St. Paul, MN - At a meeting with institutional investors and analysts today, 3M will provide an update to its five-year plan and introduce its 2014 outlook.
3M Chairman, President and CEO Inge G. Thulin will discuss the strength of 3M’s business model, driven by three key strategic levers: active portfolio management, investing in innovation, and business transformation. These levers, combined with more aggressive capital deployment, will drive enhanced value creation.
Thulin will outline 3M’s 2013-17 financial objectives:
- 9 to 11 percent growth in earnings per share
- 4 to 6 percent organic revenue growth
- Approximately 20 percent return on invested capital
- Approximately 100 percent free cash flow conversion
Senior Vice President and Chief Financial Officer David Meline will describe how 3M is managing toward an enhanced capital structure strategy and increased capital deployment. 3M expects to further leverage its balance sheet to both grow the company and to increase returns to shareholders.
The company will continue to invest in capital expenditures and research and development to support organic growth, which remains paramount to the 3M model. To augment organic growth, 3M plans to invest between $5 billion and $10 billion for acquisitions through 2017. Acquisition investments could exceed this range given the right strategic opportunity, with multi-billion dollar transactions possible.
3M also announced that its board of directors has declared a dividend increase of 35 percent for the first quarter of 2014. Next year marks 56 consecutive years of annual increases, and 3M has paid dividends without interruption for 97 years. In addition, the company expects to spend $17 billion to $22 billion on gross share repurchases for 2013-17 versus a previously expected range of $7.5 billion to $15 billion.
“The strength and diversity of our business model supports more aggressive capital deployment and reflects our confidence in 3M’s future,” Thulin said. “We are building the company for long-term success and are committed to creating sustainable value for our shareholders.”
For 2014, 3M anticipates earnings to be in the range of $7.30 to $7.55 per share with organic local currency sales growth of 3 to 6 percent. The company expects that free cash flow conversion will be in the range of 90 to 100 percent.