KIMBERLY-CLARK ANNOUNCES YEAR-END 2021 RESULTS AND 2022 OUTLOOK
Executive Summary
- Fourth quarter 2021 net sales of
$5.0 billion increased 3 percent compared to the year-ago period, including organic sales growth of 3 percent. Full-year 2021 net sales of$19.4 billion increased 2 percent, with organic sales down 1 percent. - Diluted net income per share for the fourth quarter was
$1.06 in 2021 and$1.58 in 2020. Full-year diluted net income per share was$5.35 in 2021 and$6.87 in 2020. - Fourth quarter adjusted earnings per share were
$1.30 in 2021, down 23 percent compared to$1.69 in 2020. Adjusted earnings per share exclude certain items described later in this news release. - Full-year adjusted earnings per share were
$6.18 in 2021, down 20 percent compared to$7.74 in 2020. The company's previous guidance was for adjusted earnings per share of$6.05 to$6.25 . - Net sales in 2022 are expected to increase 1 to 2 percent, including organic sales growth of 3 to 4 percent. Diluted net income per share for 2022 is anticipated to be
$5.60 to$6.00 . - The company's Board of Directors has approved a 1.8 percent increase in the quarterly dividend, which is the 50th consecutive annual increase in the dividend.
Chairman and Chief Executive Officer
Hsu continued, "Looking ahead, we will continue to invest in innovation, supporting our brands, and accelerating topline growth. While we expect inflation and supply-chain disruption to persist into 2022, we are committed to recovering margins to pre-pandemic levels over time, and we are optimistic about gradual improvement later in the year.
We remain confident in the potential of our categories in the near and long-term, and in our ability to create meaningful shareholder value while we work to achieve our purpose of better care for a better world. I am grateful for the incredible dedication of our talented teams in 2021, and we are committed to doing all we can to ensure a safe, healthy, and rewarding work environment in the year ahead."
Fourth Quarter 2021 Operating Results
Sales of
Fourth quarter operating profit was $521 million in 2021 and
Fourth quarter adjusted operating profit was $611 million in 2021 and
The fourth quarter effective tax rate was 20.9 percent in 2021 and 24.6 percent in 2020. The fourth quarter adjusted effective tax rate was 21.9 percent in 2021 and 22.2 percent in 2020. Kimberly-Clark's share of net income of equity companies in the fourth quarter was $10 million in 2021 and
Cash Flow and Balance Sheet
Cash provided by operations in the fourth quarter was
Fourth quarter 2021 share repurchases were 0.1 million shares at a cost of
Fourth Quarter 2021 Business Segment Results
Personal Care Segment
Fourth quarter sales of
Sales in
Sales in D&E markets increased 14 percent. The Softex Indonesia acquisition increased sales by approximately 4 percent. Net selling prices increased sales 4 percent, volumes grew 3 percent and product mix increased sales 3 percent. Organic sales increased high-single to low-double digits in all D&E regions.
Sales in developed markets outside
Consumer Tissue Segment
Fourth quarter sales of
Sales in
Sales in D&E markets increased 3 percent. Net selling prices rose 4 percent, product mix improved 1 percent while volumes were down 3 percent. The Softex Indonesia acquisition increased sales 1 percent.
Sales in developed markets outside
K-C Professional (KCP) Segment
Fourth quarter sales of
Sales in
Sales in D&E markets increased 5 percent versus a soft year-ago. Volumes rose approximately 6 percent, net selling prices increased slightly while changes in foreign currency exchange rates decreased sales 1 percent.
Sales in developed markets outside
Full Year 2021 Results
Sales of
Operating profit was
Adjusted operating profit was
Diluted net income per share was
2018 Global Restructuring Program
In
Charges for the restructuring program were completed at the end of 2021. Total cumulative costs were
2022 Outlook and Key Planning Assumptions
The company's 2022 outlook assumes no significant additional impact from potential supply chain disruptions as a result of COVID-19. In addition, key planning and guidance assumptions are as follows:
- Net sales increase 1 to 2 percent.
- Organic sales increase 3 to 4 percent.
- Foreign currency exchange rates unfavorable approximately 2 percent.
- Operating profit down low to mid-single digits percent compared to adjusted operating profit in 2021.
- Key cost inputs expected to increase
$750 to$900 million . Costs are projected to increase or remain elevated for most inputs including purchased raw materials as well as for distribution and energy. - Foreign currency translation effects expected to reduce operating profit by 1 to 2 percent and transaction effects are also anticipated to negatively impact the comparison.
- Cost savings associated with FORCE program of
$300 to$350 million . - Marketing, research and general spending expected to be up year-on-year driven by general inflation, variable incentive expense and investments in the business.
- Nonoperating expense expected to increase somewhat compared to adjusted nonoperating expense in 2021.
- Interest expense expected to increase slightly.
- Effective tax rate of 22 to 24 percent.
- Net income from equity companies up somewhat year-on-year.
- Earnings per share of
$5.60 to$6.00 . - Capital spending of
$1,000 to$1,100 million . - Dividend increase of 1.8 percent (approved by the Board of Directors and as mentioned previously in this release). The quarterly dividend will increase to
$1.16 per share, up from$1.14 per share in 2021. The first dividend will be payable onApril 4, 2022 to stockholders of record onMarch 4, 2022 . - Share repurchases of approximately
$100 million .
Prepared Management Remarks and Live Question and Answer Webcast
At approximately
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
- 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.
- Softex Indonesia acquisition-related costs. The company incurred costs to evaluate and execute the acquisition of Softex Indonesia in 2020.
Brazil business tax credits. In the fourth quarter of 2020, we received a favorable legal ruling that resolved certain matters related to prior years' business taxes inBrazil .
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
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, acquisitions and exited businesses also impact the year-over-year change in net sales.
About Kimberly-Clark
Copies of Kimberly-Clark's Annual Report to Stockholders and its proxy statements and other
As more fully described in Kimberly-Clark's Quarterly Report on Form 10-Q for the quarter ended
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
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 the company's Annual Report on Form 10-K for the year ended
CONSOLIDATED INCOME STATEMENTS (Millions, except per share amounts) |
|||||
Three Months Ended |
|||||
2021 |
2020 |
Change |
|||
|
$ 4,965 |
$ 4,836 |
+3% |
||
Cost of products sold |
3,529 |
3,172 |
+11% |
||
Gross Profit |
1,436 |
1,664 |
-14% |
||
Marketing, research and general expenses |
911 |
996 |
-9% |
||
Other (income) and expense, net |
4 |
(81) |
N.M. |
||
Operating Profit |
521 |
749 |
-30% |
||
Nonoperating expense |
(15) |
(13) |
+15% |
||
Interest income |
2 |
2 |
— |
||
Interest expense |
(64) |
(64) |
— |
||
Income Before Income Taxes and Equity Interests |
444 |
674 |
-34% |
||
Provision for income taxes |
(93) |
(166) |
-44% |
||
Income Before Equity Interests |
351 |
508 |
-31% |
||
Share of net income of equity companies |
10 |
38 |
-74% |
||
Net Income |
361 |
546 |
-34% |
||
Net income attributable to noncontrolling interests |
(4) |
(7) |
-43% |
||
Net Income Attributable to |
$ 357 |
$ 539 |
-34% |
||
Per Share Basis |
|||||
Net Income Attributable to |
|||||
Basic |
$ 1.06 |
$ 1.59 |
-33% |
||
Diluted |
$ 1.06 |
$ 1.58 |
-33% |
||
Cash Dividends Declared |
$ 1.14 |
$ 1.07 |
+7% |
||
Common Shares Outstanding |
|
||||
2021 |
2020 |
||||
Outstanding shares as of |
336.8 |
338.7 |
|||
Average diluted shares for three months ended |
338.2 |
341.1 |
|||
N.M. - Not Meaningful |
Unaudited |
CONSOLIDATED INCOME STATEMENTS (Millions, except per share amounts) |
|||||
Twelve Months Ended |
|||||
2021 |
2020 |
Change |
|||
|
$ 19,440 |
$ 19,140 |
+2% |
||
Cost of products sold |
13,452 |
12,318 |
+9% |
||
Gross Profit |
5,988 |
6,822 |
-12% |
||
Marketing, research and general expenses |
3,399 |
3,632 |
-6% |
||
Other (income) and expense, net |
28 |
(54) |
N.M. |
||
Operating Profit |
2,561 |
3,244 |
-21% |
||
Nonoperating expense |
(86) |
(70) |
+23% |
||
Interest income |
6 |
8 |
-25% |
||
Interest expense |
(256) |
(252) |
+2% |
||
Income Before Income Taxes and Equity Interests |
2,225 |
2,930 |
-24% |
||
Provision for income taxes |
(479) |
(676) |
-29% |
||
Income Before Equity Interests |
1,746 |
2,254 |
-23% |
||
Share of net income of equity companies |
98 |
142 |
-31% |
||
Net Income |
1,844 |
2,396 |
-23% |
||
Net income attributable to noncontrolling interests |
(30) |
(44) |
-32% |
||
Net Income Attributable to |
$ 1,814 |
$ 2,352 |
-23% |
||
Per Share Basis |
|||||
Net Income Attributable to |
|||||
Basic |
$ 5.38 |
$ 6.90 |
-22% |
||
Diluted |
$ 5.35 |
$ 6.87 |
-22% |
||
Cash Dividends Declared |
$ 4.56 |
$ 4.28 |
+7% |
||
Common Shares Outstanding |
|
||||
2021 |
2020 |
||||
Average diluted shares for twelve months ended |
338.8 |
342.5 |
|||
N.M. - Not Meaningful |
2021 Data is Unaudited |
NON-GAAP RECONCILIATIONS (Millions, except per share amounts) |
||||||||||
Three Months Ended |
||||||||||
As Reported |
2018 Global |
As Adjusted Non-GAAP |
||||||||
Cost of products sold |
$ 3,529 |
$ 56 |
$ 3,473 |
|||||||
Gross profit |
1,436 |
(56) |
1,492 |
|||||||
Marketing, research and general expenses |
911 |
33 |
878 |
|||||||
Other (income) and expense, net |
4 |
1 |
3 |
|||||||
Operating profit |
521 |
(90) |
611 |
|||||||
Nonoperating expense |
(15) |
(14) |
(1) |
|||||||
Provision for income taxes |
(93) |
27 |
(120) |
|||||||
Effective tax rate |
20.9% |
— |
21.9% |
|||||||
Share of net income of equity companies |
10 |
(7) |
17 |
|||||||
Net income attributable to noncontrolling interests |
(4) |
2 |
(6) |
|||||||
Net income attributable to |
357 |
(82) |
439 |
|||||||
Diluted earnings per share(a) |
1.06 |
(0.24) |
1.30 |
|||||||
Three Months Ended |
||||||||||
As Reported |
2018 Global |
Softex |
|
As Adjusted Non-GAAP |
||||||
Cost of products sold |
$ 3,172 |
$ 46 |
$ — |
$ — |
$ 3,126 |
|||||
Gross profit |
1,664 |
(46) |
— |
— |
1,710 |
|||||
Marketing, research and general expenses |
996 |
34 |
23 |
— |
939 |
|||||
Other (income) and expense, net |
(81) |
(8) |
— |
(77) |
4 |
|||||
Operating profit |
749 |
(72) |
(23) |
77 |
767 |
|||||
Nonoperating expense |
(13) |
(10) |
— |
— |
(3) |
|||||
Provision for income taxes |
(166) |
11 |
5 |
(26) |
(156) |
|||||
Effective tax rate |
24.6% |
— |
— |
— |
22.2% |
|||||
Net income attributable to noncontrolling interests |
(7) |
1 |
— |
— |
(8) |
|||||
Net income attributable to |
539 |
(70) |
(18) |
51 |
576 |
|||||
Diluted earnings per share(a) |
1.58 |
(0.21) |
(0.05) |
0.15 |
1.69 |
(a) "As Adjusted Non-GAAP" may not equal "As Reported" plus "Adjustments" as a result of rounding. |
|
Unaudited |
NON-GAAP RECONCILIATIONS (Millions, except per share amounts) |
||||||||||
Twelve Months Ended |
||||||||||
As Reported |
2018 Global |
As Adjusted Non-GAAP |
||||||||
Cost of products sold |
$ 13,452 |
$ 154 |
$ 13,298 |
|||||||
Gross profit |
5,988 |
(154) |
6,142 |
|||||||
Marketing, research and general expenses |
3,399 |
111 |
3,288 |
|||||||
Other (income) and expense, net |
28 |
10 |
18 |
|||||||
Operating profit |
2,561 |
(275) |
2,836 |
|||||||
Nonoperating expense |
(86) |
(79) |
(7) |
|||||||
Provision for income taxes |
(479) |
75 |
(554) |
|||||||
Effective tax rate |
21.5% |
— |
21.5% |
|||||||
Share of net income of equity companies |
98 |
(7) |
105 |
|||||||
Net income attributable to noncontrolling interests |
(30) |
5 |
(35) |
|||||||
Net income attributable to |
1,814 |
(281) |
2,095 |
|||||||
Diluted earnings per share(a) |
5.35 |
(0.83) |
6.18 |
|||||||
Twelve Months Ended |
||||||||||
As Reported |
2018 Global |
Softex |
|
As Adjusted Non-GAAP |
||||||
Cost of products sold |
$ 12,318 |
$ 283 |
$ — |
$ — |
$ 12,035 |
|||||
Gross profit |
6,822 |
(283) |
— |
— |
7,105 |
|||||
Marketing, research and general expenses |
3,632 |
109 |
32 |
— |
3,491 |
|||||
Other (income) and expense, net(b) |
(54) |
(9) |
— |
(77) |
32 |
|||||
Operating profit |
3,244 |
(383) |
(32) |
77 |
3,582 |
|||||
Nonoperating expense |
(70) |
(36) |
— |
— |
(34) |
|||||
Provision for income taxes |
(676) |
94 |
5 |
(26) |
(749) |
|||||
Effective tax rate |
23.1% |
— |
— |
— |
22.7% |
|||||
Share of net income of equity companies |
142 |
(1) |
— |
— |
143 |
|||||
Net income attributable to noncontrolling interests |
(44) |
3 |
— |
— |
(47) |
|||||
Net income attributable to |
2,352 |
(323) |
(27) |
51 |
2,651 |
|||||
Diluted earnings per share(a) |
6.87 |
(0.94) |
(0.08) |
0.15 |
7.74 |
(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 |
CONSOLIDATED BALANCE SHEETS (Millions) |
|||
|
|||
2021 |
2020 |
||
ASSETS |
|||
Current Assets |
|||
Cash and cash equivalents |
$ 270 |
$ 303 |
|
Accounts receivable, net |
2,207 |
2,235 |
|
Inventories |
2,239 |
1,903 |
|
Other current assets |
849 |
733 |
|
Total Current Assets |
5,565 |
5,174 |
|
Property, Plant and Equipment, Net |
8,097 |
8,042 |
|
Investments in Equity Companies |
290 |
300 |
|
|
1,840 |
1,895 |
|
Other Intangible Assets, Net |
810 |
832 |
|
Other Assets |
1,235 |
1,280 |
|
TOTAL ASSETS |
$ 17,837 |
$ 17,523 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||
Current Liabilities |
|||
Debt payable within one year |
$ 433 |
$ 486 |
|
Trade accounts payable |
3,840 |
3,336 |
|
Accrued expenses and other current liabilities |
2,096 |
2,262 |
|
Dividends payable |
380 |
359 |
|
Total Current Liabilities |
6,749 |
6,443 |
|
Long-Term Debt |
8,141 |
7,878 |
|
Noncurrent Employee Benefits |
809 |
864 |
|
Deferred Income Taxes |
694 |
723 |
|
Other Liabilities |
681 |
718 |
|
|
26 |
28 |
|
Stockholders' Equity |
|||
|
514 |
626 |
|
Noncontrolling Interests |
223 |
243 |
|
Total Stockholders' Equity |
737 |
869 |
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ 17,837 |
$ 17,523 |
2021 Data is Unaudited |
CONSOLIDATED CASH FLOW STATEMENTS (Millions) |
|||||||
Three Months Ended |
Twelve Months Ended |
||||||
2021 |
2020 |
2021 |
2020 |
||||
Operating Activities |
|||||||
Net income |
$ 361 |
$ 546 |
$ 1,844 |
$ 2,396 |
|||
Depreciation and amortization |
194 |
190 |
766 |
796 |
|||
Asset impairments |
— |
17 |
3 |
17 |
|||
Stock-based compensation |
(4) |
46 |
26 |
147 |
|||
Deferred income taxes |
(28) |
75 |
(70) |
45 |
|||
Net (gains) losses on asset dispositions |
5 |
1 |
39 |
68 |
|||
Equity companies' earnings (in excess of) less than dividends paid |
50 |
23 |
25 |
(30) |
|||
Operating working capital |
478 |
71 |
46 |
363 |
|||
Postretirement benefits |
8 |
(35) |
47 |
(28) |
|||
Other |
(2) |
(47) |
4 |
(45) |
|||
Cash Provided by Operations |
1,062 |
887 |
2,730 |
3,729 |
|||
Investing Activities |
|||||||
Capital spending |
(273) |
(323) |
(1,007) |
(1,217) |
|||
Acquisition, net of cash acquired |
— |
(1,083) |
— |
(1,083) |
|||
Proceeds from dispositions of property |
12 |
26 |
43 |
31 |
|||
Investments in time deposits |
(286) |
(244) |
(918) |
(753) |
|||
Maturities of time deposits |
238 |
286 |
836 |
690 |
|||
Other |
(11) |
10 |
(10) |
27 |
|||
Cash Used for Investing |
(320) |
(1,328) |
(1,056) |
(2,305) |
|||
Financing Activities |
|||||||
Cash dividends paid |
(383) |
(364) |
(1,516) |
(1,451) |
|||
Change in short-term debt |
(951) |
(64) |
(97) |
(561) |
|||
Debt proceeds |
600 |
3 |
605 |
1,845 |
|||
Debt repayments |
— |
(101) |
(269) |
(854) |
|||
Proceeds from exercise of stock options |
13 |
5 |
65 |
217 |
|||
Acquisitions of common stock for the treasury |
(7) |
(251) |
(400) |
(700) |
|||
Other |
(27) |
(23) |
(84) |
(63) |
|||
Cash Used for Financing |
(755) |
(795) |
(1,696) |
(1,567) |
|||
Effect of Exchange Rate Changes on Cash and Cash Equivalents |
(3) |
21 |
(11) |
4 |
|||
Change in Cash and Cash Equivalents |
(16) |
(1,215) |
(33) |
(139) |
|||
Cash and Cash Equivalents - Beginning of Period |
286 |
1,518 |
303 |
442 |
|||
Cash and Cash Equivalents - End of Period |
$ 270 |
$ 303 |
$ 270 |
$ 303 |
Unaudited |
SELECTED BUSINESS SEGMENT DATA (Millions) |
||||||||||||
Three Months Ended |
Twelve Months |
|||||||||||
2021 |
2020 |
Change |
2021 |
2020 |
Change |
|||||||
|
||||||||||||
Personal Care |
$ 2,632 |
$ 2,349 |
+12% |
$ 10,267 |
$ 9,339 |
+10% |
||||||
Consumer Tissue |
1,559 |
1,727 |
-10% |
6,034 |
6,718 |
-10% |
||||||
K-C Professional |
758 |
742 |
+2% |
3,072 |
3,019 |
+2% |
||||||
Corporate & Other |
16 |
18 |
N.M. |
67 |
64 |
N.M. |
||||||
TOTAL |
$ 4,965 |
$ 4,836 |
+3% |
$ 19,440 |
$ 19,140 |
+2% |
||||||
OPERATING PROFIT |
||||||||||||
Personal Care |
$ 425 |
$ 401 |
+6% |
$ 1,856 |
$ 1,933 |
-4% |
||||||
Consumer Tissue |
201 |
337 |
-40% |
888 |
1,448 |
-39% |
||||||
K-C Professional |
72 |
105 |
-31% |
404 |
528 |
-23% |
||||||
Corporate & Other(a) |
(173) |
(175) |
N.M. |
(559) |
(719) |
N.M. |
||||||
Other (income) and expense, net(a) |
4 |
(81) |
N.M. |
28 |
(54) |
N.M. |
||||||
TOTAL OPERATING PROFIT |
$ 521 |
$ 749 |
-30% |
$ 2,561 |
$ 3,244 |
-21% |
(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 |
||||||||||||||
Total(a) |
Volume |
Net Price |
Mix/ Other |
Acquisition/ |
Currency |
Organic(c) |
||||||||
Personal Care |
12 |
5 |
4 |
2 |
1 |
— |
11 |
|||||||
Consumer Tissue |
(10) |
(7) |
(1) |
— |
(1) |
— |
(9) |
|||||||
K-C Professional |
2 |
(2) |
4 |
— |
— |
— |
2 |
|||||||
TOTAL CONSOLIDATED |
3 |
— |
2 |
1 |
— |
— |
3 |
|||||||
Twelve Months Ended |
||||||||||||||
Total(a) |
Volume |
Net Price |
Mix/ Other |
Acquisition/ |
Currency |
Organic(c) |
||||||||
Personal Care |
10 |
2 |
2 |
2 |
3 |
1 |
6 |
|||||||
Consumer Tissue |
(10) |
(11) |
— |
(1) |
— |
1 |
(11) |
|||||||
K-C Professional |
2 |
(6) |
5 |
1 |
— |
1 |
— |
|||||||
TOTAL CONSOLIDATED |
2 |
(4) |
2 |
1 |
1 |
1 |
(1) |
(a) |
Total may not equal the sum of volume, net price, mix/other, acquisition/exited businesses and currency due to rounding. |
(b) |
Combined impact of the acquisition of Softex Indonesia and 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 |
[KMB-F]
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SOURCE
Investor Relations contact: Taryn Miller, 972-281-1318, KC.InvestorRelations@kcc.com; Media Relations contact: Terry Balluck, 972-281-1397, media.relations@kcc.com