KMB - Earnings call 4 2023 | Kimberly-Clark Corporation

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Operator

Good morning, and welcome to Kimberly-Clark's Fourth Quarter 2023 Earnings Question-and-Answer session. I will now hand the call over to Chris Jakubik, Vice President, Investor Relations. Please go ahead.

Chris Jakubik

Thank you, and hello, everyone. This is Chris Jakubik, Head of Investor Relations at Kimberly-Clark. Q&A results. our our full quarter to XXXX year welcome session fourth for and And

remarks we things our uncertainties, release based may During and today, due and on that forward-looking differ with in how are these statements our are we our risks filings see to today. discussed results will Actual and make earnings some SEC. the

with be should discuss today. These can GAAP non-GAAP supplemental should release investor.kimberly-clark.com. together not measures be you some and financial and at for financial considered results. non-GAAP also replacement find will to We within a And non-GAAP the GAAP read our posted measures the materials reconciliations earnings

quick it we to Hsu, and our opening I'm Chairman few Mike comments. to Before begin, hand over CEO, a going for

Michael Hsu

Chris. in I'd us. Okay. he's calls Chris first And just welcome This all, number Kimberly with done earnings his call first triple-digit to earnings of to probably like Clark. is career. that in is Thank But you,

to years, KC, of our unprecedented So Kimberly-Clark next proud to challenges. growth. These just we're of and XXXX. But strong built sharing in a not while invested few foundation chapter really Chris. course, by organization our a to welcome past navigating position satisfied. we're performance we've We've that I'd consistently for like yet build of start consumer-centric

for March. initiatives behind detailing as outline key exciting Our our algorithm strategic plans strategy long-term in an to working our and remarks, path to and shareholders in on priorities, and elevate our we're positioned returns categories And prepared we're durable looking we and as our is expand our next and markets forward deliver to I -- chapter. in mentioned growth the our our

that, it questions. love I'd up And for open with so to

Operator

coming from [Operator Instructions] Morgan Stanley. Mohsenian Dara first question from Your is

Dara Mohsenian

Obviously, year to the you sales and QX. the organic prepared next remarks. starting just I basis XXX points pretty relative out low mentioned hyperinflationary robust digits guidance from markets the for wanted to touch in lower X% year, year the this to the on mid-single growth in seems just the quarter next

a, of those a you what on And in sense So U.S. part you maybe the much volume ex could pricing market business some then if of markets on it. Maybe, versus in performance that's commentary you're expecting the those share give QX? base just markets, as channels look tracked contributed us just at QX, how are also and touch weaker. and

feeling would performance So just you that front any to how plans out share be and you're helpful. 'XX about update on market on as your look

Michael Hsu

start there, remains professional care, you growth if kind maybe I'll Dara. category staples. relative the I'd tee pretty in say broader markets, think underlying terms. Both across robust. you And Maybe as of of I our absolute up consumer across to tissue consumer personal with in Thanks, other the look particularly state developed and

penetration products, have Our On of categories, room substitution user of our unlike for categories lot still remind we a per low. you, I'll our fairly of some that, daily top and and gains. is revenue essentials

on And so working we're that.

full rate the despite what the remains ability might fully say I our that categories elevate picture, strong. consumer. it's markets picture, the further. The think fairly remains effects to kind is consumer the But We're think So all mixed you consumer healthy. of still of our overall, hikes from said, consumer and and in the is all consumer in policy impacts the pretty I confident argue now growth up. side Employment probably materialized somewhat remains our expand mixed. is are right a I to also economic Wage not fair the

the fourth North give quarter America category year. X% North the for pretty value up robust categories you America, a were the in X% was said, point. just So reference in to that and up all

pretty more that's number. Again, substitution our other the in seeing of demand the our a markets, pretty that that good that I've in So fact lot categories for China, products do We broad past. worked up I'll makes than might America, array we're a solid categories. categories like a to and And low Argentina, track premium in also in including resilient that there's you course. surprisingly, market of still still staples Brazil, a that see say North

that's so still approach even at all we got and with be to still elevate categories appropriate price we and very markets, about our enthused our though recognize working great to And tiers. our we've we're expanding value and able offer believe

I at know pause. lot I'll threw that you. a I So

parts there So you don't wanted multiple to. you if Dara I know, Nelson, know want to? I are to question. your Yes.

Nelson Urdaneta

question a line relates decomposition growth was year it and for top our the the on there Yes, QX. to of how

a Dara. me Let bit, address that little

from XXX driven on right That I you what X% we as And with we volumes line think what in really flat up this point be by was expect pricing year, economies. we saw of attained to hyperinflationary basis year. And that expect pricing today quarter based pick see is QX this going quarter economies. year to a to to on in was one. and being the largely which the hyperinflationary recap be range think the to in and beginning mix of is only in pricing volumes the be quarter we which contribution with fourth we in going about last was X% a that

QX. profile the similar to pricing saw really what side, in very the we is on So

Dara Mohsenian

the are Or recovery? Okay. over time go some in year the Is you're sort And a of product that assumption is natural recovers. volume moderates? pricing the more whatever you've that signs categories seen through seeing we as that or pricing just it more some as volume is geographies pickup early it

Michael Hsu

Dara. We're pretty pleased,

very solid we've think categories. favorably progress volume I responded on on made our and very, consumers very

which our returning that of So which page which pre-pandemic. next that, -- a all, think kind plan, first turning I to the of to and I'd chapter, mix-driven we're say, our was shifting volume is approach

that. back going we're so And to

but higher inflation or to pricing record might some receding. There some costs need in is the of that has to started contribution going locations, will I we've reflect driving to got offset our overall, And markets be there's particular inflation on we're reflect But good help likely and to the at that's volume pricing feeling if a about recede business. pretty already think address local be very surgical. levels. So going

on we seen in drive growth businesses forward. including plan quarter believe the and start our the have our We fourth mix going to America the North drivers improve, to in and share right the business perspective have a

Operator

Your next question is coming Lieberman from Barclays. Lauren from

Lauren Lieberman

that savings. picture modeled. focus a savings bit deflation little expected shift of a I just talk about and a benefit from we've FORCE Both the those fourth lighter, bit to FORCE wanted quarter or to bit in and maybe than the I cost think, certainly were

So it's rare see that. to

you at into some perspective could all? maybe and that, if maybe just on the FX why plays forward if So outlook provide moving how and

Nelson Urdaneta

Sure.

saying of that me us. let the by recovery as largely disruptions the super supply Lauren, start, cost phase this and we cycle of A stabilization, behind So chain that of saw. and lot think would it we

for is what based the to on expectation XXXX today. future certainly know and in foreseeable Our in we happen that not

no as basket deflation is like a So cost whole, there's in aggregate our but to I'd inflation easing thinking that several first, unpack. components because about there are costs

these be years. of seen with costs, in the X cycle what expect we mostly environment levels more still we've to higher cost stable in super this past but 'XX at line We will remain

As and year. trends be you are like somewhat of terms the know, dollar expected favorable pulp, the commodities saw we core last resin, in energy following to half that back

impacting in emerging basket our of to you However, need the much of on a headwind to labor think over the seeing cost and years, going market and of offsetting we other like hyperinflationary currency-related commodities, imported addressed actually 'XX, we're materials components if do that inflation, that's tailwinds past with year us this the markets, we've be that will core in our been in the and leaves that's year. distribution, to the remain intend addressing largely which on pretty inflation and course that which logistics

you perspective, very productivity of XXX hyperinflationary seen for basis see which a plans components, be more need headwind cost year, markets. in points a We've and overall got is the the the to to local around as inflation outside as little these all we've what of than Just net past. projected the manageable price strong when in much include we

feel FORCE and to Turning good about strong we we ability provided very productivity our productivity. to our continue generating that shows targets. The outlook

that perspective, We of and on the cumulative delivered our to months today. excited at evolving we're $XXX and to a at $X gross You reflected our bottom around flown little saw September, our flow end-to-end identified of that the gross integrated productivity multiyear this productivity. We're has March strong, more. of meeting the line, management margin little we've conference culture cost an about towards proactive pipeline been productivity pipeline building initiatives. about that productivity focused talk a P&L. More and we're in to to to results we the XX even is has future important more our should out ended we last outlook in really over management when it about transition year million. the your in a XX last recently, talking And north with I'm providing see highlight and FORCE integrated years, gross pretty talk that of billion to FORCE of it's

Lauren Lieberman

bit if follow then on a And Great. Okay. also I just could up Argentina.

surprise kind time then this there around to for Path-forward is whether a Or a a last also the bit impact also need couple from devaluation FX. And build Argentina, transactional about of assets because of year? was monetary in? in bit this was but of guess do of kind the of this management that's X expected next the to the hyperinflation, Or question. overall, in in we think Street kind a onetime year, again that of And year. this this of terms of I the the case or quarter the nature? FX in do risk we So parts how

on forward transaction. path then management and Argentina, monetary overall devaluation in So the risk assets and the currency piece

Michael Hsu

Lauren, question. for Okay. the thanks

the potential But the we're forward. the volatility against will the the me to staying Let overall of with we're path and hey, in I inherent business. balance start going in course say, course.

remain And to difficult going to conditions so Argentina prudent. also people operating we've markets. other we're got some in inspired and do want I'm say I and in really

markets these double around in untenable. we're I in consumers shoulder say become you multiple we these that point, working staying make becomes just that our currency, hang click some Argentina, I'll conditions. At or Ukraine, of somewhat we markets as we will again, if way the by we're But at responsibility impact the through But answer serving it. our let what's it. say, same In convert and untenable. will really and that's on now, then, make can not high-level would product if a untenable. company, employees is when our the path like conditions course, of to we're So see difficult you certainly, know right we like where proud really the so time, and can't forward inspired And course.

Nelson Urdaneta

on around Yes. And the pricing I build hyperinflationary. Lauren, and to told what

year, think year the as and position lines. net things we mark-to-market few of a So expense of last our other income of the monetary full in impact

Lauren Lieberman

Sorry, keep going.

Nelson Urdaneta

Okay.

the in income impact for the a and the That Argentina that EPS impact of off on million on perceive the of operating the the the So netted cash in and about quarter. for year about $XX EPS net above $X.XX balances to quarter. $X.XX of interest in some about profit million was $XXX led line year we

this year, forward we line that in projecting income both EPS. half impact, and As expense then to other are on and of we the about fast

a projected outlook year. of our the know. reflected but first impact see on the in It's of what's bit what at of in that of will little this based stage We half that's more part we

Operator

from from next is Your Sachs. coming Jason question Goldman English

Jason English

prepared want questions. XXXX, like of expected I quarter. down your XX% where just I it in so little back on was volume this I and volume. volumes look rightsizing a couple to want And bit I you weaker professional zoom today. A pre-COVID, since segment If know remarks bring double-click specifically, mentioned we to XX%, than and to out

is question gone? the Where volume going So all what's on my has there?

volume. you're your deleverage meaningful lost suggest that And margins how associate been effects able to not offset -- how have getting the you deleverage of

Michael Hsu

always, issue. the As you're right Jason, on

the the recall And came you had tends the development So which this in one. addressing volume majority the we may to of as demand One, rapidly of environment in softness our K-C I in adjust would I volume advent kind And recall. be the has think of couple the offices. you of at say, to job work-from-home team I if you different our profile But a a that might Professional done on business, think of environment. is washroom look COVID, to change the or great margin business, higher with good things. a business

where I in And really gone. I'm bounce basis you're quickly New it's running every on volume at volume was pre-pandemic. now, is. has about And sure your York right that is Goldman XX% so category the to a XX% reality day. not it office not in back that's the would to going say of And that what

that's so thing. And the same

As we look back our fully partial it's at And offices, not right? around in, best. we're so

that a would our say, that reality. team it business. to I that's, and think in But has So I ongoing as an challenge treat adjusted

volume the a lot cost and on reality and some perspective. rightsized we The external volume doing of of a market. co-packing a were have We the business lot of is was of it some from

to And of. costs as address so we had you have haven't fixed much I'd as thought say might

and think the the ICON reflected job our I recapturing best from the of that good -- And the volumes which that's while great price growing time And is same dispenser, -- believe innovations has like so I team a dispenser mix done really I at -- perspective. also margins behind in so both a from of business. think perspective, side

that margins So and job, team exceeding and I on from this definitely think I great margin done pre-'XX that can has in think anyways, actually see you so a the at have point. and the business recovered

Jason English

to the I but you talking of think not I about headwind volume year, helpful. were in talking appreciate late That's constraints. supply that. much were earlier year, about so this And another

remind that? can you suggest they but assume them where I So how they were? you can us lack conversation of alleviated were, sizable on the now, confirm they're

Is imagine those the cycling large supply in would year. first prove how And of I tailwind? that of And next half to right? tailwind, constraints should particularly a a that be

Michael Hsu

we Jason. majority of But pretty with do couple of year, constraints some a in only that also I supply care, weren't secondary on availability we that talked to can significant difficult access some American supply I across to conditions suppliers, developed personal external things. some through made packaging business business, course had only to of did key our that could we've hope, we able the example, We think that QX. consumer -- help. Yes, with One a during all, source about think in of get for ingredient actually, for first North our year. a last And Kleenex to the the have definitely

it we share the kind I they a suppliers, driver. last communicated was of think aware publicly. factors. say, our that not are big performance. I'm the of think So the the not that only the suppress We it, that it's we those significant through I driver, the But for we but off. were customers, I part saying it. That would better of this something would and but that with deal with say working was about did call, year, were fairly on I make challenge our fully biggest quarter -- mentioned didn't our

addressed those ever. going really our direction. have execution all commercial We is say And than talked We're to constraints our consumption moving these about. past I'd be is I in that the right issues. stronger

Our as America. share direction North the the well in in in right quarter has fourth moved

Jason English

March. in on Got you it see to and it. forward stuff. Good pass look I'll

Operator

question next Bank Lizzul Your is Anna coming of from America. from

Anna Lizzul

your on track some market in and categories. private share private in has share exposure want label creeping to up I label up follow been your in of channels, light to your of

market promotions thinking and Just to versus about order grow investment in with share? you maintain wondering brand how are marketing

Michael Hsu

of Anna. things. Okay. Great I'd say question, our business, a Core couple to Yes.

XX not basis, but down globally which on performance probably for all, market So want. improve market share share that this performance internal as is on were on of I we I'm what weighted metric, falling on don't from last share, okay? off year a cliff, year. confident we as We not about year use Definitely, to our with basis. about an our was a we talk weighted going a happy First much perspective, last not bps,

to even as under talked On in about, XX%. weighted one want growing we're basis, you to all usually the just we be a we or which was cohort share So well. up

that's in of I'd of we kind our more, or bar so XX% which XXXX. say And below back jumping that of were goal over

related So biggest for been think strong to challenge really, I we markets. constraints of really from supply largest where in are most what are I today, to that the here. did things. us had we a strong want said, we've probably we're America just I'd in and our know, build say going that North of All market has to talked gains the positions couple about. I

XX in probably years. the And reference, in business, largest second share points Korea, about in last and which up fifth was business New quarter. our which Andrex years. share bps up up XX South just Australia X Zealand, for Just largest in between over we're the XX over on and our we're the points over XXX X is last share quarter, is the somewhere

we So very And more one on good. China. feel

we're I approaching almost bps again XXX Huggies the on think the quarter. in

in able categories or improvement severe saw X up supply run X constraints QX. We in wanted the America, discussed exception we largest I underperformed, was our about So I of but gains with think very to that that X. where of our think is good way were We lot improving. been run Jason, year. improved our to X that markets. solid we brand just in had and feel A sequentially The what we has even we we what plans have weren't I some North last in it in of

feel And so trajectory. pretty our we good about

right just about excited executing and we're to to going we're well our with our a has share customers, the better bringing execution ago, been advantage business. As capability commercial and by gain sustainable cost bringing I innovations while our said never

You mentioned private label.

that, the two. the quarter or would private we yes, I in note, in have past an uptick label On recognize seen

think are if categories. very, in. very look I we're it X that think say it even we X proposition committed you label, on was in I'd price a I at up was scanner tier in to value every the of or data, having superior private

a if grow. is and label longer XXXX, today, And even bit look on the continues segment you private versus premium down to segment premium the So perspective, is up significantly. a

picked although value up private from shares second We're third So it we constraints trading. is of that. more I say would in with cognizant clear quarter, and our our supply label. has and that bit private tier a were the mean the I label impacted than compete

Our by approach which categories and And accelerating. of of right it. we very more XXXX value been have we tier. And but has to set really, really our are are I where are innovations, have and consumers. it bring accepted a brand, well a a Scott very is customers in the of couple great value offering. competes its accelerating supportive think There little very, is

we're so value uncertain and having a top is at And we're again, great or consumer that of label to out conditions, more cognizant economic becomes committed every tier. in there the to important kind that much private and value proposition

Operator

question Your from Bank. Deutsche next from Powers is Steve coming

Stephen Robert Powers

also in to earnings a So the about how and remarks on rate to back think half-weighted trends this more the just you provide year. of morning. more maybe the relative quarter in some year to and first quarter specificity and little little a first organic start, balance growth lower on you color bit there could maybe a maybe guess I of the that. the comments Echo the drivers the a for profile of bit prepared talked slightly about

Nelson Urdaneta

Steve. Sure,

very strong were basis how reiterating quarter and points So we mix which a and in to and growth. in another XXXX, stabilized that us a in which encouraged from have finish foundation by volumes a volume for had flat position I'll by start we're of was build we XXX

placing we productivity balanced our reflecting half, and about and our X of of is go-to-market the As think On sales things: is ago. combination shape across first our the balance a two, see a headwinds basis. thirdly, cadence of plans; earnings half current currency sales initiatives; somewhat our to little one, quarterly year, year, and muted second a while on talked of sequential softer QX due I growth, about organic but and we the the volumes a that relatively

And progresses, that programming will as more going coming have in. We stage. that be incremental into the QX as play innovation this at especially year into includes kicks market

we should volumes improvement growth see margins led a mix progressively and following organic and QX. So in

a QX, that, built in the we gradual bit other us that's again, we're terms because volumes, as again quarter, into we've of expecting But softness that of year, even The for think pick and below full as across plan in pushes in the also another QX slightly volume about flat relatively specifically, that year reflected expect improvement the to progresses. up possibility we inventory our retail volumes outlook level. the the year. And

Stephen Robert Powers

Okay.

I highlighted I And I et few in back lot organic Care. and of past course past guess, strong bit. of of, results been Not kind stepping you the commercialization, a over There's cetera. you've marketing, And share the year, but little trends Okay. years, the investment product see Personal market a think guess, growth. just quality, relatively that in time

I guess a from to the and volume other lag on and tissue KCP struggle consumer perspective. continue side,

and a should another likely to and year. growth. balance in you're you think relative are So give us relative contribution those both trend to about about one relative businesses about you balance we the and thinking I of little guess Can 'XX how as how on how of the think the to investment that insight

Michael Hsu

couple say make then additional business. a look, I'll running we give comments, of -- just But are can consumer maybe detail. our and Nelson would Yes, some I tissue

proud am the this a say business. made our that look differently. little time we've tissue period short margin of at it of as might consumer a over and recovery franchise. business And I premier externally see a consumer strong Some I in

the of in was and say resiliency volume that look business. for on America, you organic up at tissue excited a volume basis, To quarter, the very North our volume up and was kind X%. note, the if about I would I'm X%

category. nature the it think the reflects of I essential

is. moving As condition the bath what away no from you matter you're the category not know,

I And for we in business, first fundamentally so thing has has important kind inflation historic, the on right? our years, But an we to overall few dramatic, of especially but the amount not recognize that tissue of that's past been have all, the consumers. think but responsibility of be is occurred changed

to risk in better we've last tools. But years, not the Tamera, you are with that. We're in then tools you And at what row a supply margin superior -- revenue the in driving stability at things changed over the a going our seeing those that to teams get of improve Xx had our the volatility as or hit innovation. past Chief so Officer XX the about most the coming thing great would a of application And franchise would of to right? have some the to high necessary the in, that probably I margins about the I the our years but I lot driver business the a is A forward that, with was, call disciplined not management practices XX we costs. some in, say, internally recognize have all-time pace phenomenal would management. changed reduce more that revenue made value-added we've a we is, U.K. ever on Two hey, able consumer talking we're is franchise, keep our healthy not mentioned we Supply I moved offering. And important growth hopefully, to a job, the to our we recovering offering, forward. manage us a to input of trying we've business really quarter. been X if Nelson from move we say, we're Andrex costs. and recovery, if ability fact over going have practices that think that of share we the on And done we years coming were X looked so other couple the really, guys better biggest the investments chain management of done have

in European has and over gap differentiate our that's tissue invested X business has we've that years. in our significantly, improved product. to But widened quality us price past Our technologies the new allowing

And challenge. pockets position so good are on our There about of tissue. feel we some

margins markets Some rapid of with business teams operate pleased and how we're that be right very the those. of in But can are able so tough, managing now. to and kind our we're really recovery

Nelson Urdaneta

And was just saying and Mike investments. what on the to address build

Over the from this inflation have stepped few stronger both to up last support allowing much emerge years, seen, cycle and would advertising as we've are on brands you that our it capabilities for the us we've of that super seen.

the XXXX, for about sales, Specifically, net year, versus of which our more points of prior in than about overall basis X% and advertising increase to increased roughly budget represented million XXX that's terms. $XXX absolute

in be will we Steve, pace which the of of are capabilities year year, to the XXXX. we flat it of year-over-year. expanding bit be overheads, is largely other would terms invested half we dollar keep you but saw some what about the the for still at that, terms this in about think we As And overheads will projecting in, include in

a the give building in XXXX, on can that we what perspective of what seeing terms overall past spend we're So of in you and few did investments in years.

Stephen Robert Powers

Great. I'll it Okay. pass on.

Unknown Executive

Could question, one be great. take more that would maybe

Operator

Certainly.

Teixeira is question next coming from Your JPMorgan. from Andrea

Andrea Teixeira

And welcome, Chris.

on towards question. a of one clarification I comments last the now your So and can you question the end have

be diapers the and number, digits most break tissue for -- to Personal you reason, still professionals grow in good share, flattish assuming particularly negative of I ask and reason and market the then you're growth. then benefit your to still you're more contracts. The to to that your your between femcare. like a guide because volume I'm quarter And in for on Care, tissue mid-single at lap in can be especially to bit the U.S. there division? but get you down first the why than single dependent consumer And in looking as to Care growth you is it's First, by get some and been low a to ROI, getting Personal flattish, in XXXX or those a point be that's where China other. better historically the you've

about wondering guide, comps to mid-single. in and you a you have feel feel single how it of was growth number the Care. strong how least volume high able at in I I being at about So and mean, you does imply the end that the Personal between meet low this

So I could you have how reinvestment. then a clarification division. wondering And on decompose a the on was few by

and million then would investment. year $XXX said and mentioned is displays since to took what I -- be ago. shelf it. Nelson the And a this be going over you've main You promo, what of was point, to actual been, about Mike for half your now was fair, And was to you while Because incrementality X it's the the source? wondering years investing of is more number be roughly space

Michael Hsu

great Andrea, the set organic with first also drivers. can kind the and Maybe of bottom of start I'll of half some decom questions.

On the be investment, focused again, my priority would advertising. on

advertising, importantly, very and a think but and returns I get the very, more a we from the stuff, both high. returns certainly from TV traditional digital great on are

we we're front, have the be, across focus drive going feel last and are like Huggies, long. but so I our our We value, on Kotex is And great Scott and to XXXX on that's get creative, both our like business on by we business. we do a U how things competitive great going to there. front on would not trade promotion promotion I say, mean

And got going and invest so there. copy, we we're to great

Nelson Urdaneta

Yes.

growing expect I terms breakdown the we the in mean segment. of Personal mid-to-high Care by kind digits. be to single in of So

gets kind we the that the single that digits the think in segments, algorithm will overall provided. at of high be you we've end. digits, other in and So mid-single of growing to And the low X

let is As the mind beginning, of I our pricing XXX plan economies. plan. And basis stated largely vol mix in a currency-related will be movements largely that's at that, that around and hyperinflationary to related in keep points

breakdown So thinking growth that's year. kind should you next segment be of our how of the of

Operator

conference session. our back you. Thank closing Q&A ahead. Please remarks. go the Jakubik to will I concludes for Chris That now hand

Chris Jakubik

to today seeing And for everybody follow-up that we're analysts that, in joining we'll Thanks, all forward day. March. us for be the beyond questions, around looking everybody, have

Operator

everyone. Thank concludes today's you, This event.

Thank time, You wonderful may participation. for a your disconnect at and you day. have this

Kimberly-Clark (KMB) 24 Jan 242023 Q4 Earnings call transcript