Kimberly-Clark 2008 Annual Report Download - page 41

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PART II
(Continued)
Commentary:
2007 versus 2006
Percent Change in Net Sales Versus Prior Year
Total
Change
Changes Due To
Volume
Net
Price Currency
Mix/
Other
Consolidated ............................................. 9.1 4 1 3 1
Personal Care ............................................. 12.2 8 — 3 1
Consumer Tissue .......................................... 8.2 1 2 4 1
K-C Professional & Other ................................... 8.0 3 1 3 1
Health Care .............................................. (2.4) (5) — 1 1
• In North America, net sales of personal care products increased nearly 8 percent primarily on the
strength of increased sales volumes. Product innovations spurred volume growth, with a double-digit
gain for Huggies baby wipes, high single-digit growth for Huggies diapers and mid single-digit
increases for the Corporation’s child care and incontinence care brands. Child care sales volumes
benefited from the late third quarter introduction of GoodNites Sleep Boxers and Sleep Shorts, a unique
offering in the youth pants category. Meanwhile, sales volumes of Kotex feminine care products were
below year-ago levels. Net selling prices increased about 1 percent.
Net sales of personal care products in Europe increased about 11 percent, principally due to favorable
currency effects. Higher sales volumes of more than 2 percent were offset by lower net selling prices.
The sales volume gains reflect higher sales of Huggies diapers and baby wipes across the region,
including a more than 2 percent volume gain for Huggies diapers in the four core markets—United
Kingdom, France, Italy and Spain. The lower net selling prices were due to meeting competitive
promotional activity.
In the developing and emerging markets, net sales increased nearly 21 percent driven by a more than 13
percent increase in sales volumes. The growth in sales volumes was broad-based, with particular
strength throughout most of Latin America and in South Korea, China and Russia. Favorable currency
effects, primarily in Australia and Brazil, added about 6 percent to the higher net sales while net selling
prices were about even with last year.
• In North America, net sales of consumer tissue products rose more than 5 percent due to nearly
3 percent higher sales volumes and about 2 percent higher net selling prices. Sales volumes for
bathroom tissue and paper towels increased 5 percent and 4 percent, respectively, on growth for Scott
bathroom tissue and Viva paper towels reflecting product improvements for these brands. Net selling
prices were impacted by promotional activity, late in the year, in support of product upgrades, including
the Corporation’s improved Cottonelle bathroom tissue, as well as to support facial tissue in anticipation
of a seasonal pick-up in sales volumes that had not yet occurred because of a weaker cold and flu season
in the fourth quarter of 2007.
In Europe, net sales of consumer tissue products increased approximately 9 percent, principally due to
favorable currency exchange rates. Improved product mix was negated by an overall sales volume
decline of about 1 percent that resulted from the Corporation’s 2006 decision to shed low-margin
business following the sale or closure of certain facilities in the region. Sales volume increases for
Andrex bathroom tissue and Kleenex facial tissue were not sufficient to offset the withdrawal from the
low-margin business. Net selling prices remained about the same as in the prior year.
In the developing and emerging markets, net sales increased more than 12 percent. About half of the
increase was due to favorable currency effects. Improved product mix of nearly 3 percent was tempered
21