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Kimberly-Clark personal care sales stall, but profit jumps

By Simon Pitman+

28-Jan-2014
Last updated on 28-Jan-2014 at 17:05 GMT

Kimberly-Clark personal care sales stall, but profit jumps

Although Kimberly-Clark’s Q4 personal care and group sales were level with last year, the results beat market expectations, while net income showed big gains.

Fourth quarter group sales were even with last year at $5.3bn. Although organic sales rose by 5% and international sales were up by 11%, these gains were negated by currency exchange, together with lost sales due to restructuring to in European and the pulp and tissue businesses.

Net income for the quarter more than doubled, from $267m last year to reach $539m for the current quarter, spearheaded by improved organic sales and cost savings.

Full year sales remained steady

For the full year, sales were steady at $21.2bn, reflecting an organic sales rise of 4%, that was negated by foreign currency exchange rates and restructuring, while net income was up from $1.75bn to $2.14bn.

Stating that he was encouraged by the overall performance in 2013, CEO Thomas Falk underlined the organic sales gains, an in particular the fact that international sales delivered year-on-year growth of 9%.

In the mainstay personal care segment, the company reported that Q4 sales fell by 1% to $2.4bn, impacted by lost sales due to the restructuring of the European business, which impacted sales by 3%, while currency translations also impacted sales by 3%.

Personal care sales fall in Europe, counterbalanced by international gains

Sales in North America for the business division were even with a year ago, while sales in the international business powered away, rising 5%, despite a six-point negative impact from currency translations.

In the consumer tissues segment of the business, quarterly sales were more or less even with the same period as last year, coming in at $1.7bn.

“In 2014, we will pursue targeted growth initiatives, launch innovations and support our growth opportunities with increased advertising and research spending,” Falk said.

"We expect to achieve a healthy level of cost savings, which should help fund brand investments and improve margins.”

Looking ahead, the company predicts that in 2014 sales are likely to decrease by 1 to 2%. Although organic sales will increase by 3 to 5%, this is expected to be impacted by foreign currency translations and restructuring.

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