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Mike Kelly Presentation
 

Mike Kelly Presentation

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    Mike Kelly Presentation Mike Kelly Presentation Presentation Transcript

    • 3M Display & Graphics Business Optical Film Update Mike Kelly, Executive Vice President, Display and Graphics Building a Sustainable Business In Light Management Films September 9, 2008 1 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
    • 3M Display & Graphics Business Commercial Graphics Display & Graphics Business Optical Systems Film Mfg & Supply Chain Projection Systems Traffic Safety Systems Technology Pipeline 2 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
    • 3M Display & Graphics Business Optical Systems Division Leading global supplier of brightness enhancement films that transform the display of information anytime, anywhere Handheld devices Computer displays LCD TV Emerging applications – Ultra mobile PC, Automotive, Digital signs “Enhancing the Way You See the World” 3 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
    • 3M Display & Graphics Business Optical Film Strategies for LCDs 1995 – 2007 • Brightness enhancement • Energy savings 2008 – 2009 • Uniformity improvement • LCD system cost reduction Future • New value films 4 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
    • 3M Display & Graphics Business Recent Changes in the LCD TV Segment Brightness Spec Brightness = 500 - 550 Brightness = 400 - 450 Spec Down 20% 95% Color Gamut 75% Color Gamut LCD Panel LCD Panel LCD Panel Transmission Up 30% DBEF 60% Brighter DBEF 2x Diffuser 3x Diffuser Diffuser plate Diffuser plate Lamps Lamps Lamps Lamps Lamps Brightness Up 15-20% Recent Past Current as of 2008 Decline in DBEF demand due to: • Reduction in TV brightness specifications in order to reduce costs • Panel transmission increases • Improved bulb performance 5 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
    • 3M Display & Graphics Business Steady Improvements in LCD Performance Panel Transmission 4% – 6% As panel transmission increases, the need for brightness enhancement film enhancement decreases. However, the need for uniformity solutions may increase. increase. Graphic illustration from Scientific American 6 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
    • 3M Display & Graphics Business But…. Our Film Value Propositions Vary by LCD Segment Plug-in: Monitor & TV Customer needs: Recent shift in priority from brightness to uniformity and low power ~1 enhancement film per display Value proposition has weakened over time Growing interest in reducing power consumption Battery Operated: Handheld & Notebook Customer needs: Sustained priority on thin, uniformity, low power, brightness 2 or more enhancement films per display Films have substantial impact on power consumption Strong enhancement film value proposition 7 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
    • 3M Display & Graphics Business “Plug-in” LCDs TV TV Panel Area 70,000 100% Industry area growth rate slowing Displaysearch 90% 60,000 Lower brightness specifications 80% 50,000 70% Fewer films / TV % Growth 000 m^2 60% 40,000 50% 3M competitiveness has declined 30,000 40% DBEF use stabilizing 30% 20,000 20% Lower pricing 10,000 10% Energy savings impact - 0% Uniformity 2007 2008 2009 2010 2011 Monitor Monitor Panel Area 30,000 50% Displaysearch 45% Single digit area growth rate 25,000 40% 35% Intense prism film competition 20,000 % Growth 000 m^2 30% 3M competitiveness had declined 15,000 25% 20% substantially, but has recently improved 10,000 15% DBEF use growing 10% 5,000 5% Lower pricing - 0% Energy savings impact 2007 2008 2009 2010 2011 8 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
    • 3M Display & Graphics Business “Battery-Operated” LCDs Notebook Notebook Panel Area 18,000 50% Displaysearch 45% Double digit area growth to continue 16,000 40% 14,000 LED backlight usage increased 35% 12,000 % Growth significantly 30% 000m^2 10,000 25% 3M has remained competitive 8,000 20% 6,000 DBEF use growing 15% 4,000 10% Lower pricing 2,000 5% Improved battery life - 0% 2007 2008 2009 2010 2011 Handheld Panel Area Handheld 8,000 45% Displaysearch 40% 7,000 Area growth rate slowing 35% 6,000 30% % Growth 3M has strong competitive position 5,000 000 m^2 25% 4,000 DBEF use growing 20% 3,000 15% BEF RP (DBEF + BEF multi-function) 2,000 10% Improved battery life 1,000 5% - 0% 2007 2008 2009 2010 2011 9 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
    • 3M Display & Graphics Business Enhancement Film Industry Area Revenue Market Size Sq Meters Market Size $ 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 Revenue CAGR -9.2% Area CAGR +10.0% Enhancement Film Industry includes: DBEF, Prism, Micro Lens, Diffusers & Reflectors 10 3M Estimate © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
    • 11 Sales (000's USD) Q 1 Q '01 2 Q '01 3 Q '01 4 Q '01 1 Q '02 2 Q '02 3 HandHeld Q '02 © 3M 2008. All Rights Reserved. 4 Q '02 1 Q '03 2 3M Display & Graphics Business Q '03 3 Q '03 4 Q '03 1 Q '04 2 Q '04 3 OSD LCD Sales History Q '04 4 Q '04 LCD Notebooks 1 Q '05 2 Q '05 3 Q '05 2008 3M Investor Conference 4 Q '05 1 Q '06 2 Q '06 3 Q '06 4 Q '06 1 LCD Monitors Q '07 2 Q '07 3 Q '07 4 Q '07 1 Q '08 2 Q '08 3 Q '08 LCD TV 4 Q '08 1 Q '09 2 Q '09 3 Q '09 4' 09
    • 3M Display & Graphics Business Optical Film Strategies for LCDs 1995 – 2007 • Brightness enhancement • Energy savings 2008 – 2009 • Uniformity improvement • LCD system cost reduction Future • New value films 12 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
    • 3M Display & Graphics Business Vikuiti™ DBEF TV Energy Savings Removed 8 CCFLs 40” Common LCD-TV 40” Ultra Low Power LCD-TV Brightness: 350 nits Brightness: 350 nits Without DBEF With DBEF 20 CCFLs 12 CCFLs Power: 195 Watts Power: 92 Watts Retail Proposition: Reduced energy consumption + GREEN Consumer Proposition: Energy Savings of approximately $100 over 5 years Energy savings initiatives create the need for uniformity solutions 13 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
    • 3M Display & Graphics Business Second Half 2008 Industry Outlook LCD Industry Q3 volume will be ~10% lower than earlier expectations Q4 volume close to earlier expectations unless economy worsens Enhancement Film Industry Stable industry prism film use at lower prices Trend toward energy savings and LED use drive slightly higher DBEF use, and we expect this trend to continue 14 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
    • 3M Display & Graphics Business 2008 Actions Organization restructure New leadership team Business leadership moved to Asia – closer to the customer Strengthened key account management Differentiated products that are relevant to customers Cost down focus and operational optimization 15 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
    • 3M Display & Graphics Business Optical Film Strategies for LCDs 1995 – 2007 • Brightness enhancement • Energy savings 2008 – 2009 • Uniformity improvement • LCD system cost reduction Adjacencies 3M Products LED backlight components Air Guide, Film Light Guide Future Privacy Filters • New value films Computer filters Other optical films Front Surface Films Expansion into adjacencies doubles market opportunity size 16 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
    • 3M Display & Graphics Business Thank You 17 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference