01—Abstract
Summary
Summary of the 8-K filed December 10, 2024. Cited figures are marked; the original filing is the authoritative source.
On December 10, 2024, Kimberly-Clark Corporation filed a Form 8-K under Item 8.01 (Other Events) to disclose a change in its reportable segments.
In the fourth quarter of 2024 the company realigned its internal operating and management structure to streamline its supply chain and improve the efficiency of its corporate and regional overhead cost structures. It now reports three segments defined by geographic regions and product groupings: North America (NA), International Personal Care (IPC) and International Family Care and Professional (IFP). These replace the prior product-based segments of Personal Care, Consumer Tissue and K-C Professional.
The company also changed its measure of segment profitability to include the effects of exchange rate changes on monetary assets and liabilities for subsidiaries that have adopted highly inflationary accounting. The filing does not change consolidated results. Exhibit 99.1 provides supplemental historical segment financial information recast to the new structure for each quarter from March 31, 2023 through September 30, 2024, for the nine months ended September 30, 2024, and for the years 2021 through 2023.
The company states that these changes had no impact on consolidated financial results for any period in its prior Forms 10-Q or its 2023 Form 10-K. Segment operating profit, the CODM's primary profitability measure, excludes Corporate & Other, which includes unallocated corporate expenses, impairments, acquisition and divestiture gains or losses, and reorganization costs. For investors, the key takeaway is a re-presentation of segment reporting rather than a change in reported results.
The recast data show NA as the largest segment, with net sales of $8.29 billiona for the nine months ended September 30, 2024, compared with $10.99 billion for full-year 2023. IPC and IFP are smaller, with nine-month 2024 net sales of $4.34 billion and $2.50 billion. The exhibit also includes organic and currency-driven net sales change analysis by segment, which investors can use to compare the new segments across periods.
02—Key points
Key Highlights
- Kimberly-Clark realigned its internal operating and management structure in Q4 2024 to streamline its supply chain and reduce corporate and regional overhead costs.
- Reportable segments changed from product groupings (Personal Care, Consumer Tissue, K-C Professional) to three geographic and product-based segments: North America, International Personal Care, and International Family Care and Professional.
- Segment profitability measure was changed to include the effects of exchange rate changes on monetary assets and liabilities for subsidiaries with highly inflationary accounting.
- Exhibit 99.1 recasts historical segment results for quarters from March 31, 2023 through September 30, 2024, the nine months ended September 30, 2024, and years 2021 through 2023.
- The company states the reorganization had no impact on consolidated financial results for any period in prior Forms 10-Q or the 2023 Form 10-K.
- Nine-month 2024 net sales were $8.29 billion for North America, $4.34 billion for IPC, and $2.50 billion for IFP, with total segment net sales of $15.13 billion.
- Segment operating profit, the CODM's primary measure, excludes Corporate & Other, which includes unallocated general corporate expenses, impairments, and reorganization costs.
03—Questions
Frequently Asked Questions
Did the segment change affect Kimberly-Clark's consolidated financial results?
No. The company states that the changes had no impact on its consolidated financial results for any of the periods presented in its prior Quarterly Reports on Form 10-Q or in its 2023 Form 10-K. The recast information is presented for informational purposes only.
What were the old and new reportable segments?
The company previously reported Personal Care, Consumer Tissue and K-C Professional, which were defined by product groupings. Beginning in Q4 2024 it reports North America (NA), International Personal Care (IPC) and International Family Care and Professional (IFP), which are defined by geographic regions and product groupings.
Why did Kimberly-Clark reorganize its segments?
The company realigned its internal operating and management structure to streamline its supply chain and improve the efficiency of its corporate and regional overhead cost structures. The filing says the new structure reflects how the chief operating decision maker develops, executes and evaluates global strategies to drive growth and profitability.
What historical information is available to investors under the new structure?
Exhibit 99.1 provides segment net sales and operating profit recast to the new segments for each quarter from March 31, 2023 through September 30, 2024, for the nine months ended September 30, 2024, and for the years ended December 31, 2021, 2022 and 2023. It also includes analysis of net sales changes by volume, mix/other, net price, divestitures, currency translation and organic growth.
How does segment operating profit differ from total operating profit?
Segment operating profit is a non-GAAP measure that excludes Corporate & Other, which primarily covers unallocated general corporate expenses, impairment charges, one-time gains or losses from acquisitions and divestitures, and reorganization costs not tied to segment operations. For nine months ended September 30, 2024, segment operating profit was $2.91 billion, and total operating profit under GAAP was $2.66 billion.
04—Continue