Kimberly-Clark Corporation (NYSE: KMB) has announced a significant milestone in its evolution under the leadership of Mike Hsu, Chairman, and CEO, along with his executive team. The company is embarking on the next phase of its transformation, unveiling a fresh operating model and strategic commercial initiatives aimed at propelling its brands and businesses to greater heights within their respective categories.
Hsu remarked, “Over the past five years, our dedicated global team’s unwavering commitment and exceptional execution have positioned us to fully capitalize on the scale we’ve attained. Today, we’re poised to propel Kimberly-Clark into a new era of growth. By embracing a more agile and focused operating structure, we aim to accelerate innovation across key consumer segments, enhance our growth trajectory, profitability, and returns on investment.”
He continued, “With over 150 years of history behind us, Kimberly-Clark has a legacy of transforming insights into innovative product categories, all aimed at providing Better Care for a Better World. We’re enthusiastic about building upon this strong foundation as we pursue consistent, long-term value creation.”
Highlighting the company’s commitment to science and innovation, Hsu emphasized, “At Kimberly-Clark, science and innovation serve as our competitive edge, empowering us to meet the evolving needs of today’s consumers. Sustainability is integral to our innovation strategy, and we’re proud to announce our ambition to achieve 100% Natural Forest Free status across all our products by 2030.”
The New Operating Model
Kimberly-Clark is poised to elevate its performance by embracing a new operating model centered on three core pillars:
- Accelerating Pioneering Innovation: The company is committed to driving significant growth within its categories by investing in cutting-edge science and technology to address evolving consumer needs. With a focus on 12 powerhouse brands leading the charge across five global daily-need spaces, Kimberly-Clark aims to capture the vast market potential exceeding $240 billion.
- Optimizing Margin Structure: Kimberly-Clark will prioritize delivering superior consumer propositions across various price-value segments. Initiatives to modernize the supply chain and leverage technology and data analytics are expected to yield substantial gross productivity and working capital savings, fueling growth investments.
- Wiring for Growth: The company will enhance agility, speed, and focused execution by restructuring its operations into three distinct business segments: North America, International Personal Care (IPC), and International Family Care and Professional (IFP). Each segment will undergo strategic realignment to amplify value creation, drive growth, and improve profitability.
The company expects to complete the transition to its new organizational structure by the end of 2024, generating significant cost savings to reinvest in business growth initiatives.
Sustainability Commitment
Kimberly-Clark’s innovation pipeline underscores its commitment to sustainability, aiming to deliver products with enhanced consumer benefits while reducing environmental impact. The company’s aspiration to achieve 100% Natural Forest Free status by 2030 underscores its dedication to sustainable practices.
Long-Term Growth Targets
Kimberly-Clark has set ambitious long-term growth and return targets, including organic net sales growth ahead of market trends, mid-to-high single-digit growth in adjusted operating profit and earnings per share, and annual free cash flow generation of at least $2 billion. These targets reflect the company’s strategic focus on leveraging its competitive advantages for sustained growth and profitability.
Investor Day and Outlook
The company’s Investor Day in New York City will provide further insights into its strategic direction and growth initiatives. Kimberly-Clark’s outlook remains aligned with its long-term growth targets, with expectations for continued organic net sales growth, adjusted operating profit, and earnings per share expansion.
About Kimberly-Clark
Kimberly-Clark, with its portfolio of trusted brands, plays an indispensable role in the lives of millions worldwide. Committed to innovation and sustainability, the company creates products that address essential needs while supporting a healthy planet and thriving communities.
Forward-Looking Statements
Certain statements in this release reflect the company’s outlook and expectations concerning future events, which are subject to various factors that may impact actual results. The company does not undertake any obligation to update forward-looking statements. For further details on factors affecting future results, please refer to the company’s filings with the Securities and Exchange Commission.
Non-GAAP Financial Measures
The company refers to certain non-GAAP financial measures in this release, including adjusted operating profit, adjusted EPS, and free cash flow, which provide insights into its financial performance. These measures are presented on a forward-looking basis, and reconciliations to GAAP measures are not provided due to certain uncertainties in predicting adjustment items.
For further information on Kimberly-Clark and its initiatives, please visit www.kimberly-clark.com.
