Inge g-thulin ceo

1. All Rights Reserved.28 March 2016© 3M
2016
Investor
Day
Inge Thulin
Chairman of the Board,
President, and CEO
3M Investor Day
March 29, 2016

2. All Rights Reserved.28 March 2016© 3M 2
 Today’s highlights
 Building strength on strength
 Efficient growth
Agenda

Today’s highlights
 Our business portfolio is positioned to win
 Executing on our key levers to create efficient growth
 Portfolio Management, Invest in Innovation, and Business Transformation
 Winning with our customers by helping them deliver on their promises
 Further enhancing capital structure and allocation
 Maintaining strong track record of returning cash to shareholders
 Announcing new 2016-20 financial objectives; reaffirming 2016 outlook

Building strength on strength, and positioned to win
2012
 Articulated 3M Vision and Strategies
 Set 2013 – 2017 Financial Objectives
 Established robust portfolio management
2013
 Prioritized 3 Key Levers to create value
 Enhanced capital deployment plan
 Strengthened Code of Conduct
2014  Defined Fundamental Strengths
 Reshaped Leadership Behaviors
2015
 Deployed unified 3M Brand strategy
 Restructured organization for focus,
agility and efficient growth

Investing in Innovation
Portfolio Management
Business Transformation
Our playbook is working

Industrial
$10.3B
21.9%
Health Care
$5.4B
31.8%
Consumer
$4.4B
23.7%
$30.3B Revenue
22.9% Operating Margin
Safety & Graphics
$5.5B
23.7%
Electronics & Energy
$5.3B
21.1%
Executing on efficient growth while building for the future
Executing this playbook has created a successful portfolio . . .
2015 results
Executing on efficient growth while building for the future

. . . Leveraging our Fundamental Strengths to create sustainable value
Technology Manufacturing Global Capabilities Brand
Leveraging these assets creates value; strengthening them ensures our future

GDPpercapita
Infrastructure
Health Care
Manufacturing
Retail
Time
Safety
We execute a proven model of success globally . . .
Positioned for efficient growth

. . . Enabling us to consistently outperform our markets
3.4%
2.3%
~1.5x
3M Organic Local CurrencyIHS Industrial Production Index
IHS Industrial Production Index vs. 3M Organic Local Currency Growth
2011 – 2015 CAGR
Source: IHS Global Insights
Consistent proven capability to outgrow our markets
Organic local currency growth = organic volume + price

Our new growth targets will outpace indicators
~1.5x
3M Organic Local Currency
2% - 5%
IPI Projection Range
1% - 3%
IPI projection range vs. 3M organic local currency targets,
2016 – 2020e CAGR
Efficient growth in the face of economic realities

Industrial
2% to 4%
Health Care
4% to 6%
Consumer
3% to 5%
2% to 5%
Safety & Graphics
2% to 5%
Electronics & Energy
0% to 4%
2016-20 organic local currency growth targets by business
Strong, market-leading, global businesses
Organic local currency growth = organic volume + price

Free Cash
Flow
Conversion
100%
Organic Local
Currency
Growth
20%
EPS
Growth
8-11%
ROIC
2-5%
Long-term financial objectives
2016-20 plan; aggressive and realistic targets

Winning with our customers by helping them
deliver on their promises
Customer First

Sustainability: Helping our customers deliver on their promises
 Leveraging 3M sustainability expertise
in strategic partnerships with customers
 Identifying and understanding
sustainability challenges on the horizon
 Expanding our portfolio of products
with sustainability advantages
Creating new opportunities with customers

Investing in Innovation Business TransformationPortfolio Management
Executing our three key levers

 Align organization and resources to our
best opportunities
 Effectively deploy M&A capital
 Agile execution
Gain profitable share everywhere

Organizational structure positions us to deliver efficient growth
Combined businesses to increase customer relevance
and drive scale . . . 40 to 26 businesses
Realigned from 6 Sectors to 5 Business Groups Benefits realized
 Greater scale and
customer relevance
 Increased agility
 Reduced costs through
efficiency and productivity
improvements
 Reallocated resources to our
best opportunities
 Accelerated priority R&D
investments
 Enhanced M&A sourcing
and execution
Improved customer relevance
Healthcare
Safety &
Graphics
Industrial Consumer
Display &
Graphics
Electronics &
Communications
Safety, Security,
& Protection
Industrial &
Transportation
Consumer &
Office
Healthcare
6 Sectors 5 Business Groups
Electronics
& Energy
40 Businesses 26 Businesses

Acquisitions Divestitures
Recent portfolio actions creating significant value
Library Systems
License plate converting
(France)
Static control
Membrana = Polypore’s separation media business
Polyfoam

We will invest in and accelerate our Health Information Systems business
 Fully assessed strategic options
 Identified attractive investment opportunities
in both core and new growth segments
 Executing plan to accelerate growth by
200 – 400 bps
Expanding our leadership position in healthcare information systems

 Increase R&D productivity
 Enhance commercialization effectiveness
 Invest in and scale new growth platformsInvesting in Innovation
3M innovation creating value for our customers

Insights combined with technology platforms continue to
benefit our customers
46 Technology PlatformsInsights Productive Investment
Extending Core
Platforms
Insights to Innovation
Expanding into
New Markets
Disrupting
Markets
Customer-Inspired Innovation
Research and development is the heartbeat of 3M

Our brand platform is building awareness of how we use science to
create solutions for our customers
Enhancing perceptions of what 3M is about

 Continue to successfully roll out ERP
 Deliver productivity through footprint
optimization and enhanced supply chain
and manufacturing capabilities
 Increase service levels to customers and
reduce cost to serve
Business Transformation starts and ends with our customers

Business Service Operations
Global Processes and Governance
Global Service Centers
Supply Chain COEs
Business Transformation is accelerating
$500M to $700M annual savings and $500M working capital improvement by 2020

Building on our strong process culture
 Deploy lean deeper and more broadly
 Simplify and optimize processes
 Increase employee engagement and
leadership development focus
Reducing costs and increasing quality for our customers

 Developing our leaders
 Adding value to our
company, our customers and
our communities
 Creating opportunities
for everyone
We are investing in our people . . .
3M Leadership Way

. . . And supporting their personal health and well-being
Wellness screening
and prevention
Healthy Living programs
and incentives
Competitive rewards and
investment opportunities

Our playbook is working

Free Cash
Flow
Conversion
100%
Organic Local
Currency
Growth
20%
EPS
Growth
8-11%
ROIC
2-5%
Long-term financial objectives
2016-20 plan; aggressive and realistic targets

Inge g-thulin ceo

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