3M India has registered 9% fall in consolidated sales to Rs 673.15 crore for the quarter ended Mar 2020. Lower sales together with 250 bps contraction in operating profit margin to 11.3% has resulted in 26% fall in operating profit to Rs 76.33 crore. However a 404% jump in other income to Rs 12.44 crore, the fall at PBIDT moderated to stand at 16% to Rs 88.77 crore. But the PBT was down by 23% to Rs 71.97 crore hit further by higher interest and depreciation. As taxation stand lower by 65% to Rs 11.86 crore the PAT was flat (up 0%) at Rs 60.11 crore.
- Upside in revenue for the period was largely due to fall in revenue of all business segments barring consumer segment. The safety & Industrial (S&I) business of the company registered 13% fall in revenue to Rs 248.31 crore (or 37% of total sales). The segment revenue of Transportation & Electronics (T&E), other major contributor to revenue, has registered 9% fall in revenue to Rs 248.34 crore (or 37% of sales). Similarly the segment revenue of Healthcare was down by 3% to Rs 103.59 crore (or 15% of sales). However the segment revenue of Consumer was flat (up 0%) at Rs 68.14 crore or 10% of total sales). The segment revenue of others was down by 43% to Rs 4.77 crore.
- The EBIT was down by 34% to Rs 60.43 crore and the downside is largely due to sharp fall in profits of both S&I and T&E segments. The segment profit of S&I was down by 25% to Rs 34.15 crore hit by both lower sales as well as lower margin. Similarly the segment profit of T&E business crashed by 89% to Rs2.32 crore hit by lower sales as well as lower margin. Equally the segment profit of Healthcare was down by 9% to Rs 12.12 crore hit by lower sales and lower margin. On the other hand the segment profit of Consumer segment was up by 17% to Rs 10.93 crore despite flat sales riding on 230 bps expansion in margin to 16%.
Yearly Performance
Consolidated sales was down by 1% to Rs 2986.55 crore driven largely by modest or flat growth in revenue of all business barring that of S&I segment. The segment revenue of S&I was down by 4% to Rs 1126.21 crore and that of T&E was flat at Rs 1030.92 crore. The segment revenue of healthcare and consumer was up by 2% and 5% respectively to Rs 485.75 crore and Rs 319.66 crore.
But with OPM contract by 270 bps to 15.1%, the operating profit was down by 16% to Rs 449.66 crore. After accounting for lower other income, higher interest and higher depreciation, the PBT was down by 18% to Rs 432.57 crore. But a 40% fall in taxation to Rs 110.40 crore saw the PAT down by 6% to Rs 322.17 crore.
The EBIT was down by 21% to Rs 390.33 crore as the two large segments of the company i.e. S&I and T&E register lower segment profit for the period. S&I registered 27% fall in segment profit to Rs 176.73 crore and the T&E registered 37% fall in segment profit to Rs 67.85 crore. The segment profit of healthcare was down by 7% to Rs 74.16 crore despite higher sales. Riding on both higher sales and higher margin, the segment profit of consumer was up by 21% to Rs 66.43 crore.
Other developments
The Board of Directors of the Company and 3M Electro & Communication India Private Limited (3M E&C), at their Meetings held on 13 November 2019 had approved the Scheme of Amalgamation {'the Scheme') of 3ME&C (Transferor Company') with the Company under Section 233 of the Companies Act, 2013.The Appointed Date fixed under the Scheme was 1 April 2019. The Company sought approvals from Members and Creditors under Section 233(1){b) of the Companies Act, 2013 by Special Resolutions through Postal Ballot notice dated 21 January 2020. The results of the voting by Postal Ballot were announced on 28 February 2020. As the Company did not get the requisite approvals of 90% of the total number of Shares and 90% of the value (amount} of Creditors, the Scheme of Amalgamation did not go through under Section 233(1)(b) of the Companies Act, 2013, The Company will proceed with an alternate option available under the Companies Act 2013 for the merger.
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