10.28.19
3M reported third-quarter 2019 results. Sales declined 2.0% year-on-year to $8.0 billion. Organic local-currency sales declined 1.3% while acquisitions, net of divestitures, increased sales by 0.6%. Foreign currency translation reduced sales by 1.3% year-on-year.
Total sales grew 4.7% in Health Care and 1.7% in Consumer, with declines of 4.4% in Transportation and Electronics and 5.7% in Safety and Industrial. Organic local-currency sales increased 2.6% in Consumer and 2.0% in Health Care, with declines of 3.3% in Safety and Industrial, and 3.4% in Transportation and Electronics.
“The 3M team delivered strong operational performance in the third quarter,” said Mike Roman, 3M chairman and CEO. “While the macroeconomic environment remains challenging, we executed well and built on the progress we made in the second quarter. We continued to effectively manage costs and reduce inventory levels, while generating strong margins and cash flow.
“We also continue to make good progress on our strategic priorities, including our recently-closed acquisition of Acelity, which is an exciting addition to 3M’s health care portfolio,” Roman continued. “Moving ahead, we’ll continue to focus on driving operational improvements and investing for the future, which will position us for strong growth and premium returns as our markets recover.”
Third-quarter operating income was $2 billion including a benefit of $112 million from the divestiture of the gas and flame detection business. Operating margins were 25.2% which includes a 1.4 percentage point benefit from the divestiture. The company’s operating cash flow was $2 billion, contributing to conversion of 106% of net income to free cash flow.
Total sales grew 4.7% in Health Care and 1.7% in Consumer, with declines of 4.4% in Transportation and Electronics and 5.7% in Safety and Industrial. Organic local-currency sales increased 2.6% in Consumer and 2.0% in Health Care, with declines of 3.3% in Safety and Industrial, and 3.4% in Transportation and Electronics.
“The 3M team delivered strong operational performance in the third quarter,” said Mike Roman, 3M chairman and CEO. “While the macroeconomic environment remains challenging, we executed well and built on the progress we made in the second quarter. We continued to effectively manage costs and reduce inventory levels, while generating strong margins and cash flow.
“We also continue to make good progress on our strategic priorities, including our recently-closed acquisition of Acelity, which is an exciting addition to 3M’s health care portfolio,” Roman continued. “Moving ahead, we’ll continue to focus on driving operational improvements and investing for the future, which will position us for strong growth and premium returns as our markets recover.”
Third-quarter operating income was $2 billion including a benefit of $112 million from the divestiture of the gas and flame detection business. Operating margins were 25.2% which includes a 1.4 percentage point benefit from the divestiture. The company’s operating cash flow was $2 billion, contributing to conversion of 106% of net income to free cash flow.