Manufacturing conglomerate 3M reported its 2020 fourth quarter and full-year financial results on Tuesday, showing that sales in its Safety & Industrial segment accelerated both sequentially and year-over-year amid the COVID-19 pandemic.
The St. Paul, MN-based maker of adhesives, PPE, safety products and Post-It notes showed that its Q4 sales totaled $8.58 billion, up 2.8 percent from Q3 and up 5.8 percent year-over-year (YoY). That followed Q3 YoY and sequential gains of 4.5 percent. On an organic local-currency basis, Q4 sales improved 5.5 percent YoY, up considerably from a 0.9 percent gain in Q3.
3M's Q4 operating profit of $1.85 billion jumped 40.0 percent YoY, but ticked down from $1.91 billion in Q3. Adjusted operating profit of $1.8 billion was up 20.1 percent YoY. Q4 net profit totaled $1.39 billion, up 43.0 percent YoY and nearly identical to Q3, while adjusted net profit of $1.4 billion was up 21.5 percent YoY.
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3M said that Q4 end market demand remained strong in personal safety, home improvement, general cleaning, semiconductor, data center and biopharma filtration, while end markets of healthcare and oral care elective procedures, consumer electronics, hospitality, office supplies and healthcare IT continued to experience YoY declines that were primarily driven by COVID-19 headwinds.
Geographically, sales grew 7.4 percent YoY in EMEA, 5.8 percent in the Americas and 5.3 percent in Asia Pacific. Organic sales grew 7.9 percent in the Americas, 5.6 percent in EMEA and 1.7 percent in Asia Pacific.
Safety and Industrial
In 3M's largest business unit, Safety and Industrial, sales of $3.1 billion jumped 12.7 percent YoY, compared to a 6.9 percent gain in Q3. Organic local-currency sales increased 11.4 percent. Organically, sales increased in personal safety, roofing granules, industrial adhesives & tapes and electrical markets, while sales declined in automotive aftermarket, abrasives and closure & masking. Sales grew in the Americas, EMEA and Asia Pacific. Operating profit of $869 million surged 50 percent YoY, with margins of 27.7 percent.
In Safety and Industrial, Q4 sales of personal safety products surged 42.4 percent to $1.21 billion. Industrial adhesives & tapes was second-best at $689 million in sales that were up 6.3 percent YoY.
Here's how 3M's other Safety and Industrial product lines fared in Q4:
- Abrasives: Sales of $317 million were down 3.4 percent YoY
- Closure and Masking Systems: Sales of $248 million were down 10.1 percent YoY
- Electrical Materials: Sales of $292 million were up 1.4 percent YoY
- Roofing Granules: Sales of $95 million were up 30.1 percent YoY
- Other: Q4 net sales deficit was $19 billion, compared to $9 million in Q4 2019 sales.
In 3M's other business segments in Q4:
- Transportation and Electronics sales of $2.3 billion increased 2.3 percent YoY, with organic local-currency sales up 1.4 percent. Organic sales increased in automotive and aerospace, transportation safety, electronics and advanced materials, while sales declined in commercial solutions. Operating profit of $511 million increased 8 percent YoY, with margins of 21.8 percent.
- Health Care sales of $2.3 billion were up 5.4 percent YoY, with organic local-currency sales up 6.6 percent. Organic sales increased in medical solutions, separation and purification and food safety, while sales declined in oral care and health information systems. Operating profit of $55 million increased 22 percent YoY, with margins of 24.7 percent.
- Consumer sales of $1.4 billion increased 10.6 percent YoY, with organic local-currency sales up 9.9 percent. Organic sales increased in home improvement, home care and consumer health care, while sales declined in stationary and office supplies. Operating profit of $335 million increased 11 percent YoY, with margins of 23.5 percent.
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In early December 3M announced that it was accelerating previously-announced reorganizational actions that will impact 2,900 jobs.
"Throughout 2020 we distributed two billion respirators globally and supported the development and manufacturing of vaccines and therapeutics to help the world respond to COVID-19,” said Mike Roman, 3M chairman and CEO. "We also took significant actions to transform and build 3M for the future, while advancing our core values. Moving forward we will continue to prioritize investments in growth, productivity and sustainability as we build on our progress and deliver strong results in 2021."
Full Year
For the full-year of 2020, 3M's total sales of $32.2 billion grew 0.1 percent, with organic local-currency sales down 1.7 percent. Operating profit was $7.2 billion on margins of 22.3 percent, while adjusted operating profit was $6.8 billion with margins of 21.3 percent. Net profit of $4.57 billion was down from 2019's $5.38 billion.
3M expects its 2021 full-year total YoY sales growth in the range of 5 to 8 percent, with organic local-currency growth between 3 to 6 percent.
The company has the following full-year organic growth expectations for its business units in 2021:
- Safety & Industrial: Mid-single digits
- Transportation & Electronics: Low to high-single digits
- Health Care: Low to mid-single digits
- Consumer: Low to mid-single digits
