Consumer goods maker Kimberly-Clark said it will reorganise into three business units as it looks to simplify operations and cut costs.
The Huggies maker said it would incur about $1.5 billion (€1.4 billion) in one-time restructuring and reorganisation costs over the next three years.
Kimberly-Clark's reorganised segments will include its business in North America, the international personal care segment and the international family care and professional businesses.
The company said it expects to complete its transition to the new organisational structure by the end of 2024. The actions are expected to generate about $200 million (€184.7 million) of selling, general and administrative savings in the next few years.
Kimberly-Clark also said its planned supply chain modernisation is expected to generate more than $3 billion (€2.8 billion) in gross productivity and $500 million (€461.7 million) in working capital savings that will be used for growth investments.
'Next Chapter Of Growth'
Mike Hsu, chair and chief executive officer stated, "Over the past five years, our global team's dedication and strong execution have positioned us to fully leverage the scale we've built and to catapult Kimberly-Clark into its next chapter of growth.
"We are building on the consumer centricity and commercial advantages we've established by moving to a more agile and focused operating structure that we are confident will help accelerate our proprietary pipeline of innovation in right-to-win spaces and improve our growth trajectory, profitability, and returns on investment."
The company added that its focus will be on driving 'a step-change in performance' with the help of new operating model that leverages three synergistic forces: accelerating pioneering innovation, optimising its margin structure and wiring the organisation for growth.
In January, the Kleenex tissue maker missed expectations for fourth-quarter net sales and profit due to slowing price hikes.
News by Reuters, additional reporting by ESM.
