3M reported third-quarter 2020 results.
The COVID-19 pandemic continues to evolve and affect 3M’s businesses in several ways. The company saw sequential improvements across businesses, end markets and geographies. During the third 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, while improving, continued to experience year-on-year declines primarily driven by COVID-19-related headwinds, including healthcare and oral care elective procedures, auto OEM, general industrial, consumer electronics, hospitality, office supplies, healthcare IT, and traffic safety.
“Our third-quarter performance demonstrated once again the strength of the 3M model as we executed well, served customers and continued to fight the pandemic,” said Mike Roman, 3M chairman and CEO. “Though economic uncertainty and challenges due to the COVID-19 pandemic remain, we returned to positive organic sales growth with sequential improvement across businesses and geographies. We posted another quarter of robust cash flow, aggressively managed costs and further strengthened our balance sheet.
Third-quarter sales grew 4.5% year-on-year to $8.4 billion. Organic local-currency sales grew 0.9%, while acquisitions, net of divestitures, increased sales by 3%. Foreign currency translation increased sales by 0.6% year-on-year.
Total sales grew 25.5% year-on-year in Health Care, 6.9% in Safety and Industrial, and 5.6% in Consumer, with a decline of 7.4% in Transportation and Electronics. Organic local-currency sales increased by 8.1% year-on-year in Health Care, 6.9% in Safety and Industrial, and 5.5% in Consumer, with a decrease of 7.1% in Transportation and Electronics.
The company’s operating cash flow was $2.5 billion with an adjusted free cash flow of $2.2 billion contributing to an adjusted free cash flow conversion of 153%. The company reduced total debt by $1.2 billion, down 6%, and net debt by $1.3 billion, or 8%, sequentially.
