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Investing.com -- 3M CEO, Bill Brown, outlined the company’s future growth strategy and financial commitments at 3M’s 2025 Investor Day, emphasizing a focus on delivering shareholder value. The company experienced significant changes in 2024, including a successful Solventum spin on April 1, 2024, and the execution of the company’s largest restructuring program, which is now about 90% complete.
Despite global turbulence, 3M met its financial commitments in 2024, delivering earnings per share at the top end of the range set at the beginning of the year. The company also launched 169 new products and improved its cash conversion cycle by 8 days, generating strong free cash flow. This allowed 3M to return $3.8 billion to shareholders last year, while also reducing net leverage and improving its balance sheet.
Looking ahead, Brown stated that the future of 3M builds upon its 123-year history of material science and manufacturing capability, global reach, strong and iconic brands, and a new performance mandate. The company plans to remain focused on execution and constancy of purpose, with a new performance culture defined by customer delight, clear performance expectations, speed, urgency, and continuous improvement.
Brown also highlighted the company’s three priorities: reinvigorating top-line growth, driving operational performance, and effectively deploying capital. These priorities are underpinned by a back-to-basics approach to driving sustained performance across the company.
To reinvigorate top-line growth, 3M plans to increase innovation and improve commercial excellence. The company aims to understand customer needs better, develop differentiated products efficiently, and sell more existing products on the market.
The company’s second priority, driving sustained operational performance, is being addressed through the launch of a new 3M operating system called 3M Excellence. This enterprise-wide model is embedded in all functions and defines how 3M conducts business.
The third priority involves balanced capital deployment across the organization, both organic and inorganic growth, plus returning capital to shareholders, underpinned by a strong balance sheet. Over the next three years, 3M plans to invest $3.5 billion in R&D and return about $10 billion to shareholders.
In conclusion, Brown presented the company’s formula for reigniting long-term value creation, which includes 1,000 new product launches in the next three years, a billion dollars of sales above the macro, a billion dollars in supply chain net productivity over the same period, and $10 billion being returned to shareholders. The company is committed to outperforming the macro with earnings per share up 4 to 8% in 2025, accelerating to high single digits in 2026 and 2027 with free cash flow conversion, more than 100% of net income.
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