Kimberly-clark Corporation · NASDAQ:KMB
Kimberly-clark — Investor Presentation (2015)
29 slides from Kimberly-clark's investor presentation, Sep 22, 2015
Slide 1: Investor Presentation
Leading the World in Essentials for a Better Life Investor Presentation Financial Information as of December 31, 2014 www.kimberly-clark.com
Slide 2: Highlights
Highlights • $20 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: Our heritage is one of honesty, integrity and doing the right thing Accountable: We take ownership for our business and our future Innovative: Our commitment is to new ideas that add value Caring: We respect each other and care for the communities where we live and work 3
Slide 4: Commitment to Sustainability
Commitment to Sustainability A Trusted Brand…Yesterday, Today and Tomorrow • Sustainability 2015 vision built around a framework of People, Planet and Products – Engage with people to build enduring relationships – Respect our planet and conserve its resources – Deliver quality products today and fo
Slide 5: Senior Leadership Team
Senior Leadership Team Thomas Falk Mark Buthman Lizanne Gottung Chairman and CEO Senior Vice President Senior Vice President and Chief Financial and Chief Human Officer* Resources Officer Michael Hsu Thomas Mielke Anthony Palmer Group President of Senior Vice President President of Global Kimberly-C
Slide 6: Three Global Segments
Three Global Segments Personal Care Consumer Tissue K-C Professional (KCP) • Diapers • Facial Tissue • Facial Tissue, Bathroom Tissue • Training/Youth/Swim Pants • Bathroom Tissue and Paper Towels for away-from-home use • Infant and Child Wipes • Paper Towels • Wipers • Feminine Care • Safety Produc
Slide 7: Geographic Breakdown
Geographic Breakdown 2014 NET SALES 46% 54% North America Outside North America 2014 OPERATING PROFIT 2014 OPERATING MARGIN 21% 42% 14% 58% 7 Operating profit and margin exclude corporate and other (income) and expense, net.
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 • GBP strategies – Manage portfolio to balance g
Slide 9: GBP Objectives and Results
GBP Objectives and Results Annual 2004 – 2014 Improvement CAGR Objective Net Sales 3 to 5 percent 4 percent Mid- to high- EPS* 6 percent single digits 20 to 40 ROIC* 50 basis points basis points Dividend In line with EPS 9 percent 9 * EPS and ROIC are adjusted.
Slide 10: Business Unit Strategies
Business Unit Strategies PERSONAL Win globally in Personal Care CARE CONSUMER Deliver targeted growth and improve TISSUE margins in Consumer Tissue K-C PROFESSIONAL Grow in higher margin segments in KCP Drive rapid growth in Developing & Emerging D&E MARKETS Markets (D&E) – Focus on China, Eastern E
Slide 11: Win Globally in Personal Care
Win Globally in Personal Care • Leverage strong brands • Win with consumers by providing superior innovation supported by integrated marketing campaigns • Long track record of success – 11-year organic net sales CAGR: +6 percent PERSONAL CARE NET SALES % OF TOTAL COMPANY 49% 39% 2003 2014 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 MARGIN 16% 15% 14% 11% 10% 2010 2011 2012 2013 2014 12
Slide 13: Grow in Higher Margin Segments in KCP
Grow in Higher Margin Segments in KCP • Provide essentials for a healthy, NET SALES GROWTH (2010-2014 CAGR Index) safe and productive workplace 2.8x • Invest in high-growth, higher 1.0x margin Safety & Wiping segments • Focus on improving mix and Washroom Wipers & Safety margin to fund growth TOTAL
Slide 14: Drive Rapid Growth in D&E Markets
Drive Rapid Growth in D&E Markets • Excellent performance over last five 2010 – 2014 CAGR years 10% 9% – Double-digit organic sales growth 7% – Improved operating margin • Strong market positions Net Sales Organic Operating Net Sales Profit • Attractive market dynamics • Multi-tier product strategie
Slide 15: D&E Focus Areas: China, Eastern Europe, Latin America
D&E Focus Areas: China, Eastern Europe, Latin America • Approximately 75 percent of D&E 2010 – 2014 CAGR business • Innovation across all categories 12% 11% • Selling and marketing investments 8% • China business expanding into more cities and product tiers – Expansion opportunities in Eastern Europ
Slide 16: Personal Care in D&E Markets
Personal Care in D&E Markets • Five-year organic net sales CAGR: +12 ORGANIC NET SALES GROWTH percent 15% 15% • Personal Care in D&E now nearly as 12% 12% large as North America 6% • Leveraging strong brands, innovations 2010 2011 2012 2013 2014 and favorable market demographics • Driving market dev
Slide 17: KCP in D&E Markets
KCP in D&E Markets • Approaching $1 billion in annual net 2010 – 2014 CAGR sales; excellent margins and growth opportunities 12% • Double-digit growth in organic net 10% sales and operating profit over last 9% five years • Expanding where industrialization and economic development are occurring – In
Slide 18: Recent Portfolio Changes
Recent Portfolio Changes • Pulp & Tissue Restructuring (2011 – 2012) – Exited remaining integrated pulp operations; streamlined tissue manufacturing; $100 million cumulative operating profit benefit • European Strategic Changes (2012 – 2014) – Exited diaper category in most of Western/Central Europe
Slide 19: 2014 Organization Restructuring
2014 Organization Restructuring • Announced October 2014 • Will offset impact of stranded overhead costs from health care business spin-off and improve efficiency • More flexibility to invest in brands, targeted growth initiatives, capabilities • Anticipated workforce reductions 1,100 to 1,300 • Exp
Slide 20: Investing For Growth – Advertising
Investing For Growth – Advertising • Supporting innovation and building brand equity • Increasing use of non-traditional channels and programs • Improving efficiencies • Significant increase in spending in last five years ADVERTISING SPENDING ($ MILLIONS) $767 $559 3.9% 2.9% NSV NSV 2009 2014 20
Slide 21: Sustainable Cost Reduction
Sustainable Cost Reduction • Ongoing program FORCE SAVINGS – Delivered $2.5 billion over past ($ MILLIONS) 11 years – Accelerated performance in $320 $310 $295 recent years • Supply chain focus – Global procurement organization $200 – Lean manufacturing practices – Product cost design • Targeting at
Slide 22: Working Capital Improvement
Working Capital Improvement PRIMARY WORKING CAPITAL • Strong improvement since 2008 CASH CONVERSION CYCLE (DAYS) – Improved accounts payable 73 – Inventory focus • Expect continued progress going 58 forward 50 47 45 – Building further capabilities 39 • Targeting 3 to 4 day improvement 32 in 2015 200
Slide 23: Return on Invested Capital
Return on Invested Capital • Excellent progress since GBP ROIC* introduction • Key component of long-term 19.1% incentive compensation program • Expect additional improvement 13.7% in 2015 2003 2014 23 * Adjusted.
Slide 24: 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 25: Dividends
Dividends • Top-tier dividend in CPG industry • Announced 5 percent increase for 2015 dividend – 81st consecutive year K-C has paid a dividend, 43rd consecutive annual increase • Paid $11 billion in cash dividends over past 11 years PER SHARE DIVIDEND DIVIDEND PAYOUT* (DECLARED) $3.36 61% 41% $1.36
Slide 26: Share Repurchases
Share Repurchases • Cumulative share SHARES OUTSTANDING repurchases of $13.8 billion (MILLIONS) 2004-2014 • Strong track record of 502 reducing share count -27% • Targeting $800 million to $1.0 billion in 2015 365 Year-end Year-end 2003 2014 26
Slide 27: Total Shareholder Returns Since Launch of GBP (July 2003)
Total Shareholder Returns Since Launch of GBP (July 2003) 248% 227% 167% KMB S&P 500 S&P Consumer Staples Index 27 Total Shareholder Returns through December 31, 2014 – assumes reinvestment of dividends.
Slide 28: 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 2014 Annual Report on Form 10-K, SEC filin
Slide 29: Safe Harbor Statement
Safe Harbor Statement Forward-Looking Information Certain matters in this presentation, including our 2015 outlook, expectations and planning assumptions, and any estimates, projections, and statements relating to our business plans, strategies or objectives, constitute forward-looking statements an