Financial Reports & Markets
Kimberly-Clark Corporation sees sales increase in Q1 2020 results
By P&PC Staff
By P&PC Staff
Kimberly-Clark Corporation has reported its first-quarter 2020 results, citing $5 billion in net sales, an increase of eight per cent compared to the year-ago period.
The company is withdrawing its previous full-year 2020 financial outlook due to the uncertainty related to the COVID-19 pandemic.
“Since the outbreak of COVID-19, Kimberly-Clark has taken decisive actions to protect the health and safety of our people, customers and consumers, proactively managed our global supply chain to ensure a steady supply of our essential products, and positioned our brands to help support those in need,” says Mike Hsu, chairman and chief executive officer, in a statement. “I am incredibly proud of all the ways our employees are responding to this crisis, all while staying focused on serving consumers who count on Kimberly-Clark.
“A combination of increased consumer demand for our products and strong execution by our teams is reflected in our first-quarter results. We increased investments in our business and our market positions remain broadly healthy.”
Organic sales have increased 11 per cent. Volumes increased more than eight per cent, driven by increased shipments to support consumer stock-up related to the global outbreak of COVID-19. The stock-up impacted all business segments, in particular consumer tissue, and all major geographies.
First quarter operating profit was $904 million in 2020 and $655 million in 2019.
Results in both periods include charges related to the 2018 Global Restructuring Program. First quarter adjusted operating profit was $997 million in 2020 and $807 million in 2019.
Results benefited from organic sales growth, $100 million of cost savings from the company’s FORCE (Focused On Reducing Costs Everywhere) program and $25 million of cost savings from the 2018 Global Restructuring Program. I
Input costs decreased $115 million, driven by pulp, while other manufacturing costs rose year-on-year.
Consumer tissue segment
First quarter sales of $1.7 billion increased 13 per cent. Volumes increased 14 per cent and net selling prices rose one per cent, while changes in currency rates reduced sales two per cent.
The volume increase was driven by increased shipments in all major geographies to support consumer stock-up related to the global outbreak of COVID-19. First quarter operating profit of $365 million increased 51 per cent. Results benefited from organic sales growth, lower input costs and cost savings.
The comparison was impacted by other manufacturing cost increases, higher selling, general and administrative costs, increased advertising spending and unfavourable currency effects.
Sales in North America increased 12 per cent. Volumes rose 10 per cent and net selling prices improved three per cent, while product mix was down one per cent. The volume increase included double-digit gains on bathroom tissue and facial tissue.
Read the full Kimberly-Clark Q1 2020 financial report.