3M in the United States
The United States is 3M Company’s (MMM) largest regional market. Its US sales rose from 33.9% of its total sales in 2011 to 39.8% of its total sales in 2015. This was mainly attributable to the fact that emerging markets started unraveling after 2011, whereas the US economy continued to gain strength year after year.
US sales rose at a compound annual growth rate of 3.8% over the 2011–2015 period. The United States was the only region in which 3M sales rose. In all other regions, 3M witnessed falls in its reported sales figures. However, the US segment’s operating margin of ~22% was lower than the company’s average of 24%.
3M in Europe, the Middle East, and Africa
Sales in the EMEA (Europe, the Middle East, and Africa) region fell from $7.1 billion in 2011 (23.9% of total sales) to $6.2 billion (20.6% of total sales) in 2015. 3M’s operating margins in the region were its lowest at 16%–17%. Margins dragged mainly due to the lack of supply chain efficiency in the Western Europe region.
The company is undertaking measures to correct and transform its supply chain, so the region could see opportunities going forward. A rise in the region’s operating income could push the company’s margin above its current 24% level.
3M in Latin America and Canada
Latin America and Canada (or LAC) sales fell from $3.4 billion (11.5% of total sales) in 2011 to $3 billion (9.8% of total sales) in 2015. The rapid depreciation of Latin American currencies weighed heavily on the region’s operating margin, which fell from 26.3% in 2011 to 23.7% in 2015.
LAC’s operating income contribution fell from 14.5% of 3M’s total operating income in 2011 to 10.2% in 2015.