3M edging back to sales growth following years of restructuring, layoffs

Two years after launching a massive company restructuring and cutting 12% of its workforce, 3M is on the cusp of returning to annual sales growth.

The Maplewood-based manufacturer has steadily improved its performance since shedding 8,700 jobs and closing 75 offices, about a quarter of its global square footage. That equated to 0.1% quarterly sales growth to end 2024, with comparable profits rising 14% to $728 million.

But the company just missed posting its first full year of revenue growth since 2021, instead declining by 0.1%.

This will be the year 3M improves the top line, the company now says, predicting up to 3% organic sales growth for 2025 while continuing to grow earnings. The positive outlook boosted 3M’s stock price 4% Tuesday to close at $146.89.

“Our strong finish in the fourth quarter gives us confidence in our ability to deliver in 2025,” CEO Bill Brown said on a conference call Tuesday morning. “We’ll focus, as always, on what we can control.”

Brown’s top priority is sales growth as he seeks to reinvigorate 3M after years of litigation and dwindling innovation.

The company touted 1.3% of “adjusted” sales growth for the year, which excludes revenue from PFAS products 3M is phasing out of production through the end of this year.

A 32% increase in new product launches added some growth, surpassing high expectations for innovation Brown set last year. R&D spending, and hiring, also grew in the latter half of 2024.

“A lot of it is the enthusiasm of the team,” Brown said. “The ideas are there. The pipeline is full.”

Brown on Tuesday also reaffirmed the company’s longstanding commitment to 3M’s “15% Culture,” which lets employees spend 15% of their working hours to pursue passion projects.

“That’s a hallmark of the culture of the organization,” he said.

While the CEO called many of last year’s 169 new products “incremental” with low sales expectations in the near-term, in 2025, there should be more “higher-octane” launches with better prospects.

“We’d likely see more impact on the top line from these launches,” Brown said. “Growth in the near-term is going to come from selling more of what we have on the market today.”

3M set up an “aggressive” plan for sales and is pressing hard to improve on-time delivery from its factories, which has especially lagged in the safety and industrial segment and is losing 3M business.

Chief Financial Officer Anurag Maheshwari said the quarter overall “came in better than expected” across all three segments, which also includes the consumer business and the transportation and electronics area.

“All three business groups had positive adjusted organic growth in the quarter and performed better than our end markets,” he said.

The company’s best growth, for the year and especially the fourth quarter, came from Asia.

China is about 10% of 3M’s revenue, and Brown said the company will continue watching President Donald Trump’s tariff plans for effects on imported materials and parts. The larger issue for the year ahead in China, where 3M has several factories, is a weakening economy there.

“We do expect that our business in China will be slower,” Brown said.

Since spinning off its health care business in April and appointing Brown CEO in May, 3M stock has been on a tear. It is up 64% through the past 12 months as investors buy into a leaner and more focused company.

Adjusted earnings per share of $1.68 came in 2 cents above analyst expectations for the last three months of the year.

3M recorded $24.57 billion in revenue and a $4.17 billion profit for the full year.