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ean Lobey Executive Vice President, Safety, Security and Protection Service Business
 

ean Lobey Executive Vice President, Safety, Security and Protection Service Business

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    ean Lobey Executive Vice President, Safety, Security and Protection Service Business ean Lobey Executive Vice President, Safety, Security and Protection Service Business Presentation Transcript

    • Market Focus for Accelerated Growth Jean Lobey Executive Vice President, Safety, Security and Protection Services 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • Safety, Security & Protection Services (SS&PS) 2005 results Sales: $2.3 billion Operating income: $553 million Profit margin: 24.1% 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • Safety, Security & Protection Services (SS&PS) Safety Security Protection Authenticate, Protect and enhance Personal safety secure and protect, facilities solutions at work people, materials and home and information 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • The History And Direction Of SS&PS Time 2001-2002 2003 - 2005 2006 and beyond Business Product Focused: Market Focused: Expanded Market Model Focus: Businesses SS&PS formed Strengthen core separated residing bringing products Penetrate globally in non-safety together into a Enter adjacent focused market-focused markets organizations organization Leverage world events Annual 4% growth 7% growth > 8% growth Growth* * Annualized Local currency 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • 3M SS&PS: Key Financial Data Sales Operating Income $600 $3.0 $Billions & YOY % Chg $Millions & YOY % Chg $537 +15% $465 $2.3 $2.1 $416 +8% +12% $1.9 $400 $2.0 +10% +32%* +14% $164 $200 $1.0 $0.6 +30% +13% $0 $0.0 2003 2004 2005 Q1 2006 2003 2004 2005 Q1 2006 LC Growth 9.5% 6.6% 6.9% 15.6% OI Margin 21.6% 21.9% 23.4% 26.0% 2005 Sales By Geographic Area U.S. 43% LAC 11% Europe 26% APAC 20% *2002 estimated stock options, not restated. 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • Large And Growing Markets Trends Safety Migration of industrial production $23 Billion Increased regulatory oversight in developing countries Pandemic disease threats – Avian Flu, SARS Increased consumer awareness Security is a leading issue for governments, corporations Security $86 Billion and individuals Global economic disruption due to terrorist threats Improved technologies for asset tracking Increased awareness of brand value and the need for brand security Increased demand for hygiene and cleaning products Protection Growing awareness of food safety threats $48 Billion Increasing demand for asset protection Strong commercial and residential building growth in Asia Recent impact of natural disasters 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • Key Drivers For Growth Developing new and differentiated products addressing customer needs for safety, security and protection Penetrating international markets Expanding into adjacent markets Create an EBO focused on Track and Trace First responder to world events 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • New Products In Respiratory Protection Market Respirator 3M Solutions Needs Technologies Filter Media Performance Advanced Comfort Adsorbents Utility Advanced Particle Filtration Range of Protection Nanotechnology Catalysts End of Service Life Indicator Organic Vapor Detection 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • Full Product Line To Meet Diverse Customer Needs 8233/ 8293 9936/ 8833 High Value 2007 8212/ 8576/ 8512/ 8271 8577 8214 8514 2005 9211 9210 8240 8516 8710V Mid Range 8211 8246/8247 Norbert 8515 8511 2007 2006 2006 9010 P1 8210+ 9910 Dragon Entry Level 8000 2007 8200 8210/8810 2006 8710 8110S 2003 2005 2002 2003 2005 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • New Products In Security Systems Market Security System 3M Solutions Needs Technologies Security Optical Films Protection Adhesives Authentication Software Development Identification Hardware Development Tracking Systems Productivity Integration 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • Border Security, United Kingdom Data & Image Automated Passport Document Capture Home Office Data Page Authentication Hardware & Software Reports Printer Reader UK Opportunity: Provide 480,000 passports annually, at 144 issuance sites 3M Solution: Consular Services e-Passports using RFID technology improve document identification and authentication 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • New Products In Window Protection Market Window Film 3M Solutions Needs Technologies Energy Optical Films Savings Adhesives Comfort Abrasion Glare Resistant Reduction Coatings Shatter Nanotechnology Resistance Coatings UV protection Metalized & Pigmented Fade Films Resistance 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • New Product - Prestige Window Film Customer Problem Damaging UV rays cause fading Heat from sunlight decreases comfort Increasing energy costs Window film corrosion from existing solutions Dark tinted solutions with high reflectivity 3M Solution: Rejects up to 97% of the sun’s infrared light Cooler home, lower energy bills Furnishings don’t fade No corrosion No cell phone interference View from interior is as clear as original window 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • New Products In Cleaning Systems Market Cleaning 3M Solutions Technologies Needs Cleaning and Non-woven Hygiene Media Adhesives Performance Hardware Productivity Design Chemical Labor and Management Ergonomics Microbial Compliance Control 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • New Product – 3M Easy Clean System Easy Clean Line 3M Easy Trap Duster System 3M Easy Scrub Flat Mop System 3M Easy Shine Applicator System Rethink Cleaning Reduce labor costs by up to 70% Increase performance up to 6 times Cut chemical waste by as much as 80% Reduce mop drag by up to 10 times 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • Key Drivers For Growth Developing new and differentiated products addressing customer needs for safety, security and protection Penetrating international markets Expanding into adjacent markets Create an EBO focused on Track and Trace First responder to world events 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • Strong Growth From Developing Markets 2002 - 2005 Sales CAGR in USD 70% 2006 Q1 : + 25.7% 60% 50% 40% 30% 20% 10% 0% Russia China India Turkey Middle East Poland Korea Brazil 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • Bringing SS&PS Closer To Our Customers International Sales 57% of Total Sales + + ++ + + + + + + + + Established Manufacturing + Established Lab New/expanded Manufacturing + New/expanded Lab 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • Korea: Manufacturing Localization Of Respirators 2006~2008 Addition of manufacturing & converting lines 45 SCAF Asian L ab. 15 Years CAGR : 31.3% S/L, PF 40 (1990~2005) SCAF 35 SCAF 30 25 SCAF SCAF SCAF 20 15 10 5 0 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 Regional SOS 100% Local Manufacturing Regional SOS 100% Local Manufacturing Imported Goods Capability Increase Capability Imported Goods Capability Increase Capability 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • New product – Security Laminate For Driver’s Licenses Customer Problem Current Driver’s Licenses (DLs) easily counterfeited Alternations to DLs difficult to detect High-end security features typically require special tool for verification Departments of Motor Vehicle want to provide DL that is simple to authenticate 3M Solution: Provide an easy to recognize overt security feature (Floating Image) Build on existing high security laminate platform (Confirm™) Work with State’s preferred system integrator to provide material solution 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • Asset Tracking & Supply Chain Security, Brazil Customer Problem: Counterfeiting of pesticides Resulted crop failure Risked consumer health & safety 3M Solution: Tamper indicating labels Automated labeling equipment Authentication readers 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • Automotive Window Film, China China Auto Opportunity: +10% CAGR in local car production Increasing vehicle ownership Growing demand for “do it for me” car care 3M Solution: A multi-layer patented optical film Metal-free composition: No interference with mobile phone, GPS and radio reception Easy maintenance, long-life film Reduced reflectivity Superior heat rejection and UV protection Launching Q2, 2006 in China 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • Key Drivers For Growth Developing new and differentiated products addressing customer needs for safety, security and protection Penetrating international markets Expanding into adjacent markets Create an EBO focused on Track and Trace First responder to world events 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • Adjacent Markets – External Growth Welding Improving Welder Safety And Productivity HÖRNELL Acquisition Value Creation: Auto darkening lens technology Leading brand Welding channel access Additional sales of 3M safety and industrial products 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • Adjacent Markets – Internal Program Leveraging our granules coloring expertise to penetrate swimming pool market segment. 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • Adjacent Markets – Internal Growth Mining Miner Safety & Process Improvements Nomad Acid Mist Matting RFID Cathode Tracking Liquid Dust Suppressant Mining Focus: Market-focused sales and marketing organization Direct end-user contact Key account penetration plans Application replication plans Product offering: Entire 3M portfolio 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • Adjacent Markets – Internal Growth Health Care Market Facility Hygiene & Infection Control Easy Scrub Customer Training Easy Shine Health Care Focus: Health care sales and marketing specialists Coordination with 3M Medical Division Critical cleaning products & training services Employee safety programs 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • Adjacent Markets – Emerging Business Food Safety Solutions that prevent, detect and remediate food safety threats Food Producers Food Processors Food Service Attractive Industry Trends: Increased concern about food safety Consolidation, globalization and increased speed of the supply chains Government and consumer driven demand for healthier foods Increasing regulations 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • Key Drivers For Growth Developing new and differentiated products addressing customer needs for safety, security and protection Penetrating international markets Expanding into adjacent markets Create an EBO focused on Track and Trace First responder to world events 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • Technology Convergence – The Track and Trace Opportunity GPS Everything of value will be tracked everywhere Significant productivity RFID improvements Improved security of assets and people Wireless Total market sales ($ B) 40 30 20 Software 10 0 2006e 2009e 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • Example: End-to-End Logistics 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • We Are Creating An EBO To Address This Opportunity 3M assets Existing businesses Existing technologies Unmatched customer relationships Track and Trace EBO Increased investment in R&D “Global real-time visibility” External Selective acquisitions and investments 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • New Product – Mining Cathode Tracking System Customer Problem Impossible to track identity, location and condition of cathodes Significant process variability Difficult to manage cathode maintenance Lost yield/productivity of mining process 3M Solution Rugged, chemical resistant RFID tag applied to cathodes Engineered cathode locator system Software tracking system integrated into plant operating system Data extraction and analysis system to monitor and predict cathode and bath performance, reduce process variability 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • New product – Life Vest Tracking System Customer Problem Time-consuming to locate expired and missing life vests Regulatory bodies require compliance on every flight – life vest for each passenger on over-water flights 3M Solution 3M RFID tags incorporated into life vests during vest manufacture Provide handheld reader and application software to airline operators Pilot full solution at major air carriers consistent with emerging standards in aerospace industry Leverage into further on-board productivity enhancing applications RFID Enabled Life Vest Application Screen Shot 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • Our Winning Attributes Superior relationships with a broad range of industrial customers Numerous established programs ongoing, with strong results Critical mass Broad spectrum of critical technologies Financial strength 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • Key Drivers For Growth Developing new and differentiated products addressing customer needs for safety, security and protection Penetrating international markets Expanding into adjacent markets Create an EBO focused on Track and Trace First responder to world events 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • First Responder To World Events SS&PS Capabilities: Organizational readiness Trusted solution provider Government agency assistance Personal protection kits Additional manufacturing capacity Future new products 2003 2004 2005 2006 2007 Capital Additions 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
    • SS&PS - Summary The market-focused leader providing complete solutions that make people and assets safe, secure and productive. Winning through execution: Developing new and differentiated products addressing customer needs for safety, security and protection Penetrating international markets Expanding into adjacent markets First responder to world events 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved