3M Co.

Q2 performance beat expectations (growth, margins, earnings, cash) - Organic sales growth: +5.4% (mid-single digits) - Operating margin: 24.9%, +40 bps YoY - EPS: $2.40, +11% YoY (and GAAP EPS $1.78, +33% YoY) - Free cash flow (FCF): $1.3B, 107% cash conversion - Capital returns: $1.4B to shareholders in the quarter ($400M dividends + $1.0B share repurchases)

Guidance raised for full-year 2026 across sales, EPS, and FCF - Organic growth outlook: raised from ~3% to >3.5% for the year - EPS guidance: raised to $8.80–$8.95 (from $8.50–$8.70), implying +9% to +11% YoY - FCF guidance: raised by $100M to $4.7B–$4.9B, implying >100% conversion - Oil inflation: updated to $150M–$175M (from $125M prior); expected to be fully covered by price actions in Q2, but impacts margin rate by ~20 bps - 2H expectations: management expects high-3%+ organic growth (described as >2x macro) and ~+100 bps operating margin expansion vs prior year

What’s driving the upside: commercial execution + innovation “inflection” - Cross-selling improving: $110M opportunities booked + $120M in pipeline, >40% QoQ, ahead of Investor Day goal - Innovation ramp: 92 new products in Q2 (+44% YoY); 176 launches in first half - Scale target: >350 new products in 2026; ~1,000 launches by 2027 - Innovation productivity: development cycle time reduced ~20% vs earlier baseline; new product sales contribution rising (five-year new product sales ~$4B in 2026; vitality index mid-teens this year, ~20% next year) - Sustainability thesis: CEO frames performance as mostly “internal performance,” positioning outgrowth vs macro as a repeatable model (e.g., ~2x macro), though exact timing depends on innovation ramp and churn improvement