H.C. Shin Executive Vice President, Industrial and Transportation Business

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H.C. Shin Executive Vice President, Industrial and Transportation Business

  1. 1. Growth Through Focus on Customers H.C. Shin Executive Vice President, Industrial And Transportation Business 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  2. 2. Industrial & Transportation Business Promise To Our Customers Understand your needs and your business Improve the design, quality, productivity and safety of your products and Make our operations customers Support your business more competitive locally and globally, with the resources you need to get the job done! Provide solutions to help you succeed and be more competitive 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  3. 3. Industrial & Transportation Business Key Financial Data Sales Operating Income $1,500 $7.0 $Billions & YOY % Chg $Millions & YOY % Chg $6.1 $1,211 $5.7 $6.0 +8% $5.1 $1,200 $1,050 +15% +11% $5.0 +7% +28% $823 $900 $4.0 -1%* $3.0 $600 $381 $1.7 $2.0 $300 +12% +24% $1.0 $0 $0.0 2003 2004 2005 Q1 2006 2003 2004 2005 Q1 2006 LC Growth 2.0% 7.2% 6.5% 14.0% OI Margin 16.0% 18.4% 19.7% 22.4% 2005 Sales By Geographic Area U.S. 38% LAC 10% Europe 28% APAC 24% *2002 estimated stock options, not restated. 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  4. 4. Q1 2006 Highlights Industrial And Transportation Business Industrial and Transportation Business market/platform synergy Strong organic growth, robust new product flow Top 9 Opportunities identified and resourced CUNO integration well under way General Industrial Diamond acquisition closed Global Automotive Market Center initiative I&TB BRICP Entitlement Growth Plan under way I&TB Service and Quality Revolution initiative gaining traction 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  5. 5. Industrial Adhesives And Tapes Division Adhesives Bonding Tapes Converter Markets Packaging Tapes Single Sided Tapes 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  6. 6. Abrasive Systems Division 3 Fiber Discs 3 Scotch-Brite™ 3 Cubitron™ Ceramic Grain Surface Conditioning 3 Coated Abrasive Belts 3 Super Abrasives 3 Trizact™ CF Belts 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  7. 7. Automotive Aftermarket Division Painting and Body Repair Paint Finishing Mechanical Repair and Detailing and Maintenance Appearance 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  8. 8. Automotive Division, Automotive Market Center Functional Graphics Design Attachment Interam™ Body Structures 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  9. 9. Specialty Materials Division Filtration Solutions Fluoropolymers Creating cleaner environments and more efficient systems, inspired by a changing world. Unique, high performance material Ceramic Fibers & Additives solutions for harsh Advanced material conditions and technologies to help demanding customers make products environments. lighter, stronger, safer – better. 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  10. 10. Industrial And Transportation Business Four Growth Strategies Growth through market segments programs – Transportation, Electronics, Metalworking, – Oil and gas, MRO, Building contractors, Food and Beverage Growth through new platform – Supply chain execution, Filtration, Composite material – Top 30 New Product Programs Geographic penetration – China, India, Eastern Europe, Russia, Brazil (BRICP) – Developed economy Growth by leveraging brand – Channel growth programs – I&TB Service and Quality Revolution 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  11. 11. Industrial And Transportation Business Four Growth Strategies Growth through market segments programs – Transportation, Electronics, Metalworking, – Oil and gas, MRO, Building contractors, Food and Beverage Growth through new platform – Supply chain execution, Filtration, Composite material – Top 30 New Product Programs Geographic penetration – China, India, Eastern Europe, Russia, Brazil (BRICP) – Developed economy Growth by leveraging brand – Channel growth programs – I&TB Service and Quality Revolution 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  12. 12. Industrial And Transportation Business Serving Diverse Market Segments Appliance & Building Electronics Furnishings Contractors Metalworking Aerospace Food & Beverage Oil and Gas Maintenance & Repair Paper & Packaging Transportation 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  13. 13. Platform & Market Execution Model Focus On Market Segment And Customer Needs CUNO ASD IATD SMD HighJump Abrasives Specialty Supply Filtration Adhesives and Solutions Materials Chain Solutions Tape Solutions Solutions Solutions Transportation Oil & Gas Food Paper MRO Metal App- Wood- Electronics Working liance Markets & Bev & Working Display Auto OEM Print Assembly Tiers MHH Aerospace Semicon Aftermarket Marine Globally Managed Segments Geographically Managed Segments 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  14. 14. Window And Door Segment Team Activity Customer Process Mapping Glass Sheets Heat Wood & Composites Optimized Cut Glass Sash Attachment Wood, Vinyl, & Metals Glass Washer Customer Pain Points Framing Insulating Glass Packaging Shipping 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  15. 15. Single Sales Force Brings All 3M Solutions To Industrial And Transportation Market Centers One face to the customers Quick Market Growth ( QMG ) Removing any internal barriers on a real time basis Quality Direct System Integrated Customer Center E-enabled front end CRM tools 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  16. 16. Market Focus Is Our Go-To-Market Strategy Global Automotive Market Center 3M Solutions 3M™ Fiber 3M™ Bumpon™ Protective Vikuiti™ Adhesives Roof ditch Electrical wire harness and Mirror button in interior sealing Graphics in Products in interior Display heat-shrink protection interior attachment 3M™ Dual Lock™ Enhancement Fluoropolymers for Fasteners in interior Films in interior gaskets, seals, hoses 3M™ Blackout Film Hem flange bonding for window surrounds for hood & Pillars 3M™ Paint 3M™ Acrylic Foam Protection Film Tape for weather- 3M™ Dimensional strip attachment Graphics nameplate 3M™ Adhesive Transfer Tapes Fastener in interior Adhesives 3M™ Glass 3M™ Bubbles for plastic Damping weight reduction Foil Tape 3M™ Label 3M™ Confirm™ Materials in interior Security Labels 3M™ Interam™ 3M™ Electrical Filtrete™ Cabin Thinsulate™ Acoustic Catalytic Converter 3M™ Acrylic Foam Tapes Insulation in door Air Filter Mat Mount Tapes for exterior 3M™ Vitrotrim™ 3M™ Scotchcal ™ High- attachment 3M™ Solar Reflecting Film Performance Graphic Films badge Masking Protective Cleaning Sorbents Floor Mats Respirators Vibration Acoustic Hearing Abrasives Products Films Fluids Damping Insulation Protection 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  17. 17. 3M Solutions In Aircraft Manufacturing And Maintenance Industry New Projects : Structural Adhesives - Lightening Protection Electrical - Flame Shield Connectors Assemble - Glass Bubble Filler Seats Remove Corrosion Heavy Metal Management Gates Impact Protection Jet Blade Dove Tail Deburring Clear, Secure, Protect from Shocks Labels and Vibrations 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  18. 18. 3M Solutions To Oil And Gas Market Refining Exploration & Transportation Marketing Gas Processing & Production Petrochem 3M Solutions Abrasive Systems Solutions Corrosion Protection Solutions Entitlement: Industrial Tape and Adhesives Electrical Products 1 cent/G Occupational Health & Safety Specialty Materials Solutions Filtration Solutions Commercial Graphic Solutions Current 3M Penetration: 5 cents/G Oil and Gas Business Team represents the total 3M Solutions to Oil and Gas industry 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  19. 19. Global Business Transfer Process Launched in Sept. 2003, Business retention 91% in 2005 Follow the business transfers globally Originating Sales Rep Destination Manager Country Process Owner Draft Submit Acknowledge Transfer Acknowledge Complete Originating Manager Destination Sales Rep 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  20. 20. Industrial And Transportation Business Four Growth Strategies Growth through market segments programs – Transportation, Electronics, Metalworking, – Oil and gas, MRO, Building contractors, Food and Beverage Growth through new platform – Supply chain execution, Filtration, Composite material – Top 30 New Product Programs Geographic penetration – China, India, Eastern Europe, Russia, Brazil (BRICP) – Developed economy Growth by leveraging brand – Channel growth programs – I&TB Service and Quality Revolution 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  21. 21. Strategy: Follow The Mega Trend Expanding Urbanization Water/Air in Danger Threatened Safety and Security Changing Health Care Gender, Wealth, and Aging Population Flattening World The Energy Crunch 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  22. 22. CUNO Liquid Filtration Platform, New Growth Platform 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  23. 23. Seamless CUNO Global Integration Dec '05 Jan Feb Mar Apr May Jun Jul Aug Site R oca ti n el o 3M S ubs E mployment H o n g Ko n g Global integration direction Su pply C ain Sys. In tegrat on h i Ba ck Office Complete N /A N ot A ppli a ble c Ko re a – Preserve CUNO’s business model T ha i la n d – 3M adds value in operational M al a ys ia Ph il ip p in e s excellence & international business Ch i n a In d ia T aiwan Ind one sia Vietn am Sri L anka T BD J a p an 3 Industrial Business T BD Au s t ral ia T BD Q4 '06 Co nve rt in g t o T ha ila nd S in g a p o re Q2 '0 6 APAC Milestones by Country Robust Q1 sales growth Cost/sales synergy kicking in Integration on schedule Bringing Together Two Great Com panies 95% mgmt. retention 9 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  24. 24. High Jump Interactive Supply Chain Solutions Smiley’s POS Data: I just sold You will need 3 Visibility 1000 Cases of 3M temporary workers Masking Tapes and ship 200 cases 2 to Smiley’s DC by 1 4pm tomorrow Turn right on I-90 in 13 miles and head to Smiley’s DC Cross-dock your production to Smiley’s DC. Extend your Connectivity production run by 500 cases. 3 Optimization Information from Factory Floor : I Information from WMS: I have 200 have 500 cases TMS/Truck GPS: I cases and finished by have 300 cases capacity to pack 4pm today and I am in and ship Milwaukee,WI 4 Wow! I did not even know I needed these Masking Tapes 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  25. 25. 3M Composite Conductor – Energy Efficiency The traditional solution to bottlenecks: Build new towers to carry conventional steel conductors The problem: High Developed for Performance & Reliability construction cost, long permitting times, Continuous CERAMIC difficulty obtaining Fibers Embedded in land, community Aluminum 3 opposition 2-3X gain in transmission capacity Use existing infrastructure Quick and easy solutions © © 3M 2005 3M 2005 Proprietary 3M technology 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  26. 26. Addressing The Mega Trend, Construction Solutions Reinventing The Core Industrial Business Illness Moisture Mold Remediation Liability Intrusion Mildew Damage Customer Pain Points Window Roof Foundation New roofing system New Wall protection system House wrap tapes Concrete protection system Flashing/Sealing system 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  27. 27. Oil And Gas, 3M Down Hole Solutions Enhancing Productivity And Recovery Glass Bubble for Low density cement Filter Bags Fluoro- elastomer 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  28. 28. Industrial And Transportation Business Four Growth Strategies Growth through market segments programs – Transportation, Electronics, Metalworking, – Oil and gas, MRO, Building contractors, Food and Beverage Growth through new platform – Supply chain execution, Filtration, Composite material – Top 30 New Product Programs Geographic penetration – China, India, Eastern Europe, Russia, Brazil (BRICP) – Developed economy Growth by leveraging brand – Channel growth programs – I&TB Service and Quality Revolution 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  29. 29. Industrial And Transportation Business BRICP Country Entitlement Growth Plan Country 2004 Sales 2010 Entitlement 3 I ndustrial Business Brazil 10X Plan Russia India 3 India China Poland Products that meet local market needs Quick response to customer needs Critical Issues Supply chain efficiency Knowledge transfer Talent management (hiring, training, retention) 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  30. 30. 3M India 10X Plan Market And Portfolio Strategy 3M will be in a better position to sell up and protect share as A markets develop Strategy is to position more in B B & C Tiers A today B C C India Future India Market Today Increasing demand for quality Large C Tier will drive A & B Tier growth Limited opportunity in A Tier 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  31. 31. Strategy : Accelerate Localization And People Investment Local coating and converting Local raw material, local products Supply chain simplification 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  32. 32. Industrial And Transportation Business Four Growth Strategies Growth through market segments programs – Transportation, Electronics, Metalworking, – Oil and gas, MRO, Building contractors, Food and Beverage Growth through new platform – Supply chain execution, Filtration, Composite material – Top 30 New Product Programs Geographic penetration – China, India, Eastern Europe, Russia, Brazil (BRICP) – Developed economy Growth by leveraging brand – Channel growth programs – I&TB Service and Quality Revolution 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  33. 33. Leverage 3M Brand : Industrial Channel Growth Plan Leverage 3M Brand Category management Product gap filling Competitive conversion Channel entitlement growth plan 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  34. 34. Brand Leverage, I & TB Service and Quality Revolution Capable and aligned with the customer The Right Products….. Delivered when the customer wants. In the right quantity and # of shipments. On target with With expected quality and performance. minimal 1. variability and waste Target zero defect 2. Service as competitive advantage 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  35. 35. Industrial And Transportation Business Top 9 Growth Opportunities 1. Oil and Gas Program 2. Composite Conductor Program 3. Liquid Filtration ( CUNO ) 4. Paint Preparation Systems 5. Supply Chain Execution ( HighJump ) 6. BRICP Entitlement Growth Plan 7. Channel Growth Plan 8. Maintenance and Repair Segment Plan 9. Top 30 Organic New Product Programs 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  36. 36. Industrial And Transportation Business Summary Strong core business Excellent global reach Sound operational discipline Expanding to new adjacent markets Expanding to high growth market space Focus on growth – 5-8% near term LC growth 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved

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