3M Healthcare Spinoff Notes

February 15, 2024 Update
Commentary from 3M’s January 2024 Earnings Call:
” Our next priority is the spin-off of Solventum, our Healthcare business. Last year, we appointed experienced health care leaders to Solventum, including Brian Hansen as CEO, and Carrie Cox as Board Chair; and Wayde McMillan as CFO. The spin is on track to be completed in the first half of this year, and we are confident in the value it will create for customers care providers, patients and shareholders.”
Turning to our health care business. Q4 sales were $2 billion or down 1% organically versus last year. Sales in our medical solutions business grew low single digits organically, while separation and purification and oral care were both down low single digits. Health Information Systems organic sales decreased high single digits.

Looking at the year, our businesses within Health Care continue to see lingering COVID-related impacts. Full year organic growth in health care was approximately 1% with both Medical Solutions and Oral Care posting positive low single-digit growth, while health information systems and separation and purification were both down low single digits.

Health Care’s fourth quarter operating income was $372 million, down 10% year-on-year. Operating margins were 18.3% or down 1.9 percentage points with adjusted EBITDA margins of 26%. Year-on-year adjusted operating margins were impacted by lower sales volumes, along with added costs associated with the pending spin.”


“As Bruce noted, following the completion of the health care spin, we will host an investor meeting and provide strategic updates along with updated guidance for 3M. As always, underpinning our success will be the strengths of 3M, our industry-leading material science, advanced manufacturing global capabilities and iconic brands, along with some of the best and brightest people around the world.

Before I turn it back to Monish, let me repeat a few important points. As I look across 3M, a 2023 was a pivotal year for our enterprise. We executed our plans and delivered on our commitment to exit the year stronger, leaner and more focused.

We improved our operational performance advance the spin-off of Solventum and address risk and uncertainty. I am proud of everything we accomplished in 2023, and equally excited about the year ahead. We are in excellent position to build on our progress continue to improve our operational performance and deliver another successful year.”

“Healthcare’s organic sales growth is anticipated to be flat to up low single digits year-on-year. Brian and his team are excited to lead this great business and we’ll be providing more details on 2024 and beyond as we progress towards the spin.”

“And finally, as a reminder, if you are creating financial models for 3M post-spin, please keep in mind that simply removing the healthcare business from Total 3M financials will not equal 3M post-spin. There are other factors such as transition service agreements, stranded costs below the line changes that need to be taken into account. As mentioned, once the spin is complete, we will hold an investor meeting and provide an update on our outlook for 2024 that incorporates these factors.”

December 13, 2023 Update

Some comments from the Wolfe Research Conference in December 2023:

November 2, 2023 Update

Notes from 3M’s October 24, 2023 Conference call:

April 30, 2023 Update

Some updates from a recent earnings call:

March 24, 2023 Update

From a Bank of America conference in March 2023:

August 9, 2022 Update

3M has announced it will spinoff its healthcare business

  • SpinCo accounted for 25% of revenue last year
  • RemainCo will retain a 19.9% stake in SpinCo