Industrial Business Group December 2016© 3M . All Rights Reserved. 2 Industrial Business Group...

Industrial Business GroupMike RomanExecutive Vice President

2017 Outlook MeetingDecember 13, 2016

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


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"


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


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




Growth acceleration




Agenda


$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


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


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


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




Growth acceleration:




Agenda


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


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


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


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


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



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


OEM Direct Value Added Reseller Distributor eCommerce

Winning by transforming our customer engagement


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


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

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