Kimberly-Clark de Mexico 4Q25

Sales grew in line with our expectations, while EBITDA margin improved solidly amid FX tailwinds.

Revenues of P$14.06bn were 2.1% higher YoY, fairly in line with our estimates, with Consumer growing 5%, while Away from Home (amid inventory adjustments) and Exports (due to lower hard roll volumes) declined 10% and 26%, respectively.

Margins were above our more cautious estimates, with EBITDA margin of 26.4% a 100bps expansion YoY. Margin expansion started at the gross profit level, with a 130bps YoY expansion, and a 40.4% margin also better sequentially and vs our estimates. Raw materials such as resins, SAM, virgin and recycled fiber costs, along with FX tailwinds (8% lower YoY) supported profitability levels. Meanwhile, the cost reduction program reached P$500mn of savings during the quarter, P$2bn for the full year. EBITDA margin of 26.4% was 100bps higher YoY, 140bps higher QoQ, and 70bps above our estimates. All in, the company reached a FY25 EBITDA margin of 25.5%, amid a better FX outlook vs. our previous forecasts. From a cash flow perspective, the company’s P$1.8bn Capex was below our estimates, while P$6.2bn in dividends paid represented a c.5% dividend yield, along with a 1.4% of shares repurchased. The company ended the year with a 1.0x net debt/EBITDA.

Overall, we continue to view positively the company’s EBITDA margin despite the relatively weak top-line performance, following previous trends. We reiterate our Market Perform rating and P$41 PT, and expect a positive stock reaction in tomorrow’s trading session.

The company will host its 4Q25 CC tomorrow, January 22nd, at 9:30 am ET. We will review our model after the call.