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2. All Rights Reserved.12 December 2016© 3M
Industrial Business Group overview
Market dynamics and outlook for growth in 2017
Growth acceleration:
Enhancing our portfolio
Prioritizing high-value new products
Digitizing our go-to-market
Agenda
3. All Rights Reserved.12 December 2016© 3M
3M Vision
3M Technology Advancing Every Company
3M Products Enhancing Every Home
3M Innovation Improving Every Life
3M Industrial strategic intent
"Advance industry through transformational engagement, products, and service"
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Go-to-market models for a changing environment
Transform our customer-facing operations
Increase investment in new product platforms
Expand application engineering
Shift to high-growth, high-value portfolios
Optimize businesses facing challenging cycles
Our foundation for growth in 2017
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Industrial Business Group2016e Sales $10.3B; projecting 1-3% organic growth in 2017
Tapes and Adhesives $3.8B
Advanced Materials $1.0B
Abrasive Systems $1.4B
Separation and Purification $0.9B Automotive
Aftermarket $1.5B
Automotive and Aerospace $1.8B
6. All Rights Reserved.12 December 2016© 3M
Industrial Business Group overview
Market dynamics and outlook for growth in 2017
Growth acceleration
Enhancing our portfolio
Prioritizing high-value new products
Digitizing our go-to-market
Agenda
7. All Rights Reserved.12 December 2016© 3M
$40-45B, growing 0-2%
Automotive OEM
$15-20B, growing 1-3%
Construction
$25-30B, growing 1-3%
General Manufacturing Metal Fabrication
$10-15B, growing 0-2%
Purification
$10-15B, growing 2-4% $15-20B, growing 0-2%
Automotive Aftermarket
Size= addressable marketGrowth= 3M estimates for 2017 based on projections by IHS and Oxford Economics
Top six markets: $115B+ in 2017
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Aftermarket
Example3M Products
Why We Outperform
Enable customer efficiency and profitability
Deliver technology to advance performance
Provide total solutions across repair and auto care
OEM
Solve new problems and meet specifications
Introduce disruptive technologies
Penetrate across makes and models
Tapes Films Insulation Masking Paint SystemsAbrasivesLightweighting
Growth Drivers
Build rates – 90M+ vehicles
Fuel efficiency
Electrification
Repairable Accidents – 3.5% increase
Total miles driven
Increase in size and age of fleet
Adhesives
2017 growth in automotive
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Industrial growth outlook Improving market cycles
Channel transformation
Consolidation and digital commerce
Challenging markets moderate or turn positive in 2017
All major geographies projecting IPI growth
Imports/exports improving
PMI indicates expansion
Growing sales pipeline
Oil and Gas exposure stabilizing
Defense business improving
Specialty polymer demand increasing
Transnationals increasing share
B2B eCommerce growing at multiples of the market
2017 trajectory improves as we capitalize on market dynamics
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2017 growth drivers in key regional markets
2017e Sales Regions Execution Priorities
40%
32%
28%
U.S. Intl Developed Intl Developing
Penetration and share gain
Spec-in with leading global OEMs
Momentum in domestic industrial
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Industrial Business Group overview
Market dynamics and outlook for growth in 2017
Growth acceleration:
Enhancing our portfolio
Prioritizing high-value new products
Digitizing our go-to-market
Agenda
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Acquiring platforms with accretive organic growth
Divested non-strategic businesses
Polyfoam
Polymask
Strategic Attractiveness
Fin
an
cia
l Att
rac
tiv
en
ess
Consolidated from nine to six divisions
Actively managing our portfolio to consistently outperform our markets
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Accelerating high-value growth opportunities
Expand our go-to-market Develop disruptive technology Innovate to accelerate growth
Invest in high-growth markets and products
Optimize value
Leverage 3M brand
Innovate to maintain market position
New business models for legacy businesses
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Global acceleration investments targeting 50bps+ of additional growth
Demonstrate our superior performance
Hands-on demos of higher cut and longer life means we win
Precisely engineered abrasives take share in automation and robotics
Make to order flexibility meets every customer need
Engineered Abrasives
Assembly Solutions
Bring 3M assembly solutions to new customers
Deploy additional technical expertise online and offline
Broad portfolio enables new customer designs
Fast and easy to use means productivity gains
Accelerating 2017 growth through a “surge” investment in our core
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Energy Efficiency
Lightweighting
Automotive Electrification
New materials
Process Efficiency
Productivity and yield
Automation
Precision
Digitization
Total customer solutionsCustomer driven
Sustainability
Industry change drivers create new opportunities for innovation
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Customer inspired innovation Insights 2 innovation Application Engineers
Disruptive technologies Creating markets Leading edge customers
Build out existing platforms Adding new platforms Accelerate growth through
3M Fundamental Strengths
Disruption-driven
M&A-driven
Customer-driven
Prioritizing high-value new products
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Disruption-driven M&A-driven Customer-driven
Partnering on new applications for efficiency and sustainability
Innovative building insulation solutions advancing commercial construction
3M innovation building on Ceradyne ceramic technologies
Invigorating a $500M+ business Expanding a $500M+ businessLeadership in a $1B+ business
A balanced approach leading to high impact, high return new products
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OEM Direct Value Added Reseller Distributor eCommerce
Winning by transforming our customer engagement
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End Users Channel eCommerce
High-touch online connection Customer insights and analytics
Expanded portfolio access Streamlining our engagement
Leader in Rich content Embedded brand stores
Digitizing our B2B go-to-market models
Winning new customers
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Highly attractive portfolio of businesses and market positions
Growth Acceleration from new products and transformed go-to-market
Growth >1.5x market
Improving trajectory for market dynamics
3M Industrial Business Group market leading growth in 2017