Will Organic Growth Drive 3M’s Q1 Earnings?

Key Trends In The Quarter:

1) Focus On R&D

• 3M unveiled a new R&D laboratory at its headquarters in St. Paul, with an investment of ~$150M.
• This has been done to enhance technological prowess and for future innovation.
• The company expects to invest $1.8B in R&D in 2016 to boost organic growth.

2) Collaboration With TTS Tooltechnic Systems

• Strategic collaboration with the company to provide an all-inclusive surface preparation and finishing system.
• It caters to customers in the global automotive collision repair industry, with 3M being the sole supplier.
• This will give 3M an edge over its customers and help expand its global foothold.

3) Sale Of Its Pressurized Polyurethane Foam Adhesives Business

• 3M sold the assets of its polyfoam business to Innovate Chemicals Products Group.
• The divestiture would enable 3M to focus on its core groups and high-growth markets.

4) Decision To Retain And Invest In Its Health Information Systems Business

• After exploration of its strategic alternatives, 3M decided to retain and further invest in HIS.
• Sales increased 11% in 2015 to $760M, with 10% CAGR over the last 10 years.
• The healthcare IT market is expected to grow at a CAGR of 5%-8% during 2015-2020.

Have more questions on 3M? Have a look at some below:

• What Does 3M’s Five-Year Growth Plan Entail?
• What Is 3M’s Plan With Regards To China?
• What Caused The Change In Sales For Each Of 3M’s Segments And How Does It Compare With 2014?
• What Is The Geographic Breakdown of 3M’s Sales?
• How Does 3M Compare With Its Peers In Terms Of R&D Spending?
• What Is 3M’s Fundamental Value Based On Expected 2016 Results?
• How Will 3M’s Revenue And EBITDA Composition Change In The Next 3 Years?
• By What Percentage Did 3M’s Revenue & EBITDA Grow In The Last 5 Years?
• How Has 3M’s Revenue And EBITDA Composition Changed In The Last 5 Years?
• 3M: Year 2015 In Review
• What Is 3M’s Revenue And EBITDA Breakdown?

Notes: