Emerging economies now account for 37% of Kimberly-Clark’s revenue
By GARY JACOBSON
Kimberly-Clark Corp.’s business in emerging economies continues to boom.
During its fourth-quarter earnings conference call Friday, the company said that K-C International, which operates in Asia, South America, Africa, Russia, Eastern Europe and the Middle East, now accounts for 37 percent of total company revenue, which hit $21 billion in 2012.
In an interview, CEO Tom Falk said that proportion has increased 12 points in the past 10 years, and the same rate of increase is possible over the next 10 years.
“If we added Mexico, which is about $2.5 billion, we’d be close to 50 percent now,” Falk said. “K-C is really a big global growth play.”
The Irving-based consumer products company does not consolidate results from its Mexican affiliate.
Before the markets opened, K-C said that its fourth-quarter revenue increased 2.5 percent to $5.3 billion, but its net income in the period declined by a third to $267 million, largely because of charges related to restructuring of its Western and Central European diaper business.
At K-C International alone, revenue increased 9 percent in the quarter.
For the full year, overall company revenue increased about 1 percent and net income increased 10 percent to $1.75 billion.
The company said full-year adjusted earnings per share, which exclude restructuring charges, were $5.25, compared to $4.80 in 2011. And it forecast adjusted earnings for 2013 of $5.50 to $5.65 a share, up 5 percent to 8 percent from 2012.
“We expect less of a drag in North America in 2013 than in 2012,” Falk told investors on the conference call. After several years of declines, he said, this should be the first flat year in birthrates. That’s good news for the disposable diaper business in the United States.
With improved profit margins, K-C said it generated a record $1.1 billion in cash from operations in the fourth quarter, more than twice the amount during the year-earlier period.
The company repurchased 3.8 million of its shares in the quarter, at a cost of $320 million. For the year, K-C bought back 16.4 million shares for $1.3 billion, an average of roughly $79 a share.
In trading Friday, K-C stock jumped more than $1 a share at the opening, but closed down 32 cents at $86.26.