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falloff in disposable respirator demand and the exit of our operations in Russia
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Transcript
2022 Q4
30 Jan 23
On an organic basis, fourth quarter sales increased 0.4% versus last year.
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Transcript
2022 Q4
30 Jan 23
Excluding this decline, Q4 organic sales growth was 3%.
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Transcript
2022 Q4
30 Jan 23
And then we moved to – when we announced the change to our business group led model, we went to a common supply chain model globally. And we made some additional steps in that in last year, really to continue to drive more flexibility, greater streamlined performance end-to-end in our supply chain.
So, we see it really more as an opportunity to build on the changes we have made and drive simplification, streamline, more productivity, reducing our costs, delivering more directly to customers.
So it's continuing to build on some of those changes.
I think those actually have positioned us to be more flexible as we go ahead. And there's an expectation that supply chains will continue to heal.
working??
Transcript
2022 Q4
25 Jan 23
five or six years ago, 3M went through a sort of pretty big centralization of supply chain and business support functions. In hindsight, has that left the organization a bit too rigid? Was that the right move? And could you unwind that stabilization?
supply changes, did they work?
Transcript
2022 Q4
25 Jan 23
And 2023 is an important year for year. It's a year that we plan to execute on a lot of our strategies over the last few years, including the spin of our health care and improving our supply chain operations. I just want to end with your question, we are not satisfied with where we are. We're going to continue to look at this. We're going to continue to be nimble and agile as the volume plays itself out. And our goal is to keep building from where we are right now.
"not satisfied"
Transcript
2022 Q4
25 Jan 23
And, Monish, is that roughly right on that sort of mid-teens operating margin Q1 and 19-ish for the year in your guide?
Monish Patolawala
Yes. Yes, it's actually close there. It's close enough, Julian
margin guide 19ish for FY
Transcript
2022 Q4
25 Jan 23
And, Monish, is that roughly right on that sort of mid-teens operating margin Q1 and 19-ish for the year in your guide?
Monish Patolawala
Yes. Yes, it's actually close there. It's close enough, Julian
margin guide 19ish for FY
Transcript
2022 Q4
25 Jan 23
So as I've always said, Julian, first is, volume gives us the best leverage. And what you have seen in Q4 continues into Q1.
As we have said in Q4, we took some aggressive actions on making sure we rightsized our manufacturing facilities to help control inventory.
banging on about volume as ever
Transcript
2022 Q4
25 Jan 23
So, sort of, backing into what you've talked about, are we right in assuming that the guide embeds sort of 19% operating margin for the year and sort of mid-teens in Q1
margin guide?
Transcript
2022 Q4
25 Jan 23
s been looking at the LCD-OLED transition for a period of time. And that transition has been happening for a few years and the team has continued to deal with that as it goes on.
lcd to oled hurts 3m
Transcript
2022 Q4
25 Jan 23
I know there was an announcement about Apple making your own custom displays starting in 2024.
apple making own custom displays
Transcript
2022 Q4
25 Jan 23
'll start with the summary, which is we are expecting that as things stabilize and as customers slow down their destocking, you will start seeing the comps get better in the year. The fourth quarter was extremely hard. And as Mike said, we saw an acceleration of a trend in December.
We continue to see that in January, and that's why the first quarter starts pretty soft. But our hope is that as things stabilize, as destocking gets better, as consumer confidence builds into the year, we'll start seeing the consumer business starting to get better.
consumer expected to improve through the year
Transcript
2022 Q4
25 Jan 23
I completely appreciate that. But has anything changed in the market structure in terms of your ability to drive the pricing. I just would have thought for 3M reported pricing would have been more of a tailwind into 2023
structural change to pricing?
Transcript
2022 Q4
25 Jan 23
the discussion that's going to come up is the elasticity of price across not just our company but across all companies. And what we have found over time, Andy, as you know, 3M so well that our innovation ultimately drives the value that we add for our customers. And historically, we have been able to have a good price cost equation, because of the value that we add for customers.
price elasticity
Transcript
2022 Q4
25 Jan 23
oday, we announced that we will reduce approximately 2,500 global manufacturing roles, a necessary decision to further align with adjusted production volumes.
2500 job cuts
Transcript
2022 Q4
25 Jan 23
the exit cost of this will be in the range $1.3 billion to $2.3 billion. And we took a fourth quarter charge of $800 million, that's included in that range of $1.3 billion to $2.3 billion.
took 800m chsarge in exutinf pfas , part of the 1.3bn to 2.3 bn necessary to exit pfas
Transcript
2022 Q4
25 Jan 23
We are not satisfied with our performance and the expected start this year.
We are working to aggressively address our operating performance in this challenging environment.
We expect organic sales volumes will improve as consumer retail and consumer electronic markets stabilize. China works through its COVID-related challenges and as our year-on-year comps ease.
We also expect supply chains to continue to heal and raw materials and logistic cost headwinds to abate. Therefore, we anticipate improvements in organic growth, operating margins, earnings and cash flow as we progress through the year.
no satisfied, but exoect improvemenr rthgrough 2023
Transcript
2022 Q4
25 Jan 23
Healthcare's organic sales growth is anticipated to be up low to mid-single digits versus 2022.
We expect gradual improvement in healthcare elective procedure volume as nurse labor shortages and strain hospital budgets continue to impact global healthcare systems.
healthcare ok. up lsd to msd
Transcript
2022 Q4
25 Jan 23
irst, three weeks into January, we are seeing continued slowing in organic sales volume as we start the year. This slow start is driven by the same weakening end market trends that impacted the finish to 2022.
We expect soft consumer discretionary spending, along with retailer destocking to continue into the first quarter. Sales of electronic devices are forecasted to be down between 10% and 30% sequentially in the first quarter, while semiconductor end markets and automotive builds are down mid-single digits sequentially.
Health care and oral care elective procedure volumes are expected to be at the same levels as Q4. And as we have noted, industrial end markets are mixed. And we anticipate the ongoing COVID-related challenges to continue in China and the geopolitical situation in EMEA to persist. Therefore, taking all of these items into consideration, we estimate Q1 total adjusted sales in the range of $7.2 billion to $7.6 billion versus $8.5 billion adjusted for the exit of PFAS manufacturing or down 10% to 15% year-on-year.
This anticipated year-on-year decline includes headwinds of 3 to 4 percentage points from disposable respirator sales declines and Russia exit, 3 to 4 percentage points from foreign currency translation, and 1 percentage point impact from divestitures. Taking these factors into account, we expect Q1 organic sales to be down low single digits to mid-single digits.
Q1 colour, horrible
Transcript
2022 Q4
25 Jan 23