M Reports Third-Quarter 2021 Results Third-Quarter Highlights - Sales of $8.9 billion, up 7.1 percent year-on-year - Organic local-currency sales increased 6.3 percent year-on-year - Earnings per share of $2.45 - Operati

3M Reports Third-Quarter 2021 Results

Third-Quarter Highlights

-Sales of $8.9 billion, up 7.1 percent year-on-year

-Organic local-currency sales increased 6.3 percent year-on-year

-Earnings per share of $2.45

-Operating cash flow of $1.9 billion adjusted free cash flow of $1.5 billion, down 29 percent year-on-year

-Returned $1.4 billion to shareholders via dividends and gross share repurchases

-Company updates full-year 2021 outlook

ST. PAUL, Minn. - October 26, 2021 3M (NYSE MMM) today reported third-quarter 2021 results.

"In the face of continued global challenges, the 3M team executed well and delivered broad-based organic growth, along with strong margins and cash flow," said 3M chairman and chief executive officer Mike Roman. "Overall, end-market demand remained strong, and we navigated supply chain disruptions by maintaining a relentless focus on serving and innovating for our customers. Moving ahead, we will continue to invest for the future by investing in strong demand areas aligned with global trends, while improving our operational performance, driving productivity and advancing sustainability."

Third-Quarter Results

Sales grew 7.1 percent year-on-year to $8.9 billion. Organic local-currency sales increased 6.3 percent. Foreign currency translation increased sales by 0.8 percent year-on-year.

Total sales grew 8.1 percent in Consumer, 7.2 percent in Safety and Industrial, 5.8 percent in Transportation and Electronics, and 4.1 percent in Health Care. Organic local-currency sales increased 7.6 percent in Consumer, 6.1 percent in Safety and Industrial, 5.1 percent in Transportation and Electronics, and 3.3 percent in Health Care.

On a geographic basis, total sales grew 7.9 percent in the Americas, 6.8 percent in Asia Pacific, and 5.2 percent in EMEA (Europe, Middle East and Africa). Organic local-currency sales grew 7.4 percent in the Americas, 5.6 percent in Asia Pacific, and 4.2 percent in EMEA.

Third-quarter earnings per share was $2.45 per share, flat year-on-year. Third quarter operating income was $1.8 billion with operating margins of 20.0 percent.

The company's operating cash flow was $1.9 billion with adjusted free cash flow of $1.5 billion contributing to adjusted free cash flow conversion of 107 percent. 3M returned $1.4 billion to shareholders in the third quarter of 2021, including $856 million in cash dividends and $527 million of gross share repurchases. See the "Supplemental Financial Information Non-GAAP Measures" section for applicable information.

Full-Year 2021 Outlook

3M is updating its full-year 2021 sales and earnings expectations to include the company's year-to-date results and reflect the current global supply chain disruptions.

3M continues to expect to generate strong cash flow and maintains its full-year free cash flow conversion range of 90 to 100 percent, as referenced in the "Supplemental Financial Information Non-GAAP Measures" section.

Third-Quarter Business Group Discussion

Safety and Industrial

Sales of $3.2 billion, up 7.2 percent in U.S. dollars. Organic local-currency sales increased 6.1 percent, and foreign currency translation increased sales by 1.1 percent.

On an organic local-currency basis

Sales increased in abrasives, industrial adhesives and tapes, electrical markets, closure and masking systems, and automotive aftermarket, and decreased in roofing granules and personal safety.

Sales grew in Asia Pacific and the Americas and declined in EMEA.

Segment operating income was $620 million, a decrease of 20 percent year-on-year operating margins of 19.2 percent.

Transportation and Electronics

Sales of $2.5 billion, up 5.8 percent in U.S. dollars. Organic local-currency sales increased 5.1 percent, and foreign currency translation increased sales by 0.7 percent.

On an organic local-currency basis

Sales increased in advanced materials, commercial solutions, automotive and aerospace, and transportation safety, and decreased in electronics.

Sales grew in the Americas and EMEA and declined in Asia Pacific.

Segment operating income was $465 million, a decrease of 9 percent year-on-year operating margins of 19.0 percent.

Sales of $2.2 billion, up 4.1 percent in U.S. dollars. Organic local-currency sales increased 3.3 percent and, foreign currency translation increased sales by 0.8 percent.

On an organic local-currency basis

Sales increased in food safety, oral care, health information systems, and separation and purification, and decreased in medical solutions.

Sales grew in Asia Pacific, EMEA and the Americas.

Segment operating income was $529 million, an increase of 7 percent year-on-year operating margins were 23.5 percent.

Sales of $1.5 billion, up 8.1 percent in U.S. dollars. Organic local-currency sales increased 7.6 percent, and foreign currency translation increased sales by 0.5 percent.

On an organic local-currency basis

Sales increased in stationery and office, consumer health and safety, home improvement, and home care.

Sales grew in the Americas and Asia Pacific and declined in EMEA.

Segment operating income was $332 million, a decrease 3 percent year-on-year operating margins were 21.7 percent.

3M will conduct an investor teleconference at 9 00 a.m. EDT (8 00 a.m. CDT) today. Investors can access this conference via the following

Live webcast at http investors.3M.com.

Call 800-762-2596 within the U.S. or +1 212-231-2916 outside the U.S. Please join the call at least 10 minutes before the start time.

Go to 3M's Investor Relations website at http investors.3M.com and click on "Quarterly Earnings."

Call 800-633-8284 within the U.S. or +1 402-977-9140 outside the U.S. (for both U.S. and outside the U.S., the access code is 21972037). The telephone replay will be available until 11 30 a.m. EDT (10 30 a.m. CDT) on November 2, 2021.

Forward-Looking Statements

This news release contains forward-looking information about 3M's financial results and estimates and business prospects that involve substantial risks and uncertainties. You can identify these statements by the use of words such as anticipate, estimate, expect, aim, project, intend, plan, believe, will, should, could, target, forecast and other words and terms of similar meaning in connection with any discussion of future operating or financial performance or business plans or prospects. Among the factors that could cause actual results to differ materially are the following (1) worldwide economic, political, regulatory, capital markets and other external conditions and other factors beyond the Company's control, including natural and other disasters or climate change affecting the operations of the Company or its customers and suppliers (2) risks related to public health crises such as the global pandemic associated with the coronavirus (COVID-19) (3) foreign currency exchange rates and fluctuations in those rates (4) liabilities related to certain fluorochemicals, including lawsuits concerning various PFAS-related products and chemistries, and claims and governmental regulatory proceedings and inquiries related to PFAS in a variety of jurisdictions (5) legal proceedings, including significant developments that could occur in the legal and regulatory proceedings described in the Company's Annual Report on Form 10-K for the year ended December 31, 2020, and any subsequent quarterly reports on Form 10-Q (the "Reports") (6) competitive conditions and customer preferences (7) the timing and market acceptance of new product offerings (8) the availability and cost of purchased components, compounds, raw materials, labor, and energy (including oil and natural gas and their derivatives) due to shortages, increased demand and wages, logistics, manufacturing site disruptions or supply chain interruptions (including those caused by natural and other disasters and other events) (9) unanticipated problems or delays with the phased implementation of a global enterprise resource planning (ERP) system, or security breaches and other disruptions to the Company's information technology infrastructure (10) the impact of acquisitions, strategic alliances, divestitures and other unusual events resulting from portfolio management actions and other evolving business strategies, and possible organizational restructuring (11) operational execution, including scenarios where the Company generates fewer productivity improvements than estimated (12) financial market risks that may affect the Company's funding obligations under defined benefit pension and postretirement plans (13) the Company's credit ratings and its cost of capital and (14) tax-related external conditions, including changes in tax rates, laws or regulations. Changes in such assumptions or factors could produce significantly different results. A further description of these factors is located in the Reports under Cautionary Note Concerning Factors That May Affect Future Results and Risk Factors in Part I, Items 1 and 1A (Annual Report) and in Part I, Item 2 and Part II, Item 1A (Quarterly Reports), as updated by applicable Current Reports on Form 8-K. The information contained in this news release is as of the date indicated. The Company assumes no obligation to update any forward-looking statements contained in this news release as a result of new information or future events or developments.

3M Company and Subsidiaries

CONSOLIDATED STATEMENT OF INCOME

(Millions, except per-share amounts)

3M Company and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEET

(Dollars in millions)

3M Company and Subsidiaries

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

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3M Company and Subsidiaries

SUPPLEMENTAL FINANCIAL INFORMATION

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(a)In addition to reporting financial results in accordance with U.S. GAAP, the Company also provides non-GAAP measures that adjust for the impact of special items. Special items for the periods presented include the items described in the section entitled "Description of Special Items". Operating income (measure of segment operating performance), income before taxes, net income, earnings per share, and effective tax rate are all measures for which 3M provides the reported GAAP measure and a measure adjusted for special items. The adjusted measures are not in accordance with, nor are they a substitute for, GAAP measures. The Company considers these non-GAAP measures in evaluating and managing the Company's operations. The Company believes that discussion of results adjusted for these items is

3M Company and Subsidiaries

SUPPLEMENTAL FINANCIAL INFORMATION

NON-GAAP MEASURES - (CONTINUED)

meaningful to investors as it provides a useful analysis of ongoing underlying operating trends. The determination of these items may not be comparable to similarly titled measures used by other companies.

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(b)Free cash flow and free cash flow conversion are not defined under U.S. generally accepted accounting principles (GAAP). Therefore, they should not be considered a substitute for income or cash flow data prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. The Company defines free cash flow as net cash provided by operating activities less purchases of property, plant and equipment. It should not be inferred that the entire free cash flow amount is available for discretionary expenditures. The Company defines free cash flow conversion as free cash flow divided by net income attributable to 3M. The Company believes free cash flow and free cash flow conversion are meaningful to investors as they function as useful measures of performance and the Company uses these measures as an indication of the strength of the company and its ability to generate cash.

3M Company and Subsidiaries

SUPPLEMENTAL FINANCIAL INFORMATION

NON-GAAP MEASURES - (CONTINUED)

(c)Adjusted free cash flow and adjusted free cash flow conversion are not defined under U.S. GAAP. Therefore, they should not be considered a substitute for income or cash flow data prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. The Company defines adjusted free cash flow as net cash provided by operating activities, adjusted for special items, less purchases of property, plant and equipment. Cash payments associated with special items in the determination of adjusted free cash flow are reflected net of applicable tax using the U.S. statutory corporate tax rate during the period of payment. It should not be inferred that the entire adjusted free cash flow amount is available for discretionary expenditures. The Company defines adjusted free cash flow conversion as adjusted free cash flow divided by net income attributable to 3M, adjusted for special items. Special items for the periods presented include the items described in section entitled "Description of Special Items". The Company believes adjusted free cash flow and adjusted free cash flow conversion are meaningful to investors as they are useful measures of performance and the Company uses these measures as an indication of the strength of the company and its ability to generate cash.

3M Company and Subsidiaries

SUPPLEMENTAL FINANCIAL INFORMATION

NON-GAAP MEASURES - (CONTINUED)

3M Company and Subsidiaries

SUPPLEMENTAL FINANCIAL INFORMATION

NON-GAAP MEASURES - (CONTINUED)

3M Company and Subsidiaries

SUPPLEMENTAL FINANCIAL INFORMATION

NON-GAAP MEASURES - (CONTINUED)

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(d)Adjusted EBITDA and adjusted EBITDA margin are not defined under U.S. GAAP. Therefore, adjusted EBITDA and adjusted EBITDA margin should not be considered a substitute for other measures prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. The Company defines adjusted EBITDA as net income attributable to 3M, adjusted for net income (loss) attributable to noncontrolling interest, (income) loss from unconsolidated subsidiaries, provision for income taxes, other expense (income), depreciation and amortization expense, and special items. For business segments, the Company defines adjusted EBITDA as business segment operating income (3M's measure of segment operating performance) adjusted for depreciation and amortization expense. The Company defines adjusted EBITDA margin as adjusted EBITDA divided by net sales. Special items for the periods presented include the items described in the section entitled "Description of Special Items". The Company considers these non-GAAP measures in evaluating and managing the Company's operations. The Company believes adjusted EBITDA and adjusted EBITDA margin are meaningful to investors as they provide useful analyses of ongoing underlying operating trends.