So let's begin the review, I'll turn the program over to George, and please turn to Slide #3.George Buckley Thank you very much, Matt, and good morning, everybody, and thanks for joining us on our second quarter call. As you see, it was another outstanding quarter for us in both revenue and earnings as we essentially repeated and built upon the success patterns of recent quarters. In fact, sales of $6.7 billion matched our previous all-time quarterly record set in 2008. And coming off the depths, the recent recession, I think this is a remarkable achievement by 3M's people, holding one year after such a terrible economic contraction. We once again delivered tremendous organic volume growth 18% this time, to the twice the rate of global IPI. While it's difficult to determine accurate and the exact sources of growth, the strong economy was certainly a factor and as we explained, last quarter, we continue to take market share and create new markets with the high level of new product vitality. It's opening many old and many new customer doors for us. As we've done throughout the downturn, we continued to invest in and build for the future. In Q2, we took a major step forward, increasing advertising and promotions by nearly 30%, mostly in consumer and increased R&D spending by 13%. I think this speaks directly to the strength of the 3M model and that we were able to generate very high-quality results even as we invest and build the future success. Second quarter record operating was $1.6 billion, up 34% on last year. I'm especially pleased with our margin performance at 23.7%, with all businesses achieving 22% or better margins. The corresponding EPS of $1.54 per share is 38% increase year-over-year. Now let me take you quickly through the business highlights. Please turn to Slide #4. In our largest business, Industrial and Transportation, sales were up 23% and leveraging was outstanding with profits of 66%. Within that segment, our newest division, Renewable Energy, was up 73% of sales, coming up of 72% increase in the first quarter. FYI, we built a brand new coating line for this business in Singapore last September, which very quickly sold out. So we'll be expecting capacity again in the most of the come. Also of note, is that our Automotive OEM sales were also up nearly 50%. This compares to global auto build in the mid-20%. And Abrasives, our oldest business, was up an impressive 28%.
Health Care sales rose 5% in dollars or about 6% in local currency terms. H1N1 was about a point drag on health care growth. The stars in Health Care were drug delivery systems, which is creating double-digit growth, largely from new products. Dental care sales were up 7% in local currency and our core Skin and Wound Care business grew at a similar rate. Health Care profits increase in line with sales, reflecting increase investment levels, even both with those investments, margins were very spiffy at 31%.Display and Graphics continued on its impressive growth and profit trajectory, with a 30% sales jumping profit up 69%. Optical systems again led the way, with a 64% sales increase, driven almost entirely by new products. Our technology is in the sweet spot of need as LCD TVs migrated to LED backlights. Another star was our Commercial Graphics business. In 2009, it was impacted greatly by the downturn and is now on an upswing. With second quarter sales up 22% year-on-year and 12% sequentially. This is especially encouraging more generally since in our experience, Commercial Graphics is usually a property for future business renewal and advertising spend. Consumer and Office sales rose 10%, with organic growth accounting for the half the increase. Acquisitions were also a significant driver, with the addition of ACE Bandages in the retail health care space and A-One in the Asian retail level market. Consumer and Office is another investment story as we're having sales and marketing resources, especially internationally, and addition to the add merch investments I mentioned earlier. Profits rose 7%, with margins in a healthy 22%, very good for Consumer business in these unusual times. Safety, Security and Protection Services grew sales 10%, a great result even as H1N1-related respiratory sales naturally tapered off as that crisis passed. We estimate that H1N1 added about $18 million sales to the second quarter results in comparison a year ago, the H1N1 sales totaled $50 million. So the drag on Q2 growth for the total company was about 0.6%. Security systems posted growth of over 30% and both Industrial Mineral Products and building commercial services drove double-digit sales increases. Profits in SSPS rose 9% and margins were maintained north of 23%.
Last, but certainly not least, Electro and Communications sales rose 32%, while profits rose a whopping 150% and margins approached 23%. Consumer electronics is the story here as our business is serving the electronics market grew over 60%. Using logic chipset sales as a proxy, the industry was up 34%. You might logically ask why we're growing so much faster than the market. The answer again is new products like our Optically Clear Adhesives, a new market share as increasingly same components are being specified into a number of leading electronic handheld devices. Growth wasn't limited to electronics though, as Electrical Markets division, which is utility, MRO and construction-oriented division, sales grew by 17% year-over-year and nearly 10% sequentially.Read the rest of this transcript for free on seekingalpha.com