3M Reports Sales Decline In Second-Quarter Financial Report
3M has released its second-quarter 2019 financial results, reporting sales of $8.2 billion, down 2.6 percent year-on-year, and a decline in organic local-currency sales of 0.9 percent, year-on-year, while acquisitions, net of divestitures, increased sales by 0.1 percent. Foreign currency translation decreased sales by 1.8 percent year-on-year. The company, located in St. Paul, Minnesota, operates in the promotional products industry as supplier 3M Promotional Markets (PPAI 113638).
“I am encouraged by our company’s progress and performance in the second quarter,” says Mike Roman, 3M chairman and CEO. “Our execution was strong in the face of continued slow growth conditions in key end markets, as we effectively managed costs and improved cash flow. Moving ahead we remain focused on continuing to drive operational improvements, investing for the future and delivering for our customers and shareholders.”
3M’s total sales grew 5.8 percent in health care with declines of 0.5 percent in consumer, 2.9 percent in transportation and electronics, and nine percent in safety and industrial. Organic local-currency sales increased 3.5 percent in health care and 0.7 percent in consumer, with declines of 1.2 percent in transportation and electronics, and five percent in safety and industrial.
On a geographic basis, total sales grew 1.7 percent in the U.S., with declines of 2.9 percent in Latin America/Canada, 3.5 percent in Asia Pacific, and 9.4 percent in EMEA (Europe, Middle East and Africa). Organic local-currency sales increased 0.7 percent in Latin America/Canada and 0.1 percent in the U.S., with decreases of 0.9 percent in Asia Pacific and 3.6 percent in EMEA.
The company’s second-quarter operating income was $1.7 billion with operating margins of 20.8 percent. Included in these results is a $112 million charge from restructuring and other costs, or a negative 1.4 percentage point impact to operating margins. 3M’s operating cash flow was $1.7 billion. It paid $830 million in cash dividends to shareholders and repurchased $400 million of its own shares during the quarter.