Solventum Corp

Note 14 to the audited combined financial statements within the Company’s Information Statement provides an overview of Solventum’s business segments. In addition, disclosures relating to Solventum’s segments are provided in Note 15 to the accompanying condensed consolidated and combined financial statements. We manage our operations in four business segments. The reportable segments are MedSurg, Dental Solutions, Health Information Systems, and Purification and Filtration. Our Chief Operating Decision Maker evaluates segment operating performance using net sales and business segment operating income.

Corporate and Unallocated

In addition to the four business segments, the Company assigns certain costs to“Corporate and Unallocated,” which is presented separately in Note 15 to the condensed consolidated and combined financial statements. Corporate and Unallocated includes amortization of acquired intangible assets, restructuring and related charges, benefits or costs related to capitalized manufacturing variances, Spin-Off and separation related costs and other net costs that the Company chose not to allocate directly to its business segments. Spin-Off and separation related costs include any costs incurred as part of our separation from 3M and costs to setup operations as a standalone Company, including system implementations, manufacturing relocation, legal entity separation, certain equity awards granted as part of the Spin-Off, profit mark-ups on transition service arrangements with 3M and other one-time costs.

Corporate and Unallocated also includes sales and cost of sales related to product supplied to 3M and other supply agreements related to legacy 3M non-health care business that were assumed by the Company at Spin-Off. Because Corporate and Unallocated includes a variety of miscellaneous items, it is subject to fluctuation on a quarterly and annual basis.

Corporate and Unallocated net operating loss increased in both the third quarter and the first nine months of 2024 when compared to the same period last year as the Company had higher Spin-Off and separation related costs.

Operating Business Segments

Information related to the Company’s segments is presented in the tables that follow with additional context in the corresponding narrative below the tables.

Refer to the section entitled “Business” in Solventum’s Information Statement for discussion of products that are included in each business segment.

MedSurg (56.8% and 56.0% of consolidated sales for the three and nine months ended September 30, 2024)

Third quarter 2024 results

Sales in MedSurg were up 0.1%:

•Organic sales growth was driven by volumes, including a benefit from I.V. site management and medical OEM products, partially offset by traditional negative pressure wound therapy.

•Volume growth continues to benefit from single-use negative pressure wound therapy.

•Other includes lost sales from certain health care businesses in India retained by 3M in connection with the Spin-Off.

•Foreign currency translation negatively impacted sales by (0.1%).

Business segment operating income margin decreased when compared to the same period last year. The decrease was driven by higher costs to stand-up and operate our standalone structure after Spin-Off.

First nine months 2024 results

Sales in MedSurg were flat:

•Positive price growth was driven by the impact from actions initiated during the prior year in response to higher material and labor input costs. The favorable impact of prior year price actions has and will continue to decline during the remainder of 2024.

•Organic growth was led by I.V. site management, medical OEM products, and single-use negative pressure wound therapy, partially offset by declines in sterilization assurance products and traditional negative pressure wound therapy.

•Other includes certain health care businesses retained by 3M India in connection with the Spin-Off.

•Foreign currency translation negatively impacted sales by (0.6%).

Business segment operating income margin decreased when compared to the same period last year. The decrease was driven by higher costs to stand-up and operate our standalone structure after Spin-Off.

Dental Solutions (15.0% and 15.8% of consolidated sales for the three and nine months ended September 30, 2024)

Sales in Dental Solutions were down (5.2)%:

•Lower volumes were driven by soft end-market demand.

•Other includes lost sales from the Company’s dental anesthetics business that was sold in August 2023 as well as certain health care businesses retained by 3M India in connection with the Spin-Off.

•Foreign currency translation impact to sales was flat.

Business segment operating income margin decreased when compared to the same period last year as a result of higher costs to stand-up and operate our standalone structure after Spin-Off in addition to the impact of lower sales volumes.

Sales in Dental Solutions were down (4.3)%:

•Volume declines were partially offset by positive price growth. The favorable impact of prior year price actions decreased during the period and the impact of such price actions has and will continue to moderate through the remainder of 2024.

•Other is primarily driven by lost sales from the Company’s dental anesthetics business that was sold in August 2023 as well as certain health care businesses retained by 3M India in connection with the Spin-Off.

•Foreign currency translation negatively impacted sales by (0.6%)

Business segment operating income margin decreased when compared to the same period last year as a result of higher costs to stand-up and operate our standalone structure after Spin-Off, partially offset by the benefits from both higher price and lower manufacturing inflation.

Health Information Systems (15.7% and 15.7% of consolidated sales for the three and nine months ended September 30, 2024)

Sales in Health Information Systems were up 1.5%:

•Positive growth was driven by continued adoption of our 3MTM 360 Encompass TM, partially offset by performance management solutions and clinician productivity solutions.

•Clinician productivity solutions declined primarily due to impacts from changing market conditions.

Business segment operating income margin decreased when compared to the same period last year driven by higher compensation costs.

Sales in Health Information Systems were up 1.8%:

•Positive growth was driven by continued adoption of our 3MTM 360 Encompass TM and performance management solutions.

•Clinician productivity solutions declined primarily due to impacts from changing market conditions.

Business segment operating income margin increased when compared to the same period last year driven by a product mix benefit due to higher software sales and lower professional services, partially offset by higher compensation costs.

Purification and Filtration (11.4% and 11.7% of consolidated sales for the three and nine months ended September 30, 2024)

Sales in Purification and Filtration were down (1.5)%:

•Primarily driven by declines in drinking water filtration and membrane OEM product categories, partially offset by continued strength in bioprocessing filtration product category and added capacity coming online for industrial filtration product category.

•Other includes certain business in India retained by 3M in connection with the Spin-Off.

•Foreign currency translation impact to sales was flat.

Business segment operating income margin decreased due to a negative impact from costs to stand-up and operate our standalone structure after Spin-Off and sales mix.

Sales in Purification and Filtration were up 0.1%:

•Primarily driven by higher volume growth in our bioprocessing filtration product category. This growth was partially offset by a decline in our industrial filtration and drinking water filtration product categories.

•Other includes certain health care businesses retained by 3M India in connection with the Spin-Off.

•Foreign currency translation negatively impacted growth by (0.7%).

Business segment operating income margin decreased due to the negative impact from costs to stand-up and operate our standalone structure after Spin-Off and sales mix.