01—Abstract
Summary
Summary of the 10-K filed February 10, 2022. Cited figures are marked; the original filing is the authoritative source.
Kimberly-Clark Corporation's 2021 Annual Report reports net sales of $19.44 billiona, up 2 percent from $19.14 billion in 2020, while organic sales decreased 1 percent.
Operating profit fell to $2,561 millionb from $3,244 million, and net income attributable to Kimberly-Clark declined to $1,814 million from $2,352 million. Diluted earnings per share were $5.35 versus $6.87 in 2020. Adjusted earnings per share, which excludes restructuring charges, were $6.18 versus $7.74 in 2020.
The filing attributes the decline mainly to higher input costs of $1,490 millionc, driven by pulp, polymer-based materials, distribution and energy, partly offset by higher net selling prices and $410 million of FORCE program savings. By segment, Personal Care net sales rose to $10.27 billion while its operating profit declined 4 percent to $1,856 million. Consumer Tissue net sales fell 10 percent to $6.03 billion and operating profit fell 39 percent to $888 million, reflecting elevated pandemic-era shipments in the prior year.
K-C Professional net sales were $3.07 billion, with operating profit down 23 percent to $404 milliond. The company completed its 2018 Global Restructuring Program in 2021 and acquired Softex Indonesia in October 2020 for approximately $1.2 billion. Cash provided by operations was $2.7 billion, down from $3.7 billion, and the company paid $1.5 billion in dividends and repurchased $400 million of shares during 2021.
Management cites ongoing COVID-19 disruption, record input cost inflation and private label competition as key pressures, and expects the higher cost environment to continue in 2022. The Board approved a 1.8 percent dividend increase for 2022, and the company targets approximately $100 million of share repurchases in 2022 and capital spending of $1.0 billion to $1.1 billion.
02—Key points
Key Highlights
- Net sales of $19.44 billion rose 2 percent, but organic sales decreased 1 percent.
- Operating profit fell 21 percent to $2,561 million; adjusted operating profit was $2,836 million, down 21 percent.
- Diluted EPS was $5.35 versus $6.87 in 2020; adjusted EPS was $6.18 versus $7.74.
- Higher input costs of $1,490 million, driven by pulp, polymer-based materials, distribution and energy, were the main headwind.
- Consumer Tissue operating profit fell 39 percent to $888 million on lower volumes; Personal Care operating profit fell 4 percent to $1,856 million.
- Cash provided by operations declined to $2.7 billion from $3.7 billion; capital spending was $1.0 billion.
- Dividend was raised 6.5 percent in 2021, the 49th consecutive annual increase, and the 2022 dividend increase was set at 1.8 percent.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Kimberly-Clark kept $0.09.
- Revenue$19.44B100.0%
- Cost of revenue−$13.45B69.2%
- Gross profit$5.99B30.8%
- Operating costs−$3.43B17.6%
- Operating income$2.56B13.2%
- Interest, other & tax−$747.0M3.8%
- Net income$1.81B9.3%
Where FY2021 revenue went
$19.44B- Cost of revenue: $13.45B, 69% of revenue
- Other operating costs: $3.16B, 16% of revenue
- Net income: $1.81B, 9.3% of revenue
- R&D: $269.0M, 1.4% of revenue
- Interest, other & tax: $747.0M, 3.8% of revenue
Kept 9.3% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 10, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $19.44B$19.14B | +1.6% |
| Cost of Revenue | $13.45B$12.32B | +9.2% |
| Gross Profit | $5.99B$6.82B | −12.2% |
| R&D Expenses | $269.00M$276.00M | −2.5% |
| Operating Income | $2.56B$3.24B | −21.1% |
| Interest Expense | $256.00M$252.00M | +1.6% |
| Net Income | $1.81B$2.35B | −22.9% |
| EPS (Basic) | $5.38$6.90 | −22.0% |
| EPS (Diluted) | $5.35$6.87 | −22.1% |
| Shares Outstanding (Basic) | 337.30M340.70M | −1.0% |
| Shares Outstanding (Diluted) | 338.80M342.50M | −1.1% |
05—Questions
Frequently Asked Questions
Why did Kimberly-Clark's earnings decline in 2021 despite higher net sales?
Net sales grew 2 percent to $19.44 billion, but input costs rose by $1,490 million, driven by pulp, polymer-based materials, distribution and energy. Lower sales volumes and elevated other manufacturing costs also reduced operating profit, which fell 21 percent to $2,561 million. Higher net selling prices and $410 million of FORCE savings partly offset these pressures.
How did the individual business segments perform?
Personal Care net sales rose to $10.27 billion, with operating profit down 4 percent to $1,856 million. Consumer Tissue net sales fell 10 percent to $6.03 billion, and operating profit fell 39 percent to $888 million. K-C Professional net sales rose 2 percent to $3.07 billion, but operating profit fell 23 percent to $404 million.
How much cash did Kimberly-Clark return to shareholders in 2021?
The company paid $1.5 billion in dividends and repurchased 3.0 million shares at a cost of $400 million in 2021. Together, share repurchases and dividends totaled $1.9 billion. The Board approved a 1.8 percent dividend increase for 2022, and the company targets approximately $100 million of share repurchases in 2022.
What is the company's debt position and liquidity?
Total debt was $8.6 billion at December 31, 2021, compared with $8.4 billion a year earlier. The company maintains a $2.0 billion revolving credit facility expiring June 2026 and a $750 million facility expiring June 2022, both unused and supporting its commercial paper program. Management believes cash generation and debt capacity are adequate for the foreseeable future.
What risks and outlook does management highlight for 2022?
Management expects the higher cost environment for pulp, resin, distribution and energy to continue in 2022, and expects pricing pressure from private label competition to persist. Pandemic-related demand volatility, supply chain disruption and foreign market risks in developing markets are also cited. Capital spending is expected to be approximately $1.0 billion to $1.1 billion in 2022.
06—Continue