10-QPeriod: Q2 FY2021

3M CO Quarterly Report for Q2 Ended Jun 30, 2021

Filed July 27, 2021For Securities:MMM

Summary

3M Company reported strong growth in the second quarter of 2021, with total sales increasing by 24.7% year-over-year, driven by broad-based growth across all business segments and geographic areas. This performance was fueled by improving end markets such as home improvement, oral care, and industrial sectors, as well as increased healthcare elective procedure volumes. Net income attributable to 3M grew by 15.1% to $1.5 billion, or $2.59 per diluted share, compared to the prior year's second quarter. On an adjusted basis (excluding special items), operating margins improved by 2.4 percentage points to 22.0%. The company's financial condition remains robust, with ample liquidity and a strong balance sheet, supported by consistent operating cash flow and access to capital markets. Despite some headwinds from increased raw material and logistics costs, 3M's strategic investments in innovation and operational efficiency continue to drive positive results.

Financial Highlights

52 data points
Beta

Revenue

$8.95B

47.3% Gross Margin

Net Income

$1.52B

17.0% Net Margin

EPS (Diluted)

$2.59

Total Assets

$48.31B

Free Cash Flow

$1.49B

Financial Statements
Beta
Revenue$8.95B
Cost of Revenue$4.72B
Gross Profit$4.23B
SG&A Expenses$1.75B
Operating Expenses$6.98B
Operating Income$1.97B
Interest Expense$121.00M
Net Income$1.52B
EPS (Basic)$2.62
EPS (Diluted)$2.59
Shares Outstanding (Basic)581.00M
Shares Outstanding (Diluted)588.60M

Key Highlights

  • 1Total sales increased 24.7% year-over-year to $8.95 billion in Q2 2021.
  • 2Net income attributable to 3M was $1.52 billion, a 15.1% increase year-over-year.
  • 3Earnings per diluted share increased 15.1% to $2.59 in Q2 2021.
  • 4All four business segments (Safety and Industrial; Transportation and Electronics; Health Care; Consumer) showed strong sales growth.
  • 5Health Care and Transportation & Electronics segments experienced the highest sales growth, with increases of 24.9% and 28.1% respectively.
  • 6Operating cash flow for the first six months of 2021 increased by $457 million compared to the same period in 2020, reaching $3.575 billion.
  • 73M repurchased $734 million of its stock in the first six months of 2021 and increased its quarterly dividend by 1%.

Frequently Asked Questions

3M demonstrated strong financial performance in Q2 2021, with total sales increasing 24.7% year-over-year to $8.95 billion. Net income attributable to 3M rose 15.1% to $1.52 billion, and diluted earnings per share grew 15.1% to $2.59. Adjusted operating margins also improved, reflecting broad-based growth across all segments.

The Transportation and Electronics segment saw the strongest sales growth at 28.1%, followed closely by the Health Care segment at 24.9%. All four segments, including Safety and Industrial and Consumer, experienced significant year-over-year sales increases.

The company acknowledged increased raw material and logistics costs, which were magnified by factors like the winter storm Uri and ongoing supply chain challenges related to COVID-19. While these increased costs are a headwind, they were partially offset by higher selling prices and leverage from sales growth.

3M maintains a strong liquidity profile with robust operating cash flow and access to capital markets. The company repurchased $734 million of its stock in the first six months of 2021, increased its dividend, and has ample capacity under its revolving credit facilities, demonstrating financial flexibility.