Manufacturing conglomerate 3M reported its 2021 second quarter financial results on Tuesday, showing a strong acceleration in year-over-year and sequential organic sales, including continued strong results in the company's Safety and Industrial segment.
The St. Paul, MN-based maker of adhesives, PPE, safety products and Post-It notes showed that its Q2 sales of $8.95 billion increased 24.7 percent year-over-year and 1.1 percent from Q1. Organic sales increased 21.4 percent year-over-year, far above the 8.0 growth seen in Q1.
3M's Q2 operating profit of $1.97 billion grew 13.3 percent year-over-year and narrowly trailed Q1's $2.0 billion. Q2 operating margin of 24.3 percent fell 2.3 percentage points year-over-year, but grew 1.9 points from Q1. The company's total Q2 net profit of $1.31 billion grew 16.7 percent year-over-year and trailed Q1's $1.62 billion.
The strong Q2 results led 3M to raise its full-year guidance, with the company now expecting 2021 total sales growth of 7 to 10 percent and organic growth of 6 to 9 percent, up from the 5 to 8 percent and 3 to 6 percent ranges given in 3M's Q1 earnings report, respectively.
Geographically, Q2 sales grew 28.7 percent in EMEA, 26.1 percent in the Americas and 20.2 percent in Asia Pacific. Organic local-currency sales grew 25.6 percent in the Americas, 20.1 percent in EMEA and 15.4 percent in Asia Pacific.
Safety and Industrial
In 3M's largest business unit, Safety and Industrial, Q2 sales of $3.3 billion were essentially identical to Q1, but grew 22.4 percent year-over-year, with organic sales up 17.6 percent. 3M said organic sales increased in automotive aftermarket, roofing granules, abrasives, industrial adhesives and tapes, electrical markets and closure and masking, while sales declined in personal safety. Sales grew across all geographic areas. Segment profit of $718 million grew 15 percent year-over-year on margins of 22.1 percent and topped Q1's $591 million.
Here's how specific product lines performed within 3M's Safety & Industrial segment in Q2:
- Abrasives: $353 million, +44.9% year-over-year and up from $352 in Q1
- Automotive Aftermarket: $313 million, +55.0% year-over-year and up from $312 in Q1
- Closure and Masking Systems: $254 million, +8.1% year-over-year and up from $243 in Q1
- Electrical Materials: $319 million, +27.1% year-over-year and up from $307 in Q1
- Industrial Adhesives & Tapes: $761 million, +39.6% year-over-year and down from $768 in Q1
- Personal Safety: $1.133 billion, +3.5% year-over-year and down from $1.237 in Q1
- Roofing Granules: $121 million, +40.7% year-over-year and up from $108 million in Q1
In 3M's other business segments in Q2:
Transportation and Electronics sales of $2.5 billion grew 28.1 percent year-over-year, with organic sales up 24.2 percent. Organic sales increased in automotive and aerospace, commercial solution, advanced materials, transportation safety and electronics. Operating profit of $546 million jumped 52 percent on margins of 22.0 percent.
Health Care sales of $2.3 billion grew 24.9 percent year-over-year, with organic sales up 23.2 percent. Organic sales increased in oral care, food safety, medical solutions, separation and purification and health information systems. Operating profit of $576 million soared 92 percent year-over-year on margins of 25.3 percent.
Consumer sales of $1.5 billion grew 20.4 percent year-over-year, with organic sales up 17.8 percent. Organic sales grew in stationery and office supplies, consumer health and safety, home improvement and home care. Operating profit of $311 million grew 12 percent year-over-year on margins of 21.0 percent.