3M Safety & Industrial Organic Sales Fall 3.9% in 4Q - Modern Distribution Management

3M Safety & Industrial Organic Sales Fall 3.9% in 4Q

See our full breakdown of 3M's 4Q numbers, which showed that roofing granules were the only industrial category to see decent growth.
3M St Paul HQ

Industrial manufacturing conglomerate 3M reported its 2023 fourth quarter and full year financial results on Jan. 23, showing a continued sales deceleration to end amid the pending divestment of its Health Care business unit.

The company posted total 4Q23 sales of $8.01 billion, down 0.8% year-over-year, with organic sales down 1.9%. 3M’s 4Q23 gross margin of 41.6% was down 160 basis points year-over-year. 4Q23 operating profit of $1.24 billion nearly doubled that of 4Q22’s $632 million, while operating margin of 15.5% likewise nearly doubled the 7.8% of a year earlier. 3M’s 4Q23 adjusted operating margin was 20.9%, up from 4Q22’s 19.1%.

3M had a total 4Q23 net profit of $945 million, dwarfing 4Q22’s $541 million.

In the Americas, 3M 4Q23 sales grew 1.5%, with organic growth of 0.3%. EMEA sales growth was 3.9% (-0.6% organic); APAC sales declined 7.0% (-5.8% organic); and the rest of international declined 0.3% (-1.4% organic).

For the full year, 3M’s 2023 sales of $32.7 billion were down 4.5% vs. 2022, with organic sales down 3.2%. The company had an operating loss of $9.1 billion (vs. $6.5B profit in 4Q22) and a 2023 net loss of $7.0 billion (vs. $5.8B profit in 2022).

By business group:

Safety & Industrial 

  • 4Q sales of $2.66 billion (33.2% of total) declined 2.7% year-over-year, with organic sales down 3.9%. The company said roofing granules grew double-digits; industrial adhesives and tapes were flat; and all other divisions declined. Disposable respirators sles were down about $50 million year-over-year, pulling organic growth down by 1.6 percentage points. Adjusted operating margin of 19.7% was down 70 basis points year-over-year.
  • Full year sales of $10.96 billion declined 5.6% vs. 2022, with organic sales down 5.1%.
  • 2024 outlook: 3M forecasts flat to low-single digit organic sales growth

Transportation & Electronics

  • 4Q sales of $2.09 billion (26.1% of total) declined 1.7% year-over-year, with organic sales down 2.7% The company said it had adjusted organic growth in advanced materials, automotive and aerospace, and commercial solutions; electronics was flat; and transportation safety declined. Adjusted operating margin of 20.9% grew 380 bps year-over-year.
  • Full year sales of $8.50 billion declined 4.5% vs. 2022, with organic sales down 3.5%.
  • 2024 outlook: 3M forecast adjusted organic sales growth of flat to low-single digits.

Health Care

  • 4Q sales of $2.04 billion (25.4% of total) dipped 0.3% year-over-year, with organic sales down 1.0%. The company said it saw organic growth in medical solutions, while seperation and purification, oral care and health information systems declined. Adjusted operating margin of 18.3% fell 190 bps year-over-year. 
  • Full year sales of $8.20 billion fell 2.8% vs. 2022, with organic sales up 0.7%.
  • 2024 outlook: 3M forecasts flat to low-single digit organic sales growth.
  • 3M’s planned divestment of its Health Care segment, named Solventum, is expected in the first half of 2024.

Consumer

  • 4Q sales of $1.23 billion (15.3% of total) declined 1.4% year-over-year, with organic sales 2.2%. The company said it saw organic growth in home improvement, while home health and auto care and stationary and office declined. Adjusted operating margin of 18.0% grew 100 bps year-over-year.
  • Full year sales of $5.03 billion fell 5.0%, with organic sales down 4.7%.
  • 2024 outlook: 3M forecasts low-single digit organic sales decline.

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