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MarketScreener Homepage  >  Equities  >  Nyse  >  Kimberly-Clark Corporation    KMB

KIMBERLY-CLARK CORPORATION

(KMB)
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KIMBERLY CLARK : Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

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10/22/2019 | 11:06am EST

Introduction

This management's discussion and analysis ("MD&A") of financial condition and
results of operations is intended to provide investors with an understanding of
our recent performance, financial condition and prospects.  The following will
be discussed and analyzed:
• Overview of Third Quarter 2019 Results


• Results of Operations and Related Information

• Liquidity and Capital Resources

• Business Outlook

• Information Concerning Forward-Looking Statements



We describe our business outside North America in two groups - Developing and
Emerging Markets ("D&E") and Developed Markets. D&E markets comprise Eastern
Europe, the Middle East and Africa, Latin America and Asia-Pacific, excluding
Australia and South Korea. Developed Markets consist of Western and Central
Europe, Australia and South Korea. We have three reportable business segments:
Personal Care, Consumer Tissue and K-C Professional. These business segments are
described in greater detail in Note 9 to the unaudited interim consolidated
financial statements.
This section presents a discussion and analysis of our third quarter 2019 net
sales, operating profit and other information relevant to an understanding of
the results of operations. In addition, we provide commentary regarding organic
sales growth, which describes the impact of changes in volume, net selling
prices and product mix on net sales. Change in foreign currency exchange rates
and exited businesses also impact the year-over-year change in net sales. Our
analysis compares the three and nine months ended September 30, 2019 results to
the same periods in 2018.
Throughout this MD&A, we refer to financial measures that have not been
calculated in accordance with accounting principles generally accepted in the
U.S., or GAAP, and are therefore referred to as non-GAAP financial measures.
These measures include adjusted gross and operating profit, adjusted net income,
adjusted earnings per share, adjusted other (income) and expense, net and
adjusted effective tax rate. We believe these measures provide our investors
with additional information about our underlying results and trends, as well as
insight into some of the financial measures used to evaluate management.
Non-GAAP financial measures are not meant to be considered in isolation or as a
substitute for the comparable GAAP measures, and they should be read only in
conjunction with our unaudited interim consolidated financial statements
prepared in accordance with GAAP.  There are limitations to these non-GAAP
financial measures because they are not prepared in accordance with GAAP and may
not be comparable to similarly titled measures of other companies due to
potential differences in methods of calculation and items being excluded.  We
compensate for these limitations by using these non-GAAP financial measures as a
supplement to the GAAP measures and by providing reconciliations of the non-GAAP
and comparable GAAP financial measures.
The non-GAAP financial measures exclude the following items for the relevant
time periods as indicated in the reconciliations included later in this MD&A:
•      2018 Global Restructuring Program - In 2018, we initiated this

restructuring program to reduce our structural cost base by streamlining

and simplifying our manufacturing supply chain and overhead organization.

See Note 2 to the unaudited interim consolidated financial statements for

details.

U.S. Tax Reform Related Matters - In 2018, we recognized net charges

associated with U.S. tax reform related matters. See Note 3 to the

unaudited interim consolidated financial statements for details.

Overview of Third Quarter 2019 Results • Net sales of $4.6 billion increased more than 1 percent compared to the

       year-ago period.


•      Operating profit was $915 in 2019 and $669 in 2018. Net Income
       Attributable to Kimberly-Clark Corporation was $671 in 2019 compared to

$451 in 2018, and diluted earnings per share were $1.94 in 2019 compared

to $1.29 in 2018. Results in 2019 and 2018 include charges related to the

2018 Global Restructuring Program. Results in 2019 also include a gain on

the sale of a manufacturing facility and associated real estate which were

       disposed of as part of the restructuring.



                                       17
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Results of Operations and Related Information
This section presents a discussion and analysis of our third quarter 2019 net
sales, operating profit and other information relevant to an understanding of
the results of operations.
Consolidated
Selected Financial Results                     Three Months Ended September 30                      Nine Months Ended September 30
                                           2019             2018         Percent Change        2019             2018        Percent Change
Net Sales:
North America                         $     2,476$     2,407             +3  %      $    7,296$    7,139             +2  %
Outside North America                       2,227             2,252             -1  %           6,777            7,009             -3  %
Intergeographic sales                         (63 )             (77 )         N.M.               (206 )           (231 )         N.M.
Total Net Sales                             4,640             4,582             +1  %          13,867           13,917              -
Operating Profit:
North America                                 638               561            +14  %           1,818            1,685             +8  %
Outside North America                         292               277             +5  %             855              863             -1  %
Corporate & Other(a)                         (190 )            (171 )         N.M.               (599 )           (952 )         N.M.
Other (income) and expense, net(a)           (175 )              (2 )         N.M.               (166 )              6           N.M.
Total Operating Profit                        915               669            +37  %           2,240            1,590            +41  %
Share of net income of equity
companies                                      31                23            +35  %              91               80            +14  %
Net Income Attributable to
Kimberly-Clark Corporation                    671               451            +49  %           1,610              999            +61  %
Diluted Earnings per Share                   1.94              1.29            +50  %            4.65             2.85            +63  %

(a) Corporate & Other and Other (income) and expense, net include income and

expense not associated with the business segments, including adjustments as

indicated in the Non-GAAP Reconciliations.



N.M. - Not Meaningful
GAAP to Non-GAAP Reconciliations of Selected Financial Results
                                                         Three Months Ended September 30, 2019
                                                                      2018 Global             As
                                                       As            Restructuring         Adjusted
                                                    Reported            Program            Non-GAAP
Cost of products sold                            $      3,085$        104$      2,981
Gross Profit                                            1,555               (104 )             1,659
Marketing, research and general expenses                  815                 21                 794
Other (income) and expense, net                          (175 )             (181 )                 6
Operating Profit                                          915                 56                 859
Provision for income taxes                               (192 )              (23 )              (169 )
Effective tax rate                                       22.8 %                -                21.5 %
Net Income Attributable to Kimberly-Clark
Corporation                                               671                 33                 638
Diluted Earnings per Share(a)                            1.94               0.10                1.84



                                       18
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                                                          Three Months Ended September 30, 2018
                                                               2018 Global          U.S. Tax           As
                                                 As           Restructuring      Reform Related     Adjusted
                                              Reported           Program            Matters         Non-GAAP
Cost of products sold                      $     3,166$        103        $          -     $    3,063
Gross Profit                                     1,416               (103 )                 -          1,519
Marketing, research and general expenses           749                 26                   -            723
Operating Profit                                   669               (129 )                 -            798
Nonoperating expense                               (30 )              (20 )                 -            (10 )
Provision for income taxes                        (138 )               30                 (26 )         (142 )
Effective tax rate                                23.9 %                -                   -           19.6 %
Net Income Attributable to
Kimberly-Clark Corporation                         451               (119 )               (26 )          596
Diluted Earnings per Share(a)                     1.29              (0.34 )             (0.07 )         1.71



                                                          Nine Months Ended September 30, 2019
                                                                       2018 Global             As
                                                        As            Restructuring         Adjusted
                                                     Reported            Program            Non-GAAP
Cost of products sold                             $      9,398$        331$      9,067
Gross Profit                                             4,469               (331 )             4,800
Marketing, research and general expenses                 2,395                 66               2,329
Other (income) and expense, net                           (166 )             (182 )                16
Operating Profit                                         2,240               (215 )             2,455
Provision for income taxes                                (467 )               35                (502 )
Effective tax rate                                        23.2 %                -                22.5 %
Share of net income of equity companies                     91                 (2 )                93
Net income attributable to noncontrolling
interests                                                  (31 )                1                 (32 )
Net Income Attributable to Kimberly-Clark
Corporation                                              1,610               (181 )             1,791
Diluted Earnings per Share(a)                             4.65              (0.52 )              5.18


                                                           Nine Months Ended September 30, 2018
                                                             2018 Global             U.S. Tax              As
                                              As             Restructuring         Reform Related       Adjusted
                                           Reported             Program               Matters           Non-GAAP
Cost of products sold                   $     9,722       $          465        $               -     $     9,257
Gross Profit                                  4,195                 (465 )                      -           4,660
Marketing, research and general
expenses                                      2,599                  341                        -           2,258
Operating Profit                              1,590                 (806 )                      -           2,396
Nonoperating expense                            (75 )                (50 )                      -             (25 )
Provision for income taxes                     (380 )                197                     (108 )          (469 )
Effective tax rate                             28.7 %                  -                        -            21.5 %
Share of net income of equity
companies                                        80                   (1 )                      -              81
Net income attributable to
noncontrolling interests                        (25 )                 11                        -             (36 )
Net Income Attributable to
Kimberly-Clark Corporation                      999                 (649 )                   (108 )         1,756
Diluted Earnings per Share(a)                  2.85                (1.85 )                  (0.31 )          5.01


(a) "As Adjusted Non-GAAP" may not equal "As Reported" plus "Adjustments" as a result of rounding.

                                       19
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Analysis of Consolidated Results

                                                       Adjusted
Net Sales                    Percent Change            Operating Profit     

Percent Change

                     Three Months       Nine Months                        Three Months       Nine Months
                         Ended             Ended                               Ended             Ended
                     September 30      September 30                        September 30       September 30
Volume                      (1 )             (1 )      Volume                     (1 )               (1 )
Net Price                    4                4        Net Price                  21                 23
Mix/Other                    1                1        Input Costs                 1                 (8 )
Currency                    (2 )             (4 )      Cost Savings(c)            12                 13
                                                       Currency
Total(a)                     1                -        Translation                (2 )               (3 )
                                                       Other(d)                  (23 )              (22 )
Organic(b)                   4                4        Total                       8                  2


(a) Total may not equal the sum of volume, net price, mix/other and currency due
to rounding.
(b) Combined impact of changes in volume, net price and mix/other.
(c) Combined benefits of the FORCE (Focused On Reducing Costs Everywhere)
program and 2018 Global Restructuring Program.
(d) Includes impact of changes in product mix, marketing, research and general
expenses, foreign currency transaction effects and other manufacturing costs.
Net sales of $4.6 billion in the third quarter of 2019 increased more than 1
percent compared to the year-ago period. Changes in foreign currency exchange
rates reduced sales by 2 percent and business exits in conjunction with the 2018
Global Restructuring Program reduced sales slightly. Organic sales increased 4
percent. Changes in net selling prices and product mix increased sales by 4
percent and 1 percent, respectively, while sales volumes decreased 1 percent. In
North America, organic sales increased 4 percent in consumer products and 5
percent in K-C Professional. Outside North America, organic sales increased 5
percent in D&E markets and 1 percent in developed markets.
Operating profit in the third quarter was $915 in 2019 and $669 in 2018. Results
in both periods include charges related to the 2018 Global Restructuring
Program. Results in 2019 also include a pre-tax gain recorded in Other (income)
and expense, net of approximately $182 on the sale of a manufacturing facility
and associated real estate as part of the restructuring. Third quarter adjusted
operating profit was $859 in 2019 and $798 in 2018. Results benefited from
higher net selling prices, $50 of cost savings from our FORCE program and $45 of
cost savings from the 2018 Global Restructuring Program. Input costs decreased
$10, driven by lower raw material costs. Advertising spending increased and
selling, general and administrative costs were higher, including increased
incentive compensation expense. Other manufacturing costs also increased
year-on-year. Foreign currency translation effects reduced operating profit by
$15 and transaction effects also negatively impacted the comparison.
The third quarter effective tax rate was 22.8 percent in 2019 and 23.9 percent
in 2018. The third quarter adjusted effective tax rate was 21.5 percent in 2019
and 19.6 percent in 2018. The adjusted effective tax rate in 2018 benefited from
certain tax planning initiatives.
Our share of net income of equity companies in the third quarter was $31 in 2019
and $23 in 2018. At Kimberly-Clark de Mexico, S.A.B. de C.V. (K-C de Mexico),
results benefited from organic sales growth and cost savings.
Diluted net income per share for the third quarter of 2019 was $1.94 and $1.29
in 2018. Third quarter adjusted earnings per share were $1.84 in 2019, an
increase of 8 percent compared to adjusted earnings per share of $1.71 in 2018.
Year-to-date net sales of $13.9 billion were down slightly compared to the year
ago period. Changes in foreign currency exchange rates reduced sales by 4
percent and business exits in conjunction with the 2018 Global Restructuring
Program reduced sales slightly. Organic sales increased 4 percent. Changes in
net selling prices and product mix increased sales by 4 percent and 1 percent,
respectively, while sales volumes fell 1 percent. Year-to-date operating profit
was $2,240 in 2019 and $1,590 in 2018. Results in both periods include charges
related to the 2018 Global Restructuring Program. Results in 2019 also include a
gain recorded in Other (income) and expense, net on the sale of a manufacturing
facility and associated real estate which were disposed of as part of the
restructuring. Year-to-date adjusted operating profit was $2,455 in 2019 and
$2,396 in 2018. Results benefited from organic sales growth, $175 of FORCE cost
savings and $125 of cost savings from the 2018 Global Restructuring Program. The
comparison was impacted by $205 of higher input costs, unfavorable currency
effects, other manufacturing cost increases, increased advertising spending and
higher general and administrative costs. Through nine months, diluted net income
per share was $4.65 in 2019 and $2.85 in 2018. Year-to-date adjusted earnings
per share were $5.18 in 2019 and $5.01 in 2018.


                                       20
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Results by Business Segments
Personal Care
              Three Months Ended         Nine Months Ended                           Three Months Ended        Nine Months Ended
                 September 30              September 30                                 September 30             September 30
               2019         2018         2019         2018                 

2019 2018 2019 2018 Net Sales$ 2,305$ 2,252$ 6,866$ 6,816 Operating Profit $ 490$ 466$ 1,459$ 1,397


Net Sales       Percent Change            Percent Change        Operating Profit       Percent Change           Percent Change
Volume                          1                       1       Volume                                2                       3
Net Price                       3                       4       Net Price                            14                      17
Mix/Other                       1                       1       Input Costs                          (1 )                    (7)
Currency                       (3 )                    (5)      Cost Savings(c)                      10                      12
Total(a)                        2                       1       Currency Translation                 (2 )                    (3)
                                                                Other(d)                            (18 )                   (18)
Organic(b)                      5                       6       Total                                 5                       4


(a) Total may not equal the sum of volume, net price, mix/other and currency due
to rounding.
(b) Combined impact of changes in volume, net price and mix/other.
(c) Combined benefits of the FORCE program and 2018 Global Restructuring
Program.
(d) Includes impact of changes in product mix, marketing, research and general
expenses, foreign currency transaction effects and other manufacturing costs.
Third quarter net sales of $2.3 billion increased 2 percent. Changes in net
selling prices increased sales by 3 percent, sales volumes rose 1 percent and
changes in product mix increased sales by 1 percent. Changes in foreign currency
exchange rates reduced sales by 3 percent. Third quarter operating profit of
$490 increased 5 percent. The comparison benefited from organic sales growth and
cost savings. Results were impacted by unfavorable currency effects, other
manufacturing cost increases, higher advertising spending and increased selling,
general and administrative costs.
Net sales in North America increased 4 percent. Changes in net selling prices
and product mix increased sales by 2 percent and 1 percent, respectively, both
driven by baby and child care. Sales volumes increased 1 percent overall.
Volumes increased double-digits in adult care but were down mid-single digits in
baby and child care compared to a mid-single digit increase in the year-ago
period.
Net sales in D&E markets increased 3 percent. Changes in net selling prices and
product mix increased sales by 6 percent and 1 percent, respectively, while
sales volumes were even year-on-year and changes in foreign currency exchange
rates were unfavorable by 5 percent. The higher net selling prices mostly
occurred in Argentina, the Middle East/Eastern Europe/Africa and China. Volumes
increased in Eastern Europe, ASEAN and South Africa, but fell in Latin America.
Net sales in developed markets outside North America decreased 3 percent,
including a 6 percent decrease due to unfavorable changes in foreign currency
exchange rates. Changes in product mix increased sales by 2 percent and sales
volumes increased 1 percent.

                                       21
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Consumer Tissue

              Three Months Ended         Nine Months Ended                           Three Months Ended         Nine Months Ended
                 September 30              September 30                                 September 30               September 30
               2019         2018         2019         2018                            2019         2018          2019           2018

Net Sales$ 1,484$ 1,469$ 4,482$ 4,520 Operating Profit $ 264$ 212 $ 726 $ 668


Net Sales       Percent Change            Percent Change        Operating Profit       Percent Change             Percent Change
Volume                         (2 )                      (3 )   Volume                               (5 )                         (8 )
Net Price                       5                         5     Net Price                            34                           36
Mix/Other                       -                         -     Input Costs                           5                          (10 )
Currency                       (2 )                      (3 )   Cost Savings(c)                      14                           12
Total(a)                        1                        (1 )   Currency Translation                 (1 )                         (1 )
                                                                Other(d)                            (22 )                        (20 )
Organic(b)                      3                         2     Total                                25                            9


(a) Total may not equal the sum of volume, net price, mix/other and currency due
to rounding.
(b) Combined impact of changes in volume, net price and mix/other.
(c) Combined benefits of the FORCE program and 2018 Global Restructuring
Program.
(d) Includes impact of changes in marketing, research and general expenses,
foreign currency transaction effects and other manufacturing costs.
Third quarter net sales of $1.5 billion increased 1 percent. Changes in net
selling prices increased sales by 5 percent, while sales volumes declined 2
percent and changes in foreign currency exchange rates reduced sales by 2
percent. Third quarter operating profit of $264 increased 25 percent. Results
benefited from higher net selling prices, cost savings and lower input costs.
The comparison was impacted by other manufacturing cost increases, lower volumes
and increased selling, general and administrative costs.
Net sales in North America increased 3 percent compared to a 5 percent decline
in the year-ago period. Changes in net selling prices increased sales by 8
percent, while sales volumes fell 4 percent and changes in product mix decreased
sales by 1 percent.
Net sales in D&E markets increased 1 percent. Changes in net selling prices and
product mix each increased sales by 1 percent, while changes in foreign currency
exchange rates decreased sales by 2 percent.
Net sales in developed markets outside North America decreased 4 percent.
Changes in foreign currency exchange rates reduced sales by 5 percent. Changes
in net selling prices increased sales by 2 percent.
K-C Professional
              Three Months Ended        Nine Months Ended                           Three Months Ended         Nine Months Ended
                 September 30             September 30                                 September 30               September 30
               2019         2018        2019         2018                            2019         2018          2019           2018
Net Sales   $     839$  848$   2,477$ 2,541     Operating Profit   $     176$  160     $         488     $  483

Net Sales       Percent Change           Percent Change        Operating Profit       Percent Change             Percent Change
Volume                        (2 )                      (2 )   Volume                               (5 )                         (3 )
Net Price                      3                         3     Net Price                            18                           16
Mix/Other                      1                         1     Input Costs                           4                           (7 )
Exited Businesses(e)          (2 )                      (2 )   Cost Savings(c)                      15                           11
Currency                      (2 )                      (3 )   Currency Translation                 (3 )                         (3 )
Total(a)                      (1 )                      (3 )   Other(d)                            (19 )                        (13 )
Organic(b)                     3                         2     Total                                10                            1


(a) Total may not equal the sum of volume, net price, mix/other, exited
businesses and currency due to rounding.
(b) Combined impact of changes in volume, net price and mix/other.
(c) Combined benefits of the FORCE program and 2018 Global Restructuring
Program.
(d) Includes impact of changes in product mix, marketing, research and general
expenses, foreign currency transaction effects and other manufacturing costs.
(e) Exited businesses in conjunction with the 2018 Global Restructuring Program.

                                       22
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Third quarter net sales of $0.8 billion decreased 1 percent. Changes in foreign
currency exchange rates and business exits in conjunction with the 2018 Global
Restructuring Program each reduced sales 2 percent. Changes in net selling
prices increased sales by more than 3 percent and changes in product mix
increased sales by 1 percent, while sales volumes decreased 2 percent. Third
quarter operating profit of $176 increased 10 percent. Results benefited from
increased net selling prices and cost savings. The comparison was impacted by
lower volumes, other manufacturing cost increases, unfavorable currency effects
and higher selling, general and administrative costs.
Net sales in North America increased 4 percent. Changes in net selling prices
increased sales by 4 percent and sales volumes increased 1 percent, while
business exits in conjunction with the 2018 Global Restructuring Program reduced
sales approximately 2 percent.
Net sales in D&E markets decreased 2 percent, including a 2 percent decrease due
to unfavorable changes in foreign currency exchange rates. Sales volumes
declined 5 percent, while changes in net selling prices increased sales by 4
percent.
Net sales in developed markets outside North America were down 7 percent.
Changes in foreign currency exchange rates decreased sales by 5 percent and
business exits in conjunction with the 2018 Global Restructuring Program reduced
sales by 1 percent. Sales volumes fell 7 percent, while changes in product mix
and net selling prices increased sales by 4 percent and 2 percent, respectively.
The changes occurred mostly in Western/Central Europe.
2018 Global Restructuring Program
Annual pre-tax savings from the 2018 Global Restructuring Program are expected
to be $500 to $550 by 2021. Savings for the first nine months of 2019 were $125,
bringing cumulative savings to $260.
To implement this program, we expect to incur incremental capital spending of
approximately $600 to $700 by the end of 2020. See Item 1, Note 2 to the
unaudited interim consolidated financial statements for additional information.
Liquidity and Capital Resources
Cash Provided by Operations
Cash provided by operations was $1.8 billion for the first nine months of 2019
compared to $2.0 billion in the prior year. The decrease was primarily driven by
increased working capital and higher tax payments, partially offset by lower
pension contributions and higher operating income.

Investing

During the nine months ended September 30, 2019, our capital spending was $867
compared to $566 in the prior year. We anticipate that full year capital
spending will be $1.1 billion to $1.3 billion, including incremental spending
associated with the 2018 Global Restructuring Program. Proceeds from
dispositions of property in 2019 include approximately $200 from the sale of a
manufacturing facility and the associated real estate as part of the 2018 Global
Restructuring Program.
Financing
In April 2019, we terminated our short-term $300 revolving credit facility in
conjunction with the issuance of $700 aggregate principal amount of 3.20% notes
due April 25, 2029. Proceeds from the offering were used for general corporate
purposes, including the repayment of a portion of our outstanding commercial
paper indebtedness.
Our short-term debt, which consists of U.S. commercial paper with original
maturities up to 90 days and/or other similar short-term debt issued by non-U.S.
subsidiaries, was $0.8 billion as of September 30, 2019 (included in Debt
payable within one year on the consolidated balance sheet). The average
month-end balance of short-term debt for the third quarter of 2019 was $1.0
billion. These short-term borrowings provide supplemental funding for supporting
our operations. The level of short-term debt generally fluctuates depending upon
the amount of operating cash flows and the timing of customer receipts and
payments for items such as dividends and income taxes.
At September 30, 2019 and December 31, 2018, total debt was $7.8 billion and
$7.5 billion, respectively.
We maintain a $2.0 billion revolving credit facility which expires in June 2023
and a $750 revolving credit facility which expires in June 2020.  These
facilities, currently unused, support our commercial paper program, and would
provide liquidity in the event our access to the commercial paper markets is
unavailable for any reason.
We repurchase shares of Kimberly-Clark common stock from time to time pursuant
to publicly announced share repurchase programs. During the first nine months of
2019, we repurchased 4.3 million shares of our common stock at a cost of $548
through a broker in the open market. We expect full-year 2019 share repurchases
of $800, consistent with our original target range of $600 and $900, subject to
market conditions.

                                       23
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K-C Argentina began accounting for their operations as highly inflationary
effective July 1, 2018, as required by GAAP.  Under highly inflationary
accounting, K-C Argentina's functional currency became the U.S. dollar, and its
income statement and balance sheet have been measured in U.S. dollars using both
current and historical rates of exchange.  The effect of changes in exchange
rates on peso-denominated monetary assets and liabilities has been reflected in
earnings in Other (income) and expense, net and was not material.  As of
September 30, 2019, K-C Argentina had a small net peso monetary position. Net
sales of K-C Argentina were approximately 1 percent of our consolidated net
sales for the three and nine months ended September 30, 2019 and 2018.
We believe that our ability to generate cash from operations and our capacity to
issue short-term and long-term debt are adequate to fund working capital,
payments for our 2018 Global Restructuring Program, capital spending, pension
contributions, dividends and other needs for the foreseeable future. Further, we
do not expect restrictions or taxes on repatriation of cash held outside of the
U.S. to have a material effect on our overall business, liquidity, financial
condition or results of operations for the foreseeable future.
Business Outlook
In 2019, we plan to focus on our strategies for long-term success, including
growing our brands, leveraging our financial discipline and allocating capital
in value-creating ways. In 2019, we now expect earnings per share to be $5.75 to
$6.00, up from our prior estimate of $5.50 to $5.90. Adjusted earnings per share
are expected to be $6.75 to $6.90, up from our prior estimate of $6.65 to $6.80.
Adjusted earnings per share exclude 2018 Global Restructuring Program charges
equivalent to $0.90 to $1.00, as compared to our prior estimate of $0.90 to
$1.15. Our earnings per share and adjusted earnings per share guidance is based
on the assumptions described below:
•      We expect net sales to be down slightly year on year, as compared to our

prior assumption of even to down 1 percent. We anticipate changes in

foreign currency exchange rates to have an unfavorable impact of 4 percent

(prior estimate 3 to 4 percent). Exited businesses in conjunction with the

2018 Global Restructuring Program are expected to reduce sales slightly,

mostly in K-C Professional.

• We expect organic sales to increase approximately 3 to 4 percent (up from

       our prior estimate of 3 percent) driven by higher net selling prices of at
       least 3 percent.

• We expect adjusted operating profit growth of 4 to 5 percent (up from our

prior estimate of 3 to 5 percent).

• We plan to achieve total cost savings toward the lower end of our $400 to

$450 target range from our FORCE program and the 2018 Global Restructuring

       Program.


•      We expect inflation in key cost inputs to be in the lower half of the

previously communicated range of $150 to $250. We anticipate the majority

       of the inflation to occur in international markets.


•      We continue to expect higher marketing spending and general and
       administrative costs.

• We expect total foreign currency translation and transaction effects to be

       slightly more unfavorable than previously assumed.


•      We expect an adjusted effective tax rate toward the low end of the
       previously communicated range of 23 to 25 percent.

• We expect net income from equity companies to be higher year-on-year.



Information Concerning Forward-Looking Statements
Certain matters contained in this report concerning the business outlook,
including the anticipated cost savings from our FORCE program, charges and
savings from the 2018 Global Restructuring Program, cash flow and uses of cash,
growth initiatives, innovations, marketing and other spending, net sales,
anticipated currency rates and exchange risks, including the impact in
Argentina, raw material, energy and other input costs, effective tax rate,
contingencies and anticipated transactions of Kimberly-Clark, including
dividends and share repurchases, constitute "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995 and are
based upon management's expectations and beliefs concerning future events
impacting Kimberly-Clark.  There can be no assurance that these future events
will occur as anticipated or that our results will be as estimated.
Forward-looking statements speak only as of the date they were made, and we
undertake no obligation to publicly update them.
The assumptions used as a basis for the forward-looking statements include many
estimates that, among other things, depend on the achievement of future cost
savings and projected volume increases. In addition, many factors outside our
control, including fluctuations in foreign currency exchange rates, the prices
and availability of our raw materials, potential competitive pressures on
selling prices for our products, energy costs, our ability to maintain key
customer relationships and retail trade customer actions, as well as general
economic and political conditions globally and in the markets in which we do
business, could affect the realization of these estimates.

                                       24
--------------------------------------------------------------------------------


For a description of certain factors that could cause our future results to
differ from those expressed in these forward-looking statements, see Item 1A of
our Annual Report on Form 10-K for the year ended December 31, 2018 entitled
"Risk Factors." Other factors not presently known to us or that we presently
consider immaterial could also affect our business operations and financial
results.
Item 4. Controls and Procedures


As of September 30, 2019, an evaluation was performed under the supervision and
with the participation of management, including the Chief Executive Officer and
Chief Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures. Based on that evaluation, management,
including the Chief Executive Officer and Chief Financial Officer, concluded
that our disclosure controls and procedures were effective as of September 30,
2019. There were no changes in our internal control over financial reporting
during the quarter covered by this report that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.

                                       25

--------------------------------------------------------------------------------

© Edgar Online, source Glimpses

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