of it on a I you you the think of reliable you. there in some and then talk significant focus some given maybe decision maintaining pass little just of model what

Michael Hsu

them. marketing we what as point fairly we and innovation is in I And over business momentum it feel is, rattle Kevin, momentum brand feel just of the about the think which choppy I bunch are investments have waters excellent. quality, In strong and team but still the the a in we discuss you’re growth. we to and of making like off we categories, product One can we’re all would as back really our issues great Yes. execution, share tie say share I globally.

I will in levels, feel want supply to where not decision the but Overall, discussion small America, we highest good some but have been the ROI make we may will we promotions maintain around about some example, we driving, manner. our for a supply. North has say short-term investment don’t to let’s constraints, say, that. that. So There you have be be when it in in business in adjustments, that

has important, ROI But going for which will point latest quarter. we don’t on is So marketing the been on data generally is very the to tactical our also have especially vary, ROIs ROIs, your I think adjustments, strong. but make digital, some we is, it overall,

not if a hard cost us it be because so lever of tough, to actually little how And may cutting it’s helps that working the it’s that traditional when get advertising for effectively conditions we think see the P&L.

Maria Henry

the level at deep dollars, we can internal you to as review to payback getting did some XXXX market XXXX and into we’re where the decisions, because line is have coming varies the say market-by-market outlook the for discussions pretty we it pretty basis our makes imagine, levels advertising relatively But around we’re what that be be But product current had on extensive we to percentage sense the the ROIs that. by believe expecting got continue by a our advertising sales on would basis, discussions of spending we’ve similar it plans dollars. dollar original those the on a line, environment, to in given strong And and spend will in while year. I to with plan

of the thinking than that is, help is, of is have we would All going mix we’re said, how and to it and total ago, in that’s what but it. on where expected about different three it, it months

Kevin Grundy

Have much. very both a you Thank weekend. great Okay.

Michael Hsu

Okay. Thank Kevin. you

Operator

you. Thank

with Our Steve Bank. Deutsche next is question from Powers

Steve Powers

was going the talk your EPS we’ve I about maybe round to Good directionally morning. It at well, can like so is XQ EPS as guess, what the talked to least far, cadence start. sounds of in guidance a the XQ perspective. an because out year, you of the tough Thanks. about context balance tough from just be over of obviously

concerned that I’m a in way investors the actual there guess, confident like you’ve differences the talk share in half. have that back-half visibility what morning, So we like going of But market heard half, to highlighted guess of price through, the to lot this from first you’ve be I in better EPS elasticity what meaningful of just lost sounds the and about and year just I when it drivers? growth related you they’re in about rolling pricing just back are savings increases and back way in how earlier because I’m this in assuming P&G what are sales a efficacy frame week. and the there. movements the half, good then back announced in is hearing looks I half, you given you the the think versus

around would very be you any So just that thoughts helpful. have

Maria Henry

then some more few reasons. about pricing. in that reason I’ll biggest The half. through second give pricing the and Sure. being half, expecting are at But that is a broad the for commentary, and our that second P&L the the benefits be coming talk can stronger of Mike half, we specifically and when second we look will a actions

quarter. In terms of the and the ramping inflation input first that second cost is in quarter

it that bit moderated peak, a then and some second down half. moderate in expect and come will We -- the cases in

program cost million for the in million quarter, Additionally, of can as to savings we’ve the and full got our million $XXX savings the the of $XX $XXX FORCE tell ramping you from outlook first year.

from So first And of costs second in of year. year, the will elevated we will those down -- in typical which half half the year. also typical have ramping then, as is be in the the come a some

around some the what’s have I use, I the that, we some look it. pricing. visibility has good the would driving it, be that -- -- into area word at So one well, factors dynamism The when would

let Mike how to about come a that we talk I’ll bit fruition. little see So more

Michael Hsu

Yes.

just impact. well, were have it so, And in regarding the good around to plan our Steve, I assumptions a what we general, pricing of were. calls as original pricing, of do volume from the we couple out our did the say coming make our would experience as relates elasticity We ago. in generally in plans years of elasticity from ballpark have it, So,

of And be, we to in volatility of the exactly price be difference call competitive we related about this say it. would that. to so happens some due But some regarding our to and points, COVID would what the have learn then we to kind the which market to feel executed. I how still going good assumptions need one that’s did ability And environment

Maria Henry

quarterly at more there’ll will One conditions ahead in that tissue. point we through behind we the we while second other comment the the level And then, on. had also phasing and end And getting through in in of all-time don’t FORCE of and we includes that will the the is, that in put a I up had to in that, increases spending a in inflation quarter, growth expect normal. than have it’s We’ll we the low cost quarter commented performance be North and K-C tissue Professional the supply consumer pricing savings. quarter, it quarter pick that our our prepared the record terms on I’ll had America into guidance, make in last volume that commodity do look escalated And price chain investment then, said new remain when worth costs spending. then that before from the in do first in really will strong first the second that in in the strong consumer year, if we very all cost Mike in we think numbers. that’s And already very you quarter, provide the the second dynamics expect in noting between-the-line some but volatile relatively is And up second more category most XXXX of to tailwinds. as are challenging, factors, remarks, earnings addition will of quarter, those just working show of tail of of coming selling the market. be more disruptions detailed And

So challenging our half second quarter year. of performance in up the ticking second is the shaping with to that have all the for up of conditions

Steve Powers

strategy it thinking about -- been in impacts Could I lasting I outlook from guess, about very think That’s guess this you terms about I how of the track like of a ever for very mid the X% helpful. XXXX, -- the on and a lower at conversations, are was even when setback talking ahead much of here? context we’ve terms while in And think in And strategic could you I that and mind, I K-C Okay. XXXX CAGR investments if in Strategy unveiled. single-digit coming the doing of that we’ve EPS least all in with just since CAGR terms the quite seem been you in like year. your frankly, for our into

about into XXXX? in understand context, this that XXXX this enduring -- -- And I’m of setback guidance. context just to not path on you’re in early how is as think XXXX So, are asking could strategy. you have that of approaching broader this speed is in I’m that likely impacts a the or bump this impactful for kind more is you trying how as it

Michael Hsu

continue strategy. I’ll I That’s and we invest see our Yes. I not why long-term the that in check affect are impact view But our understand a question. should temporary if it think brands. to we as

I that I came I take as think about in but are said great feel for a really because we And our what plant I investments want the had brands Texas. think, China, we’re going. down -- before, in part a where to working. week a don’t doing are We

And thinking so, about that’s how it. we’re

plan guidance the been. to recognize what our has We hit long-term. And over medium-term so, that we

-- always least what affected we this doing in responding on accelerate -- in to recognize we organic with with operate by like happen. going but environments COVID. job We it’s never also COVID want Texas, you a think living doing the lifetime, once in suppliers that, recognize a for, and great teams And we what making great job But growth our are us. progress best challenge, here I partnering was the are to a that the a at And guidance once doing can. think, -- our in really storm to are but now they we also, that prepare lifetime beyond and medium-term a that what

a like a effect. it’s think I temporary again, feel I Maria? it’s So, --

Maria Henry

agree. both the I that encouraging And dynamics on Yes. and effects consumer tissue COVID-related the a have people given on side professional business, to categories, would our we’ve the look two-year the had take been meaningful primarily the side. on

So, when the we shift you consumer to when is our expected happening. consumer destocking you for year, demand performance as at it look that happen. We as the our had tissue. some in look the around in year it long-term happen be that didn’t up destocking year incredible consumer dynamics. half And it where stock to last that This this first quickly especially the change didn’t with at and would would business. outlook We expect appears we expect

our have side So, big not if you we the tissue net items. COVID had COVID-related guidance period the -- from long-term on impacts net year. is from years this some medium-term two-year we’ve look we at year, business a just The this and over of two performance our affect last period for benefits It’s actually the looks business. consumer good headwinds to outlook relative and where does got over two-year the

Steve Powers

your in Great. Thank you it. very much. answers. Very generous Appreciate

Operator

Thank you.

Sachs. question Our Jason comes Goldman English from with next

Michael Hsu

Good morning Jason.

Jason English

much slot the that North you morning, quarter, provide think I could in your of pricing me hoping last promotions for the XX% growth really more price se. you per price stood I Hey, you promotional particularly quarter little reported America price out expected tissue, environment this lower deterioration very was Thank America, with about mix mean, North realization, a was in. relative to thing context the I good Good cadence morning. guys. environment. on One in

a are much factor faster will have? of already. like We’re expected. negating on back Is what back promotions looks seeing than your It and certainly to I neutral how coming that price increase you’re it’d be

Maria Henry

Yes.

would I the in we show where up of the was fourth an true-up in, on with in caused jumps necessarily that year fourth quarter had last market Mike an timing Before had had the environment. unusually not accrual unusually do indicative that to effect It high of call accruals that out that the price to be quarter we high.

from quarters average comment. more the much so Mike, least wouldn’t the I three year point year last you to have But I’d full last fourth year. last So, quarter. I’ll to you of compare or at the

Michael Hsu

Yes.

So, North I why market we had that in view that still overall, constructive. American items we statement, Jason, that’s the be across would knowing say, and some to care tissue overall, different personal

care want frankly our in kind supply. where promote as advertising. levels to, little by to volume you’ve so the calls -- high significant I really reversed And where committed is a primarily kind lower remain than I promotional demand that’s personal say Obviously, journey our bit now, our given and at tissue, recall, think In it’s would getting team heard me is perception it say road would and us, I that innovation a would we again been path. plans before, had and and aggressively. returned where normalized little in along been proceeded for don’t grow say levels to few supply we in it’s I of going, to of half quarters I ago because still on personal have first -- and our the that is. least still care situation and believe have tight we we in our brands promotional a but we And think is is products planning investing

consumption And category promoting for way fixed a so for categories not feel like healthy in business. us over the a does

would the overall, appears again, say, market to us I So, constructive.

Jason English

are in headwind in given to a fourth that. I back the going north of how that your million, to have suggests going one-time which appreciate overcome quarter. I big quarter still Quick you’re fourth the was $XXX right? big almost that $X.XX there hurdle? Is benefit that suggest I math guidance was it last such you And is a EPS context. guess such half-weighted, good on realize didn’t year. that’s Now,

Maria Henry

Yes.

a lot those Our I different through described moving I And as factors myself guidance won’t of in repeat balances earlier. going points.

If at the the benefit look you net on the in then X% third the at in consumer year last look tissue about quarter. and pricing the first from and flat quarter fourth of trends, half, the it’s in you X%

commentary. outlook our various into full And and the trust taken said, encourage you half look year factors so I’d I at all of I’d that -- as the we’ve to second

Michael Hsu

Jason chair, of to I our through things. Yes. paid we you’ve what manage -- kind been you a And think lot these so have of we’re in recognize

so things year. up And come every these

mentioned know and manage will. how situations remarks, these we And in I to so, my we prepared through

Jason English

appreciate I really time. No. much understand. your Thank Yes. so for I you it. guys

Michael Hsu

Thanks Jason.

Operator

you. Thank

Teixeira with question comes JP from next Morgan. Andrea Our

Michael Hsu

Andrea. morning Good

Andrea Teixeira

Thank you. Good morning.

first three outside have for America. comment I’m questions North can that. personal But environment in I So care you sorry for you, part on, on the if competitive

competitors more I share some of there? heard first has competitive competitors share dynamics one you’ve for diapers. some late have from then But And share increases the seen the encouraging. in in think is you we second comments that’s market your which LatAm, taken market currencies. that are you of been the have Europe China, on as the -- on in you What obviously called in gains price the first and out your and call and different local out that And the are in part. one -- report market

third had the do that the to you know be I first of but -- you results Your you. year. the washroom’s have how quarter, the a have I balance embedded seen in are you prices mean, bit Thank you in more and in of comments And, taken in the So of expect Brazil sorry, coming expecting year? a the business about loaded. there the balance more, incentives trading, government that results already what obviously guidance? with at bit you back for travel-related amazing any little KCP the What part is is,

Michael Hsu

environment. -- the start very high would execution to as this I’ll be innovation, I’ll very, we’ve and which Andrea, try local of competitive in Overall, that’s kind marketing approach, the quality, all mentioned, good. build again competing been think road brands Okay, through with I I’ve right. again,

that effectively, to feels very been especially. up double-digits like us so, has across And China China, working diapers. were both and femcare in We

business. So Huggies over say, their about the we volume. would double-digits was quarter that mix. great by in in I was they China up XX% and what driven and premiumizing was feel up Organic And

very X both agility. almost feel points. good mentioned, product I we we around the and baby have as up, on are in And in like best is teams the share marketplace our and femcare digital the so And marketing

And consumers. at that the digital so good relationship they’re with very building

our been And key I business. component driving of so that’s a think

consumer being looking products market view I is as more be may quality Chinese yes, we a our competitive, bit products getting the for so, think like And still the the the best feel now, marketplace. as but they right in high and

Andrea Teixeira

That’s and helpful. comment on in those. can Europe increases price And you on the if LatAm,

Michael Hsu

say, would I Yes. overall, in we continuously have we pricing have Latin and in pricing Europe announced been announcing America. fairly

Europe. it pricing been in we would in general, So, mixed. Latin competitive have America, in then locally And has say, competitors seen -- move I

there so seen some local And the competitors. one that larger moves from had ones we or have And of have moved. been then two not pricing

And a and so for operate with year going dynamic on been a been to them. just able our that’s so that’s teams or have now

Andrea Teixeira

KCP? And parted Sorry for question. on the three

Michael Hsu

guidance as play that is, we we in. segments improvement we faster, KCP, seeing the the we do pick that Maria -- the yes, the mentioned hasn’t see flown mobility The earlier, throughout I course in through are are but KCP stronger for of again planning business up washroom And sequential typically Okay. think year. the

were do we work. get as vaccine more we a so we least will to be ending And as would saw people related to -- last we it’s to faster think do America occur initially that back in that rollout year. at North I expect see

Andrea Teixeira

you Thank great. I’ll it so pass That’s on. much.

Operator

Thank you.

comes Securities. question Our with Christopher next Carey Fargo Wells from

Michael Hsu

Chris. morning Good

Christopher Carey

good Hey, everyone. morning,

So, just one then question. and follow-up another

levers a least have how promotional would pre-pandemic on maybe I say at you’re prior just competitive if over you in those you comment if So competitive bit say would faster growth XX a bit category expect than standpoint emerging where this markets. birth a around over keep have then follow coming lot overall But take market right? know focus there’s steady markets There’s term from take planning can situation certainly, X rates rates, on on longer the Can so. reflected I that you or to to you And category below promo, been keep or just rate back even control, the and promotions talk higher on to much just impact that follow-up promotions activity can question, you you developed is share appropriately months well? just around levels off? maybe as a deploy would standpoint, XXXX, a levels. were about broader you narrative do start off, next to a -- from unemployment to that what also of to think question to my So

Michael Hsu

Chris. digital, the promotion, Yes, And in and of is the then to for the on in that’s say, right. try kind through only overall brands tends advertising. us. okay. I’ll it’s address, effective I retail spends, tool feedback investing mean, On ROI products our approach with quality of of our would is quite digital I any grow get be performance, including its promotions, than faster higher an not to other you to also--

plenty So, we very think of a this did I have to again, approach We think working it’s shift I for effectively levers. and couple years of us. ago

category think right I can fixed cookies, impulse it’s like consumption different incremental of way said, I kind the That rattle you like because say price our of don’t if than, in that yes. those a feel category, you off the we in these let’s grow are but a be competitive category on are is very control? drive And robust would I levers bunch we So where or the to we as consumption ask have we about are say, that to effectively. programs in an have what just promotions developed And feel do long-term good working want promotion. we promotions, through shares, sense.

Our consumption. categories, you drive incremental don’t generally

rather for share can to rent right. I’d short-term our it’s and earn rather share. very You the a share, rent than our share expensive But drive way

and So, significant again, we making investment our way, we capability. by in have revenue the levers, management do the are growth

promotion. while work to and the So we we have even tools invest for more

in want very to as know make spent that want would we terms that don’t -- it efficient be we’d addressed question. and your we how I of think selective I well. we if

Christopher Carey

helpful. but of then more dynamic, developed where type you GDP divide a That’s birth slowing? in see impact maybe rate you have and developing if are down, a can between drivers. you Yes. you upside your expect rates just on markets wonder Would category comments I come And maybe birth cap to your the starting more per results?

just the -- broader growth whether just starting and anyway, rates there slowing and is around some Thanks. question you’re expectation there. So, see medium-term near to for

Michael Hsu

Yes. we in both rate, question, and Chris. slowing growth little a And developing markets. the overall, seeing in developed are Great

in X although year. Paul, but I last think about U.S. say latest would point The data, the where a typically birth about data XXXX. not instance, in was For -- officially published, lags, the the down X we down point rate X roughly it’s it were down a

that And down rate too, come we’re so some well. where slowdown a the in have birth may and as read of was has that you seeing China, significantly

instance our our -- we’re X and One I our China. the premium all by creating for launching value-added products. balancing premium a up really lot more brings XX% have premium is a of to tier, that’s couple in we our call strategy products That’s is a almost we’re the think our launching Tier-X different points to we is premiumizing then are mix factor feel share product I in And our components. mentioned, we’re escalates time is Tier-X, as And and products a year we through of elevate core we this hold. mix and further features categories the a over and which them of and at Tier-X. have best product that premium what we Tier-X like current that taking

like -- in growth. are many have said, or where are maintaining other And birth like not so will to they our rates do think category way. willing is we certainly grow That drive and and also that rates to have are yet the and their Indonesia penetration as impacted developing we still continuing still that birth business India markets -- also I we better continue is the consumer pay for some to the in where products what what markets China, near-term,

for right like I D&E affected good recognize then ones likely us. because to but think environment strategies some are our about elevate feel categories Do which developed is business both in that in expand continue again, the and of to COVID markets, the So, we and to our birth our we has rates extent, strategy. feel overall our

Christopher Carey

for both of those. you Thank it. Appreciate

Michael Hsu

Chris. you Thank Okay.

Operator

time we questioners further no Thank queue. the have you. At this speakers in

Michael Hsu

I thank us you all for Okay. joining want to today.

reflects assure very remain taking hybrid are teams approach some and that change in And really our our Our significant we want I brands. our revised to environment. confident outlook growing in you action to decisive our

you. thank So,

Paul Alexander

Thank you much. very

Operator

and today’s that Ladies presentation. gentlemen concludes you. Thank

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

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