3M 2005 Annual Report Download - page 48

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22
In 2005, local-currency sales in Electro and Communications increased 4.2%, with improving end market conditions
and success driving existing products into new applications helping the business post its best local-currency growth
since 2000. Local-currency growth accelerated in the second half of 2005, with local-currency growth in the fourth
quarter of 2005 up 10.9%. Local-currency growth was led by demand for 3M electronic products for semiconductor
manufacturers, along with continued strong growth in electrical products used for insulating, testing and sensing. This
strong sales growth helped offset weakness in the electronic solutions and communications markets. Operating
margins were 19.8% in 2005, with operating income increasing 35.4% in 2005.
In 2004, local-currency sales in Electro and Communications increased 2.7%, led by electronic materials, along with
electrical products for insulating, testing and sensing. Sales in the electronic solutions and telecommunications
segments were negatively impacted by the general slowdown in the semiconductor industry and continued softness in
the hard-line infrastructure segment of the telecommunications market. Geographically, local-currency growth in this
business for 2004 was led by the Latin America and Canada area along with the Asia Pacific area. Operating income
was up 18.8% to $342 million in 2004.
Safety, Security and Protection Services Business (10.8% of consolidated sales):
2005 2004 2003
Sales (millions) $2,292 $2,125 $1,928
Sales change analysis:
Local currency (volume and price) 6.9% 6.6% 9.5%
Translation 1.0 3.6 4.9
Total sales change 7.9% 10.2% 14.4%
Operating income (millions) $ 553 $ 491 $ 437
Percent change 12.6% 12.3% 29.1%
Percent of sales 24.1% 23.1% 22.7%
The Safety, Security and Protection Services segment serves a broad range of markets that strive to increase the
safety, security and productivity of workers, facilities and systems. Major product offerings include personal protection
products, safety and security products, energy control products, cleaning and protection products for commercial
establishments, and roofing granules for asphalt shingles.
In 2005, Safety, Security and Protection Services local-currency sales growth was 6.9%, driven by broad-based growth
across the business portfolio and geographies. The continued global threat of events such as terrorism, natural
disasters, SARS and Avian flu helped raise the awareness in the general public about the importance of personal
protective equipment, especially respiratory protection for overall health. Sales growth was driven by continued strong
global demand for personal protection products and solutions, particularly respiratory protection products, along with
strong demand for cleaning and protection products for commercial buildings. Roofing granules for asphalt shingles
also experienced solid sales growth. Operating income improved 12.6% in 2005.
In 2004, Safety, Security and Protection Services local-currency sales growth was 6.6%. Local-currency growth was
driven by strong global demand for personal protective products and solutions, along with cleaning and protective
products for commercial buildings. 3M’s acquisition of Hornell Holding AB, a European-based global supplier of
personal safety equipment, added 2.3 percentage points of growth in 2004. Operating income increased 12.3% to
$491 million in 2004.