US firm Kimberly-Clark's sales up 7% in Q2 FY22

In North America, organic sales increased by 11 per cent in consumer products and 8 per cent in K-C Professional. Outside North America, organic sales rose 8 per cent in developing and emerging (D&E) markets and 9 per cent in developed markets.

Second quarter operating profit was $621 million in 2022 and $613 million in 2021. Excluding the charges related to the 2018 Global Restructuring Programme, 2021 adjusted operating profit was $676 million.

Results were impacted by $405 million of higher input costs. Higher marketing, research and general expense as well as unfavourable foreign currency transaction effects reduced operating profit in the quarter. Results benefited from organic sales growth and $45 million of cost savings from the company's FORCE (Focused On Reducing Costs Everywhere) programme.

For the first six months of 2022, sales of $10.2 billion increased by 7 per cent. Organic sales increased by 10 per cent, as net selling prices rose by 7 per cent, volumes increased by 1 per cent and product mix increased sales approximately 1 point. Changes in foreign currency exchange rates decreased sales by approximately 2 per cent, the company said in a press release.

Year-to-date operating profit was $1,314 million in 2022 and $1,383 million in 2021. Results in 2022 include the net benefit of the acquisition of a controlling interest of Thinx. 2021 results include charges related to the 2018 Global Restructuring Programme.

"I'm pleased to close the first half of the year with another quarter of excellent execution by our teams who delivered strong organic sales growth, with increases in all our segments. Our growth strategy is working," said Mike Hsu, chairman and CEO, Kimberly-Clark. "Our results also reflect ongoing market volatility and significant input cost inflation. We continue to be thoughtful with our response to inflation, focusing on providing value to our consumers while leveraging price and cost discipline to mitigate macro headwinds for margin improvement over time."

"As we manage our business prudently in the near-term, we're committed to investing in our people, brands and capabilities to ensure we continue to be well positioned to deliver balanced and sustainable growth over the long-term,” Hsu continued.

The company has updated key planning and guidance assumptions for full-year 2022. The outlook reflects a reasonable set of assumptions subject to change given the high level of volatility in the macro environment. For 2022, the company expects net sales increase to be between 2 to 4 per cent (no change), organic sales increase to be between 5 to 7 per cent (prior target 4 to 6 per cent) and key cost inputs expected to increase $1.4 to $1.6 billion (previous estimate $1.1 to $1.3 billion). Costs are projected to increase or remain elevated for most inputs, including pulp and other raw materials as well as distribution and energy.

Fibre2Fashion News Desk (RR)