Industrial manufacturing conglomerate 3M reported its 2023 fourth quarter and full year financial results on Jan. 23, showing a continued sales deceleration to end amid the pending divestment of its Health Care business unit.

The company posted total 4Q23 sales of $8.01 billion, down 0.8% year-over-year, with organic sales down 1.9%. 3M’s 4Q23 gross margin of 41.6% was down 160 basis points year-over-year. 4Q23 operating profit of $1.24 billion nearly doubled that of 4Q22’s $632 million, while operating margin of 15.5% likewise nearly doubled the 7.8% of a year earlier. 3M’s 4Q23 adjusted operating margin was 20.9%, up from 4Q22’s 19.1%.

3M had a total 4Q23 net profit of $945 million, dwarfing 4Q22’s $541 million.

In the Americas, 3M 4Q23 sales grew 1.5%, with organic growth of 0.3%. EMEA sales growth was 3.9% (-0.6% organic); APAC sales declined 7.0% (-5.8% organic); and the rest of international declined 0.3% (-1.4% organic).

For the full year, 3M’s 2023 sales of $32.7 billion were down 4.5% vs. 2022, with organic sales down 3.2%. The company had an operating loss of $9.1 billion (vs. $6.5B profit in 4Q22) and a 2023 net loss of $7.0 billion (vs. $5.8B profit in 2022).

By business group:

Safety & Industrial 

• 4Q sales of $2.66 billion (33.2% of total) declined 2.7% year-over-year, with organic sales down 3.9%. The company said roofing granules grew double-digits; industrial adhesives and tapes were flat; and all other divisions declined. Disposable respirators sles were down about $50 million year-over-year, pulling organic growth down by 1.6 percentage points. Adjusted operating margin of 19.7% was down 70 basis points year-over-year.
• Full year sales of $10.96 billion declined 5.6% vs. 2022, with organic sales down 5.1%.
• 2024 outlook: 3M forecasts flat to low-single digit organic sales growth

Transportation & Electronics

• 4Q sales of $2.09 billion (26.1% of total) declined 1.7% year-over-year, with organic sales down 2.7% The company said it had adjusted organic growth in advanced materials, automotive and aerospace, and commercial solutions; electronics was flat; and transportation safety declined. Adjusted operating margin of 20.9% grew 380 bps year-over-year.
• Full year sales of $8.50 billion declined 4.5% vs. 2022, with organic sales down 3.5%.
• 2024 outlook: 3M forecast adjusted organic sales growth of flat to low-single digits.

Health Care

• 4Q sales of $2.04 billion (25.4% of total) dipped 0.3% year-over-year, with organic sales down 1.0%. The company said it saw organic growth in medical solutions, while seperation and purification, oral care and health information systems declined. Adjusted operating margin of 18.3% fell 190 bps year-over-year. 
• Full year sales of $8.20 billion fell 2.8% vs. 2022, with organic sales up 0.7%.
• 2024 outlook: 3M forecasts flat to low-single digit organic sales growth.
• 3M’s planned divestment of its Health Care segment, named Solventum, is expected in the first half of 2024.

Consumer

• 4Q sales of $1.23 billion (15.3% of total) declined 1.4% year-over-year, with organic sales 2.2%. The company said it saw organic growth in home improvement, while home health and auto care and stationary and office declined. Adjusted operating margin of 18.0% grew 100 bps year-over-year.
• Full year sales of $5.03 billion fell 5.0%, with organic sales down 4.7%.
• 2024 outlook: 3M forecasts low-single digit organic sales decline.