Kimberly-Clark de Mexico is a Mexican company engaged in the manufacture, distribution, and marketing of cleaning, care, and personal hygiene products, such as: diapers and baby products, feminine pads, incontinence products, toilet paper, napkins, handkerchiefs, paper towels, wet wipes, soaps and antibacterial gel. Among its main brands are: Huggies®, KleenBebé®, Kleenex®, Evenflo®, Pétalo®, Suavel®, Cottonelle®, Depend®, Kotex® and Escudo® Antibacterial.
In 2020 the world faced a pandemic of COVID-19, strongly affecting the economic and health fields. Regarding Mexico, the pandemic had a significant impact on the country; millions of lives were lost and millions of people lost their jobs. Furthermore, it is estimated that the Mexican economy has contracted approximately 8.5 percent, hand in hand with the confinement and its consequent impact on consumption.
Despite the global context, Kimberly-Clark de México managed to maintain a solid position in its brands throughout 2020. Its net sales increased from $43,500 mdp in 2019 to $46,703 mdp in 2020, representing an increase of 7.4% and achieving an annual record.
In addition, due to improved operating efficiencies, a better input price environment resulted in lower costs and increased savings.
Thanks to the above, operating income grew by 17.1% from $16,321 billion pesos in 2019 to $18,009 billion pesos in 2020, while EBITDA showed a growth of 14.1 percent.
Net income surpassed $6,089 billion pesos in 2020, an 18% increase over the $5,156 billion pesos generated in 2019.
These results, together with measures aimed at improving and optimizing working capital, allowed the Company to achieve solid cash generation, bringing the net leverage ratio (Net Debt/EBITDA) down to 1.1 times even after investing in fixed assets and paying dividends to shareholders.
During 2021, net sales grew 4% compared to the same quarter of the previous year due to a 6% increase in prices and a 2% reduction in sales volume. Comparison is difficult as last year saw high volume due to purchases related to the COVID-19 pandemic.
Gross profit increased 1% with a margin of 38.5% and operating income increased 1% with a margin of 22.6%.
Operating expenses remained constant compared to last year, causing operating expenses as a percentage of sales to be 50 basis points lower than in the first quarter of 2020.
EBITDA increased 1% to $3.2 billion during the quarter, achieving a margin of 26.8%, which is at the high end of its long-term target range.
Net income increased 5% and net earnings per share for the quarter were $0.52.
For the second quarter of 2021, consolidated sales decreased 5% from Ps. 12,337 billion to Ps. 11,722 billion, as volume decreased 6% while price increased 1%. Gross profit decreased 14% and the margin was 34.5%, and operating profit decreased 21% and the margin was 19.0%.
Operating expenses decreased 5% and, as a percentage of sales, were in line with the second quarter of 2020.
EBITDA decreased 18% to $2.7 billion during the quarter with a margin of 23.2%.
Net income decreased 24% from Ps. 1,599 billion to Ps. 1,222 billion; net income per share for the quarter was Ps. 0.40.
The company announced in a press release that it will raise net selling prices in most of its consumer products business, seeking to pass on to the consumer the impact of the significant increase in raw material prices and avoid compromising operating margins.
As a result, Kimberly-Clark de México shares traded on the Mexican Stock Exchange (BMV) reached their lowest level in almost two and a half years, with a minimum price of 30.66 pesos per share.
