3M reports third quarter 2023 results

3M reported third quarter 2023 results.

“We are building momentum through strong operational execution. In the third quarter 3M again delivered for our customers in an uncertain environment, positioning us for a solid close to 2023. Our actions led to underlying earnings ahead of our expectations, as well as better than expected margins and cash flow,” said 3M chairman and CEO Mike Roman. “Our results reflect continued execution of our priorities — driving operational performance, spinning off Health Care, and reducing risk and uncertainty. Our strengths in material science innovation align with global trends in high-growth markets and sustainability, enabling us to develop indispensable products in attractive areas such as automotive electrification, climate technology, and industrial automation.”

Third quarter highlights:

• GAAP loss per share of $3.74 and operating margin of minus 31.9% include the previously announced settlement for Combat Arms, resulting in a pre-tax charge of $4.2 billion, negatively impacting EPS by $5.80.
• Adjusted EPS of $2.68 includes pre-tax restructuring related charges of $68 million, or negative $0.10 per share; restructuring program on track including forecasted full-year 2023 pre-tax restructuring charges and associated benefits.
  • Adjusted EPS up 3 percent year-on-year.
• Adjusted operating income margin of 23.2% includes a 0.8 percentage point headwind from pre-tax restructuring related charges.
  • Adjusted operating income margin expanded 1.6 percentage points year-on-year.

• Sales of $8.3 billion, down 3.6 percent year-on-year, with organic sales decline of 3.7 percent year-on-year.
• Adjusted sales of $8.0 billion, down 3.0 percent year-on-year with adjusted organic sales decline of 3.1 percent year-on-year.
• Operating cash flow of $1.9 billion, up 25 percent year-on-year; adjusted free cash flow of $1.9 billion, up 39 percent year-on-year.
• 3M returned $828 million to shareholders via dividends.

The above includes reference to certain non-GAAP measures. See the “Supplemental Financial Information Non-GAAP Measures” section for applicable information.

Full-year 2023 outlook
As a result of 3M’s year-to-date performance and the continued strong operational execution, the company is raising its full-year 2023 adjusted EPS2 and adjusted free cash flow conversion2 expectations.

3M anticipates adjusted EPS2 to be in the range of $8.95 to $9.15 versus $8.60 to $9.10 prior.

Adjusted operating cash flow2 is estimated in the range of $6.5 to $6.9 billion, contributing to 100 to 110 percent adjusted free cash flow conversion2. This compares to a prior expected range for adjusted operating cash flow2 of $5.9 to $6.3 billion, contributing to an adjusted free cash flow conversion2 range of 90 to 100 percent.

Adjusted full-year total sales growth2 is forecasted to decline by approximately -5 percent versus a decline of -5 to -1 percent prior, reflecting a decline in adjusted organic sales2 of approximately -3 percent versus the lower end of -3 percent to flat prior.
MB Bureau