Kimberly-Clark Sees Cost Savings Of Up To $550 Mln In 2021 Under Restructuring

(RTTNews) - While reporting its first-quarter financial results on Monday, Kimberly-Clark Corp. (KMB) said that it initiated the 2018 Global Restructuring Program in 2018 in order to reduce its structural cost base and bolster its flexibility to invest in its brands, growth initiatives and capabilities critical to delivering future growth.

According to the company, the program will make its overhead organization structure and manufacturing supply chain less complex and more efficient.

Kimberly-Clark expects the program will generate annual pre-tax cost savings of $500 million to $550 million by the end of 2021, driven by workforce reductions along with manufacturing supply chain efficiencies.

Under the program, Kimberly-Clark expects to exit or divest some low-margin businesses that generate about 1 percent of company net sales. The sales are concentrated in the consumer tissue business segment.

To implement the program, the company expects to incur restructuring charges of $1.70 billion to $1.90 billion pre-tax, or $1.35 billion to $1.50 billion after tax, by the end of 2020.

Looking ahead to fiscal 2019, Kimberly-Clark affirmed its outlook for organic sales growth of 2 percent and adjusted earnings per share of $6.50 to $6.70.