Q1 2023
|
Q1 2022
|
|||
GAAP EPS | $ | 1.76 | $ | 2.26 |
Special items | 0.21 | 0.37 | ||
Adjusted EPS | $ | 1.97 | $ | 2.63 |
Memo: | ||||
GAAP operating income margin | 15.4 | % | 18.6 | % |
Adjusted operating income margin | 17.9 | % | 22.0 | % |
See the "Supplemental Financial Information Non-GAAP Measures" section for applicable information. |
Three months ended March 31, |
||||
2023 | 2022 | |||
Net sales | $ | 8,031 | $ | 8,829 |
Operating expenses | ||||
Cost of sales | 4,613 | 4,826 | ||
Selling, general and administrative expenses | 1,705 | 1,882 | ||
Research, development and related expenses | 472 | 480 | ||
Total operating expenses | 6,790 | 7,188 | ||
Operating income | 1,241 | 1,641 | ||
Other expense (income), net | 52 | 38 | ||
Income before income taxes | 1,189 | 1,603 | ||
Provision for income taxes | 210 | 302 | ||
Income of consolidated group | 979 | 1,301 | ||
Income (loss) from unconsolidated subsidiaries, net of taxes | 2 | 2 | ||
Net income including noncontrolling interest | 981 | 1,303 | ||
Less: Net income (loss) attributable to noncontrolling interest | 5 | 4 | ||
Net income attributable to 3M | $ | 976 | $ | 1,299 |
Weighted average 3M common shares outstanding - basic | 552.7 | 572.3 | ||
Earnings per share attributable to 3M common shareholders - basic | $ | 1.77 | $ | 2.27 |
Weighted average 3M common shares outstanding - diluted | 553.2 | 575.0 | ||
Earnings per share attributable to 3M common shareholders - diluted | $ | 1.76 | $ | 2.26 |
March 31, 2023 |
December 31, 2022 |
|||
ASSETS | ||||
Current assets | ||||
Cash and cash equivalents | $ | 3,824 | $ | 3,655 |
Marketable securities - current | 145 | 238 | ||
Accounts receivable - net | 4,638 | 4,532 | ||
Inventories | 5,306 | 5,372 | ||
Prepaids | 558 | 435 | ||
Other current assets | 492 | 456 | ||
Total current assets | 14,963 | 14,688 | ||
Property, plant and equipment - net | 9,247 | 9,178 | ||
Operating lease right of use assets | 883 | 829 | ||
Goodwill and intangible assets - net | 17,440 | 17,489 | ||
Other assets | 4,353 | 4,271 | ||
Total assets | $ | 46,886 | $ | 46,455 |
LIABILITIES AND EQUITY | ||||
Current liabilities | ||||
Short-term borrowings and current portion of long-term debt | $ | 3,012 | $ | 1,938 |
Accounts payable | 3,130 | 3,183 | ||
Accrued payroll | 604 | 692 | ||
Accrued income taxes | 268 | 259 | ||
Operating lease liabilities - current | 263 | 261 | ||
Other current liabilities | 3,279 | 3,190 | ||
Total current liabilities | 10,556 | 9,523 | ||
Long-term debt | 12,948 | 14,001 | ||
Other liabilities | 8,031 | 8,161 | ||
Total liabilities | 31,535 | 31,685 | ||
Total equity | 15,351 | 14,770 | ||
Shares outstanding | ||||
March 31, 2023: 551,672,217
|
||||
December 31, 2022: 549,245,105
|
||||
Total liabilities and equity | $ | 46,886 | $ | 46,455 |
Three months ended March 31, | ||||
2023 | 2022 | |||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | $ | 1,275 | $ | 1,011 |
Cash flows from investing activities: | ||||
Purchases of property, plant and equipment | (475) | (424) | ||
Purchases and proceeds from sale or maturities of marketable securities and investments - net | 86 | 92 | ||
Proceeds from sale of businesses, net of cash sold | - | 13 | ||
Other investing activities | 3 | 56 | ||
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | (386) | (263) | ||
Cash flows from financing activities: | ||||
Change in debt | (43) | (584) | ||
Purchases of treasury stock | (29) | (773) | ||
Proceeds from issuances of treasury stock pursuant to stock option and benefit plans | 187 | 164 | ||
Dividends paid to shareholders | (827) | (852) | ||
Other financing activities | (4) | (9) | ||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | (716) | (2,054) | ||
Effect of exchange rate changes on cash and cash equivalents | (4) | (11) | ||
Net increase (decrease) in cash and cash equivalents | 169 | (1,317) | ||
Cash and cash equivalents at beginning of year | 3,655 | 4,564 | ||
Cash and cash equivalents at end of period | $ | 3,824 | $ | 3,247 |
Three months ended March 31, 2023 | ||||||||
Sales Change Analysis By Geographic Area | Americas | Asia Pacific | Europe, Middle East and Africa | Worldwide | ||||
Organic sales | 1.2 | % | (14.9) | % | (4.5) | % | (4.9) | % |
Divestitures | (1.6) | (1.0) | (1.0) | (1.3) | ||||
Translation | (0.5) | (5.4) | (4.9) | (2.8) | ||||
Total sales change | (0.9) | % | (21.3) | % | (10.4) | % | (9.0) | % |
Three months ended March 31, 2023 | ||||||||||
Worldwide Sales Change By Business Segment | Organic sales | Acquisitions | Divestitures | Translation |
Total sales change |
|||||
Safety and Industrial | (6.0) | % | - | % | - | % | (2.9) | % | (8.9) | % |
Transportation and Electronics | (8.0) | - | (1.0) | (3.4) | (12.4) | |||||
Health Care | 1.4 | - | (4.3) | (2.7) | (5.6) | |||||
Consumer | (6.8) | - | (0.3) | (1.9) | (9.0) | |||||
Total Company | (4.9) | - | (1.3) | (2.8) | (9.0) |
BUSINESS SEGMENT INFORMATION |
Three months ended March 31, |
|||
NET SALES | ||||
(Millions) | 2023 | 2022 | ||
Safety and Industrial | $ | 2,779 | $ | 3,051 |
Transportation and Electronics | 2,050 | 2,340 | ||
Health Care | 2,010 | 2,128 | ||
Consumer | 1,192 | 1,309 | ||
Corporate and Unallocated | - | 1 | ||
Total Company | $ | 8,031 | $ | 8,829 |
BUSINESS SEGMENT INFORMATION |
Three months ended March 31, |
|||
OPERATING INCOME (LOSS) | ||||
(Millions) | 2023 | 2022 | ||
Safety and Industrial | $ | 601 | $ | 627 |
Transportation and Electronics | 294 | 464 | ||
Health Care | 360 | 445 | ||
Consumer | 179 | 219 | ||
Total business segment operating income (loss) | 1,434 | 1,755 | ||
Corporate and Unallocated | ||||
Corporate special items: | ||||
Net costs for significant litigation | (82) | (187) | ||
Divestiture costs | (102) | - | ||
Total corporate special items | (184) | (187) | ||
Other corporate expense - net | (9) | 73 | ||
Total Corporate and Unallocated | (193) | (114) | ||
Total Company operating income | 1,241 | 1,641 | ||
Other expense/(income), net | 52 | 38 | ||
Income before income taxes | $ | 1,189 | $ | 1,603 |
GAAP amounts for which a measure adjusted for special items is also provided: | Reasons 3M believes the measure is useful |
•Net sales (and sales change)
|
Considered, in addition to segment operating performance, in evaluating and managing operations; useful in understanding underlying business performance, provides additional transparency to special items
|
•Operating income, segment operating income and operating income margin
|
|
•Income before taxes
|
|
•Provision for income taxes and effective tax rate
|
|
•Net income
|
|
•Earnings per share
|
Additional non-GAAP measures: | |
•Adjusted net cash provided by (used in) operating activities; adjusted purchases of property, plant and equipment (also referred to as adjusted capital expenditures); adjusted free cash flow and adjusted free cash flow conversion
|
Used as indicators of strength and ability to generate cash and as indicator of capital deployment; meaningful as measures of performance |
•Adjusted EBITDA and adjusted EBITDA margin
|
Considered in evaluating and managing operations; meaningful in analyses of ongoing underlying operating trends |
•Net debt
|
Meaningful as indicator of liquidity and measure of capital structure strategy |
Three months ended March 31, 2022 | ||||||||||||||||
(Dollars in millions, except per share amounts) | Net Sales | Operating Income | Operating Income Margin | Income Before Taxes | Provision for Income Taxes | Effective tax rate | Net Income Attributable to 3M | Earnings per Diluted Share | ||||||||
Safety and Industrial | ||||||||||||||||
GAAP amounts | $ | 627 | 20.6 | % | ||||||||||||
Adjustments for special items: | ||||||||||||||||
Net costs for significant litigation | 63 | |||||||||||||||
Total special items | 63 | |||||||||||||||
Adjusted amounts (non-GAAP measures) (b)
|
$ | 690 | 22.6 | % | ||||||||||||
Transportation and Electronics | ||||||||||||||||
GAAP amounts | $ | 2,340 | $ | 464 | 19.8 | % | ||||||||||
Adjustments for special items: | ||||||||||||||||
Manufactured PFAS products | (320) | (16) | ||||||||||||||
Total special items | (320) | (16) | ||||||||||||||
Adjusted amounts (non-GAAP measures) (b)
|
$ | 2,020 | $ | 448 | 22.2 | % | ||||||||||
Total Company | ||||||||||||||||
GAAP amounts | $ | 8,829 | $ | 1,641 | 18.6 | % | $ | 1,603 | $ | 302 | 18.8 | % | $ | 1,299 | $ | 2.26 |
Adjustments for special items: | ||||||||||||||||
Net costs for significant litigation | - | 250 | 250 | 25 | 225 | 0.39 | ||||||||||
Manufactured PFAS products | (320) | (16) | (16) | (4) | (12) | (0.02) | ||||||||||
Total special items | (320) | 234 | 234 | 21 | 213 | 0.37 | ||||||||||
Adjusted amounts (non-GAAP measures) (b)
|
$ | 8,509 | $ | 1,875 | 22.0 | % | $ | 1,837 | $ | 323 | 17.5 | % | $ | 1,512 | $ | 2.63 |
Three months ended March 31, 2023 | ||||||||||||||||||||
(Dollars in millions, except per share amounts) | Net Sales | Sales Change | Operating Income | Operating Income Margin | Income Before Taxes | Provision for Income Taxes | Effective tax rate | Net Income Attributable to 3M | Earnings per Diluted Share | Earnings per diluted share percent change | ||||||||||
Safety and Industrial | ||||||||||||||||||||
GAAP amounts | $ | 601 | 21.6 | % | ||||||||||||||||
Adjustments for special items: | ||||||||||||||||||||
Net costs for significant litigation | (39) | |||||||||||||||||||
Total special items | (39) | |||||||||||||||||||
Adjusted amounts (non-GAAP measures) (b)
|
$ | 562 | 20.2 | % | ||||||||||||||||
Transportation and Electronics | ||||||||||||||||||||
GAAP amounts | $ | 2,050 | (12.4) | % | $ | 294 | 14.4 | % | ||||||||||||
Adjustments for special items: | ||||||||||||||||||||
Manufactured PFAS products | (345) | (10) | ||||||||||||||||||
Total special items | (345) | (10) | ||||||||||||||||||
Adjusted amounts (non-GAAP measures) (b)
|
$ | 1,705 | (15.6) | % | $ | 284 | 16.7 | % | ||||||||||||
Total Company | ||||||||||||||||||||
GAAP amounts | $ | 8,031 | (9.0) | % | $ | 1,241 | 15.4 | % | $ | 1,189 | $ | 210 | 17.7 | % | $ | 976 | $ | 1.76 | (22) | % |
Adjustments for special items: | ||||||||||||||||||||
Net costs for significant litigation | - | 43 | 43 | 7 | 36 | 0.07 | ||||||||||||||
Manufactured PFAS products | (345) | (10) | (10) | (3) | (7) | (0.01) | ||||||||||||||
Divestiture costs | - | 102 | 102 | 20 | 82 | 0.15 | ||||||||||||||
Total special items | (345) | 135 | 135 | 24 | 111 | 0.21 | ||||||||||||||
Adjusted amounts (non-GAAP measures) (b)
|
$ | 7,686 | (9.7) | % | $ | 1,376 | 17.9 | % | $ | 1,324 | $ | 234 | 17.7 | % | $ | 1,087 | $ | 1.97 | (25) | % |
Full Year 2023 Forecast | |||||
2023 adjusted earnings per share (non-GAAP measure)*(b)
|
$8.50
|
to |
$9.00
|
||
2023 adjusted effective tax rate (non-GAAP measure)*(b)
|
18 | % | to | 19 | % |
Three months ended March 31, 2023 | ||||||||||
Sales Change (a)
|
Organic sales | Acquisitions | Divestitures | Translation | Total sales change | |||||
Total Company | (4.9) | % | - | % | (1.3) | % | (2.8) | % | (9.0) | % |
Remove manufactured PFAS products special item impact | (0.7) | - | - | - | (0.7) | |||||
Adjusted total Company (non-GAAP measures) (b)
|
(5.6) | % | - | % | (1.3) | % | (2.8) | % | (9.7) | % |
Transportation and Electronics | (8.0) | % | - | % | (1.0) | % | (3.4) | % | (12.4) | % |
Remove manufactured PFAS products special item impact | (3.3) | - | (0.1) | 0.2 | (3.2) | |||||
Adjusted Transportation and Electronics (non-GAAP measures) (b)
|
(11.3) | % | - | % | (1.1) | % | (3.2) | % | (15.6) | % |
By Geographic Area | ||||||||||
Americas | 1.2 | % | - | % | (1.6) | % | (0.5) | % | (0.9) | % |
Remove manufactured PFAS products special item impact | (0.8) | % | - | % | - | % | 0.1 | % | (0.7) | % |
Adjusted Americas (non-GAAP measures) (b)
|
0.4 | % | - | % | (1.6) | % | (0.4) | % | (1.6) | % |
Asia Pacific | (14.9) | % | - | % | (1.0) | % | (5.4) | % | (21.3) | % |
Remove manufactured PFAS products special item impact | (1.8) | % | - | % | - | % | 0.1 | % | (1.7) | % |
Adjusted Asia Pacific (non-GAAP measures) (b)
|
(16.7) | % | - | % | (1.0) | % | (5.3) | % | (23.0) | % |
Europe, Middle East & Africa | (4.5) | % | - | % | (1.0) | % | (4.9) | % | (10.4) | % |
Remove manufactured PFAS products special item impact | 0.6 | % | - | % | - | % | (0.1) | % | 0.5 | % |
Adjusted Europe, Middle East & Africa (non-GAAP measures) (b)
|
(3.9) | % | - | % | (1.0) | % | (5.0) | % | (9.9) | % |
Full-Year 2023 Forecast | ||||||||||
Worldwide Sales Change (a)
|
Organic sales | Acquisitions | Divestitures | Translation | Total sales change | |||||
Total Company* |
(3)% to flat %
|
- | % |
(1)%
|
(2)% to (1)%
|
(6)% to (2)%
|
||||
Remove manufactured PFAS products impact* | - | % | - | % | - | % | - | % | - | % |
Adjusted total Company (non-GAAP measures)* (b)
|
(3)% to flat % | (1)% | (2)% to (1)% | (6)% to (2)% |
Three months ended March 31, |
||||
Major GAAP Cash Flow Categories (dollars in millions) | 2023 | 2022 | ||
Net cash provided by (used in) operating activities | $ | 1,275 | $ | 1,011 |
Net cash provided by (used in) investing activities | (386) | (263) | ||
Net cash provided by (used in) financing activities | (716) | (2,054) |
Three months ended March 31, |
||||
Adjusted Free Cash Flow (non-GAAP measure) (dollars in millions) | 2023 | 2022 | ||
Net cash provided by (used in) operating activities | $ | 1,275 | $ | 1,011 |
Adjustments for special items: | ||||
Net costs for significant litigation after-tax payment impacts | 58 | 128 | ||
Divestiture costs after-tax payment impacts | 43 | - | ||
Divestiture-related restructuring after-tax payment impacts | 2 | - | ||
Manufactured PFAS products impact | 13 | 11 | ||
Total adjustments for special items | 116 | 139 | ||
Adjusted net cash provided by (used in) operating activities (non-GAAP measure) (c)
|
$ | 1,391 | $ | 1,150 |
Purchases of property, plant and equipment (PPE) | (475) | (424) | ||
Manufactured PFAS products impact - removing related purchases of PPE | 30 | 37 | ||
Adjusted purchases of PPE (non-GAAP measure) (c)
|
$ | (445) | $ | (387) |
Adjusted free cash flow (non-GAAP measure) (c)
|
$ | 946 | $ | 763 |
Adjusted net income attributable to 3M (non-GAAP measure) (b)
|
$ | 1,087 | $ | 1,512 |
Adjusted free cash flow conversion (non-GAAP measure) (c)
|
87 | % | 50 | % |
(Dollars in billions) | Full Year 2023 Forecast |
Net cash provided by (used in) operating activities* |
$5.8 to $6.3
|
Adjustments for special items* | - |
Adjusted net cash provided by (used in) operating activities |
$5.8 to $6.3
|
Purchase of property, plant and equipment (PPE) |
($1.5 to $1.8)
|
Manufactured PFAS products impact - removing related purchases of PPE | ~$0.2 |
Adjusted purchases of PPE (non-GAAP measure) (c)
|
($1.3 to $1.6) |
Adjusted free cash flow* (c)
|
$4.2to $5.0
|
Net income attributable to 3M* | $4.7 to $5.0 |
Adjustments for special items* | - |
Adjusted net income attributable to 3M* (b)
|
$4.7 to $5.0 |
Adjusted free cash flow conversion* (c)
|
90% to 100%
|
Adjusted EBITDA (non-GAAP measure) (d)
|
Adjusted EBITDA Margin (non-GAAP measure) (d)
|
||||||
Three months ended March 31, |
Three months ended March 31, |
||||||
(Dollars in millions) | 2023 | 2022 | 2023 | 2022 | |||
Safety and Industrial | $ | 696 | $ | 834 | 25.0% | 27.4% | |
Transportation and Electronics | 361 | 532 | 21.2% | 26.3% | |||
Health Care | 510 | 601 | 25.3% | 28.2% | |||
Consumer | 217 | 256 | 18.2% | 19.6% | |||
Corporate and Unallocated | 29 | 94 | |||||
Total Company | $ | 1,813 | $ | 2,317 | 23.6% | 27.2 | % |
Three months ended March 31, |
||||
Adjusted EBITDA (non-GAAP measure) (dollars in millions) | 2023 | 2022 | ||
Adjusted net sales (non-GAAP measure) (b)
|
$ | 7,686 | $ | 8,509 |
Net income attributable to 3M | 976 | 1,299 | ||
Add/(subtract): | ||||
Net income/(loss) attributable to noncontrolling interest | 5 | 4 | ||
(Income)/loss from unconsolidated subsidiaries, net of taxes | (2) | (2) | ||
Provision for income taxes | 210 | 302 | ||
Other expense/(income): | ||||
Interest (Income)/expense | 83 | 105 | ||
Pension & OPEB non-service cost (benefit) | (31) | (67) | ||
Depreciation and amortization (DA) expense | 466 | 459 | ||
Adjustments for special items: | ||||
Net costs for significant litigation | 43 | 250 | ||
Manufactured PFAS products impact: | ||||
Remove manufactured PFAS products operating (income) loss | (10) | (16) | ||
Subtract PFAS-related amount included in DA above | (29) | (17) | ||
Divestiture costs | 102 | - | ||
Total special items | 106 | 217 | ||
Adjusted EBITDA (non-GAAP measure) (d)
|
$ | 1,813 | $ | 2,317 |
Adjusted EBITDA margin (non-GAAP measure) (d)
|
23.6 | % | 27.2 | % |
Adjusted EBITDA (non-GAAP measure)
Three months ended March 31, 2023 (dollars in millions) |
Safety and Industrial |
Transportation and Electronics |
Health Care | Consumer |
Corporate and Unallocated |
Total Company |
||||||
Adjusted net sales (non-GAAP measure) (b)
|
$ | 2,779 | $ | 1,705 | $ | 2,010 | $ | 1,192 | $ | - | $ | 7,686 |
Business segment operating income (loss) (measure of segment operating performance), adjusted for special items (non-GAAP measure) (b)
|
$ | 562 | $ | 284 | $ | 360 | $ | 179 | $ | (9) | $ | 1,376 |
Add/(subtract): | ||||||||||||
Add depreciation and amortization (DA) expense | 134 | 106 | 150 | 38 | 38 | 466 | ||||||
Subtract PFAS-related amount included in DA above | - | (29) | - | - | - | (29) | ||||||
Adjusted EBITDA (non-GAAP measure) (d)
|
$ | 696 | $ | 361 | $ | 510 | $ | 217 | $ | 29 | $ | 1,813 |
Adjusted EBITDA margin (non-GAAP measure) (d)
|
25.0 | % | 21.2 | % | 25.3 | % | 18.2 | % | 23.6 | % | ||
Adjusted EBITDA (non-GAAP measure)
Three months ended March 31, 2022 (dollars in millions) |
Safety and Industrial |
Transportation and Electronics |
Health Care | Consumer |
Corporate and Unallocated |
Total Company |
||||||
Adjusted net sales (non-GAAP measure) (b)
|
$ | 3,051 | $ | 2,020 | $ | 2,128 | $ | 1,309 | $ | 1 | $ | 8,509 |
Business segment operating income (measure of segment operating performance), adjusted for special items (non-GAAP measure) (b)
|
$ | 690 | $ | 448 | $ | 445 | $ | 219 | $ | 73 | $ | 1,875 |
Add/(subtract): | ||||||||||||
Add depreciation and amortization (DA) expense | 144 | 101 | 156 | 37 | 21 | 459 | ||||||
Subtract PFAS-related amount included in DA above | - | (17) | - | - | - | (17) | ||||||
Adjusted EBITDA (non-GAAP measure) (d)
|
$ | 834 | $ | 532 | $ | 601 | $ | 256 | $ | 94 | $ | 2,317 |
Adjusted EBITDA margin (non-GAAP measure) (d)
|
27.4 | % | 26.3 | % | 28.2 | % | 19.6 | % | 27.2 | % |
Net Debt (non-GAAP measure) | March 31, 2023 | December 31, 2022 | ||
Total debt | $ | 15,960 | $ | 15,939 |
Less: Cash, cash equivalents and marketable securities | 3,992 | 3,916 | ||
Net debt (non-GAAP measure) (e)
|
$ | 11,968 | $ | 12,023 |
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3M Company published this content on 25 April 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 April 2023 10:37:16 UTC.