3M Sales Up 11% in 2011 to $29.6B

3M (NYSE: MMM), St. Paul, MN, reported 2011 sales of $29.6 billion, up 11.1 percent from the prior year. Five of the company’s six business segments posted growth for the year, led by Industrial and Transportation at 19.5 percent and Safety, Security and Protection Services at 15.2 percent.

Latin America/Canada was the fastest-growing geographic region in 2011 at 15.6 percent.

In the fourth quarter, 3M reported sales were up 5.7 percent from the prior-year period to $7.1 billion. Organic local-currency sales growth was 3.3 percent.

Sales growth in the fourth quarter was strongest in Industrial and Transportation at 14.3 percent, Safety, Security and Protection Services at 9.4 percent, Consumer and Office at 6.1 percent and Health Care at 5.4 percent. Sales declined 2.7 percent in Electro and Communications and 8.8 percent in Display and Graphics, as many customers continued to modify production levels in line with weaker demand.

On a geographic basis, sales growth was strongest in Latin America/Canada at 9.7 percent and the U.S. at 7.4 percent.

Industrial and Transportation

• Sales of $2.4 billion, up 14.3 percent, including 5.9 percent from acquisitions.  
• All businesses grew sales in local currencies, with double-digit increases in abrasives, aerospace, industrial adhesives and tapes, energy and advanced materials and automotive.
• Sales increased double-digits in all geographic regions.
• Operating income rose 14 percent to $472 million; operating income margin of 19.6 percent.

Health Care

• Sales of $1.3 billion, up 5.4 percent. Local-currency sales increased in all businesses, led by infection prevention, skin and wound care, health information systems, food safety and drug delivery systems businesses.
• Double-digit sales growth in both Asia Pacific and Latin America/Canada.
• Operating income increased 12 percent to $389 million; operating income margin of 30.8 percent.

Consumer and Office

• Sales of $1 billion, up 6.1 percent, including 3.1 percent from acquisitions.
• Positive local-currency sales growth in DIY, stationery products, office supplies and home care products.
• Sales increased double-digits in Europe, boosted by acquisitions, and in Asia Pacific; sales up just slightly in the U.S.
• Operating income rose 2.4 percent to $179 million; operating income margin was 17.6 percent, negatively impacted by recent GPI acquisition.

Safety, Security and Protection Services

• Sales of $927 million, up 9.4 percent.
• Double-digit local-currency sales growth in security systems and personal safety; sales up single-digits in building and commercial services.
• Sales in roofing granules business declined due to channel inventory reductions.
• Sales growth was strongest in the U.S. and Latin America/Canada.
• Operating income rose 4 percent to $171 million; operating margin of 18.5 percent.

Display and Graphics

• Sales of $823 million, down 8.8 percent.
• Local currency sales declined 17 percent in optical systems, impacted by slower consumer electronics activity and lower LCD TV attachment rates.
• Sales in traffic safety systems declined in local currency; government highway funding remains weak, particularly in the U.S. and Western Europe.
• Local-currency sales rose in both architectural markets and commercial graphics.
• Largest sales declines in Asia Pacific, largely electronics-related, and in Europe.
• Operating income rose 9.7 percent to $157 million; operating margin of 19.2 percent.

Electro and Communications

• Sales of $768 million, down 2.7 percent.
• Local-currency sales to consumer electronics down high single digits, impacted by decelerating end-market demand.
• Single-digit local currency sales growth in electrical business; communication markets’ sales were flat year-on-year.
• Sales rose in Latin America/Canada, the U.S. and Europe; Asia Pacific sales down due to electronics.
• Operating income of $153 million, down 7.2 percent; operating margin of 19.8 percent.