CLAIM #42615 · 3M Company (MMM) · 2025Q2 earnings call · Jul 18, 2025 · due Dec 31, 2025
“On the operating leverage piece, we should see that flow through. Okay. Today, our operating leverage is about -- I mean, incremental is about 35%. That will probably be the same, if not go higher.”
Anurag Maheshwari · CFO
In context
“oth on the supply chain side as well as the G&A side, which trickle through to the consumer business. Operator: Our last question comes from the line of Laurence Alexander with Jefferies. Laurence Alexander: Just 2, hopefully, very quick ones. One is, how do you think about the effect of your metering of investments on operating leverage if demand surprises on the upside either back half of this year or next year? And secondly, can you -- on the PFAS question, I just want to follow up on kind of if I understood one of your comments. How are you thinking about the property damage side of PFAS litigation. When do you think you'll have visibility around the legal strategy to ring fence the liabilities there? Anurag Maheshwari: Yes. Maybe I'll just start off with the operating leverage first. On the operating leverage piece, we should see that flow through. Okay. Today, our operating leverage is about -- I mean, incremental is about 35%. That will probably be the same, if not go higher. -- as volume picks up on the upside. Because if you look at the metering of investments, I mean, we're spending $175 million of a step-up in investment this year relative to last year. The metering was more because of the demand calibration. If demand softens up a little bit and you don't spend so much on advertising and merchandising. You look at the tariff landscape, then you look at different projects and you say, okay, let's prioritize them. But when it comes to R&D comes to sales, we've added it. For the second quarter, we had envisioned about $85 million of pickup in investment, we did more than $40 million. So it's still quite a significant amount. So that investment is probably going in the right stage -- second half, we're still maintaining the investment that we always had. And”
Verify independently
SEC filings for MMM ↗ · Claim quote is verbatim from the 2025Q2 earnings call.