Q1 2013 Earnings Call Transcript

Transcript Call Date 04/25/2013

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the 3M's First Quarter Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we'll conduct a question-and-answer session. 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; Thursday, April 25, 2013.

I would now like to turn the call over to Matt Ginter, Vice President of Investor Relations at 3M.

Matt Ginter - VP, IR: Thank you and good morning, everybody. I am here with Inge Thulin today 3M's President and Chief Executive Officer and David Meline, 3M's Chief Financial Official Officer and thanks for joining our first quarter business review.

Note that today's earnings release and slide presentation accompanying the call are posted on our Investor Relations website at, under the heading Quarter Earnings. Also note that our next two earnings conference calls are set for July 25th and October 24th. In addition, we will host Investor Meeting on the afternoon of Tuesday, December 17th at the Grand Hyatt Hotel in Midtown Manhattan. For now lock-off 1 to 5 pm on that day, if you would.

If you please turn to Slide number 2. During today's conference call, we will make certain predictive statements that reflect our current views about 3M'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.

So, now I will turn the call over to Inge and please turn to Slide number 3.

Inge G. Thulin - Chairman, President and CEO: Thank you, Matt and good morning, everyone. I appreciate you joining us this morning. Overall this was a good quarter for 3M. We delivered solid results in the phase of a stronger U.S. dollar and lower factory utilization in few businesses. Double digit organic growth in China, Latin America and Middle East Africa helped us overcome weakness in Western Europe and Japan.

I am pleased that we posted sales growth of around 2% against the backdrop of 0.8% worldwide IPI. Four of our five business groups achieved positive organic sales growth in the quarter. Health Care posted a 4% gain in organic local currency as did consumer coming off a very strong Q4. This is the first quarter of reporting based on our new structure, and as a result we have clearer visibility on all of our business groups.

Let me make a comment on importance of this change to the electronics and energy business group. Here, the new structure not only give us better visibility, but also set the stage for better asset utilization in the future. We are seeing early progress today and I know that we will see even more as this team takes shape.

On the customer front, electronics and energy, energy creates for us a launching pad from which we can quickly introduce a broader range of technologies into the market and fully capitalize on the outstanding customer relationships 3M has earned in this space. In other words, it creates opportunity. So, Q1 give us many things to be happy about.

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