3M reported second-quarter 2020 results.
The COVID-19 pandemic continues to evolve and affect 3M’s businesses in a number of ways. During the second quarter, end-market demand remained strong in personal safety, home improvement, general cleaning, semiconductor, data center and biopharma filtration.
At the same time, several other end markets continued to experience significant weaknesses including healthcare elective procedures, automotive OEM and aftermarket, general industrial, commercial solutions and office supplies.
Second-quarter sales declined 12.2% year-on-year to $7.2 billion. Organic local-currency sales declined 13.1%, while acquisitions, net of divestitures, increased sales by 2.4%. Foreign currency translation reduced sales by 1.5% year-on-year.
“While our results were significantly impacted by the global economic slowdown, we executed well, managed our costs and delivered another quarter of robust cash flow,” said Mike Roman, 3M chairman and CEO. “We are taking actions to navigate near-term challenges, while relentlessly innovating for our customers and investing for the future to lead out of the slowdown and continue to deliver long-term value for our shareholders.
“Globally across 3M, we continue to fight the pandemic from all angles and help ensure the safety of our employees, healthcare workers and first-responders, and the public,” Roman continued. “I remain incredibly proud of how our team is leading through these unprecedented times, and I thank all 3Mers for their tireless efforts.”
Total sales declined 0.4% in Health Care, 6.2% in Consumer, 9.2% in Safety and Industrial and 20.9% in Transportation and Electronics. Organic local-currency sales decreased by 5% in Consumer, 6.1% in Safety and Industrial, 12.4% in Health Care and 18.9% in Transportation and Electronics.
On a geographic basis, total sales declined 8.5% in Asia Pacific, 12.7% in the Americas and 16.4% in EMEA (Europe, Middle East and Africa). Organic local-currency sales decreased 8.1% in Asia Pacific, 14.5% in EMEA and 15.6% in the Americas.
Second-quarter GAAP earnings were $2.22 per share, an increase of 15.6% year-on-year, with an operating income of $1.7 billion and operating margins of 24.3%.
The company’s operating cash flow was $1.9 billion with an adjusted free cash flow of $1.5 billion contributing to adjusted free cash flow conversion of 149% and strengthened the balance sheet by reducing net debt by $1.7 billion since March 31, 2020.