3M 2010 Annual Report Download - page 27

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21
Industrial and Transportation Business (32.2% of consolidated sales):
2010
2009
2008
Sales (millions) ............................................................................
$
8,581
$
7,232
$
8,294
Sales change analysis:
Organic local-currency sales (volume and price) .........
17.3
%
(12.8
)%
0.2
%
Acquisitions ........................................
0.2
2.6
4.6
Local-currency sales .................................
17.5
%
(10.2
)%
4.8
%
Translation .........................................
1.2
(2.6
)
3.0
Total sales change ....................................
18.7
%
(12.8
)%
7.8
%
Operating income (millions) ...............................
$
1,799
$
1,259
$
1,568
Percent change .......................................
42.9
%
(19.7
)%
(1.4
)%
Percent of sales ......................................
21.0
%
17.4
%
18.9
%
The Industrial and Transportation segment serves a broad range of markets, such as appliance, paper and
packaging, food and beverage, electronics, automotive original equipment manufacturer (OEM) and automotive
aftermarket (auto body shops and retail). Industrial and Transportation products include tapes, a wide variety of
coated and non-woven abrasives, adhesives, specialty materials, filtration products, energy control products, closure
systems for personal hygiene products, acoustic systems products, and components and products that are used in
the manufacture, repair and maintenance of automotive, marine, aircraft and specialty vehicles.
Year 2010 results:
Sales in Industrial and Transportation increased 18.7 percent to $8.6 billion. In local-currency terms, sales increased
17.5 percent, driven almost entirely by organic volume. Foreign currency impacts added 1.2 percent to 2010 sales
growth. Geographically, local-currency sales growth increased in all major geographic regions, led by Asia Pacific.
Local-currency sales growth was broad-based across the portfolio, led by renewable energy, automotive OEM,
energy and advanced materials, aerospace, abrasives systems, and industrial adhesives and tapes.
Operating income increased 43 percent to $1.8 billion in 2010, with operating income margins of 21.0 percent. In
2009, this business segment recorded charges of $89 million related to restructuring actions, with this charge
comprised of employee-related liabilities for severance and benefits of $84 million and fixed asset impairments of $5
million.
Industrial and Transportation continues to invest aggressively to accelerate its growth capability. In February 2011,
3M completed its acquisition of the tape-related assets of Alpha Beta Enterprise Co. Ltd., a leading manufacturer of
box sealing tape and masking tape headquartered in Taipei, Taiwan. In addition, in December 2010, 3M announced
that it had entered into an agreement to acquire Winterthur Technologies AG (Winterthur) by way of a public tender
offer. The associated offer period was extended to February 25, 2011 (refer to Note 2 for additional information).
Winterthur, based in Zug, Switzerland, is a leading global supplier of precision grinding technology serving customers
in the area of hard-to-grind precision applications in industrial, automotive, aircraft, and cutting tools. Capital
spending in the Industrial and Transportation business included solar energy in the U.S. and industrial adhesives and
tapes in China. Capital spending on these projects will carry over into 2011.