Kimberly-Clark provides longer-term outlook in investor presentation; reaffirms FY24 guidance (126.09)
- Kimberly-Clark Corporation announced that today, Mike Hsu, Chairman and Chief Executive Officer, and members of his executive leadership team are unveiling the next phase of the company's transformation, including a new operating model and key commercial initiatives designed to grow its brands and businesses at a faster pace than its categories.
- The company will focus on driving a step-change in performance by sharpening its strategic focus through a new operating model that leverages three synergistic forces:
- Accelerating Pioneering Innovation to capture significant growth available in its categories by investing in science and technology to satisfy unmet and evolving consumer needs.
- Optimizing its Margin Structure to deliver superior consumer propositions at every rung of the price-value ladder. The company will implement initiatives and deploy technology and data analytics designed to create a fast, adaptable, integrated supply chain with greater visibility that can deliver continuous improvement. The planned supply chain modernization is expected to generate more than $3 billion in gross productivity and $500 million in working capital savings that will be used to help fuel growth investments.
- Wiring its Organization for Growth to drive agility, speed, and focused execution that extends the company's competitive advantages further into the future. In the coming months, the company plans to reorganize its operations into three business segments
- Long-Term Growth and Return Algorithm - Kimberly-Clark has set long-term growth and return targets that include:
- Organic Net Sales growth ahead of market growth;
- Adjusted Operating Profit growth in the mid-to-high single digits on a constant currency basis;
- Adjusted EPS growth in mid-to-high single digits on a constant currency basis; and
- Annual Free Cash Flow generation of at least $2 billion.
- 2024 Outlook
- The company noted that the outlook it provided in January is consistent with its new long-term growth and return targets. The company continues to expect to deliver a low-to-mid single-digit percentage increase in 2024 Organic Net Sales versus the prior year period, with growth in reported Net Sales forecast to reflect negative impacts of approximately 300 basis points from currency translation and 60 basis points from the Brazil Tissue divestiture. Adjusted Operating Profit is still expected to grow at a high single-digit to low double-digit rate on a constant-currency basis and Adjusted Earnings Per share are expected to grow at a high single-digit rate on a constant-currency basis versus the prior year period. Reported growth in Operating Profit and Earnings Per Share are still expected to be negatively impacted by approximately 400 basis points from currency translation.