3M CO Q1 FY2026 earnings call

• Delivered solid operating performance in Q1 with EPS $2.14 up mid-teens, operating margin 23.8% up 30bps, free cash flow over $500M up double digits. • Returned $2.4B to shareholders. • Organic growth 1.2% with encouraging order trends. • Strong execution on productivity, cost discipline, commercial rigor. • Introduced AI tools for growth, reduced churn, automated work. • Accelerated new product introductions with 84 launched in Q1, on pace for 350 in 2026. • Maintained OTIF service levels >90%, reduced inventory 3 days, delivery lead time 25%, OEE up over 100bps, cost of poor quality down ~100bps. • Announced acquisition of Madison Fire & Rescue to create leading global fire and safety business. • Growing data center and associated power utility business with EBO product.

Safety and Industrial had over 3% growth, driven by commercial excellence and new product launches. Transportation and Electronics had flat growth but orders up low teens with backlog up ~30%. Consumer had organic sales down 1% with some pockets of strength. Organic growth was 1.2% overall. SIBG grew over 3%, TEBG was flat, CBG down 1%. Orders grew over 10% with SIBG and TEBG growing mid-teens.

• Reiterating full year 2026 guidance: organic sales growth ~3%, EPS $8.50 - $8.70, free cash flow conversion >100%. • Sales expected to accelerate in Q2 and back half of year. • Margins expect ~100bps expansion for business groups. • FCF expected >$4.5B for year. • Contingency in EPS guidance due to volatile macro environment.

• Macro environment volatility. • Oil price impact on input costs. • Supply chain risks including potential bottlenecks in sulfur, helium, methanol derivative chains. • Uncertainty in consumer spending and industry-specific softness in certain segments like consumer electronics and auto.

Q: Jeff Sprague asked about pre-buy, size, and backlog visibility.

A: Bill and Anurag discussed pre-buy related to price increases, backlog growth and its significance.

Q: Scott Davis asked about factory footprint.

A: William Brown talked about factory footprint reduction and ongoing efforts.

Q: Julian Mitchell asked about Q2 dynamics and EPS.

A: Anurag Maheshwari provided details on Q2 revenue growth, margin and EPS expectations.

Q: Joseph O'Dea asked about oil exposure and commercial excellence in T&E.

A: Anurag and William Brown answered on oil impact and progress in T&E commercial excellence.

Q: Andrew Obin asked about consumer electronics strategy and R&D.

A: William Brown discussed consumer electronics strategy and R&D efforts.

Q: Andrew Kaplowitz asked about Consumer portfolio management.

A: William Brown talked about Consumer performance and portfolio management.

Q: Chigusa Katoku asked about contingency removal and macro outlook.

A: Anurag Maheshwari responded on contingency and macro trends.

Q: Nigel Coe asked about pre-buy and price surcharge.

A: William Brown discussed pre-buy and price surcharge details.

Q: Christopher Snyder asked about pricing and delivery.

A: William Brown and Anurag Maheshwari answered on pricing rollout and delivery.

Q: Amit Mehrotra asked about growth algorithm.

A: Anurag Maheshwari spoke on growth outlook.

Q: Deane Dray asked about POS momentum and EBO.

A: William Brown discussed POS momentum and EBO opportunities.

Q: Nicole DeBlase asked about margin puts and takes.

A: Anurag Maheshwari and William Brown answered on margin related aspects.

Q: Laurence Alexander asked about supply chain bottlenecks.

A: William Brown addressed supply chain bottleneck concerns