3M 2Q17 Earnings Call Notes

Inge G. Thulin – 3M Co.

Germany is doing well

“I would say the comment relative to West Europe specifically is more around, I think Germany is still doing well. And if you look upon our figures and the way we do business over there, if you take manufacturing PMI in Germany, the second quarter was 59%, if you compare that to like 50% and 51%, 52% for China. So Germany, by definition, which is a big engine in Europe are doing well in the manufacturing side. And our business in Europe, if you look upon the portfolio, Industrial business is very strong.”

Nicholas C. Gangestad – 3M Co.

Two things have changed from first quarter on pricing power

“two main things that have changed from first quarter are strong growth in electronics which was much more of a price down that the other businesses that we saw that strong volume growth there contributed to more negative price growth in Asia Pacific. And then in Latin America, where we often see price growth often driven by a weakening currencies against the U.S. dollar, we saw much more stable currencies there versus the U.S. dollar, so some of the corresponding price growth we see didn’t materialize.”

Core price growth at the low end of expectations

“The core price growth and this gets into what we saw in the United States. Core price growth, we traditionally see somewhere between 30 basis points and 50 basis points of core price growth. In the U.S., we see ourselves now tracking to the low end of what we’ve been expecting for price growth. We expect it to be closer to flat for the total year in the U.S”

Slightly tougher comps for Electronics and industrial in 2H

“when it comes to the comps, there’s a couple of different things going on. One, like for instance our Electronics and Industrial, both of those, I agree with you, we’re going to have slightly tougher comps in the second half of the year. In the case of Consumer and in Health Care, both of those will be seeing easier comps. I wouldn’t call it a big statement on our fact that we’re seeing an improving economy. We’re seeing a fairly stable economy outlook for the balance of the year.”