As one of the key CPG suppliers impacted by the pandemic, Kimberly-Clark has outlined its outlook for the year ahead and the three key levers which will underpin growth as it cycles strong comparable sales from 2020.
Net sales growth of 4-6% in 2021
Fourth quarter sales increased 5.5% to $4.8bn, contributing to a solid year for the company, with full year sales up 3.7% to $19.1bn. During the quarter it continued to see strong demand in the consumer tissue segment, with sales up 14%, led by North America. Personal care sales were up 5%, while sales in its professional segment fell by 9%, reflecting lower away from home demand and challenging business conditions following the outbreak of COVID-19. Given the work it has undertaken as part of its K-C Strategy 2022 plan and initiatives to strengthen its global supply chain, it is forecasting net sales growth of 4-6%, including organic sales growth of 1-2%, for 2021.
Growth will be powered by three initiatives:
- Optimising and scaling brand building capabilities and investments. This includes digital marketing and ecommerce programmes, building on digital sales growth of more than 30% last year
- Launching its near-term innovation pipeline, with a focus on premiumisation
- Undertaking selective pricing actions, to reflect rising pulp costs, and revenue management initiatives, including being more efficient with trade funding. The company is aiming to take a more disciplined approach to the reintroduction of promotions, aiming to avoid category commoditisation effects
Despite the optimism for the year ahead, the business is expecting a challenging trading environment. Key factors driving this include:
- The reversal of some of the COVID-19 driven consumer demand, although demand is likely to remain elevated, reflecting more people working from home, while sales will improve in its professional segment
- Rising commodity costs
- Uncertain economic conditions
- Birth rate trends; the business is forecasting a mid-single digit decline in the birth rate in the US
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