Kimberly-clark Corporation · NASDAQ:KMB
Kimberly-clark — Investor Presentation (2017)
27 slides from Kimberly-clark's investor presentation, May 2, 2017
Slide 1: Investor Presentation
Investor Presentation Financial Information as of December 31, 2016 www.kimberly-clark.com Leading the world in essentials for a better life
Slide 2: Highlights
Highlights • $18 billion global company founded in 1872 • Products used by one-quarter of world’s population • Strong legacy of innovation – created 5 of the 8 major product categories in which we compete • Products sold in more than 175 countries • #1 or #2 position in 80 countries • Strong global
Slide 3: Our Values
Our Values Authentic Accountable Innovative Caring Our heritage is We take Our commitment We respect each one of honesty, ownership for is to new ideas other and care for integrity and our business and that add value the communities doing the our future where we live right thing and work 3
Slide 4: Commitment to Sustainability
Commitment to Sustainability • Sustainability 2022 (K-C’s 150th anniversary) is a commitment to: Harness innovations to Improve social and reduce our impact on physical well-being in natural forests communities around the world Build powerful partnerships to create Increase our energy efficiency and
Slide 5: Senior Leadership Team
Senior Leadership Team Thomas Falk Michael Hsu Achal Agarwal J. Scott Boston Chairman and CEO President and President, Asia-Pacific Senior Vice President and Chief Operating Officer Chief Human Resources Officer Gustavo Calvo Paz Sergio Cruz Maria Henry Sandra MacQuillan President, President, Latin
Slide 6: Three Global Segments
Three Global Segments Personal Care Consumer Tissue K-C Professional (KCP) • Diapers • Facial Tissue • Facial Tissue, Bathroom Tissue and Paper Towels for • Training/Youth/Swim Pants • Bathroom Tissue away-from-home use • Baby Wipes • Paper Towels • Wipers • Feminine Care • Safety Products • Inconti
Slide 7: Geographic Breakdown
Geographic Breakdown 2016 SALES 52% 48% North America Outside North America 2016 OPERATING PROFIT 2016 OPERATING MARGIN 24% 35% 65% 14% Operating profit and margin exclude corporate and other (income) and expense, net. 7
Slide 8: Global Business Plan (GBP)
Global Business Plan (GBP) • GBP is our strategic plan that prioritizes growth opportunities and applies greater financial discipline to our operations – Launched in mid-2003 and designed to generate sustainable growth and improved shareholder returns Manage portfolio to Invest in brands, balance gr
Slide 9: GBP Objectives and Results
GBP Objectives and Results Annual Improvement 2004 – 2016 Objective CAGR Sales 3 to 5 percent 3 percent Organic Sales 3 to 5 percent 4 percent Mid- to high- EPS* 6 percent single digits 20 to 40 ROIC* 80 basis points basis points Dividend In line with EPS 8 percent * EPS and ROIC are adjusted. 9
Slide 10: Business Unit Strategies
Business Unit Strategies PERSONAL CARE Win globally in Personal Care CONSUMER TISSUE Deliver targeted growth and improve margins in Consumer Tissue K-C PROFESSIONAL Grow in higher margin segments in KCP Drive rapid growth in Developing & D&E MARKETS Emerging Markets (D&E) – Focus on China, Eastern E
Slide 11: Win Globally in Personal Care
Win Globally in Personal Care • Leverage strong brands • Innovation supported by integrated marketing campaigns • Long track record of success – Organic sales CAGR +5 percent since launch of Global Business Plan PERSONAL CARE SALES % OF TOTAL COMPANY 50% 39% 2003 2016 11
Slide 12: Deliver Targeted Growth and Improve Margins in Consumer Tissue
Deliver Targeted Growth and Improve Margins in Consumer Tissue • Launch value-added innovations • Focus on net realized revenue, mix, cost reduction • Excellent progress with margin improvement • Operating profit up about 45 percent over last 5 years OPERATING MARGIN 19% 18% 16% 15% 14% 2 02012 12 2
Slide 13: Grow in Higher Margin Segments in KCP
Grow in Higher Margin Segments in KCP • Provide essentials for a healthy, ORGANIC SALES GROWTH (2012-2016 CAGR) safe and productive workplace • Invest in high-growth, higher 9% margin Safety and Wiper businesses 3% KCP KCP • Expand in D&E markets where SEGMENT D&E MARKETS industrialization and econo
Slide 14: Drive Rapid Growth in D&E Markets
Drive Rapid Growth in D&E Markets • Excellent performance over last D&E SALES several years % OF TOTAL COMPANY – 2011 to 2015 organic sales CAGR: 11 percent 29% • 2016 organic sales growth 4 percent – Market positions remain broadly healthy • Optimistic about long-term potential 14% – Attractive mar
Slide 15: D&E Focus Areas: China, Eastern Europe, Latin America
D&E Focus Areas: China, Eastern Europe, Latin America – Personal Care • Approximately 50 percent of D&E business • Organic sales growth – 2011 to 2015 CAGR: 15 percent – 2016: 5 percent (some category slowdown; diaper pricing in China) • Continue to execute long-term growth plans – Innovation – Sell
Slide 16: Adult Care and Feminine Care in D&E Markets
Adult Care and Feminine Care in D&E Markets • Excellent progress over last ADULT CARE ORGANIC SALES GROWTH several years • Driving category development 16% 12% • Leveraging well-known brands • Launching steady stream 2011-2015 CAGR 2016 of innovations FEMININE CARE ORGANIC SALES GROWTH 11% 9% 2011-2
Slide 17: Marketing in a Digital World
Marketing in a Digital World • Supporting innovation and building brand equity • Increasing use of digital / non-traditional channels – More targeted communication – 1x1 relationship with consumers – More efficient reach – Easier to track ROI • Traditional advertising still has important role to pla
Slide 18: Sustainable Cost Reduction – FORCE
Sustainable Cost Reduction – FORCE ANNUAL SAVINGS • Ongoing program ($ Millions) – Delivered $3.3 billion over past 13 years $435 $320 – Performance has accelerated, including record savings in 2016 $200 • End-to-end supply chain focus 2004-2011 2012-2015 2016 Avg. Avg. – Procurement, lean manufactu
Slide 19: 2014 Organization Restructuring
2014 Organization Restructuring • Announced October 2014; CUMULATIVE ANNUALIZED completed December 2016 RESTRUCTURING SAVINGS ($ Millions) • Offset impact of stranded overhead costs from health care business spin-off and improve $140 efficiency – More flexibility to invest – Further evidence of cost
Slide 20: Working Capital Improvement
Working Capital Improvement • Strong improvement since PRIMARY WORKING CAPITAL 2008 CASH CONVERSION CYCLE (Days) – Extending payables terms – Inventory management 73 – Health care spin-off • Expect continued progress going forward – Building further capabilities (70%) – Global supply chain 22 22 org
Slide 21: Return on Invested Capital
Return on Invested Capital • Key component of long-term incentive compensation ROIC* program • Excellent progress since GBP 23.9% introduction • Expect additional 13.7% improvement in 2017 2003 2016 * Adjusted. 21
Slide 22: Capital Allocation Strategy
Capital Allocation Strategy • Maintain ‘A’ credit rating and balance sheet flexibility • Fund business needs (growth, innovation, cost savings) – Capital spending 4.5 to 5.5 percent of net sales • Grow dividend – Top-tier payout in Consumer Packaged Goods industry • Consider M&A – Not core part of g
Slide 23: Dividends
Dividends • Top-tier dividend in CPG industry • Announced 5.4 percent increase for 2017 dividend – 83rd consecutive year K-C has paid a dividend, 45th consecutive annual increase • Paid $13.5+ billion in cash dividends over past 13 years PER SHARE DIVIDEND DIVIDEND PAYOUT (Declared) (Based on adjust
Slide 24: Share Repurchases
Share Repurchases • Cumulative share SHARES OUTSTANDING repurchases of $15.4 billion (Millions) 2004-2016 502 • Strong track record of reducing share count • Targeting $800 million to $1 billion in 2017 (29%) 357 Year-end Year-end 2008 2016 24
Slide 25: Total Shareholder Returns Since Launch of GBP (July 2003)
Total Shareholder Returns Since Launch of GBP (July 2003) 266% 268% 203% S&P Consumer KMB S&P 500 Staples Index 25
Slide 26: To Learn More About Kimberly-Clark
To Learn More About Kimberly-Clark • Contact Investor Relations with your questions – Paul Alexander, Vice President at (972) 281-1440 • Visit www.kimberly-clark.com/investors to view our annual report, SEC filings or news releases • To obtain copies of our 2016 Annual Report on Form 10-K, SEC filin
Slide 27: Safe Harbor Statement
Safe Harbor Statement Forward-Looking Information Certain matters in this presentation, including our 2017 outlook, expectations and planning assumptions, and any estimates, projections, and statements relating to our business plans or objectives, constitute forward-looking statements and are based