How Have Kimberly-Clark’s Revenues, Expenses & EBITDA Changed Over The Last Five Years?

by Trefis Team
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Market
110
Trefis
KMB
Kimberly-Clark
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Kimberly-Clark (NYSE: KMB) generates most of its sales from just a few of its most popular brands – Huggies, Kotex, and Kleenex. However, the company has struggled to generate meaningful revenue growth of late, with its revenues declining by more than $1 billion in the last five years. This was primarily due to a challenging growth environment, driven by intense competition and low volume growth from developed markets. A majority of the revenue decline was witnessed in the consumer tissue business, driven by lower net sales and higher pulp costs. During the 2013- 2017 period, Kimberly-Clark’s expenses also declined by $1.5 billion, of which the Consumer Tissues and Personal Care segment accounted for most of this change in expenses. In terms of EBITDA, the Personal Care segment accounted for most of its growth during the same period.

We have created an interactive dashboard on how Kimberly-Clark’s revenues, expenses, and EBITDA have changed over the last five years and our estimates for 2018. You can adjust the expected segment revenue and margin forecast for 2018, and understand its impact on the company’s profitability and earnings.

We expect Kimberly-Clark to post a slight revenue growth in 2018, on the back of new innovations in Huggies Snug and Dry diapers, Goodnites Youth Pants, and Depends underclothing. This could also increase its market share in the global baby and feminine care market going forward from 14% (as of 2016). In addition, the company is looking at developing and emerging markets to drive growth, as it struggles to grow revenues in the North American market. The company has strong growth prospects in markets such as China and Brazil, primarily due to low penetration of its category products in these regions, and the likely increase in the consumption of these products with economic and population growth. Accordingly, we also expect developing markets to be a key driver for the company’s long-term growth.

Our price estimate of $121 for Kimberly-Clark implies a premium of around 7% to the market.

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