Ladies and gentlemen, thank you for your patience in holding. We now have your presenters in conference. Please be aware that each of your lines is in a listen only mode. At the conclusion of this morning's short remarks, we will open the floor for questions. At that time, instructions will be given as to the procedure to follow if you would like to ask a question. It is now my pleasure to introduce today's first presenter, Christina Chang. Thanks, Shelby. Welcome to our 2022 year-end earnings conference call. Joining us today are Mike Hsu, our Chairman and Chief Executive Officer, Nelson Urdaneta, our Chief Financial Officer, and Brian Ezel, our VP of Finance. We issued our press release and published supplemental materials that summarized our results and outlook this morning. You can find these resources in the event page of our investor relations website. Before we begin today, a few reminders. Our statements today will include forward-looking statements. Please refer to the latest Form 10-K or 10-Q for a list of factors that could cause our actual results to differ materially from expectations. Our remarks will focus on adjusted results, which will exclude certain items described in our Q4 2022 earnings news release. Please consult our press release and public filings for more information about these adjustments and a reconciliation to comparable GAAP financial measures. Mike will provide his perspective of the business, and then we will open the floor for Q&A. With that, let me turn it over to Mike. Okay. Thank you, Christina, and welcome to K-C. Good morning, and thank you all for joining us today. Back when we introduced our strategy in 2019, we could not have imagined the unprecedented challenges we were about to face. Over the past four years, K-Cers did what we do best, provide great care that our consumers, our customers, our employees, and our communities needed all around the world. At the peak of the pandemic, people counted on our brands to support the health and hygiene of their families, and I'm proud of what our teams were able to achieve to fulfill our purpose of better care for a better world. Now, as we look back at our results, there are three themes I'd like to emphasize. Theme number one, our strategy to accelerate growth is working. Since 2019, we've grown our business by about $1.5 billion in sales and delivered 4% average organic sales growth. In that time, we've accelerated organic growth by improving our product offering and market positions with meaningful innovation and world-class commercial execution. In 2022, organic sales increased by 7% in over-delivery on our goals at the beginning of the year. This was achieved in what turned out to be a uniquely challenging global environment. 2022 also marked Kimberly-Clark's 150th anniversary, a year in which we celebrated generations of category-defining innovation. We're proud to have created many of our categories, including feminine care and facial tissue, under the leadership of our Kotex and Kleenex brands. We are inventors at heart. New products created during the last three years contributed to over 60% of our organic growth in 2022. Whether it's Kotex Dreamwear for ultimate overnight protection or Kleenex Allergy Comfort, our product obsession, advanced technology, and consumer-centric focus is enabling us to create meaningful value and accelerate category growth. This is perhaps most evident in China, where we continue to post double-digit organic growth in the face of a declining birth rate and challenging COVID operating conditions. With major upgrades in dryness and thinness, our products are among the best in the market, led by Huggies Super Deluxe, the softest diaper in China. Our strong portfolio, supported by superior technology, will continue to anchor Kimberly-Clark's leadership in the world's largest baby and childcare market. Theme number two, we're making strong progress on margin recovery. Over the past two years, we've faced unprecedented inflation worth over $3 billion, a roughly 1,500 basis point headwind of gross margin. Our teams have done an excellent job mitigating this impact. Our product leadership, commercial agility, and cost discipline enable us to rapidly implement broad pricing actions and generate over $700 million in cost savings. The successful implementation of revenue growth management actions drove an inflection in our profitability in the second half of the year. Gross margin stabilized in Q3 and increased year-over-year in Q4 by over 200 basis points. This was our first major improvement in the last eight quarters. Collectively, these actions enabled us to fully offset inflation and currency headwinds in 2022 on a dollar basis. Recently, market prices of some inputs have begun to ease, although they remain elevated relative to pre-pandemic levels. While we're encouraged by this, it will take time for these benefits to work through our contracts and flow through the P&L. Nevertheless, we'll continue to leverage our scale to improve efficiency and reduce costs. At the same time, we expect our revenue management efforts will continue to positively impact this year. This will aid ongoing gross margin recovery while also enabling us to continue investing in our business. At the midpoint of our 2023 guidance range, we plan to improve operating margin by approximately 80 basis points. With incremental headwinds below the line, this translates to 2%-6% growth in earnings per share in 2023. We also intend to increase our dividend for the 51st consecutive year. Theme number three, we will continue to invest to drive balanced and sustainable growth. We're scaling innovation that delivers better value, more benefits, and better care for our consumers. We continue to see strong demand for great performing products. New Poise Ultra Thins and expanded sizing for Depend drove share gains in adult care, both from a dollar and unit standpoint this past year in North America. We'll be launching several exciting initiatives in 2023, including our GoodNites Youth Pant, which can hold the equivalent of 3 bottles of water, exclamation point, as well as exciting performance upgrades for Huggies diapers. At the same time, we'll leverage the broad range of our offering to address the growing need for value through compelling commercial programs. Now, to wrap up my prepared remarks, I'm very proud of K-Cers around the world. They continue to execute with excellence, standing tall in the face of countless challenges, all to fulfill our purpose of better care for a better world. We've assembled an excellent management team that has tremendous experience unlocking global growth. We have a long runway of growth ahead of us. We'll continue to invest in balanced and sustainable growth to create long-term value for our shareholders. Shelby, if you wouldn't mind, let's open the line for questions. At this time, we will open the floor for questions. If you would like to ask a question, please press the star key followed by the one key on your touchtone phone now. Questions will be taken in the order in which they are received. Please limit yourself to one question and one follow-up question. If at any time you would like to remove yourself from the questioning queue, press star two. We'll take our first question from Dara Mohsenian from Morgan Stanley. Morning, Dara. Hey, Dara. Hey, how are you? Good. I just wanted to go into the 2023 outlook in a little more detail. First, Mike, can you just outline what you're assuming for pulp prices as you look out to next year? I'm assuming you're not fully using the RISI forecast, but maybe you are. Just any clarity there would be helpful. Then you talked about the greater investment in growth and people by 100 basis points to margin. Can you just help us understand the motivation behind that? Are there specific areas of opportunity? Is it more you had to pull back a little bit in 2022, just given such a tough commodity environment? How are you sort of thinking about that? Also maybe just a little more detail on functionally where you're spending. Is that ad spend, or is it other areas? Is it headcount? Maybe geographies and product categories you plan to invest. That'd be helpful. Thanks. Okay. Will do, Dara. You know, first of all, you know, I feel great about where the brands are globally and where our business is, and we can talk about performance in the fourth quarter, and I know we'll get to that. Overall, you know, I'd say we plan to deliver a better performance in 2023 for sure. We're gonna build on our organic growth momentum. You know, Dara, you know, clearly in the plan for next year, there's plenty of carryover pricing, but there are new pricing actions in the plan as well. Most of those have already been announced to our customers. In terms of the investment, I would say I'm really excited. We got a robust innovation and commercial program for 23. In some ways, if I calibrate, I think it's this year will be stronger than last year, and we feel good about that. Consumer demand in our categories generally remains very resilient. I think from that aspect, we have good things to invest in. In terms of the overall spending, we are taking advertising back up a little bit more. Just for reference, and we haven't discussed this as much, but obviously, with the challenges that we've had over the last couple years, we had pulled back slightly over the last couple years. Some of this is returning back to where we were back in, perhaps back in 2020. Beyond that, I'd say it's more based on the merits of the commercial programs that we have, and we're excited about the programs that we have, and we wanna invest behind them. At this point, you're probably aware, Dara, we're pretty good at evaluating the returns of our investment and making sure that they pay out. We feel great about that. From the organic momentum, we continue to see that. I will say we expect continued progress on margin recovery, you know, while we're making that investment. We've got high single-digit operating profit growth while offsetting, I think what we said in our release, about $600 million in inflation and FX headwinds. Yeah, you know, we are restoring some between the lines. The, you know, obviously, as you saw, the non-operating items really kinda get us back to that, you know, mid-single digit EPS guide or low- to mid-single digit EPS guide. I will say, before I let Nelson comment on the pulp, I'll say, Dara, we are aiming for the top of our range internally, right? You know, I think we did the same thing last year. I'm glad we did, because when we came out this time last year, I think we were calling for about $700 million of cost inflation. We ended up seeing closer to $1.7 billion and still stayed within our original range. You know, as I mentioned, we have very high quality plans for this year. We're really excited about that, so we're aiming for the top end of the range. Why we call it the way we are? Well, the volatility remains extraordinarily high. If you had a good call on interest rates, FX, the war, energy, supply chain, COVID, civil unrest, you know, there's a lot going on. That's a mouthful. Maybe I'll pause and let Nelson comment on pulp and then, Dara, if you have any follow-ups. Yeah. To add, Dara, in terms of pulp and the fiber complex as a whole, I think just to give a little bit of context of where we're at. You know, overall, the fiber market prices have plateaued in Q3, and they actually began to turn slightly in Q4. To your question as to do we take RISI as a reference, yes, we take it as a reference. You know, just reiterating where we're at today, prices have more or less remained largely in line with where we were in Q3. What we're projecting into this year is that on average, eucalyptus, as a, as a, as an example, would be down 10% for the full-year. Now, same goes for fluff and NBSK and some of the other components of the whole fiber complex. We would see prices begin to ease, you know, throughout 2023. One thing that we need to take into account is that we don't cover at RISI. I mean, we actually enter into specific contracts in all the different components of fiber. What you see in RISI or some of these indexes does not necessarily translate one-to-one at that time to our P&L. That's also what's playing out. To give you a context, out of the commodity inflation of $200 million-$300 million that we're quoting in our guidance, the pulp complex as a whole is right around half of that at the midpoint. We will see pulp as a whole be up for us in 2023 based on what we're forecasting at this stage, albeit a very small number compared to what we've seen before. Markets are giving up on that end. The thing I'll add, Dara, is also, you know, while we'll take, you know, some of those declines that you see in receipt will take a little time to work through our system. You know, I would say if you saw spot in what we're paying, you'd want to pay what we're paying. Great. That's helpful. Just one quick follow-up on the higher ad spend. Are there specific geographies or product categories you're most focused on, Mike? If I can slip one additional question in. Also, just the FX guidance for 2023, the revenue guidance is worse than our currency models indicate based on your country exposure. Just any clarity there would be helpful, but also the flow through to profit looked pretty severe in terms of the FX impact to profit relative to revenue. Any clarity there would be helpful. Thanks. Yeah, yeah, the spending, Dara, I would say, you know, it's broad improvements. I mean, certainly, you know, in our major markets like the U.S. and the diaper category for sure, we have great news that we wanna make sure that we're supporting appropriately. I think I cannot share exactly what that news is because it's coming out in the second half, but it will blow your mind when you see it. It has to do with not to say this on an earnings call, but the poop side of things, that's kind of the business we're in. We'll do miraculous things with poop. So that's one set of areas. You know, we've got huge momentum in China, we feel great about that. Team's doing a fantastic job. We're gonna continue to plow and invest, in the brand, in the advertising, in our digital, capabilities in China. Those are two core areas. Obviously, you know, we have, you know, strong traction around the world, and we feel good about our investments around the world. Addressing the question on the Forex, Dara, just to unlock that a little bit. For next year on the top line, we've said that for the full-year, we're talking around 2 percentage points of a drag. It's important to highlight that we're seeing that concentrated in the first half of the year, when we do the comps year-over-year. I mean, we would see that really ease or not be that much of a headwind as we get into the second half from a top-line standpoint. You could work that out in there. Then when we go down to the flow through to the bottom line, you know, a couple of things. As a reminder, we've got about half of our revenue coming from overseas and about a third of our profit coming from overseas. We do have a significant amount of costs that impact the P&L. They're exposed to, you know, hard currencies in the foreign subs in which we operate. The other element you need to take into account as you model is that we're not covering at spot rates. I mean, we have particular risk management strategies in place that I'm not, you know, going to get into details in the call. We have to work through those risk management strategies as they flow through the P&L. As you know, that's not a one-to-one if you're engaging in hedging and doing risk management strategies that we do. Great. Thank you. Okay. Thanks, Dara. We'll take our next question from Chris Carey with Wells Fargo. Morning, Chris. Hi, Chris. Hi, good morning. I just one follow-up on the currency piece and then another question. You know, just on the currency piece, you know, it's, I think it's getting so much attention this morning because it's so, it's such an atypical multiplier versus what we've seen here, right? Mm-hmm. You know, and I appreciate there's hedging and it sounds like that's something you have good visibility into. So maybe, I'll just take that as a given. How should we think about an improvement in currency or a worsening in currency? You're hedge, is this now the outlook, or should changes in currency, you know, imply a change in what's going to be flowing through on your model this year? Perhaps you can just help us- Yeah. You know, understand that. That's a fair question, Chris. A couple of things. Obviously, on top line, it'll be what it'll be because we don't, we don't hedge top line. That's in essence what's gonna happen, is it'll translate. When you go to costs, you know, we have models in place for risk management strategies, and there are currencies we hedge, there are currencies we don't hedge, and it depends on the amounts we do. It's model driven. Changes in currency to your question would have impacts. It won't apply to all the currency pairs, because it depends on where we're at in any given point in time. Definitely on top line, yes, we will see that very fluid as markets move, and that's happening literally on the hour. As to profits, we will also see to some extent some flow as, you know, the currency changes and we update our models depending on what's hedged and what's not hedged. Okay. Okay. Thank you. You know, just given, you know, I think one other thing this morning is that, you know, the commodity outlook relative to what we can see on even forward prices, which is just, you know, worse than expected probably on that front. Clearly you're saying more of that's happening in international markets, maybe harder to track. You know, I, yeah, I think that makes sense. But nevertheless, we'll probably end the year now, you know, at a gross margin of, say, 32%, still a few hundred basis points below pre-pandemic operating margins, even farther below pre-pandemic. I think conceptually the organization does have the goal to get back to that margin structure. It just feels like, you know, with commodity volatility and the non-operating inflation that you're talking about, do you still think that's a realistic medium to long-term objective, or has the inflation been such that, you know, there's probably not enough pricing and savings to get y- there, or at least it'll take a very long time? Thanks for any thoughts on that. Yeah, Chris, I definitely feel like it's a realistic, you know, goal, and I think we'll get there. My view is we've turned the corner on our margin recovery program. You know, we obviously saw in the fourth quarter continued strong organic performance. You know, I said this in my prepared remarks, pricing exceeded input costs and inflation for the full-year. You know, we fully offset inflation and FX for the full-year last year. I think the teams did a great job there. Our operating margin, you know, as I said, stabilized in Q3 and expanded by 200 basis points in Q4. In terms of the cost outlook, I think we're making great progress there. And let me say this about costs. One, from my seat, I see green shoots, okay? Even though we still see cost headwinds coming into the year, there are green shoots, and we have seen selected commodities start to ease. And I'll also say having been in this company for ten years, reversion is around the corner, and when it happens, it happens fast. We offset extraordinary headwinds over the last couple of years. As I mentioned, we see another $600 this year. Historically, though, there has been rapid reversion, and we've seen some signs of it. I don't have a timetable for that. I don't know if it's gonna hit this year or not. At some point, it will happen. When that does happen, it will accelerate our margin recovery. You know, as I said in the past, we're not counting on reversion to deliver the margin recovery, when it does, it will accelerate our timeline. Which is why I feel confident about it, 'cause we all know, you know, $3 billion over two years, it's not gonna stay at that level, right? At some point, it's gonna come back down. Just to add a little flavor on the gross margin too, Chris, a couple of things. We had three quarters in a row where we actually expanded gross margin. As Mike pointed out, for the first time in Q4, we grew gross margin year-over-year, versus, you know, the last time we ever did that was back in mid-2020. It had been a few quarters that had not been the case, and that reinforces Mike's point that what we have been talking about since July of really remaining committed and having line of sight to recovering the margins is going to happen. As we stare at this year, our plan calls for year-over-year margin expansion in gross margin every quarter. That's what we have in place. I think you quoted 32% of gross margin. It's actually higher what we're aiming for at, you know, for the full-year, because we're expanding operating margins at the midpoint of our plan by 80 BPS. If you look at what we put out in the release and the remarks, we're investing about 100 basis points of net sale into the brands. We gotta add that back to that 80 BPS, and that gives you a sense of what at least is going to be the gross margin expansion that we have planned in here. We definitely have, you know. We're building on those green shoots that Mike's saying, we're not staying, you know, sitting here. I mean, we're moving on the productivity line, we're moving on the margin accretive innovation, and we're also moving on the net revenue growth management programs that we have in place. All of that is really putting us there. As Mike has said in the past, reversion will accelerate this. That's the only thing that would do that. Can I just confirm, and I apologize to those that have questions on this that I'm gonna get back in the queue. Do you expect gross margins up, but the 100 basis points is what you're investing into gross margin? Can you just maybe confirm what your expectation for gross margin is for 2023? Because I think there has been some confusion. Yeah, yeah. I just want you to add. Right. It would be like this. We have 80 basis points of operating margin. You add 100 basis points that we are reinvesting into the brands, that gives you 180 basis points by which at least gross margin would have to expand. Does that make sense? Okay. Yeah. Thanks so much. That's the math. All right. Thank you both. Okay. Thanks, Chris. We'll take our next question from Steve Powers with Deutsche Bank. Hello, Steve. Hi, Steve. Hello. Good morning. Good morning. Just to pick up on that math, 'cause that's sort of the math that we were working with too, but that implies, you know, if you take the numbers literally, that the 23 gross margin objective is, you know, a tick below the 4Q 2022 gross margin that you realized. Just, you know, just to Nelson's point about, you know, seeing that progressive gross margin improvement sequentially, it, you know, it doesn't, it doesn't imply a lot more movement in 2023. Maybe just talk about that in the, in the context of over time, you know, easing costs and the like. The road to margin recovery is a bumpy one, Chris or Steve. Yeah. Steve, I think a few things that just to add a little bit of color on how we get there on the math. I think the important thing to take into account is, you know, we're staring right now at about $250 million of commodity costs at the midpoint as we've guided. We have about, you know, in terms of currency, about $350 million at the midpoint in currency. In other costs, we have around $200 million. When you add it all up, you know, we will be, for another year in a row, having a significant revenue growth management realization that we've planned for, which by the way, around two-thirds of that is solely carryover from 2022. What, what happens at the end is, for the year, we're gonna be realizing positive pricing net of commodity and Forex. Whereas last year, we were pretty much neutral. We were able to fully offset the $1.7 billion. That's gonna flow through. Exiting Q4, it's not a straight line, as Mike indicated, because again, the quarters are pretty different and the dynamics between the categories and the mix and how cost impact us differs. The reality is that on a year-over-year basis, we continue to expand margins, and it would be quite the gain. Because if you recall, our pre-COVID gross margins were around 35%. We would be getting, you know, we would be making pretty good advance on, on the full-year, with the movement that we're planning for. Yeah, Steve, maybe I'll just add for context. I mean, I wasn't trying to sound facetious, you know, 'cause when I say it's a bumpy road, you know, I'm not one for hyperbole, and I think I said in my prepared remarks, unprecedented a few times. There's been unprecedented effects kind of on the demand side and on the supply side. You know, just in terms of demand, you know, obviously COVID in and out, the war, which caused demand to change in and out. Then you have, you know, all the supply issues as either associated with COVID, the war or just product availability or transportation availability. There's a lot of things moving around. You throw in our Texas Storm, which at this point, I'm on the third order impact of the Texas Storm. You got all that. There's a lot of volatility inherent in the numbers, and they were not consistent quarter to quarter, and very unusual in our business. 'Cause typically, I think, you know, I think you all are right. This tends to be a very stable business. Because of that, both from a demand perspective and a cost perspective, things are gonna move around from quarter to quarter a little bit. Okay. That's fair, and I agree. Unprecedented has become the new precedent. Two other, I guess, follow-ups, if I could. One is on the enhanced, you know, essentially net pricing, revenue growth management. Yeah. You talked about, you know, mostly carryover. That's great. Yeah. That makes sense. In terms of the incremental, do you anticipate incremental actual pricing actions versus just kinda other RGM actions? Do you know, just some color around, you know, where those might occur and what portion of them are actually list price movements versus, you know, count reductions, that kind of thing would be helpful. Then another thing that you mentioned in the release that's been a topic across, you know, other companies that have been reporting, just in terms of retail inventory levels and some downshifting in terms of trade inventory levels, just, you know, some color around, you know, what you've seen and how you're thinking about, you know, destocking inventory levels across the trade as you go through 2023. Thank you very much. Okay. Yep. Thanks, Steve. First of all, we've moved fast on pricing all the last couple years, right? I'm really proud of the team, their ability to fully offset inflation on a dollar basis in 2022. You know, for the plan this year, I would say the majority of our pricing is gonna be carryover, but we have taken new actions. Some list pricing, which is in general across most markets, already been announced into the marketplaces. There are additional RGM actions we're taking as well that you might say, whether it's, you know, promotional changes or productivity around trade spending. Those are the more typical that are kind of evergreen programs that we're gonna have in place. Overall, you know, we feel very good about our RGM, our revenue growth management capability. It's executing well. If we had not invested in it over the past five years, we would not have been able to make the moves that we're making. In general, I think it's been working very, very well. In general, I would say demand is holding up pretty well. I know that will be a topic people will wanna double-click on, but I would say the elasticities are holding up, you know, in general, better than we modeled originally. So that maybe hopefully that's it on the pricing one. Any follow-up, Steve, on the pricing? No, that's great. Thank you. Okay. Then retail inventory, you know, it was interesting, Nelson and I were at a conference in September, Lawrence Conference in September, and, you know, almost every investor asked us about retail inventories 'cause it was starting to change for a couple manufacturers. It had not affected us back in September. I would say, you know, subsequent to that meeting, perhaps a week or two afterwards, you know, we started getting news from retailers that they, yeah, they were gonna look at retail inventories as well in our categories. I, you know, and it's happened. I would say it's been typical. You know, generally typical to kind of what we've experienced year and, you know, year-over-year. In the fourth quarter, I'd say it came in about what we forecast. It did affect the consumption because if you look at North America, I think our overall organic between tissue and personal care was up one, which is a little soft relative to what the consumption was. You know, in my mind, you know, consumption is really what the business is really performing at. You're gonna have some other changes that affect your shipments. Overall long-term, shipments must equal consumption in my book. Consumption for the quarter was up 7% in personal care and 7% in tissue. We feel like the business remains very healthy, but, you know, we've worked through some typical retailer inventory issues. Okay. Very good. Thank you. Okay. Thanks, Steve. We'll take our next question from Anna Lizzul with Bank of America. Morning. Hi. Morning. Thank you so much- Morning for the question. I was wondering if you can comment from your guidance on why most of your inflation is outside of the U.S. in 2023, meaning what is different really in terms of the markets outside of the U.S. in terms of rising costs, and then I have a follow-up. Yeah. In general, a couple of things. Out of the commodity inflation, the one we're quoting, the 200-300 impact, the majority of that bucket is on the international markets. The U.S. would be not the big market largely impacted by that bucket. However, when we move down the line, obviously Forex would be mostly in it, would be the international markets, as you could see. On the other costs, it's broad-based. That would be broad-based across the portfolio, Anna. Okay. Just how should we think about the phasing of your FORCE cost savings through the year? Just given that rising input costs are more pronounced in the first half, should we expect greater cost savings to offset that in the first half as well? Yeah. As we've said in the past, Anna, you know, our FORCE savings are not linear, and, you know, it all depends on movements within the quarters, go-lives of projects, and it is very difficult for us to predict exactly how it comes into play. I would not skew FORCE into the first part of the year, because typically, you know, we've got a lot of projects that are going live. We're still dealing and managing through, you know, some challenges, especially internationally on the supply chain bit, and that weighs into how FORCE plays throughout the year. I can't give you a specific, you know, percentage of what you should be planning, but I hope that that helps guide you as to how we're thinking about it. Okay. Thanks very much. Okay. Thank you, Anna. Thank you. We'll take our next question from Andrea Teixeira with JPMorgan. Andrea. Andrea. Thank you. Good morning. How are you? I wanted to just perhaps hope to bridge the top line guidance a bit between volume and and pricing. Nelson, I understand you mentioned obviously you have some carryover impact of about two-thirds, I think you called out from from pricing. It implies that potentially you're announcing or embedding some additional pricing. First of all, wanted to check on that. By my math, probably you're embedding flattish to slightly up volume for 2023. I'm hoping to figure what regions would that be. Related to that, from a regional perspective, D&E, it was a bit softer in the fourth quarter. I understand, like you called out Southeast Asia, and I'm thinking, and correct me if I'm wrong, Softex being, you know, an acquisition that you made towards the end of 2021. Perhaps there are some puts and takes there. Anything you can add in terms of like, 2022, it seems to me, was a year that D&E had a very strong year. Actually, sorry, developed markets had a very strong year. D&E was a little bit softer. Is that gonna reverse 'cause you're obviously having tougher comps in China and, in developed markets? If you can help us with that. Okay. Maybe, Andrea, I'll start with the D&E, and then maybe, Nelson, you can come back in on the on bridging the top line. Right. You know, D&E, yeah, it did soften. In Q3, I think we were up about 11%, Andrea, it was +2% in the fourth quarter. I would say as you already, you know, talked about, primarily due to what I would call discrete challenges in Southeast Asia. You know, what we're doing is, you know, we're excited about our business in Indonesia. Great business, great brand. I would say we're working through some, you know, business approaches that, you know, we prefer. That's had an effect of the year. They did things a certain way. I prefer to do them a different way. We're just working through that, and that had an impact on sales kind of in the quarter. Hopefully we're through that. Then, on, you know, beyond Indonesia. You know, we're seeing a little increased competition in Vietnam and India, we're gonna work through that, and something that's been, you know, been going, you know, off and on for two years now. Beyond Southeast Asia, you know, China was up double digits. Latin America was up in the 20s, and Middle East and Africa was up mid-single digit for us. We still feel very good about our D&E performance overall, but recognize we have a little bit of work to do in Southeast Asia. I think the team overall is doing a great job executing, you know, bringing innovation into these markets, driving the price execution, which we've talked about, and we feel great about our commercial programming for this coming year. Does that give you enough on D&E? Yeah, no, I guess, on the developed markets, though, what is embedded in your guidance? Because I'm assuming you're thinking of Elasticity kicking in stronger for this year, or, because it seems as if, at least in North America, I know the puts and takes from North America growth was subdued in the fourth quarter, so hoping to see if there is any puts and takes as you took more pricing, and what are you embedding into 2023? Well let me just say, we had great performance across developed markets in the fourth quarter. I think generally, you know, approaching a double digit in developed markets outside the U.S. U.S., as I mentioned, was up, I think if you add tissue and personal care, was up about 1%, mostly driven by, you know, retail inventory changes, differences. We exited a private label contract that was pretty significant. We exited or changed timing on a pretty significant promotion at a big retailer. That affected, I would say, the fourth quarter overall in the U.S. Overall, I don't think we're putting out a number there specifically on each of these segments, but we are expecting continued good performance both in North America and developed markets internationally, and very excited about the plans going there too. Mm-hmm. Thanks so much. Strong innovation as well. I mean, for all the developed markets, we got pretty strong innovation pipeline that'll come through. Going back to your deconstruction of the top line, I think a couple of things that I'd like to highlight on the year and how to think about it. As, you know, first and foremost, we, you know, as, as we go through the year, it's important to note that, you know, the first half of the year will be more muted. When we say more muted, it's important to take into account the fact that, one we will still lap the private label exit in North America that we talked about just now, so that'll continue to impact us in the first half. The other bit is also we're lapping very strong comps from last year. As you remember, we grew 10% in the first half, and we grew 5% in the second half. The third point is we will still have a lot of pricing that on a year-over-year basis is coming through in the first half because of the carryover. All that put together, you know, would put pressure on volumes because of those three reasons as we think of the first half of the year. As we go into the second part of the year, that would ease. That's our expectation, and that's the way that I would think about it, Andrea. That's helpful. Just, as a one clarification that's missing on that. When you said two-thirds of the, correct me if I'm wrong, I understood it's like everything that you have in plan in terms of pricing is about two-thirds carryover. It implies that you have another one-third of pricing to come through in the plan? Yeah. Yeah, and I said earlier, I can't remember, maybe it was with Steve, but, yeah, we, you know, we have a significant portion of carryover pricing that was launched last year that still carries over into this year. Then, we've taken additional pricing action since then. So we've generally announced pricing actions across markets that are taking effect this quarter. So that's also a factor in the plan. Yeah, they go into effect, in the biggest markets, at the end of Q1, so. Yeah. Then on top of that, as I said to Steve, you know, we have additional RGM actions or revenue growth management actions that are more typical in Evergreen. Like, you know, hyperinflationary markets. Where, you know, we have that pricing as part of the overall number. Super helpful. Thank you for the clarification. I'll pass it on. Okay. Thank you, Andrea. We'll take our next question from Lauren Lieberman with Barclays. Morning, Lauren. Morning, Lauren. Great, thanks. Good morning. Thanks. Wanna talk a little bit about consumer behavior in North America and Elasticity. I guess, first, on personal care, I'm, you know, I'm sure you're not gonna give us a number, but if I make some rough assumptions around the private label exit and inventory destocking, it looks like Elasticity is less than kind of a one for one on the North America personal care business. Just kinda curious on your perspective on that and knowing how much of your innovation has been premium over the last few years, what you're seeing in terms of trade down behavior. 'Cause the market share data, it looks not great. You know, the, you know, brand is losing share to private label overall, but your shares look a little bit softer. Just on tissue, you know, there obviously expect there would be significant Elasticity. There always is. You know, what are you seeing there in terms of that, you know, a timeline to that kind of stabilizing? Should we think about it as when you start to lap the pricing that the volume stabilizes, or is the consumer under so much duress that there's space for that trade down to persist? Okay, Lauren, I knew you were gonna ask this. Russ and I were on the phone last night working through this. Anyways, here's a couple things. You know, one, let me just say, in North America, and I would say globally overall, you know, we're seeing a resilient consumer. I think that does reflect the essential nature of our categories. Generally, as, you know, our POS, you know, or consumption volume or the POS Nielsen sales, is in line with expectations. As I mentioned, our shipment volatility has been a little higher just because of some of these discrete items that we worked through. This is the thing Russ and I were looking at last night. You know, I definitely would say observed Elasticity was slightly higher, or the Elasticity impact on volume was a little bit higher in the second half than the first half, but remains I would say far below what's modeled. I think that does reflect the nature of our categories as being essential. I'll throw a couple numbers at you. These are category numbers, so not brand, they're public anyway, so not proprietary to us. In Q4, you know, pricing was up 7%, in diapers and EQ, right, equivalent units, the measure of volume was down three. So I think as you point out, therefore the implied Elasticity impact is less, you know, certainly far below one to one. The thing that I would throw in there on top of that is, you know, in the second half, us and our you know, our competitors have made a lot of count changes across all these categories. So the EQ definition includes count reductions 'cause it's based on a standard unit, right? So I, you know, my venture to guess, almost half of the volume decline is related to count and tissue sheet count changes. That was diapers. Then in bath tissue, yeah, for the fourth quarter, price was up eleven for the category and volume was down seven. Recognize, you know, I might factor in, you know, 3 or 4 points of that 7 is likely to be sheet count changes. Then adult care, the outlier because, you know, price was up eight and then volume was still up, right, up two. The delta, I think those were all fourth quarter numbers. What we... The reason I say the Elasticity is kind of seems like the impact has increased slightly in the second half is in the first half, you know, pricing was up mid to high single digit and volume continued to be up. There is a difference. I think the consumer environment was different. I do think there was more pressure on the consumer, but I still think, you know, the category remains very resilient because of the essential nature of the category. I'll pause there, Lauren. Does that answer? Yeah. That is great. Just the one piece that you missed was, the relative market share performance- Oh, yeah. In personal care and any kind of mixed dynamics, No, yeah. organization. Yeah. Again, we feel very good about our overall performance. You know, at the brands, I think, you know, in adult care, we were up 12% in consumption of the quarter. Feminine care, we were up almost double digits. Diapers was down 5%. The biggest driver behind that, you know, private label exit was a minor one for us, but the bigger one was we have a large retailer that we knowingly shifted an event from Q4 last year, prior year into Q3 of this year. We lost that. On top of that, they had a big private label event, which we know about, and planned for, and that moved from Q3 to Q4. There's a double whammy on the share side, and that accounted for the majority of our share impact in the quarter. You know, that happened in October, I think, the cycle for us. We saw later in the quarter, certainly, you know, better performance from Huggies, and we feel great about where we stand. As I told you, we have this is the Disney 100, so we got great commercial programs for our characters on our products. We've got great innovation that we're really excited about. I hate to say, but, you know, we'll. When you come out and visit with us, we'll take you to our war room on poop superiority and so. We feel very good about, you know, our offering and what we're gonna be doing there. I'm gonna put the poop superiority high on my agenda for 2023. I know it sounds funny on a call. Yeah. This is the business I'm in. Yeah. No, I get it. I get it. I'd be remiss if I didn't jump in on a modeling question. Just briefly, on the FX headwinds, relative to what just seemed like, you know, not terribly well timed hedges, unfortunately, and then the wage inflation that you called out, just any dimensional issue like gross margin versus OpEx? Just how to treat those as we work through the pieces. You know, the $200 million is on the other operating costs. That's all gross margin as you model it. In terms of the, you know, the Forex, a meaningful portion of it would be gross margin. There's a little bit on translation because of earnings, and there's a little bit on, you know, you know, mark to market of any liabilities or assets we have in foreign currency. The lion's share of it would be in gross margin. Okay. All right, great. Thank you so much. All right. Thank you, Lauren. We'll take our next question from Javier Escalante with Evercore. Javier, good morning. Hi. Hi, Javier. Hi. Good morning, everyone. I would like to come back to this Elasticity question. You mentioned that it's healthier, but yet your volumes are down seven, and I'm sure you could have itemized how much is your underlying volume growth versus market growth. If you can give us that, so what is the underlying growth? Without going to this happening in incontinence or diapers, just tell us of the 7% volume decline, how much were one-timers? The other branded competitor also saw volumes decline of 6%. My concern is, what makes you think that you can keep pricing at these levels given what this contradiction between the Elasticity that you mentioned that is better, but we see these mid to high single-digit volume declines. I have- Yeah, I mean, Javier, I think the thing that you have to get, you know, picture is there's a difference between what's happening in consumption, right? What's happening, you know, sold through to consumers versus shipments, right? Maybe the other manufacturer, I didn't listen to their call, but I'm also supposing they. I think they probably lived through some of the same effects as us. There's a difference between what's consumed, right? I said for the quarter in North America, across our businesses, our personal care business grew in consumption by 7%. Our tissue business grew by 7%. In the long run, I think you'll have to. Hopefully, you'll agree that in the long run, shipments should equal consumption, right? You're not gonna perpetually deplete retailer inventories or perpetually grow retailer inventories over time, right? Generally that's kinda what I look at as kind of the ongoing health of the business. You know, in the quarter, we did see some discrete changes, particularly as it relates to, one, you know, retailer inventory, which was probably the biggest impact for us in the quarter. The other aspect for us is we did exit a pretty significant private label contract, which added a piece of it as well. Those are discrete items. In general, and I said on an earlier question, you know, the retailer inventory changes for us, it's about typical for what we normally see. It goes back and forth from year to year, so it tends to build itself back up over time. That's why I don't view retailer inventory changes as representative of what's happening to Elasticity. I view what's happening to consumed volume and consumed dollars, right, as to what's happening with Elasticity. Does that make sense? Yeah, I couldn't agree more. You have not quantified those one-timers. What I'm asking you is to tell me, what do you think is underlying category growth for you? Well. For your branded competitor and inclusive of private label, because you are talking about price increases in addition to whatever carryover comes from this year. We wonder, to what extent you are taking too much pricing and whether you can keep it. Well, I, you know, all I'll say is the underlying category growth in the fourth quarter was 7% for both personal care and tissue. What about volumes, not pricing? I'm referring to volume declines of 7%, Mike. If you could explain- Yeah. That's. The underlying- Shipment volume declines, and then the consumption volume decline was low, low single digit, low to mid-single digit. Long as- And, and, and they- Go ahead. I think, Javier, going back to your question, the answer to the question that you have on the one-timers, we have about 3 points would have been the one-timers. Right. If you think of the inventory destock, if you think of the private label contract, that would've been about 3 points out of that 7. Excellent. I have a more strategic question when it comes to private label. What do you see private label role in diapers, both in the U.S. and Europe, and to what extent that doesn't make sense to hold onto your operations in the U.K.? Thank you. Yeah. We exited our personal care business, primarily especially our diaper business in the UK about ten years ago. I'm not sure what you're referencing there. Andrex, the tissue business as well. Yes. I mean, yeah, we have a great tissue business. It's the market leader in the U.K. What's the question? The question is, if you can tell us how is private label pricing in the U.S. versus the U.K., which we don't have, I personally don't have access to, and whether it makes sense to hold onto the tissue operations in the U.K. given the situation there. Thank you. Oh, okay. I got it. I I understand. Hey, yeah, overall, you know, again, We feel great about our brands and where their position is. Andrex, you know, we have taken significant pricing, just as we've done in the U.S. this year. It continues to perform well. Despite the price increases, it has grown share. So, you know, it's a leading brand in the United Kingdom, and, you know, much admired by consumers. So it's a great business for us. Certainly, you know, this year, there's room for improvement because of all the cost pressure. That's, you know, the priority, you know, for us, as you've heard all year, is, you know, we've been working to recover our margins on our brand of businesses to offset the significant inflation that we've had over the course of the year, and I think the teams have done a fantastic job of that, you know. That said, our margins are still below where they were pre-pandemic, and so we're working our way back up towards that. Thank you so very much. Very helpful. Okay. Thank you, Javier. We'll take our last question from Kevin Grundy with Jefferies. Hey, Kevin. Hi, Kevin. Hey. Great. Good morning, everyone. Thanks for squeezing me in. Christina, congratulations and welcome. Hey, Mike, just to maybe tie together some of the more recent questions, I wanted to hit on your U.S. market share, which I think Lauren touched on a bit. Then the promotional environment, which Javier, I think was kind of getting at a little bit. Very specifically, you know, how this plays out with the promotional environment. Some of the conversations we have with investors now is, you know, does the pricing stick? You know, is the consumer gonna be able to withstand it, particularly in some of your categories? Then, obviously, what's going on with commodities is not lost on retailers either. There's still kind of a long way to go to get back to gross margin targets, but still more benign oil, pulp, et cetera. I, you know, I'm sure your share is not quite where you want it to be in some categories, where it's eroded, tissue, diapers, wipes, et cetera. Question just around promotional environment, how you see this playing out in your categories, given the recessionary backdrop and more benign commodity cost environment, and then maybe what you've embedded in your outlook, and that'll do it for me. Thanks, guys. Okay. Yeah, Kevin, let me try to package that up. I mean, one, let me start with the share. You know, it was a bit softer than we like in Q4, but I feel confident we're moving on the right track. I mean, you know, the softness was primarily in diapers for the reason I told Lauren, which is, you know, we had a big event come out and then a big private label event, which we happen to supply, go in. That had big impact on market share in the quarter. You know, for the full-year, we're upper even in 5 of 8 categories. We were down in 5 in Q4, that's why I said it softened in Q4. We'll get it back on the right track. I do think, you know, I feel really good about our plans for this year and feel confident in our commercial activation in North America. In nearly all markets around the world. I mean, we have a few discrete items we're working across in international markets. In terms of the pricing environment, I would say the promotion environment right now remains, you know, competitive, but, you know, I would say overall constructive. You know, given the cost environment, we've seen kind of, you know, obviously the broad pricing actions from most manufacturers across categories. Promotion frequency has returned to normal levels, both in tissue and personal care, and that happened, you know, a while back. I would say the depth of promotion remains a bit shallower than historical, and I think that's related to the cost environment. However, on the consumer side, we can, you know, certainly, my comments on Elasticity and the essential nature of our categories notwithstanding, I do sense the consumer's under pressure. We've been, you know, out talking to our top customers, and so we recognize that the consumer is working through some challenges pocketbook-wise. We're gonna meet them where they need us and make sure that we're continuing to offer a strong value across our business. The thing about us is, you know, our aim is to lead our categories, and so we're not a niche premium player. We wanna play across both value and premium. We have a broad offering, and we wanna make sure we support our consumers effectively along that. For the most part, yeah, you know, we have taken significant pricing. We are managing our promotions with discipline, and we'll continue to do that. I don't know if that answers exactly what you're looking for, Kevin. I think that helps. Just to kinda tie that in with your intentions on the advertising and marketing, is it fair to say that should the promotional environment pick up because of a weaker consumer, potentially from your position trade down in your categories, it's not optimal, but you kind of view that 100 basis points in advertising and marketing, if you have to reallocate that to trade promotion, as the year progresses, then you'll cross that bridge when you get there. Is that a fair way to think about it? Yes. You know, I'll say yes, we'll cross that bridge when we get there. No, my personal bias is I'm not a fan of driving the business through promotion. You know, we can do it effectively 'cause we know our ROIs on trade promotion as well as we know our advertising ROIs. Frankly now, the returns, you know, on both are okay. You know, I like the advertising ones better, and so that's kind of my go-to, and I think it's better for the long-term health of the brand. Frankly, Kevin, this is related to the question you're asking, our customers expect it. I mean, you know, they're concerned about value for their shoppers, you know, they're not the biggest fans of all these price increases. You know, part of what they're looking for from us is to make sure that we're bringing commercial programming to grow the category for the long-term. They're excited about our innovation, and they're excited about the commercial ideas that we're bringing this year. They want us to bring it. That's probably the bigger reason why we've ticked up the investment in our advertising. Got it. Very good, guys. Thanks for all the time. Good luck. Okay. Thank you. All right. Thank you, Kevin. Shelby, I'm gonna make my closing comments. Hey, I'll just say a couple things. You know, one, I'm confident in the strength of our brands and our commercial capabilities to position Kimberly-Clark for the long-term. I'm really proud of the focused leadership talent in this organization and confident that we'll drive our business to create long-term shareholder value and fulfill our purpose of better care for a better world. I wanna thank you all for joining us today. With that, we'll sign off. That concludes today's teleconference. Thank you for your participation. You may now disconnect.