Kimberly-Clark Corporation reported year-end 2013 results and provided its 2014 outlook and related key planning assumptions.
Executive Summary
Fourth quarter 2013 net sales of $5.3 billion were even with the year-ago period. Organic sales rose 5 percent, including an 11 percent increase in K-C International. Organic sales exclude the impact of changes in foreign currency exchange rates and lost sales as a result of European strategic changes and pulp and tissue restructuring actions.
Diluted net income per share for the fourth quarter of 2013 was $1.40 versus $0.68 in 2012. Full-year diluted net income per share was $5.53 in 2013 and $4.42 in 2012.
Fourth quarter adjusted earnings per share were $1.44 in 2013 compared to $1.37 in the prior year. The improvement was driven by organic sales growth and cost savings, partially offset by input cost inflation and unfavorable foreign currency rates.
Full-year adjusted earnings per share were $5.77 in 2013 compared to $5.25 in 2012 and the company's previous guidance of $5.65 to $5.75.
Adjusted earnings per share in 2014 are expected to be $6.00 to $6.20.
The company expects to increase its dividend by 2 to 4 percent effective April 2014. This will represent Kimberly-Clark's 42nd consecutive annual increase in the dividend. Share repurchases for 2014 are expected to total $1.3 to $1.5 billion.
Chairman and Chief Executive Officer Thomas J. Falk said, "Our fourth quarter results capped off another year of excellent performance for Kimberly-Clark. For the full year of 2013, we delivered organic sales growth of 4 percent, with 9 percent growth in K-C International and benefits from product innovations around the world.
"We improved adjusted operating profit margin by 90 basis points, aided by $310 million of cost savings from our ongoing FORCE program. We grew adjusted earnings per share by 10 percent, well above our original plan for the year and slightly higher than the top-end of our long-range target. Finally, we generated strong cash flow and returned $2.4 billion to shareholders through dividends and share repurchases. Overall, we had a very good year of financial performance and I'm encouraged by the progress we made in 2013."
Falk added, "The strength of our results this past year gives us added confidence that we will continue to execute our Global Business Plan well going forward. In 2014, we will pursue targeted growth initiatives, launch innovations and support our growth opportunities with increased advertising and research spending.
"We expect to achieve a healthy level of cost savings, which should help fund brand investments and improve margins. We will also focus on cash generation and allocate capital in shareholder-friendly ways. And while we expect significant currency headwinds and higher commodity costs this year, we plan to deliver solid bottom-line growth. We remain optimistic about our prospects to drive profitable growth and generate attractive returns to shareholders."
