Nobody knows noses and bottoms better than Kimberly-Clark. One of the world's largest makers of personal paper products, the company operates through three business segments: personal care, consumer tissue, and K-C Professional. Kimberly-Clark's largest unit, personal care, makes products such as diapers (Huggies, Pull-Ups), feminine care items (Kotex), and incontinence care products (Poise, Depend). Through its consumer tissue segment, the manufacturer offers facial and bathroom tissues, paper towels, and other household items under the names Cottonelle, Kleenex, Viva, and Scott (plus the Scott Naturals line). Kimberly-Clark's professional unit makes WypAll commercial wipes, among other items.
Amid a slow global economy that has put pressure on cash-strapped consumers and inflated the cost of fuel, pulp, and paper, Kimberly-Clark has managed to hold on to the #1 or #2 position in 80 countries. Personal Care accounted for about 50% of total sales in 2015; Consumer Tissue, 33%; and K-C Professional, 17%.
Kimberly-Clark maintains a broad global presence as part of its growth strategy. It boasts 94 manufacturing facilities in about 40 countries across the US, Canada, Europe, Asia, and Latin America. Products reach about 175 countries.
Developing regions, Asia, Latin America, and others generated 38% of the company's 2015 revenues, largely due to expansions and acquisitions, such as the remaining 31% of its Bogota, Colombia-based subsidiary Colombiana Kimberly Colpapel (CKC). The deal secured the company's foothold in the developing markets of Bolivia, Colombia, Ecuador, Peru, and Venezuela. Kimberly-Clark also holds Kimberly-Clark Kenko Industria e Comercio Ltda, based in Brazil.
North America accounted for 50% of total net sales in 2015. Europe accounted for the balance.
Sales and Marketing
Kimberly-Clark sells its household items directly to supermarkets, mass merchandisers, drugstores, warehouse clubs, variety and department stores, and other retail outlets, as well as through distributors and e-commerce. For the away-from-home market it serves, the company sells through distributors and directly to high-volume public facilities and to manufacturing, lodging, office building, food service, and health care establishments.
To gain recognition for its brands, the company has averaged about $780 million in advertising expenses each year. In 2015, Kimberly-Clark logged $710 million in ad spending. As business and economic conditions improve, the consumer paper company will spend more aggressively on adverting and promoting its products.
Its largest customer, über worldwide retailer Wal-Mart, represented about 14% of sales in 2015, and 13% in 2014 and 2013.
Kimberly-Clark's revenues decreased by $1.1 billion in 2015 due to decreased sales from consumer tissue and personal care segments as the result of unfavorable currency rates.
Net income decreased by $513 million due to lower sales and increased other expenses partially offset by decreased provision for income taxes.
In 2015 net cash provided by the operating activities decreased by $539 million compared to 2014.
Kimberly-Clark's strategy includes building upon its well-branded position in the personal care and consumer tissue space. Notable introductions are Huggies Little Movers Slip-On Diapers, Poise Hourglass Shape Pads, and Kleenex Cool Touch Facial Tissue, among several others. The company has simultaneously moved into making higher-margin disposable medical products. It produces sterilization wrap, face masks, surgical drapes and gowns, and closed-suction respiratory products.
The company's business strategy includes targeted growth in Asia, Latin America, Eastern Europe, the Middle East and Africa, with a particular emphasis in China, Eastern Europe and Latin America. In 2016 the company planned to continue to execute its Global Business Plan strategies, which include a focus on targeted growth initiatives, innovation and brand building, cost savings programs and shareholder-friendly capital allocation.
In 2016 Kimberly-Clark Professional added DAC International, a Greenwich AeroGroup Company, to its global aviation distributor network. DAC International joins an extensive list of established distribution partners for Kimberly-Clark Professional's critical task wiping products and personal protection solutions for the aviation industry.
In 2015 Kleenex Brand entered the facial cleansing category with an exclusive new line of facial cleansing products for women, which feature innovative fabric-based technologies.
Its health care unit has logged increasingly higher year-over-year sales volumes, helped by acquisitions. Among them, Kimberly-Clark took over Baylis Medical's pain management business, which focuses on chronic spinal pain, and I-Flow, a developer and marketer of drug-delivery systems for post-surgical pain relief and surgical site care. To get better shareholder returns, in 2014 Kimberly-Clark spun off its health care business into a standalone company known as Halyard Health.
In 2014 Kimberly-Clark spent $370 million on research and development directed toward new or improved personal care, tissue, wiping, safety and health care products and nonwoven materials.