investor presentation 3m

• Today's news
• Reviews and deals
• Climate change
• 2024 election
• Fall allergies
• Health news
• Mental health
• Sexual health
• Family health
• So mini ways
• Unapologetically
• Buying guides

Entertainment

• How to Watch
• My Portfolio
• Latest News
• Stock Market
• Biden Economy
• Stocks: Most Actives
• Stocks: Gainers
• Stocks: Losers
• Trending Tickers
• World Indices
• US Treasury Bonds Rates
• Top Mutual Funds
• Options: Highest Open Interest
• Options: Highest Implied Volatility
• Basic Materials
• Communication Services
• Consumer Cyclical
• Consumer Defensive
• Financial Services
• Industrials
• Real Estate
• Stock Comparison
• Advanced Chart
• Currency Converter
• Credit Cards
• Balance Transfer Cards
• Cash-back Cards
• Rewards Cards
• Travel Cards
• Credit Card Offers
• Best Free Checking
• Student Loans
• Personal Loans
• Car insurance
• Mortgage Refinancing
• Mortgage Calculator
• Morning Brief
• Market Domination
• Market Domination Overtime
• Asking for a Trend
• Opening Bid
• Stocks in Translation
• Lead This Way
• Good Buy or Goodbye?
• Financial Freestyle
• Capitol Gains
• Living Not So Fabulously
• Decoding Retirement
• Fantasy football
• Pro Pick 'Em
• College Pick 'Em
• Fantasy baseball
• Fantasy hockey
• Fantasy basketball
• Download the app
• Daily fantasy
• Scores and schedules
• GameChannel
• World Baseball Classic
• Premier League
• CONCACAF League
• Champions League
• Motorsports
• Horse racing
• Newsletters

New on Yahoo

• Privacy Dashboard

Yahoo Finance

3m company (nyse:mmm) q4 2023 earnings call transcript.

3M Company (NYSE: MMM ) Q4 2023 Earnings Call Transcript January 23, 2024

3M Company beats earnings expectations. Reported EPS is $2.42, expectations were $2.31. 3M Company isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter ( see the details here ).

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the 3M Fourth Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded, Tuesday, January 23, 2023. I would now like to turn the call over to Bruce Jermeland, Senior Vice President of Investor Relations at 3M.

Bruce Jermeland: Thank you, and good morning, everyone and welcome to our fourth quarter earnings conference call. With me today are Mike Roman, 3M's Chairman and Chief Executive Officer; and Monish Patolawala, our President and Chief Financial Officer. Mike and Monish will make some formal comments and then we will take your questions. Please note, that today's earnings release and slide presentation accompanying this call are posted on the homepage of our Investor Relations website at 3m.com. Please turn to Slide 2. Please take a moment to read the forward-looking statement. During today's conference call, we will be making certain predictive statements that reflect our current views about 3M's future performance and financial results.

These statements are based on certain assumptions and expectations of future events that are subject to risks and uncertainties. Item 1A of our most recent Form 10-Q lists some of the most important risk factors that could cause actual results to differ from our predictions. Please note, throughout today's presentation, we will be making references to certain non-GAAP financial measures. Reconciliations of the non-GAAP measures can be found in the attachments to today's press release. Please turn to Slide 3. During today's presentation, Mike and Monish will discuss our 2024 outlook. This outlook will be provided on the same adjusted basis used during 2023. In the coming months, there are significant milestones that the company expects to complete, including the spin-off the Health Care business and the finalization of the public water supplier and combat arms legal settlements.

The Health Care spend remains on-track for the first half of 2024, subject to customary closing conditions as detailed in our SEC filings. We continue to expect the business to be spun-off with an estimated net leverage of 3x to 3.5x EBITDA, and with the proceeds to be distributed to 3M prior to the completion of the spin. We are working through the processes, with all parties and the courts in both the public water supplier and Combat Arms Earplugs legal settlements. Our goal is our finalization and ultimate implementation. Absent the proceeds from the intended spin-off of the Health Care business, the company has not concluded, how it would fund amounts due under the public water supplier and Combat Arms Earplugs legal settlements. Therefore, we have not included the potential impacts of changes in net debt that may be needed to fund amounts under these agreements.

For illustrative purposes only, in the absence of the proceeds from the spin, the adjusted earnings per share impact from financing legal settlements could be up to approximately a $0.20 per share headwind based on current market conditions. Also, please note that we will be treating the dilutive earnings impact of 3M's option to satisfy the $1 billion in payments related to the Combat Arms Earplug settlement with 3M's shares as an adjustment in arriving at results adjusted for special items. Finally, it is important to note that when considering 3M's financials post spin, it is not appropriate to simply remove the Health Care business financial results. There are other factors such as transition services agreements, stranded cost and below the line items that need to be taken into account.

We are planning on holding an investor meeting later this year, following the spin of Health Care where we will provide an update to our full year 2024 guidance along with our medium-term financial framework. With that, please turn to Slide 4. And I'll now hand the call off to Mike. Mike?

Mike Roman : Thank you, Bruce. Good morning, everyone, and thank you for joining us. 3M delivered a strong fourth quarter as we continued to improve our operational performance, with adjusted EPS growth of 11%, operating margin expansion of 180 basis points and robust cash flow. Monish will cover more details of the quarter, but first, I would like to comment on our full year performance. Throughout 2023, we delivered on our commitments with results that exceeded our original earnings and cash flow guidance. While organic sales declined 3%, reflecting softness in certain end markets, including consumer retail and electronics, our disciplined execution supported year-over-year adjusted margin expansion. Excluding restructuring, we delivered increased margins of 60 basis points, helping drive earnings of $9.24 per share, along with a 30% increase in free cash flow and a conversion rate of 123%.

Our strong cash flow enabled us to continue investing in the business, while reducing net debt by $2 billion or 17%, and returning $3.3 billion to shareholders through our dividend. Please turn to Slide 5. As you recall, in January of last year, we committed to take a deeper look at everything we do. Our success in 2023 reflects that commitment along with our execution of three strategic priorities, which are unlocking value for customers and shareholders, both today and into the future. Let me highlight key achievements in these areas, including how we will build on our progress in 2024. Starting with driving performance through the 3M model. In 2023, we implemented the most significant restructuring in 3M's history to streamline the organization, reduce costs at the center, and get us closer to our customers, which generated more than $400 million in savings during the year.

These efforts included aggressively cutting management layers, reducing corporate shared services and modernizing our technology by removing hundreds of legacy systems. We reduced rooftops worldwide and took actions to help us address stranded costs, as we progress the Health Care spend. We simplified our supply chains and are doing more to leverage data and data analytics to visualize the flow of goods, so we can serve customers more efficiently. We optimized our global go-to-market models for each of our business groups. And consumer for example, we simplified our division structure with each of our global area teams now better aligned around their prioritized product portfolios and brands. At the same time, we have transitioned to an export-led model in approximately 30 smaller countries around the world, allowing us to reduce costs and complexity while still bringing 3M innovation to local customers.

The simplification of our organization also frees up resources to prioritize exciting growth opportunities for 3M, such as automotive electrification, climate technology and industrial automation. While we have more work to do in 2024, our actions are helping us to improve our operational performance and create a more competitive 3M. Our next priority is the spin-off of Solventum, our Health Care business. Last year, we appointed experienced Health Care leaders to Solventum, including Bryan Hanson as CEO, Carrie Cox as Board Chair, and Wayde McMillan as CFO. The spin is on track to be completed in the first half of this year, and we are confident in the value it will create for customers, care providers, patients and shareholders. As we look to 2024, we will continue to optimize our portfolio as we prioritize geographies, markets and products, where we see the greatest opportunity.

Finally, we are focused on addressing risk and uncertainty. The Combat Arms settlement we announced last August has received strong support from both claimants and the broader military community. We completed the first three milestones of the settlement as planned, including earlier this month, when we reached agreement with all plaintiffs, who were being prepared for trial. We will continue to work with all parties in the courts to fully implement the settlement. With respect to PFAS, our settlement with public water suppliers is on track for the final approval hearing scheduled for February 2nd. We will continue to address other PFAS litigation by defending ourselves in court or through negotiated resolutions as appropriate. We also remain on schedule to exit all PFAS manufacturing by the end of 2025, with production volumes down 20%.

Looking back, in a year full of change, I am pleased how 3Mers around the world stepped-up to lead. Importantly, we stayed relentlessly focused on doing what 3M does best, using material science to make a difference in the world. I see exciting examples of innovation across our company. Earlier this month, we unveiled the world's first solar powered communications headset, building on our decades of leadership in both personal safety and sustainability. We are advancing more durable, energy efficient and connected vehicles with an array of solutions, including new thermal barrier materials that improve the range and safety of electric car batteries, just one element of our automotive electrification program, which grew 30% in 2023, on top of 30% growth in 2022.

Our Medical Solutions business, a world leader in advanced wound care, just announced a partnership with the U.S. Army, where we will collaborate with the military and leading universities to develop traumatic wound solutions. And in Consumer, last year, we launched more than a dozen new products, including new solutions for heavyweight hanging, part of our $0.5 billion Command franchise, which leverages our world-class adhesives technology. 3M's innovation engine is strong. It will remain the heart of our business and our ability to deliver differentiated value for our customers. In summary, the 3M team delivered a successful 2023, and I am confident we will accelerate our progress in the coming year. I will come back to talk about our 2024 priorities and guidance after Monish takes you through the details of the fourth quarter.

Monish Patolawala: Thank you, Mike, and I wish you all a very good morning. Please turn to Slide 6. The fourth quarter culminated a year where we took significant steps to improve our operational execution, resulting in better financial performance. We aggressively controlled spending and initiated restructuring actions to simplify our supply chains, reduce structure and streamline our go-to-market models to better serve customers. At the same time, we continue preparing for the successful spin of our Health Care business and work to reduce risks and uncertainties related to legal matters. While there is more to do, our teams made tremendous progress in 2023 that we build upon in 2024 and beyond. Looking at fourth quarter performance, adjusted sales were $7.7 billion at the high-end of our guidance.

End markets continue to play out as anticipated. Notably, the auto OEM market remains strong in the fourth quarter and we saw signs of end market stabilization in consumer electronics. As expected, China and consumer retail end markets continue to be soft. Organic sales on an adjusted basis declined 1.4% versus last year. The expected decline in demand for disposable respirator negatively impacted organic growth by 60 basis points of $50 million. Excluding this impact, Q4 adjusted organic sales were down 80 basis points. Adjusted operating margins were 20.9%, up 180 basis points year-on-year or up 320 basis points excluding the impact of restructuring charges. Adjusted earnings were $2.42 up 11% year-on-year. Versus our guidance, fourth quarter earnings were benefited by $0.06 due to a lower-than-expected tax rate which was partially offset by the acceleration of restructuring actions which impacted earnings by approximately $0.03.

And finally, fourth quarter adjusted free cash flow was $2 billion up 18% year-on-year. For the full year, we delivered $6.3 billion in adjusted free cash flow versus an originally expected range of $4.2 billion to $5 billion at the start of the year. Please turn to Slide 7 for a recap of the components that drove our year-on-year operating margin and earnings performance. Benefits from manufacturing productivity, sourcing actions, restructuring, strong spending discipline and selling prices more than offset headwinds from lower sales volumes, investments in the business and last year's disposable respirator sales comparison. This net benefit drove a year-on-year expansion in Q4 operating margins of 400 basis points and earnings per share of $0.43 per share.

Pre-tax restructuring and related charges in the quarter were $109 million, or a negative impact to margins of 140 basis points and $0.17 to earnings. Raw material, logistics and energy cost inflation was a slight year-on-year headwind of 10 basis points to operating margins or minus $0.01 to adjusted earnings per share. Foreign currency translation was a negative 70 basis points impact to adjusted operating margins are negative $0.07 per share. This result was primarily due to the net impact of hedging and the devaluation of the Argentinean peso. As previously mentioned, our adjusted tax rate was lower-than-expected coming in at 14.9%. This compared to 16.6% in last year's fourth quarter, resulting in a $0.05 benefit to earnings. And finally, other financial items and shares outstanding netted to a positive $0.01 per share year-on-year impact.

Please turn to Slide 8. Fourth quarter adjusted free cash flow was $2 billion, up 18% year-on-year with conversion of 145%, up 800 basis points versus last year's Q4. Our ongoing focus on working capital management, especially inventory, continues to yield results. Inventory was down $550 million year-on-year and is now at 14.8% of sales, a 90 basis points improvement year-on-year. I am pleased with the progress to-date and see significant opportunity to further improve performance in all aspects of working capital. Adjusted capital expenditures were $308 million, down 32% versus last year's abnormally high fourth quarter. For the year, we invested over $1.4 billion versus an expected range of $1.3 billion to $1.5 billion. And finally, we returned $828 million to shareholders via dividends during the quarter.

Turning to the balance sheet. Net debt at the end of Q4, stood at $10 billion, a decline of $2 billion year-on-year or 17%. 3M continues to be a reliable and robust cash generator. In addition, the upcoming spin-off our Health Care business will further strengthen our balance sheet. As Bruce mentioned, we anticipate receiving a 1x dividend from Solventum at an initial leverage of 3x to 3.5x EBITDA. We will also retain a 19.9% equity stake, which will provide additional liquidity. This combined with our existing strong capital structure provides us with the ability to continue to invest in the business, return capital to shareholders and meet the cash flow needs related to ongoing legal matters. Now please turn to Slide 10 for a discussion on our business group performance.

Starting with our Safety and Industrial business, which posted sales of $2.7 billion, down 3.9% organically. The expected decline in demand for disposable respirators was a headwind of approximately $50 million negatively impacting segment organic growth by 160 basis points. Organic growth was led by a double-digit increase in roofing granules, while industrial adhesives and tapes was flat, while all other businesses declined. Geographically, core industrial markets in the United States were relatively strong, while China remained weak. Our businesses were impacted by reduction in channel inventory towards the end of the quarter, particularly in the Greater China and EMEA regions, as channel partners manage cash and are cautious as we enter 2024.

Adjusted operating income was $524 million, down 6% versus last year. Adjusted operating margins were 19.7%, down 70 basis points year-on-year. This decline was driven by lower sales volumes which was partially offset by benefits from restructuring, pricing and strong spending discipline. Moving to Transportation and Electronics, which posted sales of $1.8 billion or up 2.7% organically. Our auto OEM business continued to perform well and increased 13% versus a 9% increase in global car and light truck bills. The Electronics business was flat organically year-on-year as demand for consumer electronic devices began to stabilize, while semiconductor remains soft. We continue to closely monitor these trends and are well-positioned to grow with our customers in these large and important end markets.

Looking at the rest of Transportation and Electronics, Advanced Materials grew organically high single-digits, Commercial Solutions grew low-single-digits and Transportation Safety declined –single-digits. Transportation and Electronics delivered $370 million in adjusted operating income, up 28% year-on-year. Adjusted operating margins were 20.9%, up 380 basis points versus Q4 last year. The team achieved this result through restructuring actions, pricing and strong spending discipline. Turning to our Health Care business. Q4 sales were $2 billion or down 1% organically versus last year. Sales in our Medical Solutions business grew low-single-digits organically, while Separation and Purification and Oral Care were both down low-single-digits.

Health Information Systems organic sales decreased high-single-digits. Looking at the year, our businesses within Health Care continued to see lingering COVID related impacts. Full year organic growth in Health Care was approximately 1% with both Medical Solutions and Oral Care posting positive low-single-digit growth, while Health Information Systems and Separation and Purification were both down low-single-digits. Health Care's fourth quarter operating income was $372 million down 10% year-on-year. Operating margins were 18.3% or down 1.9 percentage points with adjusted EBITDA margins of 26%. Year-on-year adjusted operating margins were impacted by lower sales volumes along with added costs associated with the pending spin. Lastly, the Consumer business posted fourth quarter sales of $1.2 billion.

Organic sales declined 2.2% year-on-year. Home improvement increased low-single-digits organically, while Home Health and Auto declined low-single-digits and Stationery and Office declined high-single-digits. Geographically, organic growth was down slightly in the U.S., while EMEA was down mid-single-digits and Asia Pacific declined low-double-digits. Consumer's fourth quarter operating income was $221 million, up 4% compared to last year. With operating margins of 18%, up 100 basis points year-on-year. The improvement in operating margins was driven by benefits from restructuring actions, portfolio optimization, strong spending discipline and productivity actions. Before I turn it back to Mike for him to discuss outlook for 2024, I wanted to take a moment to reflect on our 2023 total company performance.

As the year progressed, we made strong improvements in adjusted operating margins. For reference, Slide 23 in the appendix provides our quarterly adjusted operating margin recon for the year. As you can see, we delivered significant improvement in performance, particularly when setting aside the impact from restructuring charges. Please turn to Slide 12, and I will now turn the call back over to Mike. Mike?

Mike Roman : Thank you, Monish. We are entering 2024 with strong momentum from our strategic priorities as we build on the actions taken in 2023. We will remain focused on improving operational performance as we progress our restructuring, while driving even greater supply chain productivity and inventory reductions. These represent significant opportunities to deliver sustainable margin and cash flow expansion in 2024. We will also further accelerate efforts to optimize our portfolio, which has been an ongoing strategy for 3M. In addition to finalizing the Health Care spin, we will continue implementing our geographic prioritization strategy. We will also step up our efforts to prioritize our product portfolios based on market potential, right to win, supply chain complexity, margins and returns.

For example, in our Consumer business, we have identified approximately 5% of the portfolio where we have limited market growth and a poor right to win. While exiting these portfolios will impact consumers' growth rate in the near-term, these actions will better focus our efforts on products that best utilize 3M invention and ultimately drive improved growth and margins in the long-term. At the same time, 3M succeeds across market cycles because we remain close to customers and invest in innovation. We will continue to invest in R&D and capital expenditures, enabling us to win in our core and also in new attractive markets where 3M can make a difference. Finally, we will stay focused on reducing risk and uncertainty by proactively and effectively managing litigation, including finalizing legal settlements.

We will advance the ramp down of PFAS manufacturing while continuing to make progress on our sustainability goals. In 2024, for example, we expect to complete the investments in state-of-the-art water filtration technology across our chemical manufacturing sites. Please turn to Slide 13. Based on these focus areas, along with the macroeconomic outlook, we are laying out our guidance for 2024. We expect the execution of our priorities to support the strengthening of our competitive position, continued underlying margin improvement and strong cash flows as we aggressively manage working capital. As we start 2024, the macro environment remains muted, similar to what we saw in the fourth quarter. On an adjusted basis, we anticipate organic full year growth of flat to plus 2%.

Excluding the impact from geographic prioritization and portfolio actions, we expect organic growth of 1% to 3%. With respect to EPS, we anticipate earnings of $9.35 to $9.75 per share. We expect continued strong margin expansion, along with another year of strong cash flow with an adjusted conversion rate of 95% to 105%. As Bruce noted, following the completion of the Health Care spin, we will host an investor meeting and provide strategic updates along with updated guidance for 3M. As always, underpinning our success will be the strengths of 3M, our industry-leading material science, advanced manufacturing, global capabilities and iconic brands, along with some of the best and brightest people around the world. Before I turn it back to Monish, let me repeat a few important points.

As I look across 3M, a 2023 was a pivotal year for our enterprise. We executed our plans and delivered on our commitment to exit the year stronger, leaner and more focused. We improved our operational performance advance the spin-off of Solventum and address risk and uncertainty. I am proud of everything we accomplished in 2023, and equally excited about the year ahead. We are in excellent position to build on our progress, continue to improve our operational performance and deliver another successful year. I thank all 3Mers for their dedication and for everything they do for our company. I will now turn it over to Monish for more details on our guidance. Monish?

Monish Patolawala: Thanks, Mike. Please turn to Slide 14. As Mike highlighted, we expect another year of strong execution on our priorities, including strengthening our competitive position, continued margin improvement and robust cash flows as we aggressively manage working capital. Let's now look at our 2024 expected performance for our business segments. Starting with Safety and Industrial, where we estimate organic sales growth to be flat to up low-single-digits. As we start the year, we continue to see demand in industrial end markets remaining mixed. Full year 2024, industrial production forecast is currently expected to be at approximately 2% worldwide with the U.S. being flat. This business is not only impacted by general industrial manufacturing but also production activity in automotive and electronics end markets, which I will cover next with my comments on transportation and electronics.

Adjusted organic sales growth for Transportation and Electronics is forecasted to be flat to up low-single-digits organically. This range excludes the impact of the exit of PFAS manufacturing. Consumer electronics end markets are expected to be up slightly year-on-year as the market works to turn the corner. The semiconductor market is forecasted to start the year soft, however, improve as we progress through the year. Automotive unit volume production is forecast to be down slightly year-on-year. Despite this forecast, we continue to see significant opportunities in the automotive sector through our offerings in both electric vehicle and internal combustion engine vehicles. Health Care's organic sales growth is anticipated to be flat to up low-single-digits year-on-year.

Bryan and his team are excited to lead this great business and we'll be providing more details on 2024 and beyond, as we progress towards the spin. Turning to Consumer. Organic sales are expected to be down low-single-digits as discretionary spending is expected to remain muted, especially in the U.S., along with our ongoing portfolio optimization initiatives. As Mike mentioned, these actions are estimated to create a year-on-year organic growth headwind of approximately $100 million or 2 percentage points. As you create your models for 2024, I want to highlight some important items. We anticipate pre-tax restructuring charges in the range of $250 million to $350 million and incremental savings in the range of $150 million to $250 million. As I've previously mentioned, our savings are net of the necessary costs required to provide sustained benefits from our restructuring.

For example, this includes structure necessary to enhance our go-to-market models, automate processes and continued investment in cybersecurity. Additionally, the restructuring actions have helped to partially reduce stranded costs associated with the pending spin of Health Care. Overall, our restructuring program remains on-track to deliver pretax savings in the range of $700 million to $900 million with a similar level of charges upon completion. We anticipate our actions will be largely done by the end of 2024, with benefits carrying into 2025. Moving to pension expense. We estimate a non-operating pension headwind of approximately $100 million in 2024 or a negative $0.15 per share. This headwind is primarily due to the updating of assumptions, including mortality, along with the amortization of prior period losses.

While we will have an earnings headwind in 2024, it is important to note that our global plans are well funded, ending 2023 at 94%. Net interest expense is anticipated to be a small year-on-year benefit of approximately $0.03 per share. Again, this excludes the pending impact of the Health Care spin and legal settlements that Bruce mentioned at the start of the call. Our adjusted tax rate is expected to be between 18.5% and 19.5% for 2024. This compares to our adjusted tax rate of 17.5% in 2023, resulting in a year-on-year headwind of approximately $0.17 per share at the midpoint. Therefore, the net impact of these below-the-line items is forecasted to result in an earnings headwind of approximately $0.29 per share. This combined headwind is included in our full year 2024 adjusted earnings range guidance of $9.35 to $9.75 that Mike mentioned.

Please turn to Slide 15. Before we go to Q&A, let me briefly cover our thoughts on the first quarter. As we look at the first quarter, we see our adjusted sales being approximately $7.6 billion or down slightly versus last year. This forecast factors in an expectation for similar macroeconomic trends that we saw in Q4. It also includes an approximate $100 million year-on-year sales headwind from geographic prioritization and consumer portfolio initiatives, along with the impact of last year's disposable respirator comp. Turning to earnings. We expect first quarter adjusted earnings per share to be in the range of $2 to $2.15 per share. This expectation reflects adjusted operating margins in the range of 19.5% to 20%. This range includes continued standup costs related to this pending spin of Health Care, along with over 100 basis points impact from restructuring and related charges.

Excluding restructuring charges, adjusted operating margins are forecasted to increase by over 250 basis points year-on-year. In the first quarter, non-op pension will be a $0.04 per share headwind to adjusted earnings. And finally, we expect our adjusted tax rate in the first quarter to be in the range of 20% to 21%. In closing, I would like to emphasize a few things. We remain focused on our priorities and the team continues to drive results through strong operational execution. Our decisive actions in 2023 set the foundation for a strong 2024. As you know, there are many important milestones in the coming months, including completing the spin of Health Care. And finally, as a reminder, if you are creating financial models for 3M post-spin, please keep in mind that simply removing the Health Care business from Total 3M financials will not equal 3M post-spin.

There are other factors such as transition service agreements, stranded costs and below-the-line changes that need to be taken into account. As mentioned, once the spin is complete, we will hold an investor meeting and provide an update on our outlook for 2024 that incorporates these factors. In summary, we are building on our momentum and driving sustainable operating improvements that will drive improved financial performance. I want to thank the 3M team for their dedication and focus, as they continue to deliver for our customers and shareholders. That concludes my remarks. We will now take your questions.

See also 13 Best Grocery Stocks To Buy Now and Top 15 Countries for Dental Tourism .

To continue reading the Q&A session, please click here .

• Go to Page Content
• Go to Search
• Go to Contact Information
• 3M United States

3M News Center

• Press Releases
• News Center
• In the News
• Media Gallery
• Email Alerts
• Sustainability
• Social Justice
• Science Or STEM Advocacy
• Product Launch
• Science & Innovation
• Partnerships
• Environmental Stewardship
• Diversity, Equity & Inclusion

ST. PAUL, Minn. , May 13, 2024 / PRNewswire / -- 3M (NYSE: MMM) today announced the following investor event in partnership with Montrose Environmental Group, Inc. ( Montrose ):

• Bank of America's 31 st Annual Transportation, Airlines, and Industrials Conference on Wednesday, May 15, 2024 , at 11:50 a.m. ET .

John Banovetz Ph.D., Executive Vice President, Chief Technology Officer and Environmental Responsibility, will be joined by Montrose's Vijay Manthripragada , President and Chief Executive Officer, and Steve Woodard Ph.D., Chief Innovation Officer, for a panel discussion "PFAS Panel: Advancing Technology for a Cleaner Tomorrow." The discussion will center on the partnership formed between Montrose and 3M and the innovative approach being implemented to remove PFAS compounds from complex water sources at 3M's chemical manufacturing sites located in the U.S.

This event will be webcast live and a replay will be available on 3M's Investor Relations website at  http://investors.3M.com .

About 3M 3M (NYSE: MMM) believes science helps create a brighter world for everyone. By unlocking the power of people, ideas and science to reimagine what's possible, our global team uniquely addresses the opportunities and challenges of our customers, communities, and planet. Learn how we're working to improve lives and make what's next at  3M .com/news .

Investor Contact: Bruce Jermeland (651) 733-1807 or Diane Farrow (612) 202-2449 or Eric Herron (651) 233-0043

Media Contact: Sean Lynch [email protected]

Other Topics

Contact Media Email  

Media Hotline: 651-733-8805  

These contacts are intended only for the media. If you are not a member of the media, please call 1-888-3M HELPS (1-888-364-3577).  

We will get back to you within one business day.

Subscribe to receive automatic updates via email for 3M news & stories.

• Investor Relations
• Partners & Suppliers
• Ethics & Compliance
• SDS, RDS, More Regulatory & Compliance Information
• Transport Information Search
• CPSIA Certification Search
• Lithium Battery UN 38.3 Test Summary Search
• Transparency in Supply Chains and Modern Slavery Disclosures
• US Ingredient Communication
• Help Center

Sure Dividend

High-quality dividend stocks, long-term plan, 3m healthcare spinoff: how should shareholders proceed.

Published on September 28th, 2022 by Thomas Richmond

Updated on August 31st, 2023

3M Company (MMM) is a storied company with a long history of growing shareholder wealth. 3M has increased its dividend for over 60 consecutive years, a milestone that only a small handful of companies have reached.

As a result, it is on the exclusive Dividend Kings list. To be a Dividend King, a stock must have 50+ years of consecutive dividend increases.

You can download the full list of all 50 Dividend Kings (along with important financial metrics such as dividend yields and price-to-earnings ratios) by clicking on the link below:

Click here to instantly download your free spreadsheet of all Dividend Kings now, along with important investing metrics .

3M has established itself as a premiere dividend growth stock due to the strength of its business model. Diversity has been a big part of 3M’s success over the years. Operating large businesses across multiple economic industries has allowed 3M to post consistent profits year after year, even during recessions.

In many instances, weakness in one or multiple segments has been offset by strength in other areas, giving the company steady growth over time.

At the same time, companies need to reinvent themselves as time passes, to stay on top of economic trends and continue on a path of long-term growth. Mergers and acquisitions are a part of 3M’s long-term growth plan, as are occasional divestitures and spinoffs.

The company recently announced that it would undergo a major change, planning to spin off its healthcare segment into an independent company.

For investors, the question now is how the spinoff will impact the long-term direction of the business. This article will attempt to answer this question.

3M Spinoff Overview

3M is a leading global manufacturer, with operations in more than 70 countries. The company has a product portfolio comprised of over 60,000 items, which are sold to customers in more than 200 countries. These products are used every day in homes, office buildings, schools, hospitals, and others.

For the time being, 3M operates four separate segments: Safety & Industrial, Transportation & Electronics, Consumer, and Healthcare.

On July 27th, 2023, 3M announced earnings results for the second quarter for the period ending June 30th, 2023. For the quarter, revenue declined 4.4% to $8.3 billion, but this was $440 million above estimates. Adjusted earnings-per-share of $2.17 compared unfavorably to $2.48 in the prior year, but was $0.41 more than projected.

Organic growth for the quarter fell 2.5% for the period, but the Health Care business was a standout performer with positive organic growth of 0.1% year-over-year.

Source: Investor Presentation

3M updated its outlook for 2023, with the company now expecting adjusted earnings-per-share in a range of $8.60 to $9.10 for the year, up from $8.50 to $9.00.

Along with its quarterly results, the company separately announced that it will spinoff its healthcare segment. This is a major announcement, as the healthcare business itself generates over $8 billion in annual sales.

The healthcare spin-off will retain the product portfolio which generated $8.6 billion of sales in 2021.

3M intends the transaction to be a tax-free spinoff into a standalone publicly-traded company. The “new” 3M is expected to retain a 19.9% stake in the healthcare company, which may be divested over time.

The new healthcare company is also expected to have a net leverage of 3.0x–3.5x adjusted EBITDA. While this is fairly high, 3M expects rapid deleveraging.

The stand-alone healthcare technology business will focus on wound care, oral care, healthcare IT, and biopharma filtration. The spin-off is expected to be complete by the end of 2023 or early 2024.

3M Separation of the Food Safety Business

Aside from the recent news about the Healthcare spinoff, 3M announced on August 29th that they had finalized the spinoff of their Food Safety business, Garden SpinCo, which is set to merge with Neogen.

This deal was originally announced back in December of 2021. For months, shareholders have known about this deal, valuing the Food Safety business at $5.3 billion. Now, the deal has been finalized.

The final exchange ratio was announced as approximately 6.7713, meaning that while the tender offer was available, 3M shareholders could choose to receive 6.7713 shares of Neogen if they wanted to exchange their 3M shares.

Tender offers are generally beneficial to shareholders, because shareholders can exchange their shares at a slight premium to market value. Shareholders who tendered shares were expected to receive $107.53 of Neogen common stock for every $100 of 3M common stock they tendered.

This deal, along with the Healthcare spinoff, are both going to have a strong impact on 3M’s future.

How Will the Spinoff Impact Future Growth?

3M has been in business for over a century, which may prompt investors to ask why the company would spinoff one of its largest operating segments.

Generally, companies pursue spinoffs for a few common reasons. Spinning off a segment makes it its own publicly-traded entity, with its own dedicated management team. This provides the new entity greater resources than it had under the umbrella of its former parent company.

In addition, there is usually a view among company management that the post-spinoff entities can earn a higher cumulative valuation than the single entity previously had. This is often done after management performs a sum-of-the-parts valuation analysis of the underlying businesses.

There is also precedent for large companies to pursue spinoffs as a way of generating better long-term growth (and value for shareholders). For example, Pfizer (PFE) separated its consumer segment in 2018 before combining it with GlaxoSmithKline’s (GSK) consumer business just a few months later.

More recently, diversified healthcare giant Johnson & Johnson (JNJ) spun-off its consumer healthcare business from its pharmaceutical and medical devices businesses, which is now called Kenvue (KVUE).

To summarize, the motivation behind such a shift in strategy is likely due to the goal of unlocking value for shareholders. By focusing on its core industrial businesses while allowing its healthcare business to flourish on its own, the “new” 3M is likely to receive a higher valuation from the market, as these businesses generate higher growth.

How Should 3M Shareholders React?

A sizeable change in direction for one of the country’s oldest companies could be a shock to many shareholders. That said, we feel that investors shouldn’t panic and sell their positions. Instead, we recommend investors receive shares of the new company and hold through the spinoff.

Going forward, the “new” 3M will be able to focus on its own strategic growth priorities, which include automotive/mobility, electronics, sustainability, digitization, robotics and automation, e-commerce, and more.

Meanwhile, the healthcare spinoff will have a strong business of its own, with annual sales of approximately $8.6 billion, earnings before interest, taxes, depreciation, and amortization (EBITDA) of $2.7 billion, and EBITDA margins of ~30%.

The new healthcare company will have diversification of its own, with leading products and services across multiple areas including medical solutions, oral care, health information systems, and separation and purification sciences. Each of these segments is large, and growing.

What many shareholders are probably most concerned with is how this will impact the company’s dividend. After all, 3M has one of the longest dividend growth streaks in the entire stock market, at 65 years. The payout ratio is reasonable, expected at 68% of adjusted EPS for 2023. With the company’s long dividend history, we’re not concerned about 3M cutting their dividend.

Investors can look back at other similar separations to see what the future of the dividend holds. Other healthcare companies that have split have continued to raise dividends, with Abbott Laboratories (ABT) and AbbVie Inc. (ABBV) being the most prominent example.

The two combined dividends of these companies are greater today than at the time that they were separated in 2013. Both companies have continued to raise their dividends in the years since they separated.

We believe that the eventual separation of the healthcare segment will not result in a lower combined dividend than what shareholders currently receive. For its part, 3M management stated in the spinoff announcement that it does not anticipate any change in its capital allocation priorities through the separation.

Of course, what happens moving forward is what’s important for current shareholders. Much depends on the future growth of the new 3M, and the healthcare company. Both companies should continue to grow their sales and earnings in the years ahead.

For this reason, we believe both companies will have the ability to raise their respective dividends each year, as the current 3M has done for over 60 years.

Final Thoughts

3M has a long history of steady growth over the decades. Since its inception, it has routinely utilized acquisitions to supplement its growth, but it has rarely reorganized its business in such a dramatic fashion as the planned spinoff of the healthcare business.

The upcoming spinoff may be a concern for 3M shareholders. After reviewing the details of the spinoff, it appears both companies will be able to continue growing. The new 3M and the healthcare company both possess durable competitive advantages and specific long-term growth catalysts.

We remain confident that 3M will create greater shareholder value with the spinoff, and the dividend looks very safe.

Therefore, we feel 3M will remain a top dividend growth stock to own. It is likely the new company receives a higher valuation and the new healthcare company will attain its own leadership position in the healthcare industry .

Additional Reading

The following Sure Dividend lists contain many more high-quality dividend stocks:

• The Dividend Aristocrats: S&P 500 stocks with 25+ years of consecutive dividend increases.
• The High Yield Dividend Aristocrats List is comprised of the Dividend Aristocrats with the highest current yields.
• The High Yield Dividend Kings List is comprised of the 20 Dividend Kings with the highest current yields.
• The High Dividend Stocks List : stocks that appeal to investors interested in the highest yields of 5% or more.
• The Monthly Dividend Stocks List : stocks that pay dividends every month, for 12 dividend payments per year.
• The 20 Highest Yielding Monthly Dividend Stocks : Monthly dividend stocks with the highest current yields.
• The Dividend Champions List : stocks that have increased their dividends for 25+ consecutive years. Note: Not all Dividend Champions are Dividend Aristocrats because Dividend Aristocrats have additional requirements like being in The S&P 500.
• The Dividend Contenders List : 10-24 consecutive years of dividend increases.
• The Dividend Challengers List : 5-9 consecutive years of dividend increases.
• The Complete List of Russell 2000 Stocks : arguably the world’s best-known benchmark for small-cap U.S. stocks.
• The Best DRIP Stocks : The top 15 Dividend Aristocrats with no-fee dividend reinvestment plans.
• The High ROIC Stocks List : The top 10 stocks with high returns on invested capital.
• The High Beta Stocks List : The 100 stocks in the S&P 500 Index with the highest beta.
• The Low Beta Stocks List : The 100 stocks in the S&P 500 Index with the lowest beta.

Thanks for reading this article. Please send any feedback, corrections, or questions to [email protected].

articles Golden Rule Commitment contact - legal - testimonials

• Products and Services
• Personal Tools and Resources
• OPEN A SAVINGS ACCOUNT
• APPLY FOR A PERSONAL LOAN
• BUY A HOME --> MAKE A PERSONAL LOAN PAYMENT
• BANK ONLINE
• APPLY FOR A CREDIT CARD
• LEARN ABOUT DEBIT CARDS
• SET UP DIRECT DEPOSIT

Beyond the Basics:

Personal Banking Beyond the Basics is a blog dedicated to financial literacy in Hawaii. The stories found here discuss the Financial issues and challenges unique to our island home

• Shaka Checking
• Exceptional Checking
• Value Checking
• Plus Package
• Overdraft Options
• Home Equity Line of Credit
• Personal Loan
• Make a Personal Loan Payment
• Personal Express Line of Credit
• PV Power Loan
• Exceptional Super Savings
• Exceptional Savings
• Personal Super Savings
• Personal Savings
• Starter Savings
• CDs and IRAs
• Contact a Mortgage Loan Officer
• MortgageLoan Service Center
• Mobile Banking
• Tools & Resources
• Digital Banking Upgrades
• CREDIT CARDS
• CPB Platinum
• Private Banking
• NRA PLAN INFORMATION
• Calculators
• Customer Feedback
• DIRECT DEPOSIT
• Financial Education-Beyond Basic Blog
• Foreign Exchange
• Helpful Documents
• Infoline Telephone Access
• MOBILE CHECK DEPOSIT
• ORDER CHECKS
• Rate Schedule
• WIRE TRANSFERS
• Business Tools & Resources
• APPLY FOR A BUSINESS LOAN
• ENROLL IN BUSINESS ONLINE BANKING
• OPEN A CHECKING ACCOUNT
• LEARN MORE ABOUT BUSINESS BANKING

BUSINESS BANKING Beyond the Basics is a blog dedicated to financial literacy in Hawaii. The stories found here discuss the Financial issues and challenges unique to our island home.

• Business Exceptional Plan
• Totally Free Business Checking
• Business Value Checking
• Analyzed Business Checking
• Performance Business Checking
• Business Super Savings
• Business Savings Account
• Business Money Market Savings Account
• Certificate of Deposit
• Business Express Lines of Credit
• Business Express Term Loan
• Small Business Administration Loans
• Healthcare Practice Loans
• Commercial Real Estate Financing
• Association (AOAO) Loan Program
• Paycheck Protection Program (PPP)
• Cash Management
• Business Online Banking
• Tools & Resources
• Business Credit Cards
• Central Pacific Bank Business Debit Mastercard®
• International Banking
• Starting a Business
• Growing Your Business
• Managing Your Business
• Documents for Start-Up Businesses
• PATIENT FINANCING
• Merchant Services
• Specialized Business Services
• Beyond the Basics Blog
• New Business Account Checklist
• Online Payroll Form Ceridian
• RESERVE A TIDEPOOLS COWORKING SPACE
• Wire Transfers
• DOCUMENTS FOR START-UP BUSINESSES
• Tools and Resources
• PLAN FOR RETIREMENT
• SAVE FOR COLLEGE
• PRIVATE BANKING
• INVESTMENTS
• INTERNATIONAL BANKING
• Wealth Planning
• Guided Wealth Portfolios
• Investment Management
• Online Services
• Wealth Advisors
• Contact a Wealth Advisors
• Sustainable Investing and ESG

Presentation Details

CPF Investor Presentation - February-March 2024

Investor Relations

News Details

Johnson & johnson to host investor conference call on third-quarter results.

NEW BRUNSWICK, N.J.--(BUSINESS WIRE)-- Johnson & Johnson (NYSE: JNJ) will host a conference call for investors at 8:30 a.m. (Eastern Time) on Tuesday, October 15 th to review third-quarter results. Joaquin Duato, Chairman and Chief Executive Officer, Joseph J. Wolk, Executive Vice President and Chief Financial Officer and Jessica Moore, Vice President, Investor Relations will host the call. The question and answer portion of the call will also include additional members of Johnson & Johnson’s executive team.

Investors and other interested parties can access the webcast/conference call in the following ways:

• The webcast and presentation material are accessible at Johnson & Johnson’s website www.investor.jnj.com . A replay of the webcast will be available approximately three hours after the conference call concludes.
• By telephone: for both “listen-only” participants and those financial analysts who wish to take part in the question-and-answer portion of the call, the telephone dial-in number in the U.S. is 877-869-3847. For participants outside the U.S., the dial-in number is 201-689-8261.
• A replay of the conference call will be available until approximately 12:00 a.m. on October 29 th . The replay dial-in number for U.S. participants is 877-660-6853. For participants outside the U.S., the replay dial-in number is 201-612-7415. The replay conference ID number for all callers is 13748405.
• The press release will be available at approximately 6:45 a.m. (Eastern Time) the morning of the conference call.
• Please refer to www.investor.jnj.com for a complete list of currently planned earnings webcast/conference calls. Please note the fourth-quarter date of Wednesday, January 22 nd , 2025.

About Johnson & Johnson

At Johnson & Johnson, we believe health is everything. Our strength in healthcare innovation empowers us to build a world where complex diseases are prevented, treated, and cured, where treatments are smarter and less invasive, and solutions are personal. Through our expertise in Innovative Medicine and MedTech, we are uniquely positioned to innovate across the full spectrum of healthcare solutions today to deliver the breakthroughs of tomorrow, and profoundly impact health for humanity. Learn more at https://www.jnj.com/ .

Media contact: [email protected] Investor contact: [email protected]

Multimedia Files:

Contact Investor Relations

Questions please contact us:.

News Details

Costco wholesale corporation reports june sales results and announces quarterly cash dividend and plans for membership fee increase.

ISSAQUAH, Wash., July 10, 2024 (GLOBE NEWSWIRE) -- Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today reported net sales of $24.48 billion for the retail month of June, the five weeks ended July 7, 2024, an increase of 7.4 percent from $22.78 billion last year.

Net sales for the first 44 weeks were $210.55 billion, an increase of 6.9 percent from $196.93 billion last year.

Comparable sales were as follows:

Comparable sales excluding the impacts from changes in gasoline prices and foreign exchange were as follows:

Additional discussion of these results is available in a pre-recorded message. It can be accessed by visiting investor.costco.com (click on “Events & Presentations”). This message will be available through 4:00 p.m. (PT) on Wednesday, July 17, 2024.

The Company also announced today that its Board of Directors has declared a quarterly cash dividend on Costco common stock of $1.16 per share. The quarterly dividend is payable August 9, 2024, to shareholders of record at the close of business on July 26, 2024.

The Company also announced that, effective September 1, 2024, it will increase annual membership fees by $5 for U.S. and Canada Gold Star (individual), Business, and Business add-on members. With this increase, all U.S. and Canada Gold Star, Business and Business add-on members will pay an annual fee of $65. Also effective September 1, annual fees for Executive Memberships in the U.S. and Canada will increase from $120 to $130 (Primary membership of $65, plus the Executive upgrade of $65), and the maximum annual 2% Reward associated with the Executive Membership will increase from $1,000 to $1,250. The fee increases will impact around 52 million memberships, a little over half of which are Executive. Costco currently operates 882 warehouses, including 609 in the United States and Puerto Rico, 108 in Canada, 40 in Mexico, 33 in Japan, 29 in the United Kingdom, 18 in Korea, 15 in Australia, 14 in Taiwan, seven in China, four in Spain, two in France, and one each in Iceland, New Zealand and Sweden. Costco also operates e-commerce sites in the U.S., Canada, the U.K., Mexico, Korea, Taiwan, Japan and Australia.

Certain statements contained in this document and the pre-recorded message constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For these purposes, forward-looking statements are statements that address activities, events, conditions or developments that the Company expects or anticipates may occur in the future. In some cases forward-looking statements can be identified because they contain words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or similar expressions and the negatives of those terms. Such forward-looking statements involve risks and uncertainties that may cause actual events, results or performance to differ materially from those indicated by such statements. These risks and uncertainties include, but are not limited to, domestic and international economic conditions, including exchange rates, inflation or deflation, the effects of competition and regulation, uncertainties in the financial markets, consumer and small business spending patterns and debt levels, breaches of security or privacy of member or business information, conditions affecting the acquisition, development, ownership or use of real estate, capital spending, actions of vendors, rising costs associated with employees (generally including health-care costs and wages), energy and certain commodities, geopolitical conditions (including tariffs), the ability to maintain effective internal control over financial reporting, regulatory and other impacts related to climate change, public-health related factors, and other risks identified from time to time in the Company’s public statements and reports filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made, and the Company does not undertake to update these statements, except as required by law. Comparable sales and comparable sales excluding impacts from changes in gasoline prices and foreign exchange are intended as supplemental information and are not a substitute for net sales presented in accordance with U.S. GAAP.

COST-Sales COST-Comp

Multimedia Files: