Kimberly-Clark consolidates operations

Related tags United states

Kimberly-Clark says it is combining its North Atlantic Personal
Care and Family Care businesses into a single organization under
the leadership of Steve Kalmanson. The announcement comes off the
back of a strong set of financial results for the first quarater,
reports Simon Pitman.

Kalmanson is currently Group President - North Atlantic Personal Care and will now head the new organization as Group President - North Atlantic Consumer Products. The position gives him responsibility for all the company's business operation in both North American and Europe, as well as related customer development and supply chain organizations.

This move follows the departure of Rob van der Merwe, Group President - North Atlantic Consumer Tissue, who has been named President and CEO of Paxar Corporation, which specializes in merchandising products for the retail and apparel industry.

Kimberly-Clark​ says that the creation of an integrated North Atlantic consumer products organization continues K-C's evolution into a more unified global organization and provides immediate advantages.

"It streamlines decision-making, increases our focus on partnering with customers and facilitates bringing innovative solutions to market more quickly,"​ Falk said.

As part of the reorganization, Don Quigley, President - North America Customer Development, has been promoted to President - North Atlantic Customer Development and will report to Kalmanson.

In this position, he will be responsible for helping identify and act more quickly on customer and shopper insights to drive sales and profitability for both K-C and its retail customers in Europe and North America.

The company also reported today that sales rose more than 5 per cent to $3.9 billion for the first quarter of this year, establishing an all-time quarterly record. Currency benefits boosted sales by nearly 3 percent, and higher sales volumes of the company's health and hygiene brands added 2 percent.

The company said that volume gains were highlighted by continued strength in developing and emerging markets in each of the company's business segments along with successful product launches in North America.

The top-line growth, along with continued success in reducing costs and a strong share repurchase program, contributed to the improvement in first quarter earnings per share.

Sales of personal care products increased about 4 per cent in the first quarter, driven by higher sales volumes, up 2 per cent, and currency-related benefits of 3 per cent. The company said that net selling prices declined 1 per cent, as response to competitive activity in diapers and training pants in North America and Europe was mitigated by improving prices throughout most of the developing and emerging markets (Asia, Latin America, the Middle East, Eastern Europe and Africa).Personal care sales in North America decreased 1 per cent versus the prior year. Sales volumes rose approximately 1 percent, while net selling prices and product mix were both off 1 per cent.

In Europe, competition remained intense and sales decreased approximately 4 per cent despite positive currency effects of about 6 per cent. Net selling prices were lower by approximately 6 per cent and overall sales volumes were down about 4 per cent.

In developing and emerging markets, personal care sales climbed 14 per cent on solid volume growth - with particular strength throughout Latin America. Currency benefits and higher selling prices also contributed to the gain, the company said.

Commenting on the outlook, Falk said, "Based on our results in the first quarter and our plans for the balance of the year, we remain comfortable with our previous guidance for 2005. Specifically, we are targeting sales growth of 3 to 5 per cent, consistent with our long-term objective."

In recent years Kimberly-Clark has been increasing its presence in the personal care sector. At the end of last year the company announced that it was extending its Huggies baby care range with a number of personal care products to back up its renowned diaper brand.

The company has also said that it plans to launch the newly extended Huggies cosmetics line into Europe during the course of this year.

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