3M recently reported that its sales declined 5% to $7.9 billion in the first quarter of 2019. Organic local-currency sales declined 1.1%, while divestitures, net of acquisitions, decreased sales by 0.5%. Foreign currency translation decreased sales by 3.4% compared to the 2018 first quarter.
Total sales grew 0.3% in Health Care, with declines of 1.9% in Consumer, 4.2% in Safety and Graphics, 6.6% in Industrial, and 11.8% in Electronics and Energy. Organic local-currency sales increased 0.9% in Consumer and 0.7% in Health Care, with decreases of 0.1% in Safety and Graphics, 2.8% in Industrial, and 3% in Electronics and Energy.
On a geographic basis, total sales grew 0.1% in the U.S., with declines of 6.5% in Latin America/Canada, 7.4% in Asia-Pacific, and 9.4% in Europe, Middle East and Africa (EMEA). Organic local-currency sales increased 0.8% in Latin America/Canada and 0.7% in EMEA, with decreases of 0.4% in the U.S. and 3.6% in Asia-Pacific.
“The first quarter was a disappointing start to the year for 3M,” said Mike Roman, CEO. “We continued to face slowing conditions in key end markets which impacted both organic growth and margins, and our operational execution also fell short of the expectations we have for ourselves. As a result, we have stepped up additional actions—including restructuring—to drive productivity, reduce costs, and increase cash flow as we manage through challenges in some of our end markets.
“While we take actions to manage through the near-term, we also continue to invest in growth to position 3M for the future. We recently implemented a significant portfolio realignment from five to four business groups, which will enable us to better serve our customers and global markets. Moving forward, I am confident that we are making the necessary changes and focused on the right priorities to accelerate 3M into a stronger future.”
Reflecting a slower-than-expected 2019, 3M has initiated restructuring and other actions that will result in an expected reduction of 2,000 positions worldwide, with an estimated annual pre-tax savings range of $225 million to $250 million, with $100 million in the remainder of 2019. The company anticipates a pre-tax charge in 2019 of approximately $150 million. These actions will span all business groups, functions and geographies, with emphasis on corporate structure and underperforming areas of the portfolio.
Additional details are available at www.3m.com.