Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

Kimberly-Clark Corporation (NYSE:KMB)

Q3 2013 Earnings Conference Call

October 22, 2013 10:00 AM

Executives

Paul Alexander – Vice President of Investor Relations

Thomas J. Falk – Chairman and Chief Executive Officer

Mark A. Buthman – Senior Vice President and Chief Financial Officer

Analysts

Ali Dibadj – Sanford C. Bernstein & Co. LLC

Wendy Nicholson – Citi Investment Research

Gail Glazerman – UBS Warburg

Chip A. Dillon – Vertical Research Partners, LLC

Caroline Levy – CLSA

Chris Ferrara – Wells Fargo

Bill Schmitz – Deutsche Bank

Jason English – Goldman Sachs

Javier Escalante – Consumer Edge Research

Lauren Rae Lieberman – Barclays Capital

Olivia Tong – Bank of America Merrill Lynch

Operator

Ladies and gentlemen, thank you for your patience in holding. We now have your presenters in conference. Please be aware that each of your lines is in a listen-only mode. At the conclusion of today’s presentation, we will open the floor for your questions. At that time, instructions will be given as to the procedure to follow, if you’d like to ask a question.

It is now my pleasure to introduce, Mr. Paul Alexander.

Paul Alexander

Thank you, and good morning, everyone. Welcome to Kimberly-Clark’s Third Quarter Earnings Conference Call. With us today are Tom Falk, Chairman and CEO; Mark Buthman, Senior VP and CFO; and Mike Azbell, Vice President and Controller.

Here is the agenda for our call. Mark will begin with a review of third quarter results. Tom will then provide his perspectives on our results and the outlook for the year. We’ll finish with Q&A. As usual we have a presentation of today’s materials in the Investor section of our website, which is www.kimberly-clark.com.

As a reminder, we will be making forward-looking statements today. Please see the risk factor section of our last Annual Report on Form 10-K for further discussion of forward-looking statements. We will also be referring to adjusted results and outlook. Both excludes certain items described in this morning’s news release. The release has further information on these adjustments and reconciliations to comparable GAAP financial measures.

Now, I’ll turn it over to Mark.

Mark A. Buthman

Thanks, Paul. Good morning. Let’s start with the headlines. First, we achieved organic sales growth of 5% in the third quarter highlighted by 10% growth in K-C International. Second, we increased adjusted earnings per share of 7%, including benefits from organic sales growth and strong cost savings. And third, we’re on track with our overall capital plan, including working capital, capital spending, and allocating cash to shareholders.

Now, let’s cover some of the details of the quarter starting with the top line. Third quarter sales were $5.3 billion, even with last year. Underlying organic sales rose 5%. That included higher volumes of 3% and 1 point of growth from both higher net selling prices and improved product mix, while sales in conjunction with our restructuring activities and unfavorable currency rates each reduced net sales by more than 2%.

I’m encouraged by the pickup in organic sales growth in the quarter, which Tom will talk more about in a few minutes. Third quarter adjusted gross margin was 34.4%, up 20 basis points from last year, adjusted operating profit rose 1 point with an operating margin of 15.6%, that’s up 10 basis points compared to prior year.

Results benefited from our organic sales growth and $70 million of FORCE cost savings, on the other hand we absorbed $55 million of cost inflation and $25 million of negative currency translation effects, currency transaction effects also with the comparisons.

Total spending between the lines was down 10 basis points as a percent of sales as slightly lower marketing costs were mostly offset by higher administrative and research spending. Third quarter adjusted effective tax rate was 30.2%, that’s down from last year, but in line with the low end of our full-year target of 30% to 32%. Equity income was up 14% as K-C de Mexico had another solid quarter.

Finally, our lower diluted share count added $0.04 of EPS compared to last year. So putting all together, third quarter adjusted earnings per share were $1.44, that’s up 7% year-on-year.

Now, turning to cash flow, our cash provided by operations in the third quarter was $912 million, up 8% compared to $844 million last year. The increase included benefits from working capital and lower pension contributions partially offset by payments related to the changes we’re making in Europe.

We continue to manage primary working capital well. Our year-to-date cash conversion cycle is down four days compared to full-year 2012. So we’re on track to exceed our original one-day improvement target.

In terms of capital allocation, third quarter dividend payments and share repurchases totaled more than $450 million. We repurchased $150 million of KMB stock in the quarter, and we continue to expect full-year share repurchases of $1.2 billion.

Now, I’ll highlight a few areas from our segment results for the quarter. In Personal Care, organic sales rose more than 5%, driven by volume growth of 5%. Performance was led by K-C International, where organic sales were up 10%. Third quarter Personal Care operating margins were solid at 17.9%, although down just slightly year-on-year.

Moving to Consumer Tissue, organic sales were up 5%, net selling prices increased 3% with higher volumes and favorable mix each adding 1 point to growth. The organic growth was driven by a 10% increase in K-C International and a 4% improvement in North America.

Consumer Tissue operating margins of 14.3% were up 80 basis points versus last year. Our margins continued to benefit from revenue realization strategies, cost savings, and disciplined management of our between the lines spending.

Turning to K-C Professional, organic sales were up 5%, net selling prices and volumes each increased 2%, product mix was favorable by 1 point. Performance was led by K-C International with 11% organic growth. Organic sales were up low-single digits in both North America and Europe. Our KCP team continues to deliver strong margins. This quarter margins were 18.4%, up 90 basis points year-on-year.

Lastly, healthcare organic sales were up 4%, driven by higher volumes in our medical device business. Healthcare operating margins of 17.4% improved nicely both sequentially and compared to prior year with benefits from organic sales growth, cost savings, and below average spending between the lines.

So that wraps up my comments, to recap; we generated solid organic sales growth, we improved adjusted earnings per share, and we continue to allocate capital in shareholder-friendly ways.

Now I’ll turn it over to Tom.

Thomas J. Falk

Thanks Mark and good morning everyone. I’ll comment on our third quarter results, mostly focused on our top line and then I’ll address our full year outlook. So, let’s start with the third quarter. As Mark just mentioned, we had a good performance in a number of areas, including organic sales growth, cost savings, cash flow, and bottom line growth.

I’m particularly encouraged with our organic top line growth of 5% in the quarter, that’s a solid improvement compared to the 3% growth that we delivered in the first half of the year. As I mentioned on our July earnings call, we’re focused on driving better top line growth by taking full advantage of our innovation in marketing programs and our sales capabilities.

Our top line performance was strong in K-C International in the third quarter. We had 10% organic sales growth there overall, and we had excellent progress behind our targeted growth initiatives in that part of the world. For example in our diaper business, organic sales were up 45% in China, 35% in Russia, and 20% in Brazil in the third quarter.

Our growth initiatives and product innovations continued to perform very well in these markets. Elsewhere in K-C International, we delivered double-digit organic sales growth in our adult care business, our baby wipes business, and in K-C Professional; and organic sales were up high-single digits in our feminine care business. So, our underlying growth in K-C International remains very healthy. Our teams are also improving mix and implementing price increases where we can in response to currency headwinds.

Outside of K-C International, our top line performance in the third quarter picked up somewhat in several of our high margin businesses. That includes our North American Huggies diapers business, K-C Professional, and HealthCare. Our Huggies volumes were up 4% with benefits from improved Snug N Dry diapers supported by effective marketing communications and competitive promotion activity.

Looking ahead in the first quarter of 2014, we’ll be reducing package counts on the majority of our Huggies business in North America in conjunction with product innovation, and these moves will help fund the innovation in the right price points across our line-up.

In North American K-C Professional, our organic sales were up 3% in the third quarter. That compares to a 1 point decline in the second quarter and reflects somewhat better volume performance sequentially in those categories. In healthcare, medical device volumes rose 8% after a disappointing first half of the year, when these volumes were only up slightly.

And finally, we continue to drive solid top line growth on our Poise, Depend, U by Kotex and Cottonelle brands in North America, and all of these brands are benefiting from product innovations and effective marketing campaigns. So overall, I’m encouraged by our third quarter results, particularly on the top line.

Now let me move to the outlook. We continue to execute our global business plan strategies for long-term success. So that means, we’ll pursue targeted growth initiatives, we’ll bring innovation to the market, we’ll drive cost savings programs, and we’ll allocate capital in shareholder-friendly ways.

At the same time, we expect to deliver very good financial performance this year in 2013 with solid organic sales growth and strong improvements in adjusted earnings per share. On the top line, year-to-date organic sales were up about 4%, so we expect our full year to be right in line with our 3% to 5% target.

On the bottom line, we’re narrowing our full year outlook by raising the low-end of our previous guidance range by $0.05 a share. We now expect to deliver adjusted earnings in the range of $5.65 to $5.75 per share. That represents year-on-year growth of 8% to 10%, which is towards the high end of or even slightly above our long-term global business plan objective.

In terms of commodities and currencies, our expectations for the full year are both generally tracking with our previous plan. In terms of cost inflation, total pulp costs are similar to our prior expectation, while polymer costs have moved slightly higher recently. Overall, we expect total cost inflation for the year to be towards the middle of or perhaps in the upper half of the $150 million to $250 million range we had previously assumed.

Regarding currency rates, we continue to expect about 1 point to 2 point drag from currency in our full-year sales. Through the first nine months of the year, the impact has been about 1.5%. If recent spot currency rates hold for the balance of the year, the full-year impact should be slightly similar to or slightly worse than the year-to-date drag from currency.

We’re offsetting the currency and commodity cost headwinds through strong focus on driving profitable volume growth, improving net realized revenue, delivering on our FORCE cost savings, and closely managing discretionary spending. The environment that we operate in continues to be challenging, but I am encouraged by our execution so far this year.

So to summarize, we had another good quarter of financial performance. We expect strong overall results for the year and we remain optimistic about our prospects to deliver attractive returns to our shareholders. So that wraps up our prepared remarks and we’ll now be happy to take your questions.

Question-and-Answer Session

Operator

Ladies and gentlemen, at this time, the floor is now open for your questions. (Operator Instructions) Our first question comes from Ali Dibadj with Sanford Bernstein.

Ali Dibadj – Sanford C. Bernstein & Co. LLC

Hey, guys, how are you?

Mark A. Buthman

Good morning, Ali.

Ali Dibadj – Sanford C. Bernstein & Co. LLC

Good morning. Hey so, I guess – we included – continue to be pleasantly surprised by the KCI progress, especially in Personal Care, and you mentioned 45% growth in China, 35% in Russia, 25% in Brazil. Can you help us just aggregate that a little bit more in terms of distribution gain, share gain, category growth, to give us a look at the sustainability of some of those growth rates?

Mark A. Buthman

Yes, I mean, I would say, if you looked at the category in both those markets, it’s probably grown high-single digits in China and Russia in particular, probably not quite as much in Brazil. And in both cases, Russia had a lot of product innovation, launched boy/girl diaper pants, really doing very well in markets at premium price, so that also helps us on the mix front.

Some distributions in Russia probably a little bit more in China as we continue to expand into more cities, but in China, we’ve launched some tier-6 products, which we would call are super-premium above the norm in the market, and so that’s also helping us from a mix and new category penetration. So clearly outperforming the category and taking some share in all those markets, but doing with innovation and a little bit of geographic expansion.

Ali Dibadj – Sanford C. Bernstein & Co. LLC

So – but it sounds like the way you ordered that, it sounds like it’s more kind of same-store expansion as opposed to geographic expansion driving some of this growth. Is that a fair assessment?

Mark A. Buthman

Yes, I’d say that’s probably more of the case this year than last where it was probably the opposite case last year. I wouldn’t predict that we’re going to grow in China from 45% forever. The compounding is pretty scary, but they are definitely on a good footing over there and they’ve got lots of growth opportunities ahead.

Ali Dibadj – Sanford C. Bernstein & Co. LLC

Okay. And then given some of your experiences with SCA whether it would be when they bought (inaudible) in Mexico or when they bought the P&G tissue business in Europe. Given the potential SCA deal in China with Vinda, what should you expect, what do you think you’re going to see if that actually goes through from them as such a good competitor?

Mark A. Buthman

Ali, we don’t have much of a tissue business in China. Our business there, we got a little bit of facial tissue, but we’re really mostly focused on driving diapers and fem care, and then we’ve things like baby wipes and other areas we built – we’ve built out, first China is a fairly tough competitive tissue market with Vinda, Hengan, APP, all there were substantial investments, and so we have chosen not to play as aggressively in that space.

Ali Dibadj – Sanford C. Bernstein & Co. LLC

Well, I understand totally, what about leveraging that distribution for SCA’s nonwovens introduction into that geography?

Mark A. Buthman

Yes, I haven’t seen that yet, again they’re not going to be a controlling shareholder for a while, and there are a plenty of folks in China between Uni-Charm, [Cowl] (ph), Procter, us, as well as Hengan, it’s going to be a little different competitive set than they would have run into elsewhere in the world.

Ali Dibadj – Sanford C. Bernstein & Co. LLC

Okay, cool. And then just my last quick question, also surprised about Personal Care Europe growth numbers understanding that’s going through transformation of the smaller business, but can you give us a sense about the strategies there both short-term with the, I guess, 7% it was I think and then going forward?

Mark A. Buthman

Well, really this was the strategy all along where we said the diaper business was consuming resources and was probably starving the good performing businesses that we had in Europe, and so we put more emphasis on our DryNites business in Europe which is going great, and Pull-Ups and we’ve seen all those businesses take off, we picked up some additional distribution as we created some shelf space and we have been able to take advantage of some of that and some of it is obviously gone to private label or other competitors, but the additional emphasis, a little bit of additional marketing spend, some innovation and some additional distribution has helped those businesses pick up a little bit. So I’d say baby wipes was probably the star of that show in the quarter, but DryNites and Training Pants in Europe also had a solid quarter.

Ali Dibadj – Sanford C. Bernstein & Co. LLC

Okay, thanks so much guys.

Mark A. Buthman

Thanks, Ali.

Operator

Your next question comes from Wendy Nicholson with Citi Research.

Wendy Nicholson – Citi Investment Research

Hi, good morning.

Mark A. Buthman

Hi, Wendy. Go ahead.

Wendy Nicholson – Citi Investment Research

Just a follow-on question, with regard to KCI and the profitability there, it sounds like you’re doing a lot of innovation at the premium end, but I’m still surprised with everything we hear about the level of competitive activity in those markets. I’m hugely pleasantly surprised that your margins are hanging in there, so this year it looks like you’re going to have a healthy bump in your KCI profit margins. Is that sustainable? Do you think the KCI business can continue to expand its margins, kind of as we look out into 2014 or is that a business that’s just going to need more reinvestment do you think?

Mark A. Buthman

I mean the strategy, there is to grow and improve margin as particularly as we get to scale in some of the markets where we’ve been investment spending. Yes, I think the challenge in KCI this year has been -- currency has been probably the biggest headwind from a margin standpoint, and we’ve had both currency issues and higher commodity costs in some markets, and so that’s probably been the biggest challenge. That team has done a great job of delivering cost savings and finding ways to fund their growth out of their own P&L and doing it by basically holding their margins. I think they are slightly higher year-to-date, I think they were down slightly sequentially, so…

Wendy Nicholson – Citi Investment Research

But if we could disaggregate, underlying that margin improvement, is your marketing spending up significantly year-over-year and is it just because hey now you have got local manufacturing, I think in China that’s helping to offset that? I’m trying to get a feel for, hey have there been one-time cost savings initiatives that are going to run out, and is that going to be harder for you to continue to up the ante in terms of investment spending, or is this a just hey, positive mix is going to keep the ball rolling?

Thomas J. Falk

Yes, if you look at, our marketing spending is – in KCI is probably pretty flat in dollar terms year-over-year, but would be up and local currency because of the exchange rate. We kind of look at it market-by-market and see as our share of voice where we wanted to be in each of the markets where we’re trying to drive growth, and we’re pretty comfortable with the investment spend levels. I mean, I think like anything else teams would always like to spend more and we’re trying to balance that. We’re still delivering our results and hitting a target for the year.

Wendy Nicholson – Citi Investment Research

Got it, okay. And then just the second question on the restructuring, the 2 point headwind to revenues, when did that come to an end? When you’re going to be fully done with that?

Thomas J. Falk

It should roll off, and first quarter of 2014 would be the last big one. We had a little bit still in the second quarter of this year, so it should be fully rolled off by mid next year.

Wendy Nicholson – Citi Investment Research

Got it, terrific. Thank you so much.

Thomas J. Falk

Thanks, Wendy.

Operator

Our next question comes from Gail Glazerman with UBS.

Gail Glazerman – UBS Warburg

Hi, good morning.

Mark A. Buthman

Good morning, Gail.

Gail Glazerman – UBS Warburg

Can you talk a little bit more about some of the product volume changes in North American Personal Care, the growth in Huggies, which I think is the first that we’ve seen in awhile, the continued weakness in Little Swimmers and also kind of the snapback in feminine care? Is there any more color you can offer?

Thomas J. Falk

Yes, sure. In Diapers, we were really not strategically where we wanted to be on price in second quarter. So we had to adjust a couple of price points on key packings. You saw a little bit of that and about 1 point drag on price in North American diapers. We also tuned our marketing messages a little bit. We had launched innovation in the second quarter. It wasn’t hitting as hard as we wanted, so we’ve changed the ad campaign in third quarter and saw that pick up nicely.

So, great product performance where it has got the right messages on shelf and we are – it’s one of those where you wish you would have done in the second quarter, but we didn’t and we’ve checked and adjusted and saw the results in the third quarter.

In the Child Care business, the toughest comp of the year, last year third quarter, they were up double-digits and it had more to do with timing of promotion that shipped in the third quarter last year that shipped in the second quarter of this year. And so if you look at our Child Care business year-to-date, I think the volume is down about a point, share is pretty flat, and so that’s reflective of the category overall.

We continue to have as you know a pretty high share in that space. Fem Care saw a good high-single digit growth, had a little bit weaker second quarter. Some of that is stuff that will show up and share more in the fourth quarter as it shipped a little later in the quarter. So overall, we feel pretty good about the momentum in U by Kotex and you are seeing that that play out in the marketplace.

And then in the Adult Care business, its continued good in innovation and execution really a solid share performance, I think we had a record share for both the pan [ph] employees in the quarter and retailers were happy with the movement as well.

Gail Glazerman – UBS Warburg

Okay. And just in Healthcare, the pickup, I guess there were some reference in the room at least about better surgical activity, is that something you see is sustainable given the bump that you’ve had over the last few quarters. Is that coming back and getting stronger or…?

Thomas J. Falk

I would say, the date is a little less, immediately available. So we kind of get visibility now in the second quarter surgeries and I’d say I was getting less negative, in the second quarter, so that’s a positive and I think in some cases, some of the improvement in devices was additional penetration where we’re able to use our pain pumps on more procedures and our sales teams had some wins in the marketplace with the device products that we’re selling.

And so it was probably a function of a little bit better surgical environment and a little bit better category penetration that drove into the quarter.

Gail Glazerman – UBS Warburg

Okay. Just one last question given everything that was going on in DC over the last few weeks kind of as you exited the third quarter as is the fourth quarter, did you see any shift in volume patterns in the U.S. or not so much?

Thomas J. Falk

Not really I mean mostly people need diapers and bathroom tissue everyday, no matter what’s going on in Washington and that was the case, we don’t have a very big direct government business so that was not a factor for us to any large extent. And we’ll see and we start to get some consumer confidence data if they had an effect from that standpoint, but it’s probably little early to read that. I know talking to some of our retail partners they did see a dip in stores that were near U.S. military bases, but that didn’t overall for us play out and much from a category standpoint.

Gail Glazerman – UBS Warburg

Okay, thank you.

Thomas J. Falk

Thank you.

Operator

Our next question comes from Chip Dillon with Vertical Research.

Chip A. Dillon – Vertical Research Partners, LLC

Yeah. Hey, good morning Tom. Hey as you look into next year, it looks like well first of all looking at 2012 and 2013, you’ve been able to hit $300 million plus in the FORCE savings and you’ve done so much restructuring now with the European initiative, I guess towards the end. Should we still expect that kind of rate of FORCE savings and maybe its early days, but could you give us an idea of what you’re thinking about capital wise next year knowing that you haven’t really done much in the North American tissue area that I know of, in terms of your planned equipment there?

Thomas J. Falk

Yeah, sure on the FORCE savings, pardon me we’re pretty happy, we’ve taken that up from several years ago, we were around $150 million a year to solidly above $250 million now for the last couple of years, and that’s certainly our aspiration is to stay there and to continue to drive that and as I look at our teams around the world that are doing more than we’ve ever done to drive transformation of their cost structure we’ve really got a very robust pipeline of cost savings coming.

And so that’s been great to help us this year overcome some of the currency headwinds and higher commodity costs. And so certainly we’d expect a healthy level of FORCE savings to continue in 2014 and beyond. And on the capital front, I’d expect CapEx to be consistent with our global business plan and that of 4% to 5% of sales kind of ranges about where we’re going to be and so give or take around $1 billion and $1.1 billion something like that we will give you more specific guidance in January.

But that’s about where we’re roll up and I think from our capacity standpoint with all the restructuring we’ve done in the North American family care arena, and all the good productivity gains we’ve gotten from our Lean and FORCE savings we’ve actually freed up quite a bit of capacity out of our own assets base just by getting more productive and efficient with our existing footprint which is really free capacity for us.

Chip A. Dillon – Vertical Research Partners, LLC

Got you. And moving on as you look at China I know in past calls, you’ve talked about how your penetration has progressed in terms of number of cities have you – can you tell us where that stands maybe today versus a year or two ago and is it now more of an issue of, if you have accomplished the geographic penetration now is just getting more shelf space in the cities you currently are in?

Mark A. Buthman

Yes, I mean, I think our plan was to end this year around 90 cities and we are on track to hit that. I think we started the year at 70 and two or three years ago, it was 45 or 50 something like that. Probably there are different measures you can look at, but there’s a couple hundred cities in China with over a 1 million people and I think so, the next city gets decreasing in size and scope.

So – but I’d say, we’ve gotten the good build out in the major areas and we’re continuing to make sure we’re on the map. We’re starting to get to the point where we got enough scale that we can do national advertising and its cost effective now or that probably wasn’t the case two or three years ago. So I think we are at a critical math now and certainly are planning and keeping growing that.

Chip A. Dillon – Vertical Research Partners, LLC

Gotcha. And then just the last question, you mentioned the initiative in the first quarter on the diaper front in terms of the package counts. Can you give us an idea of what sort of the net effect of that will be kind of on a unit price basis and on average?

And then secondly, as you look at 2014, you came into 2013 obviously with a real head of steam and had tremendous growth early in a year. And just looking at your guidance, if you hit the midpoint of your range, it would be basically flat at $1.37. So as you look at 2014 besides the diaper count and obviously the – or the ongoing organic growth, are there other initiatives that you could maybe point us to in terms of staying on that, on your plan, mid to up or single-digit growth rate?

Mark A. Buthman

Yes, and again we’ll give you more color on 2014 on the January call. If you look at the diaper question, it’s essentially going to be matching up with competitive counts in the marketplace broadly and averaged about a 7% count change now, some of that will be spent back. And so I would say the yield will be – probably be less than half of that in terms of what we’ll have to work with in terms of P&L, but we’ll see how that plays out as it roles out in late first quarter of next year.

And for 2014, the big question will obviously be currency rates. And so when you look at the kind of drag that currency had on this quarter, if you look at the combination of translation and transaction, it’s about a 3.5 points. And at the peak it was more like a 5 point drag, when you look that where rates have peaked. So that will be the big bet for 2014. If we still see a big currency drag in 2014, it will be tough to get to the high-end of the range, but we still think that’s the right range for us long-term to develop our plan around.

Chip A. Dillon – Vertical Research Partners, LLC

Thank you very much.

Mark A. Buthman

Thanks, Chip.

Operator

Our next question comes from Caroline Levy with CLSA.

Caroline Levy – CLSA Americas LLC

Good morning, everybody. A couple of questions, the first is around North American pricing environment in general, because I think one of your large competitors have signaled clearly a big focus on the North American market, so just is there any specific change in behavior that you’ve noticed, any fear that there will be more discounting. I think you mentioned in that there has been some discounting if you could just talk to that?

Mark A. Buthman

Yes, I think that in the second quarter we saw some discounting in some packs and some outlets, and we didn’t mess up to those quickly as we could have. We corrected that in the third quarter. I said that’s more than normal competitive behavior. We had a major launch underway and competitors typically are more active to protect their business when there is a major launch activity, much like we would do if the situation were reversed.

I think some of the leadership on price count activity in the marketplace would signal that there is some behavior happening on that front that would indicate that there is some innovation happening in desired place for that, which is rational behavior. So I wouldn’t say we’ve seen anything that’s unusual in the North American market at this point in time.

Caroline Levy – CLSA Americas LLC

That’s very good news. And just moving to Latin America, a lot of companies, maybe not HPC in particular, but had experienced a big slow down in Brazil. Is everything you see such as things that even though the consumer is stretched to a business doesn’t get impacted?

Thomas J. Falk

We’ve got a phenomenal team in Brazil and they’ve done a great job of delivering in a challenging environment. And so while they have lost couple of years, they have missed their top line target in dollars, they’ve grown much faster than plan and local currency, and have better come very close to their dollar profit target.

So they’ve done it with driving a lot of innovation rapidly into the marketplace and pulled things forward to get them in the category. We’ve also been expanding into the Northeastern part of Brazil and just opened a new facility in Wahiawa State this year. And so that has given us more capacity to serve that big part of the market. And so we’ve had a little bit of geographic expansion even in the market like Brazil, where we’ve been for a while and that certainly helped.

Caroline Levy – CLSA Americas LLC

Great. And then the last one is over time, I think one of the things the push backs investors often use on Kimberly, is that it’s very commodity reliant company. And if you could maybe articulate why things have changed over the last four to five years enough that you probably are able to manipulate price and SG&A spend around fluctuations in input cost. So do you think that you really are indeed vulnerable to big gross margin swings?

Thomas J. Falk

Well, I think that’s one that we haven’t had in the last couple of years, a big commodity push. But I’ve been around long enough. I remember times when we did and so we went for about three years where commodities were double what we thought and that definitely put pressure on margins for a while. We put that around and have a more robust cost savings program and I think driving innovation is giving us a better margin profile.

But we also that’s something that we’re watching for and trying to do a better job of predicting and getting ahead of where we can. So with kind of the third quarter trend, where you get both commodity and currency going against you a little bit was a challenge, but the fact that we overcame that gives us confidence going forward.

Caroline Levy – CLSA Americas LLC

Thank you so much.

Thomas J. Falk

Thank you, Caroline.

Operator

Your next question comes from Chris Ferrara with Wells Fargo.

Thomas J. Falk

Hey, good morning, Chris.

Chris Ferrara – Wells Fargo

Good morning guys. One of the goal just the B2B businesses right, so HealthCare and K-C Professional both got better this quarter after I guess FORCE straight margins [ph] are good. Can you just kind of characterize that this just a change in trend, do you think the businesses are better with some of the drag that were hitting the row over for now or do you just think this is one quarter?

Thomas J. Falk

Well, if I want to start with KCP, I mean this had really pretty good execution and have delivered terrific profit margins. Our innovation has been successful in the marketplace. But we probably lost a bit of business in the part of the portfolio that we weren’t selling the new innovation to and so they’ve kind of gone back and try to make sure we’re picking up any of those opportunities that we might have lost.

And I thought to North American business for KCP turnaround in the quarter was encouraging. So that will be one example of that. And our KCP team would still see a lot of international opportunity as we see in KCI generally. And so we think we’re in very early days in China in that business and there is a huge opportunity in that market industrializes for all types of products. And so I do see a pretty robust pipeline coming for KCP in particular.

HealthCare as you know, that there is some different economic factors that work, when – in the past we’ve had pandemics, you’ve seen huge volume spikes and then it falls off or you have to lap it at the next year. So there is a little bit more volatility. I think we’re all trying to figure out in North America in particular, what’s going to happen from a healthcare spend overall? What’s going to happen? What procedures? And so there is probably a little bit more variability around our outlook for that business going forward. But it was great to see a solid execution in the third quarter and good profit performance.

Chris Ferrara – Wells Fargo

Yes, and I guess profit was up 19%, I think in the release you talked about lower marketing in R&D, what’s going on there? Is that sustainable reduction or is there something…?

Mark A. Buthman

Well, I would say in HealthCare, if you kind of look at the year-to-date average as a better predictor of the profitability of the business, we’ve had some unusual things that hit the second quarter that made a little lower than normal and probably some of those things are reversed and benefited the third quarter that made a little higher than normal. But I’d say, if you look at the year-to-date number that’s probably a pretty good proxy for our run rate for that business.

Chris Ferrara – Wells Fargo

Great, thanks. And just last thing, could you just remind me up from the downtown diapers in North America, I heard that the yield on that is going to be probably half of what the 7% downtown, but what do you expect in terms of volume, like assuming in profitability kind of do the same sorts of things.

Did you expect that volume, unit volume will take a little bit of a hit and even though you’re trying to kind of padded in with promotional spending and then you recovered that in six months, or do you expect really in order [ph] to category volume?

Mark A. Buthman

I mean historically every time we’ve done this, it’s been around a while, but done a few of these. Here you do see a little bit of household inventory destocking, because the packages have less diapers and the consumer said about the same average number of packages than they’re holding slightly fewer diapers.

So their usage per day doesn’t change just as a result of the pack count. But their average inventory level drops by roughly half of the comp decline if you’re an economist that would probably be the right answer and we’ve typically seen that for a period of time. So I would expect that will be a drag in the first half of next year and eventually it kind of stabilizes.

Chris Ferrara – Wells Fargo

Got it. Thanks a lot.

Mark A. Buthman

Okay. Thanks, Chris.

Operator

Your next question comes from Bill Schmitz with Deutsche Bank.

Bill Schmitz – Deutsche Bank

Hey, guys, good morning.

Thomas J. Falk

Good morning, Bill.

Bill Schmitz – Deutsche Bank

Hey, can you just tell us like how that you sort of sold off a decent chunk at European business, what percentage of total sales are KCI now? I know you put it in the 10-K, but I was hoping to get like a sneak peak?

Mark A. Buthman

Yeah, KCI in the third quarter was 39% and year-to-date it’s probably high 30%, 37%, 38% we might guess some.

Bill Schmitz – Deutsche Bank

Okay. And while sort of KCI sort of outside the Americas probably see predominantly your Personal Care business. I mean are there any sort of plans or sort of build out that consumer tissue piece of that business outside of the Americas?

Mark A. Buthman

Bill at this point, we got so many opportunities we’re chasing in Personal Care are not fully exploited. I mean if you look at the KCI business, it’s still heavily overweight diapers and fem care. And so it’s underweight, baby wipes is underweight, adult care both Depend on employees, Childcare, Little Swimmers, GoodNites are all still a very small businesses.

So we said we’ve got lot of opportunity to build out KCI across the broad Personal Care portfolio. That’s a much higher return, faster growing category. There is already a lot of pad tissue in emerging markets; the category is more fully penetrated. So there maybe some areas around household towels or facial tissue, but as we get some innovation, we can bring to market. But we probably will do it in a more capital efficient way than maybe we would have above the footprint built out in the Americas.

Bill Schmitz – Deutsche Bank

Gotcha. Is there any more incremental room to kind of take pricing down the lower tiers in lot of the emerging markets? I know you had a big initiative about two years ago to get into sort of like Tier-3 and Tier-4 diapers in China. But how far long are you in this business still sort of predominantly Tier-5 and even Tier-6 diapers?

Mark A. Buthman

I mean, I’d say in most emerging markets, we’re in multi-tier and it’s more of a Tier-3, 4. China was sort of the outlier that we started in Tier-5 basically when we relaunched Huggies several years ago, and then built down into the mid-tier, and so we’re in Tier-3, 4, 5 and 6 in China basically. I mean, we just sort of created Tier-6, so we’re the only ones in it. But there have been other markets. If you look at market like Mexico, we’d be present in all tiers. Brazil would be probably a combination of Tiers-2, 3, and 4. Russia is mostly 3 and 4.

So we’re really trying to figure out what – where is the market today and then how do we make sure we can bring a differentiated product that delivers a good experience for mom.

Bill Schmitz – Deutsche Bank

Gotcha. And then just lastly on the sort of commodity side, I mean it seems like you guys are sort of fairly unconcerned about the inflation, but it seems like your MBFK I guess was up $25 in October, to look at how pulp is starting to creep up, I mean why are you kind of less concerned than some of the spot prices might suggest?

Mark A. Buthman

Yes, MBFK is up, but eucalyptus which we use a lot more of is down, so we averaged and our outlook for that was – is $7.90 for the fourth quarter, and we give you that outlook in July with more $8.05, and on October it’s below $7.70. So we’re picking it up on other fiber sources. Recycled fibers, another one that we buy about 1 million tons of recycled fiber a year, and our outlook in July was for that, that averaged 245 and now we’re saying it’s going to average 214. And so we’re seeing benefits in other fiber resources that you might not have a much visibility too that, that’s helping us on that front. Oil is certainly one that – that was – that $30 million of other cost inflation in the quarter was mostly polymer, that’s oil related.

Bill Schmitz – Deutsche Bank

Okay. I mean if you look at the Bloomberg number and maybe I’m getting too far in the weeds there, but it looks like eucalyptus pulp prices are going up. So am I just looking at the wrong data set or you guys buying it differently or better, because you have to pick business in Brazil?

Thomas J. Falk

I mean we’ve got a market-based contract in Brazil, but you’re seeing more capacity come online and at least the stuff we’re – the average forecast we’re seeing has been headed down this year went rather than up. So I haven’t looked at Bloomberg, but that maybe of futures price or something like that, but…

Bill Schmitz – Deutsche Bank

Okay.

Mark A. Buthman

15% of our mix I think is now eucalyptus…

Bill Schmitz – Deutsche Bank

Yeah.

Mark A. Buthman

About 25% is northern softwood, so the mix of fiber we use is really important.

Bill Schmitz – Deutsche Bank

Gotcha. And then just one last one I promise, the capital allocation, have you guys changed your view, because it seems like you’re starting to get very under-levered and, this year it seems like it’s going to payout more than 100% of your net income in dividends and share repurchase. So is it that going to be kind of the ML going forward?

Thomas J. Falk

As you know, we want to be solidly in the middle of the A range. And so if we drift up to the upper end of the A range, we may increase our debt just a little bit to validate that back and you may notice that Mark and his team borrowed about $800 million in May, I think to fund a $500 million debt retirement in August. And so we increased our debt by about $300 million and then that extra amount went into share repurchases versus our plan for the year.

Bill Schmitz – Deutsche Bank

Great. Thanks so much, guys.

Thomas J. Falk

All right. Thanks, Bill.

Operator

Your next question comes from Jason English with Goldman Sachs.

Jason English – Goldman Sachs & Co.

Hey, good morning, folks.

Mark A. Buthman

Good morning, Jason.

Jason English – Goldman Sachs & Co.

Congratulations on another good quarter.

Mark A. Buthman

Thank you.

Jason English – Goldman Sachs & Co.

Hey, the question just in terms of maybe what’s changed, I think you sounded slightly more cautious tone last on your reported earnings, caution that you could commence the lower end if FX rates stayed about where they are today. So what’s changed?

Thomas J. Falk

Well, I would say a couple of things. We had a weaker volume quarter and we told you we weren’t happy about our second quarter organic top line. And we expected to do better in the back half of the year, and we saw that show up in the third quarter, and so that that obviously gives you a little bit more confidence when the volume and innovation is working. I also would say, at the time of the call it was probably the height of the currency of mania and that seems to have pulled back a little bit as the FED tapering has been pushed out a little bit. And so that’s probably given us a little bit of relief on that and it’s not quite as bad of a currency drag as we would have thought at late in July.

Jason English – Goldman Sachs & Co.

One area that surprised us this quarter was the strength in North American tissue and 4% organic sales growth, really good momentum all throughout this year. It’s surprising, because it stands in pretty stark contrast to the Nielsen data where we aggregate your tissue business. And trends have been decelerating and are now probably in the red. What’s the differential that’s driving the outperformance for this business versus the Nielsen data?

Thomas J. Falk

I haven’t analyzed this versus Nielsen. We look at our outlook shares and our shares sequentially in tissue were slightly negative. We did take price across facial and Cottonelle by a sheet count. And so of the organic top line in North America was positive price, negative volume as we would track it, so that maybe a bit of what you are seeing if you are looking at unit volume trends. But broadly, we’ve had a very strong year in our Family Care business, so we’re pretty happy with the results.

Jason English – Goldman Sachs & Co.

But no concern that there is too much inventory out there, nothing to be concerned about that right?

Thomas J. Falk

These are very high-Q, low value businesses, so retailers really don’t want these in their warehouse. So we’ve pretty aggressive on helping them with inventory returns.

Jason English – Goldman Sachs & Co.

It makes sense. Thanks a lot guys. I’ll pass it on.

Thomas J. Falk

Thanks, Jason.

Operator

Our next question comes from Javier Escalante with Consumer Edge Research.

Javier Escalante – Consumer Edge Research, LLC

Hi.

Mark A. Buthman

Good morning. How are you?

Javier Escalante – Consumer Edge Research, LLC

Good morning. A couple of questions actually, it’s a little bit of a follow-up on Jason’s questions with regards to the disconnect of track data and shipment data. Essentially, the [indiscernible] is that the non-track channels basically which is essentially [indiscernible] you maybe growing very strong double-digits started for our assessment?

Mark A. Buthman

And I guess, however, we won’t give a specific customer data on a call like this. We are doing well with Costco this year, we do well with Dollar Stores. There are other E-Com channels that are on track that are typically growing. So I would say broadly we tend to look more at our – all outlet share and try to make sure, we’re fully participating in the category growth. And Nielsen is one set of data points that we would look at, but we tend to look at the broad data set more than anything else.

Javier Escalante – Consumer Edge Research, LLC

But when you say higher we got the same weak volumes, but in any event, moving into the decision of removing sheet out of facial tissue and what is the other category that you mentioned as your de-sheeting in tissue?

Mark A. Buthman

Cottonelle that tissue.

Javier Escalante – Consumer Edge Research, LLC

So basically, at least in track channel data, we see increases of private label volume share, significant increases. And considering that I would imagine that cost disruption in the U.S., it should be by now over. Do you think that given that you have pricing – private label gaining share and cost coming back would probably regain some of the shares that they lost in the past nine months. Do you think that is if volume rates going forward or pricing rates going forward, you don’t see that happening?

Mark A. Buthman

Yes, if you look at a lot of the private label share gains this year was, I think in at least partly response to GP’s service issues where they actually lost some shelf space to private label. We picked up a little bit as did our other primary competitor. And I think as we see GP coming back into full customer service, I would say at this point we’re seeing a more normal level of competitive activity in the marketplace.

But we’re pretty comfortable with our overall performance in tissue and that, we’ll still be competitive as we need to in the marketplace, but with generally rising pulp prices that’s also typically what the big driver is of long-term tissue price. So we’d say in the near-term that’s feeling more positive than not.

Javier Escalante – Consumer Edge Research, LLC

Understood. And finally on Huggies, the rebound in the quarter, which also we didn’t see in track channel data, to what extent do you think that the fact that [Indiscernible] lowered their own diaper count in the second half of September could have been a benefit this quarter in personal care in North America?

Mark A. Buthman

Yeah, I think our Huggies business was pretty solid throughout the quarter and so there may have been some changeover late in the quarter that was some small advantage, but I would say it was pretty consistent growth throughout the quarter.

Javier Escalante – Consumer Edge Research, LLC

Okay, thank you very much.

Mark A. Buthman

All right, thank you Javier.

Operator

Our next question comes from Lauren Lieberman with Barclays.

Mark A. Buthman

Good morning, Lauren.

Lauren Rae Lieberman – Barclays Capital, Inc.

Good morning. Firstly, I want to ask you about with just with marketing spending and some of you guys discussed advertising and some with strategic marketing. So I realize there might be kind of mixing the conversation, but having it down slightly this quarter and I believe that earlier in the year too, it’s slightly different than what you’ve last talked about I think that was, you made it sound like it was going to increase in the back-half of the year. So if certainly if I mean if that’s incorrect and secondly why not increasing the spending when top line is coming in strongly, you’ve simply got sort of somewhat excess profitability to work with?

Mark A. Buthman

It’s a good question and as we look at the strategic marketing, it’s a combination of advertising and promotion. It’s down about $20 million in the quarter, about half of that is the exit of diapers from Europe and currency. So the fact that rates have, have dropped, so the other half of that was an actual decline in program spending. Advertising itself is flat year-on-year. So all of that decline was really what we call consumer promotion, which would be a combination of things that would flow through that, that line in the P&L generally less, a little bit less activity.

And what we look at is, are we spending at the right level and getting the current top line performance for the spending that we’re making. And overall, we’re pretty happy with the organic top line in the quarter. And as we look at the key markets that we are investing in, we feel like we’re investing at about the right level.

And so it’s really above the ROI, and the next dollar spend, is that worth chasing or you bring it to the bottom line. And so I think each of our teams around the world look at that and then our global brand teams are also challenging that to make sure that we’re making smart investments if we got some flexibility in the P&L to do that.

Lauren Rae Lieberman – Barclays Capital, Inc.

Okay. That’s particularly interesting given that sales growth and organic did accelerate nicely, though it wasn’t step up in spend?

Thomas J. Falk

Yeah, but in local currency though just being flat is a pretty big increase and spend in those market. So we’ve looked at KCI and say, yeah, we’re actually in spending more in local currency in those markets.

Lauren Rae Lieberman – Barclays Capital, Inc.

Okay, understood. And then I know it’s not a terribly large business that I just was curious about the really strong performance in K-C Professional in Europe because that it give us 5% price and then you also had 3%-ish positive mix and volume made high numbers mix of long and short, all three features were very strongly positive. So can you talk a little bit about that that was sort of dramatic acceleration?

Thomas J. Falk

I think that might have been our overall year of business, Paul you got with that…?

Paul Alexander

Yeah, I mean Lauren we were up double-digits in K-C Professional in KCI and that’s what you’re referring to. In all three pieces we’re up nicely in terms of volume and pricing mix.

Lauren Rae Lieberman – Barclays Capital, Inc.

All right, yeah that’s it.

Thomas J. Falk

Yeah.

Lauren Rae Lieberman – Barclays Capital, Inc.

That’s how…

Thomas J. Falk

Yeah, that was really led by Latin America, but broadly was the strongest of those or that business is done well. But the European business in KCI was okay, during the quarter, looked a lot more like North America though and let’s say the UK is probably coming back a little bit. You’ve seen that in some of the economics statistics and Germany was okay and Southern Europe is a challenge.

Lauren Rae Lieberman – Barclays Capital, Inc.

And then with that like you corrected me, thank you. The Latin America heading into process you said Latin America is being particularly responsible for that acceleration. Was there any kind of change in sales resources? Do you increase the sales force or broadened the footprint you’re able to reach that it was big number to file?

Thomas J. Falk

Our K-C Professional team is really driving their global strategy. In fact we would say overall we did well on Latin America. We’re not satisfied with what we’re doing in China. We’re putting more resource behind KCP in a lot of markets around the world and investing behind that. Unlike consumers doesn’t show up in a strategic A&P is probably shows up more in selling expense and G&A than in the traditional strategic marketing bucket.

Lauren Rae Lieberman – Barclays Capital, Inc.

Okay, great. Thank you so much.

Thomas J. Falk

Thanks Lauren.

Operator

My next question comes from Olivia Tong with the Bank of America Merrill Lynch.

Olivia Tong – Bank of America Merrill Lynch

Thank you. I want to touch a little bit on KCI margins clearly you’ve done quite well in terms of international sales. But how do you think about margins going forward? Do you expect them to progress faster than the corporate average or is there more spending to come specific to KCI?

Thomas J. Falk

Yeah, that’s a balance. We’re really tracking KCI to continue to narrow the margin gap versus the rest of the company and so they’ve made some progress this year, although currency headwinds have held them back from some of the progress that they help to make. And so we’re trying to balance investing for growth in the places where we got great opportunity and then looking for opportunities to take cost out to help fund our margin improvement. And so we’re satisfied with the progress, but we expect to continue to do more.

Olivia Tong – Bank of America Merrill Lynch

Got it, thanks. And then on North American diapers, obviously you’ve had some promotion in price adjustments this quarter, which I would expect to is probably going to continue, and then you’ve got the diaper downtown on the new product. So what do you think the net impact of both price and mix will be going forward in North America? Are we still looking at either positive price mix from that plus 7%, even though it goes down to plus 3% or is that the promotion offset that?

Mark A. Buthman

Well, you should see some positive, but it won’t start to happen until probably late first quarter of 2014. So for the next couple of quarters, you’ll still see some drag from price promotion activity.

Olivia Tong – Bank of America Merrill Lynch

Got it. And then just lastly, can you just talk about trends month-by-month both in developing markets and emerging markets. Did you see you mentioned Huggies Diapers in North America, but did you see any difference in trends coming from July through August through September?

Mark A. Buthman

We’ve had a pretty solid consistent quarter throughout, I mean I don’t want to get in the habit of we’re giving out monthly data, but I’d say broadly it was a pretty solid quarter month-by-month.

Olivia Tong – Bank of America Merrill Lynch

Got it. Thank you so much.

Mark A. Buthman

All right. Thanks Olivia.

Operator

Our next question comes from Chip Dillon with Vertical Research.

Mark A. Buthman

Hey, Chip.

Chip A. Dillon – Vertical Research Partners, LLC

Hey, there. Just one last one here, I noticed the equity line really is trending very positively this year. It looks like 26% up – through the first nine months and so as you look at the future, could you talk a little bit about what’s really happening in Mexico, especially now that for example you have a different competitor down there and you see that kind of growth rate continuing or is there something else going on, on that line?

Mark A. Buthman

As we go through Mexico, I think they announced late last week and had their call with their outlook. So I don’t want to trump whatever Pablo might have told you on the call. But we’ve been very happy with the year they’ve put together. It’s a tougher economic environment than they thought. So the Mexican economy was expected to grow kind of 4%, 5% in the last date I saw, it was just a little under 1%.

And so lots of exciting change happening in that marketplace. But that has probably also created some challenges in the short-term. There is lots of competition down there. So CMPC is pretty aggressive, FCA is pretty aggressive. So there is plenty of people that want to eat our lunch in Mexico. But the K-C de Mexico team has done a great job of delivering as they have for many, many years and I’d expect that to continue going forward, probably not at that same kind of growth rate. But they’re going to be a solid consistent top and bottom line performance for us.

Chip A. Dillon – Vertical Research Partners, LLC

Gotcha, thanks.

Mark A. Buthman

Thanks Chip.

Operator

Our next question comes from Ali Dibadj with Sanford Bernstein.

Mark A. Buthman

Hey…

Ali Dibadj – Sanford C. Bernstein & Co. LLC

Hey, thanks for the follow-up. I just want to get your view Tom on the North American consumer paper, consumer tissue business, your largest retailer said explicitly that they’re going to double down on investments in pricing in paper products and there is discussion about a lot of more capacity coming online both private label and kind of lower end brands. Just want to get a sense of what you make up all of that and that’s too much about nothing really in your view?

Thomas J. Falk

Well, I mean I would just start to see those guys not long ago and they want to grow their business in lots of categories. And so I think they’ll, Simon and his team are aggressively are doing that as this all of other retail customers. And so we’re doing well with our key customers in our family care categories and lot longer we’re one of those and we want to make sure that we make it easy for consumers to find Kleenex and Cottonelle and Scott where they choose to shop. So I wouldn’t say that’s a big change – we haven’t seen a big change in behavior at this point in time.

Ali Dibadj – Sanford C. Bernstein & Co. LLC

And we’re trying to connect the point specifically that they’re making about pricing in particular being a driver and the point about capacity coming online?

Mark A. Buthman

On the capacity front, I think the industry operating rate is still in the – around 90%, so there has been a lot of capacity that’s exited as much of the sales has come on. And where you have seen a little bit of private label share pickup, it hasn’t been in [indiscernible] variance that some had been concerned about. And so, overall there is a little bit of additional capacity, but it hasn’t been destabilizing the market pricing at this point in time.

Ali Dibadj – Sanford C. Bernstein & Co. LLC

And so you don’t see anything going forward that would change dynamics and consumer tissue in the U.S.?

Mark A. Buthman

Not at this stage. And we’re focused on driving innovation with better performing Kleenex. We’ve had some Cottonelle upgrades. We’ve got some great Viva and Scott Towel products out there. So we’ve got, and a good pipeline of innovation coming that will give us some news, we can talk about in 2014 and beyond.

Ali Dibadj – Sanford C. Bernstein & Co. LLC

Thanks very much.

Mark A. Buthman

Thanks, Ali.

Operator

Mr. Mark Buthman we have no further questions in the queue.

Mark A. Buthman

All right. Thank you for the questions and thanks David. We’ll wrap up with a quick closing comment from Tom.

Thomas J. Falk

So once again we were pleased with our organic top line performance and our continued execution of our global business plan and that we continue to make those benefits be available to our shareholders through dividends and share repurchases. So thank you again for your support of Kimberly-Clark.

Mark A. Buthman

Thank you.

Operator

Ladies and gentlemen that concludes today’s presentation. You may disconnect your phone lines and have a wonderful day.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Kimberly-Clark's CEO Discusses Q3 2013 Results - Earnings Call Transcript
This Transcript
All Transcripts