3M Updates Full-Year 2015 Guidance; Company Projects 7 to 12 Percent Earnings Growth in 2016
3M will announce today that it is poised for a successful 2016,
forecasting strong earnings growth in the face of a challenging global
Inge G. Thulin, 3M Chairman, President and CEO, will tell analysts and
investors on 3M’s 2016 outlook conference call that the company
continues to make investments to build strength-on-strength and position
itself for long-term success.
These actions include strengthening and focusing its portfolio of
businesses, investing in research and development, and moving to a more
efficient business model through a global ERP system.
Senior Vice President and Chief Financial Officer Nicholas C. Gangestad
will provide an update on 3M’s current year and 2016 earnings outlook,
along with its actions to deploy capital and enhance capital structure.
Reflecting the realities of a continued slow-growth global economy, 3M
expects 2015 full-year organic growth of approximately 1 percent, versus
prior guidance of 1.5 to 2 percent. Earnings per share is anticipated to
be approximately $7.55, against a prior range of $7.60 to $7.65.
For 2016, the company anticipates:
Earnings per share of $8.10 to $8.45, an increase of 7 to 12 percent
Organic local-currency sales growth of 1 to 3 percent
Free cash flow conversion rate of 95 to 105 percent
“We remain committed to executing our playbook, controlling the
controllable, and making investments for long-term success,” said
Thulin. “We are building our company for efficient growth in 2016 and
Strengthening and focusing its portfolio of businesses is a key
initiative for 3M. Since 2012, 3M has realigned from six sectors to five
business groups, and from 40 businesses to 26. These actions are
improving customer relevance, scale, productivity and speed, while
making the company leaner and better positioned to allocate resources to
its most promising opportunities.
Research and development is the heartbeat of 3M; it drives organic
growth, and supports the company’s premium margins and return on
invested capital. In 2016, 3M plans to invest approximately $1.8 billion
in R&D, or about 5.8 percent of total sales. Strategic acquisitions will
continue to complement organic growth and create greater value.
The company is also progressing toward a more efficient business model,
which includes standardizing business processes through a new, global
ERP system. By 2020, 3M expects these efforts to result in $500 to $700
million in annual operational savings, and an additional $500 million
reduction in working capital.
Today’s meeting will be webcast live beginning at 9:00 a.m. EST (8:00
a.m. CST) and is scheduled for approximately 90 minutes. Investors can
access this meeting via the following:
Live webcast at http://investors.3M.com
Call 800-762-2596 within the U.S. or +1
212-231-2916 outside the U.S. Please join the call at least 10 minutes
before the start time.
Go to 3M’s Investor Relations website at http://investors.3M.com
and click on “3M 2016 Outlook Meeting.”
Call 800-633-8284 within the U.S. or +1
402-977-9140 outside the U.S. (for both U.S. and outside the U.S.
access code is 21760298). The telephone replay will be available until
10:30 a.m. CST on December 18, 2015.
This news release contains
forward-looking information about 3M's financial results and estimates
and business prospects that involve substantial risks and uncertainties.
You can identify these statements by the use of words such as
"anticipate," "estimate," "expect," "aim," "project," "intend," "plan,"
"believe," "will," "should," "could," "target," "forecast" and other
words and terms of similar meaning in connection with any discussion of
future operating or financial performance or business plans or
prospects. Among the factors that could cause actual results to differ
materially are the following: (1) worldwide economic and capital markets
conditions and other factors beyond the Company's control, including
natural and other disasters affecting the operations of the Company or
its customers and suppliers; (2) the Company's credit ratings and its
cost of capital; (3) competitive conditions and customer preferences;
(4) foreign currency exchange rates and fluctuations in those rates; (5)
the timing and market acceptance of new product offerings; (6) the
availability and cost of purchased components, compounds, raw materials
and energy (including oil and natural gas and their derivatives) due to
shortages, increased demand or supply interruptions (including those
caused by natural and other disasters and other events); (7) the impact
of acquisitions, strategic alliances, divestitures, and other unusual
events resulting from portfolio management actions and other evolving
business strategies, and possible organizational restructuring; (8)
generating fewer productivity improvements than estimated; (9)
unanticipated problems or delays with the phased implementation of a
global enterprise resource planning (ERP) system, or security breaches
and other disruptions to the Company's information technology
infrastructure; and (10) legal proceedings, including significant
developments that could occur in the legal and regulatory proceedings
described in the Company's Annual Report on Form 10-K for the year ended
December 31, 2014, and its subsequent quarterly reports on Form 10-Q
(the “Reports”). Changes in such assumptions or factors could produce
significantly different results. A further description of these factors
is located in the Reports under "Cautionary Note Concerning Factors That
May Affect Future Results" and "Risk Factors" in Part I, Items 1 and 1A
(Annual Report) and in Part I, Item 2 and Part II, Item 1A (Quarterly
Report). The information contained in this news release is as of the
date indicated. The Company assumes no obligation to update any
forward-looking statements contained in this news release as a result of
new information or future events or developments.
At 3M, we apply science in collaborative ways to
improve lives daily. With $32 billion in sales, our 90,000 employees
connect with customers all around the world. Learn more about 3M’s
creative solutions to the world’s problems at www.3M.com
or on Twitter @3M or @3MNewsroom.
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