rad T. Sauer Executive Vice President, Health Care Business

3M Investor Meeting 2006 © 3M 2006 All Rights Reserved

Accelerating Growth In Health Care

Brad SauerExecutive Vice President,

Health Care Business


2005 Sales By Geographic AreaU.S. 47%

Europe 35%APAC 11%

LAC 7%

3M Healthcare: Key Financial Data

$3.4$3.8

$1.0

$3.6

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

2003 2004 2005 Q1 2006

$1,114

$298

$907 $973

$0

$300

$600

$900

$1,200

2003 2004 2005 Q1 2006

Sales Operating Income

LC Growth 5.3% 26.4%.6% 4.2% 4.9% 27% 29.6% 30.8%OI Margin

$Billions & YOY % Chg $Millions & YOY % Chg

+12% +5% +5%

+2%

+7%+15%

+10%

+20%*

*2002 estimated stock options, not restated.


Health Care Growth Strategy

Accelerate Growth

STEP 2

Reconfigure thePortfolio

STEP 1

REDIRECT RESOURCESREDIRECT RESOURCES


Dental &Orthodontics

Health Care Portfolio Reconfiguration

Medical Pharma

PursueStrategic

Alternatives

Leverage3M I&TB Supply

Chains &Technologies

Focused Portfolio Of StrengthIncrease R&D For New ProductsExpand Sales CoveragePenetrate Developing CountriesSynergistic Acquisitions

InvestmentRedirection

DrugDeliverySystems

HealthInformation

SystemsPersonal

Care


Pharmaceuticals Business Direction

3M is exploring strategic alternatives for its global branded pharmaceuticals business and IRM platform (Goldman Sachs retained)

Today’s very competitive pharmaceutical marketplace requires broad pipelines of new drugs, significant investments, and a longer term risk-reward business model than applies to most other 3M businesses

Very successful business but different model and not core for 3M

The best way for our branded pharmaceuticals business to succeed is for it to be free to pursue separate strategies underthe direction of a dedicated pharmaceutical industry company with a business model better suited to maximize its potential


Dental &Orthodontics

Health Care Reconfigured Portfolio

Medical

Focused Portfolio of StrengthIncrease R&D For New ProductsExpand Sales CoveragePenetrate Developing CountriesSynergistic Acquisitions

DrugDeliverySystems

HealthInformation

Systems

Investment


Health Care Growth Strategy

REDIRECT RESOURCESREDIRECT RESOURCES

Accelerate Growth

STEP 2

Reconfigure thePortfolio

STEP 1


Health Care Growth Strategies

Drive additional organic growth with key investments – R&D for new products

– Expanded sales coverage and marketing globally

Accelerate in high growth market spaces with new organic platforms

Rapidly penetrate developing countries


Rapidly Penetrating Developing Countries

HCB Revenues

DevelopedCountries*

*U.S., Canada, Western Europe, Japan, Australia, New Zealand

DevelopingCountries

Expanded SalesCoverage

New ProductsTailored To Market Needs

Local Manufacturing

2005 Local Currency Growth

China 35%Venezuela 34%Russia 32%Turkey 25%Malaysia 25%Argentina 24%India 22%Thailand 19%Taiwan 19%Gulf 14%South Africa 13%Mexico 12%Brazil 10%


Health Care Growth Strategies




Rapidly penetrate developing countries

Step up the pace on acquisitions, especially synergistic bolt-ons


Infection PreventionAsepsisSterilizationPreps & Disinfection

Medical Division Portfolio

Assessment & TherapyElectrodes & PlatesImmobilizationAuscultation

Skin HealthSkin Care & ProtectionTapes & SecuralWound CareSkin Closure

Food SafetyFood Bacterial TestingFood Pathogen TestingFood Sample Prep


Medical Division Operations

A broad portfolio in clinically important growth segments:– Infection Prevention

– Skin Health

– Patient Assessment

– Food Safety

Global business – 55% of revenue & 63% of growth OUS

Dedicated sales coverage in more than 60 countries

R&D resources on 5 continents

Major manufacturing in 10 countries


Medical Division Growth Drivers

Investing for accelerated new product flow

Expanded sales coverage U.S. and Europe

New push into Alternate Care

Accelerating growth in developing countries– Products

– Coverage

– Manufacturing

Acquisitions and technology licensing


Medical Key New Products For 2006

Scotchcast™ Wet or Dry Cast Padding

Littmann™Electronic

Stethoscopes

Ioban™ 2 Frame Delivery

3M One Step Patient Prep

ClozeXTM Wound Closure

Tegaderm™ on Roll

Tegaderm™ Ag Mesh Dressing

with Silver

CompressionLay er

Comfort Layer(L ami nate)

PU-Foa m

Coban LF

modified Coban L F(much l ess stre tch, more and he avier Denier -si ze Spandex fi laments)

CompressionLay er


PU-Foa m

Coban LF


CompressionLay er


PU-Foa m

Coban LF


CompressionLay er


PU-Foa m

Coban LF


CobanTM 2 Layer Compression

System

CobanTM 2 Layer Compression

System


Licensing Agreement – ClozeXTM MedicalUnique design for fast application and closure

Good cosmetic results

Less infection potential than invasive sutures or staples

Reduced skin trauma and patient discomfort

Used by variety of surgeons and physicians

- plastic and reconstruction - cardiothoracic - vascular- OB-GYN - general surgery- orthopedics- dermatology- emergency medicine

Sutures ClozeX

Suture closure at 6 months post-op ClozeX closure at 6 months post-op


Medical Alternate Care GrowthMarket Drivers

Care moving to outside of hospital

Growth in Chronic Wounds - aging population, diabetes & obesity

Regulatory/reimbursement activity increasing in Chronic Care

Growth InitiativesInvest – Dedicated US CoverageExpand European CoverageNew Products Build Brand

Portfolio StrengthTape Secural

Acute and Active DressingsSkin CareAdvanced Wound Care

Compression


High Growth Space – Food Processing Safety

Market DriversGrowing Awareness of Food Safety – Globally

Increased Regulatory Vigilance

International Market Expansion

Customer Expectation of Safe Food

Globalization of Food Processing

Leveraging Health CareIntegrated Detection, Monitoring & Antimicrobial Technology

Development & Testing Expertise

Global Regulatory & Quality Monitoring Systems

Regulated Manufacturing Processes

Growth InitiativesInvesting in Global Marketing/Sales Coverage

Expanding US Manufacturing

Establishing Manufacturing in Asia

Investing in Technology

Accessing Technology Through Partnerships


Dental and Orthodontics Portfolio

FiltekTM Supreme CompositeFilling Materials ImpregumTM

Impression Materials

ProtempTM 3Temporization Materials

LavaTM Frame and BridgeDigital Ceramic Systems

OMNI Preventive Products

ClarityTM

Orthodontic Appliances


Dental & Orthodontics Operations

A broad portfolio in both established and newer, high-growth segments:– Restoratives

– Prosthodontics• Including Laboratory and Digital Dentistry

– Orthodontics

– Prevention

Global business – 65% of revenue OUS

Dedicated sales coverage in more than 60 countries

Major operations centers in the U.S. and Germany


Dental & Orthodontics Growth Drivers

Investing for accelerated new product flow

Expanded sales coverage globally

Accelerating growth in developing countries– Products

– Manufacturing

Enter high-growth market spaces

Acquisitions and technology licensing


Dental & Orthodontics Key New Products For 2006

SmartClipTM

Self-Ligating BracketsFiltekTM Supreme Plus

CompositesImprintTM

Impression Materials

LavaTM Finished Bridge

Digital Ceramic Systems

VitrebondTM PlusLiner/Base

ParadigmTM C Glass Ceramic BlocksLavaTM Ceram Overlay


High Growth Space – Preventive Oral Care

Acquisition Of OMNII


High Growth Space – Digital Dentistry


Drug Delivery Systems DivisionLeveraging 3M Technologies And Manufacturing Processes


Attractiveness Of Drug Delivery Systems

Commercial valueof drug deliveryExtending patent life Increasing returns

on R&D

Differentiating fromcompeting products

Improving efficacy, convenience, compliance,

Reducing side effects


Drug Delivery Systems Key Growth Drivers

Market transition from CFC to HFA inhalers

Growing attractiveness of global emerging markets

Increased interest in transdermal delivery as a product enhancement opportunity

Demand for patient friendly macromolecule delivery technologies


Hospital Information Systems Division

Compliance and Billing Edits for Decreased A/R

Cycle & Accuracy

Patient Record post-

discharge

Medical Record Assessment for

Billing - 3M CodeFinder

Billing Codes Transferred to Billing System

Patient Hospital

Care

3M HIS Solutions

Leader in a critical segment - accuracy of reimbursements- Pioneer in coding and grouping- Leading expertise and technology- ScalePay for Performance pressures increasing- Severity adjusted reimbursement opportunity- 3M well positionedMarket pressures are global - opportunity in selected OUS countriesAcquisition opportunities in adjacent segments


Health Information Systems Acquisition

3M HIS has entered into a definitive agreement to acquire SBG GmbH based in Berlin, GermanySBG is a leading developer of coding and grouping software for the German health information technology marketThe Company participated in the development of the German codingand grouping classification system used by hospitals for reimbursement SBG’s products are complementary to 3M’s existing portfolio and expands our footprint in Germany

SBG’s technology also serves as a catalyst to expand our presence in Europe, Asia Pacific and other developing markets

SBG provides 3M with a regional development center of excellence to better serve our European customers

This acquisition also solidifies key relationships with leading European systems integrators


Health Care Business Summary

HISDrug DeliverySystems Medical Dental &

Orthodontics

Health Care Portfolio




Rapidly penetrate in developing countriesStep up the pace on acquisitions, especially synergistic bolt-ons

Strategies To Accelerate Growth

Economy & Finance

rad T. Sauer Executive Vice President, Health Care Business