Business News
3M to Outline Actions to Address Uncertain Global Economy
Tuesday 09. December 2008 - Company Adjusts 2008 Guidance; Provides 2009 Outlook
At an institutional investor and analyst meeting in New York later today, 3M chairman, president and CEO George Buckley will reiterate the companys long-term commitment to investing in its core businesses and will outline ongoing actions to address a turbulent global economy.
Buckley will reaffirm 3Ms commitment to its core businesses and to continued investments in emerging markets, such as China, India, the Middle East and Latin America, and its efforts to improve its supply chain and capital efficiency.
He will also report on aggressive cost-reduction actions in developed economies. These actions include additional restructuring in these markets, deferred merit increases, aggressively reducing indirect costs and adjusting capital expenditures.
“Clearly, the current market challenges require intense focus on cash management and on strengthening 3Ms operational execution,” said Buckley. “3Ms strong financial position, our continued investment in R&D and our operational discipline will allow us to take advantage of market opportunities in this environment.”
In the fourth quarter alone, 3M reduced nearly 1,800 positions across the company, mainly in the developed economies of the U.S., Western Europe and Japan. These actions are expected to provide benefits of $170 million in 2009. The company is also rationalizing 10 manufacturing, technical and office facilities around the world.
“During these difficult economic times, we will continue to aggressively manage our costs,” added Buckley. “We are prepared to implement additional restructuring as economic conditions dictate.”
As a result of economic realities such as the expected 10% decline in Q4 organic volume and the negative effects of currency, the company adjusted its full-year 2008 guidance from an earlier estimate of $5.40 – $5.48 per share to a revised estimate of $5.10 – $5.15 per share, excluding special items. Refer to 3Ms October 21, 2008 press release for a complete list and explanation of special items for the first nine months of 2008.
Given the uncertain duration and depth of the global slowdown, the company estimates full-year 2009 organic volumes to decline in the range of -3% to -7%. In addition, foreign exchange impacts are expected to reduce sales in the range of -6% to -7%. 2009 earnings are estimated to be in the range of $4.50 to $4.95 per share and margins are expected to be consistent with 2008 levels, excluding special items.