"Our organic sales were strong, including double-digit growth in a number of our personal care markets, and improving performance in tissue and our professional business." – Mike Hsu, Chairman and CEO, Kimberly-Clark.
Oct. 25, 2021 - Kimberly-Clark Corporation (NYSE: KMB) today reported third quarter 2021 results.
Executive Summary
Chairman and Chief Executive Officer Mike Hsu said, "Our third quarter results reflect a dynamic and challenging macro environment. Our organic sales were strong, including double-digit growth in a number of our personal care markets, and improving performance in tissue and our professional business. Market share performance also remained strong, demonstrating the strength of our innovation and excellent local commerical execution. Our earnings were negatively impacted by significant inflation and supply chain disruptions that increased our costs beyond what we anticipated. We are taking further action, including additional pricing and enhanced cost management, to mitigate these headwinds as it is becoming clear they are not likely to be resolved quickly."
Hsu continued, "We will continue to invest in our brands and capabilities as we navigate through this volatile and difficult macro environment. Our strategy is working, and we remain confident in our future and our ability to create long-term shareholder value."
Sales of $5.0 billion in the third quarter of 2021 increased 7 percent versus the prior year. Changes in foreign currency exchange rates increased sales 1 percent and the net impact of the Softex Indonesia acquisition and exited businesses in conjunction with the 2018 Global Restructuring Program increased sales 2 percent. Organic sales increased 4 percent as net selling prices rose 3 percent and product mix increased sales 1 percent.
In North America, organic sales increased 3 percent in consumer products and 16 percent in K-C Professional. Outside North America, organic sales were up 6 percent in developing and emerging (D&E) markets and were even with year-ago in developed markets.
Third quarter operating profit was $657 million in 2021 and $666 million in 2020. Results in both periods include charges related to the 2018 Global Restructuring Program. Third quarter adjusted operating profit was $745 million in 2021 and $806 million in 2020. Results were impacted by $480 million of higher input costs, driven by pulp and polymer-based materials, distribution and energy costs. Results benefited from organic sales growth, $115 million of cost savings from the company's FORCE (Focused On Reducing Costs Everywhere) program, $35 million of cost savings from the 2018 Global Restructuring Program and lower marketing, research and general expense.
The third quarter effective tax rate was 21.6 percent in 2021 and 20.1 percent in 2020. The third quarter adjusted effective tax rate was 20.9 percent in 2021 and 22.4 percent in 2020. Kimberly-Clark's share of net income of equity companies in the third quarter was $21 million in 2021 and $31 million in 2020.
Cash provided by operations in the third quarter was $782 million in 2021 and $559 million in 2020. The increase was driven by improved working capital and lower tax payments. Capital spending for the third quarter was $235 million in 2021 and $258 million in 2020. Third quarter 2021 share repurchases were 0.4 million shares at a cost of $58 million. The company now plans for full-year repurchases of approximately $400 million, at the low end of the previous range of $400 to $450 million. Total debt was $8.9 billion at September 30, 2021 and $8.4 billion at the end of 2020.
Third quarter sales of $2.7 billion increased 14 percent. The net impact of the Softex Indonesia acquisition and exited businesses in conjunction with the 2018 Global Restructuring Program increased sales approximately 3 percent while changes in currency rates increased sales 1 percent. Net selling prices increased 4 percent, volumes rose 3 percent and product mix improved 2 points. Third quarter operating profit of $496 million increased 2 percent. Results benefited from organic sales growth, cost savings and reduced marketing, research and general spending. The comparison was impacted by input cost inflation.
Sales in North America increased 11 percent. Net selling prices increased sales 5 percent, volumes rose 4 percent and product mix improved 2 points. Changes in currency rates increased sales 1 percent while exited business related to the 2018 Global Restructuring program reduced sales 1 percent.
Sales in D&E markets increased 18 percent. The Softex Indonesia acquisition increased sales by approximately 11 percent while changes in currency rates increased sales 1 percent. Net selling prices increased sales 4 percent and product mix increased sales 3 percent. Organic sales increased in Argentina, Brazil, China, Eastern Europe, India and South Africa but declined in ASEAN and most of the rest of Latin America.
Sales in developed markets outside North America (Australia, South Korea and Western/Central Europe) increased 11 percent including a 4 point favorable impact from changes in currency rates. Volumes rose 5 percent and net selling prices increased sales 2 percent.
Third quarter sales of $1.5 billion decreased 5 percent. Changes in currency rates increased sales 1 percent. Volumes declined 7 percent while net selling prices increased sales 1 percent. The volume comparison reflects elevated shipments in North America and developed markets in the year-ago period to support higher consumer and customer demand related to the global outbreak of COVID-19. Third quarter operating profit of $222 million decreased 30 percent. The comparison was impacted by lower organic sales, higher input costs and other manufacturing cost increases, including inefficiencies from lower production volumes. Results benefited from cost savings and reduced marketing, research and general spending.
Sales in North America decreased 8 percent. Volumes fell 8 percent and product mix was down 1 percent, while net selling prices improved 1 percent.
Sales in D&E markets increased 5 percent including a 1 point favorable impact from changes in currency rates. Net selling prices rose 3 percent, product mix improved approximately 1 percent while volumes were down 3 percent. The Softex Indonesia acquisition increased sales 4 percent.
Sales in developed markets outside North America decreased 6 percent. Volumes were down 6 percent while net selling prices rose 1 percent. Exited businesses related to the 2018 Global Restructuring program reduced sales 4 percent while change in currency rates increased sales 3 percent.
Third quarter sales of $0.8 billion increased 13 percent. Volumes increased 6 percent, net selling prices rose 5 percent and product mix improved slightly. Changes in currency rates increased sales 1 percent. Third quarter operating profit of $96 million increased 10 percent. Results benefited from organic sales growth, cost savings, lower other manufacturing costs, and reduced marketing, research and general spending. The comparison was impacted by higher input costs.
Sales in North America increased 16 percent. Volumes increased approximately 10 percent and net selling prices rose 6 percent. Product mix and currency rates each increased sales slightly. Sales were up significantly in washroom products reflecting comparison to weak year-ago period.
Sales in D&E markets increased 14 percent including a 1 point benefit from changes in currency rates. Volumes rose approximately 10 percent, compared to a soft year-ago period, net selling prices increased 3 percent and product mix improved 1 percent.
Sales in developed markets outside North America were up 3 percent including a 3 percent benefit from changes in currency rates. Net selling prices increased 5 percent while volumes decreased 5 percent.
Kimberly-Clark's complete third quarter 2021 results and outlook can be found on the company's website: www.kimberly-clark.com.
Kimberly-Clark's (NYSE: KMB) portfolio of brands, include Huggies, Kleenex, Scott, Kotex, Cottonelle, Poise, Depend, Andrex, Pull-Ups, GoodNites, Intimus, Neve, Plenitud, Viva and WypAll, hold No. 1 or No. 2 share positions in 80 countries. To learn more, visit: www.kimberly-clark.com
SOURCE: Kimberly-Clark Corporation
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