07.22.14
$5.33 Billion ($30.8 B total)
KEY EXECUTIVES:
Inge G. Thulin, President & CEO
David W. Meline, Sr. VP & Chief Financial Officer
Joaquin Delgado, Exec. VP, Health Care Business
Frederick J. Palensky, Exec. VP, Research & Development and Chief Technology Officer
Christopher D. Holmes, Sr. VP, Supply Chain
Hak Cheol Shin, Exec. VP, International Operations
Michael F. Roman, Sr. VP, Business Development
NO. OF EMPLOYEES: 88,667 (total)
GLOBAL HEADQUARTERS: St. Paul, Minn.
Few companies can match 3M’s reputation for innovation. Founded in 1902 on the shores of Lake Superior, the multinational conglomerate known best for its Post-it notes, sandpaper and adhesives established a culture of risk-taking and creativity rather early in its existence (as a startup, in fact).
3M stumbled in its first attempt at product development, ditching a poorly-received wheel-grinding abrasive for sandpaper—an area in which it had no expertise. The company’s ignorance was quite evident, too: Customers complained the abrasive fell off the sandpaper during use.
An astute factory worker helped 3M determine the source of the defect—a broken cargo of olive oil shipped in the same maritime container as the garnet abrasive. The oil coated the abrasive, making it virtually impossible to stick to paper. Resourceful researchers, however, found a way to cook the oil off the garnet, thus solving the problem and setting a precedent for future ingenuity.
That resourcefulness was fully ingrained at the firm more than two decades later as 3M researcher Dick Drew worked on an alternative to the heavy adhesive tape and butcher paper used at the time to paint two-tone cars. The tape-paper combo was an excellent protectant—so good, in fact, that it stripped newly-dried paint from vehicles, hiking expenses for customers and forcing frustrated auto body workers to touch up flaws.
Drew defied orders to abandon his quest and worked intently to find the right mix of materials that would protect surfaces without compromising fresh paint. When he hit upon the winning formula and was denied funding for his masking tape project, Drew simply applied his inventiveness to financing by writing a flurry of $99 purchase orders (he had the authority as a researcher to approve purchases up to $100).
Such enterprise and determination has only grown stronger over the last 80 years as 3M morphed into a $30 billion idea-maker, responsible for inventions like cellophane tape, pocket projectors, computer screen privacy filters, space-age rubber, clear bandages, and a bluetooth-enabled stethoscope that can transcend earthly barriers to detect heart trouble as well as harmless murmurs in astronauts. As Chairman/President/CEO Inge G. Thulin noted in his 2013 annual letter to shareholders, “Innovation is now, and always will be, the heartbeat of our company. That’s why we continue to invest in R&D and increase investments focused on long-term disruptive technologies aimed at opportunities with significant growth potential.”
Thulin kept 3M’s innovative heart beating strong last year by raising research and development expenses 5 percent to $1.7 billion, or 5.6 percent of total sales. The chief executive intends to maintain the practice through 2017, when the ratio is expected to reach 6 percent of net proceeds.
3M’s investment strategy served the company well in 2013, boosting total sales 3.2 percent to $30.8 billion and increasing operating income 2.8 percent to $6.6 billion. Four of the company’s five business segments delivered margins of 21 percent, with Industrial and Health Care leading growth, and earnings were up 6.3 percent to $6.72 per share, according to the company’s latest annual report.
Operating margins remained strong at 21.6 percent or 21.9 percent, excluding acquisitions, and the company returned a record $6.9 billion in cash to shareholders through dividends and share repurchases.
Additionally, the company recorded positive organic growth in all geographic regions despite volatile foreign exchange rates. Latin America/Canada posted the highest gains (7 percent), followed by Asia-Pacific at 4 percent, the United States at 3 percent and Europe/Middle East/Africa at 2 percent.
“In 2013 we received good growth and solid profitability while advancing our strategic initiatives in investments,” Thulin said. “Perhaps most importantly, we came out of 2013 stronger than ever, with both sales and earnings growth accelerating in the second half of the year. This was a first.”
Another first was the sales traffic pecking order. Unlike previous years, 3M’s Industrial and Health Care segments led the charge in 2013 (year ended Dec. 31), registering 6.5 percent and 3.8 percent growth respectively. The Industrial segment posted $10.5 billion in net sales, nearly double the Health Care unit’s $5.3 billion in revenue. Safety and Graphics finished the year 3.4 percent ahead of 2012 with $5.6 billion in proceeds, while Consumer brought up the rear with 1.1 percent growth ($4.4 billion), offsetting the 1.2 percent slide in Electronics and Energy ($5.3 billion).
Executives attributed the Health Care segment’s top-notch performance last year to strong supporting roles from health information systems, food safety, critical and chronic care, infection prevention and oral care products. The unit also benefited from a 10 percent hike in Latin America/Canada sales, an 8 percent increase in Asia Pacific revenue and a 4 percent increment in Europe/Middle East/Africa and U.S. proceeds.
Infection prevention growth likely came from the early spring introduction of the SpotOn temperature monitoring system and Surgical Clipper Professional 9681. Developed by makers of 3M Bair Hugger therapy, the SpotOn system simplifies the existing temperature measurement process while delivering accurate temperature measurement typically associated with more invasive methods such as esophageal, bladder, rectal or PA catheters.
“Clinicians have a variety of tools available to obtain temperature, but are lacking a non-invasive way to consistently measure core body temperature before, during and after surgery,” 3M global marketing manager Kathy Leith said when SpotOn debuted at the Association of periOperative Registered Nurses (AORN) Congress in San Diego, Calif. “The SpotOn system helps standardize temperature monitoring by eliminating the need for multiple products.”
The Surgical Clipper, also unveiled at the AORN event, is a hair removal product that boasts a nick rate of 5 percent—well below competitor rates of 12.5 percent and 25 percent. A clinical study presented at AORN found the Clipper Professional 9681 to be significantly more comfortable and less traumatic to the skin.
Other Health Care segment sales drivers included the VFlex 1805/1805S surgical masks and Aura 1870+ Healthcare Particulate Respirator. The VFlex 1805 portfolio has a pleated design that helps increase surface area for easier breathing, an adjustable noseclip for a custom and secure seal, and an elastic headband with no rubber latex components.
The Aura 1870 respirator, meanwhile, features a flat-fold design that resists fluids. Individually packaged to guard against contamination, the device’s embossed top panel is designed to accommodate eyewear and helps reduce fogging, while a chin tab allows for easy positioning, donning and adjusting.
KEY EXECUTIVES:
Inge G. Thulin, President & CEO
David W. Meline, Sr. VP & Chief Financial Officer
Joaquin Delgado, Exec. VP, Health Care Business
Frederick J. Palensky, Exec. VP, Research & Development and Chief Technology Officer
Christopher D. Holmes, Sr. VP, Supply Chain
Hak Cheol Shin, Exec. VP, International Operations
Michael F. Roman, Sr. VP, Business Development
NO. OF EMPLOYEES: 88,667 (total)
GLOBAL HEADQUARTERS: St. Paul, Minn.
Few companies can match 3M’s reputation for innovation. Founded in 1902 on the shores of Lake Superior, the multinational conglomerate known best for its Post-it notes, sandpaper and adhesives established a culture of risk-taking and creativity rather early in its existence (as a startup, in fact).
3M stumbled in its first attempt at product development, ditching a poorly-received wheel-grinding abrasive for sandpaper—an area in which it had no expertise. The company’s ignorance was quite evident, too: Customers complained the abrasive fell off the sandpaper during use.
An astute factory worker helped 3M determine the source of the defect—a broken cargo of olive oil shipped in the same maritime container as the garnet abrasive. The oil coated the abrasive, making it virtually impossible to stick to paper. Resourceful researchers, however, found a way to cook the oil off the garnet, thus solving the problem and setting a precedent for future ingenuity.
That resourcefulness was fully ingrained at the firm more than two decades later as 3M researcher Dick Drew worked on an alternative to the heavy adhesive tape and butcher paper used at the time to paint two-tone cars. The tape-paper combo was an excellent protectant—so good, in fact, that it stripped newly-dried paint from vehicles, hiking expenses for customers and forcing frustrated auto body workers to touch up flaws.
Drew defied orders to abandon his quest and worked intently to find the right mix of materials that would protect surfaces without compromising fresh paint. When he hit upon the winning formula and was denied funding for his masking tape project, Drew simply applied his inventiveness to financing by writing a flurry of $99 purchase orders (he had the authority as a researcher to approve purchases up to $100).
Such enterprise and determination has only grown stronger over the last 80 years as 3M morphed into a $30 billion idea-maker, responsible for inventions like cellophane tape, pocket projectors, computer screen privacy filters, space-age rubber, clear bandages, and a bluetooth-enabled stethoscope that can transcend earthly barriers to detect heart trouble as well as harmless murmurs in astronauts. As Chairman/President/CEO Inge G. Thulin noted in his 2013 annual letter to shareholders, “Innovation is now, and always will be, the heartbeat of our company. That’s why we continue to invest in R&D and increase investments focused on long-term disruptive technologies aimed at opportunities with significant growth potential.”
Thulin kept 3M’s innovative heart beating strong last year by raising research and development expenses 5 percent to $1.7 billion, or 5.6 percent of total sales. The chief executive intends to maintain the practice through 2017, when the ratio is expected to reach 6 percent of net proceeds.
3M’s investment strategy served the company well in 2013, boosting total sales 3.2 percent to $30.8 billion and increasing operating income 2.8 percent to $6.6 billion. Four of the company’s five business segments delivered margins of 21 percent, with Industrial and Health Care leading growth, and earnings were up 6.3 percent to $6.72 per share, according to the company’s latest annual report.
Operating margins remained strong at 21.6 percent or 21.9 percent, excluding acquisitions, and the company returned a record $6.9 billion in cash to shareholders through dividends and share repurchases.
Additionally, the company recorded positive organic growth in all geographic regions despite volatile foreign exchange rates. Latin America/Canada posted the highest gains (7 percent), followed by Asia-Pacific at 4 percent, the United States at 3 percent and Europe/Middle East/Africa at 2 percent.
“In 2013 we received good growth and solid profitability while advancing our strategic initiatives in investments,” Thulin said. “Perhaps most importantly, we came out of 2013 stronger than ever, with both sales and earnings growth accelerating in the second half of the year. This was a first.”
Another first was the sales traffic pecking order. Unlike previous years, 3M’s Industrial and Health Care segments led the charge in 2013 (year ended Dec. 31), registering 6.5 percent and 3.8 percent growth respectively. The Industrial segment posted $10.5 billion in net sales, nearly double the Health Care unit’s $5.3 billion in revenue. Safety and Graphics finished the year 3.4 percent ahead of 2012 with $5.6 billion in proceeds, while Consumer brought up the rear with 1.1 percent growth ($4.4 billion), offsetting the 1.2 percent slide in Electronics and Energy ($5.3 billion).
Executives attributed the Health Care segment’s top-notch performance last year to strong supporting roles from health information systems, food safety, critical and chronic care, infection prevention and oral care products. The unit also benefited from a 10 percent hike in Latin America/Canada sales, an 8 percent increase in Asia Pacific revenue and a 4 percent increment in Europe/Middle East/Africa and U.S. proceeds.
Infection prevention growth likely came from the early spring introduction of the SpotOn temperature monitoring system and Surgical Clipper Professional 9681. Developed by makers of 3M Bair Hugger therapy, the SpotOn system simplifies the existing temperature measurement process while delivering accurate temperature measurement typically associated with more invasive methods such as esophageal, bladder, rectal or PA catheters.
“Clinicians have a variety of tools available to obtain temperature, but are lacking a non-invasive way to consistently measure core body temperature before, during and after surgery,” 3M global marketing manager Kathy Leith said when SpotOn debuted at the Association of periOperative Registered Nurses (AORN) Congress in San Diego, Calif. “The SpotOn system helps standardize temperature monitoring by eliminating the need for multiple products.”
The Surgical Clipper, also unveiled at the AORN event, is a hair removal product that boasts a nick rate of 5 percent—well below competitor rates of 12.5 percent and 25 percent. A clinical study presented at AORN found the Clipper Professional 9681 to be significantly more comfortable and less traumatic to the skin.
Other Health Care segment sales drivers included the VFlex 1805/1805S surgical masks and Aura 1870+ Healthcare Particulate Respirator. The VFlex 1805 portfolio has a pleated design that helps increase surface area for easier breathing, an adjustable noseclip for a custom and secure seal, and an elastic headband with no rubber latex components.
The Aura 1870 respirator, meanwhile, features a flat-fold design that resists fluids. Individually packaged to guard against contamination, the device’s embossed top panel is designed to accommodate eyewear and helps reduce fogging, while a chin tab allows for easy positioning, donning and adjusting.