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If you're on our e-mail distribution list, you will receive an invitation later this week. So please join us and RSVP as soon as you can. For those not on our list but wish to go, just drop a note or call and we'll be glad to take care of you.If you would take a moment to read the forward-looking statement on Slide 2 in today's slide deck. During today's conference call, we'll make certain predictive statements that reflect our current views about our future performance and financial results. We base these statements on certain assumptions and expectations of future events that are subject to risks and uncertainties. Item 1A of our most recent Form 10-K and 10-Q lists some of the most important risk factors that could cause actual results to differ from our predictions. So let's begin today's review, and I'll turn the program over to George Buckley. Please turn to Slide #3. George Buckley Thank you very much, Matt, and good morning, everybody. Thanks for joining us today, and a belated Happy New Year to all of you. Today, my remarks will focus mainly on the year and the future, and Pat will go over most of the details of the quarter. Five years ago, we set out to move 3M gradually but permanently to a higher growth regimen. To do it would require a step change in our attitude towards growth and especially in our attitude to investments in growth. That challenge was made a lot tougher by our concurrent goal of maintaining superior margins and returns that you've come to expect from 3M. Looking at 2010 as a milestone toward these goals, it was a very good year. Organic volumes rose 13.7% in the year versus estimated worldwide IPI growth of 8%, and we posted record sales of $26.7 billion, an increase of 15.3%.
We achieved record operating profit of $5.9 billion, putting aside historical one-time items, with margins of 22.2%, which are up 140 basis points year-over-year. And we've posted another all-time annual record with earnings per share of $5.75, an increase of 25% year-on-year. Free cash flow was $4.1 billion, with a conversion rate of 100%.It was not long time ago when growth at 3M was limited to a handful of divisions. Last year, four of our six business segments turned in double-digit sales growth. And every single one of our businesses were up year-on-year. Sales exceeded 2008 levels by $1.4 billion. Meaning in 2009, recession is well and truly behind us, if not perhaps for all Western economies as a whole. Succeeding IPI by 570 basis points, I mean we took over half of point of share organically across the company in 2010, and we've accomplished this in a time of tremendous challenge. So all in all, we're very pleased with 3M's progress on the growth front. And that share gain means we took further step down the road of building even more enduring franchises. In fact, we've not recorded double-digit currency growth for decades, so we're very encouraged by the 14% local currency growth we drove last year, and especially saw in light of the uncertain economic conditions under which we're all operating. It's still probably premature to hang up the mission-accomplished banner. But I think, it's certainly fair to say that our growth plan is progressing very nicely. At the same time, we know that growth of the company like ours is not achieved easily or always smoothly. There are always countless dials to turn and multiple leaders to push to keep things moving on the right trajectory and in proper balance. You also get the occasional asteroid hit just to keep things exciting.
On the journey to higher growth, we've learned a few things about what we're good at and about what we need to improve. There is no longer any doubt in our minds that, as a company, we understand the calculus of higher growth. We understand how to get it and what to do to accelerate it. And we certainly revived our new product development and innovation processes as part of that. That's working extremely well and ultimately, without that, none of the other aspirations we have for accelerating shareholder value creation will work.We've also shown that we know how to secure high growth overseas, driven by building new labs and localizing our technology and leadership there to drive growth. Given the moribund state of interest in Science in the United States, this is strategically very important to our future security. We've also shown that we can drive our tax rate and bring more cash back to the company. Up to about five years ago, for years, our tax rate have bounced around the 34% rate. We've successfully driven that down. And for now, the sustainable rate already seems to be somewhere in the 29% range, but with increasing downward pressure as we grow overseas and build more manufacturing locally. We'll see it pop up a bit this year, but only because we were so hugely successful in our technical tax planning last year that won't repeat. So these things have all been very successful. We've also shown that we can manage a number of programs at once. For example, revitalizing innovation, making major changes to our manufacturing footprint, localizing labs and science et cetera, in preparation for a world where the West is no longer the dominant manufacturing power. Perhaps the most important of these projects is the rekindling of the innovative spirit of our company. 3M scientists and innovators remain our single most important competitive advantage everywhere in the world. And when properly managed and motivated, they create technology and product platforms unequaled anywhere. We've worked very hard to energize and unleash the power of 3M scientists, primarily by getting them back in the business of inventing new products. Their efforts have driven our new products NPVI up to 34.4% compared with numbers that were languishing in the teens just a few years ago. Read the rest of this transcript for free on seekingalpha.com