01—Abstract
Summary
Summary of the 10-K filed February 9, 2023. Cited figures are marked; the original filing is the authoritative source.
Kimberly-Clark Corporation's 2022 Annual Report (Form 10-K, filed February 9, 2023) reports net sales of $20.2 billiona, up 4 percent from 2021, with organic sales up 7 percent and changes in foreign currency exchange rates decreasing sales by 4 percent.
Operating profit rose to $2,681 millionb from $2,561 million, and net income attributable to Kimberly-Clark was $1,934 million, or $5.72 diluted earnings per share, versus $5.35 in 2021. Adjusted operating profit fell to $2,617 million from $2,836 million, and adjusted earnings per share decreased 9 percent to $5.63. Management attributes the margin pressure to $1.5 billion of higher input costs, higher marketing, research and general expenses, and unfavorable foreign currency effects, partly offset by net price increases and $290 million of FORCE program savings.
By segment, Personal Care net sales were $10,622 millionc with operating profit of $1,787 million, Consumer Tissue net sales were $6,243 million with operating profit of $806 million, and K-C Professional net sales were $3,256 million with operating profit of $457 million. Cash provided by operations was $2,733 million, capital spending was $876 million, and the company paid $1.6 billion in dividends and repurchased $100 million of shares.
Short-term debt was $373 milliond and total debt was $8.4 billion at year-end, and the company maintains a $2.0 billion revolving credit facility expiring in June 2026. The filing also discloses a pending agreement to sell the Neve tissue brand and related assets in Brazil for $175 million, expected to close in the first half of 2023, and the completed acquisition of a controlling 58 percent interest in Thinx for total consideration of $181 million.
02—Key points
Key Highlights
- Net sales rose 4 percent to $20.2 billion, with organic sales up 7 percent and currency reducing sales by 4 percent.
- Diluted EPS was $5.72 versus $5.35 in 2021; adjusted EPS of $5.63 decreased 9 percent from $6.18.
- Input costs increased $1.5 billion in 2022, and the company expects the higher cost environment to continue in 2023.
- Net price increased 9 percent on a consolidated basis, while volume declined 3 percent.
- Cash provided by operations was $2,733 million, and capital spending was $876 million, with 2023 capex guided to $800 to $900 million.
- Share repurchases and dividends totaled $1.7 billion in 2022, and the dividend was raised 2 percent, the 50th consecutive annual increase.
- Walmart Inc. accounted for approximately 13 percent of 2022 consolidated net sales, down from 14 percent in 2021.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Kimberly-Clark kept $0.10.
- Revenue$20.18B100.0%
- Cost of revenue−$13.96B69.2%
- Gross profit$6.22B30.8%
- Operating costs−$3.54B17.5%
- Operating income$2.68B13.3%
- Interest, other & tax−$747.0M3.7%
- Net income$1.93B9.6%
Where FY2022 revenue went
$20.18B- Cost of revenue: $13.96B, 69% of revenue
- Other operating costs: $3.25B, 16% of revenue
- Net income: $1.93B, 9.6% of revenue
- R&D: $292.0M, 1.4% of revenue
- Interest, other & tax: $747.0M, 3.7% of revenue
Kept 9.6% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 9, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $20.18B$19.44B | +3.8% |
| Cost of Revenue | $13.96B$13.45B | +3.7% |
| Gross Profit | $6.22B$5.99B | +3.9% |
| R&D Expenses | $292.00M$269.00M | +8.6% |
| Operating Income | $2.68B$2.56B | +4.7% |
| Interest Expense | $282.00M$256.00M | +10.2% |
| Net Income | $1.93B$1.81B | +6.6% |
| EPS (Basic) | $5.73$5.38 | +6.5% |
| EPS (Diluted) | $5.72$5.35 | +6.9% |
| Shares Outstanding (Basic) | 337.40M337.30M | 0.0% |
| Shares Outstanding (Diluted) | 338.30M338.80M | −0.1% |
05—Questions
Frequently Asked Questions
How did Kimberly-Clark perform financially in 2022?
Net sales increased 4 percent to $20.2 billion and operating profit increased to $2,681 million from $2,561 million. Net income attributable to Kimberly-Clark was $1,934 million, and diluted EPS was $5.72 compared with $5.35 in 2021. Adjusted operating profit declined to $2,617 million from $2,836 million on a non-GAAP basis.
What drove the decline in adjusted earnings per share?
The filing states that the adjusted EPS decrease of 9 percent to $5.63 was primarily driven by lower adjusted operating profit. Input costs rose sharply, particularly for pulp, resin, distribution and energy, partly offset by net selling price increases and FORCE cost savings of $290 million.
What is the status of the Russia business and the Neve sale?
The company has substantially curtailed media and promotional activity in Russia and suspended capital investment at its single Russian manufacturing facility, limiting sales to essential items. The Russia business represented approximately 1 to 2 percent of net global sales, operating profit and total assets. The agreement to sell the Neve tissue brand and related assets in Brazil for $175 million is pending conditions and regulatory approval, with closing expected in the first half of 2023.
How is the company's liquidity and debt position?
Total debt was $8.4 billion at December 31, 2022, compared with $8.6 billion a year earlier. Short-term debt was $373 million. The company maintains a $2.0 billion revolving credit facility expiring June 2026 and a $775 million facility expiring June 2023, both currently unused. Management believes operating cash flow and debt capacity are adequate for working capital, capital spending, pension contributions and dividends.
06—Continue