07.29.15
$5.5 Billion ($31.8B total)
KEY EXECUTIVES:
Inge G. Thulin, President & CEO
Nicholas C. Gangestad, Sr. VP & Chief Financial Officer
Joaquin Delgado, Exec. VP, Health Care Business
Ashish K. Khandpur, Sr. VP, Research & Development and Chief Technology Officer
Paul A. Keel, Sr. VP, Supply Chain
Hak Cheol Shin, Exec. VP, International Operations
Jon T. Lindekugel, Sr. VP, Business Development
NO. OF EMPLOYEES: 88,800 (total)
GLOBAL HEADQUARTERS: St. Paul, Minn.
3M has a new tagline: “3M Science. Applied to Life.” The slogan is fitting for a company whose bread and butter has been everyday products that most of us don’t even consciously think about using anymore. All sticky tapes are now ubiquitously called “Scotch Tape,” even though Scotch Tape, debuted in 1925, is a brand exclusive to 3M. How about a Post-It note? Also a 3M brand name debuted in the 1980s, yet we commonly call every brand of sticky notes by that moniker. And what better market space for a company so skilled at entering our lives in a day-to-day level than the life sciences?
3M’s healthcare division grew up in the 1960s, approximately four decades after the company’s foundation (3M grew out of another company, the Minnesota Mining and Manufacturing Co.). The 1970s and 80s saw expansion from basic medical and dental products into pharmaceuticals and radiology. Today, 3M’s Health Care Business is highly diversified, serving markets that include medical clinics and hospitals, pharmaceuticals, dental and orthodontic practitioners, health information systems, and food manufacturing and testing. Products and services provided to these and other markets include medical and surgical supplies, skin health and infection prevention products, inhalation and transdermal drug delivery systems, dental and orthodontic products (oral care), health information systems, and food safety products. In the medical and surgical areas, 3M is a supplier of medical tapes, dressings, wound closure products, orthopedic casting materials, electrodes and stethoscopes. In infection prevention, the company markets a variety of surgical drapes, masks and preps, as well as sterilization assurance equipment and patient warming solutions designed to prevent hypothermia in surgical settings. Other products include drug delivery systems, such as metered-dose inhalers, transdermal skin patches and related components. Dental and orthodontic products include restoratives, adhesives, finishing and polishing products, crowns, impression materials, preventive sealants, professional tooth whiteners, prophylaxis and orthodontic appliances, as well as digital workflow solutions to transform traditional impression and analog processes. In health information systems, 3M designs computer software for hospital coding and data classification, and provides related consulting services. The company also classifies its food safety products that facilitate microbiological food testing under its Health Care Business.
In April 2014, 3M’s Health Care Business Acquired Troy, N.Y.-based Treo Solutions LLC, which provides data analytics and business intelligence to healthcare payers and providers. Treo, which delivers analytics on data from more than 60 health plans, uses data analytics to redesign payment structures and transition payer and provider clients to value-based care models.
According to 3M, this acquisition was aimed at extending real-time data analytics and payment redesign worldwide, jumpstarting the provider organizations that have adopted the 3M 360 Encompass System for computer-assisted coding in their transition to population health management.
“Together, 3M and Treo will offer customers access to better, more comprehensive data that gives a more complete picture of the patient across all sites of care,” said Jon T. Lindekugel, president of 3M Health Information Systems. “It’s essential information needed to manage costs and improve patient outcomes under new risk-sharing care models. The acquisition of Treo is a significant step for 3M in developing coding and analytics solutions enabling our clients to deliver healthier outcomes at lower costs. By combining Treo’s expert analytic tools and services with 3M’s deep expertise in patient classification, we can help clients benchmark performance, manage population health, and achieve a more complete picture of the patient across the continuum of care.”
In product news, 3M Critical & Chronic Care Solutions launched enhancements to its 3M Tegaderm I.V. advanced securement dressings aimed at improving securement, wear time and proper application. In clinical evaluations of the upgrades, more than nine in 10 clinicians reported overall added value as the result of the enhancements, citing specific improvements in catheter stabilization, unscheduled dressing changes and ease of dressing application.
In August, 3M Digital Oral Care released the new 3M True Definition scanner system, which provides dental scanning for use by dentists and orthodontists. The scanner was released in tandem with the 3M True Definition scanner software 5.0 designed to support faster and easier scanning. In October, the company released another dental care product: the 3M ESPE Filtek bulk fill posterior restorative for tooth filling procedures. The product gives dentists and orthodontists the ability to place up to 5 mm of filling in one increment.
In December, 3M settled a patent infringement lawsuit in Germany involving technology that enables the coloring of ceramic-based dental restorations. As a result of the settlement, Whitepeaks Dental Solutions will license this patented technology from 3M. 3M’s patented technology enables the coloring of ceramics by color-matching dental restorations to the natural color of patients’ teeth.
Speaking of patents, 3M reached a major milestone in 2014 with it’s 100,000th patent license. Each year, about 3,000 patents are issued to 3M worldwide, more than 500 of which are granted in the United States. These patents have applications in a wide range of industries as diverse as the company itself, ranging from healthcare adhesives and sterilization products to consumer electronics to reflective traffic signs. 3M’s first patent was granted in 1924. The following year, former 3M Chairman of the Board William McKnight earned 3M’s second patent, which was issued for a handle for sandpaper. The milestone patent is USPTO No. 6,878,117, which is described as a “handheld sensor for acoustic data acquisition.”
“Patents are critical to protecting our innovation and significant investments in research and development,” said Fred Palensky, 3M executive vice president and chief technology officer. 3M invests nearly six percent of sales annually in R&D including funding for multiple technology platforms that, according to company officials, will be introduced to the market in the coming years.
Research and product development constitutes an important part of 3M’s activities and has been a major driver of 3M’s sales and profit growth. Research, development and related expenses totaled $1.770 billion in 2014 (year ended Dec. 31), $1.715 billion in 2013 and $1.634 billion in 2012. Research and development (R&D), covering basic scientific research and the application of scientific advances in the development of new and improved products and their uses, totaled $1.193 billion in 2014, $1.150 billion in 2013 and $1.079 billion in 2012. Related expenses primarily include technical support provided by 3M to customers who are using existing 3M products; internally developed patent costs, which include costs and fees incurred to prepare, file, secure and maintain patents; amortization of externally acquired patents and externally acquired in-process research and development; and gains/losses associated with certain corporate approved investments in R&D-related ventures, such as equity method effects and impairments.
Also in 2014, 3M Critical & Chronic Care Solutions entered into a group purchasing agreement with healthcare alliance company Premier Inc. for multiple catheter securement and stability products. In a move aimed at bringing greater economic efficiencies to Premier’s more than 100,000 healthcare provider members, the new agreement allowed 3M to take advantage of special pricing and terms pre-negotiated by Premier. The purchasing contract covered products including Tegaderm CHG Chlorhexidine Gluconate I.V. securement dressings and Tegaderm I.V. advanced securement dressings as well as the 3M PICC/ CVC securement Device + Tegaderm I.V. advanced securement dressing, a sutureless securement system.
“We’ve been very impressed with Premier’s work improving quality healthcare by facilitating better and more cost-effective patient outcomes,” said Brent Ashton, global business director for 3M Critical & Chronic Care Solutions. “The products covered by this purchasing agreement offer a unique mix of versatility and reliability, applying 3M’s expertise in transparent films and adhesives to improve patient care and safety, clinician confidence and overall cost of care. Collectively, they address the full securement and stability needs of providers and their patients.”
Overall, for the entire company, 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.
KEY EXECUTIVES:
Inge G. Thulin, President & CEO
Nicholas C. Gangestad, Sr. VP & Chief Financial Officer
Joaquin Delgado, Exec. VP, Health Care Business
Ashish K. Khandpur, Sr. VP, Research & Development and Chief Technology Officer
Paul A. Keel, Sr. VP, Supply Chain
Hak Cheol Shin, Exec. VP, International Operations
Jon T. Lindekugel, Sr. VP, Business Development
NO. OF EMPLOYEES: 88,800 (total)
GLOBAL HEADQUARTERS: St. Paul, Minn.
3M has a new tagline: “3M Science. Applied to Life.” The slogan is fitting for a company whose bread and butter has been everyday products that most of us don’t even consciously think about using anymore. All sticky tapes are now ubiquitously called “Scotch Tape,” even though Scotch Tape, debuted in 1925, is a brand exclusive to 3M. How about a Post-It note? Also a 3M brand name debuted in the 1980s, yet we commonly call every brand of sticky notes by that moniker. And what better market space for a company so skilled at entering our lives in a day-to-day level than the life sciences?
3M’s healthcare division grew up in the 1960s, approximately four decades after the company’s foundation (3M grew out of another company, the Minnesota Mining and Manufacturing Co.). The 1970s and 80s saw expansion from basic medical and dental products into pharmaceuticals and radiology. Today, 3M’s Health Care Business is highly diversified, serving markets that include medical clinics and hospitals, pharmaceuticals, dental and orthodontic practitioners, health information systems, and food manufacturing and testing. Products and services provided to these and other markets include medical and surgical supplies, skin health and infection prevention products, inhalation and transdermal drug delivery systems, dental and orthodontic products (oral care), health information systems, and food safety products. In the medical and surgical areas, 3M is a supplier of medical tapes, dressings, wound closure products, orthopedic casting materials, electrodes and stethoscopes. In infection prevention, the company markets a variety of surgical drapes, masks and preps, as well as sterilization assurance equipment and patient warming solutions designed to prevent hypothermia in surgical settings. Other products include drug delivery systems, such as metered-dose inhalers, transdermal skin patches and related components. Dental and orthodontic products include restoratives, adhesives, finishing and polishing products, crowns, impression materials, preventive sealants, professional tooth whiteners, prophylaxis and orthodontic appliances, as well as digital workflow solutions to transform traditional impression and analog processes. In health information systems, 3M designs computer software for hospital coding and data classification, and provides related consulting services. The company also classifies its food safety products that facilitate microbiological food testing under its Health Care Business.
In April 2014, 3M’s Health Care Business Acquired Troy, N.Y.-based Treo Solutions LLC, which provides data analytics and business intelligence to healthcare payers and providers. Treo, which delivers analytics on data from more than 60 health plans, uses data analytics to redesign payment structures and transition payer and provider clients to value-based care models.
According to 3M, this acquisition was aimed at extending real-time data analytics and payment redesign worldwide, jumpstarting the provider organizations that have adopted the 3M 360 Encompass System for computer-assisted coding in their transition to population health management.
“Together, 3M and Treo will offer customers access to better, more comprehensive data that gives a more complete picture of the patient across all sites of care,” said Jon T. Lindekugel, president of 3M Health Information Systems. “It’s essential information needed to manage costs and improve patient outcomes under new risk-sharing care models. The acquisition of Treo is a significant step for 3M in developing coding and analytics solutions enabling our clients to deliver healthier outcomes at lower costs. By combining Treo’s expert analytic tools and services with 3M’s deep expertise in patient classification, we can help clients benchmark performance, manage population health, and achieve a more complete picture of the patient across the continuum of care.”
In product news, 3M Critical & Chronic Care Solutions launched enhancements to its 3M Tegaderm I.V. advanced securement dressings aimed at improving securement, wear time and proper application. In clinical evaluations of the upgrades, more than nine in 10 clinicians reported overall added value as the result of the enhancements, citing specific improvements in catheter stabilization, unscheduled dressing changes and ease of dressing application.
In August, 3M Digital Oral Care released the new 3M True Definition scanner system, which provides dental scanning for use by dentists and orthodontists. The scanner was released in tandem with the 3M True Definition scanner software 5.0 designed to support faster and easier scanning. In October, the company released another dental care product: the 3M ESPE Filtek bulk fill posterior restorative for tooth filling procedures. The product gives dentists and orthodontists the ability to place up to 5 mm of filling in one increment.
In December, 3M settled a patent infringement lawsuit in Germany involving technology that enables the coloring of ceramic-based dental restorations. As a result of the settlement, Whitepeaks Dental Solutions will license this patented technology from 3M. 3M’s patented technology enables the coloring of ceramics by color-matching dental restorations to the natural color of patients’ teeth.
Speaking of patents, 3M reached a major milestone in 2014 with it’s 100,000th patent license. Each year, about 3,000 patents are issued to 3M worldwide, more than 500 of which are granted in the United States. These patents have applications in a wide range of industries as diverse as the company itself, ranging from healthcare adhesives and sterilization products to consumer electronics to reflective traffic signs. 3M’s first patent was granted in 1924. The following year, former 3M Chairman of the Board William McKnight earned 3M’s second patent, which was issued for a handle for sandpaper. The milestone patent is USPTO No. 6,878,117, which is described as a “handheld sensor for acoustic data acquisition.”
“Patents are critical to protecting our innovation and significant investments in research and development,” said Fred Palensky, 3M executive vice president and chief technology officer. 3M invests nearly six percent of sales annually in R&D including funding for multiple technology platforms that, according to company officials, will be introduced to the market in the coming years.
Research and product development constitutes an important part of 3M’s activities and has been a major driver of 3M’s sales and profit growth. Research, development and related expenses totaled $1.770 billion in 2014 (year ended Dec. 31), $1.715 billion in 2013 and $1.634 billion in 2012. Research and development (R&D), covering basic scientific research and the application of scientific advances in the development of new and improved products and their uses, totaled $1.193 billion in 2014, $1.150 billion in 2013 and $1.079 billion in 2012. Related expenses primarily include technical support provided by 3M to customers who are using existing 3M products; internally developed patent costs, which include costs and fees incurred to prepare, file, secure and maintain patents; amortization of externally acquired patents and externally acquired in-process research and development; and gains/losses associated with certain corporate approved investments in R&D-related ventures, such as equity method effects and impairments.
Also in 2014, 3M Critical & Chronic Care Solutions entered into a group purchasing agreement with healthcare alliance company Premier Inc. for multiple catheter securement and stability products. In a move aimed at bringing greater economic efficiencies to Premier’s more than 100,000 healthcare provider members, the new agreement allowed 3M to take advantage of special pricing and terms pre-negotiated by Premier. The purchasing contract covered products including Tegaderm CHG Chlorhexidine Gluconate I.V. securement dressings and Tegaderm I.V. advanced securement dressings as well as the 3M PICC/ CVC securement Device + Tegaderm I.V. advanced securement dressing, a sutureless securement system.
“We’ve been very impressed with Premier’s work improving quality healthcare by facilitating better and more cost-effective patient outcomes,” said Brent Ashton, global business director for 3M Critical & Chronic Care Solutions. “The products covered by this purchasing agreement offer a unique mix of versatility and reliability, applying 3M’s expertise in transparent films and adhesives to improve patient care and safety, clinician confidence and overall cost of care. Collectively, they address the full securement and stability needs of providers and their patients.”
Overall, for the entire company, 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.