Kimberly-Clark (KMB) 26 Jan 222021 Q4 Earnings call transcript

Company Profile

Participants

Taryn Miller	Investor Relations
Mike Hsu	Chairman and Chief Executive Officer
Maria Henry	Chief Financial Officer
Chris Carey	Wells Fargo Securities
Lauren Lieberman	Barclays
Steve Powers	Deutsche Bank
Kevin Grundy	Jefferies
Andrea Teixeira	JPMorgan
Dara Mohsenian	Morgan Stanley
Jason English	Goldman Sachs
Peter Grom	UBS
Nik Modi	RBC Capital Markets

Call transcript

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Operator

Ladies and gentlemen, thank you for your patience in holding. We now have your presenters in conference. [Operator Instructions] It is now my pleasure to introduce today’s first presenter, Taryn Miller.

Taryn Miller

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

me Maria Mike Henry, with and our call and CEO our the today Hsu, are Chairman On CFO. Maria remarks Earlier earnings this XXXX Mike results. prepared full news our our and from release and quarter morning, we also year we and that summarize issued fourth published website. Both available our Investors section the are documents of in We hope this to valuable call. prepared our you have find it of remarks ahead Mike and a moment, will then take just few comments share In opening questions. we’ll your a

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

it Now, I Mike. will turn over to

Mike Hsu

Okay. everyone. Thank Taryn. Good you, morning,

questions, on to outlook. to our get like offer to we markets. our strategy perspective execute XXXX, your In categories to elevate some and Before our and expand I’d we results our continue

helped began we the the financial selling quarter our second pricing disappointing, year, decisive strong which action the These the including While in us deliver significant growth fourth were performance. impact sales and of improved actions, with results offset to half, higher overall first organic prices costs actions. took in net half of

key Through the which with gains team to continue markets. numerous our superior organic of execution, make growth We year, market strong contributed all significant care. progress strong share personal support local innovation in in launched to and it accelerating

state-of-the-art our facility in important market positions India. route Indonesia, in growth Nigeria, We commissioning markets, by in advancing market integrating several also in to and Softex production a strengthened

further. a a our we by top and in were the meet limited operating to chain well way we fully ability our encouraged our are products. with environment. In our dynamic negatively for costs XXXX, our and to environment, margins teams growing impacted levels earnings beyond challenging organic consumer Input executed supply previous line intend growth very and the While disruptions demand performance escalated accelerate

brands categories. strong have and We healthy

to our digital market agile innovation, local execution. We brands with support and will continue breakthrough superior

performance volatility as demand tissue to we improve We have and businesses also the the years. past cycle experienced we our in over expect X

to and We are eventually year. make expect this committed our and recovering expanding margins progress we to

significant and to pricing taken impact offset have the We of expect a pricing actions of cost majority inflation.

and our meaningful pre-pandemic Better to our in while We of confident for ability of time. margins confident purpose over We World. brands are and our in levels categories remain potential ability our restore we our Better a to Care to in achieve the work create value, to shareholder

take questions. we your be Now, would happy to

Operator

you. you. Instructions] At this will open questions. [Operator Thank the Thank for time, floor we

from Chris will Securities. question Our with come first Wells Carey Fargo

Mike Hsu

Chris. morning, Good

Chris Carey

maybe how you of of versus are and you can is out it dimensionalize coming they upside there are? stay where fair? And if X% volumes that Can on to Consumer frame hikes? to play on impact an that maybe see you is some much from you could comment volume volumes help based going about expecting be around in the a Personal elasticity majority you start, that’s suggesting just then of where and your the really price seems hit seeing the just I like X% around pricing just, are Tissue inflation, momentum too I Clearly, range volume X%. shouldn’t you the comments pricing, maybe where are that cover pricing whether issue. out? some play expect maybe you Care. down off to comps Is if to it guess year wonder

Mike Hsu

Yes.

momentum the business expecting which is continue. push, we sure, that’s think right, overall. performance and good that Care, And Personal I Chris. are I good we about think our that’s to of strong a feel for overall, performance

great innovation brand the got Care coming on year great Personal have support We Tissue both throughout businesses. and and our our Consumer

feel there plan. about I is the programming. good in think That the pricing said commercial significant And we so

which there estimated. will an so And be elasticity we impact, have

we little offsetting growth driven So, some organic the that’s of a the have being volume down by programming. commercial bit,

the so in categories think of categories. we our I essential categories price far, And despite the the of And And the the fourth that increases, our essential. we I reality quarter say saw performance. volume seeing demand is, would thus the – kind are highlights are good nature

assumptions in a the our the in there direction, and love little a are our if categories, be lower. I’d elasticities see that are And potentially, the a little market moves could generally conservative to little other if elasticity Generally, so upside. –

Chris Carey

Okay. no, And that’s helpful. just Thanks. yes, yes, –

called a again these of sight the view, cognizant is the pulp environment? prepared lower conservative the just input bit you one and impact Just that. a remarks, of you for today. relative in is surprise a those. out or I you thanks the materials, follow-up taking Can maybe whether secondary this said dimensionalize more to on of frame in inflation, a the the I think of secondarily You you that’s impact line outlook can significance So cost that for guess of visibility whether bit of polymer-based are distribution maybe of part just relative – energy? But just is what

Maria Henry

Chris. Sure,

a Let XXXX. me inflation for minute spend outlook our on

mentioned, just have volatility it to around continues you it. As

today. you call, had we million that October on been have given outlook if $XXX lower perspective, For are outlook the would than the we our we providing

the calling we are the But let been hence, we it. the tough inflation the material of be around of it’s range components, XXXX it for what me led by to from And polymer-based purchase at talk see. will then raw Approximately inflation about So, expected energy. half And kind distribution the cycle, a part of and of is materials. volatile. quite come

by superabsorbent followed pulp. things like and then So, non-wovens and

P&L. one with market minute the But a I will up commodity and more in on spend you give two there detail is areas inflation year. just commodity inflation. happens use make flows will me some in inflation let you And so, a little to how some a contracts our what through we second one of of that the prices manage and beginning of know, commodities – the And those Number is on minute. contract our structures reset the volatility the as

So, they prices And year. some them then in. lag reset built have some at higher timing this also of

market seeing. we the early of tell will in market part on see that said, in flow some prices, fourth But in XXXX. So, I our the the the inflation P&L that the through will quarter high you’d are you what of

North year will down down. expecting down be price in be market eucalyptus polypropylene for will also price eucalyptus. market pricing amount XXXX. softwood, we in America similar The And the for are market prices full average a for to the So, to be in

from up; So, us to me most. year; is those up; the fiber, coming next XXXX, up. sizably hear we to expect on be recycled the pulp, to energy, up; comment and let things expect we since be up. expect about superabsorbent, up talk But market be areas are up; inflation the expect Fluff be distribution, other in you non-wovens, that pricing to

the seeing in to XXXX in expect are basket up that reflected quarter. is the fourth thankfully, prices portion already will that’s on that There of of the well, provided. coming in market be we commodities, So, and and meaningful down basket the be ones, traditional what’s the outlook that we our we

Mike Hsu

Yes.

increase So our on. XXXX, historically, a was big we is of reversion mean the driver pulp. commodities, Chris, like what just in I will in maybe tack right, see I our quick typically,

And so that and receded some in to XXXX quickly XXXX extent.

our in we And see so that’s typically categories. will

see in our reversion. will always We categories. It happens

expect down. absorbents non-wovens But And so expect whether little this to come back time broader I and and over resin-based, come cycle it’s because different, – peak is pulp longer. the super to it’s higher, fully it’s the is board or a down

restore with the both regardless margins pricing. inflation expect we with And initiatives. cycle, the cost our cover to so with to happening of of our we are and And teams price majority going what’s

one. analysts then little If will given and about energy a ones – Maria our inflationary faster. mentioned, little some of this get and if there as So, than ones set confusing we a year. more a maybe is labor I some recovery past, this maybe for reversion And one. haven’t are are a be which we we think the talked big investors, impacts That call to but a we at of that’s reversion be little broader big typically year. it’s about, point. do, is And not part that what’s will and we expecting in the said are reversion, the bit typically typically big But freight talk and

Chris Carey

all perspective. Thanks Okay. much for that so

Mike Hsu

Okay. Thank you, Chris.

Operator

you. Thank

from Lauren comes Our next Lieberman Barclays. with question

Mike Hsu

Lauren. morning, Good

Lauren Lieberman

the In release, about there pricing. Good little don’t morning. I – a the I the a I remarks know, prepared but incremental Hi, about – mention sorry, Thanks. the in bit wanted meant in pricing. was Great. of some release,

So get here? being are customers through? for the talking and new more was through pricing incremental resetting ability the difficult then more it simplistic of environment, that if higher. and Is should announced price more start Because relatively kind about down, energy, have market then difficult there increases see for price contracts speaking, logistics is a your been flowing is curious are that just that wondering, what driving your But about are the that to to but pricing so it inflation? I expect the and of resetting is I you to interestingly, better we better contracts was question, that’s perhaps difficulty higher for construct part fact also that

Mike Hsu

One, of Yes, you in announced just our globally I’ll pricing have on would things. America. – We track. generally, we Lauren. couple And Thanks, rounds executed say and example I an Yes. North is give of multiple pricing.

I think have then and another think we may had in November December announced as August, in I we in well. in announcement March,

in very rounds. – I has discussions you most tell I will will that’s most world us. there the for multiple in markets been you, been trade the So globally have tell around constructive. happened generally markets, and

seeing areas, things of freight and some since are and those mentioned in a than as it’s by customers some distribution they more are their things bigger we other happen. same component Especially, the of affected you are P&Ls. our think of I these

constructive. So have discussions been generally would I the say

and brands of in America as We us. categories. some labels. have some Europe our is Latin I the consumer other private for some nature movement But and reflects in a Chris, like the demand mentioned Western stickiness markets little in movement essential There seen to in

And so pricing. progress on to make expect we

on principle, say teams be to the of recovering our able We expect And price inflation. majority progress make expecting a as the we our to offset are to to margins. I would

Lauren Lieberman

talked bit little just The now ongoing million had the on by of of think and standards. labor, Restructuring the complete I know typical environment, one I prepared and prices. other $XXX with then because savings mentioned with negotiated sort great. million whether the is of a material savings. to plants the talked other question a we was raw $XXX achieving and the Okay, for quarter absenteeism in is forecast remarks you I in And low of one savings. also less it’s supply cost chain. COVID about last companies the challenges difficulty on productivity fourth thing access constrained recent I is run-rate release, in And But to throughout

you little you on this So, such part of level bit the sorts And on of year? bit typically why environment? of inflationary than number for savings these I wondering a are could absolute deeply if if comment a lower the little was target just in impediments might a FORCE might be that

Maria Henry

spot component meaningfully. with cost FORCE price our It’s on will are the what we thing other from negotiated hearing seeing down companies. are are you you material savings, that Lauren, the be within Yes. same

but If we benefit think our significant in in reset benefit expect from you us move the productivity we changes product forward, still less about and see those for of benefits to from ongoing XXXX, XXXX do as improvements. was that’s contracts of as a

our FORCE line The is savings other cost that’s in distribution.

any then, in happening any chain said, they be every what’s distribution the are is So is punitive. will downtime exceeding right given other our on demand Those supply continue machines XXXX. in and our are up under supply expectation ability very taking now. be would normal The going you our way where we costs to driving is expenses as And of year. productivity distribution in moment, circumstances, to our at meaningfully the the

be ever that’s have really are finding around we really so the the in and to had today bit is than off the look work And range. that that do time to better visibility cost pipeline the we in that we unlock showing we up how savings. we to to those never And we see can But have visibility opportunities are the at areas a team investment terms – the includes multiyear higher need some continue how a have savings and normalize behind drive have what FORCE to better kicked cost And things line. of chain number the as program will – say the challenged and to FORCE behind meaningful that a what’s XXXX other for I company. they be you savings the chain, we supply those. around what opportunities of when And P&L. drive supply to that in those able will on things had

Lauren Lieberman

on. will it Thanks I so much. pass

Mike Hsu

you, Thank Great. Lauren.

Operator

you. Thank

comes question Our with Bank. next Powers from Steve Deutsche

Mike Hsu

morning, Good Steve.

Steve Powers

two Maybe morning. a more thanks. around clarity little perspectives. hey, from guidance, Yes, and color your guess, I Good

that prepared decline room for might revenue higher with burden. even quarter, first sequential on a the with would first in acceleration earnings. in some is, in quarter think I difficulty remarks you suggests sequential incremental a have First FX your

is that I cost I you objective the to to that end. And curious again, strategic am margins. to where really you So I guessing And am get can can juxtapose as year incremental think on and pressure, from but pressure ambition to your want maybe by – that that? margin coming pressure you against restore dimensionalize just

sense to then where to of mind with you XQ is little the bit improvement the depiction you the as base a of trying So I ‘XX the get south in throughout year looks think kind trying like I exit my slide a back, get about case? curve rate and am in build in guess more what

Maria Henry

our earnings what usually guidance. so, don’t important will I will But be pressure a expect And give very intense of to quarter. fully be disruption is by it. the lower address inflation start fourth do commodity push do Sure. Mike acute the fourth quarter the few driven then generally when this than they caused that we We pricing The to I don’t first in, will Omicron. happening us let the we and are And high. midst and even continue isn’t that’s pretty But comments. think will it’s add quarter, we we in be were the supply things. in One, chain quarter then and by some to understand in quarter think will in quarterly you me in first do because first. the

other – we absentee that the to and which get companies we demand and as shelf. get rates, the and manufactured are our customers but to the So customers, and ability as are them suppliers stressing products our as we the seeing, but our higher fulfill customers on are see get our and to seeing them is

So is all right that live now. happening

a at we as look the earnings, And the in to stronger half ramp, the very call we’re then amount volatility total, at expecting and I are what’s the so ramp. at calling we’re causing right challenging expecting of year moment. year And XXXX a time second given this

contract ease. exposure expected spot I to and bit talked And commodity costs the also about we a other things, have structures while are on market Some commodities. to

ease. commodities as expecting are know, on billion in the we you that in we XXXX, the then just $X that to comparisons, half. billion second of $X.X came of So saw inflation And

an you’re you got the half. if looking second so And easier lap year-over-year, in

we go fully year. cost and that see half the also the currently expect in in the savings we market second pricing The thing is as our we through other the to ramp be then

So factors drive the those ramp. that are the

of recognizing on what does focused our inflation $X.X this margin then structure. last added the year are and billion from the margin inflation very to year the recovery, We

to of and this levels them business expanding very We pandemic pre recovering on focused time. over then the margins are

that to We Again, as expect this cycle. a difficult part through we calling progress make year. very go year in on we’re the the of

look I is this like, to when that. is fourth is around some and So say, going quarter what volatility today look here there our

make a and will year But quarter. this the recovery assumptions, we after in expect our got current time the first forward. comments? by with So better would moving that place the to And some if we you’ve on exit Mike, said, the margin we year progress through be

Mike Hsu

Steve. Well, yes, question, great

a COVID doing Let several we’ve cycled the me and to years making And there number now last been lot businesses think progress. growth. And mean imperatives I really tissue demand team. that, our three as to one see can expect doing work accelerate organic the strategic management is – I got is improve hit for all we us of we you a we’re we volatility. that the

margins. we’ve part that’s got So Part to enhance two, one.

got to three I’ll volatility. come much not Obviously, part And for I’m is should people that about time. And earnings know volatile to strategic going working that’s that our want we a in I you do environment, just But this want issue on I talk back second. our because a company, reduce earnings and with recognize over the smart to we’ve that reduce so to that. volatility

long-term. expect And we’ve I my previous the year our of the assumptions taken over perform in is here’s core say timing, way. in taken want give will range, categories I elevate our of of The then upper if that our all-time component to coming we our inflation, deliver I to it. margin what hold you teams on I’m substantial our of us for the recovery. And fact that’s do obviously, strategies. why the Xx course I improvement And near-term that’s markets the to will targeting On don’t reasons I our basis the That’s we’re and but that high about margin will say into on last going gross to that. we’re Expand our specific the of end delivered given we our is margin on over year. little then goal think enhance And that very a the over it. will is a have performance that the thinking a year further. substantial accelerate think and if that by in we focused margins to expand kind get how and I’m in margins, year end the commodities, hit. a reversion And has time our to then Elevate

Steve Powers

bit, maybe, I I of full thank this I at difficulty that thank I mean a call if Mike, appreciate little year the could... the for guess Okay, trying point, so you. you to color. just

Mike Hsu

environment. I would make about, the that say the COVID Tissue, the would think I in is is while environment volatile our we’ve COVID seen right? environment as centers supply talks probably businesses, it’s the it’s one Maria just of than demand so stabilized, and is point kind tissue suppliers absenteeism, point the the particularly whether in and now the distribution more on very Because pickup, missed our on Consumer – both volatile plants affecting whole throughout KCP environment so the I deployments a of period, has or it’s

that seeing other you’re broadly at as look think more industries. you of I kind

Steve Powers

for sure. Yes,

to in will more weeks. think coming continue we that I and the hear days about

guess just that you’re And how reaction you. could, assumed environment, your about what I the and Any you’re be last if good basis that sort where assumptions think Mike, conversation color the the year. less? Just approach there just elasticity, demand – coming I and more with expecting versus again, underlying compare – how conclusion? Thank on color of us in volumes the how I historical with about to elasticity you this maybe to helpful. you would for just pricing as Chris curious gave to your But thinking I’m some the year’s

Mike Hsu

beyond the we’re range of the Tough Yes. the because question of modeling estimation. is trick elasticity

it, So Steve. the that’s of part difficult

we happened direction, And is, history. round our have points elasticities that’s The That than a so been were the pricing, estimating they said, experience and market of and in recent back. past come are our price historically generally initially last estimated, in our of kind have little a kind you’re been. what’s less of higher than elasticities moved and

on. going we’re what that’s so And

businesses. commercial the important growth gotten We’ve is playbook. both very we’ve hard. strong I think very our a good professional programming got working and across consumer thing It’s

And there is brand underlying momentum. really so good

we putting nature we seeing earlier, that we as I there. we’re think the I out of expect continue. impact pricing the to so that of recognize essential – And mentioned our And are significant categories. And but

Steve Powers

Thank good. you so Okay. Very much.

Mike Hsu

Okay. Steve. Thanks,

Operator

Thank you.

Our with next Grundy from Kevin question Jefferies. comes

Mike Hsu

Kevin.

Kevin Grundy

typically question the morning, conservatism then have Maria, and for Good can just outlook you and guidance on it of sort level Difficulty] was to would the built first but which comfort I question the and of everyone. sort Mike embedded built around level hopefully would just we that earlier number ‘XX on some pressure, you is not [Technical think, a costs, input Hi, typically point? Maria, cost the how get together, environment Maria. follow-up, review you downward in I volatility I can Or revisions the this Investors in challenging the additional unprecedented in all commodities and pulled than and the A is what’s than how of said have how characterize would. and and of outlook? given best this asking given the of you sort at I’m cushion of and in volatility a as differently, low the you you guess as

Maria Henry

question. a it’s Yes, great

XXXX what from the around together own of plan imagine, internal January, reviewed at our ourselves getting tilted what calendar considerable our arms point in tell all hold And spent toward as standpoint. this toward is and we pulled And accountable we is can we repeat we’re about, in and as plans for tilted risk. risk. I middle won’t them, I reasons more and more would we the it for here an time, time that You talked it’s you internal to going plan,

put guidance together. range And we how so that’s the

beating. risk influence the our guidance used then if is got our what to teams delivering to our helpful. risks at we all And are opportunities, looking which or that’s on and either of internal plan, is tilted we’ve range, that’s So and focused it what

Kevin Grundy

moment, I was level me, which guess for the to our just like guess, model little And was helpful. bit is a the of sticking a inflation. with I where OpEx that surprising area That

that there deal bit for know. modeling around surprising. COGS I all OpEx the think been and great a reasons was also we think I of of time the level little is a But gross margins inflation

just, is fixed mind, And how not to pass variable currently that. I’ll of string of maybe much to a need on opportunity offset wouldn’t if little sort be, then and it sort there you an versus bit on, inflation on that’s So further sort tighten and spend if of a pull the moment is anticipated?

Maria Henry

Yes.

I think it’s a very important area to talk about.

continuing So our invest to we are in business.

about bullish ramped last investments off are the we we are And years been the think paying We that working. that and are XXXX over off. strategy we our They long-term prospects. have making up kicked K-C we’ve several since

talked we growth about ROIs investments we investments what are because But investing especially our very that XXXX. those long-term helping that – XXXX, that those call, commercial are would We’ve and go we in the those brands benefit the advertising with support there the Personal the are segment when at And very off marketing. are have it’s and investments. doing we compensation the advertising. our we’re between those going the are beyond what foundational Care meaningful capabilities. And to so and we’ve expense of And And business, last do to in lines for we’re there. comment they normalizes meaningful between-the-line they and effective lot about to talked to paying that area due continue just working as in in about we’re us I’d things our spending to they of few, committed XXXX also also talked health in lower investments making to XXXX the variable And look the had on think we’re company. I is a versus

in start P&L First, that this we’re to well. in S/XHANA. that we’re that it is other expenditures. an Chicago quite very – capital transition very both as And early our even center signs one are America program as team excited handling is commercial are well began And in mentioned our we our is showing ramps North year. positive, but And investment America our did upgrade That that opening before out would the about. And to up I call the North more is SAP I investment. we spring, last up in We XXXX. which

So line. And foundational we lower we’re step with are what’s and up in that that behind around are were We’ve some it. sticking will some then in the fueling expenses top ‘XX, Mike? know have working that investments employee that’s And got that we XXXX the really investments. cost.

Mike Hsu

No, obviously, to investments. just important too. future, – savings they cost The are going investment for our fuel is the SAP, that important

about And we’re continue the about we’re so we for feel of our the we spending. good long-term And right feel for like brands very those. and to be going to health organizational very the But disciplined making also investments the health.

Kevin Grundy

Got it. Thank Good you both. color. luck. That’s great

Maria Henry

Thanks.

Operator

you. Thank

Teixeira Andrea from with comes question next JPMorgan. Our

Mike Hsu

Andrea. morning, Good

Andrea Teixeira

Good morning. you. Thank

And you with did case, sales nominal categories because mean private if other to not. you you’re of obviously, it’s some when or the the imply, in that digits all the in implies the lot nominal? a But spring it probably – are should much to And that during to a some volumes. you’re Mike had whether on And additional done in mid- guess, and – question, if getting my in expect high-single four pretty Maria, at pricing pricing we the be and, three that. So to categories for the related confirm you pandemic. mid-positive the space range I said that, do want that I negative of of label to FX obviously I just then some shelf negative and getting being seeing then expecting

private here? Thank is that? you into you And not diapers the to particular, for as but in that label, private availability you. some seeing of you only product want embrace that demand go elasticity, concessions terms are in coming thinking, about is in may was I also So we label of informing back what

Mike Hsu

Yes.

we on are track. Just on bit would year, the are little But mentioned based marching far, vary earlier, Andrea, increases pricing. again, actions, And And as single-digit against. the and that’s over expect the thus multiple executed could we’ve I I pricing, course what kind conditions. they of on that a generally to of on high mid

And on keeping that. progress. we’re so we feel And good about a that close obviously, eye

– private In I’ll private still think categories. I is terms say label most and talk of maybe in America differently. down label, to I’d North still

think up still something bit progress in that’s our very It’s some to But bath making think in we’re we’re we’re down I was but focused most continue little I on. still of North categories. going of brand supply America, very although challenges. working tissue, muted other momentum. it the pleased we’re be through in to with And in because a organic

of recall, challenges you the recovered storm first well half significant because down had from very We that. Texas. here in the we in As

improve we’re But I’d really getting quarter, as in associated fourth we with saw so course under-shipped with all we the are levels throughout getting what’s the of say Maria or And – COVID. mentioned, and the having even because supplies our demand things other that service happening carriers the and Omicron year. difficulty

sharp our progress we focused on private but again, making. And business, the driving really a feel we’re we’re good we’re so eye on and keeping label, about

Andrea Teixeira

XXXX, think? should high is call it, said top in between that Is digit, terms on And increase? price that to are thinking? total, of digits the you like way we three and be of But to hit going four mid-single the way in you XXXX already implemented, like digit low-single when to single you

Mike Hsu

rounds. multiple already, pricing and happened I our in we’ve could Yes, again, in at maybe what’s – And made mentioned, kind of in pretty if Again, you back America go we look yes, significant moves. North general. as

Andrea Teixeira

on. Thank you. Thank pass much. so will Great. I you it

Mike Hsu

Thank Alright. you, Andrea.

Operator

Dara Instructions] Mohsenian Morgan Our next [Operator you. Thank with Stanley. from comes question

Mike Hsu

morning, Good Dara.

Dara Mohsenian

morning. Good guys. Hi,

more how XXXX of us your multiple granularity lot situations multiple on? focused on a in you’ve of on there might give categories you given incremental increases just can just And there historically the sort pricing, is the the you there elasticity So one Is talk necessary. that these been more you areas a in than has again, Are in about Andrea’s terms where little and categories geographies just what will is incremental about XXXX? pricing pricing can coming in it round that’s had incremental price be to in in different then situations be and where times take just of question, of experience aggressive when you’ve been specific rounds product talking across posture, everything? increases more follow-up where board we’re

Mike Hsu

as Hey, I’ll I’ll talk a pricing about about policy, Dara, though, pricing future I the we’ve clarify. talk just actions. implemented. just yes, will not any

I’ll say, pricing expect do I to of as take a approach, an significant Although portion inflation. offset I

March. about and action in in this effective on some North generally that We then mid-single-digit our list American additional further last a of was consumers. across took a there. that point. August, business XX% of quarter. in kind just And We about largely and I’ll most Care QX, I’ll already primarily consumer of took a actions back America, count tissue single-digit that’s business But in on of as occurred, our North announced what’s to put March, high kind North mid in that but in focus So I’ll about were increases increase America we starting out talk in announced Personal principle

of you say, in I monthly international in in So America. unfortunately and Europe, a should in North of the some Asia course, of happening rounds, in Latin least what’s sense that cases, marketplace, America, would market, well. in as similar, been of in rounds multiple at kind kind give multiple

pretty it’s extensive. So

Dara Mohsenian

Okay. want expecting you it’s specifics. fair? across to And if sounds to it I broad broadly But pretty know much like increases that it – sounds in you don’t into too board. XXXX Is like the get want generally, generally we’re incrementally. don’t

Mike Hsu

And that’s case. that we we’re yes, through Well, think expecting in the substantively. pricing have I flow the the that

Dara Mohsenian

far margin over the on cost returning that? on out multiyear come How the if specific current calendar Is is a possible timing that time? terms pricing point that ‘XX about be you over time, recover you back more pre to down, to it the goal? levels you levels offsets it then that? comments of or require is or in a do pandemic realistic And are at also, does cost fully And just at in some side, ability of of to through can bit levels about think Okay. more

Maria Henry

call going in around I the And it’s to we of causing depressed specific the factors very just – business, margins a right not to the will you it’s that XXXX. of be place. hard margin the – the Yes. like. the would that beyond the Dara, really the confident that are can taking too am is give actions are say to we first that driver timeframe. I And take that we and recover I I will tell What though am looks is take that to volatility whatever

rougher in If different be take we to our turns have for of great we turns the all with are is thinking, And turns out if shared of pieces. out are of terms that’s if will the what us. what XXXX environment that, that assumptions than you the moving right action. to out than it for all upside, So, be there it we

So, continues price. if to we continue inflation to will run,

the it structure of before structure will will can’t, I actions. the the was We give the right of at the the exact continually look margin pandemic and we cost take today, timing when business you XXXX where But have began. in

when that going on structure, thing Global that to Restructuring time the to right Kevin successfully we kind wrap think annualized accrue up bit call that of XXXX. Program in $XXX between did kicked and XX% terms savings lines. the the million, that through other I delivered will of out. probably off was about cost We those that, a we in we actions to and of And managing with back is probing the of this on comment The what the

advantage XXX capabilities. We competitive back the where look basis we supply invested of you structure at between-the-line So, then and of we our chain, took really we cost almost the in did when points And differentiating out. restructure outside will today the spending areas have company. the

the we between So, actually we cost look in structure. when are I good terms lines and cost in at shape, the the today, between-the-line of quartile top structure in benchmark

in have good about are feel and are we we optimized that we that where high ROI. places are investing and So,

changes I time, P&L of part the want out that environment that do as to the over call I So, feel good about.

Mike Hsu

I Hi come our our there down to would to add will not is waiting margin drive going reversion. Dara, be core But the to want suggest recovery. I for commodities the fundamentals teams commodities, other do in thing is

to hopefully that then do then if and will And move the And change work revert, that the – when timing margins. to so up. our it will commodities – recover they plan affect is

Dara Mohsenian

Thanks it guys. That’s for all me.

Mike Hsu

Okay. Thank Dara. you,

Operator

you. Thank

Our next question comes from Jason English Sachs. Goldman with

Mike Hsu

morning Good Jason.

Jason English

I Hi. me Thanks Year, Good for squeezing right. in. Happy folks. And January, still think morning New

Mike Hsu

Year Chinese so. New time,

Jason English

inflation prices quick there to in expect this to plus an many that think times response expect people have you comments pricing deficit. lag you that earlier clarification, will You A throughout call, go. Chinese around I too, realize suggested and your suggest many for so price business X% got you the have a cost interpreted to a year. big question question, we But to have

almost the If flowing would X% got you through eclipse billion that and $X P&L, would your cost be inflation.

clarify to So, can two seem conflicting you comments? what be

Maria Henry

Yes.

the in I And was think, that given even you think commodity when about to we XXXX. currency, operating at that margin The that for even story look in for was, drag XX% be that not should quoted it’s profit $X.X numbers of saw. ‘XX. that, XXXX, I about are the XXXX, right. growth I inflation price a It is billion that

spike the XXXX, it’s inflation we in So, haven’t the recovered from yet if helpful. even in XXXX, while for that’s impact Jason,

Jason English

really you most think that reality of helpful. times. get price take to it’s the year, price. said down currency, to is you Because you just of to to your to a Then to much I if and But different cost think I it you numbers, offset not the cost many you said expect No, is act next offset all going conclusion. an volume but majority expect you Sure. really have get just are which the inflation, inflation to

my guess year. you are fall to where volume you short, expecting you under-shipped are the is where is, because that I question – this us telling So,

some So, tracking me XX% XX% pre-COVID if up so point, going think on be up a hopefully, to we levels. to pretty Tell get still We replenish. you to you some is at a I it’s that’s not. and catch catch strong imagine benefit. that, I of tailwind. down biometrically Professional,

big So, where offset? the is

Mike Hsu

you things. are Well, again, of – think Jason. key I And I think is right, the a here couple

and we are expecting the and professional I think growth in performance business. consumer improved tissue both business

think I lower not back, is I though, what stabilized done level. expect I on at professional, a think has right. would Because a snap

are near-term. in offices, return scale pre-pandemic. running I We I are XX% know seen at had XX% full business And done below, – and your washroom but to about of the because office, that’s about expect our we you they don’t running is a in that don’t – what haven’t if

I travel, expecting don’t We are that And haven’t return think especially to seen near-term. we full-scale travel. business the a in

this pre-pandemic we business with I about are a that’s going dealing to professional and not are revert at we think this this so year, commercial the going the And the least. to innovation year. And levels we to growth it’s we year grow. the plans trends pretty excited have business in that have But

most of right. last part tissue, has in stable so stock volatility X, in a think couple in of would lot When plus of businesses so a quarter it’s out, probably And Consumer the one up very then and I And business, our thing. shakes by and all one. years, stable destocking the same that’s And there of consumer. consumer been years, forth. the a fourth couple X-year it stack be of last driven

growth And in we pretty high from so a very, personal And in we business really offset prices can globally you are very the pushing double quarter, then us level. growth care are well, our we at consumer continued is being And are The is up fourth there. solid tissue. expecting digits. as see expecting doing

to our going that’s be to effect. prove we so that conservative. assumptions a out And have And elasticity little hope an

Jason English

am repo, I quick. effectively paused real more the going to to squeeze it Share half Yes. one back try you year. of

buyback expect year. market You we free should flow in cash back the to are next for stock? you guiding When down see

Maria Henry

Yes.

as And the of do will year. goes here say that, dividend, is have we again, so M&A. look there, at excess to it of again cash allocation. do the are am to then about the remaining the got allow allocation, soon those to we terms steps I which us it it, are As cycle tough looking XXth in how with will for there we in in part flow, pleased beyond the And nothing to we we buybacks. capital invest grow then the assuming capital the Nothing on cash But share consecutive always are think business, flow has that changed.

So, let – when the right. margins me the top, start at recover

top line strong expecting are We our growth business. in

We cash to the will us to two generation things when are do get those And to share levels the expecting repurchases. happen, will margins back that recover. we enable

allocation as at X.Xx, of capital kind about are like finished restructuring. shareholder-friendly X.X to the think single see have leverage for the to rating. that remain excluding the past. to the And committed practices That’s – single we we agencies ahead the A of I A at we are we we So, with done in And rating. do committed

to this point the don’t to so. at but numbers line the being doing up, we have back way able much in rating forward buybacks, to to So, I get cash the time, do look the within very

Jason English

Thank Understood. you Bye. all.

Mike Hsu

you, Thank Jason.

Operator

Thank you.

from Peter comes question Our UBS. next with Grom

Mike Hsu

morning Good Peter.

Peter Grom

guys. good Hi, everyone. morning good Hi, morning

comment, closer get progress significant just quick margin margins to margin was levels? gross to return to that I I that just follow-up we should think comment the suggestion or read know as pre-pandemic that clarification simply just a timeframe, So, give around Steve’s quarter is in expect on really which see a don’t question, you expansion, fourth I XQ. Is want those when the to but some want specific a you

Maria Henry

Yes.

happen I the before. margin operating reasons than progress about to to we do investment pre-pandemic have expect gross are versus expecting that we profit for level the we think faster on talked But progress. line

pre-pandemic expecting not be levels. are to back We to

it know won’t that. be, the it that the So to course materialize But if are which able – predict, going think the in going we today, to those be were, during to to was that a it’s to in environment too would volatility, are the good through be we that that we think business with we I do on the path be hold for the is this recognizing will lot I I think call margins – on think the And about will volatility. we what structure of it I again, But we because look that year, during have is margin, actions as company. constant, of are we say on taken especially on actions and a if environment the what the health it’s P&L we with if we and I hit just all like but year, are good the environment those we because the difficult right that pre-pandemic are too when a the talk exactly we taking focused are the of glide difficult the financial to levels. we which in focused very path. But the overall

back returns So, it’s things, though, with healthy a provide would – appropriate. to I can actual we that call out few Jason’s what that getting what the so question, dollars. generates cash

important. operating worth things. at look that’s noting And growth, think profit few a very we it’s I when So,

will – we larger had structure cost recovery, get there on was a today, faster it’s producing than a professional that will margin business than one that’s built for Because on we professional. on First, consumer today. we

between business of the the the is business. structure And of so revenue there misalignment cost the a and

time. that We will some corrected, get take that will but

faster then was talked dollars, decline. that all to the But call come I on out XX% consumer profit of will recovery XXXX, that the going the for So, about, consumer. profit reasons have we in the tissue, operating

our personal of the grew the also which decline. actually half was It our profit the the It very is third grew strong care So, if look caused of But profit market specific quarter. strong there it. were quarter. in company, dynamics in growth, that fourth big business, at shares. you operating It driver

the half structure get operating will and which second is Care in to place. Personal near-term, very right segment, the I have to the margin the the profit in long-term So actually the healthy, year, take I growing of recognizing dollars, the is the

color more segment there. just would thought I So, a bit give I little by

Peter Grom

which Like is provide Kimberly-Clark more performance maybe guess regions? seeing the love what in incredibly category that’s of on whether in kind perform the in actions growth, in I shifting then health completely be D&E quarter. Can pricing, the or markets those the gears would pricing how quite And update here, received markets? on an see helpful. are of color then you the markets, seem to what get to stronger what the nicely have And No, just a specific? it those would I been in you you developed on or versus consumer driving bit

Mike Hsu

our X was quarter I organic importantly. question, markets. the and price for in Yes, and healthy XX year. really and quarter, statement, of in but full great of up And the Thanks performance emerging volume think was a the Overall Peter. that developed mix the Yes. in balance for composed in it

in in high-single and growth solid And and future EMEA. Latin really and growth we Europe markets and important saw Asia Russia, in of growth then so growth which India, Eastern kind America in China, – double-digit gains all then are strong for us. double-digit Africa, regions, And digit the

I prepared it So, we are And remarks, what’s mentioned really that. innovation. great in excited to really, is, think driving of see I have my really kind

really doing a are We job. good

multiple quarter. is the Our breakthrough job, put points. diaper of call that That out technology which was share were that diaper out up America, technology also there, in I share the North really, multiple have would teams great in around we scaling, to a the in version the have which related is we Chinese up a we is the technology which what Australia, that world put innovation fourth doing markets. points same Korea We in are across

superior local really so around market innovation digital, execution good I marketing And and execution. sales think consumer-inspired and really, then

it’s hard us. they and very the for working of kind all all are So, things

water, leaders, on to business over-reliant be business. call all oars our it we drive to used the of meaning One the thing in one

are we are We working that we to are results that we developing is think see tend And want direction. the our there really now. out we same that, capabilities the in working do when seeing we and everything commercial part of we –

Peter Grom

luck. you. Thank of Best

Mike Hsu

Okay. you. Thank

Operator

you. Thank

Modi next question RBC Nik comes with from Our Capital Markets.

Mike Hsu

Thanks. Good morning Nik.

Nik Modi

Mike. morning Good

questions So, for just me. quick two

have talk just upstream we and costs. we about with, been what’s which the labor a And situations But the and dealing that seems it to I you on customer just Just agenda, your be there? etcetera? you lot a then take about to innovation backseat a on lot talk Mike, COVID, had a retail all demand input base. don’t talk with about has can media, given growing from transportation going mean

you and P&L? bit how little I hitting So, of that’s that hoping a can was context your provide on

Mike Hsu

Yes.

questions, Okay. Great Yes. Nick. Yes.

I earlier. we healthy to in And commentary continuing right have business are this the Maria’s the invest could going I we this think are to long-term are that some you we foundational committed flavor make in mean the gotten growing waters. the to working business are and But we maybe the choppy way. for from for through things recognize now long-term.

technologies. think And pulling our I and investment so, – we technology we reason about yes, innovation are And our grounded really just are in on are are scaling had investments. around ideas excited we great the not seeing and big world we of doing better And are a realizing that job it. so big back the not because the you insight that results and we is innovations are

our and we we for as this of to And to to ever wanted it’s organization also And balance to that’s visibility so technology here one And pipeline than the things for of ever able savings we the work pipeline it’s are innovations longer we mentioned and visibility are we be too. that. Maria term. is better our been. do coming cost better the of tomorrow continuing the on – our today than of been, Well, into here that. probably are role,

are pleased progress. that we so really with And

both professional confident – and going be tissue. so we we are to And to to say which would personal are is able in businesses, our why care, invest I grow and continue in consumer that

one. that’s So,

about around bigger data I regard feel yes, topic. media, so disciplined. say exactly think mean mentioned earlier, is is. retail it will have digital And I is it – becoming digital to very Maria our we I are we very good with life. know what as much I our a And we capability.

or progress investments X X over course worth. we significant on what the are the ROIs know years years, of and made last have the We

we to organization But deal and us, the to so with expect, you have we more capability are issue equipped And right of data, work sort frankly, think and little for it’s we make investments really going capable is are others, – able right improvement. our need the them. to really very excited an might to are investments. And do with some that and I overall, really our with. retailers that to really, are good be as of those well a see operational to And

Nik Modi

Mike. Okay. Thanks,

Mike Hsu

Okay. Thank you, Nik.

Operator

Thank over showing am remarks. for further At turn no time, I back I questions. closing you. call this will the

Mike Hsu

Thank like really I my Okay. would by elevating plan top to and few In to growth growth, points and to balanced to strategy launched reinforce our markets. X you. ago, closing, strategy that and expanding opening a accelerate is categories we sustainable anchored years our our key on remarks. line our deliver

we to through our we and our programs. And to and fueled expect is year. improvements the have we anyone annual well dynamic our volatility in Global what productivity Now people. cost the environment. clear executing our to else by It’s our Restructuring anticipated. invested teams do faced delivering our capabilities pretty are This strong a in strategy we our and very reality and growth had But challenges brands this, this environment or in FORCE that’s have beyond persist base,

in we volatile market strength and care, to the evidenced growth and strategy committed are we our in are a by well, taken have actions environment. personal executing very share performance We our in

and potential about develop brands to and our the provide products ability will we the categories consumers. our our our excited portfolio are that value We and innovative to of enhance

This cycle past cycles. committed this year. also make elongated inflation. to different margins progress restoring are recover the to to We be And to commodity due our is time will clearly and continued from expect

taking you in will continue dedication are We talented to am especially shareholder over environment in and a create to for our time. the year Thank we our ahead. are I today. safe to and for all ensure of work in grateful call our confident and can ability the teams all actions we do the value we rewarding meaningful joining

Operator

Thank gentlemen. This you, today’s ladies concludes and teleconference.

You may now disconnect.

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