In This Article:
Release Date: January 28, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Kimberly-Clark Corp (NYSE:KMB) successfully launched its multiyear Powering Care transformation strategy, setting a strong foundation for future growth.
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The company achieved full-year results that exceeded its long-term algorithm, transitioning from margin recovery to margin expansion.
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Kimberly-Clark Corp (NYSE:KMB) reported strong market share momentum, particularly in North America and China, with significant share gains in key categories.
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The company delivered historical high productivity savings, contributing to its $3 billion five-year target.
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Kimberly-Clark Corp (NYSE:KMB) plans to continue investing in product quality, brand support, and capability building, with a focus on pioneering innovation and strong commercial activation.
Negative Points
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Kimberly-Clark Corp (NYSE:KMB) faces challenges with muted pricing expectations for 2025, relying heavily on volume and mix-driven growth.
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The company anticipates cost pressures, including potential increases in pulp costs, which could impact margins.
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There are concerns about lower frequency of product use in certain markets due to consumer pressures, particularly in Latin America and parts of Asia.
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Kimberly-Clark Corp (NYSE:KMB) is dealing with the impact of retailer destocking and other external variables that could affect growth projections.
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The company is exiting certain markets and business lines, such as Nigeria and private label contracts, which may limit growth opportunities in those areas.
Q & A Highlights
Q: Can you provide an update on the organizational changes and their impact on growth and innovation? A: Michael Hsu, CEO, stated that the company feels positive about their setup for long-term growth. The categories continue to show durable growth, driven by factors like penetration, frequency, and trade-up opportunities. The company expects to see 2% category growth in the short term and aims for 2-3% volume and mix-driven growth in the long term.
Q: How do you view pricing and volume growth for 2025, especially considering FX pressures? A: Nelson Urdaneta, CFO, explained that pricing is expected to be flat in 2025, with growth driven by volume and mix. The company anticipates continued market share gains and expects volume and mix to contribute significantly to growth, building on the momentum from 2024.
Q: Can you elaborate on the productivity savings and their impact on costs, particularly pulp costs? A: Nelson Urdaneta, CFO, highlighted that the company achieved historical high productivity in 2024, mainly through manufacturing efficiencies. While pulp costs are expected to rise in 2025, the company has strategic supplier relationships to manage volatility. Productivity is expected to remain strong, contributing to cost management.