Kimberly-Clark announces strategic transformation to drive growth and sustainability

Kimberly-Clark Corporation has announced that Mike Hsu, chairman and chief executive officer, along with members of its executive leadership team, are unveiling the next phase of the company’s transformation, which includes a new operating model and key business initiatives designed to drive growth of its brands and businesses at a faster pace than their categories.

Mike Hsu, chairman and chief executive officer said, “Over the past five years, the dedication and strong execution of the company’s global team has positioned the company to fully leverage the scale it has built and take Kimberly-Clark to the next chapter of growth.” “We are leveraging the consumer centricity and commercial advantages we have established by moving to a more agile and focused operating structure that we are confident will help accelerate our proprietary pipeline of innovation into spaces where the right to win and enhance our growth trajectory. profitability and return on investment. We have over 150 years of history, transforming innovative ideas into breakthrough categories, with products that deliver better care for a better world. We are excited to leverage the strength of that legacy as we drive consistent solution, long-term value creation.”

Hsu added “Science and innovation are key competitive advantages at Kimberly-Clark, driving its ability to meet the needs of today’s consumers. Sustainability is also a key component of Kimberly-Clark’s innovation strategy, and the company is proud to announce its ambition to be 100% natural forest free in all its products, being already more than halfway to this goal by 2030.”

 

Kimberly-Clark’s operating model is focused on driving a radical shift in performance through a new operating model that leverages three synergistic forces: accelerating pioneering innovation, optimizing its margin structure and connecting its organization for growth. These three new business segments will be supported by leaner, world-class functions, including research and development, marketing, finance, information technology and human resources. The company expects to complete its transition to the new organizational structure by the end of 2024, generating approximately $200 million in savings over the next several years that will be available for reinvestment in the business.

Kimberly-Clark has set long-term growth and profitability targets that include organic net sales growth, adjusted operating profit growth, adjusted EPS growth and annual free cash flow generation. The company’s capital priorities include investing to accelerate organic growth, increasing the dividend, evaluating strategic acquisitions and share repurchases. The company expects to incur approximately $1.5 billion in one-time restructuring and reorganization costs over the next three years.

Kimberly-Clark’s outlook for 2024 is consistent with its new long-term growth and return targets, expecting a low-to-mid single-digit percentage increase in organic net sales, among other metrics.