THIRD QUARTER 2017 RESULTS
19 Octubre 2017 - 03:09PM
BMV General Information
OCTOBER 19, 2017
KIMBERLY-CLARK DE MXICO, S.A.B. DE C.V.
THIRD QUARTER 2017RESULTS
HIGHLIGHTS:
- NET SALES ROSE 5.5% TO PS. $9.2 BILLION, DRIVEN BY BETTER PRICING
AND MIX, AS WELL AS POSITIVE VOLUME
- OPERATING PROFIT DECLINED BY 19.2%, MAINLY REFLECTING INCREASED
RAW MATERIALS AND ENERGY COST PRESSURES TOGETHER WITH HIGHER
DISTRIBUTION EXPENSES. THE MARGIN WAS ADDITIONALLY IMPACTED BY
EXPORTS AND ACQUISITIONS
- EBITDA OF PS. $1.9 BILLION DOWN 17.8%; MARGIN OF 21.0%
- COST SAVINGS OF PS. $300 MILLION DURING THE QUARTER
- WET WIPES BASE SHEET CAPACITY ADDITION STARTED UP AND MORELIA
TISSUE EXPANSION IS ON TRACKQUARTERLY FINANCIAL RESULTS
PREPARED IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING
STANDARDS (IFRS)MILLION PESOS
3Q'17 3Q'16 CHANGENET SALES $9,197 $8,719 5.5%
GROSS PROFIT 3,205 3,345 (4.2)%OPERATING PROFIT 1,566 1,939
(19.2)%
NET INCOME
854 1,206 (29.2)%EBITDA 1,934 2,351 (17.8)%
NET SALES WERE 5.5% HIGHER THAN PREVIOUS YEAR. THE PRICE INCREASES
IMPLEMENTED OVER THE LAST TWELVE MONTHS WERE PARTIALLY OFFSET BY
HIGHER PROMOTIONAL ACTIVITY DURING THE SUMMER SEASON RESULTING IN A
PRICE AND MIX CONTRIBUTION OF 3.9%. VOLUME GREW 1.6% REFLECTING
SLOWER CONSUMPTION GROWTH AND A MARKED TENDENCY OF THE TRADE TO
REDUCE INVENTORIES.CONSUMER PRODUCT REVENUES INCREASED 5.0%, AWAY
FROM HOME GREW 14.0% AND EXPORTS SALES INCREASED 1.2%. TISSUE
CAPACITY, WHICH LIMITED OUR EXPORTS SALES, WILL INCREASE IN THE
FOURTH QUARTER WITH THE START UP OF THE MORELIA MILL
EXPANSION.GROSS PROFIT DECLINED 4.2% AND MARGIN WAS 34.8%. THIS
REFLECTS THE SIGNIFICANT PRESSURE ON COSTS FROM HIGHER RAW
MATERIALS AND ENERGY PRICES. WE WERE IMPACTED BY DOUBLE DIGIT PRICE
INCREASES IN VIRGIN AND RECYCLED FIBERS, AS WELL AS IN ELECTRICITY
AND NATURAL GAS. THE POSITIVE RESULTS FROM THE COST REDUCTION
PROGRAMYIELDED PS. $300 MILLION OVER THE QUARTER AND HELPED REDUCE
THE NEGATIVE RAW MATERIALS IMPACT.
OPERATINGEXPENSES AS A PERCENTAGE OF SALES WERE 170 BASIS POINTS
HIGHER, AT 17.8%. THE SG&A INCREASE REFLECTS HIGHER
DISTRIBUTION COSTS, INCLUDING FUEL PRICES, AS WELLAS THE
CONSOLIDATION OF 4E EXPENSES. OTHER OPERATING EXPENSES, INCLUDING
ADVERTISING AND PROMOTION, GREW LESS THAN SALES AS WE MAINTAIN OUR
LEAN OPERATION AND CONTINUE TO EFFICIENTLY INVEST TO SUPPORT OUR
BRANDS.
OPERATING INCOME DECREASED 19.2%, AND MARGIN WAS 17.0%. THE
CONSUMER PRODUCTS PROFITABILITY ALTHOUGH LOWER THAN LAST YEAR, IS
STILL STRONG. THE CONSOLIDATED MARGIN WAS DRAGGED DOWN BY EXPORTS
AND ACQUISITIONS.
COST OF FINANCING WAS PS.$313 MILLION IN THE THIRD QUARTER COMPARED
TO PS. $181 MILLION IN THE SAME PERIOD OF LAST YEAR REFLECTING: I)
A HIGHER INTEREST EXPENSE FROM INCREASED DEBT ANDSIGNIFICANTLY
HIGHER INTEREST RATES; II) A DIFFERENCE IN EXCHANGE RATE GAIN OF
PS. $10 MILLION COMPARED TO PS. $47 MILLION IN THE PREVIOUS YEAR ;
AND III) LESSINTEREST GAIN.
NET INCOME DECREASED 29.2% AND EARNINGS PER SHARE FOR THE QUARTER
WERE $0.28. EBITDA DECREASED 17.8% TO PS. $1.9 BILLION IN THE
QUARTER.
DURING THE LAST TWELVE MONTHS WE INVESTEDPS. $3,859 MILLION (PS.
$3,751 MILLION IN CAPEX AND ACQUISITIONS AND PS. $108 MILLION IN
SHARE BUY-BACKS) AND DISTRIBUTED PS. $4,787 MILLION IN DIVIDENDS.AS
OF SEPTEMBER 30, THE COMPANY HELD PS. $6.0 BILLION IN CASH AND
EQUIVALENTS.TOTAL NET DEBT AS OF SEPTEMBER 30, 2017 WAS PS. $13.3
BILLION, COMPARED TO PS. $10.9 BILLION ON DECEMBER 2016. LONG-TERM
DEBT COMPRISED 92% OF TOTAL DEBT AND ALL DEBT IS DENOMINATED IN
MEXICAN PESOS.IN DOLLARS, UNDER US GAAP, NET SALES INCREASED 10% IN
THE QUARTER, OPERATING PROFIT DECREASED 13% AND NET INCOME
DECREASED 24%.SHARE BUYBACK PROGRAM YEAR TO DATE
2017
2016SHARES REPURCHASED 3,141,564 7,474,327YTD FINANCIAL RESULTS
MILLION PESOS9M'17 9M'16 CHANGE
NET SALES $28,334 $26,279 7.8%GROSS PROFIT 9,989 10,234 (2.4)%
OPERATING PROFIT 5,191 6,044 (14.1)%NET INCOME 2,963 3,601
(17.7)%
EBITDA 6,410 7,277 (11.9)%
FINANCIAL POSITION
MILLION PESOS
AS OF SEPTEMBER
2017 2016
ASSETSCASH AND CASH EQUIVALENTS $ 6,013 $ 8,939
TRADE AND OTHERRECEIVABLES 5,907 5,966
INVENTORIES 3,201 2,989
PROPERTY, PLANT ANDEQUIPMENT 17,177 15,649
DERIVATIVE FINANCIAL INSTRUMENTS 2,851 4,024
INTANGIBLE ASSETS AND OTHERS 3,476 2,353
TOTAL $38,625 $ 39,920LIABILITIES AND EQUITY
BANK LOANS CURRENT $ 175 $-
CURRENT PORTION OF LONG TERM DEBT 1,500 2,500
TRADE PAYABLES 4,401 4,268EMPLOYEE BENEFITS 1,085 1,226
DIVIDENDS PAYABLE 2,467 2,380PROVISIONS AND OTHER LIABILITIES 1,725
1,787
CURRENT INCOME TAX PAYABLE 117 352LONG TERM DEBT 20,515 19,999
DEFERRED TAXES 1,288 1,445OTHER LIABILITIES 456 228
EQUITY 4,896 5,735TOTAL $38,625 $ 39,920
CASH FLOWMILLION PESOSNINE MONTHS ENDED SEPTEMBER
2017 2016PROFIT BEFORE TAX $4,302 $5,234DEPRECIATION 1,219
1,233
OTHER 889 810CASH USED IN OPERATIONS (2,859) (3,819)
NET CASH FLOW FROM OPERATING ACTIVITIES 3,551 3,458CAPITAL
EXPENDITURES (1,940) (2,030)
REPURCHASE OF SHARES (110) (300)
BORROWINGS 3,163 3,567
DIVIDENDS PAID (2,436) (2,351)
PAYMENT OF BORROWINGS & NET INTEREST (3,393) (1,467)
NET (DECREASE) INCREASE IN CASH (1,165) 877
EFFECT OFEXCHANGE RATE CHANGES ON CASH (283) 128
CASH AND EQUIVALENTS AT THE BEGINNING OF PERIOD 7,461 7,934
CASH AND EQUIVALENTS AT THE END OF PERIOD 6,013 8,939
CONFERENCE CALL INFORMATION
THE 3Q17 CONFERENCE CALL WILL BE HELD ON FRIDAY, OCTOBER 20, 2017
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 CONFERENCE CALL WILL BE AVAILABLE THROUGH OCTOBER
27, 2017. TO ACCESS THE REPLAY, PLEASE DIAL US +1(877) 919-4059,
INTERNATIONAL +1(334) 323-0140; CONFERENCE ID: 16304290
KIMBERLY-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