Kimberly-Clark beats rise in costs for Q3

By Simon Pitman

- Last updated on GMT

Related tags Cent Revenue Kimberly-clark

Kimberly-Clark has reported that its price rises have helped to
off-set soaring energy and raw material costs, allowing it to meet
market expectations for the third quarter.

Sales for the period rose 5.8 per cent to reach $4 billion, to reach a new quarterly record. The company said that the improvement was due to volume growth of about 4 per cent, complemented by currency benefits of around 2 per cent.

Net sales for the nine month period were up 6.4 per cent on the previous year, to reach $11.8 billion.

Before special items, profit for the period was $451.7 million, a figure that was largely in line with market expectations, and led to a net income of $325.3 million.

For the nine month period profit before special items stood at $1.33 billion, leading to a net figure of $1.19 billion.

Breaking the sales figures down for the three month period, personal care items accounted for $1.60 billion, a rise of 7.5 per cent, and the consumer tissue division accounted for $1.43 billion, a rise of 8.1 billion.

Kimberly-Clark​ CEO Thomas J Falk attributed the third quarter growth to the execution of the company's Global Business Plan, which has entailed building and extending brands, reducing costs and improving investment returns.

"These strategies are enabling us to generate profitable top-line growth, deliver bottom-line results in line with our objectives and return significant amounts to our shareholders,"​ he said.

The company pointed out that the European market had proved particularly challenging for its personal care sales, as competitive activity, particularly for diapers, had been tough forcing sales down 1 per cent. However it did stress that some of this effect had been counterbalanced by higher prices in Asia and South America.

Developing markets continue to show strong growth for personal care, with sales increasing 18 per cent, mainly on the back of widespread volume growth and currency benefits.

Sales of personal care products in North America, the largest market, grew 3 per cent, as sales volumes grew 5 per cent, but product mix declined by 2 per cent.

Looking to the full year, Falk said that he expected Kimberly-Clark would achieve results within the guidance given at the beginning of the year, "although most likely toward the lower end of that range."

Considering this, the company is now expecting to deliver improvements in profit and shareholder earnings at between 6 and 8 per cent, compared to 2004.

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