2019 Fourth Quarter Business Review and 2020 Outlook - (Unaudited) January 28, 2020
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2019 Fourth Quarter Business Review and 2020 Outlook (Unaudited) January 28, 2020
2020 Earnings Calls
Q1: April 28
Q2: July 28
Q3: October 27
27 January
© 3M 2020. All Rights Reserved. 2
Forward looking statement
This presentation 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, regulatory,
capital markets and other external 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) operational
execution, including scenarios where the Company generates 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, 2018, 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
presentation is as of the date indicated. The Company assumes no obligation to update any forward-looking statements contained in this presentation as a result of
new information or future events or developments.
Note on non-GAAP financial measures
This presentation refers to certain non-GAAP financial measures including free cash flow, free cash flow conversion, return on invested capital (ROIC), and various
measures that adjust for the impacts of significant litigation-related charges, measurement period adjustments to the accounting for the enactment of the Tax Cuts
and Jobs Act (TCJA) and the 2019 loss on deconsolidation of the Company’s Venezuelan subsidiary. These non-GAAP measures are not in accordance with, nor
are they a substitute for, GAAP measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be
found in the appendix to this presentation.
27 January
© 3M 2020 . All Rights Reserved. 3
Today’s messages
• Q4 performance in-line with expectations; solid margins and strong free cash flow
• Advancing Transformation journey with new global operating model
• Leading in sustainability and environmental stewardship; proactively managing PFAS
• Expecting return to sales and earnings growth in 2020
27 January
© 3M 2020 . All Rights Reserved. 4
Q4 2019 summary
Sales of $8.1B, up 2.1% year-on-year
-2.6% Organic local-
currency growth
• Organic growth in-line with expectations
• Continued softness in automotive and electronics end-
year-on-year markets
Adjusted EPS of $1.95 vs. $2.31 last year
$1.95 Adjusted earnings
per share
• Q4 2019 includes global organizational restructuring:
• Pre-tax charge of $134 million, or -$0.20 per share,
-15.6% year-on-year not in prior guidance
Adjusted operating margins of 19.0% vs. 22.4% last year
19.0% Adjusted operating
margin
• Q4 2019 includes:
• Global organizational restructuring impact of -170 bps
-3.4% ppts year-on-year
• Acelity acquisition impact of -140 bps
27 January
© 3M 2020 . All Rights Reserved. 5
New global operating model and streamlined structure
Next step in transformation to improve growth and operational efficiency
3M Business Group-Led Global Operating Model
Strengthening Enabling more Empowering Streamlining and Leveraging
customer alignment powerful innovation our people simplifying knowledge globally
Realigning functions globally, including new Enterprise Operations (manufacturing,
supply chain and customer operations) and Corporate Affairs organizations
Q4 2019 pre-tax restructuring charge of $134 million;
annualized pre-tax benefit of $110-120 million, with $40-50 million in 2020
27 January
© 3M 2020 . All Rights Reserved. 6
Leading in sustainability and proactively managing PFAS
• Guided by the principles of sound science, corporate responsibility and transparency
• Q4 significant PFAS litigation-related charge of $214M, or $0.29 per share
• Manufacturing and disposal sites
• Updated assessment of environmental matters and litigation re: historical PFAS manufacturing sites
• Expanded evaluation of other 3M sites that may have used certain PFAS material and locations at which
they were disposed
• Other PFAS-related environmental litigation
• Updated evaluation of customer-related PFAS litigation based on continued, productive settlement
discussions with multiple parties
• As previously disclosed, 3M has been engaged in mediation and resolution negotiations in multiple cases
• Cooperating with relevant federal, state and local agencies, and communities
• Strong team actively managing environmental stewardship
27 January
© 3M 2020 . All Rights Reserved. 7
Q4 2019 sales recap
(year-on-year)
Organic local-currency growth by area:
$8.1B Net sales
• U.S. -2.9%
• Asia Pacific -2.7%
+2.1% year-on-year
Japan -6.9%
China/Hong Kong +0.8%
-2.6% Organic local- • Europe/Middle East/Africa -2.7%
year-on-year currency growth • Latin America/Canada flat
volume -3.4%, price +0.8%
Canada +2.6%
Mexico -5.7%
+5.1% Acquisitions/
divestitures
Brazil +5.8%
year-on-year
Foreign-currency translation:
• Euro -3%, RMB -1%, Yen +3%, Real -6%
-0.4% Foreign currency
translation
year-on-year
27 January
© 3M 2020 . All Rights Reserved. 8
Q4 2019 P&L
Operating income margin reconciliation:
Q4 2018 22.4%
$8.1B Net sales Organic volume/
productivity and other
-1.1%
Lower organic volumes; penalties
from lower manufacturing and
inventory absorption; benefit from
+2.1% year-on-year
Q2 2019 restructuring/other actions
Acquisitions/divestitures* -1.4% Acelity acquisition -1.4%
Adjusted
$1.5B operating Price/raw material +0.7%
Selling price benefits and lower raw
material costs
-13.7% year-on-year income FX +0.1% Net of hedge impact
Organizational Restructuring pre-tax charge of
-1.7%
realignment $134M
$1.1B Adjusted net
income
Q4 2019 adjusted
Significant litigation-
19.0%
-15.6% year-on-year -2.7% Pre-tax charge of $214M
related charges
Q4 2019 16.3%
* Includes net impact from acquisitions, lower gains on divestiture, net of related actions, and lost
income from divested businesses.
27 January
© 3M 2020 . All Rights Reserved. 9
Q4 2019 EPS
Q4 2018 GAAP EPS $2.27
TCJA transition tax adjustment -$0.07 per share; Q1 18
Tax adjustments +$0.04
legal settlement +$0.11 per share
Q4 2018 adjusted EPS $2.31
Q4 2019 organic growth of -2.6%; penalties from lower
Adjusted earnings Organic growth/
-$0.13 manufacturing and inventory absorption; benefit from
productivity/other
per share: Q2 2019 restructuring/other actions
+9.0%
$1.95
Acquisitions/divestitures -$0.11 Acelity acquisition -$0.10 per share
Organizational realignment -$0.20 Restructuring pre-tax charge of $134M
Tax rate* +$0.05 Adjusted tax rate Q4 2019: 20.3% vs. Q4 2018: 20.5%
-15.6% year-on-year
Shares outstanding +$0.03 Average diluted shares down -1.7%
Q4 2019 adjusted EPS $1.95
Significant litigation-related
-$0.29 Pre-tax charge of $214M
charges
Q4 2019 GAAP EPS $1.66
*The effect of income taxes on items that had specific tax rates are reflected within their respective impacts in the table above.
27 January
© 3M 2020 . All Rights Reserved. 10Q4 2019 cash flow
Free cash flow of $1.8B, up 4% year-on-year
$1.8B
• FY $5.4B, up 10% year-on-year
Free cash flow
Free cash flow conversion of 186%
• +27 ppt benefit from significant litigation-related charges
• FY 2019: 118% conversion
$828M Dividends
Capital expenditures:
• Q4 2019: $538M, up $7M year-on-year
• FY 2019: $1.7B
Gross share
$164M repurchases
Returned $1.0B to shareholders via dividends and gross
share repurchases in Q4
• FY 2019 cash to shareholders: $4.7B
27 January
© 3M 2020 . All Rights Reserved. 11Q4 Business Group performance
Sales Operating
Organic Margin
growth change
Commentary
• Organic sales increased in personal safety and roofing granules while the remaining businesses
Safety & $2.8B 20.9% declined
Industrial -2.8% -1.8 ppts • Operating margins impacted by sales decline; manufacturing/inventory reductions; and Q4
restructuring impact of -1.4 ppts
• Organic sales increased in transportation safety while the remaining businesses declined
Transportation $2.3B 20.8%
• Operating margins impacted by sales declines; manufacturing/inventory reductions; and Q4
& Electronics -5.9% -3.7 ppts restructuring impact of -1.0 ppts
• Organic sales grew in food safety, health information systems, drug delivery and medical solutions;
Health $2.1B 21.3% declined in separation and purification, and oral care
Care -0.2% -6.7 ppts • Operating margins impacted by Acelity and M*Modal acquisitions impact of -7.2 ppts; inventory
reductions; Q4 restructuring impact of -0.5 ppts; and investments in priority growth platforms
• Organic sales increased in home improvement and home care; declined in stationery and office, and
Consumer
$1.3B 23.4% consumer health care
+0.2% +3.0 ppts • Operating margins benefitted by past portfolio and footprint actions
27 January
© 3M 2020 . All Rights Reserved. 122019 full-year performance
Adjusted EPS of $9.10, includes:
-1.5% Organic local-
currency growth
• Gas and flame detection divestiture gain of +$0.21
Sales decline of 1.9%
year-on-year
• Organic local-currency growth -1.5%
• Acquisitions, net of divestitures +1.3%
• Foreign currency translation -1.7%
$9.10 Adjusted earnings
per share
Free cash flow of $5.4B (all-time record), up 10% year-on-year
-13.0% year-on-year
Free cash flow conversion of 118%, includes +9 ppts net impact from
significant litigation-related charges; Venezuela deconsolidation; and
gas and flame detection business divestiture gain
Return on
17.5% invested capital
Return on invested capital of 17.5%, includes -2 ppts net impact from
significant litigation-related charges; Venezuela deconsolidation; and
gas and flame detection business divestiture gain; and -3 ppts impact
from acquisitions
Returned $4.7 billion to shareholders via dividends and gross share
118% Free cash flow
conversion
repurchases; 61st consecutive year of annual dividend increases
See appendix for reconciliation of FY 2019 free cash flow conversion and ROIC
27 January
© 3M 2020 . All Rights Reserved. 13Delivering on our four priorities in 2019
Positioning 3M for long-term growth and value creation
Portfolio Transformation Innovation People & Culture
Realigned business groups Realigned global Accelerating investments in Deepening commitment to
around four “go-to-market” organizational structure Priority Growth Platforms; sustainability, diversity and
business models around business group “go- full-year organic growth of inclusion
to-market” models 10%
Strengthened Health Care Ethisphere – World’s Most
with Acelity and M*Modal Established Enterprise Supports organic growth, Ethical Companies®; 6th
acquisitions; and pending Operations and Corporate and premium operating consecutive year
divestiture of drug delivery Affairs organizations margins and ROIC
27 January
© 3M 2020 . All Rights Reserved. 142020 planning estimates
Forecasting a return to sales and earnings growth
2020 GAAP EPS of $9.30 to $9.75, up 19% to 25% year-on-year
Organic local- Earnings per share
currency growth 2019 GAAP EPS of $7.81, which includes:
• Significant litigation related charges of -$1.01
Flat to $9.30 to • Deconsolidation of Venezuela of -$0.28
• Gas and flame detection business divestiture gain of +$0.21
+2% $9.75
Sales growth of +3% to +5%:
• Organic local-currency growth flat to +2%
• Acquisitions, net of divestitures +3%
Return on Free cash
• Foreign currency translation flat
invested capital flow conversion
Capital allocation:
18% to 95% to • Capex of $1.6B to $1.8B
• Share repurchase: ~$1B
21% 105% • Pension contribution $0.1B to $0.2B
Refer to appendix for the definition and calculation of ROIC and free cash flow conversion
Above planning estimates do not reflect pending drug delivery business divestiture
27 January
© 3M 2020 . All Rights Reserved. 15Q&A Participants
Mike Roman Nick Gangestad Bruce Jermeland
Chairman and Senior Vice President and Vice President,
Chief Executive Officer Chief Financial Officer Investor Relations
27 January
© 3M 2020 . All Rights Reserved. 16Appendix
Q4 2019 sales recap
U.S. APAC EMEA LA/C
Organic volume -4.6% -2.0% -4.2% -0.2%
Price +1.7% -0.7% +1.5% +0.2%
Organic local-currency -2.9% -2.7% -2.7% Flat
Acquisitions/Divestitures +10.3% +0.9% +2.2% +2.8%
FX ---- +0.1% -1.5% -1.6%
Total growth +7.4% -1.7% -2.0% +1.2%
27 January
© 3M 2020 . All Rights Reserved. 18Q4 Income Statement
Q4 Q4
($M) 2018 2019 Change
Sales $7,945 $8,111 +2.1%
Gross profit $3,885 $3,786 -2.5%
% to sales 48.9% 46.6% -2.3 pts
SG&A $1,682 $1,940 +15.3%
% to sales 21.2% 23.9% +2.7 pts
R&D & related $437 $521 +19.3%
% to sales 5.5% 6.4% +0.9 pts
Gain on sale of businesses ($17) --- ---
% to sales (0.2%) --- +0.2 pts
Operating income $1,783 $1,325 -25.7%
% to sales 22.4% 16.3% -6.1 pts
Net income $1,347 $969 -28.1%
GAAP earnings per share $2.27 $1.66 -26.9%
27 January
© 3M 2020 . All Rights Reserved. 19Q4 2019 business segment information
Organic local-currency Operating
($M) Net Sales Q4 2019 Sales Growth by Geographic Area Operating Income Margin
Organic Total
Q4 Q4 local- Sales United Asia Q4 Q4 Percent Q4 Q4
Business groups 2018 2019 currency FX M&A change States Pacific LA/C EMEA 2018 2019 Change 2018 2019
Safety & Industrial $2,952 $2,811 -2.8% -0.6% -1.4% -4.8% -4% -2% 1% -4% $670 $586 -12.4% 22.7% 20.9%
Transportation &
$2,441 $2,290 -5.9% -0.3% 0.0% -6.2% -11% -4% -7% -5% $598 $475 -20.5% 24.5% 20.8%
Electronics
Health Care $1,708 $2,141 -0.2% -0.4% 26.0% 25.4% -1% 0% 2% 1% $478 $457 -4.6% 28.0% 21.3%
Consumer $1,267 $1,268 0.2% -0.2% 0.0% 0.0% 1% -2% 4% -1% $260 $296 14.4% 20.4% 23.4%
Corporate and
$3 $12 ($116) ($385)
Unallocated
Elimination of
($426) ($411) ($107) ($104)
Dual Credit
Total $7,945 $8,111 -2.6% -0.4% 5.1% 2.1% -2.9% -2.7% 0.0% -2.7% $1,783 $1,325 -25.7% 22.4% 16.3%
Effective second quarter of 2019, 3M made certain business segment reporting changes. Those changes are reflected in the segment reporting data above.
Refer to 3M’s January 28, 2020 press release for full details.
Organic local-currency = organic volume + price
27 January
© 3M 2020 . All Rights Reserved. 20Q4 sales by division
($M) Net Sales ($M) Net Sales
Business groups Q4 2018 Q4 2019 Business groups Q4 2018 Q4 2019
Abrasives 362 335 Drug Delivery 104 105
Automotive Aftermarket 336 314 Food Safety 82 87
Closure and Masking Systems 304 276 Health Information Systems 219 324
Communication Markets 6 0 Medical Consumables 763 1,112
Electrical Materials 294 289 Oral Care 340 330
Industrial Adhesives and Tapes 689 662 Separation & Purification 191 188
Personal Safety 861 852 Other Health Care 9 (5)
Roofing Granules 70 73 Total Health Care Business Group 1,708 2,141
Other Safety & Industrial 30 10
Consumer Health Care 91 86
Total Safety & Industrial Business Group 2,952 2,811
Home Care 239 244
Home Improvement 539 566
Advanced Materials 304 285
Stationery and Office 374 367
Automotive & Aerospace Solutions 499 457
Other Consumer 24 5
Commercial Solutions 414 399
Total Consumer Business Group 1,267 1,268
Electronics 1,014 951
Transportation Safety 199 204
Corporate and Unallocated 3 12
Other Transportation & Electronics 11 (6)
Elimination of Dual Credit (426) (411)
Total Transportation & Electronics Business Group 2,441 2,290
Total 7,945 8,111
27 January
© 3M 2020 . All Rights Reserved. 21Certain amounts adjusted for impacts of significant litigation-related charges, deconsolidation of the
Company’s Venezuelan subsidiary, and enactment/measurement period adjustments related to the Tax
Cuts and Jobs Act (TCJA) – (non-GAAP measures)
Operating Operating Income Provision for Effective Net Income Earnings Per Earnings Per Diluted
Income Income Before Income Tax Rate Attributable to Diluted Share Share Percentage
(Dollars in millions, except per share amounts) Margin Taxes Taxes 3M Change
Q4 2018 GAAP $1,783 22.4% $1,720 $371 21.6% $1,347 $2.27
Adjustment for significant litigation-related charges (60) 60 0.11
Adjustment for measurement period accounting of TCJA 41 (41) (0.07)
Q4 2018 adjusted amounts (non-GAAP measures) $1,783 22.4% $1,720 $352 20.5% $1,366 $2.31
Q4 2019 GAAP $1,325 16.3% $1,212 $242 19.9% $969 $1.66 (26.9%)
Adjustment for significant litigation-related charges 214 214 48 166 0.29
Q4 2019 adjusted amounts (non-GAAP measures) $1,539 19.0% $1,426 $290 20.3% $1,135 $1.95 (15.6%)
Full Year 2018 GAAP $7,207 22.0% $7,000 $1,637 23.4% $5,349 $8.89
Adjustment for significant litigation-related charges 897 897 127 770 1.28
Adjustment for measurement period accounting of TCJA (176) 176 0.29
Full year 2018 adjusted amounts (non-GAAP measures) $8,104 24.7% $7,897 $1,588 20.1% $6,295 $10.46
Full Year 2019 GAAP $6,174 19.2% $5,712 $1,130 19.8% $4,570 $7.81 (12.1%)
Adjustment for significant litigation-related charges 762 762 (172) 590 1.01
Adjustment for loss on deconsolidation of Venezuelan 162 --- 162 0.28
subsidiary
Full year 2019 adjusted amounts (non-GAAP measures) $6,936 21.6% $6,636 $1,302 19.6% $5,322 $9.10 (13.0%)
In 2019, the Company recorded significant litigation-related charges of $762 million ($590 million after tax) related to PFAS (certain perfluorinated compounds) matters and coal mine dust respirator mask lawsuits of which $214 million ($166 million after tax) occurred in the
fourth quarter. In 2018, 3M recorded significant litigation-related charges of $897 million ($770 million after tax) related to PFAS matters of which a tax expense of $60 million occurred in the fourth quarter. In the second quarter of 2019, 3M recorded a pre-tax charge of $162
million related to deconsolidation of the Company’s Venezuelan subsidiary. During 2018, the Company recorded a net tax expense of $176 related to measurement period adjustments to the provisional amounts recorded in 2017 from the enactment of the Tax Cuts and Jobs Act
(TCJA), of which a tax benefit of $41 million occurred in the fourth quarter.
In addition to reporting financial results in accordance with U.S. GAAP, the Company also provides non-GAAP measures that adjust for the impacts of significant litigation-related charges, deconsolidation of the Company’s Venezuelan subsidiary and measurement period
adjustments to the enactment of the TCJA. These items represent significant amounts that impacted the Company’s financial results. Operating income, income before taxes, net income, earnings per share, and effective tax rate are all measures for which 3M provides the
reported GAAP measure and an adjusted measure. The adjusted measures are not in accordance with, nor are they a substitute for, GAAP measures. The Company considers these non-GAAP measures in evaluating and managing the Company’s operations. The Company
believes that discussion of results adjusted for these items is meaningful to investors as it provides a useful analysis of ongoing underlying operating trends. The determination of these items may not be comparable to similarly titled measures used by other companies.
27 January
© 3M 2020 . All Rights Reserved. 22Reconciliation of GAAP amounts to free cash flow conversion
Fourth-quarter 2019 results: Full-year 2019 results and full-year 2020 estimate:
forecast:
Q4 Q4 Full-year 2020
($M) 2018 2019 Change ($B) 2019 Estimate
Major GAAP cash flow categories: Free cash flow (non-GAAP measure):
Operating cash flow $2,258 $2,338 $80 Operating cash flow $7.1 $6.9 to $7.6
Investing cash flow ($416) ($5,299) ($4,883) Purchases of property, plant and
$1.7 ($1.6 to $1.8)
equipment
Financing cash flow ($2,152) ($2,451) ($299)
Free cash flow $5.4 $5.1 to $6.0
Free cash flow (non-GAAP measure):
Net income attributable to 3M $4.6 $5.4 to $5.7
Operating cash flow $2,258 $2,338 $80
Free cash flow conversion 118% 95% to 105%
Purchases of property, plant and equipment ($531) ($538) ($7)
Free cash flow $1,727 $1,800 $73
Net income attributable to 3M $1,347 $969 ($378)
Free cash flow conversion 128% 186% +58 pts
Free cash flow and free cash flow conversion are not defined under U.S. generally accepted accounting principles (GAAP). Therefore, they should not be considered a
substitute for income or cash flow data prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. The
Company defines free cash flow as net cash provided by operating activities less purchases of property, plant and equipment. It should not be inferred that the entire free
cash flow is available for discretionary expenditures. The Company defines free cash flow conversion as free cash flow divided by net income attributable to 3M. The
Company believes free cash flow and free cash flow conversion are meaningful to investors as they function as useful measures of performance and the Company uses these
measures as an indication of the strength of the Company and its ability to generate cash.
27 January
© 3M 2020 . All Rights Reserved. 23Reconciliation of GAAP amounts to return on invested capital
Full-year 2019 results: Full-year 2020 forecast:
Year 2020
Year 2019 Planning
($B) Results ($B) Estimate
Return on invested capital (non-GAAP measure): Return on invested capital (non-GAAP measure):
Net income including non-controlling interest $4.6 Net income including non-controlling interest $5.4 to $5.7
Interest expense (after-tax)* $0.4 Interest expense (after-tax)** $0.4
Adjusted net income (return) $4.9 Adjusted net income (return) $5.8 to $6.1
Ave. shareholder’s equity (including non-controlling interest) $10.2 Ave. shareholder’s equity (including non-controlling interest) $11.0 to $12.0
Ave. short-term and long-term debt $18.0 Ave. short-term and long-term debt $18.0 to $20.0
Ave. invested capital $28.2 Ave. invested capital $29.0 to $32.0
Return on invested capital 17.5% Return on invested capital 18% to 21%
*Effective income tax rate used for interest expense 19.8% **Effective income tax rate used for interest expense 20% to 21%
Return on Invested Capital (ROIC) is not defined under U.S. generally accepted accounting principles. Therefore, ROIC should not be considered a substitute for other measures
prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. The Company defines ROIC as adjusted net income (net
income including non-controlling interest plus after-tax interest expense) divided by average invested capital (equity plus debt). The Company believes ROIC is meaningful to investors
as it focuses on shareholder value creation.
27 January
© 3M 2020 . All Rights Reserved. 242020 key assumptions
Growth/Portfolio Raw materials/Productivity Other financial
Management
EPS contribution: $0.10 - $0.35 EPS contribution: $0.25 - $0.70 EPS contribution: ($0.10) - flat
Organic growth flat to +2% Raw materials: includes tariffs, and Non-op Pension: flat year-over-year;
sourcing cost reduction projects cash contributions $100-200M
FX neutral to sales: spot rates of
Euro 1.12, RMB 7.00, JPY 109, Productivity: normalized manufacturing Tax rate 20% to 21%
BRL 4.05 utilization and inventories; manufacturing/
SG&A productivity; Lean Six Sigma Share repurchases ~$1B
Acquisition/divestiture +3% to sales:
primarily from Acelity acquisition 2019 headwinds: year-on-year headwinds
from variable compensation; and gain from
sale of certain properties
2019 restructuring: tailwinds from charges
and related year-on-year savings
27 January
© 3M 2020 . All Rights Reserved. 252020 organic local-currency growth expectations
By Business:
Health Care Safety & Industrial Transportation & Electronics Consumer
2% to 4% 0% to 2% -2% to 2% 1% to 3%
By Geography:
Americas EMEA Asia Pacific
1% to 3% -1% to 1% -1% to 3%
27 January
© 3M 2020 . All Rights Reserved. 262020 EPS roadmap
$0.50 to ($0.10) to
$0.60 Neutral $0.00 Neutral
$0.00 to
$0.05 to ($0.05) $0.10 $0.00 to
$9.10 $0.10 ($0.25) 2020
$0.28 $0.30 $0.25 GAAP
$1.01 $9.30
2019 to
Subtotal $9.75
2019 $8.89
GAAP
$7.81
Growth and Other
Raw Materials & Productivity
Portfolio Management Financial
$0.21 Gas & flame detection business divestiture
* Full-year 2020 net interest expense increase of approximately $80 million related to acquisitions is included in the “Acquisitions & Divestitures Impact” category
27 January
© 3M 2020 . All Rights Reserved. 27You can also read
