3M Reports Strong Third-Quarter 2020 Results Amid Pandemic Challenges

2020Q3 Financial Highlights

SHANGHAI, Oct. 29, 2020 /PRNewswire/ -- Recently, 3M (NYSE: MMM) released its financial results for the third quarter of 2020.

“Our third-quarter results once again demonstrate the strength of the 3M model, as we continue to support the fight against the pandemic while ensuring strong operations and serving our customers,” said Mike Roman, Chairman and CEO of 3M. “Although economic uncertainty and challenges stemming from the COVID-19 pandemic persist, our business achieved positive organic growth, with continued improvement across all four business segments and in every global region. Furthermore, we maintained robust cash flow this quarter, exercised stringent cost control, and further strengthened our financial position.”

“We will continue to drive 3M’s transformation, ensuring robust earnings growth as end markets recover,” added Mike Roman. “We will invest in areas of strong demand, actively manage our cost structure, and sustain innovation to meet customer needs and global market trends.”

2020Q3 Financial Report

The ongoing spread of the COVID-19 pandemic continues to impact 3M’s business in various ways. The company has demonstrated consecutive improvements in performance across its business segments, end markets, and geographic regions. In the third quarter, demand remained strong in end markets such as personal safety protection, home improvement, home cleaning, semiconductors, data centers, and biopharmaceutical filtration. Meanwhile, driven by pandemic-related effects, demand in end markets including healthcare, dental procedures, automotive OEM, general industrial, consumer electronics, hospitality, office supplies, health information technology, and transportation safety improved but still declined year-over-year.

This quarter, 3M’s sales increased by 4.5% to $8.4 billion. Organic growth in local currency contributed a 0.9% increase in sales; meanwhile, acquisitions and divestitures drove a 3% sales growth this quarter, while foreign exchange translation added 0.6% to the sales figure.

The Medical Products Division’s total sales increased by 25.5%, the Safety and Industrial Products Division grew by 6.9%, the Consumer Goods Division rose by 5.6%, and the Transportation and Electronics Products Division declined by 7.4%. In local currency terms, the Medical Products Division’s total sales increased by 8.1% year-on-year, the Safety and Industrial Products Division grew by 6.9%, the Consumer Goods Division rose by 5.5%, and the Transportation and Electronics Products Division declined by 7.1%.

By region, total sales in the Americas increased by 7.7% year-on-year, the EMEA region (Europe, Middle East, and Africa) grew by 4.4%, and the Asia-Pacific region declined by 0.6%. In local currency terms, sales in the Americas rose by 3.4% year-on-year, while the EMEA region decreased by 0.3% and the Asia-Pacific region fell by 2.6%.

Both GAAP and adjusted earnings per share (EPS) were $2.43, representing year-over-year declines of 10.7% and 3.8%, respectively. In the current quarter, 3M reported an operating profit of $1.9 billion, with a margin of 22.9%.

The company’s operating cash flow reached $2.5 billion, with adjusted free cash flow at $2.2 billion, representing a 153% conversion of net income into free cash flow. In the third quarter, 3M distributed $847 million in cash dividends to shareholders. Total debt decreased by $1.2 billion, a year-over-year decline of 6%, while net debt fell by $1.3 billion, down 8% year over year.

Financial Outlook

Given the evolving nature of the COVID-19 pandemic and the uncertainty surrounding its impact, the Company is unable to accurately predict the recovery trajectory across its various end markets. Consequently, 3M is not providing financial guidance at this time. 3M will continue to release monthly performance reports in the fourth quarter. The Company expects October sales to be flat or to show slight growth compared to the same period last year, an outlook that accounts for the impact of having one fewer working day in October 2020 than in October 2019.

About3MCompany

3M technology continuously improves people’s daily lives. By the end of 2019, 3M’s global annual sales revenue reached $32.1 billion, with 96,000 employees worldwide conducting business with customers across the globe. For more information on 3M’s innovative solutions to address global challenges, please visit:www.3M.com, stay updated on our latest developments.

About3MChina

3M China Limited was registered and established in China in November 1984, becoming the first wholly foreign-owned enterprise founded outside of China’s Special Economic Zones. Currently, 3M has established 12 companies, 9 production bases, 27 representative offices, 4 technology centers, and 1 research and development center in China, with a workforce of nearly 8,000 employees.