3M Reports First-Quarter 2023 Results; 6000 more layoffs globally
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“In the first quarter we continued our relentless focus on serving customers and aggressively managed costs,” said 3M chairman and CEO Mike Roman. “Market trends were as we expected, and we made changes to improve our operations and position us for success as supply chains improve.”
“To strengthen 3M for the future, today we announced actions that will reduce costs at the corporate center, further simplify and strengthen our supply chain structure, and streamline our go-to-market business models, which will improve margins and cash flow,” Roman continued. “We will continue to prioritize investments in high-growth end markets where 3M science gives us a clear competitive advantage.”
3M Announces Restructuring Actions
3M is taking restructuring actions that are intended to make 3M stronger, leaner and more focused. The structural reorganization will reduce the size of the corporate center of the company, simplify supply chain, streamline 3M’s geographic footprint, reduce layers of management, and further align business go-to-market models to customers. These restructuring actions are expected to affect all functions, businesses, and geographies and will impact approximately 6,000 positions globally, in addition to the reduction of 2,500 global manufacturing roles announced in January 2023. 3M anticipates annual pre-tax savings of $700 million to $900 million upon completion of these actions.
These actions are expected to meaningfully reduce costs and drive long-term improvement in margins and cash flow while enabling a more efficient and effective structure for driving long-term growth. The company will continue to focus its commercial efforts in high-growth markets including automotive electrification, home improvement, personal safety, electronics, and health care. In addition, 3M will prioritize emerging growth areas such as climate technology, sustainable packaging, industrial automation, semiconductors, and next-generation consumer electronics.
The company expects total pre-tax charges of $700 million to $900 million inclusive of previous actions announced in January 2023. 3M expects to incur approximately half of the pre-tax charges in 2023, with $175 million to $250 million expected in the second quarter. The charges will be offset by pre-tax savings and are included in the company’s full-year 2023 guidance.
Full-Year 2023 Outlook
3M affirms its full-year expectations for 2023 including the following:
- -6 to -2 percent adjusted total sales growth^, reflecting adjusted organic sales growth^ of -3 percent to flat
- Adjusted earnings per share^ of $8.50 to $9.00
- Adjusted operating cash flow^ of $5.8 to $6.3 billion contributing to 90% to 100% adjusted free cash flow conversion^
As further discussed at * within the “Supplemental Financial Information Non-GAAP Measures” section, 3M cannot, without unreasonable effort, forecast certain items required to develop meaningful comparable GAAP financial measures and, therefore, does not provide them on a forward-looking basis reflecting these items. (source)
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