Inge g-thulin ceo

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  • 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
  • 3. All Rights Reserved.28 March 2016© 3M 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
  • 4. All Rights Reserved.28 March 2016© 3M 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
  • 5. All Rights Reserved.28 March 2016© 3M
  • 6. All Rights Reserved.28 March 2016© 3M Investing in Innovation Portfolio Management Business Transformation Our playbook is working
  • 7. All Rights Reserved.28 March 2016© 3M 7 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
  • 8. All Rights Reserved.28 March 2016© 3M . . . Leveraging our Fundamental Strengths to create sustainable value Technology Manufacturing Global Capabilities Brand Leveraging these assets creates value; strengthening them ensures our future
  • 9. All Rights Reserved.28 March 2016© 3M G D P p er c ap it a Infrastructure Health Care Manufacturing Retail Time Safety We execute a proven model of success globally . . . Positioned for efficient growth http://solutions.3m.com/wps/portal/3M/en_US/PPESafetySolutions/PPESafety/Personal_Protective_Equipment/Product_Catalog/?N=5003987&rt=c3 http://solutions.3m.com/wps/portal/3M/en_US/PPESafetySolutions/PPESafety/Personal_Protective_Equipment/Product_Catalog/?N=5003987&rt=c3
  • 10. All Rights Reserved.28 March 2016© 3M . . . 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
  • 11. All Rights Reserved.28 March 2016© 3M
  • 12. All Rights Reserved.28 March 2016© 3M 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
  • 13. All Rights Reserved.28 March 2016© 3M 13 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
  • 14. All Rights Reserved.28 March 2016© 3M 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
  • 15. All Rights Reserved.28 March 2016© 3M 15 Winning with our customers by helping them deliver on their promises Customer First
  • 16. All Rights Reserved.28 March 2016© 3M 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
  • 17. All Rights Reserved.28 March 2016© 3M Investing in Innovation Business TransformationPortfolio Management Executing our three key levers
  • 18. All Rights Reserved.28 March 2016© 3M Portfolio Management  Align organization and resources to our best opportunities  Effectively deploy M&A capital  Agile execution Portfolio Management Gain profitable share everywhere
  • 19. All Rights Reserved.28 March 2016© 3M 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
  • 20. All Rights Reserved.28 March 2016© 3M Acquisitions Divestitures Recent portfolio actions creating significant value Library Systems License plate converting (France) Static control Membrana = Polypore’s separation media business Polyfoam
  • 21. All Rights Reserved.28 March 2016© 3M 21 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
  • 22. All Rights Reserved.28 March 2016© 3M Investing in Innovation  Increase R&D productivity  Enhance commercialization effectiveness  Invest in and scale new growth platformsInvesting in Innovation 3M innovation creating value for our customers
  • 23. All Rights Reserved.28 March 2016© 3M 23 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
  • 24. All Rights Reserved.28 March 2016© 3M 24 Our brand platform is building awareness of how we use science to create solutions for our customers Enhancing perceptions of what 3M is about
  • 25. All Rights Reserved.28 March 2016© 3M 25
  • 26. All Rights Reserved.28 March 2016© 3M Business Transformation  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 Business Transformation starts and ends with our customers
  • 27. All Rights Reserved.28 March 2016© 3M 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
  • 28. All Rights Reserved.28 March 2016© 3M 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
  • 29. All Rights Reserved.28 March 2016© 3M
  • 30. All Rights Reserved.28 March 2016© 3M  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
  • 31. All Rights Reserved.28 March 2016© 3M . . . And supporting their personal health and well-being Wellness screening and prevention Healthy Living programs and incentives Competitive rewards and investment opportunities
  • 32. All Rights Reserved.28 March 2016© 3M Investing in Innovation Portfolio Management Business Transformation Our playbook is working
  • 33. All Rights Reserved.28 March 2016© 3M 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
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