09.08.16
Kimberly-Clark continues to make headways in developing and emerging (D&E) markets, according to CFO Maria Henry. Henry spoke to investors on the company’s strategies at Barclays Global Consumer Staples Conference earlier this week.
Updating investors on the fruits of K-C’s global business plan, which includes managing its portfolio, investing in brands and innovation for growth, delivering sustainable cost reductions and practicing strong financial discipline, Henry reports improved volumes and earnings growth across its three main reporting segments—personal care, tissue and K-C Professional.
While successes can be found across the company’s global footprint, Henry points to its D&E growth in all three segments as a crowning achievement. From 2011-2015, sales in these markets grew 11% per year, allowing them to comprise 30% of sales (up from 14%). While growth has slowed to the mid single digits recently, K-C continues to maintain its marketshare in these regions, Henry adds. “We continue to be optimistic about that.”
In the BRIC (Brazil, Russia, India and China) countries alone, an estimated one billion customers are expected to enter the middle class in the next 10 years, a situation that bodes well for many of K-C’s categories despite challenges including a diaper category slowdown in Brazil and a crowded playing field in China (where 20% volume growth has helped combat lower selling prices).
“We still continue to be bullish about these markets and we will continue to innovate and invest in our distribution network,” Henry says, adding that growth will largely come on the heels of increased penetration. In many of these D&E markets, mothers use just one disposable diaper per day compared to five or six in more developed markets. Usage will rise as disposable income increases.
Within adult incontinence and feminine hygiene, D&E sales comprise about half of K-C’s sales. In the feminine hygiene market, K-C recently achieved the important milestone of capturing the top marketshare position in Brazil, and the company continues to focus on attracting POBA (point of brand adoption) consumers, age 18-25, with the hope of gaining a lifelong customer. Within adult incontinence, the same social and emotional stigmas facing adult incontinence sufferers around the world, continue to be overcome through marketing and educational efforts.
Henry also spoke on K-C’s global personal care business. In the past 12 years, this business has grown on average 6% per year, allowing it to comprise 50% of total sales. In recent years, this segment has benefitted from the relaunch of its mid-tier diaper offering, Huggies Snug N’Dry, as well as improvements to its premium Huggies Little Snugglers and Little Movers brands. Within adult care, the market leader, K-C reports a 56% marketshare in North America, where only one quarter of the 80 million incontinence sufferers use the right product.
“The name of the game in adult incontinence is to grow the category, given the low penetration rate,” Henry adds.
Updating investors on the fruits of K-C’s global business plan, which includes managing its portfolio, investing in brands and innovation for growth, delivering sustainable cost reductions and practicing strong financial discipline, Henry reports improved volumes and earnings growth across its three main reporting segments—personal care, tissue and K-C Professional.
While successes can be found across the company’s global footprint, Henry points to its D&E growth in all three segments as a crowning achievement. From 2011-2015, sales in these markets grew 11% per year, allowing them to comprise 30% of sales (up from 14%). While growth has slowed to the mid single digits recently, K-C continues to maintain its marketshare in these regions, Henry adds. “We continue to be optimistic about that.”
In the BRIC (Brazil, Russia, India and China) countries alone, an estimated one billion customers are expected to enter the middle class in the next 10 years, a situation that bodes well for many of K-C’s categories despite challenges including a diaper category slowdown in Brazil and a crowded playing field in China (where 20% volume growth has helped combat lower selling prices).
“We still continue to be bullish about these markets and we will continue to innovate and invest in our distribution network,” Henry says, adding that growth will largely come on the heels of increased penetration. In many of these D&E markets, mothers use just one disposable diaper per day compared to five or six in more developed markets. Usage will rise as disposable income increases.
Within adult incontinence and feminine hygiene, D&E sales comprise about half of K-C’s sales. In the feminine hygiene market, K-C recently achieved the important milestone of capturing the top marketshare position in Brazil, and the company continues to focus on attracting POBA (point of brand adoption) consumers, age 18-25, with the hope of gaining a lifelong customer. Within adult incontinence, the same social and emotional stigmas facing adult incontinence sufferers around the world, continue to be overcome through marketing and educational efforts.
Henry also spoke on K-C’s global personal care business. In the past 12 years, this business has grown on average 6% per year, allowing it to comprise 50% of total sales. In recent years, this segment has benefitted from the relaunch of its mid-tier diaper offering, Huggies Snug N’Dry, as well as improvements to its premium Huggies Little Snugglers and Little Movers brands. Within adult care, the market leader, K-C reports a 56% marketshare in North America, where only one quarter of the 80 million incontinence sufferers use the right product.
“The name of the game in adult incontinence is to grow the category, given the low penetration rate,” Henry adds.
