3M Earnings Call Insights: Industrial Dynamic, Security and Transportation
David Begleiter – Deutsche Bank: Inge, just on Industrial sequentially sales declined $73 million, but operating profit declined $106 million sequentially. Can you just describe exactly what drove that dynamic Q3 versus Q4 in Industrial?
Inge G. Thulin – Chairman, President and CEO: We have some businesses that do well and continue to do well like automotive did well. I think one of the impact is the RED business that we had an issue with and have had during the whole year. And the way we look upon RED is that is relatively small division for us, generally speaking, it is a $400 million business and you can look upon the segment that as segments; one, conservation and one generation and conservation is like the window film for us that was type of flat and on generation side which is wind and solar, as you know, on the global market that is declining market. So, we were down in that side. So, I think, that was a big piece for us during the quarter for Industrial in total.
David W. Meline – SVP and CFO: If I could, David. As we look at Industrial performance in the quarter the sales were quite reasonable in terms of 4% growth year-on-year. Certainly Q4, we always see a decline in activity including margins and as you know as we called out we were also impacted by the cost in Ceradyne.
David Begleiter – Deutsche Bank: Just Inge, on Consumer Electronics, you mentioned it will likely be weak through Q1. Any further insight into when it might pick up via your customers order book or conversations?
Inge G. Thulin – Chairman, President and CEO: No, I think it look like 2013 will look like – the beginning of 2012 look like the same, so it’s a – we don’t know where it will come, but probably sometime in the end of Q2 is the indication that we can see at this point in time.
Security and Transportation
Jeffrey Sprague – Vertical Research Partners: Inge, back in November, you gave us some good insight to your thinking around business under a strategic review. I just wonder, if there is anything else moving around there. I think at the time, you said, there was about $2.5 billion of sales that were maybe in the crosshairs. Could you just give us some color on how big Security and Transportation is now that you put together as a percent of that and if there is any other businesses moving around in that thought process?
Inge G. Thulin – Chairman, President and CEO: Yeah, first of all, as I said, we are taking action relative to that. And as I said, that’s about fix combined or closed in order to see the advantage of the businesses and if we can fix them moving forward. So I think this is a first good step for us. We believe by combining those two divisions that is very good synergy for us in between the two businesses. Yes, to make a comment around it, both those businesses are businesses that are based on material as the core. So they’re very strong – both those businesses are in the core relative to material and then both business is a type of reaching out and going to more solutions around Electronic. So, that is the advantage of combining them in order to look upon the synergy. So, when we look upon it specifically, you have elements or the customer facing opportunity, which I think is still very precise in terms of execution, and then you can get leverage around technology, businesses processes, compliance and then manufacturing and supply chain.
So, when you do that, combine them, you will get more efficiency and also from an organization perspective around the world where we have all the subsidiaries, it will work very well for them because they get more focus, more dedication and can execute better and in many pieces there, as you know, it’s project management, so you need to have specialists that is working with it. So, you combine those two businesses, we feel very good in terms of this is something we can fix, this is something where we will win and we will move them forward. Some other businesses without calling them out, we are working on them in order to find solutions for them as an outcome around a strategic review. So, this was two of them that we looked upon in order to make sure that we can win for the future and I will update you as we go as other actions will be taken.
Jeffrey Sprague – Vertical Research Partners: And these two combined would be kind of the biggest single piece of businesses under review now?
David W. Meline – SVP and CFO: So, if you look at the businesses under review, we had called out, as part of that, the security division was in there and that was a business I think $400 million to $500 million of revenue out of their $2.5 billion, traffic safety was not part of that group, but inevitably as you look at how to get the right alignment across the businesses in our total portfolio we made that change.
Jeffrey Sprague – Vertical Research Partners: And then, Inge, can you just or David provide a little more color on what you are seeing in China, the organic growth in the quarter and in particular end markets that are standing out. And I guess everybody’s question really is there a legitimate recovery of some sort now underway there as opposed to kind of the hopes for one that everybody had last year?
Inge G. Thulin – Chairman, President and CEO: We saw recovery and as you saw we had a growth in the quarter of 16% in total. Our base business which is excluding electronic was like 10, so that’s a good uptick for us. And I would say then when we – and that’s a best quarter for us last year like 2012. Looking into 2013 our base business, I will say, will continue in the same mode as we saw here in the end. We don’t know yet in terms of electronics or electronic maybe will still be a little bit of challenge as we move into the year, but for the base business we see recovery coming and we feel optimistic about that. But we are still cautious, as you said, because when you look upon at quarter-by-quarter is not the old China, if you like, right. There is a different base line that we need to grow out from. But we can see recovery coming in base business and that is a big portion for us and so we see sequential improvements in that as we move ahead for the base business going into Q1. Electronic is little more question mark for us as we speak.
David W. Meline – SVP and CFO: Yeah, if I could add, so base being industrial, we saw good growth again in Health Care in the quarter and in China as we’ve seen all year, and also recall or you may recall that we had a very weak quarter in China last year in the fourth quarter. So, quite honestly there’s a bit of an element here of the year-over-year comparison.
Inge G. Thulin – Chairman, President and CEO: I think five of six businesses grew in China in the last quarter.
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