KIMBERLY CLARK CORP Q4 FY2024 earnings call

• 2024 was an outstanding year with the launch of the multi-year Powering Care transformation strategy, including organizational rewiring into three powerhouse segments. • Pivoted to volume plus mix-driven growth and achieved margin expansion from 2023 to 2024. • Entering 2025 with visibility on growth drivers, confident in innovation-led growth, investing in product quality, brand support, and capability building. • Transforming while performing, scaling playbook and capabilities globally, and shaping portfolio for stronger, more profitable growth.

No specific financial performance details for product segments provided in absolute terms and revenue contribution percentages.

• 2025 top-line expected to be volume and mix-led with muted pricing, overall pricing likely flat. • Productivity expected in the 5% range in 2025, a bit lower than 2024's 5.9%. • SG&A savings from the new segment structure to start kicking in meaningfully in 2025. • Gross margin expected to expand but at a slower pace than prior years; operating margins expected to grow ahead of gross margins due to SG&A leverage.

• Consumer pressures in Latin America and parts of Asia leading to lower frequency of product use. • Impact of retail destocking, especially in the US, on sales phasing. • Macroeconomic uncertainties affecting market share and growth.

Q: Give a review of the organizational front with rewiring plans announced at Analyst Day and tangible benefits?

A: Mike Hsu mentioned categories have durable growth with drivers like penetration, frequency, and trade-up. Short-term top-line around 2% with long-term aspiration of 2%-3% volume mix-driven growth. Pleased with setup for 2025 and long-term, with categories showing positive growth in some markets.

Q: Thoughts on 2025 top-line, pricing trajectory, and volume vs price balance?

A: Nelson Urdaneta said 2025 pricing likely muted on enterprise level, volume and mix-led growth, with 2024 volume and mix contributing 1.2 points of growth, expecting at least 10 basis points of market share gain in 2025.

Q: Productivity savings, impact on pulp costs, and PNOC outlook?

A: Mike Hsu said 2025 productivity expected in 5% range, not related to pulp costs due to strategic supplier relationships. Confident in pricing net of cost being at least neutral. Nelson Urdaneta added Powering Care strategy supports algorithm performance, strong visibility into productivity fueling investment and bottom-line growth.

Q: SG&A productivity sources, timing, and confidence in achieving without walking back 2024 investments?

A: Mike Hsu said comfortable with current marketing investment, advertising spend doubled since 2018 with strong returns. Nelson Urdaneta said SG&A savings plan to deliver $200 million, kicking in Q4 2024, expected to materialize in 2025, with investments maintained while driving productivity.

Q: Broaden sources of volume growth beyond US and China, competitive dynamics?

A: Mike Hsu said making progress in share gains globally, with examples like Huggies in China, Andrex and Kleenex in UK, diapers in South Korea. New operating model aims to move faster with global growth playbook, leveraging scale and technology.

Q: Phasing in 2025, impact of retailer destocking, FX, etc.?

A: Nelson Urdaneta said 2024 had retail inventory reductions impacting sales phasing, 2025 expected to have less than 40 basis point tailwind from trade stocks lap, growth volume and mix-driven, P&L expected evenly distributed first-half and second-half.

Q: Markets to invest in, choicefulness, and professional segment momentum?

A: Mike Hsu said disciplined about portfolio, with examples like exiting Nigeria, Bolivia, being choiceful about markets, and professional segment showing improvement with right plans in place for 2025.

Q: Lower frequency of product use in Latin America and Asia, broad-based or category-specific?

A: Mike Hsu said it's a dynamic in their categories globally, more in informal economies where economic conditions affect spending frequency.

Q: Gross margin expectations for 2025, expansion dynamics, and marketing ad spend cadence?

A: Nelson Urdaneta said gross margin expected to expand but at slower pace than prior years due to muted pricing and productivity, operating margins to grow ahead of gross margins due to SG&A leverage from new segment structure, with marketing ad spend expected to be at similar level in 2025.