Financial Reports & Markets
Kimberly-Clark sees sales uptick in Q2 2020
By P&PC Staff/Kimberly-Clark
By P&PC Staff/Kimberly-Clark
Kimberly-Clark Corporation has released its second-quarter 2020 financial results, citing net sales of $4.6 billion, which increased slightly compared to the year-ago period.
Tissue sales for the second quarter were up 12 per cent.
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.
“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,” says Mike Hsu, chairman and chief executive officer of Kimberly-Clark, in a statement.
“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.”
Q2 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 four per cent, while organic sales increased four per cent.
Volumes increased two per cent and changes in net selling prices and product mix each improved one per cent.
In North America, organic sales increased 12 per cent in consumer products but fell three per cent in K-C Professional. Outside North America, organic sales rose three per cent in developed markets but fell three per cent 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.
The company says 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.
Consumer tissue segment
Second quarter sales of $1.6 billion increased 12 per cent. Volumes increased 14 per cent and net selling prices rose one per cent, while product mix was unfavourable by one per cent.
Changes in currency rates reduced sales approximately three per cent. 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 per cent. Results benefited from organic sales growth, cost savings and lower input costs. The comparison was impacted by increased advertising spending and unfavourable currency effects.
Sales in North America increased 22 per cent. Volumes rose 24 per cent and net selling prices improved one per cent, while product mix was down two per cent. Volumes increased double-digits in all major product categories.
For the full Kimberly-Clark financial results, including personal care and year-to-date information, click here.