3M Company

Ladies and gentlemen, thank you for standing by. Welcome to the 3M Fourth Quarter Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, please press the 1 followed by the 4 on your telephone keypad. It is recommended that you use a landline phone if you're going to register for a question. As a reminder, this conference is being recorded Tuesday, January 26th, 2021. I would now like to turn the call over to Bruce Germeland, Vice President of Investor Relations at 3M.

Thank you and good morning, everyone, and welcome to our fourth quarter earnings conference call. Let me begin today by expressing our sincere hope that you and your families continue to be safe and are doing well. With me today are Mike Roman, 3M's chairman and chief executive officer, and Monish Patalawalla, our chief financial officer. Mike and Monish will make some formal comments, and then we'll open it up for your questions. Please note that today's earnings release and slide presentation accompanying this call are posted on our investor relations website at 3M.com under the heading quarterly earnings. Please turn to slide two. Before we begin, I would like to introduce the dates for our 2021 quarterly earnings conference calls, which will be held on April 27th, July 27th, and October 26th. Please take a moment to read the forward-looking statement on slide three. During today's conference call, we'll make certain predictive statements that reflect our current views about TRAM's future performance and financial results. These statements are based on certain assumptions and expectations of future events that are subject to risks and uncertainties. Item 1A of our most recent Form 10-K lists some of the most important risk factors that could cause actual results to differ from our predictions. Finally, throughout today's presentation, we'll be making references to certain non-GAAP financial measures. Reconciliations of the non-GAAP measures can be found in the attachments to today's press release. Please note, we have provided segment and total company adjusted EBITDA reconciliations for reference in today's press release attachments as part of our non-GAAP measures. Please turn to slide four, and I'll hand it off to Mike. Mike?

Thank you, Bruce. Good morning, everyone, and thank you for joining us. The 3M team finished the year strong as we continue to execute well, innovate for our customers, and fight the pandemic from every angle. In an uncertain economic environment, we delivered organic growth in all business groups and geographic areas, along with margin expansion, a double-digit increase in earnings, and strong cash flow during the fourth quarter. Throughout 2020, I am proud of how 3M stepped up to help meet the extraordinary challenges facing the world, which includes our comprehensive response to COVID-19. Last year, we also took actions to transform for the future, advance our core values, and strengthen our balance sheet through robust cash generation. At the same time, we know that more work remains to deliver for our customers, shareholders, and all stakeholders. Moving forward, we will build on our progress and continue to prioritize investments in growth, productivity, and sustainability. 3M is well positioned as we head into 2021, and today we are providing guidance for the year, where we expect a return to healthy growth. Overall, I am confident in our ability to deliver a successful 2021. lead through the economic recovery, and capitalize on opportunities from emerging trends that are favorable to 3M and our market-leading businesses. Please turn to slide five. Company-wide, total sales in the fourth quarter increased to $8.6 billion, with organic growth of 6% and earnings of $2.38 per share, up 22% year-on-year on an adjusted basis. Demand remains strong in end markets such as personal safety, home cleaning, and semiconductors. And we saw a sequential improvement in general industrial and automotive OEM. We also saw ongoing weakness in other end markets, including healthcare and oral care elective procedures, which declined sequentially as they continued to be impacted by COVID-19. Geographically, organic growth was led by the Americas, up 8%. with the United States up 9%. EMEA grew 6%, and Asia Pacific grew 2%, with China up 14%. Our team delivered another quarter of good operational performance. We expanded our adjusted EBITDA margins to over 27%, with all business groups above 26%, and increased our adjusted cash flow to $2.1 billion. That wraps up my opening comments. I will come back to discuss our full year performance, along with my perspective on 2021, after Monish takes you through the details of the quarter.