Marketing spending to continue to support product innovation, K-C

22 Mar '10

3 min read

Kimberly-Clark Corporation updated its long-range Global Business Plan, calling for consistent top- and bottom-line growth,increased strategic marketing spending, robust ongoing cost savings, and additional improvements in working capital and overall return on invested capital. The company also said that it will continue to use cash generated by the Plan in shareholder-friendly ways, including maintaining its top-tier dividend payout.

The above announcements were made in connection with the company's Investor Day meeting, held here this morning. Members of Kimberly-Clark's senior leadership team met with investors and analysts to review progress on the company's Global Business Plan and further plans to achieve sustainable growth and improve shareholder returns through 2015.

"We have made excellent progress since we originally launched our Global Business Plan in 2003," said Thomas J. Falk,Chairman and CEO. "We have strengthened our brands, increased our exposure to faster-growing, higher-margin businesses and markets, generated significant cost savings, improved our capital efficiency and returned cash to shareholders. Our updated Global Business Plan represents our strategies and plans to achieve our existing top- and bottom-line growth objectives. We will manage our portfolio to drive growth, margin and cash flow. Moreover, we will continue to invest to support our brands, innovations and growth initiatives while we develop our key capabilities to sustain our growth. At the same time, we will remain financially disciplined, with a strong focus on delivering ongoing cost reductions and increases in ROIC. We will continuously improve the effectiveness and efficiency of our organization as we create a leaner,stronger and faster company. All-in-all, we are clearly focused on achieving our company vision, which is to lead the world in essentials for a better life, and we firmly believe that successful execution of our Global Business Plan will deliver long-term value for our shareholders."

During his presentation, Falk reviewed several new and improved products that K-C will introduce in the first half of 2010. Noteworthy items include several launches in baby and child care, new Poise and Depend incontinence offerings, a premium line extension to the Kotex feminine care brand, a disposable Kleenex hand towel, improvements to Cottonelle bathroom tissue and Viva paper towels, safety and wiper product upgrades in K-C Professional, and plans for continued innovation in K-C's International operations (KCI) in Asia, Latin America, the Middle East, Eastern Europe and Africa.

In addition, Falk shared plans to continue to generate strong growth in KCI, which has delivered double-digit compound annual increases in net sales and operating profit since 2003. The company expects KCI to continue to deliver rapid growth ahead of category rates, as it focuses on high-potential, fast-growing markets like China, Russia and Latin America. Falk also reviewed the company's targeted approach to growth and focus on improving margins in its consumer tissue business. Lastly, Falk discussed strategies to continue to shift mix to higher margin segments within its K-C Professional (KCP) and health care businesses, including safety and wiper offerings in KCP and medical devices in health care.

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