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K-C reports flat results in Q3

November 30, -0001

Organic sales up 5%

Kimberly-Clark’s third quarter net sales remained flat at $5.3 billion compared to the same period last year. Organic sales, excluding the impact of foreign currency fluctuations and divested businesses, increased 5% including a 10% sales increase in K-C International.Third quarter adjusted earnings per share were $1.44 in 2013 compared to $1.34 in the prior year.  The improvement was driven by organic sales growth, cost savings, a lower effective tax rate and a lower share count, partially offset by input cost inflation and unfavorable foreign currency rates. 

"We delivered another very good quarter of results in a challenging environment,” sayd chairman and CEO Thomas Falk. “I'm particularly encouraged that we achieved organic sales growth of 5%, which reflects progress with targeted growth initiatives, innovation programs and revenue realization strategies.  We also generated healthy levels of cost savings and cash flow, increased adjusted earnings per share at a high-single digit rate and continued to allocate capital in shareholder-friendly ways.  In terms of the full year, we expect to deliver growth in adjusted earnings per share of 8-10%.  That's toward the high end of, or slightly above, our long-term objective.  We are executing our Global Business Plan strategies well and we continue to be optimistic about our prospects to generate attractive returns to shareholders."    

Within the personal care segment, third quarter sales of $2.4 billion decreased 1%.  Lost sales as a result of European strategic changes reduced sales volumes by 4% and currency rates were unfavorable by 3%.  Organic sales volumes rose 5% and the combined impact of changes in net selling prices and product mix added 1 point of sales growth.  Third quarter operating profit of $427 million decreased 2%.  Sales in North America were even with the year-ago period. Volumes increased 2%, while product mix was off 1% and net selling prices fell 1%, primarily due to increased promotion activity in the diaper category.  Feminine care volumes were up high-single digits, driven by growth on the U by Kotex brand.  Adult care volumes increased mid-single digits, including benefits from product innovation on the Depend and Poise brands.  Huggies diaper volumes were up mid-single digits, with benefits from improved Huggies Snug & Dry diapers.  Child care volumes decreased high-single digits and were impacted by the timing of promotions, category softness and competitive activity. 

Sales in K-C International increased 3% despite a 6 point negative impact from changes in currency rates.  Sales volumes were up 7% and the combined impact of higher net selling prices and improved product mix added 3 points of growth.  Volumes increased in Australia, China, Russia, South Africa, Vietnam and throughout most of Latin America, including Brazil, but declined in South Korea and Venezuela.

Sales in Europe decreased 40%, including a 48 point negative impact from lost sales in conjunction with European strategic changes, which includes the company’s exit from the diaper market in much of the continent.  Organic sales volumes rose 7%, including growth in Huggies baby wipes and child care products, and currency rates were favorable by 1%.           
In K-C Professional ,sales increased 3% to $0.8 billion drvein by increases in wiper products in North America