Loath to be stuck in one industry, 3M makes everything from tape to high-tech security gear. The diversified company's products fall under four segment categories: Safety & Industrial, Transportation & Electronics, Health Care, and Consumer. 3M boasts some of the world's most recognizable consumer brands including Post-it notes, Scotch tapes, Scotchgard fabric protectors, Scotch-Brite scouring pads, Filtrete home air filters, and ACE bandages. 3M sells products directly to users and through numerous wholesalers, retailers, distributors, and dealers worldwide. The company generates about 60% of its sales outside the US. 3M was founded in 1902 as a small mining venture in Northern Minnesota called Minnesota Mining and Manufacturing Company.
In 2019 3M restructured its operations to reduce its number of business segments to four: Safety & Industrial, Transportation & Electronics, Health Care, and Consumer.
The Safety & Industrial segment brings in around 35% of revenue and serves industrial, electrical, and safety markets. Major offerings include personal safety items and manufacturing materials like adhesives and abrasives. It also markets automotive aftermarket products and roofing granules.
3M's Transportation & Electronics division generates some 30% of its revenue. It houses the company's display systems business, which sells films and components for LCD monitors and other electronic displays. The segment also supplies materials for electronics and automotive and aerospace applications. Its commercial products include graphics sheeting and cleaning products.
The company's Health Care segment provides about 20% of its revenue and targets clinics, pharmaceutical companies, and food manufacturers. Its offerings include medical supplies; skin health, oral care, and food safety products; and drug delivery systems.
Roughly 15% of 3M's revenue comes from its Consumer business. The division addresses consumer, pharmacy, and office retail; home improvement; and building maintenance markets. Some of the unit's most recognizable brands are Scotch tapes and cleaning products, Post-it notes, Filtrete furnace and air conditioner filters, Scotchgard Fabric Protectors, and Nexcare and ACE bandages.
3M has about 75 manufacturing plants in some 30 US states and operates around 110 manufacturing and converting facilities in roughly 35 other countries. Overall, 3M has operations in more than 70 countries.
3M generates around 40% of its revenue from the US; some 30% from the Asia and the Pacific islands; about 20% from Europe, the Middle East, and Africa; and roughly 10% from Latin America and Canada.
Sales and Marketing
3M sells its products through distribution channels including dealers, distributors, retailers, jobbers, wholesalers, and sales reps. It also markets directly to consumers. The company's products are used nearly all industry sectors. The company spends around $400 million on average in advertising each year.
3M has shown lackluster performance since 2014. Modest revenue expansion of about 5% in each of 2017 and 2018 was largely offset by reductions the two previous years. It's showed overall growth of only 3% in the last five years. The company's net income fared better: it added nearly 10% in that time thanks mostly to gains in 2018 after 3M divested its identity management business and its Communication Markets Division.
In 2018 3M grew its sales by 4% to $32.8 billion based mostly on the strength of its former Safety and Graphics and Industrial segments. In Safety and Graphics, a slow shingle manufacturing market only partially offset increased sales of its personal safety equipment, commercial solutions (including graphics sheeting and cleaning products), and products acquired through its purchase of fire safety company Scott Safety. Industrial operations were bolstered by sales in advanced materials, separation and purification, adhesives and tapes, automotive and aerospace, and abrasives.
The company's net income gained 10% in 2018 to end the year at $5.3 billion thanks to lower charges related to restructuring activities (excluding the Communication Markets Division exit).
3M reduced its cash stores by $200 million to $2.9 billion in 2018. Operations and investments contributed $6.4 billion and $222 million, respectively; financing activities ate $6.7 billion. Exchange rates subtracted a further $160 million. Purchases of property, plant, and equipment largely offset gains from maturities and sale of marketable securities and investments. Spend associated with financing centered on treasury stock and dividend payments.
After several years of sluggish growth, 3M is refocusing operations on its more lucrative sectors through strategic divestitures, selective acquisitions, and cost-saving restructurings.
Bucking its long-running hunger for acquisitions, the company made no business purchases in 2018. That year saw the company take cost-cutting measures that included selling its Communication Markets Division and several personal safety product offerings primarily focused on noise, environmental, and heat stress monitoring. In the year prior it sold its safety prescription eyewear business. The company also exited an oral care technology business in 2019. The company previously signaled its intent to focus on high-growth operations by reducing its exposure to the consumer and electronics markets over the last several years, selling off around 15 businesses.
3M made its first acquisition in two years with its 2019 buyout of the technology business of M*Modal, a developer of cloud- and AI-based medical speech recognition technology for electronic health records. That year it also agreed to acquire Acelity, a medical technology company that markets advanced wound care and specialty surgical products under the KCI brand. 3M's 2017 acquisitions included food safety test kit company Elution Technologies and fire safety equipment business Scott Safety.
In 2019 3M reduced its number of operating segments from five to four in efforts to eliminate operational inefficiencies. As part of that reorganization the company expects to cut 2,000 employees and reduce capital expenditures. The company also sold its gas- and flame-detection business to Teledyne Technologies for $230 million in 2019. The business operates under the Oldham, GMI, Detcon, Simtronics, and Scott Safety brands.
Mergers and Acquisitions
In an effort to bolster its medical dressings business, 3M agreed in 2019 to acquire medical device maker Acelity for $6.7 billion. That year it completed its $1 billion acquisition of the technology business of M*Modal, a developer of cloud- and AI-based medical speech recognition technology for electronic health records.
In 2017 3M announced a $2 billion acquisition of Scott Safety from Johnson Controls. The US-based company manufactures safety and protection devices like self-contained breathing apparatus systems and gas and flame detection instruments. 3M also purchased Elution Technologies, a Vermont-based manufacturer of allergen test kits to boost its Health Care business segment.
3M launched in 1902 as Minnesota Mining and Manufacturing Company, a small mining venture in Northern Minnesota. The company went public on the NYSE in 1946 as 3M before the 1951 creation of its international division in Australia, Brazil, Canada, France, Germany, Mexico, and the UK. The company's sales hit $20 billion in 2005 and $30 billion in 2013. In 2014 3M was issued its 100,000th patent.
3M Center, 224-1W-02
Saint Paul, MN 55144
Phone: 1 (978) 659-9000
Employer Type: Unknown
Chairman; Chairman Of The Board; Chief Executive Officer: James Cogan
Owner: Michelle Morrison
Chief Technology Officer: Gary Walsh
2015 Employees (All Locations): 845