31 July 2023

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3M initiatives drive strong quarterly financial results

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Mike Roman, 3M chairman and CEO, said in a July 25 news release that in the second quarter, 3M strengthened its supply chain and restructured the company, which led to improved service for customers. In addition, the company's moves reduced costs across 3M, which resulted in better-than-expected margins and cash flow. 

"As we execute our strategy, we are positioning 3M for long-term performance, including progressing the planned spin of our Health Care business and addressing a significant portion of PFAS litigation," he said in the news release. 

The company reported:

• A GAAP loss per share of $12.35 and operating margin of minus 107.6% which includes the previously announced proposed settlement agreement with PWS in the U.S. regarding PFAS, resulting in a pre-tax charge of $10.3 billion payable over 13 years, negatively impacting earnings per share by $14.19.
• Adjusted earnings per share of $2.17 which includes pre-tax restructuring charges of $212 million, or negative $0.31 per share.
• Adjusted operating income margin of 19.3% which includes a 2.7 percentage point headwind from pre-tax restructuring charges.

Full-Year 2023 outlook

Given the company's strong operational execution and cost discipline, 3M raised its full-year adjusted EPS2 expectations for 2023 to $8.60 to $9.10 vs. $8.50 to $9.00 prior.

The company adjusted total sales growth in the range of -5 to -1 percent, reflecting adjusted organic sales growth of -3 percent to flat, which remains unchanged. In addition, 3M adjusted operating cash flow2 of $5.9 to $6.3 billion is contributing to 90% to 100% adjusted free cash flow conversion2, which is also unchanged.

Read more about the proposed settlement agreement with PWS in the U.S. and see additional financial details in the company's news release.