3M (NYSE:MMM) executives said the company finished 2025 with what management described as “solid results” in the fourth quarter, highlighted by organic growth of 2.2%, an operating margin of 21.1%, earnings per share of $1.83, and free cash flow conversion of more than 130%.
Chairman and CEO Bill Brown said the quarter capped “a strong year” in which organic sales growth exceeded 2%, improving from 1.2% organic growth in 2024 and negative growth in 2023. Brown attributed the performance to a commercial excellence effort and an emphasis on innovation, alongside operational improvements that he said are becoming embedded across the enterprise.
Quarterly and full-year performance highlights
Maheshwari also noted a $55 million charge in the quarter related to transformation investments to redesign manufacturing, distribution, and business process services and locations, which he said would be excluded from adjusted results.
For full-year 2025, management reported:
- Organic sales growth of 2.1%
- Adjusted operating margin of 23.4%, up 200 basis points year over year
- Adjusted EPS of $8.06, up 10% (which Brown described as double-digit growth)
- Free cash flow conversion slightly above 100%
Maheshwari said the year’s operating profit growth of about $650 million at constant currency was driven by $200 million from volume growth and $550 million of net productivity across supply chain and SG&A, partially offset by headwinds that included growth and productivity investments, stranded costs, and tariff impacts. The company returned $4.8 billion to shareholders in 2025, including $1.6 billion in dividends and $3.2 billion in gross share repurchases.
Commercial excellence, innovation, and operational metrics
Brown said 3M has been building a commercial excellence foundation around sales effectiveness and pricing governance, closer collaboration with channel partners, and increased customer loyalty. He said the company developed more than 600 joint business plans and closed nearly $50 million of annualized cross-selling wins, with what he described as a robust pipeline.
On innovation, Brown said 3M launched 284 new products in 2025, up 68% versus 2024 and more than double the launches in 2023. He said the company expects 350 launches in 2026. Brown added that sales from products launched in the last five years were up 23% for the full year and “exited Q4 at 44%,” and that the company’s new product vitality index ended the year at 13%.
Brown also highlighted operational metrics the company tracks, including on-time in-full delivery (OTIF), overall equipment effectiveness (OEE), and cost of poor quality. He said OTIF ended the year above 90%, up 300 basis points from the prior year and sustained for seven consecutive months. OEE ended at about 63%, up more than 300 basis points across assets covering 70% of production volume. Brown said cost of poor quality improved to 6% of cost of goods, down 100 basis points year over year, with a target of 5.4% in 2026 and less than 4% over time.
Segment trends: strength in industrial and electronics, consumer softness
Management said 3M outperformed a “soft” macro environment, particularly in industrial and electronics areas, while calling out consumer and roofing granules weakness.
In Safety and Industrial (SIBG), Maheshwari said fourth-quarter organic sales increased 3.8%, driven by high-single-digit growth in safety and high-single-digit growth in industrial adhesives and tapes. Abrasives posted mid-single-digit growth. He said these gains more than offset weakness in automotive aftermarket and “incremental weakness” in roofing granules tied to the slow housing market and weak consumer sentiment. For the full year, SIBG grew 3.2%, with growth accelerating to 3.9% in the second half from 2.5% in the first half.
In Transportation and Electronics (TBG), Maheshwari said fourth-quarter organic sales increased 2.4%, driven by momentum in electronics and aerospace. He said auto (including commercial vehicles in 3M’s structure) was down high teens in the quarter. Electronics gained share, supported by demand for film technologies and optically clear adhesives, and Maheshwari said 3M partnered with leading consumer electronics brands to deliver solutions aligned with their portfolio needs. Aerospace delivered another strong quarter, helped by demand for space materials and strength in defense-related markets; Maheshwari said aerospace sales have doubled over the last four years. For full-year 2025, TBG grew 2%.
In Consumer (CBG), Maheshwari said fourth-quarter organic sales declined 2.2%, which was weaker than the company had expected after modest growth earlier in the year. He attributed the decline to weaker consumer sentiment and sluggish U.S. retail traffic, which pressured point-of-sale trends in discretionary categories. He said this weakness was partially offset by new products, increased advertising and promotional investments in the U.S., and growth in Asia and Latin America. Full-year CBG revenue declined 0.3%.
2026 outlook: ~3% organic growth and margin expansion
Looking ahead, Brown and Maheshwari said 3M expects organic sales growth of approximately 3% in 2026, adjusted operating margin expansion of 70–80 basis points, EPS of $8.50–$8.70, and free cash flow conversion greater than 100%. Management said it is planning for a macro environment similar to 2025, while monitoring “watch items” including the pace of a U.S. consumer recovery, auto build rates, and consumer electronics trends.
Maheshwari said the company expects sales to accelerate for all business groups, including a return to growth for consumer. He also said the business groups combined are expected to expand margins by more than $450 million, including $875 million from volume growth and net productivity, partially offset by headwinds including PFAS stranded costs, tariff impacts, and a planned increase in growth and productivity investments to $225 million. Maheshwari added that corporate and other income is expected to be lower by $50 million to $75 million, largely due to the wind down of transition services agreements related to Solventum.
On capital returns, Maheshwari said 3M plans gross share repurchases of about $2.5 billion in 2026.
During the Q&A, Brown said 3M’s “priority verticals” represent a little north of 60% of revenue, and that about 80% of R&D spending is aligned to new product initiatives in those verticals. He also said the company has previously described roughly 10% of the company as “more commodity-like” businesses that may be evaluated over time as the portfolio evolves.
Executives also discussed customer inventories, calling industrial channel inventories “pretty normalized” at roughly a 60-day range and saying consumer inventories, while elevated early in the quarter, began to normalize with stronger December performance. On pricing, management said 2025 pricing was lighter than expected due to consumer promotions but characterized pricing in SIBG as solid, and said it expects roughly 80 basis points of pricing in 2026.
On transformation and footprint optimization, Brown said 3M ended 2025 with around 108 factories and noted that several would come out with the sale of Precision Grinding and Finishing, bringing the count to roughly 100 factories. He said the network will come down over time and that the company expects to consolidate factories and distribution centers, but did not provide specific facility targets.
About 3M (NYSE:MMM)
3M Company, originally founded in 1902 as the Minnesota Mining and Manufacturing Company, is a diversified global technology and manufacturing firm headquartered in St. Paul, Minnesota. Over its history the company has expanded from mineral mining into a broad portfolio of industrial, safety, healthcare and consumer products, building a reputation for applied science and product innovation across many end markets.
3M’s businesses span a wide range of product categories including adhesives and tapes, abrasives, filtration and separation technologies, personal protective equipment such as respirators, medical and dental products, industrial and automotive solutions, and a suite of consumer brands (for example, well-known office and home products).
