01—Abstract
Summary
Summary of the 10-K filed February 9, 2022. Cited figures are marked; the original filing is the authoritative source.
3M Company (MMM) reported its full-year 2021 financial results in its 10-K filing, showcasing resilience and growth amidst supply chain challenges and global economic shifts.
The diversified technology company, operating across Safety and Industrial, Transportation and Electronics, Health Care, and Consumer segments, experienced broad-based organic growth, with total sales increasing by 9.9%a year-over-year, driven by an 8.8% organic sales increase. Despite increased raw material and logistics costs, the company managed to offset these pressures through higher selling prices and continued productivity efforts. The Health Care segment demonstrated particularly strong performance with a 20.1% increase in operating income.
While the company navigated inflationary pressures and supply chain disruptions, including the impact of extreme weather events, it maintained a strong financial position. Net income attributable to 3M was $5.92 billionb, and the company returned significant capital to shareholders through $2.2 billion in share repurchases and $3.4 billion in dividends.
Management highlighted its commitment to investing in growth, productivity, and sustainability, with plans for increased capital spending in 2022. However, investors should remain aware of the ongoing risks, including potential impacts from global economic conditions, public health crises, foreign currency fluctuations, and significant legal and regulatory proceedings, particularly those related to fluorochemicals (PFAS) and product liability.
02—Key points
Key Highlights
- 3M reported a 9.9% increase in total sales to $35.4 billion for the full year 2021, with organic sales growing by 8.8%.
- The Health Care segment showed robust growth, with sales up 8.4% and operating income increasing by 20.1%.
- The company faced increased raw material and logistics costs, which impacted operating income margins, but managed these through higher selling prices and productivity initiatives.
- 3M returned $5.6 billion to shareholders through dividends ($3.4 billion) and share repurchases ($2.2 billion) in 2021.
- Significant legal and environmental matters, particularly those involving PFAS (per- and polyfluoroalkyl substances), continue to be a key area of focus and potential risk for the company.
- The company maintained a strong liquidity profile with $4.8 billion in cash, cash equivalents, and marketable securities at year-end 2021.
- The Safety and Industrial segment saw a 9.8% sales increase, though operating income decreased by 3.3% due to higher costs and litigation expenses.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, 3M Co kept $0.17.
- Revenue$35.35B100.0%
- Cost of revenue−$18.80B53.2%
- Gross profit$16.56B46.8%
- Operating costs−$9.19B26.0%
- Operating income$7.37B20.8%
- Interest, other & tax−$1.45B4.1%
- Net income$5.92B16.7%
Where FY2021 revenue went
$35.35B- Cost of revenue: $18.80B, 53% of revenue
- SG&A: $7.20B, 20% of revenue
- Net income: $5.92B, 17% of revenue
- R&D: $1.20B, 3.4% of revenue
- Other operating costs: $794.0M, 2.2% of revenue
- Interest, other & tax: $1.45B, 4.1% of revenue
Kept 17% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 9, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $35.35B$32.18B | +9.9% |
| Cost of Revenue | $18.80B$16.61B | +13.2% |
| Gross Profit | $16.56B$15.58B | +6.3% |
| R&D Expenses | $1.20B$1.10B | +9.1% |
| SG&A Expenses | $7.20B$6.93B | +3.9% |
| Operating Expenses | $27.99B$25.02B | +11.8% |
| Operating Income | $7.37B$7.16B | +2.9% |
| Interest Expense | $488.00M$529.00M | −7.8% |
| Net Income | $5.92B$5.45B | +8.7% |
| EPS (Basic) | $10.23$9.43 | +8.5% |
| EPS (Diluted) | $10.12$9.36 | +8.1% |
| Shares Outstanding (Basic) | 579.00M577.60M | +0.2% |
| Shares Outstanding (Diluted) | 585.30M582.20M | +0.5% |
05—Questions
Frequently Asked Questions
What was 3M's overall financial performance in 2021?
In 2021, 3M achieved strong growth with total sales increasing by 9.9% to $35.4 billion, driven by an 8.8% increase in organic sales. Net income attributable to 3M was $5.92 billion. The company navigated rising costs for raw materials and logistics through price increases and operational efficiencies.
Which business segments performed best in 2021?
The Health Care segment demonstrated particularly strong performance with an 8.4% increase in sales and a significant 20.1% rise in operating income. The Safety and Industrial segment also saw an 8.8% organic sales increase, though operating income saw a slight decrease due to cost pressures and litigation expenses. The Transportation and Electronics and Consumer segments also reported positive sales growth.
What are the major risks and potential liabilities facing 3M, as highlighted in the filing?
3M faces several significant risks, including potential liabilities related to PFAS (per- and polyfluoroalkyl substances), which are subject to ongoing regulatory reviews and litigation. Product liability litigation, particularly concerning respirator mask/asbestos claims and Combat Arms earplugs, also presents significant ongoing risks. Other risks include global economic conditions, supply chain disruptions, foreign currency fluctuations, and cybersecurity threats.
How did 3M return capital to shareholders in 2021?
In 2021, 3M returned substantial capital to shareholders through dividends, totaling $3.4 billion, and share repurchases, amounting to $2.2 billion. The company also announced a 1% increase in its quarterly dividend, marking the 64th consecutive year of dividend increases.
06—Continue