DALLAS, July 23, 2020 /PRNewswire/ -- Kimberly-Clark
Corporation (NYSE: KMB) today reported second quarter 2020
results.
Executive Summary
- Second quarter 2020 net sales of $4.6
billion increased slightly compared to the year-ago period,
including organic sales growth of 4 percent.
- Diluted net income per share for the second quarter was
$1.99 in 2020 and $1.40 in 2019.
- Second quarter adjusted earnings per share were $2.20 in 2020, up 32 percent compared to
$1.67 in 2019. Adjusted earnings per
share exclude certain items described later in this news
release.
- Second quarter cash provided by operations was $1,579 million in 2020 and $609 million in 2019.
- The company is restoring financial guidance for full-year 2020
and restarting its share repurchase program after temporarily
suspending both in April due to the uncertainty related to the
COVID-19 pandemic.
- Net sales in 2020 are expected to increase 1 to 2 percent
year-on-year, including organic sales growth of 4 to 5 percent.
Diluted net income per share for 2020 is anticipated to be
$6.35 to $6.90. Adjusted earnings per share in 2020 are
expected to be $7.40 to $7.60. The company's outlook in January was for
organic sales growth of 2 percent and adjusted earnings per share
of $7.10 to $7.35.
Chairman and Chief Executive Officer Mike Hsu said, "We continue to focus on
protecting the health and safety of our employees and consumers and
operating our supply chain with excellence to meet the needs of our
consumers and customers during this unprecedented time
period. I am extremely proud of how our teams are managing
these near-term operating priorities. At the same time, our
underlying business momentum is good, our market share positions
are healthy overall and we are delivering excellent financial
results."
Hsu continued, "We achieved very good organic sales growth and
all-time record adjusted earnings and cash flow in the second
quarter. We also delivered significant cost savings, helping
us achieve strong margin improvements. While the environment
remains uncertain, visibility has improved from three months ago
and we are restoring forward-looking guidance. We have
increased our 2020 outlook for organic sales and earnings compared
to our original plan. We are also further increasing our growth
investments to position us for future success. We continue to
execute well, operate our business with a balanced approach and
remain very optimistic about our opportunities to create
shareholder value."
Second Quarter 2020 Operating Results
Sales of $4.6 billion in the
second quarter of 2020 increased slightly compared to the year-ago
period. Changes in foreign currency exchange rates reduced
sales approximately 4 percent, while organic sales increased 4
percent. Volumes increased 2 percent and changes in net
selling prices and product mix each improved 1 percent. In
North America, organic sales increased 12 percent in consumer
products but fell 3 percent in K-C Professional. Outside North
America, organic sales rose 3 percent in developed markets but fell
3 percent in developing and emerging markets, driven by
Latin America.
Second quarter operating profit was $925
million in 2020 and $670
million in 2019. Results in both periods include
charges related to the 2018 Global Restructuring
Program. Second quarter adjusted operating profit was
$1,012 million in 2020 and
$789 million in 2019. Results
benefited from organic sales growth, $120
million of cost savings from the company's FORCE (Focused On
Reducing Costs Everywhere) program and $55
million of cost savings from the 2018 Global Restructuring
Program. Input costs decreased $80
million, driven by pulp, while other manufacturing costs
rose year-on-year. Advertising spending increased and general
and administrative costs were also higher compared to the prior
year. Foreign currency translation effects reduced operating
profit by $15 million and transaction
effects also negatively impacted the comparison.
The second quarter effective tax rate was 23.2 percent in 2020
and 22.2 percent in 2019. The second quarter adjusted
effective tax rate was 22.7 percent in 2020 and 22.3 percent in
2019.
Kimberly-Clark's share of net income of equity companies in the
second quarter was $35 million in
2020 and $33 million in
2019. Results benefited from organic sales growth and lower
input costs, partially offset by negative foreign currency
effects.
Cash Flow and Balance Sheet
Cash provided by operations in the second quarter was an
all-time record $1,579 million in
2020 compared to $609 million in
2019. The increase was driven by improved working capital,
higher earnings and the timing of tax payments. Capital
spending for the second quarter was $284
million in 2020 and $253
million in 2019. Second quarter 2020 share repurchases
were 0.3 million shares at a cost of $39
million and occurred prior to the company temporarily
suspending its share repurchase program effective April 24, 2020. The company will be
restarting its share repurchase program effective July 24, 2020. Total debt was $8.1 billion at June 30,
2020 and $7.7 billion at the
end of 2019.
Second Quarter 2020 Business Segment Results
Personal Care Segment
Second quarter sales of $2.2
billion decreased 2 percent. Changes in currency rates
reduced sales by 5 percent. Product mix improved 2 percent and
volumes and net selling prices each increased slightly. Second
quarter operating profit of $519
million increased 7 percent. The comparison benefited
from organic sales growth, cost savings and lower input
costs. Results were impacted by unfavorable currency effects,
other manufacturing cost increases, higher advertising spending and
increased general and administrative costs.
Sales in North America
increased 4 percent. Volumes increased 2 percent, product mix
improved 2 percent and net selling prices rose 1 percent. The
improved volumes and product mix were driven by baby and child
care.
Sales in developing and emerging markets decreased 9
percent. Changes in currency rates reduced sales 11
percent. Product mix improved 2 percent and volumes rose
slightly, while net selling prices were down 1 percent.
Sales in developed markets outside North America (Australia, South
Korea and Western/Central
Europe) decreased 8 percent. Changes in currency rates
reduced sales 5 percent. Volumes fell 6 percent, while the
combined impact of changes in net selling prices and product mix
improved sales 3 percent.
Consumer Tissue Segment
Second quarter sales of $1.6
billion increased 12 percent. Volumes increased 14
percent and net selling prices rose 1 percent, while product mix
was unfavorable by 1 percent. Changes in currency rates
reduced sales approximately 3 percent. The volume increase was
driven by increased shipments in North
America and developed markets to support higher consumer and
customer demand related to the global outbreak of
COVID-19. Second quarter operating profit of $428 million increased 94 percent. Results
benefited from organic sales growth, cost savings and lower input
costs. The comparison was impacted by increased advertising
spending and unfavorable currency effects.
Sales in North America
increased 22 percent. Volumes rose 24 percent and net selling
prices improved 1 percent, while product mix was down 2
percent. Volumes increased double-digits in all major product
categories.
Sales in developing and emerging markets decreased 9 percent
including a 7 point negative impact from changes in currency
rates. Volumes decreased 2 percent and net selling prices fell
1 percent, while product mix improved 1 percent.
Sales in developed markets outside North America increased 8
percent. Volumes rose 7 percent, driven by South Korea and Western/Central
Europe. Net selling prices rose 4 percent and product mix
improved 1 percent. Changes in currency rates reduced sales 4
percent.
K-C Professional (KCP) Segment
Second quarter sales of $0.7
billion decreased 12 percent. Volumes declined 16
percent, reflecting challenging economic and business conditions
globally following the outbreak of COVID-19. Net selling
prices increased 4 percent and product mix improved approximately 3
percent. Changes in currency rates reduced sales 2
percent. Second quarter operating profit of $155 million decreased 4 percent. The
comparison was impacted by lower volumes, other manufacturing cost
increases and unfavorable currency effects. Results benefited
from increased net selling prices, improved product mix and cost
savings.
Sales in North America
decreased 3 percent. Volumes were down 9 percent, as
double-digit declines in washroom and safety products were
partially offset by double-digit increases in wipers and other
products. Net selling prices increased 4 percent and product
mix improved 3 percent.
Sales in developing and emerging markets decreased 35 percent
including a 5 point negative impact from changes in currency
rates. Volumes fell 32 percent, with significant declines in
all major geographies, and product mix was down 1 percent. Net
selling prices increased 3 percent.
Sales in developed markets outside North America were down 12
percent. Volumes decreased 17 percent, while product mix
improved 5 percent and net selling prices increased 3
percent. The changes were driven by Western/Central
Europe. Currency rates were unfavorable by 4 percent.
Year-To-Date Results
For the first six months of 2020, sales of $9.6 billion increased 4 percent. Organic
sales increased 7 percent, as volumes rose 5 percent and net
selling prices and product mix each improved 1
percent. Changes in foreign currency exchange rates reduced
sales by 3 percent and business exits in conjunction with the 2018
Global Restructuring Program reduced sales slightly.
Year-to-date operating profit was $1,829
million in 2020 and $1,325
million in 2019. Results in both periods include
charges related to the 2018 Global Restructuring
Program. Year-to-date adjusted operating profit was
$2,009 million in 2020 and
$1,596 million in 2019. Results
benefited from organic sales growth, $220
million of FORCE cost savings and $80
million of cost savings from the 2018 Global Restructuring
Program. Input costs decreased $195
million, driven by pulp. The comparison was impacted by
unfavorable currency effects, other manufacturing cost increases,
increased advertising spending and higher general and
administrative costs.
Through six months, diluted net income per share was
$3.92 in 2020 and $2.71 in 2019. Year-to-date adjusted
earnings per share were $4.34 in 2020
and $3.33 in 2019.
2018 Global Restructuring Program
In January 2018, Kimberly-Clark
initiated the 2018 Global Restructuring Program in order to reduce
the company's structural cost base and enhance the company's
flexibility to invest in its brands, growth initiatives and
capabilities critical to delivering future growth. As part of
the program, Kimberly-Clark expects to exit or divest some
low-margin businesses that generate approximately 1 percent of
company net sales.
The restructuring is expected to be completed in 2021, with
total restructuring charges to implement the program expected to be
toward the high end of the range of $1,700 to $1,900
million pre-tax ($1,300 to
$1,400 million after tax). The
company expects the program will generate annual pre-tax cost
savings of $500 to $550 million. The company continues to
target to achieve those savings by the end of 2021, although it is
possible the full realization could occur in 2022 because of the
uncertainties related to COVID-19. Through the second
quarter of 2020, the company has incurred cumulative restructuring
charges of $1,582 million pre-tax
($1,177 million after tax) and
generated cumulative savings of $380
million.
2020 Outlook and Key Planning Assumptions
On April 23, 2020 the company
withdrew its previous 2020 guidance because of the uncertainty
related to the COVID-19 outbreak. Although uncertainty remains
meaningful related to the duration and potential impacts of
COVID-19 and the overall environment, visibility has improved from
three months ago and the company is restoring forward-looking
guidance. In addition to assuming no significant impact from
potential supply chain disruptions as a result of COVID-19, the
company's key planning and guidance assumptions for full-year 2020
are below:
- Net sales increase of 1 to 2 percent.
-
- Organic sales increase of 4 to 5 percent.
- Foreign currency exchange rates unfavorable by 3 percent.
- Exited businesses in conjunction with the 2018 Global
Restructuring Program expected to reduce sales slightly.
- Adjusted operating profit growth of 6 to 9 percent.
-
- Cost savings of $510 to
$560 million, including $390 to $420
million from the FORCE program and $120 to $140
million from the 2018 Global Restructuring Program.
- Key cost inputs expected to decline $150 to $250
million.
- Higher other manufacturing costs, including expenses related to
COVID-19.
- Increased investments in advertising and commercial
capabilities.
- Unfavorable foreign currency translation and transaction
effects.
- Interest expense expected to decrease somewhat
year-on-year.
- Adjusted effective tax rate of 23 to 24 percent.
- Net income from equity companies expected to be similar to down
slightly year-on-year.
- Adjusted earnings per share of $7.40 to $7.60
compared to $6.89 in 2019.
- Capital spending of $1,200 to
$1,300 million.
- Share repurchases of $700 to
$900 million, subject to market
conditions.
Non-GAAP Financial Measures
This news release and the accompanying tables include the
following financial measures that have not been calculated in
accordance with accounting principles generally accepted in the
U.S., or GAAP, and are therefore referred to as non-GAAP financial
measures:
- Adjusted earnings and earnings per share
- Adjusted gross and operating profit
- Adjusted effective tax rate
These non-GAAP financial measures exclude the following items
for the relevant time periods as indicated in the accompanying
non-GAAP reconciliations to the comparable GAAP financial
measures:
- 2018 Global Restructuring Program. Mentioned elsewhere in this
release.
The company provides these non-GAAP financial measures as
supplemental information to our GAAP financial
measures. Management and the company's Board of Directors use
adjusted earnings, adjusted earnings per share and adjusted gross
and operating profit to (a) evaluate the company's historical and
prospective financial performance and its performance relative to
its competitors, (b) allocate resources and (c) measure the
operational performance of the company's business units and their
managers. Management also believes that the use of an adjusted
effective tax rate provides improved insight into the tax effects
of our ongoing business operations.
Additionally, the Management Development and Compensation
Committee of the company's Board of Directors has used certain of
the non-GAAP financial measures when setting and assessing
achievement of incentive compensation goals. These goals are
based, in part, on the company's adjusted earnings per share and
improvement in the company's adjusted return on invested capital
determined by excluding certain of the adjustments that are used in
calculating these non-GAAP financial measures.
This news release includes information regarding organic sales
growth, which describes the impact of changes in volume, net
selling prices and product mix on net sales. Changes in
foreign currency exchange rates and exited businesses also impact
the year-over-year change in net sales.
Conference Call
A conference call to discuss this news release and other matters
of interest to investors and analysts will be held at 9 a.m. (CDT) today. The conference call will
be simultaneously broadcast over the World Wide
Web. Stockholders and others are invited to listen to the live
broadcast or a playback, which can be accessed by following the
instructions set out in the Investors section of the company's Web
site (www.kimberly-clark.com).
About Kimberly-Clark
Kimberly-Clark (NYSE: KMB) and its trusted brands are an
indispensable part of life for people in more than 175
countries. Fueled by ingenuity, creativity, and an
understanding of people's most essential needs, we create products
that help individuals experience more of what's important to
them. Our portfolio of brands, including 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. We use sustainable
practices that support a healthy planet, build strong communities,
and ensure our business thrives for decades to come. To keep
up with the latest news and to learn more about the company's
148-year history of innovation, visit kimberly-clark.com.
Copies of Kimberly-Clark's Annual Report to Stockholders and its
proxy statements and other SEC filings, including Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on
Form 8-K, are made available free of charge on the company's Web
site on the same day they are filed with the SEC. To view
these filings, visit the Investors section of the company's Web
site.
As more fully described in Kimberly-Clark's Quarterly Report
on Form 10-Q for the quarter ended June 30,
2020, the company has been actively monitoring the COVID-19
situation and its impact globally. The impact of
COVID-19 and measures to prevent its spread are affecting our
business in a number of ways. We have experienced
increased volatility in demand for some of our products as
consumers adapt to the evolving environment. We have
also experienced incidents of supply chain disruption and increased
currency and commodity volatility. We expect the
ultimate significance of the impact on our financial and
operational results will be dictated by the length of time that
such circumstances continue, which will depend on the currently
unknowable extent and duration of the COVID-19 pandemic and any
governmental and public actions taken in
response. COVID-19 also makes it more
challenging for management to estimate future performance of our
businesses, particularly over the near term.
Certain matters contained in this news release concerning the
outlook, anticipated financial and operating results, raw material,
energy and other input costs, anticipated currency rates and
exchange risks, including in Argentina, net income from equity companies,
sources and uses of cash, the effective tax rate, the anticipated
cost savings from the company's FORCE program, charges and savings
from the 2018 Global Restructuring Program, growth initiatives,
product innovations, contingencies and anticipated transactions of
the company constitute forward-looking statements and are based
upon management's expectations and beliefs concerning future events
impacting the company. In addition, many factors
outside our control, including pandemics (including the ongoing
COVID-19 outbreak), epidemics, fluctuations in foreign currency
exchange rates, the prices and availability of our raw materials,
potential competitive pressures on selling prices for our products,
energy costs, our ability to maintain key customer relationships,
as well as general economic and political conditions globally and
in the markets in which we do business, could affect the
realization of these estimates.
There can be no assurance that these future events will occur
as anticipated or that the company's results will be as
estimated. Forward-looking statements speak only
as of the date they were made, and we undertake no obligation to
publicly update them. For a description of
certain factors that could cause the company's future results to
differ from those expressed in any such forward-looking statements,
see Item 1A entitled "Risk Factors" in each of the company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 and the company's Annual Report on
Form 10-K for the year ended December 31,
2019.
KIMBERLY-CLARK
CORPORATION
|
CONSOLIDATED INCOME
STATEMENTS
|
(Millions, except per
share amounts)
|
|
|
Three Months Ended
June 30
|
|
|
|
2020
|
|
2019
|
|
Change
|
Net
Sales
|
$
|
4,612
|
|
$
|
4,594
|
|
—
|
Cost of products
sold
|
2,835
|
|
3,108
|
|
-9 %
|
Gross
Profit
|
1,777
|
|
1,486
|
|
+20 %
|
Marketing, research
and general expenses
|
844
|
|
811
|
|
+4 %
|
Other (income) and
expense, net
|
8
|
|
5
|
|
+60 %
|
Operating
Profit
|
925
|
|
670
|
|
+38 %
|
Nonoperating
expense
|
(6)
|
|
(11)
|
|
-45 %
|
Interest
income
|
2
|
|
2
|
|
—
|
Interest
expense
|
(65)
|
|
(67)
|
|
-3 %
|
Income Before
Income Taxes and Equity Interests
|
856
|
|
594
|
|
+44 %
|
Provision for income
taxes
|
(199)
|
|
(132)
|
|
+51 %
|
Income Before
Equity Interests
|
657
|
|
462
|
|
+42 %
|
Share of net income of
equity companies
|
35
|
|
33
|
|
+6 %
|
Net
Income
|
692
|
|
495
|
|
+40 %
|
Net income
attributable to noncontrolling interests
|
(11)
|
|
(10)
|
|
+10 %
|
Net Income
Attributable to Kimberly-Clark Corporation
|
$
|
681
|
|
$
|
485
|
|
+40 %
|
|
|
|
|
|
|
Per Share
Basis
|
|
|
|
|
|
Net Income
Attributable to Kimberly-Clark Corporation
|
|
|
|
|
|
Basic
|
$
|
2.00
|
|
$
|
1.41
|
|
+42 %
|
Diluted
|
$
|
1.99
|
|
$
|
1.40
|
|
+42 %
|
|
|
|
|
|
|
Cash Dividends
Declared
|
$
|
1.07
|
|
$
|
1.03
|
|
+4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares
Outstanding
|
June
30
|
|
|
|
2020
|
|
2019
|
|
|
Outstanding shares as
of
|
341.0
|
|
344.2
|
|
|
Average diluted shares
for three months ended
|
341.9
|
|
346.0
|
|
|
KIMBERLY-CLARK
CORPORATION
|
CONSOLIDATED INCOME
STATEMENTS
|
(Millions, except per
share amounts)
|
|
|
Six Months Ended
June 30
|
|
|
|
2020
|
|
2019
|
|
Change
|
Net
Sales
|
$
|
9,621
|
|
$
|
9,227
|
|
+4 %
|
Cost of products
sold
|
6,053
|
|
6,313
|
|
-4 %
|
Gross
Profit
|
3,568
|
|
2,914
|
|
+22 %
|
Marketing, research
and general expenses
|
1,717
|
|
1,580
|
|
+9 %
|
Other (income) and
expense, net
|
22
|
|
9
|
|
+144 %
|
Operating
Profit
|
1,829
|
|
1,325
|
|
+38 %
|
Nonoperating
expense
|
(17)
|
|
(22)
|
|
-23 %
|
Interest
income
|
4
|
|
5
|
|
-20 %
|
Interest
expense
|
(126)
|
|
(132)
|
|
-5 %
|
Income Before
Income Taxes and Equity Interests
|
1,690
|
|
1,176
|
|
+44 %
|
Provision for income
taxes
|
(396)
|
|
(275)
|
|
+44 %
|
Income Before
Equity Interests
|
1,294
|
|
901
|
|
+44 %
|
Share of net income of
equity companies
|
73
|
|
60
|
|
+22 %
|
Net
Income
|
1,367
|
|
961
|
|
+42 %
|
Net income
attributable to noncontrolling interests
|
(26)
|
|
(22)
|
|
+18 %
|
Net Income
Attributable to Kimberly-Clark Corporation
|
$
|
1,341
|
|
$
|
939
|
|
+43 %
|
|
|
|
|
|
|
Per Share
Basis
|
|
|
|
|
|
Net Income
Attributable to Kimberly-Clark Corporation
|
|
|
|
|
|
Basic
|
$
|
3.93
|
|
$
|
2.73
|
|
+44 %
|
Diluted
|
$
|
3.92
|
|
$
|
2.71
|
|
+45 %
|
|
|
|
|
|
|
Cash Dividends
Declared
|
$
|
2.14
|
|
$
|
2.06
|
|
+4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares
Outstanding
|
June
30
|
|
|
|
2020
|
|
2019
|
|
|
Average diluted shares
for six months ended
|
342.3
|
|
346.0
|
|
|
KIMBERLY-CLARK
CORPORATION
|
NON-GAAP
RECONCILIATIONS
|
(Millions, except per
share amounts)
|
|
|
Three Months Ended
June 30, 2020
|
|
As
Reported
|
|
2018
Global
Restructuring
Program
|
|
As
Adjusted
Non-GAAP
|
Cost of products
sold
|
$
|
2,835
|
|
$
|
60
|
|
$
|
2,775
|
Gross
Profit
|
1,777
|
|
(60)
|
|
1,837
|
Marketing, research
and general expenses
|
844
|
|
27
|
|
817
|
Operating
Profit
|
925
|
|
(87)
|
|
1,012
|
Provision for income
taxes
|
(199)
|
|
15
|
|
(214)
|
Effective tax
rate
|
23.2
%
|
|
—
|
|
22.7
%
|
Share of net income
of equity companies
|
35
|
|
(1)
|
|
36
|
Net income
attributable to noncontrolling interests
|
(11)
|
|
1
|
|
(12)
|
Net Income
Attributable to Kimberly-Clark Corporation
|
681
|
|
(72)
|
|
753
|
Diluted Earnings per
Share(a)
|
1.99
|
|
(0.21)
|
|
2.20
|
|
|
|
Three Months Ended
June 30, 2019
|
|
As
Reported
|
|
2018
Global
Restructuring
Program
|
|
As
Adjusted
Non-GAAP
|
Cost of products
sold
|
$
|
3,108
|
|
$
|
102
|
|
$
|
3,006
|
Gross
Profit
|
1,486
|
|
(102)
|
|
1,588
|
Marketing, research
and general expenses
|
811
|
|
17
|
|
794
|
Operating
Profit
|
670
|
|
(119)
|
|
789
|
Provision for income
taxes
|
(132)
|
|
27
|
|
(159)
|
Effective tax
rate
|
22.2 %
|
|
—
|
|
22.3 %
|
Net Income
Attributable to Kimberly-Clark Corporation
|
485
|
|
(92)
|
|
577
|
Diluted Earnings per
Share(a)
|
1.40
|
|
(0.27)
|
|
1.67
|
|
(a) "As
Adjusted Non-GAAP" may not equal "As Reported" plus "Adjustments"
as a result of rounding.
|
|
Non-GAAP financial
measures are not meant to be considered in isolation or as a
substitute for the comparable GAAP measures, and they should be
read only in conjunction with the company's consolidated financial
statements prepared in accordance with GAAP. There are
limitations to these non-GAAP financial measures because they are
not prepared in accordance with GAAP and may not be comparable to
similarly titled measures of other companies due to potential
differences in methods of calculation and items being
excluded. The company compensates for these limitations by
using these non-GAAP financial measures as a supplement to the GAAP
measures and by providing reconciliations of the non-GAAP and
comparable GAAP financial measures.
|
|
Unaudited
|
KIMBERLY-CLARK
CORPORATION
|
NON-GAAP
RECONCILIATIONS
|
(Millions, except per
share amounts)
|
|
|
Six Months Ended
June 30, 2020
|
|
As
Reported
|
|
2018
Global
Restructuring
Program
|
|
As
Adjusted
Non-GAAP
|
Cost of products
sold
|
$
|
6,053
|
|
$
|
130
|
|
$
|
5,923
|
Gross
Profit
|
3,568
|
|
(130)
|
|
3,698
|
Marketing, research
and general expenses
|
1,717
|
|
50
|
|
1,667
|
Operating
Profit
|
1,829
|
|
(180)
|
|
2,009
|
Provision for income
taxes
|
(396)
|
|
33
|
|
(429)
|
Effective tax
rate
|
23.4
%
|
|
—
|
|
22.9
%
|
Share of net income
of equity companies
|
73
|
|
(1)
|
|
74
|
Net income
attributable to noncontrolling interests
|
(26)
|
|
2
|
|
(28)
|
Net Income
Attributable to Kimberly-Clark Corporation
|
1,341
|
|
(146)
|
|
1,487
|
Diluted Earnings per
Share(a)
|
3.92
|
|
(0.43)
|
|
4.34
|
|
|
|
Six Months Ended
June 30, 2019
|
|
As
Reported
|
|
2018
Global
Restructuring
Program
|
|
As
Adjusted
Non-GAAP
|
Cost of products
sold
|
$
|
6,313
|
|
$
|
227
|
|
$
|
6,086
|
Gross
Profit
|
2,914
|
|
(227)
|
|
3,141
|
Marketing, research
and general expenses
|
1,580
|
|
45
|
|
1,535
|
Other (income) and
expense, net
|
9
|
|
(1)
|
|
10
|
Operating
Profit
|
1,325
|
|
(271)
|
|
1,596
|
Provision for income
taxes
|
(275)
|
|
58
|
|
(333)
|
Effective tax
rate
|
23.4 %
|
|
—
|
|
23.0 %
|
Share of net income
of equity companies
|
60
|
|
(2)
|
|
62
|
Net income
attributable to noncontrolling interests
|
(22)
|
|
1
|
|
(23)
|
Net Income
Attributable to Kimberly-Clark Corporation
|
939
|
|
(214)
|
|
1,153
|
Diluted Earnings per
Share(a)
|
2.71
|
|
(0.62)
|
|
3.33
|
|
(a) "As
Adjusted Non-GAAP" may not equal "As Reported" plus "Adjustments"
as a result of rounding.
|
|
Unaudited
|
KIMBERLY-CLARK
CORPORATION
|
CONSOLIDATED BALANCE
SHEETS
|
(Millions)
|
|
|
June 30, 2020
|
|
December 31,
2019
|
ASSETS
|
|
|
|
Current
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
1,448
|
|
$
|
442
|
Accounts receivable,
net
|
2,024
|
|
2,263
|
Inventories
|
1,825
|
|
1,790
|
Other current
assets
|
607
|
|
562
|
Total Current
Assets
|
5,904
|
|
5,057
|
Property, Plant
and Equipment, Net
|
7,366
|
|
7,450
|
Investments in
Equity Companies
|
319
|
|
268
|
Goodwill
|
1,401
|
|
1,467
|
Other
Assets
|
1,183
|
|
1,041
|
TOTAL
ASSETS
|
$
|
16,173
|
|
$
|
15,283
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
Liabilities
|
|
|
|
Debt payable within
one year
|
$
|
850
|
|
$
|
1,534
|
Trade accounts
payable
|
3,032
|
|
3,055
|
Accrued expenses and
other current liabilities
|
2,252
|
|
1,978
|
Dividends
payable
|
360
|
|
352
|
Total Current
Liabilities
|
6,494
|
|
6,919
|
Long-Term
Debt
|
7,223
|
|
6,213
|
Noncurrent
Employee Benefits
|
859
|
|
897
|
Deferred Income
Taxes
|
527
|
|
511
|
Other
Liabilities
|
546
|
|
520
|
Redeemable
Preferred Securities of Subsidiaries
|
29
|
|
29
|
Stockholders'
Equity
|
|
|
|
Kimberly-Clark
Corporation
|
268
|
|
(33)
|
Noncontrolling
Interests
|
227
|
|
227
|
Total
Stockholders' Equity
|
495
|
|
194
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
$
|
16,173
|
|
$
|
15,283
|
KIMBERLY-CLARK
CORPORATION
|
CONSOLIDATED CASH
FLOW STATEMENTS
|
(Millions)
|
|
|
Three Months
Ended
June 30
|
|
Six Months
Ended
June 30
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Operating
Activities
|
|
|
|
|
|
|
|
Net income
|
$
|
692
|
|
$
|
495
|
|
$
|
1,367
|
|
$
|
961
|
Depreciation and
amortization
|
201
|
|
236
|
|
414
|
|
470
|
Stock-based
compensation
|
39
|
|
32
|
|
54
|
|
48
|
Deferred income
taxes
|
21
|
|
15
|
|
12
|
|
26
|
Net (gains) losses on
asset dispositions
|
6
|
|
11
|
|
13
|
|
17
|
Equity companies'
earnings (in excess of) less than dividends paid
|
(9)
|
|
(3)
|
|
(47)
|
|
(30)
|
Operating working
capital
|
634
|
|
(150)
|
|
490
|
|
(525)
|
Postretirement
benefits
|
(1)
|
|
(9)
|
|
(15)
|
|
(21)
|
Other
|
(4)
|
|
(18)
|
|
(5)
|
|
(20)
|
Cash Provided by
Operations
|
1,579
|
|
609
|
|
2,283
|
|
926
|
Investing
Activities
|
|
|
|
|
|
|
|
Capital
spending
|
(284)
|
|
(253)
|
|
(636)
|
|
(569)
|
Investments in time
deposits
|
(218)
|
|
(106)
|
|
(323)
|
|
(186)
|
Maturities of time
deposits
|
158
|
|
157
|
|
254
|
|
229
|
Other
|
13
|
|
4
|
|
15
|
|
4
|
Cash Used for
Investing
|
(331)
|
|
(198)
|
|
(690)
|
|
(522)
|
Financing
Activities
|
|
|
|
|
|
|
|
Cash dividends
paid
|
(365)
|
|
(355)
|
|
(722)
|
|
(700)
|
Change in short-term
debt
|
(385)
|
|
(308)
|
|
(667)
|
|
543
|
Debt
proceeds
|
—
|
|
696
|
|
1,241
|
|
696
|
Debt
repayments
|
—
|
|
(301)
|
|
(252)
|
|
(703)
|
Proceeds from exercise
of stock options
|
27
|
|
134
|
|
135
|
|
160
|
Acquisitions of common
stock for the treasury
|
(49)
|
|
(166)
|
|
(263)
|
|
(330)
|
Other
|
(15)
|
|
(71)
|
|
(39)
|
|
(79)
|
Cash Used for
Financing
|
(787)
|
|
(371)
|
|
(567)
|
|
(413)
|
Effect of Exchange
Rate Changes on Cash and Cash Equivalents
|
8
|
|
3
|
|
(20)
|
|
4
|
Change in Cash and
Cash Equivalents
|
469
|
|
43
|
|
1,006
|
|
(5)
|
Cash and Cash
Equivalents - Beginning of Period
|
979
|
|
491
|
|
442
|
|
539
|
Cash and Cash
Equivalents - End of Period
|
$
|
1,448
|
|
$
|
534
|
|
$
|
1,448
|
|
$
|
534
|
KIMBERLY-CLARK
CORPORATION
|
SELECTED BUSINESS
SEGMENT DATA
|
(Millions)
|
|
|
Three Months
Ended
June 30
|
|
|
|
Six Months
Ended
June 30
|
|
|
|
2020
|
|
2019
|
|
Change
|
|
2020
|
|
2019
|
|
Change
|
NET
SALES
|
|
|
|
|
|
|
|
|
|
|
|
Personal
Care
|
$
|
2,229
|
|
$
|
2,286
|
|
-2 %
|
|
$
|
4,651
|
|
$
|
4,561
|
|
+2 %
|
Consumer
Tissue
|
1,645
|
|
1,472
|
|
+12 %
|
|
3,368
|
|
2,998
|
|
+12 %
|
K-C
Professional
|
724
|
|
821
|
|
-12 %
|
|
1,572
|
|
1,638
|
|
-4 %
|
Corporate &
Other
|
14
|
|
15
|
|
N.M.
|
|
30
|
|
30
|
|
N.M.
|
TOTAL NET
SALES
|
$
|
4,612
|
|
$
|
4,594
|
|
—
|
|
$
|
9,621
|
|
$
|
9,227
|
|
+4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
Personal
Care
|
$
|
519
|
|
$
|
485
|
|
+7 %
|
|
$
|
1,046
|
|
$
|
969
|
|
+8 %
|
Consumer
Tissue
|
428
|
|
221
|
|
+94 %
|
|
793
|
|
462
|
|
+72 %
|
K-C
Professional
|
155
|
|
162
|
|
-4 %
|
|
336
|
|
312
|
|
+8 %
|
Corporate &
Other(a)
|
(169)
|
|
(193)
|
|
N.M.
|
|
(324)
|
|
(409)
|
|
N.M.
|
Other (income) and
expense, net(a)
|
8
|
|
5
|
|
+60 %
|
|
22
|
|
9
|
|
+144 %
|
TOTAL OPERATING
PROFIT
|
$
|
925
|
|
$
|
670
|
|
+38 %
|
|
$
|
1,829
|
|
$
|
1,325
|
|
+38 %
|
|
|
(a)
|
Corporate & Other
and Other (income) and expense, net include income and expense not
associated with the business segments, including adjustments as
indicated in the Non-GAAP Reconciliations.
|
PERCENTAGE CHANGE
IN NET SALES VERSUS PRIOR YEAR
|
|
|
Three Months Ended
June 30, 2020
|
|
Total(a)
|
|
Volume
|
|
Net
Price
|
|
Mix/
Other
|
|
Exited
Businesses(b)
|
|
Currency
|
|
|
Organic(c)
|
Personal
Care
|
(2)
|
|
—
|
|
—
|
|
2
|
|
—
|
|
(5)
|
|
|
2
|
Consumer
Tissue
|
12
|
|
14
|
|
1
|
|
(1)
|
|
—
|
|
(3)
|
|
|
14
|
K-C
Professional
|
(12)
|
|
(16)
|
|
4
|
|
3
|
|
—
|
|
(2)
|
|
|
(10)
|
TOTAL
CONSOLIDATED
|
—
|
|
2
|
|
1
|
|
1
|
|
—
|
|
(4)
|
|
|
4
|
|
|
|
Six Months Ended
June 30, 2020
|
|
Total(a)
|
|
Volume
|
|
Net
Price
|
|
Mix/
Other
|
|
Exited
Businesses(b)
|
|
Currency
|
|
|
Organic(c)
|
Personal
Care
|
2
|
|
4
|
|
1
|
|
2
|
|
—
|
|
(4)
|
|
|
6
|
Consumer
Tissue
|
12
|
|
14
|
|
1
|
|
—
|
|
—
|
|
(2)
|
|
|
14
|
K-C
Professional
|
(4)
|
|
(6)
|
|
3
|
|
2
|
|
(1)
|
|
(2)
|
|
|
(1)
|
TOTAL
CONSOLIDATED
|
4
|
|
5
|
|
1
|
|
1
|
|
—
|
|
(3)
|
|
|
7
|
|
(a) Total
may not equal the sum of volume, net price, mix/other, exited
businesses and currency due to rounding.
|
(b)
Exited businesses in conjunction with the 2018 Global Restructuring
Program.
|
(c)
Combined impact of changes in volume, net price and
mix/other.
|
|
N.M. - Not
Meaningful
|
Unaudited
|
KIMBERLY-CLARK
CORPORATION
|
NON-GAAP
RECONCILIATIONS
|
OUTLOOK FOR 2020 AND
2019 RESULTS
|
|
|
Estimated
Range
|
ESTIMATED FULL
YEAR 2020 DILUTED EARNINGS PER SHARE
|
|
|
|
|
|
Adjusted earnings per
share
|
$
|
7.40
|
|
—
|
|
$
|
7.60
|
Adjustment for
charges related to the 2018 Global Restructuring Program
|
(1.05)
|
|
—
|
|
(0.70)
|
Per share basis –
diluted net income attributable to Kimberly-Clark
Corporation
|
$
|
6.35
|
|
—
|
|
$
|
6.90
|
|
Twelve months
ended
December 31,
2019
|
|
FULL YEAR 2019
DILUTED EARNINGS PER SHARE
|
|
|
Adjusted earnings per
share
|
$
|
6.89
|
|
Adjustment for
charges related to the 2018 Global Restructuring Program
|
(0.72)
|
|
Adjustment related to
property sale gain
|
0.07
|
|
Per share basis –
diluted net income attributable to Kimberly-Clark
Corporation
|
$
|
6.24
|
|
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SOURCE Kimberly-Clark Corporation