Kimberly-Clark Kimberly-Clark Corp.Corp.David MizellDavid MizellMary VossMary Voss

4/19/20054/19/2005

Why is K-C a good Why is K-C a good company?company?

Strong Portfolio of BrandsStrong Portfolio of Brands International Growth PotentialInternational Growth Potential Innovation/Product ImprovementsInnovation/Product Improvements Continuing Cost ReductionContinuing Cost Reduction Good Management and Strong Good Management and Strong

Corporate GovernanceCorporate Governance Commitment to EnvironmentalismCommitment to Environmentalism

Company OverviewCompany Overview Founded in 1872 in Neenah, WI by John A. Founded in 1872 in Neenah, WI by John A.

Kimberly, Charles B. Clark and two other Kimberly, Charles B. Clark and two other partners.partners.

Company TimelineCompany Timeline First paper towel (Scott) invented in 1907First paper towel (Scott) invented in 1907 Kotex pads created in 1920Kotex pads created in 1920 Kleenex invented in 1924Kleenex invented in 1924 Huggies developed in 1978Huggies developed in 1978 Depends introduced in 1980Depends introduced in 1980 Pull-Ups developed in 1989Pull-Ups developed in 1989 Kimberly-Clark and Scott Paper Merge in 1995Kimberly-Clark and Scott Paper Merge in 1995 Neat Sheet introduced in 2002Neat Sheet introduced in 2002

BrandsBrands

Kimberly-Clark BrandsKimberly-Clark Brands Kleenex facial tissuesKleenex facial tissues Cottonelle toilet paperCottonelle toilet paper Scott and Viva paper towelsScott and Viva paper towels Kotex padsKotex pads Huggies, Pull-Ups, Depends, and Poise Huggies, Pull-Ups, Depends, and Poise

diapersdiapers Neat SheetNeat Sheet

Market ShareMarket Share Category 2004 2003

2002 Diapers . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . .38% 38%

40% Training, Youth and Swim Pants . . . . . . . . . . .69% 68% 73% Feminine Care . . . . . . . . . . . . . . . . . . . . . . . . . 20% 22%

23% Adult Incontinence Care . . . . . . . . . . . . . . . . . .56% 56% 55% Baby Wipes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40% 41%

42% Facial Tissue . . . . . . . . . . . . . . . . . . . . . . . . . . . 51% 53%

54% Bathroom Tissue . . . . . . . . . . . . . . . . . . . . . . . 29% 28% 27% Paper Towels . . . . . . . . . . . .. . . . . . . . . . . . . . . 19% 19%

19%

Financial PerformanceFinancial Performance Total RevenueTotal Revenue

$13,231,500,000 in 2002$13,231,500,000 in 2002 $14,026,300,000 in 2003$14,026,300,000 in 2003 $15,083,200,000 in 2004$15,083,200,000 in 2004

Basic net earnings per shareBasic net earnings per share $3.24 in 2002$3.24 in 2002 $3.34 in 2003$3.34 in 2003 $3.64 in 2004$3.64 in 2004

Market Cap is $31.04 BMarket Cap is $31.04 B P/E Ratio is 18.04P/E Ratio is 18.04

Kimberly-Clark’s Kimberly-Clark’s NumbersNumbers

Trailing P/E: 18.04Trailing P/E: 18.04 Forward P/E: 15.57Forward P/E: 15.57 Profit Margin (ttm): 11.40%Profit Margin (ttm): 11.40% Operating Margin (ttm): 16.62%Operating Margin (ttm): 16.62% Return on Assets (ttm): 10.22%Return on Assets (ttm): 10.22% Return on Equity (ttm): 26.56%Return on Equity (ttm): 26.56% Beta is .85Beta is .85

KMB 1 Year ChartKMB 1 Year Chart

KMB 5 Year ChartKMB 5 Year Chart

KMB 5 Year vs. S&P 500 KMB 5 Year vs. S&P 500 and DJIAand DJIA

Competitor ComparisonCompetitor Comparison Kimberly-Clark (KMB)Kimberly-Clark (KMB)

Market Cap:31.04BMarket Cap:31.04B Employees:60,000 Employees:60,000 Rev. Growth (ttm):5.10%Rev. Growth (ttm):5.10% Revenue (ttm):15.08BRevenue (ttm):15.08B Operating Margin Operating Margin

(ttm):16.62%(ttm):16.62% Net Income (ttm):1.77BNet Income (ttm):1.77B EPS (ttm):3.574EPS (ttm):3.574 P/E (ttm):18.04P/E (ttm):18.04

Proctor & Gamble (PG)Proctor & Gamble (PG) Market Cap:137.73BMarket Cap:137.73B Employees: 110,000Employees: 110,000 Rev. Growth (ttm):18.5%Rev. Growth (ttm):18.5% Revenue (ttm):51.49BRevenue (ttm):51.49B Operating Margin Operating Margin

(ttm):19.16%(ttm):19.16% Net Income (ttm):6.81BNet Income (ttm):6.81B EPS (ttm):2.513EPS (ttm):2.513 P/E (ttm):21.73P/E (ttm):21.73

Playtex Products (PYX)Playtex Products (PYX)Market Cap:625.23MMarket Cap:625.23MEmployees:1,500 Employees:1,500 Rev. Growth (ttm):1.4%Rev. Growth (ttm):1.4%Revenue (ttm):666.90MRevenue (ttm):666.90MOperating Margin Operating Margin (ttm):18.70%(ttm):18.70%Net Income (ttm):55.51MNet Income (ttm):55.51MEPS (ttm):.907EPS (ttm):.907P/E (ttm):10.85P/E (ttm):10.85

Industry AveragesIndustry Averages

Market Cap: 947.34MMarket Cap: 947.34M Employees: 8,100Employees: 8,100 Revenue Growth (ttm): 7.5%Revenue Growth (ttm): 7.5% Revenue: 1.60BRevenue: 1.60B Operating Margin (ttm): 3.90%Operating Margin (ttm): 3.90% Net Income: 14.31MNet Income: 14.31M EPS: .39EPS: .39 P/E: 16.87P/E: 16.87

KMB 1 Year vs. PG and KMB 1 Year vs. PG and PYXPYX

KMB 5 Year vs. PG and KMB 5 Year vs. PG and PYXPYX

Porter’s Five ForcesPorter’s Five Forces

Threat of New Entrants: LowThreat of New Entrants: Low Threat of Substitutes: HighThreat of Substitutes: High Bargaining Power of Buyers: Bargaining Power of Buyers:

ModerateModerate Industry Rivalry: HighIndustry Rivalry: High Bargaining Power of Suppliers: LowBargaining Power of Suppliers: Low

Financial ForecastFinancial Forecast

From company guidance:From company guidance: 3-5% Revenue growth expected3-5% Revenue growth expected Reduction of 150 million in cost each Reduction of 150 million in cost each

year for next couple of yearsyear for next couple of years Plan to repurchase 25 million shares Plan to repurchase 25 million shares

over the next 5 years over the next 5 years Capital spending 5-6% of salesCapital spending 5-6% of sales

Concern over rising commodity Concern over rising commodity pricesprices

Financial ForecastFinancial Forecast

Discounted Cash Flow Analysis Discounted Cash Flow Analysis returns a price of $77.40 per sharereturns a price of $77.40 per share

View excel spreadsheetView excel spreadsheet

Scenario AnalysisScenario Analysis Growth RatesGrowth Rates

- rates at 5% : 78.62 - rates at 5% : 78.62 - rates at 4% : 75.99- rates at 4% : 75.99 - rates at 3% : 73.44- rates at 3% : 73.44 WACCWACC

- WACC at 8% : 82.89- WACC at 8% : 82.89- WACC at 8.5% : 74.56- WACC at 8.5% : 74.56- WACC at 9% : 67.64- WACC at 9% : 67.64

Cost of Products SoldCost of Products Sold- at 65.40% : 66.92- at 65.40% : 66.92

Global Growth PotentialGlobal Growth Potential Sells products in more than 150 countriesSells products in more than 150 countries Manufacturing facilities in 37 countries Manufacturing facilities in 37 countries In K-C’s developing and emerging markets sales

and operating profit rose at double-digit rates Developing and emerging markets account for

less than 25 percent of sales BRICIT, where K-C has established assets and a

marketplace presence: Brazil, Russia, India, China, Indonesia and Turkey. Per capita income in each of these countries is rising Using multi-tier product strategy to drive penetration

and usage and to build brand loyalty

Good ManagementGood Management FortuneFortune magazine named K-C among the 100 Best magazine named K-C among the 100 Best

Companies to Work For in America in 2002 and 2003. Companies to Work For in America in 2002 and 2003. K-C has won several similar global awardsK-C has won several similar global awards Wal-Mart recognized Kimberly-Clark with a Supplier of the Wal-Mart recognized Kimberly-Clark with a Supplier of the

Year Award in 2003 Year Award in 2003 Named in 2002 to the Calvert Social Index:Named in 2002 to the Calvert Social Index:

Criteria relates to workplace issues, environmental Criteria relates to workplace issues, environmental management, product safety, application of consistent high management, product safety, application of consistent high standards to international operations, respect for indigenous standards to international operations, respect for indigenous peoples’ rights and progressive community relations.peoples’ rights and progressive community relations.

Kimberly-Clark was listed on the Financial Times Stock Kimberly-Clark was listed on the Financial Times Stock Exchange Index for Good US 100 Companies and the Exchange Index for Good US 100 Companies and the FTSE4GOOD Global 100 Companies Index in 2002FTSE4GOOD Global 100 Companies Index in 2002

Kimberly-Clark was recognized in 2002 by the National Kimberly-Clark was recognized in 2002 by the National Safety Council as a Charter Member for the company’s Safety Council as a Charter Member for the company’s involvement in founding the organization in 1912. involvement in founding the organization in 1912.

Thomas J. Falk ,Chief Executive Officer, has worked for Thomas J. Falk ,Chief Executive Officer, has worked for Kimberly-Clark since 1983.Kimberly-Clark since 1983.

Environmental PoliciesEnvironmental Policies Protection of the Biosphere Protection of the Biosphere

Periodically audits environmental performance Periodically audits environmental performance at all locations.at all locations.

Sustainable Use of Natural ResourcesSustainable Use of Natural Resources Recycled fiber in products and packaging and Recycled fiber in products and packaging and

following sustained yield forestry practices following sustained yield forestry practices Use and Conservation of EnergyUse and Conservation of Energy

Establishing ongoing energy conservation Establishing ongoing energy conservation programs in all locationsprograms in all locations

Reduction and Disposal of Wastes Reduction and Disposal of Wastes Supporting an integrated approach to solid Supporting an integrated approach to solid

waste management including: waste management including: RecyclingRecycling Conservative use of landfillsConservative use of landfills

RecommendationRecommendation

Purchase 300 Shares of KMB at the Purchase 300 Shares of KMB at the MarketMarket

KMB closed at 64.48 as of 4/18/2005KMB closed at 64.48 as of 4/18/2005

300 shares at 64.48 yields an 300 shares at 64.48 yields an investment of $19,344.investment of $19,344.