3M 2011 Annual Report Download - page 34

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28
businesses, which each had local-currency sales growth of greater than 25 percent. 3M also saw strong growth in
the electrical markets business. 3M’s telecom infrastructure-related business increased slightly year-on-year.
Operating income was $670 million in 2010, or 22.0 percent of sales, which was significantly improved versus 2009
as the consumer electronic-related businesses showed significant year-on-year improvements. In 2009, this business
segment recorded charges of $11 million related to restructuring actions, with this charge comprised of employee-
related liabilities for severance and benefits.
PERFORMANCE BY GEOGRAPHIC AREA
While 3M manages its businesses globally and believes its business segment results are the most relevant measure
of performance, the Company also utilizes geographic area data as a secondary performance measure. Export sales
are generally reported within the geographic area where the final sales to 3M customers are made. A portion of the
products or components sold by 3M’s operations to its customers are exported by these customers to different
geographic areas. As customers move their operations from one geographic area to another, 3M’s results will follow.
Thus, net sales in a particular geographic area are not indicative of end-user consumption in that geographic area.
Financial information related to 3M operations in various geographic areas is provided in Note 18. Operating income
results by geographic area were significantly impacted by restructuring and other items. In 2009, restructuring
actions, partially offset by a gain on sales of real estate, decreased worldwide operating income by $194 million, with
the largest impact in Europe, Asia Pacific and the United States.
A summary of key information and discussion related to 3M’s geographic areas follow:
2011
United
States Asia Pacific
Europe,
Middle East
and Africa
Latin
America/
Canada
Other
Unallocated Worldwide
Net sales (millions) ...... $ 10,028 $ 9,108 $ 7,076 $ 3,411 $ (12) $ 29,611
% of worldwide sales . . 33.9% 30.7 % 23.9 % 11.5 %
—
100.0 %
Components of net sales
change:
Volume — organic ...... 4.0% 3.5 % 1.6 % 7.4 %
—
3.7 %
Price .................. 1.9 (1.4 ) 1.6 3.5
—
1.0
Organic local-currency sales
5.9 2.1 3.2 10.9
—
4.7
A
cquisitions ............ 3.0 3.5 4.6 1.1
—
3.3
Local-currency sales .... 8.9 5.6 7.8 12.0
—
8.0
Translation .............
—
4.7 5.3 3.6
—
3.1
Total sales change ...... 8.9% 10.3 % 13.1 % 15.6 %
—
11.1 %
Operating income (millions) $ 1,629 $ 2,523 $ 1,150 $ 896 $ (20) $ 6,178
Percent change ....... (0.4)% 5.1 % 3.4 % 12.3 %
—
4.4 %
For total year 2011, as shown in the preceding table, sales rose 11.1 percent, with organic volume increases of 3.7
percent, selling price increases of 1.0 percent, acquisitions of 3.3 percent, and foreign currency effects of 3.1
percent. Every major geographic region expanded sales, with total sales in Latin America/Canada up 15.6 percent,
Europe, Middle East and Africa up 13.1 percent, Asia Pacific up 10.3 percent, and the United States up 8.9 percent.
For 2011, international operations represented 66.1 percent of 3M’s sales.