12.15.15
3M announced that it is poised for a successful 2016, forecasting strong earnings growth in the face of a challenging global economy.
Reflecting the realities of a continued slow-growth global economy, 3M expects 2015 full-year organic growth of approximately 1%, versus prior guidance of 1.5% to 2%. Earnings per share is anticipated to be approximately $7.55, against a prior range of $7.60 to $7.65.
For 2016, the company anticipates:
• Earnings per share of $8.10 to $8.45, an increase of 7% to 12%.
• Organic local-currency sales growth of 1% to 3%.
• Free cash flow conversion rate of 95% to 105%.
“We remain committed to executing our playbook, controlling the controllable and making investments for long-term success,” said Inge G. Thulin, 3M chairman, president and CEO. “We are building our company for efficient growth in 2016 and beyond.”
Strengthening and focusing its portfolio of businesses is a key initiative for 3M. Since 2012, 3M has realigned from six sectors to five business groups, and from 40 businesses to 26. R&D is the heartbeat of 3M; it drives organic growth, and supports the company’s premium margins and return on invested capital. In 2016, 3M plans to invest approximately $1.8 billion in R&D, or about 5.8% of total sales. Strategic acquisitions will continue to complement organic growth and create greater value.
The company is also progressing toward a more efficient business model, which includes standardizing business processes through a new, global ERP system. By 2020, 3M expects these efforts to result in $500 million to $700 million in annual operational savings, and an additional $500 million reduction in working capital.
Reflecting the realities of a continued slow-growth global economy, 3M expects 2015 full-year organic growth of approximately 1%, versus prior guidance of 1.5% to 2%. Earnings per share is anticipated to be approximately $7.55, against a prior range of $7.60 to $7.65.
For 2016, the company anticipates:
• Earnings per share of $8.10 to $8.45, an increase of 7% to 12%.
• Organic local-currency sales growth of 1% to 3%.
• Free cash flow conversion rate of 95% to 105%.
“We remain committed to executing our playbook, controlling the controllable and making investments for long-term success,” said Inge G. Thulin, 3M chairman, president and CEO. “We are building our company for efficient growth in 2016 and beyond.”
Strengthening and focusing its portfolio of businesses is a key initiative for 3M. Since 2012, 3M has realigned from six sectors to five business groups, and from 40 businesses to 26. R&D is the heartbeat of 3M; it drives organic growth, and supports the company’s premium margins and return on invested capital. In 2016, 3M plans to invest approximately $1.8 billion in R&D, or about 5.8% of total sales. Strategic acquisitions will continue to complement organic growth and create greater value.
The company is also progressing toward a more efficient business model, which includes standardizing business processes through a new, global ERP system. By 2020, 3M expects these efforts to result in $500 million to $700 million in annual operational savings, and an additional $500 million reduction in working capital.