3M recently reported results for the second quarter of 2020, including a decrease in sales of 12.2% to $7.2 billion. Organic local currency sales declined 13.1%, while acquisitions, net of divestitures, increased sales by 2.4%. Foreign currency translation reduced sales by 1.5% compared to the 2019 quarter.
Total sales declined 0.4% in Health Care, 6.2% in Consumer, 9.2% in Safety and Industrial, and 20.9% in Transportation and Electronics. Organic local currency sales decreased 5% in Consumer, 6.1% in Safety and Industrial, 12.4% in Health Care, and 18.9% in Transportation and Electronics.
On a geographic basis, total sales declined 8.5% in Asia-Pacific, 12.7% in the Americas, and 16.4% in EMEA (Europe, Middle East and Africa). Organic local currency sales decreased 8.1% in Asia-Pacific, 14.5% in EMEA, and 15.6% in the Americas.
“While our results were significantly impacted by the global economic slowdown, we executed well, managed our costs and delivered another quarter of robust cash flow,” said Mike Roman, chairman and CEO. “We are taking actions to navigate near-term challenges, while relentlessly innovating for our customers and investing for the future to lead out of the slowdown and continue to deliver long-term value for our shareholders.
“Globally across 3M, we continue to fight the pandemic from all angles and help ensure the safety of our employees, healthcare workers and first-responders, and the public,” Roman continued. “I remain incredibly proud of how our team is leading through these unprecedented times, and I thank all 3Mers for their tireless efforts.”
3M reports that it has been aggressively responding to the COVID-19 pandemic. The company continues to adjust and adapt quickly with a focus on mitigating the near-term impact while positioning 3M’s businesses for success coming out of the crisis. Ongoing efforts reportedly include:
- Strong, global workplace safety protocols to protect employees
- Employees effectively adjusting to different ways to work while ensuring business continuity
- In early stages of return-to-workplace; complying with government guidelines and policies
- Global production of nearly 800 million respirators in the first half of 2020; approximately 50% distributed in U.S. primarily to healthcare and FEMA; on track to approximately 2 billion globally, including 1 billion in the U.S. for full-year 2020
- Partnering with U.S. Department of Defense and other governments to expand global respirator manufacturing capacity
- Advanced membrane technology being used in blood oxygenation procedures; biopharma filtration solutions supporting new vaccine and therapeutic development efforts
- Expanding partnerships, including new innovative rapid diagnostic COVID-19 test with the Massachusetts Institute of Technology
- Created hotlines and websites around the world to report suspected fraud
- Filed 18 lawsuits including in 10 U.S. states and Canada
- Secured removal of more than 7,000 counterfeit websites and more than 10,000 false or deceptive social media posts to date
- Maintaining strong customer service with new global enterprise operations team
- Ongoing adjustments to manufacturing/supply chain operations as demand trends evolve
- Nearly all plants and distribution centers fully or partially operational
- Continue to innovate for customers to solve big challenges such as air quality, automotive electrification, and food safety; Priority Growth Platforms outperforming markets they serve
- Aggressively reduced costs by approximately $400 million year-on-year to help offset COVID-19 related impacts and actions
- Undertook restructuring actions as a result of the COVID-19 pandemic and related economic impact, resulting in a $58 million charge
- Divested the drug delivery business, generating a pre-tax gain of $387 million
- Strengthened the balance sheet by reducing net debt by $1.7 billion since March 31, 2020
According to 3M, the COVID-19 pandemic continues to evolve and affect its businesses in a number of ways. During the second quarter, end market demand remained strong in personal safety, home improvement, general cleaning, semiconductor, data center, and biopharma filtration. At the same time, several other end markets continued to experience significant weakness, including healthcare elective procedures, automotive OEM and aftermarket, general industrial, commercial solutions, and office supplies.
Additional details are available at www.3m.com.
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