KMb Kimberly Clark Sept 2013 Investor Slide Deck Powerpoint PPT PDF

7/29/2019 KMb Kimberly Clark Sept 2013 Investor Slide Deck Powerpoint PPT PDF

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Leading the world in essentialsfor a better life.

Leading the worldin essentialsfor a better life.

Barclays

Back-To-School

Consumer Conference

September 4, 2013


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Agenda

Strategy & FinancialPerformance Update

Global Business Plan (GBP) Financial Discipline

Q&A

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Headlines

Executing GBP well in difficult environment

Investing for future growth and long-term success

Leveraging strong financial and cost discipline

Allocating capital in shareholder-friendly ways

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GBP Strategies

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Manage portfolio tobalance growth,

margin, cash flow

Invest in brands,innovation, growth

initiatives

Deliver sustainablecost reduction

Disciplined capital

management to improveROIC and return

cash to shareholders


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GBP Objectives and Results

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EPS and ROIC are adjusted.

ImprovementObjective

20042012 CAGR

Net Sales 3 to 5 percent 5 percent

EPSMid- to high-single digits

5 percent

ROIC20 to 40

basis points30 basis points

Dividend In line with EPS 9 percent


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First Half 2013(versus year-ago)

Net Sales +1 percent

Organic Net Sales +3 percent

Operating Margin +150 basis points

EPS +14 percent

ROIC +90 basis points

First Half 2013 Results

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Organic sales growth excludes the impact of changes in currency rates and lost sales from European strategic changes and restructuring actions.Operating margin, EPS and ROIC are adjusted.


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January Guidance July Guidance

Net Sales 0 to +3 percent -1 to +2 percent

Organic Net Sales +3 to 5 percent +3 to 5 percent

Operating Margin +40 to 50 basis points +70 to 80 basis points

EPS +5 to 8 percent +7 to 10 percent*

ROIC +20 to 40 basis points +80 to 120 basis points

2013 Outlook

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Operating margin, EPS and ROIC are adjusted. Operating margin change for 2013 = midpoint of net sales and operating profit guidance.

* If currency exchange rates generally hold at recent (mid-July) spot rates for the balance ofthe year, less likely that adjusted earnings per share will be in the upper half of the range.


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Recent Bottom-Line Growth Improving

Progress with targeted growth initiatives

Significant cost savings

Excellent margin improvement

Strong execution overall

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10%

5%

9%

7%

2004-2011CAGR

2012 2013July

Guidance

AdjustedEPS Growth


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Business Unit Strategies

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Win globally inPersonal Care

Deliver targeted growthand improve margins in

Consumer Tissue

Drive rapid growth

throughout KCIfocuson China, Russia and

Latin America

Grow in higher marginsegments in KCP and

Health Care


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North American Adult Care

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Attractive category with favorabledemographic trends

Well known, trusted brands:POISE and DEPEND

Innovation and marketingprograms delivering strong growth

8%

12%

7%

10%8%

2009 2010 2011 2012 1H2013

51%53%

55%57% 58%

2009 2010 2011 2012 1H2013

Net Sales Growth

Market Share


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North American Adult Care - 2013 Innovations

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Improved POISE

products help deliver on #1 unmetconsumer need of odor control

DEPENDGuards and Shields for Men

Unique and innovative marketing campaigns to spur trial


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North American Baby & Child Care

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Diaper and training pant categoriesstill down

Strong market share positions

Continued innovation with integratedmarketing campaigns

Several innovations launched first half 2013

Market Share

42%41% 41%

2011 2012 1H2013


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European Strategic Changes Announced

October 2012

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Exiting diaper category in most of Western/Central Europe andsome other lower margin or slower growing businesses

Streamlining cost structure to align with strategic changes

Benefits

Improves underlying profitability Better focus on strongest positions and growth opportunities

Update

More than 80 percent of restructuring costs complete

Diaper market exits complete

Facilities impacted: 4 out of 5 already closed or sold

Workforce reductions about half complete

On track with 2013 operating plan


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Consumer Tissue:

Targeted Growth and Improve Margins

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Innovations to strengthen brands and enhance mix

Launched significant product improvements in Q2 in NorthAmerica

o COTTONELLEbathroom tissue

o COTTONELLEmoist cleansing cloths

o KLEENEXfacial tissue

Innovations in internationalmarkets to drive mix


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Consumer Tissue:

Targeted Growth and Improve Margins

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Global focus on net realized revenueand cost reduction

Pulp & tissue restructuring

Charges complete at end of 2012

Cumulative benefits of $65 millionthrough Q2 2013, will grow to at least$100 million by 2014

Excellent margin improvement

since 2010

10.2%

11.4%

13.6%14.4%

2010 2011 2012 1H2013

Operating Margin


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11% 11%

Net Sales OperatingProfit

22%

37%

16%

32%

2003 2012Net Sales Operating Profit*

Drive Rapid Growth Throughout KCI

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Double-digit growth since GBPintroduction

Now approaching 40 percent ofcompany sales

Strong market positions

Attractive market dynamics

Multi-tier product strategies

Targeted geographic expansionand growth plans

* Total company amounts are adjusted.

2004 - 2012 CAGR

KCI % of Total Company


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Focus Areas: China, Russia, Latin America

Approximately 55 percent of KCI

Innovation across all categories

Selling and marketing investments

Increasing manufacturing asset baseto support growth and improveprofitability

Emphasis on Personal Care and KCP

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Organic Net SalesGrowth

8%

12%

7%

11%

KCI China, Russia,Latin America

2010-2012CAGR

1H 2013


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Leading the world in essentialsfor a better life.Leading the world in essentialsfor a better life.

-2%

22%

10%

2010-2011 2012 1H 2013

Russia

17% 21% 18%

2010-2011 2012 1H 2013

Brazil

Diaper Organic Sales Growth

Winning innovations

Extending diaper pants

Marketing investments

Expanding distribution

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24%

45%42%

2010-2011 2012 1H 2013

China


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Adult Care/Baby Wipes Organic

Sales Growth

Driving category development

Bringing products to more markets

Leveraging well-known brands

Investing to make businesses global

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14%

19%

12%

2010-2011 2012 1H 2013

Adult Care

15%16%

13%

2010-2011 2012 1H 2013

Baby Wipes

Leading the world in essentialsfor a better life. 19


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Higher Margin Segments:

KCP & Health Care

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Faster growing and highermargin categories

Ongoing innovation

Geographic expansion

1.0x1.2x

Washroom Wipers/Safety

KCPNet Sales Growth(2011-2012 CAGR Index)

1.0x

1.3x

Supplies MedicalDevices

Health CareNet Sales Growth(2011-2012 CAGR Index)


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Investing For Growth:

Strategic Marketing

Supporting innovation

Building brand equity

Increasing use of non-traditionalchannels and programs

Improving efficiencies

Significant increase in spending

in last five years

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$468

$810

2007 2012

Advertising Spending($ Million)

2.6%NSV

3.8%NSV


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Leading the world in essentialsfor a better life. 22

Sustainable Cost Reduction

Ongoing program

Delivered $1.9 billion overpast 9 years

Supply chain focus

Global procurement organization

Lean manufacturing practices

Accelerated performancebenefiting profitability:

FORCE Savings($ Million)

$200

$295 $300

2004-2011Average

2012 2013July

Guidance

$350

31.5%33.8% 34.6%

2011 2012 1H 2013

Adjusted Gross Margin


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Cash ConversionCycle (Days)

Working Capital Improvement

Strong improvement since 2008

Improved accounts payable

Inventory focus

Expect continued progress goingforward

Building further capabilities

Targeting at least 1 day improvement

in 2013

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73

58

50 47 4541

2008 2009 2010 2011 2012 1H2013


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Shareholder-Friendly Cash Deployment:

Dividends

Top-tier dividend in CPG industry

Current yield ~3.5 percent

9.5% dividend increase for 2013 Represents 41stconsecutive

annual increase and 79thstraight yearof paying dividends

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*2013 based on midpoint of company July guidance for adjusted earnings per share.

41%

57%

2003 2013

Dividend Payout*

$1.36

$3.24

2003 2013

Per Share Dividend

(Declared)


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Shareholder-Friendly Cash Deployment:

Share Repurchases

Excess cash flow forshare repurchases

Cumulative share

repurchases of $10.6billion 2004-2012

2013 plan: $1.2 billion

Strong track record ofreducing share count

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Shares Outstanding(Millions)

502

383

-24%

June 302013

Year-end2003


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Total Shareholder Returns*

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*Total Shareholder Returns through 8/27/13 assumes reinvestment of dividends.

16%

63%

87%

167%

18%

63%

42%

101%

14%

61% 62%

155%

1 Year 3 Year 5 Year 10 Year

KMB

S&P 500

S&P 500 Consumer Staples


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Summary

Making good progress with targeted growth initiatives

Delivering ROIC and margin improvement

Improving overall business portfolio

Confident GBP will continue to improve shareholder value

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Reminders

Forward-Looking Information

Certain matters in this presentation, including our 2013 outlook, expectations and planningassumptions, constitute forward-looking statements and are based upon managementsexpectations and beliefs concerning future events impacting the company. There can be noassurance that these future events will occur as anticipated or that the companys results will

be as estimated. Forward-looking statements speak only as of the date they were made, andwe undertake no obligation to publicly update them. For a description of certain factors that

could cause the companys future results to differ materially from those expressed in any suchforward-looking statements, see Item 1A of the companys Annual Report on Form 10-K for theyear ended December 31, 2012 entitled Risk Factors.

Non-GAAP Financial Measures

In our presentation, we refer to certain non-GAAP financial measures, including adjustedearnings per share, adjusted ROIC, organic net sales, adjusted operating profit, adjustedoperating margin and adjusted dividend payout. Management believes that reporting in this

manner enhances investors understanding and analysis of the companys performance. Foradditional information on why we make these adjustments, see the supplemental informationposted to the Investors section of our website (www.kimberly-clark.com).

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Q&A Session


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Leading the world in essentials for a better life


BarclaysBack-To-School

Consumer Conference

September 4 2013

Documents

KMb Kimberly Clark Sept 2013 Investor Slide Deck Powerpoint PPT PDF