Kimberly-Clark Corporation (KMB) Earnings Call Transcript & Summary

All right. We're back. We're back. Good morning. Still morning? What time is it? It feels like a long day already. And yes, it's still morning. So thank you all for joining us, both those of us in the room and those of us on the webcast. So I'm really excited for, I'd say, the first time in years, but it may be the first time ever, certainly the first time since I've been here that we've had the pleasure of having Kimberly-Clark attend this conference. So a huge thank you to the folks at Kimberly. And I hope you all appreciate, the investors out here who are both in the one-on-ones and the audience, it's a rare opportunity. And here representing the company is Michael Hsu, who's joined the company how many years ago?

10 years ago.

10 years ago. 10 years ago assumed a senior leadership role. Well, I guess it was always a senior leadership role, heading North America consumer products but stepped into the COO role in 2016 where he then transitioned to CEO in 2019. So we're now into year 3 with him at the helm and more recently with a number of changes that have accompanied the organization. We have a new CFO, Mr. Nelson, I should have asked you how to pronounce this earlier, Urdaneta. Did I do that halfway?

Just halfway.

Halfway. Okay. Well, I'll ask him to clarify when he's in stage later, so I get this right. My apologies. He's the company's newly named CFO. He brings an outsider perspective to the company, have just recently joined from Mondelez, where he served as the company's Corporate Controller and Chief Accounting Officer, after a long and distinguished career with the company where he oversaw a number of key initiatives from massive restructuring, cost-cut initiatives, breakup, M&A, lots of activity happening there. So without further ado, let me turn it to Michael, who's got some opening remarks, a brief presentation, then we're going to sit down for some Q&A and a good fireside chat.

Okay. Thank you, Jason. Well, it's great to be here for the first time at the Goldman Sachs conference, Jason. It's -- we're obviously here because of the amazing -- your amazing gift of persuasion. And so we're delighted to be here and appreciate the opportunity. We're excited to share how we're executing our strategies for growth and long-term value creation. Let's see. The standard reminders apply today about any forward-looking statements that we make and any reference to non-GAAP financial measures. And I will refer you to our latest 10-K and website for further info. Okay. I just got a couple of things I want to cover. One, Kimberly-Clark is led by our purpose to provide better care for a better world. And we're really motivated to provide better care for all of our stakeholders and our planet. Our purpose drives the social and environmental commitments in our approach to sustainability. So by 2030, we aspire to advance the well-being of 1 billion people through social programs. And we plan to reduce our environmental footprint by half through a focus on climate, FORCE, water and plastics. We've been focused on sustainability for a long time and are committed to building on our excellent track record. Now to deliver better care with -- we deliver better care with iconic brands that improve the health and hygiene of people around the world. We're a global company with a long successful history of innovation and category development. We have a portfolio of iconic and trusted brands you can see on this slide, including Huggies, Kleenex Kotex and Scott. Our brands hold the #1 or #2 market position in about 80 countries. And our categories and markets still have significant growth potential. We introduced K-C Strategy 2022 back when I assumed this role 3 years ago, as Jason had mentioned. It's our "medium-term plan" to drive balanced, sustainable growth and create shareholder value. And this strategy has 3 pillars, which you can see on this chart: driving growth of our portfolio of iconic brands, leveraging our cost and financial discipline and allocating capital and value-creating ways. We are delivering. So over the last 3 years, our organic sales has grown by an average of 3%. Our cumulative savings through our FORCE cost savings program and restructuring program was over $1.5 billion. And we returned $6.3 billion to shareholders through dividends and buybacks. Our first strategic pillar is growing our portfolio of iconic brands. Now when I joined K-C, as Jason mentioned a decade ago, I saw a long runway of growth ahead of us, and I see that even more clearly today. We're going to lead our growth by elevating our categories and expanding our markets. Elevate our categories means driving premiumization, especially through innovation that delivers enhanced consumer benefits. Expand Our Markets is making our products available to more consumers and accelerating the development of our developing and emerging markets. Our focus is personal care, which is still in the very early stages of development across the [ NA ]. There remains tremendous opportunity to expand category penetration. Now to enable these strategies, we are investing in our brands and commercial capabilities. We're accelerating growth. In 2020 and 2021, we grew or held market share in about 60% of our category country combinations. Personal care is leading the way for us. This is a $10 billion business that has accelerated from an average of 1% growth to over 5% growth in the past 3 years. Now if we include Softex last year, this business grew 9% in 2021, and our momentum continued in the first quarter, which is not on this slide, but where personal care organic sales were up 13% in the first quarter. Now our performance has been driven by consistently applying our growth playbook around the world. We've made significant investment to build and enhance our commercial capability. And moreover, we've developed a consistent growth playbook to deploy these enhanced capabilities effectively around the world. And this approach has enabled us to continue to move fast and win locally while also leveraging the global scale of Kimberly-Clark. There's a long runway of opportunity to elevate and expand our categories. And we're going to unlock the next phase of our growth by applying our consumer focus and product obsession, multiplying it with advantaged technologies and mirroring that to winning ideas. That all said, the near-term environment remains dynamic. Our results have been impacted by disruption in the global supply chain and significant cost inflation, about $2.7 billion over the last 2 years alone. We've taken decisive action. We've increased selling prices, and we'll continue to take appropriate action as the cost situation continues to evolve. We're closely monitoring demand and market shares, and we'll adjust our tactics as appropriate. We remain confident in our ability to offset the effects of inflation through price realization and cost savings over time. We'll also continue to invest in our brands and capabilities to ensure our ability to deliver balanced and sustainable growth now and for the long term. So in summary, Kimberly-Clark is accelerating growth, and we see a long runway of growth ahead of us. We're growing our top line, strengthening our brands and our company for the long term. And while near-term headwinds are significant, we expect to restore and eventually expand our margins over time. I remain confident in our ability to deliver balanced and sustainable growth and create long-term value for our shareholders. So with that, maybe, Jason, I'll turn it back over to you.

Excellent. Come, grab a seat. Make yourself at home. Be comfortable. So lots of questions. Thanks for those opening remarks. I appreciate it. Let's start with guess I want to step back and talk about how you're changing the organization since you've taken the helm, lots of questions. But right now in front of us, we've got a brand-new CFO. You have a big organization. I'm sure you have a lot of internal talent, but to replace Maria, you've chosen to do that on the outside. So a question for you is why? What could you not find inside that took you to the outside?

Well, we have -- as you mentioned, Jason, we have awesome talent inside the company. I'm looking at a couple right there. But you're right, I did go outside. And I think that probably says more about Nelson Urdaneta, but -- and his capability. Nelson and I, we go way back. We started working together -- actually, we first met when he was running Venezuela for the combined Kraft Foods entity. And then he came over to North America, and we had a chance to work together. I think Nelson brings a unique set of skills. I mean, first of all, I would say deep operational expertise. As I mentioned, we worked in a similar environmental situation at the beginning of the recession in '08 with similar cost pressures, pricing pressures and everything else. And Nelson was a rock in helping us improve our business there. He also worked in Asia Pacific, Latin America. And then beyond that, he's had strong functional experience. I think he ran the finance organization for a North American supply chain organization and then eventually, broad functional experience. And I think you can almost -- he's had almost every job you can have in finance. So I would say a strong set of experiences, both operational and functional. And then the last part, I think you mentioned in your introduction. He's been through -- if you look at the long history, Kraft, Kraft Foods, Mondelez, the evolution of the company, he's been involved in some very important transformations. And while we may not talk publicly about a transformation, we are changing our company. And I think Nelson brings a diversity of ideas and thoughts and experiences as the rest of my leadership team brings, right? One of the things we really value is diversity of thought and experiences, and so Nelson brings more to that.

How about you, Nelson, what excited you about this? Obviously, it's a big role, public CFO in a large and important company. But when you dug into the organization itself and said, geez, where can I add value? Like everybody wants to join some place where they can have an impact. Where do you see the opportunity to come here and make an impact?

Sure. And first, I'm very glad to be here and meet you all. And I tell you, I mean, a few things. One, I am a firm believer in K-C's long-run growth opportunity. I mean, I assessed it. I evaluated it. And frankly, I see that the path is there, looking at a clear strategic road map that has been set up, and it's working. That's first. First and foremost. Secondly, I did see the opportunity to join a pretty diverse set of leaders that Mike's been assembling to bring to bear all those capabilities and bring it forward. And as I looked at it, then I looked at what do I bring to the table. And as Mike said, this operational experience and having lift on the ground and operated on the ground extensively in Asia Pacific and Latin America as well as here in the U.S. gave me that ability to be able to come in and work with the team and a wonderful team talent that we've got at Kimberly to push that next phase of growth as we're going to focus on smart investments and a disciplined financial approach to the overall policy. So that really, I see as a great opportunity. And on top of that, I mean, we are -- being part of an organization that's doing better care for a better world, impacting positively the lives of billions of people while also focusing on unlocking shareholder value in the long term is something I want to be part of.

Okay. Sounds exciting. Lots to do there. Let's -- you used the term transformation. You said you don't talk a lot about it publicly, suggesting there's a lot going on privately in terms of how you're looking to transform the organization. And Nelson, it sounds like you're talking like that's part of what excited you, too. Can you expound upon this, please? Tell us like how are you transforming the organization, the people, the process, the portfolio, any and all that apply here?

Yes. I mean we're working hard, Jason, to make the company a better company for the long term, right, to deliver sustainable growth for the long term. And I think a couple of things. I will talk about some of the things that we're really leveraging some of the core capabilities of Kimberly-Clark. And if I were to point to 2 things that are staying the same, one is care. And it's in our purpose that we talk about better care for a better world. That means it is core to the heritage of Kimberly-Clark. It's an organization. And if you go from the top executives to the shop floor, everybody cares about taking care of our consumers. They care about each other and our employees and our communities. And so that's a core aspect to Kimberly-Clark that we're tapping into. And I think it's a real source for us of a competitive advantage. The other area that I view as an advantage for us is, historically, we've been a decentralized organization, which has its pluses and minuses. The plus is we believe we have excellent local agility. And I think throughout our history, we're a company that moves very fast. And we're very agile in local markets, why we're winning in almost every market in D&E. It's why, as you point out, that we've been able to turn around our China business from a few years ago. And I think -- so that's a core strength. The things that I really want to work on and improve, and I think that's why my predecessor, Tom Falk, brought me here, is why the Board wanted me to come here is I have a big focus on brand building. And while I think Kimberly-Clark has -- was excellent at running a global organization, locally, excellent general managers, excellent P&L managers, I wanted to increase the focus on brand building. And so for me, the core model is a sustainable brand growth model, which says, hey, we're going to invest in the brands through advertising, innovation, capability. And we're going to maintain that investment so that we can sustainably grow over time. And then when you do that, then you lead your brands, and you lead your categories to growth versus trying to follow and find growth, right? And so I think that's one aspect is the -- I think the focus on brand building. And if you look at the evolution, your first question, of the team at Kimberly-Clark that's evolved, I'd say if you look across the top, they have a lot of brand-building experience. The second big change, while we love our local agility and I think that's an advantage, I think we can move even faster by leveraging scale more effectively. And so we probably went on our own too much on the individual markets, and everybody did their own thing. And if you think about great consumer companies and great brands, there are common insights. There are common technologies. There are common ways to approach sales. And I want to leverage more of our scale. It doesn't mean that we're going to just make everybody do everything the same way. But I wanted the markets that bring the best of what the company does to bear in the local markets.

Can you give me an example?

Well, maybe one -- I can talk about -- maybe we'll come back to some of the innovation ideas, but one area would be sales. And we -- it's very complex to run a global organization that operates in very diverse markets. And so certainly, I think most of us -- most companies have a common approach to the modern trade, right? So if you're dealing with the big retailers around the world, there's Walmarts or the Carrefours, there's common ways to deal with that. And those are well understood. But we also operate in markets like Indonesia, where we're covering 500,000 outlets, right, all the time or Vietnam, 120,000 outlets, Brazil, similarly in the hundreds of thousands. And so those are complex markets. There are better ways to do that. And I believe there's a right way and a wrong way to do that. And so we've got different tools in place, but we are developing best-in-class tools to help our go-to-market or our sales organizations become much more efficient in terms of how they approach the trade by applying smart technology.

And I think innovation probably is another example, and we'll get to it later. Let's get to it now because it's important. And to my years at least, I think you've broken through it like a not-invented-here syndrome, where everyone kind of wants to invent their own thing in their own market. And it sounds like there's a little more willingness now to look at it and say, wow, this is interesting. It was developed here. Can we reapply elsewhere?

Yes. That's what's really changed. It's -- I think the culture is changing to hey, look and see what the best of the world has and pull it fast in your market. And I think the best example, I think of local agility combined with global scale is what's been happening in China for us over the last, let's say, call it, 5 years. And as you will recall, I think if we went 2015, 2016, we -- our business started to slow down in China. One, because of some macro pricing issues that were occurring from the multinational competitors. And then starting in 2017, we started to see growth from the local competitors with a differentiated offering, right, a thinner, more flexible, more breathable product that moms really wanted and willing to pay a much higher premium for. And so our team responded to that, and they were very early in catching it. Actually, Taryn, who's with us today, she's running our Investor Relations. We went to China right when I became Chief Operating Officer in 2017. I think these products started to hit in market in January of 2017. Taryn and I were out there in June of 2017, if you recall. And the team -- we spent the whole meeting talking about these products. And the team had identified with their local R&D organization and the local manufacturing a way to get to a lot of the benefits of what they are seeing in the marketplace. But it wasn't really the best product. And so we started talking about the benefits that we needed to win at the global level. And then once our China team started seeing what the global organization had, for instance, our R&D organization in North America, they had developed their own local product to win. When they saw what was happening in North America and in Latin America, they're like, we want that. And so we're now, I think, on our fifth generation of that product, which we call the 5D diaper, which has driven us to share leadership position in the China diaper market, and we added another share point in the first quarter. China was up double digits last year, up high single digit in the quarter. And I think you know, Jason, that's kind of bucking the trend because there are birth rate declines. But our team is saying, hey, there's still a lot of share to grow, and we believe we have the technology pipeline that's going to enable us to continue winning.

Certainly bucks the trend. We asked P&G this earlier because they have a substantial footprint in China, but throughout the earnings cycle, anyone with China exposure generally was delivering a [ knock-away ] message of -- the business has really slowed in March and April with outright declines in many instances, and things have gotten tough overall. So you bucked the trend through the first quarter. Is it fair to say like some of these macro themes have caught up with you, and it is getting tougher or more sluggish in that market in the near term?

I'll say again, I remain confident, China overall is a long-term growth engine for us.

Yes.

It's already the biggest diaper market in the world. It's the largest fem care market in the world, will continue to be even with the birth rate slowdown. And then there's still a huge opportunity for us to grow share and grow the categories. As Alison pointed out at CAGNY, the value per baby or the dollars per baby in the category is less than half of what it is in developed markets. And so there's still a long runway of growth. We're not immune in terms of the COVID lockdowns and what's happening in the marketplace. But I will point out our manufacturing is not in Shanghai. And so we're still operating. We are highly developed in e-commerce. And so because of that, we're still serving consumers. We do have some lockdown effects in a market like Shanghai, but I think our team has done a nice job of navigating. So we don't typically share -- we'll share what happened this quarter at the end of the quarter or after the end of the quarter. But again, I would say our business continues to perform, but we're not immune to some of the issues.

And on that half of the dollar spend per baby is half than what we see in the [ DM ]. If we were -- is that because they're just cheap diapers? Or is it more reflective of -- because I don't actually think that's the case. I'm guessing the volume rate's not meaningfully similar or they could actually even be less developed in the volume base.

Yes, both. You're on it, and you were a brand manager. So it's like the penetration and frequency and value per diaper. So it's all those things. But I would say what makes China fascinating is from the premium side, it's already the most premium market in the world, meaning we have price points that consumers in developed markets are not willing to pay for yet. So -- but it's a thin slice of the market. And so where you have disposable income in China. And remember, in China, it's generally 6 adults are supporting one child. So there's a lot of disposable income that make the baby comfortable. If you can deliver better offering, they're willing to spend that. And so there is premium. But I would say there's still a long tail of people who aren't in the category on a frequent basis or at all. And so -- and that's going to continue to climb over the years.

Yes. Yes, it would be great to be able to see that brought to light a little bit more, more of an idea for Taryn over there, some presentation really contextualized.

I'm pulling you back into your brand manager days.

Well, you could -- it's interesting, right? Starts with overnight, where are you on the overnight penetration then it starts throughout the day, and the frequency keeps climbing.

Well, that's the innovation change. if you hit it, Jason, it really is I think we used to think in terms of, hey, how do we drive product preference, which is still an objective. But if we talk take, hey, there's a huge opportunity in comfort. Well, how do you think about comfort? And I won't share all the details, but everybody knows we're working on comfort. There's multiple dimensions of that, the absorbency and how you intake fluids, the cover and how soft it is, the fit. So there's many ways to deliver superior benefits.

We've got about 13 minutes left. I've got an exceptionally long list of questions, which means I'm not going to touch and even half of these are left, which is fine. I'd like to be overprepared rather than underprepared. I want to zoom in here and now. But before I get there, back to your transformation, you've been a little more active on M&A recently, particularly in Indonesia, where it sounds like the market is in a better place than maybe it was a decade ago, which attract you to it. But you've also mentioned the potential of being a more diversified company and potentially participating in other verticals than you are today. That sounds back to -- I'm going to steal your word from earlier, more transformational. Should we expect you to pursue something like that down the road? And what could it look like?

Well, we're definitely going to look up for opportunities to create more value by accelerating growth, and M&A would be useful in that in some cases, in categories that have higher-growth profiles, work or markets that have higher-growth profiles or that are accretive to margin for us. And so the thing, though, Jason, we're going to continue to be very disciplined and focused on shareholder value creation, right? And that's a heritage of KC. And so -- but I'd say I -- we love our categories. I love all of our categories, personal care, consumer tissue. I still think there's a lot of development and growth in our categories there. K-C Professional is again, a great business for us, been rocked a little bit by COVID, but great long-term potential. So we love our categories. But certainly, we'll look for acquisitions or opportunities that can be accretive to both the growth profile and margin. Now the ones that we've done in the last couple of years, which you pointed out, fit exactly that profile. I mean -- and you raised Indonesia did not -- we didn't always think of it as an attractive market. I would say we love Indonesia now, and we love Softex, great business and huge market potential. And I think what we like about Indonesia, obviously, I think it's already the sixth-largest diaper market in the world. And by the next decade, it will be #3 for us, very stable economic development, great infrastructure development. And so those are the kind of general positives about the market for us. Obviously, a huge population base. That's right in the sweet spot of where income growth is going where our categories start to take off. So there are about $4,000 per household, and that's generally China for us in 2010 hit $4,000. Now it's $13,000 a household. So that's kind of where the growth in China -- what's driven the growth in China or enabled it. And so Indonesia is in that sweet spot now. But the other side of it is it's a company that internally, we'll use the language has exhibited a growth mindset. Now while 10 years ago, maybe the economics weren't that great. Softex's economics are pretty darn good. And so they cracked the code. They do low-cost diapers in a lower cost way than we do. So we learned some things from them. They're great at the go-to-market. As I mentioned, they go to 500,000 outlets. They figured out how to do that in an efficient way with a low-cost structure. And so there's a lot of things we like about a company like Softex. So I think that's on the market side. The other thing is Thinx and -- which is reusable underwear for menstruation or incontinence. And I think that's, for us, we think long term where the market is going to go. I mean, as we started to think about innovation, we started talking internally that we're more than diapers and pads and bath tissue. In some ways, we should view ourselves as a garment company, right? We make clothing that's disposable. But if you think about that, obviously, things really push that to the next level. And I think that's where a market or at least a portion of the market will evolve. And even with Thinx, I think they're -- thinking about garments and comfort and fit has a lot of applications to even the business that we would say remains disposable.

Sure. All those pretty close in, though, to kind of what you do on a daily basis.

Yes.

You could also reframe and say, we're a hygiene business. But we shouldn't expect you to go out and buy a personal cleaning-type piece to add to your portfolio.

Well, if we were, I wouldn't say it now.

Exactly. Let me say, illustrate example.

No, no. But I think that's right. i mean, there are -- there have been a few large investors that have asked us this. Well, like you all are starting to develop obviously some domain expertise, would you ever extend that to other categories? And again, I would say, the things that I've listed out, yes, we are probably closer in. We probably would be amenable to looking a little further up. But again, we'll stay focused, making sure that we can deliver value creation.

Okay. And before you get there, you show the charts around your recent performance and the earnings pressure. You probably want to get your earnings back in a better place before you start contemplating some of that stuff. So let's talk about how you do that. Top line is humming, right? It's not that. It's a cost issue. Where do we stand? Like is there a line of sight from where you're at today of whether or not costs have found a plateau level sequentially? Or are you still chasing the ball downhill, trying to catch up with an ever-escalating cost curve?

Well, with almost a month in, we're going to let our CFO address that.

That's right. That's 30 days. You're good.

So you're right. I mean, costs have been increasing, and we've been all facing in all cost baskets, we've seen the pressure, Jason. And the reality is we had seen or we had begun to see some of the commodities begin to plateau or subside as we've all been experiencing. However, the recent situation in Europe kind of triggered a reacceleration in a few, like, for instance, the energy -- the energy bid as well as the oil-derived commodities. And the other dynamic that we're facing this year is that as opposed to last year, it's more of an international situation this year than last year. If you recall, last year, we had the Texas freeze, and that kind of hit us -- part in North America, and we're lapping that. Having said that, as we look at this year, our reality is based on the latest outlook we provided, we -- and at the midpoint, we already took the hit for about 40% of those costs in Q1. So absent any other massive moves in commodities, we should expect that to subside as we go in the subsequent quarters of the year. Hence, why we've said that as we head into the second half of the year, we should see that plateau and really get to that level, absent, again, any major moves in the commodities environment.

Yes. And you've still got more price coming in.

Yes.

Is it possible that by the time we get to the back half of the year, you're back to a price cost surplus?

So here's the way that I would look at it. We -- as our pricing is kicking in, what's going to happen is we've committed, and we guided to the fact that based on the current situation and the facts we know for the full year, we would expect to be at about a neutral place for overall pricing net of all the costs we're facing, which would get us into a good trajectory to recover all those costs. And we still have a little bit to go through as we go into next year. I will state, however, and reinforce the fact that we're committed to margin recover case. That is a must for all of us and even margin expansion as we move forward. So that is the objective that we were having of that end.

And can you get to margin recovery without the cyclical costs cycling back down?

So listen, we've talked about the reality that at some point, commodities do revert. And that is an element that we do see in our categories. To the extent that, that reversion happens, we would get there quicker, faster. But I would say, we remain committed to get there. And again, keep in mind that it's not just pricing. We also have our productivity program, FORCE. We've been very committed around it. We've invested heavily in our supply chain. And we have line of sight to a good pipeline of productivity that will be kicking in as we progress.

Yes. I'll reiterate that, Jason, because it's exactly as Nelson said, which is we're committed to the margin recovery. We're holding our teams accountable to recovering the margins with or without commodity reversion. We all know -- and you've been covering our business for a long time. We all know there's going to be reversion. And so if and when that happens, that will accelerate our top line.

Yes. I think so far you've absorbed about a $1.3 billion price-to-cost deficit. You grind out a little bit more than $400 million per year of FORCE cost savings. Ceteris paribus, that's 3 years of margin recovery on FORCE savings alone. So if we -- minimum we look out there and say, okay, 3 years out. And obviously, if we get some pullback in costs, that could be accelerated, you can pull it forward. Is that a fair way to think about it?

Listen, we -- for this year, we said in the $300 million to $350 million of FORCE. That's what we've kind of said for the year. But the way to look at it is we are committed regardless of the commodity reversion to get back to our margins and to expand. That is something that we're all holding ourselves to account, and the teams are executing the core.

Yes, and even if you don't, we just want penny profit growth. Give us back to penny profit growth. And at the end of the day, that's what pays bills, not ratios.

And remember, that's the key component of our cash flow. That's the element that allows us to keep investing in the business and driving that sustainable growth over time.

Yes. Yes. We've got a couple of minutes left for Q&A. Anyone in the audience want to lob a question out here?

Not after that ceteris paribus. Did they teach you that in Battle Creek?

Yes. Latin is very common in Battle Creek. That's right, common language out there. Okay. One other question that we've asked most people because it's topical, but it hasn't come up here yet, but let's just put on the table. Price sensitivity. So far, the consumer has shown very little sensitivity, but there's some evidence that it's building. It's not ubiquitous, but you're seeing pockets of private label. Are you seeing areas where the consumer may be shrinking basket, a little more focused on price point rather than the quantity? So it looks like it's starting to surface and get a little worse. What are you guys seeing? And what are you expecting? And because you're global, love to hear that perspective on how -- what you're seeing, it may look different in the U.S. versus Europe or some of your emerging markets.

You are right on. It varies by market. And I'd say in developed markets, Jason, probably in markets where there's been a little more consumer subsidy, let's say, with the stimulus packages in the U.S. or similar programs in other developed markets, I think the consumer has been able to spend a bit more. We're keeping a close eye on to it because I think the -- with the inflation that's happening across their basket, I think the pressure on the consumer is building. And so we have to keep a close eye. Thus far, though, in our big developed markets, as you've seen in the quarter, we were up 10% overall on the floor. We got about 7 points of price in the first quarter. The volume is a bit better than we had anticipated at the beginning of the year. And that's typical in our category because when pricing moves up, our categories are still essential. And so in a category like bath tissue, you probably will not use less even though the pricing is up slightly.

Yes. Not many options to trade out to. [indiscernible]leaves, but who's going to go back there?

Right. So that's, I think, generally in developed markets and a lot of developing and emerging markets as well. In Latin America, though, I think we're -- there has been less -- it's more of an informal economy. And when people have less hours to work when they were locked down in COVID, right, their paychecks are proportionately less. We have seen either lower category usage. So in a diaper category, they may use diapers longer. And so the frequency changes or they may down-trade to a lower tier, right, for us, more of a value tier. And so we -- we've seen some of that movement. The great thing about our business in Latin America is we are the leaders across Latin America in our categories. We play in both the premium end, which is our strategy to elevate our business there, but we're still the leaders on the value end. And so we're able to pivot.

That's excellent. Thank you so much. We're fresh out of time. So let's wrap it there. Nelson, Michael, thank you so much for your time today. I really appreciate it. It's great meeting you all -- or not great meeting you and great [ being inside ] with you in person. So thank you so much for joining us today.

All right. Great to be here. Thank you, Jason.

Thank you so much.