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K-C to exit diaper category in western and central Europe

November 16, 2012

Huggies maker will remain active in Italy.

In announcing its third quarter results this week, Huggies maker Kimberly-Clark said it has decided to exit the diaper category in Western and Central Europe, with the exception of the Italian market, and to divest or exit some lower-margin businesses, mostly in the consumer tissue segment. The company will also streamline its European manufacturing footprint and administrative organization to align its cost structure with these strategic decisions.
Restructuring costs for these actions will be incurred through 2014 and are expected to total $250 to $350 million after tax. The businesses that will be exited or divested generate annual net sales of approximately $500 million and negligible operating profit.
"The strategic changes we will be making in Europe should allow us to better focus on our best market positions and growth opportunities, improve our underlying profitability and enable more sustainable returns going forward in this part of the world,” says chairman and CEO Thomas Falk. “These moves are further evidence of the portfolio management approach we use to run our company and the financial discipline embedded in our Global Business Plan."
Third quarter sales were down 3% to 5.2% due largely to unfavorable currency exchange rates. Operating profit rose 18% to $783 million.

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