James B. Stake Executive Vice President, Display and Graphics Business

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James B. Stake Executive Vice President, Display and Graphics Business

  1. 1. Sustainable Profitable Growth Jim Stake Executive Vice President, Display & Graphics Business 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  2. 2. Display & Graphics Business Commercial Graphics Optical Technology Traffic Pipeline Safety Growing core businesses… Growing core businesses… common strengths…healthyReserved common strengths…healthy pipeline © 3M 2006 All Rights pipeline 3M Investor Meeting 2006
  3. 3. 3M Display & Graphics: Key Financial Data Sales Operating Income $1,500 $Billions & YOY % Chg $Millions & YOY % Chg $1,162 $4.0 $3.5 $1,115 $1,200 $3.3 +4% +5% +29% $2.9 $865 +17% $3.0 $900 +35% +67%* $2.0 $600 $296 $0.9 $1.0 $300 +8% +4% $0 $0.0 2003 2004 2005 Q1 2006 2003 2004 2005 Q1 2006 LC Growth 28.4% 12.4% 4.7% 9.5% OI Margin 30.3% 33.3% 33.1% 32.4% 2005 Sales By Geographic Area Europe 14% U.S. 21% LAC 5% *2002 estimated stock options, not restated. APAC 60% 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  4. 4. Commercial Graphics Division Building brands through graphics and digital signage Building brands through graphics and digital signage World’s largest graphic Boeing complex – Everett, WA 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  5. 5. Commercial Graphics Division Transportation 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  6. 6. Commercial Graphics Division Food & Beverage 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  7. 7. Commercial Graphics Division Banking Night Signage Interior & Digital Signage Day Signage 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  8. 8. Commercial Graphics Division Patented microreplicated Patented microreplicated adhesive technology adhesive technology 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  9. 9. Commercial Graphics Division Printing Knowledge “Big 3M” End-user Coverage Broad Scotchprint™ Range of Warranted Offerings Graphics Manufacturing Global Graphic Excellence & Network Scale Intellectual Sustainable global Sustainable global Property growth model growth model 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  10. 10. Traffic Safety Systems Division The Leader in Transportation Safety The Leader in Transportation Safety & Mobility Solutions & Mobility Solutions 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  11. 11. Traffic Safety Systems Division 3X Brighter 10X Brighter Prismatic Migration DG³ 1939 2006 Diamond Grade High Intensity Engineer Grade 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  12. 12. Traffic Safety Systems Division Materials Digital Systems Solutions & Services Latest Innovation High value solutions for vehicle registration High value solutions for vehicle registration 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  13. 13. Traffic Safety Systems Division Day - Dry Night - Dry Night - Wet Technology breakthrough and service migration in pavement markings 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  14. 14. Traffic Safety Systems Division History of Leadership Expanding into Services Global Coverage Broad Consistent Range of Quality & Offerings Service Government Manufacturing Relationships – Excellence & “Trust” Scale Intellectual Sustainable global Sustainable global Property © 3M 2006 growth model growth model 3M Investor Meeting 2006 All Rights Reserved
  15. 15. Optical Systems Division Making LCDs better, brighter Making LCDs better, brighter and more energy efficient and more energy efficient 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  16. 16. LCD Panel Structure Polarizer Compensator Glass Color Filter Liquid Crystal Display Glass Liquid Cr ystal Glass Compensator Polarizer Cover Sheet 3M DBEF 3M BEF Backlight 3M BEF Diffuser Light Guide 3M Reflectors 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  17. 17. BEF - Brightness Enhancement Film BEF Recycles off axis light Wasted Light Without BEF Dim Light refracted toward viewer Wasted Light Lamp Wasted off-axis light reflected back for recycling BEF redirects Bright light towards the viewer BEF Backlight LCD 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  18. 18. DBEF - Dual Brightness Enhancement Film Without DBEF, 50% of backlight output is absorbed by the LCD Transmit P1 Dim Absorb P2 LCD Backlight DBEF increases brightness by Reflecting & Recycling polarized light P1 P2 Bright Reflect Recycle P1 LCD DBEF Backlight 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  19. 19. LCD Area Growth 05-10 CAGR: 25% 80 TV 70 Monitor Notebook Display Area (Millions m2) 60 Handheld 50 40 30 20 10 - 2002 2003 2004 2005 2006 2007 2008 2009 2010 3M Investor Meeting 2006 Source: DisplaySearch © 3M 2006 All Rights Reserved
  20. 20. 3M LCD Film Sales ($) by Application LCD TVs Monitors Notebooks Handhelds 2001 2002 2003 2004 2005 Strong growth led by LCD-TV Strong growth led by LCD-TV and handheld devices and handheld devices 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  21. 21. Consumer Television Units 250 LCD PDP PJ TV 200 CRT Units (Millions) 150 100 50 0 2003 2004 2005 2006 2007 2008 2009 2010 3M Investor Meeting 2006 Source: DisplaySearch © 3M 2006 All Rights Reserved
  22. 22. New TV Technology Area Growth 05-10 CAGR: 32% 60000 LCD TV 50000 PDP RPTV 40000 Area (000's m2) 30000 20000 10000 0 2003 2004 2005 2006 2007 2008 2009 2010 3M Investor Meeting 2006 Source: 3M Estimate © 3M 2006 All Rights Reserved
  23. 23. 32” LCD TV Panel Price LCD Panel ASP LCD Panel Demand $2,250 $2,250 45,000 45,000 $2,000 $2,000 40,000 40,000 $1,750 $1,750 35,000 35,000 $1,500 $1,500 30,000 30,000 ($/unit) ASP ($/unit) (000's) Units (000's) $1,250 $1,250 25,000 25,000 $1,000 $1,000 20,000 20,000 $750 $750 15,000 15,000 $500 $500 10,000 10,000 $250 $250 5,000 5,000 $- $- -- 2002 2003 2004 2005 2006 2007 2008 2009 2010 2002 2003 2004 2005 2007 2008 2009 2010 LCD price decreases fueling strong demand LCD price decreases fueling strong demand 3M Investor Meeting 2006 Source: DisplaySearch © 3M 2006 All Rights Reserved
  24. 24. Customer Investments LCD Fabs LG Philips 7G Q1’06 8G Q3’08 Samsung/Sony 7G Q1’06 8G Q4’07 Samsung 9G Q3’09 Sharp 8G Q4’06 9G Q1’10 AUO 7G Q4’06 8G TBD CMO 7G Q3’07 8G Q2’08 8G TBD Hannstar 7.5G TBD SVA-NEC 6G Q3’08 BOE-Hydis 6G Q1’09 Poland TV Assembly LG Electronics Sharp Total customer investment of over $30 Billion Total customer investment of over $30 Billion 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  25. 25. Customer Investments Sharp Kameyama Samsung Source: Sharp Website Source: Samsung Website Source: L.G. Investors Presentation L.G. Philips – 7G Substrate 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  26. 26. Large Area LCD Supply / Demand 180000 Excess capacity Excess capacity 160000 represents upside represents upside 140000 120000 Units (1,000/QTR) 100000 80000 60000 40000 20000 0 Q1'05 Q2'05 Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Q4'07 Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Realistic Capacity Demand Total 3M Investor Meeting 2006 Source: DisplaySearch © 3M 2006 All Rights Reserved
  27. 27. Optical Systems Division Product Technology Customer Support Teams Process Technology Global Supply Chain Intellectual Property Quality Customer Systems Relations Manufacturing Application Excellence & Development Scale 3M Investor Meeting 2006 Sustainable global© growthRights Reserved Sustainable global 3M 2006 All model growth model
  28. 28. Optical Systems Intellectual Property 750 Active US Patents 0 2000 2001 2002 2003 2004 2005 2006 YTD Large and growing patent portfolio Large and growing patent portfolio 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  29. 29. Customer Satisfaction is Growing Key Account Teams supporting customer success Annual customer satisfaction surveys ’03 ’04 ‘05 0 1 2 3 4 5 6 7 8 9 10 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  30. 30. Investing to Support Customer Growth Suzhou, China Wroclaw, Poland Kansai, Japan Hwaseong, Korea Tainan, Taiwan USA Naju, Korea 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  31. 31. Continuous Flow of New Product Innovations High Gain BEF – 8% - 10% brightness improvement Anti-Static BEF – Lower LCD assembly cost APF: Next generation DBEF – Thinner, higher contrast, better color BEF- RP Multifunction Film – Superior gain, lower LCD assembly cost Notebook Privacy Filters – New manufacturing process enables mass market pricing 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  32. 32. Quality Advantage 3M delivers industry-leading quality 2006 quality objectives: – Tighten particle size specs by 25% to 30% – Cut total number of defects by 50% Superior quality: – Lowers customer assembly and rework costs – Improves 3M manufacturing yields Current Spec Future Spec Defect Human Hair 24 um 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  33. 33. LCD Film Price History 120 100 80 Relative Price 60 40 3M Enhancem ent ASP 20 0 1999 2000 2001 2002 2003 2004 2005 2006 Sharing productivity gains and optimizing Sharing productivity gains and optimizing price/value to maximize opportunity price/value to maximize opportunity 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  34. 34. VikuitiTM DBEF And Energy Efficiency 12 Lamps + DBEF 16 Lamps Less Power Lower Temp DBEF = fewer bulbs, less energy, lower temperature DBEF = fewer bulbs, less energy, lower temperature 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  35. 35. D&G Technology Pipeline – Plasma 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  36. 36. D&G Technology Pipeline – OLED 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  37. 37. D&G Technology Pipeline – LEDs 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  38. 38. D&G Technology Pipeline – Projection Durable Polarizers for LCD projection systems – Dramatically reduces long term display degradation Solid State Lamps (LEDs) – Improved lifetime, better color, instant on, no Mercury Optical core for reflective LCD systems (L-COS) – Improved brightness, contrast and uniformity 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  39. 39. D&G Technology Pipeline – Touch Systems 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  40. 40. Stepped-Up Marketing www.vikuiti.com 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved
  41. 41. Display & Graphics Outstanding teams in place Excellent customer relationships Strong core businesses Unmatched manufacturing scale and quality Growing markets Clear leadership positions Positive momentum – 8%+ LC Growth Target Robust technology pipeline Sustainable, profitable growth! Sustainable, profitable growth! 3M Investor Meeting 2006 © 3M 2006 All Rights Reserved

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