Rosa Miller Presentation

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Rosa Miller Presentation

  1. 1. Latin America Rosa Miller Vice President Sustaining Credibility & Profitable Growth Investors Presentation September 9, 2008 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
  2. 2. Latin America Area 21,076,501 square kilometers 578 million people well-related to the U.S. Improved political, social and economic stability GDP growth of 4.2% Literacy rate of 89% Spanish, Portuguese, English primary languages Well-educated middle class Brand drives people’s behavior Strong and competitive manufacturing base in Brazil and Mexico Huge Opportunity… In Our Backyard 5 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
  3. 3. Latin America Area 21,076,501 square kilometers 578 million people well-related to the U.S. Improved political, social and economic stability GDP growth of 4.2% Literacy rate of 89% Spanish, Portuguese, English primary languages Well-educated middle class Brand drives people’s behavior Strong and competitive manufacturing base in Brazil and Mexico Huge Opportunity… In Our Backyard 6 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
  4. 4. Latin America Area Key Economics Economic Outlook Strong historical GDP growth performance Domestic demand remains generally vigorous to drive growth in the range of 4+ percent in 2008 Impact of exports and US economy (*) Sources: IMF, National Authorities, Global Insight, Citigroup Global Markets and Prudential Economical Outlook 7 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
  5. 5. Latin America Area Key Economics Changing the Landscape Unemployment improvement Inflation dynamics Real exchange rates appreciation Raising productivity Political, economical and monetary policies (*) Sources: IMF, National Authorities, Global Insight, Citigroup Global Markets and Prudential Economical Outlook 8 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
  6. 6. 3M Has A Long History in Latin America Ecuador Chile Dominican Republic Costa Rica Panama Venezuela Peru Colombia Puerto Rico Argentina Mexico Brazil 1960 1970 1980 1940 …and We Continue to Create a Successful Future …and We Continue to Create a Successful Future 9 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
  7. 7. 3M Latin America Recent Performance Revenue ($B) Operating Income ($M) CAGR 14% CAGR 13% CAGR 14% CAGR 13% $428 $1.7 $351 $1.4 $1.3 $305 $1.2 $287 $273 $1.0 $259 $1.0 $234 $0.9 2002 2003 2004 2005 2006 2007 2008 2002 2003 2004 2005 2006 2007 2008 1st Half 1st Half 3X GDP/IPI Growth * Excluding pharma business and special items. 10 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
  8. 8. 3M Latin America Recent Performance Doubled the size in the last 5 years Bigger than Optical Business, China, India and Central Eastern Europe 3M Brazil larger than 3M Italy and 3M France Growth Drivers: consumer and office, oil and gas, manufacturing, mining, agriculture and construction Creative, talented and passionate employees 3X GDP/IPI Growth 11 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
  9. 9. 3M Latin America Strategies Growing the core CENTRAL AMERICA: Investing in the future PANAMA PACIFICO as a new company Improving supply chain speed and efficiency Penetrating new markets Making talent a strategic priority 12 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
  10. 10. 3M Latin America Growth Top Opportunities Market Focus: oil and gas, mining, construction Localization: Brazil, Mexico, Panama Pacifico Penetration in Brazil and Mexico Targeted M&A Key account management Management Innovation: people & talent 13 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
  11. 11. Strategy Across Four Primary Drivers Strategic Thrust International Complementary Build New Grow the Growth Current Core Acquisitions Businesses The Four Cornerstones of the International Growth Plan Portfolio Management Brand & Reputation Human Capital R&D & Supply & Geographic Building Chain Localization Planning Expansion Corporate Strategies and International Cornerstones Totally Aligned Corporate Strategies and International Cornerstones Totally Aligned 14 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
  12. 12. Building Global and Local Strength Globalization Four Cornerstones of Localization Portfolio Brand and R&D and Management & Human Capital Reputation Supply Chain Geographic Planning Building Localization Expansion 15 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
  13. 13. Building Global and Local Strength Globalization Four Cornerstones of Localization Portfolio Brand and R&D and Management & Human Capital Reputation Supply Chain Geographic Planning Building Localization Expansion 16 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
  14. 14. 3M Latin America Local Market Penetration Health Care Consumer Food & Beverage Oil & Gas Mining Construction Transportation Government 17 Priority Markets Critical to Deliver the Growth Priority Markets Critical to Deliver the Growth
  15. 15. 3M Latin America Key Customers Key Accounts are a Significant Part of Latin America Growth 18 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
  16. 16. Building Global and Local Strength Globalization Four Cornerstones of Localization Portfolio Brand and R&D and Management & Human Capital Reputation Supply Chain Geographic Planning Building Localization Expansion 19 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
  17. 17. 3M Latin America Consumer & Office Business 5 Years Sales Growth CAGR 24 % CAGR 24 % ($M) $290 $233 $232 $199 $198 $166 $123 2004 2005 2006 2007 2008E Double the Size in 5 Years… The Power of the Brand Double the Size in 5 Years… The Power of the Brand 20 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
  18. 18. 3M Latin America 2004-2008 Consumer and Office Growth Drivers Brand building through advertising/merchandising spending increase ® Successful commercialization of new-to-the-market products Mass retailers’ relationship excellence Marketing innovation: in-store execution 21 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
  19. 19. Scotch-Brite™ Twister 22 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
  20. 20. Post-it® Twister Cristal 23 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
  21. 21. Building the Brand… Cero Rayas Opportunity: Large scouring market size: Create a new product category to penetrate non-scratch scrub sponge segment Expected Results: Upgrade the scrub laminate market and increase differentiation over competition 24 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
  22. 22. Costa Rica – Building a New Category Embryonic Early Growth Growth Mature Aging Leadership Cero-Rayas Competitive Position 400% Urethane sales increase Aqua Pad 49% sales 15% sales Favorable Strong increase 36% Incr. increase 27% Incr. Tenable Weak Gross Margin % 50%-60% 60%-70% Local Markets, Local Teams … Full Localization Local Markets, Local Teams … Full Localization 25 25 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
  23. 23. Cero Rayas Twister 26 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
  24. 24. Integrated Marketing Campaign Strengthen an emotional bond between the consumer & the brand by adopting their lifestyle through a usage experience … and Continue to Expand the New Category … and Continue to Expand the New Category 27 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
  25. 25. Building Global and Local Strength Globalization Four Cornerstones of Localization Portfolio Brand and R&D and Management & Human Capital Reputation Supply Chain Geographic Planning Building Localization Expansion 28 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
  26. 26. 3M Latin America R&D and Manufacturing Key Sites CENTRAL AMERICA: MEXICO: SANTA FE, PANAMA PACIFICO SAN LUIS POTOSI, as a new company MONTERREY (*) (*) Mexican Maquilas not Included BRAZIL: SUMARE, ITAPETININGA, RIBEIRAO PRETO, MAIRINQUE, MANAUS, SAO JOSE DO RIO PRETO 3M Brazil Laboratory R & D Capacities • Abrasives • Adhesives Rf Ad Am Bi • Films A dvanced Bi ot ch e R c ab e los le M t r al s aei Adhe s e v is F s t ne a e rs • Filtration Ab Dd Mr Pe Rp Pr dc t e e ivi Dr ug M c r o- i R adi t on ai Abr a s e s i v Engner ng i i Del v er y i r epl cat o i in Pr ocessi g n & Mo d i n el g • Non Woven • Pol ymer Processing Ac Dm Fc Nt Sm Nm Pm D s pl ay i Nano S peci l t ay Ac ous s tic Non wo e nv Po y m e r l M t r al s aei Tec n ol gy h o M at er al is Fl x ible e M e lt M a te ra ls i Conv e rting Pr oc e s i g sn & P c k a ging a • Precision Processing As Do Mi Ir Md Pc Po Fi Fs Su Appl c at o ii n Den t l & a m I m un e M edi cal M r obi l c i a P r ci si e o n P or ous • Molding Sof w ar te O h odont c rt i R espone s Dat a Deect on t i M er al s & at i Film s Fil ra tion, t S ac urf e Coa t n ig M t r al s aei &Cont r ol M odi f e irs M gm t M em br nes a Se p ra tion, a Mo fic a n di tio Purifi a tion c • Surface Modification Ce Ep Im Mo Is Me Pr Wo Pd Fl C er m c a is El ct r oni e c mi I ag ng ne t I t gr aed M et l a Pr ocess W oun d Molding P ackagi n g Fl uor o- D esi n & g P a tic & rl e Syst m es M rx at i M gmt m at er al is D esig n Co mposi t s e C ont ol r D is rs i n pe o • Flexible Converting & Cp E t Pr oc s ing es Fo Ip Lm Pp Vo Packaging Chem c a il Fi e r b n I ks & Li ght Etha nol Pow er O pt cs i Pi m ent s g P re c i ion s V ge ta l e M gmt Sou r es c Pr oc e s ing s O il Proc e s ing s Che m is try • Acoustic Control Vp V acuum • Particle & Dispersion Processing Pr ocessi ng • Reclosable Fastening • Vegetal Oil Chemistry 29 • Ethanol Processing
  27. 27. 3M Latin America Acquisitions Higher organic growth results Pomp – Brazil Abzil – Brazil from more frequent •Safety market • Dental products re-usable ear plug products acquisitions eyewear & barrier creams • Brasilian orthodontic center 3M Brazil He alth Care Busi ness Review of excellence Acquisitions 3 Apr. 2008 Confi denti al Growth Base Fiorentina - Argentina Medisor – Chile •Consumer market – innovative •Medical products Adding Leading Brand Adding Leading Brand branding Position in Local Markets •High-quality and differentiated- Position in Local Markets designed products 30 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
  28. 28. Building Global and Local Strength Globalization Four Cornerstones of Localization Portfolio Brand and R&D and Management & Human Capital Reputation Supply Chain Geographic Planning Building Localization Expansion 31 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
  29. 29. 3M Latin America Human Capital Planning Robust systems/processes for recruiting, developing & retaining talented employees Focus on talent management at all levels Continue to re-allocate resources to high growth markets Employees….The Sustainable Competitive Advantage 32 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
  30. 30. 3M Latin America Productivity Performance Sales per Employee ($000) OI per Employee ($000) CAGR 16 % CAGR 24 % CAGR 16 % CAGR 24 % OI per Employee Sales per Employee $87 $302 $87 $302 $260 $69 $260 $226 $69 $226 $57 $57 ‘07 '06 '07 ’08 Est '08 ‘06 est ‘06 ‘07 ’08 Est '08 est '06 '07 Competitive Advantage Model Driving Sustainable Growth Competitive Advantage Model Driving Sustainable Growth 33 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
  31. 31. 3M Latin America Summary Credible and sustainable performance Doubled the size in the last 5 years Profitable and healthy growth 3M portfolio well-aligned to Latin America market opportunities Outpace area GDP/IPI growth Targeted investment to support local growth Talented, creative, entrepreneurial and professional employees Again, Double the Size in the Next 5 Years 34 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference
  32. 32. 35 © 3M 2008. All Rights Reserved. 2008 3M Investor Conference

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