3M Plans To Exit PFAS Manufacturing By 2025 End; Expects Up To $2.3B In Charges

3M Co MMM plans to exit manufacturing of per- and polyfluoroalkyl substance (PFAS) dubbed 'Forever Chemical' and work to discontinue the use of PFAS across its product portfolio by the end of 2025 amid regulatory actions worldwide on reducing or eliminating the presence of PFAS in the environment.
PFAS are used in manufacturing products, including medical technologies, semiconductors, batteries, phones, automobiles, and airplanes.
The current annual net sales of manufactured PFAS are approximately $1.3 billion, with estimated EBITDA margins of approximately 16%.
Over the course of the exit from PFAS manufacturing, 3M expects to incur related total pre-tax charges of approximately $1.3 billion to $2.3 billion, including Q4 charges.
The company expects to take an estimated Q4 2022 pre-tax charge of $0.7 billion to $1.0 billion, primarily non-cash and related to asset impairments.
3M will discontinue manufacturing all fluoropolymers, fluorinated fluids, and PFAS-based additive products.
The company, however, intends to fulfill current contractual obligations during the transition period.
Litigations: 3M plans to address litigation by defending in court or through negotiated resolutions.
Price Action: MMM shares are trading lower by 0.66% at $121.32 on the last check Tuesday.