The paragraph is from the Kimberly-Clark 4Q 2024 Earnings Call. It starts with an introduction by the operator, stating that participants are in a listen-only mode and that the call includes a Q&A session after the formal presentation. Chris Jakubik, Vice President of Investor Relations, acknowledges that forward-looking statements will be made, which could differ due to risks and uncertainties. He also mentions the use of non-GAAP financial measures alongside GAAP results. Mike Hsu, the speaker, highlights 2024 as a successful year for Kimberly-Clark with the launch of the multi-year Powering Care strategy, organizational restructuring into three segments, and the shift towards volume plus mix-driven growth. They transitioned from margin recovery in 2023 to margin expansion in 2024, exceeding expectations despite challenges. The company is well-positioned for growth and profit in 2025.

The company is optimistic about achieving innovation-driven growth surpassing its competitors by investing in product quality, brand support, and capability building. They aim to enhance investment returns and profit growth through productivity improvements and strategic savings. This year, their focus is on global transformation, scaling operations, and reshaping their portfolio for long-term profit growth. Through their initiative "Powering Care," they seek to navigate a changing environment to provide better care globally. Following this, the floor was opened for a Q&A session where Dara Mohsenian from Morgan Stanley asked about the progress of the company's organizational plans, innovation, and marketing effectiveness, and how these efforts might impact growth by 2025. The company leaders, Mike Hsu, Nelson Urdaneta, and Chris, are to respond, keeping each other accountable.

The paragraph discusses the positive outlook for the company's growth in 2025 and over the long term. It highlights three main drivers: increasing penetration, particularly in markets like Korea and China; strong consumer frequency, despite some weakness in Latin America and Southeast Asia; and a growing interest in premium products. These factors are supporting durable growth in essential categories, with an expected 2% growth rate this year. The company's products are seen as daily essentials, contributing to steady demand and growth.

The paragraph discusses the company's long-term strategy for achieving consistent growth in volume and mix, aiming for a 2% to 3% growth in category performance. Despite some market slowdowns and lower frequency in North America, the company expects to maintain growth without significant new pricing changes this year. The goal is to outperform the overall category growth, which is expected to remain around 2%. Dara Mohsenian then inquires about the company's pricing strategy and its considerations for balancing price and volume, especially in light of foreign exchange pressures, as they plan for 2025.

In the paragraph, Nelson Urdaneta discusses the company's expectations for 2025, highlighting that pricing will be largely flat and not a driver of growth. In 2024, pricing contributed to growth due to hyperinflationary conditions, especially in Argentina, but this impact is diminishing as inflation stabilizes. Looking ahead to 2025, the company anticipates growth to be driven by volume and mix, with a shift away from price increases. The company also expects to gain market share, building on a 10-basis-point gain in 2024, which they expect to match or exceed in 2025.

In the paragraph, Mike Hsu responds to Robert Moskow's questions about the company's productivity savings and pulp costs. Hsu highlights the successful first year towards a $3 billion five-year productivity target, primarily driven by their global supply-chain transformation and integrated margin management in manufacturing. He clarifies that the productivity savings are not specifically tied to managing pulp costs, but rather come from strategic supplier relationships that provide stability despite commodity volatility. Looking ahead to 2025, the company expects productivity levels to be around 5%, slightly lower than the 5.9% achieved before but still considered best-in-class.

The paragraph discusses the company's improved cost visibility over the next few years due to its integrated margin management and risk management strategies. It expresses confidence in maintaining a pricing strategy that is at least cost-neutral. Nelson Urdaneta highlights the positive impact of the Powering Care strategy on performance, noting that while they faced challenges like private label and PPE exits, they have strong productivity visibility and plans for innovation and commercial activation. The company expects SG&A leverage through its growth initiative, contributing to productivity and bottom-line growth. Steve Powers from Deutsche Bank initiates the next question.

The paragraph involves a discussion between Nelson Urdaneta and Mike Hsu regarding expectations for costs and pricing net of cost (PNOC) for their company. Urdaneta clarifies that despite some expected challenges with cost inflation, the company expects to manage costs at around $200 million level for 2025, similar to 2024, and considers this manageable. They aim for pricing net of cost neutrality, though strategic pricing decisions may sometimes lead to tactical investments. The company is focused on reducing total delivered costs while maintaining product performance. Hsu adds that they've moved past a period of significant inflation, termed an "inflation super-cycle".

The paragraph discusses a focus on achieving growth through a combination of increased volume and improved product mix, while maintaining discipline in pricing and cost management (PNOC). The speaker notes that while inflation-related pricing pressures have lessened, maintaining PNOC discipline remains important. The company has invested in analytical tools for revenue growth management, contributing to confidence in this strategy. Additionally, productivity plans are highlighted as part of their integrated margin management, with expected contributions to profit growth from areas like SG&A. The aim is to achieve sustained profit growth without retracting prior investments made in 2024.

In the paragraph, Mike Hsu expresses confidence in the current marketing investment levels, noting that advertising spending has more than doubled since 2018, yielding strong returns. He highlights plans to maintain similar spending in 2025, with efforts to improve creativity and efficiency by consolidating agency partners. Patricia Corsy, the new Chief Growth Officer, is focused on enhancing brand storytelling. Nelson Urdaneta discusses the company's Powering Care program, which aims for $200 million in SG&A savings, set to materialize over two years, starting in 2025. These savings are expected to result from organizational changes implemented in Q4 2024.

In the paragraph, Mike Hsu and Lauren Lieberman discuss growth sources, emphasizing volume growth in personal care, particularly in the U.S. and China. Lauren highlights good volume growth in North America and queries about expanding growth to other markets beyond the U.S. and China. Mike acknowledges the focus on winning in the U.S. and China, noting these are their largest and most critical markets for growth, reflecting a strategic decision made about five years ago.

The paragraph discusses the company's strategic focus and progress in its international markets, particularly highlighting growth in market share across various categories and regions. Key achievements noted include gains in North America, particularly in personal care, consumer products, and specific product categories like diapers and tissues. Significant improvements are also observed in China, the UK, Australia, Indonesia, and South Korea. The company's strategic positioning is emphasized, focusing on superior product propositions. The ongoing reorganization efforts are aimed at continuing this trajectory of growth and improvement.

The paragraph discusses a company's new operating model aimed at accelerating the implementation of their global growth strategy by leveraging their scale and technology. The company believes that this reorganization will enhance productivity by quickly spreading innovative ideas and supply-chain solutions across different markets. During a conversation with investors, Lauren Lieberman and Bonnie Herzog from Goldman Sachs, the company's executives, Mike Hsu and Nelson Urdaneta, discuss challenges for 2024, including retailer destocking, foreign exchange effects, and their private label exit, which have impacted sales and earnings phasing.

The paragraph discusses the company's performance throughout the year, highlighting its ability to exceed initial expectations despite challenges, particularly the reduction in retail inventory in the US. It explains how inventory changes impact organic growth and mentions improvements seen in 2023 as the supply chain normalized. The text projects into 2025, anticipating a less than 40 basis point boost from aligning shipments with consumption and improved trade stocks from 2024. The company plans for growth driven by volume and mix, building on a 10 basis point share gain in 2024, with hopes for further acceleration.

In the article, the company expects to have its revenue and profits evenly distributed between the first and second halves of 2025, unlike in 2024. Bonnie Herzog and Mike Hsu conclude their exchange, followed by a question from Anna Lizzul of Bank of America. Anna inquires about the company's strategy in international Personal Care markets, especially after exiting markets like Nigeria and Bolivia, and the momentum in the professional sector. Mike Hsu responds by acknowledging past business exits but expresses confidence in the current portfolio. He mentions ongoing efforts to ensure robust growth in their categories and highlights a strategic choice in the Brazilian tissue business to optimize participation.

The paragraph discusses a company's strategic approach and current business situation. They are focusing on disciplined and methodical strategies, especially regarding the professional sector, where they feel confident globally. There has been some softness in the North American washroom business, but plans are in place to improve it. Internationally, they are making progress by increasing volume, market share, and overall business growth. The conversation shifts to a question about reduced product use frequency in Latin America and parts of Asia due to consumer pressures, particularly in informal economies like Peru, where many are paid daily. The speaker is focusing on observing these trends within their own industry and business.

In the paragraph, the discussion centers on consumer behavior during economic downturns, specifically within the diaper category. People tend to reduce their usage rather than exit the category entirely, as observed during COVID and in certain regions like Latin America and Southeast Asia. When economic conditions worsen, they may use fewer diapers daily to adjust to financial constraints. The conversation then shifts to a financial outlook and growth trajectory, with Peter Grom asking about confidence and potential challenges for the second half of the year. Nelson Urdaneta responds, noting that they expect balanced profitability between the two halves of the year and that their growth will face a stronger comparative base, particularly in the first quarter.

The paragraph discusses the company's financial outlook and performance, specifically focusing on gross and operating margin expectations. It mentions that despite flat pricing projections and minimal contributions from inflationary economies, gross margins have expanded significantly over the past two years (by roughly 300 basis points in 2023 and 200 basis points the previous year). Operating profit margins also increased during this period, albeit at a slower rate due to increased investment in brand promotion. As they approach 2025, there's an emphasis on understanding different dynamics compared to 2024, including the impact on gross margins and the cadence of marketing and ad spend.

Between 2023 and 2024, the company significantly increased investments in advertising and brand support by around $250 million, supporting innovation and volume mix growth for 2024. For 2025, they anticipate gross margins to continue expanding, though at a slower rate compared to previous years. This will be driven by productivity improvements, albeit slightly lower than 2024, and supply-chain investments. Despite muted pricing contributions, they plan to focus on supply-chain transformation through network optimization and automation. Additionally, their Powering Care program is expected to provide $200 million in SG&A savings, beginning in 2025 and 2026, leveraging their new organizational structure. As a result, operating profit margins are projected to grow faster than gross margins.

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This summary was generated with AI and may contain some inaccuracies.