3M Company (MMM)

“We see ourselves marching ahead and with an ability to hit the high-40s over time, you know, but the roadmap is relatively clear.”

“Along with growth, we are seeing good operating margin expansion and are tracking ahead of the approximately 25% margin rate by 2027.”

“Our growth trajectory continues to accelerate from commercial excellence and innovation, and is on track to exceed the $1 billion above macro commitment.”

“Given our strong first half performance, we are raising our guidance for the year for sales, EPS, and free cash flow.”

“Over time that go up to 30%, maybe a little bit better than that. It will be a little bit higher in the industrial side. So we do expect TEBG and SIBG to get to 40% or beyond 40% class fours and fives, but we are still running as a company around 25% today.”

“You know, we expect to outperform in the back half of the year, but the market is getting weaker because of memory.”

“I would say it is normal seasonality with the, EPS growing by 30 seconds, 30¢ in the back half equal between Q3 and Q4.”

“You should see the normal seasonality. Through the course of the year as well. You know, our guide says we are gonna be over 3.5% for the year.”

“You know, but even with the tough compares, we think know, second half will be pretty strong growth well.”

“And on investments, we said it is going to be $225 million, and the investments are spread over growth, productivity, and foundation of about $225 million, $75 million in the first half, $150 million in the second half.”

“Just on the static cost, it is still $150 million for the year, more in the second half versus the first half.”

“But over time, you know, given our technology and the momentum we think we are building here and our ability to scale, we think our share in that segment will grow materially.”

“You know, we do expect good momentum going into the back half of the year.”

“The Auto Aftermarket business, we think, was Going To Be Soft, Repair Claims Is Still Expected To Be Down In The Back Half Of The Year”

“Auto is stabilizing In General For Us, But it is Still Expected To Be Down On The Build Rate Year Over Year In The Back Half.”

“we see some improvements in the back half on easier comps and you know, we do see some tailwind on pricing, you know, for the year will be about 1.5 which implies about 2 points in the back half.”

“But we feel it is gonna normalize here and help us in the back half of consumer to be flat to up slightly, is what our expectation would be in the back half of the year.”

“So as we get into Q3, we feel good visibility, for this Q3 and the 2nd half of the year.”

“You will see more impact in the back half of the year as those products that we started to work on a few years ago start to launch this year and become meaningful in the back half. They will be even more meaningful into 2027.”

“And earlier this year, we announced that we would double our capacity on Expanded Beam Optics this year and another doubling over the next year to 18 months.”

“The revenue this year, it was in the $40, $50 million range. You know, we do think it will scale over time. Could be you know, 4x or 5x that or even more over the next several years, depending upon our progress here as well as the adoption of optical technologies and data centers.”

“As we look to the back half of the year, we do see the innovation engine contributing even more in the back half and in fact, greater into 2027.”

“So we feel pretty good this year. We think we will be about $450 million above macro in the full year.”

“And on cash, we expect to continue the strong trajectory exceeding our cumulative cash commitment and $10 billion return to shareholders.”

“For earnings, we are trending to a double digit CAGR reflecting strong operational improvements coupled with below the line efficiency.”

“Sequentially, we expect operating profit to follow typical seasonality with similar phasing between the halves while earnings will see an impact from tax timing.”

“The updated guidance implies second half organic sales growth of high-3s or better over 2x macro and margin expansion of about 100 basis points from the prior year resulting in EPS growth of approximately $0.30 at the midpoint.”

“Given the higher earnings growth, and progress in working capital, we have increased our free cash flow guidance by $100 million to a $4.7 billion to $4.9 billion implying conversion greater than 100%.”

“Though oil price cost is dollar neutral, it impacts margin rate by 20 basis points which we will mitigate through higher volume and better productivity resulting in operating margin expansion in line with our prior expectations.”

“This impact is expected to be fully covered by the price actions we implemented in Q2.”

“We now estimate oil inflation $150 million to $175 million up from $125 million previously.”

“EPS guidance is increasing from a range of $8.50 to $8.70 to $8.80 to $8.95, a growth of 9% to 11% year over year.”

“We are raising organic growth expectations from 3% to greater than 3.5% for the year.”

“These efforts are translating into commercial results with 5 year new product sales reaching about $4 billion this year and new product vitality index climbing to the mid teens this year, and 20% next year.”

“We expect performance to continue accelerating as we leverage AI to move more quickly from idea generation to development and production.”

“While reducing development cycle time by about 20%.”

“We are increasing the pace of innovation and are on track to nearly triple the number of new products introduced this year versus 3 years ago, and launch more than 1 thousand products by 2027.”

“and putting us on track to deliver more than 350 new products this year.”

“we expect organic growth in the second quarter to be higher than 3%, with all the 3 BGs accelerating. SIBG, which was at 3.2%, obviously going higher than that. TEBG, low single digit. And CBG flat to positive.”

“Backlog conversion and continued order strength is expected to support growth momentum in both SIBG and TEBG in the second quarter.”

“So it's -- I think it's a great combination in a space that we like quite a bit... It is going to be accretive to our growth, margins, earnings over time.”

“Our 2026 financial outlook puts us on pace to exceed our medium-term financial commitments that we laid out during Investor Day around growth, margin and cash.”

“the strong backlog combined with continued strength in orders in the first 3 weeks of April gives us confidence that all 3 business groups will accelerate growth in the second quarter and through the balance of the year.”

“As we lap tariff pressure in the second half, the continued momentum on productivity and volume acceleration gives us confidence in our expectation of approximately 100 basis points margin expansion for business groups this year.”

“that consistency and momentum gives us confidence that we can meet or exceed the medium-term goals we outlined at our Investor Day last year, even in an uncertain macro environment.”

“This will put us ahead of our Investor Day target to launch 1,000 new products through 2027.”

“Looking forward, we remain confident in achieving our full year 2026 guidance despite the volatile environment.”

“we said this year that we will grow about $330 million, $300 million above macro. And as we get into the second half of the year, from the exit rates, you are right, we will be north of 3.5%”

“we will double capacity towards the back end of the year.”

“It won't be a meaningful driver of the overall 3M growth in the year.”

“For the year, we expect to see some growth. It will be positive.”

“As we look at the balance of the year, we see electronics start to get modestly positive.”

“What we've seen so far and expect is about $125 million of cost increase there, which are offsetting into pricing. As I mentioned earlier on that we expect about a 50 basis point uplift on price coming from that oil-based exposure.”

“any pre-buy that's happened will wash out in Q2, but we do see acceleration in the back half on the back of really core operating fundamentals around NPI and commercial excellence.”

“Yes, we see Q2 being better than Q1. And we see the second half being better than the first half, is the way we're currently looking at it, Jeff.”

“On EPS, given the contingencies for the second half, we expect the first-half EPS to be higher than the second half.”

“We anticipate consumer to improve as point of sale is on an upward trend, resulting in normalized inventory levels.”

“Regarding cadence, we expect sales growth to accelerate in Q2 and the back half of the year.”

“We are facing higher input costs due to the recent increase in oil price, but have implemented targeted price increases to mitigate the impact at the current levels.”

“free cash flow conversion of greater than 100%.”

“earnings per share ranging from $8.50 to $8.70”

“Organic sales growth of approximately 3%, earnings per share ranging from $8.50 to $8.70 and free cash flow conversion of greater than 100%.”

“we believe our free cash flow will be more than $4.5 billion for the year and greater than 100% conversion.”

“On nonoperational, we expect positive trends driven by a $2 billion share repurchase in the first quarter and lower net interest expense.”

“we're investing to more than double our capacity to support growing AI demand.”

“It positions us to maintain above-market growth, enhance margins and drive strong free cash flow generation.”

“Electronics orders were up double digits due to significant activity in semis and data centers, which will convert to revenue in Q2 and the second half.”

“we're investing more than $250 million over the next 3 years in standard, easy-to-replicate automation across our plants and distribution centers.”

“we're on pace to launch 350 in 2026.”

“But we saw encouraging order trends that support our outlook for acceleration in the balance of the year.”

“Again, I think CE, or consumer electronics, may soften a little bit. But we are seeing better trajectory and growth in the data center and the semiconductor business.”

“I feel good that we will outgrow the macro next year. at this year at '26 as a result of some of the initiatives we have in place on NPI and commercial excellence.”

“So we do see a higher in '26 than '25 in terms of market outgrowth, and it is exactly from the progress made on innovation and five-year new product sales coming up.”

“we are pretty confident that those are going to start to move the needle for the company, which is why we feel good about the outgrowing the macro here in '26.”

“So you know, our outperformance, you know, this year versus the macro is more like $300 million or more.”

“with a little bit of consumer recovery, you will see that coming through in a CBG business this year.”

“I would expect margin growth as we get into 2026 as well as a really level out the business.”

“I just come back to with the execution of the team in commercial excellence and NPI, I think they are doing a very good job. I expect it will outperform that industrial macro as we get into '26.”

“I expect the same thing here in '26.”

“we see that market to be more low to mid-single digits this year. Still growing, maybe not as robustly as we saw last year, but still low to mid-single digits.”

“Last year, we did $185 million. We are going to do an incremental $225 million this year. The stranded cost goes up from $100 million last year to $150 million this year.”

“So overall, we are going to see about a 125 to $150 million increase between volume and productivity in '26.”

“With 3% growth, the $200 million of volume will now become closer to $250 million, and productivity actually goes up from $550 million to about $600 million.”

“Just firstly, you look at both volume and productivity in 2026, it is going to be higher than what it was in 2025.”

“largely, I think, you are heading in the right direction. I think you know, SABG is performing really well. We would expect to continue that trend here in 2026.”

“No. We are not seeing it being more margin dilutive.”

“even though IPI is coming down, you know, our commercial initiatives, our NPI initiatives, it is going to allow us to get to outperform that macro, and we expect that to accelerate in '26 from what we have experienced in '25.”

“we can continue to see good pricing movement here going into 2026.”

“Regarding cadence, we expect the rate of sales growth to increase through the year, with margin and EPS equal between the two halves.”

“Adjusted free cash flow conversion is expected to be greater than 100%, driven by strong operating income growth and a focus on working capital management.”

“Overall, we expect total company income to grow by $400 million at the midpoint of our 70 to 80 basis points margin expansion guide.”

“Corporate and other income will be lower by $50 to $75 million, or 20 to 30 basis points, largely from the wind-down of transition services agreements related to Solventum.”

“This will be partially offset by headwinds from PFAS, stranded costs, and tariff impacts, as well as an increase in growth and productivity investments to $225 million.”

“The business groups combined will expand margins over $450 million or 100 basis points, including $875 million from volume growth and net productivity across supply chain and G&A.”

“SIBG and TEBG grew 2.7% combined in 2025, and we expect this growth rate will accelerate in 2026, supported by ongoing commercial excellence initiatives, strong service levels, and continued new product introductions.”

“We expect organic sales growth to be approximately 3%, earnings per share ranging from $8.5 to $8.7, and free cash flow conversion of greater than 100%.”

“adjusted operating margin expansion of 70 to 80 basis points”

“This year, we expect organic sales growth of approximately 3%, adjusted operating margin expansion of 70 to 80 basis points, and earnings per share of $8.5 to $8.7, and free cash flow conversion greater than 100%.”

“with a target of 5.4% cost of quality in 2026 and less than 4% over time.”

“We expect this growth to continue with 350 launches in 2026.”

“if that plays out exactly as we expect and evolve the trade flows I mentioned, you know, it could be a $30 million, $40 million impact this year.”

“It is probably going to be in line with that. I cannot really tell you if it is going to be up or down. I mean, it depends on what happens in the overall docket, but I would expect it to be, you know, pretty similar to that.”

“We are planning for the macro to be similar to 2025, but it is still early to put too much weight on market forecasts.”

“we are raising our earnings per share guidance for the year from a range of $7.75 to $8 to a range of $7.95 to $8.05 representing an approximately $0.12 increase at the midpoint or 10% growth for the year.”

“Our strong performance through the first 3 quarters of the year enables us to increase our earnings per share guidance to $7.95 to $8.05”

“Commercial vehicles is down. It was down -- I think it's going to be just north of 20% here in the back half of the year.”

“At the midpoint of the guidance, we would be 100 basis points of margin expansion. Now if we continue to perform the way we have in terms of either higher volume like in the third quarter or more on the margin side, we could be at the higher end of the guidance range, which would imply a margin expansion of 150 basis points in the fourth quarter for us.”

“So I think it's quite typical. If you look year-over-year, which is the more appropriate comparison, we do believe that we will grow above macro again in the fourth quarter.”

“This is something that we're going to continue to work on. We don't size it today. We'll give updates to investors over time. It will not be a big bang. We'll shape more next quarter. This quarter of $14 million next quarter. It will be in that same range, about $15 million.”

“We continue to expect free cash flow conversion of greater than 100% with absolute free cash flow dollars being higher reflecting the increase in earnings.”

“on the back of this performance, we are updating our margin expansion expectations to 180 to 200 basis points for the year.”

“As such, we do not expect this divestiture to be dilutive to earnings.”

“sales from products launched in the last 5 years up 30% in Q3 and 16% year-to-date, tracking to be up high teens for the full year.”

“we now expect to launch over 250 new products this year, exceeding our goal of 215 and pacing ahead of our Investor Day target of 1,000 new products through 2027.”

“we now expect full year organic sales growth to be greater than 2% with adjusted free cash flow conversion remaining above 100%.”

“And next year, we see a line of sight because of commercial excellence, NPI to get there.”

“So where we sit today, we actually feel very good about the 25% target that we set out for '27.”

“this is all about how do you grow and accelerate our margin expansion journey beyond 25% by '27, that's not where we're going to stop.”

“While the macroeconomic outlook is uncertain, we will outperform by scaling commercial excellence across all business units and leveraging new product launches.”

“we have a long runway for improvement toward our target of achieving less than 4% cost of quality as a percentage of cost of goods sold.”

“On the supply chain side, we said that we'll do $1 billion of productivity over the next 3 years. We did good this year, but we're also finding more opportunities... So you're going to see a little bit more on the productivity side next year.”

“So I think overall, you will see next year again to be a strong operating performance here.”

“as we get into '26, Amit, I think what we are going to see is continued outperformance versus the macro.”

“This will grow over time. And again, it's -- we're not going to be at 50-50 Class 3 versus Class 4s and Class 5s, but you'll see more 4s and 5s come in into the pipeline into next year and into 2027.”

“Finally, we continue to expect to deliver cash flow conversion that exceeds 100%.”

“For EPS, we expect operational performance to be the primary driver of earnings growth similar to this year.”

“Alongside growth, we will improve productivity in our supply chain and G&A to more than offset investments, stranded costs and anticipated tariff impacts, resulting in margin expansion in 2026.”

“We think it might soften a little bit in Q4. I don't know what's actually going to happen because the team is pushing pretty hard.”

“Q3 was up high single digits, around 8%. So it's -- it was better than we had expected. We had expected a softening in the back half. And in fact, it accelerated a little bit in Q3, now it might weaken a little bit in Q4 but still be up.”

“it helps us with maintaining reasonable fit GILTI rates, which is important to us, helps us maintain our effective tax rate in the 20% range, which is what we had anticipated and hoped for.”

“we know that's going to drive growth in the back half.”

“we know A&D is going to be picking up for us in the back half.”

“If volume comes up, I think the operating leverage should be north of 35% in the second half or in time to come.”

“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 we go through the course of the year, in our current margin guide of 150 to 200 basis points. You should see all 3 business groups doing well. SIBG and CPG will definitely do better. TEBG a little bit lighter because of the stranded cost that you pointed out, but the productivity is flowing through well there.”

“We expect to be in the high 80s now by the end of the year. The team tells me they want to exit the year at 90%.”

“We do expect us to be flattish in the back half from being down in the front half, even though the builds are still weak in the back half.”

“again, it will slow down, but still be up for the year.”

“We do expect it will slow down in the back half. That's embedded in our numbers.”

“So it's -- we're offsetting $0.20 of gross tariff with both cost and sourcing changes, which is about half of the offset and the other half is coming through price.”

“we're starting to see benefits of lower churn in the back half.”

“So we see electronics, it's still up in the back half. It's just not as strong in the front half.”

“On ForEx, our headwind on the EPS for the year is about $0.05.”

“if you take a step back and you look at it year-over-year, you're still seeing the second half margins go up by 110 basis points at the midpoint of our guidance.”

“In terms of EPS, Q3 is historically higher than Q4, and -- that's what is is because seasonally, our revenue is higher in Q3 than in Q4 and also on the margin side, it's higher. The ratio has been, if you look at the second half, 52% of the EPS of the second half is in Q3, about 48% is in Q4. So we kind of expect the same trend this year as well.”

“In the first half, we grew 1.5%. So that would imply a 2.5% growth in the back half. And we're expecting probably Q3 and Q4 to grow at similar levels around there.”

“we do see the back half on safety accelerating there as well because of both a couple of wins that we've had, but some new product introductions.”

“Electrical markets remain very robust for us. Again, we expect that to be high single digits going into the back half.”

“For the year, we're expecting about the same and again, we're getting about 2% gross productivity, 2% net productivity on top of inflation.”

“I think the -- we should be expecting both improvements in growth from new product innovation as well as improving margin as you're bringing a product to market.”

“this includes an approximately $0.50 to $0.55 benefit from volume growth and continued productivity net of stranded cost and growth investments, which is partially offset by $0.30 to $0.35 of tariff impact and higher interest expense.”

“Regarding the second half, we expect year-on-year earnings growth of $0.18 at the midpoint.”

“we now expect an operational benefit of $0.95 to $1.20, partially offset by $0.50 of tariff, FX and non-op headwinds for a total EPS growth of 6% to 10%.”

“On the back of a strong first half performance, we now expect margin expansion of 150 to 200 basis points and are increasing both the lower and higher end of our EPS range”

“We are updating our organic revenue growth guidance to approximately 2% and expect all 3 business groups to grow low single digits for the year with a similar profile to the first half.”

“In the first half of the year, we returned $3 billion to shareholders via dividends and share repurchases, and we'll continue to be opportunistic on buybacks in the second half of the year while preserving balance sheet flexibility.”

“tracking well to be up more than 15% for the year.”

“To the extent that things look a little bit better in the back half into '26, then we'll let it a little bit more out.”

“As we go through the year, we do expect all three business groups margins to expand.”

“We do expect all three business groups to expand their margins for 2025.”

“But the reality is we see that to be a kind of modest growth flattish to modest growth for us for this year.”

“We expect our auto OE business to be down mid-single digits both in the quarter and for the year.”

“It's probably trending more towards the higher end.”

“But you know, the team has been very smart and surgical about how we do this. So so we outside of the macro erosion, you know, we're not expecting much much demand deterioration from a volume perspective. Because of the way we're being smart about pricing.”

“So sequentially, also, we should see about $0.10 to $0.15 benefit on the EPS.”

“Now sequentially, you're correct. It's seasonally, you know, revenue should be up about $300 million should come with good flow through.”

“For the second quarter, we may see a couple of pennies here and there, small impact, but that's within the guidance range of $7.60 to $7.90.”

“Julian, again, listen, as we said, the tariffs started in February with non-USMCA aluminum steel but the ones with the biggest impact started in April, particularly with between US and China. And as I mentioned, we typically carry about 90 days of inventory. So we will see this impact in more mainly in the second half of the year.”

“So overall, if you put all of that together for the first half, our EPS will grow about $0.22 to $0.27.”

“On cash, we continue to expect approximately 100% adjusted free cash flow conversion”

“We expect the operational cadence of sales and EPS to be split equally between the first and second half in line with historical performance.”

“We expect this $0.07 of timing items to be earnings neutral for the first half of the year.”

“Tariffs are going to be a headwind this year, but we thought it would be prudent to hold the impact outside of our full-year guidance while I digest the new policies and fully develop and qualify mitigation plans.”

“Safety and industrial was up 2 points to about 82%. It's on a steep climb to achieve 90% by year-end.”

“We're on track to launch 215 new products this year and 1,000 over the next three years.”

“No, it will be a net positive in this year. Yes.”

“So we feel very positive about that. So we see that getting a little bit better here in '25.”

“We should end '25 at over $6 billion in cash.”

“As you move into '25, you should see margin expansion again in TEBG.”

“But whatever we've seen in terms of launches, is built into the two to three guidance we see next year.”

“This will result in Q1 earnings being similar to that of last year and we expect sequential improvement into Q2 as we lap the Solventum spin items with earnings being approximately equal between the two halves.”

“Within the first half, we expect Q1 sales growth to be similar to Q4 and earnings will reflect the annual equity grants, which last year were deferred to Q2.”

“As we think about the cadence through the year, we expect sales and EPS to be split equally between the first and second half, in line with historical trends.”

“Adjusted CapEx of approximately $1 billion will be in line with depreciation and amortization.”

“This is just the start as our goal is to get to 75 days, freeing up cash for our capital deployment priorities”

“Our goal remains to deliver 2% net productivity through sourcing efficiency, quality improvement, lean manufacturing and asset utilization”

“In 2025, we expect to see a double-digit increase in the number of launches on top of the higher performance in '24”

“These efforts are starting to take hold and will support further gross margin expansion toward our goal of high 40s.”

“It gives us confidence to expand operating margins next year while driving top line growth, and we will give more specific details this year.”

“Look, we don’t see on the horizon going out through next year big liability payments that aren’t already on our balance sheet.”

“No, Brett, it should be declined substantially going into next year. I mean we will lap the year, so there will be a little bit of drag on effect for things that happen in the course of ‘24. But we shouldn’t see significant headwind from portfolio or geographic prioritization going into next year.”

“So, the negative is essentially inflation that we will see over there, which is a wage inflation moving forward.”

“And as I step back and you put all that stuff together and turn the corner into ‘25, we should see better growth. That would be my expectation.”

“As I laid out sort of the math there and earlier in this conversation, $13 billion worth of cost of goods, if we do 2% net productivity, it’s more or less $260 million. If we did it every year, it’s sort of a point a year of gross margin.”

“We intend to ramp up our recovery efforts in the coming days and weeks. And we do expect our insurers to honor their policy obligations to us in full.”

“We are looking to drive 2% net productivity, so 2% net of inflation across all those elements, including in supply chain.”

“Transportation and Electronics, up low single-digits and consumer down low single-digits.”

“We expect our full year adjusted organic growth to be approximately 1%, with business group estimates unchanged, with safety and industrial flat to up low single-digits.”

“But I do see that that’s a big focus of ours. We have got to be really pushing that hard to drive gross margin improvement over time.”

“And we do expect in years to come the cap – as earnings grow, we make progress in working capital, especially in the area of inventory, this will increase our cash flow and keep the conversion higher than 100%.”

“This is a football metaphor. It’s a couple of yards and a pile of dust in lots of ways to get ground game going on operations excellence. It’s a multi-quarter, multi-year journey. So the way I look at this, I think we’re still, Jeff, in the early innings of becoming operationally excellent. And I think the bulk of the opportunities are ahead of us, which is why I think as I look out the next 1, 2, 3 years, we should continue to see margin growth coming out of a lot of what’s happening across our factory network.”

“That will start to bear fruit into next year, maybe the end of next year and into ‘26.”

“Please note that in the month of July we will make total combined payments of $3.7 billion related to the Public Water Supplies and Combat Arms settlements.”

“Based on what we know right now, the team feels the guide that we have given you, which is for the company as a whole, is fair.”

“This year in our sort of 1% center point of our 0 to 2 guidance, we have positive price within that.”

“And then tax rate for the third quarter will be in the range of 20% to 21%.”

“And then you will see -- we talked about $0.11 EPS impact for the second half on Combat Arms and PWS.”

“Restructuring costs based on what the team sees right now is flat Q2 to Q3.”

“We will see lower fees as Solventum begins to exit. And that's an impact of approximately $0.09 from a headwind on an EPS perspective, which is overall still in the range 2Q was heavier than 3Q and 4Q.”

“You will get a tailwind from the timing of stock comp, which we announced in 2Q, approximately 100 of it that comes back as a tailwind in Q3.”

“If you now go to just the guidance between 2Q, 3Q or 3Q, 4Q, 3Q revenue trends will be very similar to what we saw in 2Q.”

“So the tax rate will be around 19% in the second half versus 20% in the first half.”

“We spent $165 million in the first half on restructuring, and at the midpoint that would be another $110 million in the second half.”

“Our interest costs, interest expense is going to go up. Our interest income will come down in the back half of the year.”

“We do see some headwinds in our factories. We built inventory through the second quarter that caused some positive absorption. We'll see inventory coming down in the back half of the year. That's going to cause some negative absorption or some headwinds there”

“We'll see some tailwinds from the benefit of lower restructuring cost, which is now 60/40 first half, second half.”

“We do expect revenue to be very similar in the second half to the first half, and that does reflect historical trends.”

“We do expect that we have some capacity in the back half to incrementally invest in the business.”

“You're right. We've been through and are actually getting through a very substantial restructuring program, about 75% complete. It will drag into 2025.”

“We've done a very good job at the covering inflation and we'll see some incrementally positive pricing this year.”

“And finally consumer is down nearly 3% organically through the first half of the year versus a full year expectation of down low single digits.”

“On an adjusted basis, transportation and electronics is up nearly 5% organically in the first half versus a full year expectation of up low single digits.”

“Full year adjusted organic growth remains unchanged at flat to up 2% with expectations for second half organic growth in line with first half performance at the midpoint.”

“We remain in discussion with multiple carriers and anticipate additional future recoveries.”

“Year-to-date Other had an operating loss of $28 million which is in line with our full year expectation of flat to a loss of $25 million.”

“This is in line with our full year anticipated sales range of $225 million to $275 million with a forecasted adjusted operating loss in the range of $125 million to $175 million.”

“Taking into account our first half of the year performance, we now expect our full year non-operating expense to be in the range of $50 million to $75 million versus a prior range of $75 million to $100 million.”

“For the full year we continue to expect pretax restructuring charges in the range of $250 million to $300 million.”

“This year we'll do probably less than 150.”

“No, Deane, we're committed to that exit. We're on track, and we're committed to follow through.”

“We are on track to meet our commitment by the end of 2025 and are working closely with each of our customers to complete an orderly transition.”

“So there's a little bit of drag next year, but I -- it's not big. I would just say the first half of this year will be slightly heavier than the second.”

“And then on semiconductor, our view is we saw the first quarter slow, and we believe that this will pick up in the second half, Andy.”

“Q2, as I mentioned, will continue to benefit from the interest income that we receive from the -- dividend that we receive from Solventum of $7.7 billion. And so therefore, the $75 million to the $100 million guide for the year will mostly be weighted to the second half of the year.”

“Similarly, you mentioned it too and I said that in my prepared remarks, we will incur stock-based compensation headwind around $120 million to $150 million.”

“Restructuring charges are between $250 million to $300 million for the year. 70% is weighted to the first half.”

“So on revenue, the first half, second half is 49-51. And then the margin split first half, second half is 47-53.”

“We expect to seek Board approval to declare the second quarter dividend in May with payments anticipated in June.”

“As a result, we anticipate a dividend of approximately 40% of adjusted free cash flow.”

“These actions are estimated to create a year-on-year organic growth headwind for the Consumer business of approximately 2 percentage points.”

“And in Consumer, we estimate organic sales to be down low single digits, which includes our ongoing product portfolio initiatives.”

“We estimate organic sales growth in Safety and Industrial to be flat to up low single digits.”

“As disclosed in our Form 10-K, stock-based compensation grants were delayed to Q2. As a result, we expect to incur $125 million to $150 million in expense in Q2.”

“As we have previously discussed, we estimate annualized dis-synergies of approximately $150 million to $175 million.”

“We expect full year Corporate and Unallocated net operating loss in the range of $125 million to $175 million.”

“Finally, Corporate and Unallocated includes full year 2024 sales in the range of $225 million to $275 million for commercial agreements with Solventum beginning in April.”

“This range includes first quarter net operating loss of approximately $65 million on a continuing operations basis. Beginning in April, transition service agreements costs plus a markup will be reimbursed to 3M, and therefore, we will generate modest income in the remaining 3 quarters of the year.”

“And our 2024 adjusted tax rate is expected to be in the range of 19% to 20% with the first half of the year coming in at the high end of the range.”

“We expect adjusted operating income and earnings per share to show relative strength in the second half of the year.”

“We also anticipate an approximately 75 basis point benefit to sales from the commercial agreement with Solventum.”

“Our expectations also include a 1% foreign currency headwind to sales given the strength of the U.S. dollar at current spot rates or a negative $0.20 to earnings per share.”

“We anticipate full year adjusted organic growth of flat to up 2% or up 1% to 3% excluding the impact from geographic prioritization and product portfolio initiatives we are taking.”

“We anticipate making total payments with a pretax present value of up to $10.3 billion over the next 13 years. The first payment is expected in the third quarter of 2024.”

“We anticipate making total payments up to a pretax present value of $5.3 billion through 2029.”

“What I would tell you is second half is so important for the consumer electronics business, and we are watching that trend. If there is a big pickup in consumer electronics, we will definitely grow with it because we are now specced in to many more devices than before.”

“We are going to exit and complete by the end of 2025. That's everybody's focused on that goal.”

“We're committed to that what we announced to exit PFAS manufacturing by the end of 2025.”

“In total, I still feel good that the range of $700 million to $900 million is good for the overall program.”

“We also remain on schedule to exit all PFAS manufacturing by the end of 2025, with production volumes down 20%.”

“2024 outlook assumes we will have selling prices year-on-year. It's helping us offset some of the moderate inflation we are seeing in certain raw materials, and then the labor market continues to remain strong.”

“Q1 looks to us a lot like Q4.”

“In the first quarter, non-op pension will be a $0.04 per share headwind to adjusted earnings.”

“Overall, our restructuring program remains on-track to deliver pretax savings in the range of $700 million to $900 million with a similar level of charges upon completion.”

“We anticipate pre-tax restructuring charges in the range of $250 million to $350 million and incremental savings in the range of $150 million to $250 million.”

“As Mike mentioned, these actions are estimated to create a year-on-year organic growth headwind of approximately $100 million or 2 percentage points.”

“Health Care's organic sales growth is anticipated to be flat to up low-single-digits year-on-year.”

“We expect continued strong margin expansion, along with another year of strong cash flow with an adjusted conversion rate of 95% to 105%.”

“Excluding the impact from geographic prioritization and portfolio actions, we expect organic growth of 1% to 3%.”

“In 2024, for example, we expect to complete the investments in state-of-the-art water filtration technology across our chemical manufacturing sites.”

“In addition, the upcoming spin-off our Health Care business will further strengthen our balance sheet.”

“We are planning on holding an investor meeting later this year, following the spin of Health Care where we will provide an update to our full year 2024 guidance along with our medium-term financial framework.”

“We continue to expect the business to be spun-off with an estimated net leverage of 3x to 3.5x EBITDA, and with the proceeds to be distributed to 3M prior to the completion of the spin.”

“this program will take approximately two years to complete out, you can see the overall, long-term benefits from the margin rate that you're going to get from better operating performance as well as better restructuring benefits.”

“Auto electrification is on track to be a $600 million business this year and has delivered organic growth of 30% year to date.”

“it's somewhere in that 20.5% to 21% for the fourth quarter.”

“based on where we are with the midpoint of our guide, our margin rate will be approximately 20%.”

“We came into the quarter -- into the year, we said low single digits price increase. That's what we are -- as of right now, we are on track with pretty much the same range.”

“We expect Q4 to look a lot like Q3 in our end markets, and I would say electronics included.”

“our capital allocation, first priority is going to be investing in organic growth in R&D and CapEx.”

“Looking ahead to the implied fourth quarter, we expect end market trends to be consistent with Q3.”

“We now estimate a full year sales decline for disposable respirators of approximately $600 million versus $550 million previously.”

“the anticipated one-time dividend from the spin of health care at leverage of three to three and a half times EBITDA and 19.9% retained stake will provide additional financial flexibility.”

“We continue to expect full year pre-tax restructuring benefits of $400 million to $450 million with offsetting charges.”

“Nicole, I'll add one more is we are very confident and bullish about this business. In fact, we have added capacity to continue to have more production output out there as the demand comes back.”

“And we have announced that 3M will exit all PFAS manufacturing by the end of 2025.”

“I would say in the long term, you should see trends continue to improve from an inventory turns perspective. Because as supply chains heal, as we get better on demand planning, that's why you're going to see it. So you will see it get better in the long run.”

“So as I've mentioned, there is slight improvement that you're going to see in -- overall in Health Care.”

“As Monish outlined, we're going to see more to the high end of our range of what we expected for disposable respirator declines in the year which means in third quarter, we'll see an impact from that as well.”

“And then, on -- I would just say on another housekeeping item is other financial, when we came into the year, we had said it would be minus 10% to flat on a year-over-year basis. We are updating that to minus 5% to flat -- minus 5% to plus 5% which on the midpoint is 0.”

“What we are watching also is, to answer some other of your points, raw material and energy cost inflation coming into the year was $150 million to $250 million. We have now changed that to $150 million to $200 million.”

“We've given you 2023, we expect 2024 charges by the end of 2024 to have pretty much taken most of the restructuring charges. The benefits, of course, show up in '25 and beyond.”

“The total program, as a reminder, is between $700 million to $900 million of charge and $700 million to $9 million -- $900 million of benefits.”

“We have attached an appendix that shows you by quarter where we expect to be for 2023 which is charges in the range of $400 million to $450 million and benefits in the range of $400 million to $450 million, so self-funding.”

“And so we expect some destocking to continue in the electronics channel.”

“Health care elective procedures, we believe, will continue to go up on a sequential basis.”

“And finally, our full year adjusted free cash flow conversion expectation remains unchanged in a forecasted range of 90% to 100%.”

“We expect this trend to continue into the second half of the year.”

“We expect our year-on-year organic growth rates in electronics to remain negative in the second half, however, improve versus down nearly 30% in the first half as we start to lap easier comps.”

“In addition, our proven access to capital markets, along with the anticipated onetime dividend from the spin of Health Care at 3 to 3.5x EBITDA and 19.9% retained stake, will provide additional financial flexibility.”

“We continue to work towards closing the transaction by year-end 2023 or early 2024, subject to the required conditions and additional factors we have disclosed in our SEC filings.”

“I would say the conversation is something that we anticipate as we see disinflation and eventually, we see deflation, then we would expect it to ramp up.”

“The actions we announced today will enable us to exit 2023 stronger than we started and provide for significant margin and cash flow improvement into the future.”

“So, currently, our view on stranded costs ultimately depends on the revenue of ParentCo too is between 50 basis points to 75 basis points, so much lower than benchmark.”

“As we think about the second half, that’s where supply chains, our belief is supply chain start healing, which means we should be able to see better cost – product cost from our factories as well as the cost from sourcing.”

“Our view is that as China stabilizes as we start seeing our comps ease compared to last year, fourth quarter should be on a much more normal run rate, which means on a year-over-year basis, it will show positive growth.”

“And as supply chains continue to heal, we should start also seeing the productivity or cost reductions in our cost of goods to start showing up in the second half.”

“Our full year guidance, as I have talked about, assumes overall recovery in all economies in the second half, including China.”

“And the benefits from that program are also $700 million to $900 million. And we expect the benefits – half of those benefits also to show up in 2023.”

“But with that said, just for the year, again, we are maintaining guidance, which includes the restructuring charge of $700 million to $900 million for the program. We expect half of that will be incurred in 2023.”

“We expect organic sales volumes will improve as consumer retail and consumer electronics markets stabilize, China work through its COVID-related challenges as our year-on-year comps ease.”

“This range also incorporates the continued softness in organic sales and expected increase in investments, higher non-op interest costs and an adjusted tax rate of 18.5% to 19.5%.”

“Organic sales is expected to be down low to mid-single digits, which includes the forecasted year-on-year headwind of approximately 1.5% from disposable respirators.”

“While we will remain disciplined, we expect to increase investments as we progress through the year to support end-market demand improvement in the second half and into the future.”

“We expect both sequential and year-on-year increase in auto bills, while healthcare procedure volumes are anticipated to be similar to Q1 levels and industrial end markets are expected to remain mixed.”

“The softness we experienced in Q1 in consumer electronics and consumer retail is expected to continue into Q2.”

“And at the same time, as we have said before, if we continue to see inflation, we will readjust as needed.”