Kimberly-Clark has reported fourth quarter 2016 net sales of $4.5bn as it noted a “challenging economic and competitive environment”.
Organic sales for the period increased 1%, including 3% growth in developing and emerging markets. Changes in foreign currency exchange rates reduced sales by 1%.
Fourth quarter operating profit was $839m in 2016 and $630m in 2015. Results in 2015 included $108m of charges for the Venezuelan deconsolidation.
The consumer tissue segment reported fourth quarter sales of $1.5bn, a decrease of 1%, as currency rates were unfavourable.
Fourth quarter operating profit of $295m increased 13%. The comparison benefited from cost savings and input cost deflation, partially offset by slightly lower net selling prices and unfavourable currencies.
In North America, the company said sales were essentially even with year-ago levels; volumes were up slightly, including an increase in paper towels compared to 8% growth in the base period.
Sales in developing and emerging markets decreased 3%, volumes fell 4%, while net selling prices improved 1%.
In developed markets outside of North America, sales fell 1%, including: “a 4 point drag from unfavourable currency rates”. Volumes were up 3%, mostly in Australia and Western/Central Europe.
For the full year 2016, the company recorded sales of $18.2bn, a decrease of 2% compared to the year-ago period, as changes in foreign currency exchange rates reduced sales by about 4%.
Chairman and chief executive Thomas J. Falk said the full-year results were consistent with the company’s previous outlook.
“While we experienced a challenging economic and competitive environment in 2016, our market share positions remained broadly healthy.
“We also achieved record cost savings, which helped us improve our margins and deliver bottom-line earnings in line with our guidance for the year.
“In addition, we generated strong cash flow and returned $2.1bn to shareholders through dividends and share repurchases.”
He added that in 2017, the company will execute its Global Business Plan strategies in what Falk expects to be “a continued difficult environment”.
The company will target innovation, marketing and targeted growth initiatives.
“We will also continue to manage our company with financial discipline, with a focus on cost savings, cash flow and shareholder-friendly capital allocation. We remain optimistic about our opportunities to create long-term shareholder value.”
He added that net sales in 2017 are expected to be similar to 2016, including organic sales growth of approximately 2%.