3M Company (MMM) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

July 25, 2023 9:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the 3M Second Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded, Tuesday, July 25, 2023.

I would now like to turn the call over to Bruce Jermeland, Senior Vice President of Investor Relations at 3M.

Bruce Jermeland

Thank you and good morning, everyone and welcome to our second quarter earnings conference call. With me today are Mike Roman, 3M's Chairman and Chief Executive Officer; Monish Patolawala, our Chief Financial and Transformation Officer; and Kevin Rhodes, our Chief Legal Officer. Mike, Kevin and Monish will make some formal comments, then we will take your questions. Please note that today's earnings release and slide presentation accompanying this call are posted on the homepage of our Investor Relations website at 3m.com.

Please turn to Slide 2. Please take a moment to read the forward-looking statement. During today's conference call, we'll be making 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. Please note, 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.

With that, please turn to Slide 3 and I'll now hand the call off to Mike. Mike?

Mike Roman

Thank you, Bruce. Good morning, everyone and thank you for joining us. In the second quarter, we made significant progress on the important actions we have been taking to improve our performance and shape the future of 3M. We posted adjusted organic growth of negative 2.5% which includes a negative 1.7% headwind from the expected decline in disposable respirator sales. Revenue for the quarter was at the high end of our guidance range.

Our adjusted operating margin was 19.3%, impacted by restructuring charges of $212 million or a headwind to adjusted operating margin of 2.7 percentage points. Excluding these charges, we increased operating margin year-over-year. We delivered adjusted earnings per share of $2.17 and adjusted free cash flow of $1.5 billion driven by continued improvements in inventory management.