Sales were down 5.0% to $7.9 billion. Organic local-currency sales declined 1.1% while divestitures, net of acquisitions, decreased sales by 0.5%. Foreign currency translation decreased sales by 3.4% year-on-year.
Total sales grew 0.3% in Health Care, with declines of 1.9% in Consumer, 4.2% in Safety and Graphics, 6.6% in Industrial, and 11.8% in Electronics and Energy.
“The first quarter was a disappointing start to the year for 3M,” said Mike Roman, 3M CEO. “We continued to face slowing conditions in key end markets which impacted both organic growth and margins, and our operational execution also fell short of the expectations we have for ourselves. As a result, we have stepped up additional actions – including restructuring – to drive productivity, reduce costs, and increase cash flow as we manage through challenges in some of our end markets.
“While we take actions to manage through the near-term, we also continue to invest in growth to position 3M for the future,” Roman continued. “We recently implemented a significant portfolio realignment from five to four business groups, which will enable us to better serve our customers and global markets. Moving forward, I am confident that we are making the necessary changes and focused on the right priorities to accelerate 3M into a stronger future.”
First-quarter operating income was $1.1 billion with operating margins of 14.4%. Excluding significant litigation-related charges, operating income was $1.7 billion with operating margins of 21.4%. The company’s operating cash flow was $1.0 billion, contributing to conversion of 74% of net income to free cash flow.
Reflecting a slower than expected 2019, 3M has initiated restructuring and other actions that will result in an expected reduction of 2,000 positions worldwide with an estimated annual pre-tax savings range of $225 million to $250 million, with $100 million in the remainder of 2019.