Kimberly-Clark Corporation (KMB) Presents at Barclays 17th Annual Global Consumer Staples Conference (Transcript)

Summary of Kimberly-Clark Corporation Conference Call Company Overview - Company: Kimberly-Clark Corporation (NYSE: KMB) - Event: Barclays 17th Annual Global Consumer Staples Conference - Date: September 4, 2024 Key Points Organizational Changes - The reorganization, termed "wire for growth," is progressing well with strong employee support, evidenced by high participation in calls (5,000-12,000 lines) [6][9][10] - Employees have shown a high approval rating (in the high 70s) for the new structure, which aims to balance local market focus with global capabilities [7][9] - The new structure differentiates between North America, focus markets, and enterprise markets, enhancing local agility while leveraging global scale [8][9] Supply Chain Strategy - The company is implementing a new global supply chain organization aimed at achieving $3 billion in gross productivity savings over the next five years [23][24] - Key strategies include value stream simplification, network optimization, and digital supply chain automation [24][25] - The goal is to improve gross margins to at least 40% and operating profit margins to 18-20% by the end of the decade [23] Market Growth Expectations - Categories are expected to revert to a growth rate of 2-3%, driven by volume and mix, after experiencing mid-single-digit growth due to inflationary pricing [31][32] - The company anticipates outpacing category growth through innovation and increased advertising investment [33][34] Innovation and R&D - The company is focused on enhancing R&D efficiency and coordination, with a new leader expected to streamline efforts [41][42] - There is an emphasis on both increasing the frequency of new product launches and ensuring impactful innovations [45] Advertising and Brand Support - Advertising spend has increased significantly, from 4.5% of sales in 2022 to 5.3% in 2023, with plans to reach around 7% in the second half of 2024 [46][48] - The company aims to improve storytelling and brand differentiation through targeted advertising strategies [51][52] Portfolio Management - The company is continuously assessing its portfolio, focusing on adding long-term accretive assets while exiting underperforming markets [56][58] - Recent divestitures include Brazil consumer tissue and KCP assets, reflecting a disciplined approach to portfolio management [54][56] Market Insights - The company remains optimistic about its investment in Indonesia, despite challenges faced during the COVID-19 pandemic [64][65] - The Indonesian market is projected to grow significantly, with volume turning positive recently [64] Additional Insights - The reorganization and supply chain strategies are expected to create a virtuous cycle of growth, enhancing both margins and reinvestment capabilities [34][38] - The focus on integrated margin management is a new operational rhythm for Kimberly-Clark, aimed at optimizing costs and expanding margins [26][27] This summary encapsulates the key insights and strategic directions discussed during the conference call, highlighting Kimberly-Clark's focus on growth, efficiency, and market responsiveness.