Kimberly-Clark News and Products
Analyst’s Choice: Kimberly-Clark Turns Corner:
Recent Price: $62
P/E Ratio: 21
Shares (Millions) 548.3
5-Yr. Return on Equity: 30.1%
Long-Term Debt As % of Capital: 28%
52-Week Price Range: $69 9/16 – $44 13/16
Kimberly-Clark derives its revenue from three global businesses. Tissue-based products (54% of revenue in 1999) include popular brands such as Kleenex and Scott towels. In the U.S., the company ranks second among makers of personal-care products (40%). Here, leading brands include Huggies diapers, Kotex, and Depends. Kimberly’s health-care business (6%) consists of disposable surgical masks, drapes, and wound dressings. All told, the company has manufacturing facilities in 40 countries and sells its products in more than 150 countries.
Kimberly is steadily building its health-care business. Last September, the company completed its acquisition of Ballard Medical, a maker of catheters and disposable products for hospitals. In mid November, Kimberly-Clark agreed to acquire Safeskin. A former Forecasts recommendation, Safeskin is coming off a difficult year in which worldwide capacity for gloves for the health-care, high-tech, and scientific markets, should benefit from Kimberly’s distribution and marketing strength.
By combining its marquee Kleenex Brand with Scott’s Cottonelle, Kimberly has created a line of tissues boasting the virtues of durability and softness. In November, the company launched an improved Kleenex-Cottonelle bathroom tissue. The brand is the thickest premium bathroom tissue on the market. Kimberly-Clark’s brands account for 24% of the $4.2 billion U.S. bathroom tissue market, with the Kleenex-Cottonelle brand representing 50% of the total and the Scott brand, the leader in the value segment, accounting for the remainder.
Kimberly-Clark stumbled somewhat after its $9.4 billion merger with Scott Paper in 1995.
History: Products of Yesteryear: Current Products
1902 Waldorf: In 1872, when Kimberly-Clark’s founders set about creating a mission for the new company, one of their guiding principles was a pledge to “Manufacture the Best Possible Product.”
Waldorf was the first bathroom tissue manufactured by Scott Paper under its own trademark. Before this, Scott made private labels for its merchant customers. Scott had been manufacturing Waldorf for several years and purchased the brand rights in 1902. By 1921, Waldorf represented 64% of Scott’s total case sales. By 1940, Waldorf was the world’s largest selling brand of bathroom tissue.
In 1951, Waldorf changed colors from cream to white. By 1953, all Scott customers could purchase the new, attractive color, complete with a new wrapping design.
History: Kimberly-Clark History
1872: Kimberly, Clark and Company established in Neenah, Wisconsin, with $30,000 to start Kimberly-Clark and Co.
Four young businessman, John A. Kimberly, Havilah Babcock, Charles B. Clark, and Frank C. Shattuck, joined forces as partners in this Wisconsin village and put together the modest sum of $30,000 to start Kimberly-Clark and Co.
1879: Scott Paper Company founded in Philadelphia by Irvin and Clarence Scott.
Brothers Seymour and Irvin Scott ran a paper commission business for twelve years, but the poor economy in the 1870s forced them out of business. Irvin and his younger brother, Clarence, then decided to form their own company out of the remains of the first. Irvin reportedly borrowed $2,000 from his father-in-law and added it to the $300 the two brothers had to form the capital of Scott Paper Company.