3M 2005 Annual Report Download - page 4

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to our shareholders
When I joined 3M in December of last year, I knew I was becoming part of one
of the world’s finest companies. Everything I have observed and experienced
here has served to confirm that initial view. In fact, I am more convinced than
ever that 3M is indeed an excellent company, but more importantly, a very
strong company with the potential to become truly great in all aspects, and
especially in delivering sustainable and superior returns to our shareholders.
unique strengths
ingenious solutions
2
3M’s 2005 solid performance demonstrates the company’s broad strength
while auguring the promise of 3M’s future. For the year, sales reached
$21.2 billion, an increase of 5.8 percent over 2004. We generated $3.2
billion of net income, or $4.12 per share – an EPS increase of 9.9
percent. Operating profit margins grew nearly one percentage point
to 23.7 percent.
I am pleased that our local-currency sales growth was broad based, driven
by increases of 9.3 percent in Industrial, 6.9 percent in Safety, Security
and Protection Services, 5.0 percent in Transportation, and 4.2 percent in
Electro and Communications. I expect these figures to gather upward
momentum in the coming years as we focus on the next element of our
evolution as a company – growth.
All in all, I consider 2005 to have been a solid year for 3M. That said,
our efforts going forward will be focused on increasing 3M’s growth
momentum via several paths, including:
•A renewed focus on innovation and new products.
•Continued international expansion and penetration with greater
emphasis on localization. We already generate more than 60 percent
of our sales from outside the United States, with more than 20
percent coming from emerging markets.
•Increased focus on serving our customers better.
•Thoughtful building of the 3M brand, while using complementary
brands to grow market share, especially internationally.
•A clear acquisition strategy driven by a determination to quickly
add value.
We will pursue these avenues while maintaining the strong operating
discipline exhibited by 3Mers over recent years.
George W. Buckley
Chairman of the Board, President
and Chief Executive Officer