Achieved double-digit adjusted earnings growth with earnings of $2.39 per share, a 21% increase.
Improved organic growth, with an adjusted organic growth rate of nearly 1% or up 2.4%, excluding certain initiatives.
Operating margins increased to 22%, up 400 basis points.
Safety and Industrial business posted sales of $2.7 billion, down 1.4% organically, with adjusted operating income of $664 million, up 18%.
Transportation and Electronics business posted adjusted sales of $1.8 billion, up 6.7% organically, with adjusted operating income of $479 million, up 68%.
Consumer business posted first quarter sales of $1.1 billion, with organic sales declining 3.9%, and operating income of $216 million, up 21%.
Health Care business showed organic growth of 1% and operating margins of 17.5%.
Future Guidance
Full year 2024 earnings guidance on a continuing operations basis reflects Health Care as discontinued operations.
Anticipates adjusted organic growth to be flat to up 2% or up 1% to 3% excluding certain impacts.
Operating margins expected to improve by approximately 200 to 275 basis points year-on-year from an illustrative midpoint of 18.7% for 2023.
Adjusted EPS forecasted in the range of $6.80 to $7.30 per share, indicating over 15% growth at the midpoint.
Adjusted free cash flow conversion expected to remain in the range of 90% to 110%.
Anticipates a 1% foreign currency headwind to sales.
Plans for adjusted capital expenditures down 20% year-on-year mainly due to completion of water filtration investments.
Restructuring charges expected to be $250 million to $300 million, heavily weighted to the first half of the year.
Trends, Market Conditions, Sentiment
Positive momentum gained throughout 2023 and into Q1 2024, indicating strong operational execution and spending discipline.
Solventum Corporation’s spin-off expected to provide tailored capital allocation and boost investment priorities.
Market conditions showed mixed industrial demand, stable consumer electronics end markets, soft semiconductor market at the start, and muted consumer discretionary spending.
Emphasis on exiting all PFAS manufacturing by the end of 2025.
Legal settlements (public water suppliers and Combat Arms litigation) resolved, with significant anticipated payments but providing certainty and finality.
Geographic strength in China and EMEA, driven by electronics and automotive, contrasts with U.S. flatness due to consumer retail softness.
Notable Quotes
”In the first quarter, we delivered strong results that were better than our expectations as we return to adjusted organic growth and achieve double-digit adjusted earnings growth.” - Michael Roman, CEO
”As independent companies, both 3M and Solventum are better able to tailor their capital allocation and investment priorities to win in their respective markets.” - Michael Roman, CEO
”This provides us the certainty and finality the settlement was intended to achieve.” - Regarding the Combat Arms settlement.
”…our teams have made tremendous progress on fundamentally improving how we work, which is driving better performance across the business.” - Monish Patolawala, CFO
”We delivered a strong start to the year… well positioned for long-term success and consistent value creation for our customers and shareholders.” - Monish Patolawala, CFO
