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© 3M 2007. All Rights Reserved.
Jean LobeyExecutive Vice President
3M Safety, Security and Protection Services Business
October 9, 2007
2© 3M 2007 2007 3M Investor Conference
Agenda
• Our markets and businesses
• Driving growth for the future
• Summary
3© 3M 2007 2007 3M Investor Conference
Strong Sales And Operating Income Growth*
U.S. 40%
LAC 12% APAC 19%
Europe 29%
$2,152
$1,301 $1,557
$2,663$2,320
2004 2005 2006 1H06 1H07
$449 $513 $559
$297 $350
2004 2005 2006 1H06 1H07
Sales
Operating Income
LC % 8.5% 6.8% 13.7% 15.9%
OI % 20.9% 22.1% 21.0% 22.5%
+11%+14% +9%
($ millions)
+12%+8%
+15%
+20%
+18%
(YOY % Change)
2006 Sales by Geography
Averaged 14% total LC growth over the last six quarters
Significant investment in capex and acquisitions to support growth plan
Leading provider of technology and solutions into the global safety and security markets
Highlights
1
2
3
22.8%
12.2%
*Excludes special items in all periods
4© 3M 2007 2007 3M Investor Conference
SS&PS Markets
Protect and enhance facilities
Authenticate, secure and protect, people,
materials and information
Personal safety solutions at work
and home
ProtectionSecuritySafety
$30 Billion Market $12 Billion Market $20 Billion Market
5© 3M 2007 2007 3M Investor Conference
Industrial MineralsCorrosion ProtectionSecurity Systems
Building & Commercial ServicesOccupational Health & Environmental Safety
SS&PS Is Composed Of Five Divisions…
• Personal protection equipment: respirators, hearing protection, visibility, Thinsulate®
Sales growth: 8% to 12%
• Industrial hygiene, cleaning and window glazing products – Scotch Brite®, Prestige
Sales growth: 5% to 8%
• Border and civil security products – passports, passport readers, secure materials
Sales growth: 9% to 14%
• Corrosion protection products –fusion bonded epoxy powders, liquid epoxies, functional coatings
Sales growth: >20%
• Roofing granules, Color Quartz® for swimming pools
Sales growth: 3% to 6%
6© 3M 2007 2007 3M Investor Conference
…And Two Organizations Focused On Emerging Opportunities
Track & Trace Solutions EBO Global Mining EBO
• Library systems, locating and marking equipment, warehouse management software, patient safety solutions
• Bringing new technologies and complete solutions to an emerging market
Sales growth: >20%
• Market center focused on mining and mineral extraction customers
• Selling the Big 3M – product lines from across the company
Sales growth: >15%
Addressing entirely new market opportunities
7© 3M 2007 2007 3M Investor Conference
Multiple Forces Are Driving Strong Growth In Target Markets
Regulatory pressure
Need for integrated safety
solutions & “smart safety”
X-factors – weather, terrorism,pandemic disease
Need for productivity
Movement of industrial manufacturing to developing economies
Consolidation among industrial companies
Strong growth in safety, security, & protection markets
8© 3M 2007 2007 3M Investor Conference
Our Dream: A $10 Billion Business
ILLUSTRATIVE
Cons
umer
sGo
vern
men
ts
Cust
omer
s
Busin
esse
s
Protection - AssetsSecurity - ProcessesSafety - People
CPP
IMPD
B&CSD
SSD
T&T EBOT&T EBO
• The global leader in Safety, Security, and Protection products across multiple market centers and customers groups
OH&ESD
T&T
Mining
9© 3M 2007 2007 3M Investor Conference
Our Dream In Safety: Multiple Category Leadership
Addressing locally
$1.9 – $2.2$7.0 - $8.5$1.0 - $1.2$2.0 – $2.2$0.9 -$1.2$3.5 - $4.0
Visibility & Protective Clothing
Hand, Foot & BodyFallHead, Eye &
FaceHearingRespiratory
Current leadershipBuilding towards leadershipWhite space opportunity
Personal Protective Equipment Markets$ Billions
We will be a leader in multiple PPE categories
10© 3M 2007 2007 3M Investor Conference
AuthenticationSystems
IssuanceSystems
Our Dream In Security: Leading Solution Provider To Multiple Verticals
Secure Materials
Complete Secure Document Solution Markets• Border control• Law enforcement• Municipal transactions• Banking• Hospitality
Current status:
Leading positionDeveloping positionDeveloping market
We will provide a complete solution across multiple verticals
11© 3M 2007 2007 3M Investor Conference
Our Dream In Protection: Driving Innovation Into Multiple Market Segments
We will continue to drive innovative new solutions into the market
Food Services Construction
Building ServicesMining Hospitals
Military
Industrial Government3M Technology
12© 3M 2007 2007 3M Investor Conference
Agenda
• Our markets and businesses
• Driving growth for the future
• Summary
13© 3M 2007 2007 3M Investor Conference
Last Year We Articulated 4 Key Strategies
• T&T EBO• Mining market center EBO
EBO & special initiatives
• Emerging market channel/sales coverage• Optimize supply chain & regional manufacturing• Local/regional product coverage & development
International
• Border and civil security• Water market
Adjacencies/M&A
• Drive new product introductions• Assure the Maintenance Free Respirator franchise• Eliminate capacity constraints
Core growth
14© 3M 2007 2007 3M Investor Conference
Last Year We Articulated 4 Key Strategies
• T&T EBO• Mining market center EBO
EBO & special initiatives
• Emerging market channel/sales coverage• Optimize supply chain & regional manufacturing• Local/regional product coverage & development
International
• Border and civil security• Water market
Adjacencies/M&A
• Drive new product introductions• Assure the Maintenance Free Respirator franchise• Eliminate capacity constraints
Core growth
15© 3M 2007 2007 3M Investor Conference
Core Growth – New Product Growth Is Accelerating
% New Product Sales200719%
200823%
201230%
New product sales$ Millions
• Ultra Prestige Window Film• Digital Wireless Comm.• Welding Helmet• RFID-enabled Smart Shelves• Reengineered Copper
Granules• Durable Floor Finish• New CBRN• Cool Roof Granules• EFR 7700
• Swordfish (EFR)• Mistral (PAPR)• Sentinel (MFR)• Hospital Specimen Tracking• Secure Supply Chain• Grease Duct Fire Protection• Mobile Handheld Passport
Reader• Stay-Clean Granules
2007
2008
200412%
CoreAdjacentIntl’EBO’s
16© 3M 2007 2007 3M Investor Conference
Breakthrough New Product – NBC Protection Equipment
• Currently, the only loose fitting NIOSH approved system
• Versatile communications systems included• Robust materials that withstand
decontamination showers
NBC Protection System – provides complete protection from Chemical, Biological, Radiation, and Nuclear hazards; NIOSH approved for First Responders
AdvantagesDescription
CoreAdjacentIntl’EBO’s
17© 3M 2007 2007 3M Investor Conference
• Soft-silicone face seal for greater durability in harsh environments
• Quarter turn cartridge connection for easy attachment and ability to change cartridges without removing the respirator
• “Cool-flow” exhalation valve design for easier breathing with less resistance
The latest entry into 3M’s single cartridge EFR product line with a face seal specifically designed to fit face sizes throughout the Asia Pacific region
AdvantagesDescription
Breakthrough New Product – Elastomeric FacepieceRespirator (EFR) 7700
Product Pict. 1
Product Pict. 2
CoreAdjacentIntl’EBO’s
18© 3M 2007 2007 3M Investor Conference
Entry Level
Extending The Maintenance Free Respirator Franchise
San HueiGangkai
JSP
Shanghai Dasheng
KSN
CoreAdjacentIntl’EBO’s
Mid Range
Unapproved
High Value
Strong positionIntermediate positionNot participating
19© 3M 2007 2007 3M Investor Conference
Breakthrough New Product – Speedglass SLCoreAdjacentIntl’EBO’s
• Auto darkening lens – eliminates need to remove helmet between welds
• Ultra-Lightweight design – only 13 oz, reduces fatigue
• 4 sensitivity levels – enables more customized use
Speedglass SL Welding Helmet – auto darkening welding vision protection
AdvantagesDescription
20© 3M 2007 2007 3M Investor Conference
Breakthrough New Product – Prestige Series Window Film
• Fade Control - blocks 99.9% of the sun’s harmful rays
• Energy Savings - reduced energy costs, blocks up to 66% of heat coming through the glass
• Aesthetics and Glare Control - significantly reduces glare
3M™ Prestige Series Window Film - a selection of clear, metal-free films that deliver superior protection from UV and performance never before offered in a clear window film
AdvantagesDescription
CoreAdjacentIntl’EBO’s
21© 3M 2007 2007 3M Investor Conference
Preparing For The Worst – Safety And Security Window Films
• Bomb Blasts – offers protection against flying glass caused by explosions
• Severe Weather and Hurricanes – hold glass together preventing flying glass from harming inhabitants, keeps out wind and rain.
• Street Crime – Deters smash-and-grab thieves, prevents intruders from gaining access
3M™ Safety and Security Window Films –a family of products that help you prepare for the worst
AdvantagesDescription
CoreAdjacentIntl’EBO’s
22© 3M 2007 2007 3M Investor Conference
Breakthrough New Product – Digital Communication
• Superior Sound Clarity helps to optimize communications with the customer
• Smart Technology provides self diagnostics to improve reliability
• Fully Digital simplifies user controls and enables network support and services
• Enhanced efficiency through automation that improves drive-thru performance
Wireless Communication System Model XT-1 is a fully digital intercom system for the Quick Serve Restaurant (QSR) industry and Drive-thru Applications; 3M is a leader in this space
AdvantagesDescription
CoreAdjacentIntl’EBO’s
23© 3M 2007 2007 3M Investor Conference
Breakthrough New Product – Cool Roof GranulesCoreAdjacentIntl’EBO’s
• 3M™ Cool Roofing Granules provide for an increase of up to three times greater solar reflectance and exceptionally high thermal emittance.
• Allow shingle manufacturers to achieve EPA’s Energy Star® rating
• A palette of 8 durable, Cool colors
3M™ Cool Roofing Granules reflect a greater share of the infrared portion of the solar spectrum, which helps keep roofs cool in the summer time.
AdvantagesDescription
24© 3M 2007 2007 3M Investor Conference
Last Year We Articulated 4 Key Strategies
• T&T EBO• Mining market center EBO
EBO & Special initiatives
• Emerging market channel/sales coverage• Optimize supply chain & regional manufacturing• Local/regional product coverage & development
International
• Border and civil security• Water market
Adjacencies/M&A
• Drive new product introductions• Assure the Maintenance Free Respirator franchise• Eliminate capacity constraints
Core growth
25© 3M 2007 2007 3M Investor Conference
Additional Capacity Will Further Drive Core Growth
• Significantly increases maintenance free respirator and elastomeric face respirator capacity
• Shortens supply chain
Hwaseong, Korea
• Increases corrosion protection capacity close to exploration customers in Eastern Europe and Asia
Volokolamsk, Russia
• Increases corrosion protection capacity close to customers in the oil sands region of Canada
Morden, Canada
CoreAdjacentIntl’EBO’s
26© 3M 2007 2007 3M Investor Conference
Additional Capacity Will Further Drive Core Growth
• New ScotchBrite® capacity closer to Asian customers
JinShan, China
• Increases corrosion protection capacity close to exploration customers Asia
Ahmedabad, India
• New window glazing capacity closer to Asian customers
XinQiao, China
CoreAdjacentIntl’EBO’s
27© 3M 2007 2007 3M Investor Conference
Last Year We Articulated 4 Key Strategies
• T&T EBO• Mining market center EBO
EBO & Special initiatives
• Emerging market channel/sales coverage• Optimize supply chain & regional manufacturing• Local/regional product coverage & development
International
• Border and civil security• Water market
Adjacencies/M&A
• Drive new product introductions• Assure the Maintenance Free Respirator franchise• Eliminate capacity constraints
Core growth
28© 3M 2007 2007 3M Investor Conference
M&A And Has Driven Significant Growth In Both Core And Adjacent Markets
• Access to new technologyNov ’06Ekahau, Oy (T&T)
• New authentication products & technologiesJuly ’07Rochford Thompson (SSD)
• Transportation Management System softwareJuly ’06Pinnacle Distribution (T&T)
May ’07
Nov ’06
Aug ’06
Aug ’06
June ’06Closed
• New products & technologies in liquid coatings, also new products & access for the water market
E. Wood Holdings (CPP)
• Direct store delivery management softwareGlobal Beverage Group (T&T)
• Core changing addition of secure printing technology, products, marquee customers
SPSL (SSD)
• Gas detection products & technologiesAerion (OHESD)
• Hearing protection products & technology in LACPomp (OHESD)Comments
CoreAdjacentIntl’EBO’s
Over $325M of sales expected in 2008
29© 3M 2007 2007 3M Investor Conference
Our Acquisition Of SPSL Enables Us To More Fully Serve The Passport Market
CoreAdjacentIntl’EBO’s
Building our capabilities in border and civil security systems
Assets/capabilities added• Secure passport/document printing capability (enables addition of
security film and other features)• ePassport technology and manufacturing• Significant Tier 1 customer relationship – United Kingdom
passport contract
30© 3M 2007 2007 3M Investor Conference
Our Acquisition Of Rochford Thompson Extends Our Abilities In Border Security
CoreAdjacentIntl’EBO’s
Airline Kiosks, Law Enforcement, Public
Transport, HospitalityBorder Control
• A clear leader in the passport reader products market globally
Acquired with RT
31© 3M 2007 2007 3M Investor Conference
As A Result, We Are Now Contributing To Security Solutions Across The World
CoreAdjacentIntl’EBO’s
32© 3M 2007 2007 3M Investor Conference
Our E. Wood Acquisition Moves Us Into The Water Market
Pipelines are wearing out en masse over the next 30 years, and repairs are complicated by in-ground conditions
CoreAdjacentIntl’EBO’s
2010-204075 yrs1940’sSteel
2005-2035100 yrs.1920’s Ductile Iron
2000-2030120 yrs.1880’sCast IronRepairs beginAverage lifeInstalledMaterial
Potable water loss from corroded infrastructure (estimates)• Boston 36%• London 50%
Aging water infrastructure is a global issue
• Italy 40%• Norway 50-70%
33© 3M 2007 2007 3M Investor Conference
The E. Wood Solution Provides For Trench-less Water Pipe Rehabilitation And Protection
CoreAdjacentIntl’EBO’s
Existing pipe Clean in place Apply product Rehabilitated pipe• Expected 75 yr life
34© 3M 2007 2007 3M Investor Conference
Last Year We Articulated 4 Key Strategies
• T&T EBO• Mining market center EBO
EBO & Special initiatives
• Emerging market channel/sales coverage• Optimize supply chain & regional manufacturing• Local/regional product coverage & development
International
• Border and civil security• Water market
Adjacencies/M&A
• Drive new product introductions• Assure the Maintenance Free Respirator franchise• Eliminate capacity constraints
Core growth
35© 3M 2007 2007 3M Investor Conference
Strong International GrowthCoreAdjacentIntl’EBO’s
Country growth 2006 (%)
Double digit international growth
60%
44% 41% 38%34%
25% 24% 23% 20% 19% 19%
India
Russia
Turkey
Poland
Argentina
S. Afric
a
China
Korea
Mexico
Brazil
Venezuela
36© 3M 2007 2007 3M Investor Conference
Maintenance Free Respirators Used To Be Supplied By Two Plants
CoreAdjacentIntl'EBO’s
ILLUSTRATIVEMaintenance Free Respirator supply chain 2005
37© 3M 2007 2007 3M Investor Conference
An Additional Plant Has Allowed Us To Dramatically Shorten The MFR Supply Chain
CoreAdjacent
EBO’s
ILLUSTRATIVEMaintenance Free Respirator supply chain 2007
3 week reduction in supply chain time to AsiaLess costly local source of raw materials
Intl’
38© 3M 2007 2007 3M Investor Conference
Two Manufacturing Sites Formed The Foundation Of The Corrosion Protection Supply Chain In 2002
CoreAdjacent
EBO’s
ILLUSTRATIVECorrosion protection supply chain 2002
Intl’
39© 3M 2007 2007 3M Investor Conference
Corrosion Protection Customers Will Soon Be Served By A Number Of Regional Supply Hubs
CoreAdjacent
EBO’s
ILLUSTRATIVECorrosion protection supply chain - Future
Significant lead time reductions to customersReduced inventory requirements
Intl’
40© 3M 2007 2007 3M Investor Conference
Our Local Labs Are Driving Local InnovationCoreAdjacent
EBO’s
Working with customers - globally
Intl’
41© 3M 2007 2007 3M Investor Conference
Last Year We Articulated 4 Key Strategies
• T&T EBO• Mining market center EBO
EBO & Special initiatives
• Emerging market channel/sales coverage• Optimize supply chain & regional manufacturing• Local/regional product coverage & development
International
• Border and civil security• Water market
Adjacencies/M&A
• Drive new product introductions• Assure the Maintenance Free Respirator franchise• Eliminate capacity constraints
Core growth
42© 3M 2007 2007 3M Investor Conference
EvaluateLocate
Track & Trace EBO: Tapping Into The Next Great Market Opportunity
·Sensors and sensor networks
·Software
·RFID·Active RFID·Bar-code
·GPS ·RFID/RTLS·Ultrasound
Identify Optimize
·Location-based services
·Logistics & optimization solutions
Products:
Who Am I? Where Am I? How Am I?
CoreAdjacentIntl’EBO’s
43© 3M 2007 2007 3M Investor Conference
Breakthrough New Product – Specimen Management SystemCoreAdjacentIntl’EBO’s
• Increased patient safety – limits mix-up, mislabeling and loss of specimen samples which can lead to inappropriate diagnosis
• Increased efficiency – process optimization through visibility and management of all samples throughout the hospital
An RFID enabled solution that tracks and manages specimen movement from surgical suites, through pathology laboratories, to result at the patient’s bedside
AdvantagesDescription
Product Pict. 1
44© 3M 2007 2007 3M Investor Conference
Sample Patient Safety Applications
Locate
Obstetric Surgical Suites
NurseryNICU
Perinatology& Genetics
Labor/Delivery
CatheterizationSuites
Catheterization Recovery
Cardiac Intensive
Care
Medical Oncology
Post-partum/Maternity
Stat LabAdministration
ConferenceCardiology Family Rooms
Lobby
Patient Rooms
Patient Rooms
Sample Hospital Floor Plan
Locate
Infusion pumpsCrash cartsPhysiciansPatientsSpecific patients
Nurses station
DRPT
DR DR
DR
Track
Infusion pumpsCrash cartsPhysiciansPatientsSpecific patients
DRPT
Mrs. SmithMrs. Smith
Mrs. Smith
Optimize/Protect
Rules-based movement monitoring & notification
Baby SmithMrs. Smith
Baby SmithMrs. Smith
CoreAdjacentIntl’EBO’s
45© 3M 2007 2007 3M Investor Conference
Sample Patient Safety Applications
Locate
Obstetric Surgical Suites
NurseryNICU
Perinatology& Genetics
Labor/Delivery
CatheterizationSuites
Catheterization Recovery
Cardiac Intensive
Care
Medical Oncology
Post-partum/Maternity
Stat LabAdministration
ConferenceCardiology Family Rooms
Lobby
Patient Rooms
Patient Rooms
Sample Hospital Floor Plan
Locate
Infusion pumpsCrash cartsPhysiciansPatientsSpecific patients
Nurses station
DRPT
DR DR
DR
Track
Infusion pumpsCrash cartsPhysiciansPatientsSpecific patients
DRPT
Mrs. SmithMrs. Smith
Mrs. Smith
Optimize/Protect
Rules-based movement monitoring & notification
Baby SmithMrs. Smith
Baby SmithMrs. Smith
CoreAdjacentIntl’EBO’s
ALARM
46© 3M 2007 2007 3M Investor Conference
New Mining EBO: Bringing The Big 3M To Mining Globally
Market focused organization – dedicated to mining customers
“Driving Growth at the Customers’ Place with the Customers Pace”
CoreAdjacentIntl’EBO’s
47© 3M 2007 2007 3M Investor Conference
Multiple Forces Driving Growth In The Mining Industry
Growth Drivers• Increased worker safety compliance • Increased environmental awareness
• Continuing productivity challenges• Consolidation among incumbents• Regulatory activity in developing economies
Regional 3M Mining Sales Growth’04-’07 CAGR
23%
22%21%
19%
Significant untapped potential
CoreAdjacentIntl’EBO’s
48© 3M 2007 2007 3M Investor Conference
Focused On Rapid Development Of Innovative Products And Services
CoreAdjacentIntl’EBO’s
Dust Suppression
Smart Safety
24x7 Onsite Service
Personal Safety
49© 3M 2007 2007 3M Investor Conference
Agenda
• Our markets and businesses
• Driving growth for the future
• Summary
50© 3M 2007 2007 3M Investor Conference
Driving The Execution Of Our Key Strategies To Accomplish Our Dream: A $10 Billion Business
Cons
umer
sGo
vern
men
ts
Cust
omer
s
Busin
esse
s
Protection - AssetsSecurity - ProcessesSafety - People
CPP
IMPD
B&CSD
SSD
T&T EBOT&T EBO
ILLUSTRATIVE
EBO & Special initiatives
Global focus
Adjacencies/M&A
Core growth
OH&ESD
Mining
T&T
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