With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

The 300 companies on this year’s list brought in over $12.5 trillion in revenue for the latest 12 months, with the median revenue figure at $24 billion.

America's Most Innovative Companies

AI is a major force shaping this year’s list—but it’s far from the only story.

World's Most Admired Companies

The region's best workplaces put integrity, inclusion, and respect at the center of their workplace culture.

Great-Places-To-Work-Asia-2025_Team Photo_3M GSC Philippines

3M ranks No. 71 on the 2025 Best Companies to Work For Southeast Asia.

Fortune 100 Best Companies To Work For – Southeast Asia

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

The corporations on our annual list posted aggregate revenues of $41 trillion for the second year in a row.

Fortune Global 500

Industries included in the sector are diversified and specialty chemical manufacturers.

Fortune Sector Leaders: Chemicals

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The 200 companies on this list are transforming industries from the inside out.

The 26th edition of the list shows how much esteem Big Tech giants command among other business leaders.

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The 25th Fortune World’s Most Admired Companies list suggests that tech giants’ peers respect them as much as ever.

WMA-2023-3M

The corporations on our annual list of the world’s largest companies delivered a record $41 trillion in aggregate revenues.

The 300 companies on this list are transforming industries from the inside out.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

Just as it dominates our economy, Big Tech now dominates Fortune’s annual ranking of corporate reputation.

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Aggregate sales hit $37.8 trillion last year—an increase of 19%, the highest annual growth rate in the list’s history.

Fortune collaborated with the Diligent Institute to rank the most innovative boards of directors among S&P 500.

Modern Boards 2022 3M

The company founded as the Minnesota Mining and Manufacturing Company makes the list with an impressive and diverse group of directors. 3M’s board scored highly in gender equality, senior independent nonexecutive director representation, and board expertise. While recent results for the company have been impacted by supply-chain constraints and rising inflation, long-term prospects look good.  
 
Patricia A. Woertz, former chairman and CEO of Archer Daniels Midland, is one of six 3M board members (out of 13 total) to have held a CEO post. The others include Gregory R. Page (Cargill), Muhtar Kent (Coca-Cola), Herbert L. Henkel (Ingersoll-Rand), Michael L. Eskew (UPS), and David B. Dillon (Kroger). 3M CEO Michael Roman also serves as the board’s chairman. Dow CEO James R. Fitterling is the other currently active CEO on the board.  
 
Roman has <a href="https://fortune.com/2021/03/09/the-pandemic-was-an-awakening-for-3m-ceo-daily/">called the pandemic</a> an “awakening” for 3M. In the aftermath of George Floyd’s murder, Roman told Fortune in 2021, the Minneapolis-based company increased its focus on the well-being of employees and the economic health of the Twin Cities area. He said that business leaders can “use the same lessons and abilities you have built in business success and apply them more broadly to whatever is most important to your stakeholders—and that includes your employees.” 
 
The former CFOs of Microsoft and Accenture are 3M directors, as is Dambisa Moyo, former global economist at Goldman Sachs and director at Chevron and Condé Nast. 3M’s board also includes Susan Kereere, the head of global business solutions at Fiserv, and Thomas K. Brown, the former group vice president of global purchasing at Ford. These two offer the perspective of the company’s customers, an increasingly important voice to have on any corporate board.

Fortune Modern Board 25

This year’s Fortune 500 marks the 68th running of the list.

After a year in which humanity leaned more heavily than ever on tech giants, see which companies topped Fortune's ranking of corporate reputation.

WMAC 2021-24-3M

Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

<span data-sheets-value="{&quot;1&quot;:2,&quot;2&quot;:&quot;Conglomerate 3M weathered 2020 thanks to its diverse slate of businesses. While sales in many segments tumbled because of the pandemic, they rose in others. In the positive column were home improvement products (credit all those renovations during lockdown); personal safety items (production of N95 respirators tripled); and filters for biotech labs (as pharma companies pushed to create COVID-19 vaccines). But some of 3M’s other big businesses suffered, including industrial products and office supplies. That’s partly because corporate customers slowed their manufacturing and consumers switched to remote work and therefore didn’t need as many Post-it notes. The result: flat revenue of $32.2 billion in 2020 and profits of $5.38 billion, up nearly 18%.&quot;}" data-sheets-userformat="{&quot;2&quot;:12673,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:2,&quot;11&quot;:4,&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:12}">Conglomerate 3M weathered 2020 thanks to its diverse slate of businesses. While sales in many segments tumbled because of the pandemic, they rose in others. In the positive column were home improvement products (credit all those renovations during lockdown); personal safety items (production of N95 respirators tripled); and filters for biotech labs (as pharma companies pushed to create COVID-19 vaccines). But some of 3M’s other big businesses suffered, including industrial products and office supplies. That’s partly because corporate customers slowed their manufacturing and consumers switched to remote work and therefore didn’t need as many Post-it notes. The result: flat revenue of $32.2 billion in 2020 and profits of $5.38 billion, up nearly 18%.

Companies on this year's list earned recognition based on surveys of 19.8 million employees worldwide.

GPTW-World's-Best-2021-3M

World’s 25 Best Workplaces

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-96-3M

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

This year's Fortune Global 500 generated $33.3 trillion in revenues and $2.1 trillion in profits.

G500-2020-389-3M

Based in St. Paul, Minn, and with corporate operations in 70 countries, 3M makes a wide range of products covering areas from health care to office supplies. The company has been in spotlight throughout the coronavirus pandemic, ramping up its production of N95 respirator masks and partnering with MIT in an attempt to develop a rapid COVID-19 test.

This year's Fortune 500 marks the 66th running of the list.

The St. Paul, Minn.-based company, with corporate operations in 70 countries, makes a wide range of products covering areas from health care to office supplies.

Here are the World's Most Admired Companies for 2019 as ranked in their industries. See who made the list.

This year's Fortune Global 500 generated $27.7 trillion in revenues and $1.5 trillion in profits.

This year's Fortune 500 marks the 65th running of the list.

Here are the World's Most Admired Companies for 2018 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 64th running of the list.

Here are the World's Most Admired Companies for 2017 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 63rd running of the list.

Here are the World's Most Admired Companies for 2016 as ranked in their industries. See who made the list.

This year's Fortune Global 500 generated $27.6 trillion in revenues and $1.5 trillion in profits.

This year's Fortune 500 marks the 62nd running of the list.

Business insiders have spoken: Asked which companies they most admire, more than 4,100 executives, directors, and analysts chose these top 50 All-Stars.

The world's 500 largest companies generated $31.2 trillion in revenues and $1.7 trillion in profits in 2014. Together, this year's Fortune Global 500 employ 65 million people worldwide and are represented by 36 countries.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Global business is back. After limping through a worldwide financial crisis and economic slowdown, the 500 largest companies ranked by revenues shattered all sorts of performance records in 2013: They racked up combined revenues of $31.1 trillion, up 2.5% from 2012, and profits soared 27% to nearly $2 trillion. China’s 95 companies (up from 89 last year) posted $5.8 trillion in revenues. The U.S. has four fewer companies on the list than last year but remains (for now) the country leader, with 128 corporations on the list—including No. 1 Wal-Mart Stores—reporting $8.6 trillion in revenues. 

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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3M is a multinational conglomerate that manufactures industrial, safety, and consumer products. The company sells its merchandise through e-commerce and traditional wholesalers, retailers, and distributors. Founded in 1902 as the Minnesota Mining and Manufacturing Co., 3M is best known for its iconic Scotch tape and Post-it brands.

Q2 2026

Q1 2026

Q4 2025

Q2 2025

Q1 2025

Q4 2024

3M (MMM): Company Profile, Stock Price, News, Rankings

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Ladies and gentlemen, thank you for standing by. Welcome to the three ms Second 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 do have a question, please press star one on your telephone keypad. As a reminder, this call is being recorded Friday, 07/18/2025. I would now like to turn the call over to Chinmay Trevedi, Senior Vice President of Investor Relations and Financial Planning and Analysis at three

Good morning, everyone, and welcome to our quarterly earnings conference call. With me today are Bill Brown, three ms's Chairman and Chief Executive Officer and Anurag Maheshwari, our Chief Financial Officer. Bill and Anurag 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 3ms.com. Please turn to Slide two and take a moment to read the forward looking statements.

During today's conference call, we'll be making certain predictive statements that reflect our current views about three ms'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 Q 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 three and I will hand the call off to Bill. Bill?

Thank you, Chimei, and good morning everyone. We had another quarter of strong performance with second quarter adjusted earnings per share of $2.16 up 12% versus last year and above expectations. Organic sales growth was 1.5% with all three business groups reporting positive growth for the third quarter in a row. Operating margins increased two ninety basis points year on year through productivity and cost controls while we continue to invest in growth initiatives. And free cash flow was solid at $1,300,000,000 for the quarter and 110% conversion.

Our performance reflects the culture of excellence we're building inside the company as we continue to drive the rigor and op tempo necessary to deliver on our strategic priorities in this uncertain macro environment. As part of our commitment to innovation excellence, we're increasing the cadence of new product launches. In Q2, we launched 64 new products, up about 70% versus last year which puts us at 126 launches for the first half and on track to exceed our target of two fifteen for the year. The pipeline remains healthy and there is more rigor and discipline in the process with better business cases and higher launch schedule attainment. And most importantly, five year new product sales bottomed last year and was up 9% in the first half accelerating from Q1 into Q2 and tracking well to be up more than 15% for the year.

With 64 launches in the quarter there are a lot of exciting new products to discuss but let me take a moment to highlight just a few. In our fire safety business, we launched a low profile rugged air pack with updated electronics to enable telemetry and connectivity that has been well received by our largest firefighting customers, especially those who value compactness and maneuverability in small spaces. In our consumer business we've been building around the Filtree platform with four new product launches in the last six months including one with a reusable filter frame that can be refilled by a collapsible deplete filter, analogous to a razor razor blade model. This innovative design reduces shipping costs and saves retailers storage and shelf space. At the same time, we're continuing our focus on commercial excellence as we drive increased sales force performance, capture higher cross selling opportunities, improve price discipline and reduce churn.

You recall that our team in Safety and Industrial launched the program in U. S. Late last year and has now expanded this effort into Europe and Asia. We've trained over 400 sales managers and see early results through higher closed won opportunities and improved order rates. We now have 48 cross selling pairs identified about double since Q1 with a pipeline value of over $60,000,000 and $10,000,000 of new orders book to date.

We are tightening pricing controls by reducing price deviations and focusing on bigger deals with strategic customers. And we're reducing customer churn by leveraging our predictive analytics model to identify and win back customers at risk. SIBG has been first out of the gate on commercial excellence initiative and we're seeing promising early results with average daily order rates up low single digits in Q2. Our strategy is working and we're now extending this three ms enterprise wide commercial excellence model across the organization with transportation electronics quickly leveraging the learnings and best practices from SIBG while adapting it to the unique nature of a more spec in type business. Our second priority is operational excellence.

In the second quarter, we made good progress on several fronts including service, asset utilization and quality. On service, our on time and full metric reached 89.6%, the highest quarterly performance we've achieved in nearly six years and we exited June at just over 90%. Consumer and TEBG remained consistently above 90% and SIBG was 83% for the quarter improving more than 300 basis points year on year. Our overall equipment effectiveness metric was approximately 59% showing continued improvement both year on year and sequentially with a lot of runway ahead of us. We're now at the point where OEE is improving on a consistent basis through better tracking and deeper root cause analysis and it's highlighting potential capacity consolidation opportunities.

For example, a core manufacturing process at three ms is adhesive coating and we have about two fifty different types of coders throughout the network, some quite old and all expensive to replace. One of our larger coaters is in Knoxville, Iowa making fiber adhesive tapes. Through an extensive effort to reduce changeovers, increase operating speed and improve machine uptime, the team drove a 12 improvement in OEE and freed up enough capacity to retire two 70 year old coders at another facility. This is just one example of the broader opportunity at three ms to use a rigorous, methodical approach to get more production out of our higher capacity assets and proactively decommission aging, less productive assets in the network. This thinking can be extended to all of our core manufacturing processes, making, coating, slitting, packaging and over time more holistically to the design of our future network.

We're also making progress on quality. In the second quarter, our cost of poor quality was 6.1%, down 30 basis points sequentially and 90 basis points year over year. We are using AI enabled models to optimize machine settings for more efficient changeovers leading to better utilization and higher yield. Quality is a core element of our enterprise wide three ms Excellence operating model and we're extending our efforts to improve quality in every function and everything that we do. Our third priority is effective capital deployment.

In the first half of the year, we returned $3,000,000,000 to shareholders via dividends and share repurchases and we'll continue to be opportunistic on buybacks in the second half of the year while preserving balance sheet flexibility. In May, we announced a settlement with the State of New Jersey on PFAS claims taking the opportunity to settle both site specific and statewide claims with broad protections against future litigation and cash payments spread over twenty five years. We continue to manage other state, federal and international matters all of which are extensively covered in our 10 Q. On the back of the progress we're making on our priorities and the strong results in the first half, we're increasing our earnings guidance to a range of $7.75 to $8 now inclusive of the anticipated impact of tariffs. We expect organic growth to be approximately two percent for the year reflecting the current macro environment as we see it today.

Slide four highlights several of the key macro trends we're tracking and their impact on three ms. All metrics on the left reflect a global economy that remains sluggish and moving laterally, not materially improving or worsening. Our safety and general industrial businesses were up low single digits in the first half and are both beginning to see a pickup due to our commercial excellence initiatives. Auto will be flattish in the second half, a step up from the decline in the first half due to share gains in new models, while consumer electronics is likely to soften a bit in the back half due to slower demand for premium devices. Auto aftermarket will remain challenged and consumer will likely follow a similar pattern to the first half due to the subdued U.

S. Retail environment. As we navigate these uncertain times, we are focused on what we control, solving customer problems through innovation excellence, delivering high quality products on time to customers and driving efficiency and waste elimination all with a renewed sense of urgency that defines our new performance culture. And with that, I'll turn it over to Anurag to share the details on the quarter. Anurag?

Thank you, Bill. Turning to Slide five, we reported another quarter of strong profitable growth and robust free cash flow generation. Starting with the top line, all three business groups delivered positive year on year growth despite the fluid macro environment, resulting in total company adjusted organic growth of 1.5%. We saw continued momentum across electronics, general industrial and safety end markets, which was partially offset by known softness in auto and automotive aftermarket. Consumer was flattish as sentiment remains cautious.

By geography, our growth was led by China, up mid single digits with strength in industrial adhesives, films and electronics bonding solutions driven by strong commercial execution that led to share gains. The U. S. Was up low single digits, led by growth in Electrical Markets and Personal Safety, partially offset by weakness in Auto OEM and Aftermarket. Europe was flat with strength in Electrical Markets and Personal Safety, partially offset by weakness in Transportation Safety and Auto.

Q2 daily order trends were up modestly year on year driven by our progress on commercial excellence in the Industrials businesses, partially offset by weakness in consumer as retailers are watching to see how the season plays out. Our backlog continues to grow providing 20% to 25% coverage of third quarter sales. Q2 adjusted operating margins were 24.5%, up two ninety basis points and operating profit increased high teens or $225,000,000 in constant currency driven by continued strong operational performance. This included a $300,000,000 benefit from volume growth, broad based productivity, lower restructuring cost and equity comp timing, partially offset by $50,000,000 of growth investments and $25,000,000 from tariff impact and stranded cost headwind. Collectively, this contributed $0.31 to earnings, which was partially offset by $02 from FX and $06 from non operational below the line items.

Our strong operational performance resulted in overall adjusted EPS of 2.16 an increase of 12%. Relative to our initial expectations of approximately $2 this outperformance was driven by four factors. First, continued G and A efficiency as we make progress on IT optimization and lower indirect expenses. Second, metering of increase in year over year investments in response to a lower demand environment and evolving tariff landscape. Third, weakening of the U.

S. Dollar. Finally, we had a $06 benefit from the sale of an investment below the line, which was initially anticipated in the third quarter and offset the impact from tariffs and other below the line items. Free cash flow was $1,300,000,000 10% higher than last year as we benefited from strong earnings and we returned $400,000,000 to shareholders via dividends and executed on a $1,000,000,000 in gross share buybacks. For the first half, our gross buybacks were $2,200,000,000 I will provide a quick overview of our growth performance for each business group on Slide six.

Safety and Industrial organic sales grew for the fifth consecutive quarter, up 2.6% in Q2. This was broad based with six out of seven divisions posting positive results. Similar to the first quarter, industrial adhesives and tapes and electrical markets continued to perform well on the back of new product innovation and commercial excellence. It was encouraging to see abrasives turn positive as we launch new products and execute our commercial strategy to increase sales effectiveness. Auto aftermarket continued to see challenges down mid single digits amid industry pressure with collision repair claim rates down double digits year to date.

Transportation and Electronics adjusted sales were up 1% organically in Q2. Growth was led by commercial graphics and auto personalization driven by demand for a new product, the premium fleet wrap and expanding sales coverage. Electronics and Aerospace and Defense showed strength, while our auto OEM business was down low single digits, reflecting continued weakness in auto builds, particularly in Europe and The U. S, which were each down low single digits year on year. Finally, the consumer business was up 0.3% organically in Q2.

Though consumer sentiment remains soft, we continue to execute on growth initiatives including new product launches in Scotch Brite Kitchen Scouring, Scotch Blue Pro Sharp Painters Tape and Command, and continued service improvements and increase in advertising and merchandising investment. And along with organic growth, each business group expanded margins year on year, SIBG up three twenty basis points, TBG up two thirty basis points and CBG up three seventy basis points. Overall, our focus on delivering organic growth and improving operational excellence helped us deliver solid results in the first half, including growth of 1.5%, operating margin expansion of two fifty basis points to 24% and earnings growth of 11%. Before providing the details of our updated guidance, let me start with a reminder of how we framed it in April, which is the middle column on Slide seven. On organic sales growth, due to the soft macro, we indicated that we were trending to the lower end of our 2% to 3% range.

Our first quarter productivity gains were very strong, but given the dynamic environment, we did not flow through this outperformance into our guidance and maintained the EPS range at $7.6 to $7.9 Given that the tariff situation was uncertain, we kept tariffs out of the guidance range at the time, but estimated a gross impact of $0.60 or a net impact of $0.20 to $0.40 after mitigating actions. We have now updated the guidance to reflect our strong first half performance and have also incorporated the tariff impact. We are updating our organic revenue growth guidance to approximately 2% and expect all three business groups to grow low single digits for the year with a similar profile to the first half. On the back of a strong first half performance, we now expect margin expansion of 150 to 200 basis points and are increasing both the lower and higher end of our EPS range, which is a $0.13 increase at the midpoint, dollars $0.02 3 of that coming from operational performance, offset by $0.10 of FX and tariff impact. We now expect our free cash flow conversion to be higher than 100% building on strong first half performance, efficient CapEx and second half improvement in working capital providing us with further optionality on capital deployment.

Let me walk you through the drivers of the EPS guidance updated on Slide eight. First, we are flowing through $0.23 of operational improvements, which include actions to offset the tariff impacts. This is driven by $0.16 of productivity, which includes the G and A efficiency gains and $0.07 metered investments. As we highlighted previously, we are investing in a metered manner while maintaining the critical growth investments to support our strategic priorities. Finally, as mentioned, we have now included tariffs in the guidance, which is a gross headwind of $0.20 partially offset by the foreign exchange headwind reduction from $0.15 to $05 On the other non operational items, there is no change from the prior guidance.

Putting this all together, the EPS growth year on year is driven by strong operational improvement and we now expect an operational benefit of $0.95 to $1.2 partially offset by $0.50 of tariff, FX and non op headwinds for a total EPS growth of 6% to 10%. Regarding the second half, we expect year on year earnings growth of $0.18 at the midpoint. Similar to the first half, this includes an approximately $0.50 to $0.55 benefit from volume growth and continued productivity net of stranded cost and growth investments, which is partially offset by $0.03 0 to $0.35 of tariff impact and higher interest expense. Before we open the call for questions, I would like to acknowledge and thank the three ms team for their focus on operational excellence and controlling the controllables in a dynamic macro environment, which gives us confidence in meeting our increased guidance and delivering strong shareholder returns in 2025. With that, let's open the line for questions.

Our first question comes from the line of Scott Davis with Melius Research. Please proceed with your question.

Bill, can you talk about the new product plan and I guess kind of more specifically teasing out the impact on kind of margin versus growth and how you think about that tipping point where you can really start to see growth above your end markets. I'll just leave it that. Have a follow on.

So Scott, I'm glad you asked about R and D and NPI because it's been a very important initiative. And as I talked a year ago, this would take some time to materialize and we are starting to see some improvement on our five year sales. We talked about 9% up in the first half and quite good for the year going to 15%. So it's actually trending in the right way. I'm really excited about the fact that we're launching more products up 70% in the quarter and we did more in the first half or about as many in the first half as we did in 2023.

So the progress on that I think has been quite good. I think we should be expecting both improvements in growth from new product innovation as well as improving margin as you are bringing a product to market. Certainly as these things materialize and they stabilize in a factory, we are bringing better benefits to the customers. They should generate better pricing in the marketplace. So I do expect that we should see better margin performance from them, but really what we are focused on is delivering against customer expectations, beating the competition, regaining share of wallet and just getting back to that spirit of innovation at the company.

And as I said, I think the progress we have made so far has been fantastic. We are investing more in R and D, are shifting dollars, we are shifting resources into new product development as we talked a year ago. We are up about 150 people since Q4 of last year. So it takes some effort, it takes focus, takes following the metrics, but we're making good progress and we should see certainly growth and hopefully some margin benefit as well.

Okay, Bill. That's helpful. And I just want to follow on on that a little bit. I mean historically when you think about some of your customers have been tough to get price with auto, big box guys, mean just brutally hard. So is it have you found that new products are really going to be your only avenue of getting price for those guys?

Or because of the realities of inflation and tariffs and such, do you find it a little bit easier to capture a little bit of inflation impact from those guys also without new products?

So it's what we are seeing so far this year is pretty good progress on pricing and it's mostly coming out of the industrial businesses. I think you are right for auto where it's a spec in business as you win a spec you tend to have some value built into that. It's hard to determine how much is price versus the value that's there. Consumer, the big box people a little bit harder as you just pointed out. So it's a bit we are getting better price certainly on the industrial side and as I have said before, we are covering our inflation typically with a little bit more because of the tariff impacts coming through.

So we are doing pretty well this year on pricing again mostly on the industrial side.

Our next question comes from the line of Jeffrey Sprague with Vertical Research. Please proceed with your question.

Hey, Bill. Good morning. Maybe just pivot from the growth side to the cost side and what you're working on there. I'm wondering if you could just elaborate a little bit more on kind of the sources of operational upside in the footprint versus kind of G and A and the like. And I asked the question in the spirit, right?

The adjusted margins are moving up pretty nicely. We don't get an adjusted gross margin, for example. So how much of it's at the gross line? How much of it's kind of in G and A? And how do you see that playing out moving forward?

Okay, Jeff. So it's a good question and I'll start and maybe I'll ask Ganaragh to jump in on part of this. So for the year, it's about $05,000,000,000 of productivity, more or less about half is coming out of G and A and about half is coming out of our factories, of our supply chain which as we translated internally is running about 2% net of inflation which is about what we had expected. Inflation in the quarter, Q2 was a little bit higher than 2% and Q1 was a less than 2% for the fire staff it's around 2% for the year we are expecting about the same and again we are getting about 2% gross productivity, 2% net productivity on top of inflation. So it's actually been pretty good on supply chain side.

It's the elements that we have been talking about I alluded to in some of my prepared remarks, 40,000,000, 50,000,000 coming out of reduced cost per quality which has been a good trajectory that we've been on a long journey, lot more to do, good movement on procurement savings net of any inflationary pressures from our suppliers, Really good cost controls on the four wall size within our factories as well as in the logistics network as well. So overall about $250,000,000 really good progress on driving supply chain productivity And I'd say the same thing on the G and A side and I'll turn to Anurag to maybe say a couple of words of what's happening on the G and A side, but overall about $05,000,000,000 half G and A, half is supply chain.

Thanks, Bill. So Jeff, really encouraged by the performance and productivity just across both supply chain and on the G and A side and that gave us confidence to raise the EPS at the midpoint by about $0.13 Yes, so Bill spoke through the pieces on supply chain, very consistent to what we communicated and invested across the four buckets. On the G and A similarly at the Investor Day what we said is there are three areas where we would expect G and A savings to come out of. IT optimization where we spend close to $1,000,000,000 Second is indirect expenses where we spend more than $3,000,000,000 and then shared services. So where we are more of the opportunities coming is the first two buckets.

I think on the IT, the team has done a really, really good job. We take our IT expenses, it's broken into three categories, which is protecting, maintaining and investments, maintenance, which is about two thirds of it. The team has done a good job in terms of cloud mainframe network optimization, also looking at staff augmentation, the number of applications we have. So there is a whole bunch of tactical efforts that the team has gone through and done a good job. And what's also shown is not only is these savings which we can take in the quarter, but also long term structural savings that we can see and we are well down on that path.

On indirect, I mentioned in the last call as well, we have more visibility in terms of the data, where the spend is going. So first we look at whether it's aligned with our strategic priorities or not. If it's not aligned, then we don't need to spend. If it's aligned, what's the best way for us to procure and use the leverage of the enterprise. So I think it's moving quite well in that direction and shared services will take a little bit more time as we go down that path.

But overall, I would say very good performance and productivity.

And then Bill, maybe just back to growth as my follow-up. Just maybe your philosophy on sort of metering I get it the macro is not great and you're managing a complex P and L, but it's $07 right? I think we all would have been perfectly happy with the guide $07 lower than what you put out today. And you telling us, hey, we're keeping our foot on the gas on the investment.

So are these just kind of longer term things that weren't going to bear fruit in the near term anyhow? Again, maybe just your philosophy on that.

No, so Jeff, a good question. I mean, look at this very, very carefully and we were leaning in on making growth investments where we think there's a prudent payback in the near to medium term and if we see the macro not as strong as we had anticipated, we're pulling back a little bit, but still we're significantly investing in growth investments this year. The number is about $175,000,000 and when you parse that there is significant more in add and add merch, is more in the sales force, there is more going into R and D. As I mentioned, we're up 150 people there. Are pushing people from PFAS into R and D, into new product development as well.

So we are pushing up our R and D spend as a percentage of sales. All those pieces I think are going in the right direction and there are some things that are happening on the IT side that are systems related to driving growth. So all of those things we're trying to be smart and prudent and invest in to actually stimulate long term growth about recognizing where the macro happens to be today. So I think we're being balanced here Jeff. We look at it very carefully to the extent that things look a little bit better in the back half into '26 then we'll let a little bit more out but we watch it very carefully.

Our next question comes from the line of Julian Mitchell with Barclays. Please proceed with your question.

Hi, good morning. Maybe just wanted to start with the Slide four where you run through some of those macro buckets. And just trying to understand within general industrial and safety, is the improvement there based on sort of self help market share efforts at three ms? It sounded like that, but I wondered what you're assuming for the sort of core macro environment in the back back half and maybe just give us any understanding of how recent demand trends have evolved across different markets in the last couple of months.

Okay, Julien. So I'll start here and Anurag can jump in as well. I'm glad you pointed that chart out. We spent a lot of time putting together to make it as clear for investors as we can on what's happening in the macro as we see it and the impacts on the company. Look, as I mentioned in my script, the macro it's sluggish, it's moving laterally.

I went through some of the numbers there on what's happening with IPI, it's around 2%, it's sort of flattish, GDP is about the same, it's in mid-2s and about to be the same, maybe a little bit softer in the back half. PMI I mentioned is below 50, it's at 49, but it's contracting but not as much. So again things are just moving laterally, consumer remains relatively sluggish. And what you see on that slide four is momentum building inside the company on self help, on new product introductions, many of which will come out in the market, it will come in the first half of the year, will start to impact sales in the back half and the benefits of commercial excellence which is really starting to take hold inside the company. So general industrial includes parts of both SIBG and TEBG, so parts of those two businesses.

So it has abrasives, industrial specialties, roofing granules, electrical markets, a piece of the tapes business that goes into industrial products and then from TEBG includes advanced materials, aerospace and defense which actually we expect to grow pretty decently in the back half, consumer branding. So it's got commercial branding and transportation safety. So you have got all those pieces in there. It's about 38% to 40% of the company. So it's a pretty big part of it.

Again, the industrial IPI is moving somewhat laterally, but generally speaking the opportunities we are seeing here are principally coming from self help. There is some in the markets we know A and D is going to be picking up for us in the back half. It wasn't as strong in the first as we had expected some internal, some external issues, but we see that picking up for us in the back half. Electrical markets remain very robust for us. Again we expect that to be high single digits going into the back half.

So that's kind of a nutshell on the safety side or on the general industry side. On safety, we had a good start to the year. We see some acceleration in the back half. Part of it is from new product introduction in fire safety, SCBA, we have launched a new product that and we have had some big wins with government customers. So we do see the back half on safety accelerating there as well because of both a couple of wins that we have had but some new product introductions.

That's great. Thanks very much. And then just focusing a little bit on the second half guidance, often your third quarter earnings are up a little bit sequentially, but I understand you had that $06 gain moving into the second quarter. Maybe help us understand how we should be thinking about third quarter versus fourth quarter dynamics, anything to call out on sales or the margin progression?

Yes. Thanks, Julien. It's Anurag here. So listen, within the second half, let's just first start with the top line. Guidance for the full year is approximately 2% organic growth.

In the first half, we grew 1.5%. So that would imply a 2.5% growth in the back half. And we're expecting probably Q3 and Q4 to grow at the similar levels around there. In terms of EPS, Q3 is historically higher than Q4 and that's firstly because seasonally our revenue is higher in Q3 than in Q4 and also on the margin side it's higher. The ratio has been, if you look at the second half, 52 of the EPS of the second half is in Q3, about 48% is in Q4.

So we kind of expect the same trend this year as well.

Our next question comes from the line of Amit Mehrotra with UBS. Please proceed with your question.

Thanks. Morning everybody. I guess maybe just a separate topic talk about PFAS. I think there was obviously a nice settlement or not a nice settlement but a decent settlement size with the state of New Jersey. I think you have 30 more states still pending.

There's obviously a personal injury suit still outstanding. But just given the development in New Jersey and kind of the structure of that. And then you're obviously year to date exceeding your full year share buyback target. Maybe Bill talk about your freshest most updated thoughts on that because I still feel I still feel there's this overhang in the value of the company based on these pending liabilities. So I think it would be great to hear your thoughts on maybe how you view the progress on these and when you expect to maybe gain a little bit more full clarity on it.

Well, Amit, thanks for the question. And yes, so we did have a settlement with the state of New Jersey both for a specific site which we did not own. It's a Chemours DuPont site but there was some liability there as well as statewide claims. And we believe it was the right decision for the company and the shareholders to take risk off the table.

It spread cash out, cash payments out over the next twenty five years through 02/1950. So we thought that that was quite manageable. You are right, there is just over 30 other states AG cases both within the MDL and some outside of the MDL. We are taking them piece by piece. There is obviously lots of conversation going on with the AGs and the MDL in individual states.

So there is a lot of activity there And we're I just want to remind you we're exiting PFAS manufacturing by the end of this year. So there'll be no new molecules that the company's produced on PFAS going into the environment. These are all settling legacy issues and we are going to deal with this as best that we can. Personal injury is on the horizon. It is scheduled for in October.

There is a bellwether case. Will be kidney cancer. There will be one, two or three cases that we tried around October 20. There is a lot of conversation that's happening there as well. There is a science day on other things last month.

So there is a lot of activity here. We are managing it as best that we It's important for us to make sure that we maintain the cash flexibility to handle these issues as they come yet still invest in the growth of the company and that's what we're trying to do. Our balance sheet is very, very healthy. We have a lot of optionality on things that we can do and we are dealing with this and we communicate with investors with what we know as we know it and you see a lot of it in the 10 Q.

Okay. Helpful. Thanks. And then maybe just one for Anurag. Just circling back to the first half to second half cadence.

If I just kind of unpack the implied margin I mean I think the company did 24% in the first half guiding to 23 a little over 23 for the full year. So obviously that implies a step down in second half versus first half. But obviously revenue should be higher sequentially. So I'm just trying to kind of square that circle a little bit and understand why what are the puts and takes that actually take margin down 2H versus 1H when revenue is building sequentially?

Yes. Thanks Amit. So yes our first half margin is 24%. We are guiding between one hundred fifty two hundred for the year. So that would imply at the midpoint that the second half guidance would be around 22.5%.

And the delta between the two is you clearly see a pickup in volume, productivity should do well. It's essentially the tariff impact that we are seeing in the second half, which is more than 120 basis one and thirty basis points and also a pickup in investments and stranded costs. So that's a big delta between the first half and the second half, but volume productivity better. But if you take a step back and you look at it year over year, you're still seeing the second half margins go up by 110 basis points at the midpoint of our guidance and that's after absorbing tariff, after absorbing increase in stranded costs and higher investment. So it's pretty encouraging in terms of the performance of the second half which is obviously as we go into next year, we mitigate more of the tariff impact, there is more productivity that will come through.

So overall, the momentum in the second half operationally is similar to where we are in the first half.

Okay, got it. Thank you very much. Appreciate it.

Our next question comes from the line of Steve Tusa with JPMorgan. Please proceed with your question.

Just a quick one to start. What's the embedded assumption on Forex? I would have thought there was maybe a little bit more upside just given your exposure on the euro.

Yes. So on Forex, our headwind on the EPS for the year is about $05 On revenue, we think it's about flattish. And the reason there is a disconnect between the flattish on the revenue and the $05 headwind is just the impact of the year on year hedge benefit that we had last year. As you know, we hedge our non dollar currencies, which create a hedge benefit or a loss which lag to the currency movements. So last year in Q2, it produced a significant hedge benefit because of the strength of the dollar.

Now the dollar weakens in the second quarter, so the hedge benefit is modest. Which is why you see all of our FX headwind in the first half of the year, which is about $05 As you go into the second half, you should see that kind of normalize and for the full year it will be about $05 headwind on the FX side.

Okay. And then just as a follow-up on the consumer electronics side, I think you guys are maybe a little bit more bear it seems like on the trend there. Can you maybe talk about specifically where that weakness is on electronics?

So we see electronics, it's still up in the back half, it's just not as strong in the front half. When we look at the across all things TVs, tablets, phones, notebooks, everything is sort of softening towards the back end of the year at least that's what's been expected. We had a very strong year last year. So part of it is year over year comps, but started pretty good in the first half up mid single digits. Still up in the back half, but softening versus in terms of a rate basis versus the first.

Our next question comes from the line of Andrew Obin with Bank of America. Please proceed with your question.

Just a question. Can we just sort of say in terms of on time in full, I know that this was a big drag on top line and safety and industrial. What kind of impact to top line does it have as it's improving and you're sort of regaining traction with your medium and smaller customers? Can you quantify that? Are you seeing any discernible impact yet?

So we're not going to quantify it specifically because there is lot of factors into why customers may not buy from us because of OTIF, but improving it, delivering on time in full to customers is quite important. We know from talking to our end customers, element it is of churn, why customers leave us that number is across the company is pretty substantial. Are focused on this. We are trying to bring it down. One element is responsiveness and customer service, its quality, but importantly it's on time and full.

So clearly Andrew as we get better on that, that's going to allow us to reduce churn grow and we are starting to see benefits of lower churn in the back half. Think part of it probably is related to OTIF. It is hard to say exactly what part of it is though.

3M (MMM) Q2 2025 Earnings Call Transcript

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