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2016 InvestorDayInge Thulin
Chairman of the Board,
President, and CEO
3M Investor Day
March 29, 2016
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Today’s highlights
Building strength on strength
Efficient growth
Agenda
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Today’s highlights
Our business portfolio is positioned to win
Executing on our key levers to create efficient growth
Portfolio Management, Invest in Innovation, and Business Transformation
Winning with our customers by helping them deliver on their promises
Further enhancing capital structure and allocation
Maintaining strong track record of returning cash to shareholders
Announcing new 2016-20 financial objectives; reaffirming 2016 outlook
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Building strength on strength, and positioned to win
2012 Articulated 3M Vision and Strategies Set 2013 – 2017 Financial Objectives Established robust portfolio management
2013 Prioritized 3 Key Levers to create value Enhanced capital deployment plan Strengthened Code of Conduct
2014 Defined Fundamental Strengths Reshaped Leadership Behaviors
2015 Deployed unified 3M Brand strategy Restructured organization for focus,
agility and efficient growth
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Investing in Innovation
Portfolio Management
Business Transformation
Our playbook is working
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Industrial
$10.3B21.9%
Health Care
$5.4B31.8%
Consumer
$4.4B23.7%
$30.3B Revenue
22.9% Operating Margin
Safety & Graphics
$5.5B23.7%
Electronics & Energy
$5.3B21.1%
Executing on efficient growth while building for the future
Executing this playbook has created a successful portfolio . . .2015 results
Executing on efficient growth while building for the future
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. . . Leveraging our Fundamental Strengths to create sustainable value
Technology Manufacturing Global Capabilities Brand
Leveraging these assets creates value; strengthening them ensures our future
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GD
P p
er c
apit
a
Infrastructure
Health Care
Manufacturing
Retail
Time
Safety
We execute a proven model of success globally . . .
Positioned for efficient growth
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. . . Enabling us to consistently outperform our markets
3.4%
2.3%
~1.5x
3M Organic Local CurrencyIHS Industrial Production Index
IHS Industrial Production Index vs. 3M Organic Local Currency Growth2011 – 2015 CAGR
Source: IHS Global Insights
Consistent proven capability to outgrow our markets
Organic local currency growth = organic volume + price
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Our new growth targets will outpace indicators
~1.5x
3M Organic Local Currency
2% - 5%
IPI Projection Range
1% - 3%
IPI projection range vs. 3M organic local currency targets, 2016 – 2020e CAGR
Efficient growth in the face of economic realities
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Industrial
2% to 4%Health Care
4% to 6%Consumer
3% to 5%
2% to 5%
Safety & Graphics
2% to 5%Electronics & Energy
0% to 4%
2016-20 organic local currency growth targets by businessStrong, market-leading, global businesses
Organic local currency growth = organic volume + price
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Free Cash Flow
Conversion
100%
Organic Local Currency Growth
20%
EPSGrowth
8-11%
ROIC
2-5%
Long-term financial objectives2016-20 plan; aggressive and realistic targets
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Winning with our customers by helping them deliver on their promises
Customer First
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Sustainability: Helping our customers deliver on their promises
Leveraging 3M sustainability expertise in strategic partnerships with customers
Identifying and understanding sustainability challenges on the horizon
Expanding our portfolio of products with sustainability advantages
Creating new opportunities with customers
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Investing in Innovation Business TransformationPortfolio Management
Executing our three key levers
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Portfolio Management
Align organization and resources to our best opportunities
Effectively deploy M&A capital
Agile executionPortfolio Management
Gain profitable share everywhere
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Organizational structure positions us to deliver efficient growth
Combined businesses to increase customer relevance and drive scale . . . 40 to 26 businesses
Realigned from 6 Sectors to 5 Business Groups Benefits realized
Greater scale and
customer relevance
Increased agility
Reduced costs through
efficiency and productivity
improvements
Reallocated resources to our
best opportunities
Accelerated priority R&D
investments
Enhanced M&A sourcing
and execution
Improved customer relevance
Healthcare
Safety & Graphics
Industrial Consumer
Display & Graphics
Electronics & Communications
Safety, Security, & Protection
Industrial & Transportation
Consumer & Office
Healthcare
6 Sectors 5 Business Groups
Electronics & Energy
40 Businesses 26 Businesses
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Acquisitions Divestitures
Recent portfolio actions creating significant value
Library Systems
License plate converting (France)
Static control
Membrana = Polypore’s separation media business
Polyfoam
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We will invest in and accelerate our Health Information Systems business
Fully assessed strategic options
Identified attractive investment opportunities in both core and new growth segments
Executing plan to accelerate growth by 200 – 400 bps
Expanding our leadership position in healthcare information systems
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Investing in Innovation
Increase R&D productivity
Enhance commercialization effectiveness
Invest in and scale new growth platformsInvesting in Innovation
3M innovation creating value for our customers
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Insights combined with technology platforms continue to benefit our customers
46 Technology PlatformsInsights Productive Investment
Extending Core Platforms
Insights to Innovation
Expanding into New Markets
Disrupting Markets
Customer-Inspired Innovation
Research and development is the heartbeat of 3M
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Our brand platform is building awareness of how we use science to create solutions for our customers
Enhancing perceptions of what 3M is about
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Business Transformation
Continue to successfully roll out ERP
Deliver productivity through footprint optimization and enhanced supply chain and manufacturing capabilities
Increase service levels to customers and reduce cost to serve
Business Transformation
Business Transformation starts and ends with our customers
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Business Service Operations
Global Processes and Governance
Global Service Centers
Supply Chain COEs
Business Transformation is accelerating
$500M to $700M annual savings and $500M working capital improvement by 2020
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Building on our strong process culture
Deploy lean deeper and more broadly
Simplify and optimize processes
Increase employee engagement and
leadership development focus
Reducing costs and increasing quality for our customers
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Developing our leaders
Adding value to our
company, our customers and
our communities
Creating opportunities
for everyone
We are investing in our people . . .
3M Leadership Way
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. . . And supporting their personal health and well-being
Wellness screening and prevention
Healthy Living programs and incentives
Competitive rewards and investment opportunities
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Investing in Innovation
Portfolio Management
Business Transformation
Our playbook is working