Kimberly-Clark Corporation (KMB) Presents at Barclays 2022 Global Consumer Staples Conference (Transcript)

Summary of Kimberly-Clark Corporation Conference Call Company Overview - Company: Kimberly-Clark Corporation (NYSE: KMB) - Participants: - Mike Hsu - CEO - Nelson Urdaneta - CFO - Lauren Lieberman - Barclays Key Messages - Growth Strategy: The company is executing strategies for growth and long-term value creation, focusing on elevating categories and expanding markets [4][14] - Organic Sales Growth: Achieved an average organic sales growth of 3% over the past three years, with a significant increase in the first half of the year [7][12] - Inflation Impact: Inflation and supply chain disruptions have negatively impacted earnings, with an estimated $3 billion drag on EPS over the last two years [7][9] - **Sustainability Goals**: Aiming to advance the well-being of 1 billion people and reduce environmental footprint by half by 2030 [5] Financial Performance - **Cumulative Savings**: Delivered over$1.5 billion in cumulative savings through restructuring and cost management initiatives [7] - Shareholder Returns: Returned $6.3 billion to shareholders through dividends and buybacks [7] - **EPS Guidance**: Despite inflationary pressures, the company maintains its full-year adjusted EPS range, albeit at the lower end [9] Market Insights - **Personal Care Growth**: The personal care segment, valued at$10 billion, has seen organic growth accelerate from 1% to over 5% [12] - China Market: The company has experienced double-digit growth in China, leveraging local consumer insights and technology [13][18] - U.S. Market Recovery: The company is regaining market share lost due to supply chain issues, with a focus on maintaining service levels [25][26] Strategic Initiatives - Pricing and Cost Management: The company is focused on price realization and cost savings to offset inflation [8][41] - Digital Marketing: 70% of global marketing investment is now digital, enhancing consumer engagement and efficiency [11] - Product Innovation: Continuous investment in product technology and innovation to drive premiumization and consumer benefits [9][11] Challenges and Adaptations - Consumer Behavior: Increasing consumer value consciousness due to economic pressures, prompting a shift towards value offerings [19][50] - Tissue Business Vulnerability: The consumer tissue segment is susceptible to private label trade-downs, necessitating a focus on margin protection [50][51] - Professional Segment Recovery: The professional business has been hardest hit by the pandemic, but recovery plans are in place to regain market share and improve margins [56][58] Capital Allocation and M&A - Investment Focus: Committed to investing in business growth, maintaining dividends, and pursuing strategic M&A opportunities [38][60] - Softex Acquisition: The acquisition of Softex is highlighted as a successful strategic move in a growing market [36][60] Conclusion - Long-term Outlook: Kimberly-Clark is confident in its ability to deliver balanced and sustainable growth, despite near-term challenges [14][45]