Solventum : Press Release (image/SOLV 1Q25 earnings press release 05082025 vF)
SOLV
Published on 05/08/2025 at 17:08
Reported sales increased 2.6%; organic sales increased 4.3%
Increases full year organic sales growth outlook by 50 bps to +1.5% to +2.5%
ST. PAUL, Minn., May 8, 2025 - Solventum (NYSE: SOLV) today reported financial results for the first quarter ended March 31, 2025.
Sales increased 2.6% to $2.1 billion; up 4.3% on an organic basis
GAAP diluted earnings per share of $0.78; adjusted diluted earnings per share of $1.34
Operating cash flow of $29 million; free cash flow of $(80) million
"Our first quarter fiscal year 2025 results reflect solid revenue growth across our business and the positive progress we're making as part of our 3-phased transformation," said Bryan Hanson, chief executive officer of Solventum. "During the quarter, we introduced our long-term strategic plan, and we're focused on executing that strategy to drive sustainable growth and value creation while navigating through evolving macro trends and other short-term pressures."
Three months ended March 31,
(Dollars in millions, except per share amounts)
2025
2024
Year over year change
Net sales........................................................................................................................................
$ 2,070
$ 2,016
2.6 %
Selling, general and administrative expenses .........................................................................
$ 769
$ 596
29.0 %
Research and development expenses .....................................................................................
$ 193
$ 195
(1.0)%
Operating income margin............................................................................................................
7.3 %
18.9 %
(1,160) bps
Adjusted operating income margin1 ..........................................................................................
19.7 %
24.0 %
(430) bps
Net income ....................................................................................................................................
$ 137
$ 237
(42.2)%
Diluted earnings per share..........................................................................................................
$ 0.78
$ 1.37
(43.1)%
Adjusted diluted earnings per share1 ........................................................................................
$ 1.34
$ 2.08
(35.6)%
Net cash provided by operating activities.................................................................................
$ 29
$ 442
(93.4)%
Free cash flow1 .............................................................................................................................
$ (80)
$ 340
(123.5)%
Organic sales growth in the quarter reflect positive performance from all segments, primarily driven by the MedSurg and HIS segments.
GAAP and adjusted operating income margin declined due to lower gross margins, including the impact from 3M supply agreement mark-up, and an increase in operating expenses related to public company stand-up costs and growth investments.
1 Represents non-GAAP financial measure; see the "Non-GAAP Financial Measures" section for applicable information.
Three months ended March 31, Increase/(Decrease)
Reported
Currency
Constant
Organic
(Dollars in millions)
2025
2024
Growth
Impact
Currency2
Other3
Growth
Advanced Wound Care .........
$ 448
$ 441
1.5 %
(1.2) %
2.7 %
(0.2) %
2.8 %
Infection Prevention and Surgical Solutions...................
710
678
4.7
(2.0)
6.7
(1.5)
8.2
MedSurg .....................................
1,157
1,119
3.4
(1.6)
5.0
(1.0)
6.0
Dental Solutions ........................
328
335
(2.1)
(1.9)
(0.2)
(0.6)
0.4
Health Information Systems ....
329
317
3.6
(0.3)
3.8
-
3.9
Purification and Filtration..........
242
245
(0.9)
(2.0)
1.1
(1.1)
2.2
Corporate and Unallocated4 ....
13
-
NM
NM
NM
NM
NM
Total Company...........................
$ 2,070
$ 2,016
2.6 %
(1.6) %
4.2 %
(0.1) %
4.3 %
*Data in the schedule above is intentionally rounded to the nearest million and, therefore, may not sum.
2 Constant currency represents the change in net sales absent the impact on sales from foreign currency translation.
3 Other represents sales impact from acquisitions and divestitures measured separately for the first 12 months post-transaction. Acquisitions include non-healthcare related supply agreements that conveyed from 3M to the Company at Spin-Off and sales from new supply agreements with 3M that commenced at Spin-Off. Divestiture impacts include certain health care businesses retained by 3M India in connection with the Spin-Off.
4 Corporate and unallocated includes sales related to product supplied to 3M and other supply agreements related to legacy 3M business and assumed by the company at Spin-Off.
Solventum is updating its full year 2025 guidance to reflect underlying business performance and flexibility to navigate the dynamic macroeconomic environment as follows:
Increased Organic sales growth range to +1.5% to +2.5% (+2.0% to +3.0% excluding ~50 bps of SKU exit impact) from prior range of +1.0% to +2.0%
Adjusted EPS in the range of $5.45 to $5.65; no change
Free cash flow in the range of $450M to $550M; no change
Note: Full year 2025 guidance currently includes our Purification & Filtration segment. On February 25, 2025, we announced the sale of our Purification & Filtration segment. We will update our annual guidance for related impacts after the transaction closes.
Organic sales, adjusted diluted EPS and free cash flow amounts included in Solventum's full-year guidance are non-GAAP financial measures. Solventum does not provide reconciliations of the forward-looking non-GAAP financial measures to the respective GAAP metrics as it is unable to predict with reasonable certainty and without unreasonable effort certain items, such as the impact of changes in currency exchange rates, impacts associated with business acquisitions or divestitures, and the timing and magnitude of restructuring activities, among other items.
Please note Solventum's Q1 2024 results were reported on a carve-out basis.
See the "Non-GAAP Financial Measures" section for explanations of our non-GAAP financial measures.
Earnings Conference Call
Solventum will host a conference call today, May 8, at 4:30 p.m. Eastern Time to discuss its first quarter financial results and provide an update on its business. The conference call can be accessed via audio webcast at investors.solventum.com or by dialing (800) 715-9871 within the U.S. or +1 (646) 307-1963 for international callers, using the conference ID 6342275.
A replay of the webcast, along with the earnings press release, slides highlighting the results, and supplemental financial disclosures, will also be available at the same link on the Investor Relations section of the company's website.
This news release contains forward-looking information about Solventum's financial results and estimates and business prospects, including guidance for 2025, that contain or incorporate by reference statements that relate to future events and expectations and, as such, constitute forward-looking statements that involve risk and uncertainties. Forward-looking statements include those containing such words as "anticipates," "believes," "could," "estimates," "expects," "forecasts," "goal," "guidance," "intends," "may," "outlook," "plans," "projects," "seeks," "sees," "should," "targets," "will," "would," or other words of similar meaning in connection with any discussion of future operating or financial performance or business plans or prospects. Among the factors that could cause actual results to differ materially from those described in our forward looking statements are the following: (1) the effects of, and changes in, worldwide economic, political, regulatory, international, trade and geopolitical conditions, natural disasters, war, public health crises, and other events beyond Solventum's control; (2) operational execution risks;
(3) damage to Solventum's reputation or its brands; (4) risks from acquisitions, strategic alliances, divestitures and other strategic events, including the divestiture of our Purification and Filtration business; (5) Solventum's business dealings involving third-party partners in various markets; (6) Solventum's ability to access the capital and credit markets and changes in Solventum's credit ratings; (7) exposure to interest rate and currency risks; (8) the highly competitive environment in which Solventum operates and consolidation in the healthcare industry; (9) reduction in customers' research budgets or government funding; (10) the timing and market acceptance of Solventum's new product and service offerings; (11) ongoing working relationships with certain key healthcare professionals; (12) changes in reimbursement practices of governments or private payers or other cost containment measures; (13) Solventum's ability to obtain components or raw materials supplied by third parties and other manufacturing and related supply chain difficulties, interruptions, and disruptive factors; (14) legal and regulatory proceedings and legal compliance risks (including third-party risks) with regards to antitrust, FCPA and other anti-bribery laws, environmental laws, anti-kickback and false claims laws, privacy laws, product liability claims, tax laws, and other laws and regulations in the United States and other countries in which Solventum operates; (15) potential liabilities related to per-and polyfluoroalkyl substances, collectively known as "PFAS"; (16) risks related to the highly regulated environment in which Solventum operates; (17) risks associated with product liability claims; (18) climate change and measures to address climate change; (19) security breaches and other disruptions to information technology infrastructure; (20) Solventum's failure to obtain, maintain, protect, or effectively enforce its intellectual property rights; (21) pension and postretirement obligation liabilities; (22) any failure by 3M Company ("3M") to perform any of its obligations under the various separation agreements entered into in connection with the separation of Solventum from 3M and distribution (the "Spin-Off"); (23) any failure to realize the expected benefits of the Spin-Off; (24) a determination by the IRS or other tax authorities that the Separation or certain related transactions should be treated as taxable transactions; (25) indebtedness incurred in the financing transactions undertaken in connection with the Separation and risks associated with additional indebtedness; (26) the risk that incremental costs of operating on a standalone basis (including the loss of synergies), costs of restructuring transactions and other costs incurred in connection with the Spin-Off will exceed Solventum's estimates; and (27) the impact of the Spin-Off on Solventum's businesses and the risk that the separation from 3M may be more difficult, time-consuming or costly than expected, including the impact on Solventum's resources, systems, procedures and controls, diversion of management's attention and the impact on relationships with customers, suppliers, employees and other business counterparties.
The above list is not exhaustive or necessarily set forth in the order of importance. Forward-looking statements are based on certain assumptions and expectations of future events and trends, and actual future results and trends may differ materially from historical results or those reflected in any such forward-looking statements depending on a variety of factors. A further description of these factors is located under "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" in Solventum's periodic reports on file with the U.S. Securities & Exchange Commission. Solventum assumes no obligation to update any forward-looking statements discussed herein as a result of new information or future events or developments.
In addition to reporting financial results in accordance with U.S. GAAP, Solventum also provides non-GAAP measures that we use, and plan to continue using, when monitoring and evaluating operating performance and measuring cash available to invest in our business. The adjusted measures are not in accordance with, nor are they a substitute for, GAAP measures. These non-GAAP financial measures are supplemental measures of our performance and our liquidity that we believe help investors understand our underlying business performance and Solventum uses these measures as an indication of the strength of Solventum and its ability to generate cash.
Solventum calculates forward-looking non-GAAP financial measures, including organic sales growth, adjusted operating income, adjusted operating income margin, adjusted effective tax rate, adjusted diluted earnings per share, and free cash flow based on internal forecasts that omit certain amounts that would be included in GAAP financial measures. Solventum does not provide reconciliations of these forward-looking non-GAAP financial measures to the respective GAAP metrics as it is unable to predict with reasonable certainty and without
unreasonable effort certain items such as the impact of changes in currency exchange rates, impacts associated with business acquisitions or divestitures, and the timing and magnitude of restructuring activities, among other items. The timing and amounts of these items are uncertain and could have a material impact on Solventum's results in accordance with GAAP.
The Q1 2025 financial statements and financial information, including reconciliations of non-GAAP financial
measures, are available on Solventum's website: investors.solventum.com.
About Solventum
At Solventum, we enable better, smarter, safer healthcare to improve lives. As a new company with a long legacy of creating breakthrough solutions for our customers' toughest challenges, we pioneer game-changing innovations at the intersection of health, material and data science that change patients' lives for the better - while empowering healthcare professionals to perform at their best. See how at Solventum.com.
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(Dollars in millions, except per-share data) (Unaudited)
Three months ended March 31, 2025 2024
Net sales of product ................................................................................................................ $ 1,597 $ 1,553
Net sales of software and rentals.......................................................................................... 473 463
Total net sales...................................................................................................................... 2,070 2,016
Cost of product......................................................................................................................... 835 725
Cost of software and rentals .................................................................................................. 121 119
Selling, general and administrative expenses..................................................................... 769 596
Gross profit........................................................................................................................... 1,114 1,172
Research and development expenses................................................................................. 193 195
Operating income .................................................................................................................... 152 381
Interest expense, net............................................................................................................... 104 39
Other expense (income), net ................................................................................................. 11 13
Income before income taxes ................................................................................................. 38 329
Provision for (benefit from) income taxes ........................................................................... (99) 92
Net Income................................................................................................................................ $ 137 $ 237
Earnings per share: .................................................................................................................
Basic earnings per share .................................................................................................... $ 0.79 $ 1.37
Diluted earnings per share.................................................................................................. 0.78 1.37
Diluted.................................................................................................................................... 174.8 172.7
Weighted-average number of share outstanding: ..............................................................
Basic....................................................................................................................................... 173.7 172.7
*Data in the schedule above is intentionally rounded to the nearest million and, therefore, may not sum.
Disclaimer
Solventum Corporation published this content on May 08, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 08, 2025 at 20:41 UTC.