3M announced fourth-quarter earnings of $1.81 per share, an increase of 11.7 percent versus the fourth quarter of 2013. Sales grew 2.0 percent year-on-year to $7.7 billion. Organic local-currency sales grew 6.3 percent with acquisitions adding 0.1 percent to sales. Foreign currency translation reduced sales by 4.4 percent year-on-year. Operating income was $1.7 billion and operating income margins for the quarter were 21.5 percent. Fourth-quarter net income was $1.2 billion and the company converted 144 percent of net income to free cash flow. 3M paid $544 million in cash dividends to shareholders and repurchased $1.3 billion of its own shares during the quarter. Organic local-currency sales growth was 9.2 percent in Safety and Graphics, 6.4 percent in Health Care, 6.2 percent in Electronics and Energy, 5.9 percent in Industrial, and 5.8 percent in Consumer. On a geographic basis, organic local-currency sales grew 9.0 percent in Latin America/Canada, 6.9 percent in Asia Pacific, 6.6 percent in the US, and 3.3 percent in EMEA (Europe, Middle East and Africa). Full-year 2014 earnings were $7.49 per share, an increase of 11.5 percent. Sales increased 3.1 percent to a record $31.8 billion with organic local-currency growth of 4.9 percent. Foreign currency translation reduced sales by 1.9 percent. Full-year operating income margins were 22.4 percent, up 0.8 percentage points versus 2013. 3M converted 104 percent of net income to free cash flow for the year and generated 22 percent return on invested capital. For the full year, 3M paid $2.2 billion in cash dividends to shareholders and repurchased $5.7 billion of its own shares. “3M delivered strong results in the fourth quarter, which culminated a solid 2014 performance,” said Inge G. Thulin, 3M's chairman, president and chief executive officer.
“Organic growth was positive across all business groups and geographic areas, and operating margins rose by nearly a full point. We once again generated substantial free cash flow, which allowed for continued investment in our businesses and significant return of cash to our shareholders.” — SG
