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3M

Company

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Assets

+ 3M

Company 3M is multi-profile diversified international production corporation which releases unique innovation products for the most different markets. During the developing and production 3M uses more than 40 technology platforms and their combinations. The annual turnover of the company makes $23 billion, and the number of employees exceeds 75 thousand people. The company has the representations in more than 65 countries (data for 2016).

Structure

By April, 2019 activity 3M is divided into four main divisions:

  • Safety & Industrial;
  • Transportation & Electronics;
  • Health Care;
  • Consumer.

Performance Indicators

2018

Net profit counting on an action at the end of 2018 grew by 12.1%

On February 4, 2019 it became known that company 3M reported activity results for 2018. Net profit counting on an action was $8.89, having shown growth by 12.1% in comparison with 2017.

Key indicators of 2018:

  • Sales volume was 32.8 billion US dollars that is 3.5% more than indicators of 2017.
  • Sales in local currencies grew by 3.2%. Growth was observed in all business groups and all regions of presence.
  • Net profit was 8.89 US dollars counting on an action against 7.93 US dollars in 2017. The corrected annual earning per share was 10.46 US dollars in comparison with 9.17 US dollars at the end of 2017.
  • 8.1 billion US dollars are returned to shareholders through dividend payouts and gross redemption of stocks.

Sale and acquisition of assets in total gave growth in 0.1% for 2018. Rate fluctuations of currencies reduced final sales volume by 0.2%. The annual operational margin made 22.0%, and the corrected operational margin — 24.7% that on 40 basis points it is more, than in 2017.

Operational turnover of funds of the company made 6.4 billion US dollars that was promoted by transfer of 91% of net profit in a free cash flow.

At the end of 2018 3M paid to the shareholders 3.2 billion US dollars as dividends in cash and redeemed own actions for the amount 4.9 billion US dollars.

Forecast

According to the updated forecasts of company 3M for 2018, profit will be from $10.20 to $10.70 for an action, earlier it was expected that profit will be from $9.60 to $10.00 for an action. The company predicts sales growth in local currency for 3-5% and free cash flow at the level from 90 to 100%.

The Board of Directors of company 3M announced increase in the amount of dividends. Payments will make $1.36 for an action according to the results of the first quarter 2018 and will increase by 16%.

History

2019

Opening 3M Espertise Center for stomatologists in Moscow

The international company 3M 10 of June, 2019 announced about in Moscow opening 3M of Espertise Center — the educational platform for stomatologists.

Platform 3M of Espertise Center includes 14 individual dental installations for participants. Each workplace is equipped with the latest technology: tips, regulated water supply and air, touch control of lighting and monitor. Hardware of installation allows to configure an individual profile of the participant with a possibility of preserving of the selected parameters.

«
Work with quality dental materials requires good manual skills. We would like that each doctor who aims to increase the level of the skill could implement it in our center. Everything is directed to that the doctor could perfect most effectively the skills for future practice in clinic — noted Evgeny Mikheyev, the Department director Health care Russia and the CIS.
»

Level of equipment of a class allows to work in the conditions of ideal ergonomics of a workplace, each of them is equipped with the mobile module Planmeca with a touch control, upper giving of tips, contactless adjustment of intensity of light and also the best specialized dental chairs creating the landing, correct, safe for health of the doctor.

The Russian and international doctors-consultants, specialists of the high level, will share experience in this this space with wealth of experience and baggage of clinical knowledge. And it is important that any practical nuance of a technique of work of the lecturer will not remain unclear for the participant of a rate — each module is equipped with the medical monitor of high accuracy Planmeca Serenus allowing to penetrate in details and step by step in the correct sequence of manipulations resulting in long-term clinical success emphasized in 3M.

In the new center actions for stomatologists of different specialization are planned: therapists, orthopedists, orthodontists, hygienists and children's stomatologists.

Agreement with Sibur on cooperation in ecological and digital developments

Sibur and 3M was announced on May 30, 2019 conclusion of an agreement about cooperation in the field of product development and processing of polymers based on the research center of Sibur Polilab. Read more here.

Purchase of the developer of solutions for care of Acelity wounds for $6.7 billion

At the beginning of May, 2019 3M announced purchase of the developer of solutions for care of Acelity wounds for $6.7 billion Read more here.

Dismissal of 2 thousand people and reduction of number of divisions

On April 25, 2019 announced 3M reduction of 2000 jobs worldwide. Due to dismissals the company hopes to save from $225 million to $250 million annually. And in 2019 it is going to reduce costs on $100 million.

However at first 3M it is necessary to spend about $150 million for reduction of number of staff, including payment of compensations to the dismissed employees.

3M dismisses 2 thousand people and reduces number of divisions
3M dismisses 2 thousand people and reduces number of divisions

In 3M note that personnel restructuring will concern "a corporate structure and areas showing weak results". At the same time the company did not specify divisions in most of which of all workers will be dismissed.

Announced 3M a staff decrease in a month after the announcement of restructuring within which the company reduced number of divisions from five to four:

  • Safety & Industrial;
  • Transportation & Electronics;
  • Health Care;
  • Consumer.

Before the structure was as follows:

  • Industrial;
  • Safety and Graphics;
  • Healthcare;
  • Electronics and Energy;
  • Consumer.

And still earlier the company had seven divisions. In March, 2019 the structures developing solutions for security (individual protection equipment, work place safety, food and road security) and products of industrial production were joint (solutions for filtering, electrotechnical products, abrasive materials, etc.). Hardly it is possible to call merge unexpected, considering that divisions used the same partners for distribution long ago. Annual revenues of the joint division are stated in $12 billion.

Creation of structure of Transportation & Electronics supervising development of transport technologies and electronics can be considered as sign that the company seriously treats mastering of the market of high-tech automobile solutions using touch devices.

In day when 3M announced mass layoffs, stocks of the company fell in price more than by 12%.[1]

2018

Closing of the transaction on sale of fiber optic business

Company 3M 5 of June, 2018 announced closing of the transaction with Corning Incorporated company selling solutions for the market of telecommunications. The volume of the transaction was about $870 million before closing and other adjustments.

Business of telecommunication equipment 3M includes optical and copper solutions for telecom industry, including FTTx, xDSL and products for the structured cabling systems (SCS). Annual global sales of this business make about $400 million.

Sale of the business of solutions on integration of the systems of telecommunication which is based in Hanover Germany, remains incomplete. Closing of the transaction is expected at the end of 2018 about $30 million.

As a result of the transaction company 3M expects to raise at the end of year earning per share in the amount of about $0.40-0.45, less the actions connected with sale.

Michael Romanus is the new CEO 3M

In March, 2018 3M announced Michael Romanus's appointment to the CEO's post. He will head the company one and a half years later after became the operating officer. Read more here.

2017

Results 4 quarters and financial year

Results of quarter

Sales volume 3M according to the results of the fourth quarter 2017 grew by the 9th percent point and was $8 billion. The indicator of sales in local currencies increased by 6%, and acquisition of other companies without sales accounting of assets led to sales growth for 0.3%. Rate fluctuations of currencies increased sales volume by 2.7% in comparison with indicators of the same period of last year.

Earning per share was $0.85 that is 55% lower than an indicator for the fourth quarter 2016. According to the Employment Act and reduction of taxes which became effective in the fourth quarter tax payments made $762 million, or 1.25% for an action. Excepting these expenses, earnings per share made $2.1, having increased by 11.7% in comparison with the same period of last year.

Operating profit was $1.8 billion, profitability of operating profit in a quarter — 22.8%. The cash flow from operations made $1.9 billion and provided growth of free money by 268%.

In the fourth quarter 3M paid $699 million cash as dividends to shareholders and performed gross redemption of stocks for the amount of $504 million.

Sales growth on business groups made: Security and graphics – 15%, the Electronic engineer and the power engineering specialist – 12.5%, Consumer goods – 7.3%, the Industry – 6.9%, Health care – 6%. Organic sales growth in local currencies reached 11% on the Electronics business group and power, 10.7% – Security and graphics, 5.4% – Consumer goods, 3.9% – the Industry and 3.1% – Health care.

By the geographical principle the greatest organic sales growth in local currencies was observed in the region Europe, Africa and to the Middle East – 17.1%, in the Pacific Rim the indicator was 14.4%, in Latin America / Canada – 4%, in the USA – 3%.

Organic sales growth in local currencies grew by 11.9% in the Pacific Rim, for 6.8% in Europe, Africa and in the Middle East, 2.8% to the USA and 2.5% in Latin America / Canada.

Results of year

At the end of 2017 sales volume 3M increased by 5.1% (for 5.2% in local currencies) and was $31.7 billion. The earnings per share made $7.93 (decrease in an indicator by 2.8%). Acquisition of other companies and an asset sale reduced sales by 0.6%. Rate fluctuations of currencies led to increase in final sales volume by 0.5%. Profitability of operating profit in 2017 reached 24.7%, growth was 70 basic points in comparison with 2016. Excepting effect of operation of the Employment Act and reduction of taxes (Tax Cuts and Jobs Act), the adjusted earnings on an action were $9.17, having increased by 12.4% in comparison with last year.

The cash flow from operations is recorded at the level of $6.2 billion, it provided growth of free money by 100%. The indicator of profitability of the invested capital was 21%. Effect of operation of the Employment Act and reduction of taxes (Tax Cuts and Jobs Act) and retirement benefits according to the results of the fourth quarter 2017 added 3 percent points to growth of volume of cash flow at simultaneous decrease in profit on the investment capital on 3 percent points.

In general in 2017 3M paid to shareholders $2.8 billion and performed gross redemption of stocks for the amount of $2.1 billion.

Sale of fiber optic business for $900 million

In December, 2017 3M announced sale of the business on release of solutions for fiber-optical networks of the Corning company known on development of cover plates for displays of mobile devices. The cost of the transaction is $900 million.

It is about the division of Communications Markets which is engaged in creation of products for structured cabling systems: switching cables, optical panels, couplings adapters, optical connectors, patch cords, etc. In 3M say that this telecommunication business which brought to the company about $400 million revenue a year stopped being profile for the producer.

3M sells fiber optic business for $900 million Corning company
3M sells fiber optic business for $900 million Corning company
«
After completion of a careful strategic research we came to a conclusion that this business will well fit into Corning — the executive vice president for electronics and power of company 3M Ashish Khandpur who in the message also thanked the staff of Communications Markets for "their outstanding contribution" said.
»

It is going to close the transaction on sale 3M of Communications Markets of Corning company in 2018. As soon as all necessary formalities are executed, 500 employees of division will pass into Corning.

3M expects to earn about 40 cents on an action without the expense accounting connected with department of business from the transaction. The consultant of the company for the transaction selects Goldman Sachs investment bank.

Corning is going to spend from 1 to 3 billion dollars for acquisition of assets within the long-term dispersion plan of the capital. The company predicts sales increase of solutions for fiber-optical networks to $5 billion by 2020 thanks to purchase of business 3M.

As notes The Wall Street Journal, Communications Markets — not the first business sold 3M. Earlier the company sold the divisions which are responsible for development of biometric solutions and technologies of electronic monitoring.[2]

Forecast for earning per share and sales growth

In 2017 the company predicts:

  • An indicator of earning per share in the range of $8.45-8.80,
  • Sales increase for 1-3%,
  • An indicator of profitability of cash flows at the level of 95-105%.

The company is going to invest $1.8 billion in R&D in 2017 for increase in organic growth and to reach high rates of profit and return of investments. 3M will also monitor results of business transformation which already positively affects the company and its customer interaction. By 2020 this initiative should lead to economy $500 - $700 million annually and also to reduction of working capital for $500 million.

2016

New strategy

Within the accepted strategy 3M the following activities are implemented: portfolio management, investments into the innovations and business transformation directed to increase in efficiency of activity and development of customer-oriented model of the organization. 3M strengthened and prioritized a product portfolio, having reduced quantity of the business directions from 40 to 25 and also having made a number of strategic transactions on acquisition and an asset sale. Investments into science and innovations make about 6% of sales, business transformation which purpose — to increase efficiency and quality of work 3M with clients continues.

Sale of biometric business

In December, 2016 3M (Minnesota Mining and Manufacturing Company) announced sale of the division which is responsible for development and sales of solutions for management of the identification information. This business is bought by the large developer of technologies of a digital security Gemalto for $850 million.

The sold division 3M creates, in particular, hardware and software biometric solutions (sensors of face recognition, fingerprints and an iris of the eye of an eye) and scanners of passports which law enforcement officers, customs control and also the civil companies use.

3M sells biometric business of Gemalto company for $850 million
3M sells biometric business of Gemalto company for $850 million

Revenue 3M in this business is stated in $215 million a year. About 450 people are involved in it, and all of them will pass into Gemalto after accomplishment of terms of agreement.

The transaction is going to be closed until the end of the first half of 2017. At first regulators should approve it. The consultant 3M from sales process of the specified assets selects investment bank Goldman, Sachs & Co.

The vice president of division for development of security technologies of traffic 3M John Riccardi says that the company decided to sell business on release of solutions for management of the identification information after in-depth examination of a question.

«
We are sure that business in the field of management of identification data will become better in the company which first of all is concentrated on solutions for security — Riccardi reported.
»

In August, 2016 the CEO 3M of Inge Thulin said that some divisions specializing in release of security systems show weak results therefore the company gets rid of such assets, leaving only those directions which have the best opportunities for growth.[3]

Forecast for earning per share and sales growth

At the end of year it is planned that the indicator of earning per share will be in range of $8.45-8.80, and sales will increase by 1-3%. According to forecasts the indicator of profitability of cash flows will be at the level of 95-105%.

2011

Company 3M improved the forecasts for earning per share in 2011 to 5.95-6.20 US dollars instead of earlier being expected 5.90-6.10 US dollars. This range includes annual pension indexing and costs for pension benefits. Without their accounting, the expected profit counting on an action will make 6.17-6.42 US dollars, with growth in 10-14% in comparison with previous year. The company also expects two-digit numbers of sales growth in 2011, taking into account increase in indicators of organic growth by 5.5%-7.5%, additional 1% - 2% thanks to an exchange difference and also the acquisitions increasing sales volume by 4% - 6% a year.

2010

Company 3M announced financial results for the 4th quarter and 2010:

  • Company 3M announced that based on the fourth quarter 2010 sales volume was 6.7 bln. dollars of the USA that is 9.6% more in comparison with the same period of last year. Net profit

made the companies 928 mln. dollars of the USA, or 1.28 dollars counting on one action, in comparison with 935 mln. dollars of the USA, or 1.30 US dollars on an action for the same period in previous year.

  • Sales growth was observed in all six departments 3M. Departments of Electrotechnical and telecommunication equipment managed to reach the best indicators - 19.8% and Systems visual

communications - 14.7%. Representations in the Pacific Rim (18.1%) and Latin America (12.2%) achieved the largest growth of indicators of sales.

  • For all 2010 the sales volume of the company was 26.7 bln. dollars of the USA, and earnings per share of 5.63 US dollars, having increased respectively by 15.3% and 24.6%. All departments announced the positive growth of indicators of sales. Profit grew by 22.6% up to 5.75 US dollars counting on an action. The highest growth was shown by departments of Electrotechnical and telecommunication equipment - 26.9%, the Systems of visual communication - 26.5%, Materials for transport and the industry - 16.9%.

The company also achieved good sales in anticipation of 2011. In the fourth quarter they grew approximately by 10% and made the record amount of 6.7 bln. dollars of the USA, despite negative comparison to previous year when sales grew in connection with H1N1 flu epidemic, and decrease in growth in sales of optical films for LCD TVs. Sales growth was comprehensive in all departments and representations in the different countries.

Indicators on departments (all indicators are calculated on the basis of the principles of financial accounting GAAP including influence of special expenses)

Materials for transport and the industry

  • The fourth quarter 2010:
    • Sales volume increased by 10.4% in local currency and was 2.1 bln. dollars of the USA.
    • Sales volume in Department of renewable energy sources in local currency increased by 75%.
    • Two-digit numbers of sales growth in local currency are observed in Departments of the abrasive systems, materials for automobile industry, materials for the industry of polymers and energy industry and materials for aircraft.
    • Sales grew in all regions, the Pacific Rim was in the lead.
    • Operating profit reached 423 million US dollars, and profit margin was 19.8%.

  • 2010 in general

    • Sales volume was 8.6 bln. dollars of the USA, having increased by 17.5% in local currencies.
    • Two-digit numbers of sales growth in local currencies in all regions and almost all departments.
    • Operating profit was 1.8 bln. dollars of the USA, and the profit margin of 21%.

Health care

  • The fourth quarter 2010:
    • Sales volume increased by 5.9% in local currency and reached 1.2 bln. dollars of the USA, including 4.3% of acquisitions (Arizant company).
    • Sales in local currency of products for prevention of an intrahospital infection grew in two-digit numbers, digits of growth in sales of materials on care of skin and wounds, information systems for health care, materials for security of food and the systems of introduction of drugs, small growth in sales of products for care of an oral cavity.
    • Sales grew in all regions, the largest growth in the Pacific Rim.
    • Operating profit reached 347 mln. dollars of the USA, profit margin was 29%.

  • 2010 in general

    • Sales volume was 4.5 bln. dollars of the USA, having increased by 5.2% in local currency.
    • Sales growth in all departments and regions.
    • Operating profit was 1.4 bln. dollars of the USA, and profit margin - 30.2%.

Goods for the house and office

  • The fourth quarter 2010:
    • Sales volume increased by 8.4% in local currency and reached 961 mln. dollars of the USA, including growth from acquisitions by 2.6 percentage points.
    • growth in sales of goods on care of the house, office accessories in two-digit numbers and goods of category<<Сделай сам>> and also office supplies in digits Is observed<Сделай сам>.
    • Growth in two-digit numbers was reached by the Pacific Rim and Latin America.
    • Operating profit grew by 9.8% and reached 175 mln. dollars of the USA, and profit margin was 18.2%.

  • 2010 in general

    • Sales volume increased by 10% in local currency and reached 3.9 bln. dollars of the USA, including growth from acquisitions for 2.9%.
    • Sales growth in local currencies in all regions and all departments.
    • Operating profit grew by 12.3% and was 840 million US dollars, and profit margin - 21.8%.

Systems of visual communication

  • The fourth quarter 2010:
    • Sales volume increased by 10.2% in local currency and reached 903 million US dollars.
    • the sales growth in departments of Optical systems and Commercial graphics which is expressed by two-digit number and also small sales increase in department of Security systems of the movement Is observed.
    • Two-digit numbers of sales growth in Latin America / Canada, the Pacific Rim and the United States.
    • Operating profit was 144 million US dollars, and the profit margin of 15.9%.

  • 2010 in general

    • Sales volume was 3.9 bln. dollars of the USA, and increased by 23% in local currency.
    • Sales in local currencies grew in all departments, in particular in departments of Optical systems and Commercial graphics.
    • the highest growth in the Pacific Rim and Latin America.
    • Operating profit grew by 60% and was 946 million US dollars, and the profit margin of 24.4%.

Security systems, protection and protection

  • The fourth quarter 2010:
    • Sales volume increased by 8.1% in local currency and reached 847 million US dollars, including 4.3% of acquisitions (Cogent and Attenti company), comparison to the period of H1N1 flu epidemic reduces growth of sales volume by 12.5%.
    • Growth of sales volume in local currency for 150% is connected generally with indicators of organic sales growth, but also caused by acquisitions.
    • All regional representative offices reported in growth of sales volume in local currencies. The largest growth of sales volume was observed in Europe.
    • Operating profit decreased by 14.3% to 165 million US dollars, at the profit margin of 19.5%.

  • 2010 in general

    • Sales volume was 3.3 bln. dollars of the USA, and increased by 7.5% in local currency.
    • Positive sales growth in local currencies in all departments (the department of Security systems managed to achieve the largest growth) and also in all regions. Among regions Latin America was in the lead.
    • Operating profit was 707 million US dollars, at the profit margin of 21.4%.

Electrotechnical and telecommunication equipment

  • The fourth quarter 2010:
    • Sales volume increased by 20.3% in local currency and reached 759 million US dollars.
    • Two-digit indicators of growth in the departments offering goods for the industries of electronics and electrotechnical products.
    • the Largest growth of sales volume managed to achieve in the Pacific Rim and Latin America / Canada.
    • Operating profit increased by 32.2% to 156 million US dollars, at the profit margin of 20.6%.

  • 2010 in general

    • Sales volume was 2.9 bln. dollars of the USA, and increased by 27% in local currency.
    • More than 25% sales growth in local currency of materials and solutions for the market of electronics, and sensor systems.
    • Operating profit was 631 million US dollars, at the profit margin of 21.6%.

1902

Company 3M was founded by five entrepreneurs in 1902 in the Tu Harbors town (piece of Minessot, the USA).  Throughout the centenary history of the company employees generate the different ideas and integrate them into thousands of new products and technologies which allow to make our life more comfortable and safer. Products of company 3M increase production efficiency, promote quality improvement of products, decrease in cost value and an increase in labor productivity.

Notes