3m Company · NYSE:MMM
3m — Q1 2024 Earnings Presentation
28 slides from 3m's earnings presentation, Apr 30, 2024
Slide 1: 2024 First Quarter Earnings
2024 First 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 statements. You can identify these statements by the use of words such as “plan,” “expect,” “aim,” “believe,” “project,” “target,” “anticipate,” “intend,” “estimate,” “will,” “should,” “could,” “would,” “forecast” and other word
Slide 3: Q1 2024 actuals and full-year earnings outlook approach
3 Q1 2024 actuals and full-year earnings outlook approach • Q1 2024 results are reported inclusive of the Health Care business segment, on the same basis on which 3M provided its first-quarter guidance – Solventum Corporation’s financial reporting will differ from the basis of presentation used by 3
Slide 4: Financial reporting framework
4 Financial reporting framework Primary updates, additional details in future communications Pre-spin framework Post-spin framework Adjusted Adjusted Operating Adjusted Adjusted Operating Business Groups Net Sales Income/(Loss) Business Groups Net Sales Income/(Loss) Safety & Industrial X X Safety &
Slide 5: Strong execution, significant progress on priorities
5 Strong execution, significant progress on priorities Driving performance Spinning off Reducing risk and through the 3M model Health Care uncertainty • Adjusted revenue of $7.7B, • Successfully completed the spin • Public Water Suppliers (PWS) improved organic growth of Solventum on April 1st settl
Slide 6: Strong operational execution drives Q1 results
6 Strong operational execution drives Q1 results • Adj. organic growth of 0.8%, includes ~1.6 ppt YoY headwind from product portfolio Adjusted Sales initiatives, disposable respirator comp, and exit of small countries • Strength in automotive and electronics – gained share with spec-in wins and new
Slide 7: Q1 2024 operating margin and EPS
7 Q1 2024 operating margin and EPS Adjusted Adjusted operating earnings Results vs. (Includes Health Care) margin per share Q1 YoY commentary Q1 guidance Q1 2023 17.9% $1.97 Total organic growth/ +5.5% +$0.65 productivity/other Organic growth/ • Benefits from productivity, sourcing actions, restruct
Slide 8: Q1 2024 cash flow and balance sheet
8 Q1 2024 cash flow and balance sheet Adjusted free cash flow Adjusted free cash flow • Q1: $0.8B, down 12% YoY $0.8B • Q1: 63%, down 24 ppts YoY Adjusted free cash flow – Continued improvement in working capital efficiency Adjusted free cash flow conversion – Higher YoY annual incentive cash compen
Slide 9: Business Group performance
Business Group performance Safety & Transportation & Consumer Industrial Electronics 2024 Q1 Earnings | April 30, 2024. All rights reserved.
Slide 10: Safety & Industrial
10 Safety & Industrial Q1 2024 commentary • Organic growth performance: – Mid-teens increase in roofing granules; low-single digit increase in industrial adhesives and tapes Organic growth – Low-single digit decline in electrical markets, abrasives, automotive aftermarket, and personal safety; high-
Slide 11: Transportation & Electronics
11 Transportation & Electronics Q1 2024 commentary • Adjusted organic growth performance – Mid-teens increase in electronics; mid-single digit increase in automotive and aerospace; low-single digit increase in commercial branding and Adjusted organic growth transportation; advanced materials flat •
Slide 12: Consumer
12 Consumer Q1 2024 commentary • Organic growth performance – Low-single digit decline in home improvement, and consumer safety and well-being Organic growth – Mid-single digit decline in home and auto care -3.9% – High-single digit decline in packaging and expression Includes ~(2.4) ppt headwind fr
Slide 13: 2024 Outlook
2024 Outlook 2024 Q1 Earnings | April 30, 2024. All rights reserved.
Slide 14: Initiating 2024 full-year earnings guidance on a continuing operations basis
14 Initiating 2024 full-year earnings guidance on a continuing operations basis 2023 2024 illustrative guidance Adjusted organic -4.4% Flat to +2% sales growth (Includes 240 bps headwind from disposable respirator decline and 2022 exit of Russia) (Includes ~100+ bps headwind from portfolio/geographi
Slide 15: 2024 key assumptions on a continuing operations basis
15 2024 key assumptions on a continuing operations basis (adjusted basis) Q1 2024 Additional full-year key assumptions: illustrative • Total sales: ~(0.25%) to 1.75% (~49% H1/51% H2) Sales ~$5.7B • Acquisition/divestiture: ~0.75% (revenue from Solventum agreements) • Foreign currency: sales translat
Slide 16: 2024 business group outlook
16 2024 business group outlook Safety & Transportation & Consumer Industrial Electronics • Organic sales growth: • Adjusted organic sales growth: • Organic sales growth: flat to up LSD up LSD down LSD • Industrial end-market • Auto build forecast slightly • Portfolio/geographic demand mixed negative
Slide 17: Resetting our dividend post Solventum spin
17 Resetting our dividend post Solventum spin • 100+ year history of paying shareholders a competitive dividend • Distributed 80.1% of Solventum’s outstanding shares to 3M shareholders • Following the spin of Solventum, 3M’s dividend payout ratio is expected to be approximately 40% of adjusted free
Slide 18: Closing comments
18 Closing comments • Q1 a strong start to the year • Delivering on our priorities … strong operational execution driving improved financial performance and completed major milestones • Remain focused on delivering for our customers and shareholders; our strategies have positioned the company for lo
Slide 19: Q&A
Mike Roman Monish Patolawala Bruce Jermeland Q&A Chairman of the Board and Chief Executive Officer President and Chief Financial Officer Senior Vice President, Investor Relations 2024 Q1 Earnings | April 30, 2024. All rights reserved.
Slide 20: Appendix
Appendix 2024 Q1 Earnings | April 30, 2024. All rights reserved.
Slide 21: Q1 2024 P&L
21 Q1 2024 P&L GAAP ($M), except per share Q1 Q1 amounts 2024 2023 Change Sales $8,003 $8,031 (0.3)% Gross profit $3,674 $3,418 7.5% % to sales 45.9% 42.6% 3.3% SG&A $1,736 $1,705 1.8% % to sales 21.6% 21.3% 0.3% R&D & related $437 $472 (7.4)% % to sales 5.5% 5.9% (0.4)% Operating income $1,501 $1,2
Slide 22: Q1 2024 adjusted sales recap
22 Q1 2024 adjusted sales recap Americas EMEA APAC Worldwide Organic growth (0.9)% 3.3% 2.6% 0.8% Acquisitions/divestitures 0.6% (0.2)% —% 0.3% FX 0.4% 1.7% (4.3)% (0.6)% Total growth 0.1% 4.8% (1.7)% 0.5% 2024 Q1 Earnings | April 30, 2024. All rights reserved.
Slide 23: Q1 2024 business segment information
23 Q1 2024 business segment information ($M) Adjusted net sales* Q1 2024 adjusted sales growth* Adjusted operating income* Adjusted operating margin* Total Q1 Q1 Organic sales Q1 Q1 Percent Q1 Q1 Business Groups 2024 2023 growth FX M&A change 2024 2023 change 2024 2023 Safety & Industrial $2,732 $2,
Slide 24: Health Care
24 Health Care Q1 2024 commentary • Organic growth performance – Mid-single digit increase in purification and filtration Organic growth – Medical surgical (MedSurg), dental solutions, and health information systems flat 1.0% • Operating margin down 40 bps YoY; down 80 bps sequentially Operating mar
Slide 25: Additional GAAP sales detail
25 Additional GAAP sales detail ($M) GAAP Net Sales ($M) GAAP Net Sales Business Groups Q1 2024 Q1 2023 Business Groups Q1 2024 Q1 2023 Abrasives 328 341 Health Information Systems 300 300 Automotive Aftermarket 306 312 Medical Surgical (MedSurg) 1,123 1,123 Electrical Markets 311 324 Dental Solutio
Slide 26: “Other” category and “Corporate & Unallocated” details
26 “Other” category and “Corporate & Unallocated” details ($ in millions) Other(a) Q1 2024 Remaining FY 2024 illustrative Q2 - Q4 2024 estimated Net operating ~($65) ~$40 to $65 ~Flat to ($25) income/(loss) ($ in millions) Corporate & Unallocated(b) Q1 2024 Remaining FY 2024 illustrative Q2 - Q4 202
Slide 27: Our 2024 priorities: Reduce risk and uncertainty
27 Our 2024 priorities: Reduce risk and uncertainty • Public Water Suppliers (PWS) settlement received final court approval • Agreement includes pre-tax present value commitment of up to $10.3B payable over 13 years • Supports PFAS remediation for U.S. PWS that have or may detect in the future any f
Slide 28: Science. Applied to Life.
Science. Applied to Life.”