George W. Buckley Presentation

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George W. Buckley Presentation

  1. 1. George W. Buckley Chairman of the Board, President, and CEO 3M Company Accelerated Growth Premium Returns Enhanced Shareholder Value December 12, 2007 © 3M 2007. All Rights Reserved. 2008 3M Outlook Meeting
  2. 2. 3M 2008 Outlook Meeting Forward-Looking Statements These presentations contain forward-looking information (within the meaning of the Private Securities Litigation Reform Act of 1995) about 3M’s financial results and estimates and business prospects that involve substantial risks and uncertainties. You can identify these statements by the use of words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “will,” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. Among the factors that could cause actual results to differ materially are the following: (1) worldwide economic conditions; (2) competitive conditions and customer preferences; (3) foreign currency exchange rates and fluctuations in those rates; (4) the timing and acceptance of new product offerings; (5) the availability and cost of purchased components, compounds, raw materials and energy (including oil and natural gas and their derivatives) due to shortages, increased demand or supply interruptions (including those caused by natural and other disasters and other events); (6) the impact of acquisitions, strategic alliances, divestitures, and other unusual events resulting from portfolio management actions and other evolving business strategies, and possible organizational restructuring; (7) generating less productivity improvements than estimated; and (8) legal proceedings, including significant developments that could occur in the legal and regulatory proceedings described in the company’s Annual Report on Form 10-K for the year ended Dec. 31, 2006 and its subsequent Quarterly Reports on Form 10-Q (the “Reports”). Changes in such assumptions or factors could produce significantly different results. A further description of these factors is located in the Reports under “Risk Factors” in Part I, Item 1A (Annual Report) and in Part II, Item 1A (Quarterly Report). The information contained in these presentations is as of the date indicated. The company assumes no obligation to update any forward-looking statements contained in these presentations as a result of new information or future events or developments. 2 © 3M 2007. All Rights Reserved. 2008 3M Outlook Meeting
  3. 3. Today’s Agenda Strategic summary and performance to-date Display & Graphics business review Industrial & Transportation business review 2008 outlook 3 © 3M 2007. All Rights Reserved. 2008 3M Outlook Meeting
  4. 4. What Happened At 3M In 2007 We overcame the loss of $255M of Pharma earnings without the benefit of discontinued operations treatment We dealt with the loss of $40M + earnings in a little known end-of-life flex- circuit issue (ink jet mainly) We closed inefficient plants in Japan, Italy, US, Canada and New Zealand We put massive effort into solving long standing capacity and supply chain issues We dealt with a significant legacy of underinvestment in technology We bought back record numbers of shares and increased dividends We did this in a softer optical environment for 3M A powerful restructuring of one of America’s great companies took place before your eyes 4 © 3M 2007. All Rights Reserved. 2008 3M Outlook Meeting
  5. 5. Why We Are Confident About Our Future Our strategy of accelerating growth and maintaining premium margins is working 3M’s traditional core is getting stronger and more businesses are contributing to a higher growth rate environment 3M has the greatest technical and film manufacturing capability in the world; it comprises optical, mirror, color, solar, architectural, automotive, graphic and window films business 2008 will be used to secure the future of the optical films element. We have the financial plans in place to fund this investment We Will Deliver Double-Digit EPS Growth in 2008 5 © 3M 2007. All Rights Reserved. 2008 3M Outlook Meeting
  6. 6. The World 3M Lives In A portfolio of mostly short cycle businesses which can create short-term variability on a quarter-by-quarter basis, but has consistently delivered on a year-by-year basis A wide geographic portfolio increasingly focused on high growth emerging markets In countries where manufacturing migration is an issue, emphasis on less affected products (health care, security, worker safety, education, consumer and government) We are the best technology sharing company in the world and among the most innovative An incredibly diverse product portfolio that mostly inoculates us against one or even two market declines Markets where we have generally taken share in 2007 6 © 3M 2007. All Rights Reserved. 2008 3M Outlook Meeting
  7. 7. Growth Inspired By Our Customers, Balanced with Operational Excellence Growth Operational Excellence Protect and Adjacency Grow the Core Build Out 3. Solve Low 1. Factory Cost 2. Control Price 1. New Technology 2. New Products 3. M&A Turns Inventory Reduction Leakage 4. Emerging Bus. 4. Service & Quality 5. Localized, Simplified 6. Go to 5. Sourcing 6. Lean Six Sigma Opportunities Revolution Supply Chains Market (EBO’s) Operational Excellence Within A Growth Culture Is Essential 7 © 3M 2007. All Rights Reserved. 2008 3M Outlook Meeting
  8. 8. Our Direction Remains… Investing to accelerate sustainable, profitable growth Continue to strengthen the traditional core of 3M and further build on our enduring franchises Accelerating international growth, still enhanced by FX benefits Steady diet of tuck-in acquisitions Continue to optimize our supply chains Not just about foot print Increasing sourcing in low cost countries Driving operational excellence to maintain superior margins and ROIC Steadily increasing dividends and consistent share buy backs Provide attractive returns and maintain flexibility to grow 8 © 3M 2007. All Rights Reserved. 2008 3M Outlook Meeting
  9. 9. …And Our Formula Is Working 2005 2006 ($Billions) Q307 YTD Sales $20.4 $22.1 $18.3 Accelerating growth % Growth +9% +10% O.I. $4.6 $4.9 $4.2 Maintaining best-of-breed 22% 23% % to Sales EPS $3.92 $4.26 $3.79 Double-digit gains % Growth 9% 18% Premium asset returns 22% 22% 22% ROIC Executing the Plan Amounts exclude special items and pharma in all periods. See appendix for GAAP reported numbers. Return on Invested Capital is a non-GAAP measure; see appendix for a full reconciliation to GAAP results. 9 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  10. 10. Delivering Double-Digit EPS Growth In 2007 Despite Impact Of Pharma Divestiture Earnings Per Share Ex. Pharma $6.00 16%+ $4.94-4.97 $5.00 10%+ Pharma $4.49 $0.23 Base $4.00 $4.26 $3.00 2006 2007 Actual Guidance Accelerated Sales Growth and Operational Excellence Is Driving Results Amounts exclude special items in all periods. 10 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  11. 11. All Businesses Contributing, But Changing Total Local Currency Operating Margins +27.8% 34% 21% 31% 17% 28% 13% 25% 9% 22% 5% 19% 16% 1% 2002 2003 2004 2005 2006 Q3 YTD 2001 13% -3% 2001 2002 2003 2004 2005 2006 Q3 YTD D&G LC Growth Other Segments LC Growth Total 3M LC Growth D&G OI Margin Other Segments OI Margin Total 3M OI Margin Portfolio Breadth Strengthens Results Amounts exclude special items and pharma in all periods. 11 © 3M 2007. All Rights Reserved.
  12. 12. An Outstanding Portfolio: Growing, Profitable, Stable $ in billions Health Care Consumer and Office $4.0 $0.8 $4.3 $1.2 CAGR: Sales 12%, OI 11% CAGR: Sales 8%, OI 9% $3.9 $3.4 $3.5 $0.9 $3.2 $3.0 $0.6 $2.9 $2.7 $3.2 $3.0 $2.8 $2.7 $0.6 $2.0 $0.4 2004 2005 2006 2007E 2004 2005 2006 2007E Safety, Security & Protection Services Electro & Communications $3.6 $3.0 $0.6 CAGR: Sales 12%, OI 13% CAGR: Sales 4%, OI 20% $2.7 $3.0 0.6 $2.6 $0.4 $2.8 $2.6 $2.7 $2.5 $2.5 $2.3 $2.2 $2.2 $0.2 $2.0 0.4 2004 2005 2006 2007E 2004 2005 2006 2007E Sales Operating Income All Are Growing, Profit-Producing Machines 12 Amounts exclude special items and pharma in all periods. 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  13. 13. An Outstanding Portfolio: Growing, Profitable, Stable $ in billions Sales Operating Income Display & Graphics Industrial & Transportation $4.2 $1.3 $7.7 $1.7 CAGR: Sales 5%, OI -1% CAGR: Sales 8%, OI 13% $7.2 $3.9 $3.8 $3.6 $1.1 $6.6 $1.3 $6.6 $3.5 $3.4 $6.0 $5.6 $3.0 $0.9 $5.5 $0.9 2004 2005 2006 2007E 2004 2005 2006 2007E • The traditional ‘roots’ of 3M • Commercial Graphics/Traffic Safety • Diverse product mix - abrasives, Systems – large, profitable, market leaders tapes, automotive OEM and • Ensuring an enduring franchise in Optical aftermarket, filtration, etc. Systems • Accelerating growth and margins • 3M created all of these markets Large, Profitable Businesses Driven By Customer-Inspired Innovation; Both Represent The ‘Core’ of 3M Amounts exclude special items in all periods 13 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  14. 14. More Divisions Are Growing Faster… # of Divisions Total Local Currency Growth 20 17 15 Better Better 13 13 10 11 Better 8 5 6 0 < 5% 5-10% 10%+ 2005 2007 An Improved Growth Profile with Lower Risk 14 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  15. 15. …And More Divisions Are Accelerating Profit Growth As Well # of Divisions Operating Income Growth 20 Better 18 15 15 12 10 Better 7 5 6 Better 5 4 1 0 < 5% 5-10% 10-15% 15%+ 2005 2007 Gaining Competitiveness Across 3M Amounts exclude special items in all periods 15 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  16. 16. 3M’s Dependency on US Economy Lessens Over Time 70% 64-65% 65% Percentage Non-US 60% 55% 51% 50% 45% 40% E 98 99 00 01 02 03 04 05 06 07 08 19 19 20 20 20 20 20 20 20 20 20 16 Amounts exclude pharma in all periods. 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  17. 17. Accelerating International Sales Growth… International Sales Growth (Billions) $16 $15.3 $13.6 14 $12.4 $11.7 R G 12 CA % 12 $10.2 10 $8.5 $8.5 $8.2 $7.9 $7.5 8 R 3% CAG 6 4 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007e Our Single Largest Growth Platform… 17 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved. Amounts exclude pharma in all periods
  18. 18. …With a Growing Percentage of Emerging Market Sales International Sales Growth (Billions) $8 $7.0 7 Emerging Markets $6.1 6 Adding Almost $1B/Year $5.2 Or 4% To Growth GR 5 CA $4.5 %+ 19 4 $3.7 $2.9 $2.8 3 $2.7 $2.5 $2.4 5% CAGR 2 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007e Emerging Markets = Central/Eastern Europe + Middle East Africa + Asia Pacific ex. Japan + Latin America 18 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved. Amounts exclude pharma in all periods
  19. 19. A Long-Term Track Record Of Success Profitability Total LC Growth Operating Income Operating Margin % $6,000 25% $5,000 20% R +6% +12% AG 9.0% R $4,000 +12% C G 7.5% CA 5% 15% 8% 1 8% $3,000 6% 6.0% 10% 4.5% 5% $2,000 (15%) 3.0% 5% $1,000 1.5% -1% 0.0% $0 0% -1.5% 2001 2005 2006 Q307 YTD 2001 2005 2006 Q307 YTD ROIC EPS 24% R $5.00 AG 22%nts 22% 22% i C 20% o $4.00 7P % +9% 18 +15% + +18% $3.00 16% $2.00 (11%) 15% $1.00 $0.00 12% 2001 2005 2006 Q307 YTD 2001 2005 2006 Q307 YTD Accelerating Sustainable Growth And Driving Premium Returns Amounts exclude special items and pharma in all periods. See appendix for GAAP reported numbers. Return on Invested Capital is a non-GAAP measure; see appendix for a full 19 reconciliation to GAAP results. 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  20. 20. Today’s Agenda Strategic summary and performance to-date Display & Graphics business review Mike Kelly – Executive Vice President Display & Graphics 20 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  21. 21. So To Summarize On Optical Systems… 3M is the undisputed leader in technology, innovation and service in this space; customers are very supportive Our manufacturing capability is the best in the world, and we have the capacity needed to compete well into the future While we are going through a pricing/penetration transition in 2007-08, Display and Graphics’ operating margins will still be above overall 3M levels 24.5% to 25.5% is a reasonable expectation for 2008 The Optical transition is easily manageable in light of improvements across our portfolio; overcoming the Pharma divestiture in 2007 is a proof point Optical Systems Remains One Of 3M’s Crown Jewels 21 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  22. 22. 3M’s Film Franchise Is Far More Than Optical $3.1B+ 3M Display Polarizer Franchise Films In Films (Brightness Enhancement) Visible light control & mirror ≈ $8Bn Total films Available Market Energy Reflective highway signage/safety, commercial graphics Saving Window, architectural and automotive films Global Leadership In a Multi-Billion Display & Non-Display Film Categories 22 © 3M 2007. All Rights Reserved. 2008 3M Outlook Meeting
  23. 23. An Outstanding Portfolio: Growing, Profitable, Stable $ in billions Sales Operating Income Display & Graphics Industrial & Transportation $4.2 $1.3 $7.7 $1.7 CAGR: Sales 5%, OI -1% CAGR: Sales 8%, OI 13% $7.2 $3.9 $3.8 $3.6 $1.1 $6.6 $1.3 $6.6 $3.5 $3.4 $6.0 $5.6 $3.0 $0.9 $5.5 $0.9 2004 2005 2006 2007E 2004 2005 2006 2007E • The ‘roots’ of 3M • Commercial Graphics/Traffic Safety • Diverse product mix - abrasives, Systems – large, profitable, market leaders tapes, automotive OEM and • Ensuring an enduring franchise in Optical aftermarket, filtration, etc. Systems • Accelerating growth and margins • 3M created all of these markets Large, Profitable Businesses Driven by Customer-Inspired Innovation; Both Represent The ‘Core’ of 3M Amounts exclude special items in all periods 23 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  24. 24. Today’s Agenda Strategic summary and performance to-date Display & Graphics business review Industrial & Transportation business review H.C. Shin – Executive Vice President Industrial & Transportation Chris Holmes – Vice President & General Manager Abrasive Systems 24 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  25. 25. Industrial & Transportation Is An Outstanding Business 3M’s largest business with sales exceeding $7 billion A consistent performer, driven by a balanced management approach…lead with productivity and operational excellence, which become the seeds of future growth Home to many enduring 3M franchises, including the rebirth of our oldest business…industrial abrasives Tremendous growth opportunities in developing economies…growing 25%-plus A Stabilizing Factor In Our Portfolio, Yet Growth Opportunities Abound 25 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  26. 26. Today’s Agenda Strategic summary and performance to-date Display & Graphics business review Industrial & Transportation business review 2008 outlook 26 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  27. 27. 2008 Expectations For 3M Company Double-digit sales growth 5-8% organic, 3% + of acquisition, 2-3% positive FX at current rates Sales growth boosted by 3M’s growing international presence, additionally lifted by FX gains 10% earnings per share growth Quarterly splits are non-linear; Q1 will be most difficult (fewer billing days, timing of Easter holiday) Operating margin 22.5% to 23.5% Tax rate 31.5% to 32.5% Cap ex $1.4 – 1.5B Excludes special items in all periods 27 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  28. 28. Outlook For 2008 Moderately softer but stable worldwide economic growth Strong and sustainable growth in developing economies – BRICP and beyond Continued slow US, but still growing; H2 stronger than H1; no relief on residential housing Low single-digit IPI growth in Western Europe, Japan Higher commodity prices/RMs; raising prices to help offset Investments R&D investments Investing in emerging markets LCD films Plant start-ups Productivity G&A leverage Lean Six Sigma Benefit cost containment Tailwinds Favorable currency trends Fewer shares outstanding Actively Managing Whatever Comes Our Way 28 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  29. 29. 3M’s Iterative Financial Planning Model Double Digit EPS Growth Incremental Tax Rate Improvements Share repurchases offset dilution at minimum - + Other potential gains – FX, pension, asset sales + Productivity offsets inflation/pricing; reinvest excess Earmark percentage of leverage for reinvestment Leverage Total Local Currency Growth – 30% to 40% Total Local Currency Sales Growth 2x IPI Delivering Sustainable Long-Term Shareholder Return 29 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  30. 30. 2008 Planning Model 2007 Guidance $4.94 - $4.97 $5.65 $0.10 to $5.55 $0.15 $0.05 to $0.05 to ($0.05) $5.45 $0.15 $0.20 to $0.30 $5.35 $0.25 to EPS $0.40 $0.25 to $5.25 ($0.05) to $0.40 ($0.15) ($0.05) to $5.15 ($0.10) $5.05 $4.95 $4.85 2007e EPS Sales Display & Investments Pricing/ FX Tax Rate Shares Volume Ex. Graphics Productivity Display & Graphics *Amounts exclude special items and pharma in all periods. 30 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  31. 31. 2008 Planning Model 2007 Guidance $4.94 - $4.97 $5.65 $0.10 to $5.55 $0.15 $0.05 to $0.05 to ($0.05) $5.45 $0.15 $0.20 to $0.30 $5.35 Organic Local Currency Growth Assumptions: $0.25 to Low High EPS $0.40 $0.25 to $5.25 ($0.05) to U.S. 1.5% 3% $0.40 ($0.15) International to ($0.05) 7% 10% $5.15 Worldwide($0.10) 5% 8% $5.05 $4.95 $4.85 2007e EPS Sales Display & Investments Pricing/ FX Tax Rate Shares Volume Ex. Graphics Productivity Display & Graphics *Amounts exclude special items and pharma in all periods. 31 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  32. 32. 2008 Planning Model 2007 Guidance $4.94 - $4.97 $5.65 $0.10 to $5.55 $0.15 $0.05 to $0.05 to ($0.05) $5.45 $0.15 $0.20 to $0.30 $5.35 $0.25 to EPS $0.40 $0.25 to $5.25 ($0.05) to $0.40 ($0.15) ($0.05) to $5.15 ($0.10) $5.05 $4.95 $4.85 2007e EPS Sales Display & Investments Pricing/ FX Tax Rate Shares Volume Ex. Graphics Productivity Display & Graphics *Amounts exclude special items and pharma in all periods. 32 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  33. 33. 2008 Planning Model 2007 Guidance $4.94 - $4.97 $5.65 $0.10 to $5.55 $0.15 $0.05 to $0.05 to ($0.05) $5.45 $0.15 $0.20 to $0.30 $5.35 Major Programs: $0.25 to International R&D EPS $0.40 $0.25 to $5.25 ($0.05) to Composite conductor $0.40 ($0.15) ($0.05) to Track and Trace $5.15 ($0.10) Medical diagnostics Digital dentistry $5.05 Plant start-ups $4.95 $4.85 2007e EPS Sales Display & Investments Pricing/ FX Tax Rate Shares Volume Ex. Graphics Productivity Display & Graphics *Amounts exclude special items and pharma in all periods. 33 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  34. 34. 2008 Planning Model 2007 Guidance $4.94 - $4.97 $5.65 $0.10 to $5.55 $0.15 $0.05 to $0.05 to ($0.05) $5.45 $0.15 Largest Contributors: $0.20 to Pricing (ex. D&G) $0.30 $5.35 Flat G&A spend $0.25 to EPS Fixed cost leverage $0.40 $0.25 to $5.25 ($0.05) to Lean Six Sigma $0.40 ($0.15) ($0.05) to Benefit cost containment $5.15 ($0.10) $5.05 $4.95 $4.85 2007e EPS Sales Display & Investments Pricing/ FX Tax Rate Shares Volume Ex. Graphics Productivity Display & Graphics *Amounts exclude special items and pharma in all periods. 34 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  35. 35. 2008 Planning Model 2007 Guidance $4.94 - $4.97 $5.65 $0.10 to Currency Assumptions: $5.55 $0.15 -Low end: ave. ’08 rates $0.05 to $0.05 to approximate ave. ’07 rates ($0.05) $5.45 $0.15 -High end: ’08 rates equal $0.20 to November ’07 rates $0.30 $5.35 $0.25 to EPS $0.40 $0.25 to $5.25 ($0.05) to $0.40 ($0.15) ($0.05) to $5.15 ($0.10) $5.05 $4.95 $4.85 2007e EPS Sales Display & Investments Pricing/ FX Tax Rate Shares Volume Ex. Graphics Productivity Display & Graphics *Amounts exclude special items and pharma in all periods. 35 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  36. 36. 2008 Planning Model 2007 Guidance $4.94 - $4.97 $5.65 $0.10 to $5.55 Range: $0.15 $0.05 to $0.05 to 31.5% to ($0.05) $5.45 $0.15 32.5% $0.20 to $0.30 $5.35 $0.25 to EPS $0.40 $0.25 to $5.25 ($0.05) to $0.40 ($0.15) ($0.05) to $5.15 ($0.10) $5.05 $4.95 $4.85 2007e EPS Sales Display & Investments Pricing/ FX Tax Rate Shares Volume Ex. Graphics Productivity Display & Graphics *Amounts exclude special items and pharma in all periods. 36 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  37. 37. 2008 Planning Model 2007 Guidance $4.94 - $4.97 $5.65 $0.10 to $5.55 $0.15 $0.05 to $0.05 to ($0.05) $5.45 $0.15 $0.20 to $0.30 Share Assumption: $5.35 $0.25 to -Low end: ’07 exit rate EPS $0.40 $0.25 to $5.25 ($0.05) to -High end: net 1% $0.40 ($0.15) ($0.05) to reduction $5.15 ($0.10) $5.05 $4.95 $4.85 2007e EPS Sales Display & Investments Pricing/ FX Tax Rate Shares Volume Ex. Graphics Productivity Display & Graphics *Amounts exclude special items and pharma in all periods. 37 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  38. 38. 2008 Planning Model • Goal: minimum 10% EPS growth net of investment programs • Growth and operational excellence offset 2007 Guidance $4.94 - $4.97 raw material inflation $5.65 $0.10 to $5.55 $0.15 $0.05 to $0.05 to ($0.05) $5.45 $0.15 $0.20 to $0.30 $5.35 $0.25 to EPS $0.40 $0.25 to $5.25 ($0.05) to $0.40 ($0.15) ($0.05) to $5.15 ($0.10) $5.05 $4.95 $4.85 2007e EPS Sales Display & Investments Pricing/ FX Tax Rate Shares Volume Ex. Graphics Productivity Display & Graphics *Amounts exclude special items and pharma in all periods. 38 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  39. 39. Even A Conservative Scenario Yields 10% EPS Growth In ‘08 2007 Guidance $4.94 - $4.97 $5.65 $5.55 $5.47 $0.05 to ($0.05) $5.45 $0.10 $0.00 $5.35 $0.10 EPS $0.25 to $5.25 $0.20 $0.40 ($0.07) $0.25 $5.15 ($0.07) $5.05 $4.95 $4.85 2007e EPS Sales Display & Investments Pricing/ FX Tax Rate Shares Volume Ex. Graphics Productivity Display & Graphics *Amounts exclude special items and pharma in all periods. 39 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  40. 40. Even A Conservative Scenario Yields 10% EPS Growth In ‘08 2007 Guidance $4.94 - $4.97 $5.65 $5.55 $5.47 $0.05 to ($0.05) $5.45 $0.10 $0.00 $5.35 $0.10 EPS $0.25 to $5.25 $0.20 $0.40 Organic Local Currency Growth Assumptions: ($0.07) $0.25 $5.15 Low ($0.07) U.S. 1.5% $5.05 International 7% Worldwide 5% $4.95 $4.85 2007e EPS Sales Display & Investments Pricing/ FX Tax Rate Shares Volume Ex. Graphics Productivity Display & Graphics *Amounts exclude special items and pharma in all periods. 40 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  41. 41. Even A Conservative Scenario Yields 10% EPS Growth In ‘08 2007 Guidance $4.94 - $4.97 $5.65 $5.55 $5.47 $0.05 to $5.45 ($0.05) $0.10 $0.00 $5.35 $0.10 EPS $5.25 $0.25 to $0.20 $0.40 Most likely case ($0.07) $0.25 $5.15 ($0.07) $5.05 $4.95 $4.85 2007e EPS Sales Display & Investments Pricing/ FX Tax Rate Shares Volume Ex. Graphics Productivity Display & Graphics *Amounts exclude special items and pharma in all periods. 41 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  42. 42. Even A Conservative Scenario Yields 10% EPS Growth In ‘08 2007 Guidance $4.94 - $4.97 $5.65 $5.55 $5.47 $0.05 to ($0.05) $5.45 $0.10 $0.00 $5.35 $0.10 EPS $0.25 to $5.25 $0.20 $0.40 ($0.07) $0.25 $5.15 Mid point of range ($0.07) $5.05 $4.95 $4.85 2007e EPS Sales Display & Investments Pricing/ FX Tax Rate Shares Volume Ex. Graphics Productivity Display & Graphics *Amounts exclude special items and pharma in all periods. 42 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  43. 43. Even A Conservative Scenario Yields 10% EPS Growth In ‘08 2007 Guidance $4.94 - $4.97 $5.65 $5.55 $5.47 $0.05 to ($0.05) $5.45 $0.10 $0.00 $5.35 $0.10 EPS $0.25 to $5.25 Low end of range $0.20 $0.40 ($0.07) $0.25 $5.15 ($0.07) $5.05 $4.95 $4.85 2007e EPS Sales Display & Investments Pricing/ FX Tax Rate Shares Volume Ex. Graphics Productivity Display & Graphics *Amounts exclude special items and pharma in all periods. 43 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  44. 44. Even A Conservative Scenario Yields 10% EPS Growth In ‘08 2007 Guidance $4.94 - $4.97 $5.65 $5.55 $5.47 $0.05 to ($0.05) $5.45 $0.10 $0.00 $5.35 Mid point of range $0.10 EPS $0.25 to $5.25 $0.20 $0.40 ($0.07) $0.25 $5.15 ($0.07) $5.05 $4.95 $4.85 2007e EPS Sales Display & Investments Pricing/ FX Tax Rate Shares Volume Ex. Graphics Productivity Display & Graphics *Amounts exclude special items and pharma in all periods. 44 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  45. 45. Even A Conservative Scenario Yields 10% EPS Growth In ‘08 2007 Guidance $4.94 - $4.97 $5.65 $5.55 $5.47 $0.05 to ($0.05) $5.45 32% - no $0.10 $0.00 change vs. $5.35 $0.10 2007 EPS $0.25 to $5.25 $0.20 $0.40 ($0.07) $0.25 $5.15 ($0.07) $5.05 $4.95 $4.85 2007e EPS Sales Display & Investments Pricing/ FX Tax Rate Shares Volume Ex. Graphics Productivity Display & Graphics *Amounts exclude special items and pharma in all periods. 45 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  46. 46. Even A Conservative Scenario Yields 10% EPS Growth In ‘08 2007 Guidance $4.94 - $4.97 $5.65 $5.55 $0.05 to ($0.05) $5.45 $0.10 $0.00 $5.35 $0.10 EPS $0.25 to $5.25 Share Assumption: $0.20 $0.40 Low end: ’07 exit rate ($0.07) $0.25 $5.15 ($0.07) $5.05 $4.95 $4.85 2007e EPS Sales Display & Investments Pricing/ FX Tax Rate Shares Volume Ex. Graphics Productivity Display & Graphics *Amounts exclude special items and pharma in all periods. 46 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  47. 47. Even A Conservative Scenario Yields 10% EPS Growth In ‘08 2007 Guidance $4.94 - $4.97 10% EPS $5.65 Growth $5.55 $5.44-$5.47 $0.05 to ($0.05) $5.45 $0.10 $0.00 $5.35 $0.10 EPS $0.25 to $5.25 $0.20 $0.40 ($0.07) $0.25 $5.15 ($0.07) $5.05 $4.95 $4.85 2007e EPS Sales Display & Investments Pricing/ FX Tax Rate Shares Volume Ex. Graphics Productivity Display & Graphics *Amounts exclude special items and pharma in all periods. 47 2008 3M Outlook Meeting © 3M 2007. All Rights Reserved.
  48. 48. Driving Toward Our Long-Term Objectives Deliver sales growth at >2x IPI Customer-inspired innovation Move into faster-growing market spaces Aggressively drive EBOs Commitment to double-digit earnings growth Maintain >20% ROIC Continuous supply chain improvement Quadruple win: better service, improve inventory, lower logistics cost, lower tax rate Driving to 30.5% tax rate by 2012 Unlimited Potential for Shareholder Value Creation 48 © 3M 2007. All Rights Reserved. 2008 3M Outlook Meeting
  49. 49. 3M Is A Premium Company That Will Only Get Better Superior materials science and innovation Superb international distribution with already-strong capabilities in high-growth developing countries Leading market positions with many enduring franchises World-class margins and returns Deliver on our commitments, year-in and year-out Committed to shareholders Over the period 2001-06: $9B share repurchases, $7B dividends; returned >100% of reported net income via dividends and share repurchases We Will Again Deliver On Our Commitments In 2008; We Will Invest To Ensure A Strong Future For 3M; Our Team Will Get The Job Done Once Again 49 © 3M 2007. All Rights Reserved. 2008 3M Outlook Meeting
  50. 50. Question and Answer December 12, 2007 © 3M 2007. All Rights Reserved. 2008 3M Outlook Meeting

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