3M Company (MMM) Earnings Call Transcript & Summary

Good morning, everyone. This is Markus Mittermaier, I'm the UBS electric equipment and multi-industry analyst, and I'd like to welcome you also the second day of our Virtual Global Industrials and Transportation Conference. I hope you all had a productive and insightful first day of the conference, and I'm delighted to kick off the second day here and welcome 3M back to our conference. We have Mike Roman, Chairman and CEO; Nick Gangestad, SVP and CFO; as well as Bruce Jermeland, Head of IR, here with us today. Gentlemen, welcome, and thank you very much for taking the time during what must be incredibly busy and difficult times. Before we kick off here, just a reminder for the audience. Just like yesterday, you can submit your questions through the little chat window your screen. And I think we've also had some breaking news this morning, I'm sure most of you have already seen it, with the announcement of Nick's retirement from 3M after 35 years and 6 years as CFO and the appointment of Monish Patolawala as Senior Vice President and CFO effective July 1. Monish will be joining from GE Healthcare, where he's been the CFO. Mike, Nick, I know that you have some prepared remarks here, but let me first -- be the first one to thank Nick for his collaboration over the years and wish him the very best for his next steps. And with that, I'll hand it over to Mike.

Well, thank you, Markus. Good morning, and it's good to be with you today. Let me make a few opening remarks regarding the challenging environment in which we find ourselves today. Like all 3Mers, I'm heartbroken and appalled at the senseless death of George Floyd last week. And I offer my condolences to his family, friends and the entire Twin Cities community, especially our African-American community. As I talk with other CEOs, we are resolved to turn this into a call to action that finally makes a difference. All of our institutions must respond and take up the mantle of leading change here, and this includes our companies and their leaders. Businesses have a unique opportunity to help lead our community forward. I would also like to say how much 3Mers appreciate and admire everything our heroic health care workers and first responders around the world are doing to fight the COVID-19 pandemic. I could not be prouder of how our employees have stepped up to help protect those on the front lines of this crisis, including 3Mers in our manufacturing and distribution sites who, in these most challenging circumstances, continue to work around the clock to accelerate the production of respirators and other critical supplies in the pandemic fight. As we continue to fight COVID-19, we are guided by 3 principles: First, an uncompromising commitment to the safety of our employees; second, fighting the pandemic with urgency from all angles, including what I just talked about, what we're doing to help protect health care workers and first responders; and third, maintaining business continuity, which is really executing to deliver for our customers and shareholders and the lead out of this economic slowdown. Finally, I'd like to comment on what you mentioned at the beginning, on our press release we issued this morning. Today, we announced that Monish Patolawala is appointed as 3M Chief Financial Officer effective July 1. Monish will succeed Nick Gangestad, who has announced his intention to retire. Nick will stay on through July 31 to ensure an orderly transition. I am pleased to welcome Monish to our leadership team. He has tremendous experience leading the financial operations of industrial and health care businesses as part of GE. I'm confident Monish will make an immediate impact as we manage through the current economic challenges, and he will help to continue to position 3M for the future. I want to take this opportunity to thank Nick for his exceptional leadership, partnership as CFO and his many contributions through this 35-year career. I wish Nick all the best in the next chapter of his life. And with that, I'll turn it over to Nick for a few comments.

Thanks, Mike. And Markus, thanks for having us here. Markus, 3M's just been an amazing company to be part of. I just don't think I can do justice to the gratitude I feel to have been able to contribute to 3M over the last 35 years. It's been an honor and a privilege to be part of this company's journey. Mike and I have been dialoguing about my plans to retire for quite some time, which has led ultimately to today's announcement. It's an -- this is going to be an exciting time for Monish to be the CFO of 3M. I look at our company, our business model, our technologies, our products, our strategies, and our people, and I see a great company that gives me high confidence in 3M's future. So Markus, thanks for having us here so we could share the news. And I'll turn it back over to you for the Q&A time.

Great. Thanks so much and congratulations again, and all the best.

Thanks.

So Mike, maybe I can just ask you on this. As you kind of -- you and the Board were kind of thinking through this and the transition here, not only given the macro context, but also the overall kind of transformation in 3M. What was -- what were you looking for and kind of focusing on as you tried to fill this role? And maybe let's start with Nick's part here.

Sure. Markus, as Nick said, we've been dialoguing for some time about his intention to retire. And so we undertook a robust process looking both inside and outside the company to get the right person for the role. And for 3M, the CFO role is a critical leadership role. It of course leads our financial operations, and that's critical. And you heard me highlight some of the strengths Monish brings to the table there, and that's clearly something we were looking for. The leadership of transformation and strategy for us as a company are also critical factors. And that broad leadership impact on, not only the operations of the company, but the broader leadership of the company, is critical as well. So it was a robust process with, I think, clear view of what was critical to the role and leading 3M forward. Monish has that operational experience. He's got that experience in GE within financial leadership. He will be a strong leader for us as we move ahead. So the Board was very well -- very supportive of the process and the appointment, as you would expect.

Great. And then if we switch maybe to kind of near-term trading dynamics. You switched to kind of giving us monthly updates. Now obviously, what's on people's minds, and I see that by far already the biggest question here: How are May sales looking like? Just to maybe step a minute back here. Sort of you kind of said in the quarter that you expect mid-teens sales declines. April came in organically at negative 12%. Do you feel sort of like that trajectory kind of continuing? Or could be coming maybe sort of the low teens here. How is May trending versus April?

Thanks, Markus, for asking that question. So as you said in your question, we posted total company organic sales decline in April of minus 12%. And included in that, we had strong respirator demand related to our COVID -- related to COVID-19. And that helped our April revenue by approximately 3 percentage points. And we expect that impact to continue throughout the second quarter. We don't have everything finalized on May revenue, Markus. But what we're seeing on a per billing day revenue perspective, I would say May is very much a continuation of what we were seeing in April. And the reason I'd just say on a per billing day is in our calendar for revenue in the second quarter, May, we have 2 less billing days than we had in May of last year. And then in June, we have 2 more billing days than we had in June of last year. So for the quarter, it's going to be a wash. So on a per billing day, we're seeing things continue on a pretty constant trend. If I go a little deeper, Markus, into what we're seeing at end markets, we're seeing a lot of similar patterns to what we shared with our April results. We are continuing to experience strong end market demand in places like personal safety and electronics, in particular around semiconductor and data centers. And we are seeing weakness in consumer electronic devices. We're continuing to see strength in general cleaning, food safety and biopharma filtration. At the same time, some of the trends we were seeing in April have continued into May for weaknesses. And those include our businesses in oral care, automotive OEM, general industrial, commercial solutions and stationery and office. So those trends that we were seeing in April, we're seeing those continue into May. And then of course, a little later this month, we'll share our May sales data and give you a bit more detail on that.

Great. So it sounds like on a headline number, that May -- just from a billing day or working day -- or rather billing day perspective, might trend a little bit lower. But then you catch that up in kind of June. But we are broadly, on a billing day basis, in line with April, right?

Yes. Markus, that's a very fair summary.

Great. Okay. And can we maybe also do the same slicing here on a kind of regional development? I know that the China bounce back in April was pretty strong with 7%. How is that developing? And sort of is kind of Europe following suit there with the slow reopening across Europe? And then sort of what are you seeing in the U.S.?

Yes, Markus, maybe I'll take that one. Geographically, our organic sales trends have been playing out largely in line with how the virus has evolved around the world. As you know, Asia Pacific was impacted early, in early first quarter, and they've been showing the earliest signs of improvement, particularly China, as you noted. Japan has decelerated a bit, and countries such as Thailand and India remain in lockdown. But in general, we're seeing early improvements in APAC. EMEA. Europe in particular declined significantly in March across the month in the. They're in, I would say, the early stages of economies opening back up. And the U.S. decelerated really at the end of March and is right behind Europe. Latin America, I would say, still remains challenging as we look at where we are in Q2. Nick outlined where we're trending in April. We'll provide geographic details, along with the trends that he talked about for May, when we release that sales information later this month.

Okay. Great. So it sounds like in the April data that we had put out there, the drop that Americas declined, I think it was 17%; in EMEA, sort of 12%. That's not really mix, that's just timing, I guess, with how the pandemic is spread...

Yes, I think that's fair. We saw the deceleration in Europe earlier in March, and with the Americas decelerating as we got to the end of the month.

Okay. Great. So on one of the businesses that's clearly very strong in personal safety, right? And particularly on the N95 masks, I think you started the year with a 50 million run rate on production, and you've done an excellent job here ramping that up. So I think the exit rate will be around about 2 billion N95s by year end. So if I try and translate that to dollar terms, should probably be, call it, roughly $200 million or a bit more on a quarterly basis, so maybe $1 billion annualized. How should we think about this business the way it's set up into 2021? If at some point, hopefully, we get a vaccine, how do you think about this sort of like ramp and then maybe stabilization or decline, depending on how the world looks like in a year's time?

Yes. And Markus, your comment about our ramp up, that's really what we have been doing to attack this pandemic from all angles. It's part of our strategy to keep surge capacity available for situations like this. And we brought that online, and as you noted, we've been ramping up production. We're still in the middle of really focusing and prioritizing those frontline health care workers and first responders and doing everything we can to ramp up production. We doubled our capacity as we came out of first quarter, about 100 million N95s per month globally with the largest production in the U.S. And we've got additional investments that are starting to have an impact. We will be delivering -- ramping up from 35 million a month in the U.S. to 50 million by middle of this month, in the month of June. And then we're -- to get to that 2 billion that you noted, we are working with the Department of Defense here in the U.S. to ramp up production even further, and we'll be there by the end of the year. So we're still in the middle of prioritizing that ramp up and fighting the pandemic from all angles. That said, we do look at what will be the longer-term demand and what will happen in these end markets. Normally, as we -- our personal protective equipment business, N95s in particular, the majority of those go into industrial use, 90%-plus go to industrial customers or through our consumer channel to industrial users typically. And in the pandemic, it's flipped to 90%-plus to health care workers and first responders. So we're looking at what goes on in the health care markets as we move forward? What will happen to industrial markets as we reopen economies and the demand there? What will be the new demand in consumers? So it's -- these individual behaviors and preferences, will people masks more often now that they're out in public, like we see in many Asian countries? What will happen in other areas? Like you mentioned, the pace of vaccine development, what will -- what impact will that have on demand? And then I would say, this time, one of the things we see clearly is that countries around the world are really thinking about their pandemic preparedness and how they might do things differently. And so what will that mean to demand? So it's -- all of these factors are playing into that maybe midterm demand as we get into 2021 and 2022. It's really, as I said, we're in the middle of still fighting the pandemic from all angles. It's too early to know what the new normal for disposable respirator demand will be. But with the focus on production and capacity ramp-up and the close connection we have to customers across these different segments, we will be ready to adjust as we go into that new normal.

Great. If I switch to some of the other sort of end markets that you have. You mentioned semis, data center, consumer electronic devices, et cetera, before. Twofold question, one around inventory. I mean, some of the recovery we see in China, to what extent is that sort of like a restocking snapback with some sort of going back towards a more normalized demand picture? And then secondly, if I think around your very broad portfolio. And if you see, in fact, sort of like the prior crisis, although I know nothing is quite like this one, but where would you expect -- as we come to the other end, what sort of like that short-cycle demand that you are watching for to kind of gauge where we are and how that sort of recovery trajectory might look like?

Markus, that's an excellent question as it's one we're watching very closely right now, and looking for the signs of, are there signs of strength of interest in the amount of inventory in the channel? You mentioned China, and in April, we -- what we shared last month was that we were seeing increased sales out the door out of 3M in China. We continue to believe that some of that was some restocking of the channel. We think there was some underlying improvement in demand, but we also believe that there's some restocking of the channel that's going on -- that was going on in China. And it continues to be an aspect we're watching because we see that as a vote of confidence as we see economies working to come back. As far as the overall channel level and what we're seeing, Markus, I think is the fair thing to say, is we think it's still too early to give you much of a read on that. That we entered the year thinking of our channels, level of inventory, as pretty well balanced of where it should be. And COVID-19's obviously had a tremendous impact on that end market visibility and the associated amount of inventory in the channel. So the -- our view is it's going to be highly dependent on the ability of the world to ultimately contain the virus, and along with end market demand and that pace of recovery, is going to be the single biggest determiner for where we're seeing those channel levels. And so we'll be watching to see what that happens. And that's partly why we decided to share monthly revenue instead of quarterly, to help give everyone as much transparency of what we're seeing on that front.

Great. I certainly appreciate it. I think that level of transparency also, thank you for that. Maybe let me switch to sort of like the bigger picture here. And historically, 3M has really had a history of outgrowing IP globally, really, in most years over the past decade or even more, except recently, sort of like in the last couple of years. Now obviously, now IP being negative, I'm referring to like the pre-COVID world and sort of like more through the cycle there, the picture here. How do you explain that? Is that all mix? Is it China? Or are there things like pricing that changed? How would you think about that?

Yes. Markus, and you noted it, we have a time-tested business model with a long history of outgrowing IPI, approximately 1.5x over the economic cycles. And we expect relative outperformance to continue as we move forward and lead out of this pandemic. In 2019, we were impacted. We saw really specific end markets slow, particularly China, automotive and electronics. And we saw some impact from adjustments in channel inventories as they reacted to those slowing markets, negative growth markets. Combined, those 3 end markets make up about 30% of our global revenue. So that was really a big impact driving overall company organic growth negative. Relative to your question on pricing, we continue to see strong pricing performance across our markets. It's really a reflection of our value and innovation that we bring to customers, the differentiated value that we provide for those customers in the markets every day. So we see that continuing as we -- even as we fight through the pandemic.

Okay. Great. And I think -- I mean, you kind of mentioned -- or I think you alluded on sort of like the inventory, China in '19. I mean, I think it was roughly at the same time, correct me if I'm wrong here, where you also went through ERP adjustments, et cetera. So where are you on that now and in that internal transformation? And maybe as a follow-on to that transformation, how are you actually managing the company now? I mean, sort of with people being remote, how do you make sure that R&D, which is kind of inherently a collaborative process, right, is being done? How is the ability integration? How do you keep the momentum here? Because I think that's ultimately, to your point around pricing, it's a function of past R&D spend, right? How do you keep the momentum there?

Yes. Look, there's a number of aspects to that question, Markus, I'll try to hit them all. So transformation, maybe I'll start there. It's 1 of our 4 strategic priorities. It's -- really, transformation is an overused word in the world of business, but it's very appropriate for what we've been doing. We've been digitizing 3M over time, deploying a new ERP system and ecosystem, deploying new globalized standard business processes, standing up shared service centers and supply chain control towers and building out data and analytics capabilities across the company. And that is building a very strong foundation for performance. And we're seeing that as we come through 2020 in the middle of COVID, we're seeing the benefits of much of that. 2019 was a very important year for us. We had -- if you go back to '18, we had deployed the U.S. on the new ERP and ecosystem, and then at that point, had a majority of our global revenues, almost 70%, on the new systems. In 2019, we took the step to realign our businesses around 4 go-to-market models: Business-to-business through distribution, OEM direct, health care and our retail models, to really leverage our innovation and manufacturing capabilities to those customers in those different go-to-market models. We also redesigned and implemented a new business group-led global model around that to streamline and really align to customers our innovation model. We established a new enterprise operations organization, which was bringing together end-to-end our manufacturing, supply chain and customer operations. And that's one of the areas I can maybe comment on what we're seeing as a benefit in what we are doing and the flexibility and agility that we need to be able to execute under COVID, that enterprise operations change has really served us well. It was also fundamental as we launched that in 2019 to helping us drive that inventory reduction that you talked about. We -- as we went through 2019, even in the face of the slowing end markets, we were taking down inventory, reducing days of inventory outstanding, reducing our inventory by over $350 million in the year. And we continue to expect to see gains from that as we come through and come out and lead out of COVID. I would say all of these transformation actions that I highlighted are really enabling us to be more agile, reduce cycle times, respond more quickly to customers, provide improved service to customers. It's positioning us well, not only in the middle of COVID, but as we lead out. So this is now -- transformation is not defined as a program or a project in 3M. It's really how we are improving the company, how we are running the company, how we are driving agility and productivity as we move forward.

Great. And maybe as a follow-up here. And to get back to like 1.5x IPI growth, right? I mean, I guess, that's sort of like the -- setup that kind of helps you there. How confident are you that we get back to that? I mean, it kind of seems far off at the moment, given sort of COVID. But sort of how are you thinking about that to kind of recapture that superior growth profile, if you will?

Yes. Markus, I would start here. Our expectation is to outgrow the macro. That's where we -- that's where our 3M model has demonstrated capability over time, our time-tested demonstration of that through the business cycle. So we expect to do that going forward. And there is 2 things that we focus on there. One is our innovation and driving innovation that will create new opportunities, new opportunities with customers, meeting their needs, driving new opportunities and markets, creating growth for us through that innovation, that 3M innovation model. Our innovation does more than that. It shows up in our value that we deliver, and that shows up in margins and return on invested capital. Innovative companies, that's where you can see that innovation very clearly, is in that differentiated value you provide in your markets against your peers and competitors. And I would say that, that growth focus is an important part for us, creating new opportunities to build new businesses and new markets. We also need to manage our portfolio and specifically where we prioritize investments relative to market attractiveness. And so we are -- we can -- one of the contributions to that outgrowing the macro is picking markets that are attractive and growing strongly. And I would say the other side of portfolio is, sometimes as you have markets that are not all in sync. And we saw that in 2019 with, as I just mentioned, China, automotive and electronics, being down. But those are attractive markets for us long term. They present opportunities for innovation, they present opportunities for strong growth. So those will be part of what help us to drive that kind of growth. So that -- we build it on those 2 areas, on our portfolio management and where we prioritize organic investments, and then also how we drive our innovation investments and building new businesses off of that.

That's such actually an interesting segue into sort of like thinking around how you allocate the incremental investments then, CapEx, et cetera. And there's this is one debate, I mean, I would say, that almost resurfaced. I mean, we've had that in the past and it's come back around reshoring. Do you -- how do you think about that? Do you see that in your own customers, say, in -- for instance the pharma filtration business, that all of a sudden people kind of come to you and sort of look for more production? Do you see that?

Yes. Markus, I think you cut out a little on me there, but I think I have the gist of your question. So the whole market debate about should companies be changing their supply chain and where they're putting their capital, their CapEx dollars. And Markus, what we see is, what we've been seeing last year and this year is just a clear affirmation of the 3M strategy. Our strategy has been, we build our capabilities close to our customers, close to our markets and we invest in local manufacturing so that we can be best servicing our customers around the world with local manufacturing. And that's a strategy that's served us well over the history, and in recent days, it's been serving us especially well. The U.S. happens to be a place where we have our greatest capability. Over half of our R&D dollars are being invested in the United States as well as over half of our capital investments. And every year, we invest, we export $5 billion of goods manufactured in the United States to other places around the world. So we don't anticipate a very -- a major change in how we operate or how we allocate that capital. We're going to continue to invest close to where our markets are, close to where our customers are, not for export, but how we can best service our customers. And as we see customers moving, if they move, we are prepared to move with them and to have capital close to where our customers are.

And Markus, in your question, you talked about reshoring, and that is a big discussion. And I would say while other companies offshored production over the years, 3M never left the U.S. Nick outlined our model, our regional model. We manufacture nearly everything we sell in the U.S. in factories in the U.S., in 29 states across the United States. And it's not just the U.S., we have that model around the world. China, which is another key part of this discussion often, is we entered China in 1984, and as the first wholly owned multinational. And we grew up with that economy. We built capabilities in China, manufacturing to serve China. And a majority of what we sell in China is produced in China for our customers there. So it's that model, we didn't offshore. So reshoring is not really in our language. This regional strategy has served us well, and it will continue. I think it's clearer than ever before that it's a very good model in these times. But it's something that we know is true for us, time-tested true for us, so we will continue to invest in it.

Great. Yes. And sorry for the line cutting out here, but you've got the gist of my question. Let me switch maybe over to ESG. Obviously, it's become an increasingly important topic for institutional investors. And I know that there's a lot you do around emissions, waste reduction, et cetera. So how do you approach this topic broadly? And in that context, obviously, you also need to talk about PFAS, if you could?

Yes. And ESG is a core value of 3M. It's deep roots in our culture. We have a long-standing commitment to environmental stewardship, and positive societal impact and sustainability are all part of it. We have a clear commitment and an ambitious strategy around sustainability and it's reflected in our vision and what we do every day to improve every life. And we have a history of, as you mentioned, preventing waste with our groundbreaking Pollution Prevention Pays program. We now have a focus, all of our new products, developing products that have a sustainable and a sustainability value commitment. Every new product must demonstrate how it drives positive sustainability, a tangible benefit. We also recently formed our Science, Technology and Sustainability board committee in November of 2019 to provide oversight on innovation R&D and also on sustainability and environmental stewardship. And this is really, I would say, a strong core part of our history, but also something aspirationally that we look at moving forward. We have a framework we use that really drives how we think about it. And that's sustainability for circular, and that waste reduction and management of that is an important part of that science for climate, and our impact on the environment and science for community and what we can do to make a difference in our communities, really promoting STEM and science as part of this ESG commitment that we have. Maybe a few words on PFAS. We -- the way I talk about it, we are proactively managing this issue. And we're guided by 3 principles: Sound science, corporate responsibility and transparency. And that transparency is continuing to have a dialogue with investors is an important part of that. We continue to work with the U.S. EPA and other stakeholders to make sure that we are fulfilling our ongoing commitment to environmental compliance and also to commitments we've made with them to be part of the solution as we move forward, in providing data and information and a clearinghouse around that. We are also making progress on the commitments we announced related to our manufacturing disposal sites and the reserves that we took around those. And so we continue to make progress there, and it's an important part of what I just outlined in those principles. So we'll keep you updated as we move ahead on more -- as more information comes available on PFAS. I would mention -- I mentioned this in the earnings call this -- in April, we have a PFAS site on our 3M.com that we keep updated, and it's part of that transparency focus that we have to keep really all stakeholders, but investors as well, updated on PFAS.

Great. If I may, just 2 quick follow-ups here, given sort of the investor interest. Where are you sort of like in this litigation process? I mean I believe the MDL in South Carolina or the Michigan cases, anything that may provide more clarity in terms of scale, timing. And then secondly, around PFOS and PFOA, I think there's obviously a number of producers out there, arguably that produce PFOA. And how does that look like for PFOS? Is that sort of like 3M sort of that have, say, produced or anything that you can tell us here would be appreciated, as much as of course you can talk at this point.

Yes. Maybe I'll take the PFOA, PFOS question first. You're correct. There are a number of companies that either produce PFOA directly or produce materials which end up degrading into PFOA in the environment. There were fewer manufacturers of PFOS than PFOA. However, we weren't the only manufacturer there. Just regarding what are the next steps in litigation process. One of the questions is what's the impact of COVID-19? It's too early to really estimate the impact on timing of litigation. The timing that we do have in front of us and that we talk about is there are PFAS-related bellwether trials in Michigan that are currently set for October. The MDL in South Carolina, the earliest actions we expect are late this year. And I -- as I said, I'm not sure at this point of what, if any, impact we'll see from COVID-19 on the timing of those.

Okay. Great. And maybe I know we're coming up to the end here, but maybe around just capital allocation, you talked on CapEx before. Maybe on the M&A side, I mean, this current sort of crisis could also create some opportunities, I guess. How are you thinking about that? And then sort of the repurchases, I know it's on hold for now, but what would need to happen for that program to restart? Then you would be confident to kind of make a call on that?

So Markus, I know you've heard me say this before, but our top priority for capital allocation remains investing in our organic business, our organic growth opportunities. And -- but we do also continue to manage an active M&A and divestiture pipeline. Our focus right now is on integrating Acelity, the large acquisition we did late last year. And while we continue to have an active pipeline, we currently do not anticipate any sizable acquisitions over the near-term as we are focused on integrating that into our company -- Acelity into our, company and also focusing on the strength of our balance sheet. Now our approach is we're always looking for good businesses in strong end markets, looking at how they can lever 3M's fundamental strengths. And sometimes, we have found that those businesses often aren't available during downturns as they're often waiting for their own valuations to improve before selling or divesting. So while there might be a great valuation, it may not be something that we can actually execute on in the short term. To your second part of your question on share buyback, as I said on our first quarter earnings call, we've suspended that. For us, we want to be in a position where, at the very least, we can be giving guidance of what we're expecting. And I wouldn't anticipate us resuming our share buyback program until at least we're in a position where we're -- have enough confidence in our ability to see the future, that we can be sharing our guidance of what to be expecting from a revenue and earnings perspective. So that would be the first thing to look for, Markus, before we would turn that program back on.

Okay. Great. So we have a minute left. Are there any sort of closing remarks that you want to leave us with?

Yes, Markus, maybe I'll close where I started and just highlight the 3 principles that are guiding us in this unprecedented time with COVID-19. First, as I said, our uncompromising commitment to our employee safety; second, as we talked around fighting the pandemic with urgency from all angles and continuing to focus on doing everything we can to protect health care workers and first responders; and third, maintaining business continuity, really executing for our customers and shareholders and lead out of this economic slowdown. We've talked about it in the Q&A that 3M has a strong, time-tested model, and we are leading from a position of strength. In these challenging times, our business model and the benefits that it drives have never been clearer. So while we're managing in unprecedented times, we remain committed to transparency, and we'll continue to update you as we move forward. Thank you for the opportunity to be with you today, Markus.

Thanks, again. And Nick, congratulations again. And Mike, I forgot to mention earlier. Definitely echo comments at the very beginning of the call here. And thanks, everybody.

Thanks so much, Markus.

Thanks for having us, Markus.

Yes, bye-bye.

Bye-bye.