Net income up 15.2% in Q1 2016 at Kimberly Clark

The reason for the rise in net income was attributed to cost savings, input cost deflation, organic sales growth and a lower adjusted effective tax rate.

The company enjoyed cost savings worth $95 million from its Focused On Reducing Costs Everywhere (FORCE) programme and worth $15 million from its 2014 organisation restructuring programme.

Its input costs decreased by $30 million - $25 million of lower costs for raw materials other than fibre and $5 million of lower costs for fibre.

Organic sales grew by 2 per cent in the quarter because of increased volumes. Volumes increased by 3 per cent at the personal care segment and by 1 per cent at the K-C Professional segment, making the consolidated volume rise by 2 per cent.

The first quarter effective tax rate stood at 28.3 per cent in 2016 and 33.8 per cent in 2015. The adjusted effective tax rate was 28.3 per cent in 2016, down from 32.3 per cent in 2015, as a result of benefits from certain tax planning initiatives.

Commenting on the results, Thomas Falk, chairman and CEO of Kimberly Clark said, “In the first quarter, organic sales grew more than 2 per cent and our adjusted operating profit margin improved by 90 basis points. We achieved $110 million of total cost savings from our FORCE programme and 2014 organisation restructuring, and continued to allocate capital in shareholder-friendly ways.”

“For the full-year, we continue to expect our organic sales to grow 3 to 5 per cent. Compared to the first quarter, we expect more benefits from targeted growth initiatives, product innovations and improved net realised revenue,” he said.

Additionally, Kimberly Clark posted net sales of $4.4 billion in the quarter, a fall of 4.6 per cent as compared to $4.6 billion in the same quarter last year.

The personal care segment posted sales of $2.2 billion, consumer tissue segment posted sales of $1.5 billion and the K-C Professional segment posted sales of $0.8 billion during the quarter. (MCJ)

Fibre2Fashion News Desk