Solventum Corp

Note 17 to the consolidated financial statements provides an overview of Solventum’s business segments in addition to disclosures relating to Solventum’s segments. 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

Certain items are maintained at the corporate level and not allocated to the segments ("Corporate and Unallocated"). Prior to Spin-Off, Corporate and Unallocated primarily included amortization of acquired intangible assets, restructuring and related charges, and benefits or costs related to capitalized manufacturing variances. Corporate and Unallocated also includes Spin-Off and separation related costs. 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 relocations, legal entity separations, 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 our supply agreements with 3M and other supply agreements assumed by the Company at Spin-Off related to legacy 3M businesses. Because Corporate and Unallocated includes a variety of miscellaneous items, it is subject to fluctuation on a quarterly and annual basis.

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.

MedSurg (56.2% of consolidated sales for the year ended December 31, 2024 )

Sales in MedSurg were up 0.1%:

•Organic sales growth of 1.2% was driven by volumes, primarily due to benefits from medical OEM products, I.V. site management, and single-use negative pressure wound therapy, partially offset by declines in traditional negative pressure wound therapy and sterilization assurance products.

•Other includes lost sales from 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.

Sales in MedSurg were up 1.0%:

•Organic sales growth of 1.6% was driven by price partially offset by lower volume. Volume declines from our microfluidics and hand hygiene product lines, which benefited from higher sales during the pandemic, negatively impacted growth by 1.1%.

Business segment operating income margin increased when compared to the same period last year. The increase was driven by spending control and price partially offset by material inflation.

Dental Solutions (15.7% of consolidated sales for the year ended December 31, 2024)

Sales in Dental Solutions were down (2.6%):

•Volume declines associated with softening end-market demand were partially offset by the favorable impact of prior year price actions.

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

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

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.

Sales in Dental Solutions were up 0.2%:

•Positive volume and price growth of 3.5% from dental products were partially offset by declines in traditional orthodontic products.

•Other was negatively impacted by 1.1% due to the exit of Health Care operations in Russia.

Business segment operating income margin increased slightly when compared to the same period last year as price increases offset the cost of material inflation.

Health Information Systems (15.8% of consolidated sales for year ended December 31, 2024)

Sales in Health Information Systems were up 1.6%:

•Positive sales growth was driven by continued adoption of our 3MTM 360 Encompass TM.

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

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

Sales in Health Information Systems were up 4.7%:

•Sales growth was broadly driven across the portfolio, including revenue cycle management, performance management and clinician productivity solutions. Growth was driven by both new customers and product upgrades at existing customers.

•Sales growth was negatively impacted by delays to customers’ investments in IT, which were driven by ongoing stress on hospital budgets.

Business segment operating income margin increased when compared to the same period last year driven by both price increases and lower spending, partially offset by wage inflation. Volume growth into higher margin products drove mix benefit.

Purification and Filtration (11.6% of consolidated sales for the year ended December 31, 2024)

Sales in Purification and Filtration were up 0.6%:

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

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

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

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

Sales in Purification and Filtration were down 4.0%.

•Sales growth was primarily impacted by inventory rebalancing at our bioprocessing filtration customers, which reduced sales by 5.4%. This decline was partially offset by growth in our separation products.

Business segment operating income margin decreased primarily due to the negative impact of product mix from lower bioprocessing filtration sales.