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3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
Jim StakeExecutive Vice President,
Display & Graphics Business
Sustainable Profitable Growth
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
Growing core businesses…common strengths…healthy pipeline
Growing core businesses…common strengths…healthy pipeline
Optical
TrafficSafety
TechnologyPipeline
Commercial Graphics
Display & Graphics Business
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
3M Display & Graphics: Key Financial Data
$2.9$3.3 $3.5
$0.9
$0.0
$1.0
$2.0
$3.0
$4.0
2003 2004 2005 Q1 2006
$865
$1,115 $1,162
$296
$0
$300
$600
$900
$1,200
$1,500
2003 2004 2005 Q1 2006
2005 Sales By Geographic AreaU.S. 21% Europe 14%
APAC 60%
LAC 5%
Sales Operating Income
LC Growth 28.4% 30.3%12.4% 4.7% 9.5% 33.3% 33.1% 32.4%OI Margin
$Billions & YOY % Chg $Millions & YOY % Chg
+35%+17% +5%
+8%
+29% +4%
+4%
+67%*
*2002 estimated stock options, not restated.
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
Building brands through graphics and digital signageBuilding brands through graphics and digital signage
World’s largest graphicBoeing complex – Everett, WA
Commercial Graphics Division
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
Transportation
Commercial Graphics Division
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
Food & Beverage
Commercial Graphics Division
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
Interior & Digital Signage
Night Signage
Day Signage
Banking
Commercial Graphics Division
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
Patented microreplicatedadhesive technology
Patented microreplicatedadhesive technology
Commercial Graphics Division
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
Commercial Graphics DivisionPrinting
Knowledge
End-user Coverage
Scotchprint™Warranted Graphics
Global Graphic Network
Intellectual Property
Broad Range of Offerings
“Big 3M”
ManufacturingExcellence &
Scale
Sustainable globalgrowth model
Sustainable globalgrowth model
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
The Leader in Transportation Safety & Mobility Solutions
The Leader in Transportation Safety & Mobility Solutions
Traffic Safety Systems Division
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
Engineer Grade
High Intensity
DG³Prismatic Migration
1939 2006
3X Brighter 10X Brighter
Traffic Safety Systems Division
DiamondGrade
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
Digital Systems
Solutions & Services Latest Innovation
High value solutions for vehicle registrationHigh value solutions for vehicle registration
MaterialsTraffic Safety Systems Division
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
Technology breakthrough and service migration in pavement markings
Day - Dry Night - WetNight - Dry
Traffic Safety Systems Division
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
Traffic Safety Systems DivisionHistory of
Leadership
Global Coverage
Consistent Quality & Service
Government Relationships –
“Trust”
Intellectual Property
Broad Range of Offerings
Expanding into Services
Manufacturing Excellence &
Scale
Sustainable globalgrowth model
Sustainable globalgrowth model
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
Making LCDs better, brighterand more energy efficient
Making LCDs better, brighterand more energy efficient
Optical Systems Division
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
Polarizer
CompensatorGlass
Color FilterLiquid Crystal
Glass
Compensator
Polarizer
Cover Sheet
3M DBEF
3M BEF
3M BEF
Diffuser
Light Guide
3M Reflectors
Liquid Crystal Display Glass
Backlight
LCD Panel Structure
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
Without BEFDim
Wasted Light
Wasted Light
BEF redirectslight towards the viewer
Bright
Light refractedtoward viewer
LampWastedoff-axis lightreflected back for recycling
BEF Recycles off axis light
LCD BEF Backlight
BEF - Brightness Enhancement Film
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
DBEF - Dual Brightness Enhancement FilmWithout DBEF, 50% of backlight output is absorbed by the LCD
LCD Backlight
Transmit P1
Absorb P2Dim
DBEF increases brightness by Reflecting & Recycling polarized light
P1
DBEFLCD
P2
Ref
lect
Backlight
P1
Rec
ycle
Bright
3M Investor Meeting 2006 © 3M 2006 All Rights ReservedSource: DisplaySearch
-
10
20
30
40
50
60
70
80
2002 2003 2004 2005 2006 2007 2008 2009 2010
Dis
play
Are
a (M
illio
ns m
2)
TVMonitorNotebookHandheld
05-10 CAGR: 25%
LCD Area Growth
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
LCD TVs
Monitors
Strong growth led by LCD-TVand handheld devices
Strong growth led by LCD-TVand handheld devices
2001 2002 2003 2004 2005
Handhelds
Notebooks
3M LCD Film Sales ($) by Application
3M Investor Meeting 2006 © 3M 2006 All Rights ReservedSource: DisplaySearch
0
50
100
150
200
250
2003 2004 2005 2006 2007 2008 2009 2010
Uni
ts (M
illio
ns)
LCDPDPPJ TVCRT
Consumer Television Units
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
0
10000
20000
30000
40000
50000
60000
2003 2004 2005 2006 2007 2008 2009 2010
Area
(000
's m
2)
LCD TVPDPRPTV
05-10 CAGR: 32%
Source: 3M Estimate
New TV Technology Area Growth
3M Investor Meeting 2006 © 3M 2006 All Rights ReservedSource: DisplaySearch
$-
$250
$500
$750
$1,000
$1,250
$1,500
$1,750
$2,000
$2,250
2002 2003 2004 2005 2006 2007 2008 2009 2010
AS
P ($
/uni
t)
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
Units
(000
's)
LCD Panel ASP
$-
$250
$500
$750
$1,000
$1,250
$1,500
$1,750
$2,000
$2,250
2002 2003 2004 2005 2006 2007 2008 2009 2010
ASP
($/u
nit)
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
Units
(000
's)
LCD Panel ASP LCD Panel Demand
LCD price decreases fueling strong demandLCD price decreases fueling strong demand
32” LCD TV Panel Price
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
LG Philips 7G Q1’06 8G Q3’08Samsung/Sony 7G Q1’06 8G Q4’07Samsung 9G Q3’09Sharp 8G Q4’06 9G Q1’10AUO 7G Q4’06 8G TBDCMO 7G Q3’07 8G Q2’08 8G TBD Hannstar 7.5G TBDSVA-NEC 6G Q3’08BOE-Hydis 6G Q1’09
LCD Fabs
Poland TV AssemblyLG ElectronicsSharp
Total customer investment of over $30 BillionTotal customer investment of over $30 Billion
Customer Investments
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
Sharp KameyamaSharp Kameyama SamsungSamsung
L.G. Philips – 7G SubstrateL.G. Philips – 7G Substrate
Source: Sharp Website Source: Samsung Website
Source: L.G. Investors Presentation
Customer Investments
3M Investor Meeting 2006 © 3M 2006 All Rights ReservedSource: DisplaySearch
0
20000
40000
60000
80000
100000
120000
140000
160000
180000Q
1'05
Q2'
05
Q3'
05
Q4'
05
Q1'
06
Q2'
06
Q3'
06
Q4'
06
Q1'
07
Q2'
07
Q3'
07
Q4'
07
Q1'
08
Q2'
08
Q3'
08
Q4'
08
Q1'
09
Q2'
09
Q3'
09
Q4'
09
Q1'
10
Q2'
10
Q3'
10
Q4'
10
Uni
ts (1
,000
/QTR
)
Realistic Capacity Demand Total
Excess capacityrepresents upsideExcess capacityrepresents upside
Large Area LCD Supply / Demand
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
Product Technology
Process Technology
Customer Relations
Application Development
Quality Systems
Global Supply Chain
ManufacturingExcellence &
Scale
Customer Support Teams
Intellectual Property
Sustainable global growth modelSustainable global growth model
Optical Systems Division
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
Optical Systems Intellectual Property
0
750
2000 2001 2002 2003 2004 2005 2006 YTD
Activ
e U
S P
aten
ts
Large and growing patent portfolioLarge and growing patent portfolio
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
Key Account Teams supporting customer success
Customer Satisfaction is Growing
Annual customer satisfaction surveys
0 1 2 3 4 5 6 7 8 9 10
’03 ’04 ‘05
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
Suzhou, China Wroclaw, Poland
Kansai, Japan Hwaseong, Korea
USA Naju, Korea Tainan, Taiwan
Investing to Support Customer Growth
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
High Gain BEF– 8% - 10% brightness improvement
Anti-Static BEF– Lower LCD assembly cost
Notebook Privacy Filters– New manufacturing process
enables mass market pricing
APF: Next generation DBEF– Thinner, higher contrast, better color
BEF- RP Multifunction Film– Superior gain, lower LCD assembly cost
Continuous Flow of New Product Innovations
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
3M delivers industry-leading quality2006 quality objectives:
– Tighten particle size specs by 25% to 30%
– Cut total number of defects by 50%
Superior quality:
– Lowers customer assembly and rework costs
– Improves 3M manufacturing yields
24 um
Defect Human Hair Current Spec Future Spec
Quality Advantage
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
0
20
40
60
80
100
120
1999 2000 2001 2002 2003 2004 2005 2006
Rel
ativ
e Pr
ice
3M Enhancement ASP
Sharing productivity gains and optimizing price/value to maximize opportunity
Sharing productivity gains and optimizing price/value to maximize opportunity
LCD Film Price History
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
DBEF = fewer bulbs, less energy, lower temperature DBEF = fewer bulbs, less energy, lower temperature
12 Lamps + DBEF 16 Lamps
Less PowerLower Temp
VikuitiTM DBEF And Energy Efficiency
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
D&G Technology Pipeline – Plasma
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
D&G Technology Pipeline – OLED
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
D&G Technology Pipeline – LEDs
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
Durable Polarizers for LCD projection systems– Dramatically reduces long term display
degradation
Solid State Lamps (LEDs)– Improved lifetime, better color, instant on,
no Mercury
Optical core for reflective LCD systems (L-COS)– Improved brightness, contrast and uniformity
D&G Technology Pipeline – Projection
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
D&G Technology Pipeline – Touch Systems
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
Stepped-Up Marketing
www.vikuiti.com
3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
Display & Graphics
Outstanding teams in placeExcellent customer relationshipsStrong core businessesUnmatched manufacturing scale and qualityGrowing marketsClear leadership positionsPositive momentum – 8%+ LC Growth TargetRobust technology pipeline
Sustainable, profitable growth!Sustainable, profitable growth!