3m Company · NYSE:MMM
3m — Q4 2023 Earnings Presentation
24 slides from 3m's earnings presentation, Jan 23, 2024
Slide 1: 2023 Fourth Quarter Earnings
2023 Fourth Quarter Earnings (unaudited) Mike Roman Monish Patolawala Bruce Jermeland Chairman of the Board and President and Chief Senior Vice President, Chief Executive Officer Financial Officer Investor Relations
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 “plan,” “expect,” “aim,” “believe,” “p
Slide 3: 2024 outlook approach
3 2024 outlook approach Notes on guidance ▪ At this time, the 2024 guidance approach − Includes the Health Care business as part of the company for the full year and − Does not reflect the potential impact of funding the litigation payments, absent the receipt of the cash payments in the spin (each
Slide 4: 2023 performance
4 2023 performance Executed our plan and delivered on commitments Original Guidance January 2023 2023 Actuals Adjusted earnings per share $8.50 to $9.00 $9.24 Adjusted free cash flow conversion 90% to 100% 123% Adjusted organic sales growth Flat to -3% -3% Drove operational performance and improved
Slide 5: Advancing our priorities
5 Advancing our priorities: 1 2 Driving performance Spinning off through the 3M model Health Care • Took actions to simplify the company; initiated restructuring • Spin remains on track for first-half 2024 actions that drove strong benefits in 2023 • Improved adjusted operating margins to 20.3%, whi
Slide 6: Driving margin and cash flow through operational execution
6 Driving margin and cash flow through operational execution Q4 2023 performance Adjusted Sales of $7.7B Adjusted Op. Income Adjusted EPS of $2.42 Adjusted Free Cash vs. $7.6 to $7.7B guidance Margin of 20.9% vs. $2.13 to $2.33 guidance Flow of $2.0B Adj. organic growth of -1.4% • Adjusted operating
Slide 7: Q4 2023 operating margin and EPS
7 Q4 2023 operating margin and EPS Adjusted Adjusted operating earnings margin per share Commentary Q4 2022 19.1% $2.18 Total organic growth/ +4.0% +$0.43 productivity/other Disposable respirator -0.1% -$0.03 • Decline in COVID-related disposable respirator demand Remaining organic growth/ • Benefit
Slide 8: Q4 2023 cash flow and balance sheet
8 Q4 2023 cash flow and balance sheet Adjusted free cash flow • Q4: $2.0B, up 18% YoY Adjusted free cash flow • FY: $6.3B, up 30% YoY $2.0B • Q4: 145%, up 8 ppts YoY Adjusted free cash flow • FY: 123%, up 37 ppts YoY Adjusted free cash flow conversion • FY: improvement driven by working capital, esp
Slide 9: Business Group performance
Business Group performance Safety & Transportation & Health Care Consumer Industrial Electronics 2023 Q4 Earnings | January 23, 2024. All rights reserved.
Slide 10: Business Group performance
10 Business Group performance FY 2023 Q4 2023 Organic Organic growth growth Adjusted Adjusted operating operating margin margin Q4 Commentary -5.1% -3.9% • Double digit organic growth in roofing granules, industrial adhesives and tapes flat, all other divisions declined Safety & • Disposable respira
Slide 11: 2024 Outlook
2024 Outlook 2023 Q4 Earnings | January 23, 2024. All rights reserved.
Slide 12: Positioning 3M for the future
12 Positioning 3M for the future 2024 focus areas Sustainable margin and cash • Simplify and streamline the organization • Drive productivity throughout the supply chain 1 Drive sustainable margin and cash flow • Relentless focus on working capital improvement through the 3M model Portfolio optimiza
Slide 13: 2024 full-year guidance
13 2024 full-year guidance Adjusted organic Flat to +2% sales growth (Includes ~ 1 ppt headwind from portfolio/geographic prioritization) Adjusted earnings $9.35 to $9.75 per share Adjusted free cash 95% to 105% flow conversion Note: 2024 guidance approach includes the Health Care business as part o
Slide 14: 2024 business group outlook
14 2024 business group outlook Safety & Industrial Transportation & Electronics • Organic sales growth: flat to +LSD • Adjusted organic sales growth: flat to +LSD • Industrial end-market demand mixed • Auto builds slightly negative • Industrial Production Index (IPI) up 2% (IHS) • Consumer electroni
Slide 15: Q1 2024 outlook
15 Q1 2024 outlook Performance drivers Adjusted sales • Macroeconomic trends similar to Q4 • Estimated combined sales headwind of ~$100M YoY from: ~$7.6 billion − Consumer product portfolio rationalization, disposable respirator YoY comp and the exit of small countries • Pre-tax restructuring charge
Slide 16: Q&A
Mike Roman Monish Patolawala Bruce Jermeland Q&A Chairman of the Board and Chief Executive Officer President and Chief Financial Officer Senior Vice President, Investor Relations 2023 Q4 Earnings | January 23, 2024. All rights reserved.
Slide 17: Appendix
Appendix 2023 Q4 Earnings | January 23, 2024. All rights reserved.
Slide 18: Q4 2023 P&L
18 Q4 2023 P&L Q4 Q4 GAAP ($M) 2023 2022 Change Sales $8,013 $8,079 (0.8)% Gross profit $3,335 $3,494 (4.5)% % to sales 41.6% 43.2% (1.6)% SG&A $1,625 $2,146 (24.3)% % to sales 20.3% 26.5% (6.2)% R&D & related $467 $445 4.9% % to sales 5.8% 5.5% 0.3% Goodwill impairment expense $— $271 (100.0)% % to
Slide 19: Q4 2023 adjusted sales recap
19 Q4 2023 adjusted sales recap Americas EMEA APAC Worldwide Organic growth 0.3 % (0.6)% (5.8)% (1.4)% Acquisitions/divestitures 0.7 % (0.6)% (0.3)% 0.2 % FX 0.5 % 5.1 % (0.9)% 0.9 % Total growth 1.5 % 3.9 % (7.0)% (0.3)% 2023 Q4 Earnings | January 23, 2024. All rights reserved.
Slide 20: Q4 business segment information
20 Q4 business segment information ($M) Adjusted net sales* Q4 2023 adjusted sales growth* Adjusted operating income* Adjusted operating margin* Total Q4 Q4 Organic sales Q4 Q4 Percent Q4 Q4 Business Groups 2023 2022 growth FX M&A change 2023 2022 change 2023 2022 Safety & Industrial $2,661 $2,735 (
Slide 21: Additional GAAP sales detail
21 Additional GAAP sales detail ($M) GAAP Net Sales ($M) GAAP Net Sales Business Groups Q4 2023 Q4 2022 Business Groups Q4 2023 Q4 2022 Abrasives 322 329 Health Information Systems 312 338 Automotive Aftermarket 304 309 Medical Solutions 1,162 1,134 Closure and Masking Systems 236 252 Oral Care 306
Slide 22: 2023 to 2025 structural reorganization actions
22 2023 to 2025 structural reorganization actions* Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 (($M) Actual Actual Actual Actual Actual ) Restructuring & related net charges $52 $212 $68 $109 $441 Net benefits (YoY) - $89 $166 $162 $417 2024 Total (($M) Estimated Program Estimated Restructuring & relate
Slide 23: Quarterly 2023 adjusted operating margin progression
23 Quarterly 2023 adjusted operating margin progression Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Adjusted Adjusted Adjusted Adjusted Adjusted operating operating operating operating Operating margin margin margin margin margin 2022 22.0% 21.6% 21.6% 19.1% 21.1% Total organic growth/ -2.0% +0.9% +2.6%
Slide 24: Science. Applied to Life.
Science. Applied to Life.”