Kimberly-Clark Corp. Barclays 19th Annual Global Consumer Conference

Okay. All right. Thanks for having us here, Lauren. Great conference, and we're excited to be here. Powering Care, we introduced, as Lauren said, at our Investor Day back in the spring of 2024, and we've been operating on that pretty consistently. It really has three big planks. Plank number one, we call externally, Lauren, Accelerate Pioneering Innovation. Internally, we call it Onslaught, because that's really the intent of what we're looking for, which is an onslaught of pioneering innovation, marketing, and activation. But I think the core idea there is, hey, to understand what consumer needs are that are unmet. We want to deliver obvious superiority. And then for us, superior performance is another way to deliver superior value, and so that's our big focus there. The second big plank is what we call Optimize its Margin Structure.

We felt like we had some room to improve in terms of our cost structure. We really think about that as, how do we offer the best possible product at the lowest possible cost? Internally, it is not lower cost, it is lowest possible cost. We operate that way, and we have made strong progress, as you have seen over time, enhancing our margins. The third plank is Wire the Organization for Growth. Historically, Kimberly-Clark was a very decentralized company, which led to a lot of positive things, Lauren. Very entrepreneurial, very agile in markets, but we under-leveraged our scale. A big part of Wiring the Organization for Growth is, how do we leverage our scale more effectively and enable ourselves to go faster by bringing global might to the local fight? I will pause there. I would say, since 2024 when we have been operating, I think it has helped us deliver consistent organic growth.

I think we are in our 10th quarter of volume and mixed growth. We have expanded our margins and really dramatically reduced our earnings volatility, which you may remember from the bad old days.

Yeah. Thanks for that. Maybe I'll lead off, Lauren, and I'll ask Russ and Nelson to comment with a little more detail. But I would say the headline for us is the categories we operate in, I would say, are very durable and resilient, and our focus is on superior value, and expanding the categories. That's really how we're driving our growth. The resilient and durable category part, the reality is, if you look at our categories like diapers, adult care, bath tissue, they really, if left alone, grow with population growth. Right? That's the thing. It's not a fast-growing category. It tends to grow with population. But we feel like we can accelerate that category growth by adding premiumization into the mix, and that's what we've done in our two largest markets, in North America and in China.

I think back when I started with the company, I think we were about a 70% business was mixed, driven by value in our value performance tiers. Today, we're over 80% premium. China, if you went back to 2019, was 6% premium. Today, it's well over 50%. So I think one way we accelerate it is bring value-added innovation to drive the premiumization of the category, and I think that's been working. Then the other big area is, we feel like we can expand the category as category leaders by driving category consumption. So an area that we focused on more recently in the last three years was on Kleenex, and we've been able to successfully drive household penetration, over the last three years, by focusing on the category growth drivers.

I think we've seen, Russ, maybe about, I think 7% compounded growth over the last three years on Kleenex. So there are ways that we think about that we can drive it. I would say your note on what's been happening this year, I think, one, I would say the category's been choppier. We have seen an uptick in promotional intensity, by competitors over the last few quarters, and whether they're new small brands or some of our major competitors, we have seen that occur. I think our point on it is, and you've heard me say this before, Lauren, is it doesn't really make sense for us to try to rent additional share through promotion. The reason I say that, in our categories, since they grow with the population, they're kind of fixed consumption in a lot of ways.