Professional Documents
Culture Documents
Annual Report 2014 (Chairman's Message) : Strategic Levers Power Us Forward
Annual Report 2014 (Chairman's Message) : Strategic Levers Power Us Forward
Annual Report 2014 (Chairman's Message) : Strategic Levers Power Us Forward
Overall, I am very pleased with our progress in 2013. We delivered good broad-based
performance while investing and building for long-term success. We continue to be inspired and
motivated by our vision.
Sales for the year were $32 billion, an all-time high. Earnings-per-share rose to $7.49.
We expanded operating income to more than $7 billion, and operating margins to 22.4
percent.
• Our earnings-per-share growth target is 9 to 11 percent per year, on average;
in 2014, earnings-per-share grew 11.5 percent.
• Our organic growth target is 4 to 6 percent per year, on average;
in 2014, we grew 4.9 percent organically.
• Our target for Return on Invested Capital is approximately 20 percent;
in 2014, we achieved 22 percent.
• Our Free Cash Flow Conversion target is approximately 100 percent;
in 2014, we hit 104 percent.
.
Strategic Levers Power Us Forward
In last year’s letter, I highlighted 3M’s three strategic levers: Portfolio Management,
Investing in Innovation and Business Transformation. In 2014, those levers continued to
not only drive results today, but also strengthen our foundation for long-term prosperity.
The first lever is Portfolio Management. Core to 3M is our culture of continuous
improvement, which includes actively managing and enhancing our portfolio. Since
2012, for example, we’ve realigned from six sectors to five business groups, and
from 40 businesses to 27. In 2014 alone, we combined businesses within three of our
business groups to increase customer relevance, build scale and drive efficiencies.
Mergers and Acquisitions are another piece of portfolio management. Last year we
invested $1 billion in acquisitions, including acquiring the remaining 25 percent of our
Sumitomo subsidiary. 3M now has full control of one of our largest and most successful
subsidiaries, and we look forward to growing that business even further into the future.