3M has reported its third-quarter 2020 financial results up 4.5 percent year over year for the quarter at $8.4 billion. The St. Paul, Minnesota, company operates in the promotional products market through its 3M Promotional Markets Dept. (PPAI 113638, S11).

“Our third-quarter performance demonstrated once again the strength of the 3M model as we executed well, served customers and continued to fight the pandemic,” says Mike Roman, 3M’s chairman and CEO. “Though economic uncertainty and challenges due to the COVID-19 pandemic remain, we returned to positive organic sales growth with sequential improvement across businesses and geographies. We posted another quarter of robust cash flow, aggressively managed costs and further strengthened our balance sheet.”

Roman adds, “We continue to take actions to transform 3M and position us to deliver strong results as our end markets recover. We will invest where demand is strong, aggressively manage our cost structure and create new innovations that address customer needs and global market trends.”

The company reports that the COVID-19 pandemic continues to evolve and affect its businesses in a number of ways. 3M saw sequential improvements across businesses, markets and geographies. During the third quarter, market demand remained strong in personal safety, home improvement, general cleaning, semiconductor, data center and biopharma filtration. At the same time, several other sectors, while improving, continued to experience year-on-year declines primarily driven by COVID-19-related headwinds, including health care and oral care elective procedures, auto OEM, general industrial, consumer electronics, hospitality, office supplies, health care IT and traffic safety.

Third-quarter organic local-currency sales grew 0.9 percent, while acquisitions, net of divestitures, increased sales by three percent. Foreign currency translation increased sales by 0.6 percent year over year. Total sales grew 25.5 percent year-on-year in health care, 6.9 percent in safety and industrial, and 5.6 percent in consumer, with a decline of 7.4 percent in transportation and electronics. Organic local-currency sales increased 8.1 percent year-on-year in health care, 6.9 percent in safety and industrial, and 5.5 percent in consumer, with a decrease of 7.1 percent in transportation and electronics.

On a geographic basis, total sales grew 7.7 percent year-on-year in the Americas, 4.4 percent in EMEA (Europe, Middle East and Africa), with a decline of 0.6 percent in Asia Pacific. Organic local-currency sales grew 3.4 percent year-on-year in the Americas, and declined 0.3 percent in EMEA and 2.6 percent in Asia Pacific.

Both third-quarter GAAP and adjusted earnings were $2.43 per share, resulting in year-on-year declines of 10.7 percent and 5.8 percent on a GAAP- and adjusted-basis, respectively. Third-quarter operating income was $1.9 billion with operating margins of 22.9 percent.

The company’s operating cash flow was $2.5 billion with adjusted free cash flow of $2.2 billion contributing to adjusted free cash flow conversion of 153 percent. 3M paid $847 million in cash dividends to shareholders during the third quarter, and it reduced total debt by $1.2 billion, down six percent, and net debt by $1.3 billion, or eight percent, sequentially.