3M 2012 Annual Report Download - page 31
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Consumer and Office Business (14.4% of consolidated sales):
2012
2011
2010
Sales (millions)
$
4,316
$
4,153
$
3,853
Sales change analysis:
Organic local currency
3.8
%
4.0
%
7.1
%
Acquisitions
2.0
1.4
2.9
Translation
(1.9)
2.4
1.0
Total sales change
3.9
%
7.8
%
11.0
%
Operating income (millions)
$
930
$
840
$
840
Percent change
10.8
%
―
%
12.3
%
Percent of sales
21.6
%
20.2
%
21.8
%
The Consumer and Office segment serves markets that include consumer retail, office retail, home improvement, building
maintenance and other markets. Products in this segment include office supply products, stationery products, construction
and home improvement products (do-it-yourself), home care products, protective material products, certain consumer
retail personal safety products, and consumer health care products.
Year 2012 results:
Sales in Consumer and Office totaled $4.3 billion, up 3.9 percent in U.S. dollars. Organic local-currency sales increased
3.8 percent, acquisitions added 2.0 percent, and foreign currency translation reduced sales by 1.9 percent. Organic local-
currency sales growth was led by the consumer health care and construction and home improvement businesses.
Organic local-currency sales increased slightly in stationery and office supplies, impacted by continued softness in the
office wholesale and retail markets. Acquisition growth was largely due to the October 2011 acquisition of the do-it-
yourself and professional business of GPI Group. GPI is a manufacturer and marketer of home improvement products
such as tapes, hooks, insulation and floor protection products and accessories. The addition of GPI’s products expands
3M’s product portfolio in core and complementary categories in the construction and home improvement markets.
On a geographic basis, organic local-currency sales increased 9.5 percent in Latin America/Canada, 5 percent in Asia
Pacific, and 4 percent in the United States. EMEA organic local-currency sales decreased 2 percent.
Consumer and Office operating income increased 10.8 percent to $930 million. Operating income margins were 21.6
percent, compared to 20.2 percent in 2011, as all businesses and major geographic areas posted operating income
increases. Consumer and Office benefited from the combination of selling price increases and raw material cost
decreases, in addition to cost-control efforts.
In December 2011, 3M (Consumer and Office Business) entered into a definitive agreement to acquire the Office and
Consumer Products business of Avery Dennison Corp. (Avery). 3M and Avery withdrew from the regulatory approval
process for this acquisition in September 2012 and subsequently announced that they had terminated this agreement in
October 2012.
Year 2011 results:
Sales in Consumer and Office increased 7.8 percent in 2011 to $4.2 billion, with all businesses posting positive sales
growth. Organic local-currency sales increased 4.0 percent and acquisitions added 1.4 percent. Acquisition growth was
largely due to the October 2011 acquisition of the do-it-yourself and professional business of GPI Group and the
April 2010 acquisition of the A-One branded label business and related operations. A-One is the largest branded label
business in Asia and the second largest worldwide. 3M also acquired Hybrivet Systems Inc. in the first quarter of 2011, a
provider of instant-read products to detect lead and other contaminants and toxins. Foreign currency impacts contributed
2.4 percent to sales growth in the Consumer and Office segment.
On a geographic basis, sales increased in all regions, led by Asia Pacific, Latin America/Canada and Europe, which all
had sales growth rates in excess of 10 percent. U.S. sales also grew, albeit at a slower rate.
Consumer and Office operating income was flat when comparing 2011 to 2010, reflecting continued ongoing investments
in developing economies in brand development and marketing and sales coverage. Even with these investments,
Consumer and Office generated operating income margins of 20.2 percent.