The Global Demographic Tailwind

[DewDiligence]

Kimberly-Clark Promises Cost Cuts, Dividend Hikes

[Example of the kinds of premium-margin products KMB plans to bring to market are Depend adult diapers packaged to look like regular underwear on the store shelf (#msg-47619675) and toddler diapers designed to look like a pair of jeans. (KBM turned the new Depend product into a sick joke at the Investor Day presentation this week: #msg-48121544.)

Note the emphasis on The Global Demographic Tailwind in the second-to-last paragraph below. This theme pervaded the Investor Day presentation to a degree that rivaled any company I’ve followed.]

http://finance.yahoo.com/news/KimberlyClark-backs-outlook-apf-2662836925.html?x=0&.v=8

›March 22, 2010, 10:37 am EDT

NEW YORK (AP) -- The maker of Kleenex and Huggies reiterated its full-year adjusted profit forecast and expects to save more money through cost-cutting than initially anticipated. Shares climbed $1.44, or 2.3 percent, to $62.87 in morning trading. Over the past year, the stock has traded in a range of $45.19 to $67.03.

Kimberly-Clark Corp. said Monday that it still sees 2010 adjusted earnings between $4.80 and $5 per share. That excludes an expected charge for the reworking of its local currency balance sheet in Venezuela to account for the country's currency devaluation.

Analysts polled by Thomson Reuters, whose estimates generally remove one-time items, predict a profit of $4.87 per share.

The consumer products maker also said its cost reduction program will likely result in savings of $400 million to $450 million for 2008 through 2010. It previously anticipated savings of $350 million to $450 million. A new three-year plan predicts an additional $400 million to $500 million in savings for 2011 to 2013.

The announcements came as part of Kimberly-Clark's investor day meeting in New York on Monday.

The company, based in Dallas, has weathered the recession well, according to some analysts, by guarding its profits through price increases that helped buffer rising costs for key components like pulp.

Chairman and CEO Thomas J. Falk said in a statement that Kimberly-Clark will still pour money into supporting its brands, as well as continue to focus on trimming costs in the future.

"We will continuously improve the effectiveness and efficiency of our organization as we create a leaner, stronger and faster company," he said.

Long term, Kimberly-Clark expects earnings-per-share growth in the mid- to high-single digits through 2015 and a sales increase of 3 percent to 5 percent.

The consumer products maker also plans to roll out several new and updated products during the first half of the year, including a disposable Kleenex hand towel [already available in stores], improved Cottonelle bathroom tissue and Viva paper towels, and new Poise and Depend products.

Kimberly-Clark will also spend more on research and development that will concentrate on producing more innovative products, improving margins, providing a better mix of products and expanding its brands.

The efforts will help Kimberly-Clark remain competitive against rivals such as Procter & Gamble Co., which is pouring more money into its tissue promotions and launching a new diaper line. Procter & Gamble's products include Pampers diapers and Gillette shavers.

Overseas will remain a key focus for Kimberly-Clark, with the company emphasizing high-potential, fast-growing markets like China, Russia and Latin America.

The consumer products maker also said it will maintain a "top-tier dividend payout." Kimberly-Clark expects its dividend increases to be in line with its long-term earnings-per-share growth forecast. The company said in January that it expects a high single-digit to low double-digit increase in its 2010 dividend.‹