In This Article:
Release Date: April 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Kimberly - Clark de Mexico SAB de CV (KCDMF) reported a 0.3% increase in sales, reaching 13.8 billion pesos, despite challenging market conditions.
-
Exports saw a significant rise of 21%, with double-digit increases in both converted products and hardwall sales.
-
The company achieved approximately 450 million pesos in savings through its cost reduction program, primarily at the cost of goods sold level.
-
SGNA expenses were reduced by 5% year over year, contributing to a decrease in distribution expenses due to improved logistics operations.
-
The company maintains a strong balance sheet with a cash position of 11.8 billion pesos and no debt maturing in the next 12 months.
Negative Points
-
Total volume decreased by 1.3%, with consumer products and away-from-home segments declining by 1.4% and 4.2%, respectively.
-
Gross profits decreased by 9.4%, and the operating margin fell to 21.5%, reflecting lower margins in hardroll sales.
-
The exchange rate was significantly higher, averaging 22% more, impacting costs negatively.
-
The company anticipates continued challenges in the second quarter due to economic slowdown and muted volume growth in key categories.
-
Despite efforts, some expected relief in input prices did not materialize, particularly in softwafa and fluff, which reached record levels.
Q & A Highlights
Q: Can you provide more details on the partnership with Group Lutech and how it fits into Kimberly-Clark de Mexico's broader strategy? A: (CEO Pablo Gonzalez) The partnership with Group Lutech is focused on entering the pet food market, which is a growing category. Lutech will develop and manufacture the products, while we will market and commercialize them. This collaboration allows us to leverage our commercial capabilities and Lutech's expertise in pet nutrition. We expect this venture to become a significant part of our business in the medium term, potentially expanding beyond Mexico.
Q: What is the current status of your hedging strategy, and how does it impact your financial outlook? A: (CFO Javier) We have hedged approximately 50% of our purchases for the second quarter at a rate slightly above 20.70 pesos per dollar. This strategy helps mitigate the impact of currency fluctuations on our costs, providing some stability in our financial planning.
Q: How are you managing price increases in the current economic environment, and what impact do you expect on your margins? A: (CEO Pablo Gonzalez) We are implementing selective price increases based on the consumer and competitive landscape. We anticipate a net impact of about 3-4% in the second half of the year. Despite the challenging environment, we aim to maintain our margins within our long-term target range of 25-27%.