3M Company (NYSE:MMM) Q3 2018 Earnings Conference Call - Final Transcript

Oct 23, 2018 • 09:00 am ET

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3M Company (NYSE:MMM) Q3 2018 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

[Starts Abruptly] As a reminder this conference is being recorded Tuesday, October 23rd, 2018.I would now like to turn the call over to Bruce Jermeland, Director of Investor Relations at 3M.

Executive
Bruce Jermeland

Thank you, and good morning everyone. Welcome to our third quarter 2018 business review. With me today are Mike Roman, 3M's Chief Executive Officer and Nick Gangestad, our Chief Financial Officer. Mike and Nick will make some formal comments and then we'll take your questions. Please note that today's earnings release and slide presentation accompanying this call are posted on our Investor Relations website at 3M.com under the heading Quarterly Earnings.

Before we begin, let me remind you of the dates for our upcoming Investor events found on slide 2. First, we will be hosting an Investor Day at our headquarters in St. Paul, Minnesota in a few weeks with a welcome reception in the evening of Wednesday, November 14th, where we will be highlighting how 3M science is advancing our priority markets for growth along with the formal presentation program on Thursday, November 15th. The presentations we'll discuss; our new five-year plan along with a preview of our 2019 outlook. If you plan to attend the event and have not yet responded, please RSVP right away.

Second, our Q4 earnings conference call will take place on Tuesday, January 29th, 2019. Please take a moment to read the forward-looking statement on slide 3. During today's conference call, we will make certain predictive statements that reflect our current views about 3M'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-K lists some of the most important risk factors that could cause actual results to differ from our predictions.

Please note that throughout today's presentation, we will be making references to certain non-GAAP financial measures. Reconciliations of the non-GAAP measures can be found in the appendices of today's presentation and press release.

Please turn to slide 4, and I'll hand off to Mike. Mike?

Executive
Mike Roman

Thank you, Bruce. Good morning everyone and thank you for joining us. In the third quarter, 3M delivered a double-digit increase in cash flow and earnings per share along with strong margins, despite slower growth. We also continue to execute on business transformation while deploying capital to invest in our future and return cash to our shareholders.

Looking at the numbers, our team posted total sales of $8.2 billion in the quarter. We delivered organic growth of 1%, which is on top of 7% growth in last year's third quarter. As you recall from the discussion on our July earnings call, our ERP rollout in the US resulted in revenue shifting between Q2 and the second half of the year. Today, we estimate the pull forward into Q2 was approximately 100 basis points with the vast majority coming out of Q3.

Moving on to earnings per share; we posted EPS of $2.58, an increase of