All right, we're ready to kick it off with the second track today. Really excited to have 3M here. There's been a lot going on. On stage with us, we've got Bill Brown, who's Chief Executive Officer, Anurag Maheshwari, EVP and CFO, and then Chinmay Trivedi, who just joined us, took over. He's taking over the IR function to start the year. So thank you all for joining us today.
Great. Thanks for having us.
Yeah, great to see you guys. So look, lots of changes over the past year. Bill, maybe just kind of talk about your first three, seven months at 3M. How do you see the company fundamentally changing from here, and we'll take the conversation from there?
Well, first of all, good morning, everybody. It's great to be here. We had a good start to the year. It's a start, meaning it's almost December, so it's moving very quickly. But now about seven or so months in the job. Earnings per share this year were up about 30% so far through Q3 year to date. Organic revenue about 1%, but margins were up 380 basis points. So a pretty good start to the year. Free cash flow was $3.5 billion, 102% of income. So it's very strong cash generation. We returned $2.7 billion to shareholders, including $1.1 billion worth of share buybacks in Q2 as well as in Q3. We took the opportunity in the last earnings release to raise our guidance, the bottom end, by $0.20. So we're now at $7.20-$7.30. Of course, all my numbers are adjusted EPS.
I won't keep saying that, but they're adjusted numbers. It's up 19%-21% yea- over- year. So I think a pretty good year, a pretty good start. I think we'll end strong. Again, organic revenue for the year will be about 1%. And again, when I talk about our free cash generation return to shareholders, it's after spending quite a bit, $1.7 billion year to date in R&D as well as in capital spending. So we're investing pretty heavily back in the business. We feel good about those investments. I'll talk more about that as we go through discussion today. I'm making good progress on the priorities I laid out at the Q2 earnings release. I gave a little more color in our Q3 earnings release. Top line organic growth is at the front end of this.
It's both reinvigorating innovation inside the company as well as improving our execution at the commercial interface. So making sure we start to drive organic revenue growth is sort of a key priority, driving operational performance across the enterprise. My comments are oftentimes focused on the supply chain and what we're doing in our factories, what's our supply base and our cost of quality, all those other pieces. But the reality is, when I think about operational excellence in the company, it goes way beyond just supply chain. It goes back into R&D, how we market, how we sell. There are a lot of opportunities to drive OpEx in R&D. I look at that as sort of our factory of innovation in many ways. There's a lot of ways of driving improvements there.
And the third is really around capital deployment, making sure we maintain a strong balance sheet, invest in the business, pay an attractive dividend, all those pieces, including over time with any excess cash either buying back stock or doing M&A, as I just mentioned a couple of minutes ago. So again, about seven months in the job, I think it's been a good start. It's been a quick start. I'm learning a lot. The curve is pretty steep. We've made a couple of changes. Joe talked a minute ago about Anurag, who joined us in early September. It's been a couple of months, so you can ask him what he's been doing, of course. You're free to do that. But he's been with us for now about three months or so. I worked with Anurag for a lot of years, probably two decades.
We started working together back in Singapore about 20 years ago. We've worked off and on together through that period of time. That helps a lot because we know each other's style. We know each other's capabilities. We can talk to each other almost in shorthand. It's a way to move very, very quickly. He's been a great addition to the team, as well as some others in the organization. We had Wendy Bauer join us a couple of months ago back in June. She's now running our Transportation and Electronics Business Group. She came from AWS and Microsoft. Her career is back in automotive. Most of her life was in the automotive industry. It's off to a great start. A couple of other changes kind of one level down, and there'll be more, I'm sure, will come in the coming months and quarters.
Nothing really to share with you today other than Chinmay joining us as head of IR. Bruce Jermeland has been in the role for six years in IR for more than two decades. He's done a great job. He decides to retire on January 1st, and Chinmay is now going to take on the IR responsibility. He's been with us for three years doing FP&A work. He's an outstanding leader, outstanding finance executive, career in GE before he joined 3M. And he's going to do a great job in driving IR. So a lot of things I think to be excited about in terms of where we're going. When I talked in Q2 and again in Q3, of course, all of our employees listen quite eagerly to what I'm talking about there. It's the same messages I drive internally in our all-hands meetings.
I'll tell you, one of the things I'm most encouraged about is the way the employees of 3M have embraced the change agenda and what we're trying to do to drive top line growth, drive innovation. A lot of people joined 3M to innovate. They didn't join to focus on liability. They joined to innovate. It's very refreshing to them to get back to what are we doing to drive innovation, new solutions for our customers. They recognize very well, as I do, and I think investors do, that we're in the early stages of our operational excellence journey. I think that's good news, bad news. I would have expected coming in, we'd be further along in driving OpEx. It's been what I've been doing for more than two decades.
From the time I was at UTC many, many years ago, and I did at Harris and L3Harris, I would have thought we were further along. We're not. But the good news is a lot of upside opportunity for us inside the company. So I think employees realize there's more work to do, but a lot of excitement and enthusiasm about where we're heading and taking the company. So I think a lot to be happy about this year as we turn into 2025.
Bill, really great opening remarks. And there's a lot of jumping off points there. But before we do that, Anurag, just so clearly you guys have worked together for a long period of time. Just curious, what attracted you, obviously, besides this relationship to 3M and the opportunities you see? I know it's only been three months.
Yeah, great. Hey, thanks for the question, Joe. Listen, 3M, iconic company, very strong brand name, strong history of innovation, great customer presence and geographical presence as well. Over the past three months, I've spent a lot of time with not only the segments, but also the divisions below them, visiting different locations, different sites, going to China, Europe, and meeting other colleagues of ours as well, and shared the same observations as Bill around the amount of opportunity that the company has. I think we're focusing on the right priorities, which are the three, one, in terms of driving the revenue growth, which is making investments in the right area, commercial execution, and on the operational excellence on the margin side, a lot of opportunity, not only on the gross margin, but also what we can do with indirect expenses and so on.
And last, the real strength is on the capital structure or the balance sheet that we have and the cash generation. So you put all of this together in terms of what the opportunities ahead of us with the strong brand the company has, that's probably the big attraction for me. And so far, it's going on quite well.
So thank you for that. Bill, you mentioned on the most recent earnings call, potentially thinking about ways to change the incentive plan. You guys talked about better growth, more operational excellence. Maybe provide some thoughts around that.
So it's come up a lot. In fact, in every investor conversation, and it's certainly important in my mind, as I'm thinking through strategically where we want to take the company, what's the execution path, and then how do you make sure you have the right people on the team in the right positions with the right incentives? And when I think about incentives, for me, what's become clear, it starts off with, number one, very clear, tangible, time-based objective setting process. And I think that's really important. Incentives should fall from that, but out of the gate, it's got to be making sure the objectives are very clear, and then making sure that we pay for performance. We have a culture at 3M. It's in Minnesota. People call it Minnesota Nice, but we have a culture where everyone gets an A.
There's not a lot of differentiation in performance inside the company. And I'm not sure if it's been there for a while or it came from COVID or what happened, but the reality is we have to have clear objectives top down inside the company for every individual, time-based, what are we expecting every individual to do, how's the entity different at the end of the year because you are here over the course of the year. I mean, all of those various pieces. So number one, as we turn the corner to 2025, it's a much more rigorous, fact-based, detailed objective setting process, and then paying for performance. Sounds simple. It's something that I've done before and we'll make sure we do this here as well.
So then as it flows into incentives, really, it starts at the executive population, and then the same metrics flow into the overall company. On a short-term basis, it's a third, a third, a third between organic revenue, operating income, and operating cash flow generation. It's op cash, not free cash flow on the AIP. It's something the board wanted to focus on. So that's really, and we'll probably continue that into 2025. The company's got to formally decide this, but that's likely to happen. And those metrics flow deep into the organization, into all the non-executive population. The place where we will see a change going in the next year is in the long-term incentive plan. We had a pretty adverse say on pay in May at the shareholders' meeting. There's a number of reasons behind that.
I think part of it was related to the fact that our LTIP program, if you read the proxy, it's pretty complicated. I was on the comp, I was on the area comp committee at L3Harris. I was on the comp committee at Celanese, and now at the BD Board of Directors on the comp, and I think we've got a very complicated LTIP program, so the first one, we have to simplify it. It's going to go from three one-year plans to a three-year plan. So instead of a plan which was reset every year over a three-year period, which I didn't really like, investors don't really like, it's a three-year plan, it's likely to be 50/50 between EPS or cumulative EPS or something like that and free cash flow.
I believe very strongly in free cash generation and the importance of the company driving that and you measuring on us that on that part. And to me, that's really important because we spend over $1 billion in capital. So I think that's really important. So 50/50 between earnings per share and free cash, but there'll be an overlay on total return to shareholders, which I think is very, very important. There'll be a modifier. It'll have some definition. It's likely the S&P 500 Industrials. But again, these things, the board's going to continue to have discussions around. We've been out talking to a lot of owners. We probably talked to 40% of our owner base about this. And another one, I think, on Monday and Tuesday. So it's likely that's the path that we're going down.
But again, it really, Joe, it starts with really clear objectives and then paying for performance and differentiating awards based on performance and potential inside the company. So very, very important to us. We're spending a ton of time on this, but I think you'll see a difference as we go into next year.
That's really great to hear. I'm a big believer in free cash flow as well. That's great. Look, restructuring, let's turn it there. 3M's done a bunch of restructuring in the last decade. Not a lot of it has been asset-based. So talk to us a lot about the opportunity to consolidate the footprint.
Yeah. I didn't go back in time to see how much was asset-based. I think I'll take your word for it. The most recent program that we're in right now, the range on spending is $700 million-$800 million savings, about one times cost. So it's a pretty good program, but that in and of itself tells you it's more people than assets. You don't get a return like that on going to big factories. But it's really not all just people. There have been some asset restructurings within that against about 8,000-9,000 people that have or will lose their jobs through this big restructuring program. But there's a few things within that. As you remember, we went from an organizational model, which was very geographically driven to business groups that are global, and a supply chain group that is now global.
So part of that was reducing a lot of the overhead costs within our supply chain organization. There's been some factory closures, about nine factories, so maybe seven full and two partial factories, about 20 distribution centers that are closed or closing through that process, a couple more in flight. We've had about 44% reduction in the number of offices and office square footage. So there have been some facility or asset takeout for sure. But I do think, to your point, I think there's probably more people related to that. The first thing we have to do is execute really well in this program. We're about 85% complete, so we're not done. We've got more in Q4, a little bit more tailing into 2025.
We’ve got to continue to execute well on restructuring and avoid the bleed back into the organization, which sometimes happens when you do restructurings that are people related. So this, to me, is very, very important. But when I step back and look at, as we go forward, what do I think about the next set of opportunities ahead of us? The fact is we have 110 factories even after the restructuring. We have 95 distribution centers even after some of the restructuring. And we’re operating our factories at about 50%-55% utilization. I call it operating equipment effectiveness to utilization metric with a quality overlay to it. But the fact is we’ve got a lot of unused capacity in our network. And I see that in distribution centers as well. We’ve got a lot of complexity across.
I gave the example of the Q2 earnings release about a Command strip hitting three factories and two distribution centers before it hits the shelf, and the whole business runs this way. It runs in a way where we have a lot of things that are made as semi-finished goods going from factory A to B to C, and then to a distribution center or two before it gets to the customer, so we've got to figure this out, and we've got to simplify the construct of our manufacturing base, but when I look at the opportunities ahead of us, the first thing I'm focusing on is making sure we look at what I call four-wall spend. So how do I optimize what's inside the four walls of the factory, and there's a ton of opportunity in this.
We have 25,000 suppliers, including 4,000 contract manufacturers, a lot of which were grown up locally around a plant because every plant was in a region or a country, and the country manager ran it. So we've got opportunities. Now we're looking across the company to look at, okay, how do we take cost out? And there's a ton of opportunity by just running the four-wall spend better. And those are things we're driving right now: supply chain efficiency, waste reduction, drilling Kaizen, lean manufacturing, tons of opportunities here. And that, to me, is step one. Step two is then taking the existing network and how do I optimize modes and flows between these facilities? And again, there's lots of opportunities to do better in terms of just the way the network is constructed today.
And then, third, over time is going to be, okay, now what's the factory of the future? The network of the future really look like? It should be less than 110 and less than 95 distribution centers. What the number is, we'll figure that out as we go. But a fundamental part of getting to that step is really the first step, which is, well, what's the utilization of the assets you happen to have? And you recall in the Q3 earnings release, I talked about OEE, Operating Equipment Effectiveness, because that's an important metric. Knowing what's the utilization or underutilization of your assets is important as you start to step back and think about how do you consolidate facilities. And that's kind of what we're building the ground base on right now. So when I think about it, it's these steps that we're taking here.
From an investor perspective, looking at us, we've got horizons of opportunities that are ahead of us that every year I can see more and additional opportunities to drive lean, take out costs, become more efficient across our network, and then extending that same sort of lean principle, if you will, to all of the non-factory assets as well, all of our finance and HR and R&D and those other activities. So that's how I'm thinking about it. It will be over time some additional assets, but right now, I think the biggest thing, execute what we have and do a lot of the blocking and tackling in our factories.
I mean, I can't help but not comment on how energized you seem. And at the same time.
It's a copy of me. I got him earlier today.
Thank you. You seem incredibly energized, but this also seems like an incredibly complex long-term process. I've got to ask you, I mean, you're signed up for this for a long period of time?
This is not. It's a long game, of course. I mean, the company's been around for 123 years. So I'm here for a period of time. The reality is, I mean, the steps that we're taking, the things I'm laying out, it is not rocket science. I mean, it's different. It's 3M. It's not the same company, not the same footprint, not the same products. But the fundamentals of how you do this is not that hard. Even the fundamentals of how do you drive innovation in a factory is not that hard.
You do it by breaking the problem down and attacking the pieces of the problem and doing it very systematically, very methodically, and hopefully with people that I've partnered with before in the past that can do it through some hand signals and gestures and know exactly what to do because you've been there before, which is why Anurag and the team and other people are going to join us because, look, that's how you get at this stuff fast. But nothing about what I'm talking about is rocket science. And you might be sitting there saying, "Well, geez, why 3M? Why didn't you do this before?" That's a question for a different day. The fact is, as I sit here today, I look at what we're given.
We have a lot of great raw material, a lot of great brands, a lot of energized people, good facility network, and lots of opportunities that are right in front of us to do a better job at running these assets than we've done in the past.
Bill, I think on the most recent call, you talked about on-time in-full being at 89%, which honestly was really surprising to me. I hadn't heard that stat before. It seems like that's a near-term opportunity. Can you talk about what you're doing there to prove theoretical?
So this is, again, it's a fundamental. And I want to emphasize my point at the beginning. This is a focus on the fundamentals, back to basics approach, because that's really what it is. On-time in-full is very, very simple. When you have customers and you're shipping lots of product to, and they have choices, you have to make sure you're delivering them good product on time and in the number and quantity which they ask for. Sounds really simple, but the fact is we've not been doing that. If you go back to pre-COVID, I think our performance was a little bit better, but not great. But I think we took a big hit during COVID, and we didn't respond as quickly. We didn't adjust with our supply bases quickly. So we are running year to date, we're running at 89% on-time in-full. That's across the franchise, 89%.
We are losing business, 100% guaranteed. We're losing business because we're not delivering it in full. We know this. We see it every single day, and the consumer business, you need to be above 95%, sometimes 98%. We're running around 93% on consumer, which means we're getting fined, and it's tens of millions of dollars in fines from the retailers who expect it's going to be there at 97%, 98%, and if it's not, they basically fine you. They just deduct it from whatever invoice they're going to pay you, so there's fines that happen. In our transportation business group, we are running about 89%. It's a tick above that now. So it's doing a little bit better, not where we want to be, but getting better.
The challenge for us has been in the Safety and Industrial business, the industrial side, SIBG, which has been running in the low to mid-80s, and we're struggling to kind of make a lot of improvement there. That's where we're really focusing. So we're not where we need to be. We're five points better than the beginning of the year. We're 10 points above two years ago. So progress, but not anywhere where we need to be. Interestingly, when I think about, we actually look at the reports every single week on this metric, and we talk about this a lot internally. Sometimes it's shipping delays. Sometimes it might be supplier delays. Our supplier performance is not very good. We've got to get better there. But a lot of times it's that we have insufficient capacity in the business to deliver the volume.
You say, "Well, how can that be when you've got 50% or 55% utilization of your assets that you don't have capacity?" The fact is that sometimes our machines are down for maintenance issues. In this three- or four-step process where we deliver a product, it goes from plant A to plant B to plant C. If plant A is running at 50% and you produce, and it goes to plant B and it's also running at 50% and it's down to that point in time, you just lost your opportunity to ship to the customer. We've got to fix this. That's why I'm focusing a lot on expanding our capacity by unleashing some of the improving capacity utilization. The other part about this is you got to get better at demand planning and demand forecasting.
The fact is we're running in the low 60%-65% forecast accuracy, and we don't do it very aggressively. We don't look at this very closely. So we've got to get a lot better at predicting demand, flowing it back to the factory, flowing it back to the supply chain. Again, really basic stuff. You see lots of people doing this. If I focus on those two things, improve capacity in our facilities, as well as improve our demand planning process, I think I can actually crack the code on on-time in-full and get well above 90%. That's our goal. Our goal is at 90% this year. Whether we achieve that or not, I'll let you know when the time comes in January to report Q4 earnings. But this, to me, is a fundamental piece. It gets back to the basic building blocks and correcting each of the building blocks.
Super helpful. I'm going to open it up to the audience in a minute. Just wanted to ask this question. With everything that you just described, the gross margins for 3M today are in that 43%, 44% zone. Historically, it's been in the high 40s. You're describing a scenario where we're really talking about maybe 50-plus. Just maybe talk us through what the long-term ambition is for gross margins in the business.
You know, look, you're right. I mean, even when you adjust for the healthcare spend, we've been in the high 40s. I don't know if it touched 50 or not, but it could have been. I really don't know. But you're right. We're in 43%, 44%. The way I step back and the way Anurag and Chinmay and other parts of the team are looking at this, we have $13 billion cost of goods sold. The objective that Peter Gibbons and the team are driving in terms of productivity is 2% net of inflation, 2% net. So 2% on 13 billion is $260 million. On our revenue base, it's a point.
So if you get 2% net and you don't have any other ankle biters of the quality issues and all of the other things that happen day-to-day in a factory, you put $250-$260 million on. You have a point of growth every year and margin expansion. Ideally, that's what you'd like to see. But the world's not ideal. So you're going to have things that happen in your business where you're going to have escapes. You're going to have quality issues. You're going to have different things where you might not be able to drive that every year. We've got high inventories. We're sitting at almost $4 billion, so about 101 days, 100 days of inventory. That's got to come down. And when it comes down, there's underabsorption in the factories. We've got to eat through that. You've got issues.
This year we've had a pretty good year in electronics, higher margins, so you've got to work the mix. As our volume comes up, that helps us go in the other direction, so when I think about it, there's lots of different levers here. We'll work this out over time, but as I look at the math going out the next several years, we should see gross margin expansion by just getting really good at this operational excellence muscle, and that's why I spend all my time, as I'm talking to you a lot about, all the various pieces that I'm seeing here that I've seen before in different shapes and forms, but I kind of know what we need to do, and I know we're actually going to solve the problem. It won't necessarily be linear. We'll see it every single quarter.
I can draw a line and see kind of where we're going on gross margins. So we will get better. I'm not here to say Joe is going to be 50 or 49 or 51. We'll lay this out a little more carefully as we get into next year and have an investor day at the end of February. But there's a lot of opportunities untapped here on the gross margin line for sure.
Last question before I go to the audience. So we're on the eve of 2025. I know you're going to have an investor day. Just any initial thoughts that you'd give us on next year, maybe early preview on the investor day? Any thoughts?
So the investor day is going to be fleshing out clearly what I'm discussing here with a lot more detail, a lot more rigor, more examples. I'm talking with some hand waving of what we're doing on driving innovation, but I expect we'll lay out the vertical markets that we'll be focusing in and those that we won't, how we're going to start to redeploy investments to make sure we're investing on the highest ROI projects and how we're transforming how we drive R&D with a new governance process. Again, when I'm not talking about a lot of rocket science here, a lot of stuff is very basic, but I'm going to lay this out a lot more clearly and how we're using IT tools to drive innovation at a faster pace.
Clearly, we've got an opportunity to compress the cycle time and drive out some of the non-value-added labor and R&D efforts. So there's a ton of opportunity there, and we'll talk a lot more about that. But you asked about the macro. Look, this year has been, the macro has been a little bit tough. I think IPI has been running around 1.1%-1.2% this year, more or less. You read the numbers next year, it's around 2.3%-2.4%. So industrial should be accelerating. But I also look at it with some caution. A year ago, looking at 2024, the number was also around 2.3%-2.4%, and here we are running at 1.2%. So I'm not sure how much credence we put into that. When you look at the automotive build rate, it's come down quite a bit since the middle of the year.
It's sort of down 4% in the back half, around 2.5% for the full year. At least the forecasts are to be up 1% or 2%, 1.3% or something like that % next year. But then when you peel the onion, it's mostly China. It's not so much Europe. Europe is flat, but down, the U.S. is down. It all depends on what automakers are you actually selling to. And we don't do as much on a contemporary vehicle in China as we certainly would like. So consumer business should be a little bit better this year. Obviously, we've had some issues in our organic business. We'll see that turning positive in Q4. The consumer economy, at least when you look at U.S. retail sales, should improve a little bit, but maybe be flat next year as opposed to being down a little bit this year.
We'll see how that goes. But there's a lot of stuff that's happening, I think, in the macro backdrop, and it's going to be an important element for us. As we're sitting here in the fourth quarter, I have to say we are seeing a really modest uptick in our order rates on industrial. Somebody asked me the other day about, "Well, is that an indicator?" Well, it's maybe a green shoot. It's not a shoot. Maybe it's one little thing. So I can't tell you for sure that's going to carry in the next year, but we're starting to see just a little bit of recovery. It could be, by the way, it could be what's happening in China. There's definitely some pull ahead business that's happening because of tariffs, tariff loading, if you will. So we see that a little bit.
I've got to be very careful about that. Some of that might be pulling into Q4 from Q1. But right now, things are looking, I think, reasonably stable. We'll have a decent quarter as we go into next year. At least in theory, the macro is going to be just a little bit better than where we happen to be sitting today. A lot of things we've got to do is just control what we can control. Because I look at this and I say, "Okay, the macro, whatever it affects everybody else." But as we drive new product introductions, and we will see an improvement going into next year. The last call, we were up about 10% this year on new product introductions. It's a simple metric. It's just numbers. It's just a number of launches. Next year will be more than 10% growth.
So we were at one point in time, 1,300 launches in a year. Last year, we were below 130. So now we're 10% above that. It's going to be more than that going into 2025. I know, like you all know, it's not about the numbers. It's the quality launch. What's the revenue? Are you launching it in that particular quarter, month, week, day that you said you would do? So all that has to happen in our business. But all of those things I think we can control, including the execution at the customer interface, is really important, driving on-time in-full. I think those are the things that we can control to drive growth as we think about next year. Pricing for us is an important dimension. We didn't talk about it here, but that's going to be important for us.
We typically get 30-50 basis points of price, more or less. We cover material cost inflation. And we've got opportunities to think a lot more surgically about what we do on pricing. We've not gone at really attacked cross-selling opportunities. So we're doing a very deep dive piece of work in the industrial business. It's our biggest business. They have a lot of opportunities to cross-sell products. I gave a couple of examples on that at the Q2 earnings release. The reality is we just haven't really focused on this. And as we're digging into this, there's a lot of opportunities to figure out ways to better price, how do you cross-sell products. And the third is how do you avoid churn, a share loss, share wallet loss with your customers? This gets back to how you train and incentivize the salesforce to attack.
When you have the first inkling that you're going to lose some share, what do you do? You attack. You attack. You go do something. So that's why we're trying to pivot our salesforce to be more hunters than farmers, with all these different analytical tools that can help the salesforce be a lot more productive. So long way of saying about the macro in next year, a lot of the things are within our control. It's about the execution of the team at the strategies we're laying out to go and attack the market next year, regardless of what the macro happens to be.
Just to follow on there, on margins, you've seen a lot of margin expansion this year. Just any comments that you'd make around the expectations for next year?
So there's a lot on the horizon. I'll jump in here. So we haven't put together our plan yet. That's something that we're working on right now. And again, we'll give some guidance next year as we get into 2025 and what we see happening in the margins. So we'll see the tailwinds on restructuring. There'll be lower restructuring cost headwind going into next year. We'll see some productivity benefits. Volume is going to be an important volume driver. Mix is going to have some effect. It's probably negative. Just keep in mind we're getting out of PFAS manufacturing. We exclude that from our. We non-GAAP that in our results. But as we exit PFAS manufacturing, the absorption hit in the factories will hit us next year and into 2026. So there's a couple of below-the-line items. Maybe Anurag, you can talk a bit about.
But when you put it all together, we should see some margin expansion next year. We'll qualify that as we get into next year. But maybe you can jump in.
Absolutely. Just to add to that, Bill, just on the operating margin, we should see it growing at a healthy clip, right? Volumes incremental 35%, 40% productivity, which Bill mentioned about restructuring more than offset the PFAS stranded cost plus the mix issue. So that should be growing at a healthy clip. On below the line, as I said on the Q3 earnings call as well, pension expense is going to be higher next year because of the service amortization. We're going to have higher interest expense, lower interest income because of lower cash balance and yields coming down. Of course, part of that will get offset by the share buyback that we did this year, which resulted in lower share count. But if you put all the three together, it'll be about a $0.30 headwind as we move into next year on the EPS side.
But overall, driving the top-line growth, driving operating excellence, I think with good momentum as we go into next year, we'll give more color, but feeling pretty good about it.
Great. Thank you. And any questions from the audience at this point? Okay. I'll keep going. Any comments you guys want to make on the outstanding or potential litigation next year? Personal injury kicks off, I think the MDL kicks off next year. Just any thoughts around that?
So not much more to say than what's actually in our 10-Q and 10-K as we go into next year. So we are through the biggest settlements around public water supply issues. And I think that was important is behind us. It's gotten funded. That cash is on our balance sheet and now moving out to fund some of those settlements. What's really next ahead of us is personal injury. There's a lot of the cases are within the AFFF MDL. The judge very recently, the court just recently decided to dismiss without prejudice a third of the cases. So about 3,000, so now 6,000 cases in the MDL. And they're driving forward with a couple of benchmark cases. I think the first court date is October 5th of next year of 2025. It's early October of next year.
So, there's going to be kind of a lot of back and forth and conversation with the plaintiff's counsel and plaintiff's executive committee between now and then on how that's all going to transpire. But a lot of that's within the AFFF MDL, which I think net for us is a good thing. There's also a couple of AG cases that are happening. There's a broader AG issue that's in the MDL. But then New Jersey and Vermont are outside of that. New Jersey, I think, is in June. And Vermont is, I think it's in the third quarter. I believe it's in August. I think it's in our queue. It's likely to kind of happen mid to end of summer of next year. Those are the things that we're really watching about.
are other things going on in Europe, Australia, Canada, but those are the ones that are on my mind. A lot of people are asking a lot about insurance recoveries. Year to date, we've recovered about $175 million in insurance for both Combat Arms as well as PFAS. Most of it is Combat Arms. Very little of that was PFAS. We do have opportunities to recover from our insurers. We do expect that they're going to honor their commitments with their policies with us. We're arbitrating. We're going to litigate on that. We're going to push that one very, very hard. There were specific legal reasons why we didn't push that hard until about a month ago or so. That's an opportunity ahead of us.
But just keep in mind, when you think about other players that have talked about insurance settlements on some of what they've done, their policies were up in here and the liabilities were quite a bit below that within the policies. Ours are the other way around. The amount that we actually settle for PWS is well above what our insurance policies happen to be at. So we're looking to not trade $0.50-$0.60 on a dollar. We want to get full recovery from insurance companies for what they're obligated to give us. And that may mean some litigation and arbitration.
That's great. Bill, I'm going to turn it to you in case of any closing comments.
No, we look forward to getting together in a more formal session. Again, we're looking at the end of February next year, so about a month after our earnings release, and it will be an opportunity for us, Anurag and I and Chinmay to expose the whole team. As we have some investors coming to see us in Minneapolis, you're welcome to come. It's 90 degrees Fahrenheit today, so it's really balmy. We have people, and we're showing more of the team because they're really, really strong leaders in the business. We're really energized, and we'll lay out a very comprehensive plan with investors if we get towards the end of February next year, but listen, I enjoy the time. Thanks so much. Thank you very much.
Yeah, thanks so much, Bill, Anurag, and Chinmay. Great to see you guys.
Great to see you.
Yeah.
Thank you.