K-C announces improved outlook
Kimberly-Clark Corporation has reported that net sales in the third quarter
of 2009 decreased 1.7% to $4.9 billion, as the effect of weaker foreign currency
exchange rates more than offset organic sales growth of about 3%. The growth
in organic sales was driven by higher net selling prices, which increased approximately
3%, while overall sales volumes were essentially even with year-ago levels.
Sales volumes continue to reflect challenging economic conditions, particularly
affecting the company's K-C Professional and Consumer Tissue businesses in
North America and Europe, along with the company's focus on improving net realized
revenue.
Meanwhile, sales volumes rose approximately 18% for K-C's global Health Care
business and about 3% for the company's operations in developing and emerging
markets.
During the quarter, the company delivered continued double-digit organic
sales growth in developing and emerging markets, realized improved net selling
prices in North America, generated strong sales and operating profit growth
in Health Care, achieved significant cost savings and benefited from lower
costs stemming from commodity cost deflation. These factors led to an increase
in gross profit margin of nearly 600 basis points and growth in both operating
profit and diluted net income per share in excess of 40%.
Chairman and CEO Thomas J Falk said: "We delivered outstanding third
quarter results in a challenging environment, while maintaining a strong focus
on doing what's right to sustain our long-term growth. Third quarter performance
was highlighted by strong margin expansion in each of our four business segments,
record earnings per share and excellent cash flow.
Metsä Tissue continues positive
The sales of Metsä Tissue totalled €661 million and operating profit €72
million in January- September 2009. Sales declined by 5% compared to the previous
year as a result of adverse exchange rates (-5%) and lower sales volumes (-2%).
Sales volume of Metsä Tissue’s own brands increased compared to the previous
year; the Serla brand, in particular, continued to be strong. During the period,
the company’s AfH business increased its sales volumes after the slightly weaker
first half of the year. The worldwide pandemic threat of H1N1 virus clearly
increased the awareness of the importance of a good level of hygiene both at
home and at work.
Metsä Tissue announced its streamlined operating model and organisation,
which now comprises three instead of the former five business areas. Today,
Metsä Tissue’s businesses are: Consumer, Away-from-Home and Baking & Cooking.
The napkin category is seen as an area to be further developed and expanded
as an integrated part of the Consumer and Away-from-Home businesses.
“The organisational and structural simplification, followed by streamlined
processes will increase the company’s agility and free capacity to enhance
performance and competences. Our aim is to see the positive results at the
customer interface as well as in further strategic brand growth.” Says Hannu
Kottonen, CEO.
SCA Q3 profit and cash flow up
SCA reported net sales up 1% to SEK83.4 billion (about €8.4 billion) in the
first nine months of the year. Profit before tax, excluding restructuring costs,
was SEK5.72 billion and cash flow from current operations amounted to SEK8.95
billion.
President and CEO Jan Johansson commented that “SCA continues to improve
its earnings and cash flow in pace with the completion of action plans. Operating
profit rose 5% for the first nine months of the year and 26% for the third
quarter compared with a year ago.
“A number of measures have been taken to strengthen cash flow. Working capital
has decreased mainly through lower inventory levels. Together with a higher
operating surplus and a lower level of capital expenditures, among other things,
this has resulted in a sharp increase in cash flow from current operations,
by SEK 6.77 billion. Our net debt has decreased by nearly SEK 5 billion since
the start of the year.
“Earnings from our hygiene business improved significantly during the third
quarter compared with a year ago – Tissue by 74% and Personal Care by 10%.
A better product mix and stronger margins along with synergy effects in the
European tissue operations contributed to this. Margins for our baby diapers
have increased compared with a year ago. Campaign intensity remains high in
all categories.
“We anticipate higher energy and raw material costs during the fourth quarter.
On the whole, we expect to see a stable price picture for hygiene products,
while we will encounter a continued weak market for publication papers. The
recovery that has begun to take place in liner prices is not expected to affect
corrugated board prices until the end of the first quarter of 2010.”
LPC sales record for 2008-09 year
UK-based LPC Group is forecasting record sales in excess of £230 million
for the year ending September 2009. Yet another year of growth is on the back
of a £75 million investment programme that has transformed the group.
Executive Chairman Amin Tejani explained how this success has been achieved.“The
business growth we have experienced in recent years is due to the unrelenting
focus we place on our customer needs in terms of service and quality. This
is backed by investment to ensure that we have a state of the art manufacturing
platform to deliver and exceed our customer expectations”.
Group Finance Director, Arvind Vij said he is “delighted” with the results
achieved so far. “When I joined the company in November 2005 I found that the
board had a clear vision of what the business needed to achieve to serve it
markets. Based on this we put in place a three-year strategic plan to invest
in our facilities, systems and people and successfully raised £115 million
of funding.
