01.29.20
3M reported fourth-quarter and full-year 2019 results and provided its 2020 earnings outlook.
“Our team executed well in the fourth quarter and delivered results that were in-line with our expectations,” said Mike Roman, 3M chairman and CEO. “While we continued to manage challenges in certain key end markets, we generated solid underlying margins and robust free cash flow. We also continue to build for the future, including the launch of our new global operating model which represents the next phase of our transformation journey. As a result of our actions, we are well positioned to improve our performance, return to growth and deliver a successful 2020.”
Fourth-Quarter Results
Sales grew 2.1% year-on-year to $8.1 billion. Organic local-currency sales declined 2.6% while acquisitions, net of divestitures, increased sales by 5.1%. Foreign currency translation reduced sales by 0.4% year-on-year.
Total sales grew 25.4% in Health Care, were flat in Consumer, with declines of 4.8% in Safety and Industrial, and 6.2% in Transportation and Electronics. Organic local-currency sales increased 0.2% in Consumer, with declines of 0.2% in Health Care, 2.8% in Safety and Industrial, and 5.9% in Transportation and Electronics. The company’s operating cash flow was $2.3 billion, contributing to conversion of 186% of net income to free cash flow.
Full-Year 2019 Results
Sales declined 1.9% to $32.1 billion with an organic local-currency sales decline of 1.5%. The combination of acquisitions and divestitures increased sales 1.3%. Foreign currency translation decreased sales 1.7%. Full-year operating income margins were 19.2%, while adjusted operating margins were 21.6%. The company’s operating cash flow was $7.1 billion, contributing to conversion of 118% of net income to free cash flow for the year. In addition, 3M generated 17.5% return on invested capital. Free cash flow was $5.4 billion, an all-time record.
“Our team executed well in the fourth quarter and delivered results that were in-line with our expectations,” said Mike Roman, 3M chairman and CEO. “While we continued to manage challenges in certain key end markets, we generated solid underlying margins and robust free cash flow. We also continue to build for the future, including the launch of our new global operating model which represents the next phase of our transformation journey. As a result of our actions, we are well positioned to improve our performance, return to growth and deliver a successful 2020.”
Fourth-Quarter Results
Sales grew 2.1% year-on-year to $8.1 billion. Organic local-currency sales declined 2.6% while acquisitions, net of divestitures, increased sales by 5.1%. Foreign currency translation reduced sales by 0.4% year-on-year.
Total sales grew 25.4% in Health Care, were flat in Consumer, with declines of 4.8% in Safety and Industrial, and 6.2% in Transportation and Electronics. Organic local-currency sales increased 0.2% in Consumer, with declines of 0.2% in Health Care, 2.8% in Safety and Industrial, and 5.9% in Transportation and Electronics. The company’s operating cash flow was $2.3 billion, contributing to conversion of 186% of net income to free cash flow.
Full-Year 2019 Results
Sales declined 1.9% to $32.1 billion with an organic local-currency sales decline of 1.5%. The combination of acquisitions and divestitures increased sales 1.3%. Foreign currency translation decreased sales 1.7%. Full-year operating income margins were 19.2%, while adjusted operating margins were 21.6%. The company’s operating cash flow was $7.1 billion, contributing to conversion of 118% of net income to free cash flow for the year. In addition, 3M generated 17.5% return on invested capital. Free cash flow was $5.4 billion, an all-time record.
