Kimberly-Clark Corp.

founded: 1872

Contact Information:

headquarters: po box 619100
dallas, tx 75261 phone: (972)281-1200 url: http://www.kimberly-clark.com

OVERVIEW

Kimberly-Clark manufactures and distributes consumer tissue products, personal care products, feminine care products, and baby care products. Kimberly-Clark products include Huggies diapers and Pull-Ups training pants, Scott paper towels, Kotex products, Kleenex, and Depends personal protection garments. Kimberly-Clark products are sold in more than 150 countries globally, and approximately 1.3 billion people around the world use their products.

COMPANY FINANCES

Kimberly-Clark's financial performance has been consistently strong. Even in 2001, one of the most difficult financial years in two decades, the company's cash operations grew by 6 percent to $2.3 billion. Net sales grew 3.9 percent from $13.98 billion in 2000 to $14.52 billion in 2001. In early 2002 shares were $63.67, having reached a 52-week high of $68.96 and a 52-week low of $52.06. In 2001 earnings per share were $3.04, down from $3.34 the previous year, and Kimberly-Clark shares paid cash dividends of $1.11, up from $1.07 in 2000.

Kimberly-Clark's CEO Wayne Sanders stated that several factors impacted the company's performance in 2001. The high cost of natural gas and electricity, along with a strong U.S. dollar, cost investors $.18 per share. The sluggish economy impacted Kimberly-Clark's newly-developed business-to-business division. A weak global economy also contributed to the decline in profits. Operating profit in Latin America and Asia fell from $329.7 million in 2000 to $245.2 million in 2001. Financial difficulties in Latin America, particularly in Argentina and Brazil, prompted Kimberly-Clark to streamline in 2001, and the company closed four small plants. The company also closed a technical paper mill in North America.

Kimberly-Clark management remained optimistic and predicted the delivery of sales growth of 6 to 8 percent annually, as it had consistently done in the past. The company's strategy included a continued global expansion, particularly in the emerging economies of Latin America and Asia.

ANALYSTS' OPINIONS

Standard & Poor's rated Kimberly-Clark's conservative, diverse approach favorably, and the company maintained an AA/Stable/A-1+ credit rating in 2001. Although the paper products industry only grows by a small amount annually, between 2 and 3 percent, growth remains stable. The company's global sales and opportunity for growth, particularly in the health care industry, combined with its relatively low debt, were deemed positive in S&P's rating of Kimberly-Clark.

HISTORY

In 1872 four young business men: John Kimberly, Havilah Babcock, Charles Clark, and Frank Shattuck, combined their ideas and with $30,000 established Kimberly, Clark and Company in Neenah, Wisconsin. By 1880 Kimberly, Clark and Company had grown and incorporated under the name Kimberly & Clark Company, with $400,00 in capital stock. Nine years later, the company built a town around Kimberly Mill, just east of Appleton, Wisconsin. In 1879, brothers Irvin and Clarence Scott, formed a paper company with $300 cash and $2,000 borrowed from Irvin's father-in-law.

Both companies grew and were leaders in the paper products industry. Scott Paper introduced the first paper towel in the United States in 1907, and Kimberly-Clark set up the Cellucotton Products Company to sell Kotex feminine pads in 1920. Scott Paper's strategy for building brand loyalty used catchy slogans such as "It's the counted sheet that counts," for its toilet tissue ads in 1916, and the catchy title of "Thirsty Fibre," for its cross-weave paper towels in 1921.

The two companies merged in 1995, and the new company became a Fortune 100 global consumer products company with annual revenues upwards of $13 billion.

STRATEGY

Kimberly Clark's formula for success lay in diverse products. The company introduced the disposable cold cream towel, Kleenex facial tissue, in 1924. Six years later, the company marketed the tissues as disposable handkerchiefs and sales skyrocketed. Kimberly-Clark became an industry leader once again in 1978 when it introduced Huggies diapers. The brand has consistently been the top selling disposable diaper since it hit the market shelves. The company hit two more sales jackpots in 1989 with Pull-Ups training pants and in 1998 with Huggies Little Swimmers disposable swim pants.

Another important factor in Kimberly-Clark's strategy has been their ability to go global. Through brand marketing and global acquisitions, the company has consistently sold brands that rank first or second in their markets around the globe. Between 1993 and 2001, the company made more than 40 acquisitions around the world which helped Kimberly-Clark establish leading market shares in 80 countries. By working with global retailers such as Wal-Mart, Carrefour, Ahold and Costco, the company further strengthened its global sales.

CURRENT TRENDS

Growing and developing global economies drove many of Kimberly-Clark's business decisions and acquisitions through the 1990s and early 2000s. After establishing brand loyalty in the United States, and securing a modest, but predictable growth rate, the company expanded abroad and predicted their greatest growth would be in countries whose economies were still improving, such as Latin America and Asia.

In 2002 the company predicted growth in the global markets, as only 10 percent of Asian consumers and 30 percent of Latin American consumers used tissue products. In 2001 nearly two-thirds of the company's sales came from outside the United States, compared to one-third 10 years earlier.

PRODUCTS

Kimberly-Clark is the manufacturer and distributor of a variety of paper and personal care products including: Huggies and Goodnites diapers, Pull-Ups training pants, Little Swimmers swim diapers, Scott towels and toilet tissue, Kotex feminine pads, Kleenex facial tissues, Depend and Poise adult undergarments, Scott toilet tissue, Andrex tissue, Page tissue, and Safeskin latex gloves.

Kimberly-Clark also has a non-consumer division, which it developed into its business-to-business (B2B) division in 2001. The B2B division manufactures and markets health care products and technical paper products, and comprises 25 percent of the company's global sales. The rest of the company's sales are in its personal care division, which makes up 40 percent of sales, and consumer tissue, which makes up 35 percent of sales, divisions.

CORPORATE CITIZENSHIP

Kimberly-Clark established it charitable arm, the Kimberly-Clark Foundation, in 1952. The foundation supports programs and organizations in the communities where it operates. Since 1993 the foundation has contributed more than $4 million to schools and nonprofit organizations, has awarded more than $16 million in scholarships, and has awarded $16.5 million in employee matches to the United Way and other nonprofit organizations.

GLOBAL PRESENCE

When Kimberly-Clark purchased Scott Towels in 1995, overnight it became a global Fortune 100 company. Kimberly-Clark operates in nearly every country on the planet and has manufacturing facilities in 42 countries. Its global presence has helped the company to quickly expand its overseas markets and, in 2001, two-thirds of the company's sales came from outside the United States, compared with one-third in 1990. Kimberly-Clark established its global presence in part due to acquisitions like the 2001 purchase of Italian diaper business, Lines. The company made 40 such acquisitions between 1993 and 2001, helping it to increase its global reach.

FAST FACTS: About Kimberly-Clark Corp.

Ownership: Kimberly Clark is a publicly traded company on the New York Stock Exchange.

Ticker Symbol: KMB

Officers: Wayne R. Sanders, Chmn. and CEO, 55, 2001 base salary $950,000, bonus $1,110,304; John W. Donehower, SVP and CFO, $440,000; Thomas J. Falk, Pres. and CEO, 58, $675,000; Kathi P. Seifert, EVP, 53, $480,000; O. George Everbach, SVP, Law and Govt. Affairs, $455,000

Employees: 64,000

Chief Competitors: Kimberly-Clark's key competitors include Playtex and Proctor & Gamble.

EMPLOYMENT

Kimberly-Clark was ranked number 92 in 2001 on Fortune magazine's "Best 100 Companies to Work for." The company offers better than average salaries, with the average entry-level production worker garnering more than $30,000 a year, and an entry-level engineer earning more than $50,000 annually. Kimberly-Clark says its

CHRONOLOGY: Key Dates for Kimberly-Clark

1872:

Kimberly, Clark and Company is established in Neenah, Wisconsin; John A. Kimberly, Havilah Babcock, Charles B. Clark, and Frank C. Shattuck joined to start the company with $30,000 in capital

1879:

Brothers Irvin and Clarence Scott formed Scott Paper Company with $300 and another $2,000 they borrowed from Irvin's father-in-law

1880:

Kimberly, Clark and Company changes its name to Kimberly & Clark Company, and incorporates with a capital stock of $400,000

1889:

Kimberly Mill builds and develops a town three miles east of Appleton, Wisconsin; the town was built along the Fox River, and the company constructed 60 houses and a hotel

1890:

At a time when toilet tissue was still an "unmentionable" product, Scott Paper had become the nation's leading producer

1906:

Kimberly & Clark is reorganized and incorporated as Kimberly-Clark

1907:

Scott Paper introduces the first paper towel in the country, the Sani-Towel, for use in Philadelphia classrooms to prevent the spread of the common cold

1915:

Kimberly-Clark begins to manufacture Cellucotton, which was first used as bandage material for soldiers in World War I

1920:

After the war, Kimberly-Clark found another use for Cellucotton and began production and sales of Kotex feminine pads; because the company was afraid the move might tarnish its reputation during a time when people didn't openly discuss menstruation, the company formed a subsidiary, Cellucotton Products Company, under which to manufacture and market the products

1955:

Scott Paper becomes the first company to advertise toilet tissue on national television

1978:

Kimberly-Clark introduces Huggies diapers, and they soon become the top selling disposable diaper in the country

1980:

Kimberly-Clark introduces Depend incontinence products and hired actress June Allyson for the ad campaign, "Get back into life"

1989:

Without the benefit of a test-marketing program, Kimberly-Clark invents and markets Pull-Ups training pants, which became an instant hit with parents

1995:

Scott Paper and Kimberly-Clark merge in a $9.4 billion deal, creating a Fortune 100 company with annual revenue of more than $13 billion

2000:

Kimberly-Clark posts a sales record for the fourth quarter and full year of 2000; the company's fourth quarter sales were $3.6 billion, an increase of 5.1 percent over the previous year

work environment is casual, comfortable, professional, and respectful, and the company values teamwork, integrity, and respect.

SOURCES OF INFORMATION

Bibliography

harris, lori. "kimberly-clark corp. ratings." standard & poor's, 4 october 2001.

"snapshot report." market guide, 22 march 2002.

stenqvist, alf. "stable outlook for european forest products despite challenging market conditions." standard & poor's, 13 march 2002.

For an annual report:

on the internet at: http://www.kimberly-clark.com

For additional industry research:

investigate companies by their standard industrial classification codes, also known as sics. kimberly-clark corp.'s primary sic is:

2676 sanitary paper products

also investigate companies by their north american industry classification system codes, also known as naics codes. kimberly-clark corp.'s primary naics code is:

322291 sanitary paper product manufacturing