Slide 1: Q3 2017 Results and 2017 Outlook
Q3 2017 Results and 2017 Outlook October 23, 2017 www.kimberly-clark.com Leading the world in essentials for a better life
Slide 2: Conference Call Reminders
Conference Call Reminders Forward-Looking Information Certain matters in this presentation and conference call, including our 2017 outlook, expectations and planning assumptions, and any estimates, projections, and statements relating to our business plans or objectives, constitute forward-looking s
Slide 3: Q3 2017 Results
Q3 2017 Results Maria Henry Leading the world in essentials for a better life
Slide 4: Headlines
Headlines • Delivered sales and earnings growth in a challenging environment • Achieved excellent cost savings and reduced discretionary spending • Returned significant cash to shareholders 4
Slide 5: Consolidated Net Sales
Consolidated Net Sales Net Sales Q3 2017 Q3 NET SALES ($ BILLION) Total Change(a) 1% Volume 1% $4.6 $4.6 Net Price (1%) Mix/Other 0% Currency 1% Organic(b) 0% • Organic sales up slightly 2016 2017 (a) Total may not equal the sum of volume, net price, mix/other and currency due to rounding. (b) Growt
Slide 6: Gross and Operating Profit
Gross and Operating Profit • Gross margin 35.8 percent – Down 60 basis points year-on-year Q3 OPERATING PROFIT / MARGIN • Input cost inflation $115 million ($ MILLION) – Full-year inflation slightly above $854 previous $200 to $300 million estimate; $836 somewhat higher cost estimates for 18.4% pulp
Slide 7: Earnings Per Share
Earnings Per Share Q3 EPS • EPS $1.60, up 5 percent year-on-year – Lower equity income reduced earnings by $1.60 about 3 cents per share, offset by slightly $1.52 better effective tax rate 2016 2017 (adjusted) 7
Slide 8: Cash Flow and Capital Allocation
Cash Flow and Capital Allocation • Cash provided by operations $805 million in line with expectations – Down compared to $948 million in year-ago quarter that included very strong working capital improvements – Primary working capital cash conversion cycle in Q3 2017 down 6 days versus 2016 full-yea
Slide 9: Personal Care
Personal Care Net Sales Q3 2017 OPERATING MARGIN Total Change (1%) Volume (1%) 19.8% 20.8% Net Price (1%) Mix/Other 0% Currency 0% Organic (2%) 2016 2017 • Organic sales fell about 2 percent – Up 3 percent in D&E markets, down elsewhere • Operating margin up 100 basis points – Cost savings and reduc
Slide 10: Consumer Tissue
Consumer Tissue Net Sales Q3 2017 OPERATING MARGIN Total Change 3% Volume 4% 18.1% 17.1% Net Price (1%) Mix/Other 0% Currency 1% Organic 2% 2016 2017 • Organic sales up 2 percent – Driven by North America • Operating margin down 100 basis points – Higher input costs, mostly in pulp 10
Slide 11: K-C Professional
K-C Professional Net Sales Q3 2017 OPERATING MARGIN Total Change 3% Volume 2% 19.6% 20.9% Net Price (1%) Mix/Other 0% Currency 1% Organic 2% 2016 2017 • Organic sales up 2 percent – Gains in all major geographies • Operating margin up 130 basis points – Sales growth and cost savings 11
Slide 12: Summary
Summary • Earnings growth in a continued difficult environment • Tightly managing costs, working capital and capital spending • Allocating capital in shareholder-friendly ways 12
Slide 13: Recap of Q3 2017 Results & 2017 Outlook
Recap of Q3 2017 Results & 2017 Outlook Tom Falk Leading the world in essentials for a better life
Slide 14: Q3 2017 Recap
Q3 2017 Recap • Organic sales up slightly year-on-year – Volumes increased more than 1 percent, net selling prices fell about 1 percent • North America conditions remain relatively difficult – Elevated competitive activity – Consumer category market growth 1 percent • North American consumer busines
Slide 15: Q3 2017 Recap
Q3 2017 Recap – North American personal care volumes off 1 percent • Infant and child care mega-category volumes down mid-single digits – Expect better performance in Q4 – comparisons ease, more promotion and other brand activities planned • Adult care volumes increased high-single digits – Category
Slide 16: Q3 2017 Recap
Q3 2017 Recap • Developed markets outside North America organic sales down 3 percent – Driven by South Korea, including in diapers • Category conditions challenging due to significant declines in birth rate • D&E markets organic sales up 3 percent, volumes grew 4 percent – Brazil organic sales in pe
Slide 17: Q3 2017 Recap
Q3 2017 Recap – Argentina organic sales in personal care up strong double- digits • Driven by higher net selling prices • Huggies® diaper volumes continue to grow somewhat – Diaper category demand still down – Eastern Europe organic sales in personal care increased high-single digits • Double-digit
Slide 18: 2017 Outlook
2017 Outlook • Confirming previous full-year 2017 targets • Sales and organic sales similar, or up slightly – Given results through nine months, organic sales more likely to be similar for the full-year 2017 • Continue to expect EPS will be at low-end of $6.20 to $6.35 range – Commodity inflation es
Slide 19: Summary
Summary • Focused on competing effectively in the near-term • Executing Global Business Plan strategies for long- term success • Optimistic about opportunities to deliver attractive returns to shareholders 19
Slide 20: Q&A Session
Q&A Session Leading the world in essentials for a better life
Slide 21: Q3 2017 Results and 2017 Outlook
Q3 2017 Results and 2017 Outlook October 23, 2017 www.kimberly-clark.com Leading the world in essentials for a better life