3m Company · NYSE:MMM
3m — Q2 2023 Earnings Presentation
22 slides from 3m's earnings presentation, Jul 25, 2023
Slide 1: 2023 Second Quarter Earnings
2023 Second Quarter Earnings (unaudited) Mike Roman Monish Patolawala Kevin Rhodes Bruce Jermeland Chairman of the Board & Executive Vice President, Executive Vice President, Senior Vice President, Chief Executive Officer Chief Financial & Chief Legal Affairs Officer Investor Relations Transformatio
Slide 2: Forward-looking statements
2 Forward-looking statements This presentation contains forward-looking information about 3M’s financial results and estimates and business prospects that involve substantial risks and uncertainties. You can identify these statements by the use of words such as “anticipate,” “estimate,” “expect,” “a
Slide 3: Strong operational execution; raising full-year earnings expectation
3 Strong operational execution; raising full-year earnings expectation • Q2 performance Adjusted organic growth – Strong focus on serving customers, operational execution and continued spending discipline – All business segments delivered significant sequential improvement in -2.5% Includes ~(1.7) p
Slide 4: Executing on our strategies
4 Executing on our strategies Operational efficiency Health Care spin • Restructuring actions well underway • In final stages of appointing leadership • Reducing costs at the corporate center • Separation workstreams progressing, preparing for soft spin in November • Simplifying management structure
Slide 5: Addressing PFAS litigation with U.S. Public Water Systems
5 Addressing PFAS litigation with U.S. Public Water Systems • Benefits U.S.-based Public Water Systems (PWS) nationwide that provide drinking water to a Creates broad vast majority of Americans class-based • Addresses current and future claims by PWS class members that detect PFAS settlement • Inclu
Slide 6: Q2 2023 operating margin and EPS
6 Q2 2023 operating margin and EPS Adjusted Adjusted operating earnings margin per share Commentary Q2 2022 21.6% $2.45 Total organic growth/ +0.9% +$0.06 productivity/other Disposable respirator -0.5% -$0.09 • Decline in COVID-related disposable respirator demand in-line with expectations • Benefit
Slide 7: Q2 2023 cash flow and balance sheet
7 Q2 2023 cash flow and balance sheet Adjusted free cash flow • Q2: $1.5B, up 44% YoY Adjusted free cash flow • YTD: $2.4B, up 35% YoY $1.5B • Q2: 122%, up 50 ppts YoY Adjusted free cash flow • Q2 YoY increase driven by strong inventory management and Adjusted free cash flow conversion restructuring
Slide 8: Business Group performance
Business Group performance Safety & Transportation & Health Care Consumer Industrial Electronics 2023 Q2 Earnings | July 25, 2023. All rights reserved.
Slide 9: Safety & Industrial
9 Safety & Industrial Q2 2023 commentary • Organic growth performance: – Mid single-digit increases in roofing granules and automotive aftermarket – Declines in closure and masking, personal safety, industrial adhesives and Organic growth tapes, abrasives, and electrical markets – Disposable respira
Slide 10: Transportation & Electronics
10 Transportation & Electronics Q2 2023 commentary • Adjusted organic growth performance – Double digit increase in automotive and aerospace, high-single digit increase in transportation safety, and low-single digit increases in Adjusted organic growth commercial solutions and advanced materials – S
Slide 11: Health Care
11 Health Care Q2 2023 commentary • Organic growth performance – Low-single digit increase in oral care, and medical solutions up slightly – Declines in separation and purification, and health information systems Organic growth • Low-single digit hospital procedure growth YoY 0.1% • Normalization of
Slide 12: Consumer
12 Consumer Q2 2023 commentary • Organic growth performance – Low-single digit increase in home health and auto care – Mid-single digit decline in stationery and office; low-single digit decline in Organic growth home improvement -2.2% • Discretionary spending trends on hardline categories remains s
Slide 13: 2023 Outlook
2023 Outlook 2023 Q2 Earnings | July 25, 2023. All rights reserved.
Slide 14: Raising full-year 2023 EPS guidance
14 Raising full-year 2023 EPS guidance Full-year 1H 2023 Increasing adjusted earnings per share • Adjusted sales of $15.7B $8.60 to $9.10 vs. $8.50 to $9.00, prior • Adjusted earnings of $4.14 per share, includes: Includes restructuring actions − Pre-tax restructuring charges of $264M, or $0.38 per
Slide 15: Q&A
Q&A Mike Roman Chairman of the Board & Chief Monish Patolawala Executive Vice President, Chief Bruce Jermeland Senior Vice President, Executive Officer Financial & Transformation Officer Investor Relations 2023 Q2 Earnings | July 25, 2023. All rights reserved.
Slide 16: Appendix
Appendix 2023 Q2 Earnings | July 25, 2023. All rights reserved.
Slide 17: Q2 2023 P&L
17 Q2 2023 P&L Q2 Q2 GAAP ($M) 2023 2022 Change Sales $8,325 $8,702 (4.3)% Gross profit $3,719 $3,609 3.0% % to sales 44.7% 41.5% 3.2% SG&A $12,204 $3,023 N/M % to sales 146.6% 34.7% 111.9% R&D & related $473 $476 (0.6)% % to sales 5.7% 5.5% 0.2% Operating income $(8,958) $110 N/M % to sales (107.6)
Slide 18: Q2 2023 adjusted sales recap
18 Q2 2023 adjusted sales recap Americas EMEA APAC Worldwide Organic growth (0.2)% (0.5)% (8.4)% (2.5)% Acquisitions/divestitures (1.5)% (0.8)% (1.1)% (1.3)% FX (0.2)% 1.1% (3.6)% (0.9)% Total growth (1.9)% (0.2)% (13.1)% (4.7)% 2023 Q2 Earnings | July 25, 2023. All rights reserved.
Slide 19: Business segment information
19 Business segment information ($M) Adjusted net sales* Q2 2023 adjusted sales growth* Adjusted operating income* Adjusted operating margin* Total Q2 Q2 Organic sales Q2 Q2 Percent Q2 Q2 Business Groups 2023 2022 Growth FX M&A change 2023 2022 change 2023 2022 Safety & Industrial $2,765 $2,924 (4.6
Slide 20: Additional GAAP sales detail
20 Additional GAAP sales detail ($M) GAAP Net Sales ($M) GAAP Net Sales Business Groups Q2 2023 Q2 2022 Business Groups Q2 2023 Q2 2022 Abrasives 334 346 Food Safety — 89 Automotive Aftermarket 305 289 Health Information Systems 302 309 Closure and Masking Systems 241 270 Medical Solutions 1,161 1,1
Slide 21: 2023 pre-tax estimated restructuring schedule
21 2023 pre-tax estimated restructuring schedule (($M) Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Total Program ) Actual Actual Estimated Estimated Estimated Estimated Charges $52 $212 $125 to $175 $10 to $60 $400 to $450 $700 to $900 Benefits - $89 $125 to $150 $185 to $235 $400 to $450 $700 to $900 2
Slide 22: Science. Applied to Life.
Science. Applied to Life.”