FOURTH QUARTER AND FULL YEAR 2017 RESULTS
18 Enero 2018 - 3:12PM
BMV General Information
JANUARY 18, 2018
KIMBERLY-CLARK DE MXICO, S.A.B. DE C.V.
FOURTH QUARTER ANDFULL YEAR 2017 RESULTS
HIGHLIGHTS:- FOURTH QUARTER SALES GREW TO PS. $9.4 BILLION
- EBITDA OF PS.$2.2 BILLION DURING THE QUARTER; MARGIN IMPROVED
SEQUENTIALLY 200 BASIS POINTS TO 23.0%
- FULL YEAR 2017 SALES GREW5.9% TO PS. $37.8 BILLION, A RECORD FOR
THE COMPANY
- EBITDA OF PS. $8.6 BILLION DURING THE YEAR WITH A 22.7%
MARGIN
- APPROXIMATELY PS. $3 BILLION OF CAPEX DURING 2017
- SUCCESSFUL START-UP OF MORELIA TISSUE MACHINE
QUARTERLY FINANCIAL RESULTS
PREPARED IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING
STANDARDS (IFRS)MILLION PESOS
4Q'17 4Q'16 CHANGENET SALES $9,432 $9,381 0.5%
GROSS PROFIT 3,413 3,551 (3.9)%OPERATING PROFIT 1,791 1,974
(9.3)%
NET INCOME 1,075 1,193 (9.9)%EBITDA 2,171 2,342 (7.3)%
OUR FOURTH QUARTER RESULTS WERE BETTER SEQUENTIALLY, PARTICULARLY
ON MARGINS, BUT STILL BELOW LAST YEAR BECAUSE OF THE CHALLENGING
ECONOMIC AND COST ENVIRONMENT WE FACED. PRIVATE CONSUMPTION
CONTINUED DECELERATING AND IN COSTS, FIBER PRICES AND ENERGY WERE
SUBSTANTIALLY HIGHER THAN LAST YEAR. ACTION WAS TAKEN TO INCREASE
PRICES AND MIX AND RECOVER PROFITABILITY WHICH, TOGETHERWITH
CONTINUED REDUCTION OF INVENTORIES BY RETAILERS, NEGATIVELY
IMPACTED VOLUMES. NET SALES WERE 0.5% HIGHER THAN THE PREVIOUS
YEAR, WITH PRICE AND MIX CONTRIBUTING 3.1% WHILE VOLUME DECREASED
2.6%.
CONSUMER PRODUCT REVENUES DECREASED 3.5%, AWAY FROM HOME GREW 12.3%
AND EXPORTS INCREASED 60.9%. EXPORTS INCLUDE PARENT ROLL SALES FROM
THE MORELIA TISSUE MACHINE THAT STARTED UP DURING THE QUARTER.
GROSS PROFIT DECLINED 3.9%, WHILE THE MARGIN DECREASED 170 BASIS
POINTS ON A YEAR ON YEAR BASIS TO 36.2%, BUT IMPROVED SEQUENTIALLY
BY 140 BASIS POINTS. THIS REFLECTS THE SIGNIFICANT PRESSURE ON
COSTS WITH DOUBLE DIGIT PRICE INCREASES IN VIRGIN AND DOMESTIC
RECYCLED FIBERS, RESINS AND ELECTRICITY. ON THE POSITIVE
SIDE,PRICES OF IMPORTED RECYCLED FIBERS, SUPERABSORBENT MATERIALS
AND FLUFF PULP COMPARED POSITIVELY. THE COST REDUCTION PROGRAM
YIELDED MORE THAN PS. $300 MILLION OF SAVINGS IN THE QUARTER AND
HELPED TO PARTIALLY OFFSET THE NEGATIVE COST IMPACT. THE PESO
COMPARED POSITIVELY TO THE PREVIOUS YEAR, BUT DEPRECIATED 10% OVER
THE LAST SIX MONTHS OF THE YEAR.
OPERATING EXPENSES GREW 2.9% MAINLY REFLECTING HIGHER DISTRIBUTION
COSTS. OTHER EXPENSES WERE DOWNVERSUS LAST YEAR AS WE MAINTAIN OUR
LEAN OPERATION AND CONTINUE TO EFFICIENTLY INVEST TO SUPPORT OUR
BRANDS.
OPERATING INCOME DECREASED 9.3%, AND MARGIN WAS 19.0%, A YEAR ON
YEAR CONTRACTION OF 200 BASIS POINTS, BUT A SEQUENTIAL IMPROVEMENT
OF 200 BASIS POINTS. COST OF FINANCING WAS PS. $382 MILLION IN THE
FOURTH QUARTER, COMPARED TO PS. $263 MILLION IN THE SAME PERIOD OF
LAST YEAR, REFLECTING HIGHER INTEREST EXPENSE FROM INCREASED DEBT
AND HIGHERINTEREST RATES, AS WELL AS AN EXCHANGE RATE LOSS OF PS.
$51 MILLION COMPARED TO A GAIN OF PS. $22 MILLION IN THE PREVIOUS
YEAR.NET INCOME DECREASED 9.9% AND EARNINGS PER SHARE FOR THE
QUARTER WERE $0.35. EBITDA DECREASED 7.3% TO PS. $2.2 BILLIONIN THE
QUARTER COMPARED TO LAST YEAR AND INCREASED 12.3% VERSUS PRIOR
QUARTER.
IN DOLLARS, UNDER US GAAP, NET SALES INCREASED 6% IN THE QUARTER,
OPERATING PROFIT DECREASED 6% AND NET INCOME DECREASED 14%.
FULL YEAR FINANCIAL RESULTSPREPARED IN ACCORDANCE WITH
INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)MILLION PESOS2017
2016 CHANGE
NET SALES $37,766 $35,660 5.9%GROSS PROFIT 13,402 13,785 (2.8)%
OPERATING PROFIT 6,981 8,018 (12.9)%NET INCOME 4,037 4,794
(15.8)%
EBITDA 8,581 9,619 (10.8)%FOR THE FULL YEAR REVENUES INCREASED
5.9%, WHILE GROSS PROFIT DECLINED BY 2.8%, OPERATING PROFIT 12.9%,
EBITDA 10.8% AND NET INCOME 15.8%. EARNINGSPER SHARE FOR THE YEAR
WERE $1.31.
IN DOLLARS, UNDER US GAAP, NET SALES INCREASED 3% IN THE YEAR,
OPERATINGPROFIT WAS LOWER 15% AND NET INCOME DECREASED 20%.
DURING THE YEAR, WE INVESTED APPROXIMATELY PS. $3 BILLION IN CAPEX,
PS. $110MILLION IN OUR SHARE BUY-BACK PROGRAM AND PAID PS. $4,874
MILLION IN DIVIDENDS.AS OF DECEMBER 31, THE COMPANY HELD PS. $4.7
BILLION IN CASH AND EQUIVALENTS.TOTAL NET DEBT AS OF DECEMBER 2017
WAS PS. $14.3 BILLION, COMPARED TO PS. $10.9 BILLION ON DECEMBER
2016. LONG-TERM DEBT COMPRISED 93% OF TOTAL DEBT AND ALL DEBT WAS
DENOMINATED IN MEXICAN PESOS.
SHARE BUYBACK PROGRAM YEAR TO DATE
20172016
SHARES REPURCHASED 3,141,564 7,554,327CONFERENCE CALL
INFORMATION
THE 4Q'17 CONFERENCE CALL WILL BE HELD ON FRIDAY, JANUARY 19, 2018
AT 9:30 AM EASTERN TIME (8:30 AM CENTRAL TIME / MEXICO TIME). TO
PARTICIPATE IN THE CALL, PLEASE DIAL: US +1(888) 318-6429,
INTERNATIONAL +1(334) 323-7224; CONFERENCE ID: KIMBERLY.
A REPLAY OF THE CONFERENCECALL WILL BE AVAILABLE THROUGH JANUARY
26, 2018. TO ACCESS THE REPLAY, PLEASE DIAL US +1(877) 919-4059,
INTERNATIONAL +1(334) 323-0140; CONFERENCE ID:
28874012KIMBERLY-CLARK DE MXICO S.A.B. DE C.V. IS A MEXICAN COMPANY
THAT MANUFACTURES AND COMMERCIALIZES BRANDED CONSUMER PRODUCTS SUCH
AS DIAPERS, FEMININE PADS, BATH TISSUE, NAPKINS, FACIAL TISSUE,
PAPER TOWELS, WET WIPES AND SOAP. WE ARE MARKET LEADERS IN ALMOST
ALL OF OUR CATEGORIES WITH BRANDS SUCH AS HUGGIES, KLEEN-BEB,
KLEENEX, KIMLARK, PTALO, COTTONELLE, DEPEND, KOTEX, EVENFLO AND
ESCUDO.INVESTOR RELATIONS CONTACT
AZUL ARGELLESTEL: (5255) 5282-7204
AZUL.ARGUELLES@KCC.COM