“As expected, the global economic slowdown dramatically affected our businesses in the first quarter,” said George W. Buckley, 3M chairman, president and chief executive officer. “Substantial end-market declines and continued inventory takedowns in major industries, including automotive, consumer electronics and general industrial manufacturing, resulted in significantly lower sales and profits. Accordingly, we aggressively reduced our cost structure, lowered manufacturing output and intensified our attention to operational improvement. The combination of these actions drove strong operating income margins of more than 17%.”

Buckley continued, “In these extraordinary times, 3M employees around the world are energized by the challenges, remain keenly focused on our customers and are steadfastly committed to building for the future. In 2009, we will enhance our balance sheet by improving our free cash flow while still maintaining a significant investment in R&D. Our strategy will strengthen the company and position us for even greater success when global economies recover.”

The company adjusted its 2009 sales and earnings expectations to reflect ongoing global economic uncertainty. 3M now plans 2009 organic sales volume to decrease between 11% and 15%, versus a previous planning assumption of negative 5% to negative 9%. The company also plans 2009 full-year earnings to be in the range of $3.90 to $4.30 per share, down from a previous range of $4.30 to $4.70. All estimates quoted exclude special items.

Key Financial Highlights

First-quarter worldwide sales totaled $5.1 billion, a decrease of 21.3% versus last year. Local-currency sales including acquisitions decreased 13.9%, and foreign exchange impacts reduced sales by an additional 7.1 points in the quarter. Local-currency sales including acquisitions increased 1.9% in Health Care, but declined in the remaining segments with Consumer and Office down 0.1%, Safety, Security and Protection Services down 3.6%, Industrial and Transportation down 20.7%, Display and Graphics down 26.6% and Electro and Communications down 29.8%. Excluding special items, first-quarter net income was $563 million, or $0.81 per share, versus $1.0 billion, or $1.38 per share, in the first quarter of 2008. Net income and earnings per share declined 43% and 41% respectively, excluding special items.

Industrial and Transportation

Sales decreased 27.5% to $1.6 billion.

Local-currency sales declined 20.7% including a 2.8% increase from acquisitions.

Foreign currency translation reduced sales by 6.8%.

50% decline in North American auto builds directly impacted 3M’s auto OEM business; many other industrial market segments were down by more than 20%.

Local-currency sales down mid-single digits in Latin America, all other major geographies declined by double-digits.

Operating income of $197 million, with margins of 12.4%.

Health Care

Sales of $1.0 billion, down 7.7%, including a negative 9.6% impact from foreign currency translation.

Local-currency sales growth of 1.9%, largely from acquisitions.

Positive local-currency growth in oral care and medical supplies businesses.

Local-currency sales declined in drug delivery.

Geographically, Latin America posted double-digit local-currency sales growth.

Operating income declined slightly to $311 million, with margins of 31.2%.

Consumer and Office

Sales of $795 million, down 7.1%, mainly due to foreign currency translation.

Local-currency sales were flat, including a 2.9% benefit from acquisitions.

Positive local-currency sales growth in do-it-yourself and stationery products businesses.

Regionally, Latin America, Canada and U.S. delivered positive local-currency sales growth.

Profits down slightly to $167 million, with operating margins of 21.1%.

Safety, Security and Protection Services

Sales of $694 million, down 15.4%.

Sales growth in local currency down 3.6%, including positive growth of 10.6

percent from acquisitions, primarily Aearo Technologies, Inc.

The 2008 divestiture of HighJump Software, Inc. hurt sales growth by 2.2%.

Foreign currency translation decreased sales by 9.6%.

Global industrial manufacturing slowdown hurt organic sales in personal safety products.

Sales declined in all major geographies.

Profits down 34% to $129 million, with operating margins of 18.6%.

Display and Graphics

Sales declined 30.2% to $611 million, with local-currency sales down 26.6%.

Foreign currency translation reduced sales by 3.6%.

Local-currency sales were flat in traffic safety systems.

Optical systems’ sales declined 44% year-on-year, which negatively impacted Display and Graphics’ total sales growth by nearly 12%.

Double-digit decline in commercial graphics sales as customers reduced advertising spend.

Operating profits were $66 million, with a 10.9% margin.

Electro and Communications

Sales declined 34.8% to $480 million, including a 5.0 point penalty from foreign currency translation.

Local-currency sales down 29.8% due to significant double-digit market declines in many served markets–electronics, semiconductor, telecommunications and appliance.

Operating profits down 84% to $24 million.