Kimberly-Clark has finished off a good year with strong Q4 results, but the company predicts modest gains for the year ahead on the back of weaker sales in Europe.
The company said that Q4 net sales rose by 3 percent to $5.3 billion, which represented an increase in organic sales of 5 percent, and was driven by a strong performance from the company’s K-C International division.
The personal care division posted a healthy sales increase of 8 percent to $2.4bn, a figure that was driven by a 6 percent increase in volumes and 3 percent increase in net selling price.
Sales increased in all geographic regions
Sales in North America for the division increased by 5 percent, while sales for K-C International were up by 10 percent. And even in the tough European market the company recorded an increase of 4 percent.
Adjusted net income for the quarter was up at $539m, compared to $508m for the corresponding quarter last year.
The results for the quarter beat all investment analysts’ expectations, giving share prices a boost.
Fourth Quarter trend is up
The results show and uptick in the trend for the rest of the year, with sales up 1 percent to $21.1bn, a figure that represented an increase of 5 percent in organic terms and also represented an impact of 5 percent due to the negative impact of currency translations.
"Our fourth quarter results capped off a year of excellent performance for Kimberly-Clark. For the full year of 2012, we delivered organic sales growth of 5 percent, highlighted by 10 percent growth in K-C International,” said chairman and CEO Thomas Falk.
“We launched a number of product innovations and increased strategic marketing spending by $115 million and research and development spending at a double-digit rate.”
What to expect from K-C in 2013
Looking ahead to the full financial year 2013, the company predicts net sales should increase at a rate of between 0 and 3 percent, whereas organic sales should increase by 3 to 5 percent.
The caution in the results points to an expected dip in Western European sales, whereas this result is expected to be buoyed by a continued improvement in sales from other international markets.
“In 2013, we will continue to pursue targeted growth initiatives, launch product innovations and support our brands with increased strategic marketing spending. We expect to achieve healthy levels of cost savings, which should help us overcome moderate commodity cost inflation,” Falk said.