07.27.09
$4.2 Billion ($25.3B total)
KEY EXECUTIVES:
George W. Buckley, Chairman, President and CEO
Patrick D. Campbell, Sr. VP and CFO
Brad T. Sauer, Exec. VP, Health Care Business
Robert D. MacDonald, Sr. VP, Marketing and Sales
Inge G. Thulin, Exec. VP, International Operations
John K. Woodworth, Sr. VP, Corporate Supply Chain Operations
NO. OF EMPLOYEES: 75,333 (total)
GLOBAL HEADQUARTERS: St. Paul, Minn.
The global economic crisis has left many companies struggling to survive. But at 3M Healthcare, the crisis has had a different effect on management: It has strengthened their resolve not only to survive, but to emerge from the debacle a stronger, leaner company.
“As George Bernard Shaw said, ‘The best way to predict the future is to create it.’ We can only do that by taking absolute control of our own destiny,” George W. Buckley, 3M chairman, president and CEO, told shareholders in the company’s 2008 annual report. “It means rigorous control of cash and costs…Business is still about balance and, while remaining responsive to present-day developments, we must also keep an eye on the future. We must still invest in the future if we expect to thrive later on.”
3M executives took a number of steps last year to balance the company’s cost structure with its revenue stream. They eliminated 3,500 positions throughout the year and furloughed more than 1,000 factory workers due to low production volumes. Executives also reduced the number of contract workers the company uses and deferred merit pay increases for all employees.
While those corrective cost actions could not fully offset the impact from the flat-lining economy in the second half of 2008, Buckley said they helped 3M make the “best of a very tough situation.”
3M’s situation eventually turned out better than executives had expected. The company delivered a Return on Invested Capital of 19.7 percent (20.8 percent excluding special items) in 2008. It also paid out $1.4 billion in dividends and increased its 2009 quarterly dividend to 51 cents per share. The increase is the 51st consecutive raise to be applied to 3M’s dividend since 1958.
The company also posted record sales figures for 2008, despite the challenges posed by the economy and the secular transition of its Optical Systems division. Overall sales totaled $25.3 billion, a 3.3 percent increase compared with the $24.4 billion 3M reported in 2007. Net income was $3.46 billion, or $4.89 per diluted share, versus $4.1 billion, or $5.60 per diluted share in 2007. Excluding special items, 2008 earnings were $5.17 per share, versus $4.98 per share in 2007.
3M garnered the bulk of its sales overseas last year, reporting $16 billion in international revenue. Foreign sales were split almost evenly between Asia Pacific and Europe, the Middle East and Africa—according to the annual report, the Asia Pacific region garnered $6.42 billion in sales for the company, while Europe, the Middle East and Africa generated $6.9 billion in revenue last year. Sales to customers in Latin America and Canada totaled $2.7 billion, and U.S. sales amounted to $9.1 billion.
Sales growth was broad-based last year, with five of the company’s six business segments experiencing increases. The Health Care segment posted $4.2 billion in sales last year, an 8.2 percent increase compared with the $3.9 billion in revenue generated in 2007. 3M’s Health Care division markets and sells medical tapes, dressings, wound closure products, orthopedic casting materials, electrodes and stethoscopes as well as sterilization assurance equipment, surgical drapes, and masks and preps. It also is a leading supplier to the dental industry.
The United States and Asia Pacific region led sales growth last year in the Health Care segment. Operating income margins of 24 percent in the fourth quarter were the highest in the company in spite of $50 million in restructuring and “exit activity” charges that reduced operating income margins by 4.9 percent. For the year ended Dec. 31, 3M’s operating income increased 8 percent, an impressive figure considering the state of the economy throughout 2008. Still, the growth was a significant drop from the 34.6 percent increase in operating income the company reported in 2007, when 3M sold the last chunk of its pharmaceutical business.
While no major sales took place in 2008 within the Health Care sector, 3M acquired several companies that contributed 1.7 percent to local-currency sales. In April 2008, 3M Canada acquired Solumed Inc., a Quebec, Canada-based developer and marketer of products designed to prevent infections in operating rooms and hospitals. The move added a chlorhexidine gluconate and alcohol-based line of products for infection prevention to 3M’s merchandise lineup.
One month later, 3M snatched up Imtec Corp., a dental implant manufacturer based in Ardmore, Okla. The acquisition gives 3M access to the fast-growing dental implant and cone beam computed tomography equipment markets.
3M picked up its final company in mid-June 2008. Its merger with TOP-Service fur Lingaultechnik GmbH, a German manufacturer of orthodontic technology and services, bolsters 3M’s existing products portfolio and has helped the company expand its orthodontic products offering into Europe and Asia.
KEY EXECUTIVES:
George W. Buckley, Chairman, President and CEO
Patrick D. Campbell, Sr. VP and CFO
Brad T. Sauer, Exec. VP, Health Care Business
Robert D. MacDonald, Sr. VP, Marketing and Sales
Inge G. Thulin, Exec. VP, International Operations
John K. Woodworth, Sr. VP, Corporate Supply Chain Operations
NO. OF EMPLOYEES: 75,333 (total)
GLOBAL HEADQUARTERS: St. Paul, Minn.
The global economic crisis has left many companies struggling to survive. But at 3M Healthcare, the crisis has had a different effect on management: It has strengthened their resolve not only to survive, but to emerge from the debacle a stronger, leaner company.
“As George Bernard Shaw said, ‘The best way to predict the future is to create it.’ We can only do that by taking absolute control of our own destiny,” George W. Buckley, 3M chairman, president and CEO, told shareholders in the company’s 2008 annual report. “It means rigorous control of cash and costs…Business is still about balance and, while remaining responsive to present-day developments, we must also keep an eye on the future. We must still invest in the future if we expect to thrive later on.”
3M executives took a number of steps last year to balance the company’s cost structure with its revenue stream. They eliminated 3,500 positions throughout the year and furloughed more than 1,000 factory workers due to low production volumes. Executives also reduced the number of contract workers the company uses and deferred merit pay increases for all employees.
While those corrective cost actions could not fully offset the impact from the flat-lining economy in the second half of 2008, Buckley said they helped 3M make the “best of a very tough situation.”
3M’s situation eventually turned out better than executives had expected. The company delivered a Return on Invested Capital of 19.7 percent (20.8 percent excluding special items) in 2008. It also paid out $1.4 billion in dividends and increased its 2009 quarterly dividend to 51 cents per share. The increase is the 51st consecutive raise to be applied to 3M’s dividend since 1958.
The company also posted record sales figures for 2008, despite the challenges posed by the economy and the secular transition of its Optical Systems division. Overall sales totaled $25.3 billion, a 3.3 percent increase compared with the $24.4 billion 3M reported in 2007. Net income was $3.46 billion, or $4.89 per diluted share, versus $4.1 billion, or $5.60 per diluted share in 2007. Excluding special items, 2008 earnings were $5.17 per share, versus $4.98 per share in 2007.
3M garnered the bulk of its sales overseas last year, reporting $16 billion in international revenue. Foreign sales were split almost evenly between Asia Pacific and Europe, the Middle East and Africa—according to the annual report, the Asia Pacific region garnered $6.42 billion in sales for the company, while Europe, the Middle East and Africa generated $6.9 billion in revenue last year. Sales to customers in Latin America and Canada totaled $2.7 billion, and U.S. sales amounted to $9.1 billion.
Sales growth was broad-based last year, with five of the company’s six business segments experiencing increases. The Health Care segment posted $4.2 billion in sales last year, an 8.2 percent increase compared with the $3.9 billion in revenue generated in 2007. 3M’s Health Care division markets and sells medical tapes, dressings, wound closure products, orthopedic casting materials, electrodes and stethoscopes as well as sterilization assurance equipment, surgical drapes, and masks and preps. It also is a leading supplier to the dental industry.
The United States and Asia Pacific region led sales growth last year in the Health Care segment. Operating income margins of 24 percent in the fourth quarter were the highest in the company in spite of $50 million in restructuring and “exit activity” charges that reduced operating income margins by 4.9 percent. For the year ended Dec. 31, 3M’s operating income increased 8 percent, an impressive figure considering the state of the economy throughout 2008. Still, the growth was a significant drop from the 34.6 percent increase in operating income the company reported in 2007, when 3M sold the last chunk of its pharmaceutical business.
While no major sales took place in 2008 within the Health Care sector, 3M acquired several companies that contributed 1.7 percent to local-currency sales. In April 2008, 3M Canada acquired Solumed Inc., a Quebec, Canada-based developer and marketer of products designed to prevent infections in operating rooms and hospitals. The move added a chlorhexidine gluconate and alcohol-based line of products for infection prevention to 3M’s merchandise lineup.
One month later, 3M snatched up Imtec Corp., a dental implant manufacturer based in Ardmore, Okla. The acquisition gives 3M access to the fast-growing dental implant and cone beam computed tomography equipment markets.
3M picked up its final company in mid-June 2008. Its merger with TOP-Service fur Lingaultechnik GmbH, a German manufacturer of orthodontic technology and services, bolsters 3M’s existing products portfolio and has helped the company expand its orthodontic products offering into Europe and Asia.