3M to Continue Its Strong Momentum in 2018
December 12 2017 - 6:00AM
Business Wire
At today’s annual outlook meeting in New York City, 3M Chairman
of the Board, President and CEO Inge Thulin will announce that the
company is expecting another strong performance in 2018. Thulin
will outline how the 3M Playbook is creating significant value,
while emphasizing ongoing investments to support growth, strengthen
the portfolio and increase productivity.
“The 3M team is delivering a robust performance in 2017, and is
well-positioned to build on that momentum in 2018 – including
strong, broad-based organic growth and expanded profitability,”
said Thulin. “We are executing the 3M Playbook, which is making us
even more competitive and enabling us to generate premium value for
our customers and shareholders.”
Thulin will discuss the company’s three key levers, which are
significant value-creators and key components of the 3M
Playbook.
The first lever – Portfolio Management – is increasing customer
relevance and allowing 3M to focus on its most profitable and
fastest-growing businesses; since 2012, the company has realigned
from 40 businesses to 24, while making strategic acquisitions and
divestitures. Investing in Innovation is the second lever, and in
2018 3M plans to increase investments in research and development
to $1.9 billion, or about 6 percent of sales. 3M continues to make
good progress on its third lever – Business Transformation – which
is enabling the company to better serve customers with even more
agility and efficiency.
The company will also highlight investments in priority growth
platforms – such as auto electrification, air quality and personal
safety – along with its strong global business model including in
the U.S. and China.
With respect to guidance, 3M will announce its expectations for
the full-year 2018:
- GAAP earnings per share of $9.60 to
$10.00, an increase of 6 to 10 percent
- Total sales growth of 5 to 7 percent;
organic local-currency sales growth of 3 to 5 percent
- Free cash flow conversion of 90 to 100
percent (assumes operating cash flow of $6.9 to $7.6 billion).
Refer to section entitled “Supplemental Financial Information,
Non-GAAP Measures” for more detail.
The company will also report that it is tracking to the top half
of both its full-year 2017 organic growth range of 4 to 5 percent
and earnings per share range of $9.00 to $9.10.
Today’s meeting will be webcast live beginning at 8:00 a.m. EST
(7:00 a.m. CST) and is scheduled to end at noon EST (11:00 a.m.
CST). Investors can access this meeting via the following:
- Live webcast at
http://investors.3M.com
- Webcast replay:Go to 3M’s Investor
Relations website at http://investors.3M.com and click on “3M 2018
Outlook Meeting.”
Forward-Looking StatementsThis news release contains
forward-looking information about 3M's financial results and
estimates and business prospects that involve substantial risks and
uncertainties. You can identify these statements by the use of
words such as "anticipate," "estimate," "expect," "aim," "project,"
"intend," "plan," "believe," "will," "should," "could," "target,"
"forecast" and other words and terms of similar meaning in
connection with any discussion of future operating or financial
performance or business plans or prospects. Among the factors that
could cause actual results to differ materially are the following:
(1) worldwide economic, political, and capital markets conditions
and other factors beyond the Company's control, including natural
and other disasters or climate change affecting the operations of
the Company or its customers and suppliers; (2) the Company's
credit ratings and its cost of capital; (3) competitive conditions
and customer preferences; (4) foreign currency exchange rates and
fluctuations in those rates; (5) the timing and market acceptance
of new product offerings; (6) the availability and cost of
purchased components, compounds, raw materials and energy
(including oil and natural gas and their derivatives) due to
shortages, increased demand or supply interruptions (including
those caused by natural and other disasters and other events); (7)
the impact of acquisitions, strategic alliances, divestitures, and
other unusual events resulting from portfolio management actions
and other evolving business strategies, and possible organizational
restructuring; (8) generating fewer productivity improvements than
estimated; (9) unanticipated problems or delays with the phased
implementation of a global enterprise resource planning (ERP)
system, or security breaches and other disruptions to the Company's
information technology infrastructure; (10) financial market risks
that may affect the Company’s funding obligations under defined
benefit pension and postretirement plans; and (11) legal
proceedings, including significant developments that could occur in
the legal and regulatory proceedings described in the Company's
Annual Report on Form 10-K for the year ended Dec. 31, 2016, and
any subsequent quarterly reports on Form 10-Q (the “Reports”).
Changes in such assumptions or factors could produce significantly
different results. A further description of these factors is
located in the Reports under "Cautionary Note Concerning Factors
That May Affect Future Results" and "Risk Factors" in Part I, Items
1 and 1A (Annual Report) and in Part I, Item 2 and Part II, Item 1A
(Quarterly Reports). The information contained in this news release
is as of the date indicated. The Company assumes no obligation to
update any forward-looking statements contained in this news
release as a result of new information or future events or
developments.
3M Company and Subsidiaries
SUPPLEMENTAL FINANCIAL
INFORMATION
NON-GAAP MEASURES
(Dollars in billions)
(Unaudited)
Year 2018 Free cash flow (non-GAAP measure)
Planning Estimate Operating cash flow $6.9 to $7.6
Purchases of property, plant and equipment $1.5 to $1.7 Free
cash flow (a) $5.2 to $6.1 Net income attributable to
3M $5.8 to $6.1 Free cash flow conversion (a) 90% to 100%
___________
(a) Free cash flow and free cash flow conversion are not
defined under U.S. generally accepted accounting principles (GAAP).
Therefore, they should not be considered a substitute for income or
cash flow data prepared in accordance with U.S. GAAP and may not be
comparable to similarly titled measures used by other companies.
The Company defines free cash flow as net cash provided by
operating activities less purchases of property, plant and
equipment. It should not be inferred that the entire free cash flow
amount is available for discretionary expenditures. The Company
defines free cash flow conversion as free cash flow divided by net
income attributable to 3M. The Company believes free cash flow and
free cash flow conversion are meaningful to investors as they
function as useful measures of performance and the Company uses
these measures as an indication of the strength of the company and
its ability to generate cash.
About 3MAt 3M, we apply science in collaborative ways to
improve lives daily. With $30 billion in sales, our 90,000
employees connect with customers all around the world. Learn more
about 3M’s creative solutions to the world’s problems at www.3M.com
or on Twitter @3M or @3MNews.
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version on businesswire.com: http://www.businesswire.com/news/home/20171212005624/en/
3MMedia Contact:Lori Anderson, 651-733-0831orInvestor
Contacts:Bruce Jermeland, 651-733-1807orTony Riter,
651-733-1141
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