3M Co. (MMM:US) Chief Executive Officer Inge Thulin recast as a “stretch target” a revenue goal set by his predecessor more than two years ago that the maker of Scotch tape and dental braces has failed to meet.
3M has posted sales growth excluding acquisitions of 3.4 percent over the past decade, half of the 7 percent to 8 percent goal that former CEO George Buckley set in December 2009, according to Thulin, who took over the top job in February.
“That was laid out during George Buckley’s leadership at, I would say, a different economic environment,” said Thulin at a Sanford C. Bernstein & Co. conference in New York today. “The world has changed since that time. I view 7 to 8 as a stretch target to be honest.”
Thulin didn’t scrap Buckley’s revenue target today and said he will work to increase sales growth through the introduction of new products, greater emphasis on marketing and by the creation of a new mining, oil and gas business. The company’s first-quarter profit, which beat estimates, was helped by U.S. sales gains at its industrial and transportation unit.
Besides sales, the company focuses on return on invested capital, earnings per share and profit margins, Thulin said. Including acquisitions, sales have grown 7.4 percent over the last decade, he said.
“We have multiple metrics that we try to balance. We’re doing well in most of them,” he said. “We would like to grow more.”
3M fell 1.8 percent to $82.85 at the close in New York. The Dow Jones Industrial Average fell 2.2 percent.
Thulin praised Buckley for boosting spending on research and development during his six years as CEO, which has resulted in a higher rate of new products. Before Buckley, the company improved manufacturing efficiency under then-CEO Jim McNerney, helping operating margins jump to as high as 23 percent in 2005 from 17 percent in 2002, Thulin said. Margins were 21 percent in 2011, the company said today.
“We’re in a very good position as a company,” Thulin said. “Now we need to improve our commercialization capabilities.”
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