St. Paul, MN-based 3M reported 2008 sales of $25.3 billion, up 3.3% from a year ago. Profit for 2008 was $3.5 billion, down 14.6%.
Fourth-quarter sales were $5.5 billion, a decrease of 11.2% from the same period a year ago. Profit was $536 million, a decrease of 37%.
3M drove record sales in 2008 despite a dramatic fourth-quarter economic downturn, said George W. Buckley, 3M president and CEO, "We are responding to lower demand with aggressive cost management and operational discipline. We streamlined our operations throughout 2008 and we will continue to optimize to protect against the downside throughout 2009. In addition, we plan to reduce capital expenditures by about 30 percent and aggressively attack working capital in order to conserve cash."
Yearly sales growth was led by 3M's three largest businesses-with growth of 18.3% in Safety, Security and Protection Services; 6.8% in Health Care; and 4.6% in Industrial and Transportation. Local-currency sales declined in the three remaining businesses, with Consumer and Office down 0.3%, Electro and Communications down 1.7% and Display and Graphics down 17.9%. Sales in 3M's international operations grew 4%.
Industrial and Transportation Fourth-quarter sales decreased 11.3% to $1.7 billion. Local-currency sales declined 6.3%, including a 3.2% benefit from acquisitions. Volume declines were heavily influenced by customer plant shut-downs across the manufacturing sector, along with customer inventory reduction efforts. Automotive aftermarket business posted positive sales growth for the quarter; most other businesses and geographic regions posted negative sales and operating income growth. Profit was $239 million.
Health Care Sales of $1 billion represent a decrease of 2.1% from fourth quarter 2007. Local-currency sales grew 4.5% including 2.2% from acquisitions. The segment experienced positive sales growth in both the U.S. and Asia Pacific.
Safety, Security and Protection Services Fourth-quarter sales increased 2.9% to $769 million. Local-currency sales increased 13.2%, including 15.7% from acquisitions. The 2008 divestiture of HighJump Software, Inc. hurt sales growth by 2.9%. Profits declined 3.5% to $128 million.
Consumer and Office Segment sales decreased 11.2% to $765 million in the quarter. Local-currency sales declined 6.5%, hurt by the poorest fourth-quarter retail industry sales performance in recent memory. Profit was $119 million.
Display and Graphics Fourth-quarter sales were $685 million, down 28.4%, with local-currency sales down 25.8%. Optical systems' sales declined 48%, driven by weak consumer demand for electronics and OEM customer plant shutdowns. Profit was $70 million.
Electro and Communications Segment sales declined 15.3% to $590 million. Local-currency sales dropped 12.3%, driven by weak demand and customer inventory reduction in the electronics, residential construction and telecommunications industries. Profit was $86 million.