3M preaches AI, automation, cost-savings, innovation and more at investor meetup

Much has changed at 3M since the company last hosted a major investor gathering in 2022: the health care spinoff, lawsuit settlements, layoffs and a major restructuring.

Shareholders haven’t changed their core desire, however: consistent returns.

“The question I’m asked: What’s different this time? How is this going to be different?” CEO Bill Brown told an audience of investors and analysts Wednesday morning. “... It’s really about a mindset shift, and when it finally sinks in, the results follow, and I’m starting to see it here today.”

Wednesday’s event gave the company’s shareholders a glimpse of the Maplewood company’s grand ambitions through the next few years and why Brown is “really enthusiastic about the opportunities ahead.”

“I’ve done this before,” said Brown, referring to the culture change underway. “I’ve seen how it can work, and I’m confident this is going to move the needle for 3M as well.”

Here were some of the big talking points of the day, from potential cost-savings to new products and streamlined operations:

3M has 80 projects underway this year to automate work in factories that will reduce head count by 700 people. The company expects those reductions to happen through normal attrition over time.

More automation could be on the way.

“We need to have standardized automation solutions that we can roll out faster across more plants simultaneously,” said Peter Gibbons, group president of enterprise supply chain.

The company intends to save $300 million through a combination of automation and other cost-saving efforts at its manufacturing facilities around the world.

“I think there’s a lot of opportunities for us to streamline the process,” said Chief Financial Officer Anurag Maheshwari. “This will not only bring down the cost, but it’s also going to improve customer satisfaction, turnaround time and lead time.”

Gibbons also pledged a 95% on-time-in-full rate. Last year, 88% of the company’s shipments qualified as such, which Brown said needs to improve, as it is currently costing the company business.

Gibbons is retiring in April “for personal reasons,” Brown said Wednesday. Torsten Pilz, currently the chief supply chain officer at Honeywell, will take the position when he joins 3M in May.

3M plans to introduce 1,000 new products in the next three years.

That’s a sweltering pace compared to the 169 new products launched in 2024, which was already a turnaround from years of declining innovation.

Company leaders want to see more swings, no matter how small, to make it happen.

“Over time, we kind of lost our focus on making the small bets on innovation that you have to do: introducing a product, learning from it, iterating on it,” said John Banovetz, 3M’s chief technology officer.

It’s not an unprecedented rate of product launches. In 2018, the company had 454 new releases.

“If we’re shifting the resources and building capacity, it can happen,” Banovetz said.

Artificial intelligence will play a major role in meeting the new-product goal and “fundamentally change how we do research,” Banovetz said, adding it will ultimately reduce “time and cost.”

On time, the company aims to reduce how long it takes to commercially launch a new product from up to 14 months down to nine to 10 months.

By 2027, 3M expects $5 billion in sales should come from products introduced in the previous five years. That’s more than twice the rate of new product sales in 2024.

3M sells thousands of individual products. Some need more investment to really shine; some might be better off at a different company, Brown said.

“We need to systematically shift our portfolio toward high growth, high return markets,” he said. “The plan there is to invest our dollars there, shift and invest our time in those businesses where we have a right to win.”

That might mean small, “bolt-on” acquisitions in the coming years.

“The other end of the spectrum are the businesses where we have slower growth or lower margins,” Brown said. “They’re more commodity-like, we have a limited right to win.”

3M will look at divesting some of those businesses, but Brown stressed that will happen “over time.”

“The focus right now really is around organically investing in the company, returning cash to shareholders, evaluating what we can do for divestitures to gradually shift the portfolio,” he said.

3M reiterated its 2025 guidance Wednesday, with earnings per share estimated between $7.60 and $7.90, up from $7.30 last year.

Organic sales growth — which does not include divestitures, acquisitions and other special items — should reach 2% to 3%.

For 2026 and 2027, sales growth is expected to trend better than the economic environment might otherwise allow.