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Inge G. Thulin Executive Vice President, International Operations
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Inge G. Thulin Executive Vice President, International Operations

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  • 1. Our Largest Growth Platform Inge G. Thulin Executive Vice President International Operations 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 2. Six Market Leading Businesses – Executed in a Worldwide Network of Subsidiaries Health Care Consumer Industrial and and Office Transportation Electro and Communications Safety, Security Display and and Protection Services Graphics Decide Where to Play and How to Win 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 3. 3M’s Subsidiary Network Poland Switzerland Norway Hungary Ukraine Canada East Czech Trinidad Austria Romania Finland Republic Sweden & Tobago Puerto Rico Russia Germany Dominican Republic Denmark Jamaica Korea Netherlands Belgium Japan Ireland Mexico China United Guatemala Kingdom Hong Kong El Salvador Portugal Taiwan Costa Rica Spain Pakistan Panama Vietnam France UAE Colombia Philippin es Morocco Kuwait Indonesia Venezuela Thaila nd Saudi Tunisia Arabia Ecuador Malaysia Singapore Italy Peru Lebanon Sri New Zealand Greece Australia Lanka Brazil Israel India Turkey Chile Egypt South Africa Key Kenya Uruguay Argentin a Zimbabwe Sales & Mar keti ng Manufacturing/Converting Technical Capabilities 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 4. 3M International Overview Subsidiaries in 69 countries organized in three geographic areas – Representing 61% total 3M sales for 2005 33 countries with laboratories 79 manufacturing sites 36,600+ employees 99% 3M International subsidiary employees are local nationals 3M product sales in over 200 countries Local Knowledge and Execution Supported by Global Processes and Capabilities 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 5. 3M International Recent Performance Sales Operating Income $4,000 $14.0 $Billions & YOY % Chg $Millions & YOY % Chg $12.9 $3,654 +6% $12.1 $3,328 +10% $12.0 +14% $10.7 +30% $3,000 +20% $10.0 $2,552 $8.0 +26%* $2,000 $6.0 $1,059 $4.0 $3.4 $1,000 +7% +14% $2.0 $0 $0.0 2003 2004 2005 Q1 2006 2003 2004 2005 Q1 2006 LC Growth 10.1% 7.4% 5.1% 10.3% OI Margin 24.0% 27.4% 28.3% 30.7% 2005 International Sales by Business and Region APAC 45% I & T 29% HC 16%% LAC 14% C & O 10% E & C 13% SS & PS 10% Europe 41% D & G 22% *2002 estimated stock options, not restated. 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 6. 3M’s Competitive Advantage – International Technology Platforms Manufacturing and Process Capabilities Geographical Reach and Local Market Knowledge Borderless Customer Success: Unique Ability to Serve Transnational Accounts Globally and Domestic Accounts Locally 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 7. Importance of Geographies in Global Execution Know the cultures and business practices. Speak the language. Know the customers and their needs. Develop and sustain long-term key account relationships. Understand the local competitive environment. Anticipate and respond to market opportunities. Provide knowledgeable, responsive and ethical representation where the customers are. Protect the Corporation. Local Knowledge is Key to Global Execution 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 8. 3M Path to Local Market Penetration Japan Building products, UK Sales Germany services and Brazil Canada businesses closer to Taiwan Potential Global customers Source of Korea Supply M&A – Poland Mexico Products and Technologies China Full Manufacturing for Local Needs Add R&D for Russia Local Product Development India Add R&D for Local Application Establish Meeting Local Local Converting Requirements & Mfg. Im port to Demand Establish Position Time Local Ownership and Accountability 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 9. International Growth Imperatives Market Focus / Customer Success Developed Countries Operational Excellence Developing Countries Engaged Employees Alignment to Imperatives Enables Consistent Customer Focus and Service on a Global Basis 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 10. International Growth Imperatives in Action Sustainable Growth Sustainable Growth Market Focus / Customer Success Operations / Commercialization Local Solutions Local Sourcing Global Technology Platforms Engaged Employees Power of Local Subsidiaries 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 11. Mining Market: Copper Extraction Transportation & Crushing Flotation & Smelting Electrical Splices Electrical Splices Electrical Supplies Electrical Supplies Electrical Supplies Respirators Electrical Supplies Respirators Conveyor Kit Repair Conveyor Kit Repair Reflectives Respirators Reflectives Respirators Asset Tracking Asset Tracking Glass Bubbles pHmeter Glass Bubbles pHmeter Novec I/C Cleaning Novec I/C Cleaning Dust Suppressant Dust Suppressant Distribution ElectroWinning & Leaching & Final Sale ElectroRefining Cathode Tracking Cathode Tracking Surfactant for Acid Mist Surfactant for Acid Mist Cuno Filters Cuno Filters Bundle Labels Nomad for Acid Mist Bundle Labels Nomad for Acid Mist High Flow Filters High Flow Filters Abrasives Tracking Solutions Abrasives Tracking Solutions Leach Additives Leach Additives Electrical Supplies Bundle Strapping Electrical Supplies Bundle Strapping Close Loop Control Close Loop Control Respirators Respirators Novec Degreaser Novec Degreaser Local Subsidiaries Bring All 3M Businesses and Solutions to Mining Customers 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 12. Food & Beverage Market: Salmon Hatchery Farming at Sea Harvesting & Sea Transport Reflective Reflective Safety Walk Safety Walk Duct Tape Duct Tape Thermographs Thermographs Thermograph Abrasives Thermograph Abrasives RFid RFid Antifouling Marine Products Antifouling Marine Products Cuno Filters Cuno Filters Tracking Solutions Tracking Solutions Tracking Solutions Tracking Solutions Infection Control Infection Control Labels Labels Recovering Recovering Net Cage Cleaning Net Cage Cleaning Distribution &Final Sale Exportation & Cold Chain Plant Process Labels & TPS Labels & TPS Stretchable Tape Stretchable Tape Thermographs Thermographs Special Labels Cleaning Chemicals Special Labels Cleaning Chemicals Highjump Highjump Smart Packaging Abrasives Smart Packaging Abrasives RFid RFid Packaging Materials Microbiology Packaging Materials Microbiology Cold-Pack Cold-Pack RFid Adhesives RFid Adhesives DLR DLR Shelf Life Extension OH&ES Shelf Life Extension OH&ES Security Labels Security Labels Mattings Local Subsidiaries Bring All 3M Businesses and Mattings Primary Packaging Primary Packaging Solutions to Food & Beverage Customers 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 13. Developed Country Growth - Customer Success Market Focus / Customer Success Developed Countries Operational Excellence Developing Countries Engaged Employees 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 14. Managing Transnational Accounts: Toyota TOYOTA “Innovative International Multi-purpose Vehicle” (IMV) Program Highlights Account managed globally by Sumitomo 3M Japan Fast, accurate and expert response to customer issues Applications from over 10 different 3M Divisions Enabling Borderless Customer Success 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 15. Sumitomo 3M Japan Growth Model Prospects Forwarded to Prospects Forwarded to Market Centers Cross Functional Teams New Products Flow Cross Functional Teams Idea Automotive Automotive Sales Sales Marketing Marketing 3M Businesses Concept Electronics Electronics ManufacturingApplication & ManufacturingApplication & + Feasibility & EngineeringDevelopment & EngineeringDevelopment Healthcare Healthcare + Development Industrial Customer Industrial Customer Scale-up Technology Technology Construction Construction Center Center Launch + Laboratory Laboratory “Voice of Customer” Customer is a Critical Input Apply Intellectual Apply Intellectual Relationships - Replicate at other Capability to Capability to - Key account focus key accounts Opportunities Opportunities 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 16. Sumitomo 3M Japan Customer Technology Center Tokyo, Japan Opened January 1998 32,300 Square Feet 6,500+ Visitors in 2005 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 17. Customer Technology Centers (CTC) Global Reach CTC’s in More than 25 countries Workplace for addressing Customer articulated and unarticulated needs Knowledge transfer between 3M and Customers – mutual exchange Showcase for 3M technology, capabilities and products Internal coordination ensures customers linked around the world CTC Success Lies in Local Bench-to-Bench Technical Expertise Combined with Cross-Business Product Application 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 18. 3M Germany – Customer Technology Center Neuss, Germany Opened November 2001 213,000 Square Feet 4,000+ Visitors in 2005 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 19. Successful Applications for Growth: BMW 5 Series M irror Button Sun Roof Seal Cover Cup Attachment Navigation Display Film Holder Rear Spoiler M ounting Rain Sensor Attachment Trunk Lid Fogging Sensor Attachment Tape Cabin Air Filter Window M ounting Door Reflector Door M ounted Seals Where’s 3M? Scratch Protection Film Meeting Customer’s Quality & Performance Demands All Over the World 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 20. 3M - BMW Group Partnership Germany Russia China UK Austria USA Thailand Egypt Malaysia Brazil Indonesia South Africa : BMW Location Enabling Borderless Customer Success 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 21. in Germany GROWTH |2006 3M Investor Meeting SERVICE | PRODUCTIVITY © 3M 2006 All Rights Reserved
  • 22. 3M Germany Compensation for Growth Program Growth Incentives For All Employees Shift from Fixed to Variable Pay Professional Plus: % Variable Pay Based on Plan Achievement Position New System Old System Sales Representative 30% 14% Marketing 20% 7% Sales & Marketing Sales Bonus Structure Example Management 30% 20% Bonus Value in Percent Employee Grade F Pres ent Grade A % Target 101.5 110.5 Operating Plan Aligned Company and Employee Growth Aspirations 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 23. Developing Country Growth Market Focus / Customer Success Developed Countries Operational Excellence Developing Countries Engaged Employees 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 24. Solutions for Developing Markets Infrastructure Spending Emerging Middle Class Migration of Industrial Increased Spending Production On Healthcare 3M Business Portfolio Meets Developing Market Opportunities 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 25. Sales in Developing Countries 2001-05 CAGR 14.2% Developing Markets Sales (% of 3M) 25% Brazil Brazil 20% Russia Russia 15% 10% India India 5% China China 0% Poland Poland 2001 2002 2003 2004 2005 Other Asia Pacific (excludes Japan, ANZ) Other Eastern Europe Middle East/Africa Strong Track Record in Developing Markets 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 26. BRICP Subsidiaries Russia ● 237 Employees ● 1 Plant Poland ● 652 employees China ● 2 Plants ● 2,070 Employees ● 6 Plants India ● 722 Employees Brazil ● 3 Plants ● 2,943 Employees ● 4 Plants Strengthening Local Teams and Operational Capabilities 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 27. 3M Brazil – Latin America’s Growth Driver • Manufacturing Capacity and Broad Regional Reach • Local Technical Expertise • New CTC Opened July 2005 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 28. 3M Russia – Broad-based Opportunity • Improving Economy • Customer Contact Center in St Petersburg - Opened 2005 • New CTC in Moscow Q2 2006 • Local Manufacturing in Q4 2006 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 29. 3M India – Significant Growth Opportunity • Broad-based Penetration Opportunity • R&D and Local Conversion in Place • Expanding Market Coverage 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 30. 3M China – Increasing Investment and Returns • Economy Remains Strong • Broad Geographic Reach • New Investments in R&D • Executing Well Against Plan 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 31. 3M China Geographic Coverage Haerbing Changchun Urumqi Beijing Shenyang Shijiazhuang Tianjin Dalian Jinan Yantai Qingdao Zhenzhou Wuxi Xi’an Hefei Kunshan Zhengzhou Nanjing Shang Wuhan Chengdu Suzhou Hangzhou hai Ningbo Chongqing LEGEND Changsha Nanchang General Office, Manufacturing Fuzhou Taipei Kunmin Guangzhou Warehousing & Technical Center XiamenTaichung ShenzhenKaohsiu Existing Customer Sales Center Nanning ng Dongguan Home base location Hong Kong Foshan 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 32. 3M China Local Manufacturing Six Major Focused Plants Xin Qiao CAOHEJING PLANT Supports: Consumer, Display & Graphics, Industrial & Transportation and Safety & Security Caohejing Supports: Consumer, Electro & Communications and Industrial & Transportation Waigouqiau Supports: Display & Graphics Suzhou CEO Safety Award in 1997, 1999, 2003 Supports: Display & Graphics ISO 9000 v2000 Certified Shanghai Cuno ISO 14001Certified OHSAS 18000 Certified Supports: Industrial & Transportation (Cuno) QS9000 Certified Guangzhou (Opens Q4 2006) Will Support: Display & Graphics, Industrial & Transportation 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 33. 3M China R&D Investment Shanghai, China 180,000 square feet Facilities assignment: 30 Tech Service Labs 12 R&D Labs Customer Technical Center Multiple Customer Workshops Target 300 Staff by 2007 Total Investment: USD $40 Million 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 34. 3M Poland - Bridging Europe and Asia • Untapped Domestic Market • Emerging Destination for Business Migration •Successful Local Brands • Global Manufacturer 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 35. 3M International Growth Strategy Extend the Core through new market adjacencies, Grow the current 3M acquisitions and EBOs Core in all countries – emphasize Borderless Customer Success Extend the Core in all countries – emphasize locally-relevant brands, products / applications and business models International Expansion in All Three Dimensions 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 36. Local Brands: Viscoplast Acquisition secured existing market position in Poland for Viscoplast portfolio Accelerating penetration of 3M product portfolio in Poland Leveraging low-cost manufacturing and converting capabilities Providing low cost entry level products for other neighboring markets 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 37. Viscoplast High Brand Awareness - Poland 1% 3M Nexcare 2% Compeed 3% TZMO / Matopad 3% Cosmos 3% Urgo 12% Hansplast 12% Cleanic 14% Salvequick 45% 3M Viscoplast Source: Millward Brown, SMG/KRS, Omnibus, Sept 2005 Balancing Strategic 3M Brands with Locally-Acquired Brands …Where to Grow and How to Win 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 38. 3M - LG.Philips (LPL) Global Collaboration Business Partnership • 3M Korea Supports LPL Business on a Global Basis • Simultaneous Investment in Poland • Total Solution Provider with 3M Technology Platforms • Exchange Business / Technology Roadmap • Executive Engagement for Strategic Collaborations Technical Partnership Borderless Customer Success • Timely Technical Service Support on Site • Dedicated Technical & Business Teams • Quality Engineers on LPL Sites Support LPL Global Operations in Korea,China • Quarterly Lab-to-Lab Meetings & Poland • Collaboration for New Product Development • 3M Korea Transnational Account Team • Testing, Optical Simulation & Design Supports Supports 3M China & 3M Poland teams and • Annual Technical Fair at LG LPL Global Suppliers 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 39. International Growth Imperatives Market Focus / Customer Success Developed Countries Operational Excellence Developing Countries Engaged Employees 3M’s Geographic Presence and Reach Enables Borderless Customer Success 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  • 40. 3M International Summary International growth continues to expand Developed countries will grow through transnational account management and coordinated on-the-ground technical expertise Developing countries strengthening – BRICP strategy and ongoing product localization are significant drivers in 3M growth Strategic acquisitions provide locally-relevant customer/market knowledge and product portfolio All about EXECUTION starting with the CUSTOMER!!! Growth Possible in All “Corners” of the World 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved

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