Kimberly-Clark de México, S. A. B. de C. V. (KCDMY) Q1 2025 Earnings Call Transcript

2025-04-25 14:09:08 ET

Kimberly-Clark de México, S. A. B. de C. V. (KCDMY)

Q1 2025 Earnings Conference Call

April 25, 2025 10:30 AM ET

Company Participants

Pablo González - CEO

Xavier Cortés - CFO

Conference Call Participants

Ben Theurer - Barclays

Bob Ford - Bank of America

Antonio Hernandez - Actinver

Joseph Giordano - JP Morgan

Eugenia Cavalheiro - Morgan Stanley

Juan Guzman - Scotiabank

Jeronimo de Guzman - INCA Investments

Presentation

Operator

Good day, everyone. And welcome to today's Kimberly-Clark de Mexico 1Q '25 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. Please note today's call will be recorded, and I will be standing by should you need any assistance. It is now my pleasure to turn the conference over to CEO, Pablo González.

Pablo González

Good morning, everyone. Thanks for participating on the call. We have a few things to share with you today. To begin, we'll go straight to results and then we'll make some brief comments about the quarter and our expectations going forward, as well as describe some important initiatives underway. With that, let me pass it on to Xavier.

Xavier Cortés

Thank you, Pablo. Good morning, everyone. During the quarter, our sales were MXN13.8 billion, a 0.3% increase versus the first quarter of 2024. Total volume was down 1.3% and price mix was up 1.6%. Consumer products and away from home decreased 1.4% and 4.2%, respectively. Exports were up 21% with double digits increases in both converted product and hard rolled sales. Cost of goods sold increased 7.4%. Against last year, SAM and resins were favorable, recycled fibers were relatively flat while virgin fibers and fluff compared negatively. The FX was significantly higher averaging 22% higher. Our cost reduction program once again had very good results and yielded approximately MXN450 million of savings in the quarter. These savings are mainly at the cost of goods sold level and are generated by sourcing, materials improvement and process efficiencies. Gross profit decreased 9.4% and margin was 38.2% for the quarter. Mix was negatively affected by lower margin hard roll sales. SG&A expenses were 5% lower year-over-year and as a percentage of sales were down 94 basis points. Distribution expenses are down as our investments to improve our footprint and streamline our logistic operations are yielding positive results. Operating profit decreased 12.5% and the operating margin was 21.5%. We generated MXN3.5 billion of EBITDA, a 10.9% decrease despite the 22% peso depreciation against the first quarter of last year....

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