3M (MMM) Q3 2024 earnings summary

Executive summary

• Q3 2024 adjusted sales reached $6.1B, with organic growth up 1.0% year-over-year, and adjusted EPS rose 18% to $1.98; GAAP EPS from continuing operations was $2.48, up 154% year-over-year.

• Free cash flow was $1.5B with a 141% conversion rate; $1.1B was returned to shareholders via dividends and share repurchases.

• Completed the spin-off of the Health Care business (Solventum) in April 2024, now reported as discontinued operations; retained a 19.9% stake.

• Operational improvements included a 10 percentage point increase in OTIF since 2022 and a focus on accelerating new product introductions, up 10% in 2024.

• Significant litigation settlements and restructuring actions impacted results, with $3.6B in net after-tax litigation payments in Q3.

Financial highlights

• Q3 2024 net sales were $6.29B (up 0.4% year-over-year); adjusted sales were $6.1B, with 1.0% organic growth.

• Adjusted operating margin was 23.0%, up 140 basis points year-over-year; gross margin improved to 42.1%.

• Adjusted EPS was $1.98, up $0.30 year-over-year; GAAP EPS from continuing operations was $2.48.

• Year-to-date, adjusted EPS was $5.62, and free cash flow conversion was 102%.

• Returned $1.1B to shareholders in Q3 via dividends and share repurchases.

Outlook and guidance

• Full-year 2024 adjusted organic sales growth expected at ~1%, including a 100+ bps headwind from portfolio/geographic actions.

• Adjusted operating margin guidance raised to +250 to 275 bps; adjusted EPS guidance raised to $7.20–$7.30.

• Free cash flow conversion expected to exceed 100% for the full year.

• Company progressing toward exit of all PFAS manufacturing and use by end of 2025.

• Restructuring actions expected to continue through 2025, with further cost savings anticipated.