Kimberly-Clark results held back by European business

By Simon Pitman

- Last updated on GMT

Related tags North america

Kimberly-Clark has announced steady group sales, with gains in the North American and International business divisions negated by currency exchange rates and the restructuring of its European business.

For the first quarter net sales were up by 1 percent to $5.3bn, which represented organic sales gains of 3 percent that also included a 6 percent gain for consumer tissue sales in the North American market and 5 percent in K-C International.

The company also said that profitability for the quarter was hit by costs attributed to the restructuring of the European business, together with a remeasurement charge associated with the devaluation of the bolivar in Venezuela.

Overall sales gains help to push profits up

However, overall gains in the business helped to push the bottom line upwards, with net profits for the period increasing by 13.1 percent to $551m, up from $487m in the corresponding period last year, prompting the company to slightly upgrade its projected earnings per share forecast for the year.

“As a result of our strong first quarter performance, we are raising our full-year outlook for adjusted earnings per share while we continue to invest for long-term success,”​ said CEO Thomas Falk.

“We are optimistic about our plans and believe that execution of our Global Business Plan strategies will generate attractive returns to shareholders."

Personal care results driven by adult and baby care

The business is divided into four main divisions – health care, consumer tissue, K-C professional and personal care, with the latter being the biggest business area, providing just under half the total annual revenues.

The personal care segment grew sales by 1 percent during the first quarter, to $2.4bn, which accounted for a 3 percent rise in organic sales volumes and a 1 percent increase in net selling prices.

The overall figure for the division was negatively impacted by European strategic changes that reduced sales volumes by approximately 2 percent, whereas currency rates further impacted the figure by approximately 1 percent.

K-C International represented the biggest gains

Sales in North America were steady, with higher selling prices being offset by lower sales volumes. The best performing area was child and adult care, where sales volumes rose in the high single digit figures.

K-C International personal care sales volumes were up 4 percent, driven by markets such as China, Russia and South Korea, but offset by declines in markets such as Venezuela and Australia.

Sales for the division fell by 10 percent and by 14 for organic volumes in Europe, which was mainly impacted by lost sales attributed by the company’s strategic changes.

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