Joe Harlan Presentation

Electro & Communications Business
Joe Harlan – Executive Vice President

Positioned
For Accelerating Growth

© 3M 2008. All Rights Reserved. 2008 3M Investor Conference
2008 3M Investor Conference

Positioned for Accelerating Growth…

Stronger business footprint has yielded stronger financial results

Growth initiatives materializing nicely

Operational excellence embedded in ECB culture

Market dynamics in infrastructure and electronics favor 3M
technologies…time for offense

Lots of Work on the ECB Transformation…
Opportunities Abound
2

ECB Key Financial Data
Revenues Operating Income
+5% +14%
$700
$3.5
CAGR CAGR
YoY% Chg
$2.8
$3.0 $600
$2.7 $533
$2.5
$464
$2.5 $500
$413

$ Millions
+15%
$ Billions

$2.0 $400
+12%
$1.5 $297
+44%
$300
$1.5
$200
$1.0
+13%
$100
$0.5
$0
$0.0
2005 2006 2007 1H '08
2005 2006 2007 1H '08

V% 4 6 4 9 OI Margin 16.5% 17.5% 19.3% 20.1%

2007 Revenues by Geographic Area
LAC 9%
U.S. 29%
Europe 23%

3
APAC 39%

ECB Portfolio Footprint
Balanced Platform Portfolio… Characteristics
Integrated materials science & processing technologies
Participating in “hot” markets
30% 22%
Infrastructure Infrastructure build / upgrades
Electronics market momentum
Go-to-market via OEM, channel pull / push & “Bench-to-
Electronics 5%
Bench” selling (ODMs, CMs)
23%
20%

…And Balanced Proportionately to Global Opportunities
LAC
Strong positions in expanding / upgrading infrastructure
9%
(Europe, LAC, APAC)
U.S.
Asia driven by electronics…EE emerging
29%
Europe
23%
Servicing transnational customers globally

Opportunities Across Multiple
Platforms and Geographies
APAC
4
39%

Electrical Markets Division
Applications
Power Generation Transmission Distribution

Solutions

Tape Cold Shrink & Heat Shrink Connectors & Terminals
Splices & Terminations Flexible Insulation

Key Capabilities
Vinyl electrical tapes for insulating and sealing Insulating tapes and papers
Connecting and terminating underground cables Specialty high voltage overhead cable
EMI / RFI shielding and absorbing Resins and conductive tapes
5

Communication Markets Division
Applications
C e n tra l C e n tra l
Cam pus O ffic e O ffic e C u s to m e r
P r e m is e s

Solutions
Copper and
Fiber Optic
Structured
Cabling Central Office Connectivity
Copper Aerial Closure
Copper Splicing
Modules & Connectors
DSL Test
Equipment
Fiber Optic Closures
Fiber Optic Splices

Key Capabilities
Copper & optical fiber cable…
Connectivity - Splicing, terminating, and cross connecting of cable facilities
Management – Routing, labeling, identifying, and managing cable facilities
Protection – Junction points in a network, facilities security, passive and active elements in a network
6
Copper media layer diagnostics – Identifying and locating faults in a media layer

Electronic Solutions Division
Applications

Solutions

High Speed
Backplane Fiber Optic Carrier & Cover
Flex Circuits Inkjet Cartridge Cable
Solutions Solutions Tape Assemblies

Key Capabilities
Flexible fine-pitch interconnect Component transport and testing
High-performance electronic substrate materials Static control and protection
Embedded capacitance
7

Electronics Markets Materials Division
Applications

Solutions

Tapes & Bonding Thermally
Gaskets &
Films
Chemicals & Conductive
Adhesives
Gases Semiconductor Materials Materials

Key Capabilities
Specialty fluids & gases Plastic bonding & hot melt solutions
Sintered & fixed abrasives Form-in-place gaskets
Battery materials Thermal management
8

3M Touch Systems
Applications

Retail Industrial Gaming Food Service Transportation Financial

Solutions

Capacitive – ClearTek II Sensors & EX II Electronics Touch Monitors Dispersive Signal Technology (DST)

Key Capabilities
Capacitive sensing technology expertise Glass-based product manufacturing
Bending wave technology Coating and optics expertise
Touch electronics and software Gaming & retail touch markets expertise
Worldwide customer & engineering support Global presence & brand recognition
9

An Improved Business Footprint…
New Strategy Addressed Our ‘1-Trick’ Pony…Flex
‘02 - ‘07 Change
Revenues % of
% of Total Margin
Total
% of
($ Millions)
(5%) +15 Pts.
$603
Total 22
% of
Total
22
$534
CMD 27
$579
+7% +3 Pts.
30
$843
24
$581
EMD $495 23

42
Electronics +9%
$995 +22 Pts.
32 41
$705 $1,132

18
Flex $403 12
$287 (11%) (19) Pts.
7
$184

2002 2004 2007
Flex % of OI 87% 43% 11%

Flex Decline Dampens Business Performance…But Balanced
Portfolio Management Overcomes the Impact
10

Portfolio Management Yields a Stronger Financial Footprint…
Core
ECB Revenues
growth 8%
($ Billions) excluding
$2.8
R Flex
CAG $2.7
+5 %
(7% $2.5
)
$2.4
$2.4

$2.2
$2.2

2001 2002 2003 2004 2005 2006 2007

OI% 8% 11% 11% 12% 17% 18% 19%
ROIC 7% 11% 11% 13% 18% 18% 21%

Ideally Situated to Pursue Growth Opportunities…
“Offense vs. Defense” in Growth Markets
11

Infrastructure Markets
Electrical Markets in the “Sweet Spot”…
Initial Build Phase O ptim ization Phase Replacem ent Phase
Building up reliable and cost O ptim izing the grids for power D eveloping in a new com petitive
efficient electrical infrastructure quality and power-flow efficiency environm ent
Capital Expenditures

Tim e Fram e: 15-30Years 10-15Years 10-15Years
Source: Siemens 2006, Boston Consulting Group M arket R esearch
Sources: U BS Investm ent R esearch, T &D and Internal

Dynamics
Aging infrastructure in developed countries & new infrastructure in developing
countries driving massive global investment
Transmission & distribution spend expected to grow at 13% CAGR through 2010

Energy Demand Drives Bright Electrical Core Outlook
12

Infrastructure Markets
Telecom Markets Steady…
Telecom Customer & Broadband Investments

$29B

$31B

$63B

$13B $24B

Dynamics
Worldwide broadband subscribers will double by 2012 to 500 million driving
investments
Consolidation continues…but cyclical spending is still a challenge

Telecom “Hangover” has Passed…Spending Normalized
13

Electronics Markets…Perpetual Growth
Instrument Business

Industrial Est. 2008 Size Est. CAGR
Segment
($ Billions) ('06 - '11)
Communication
Business $37 6%
Communication 439 11%
Gov't / Military
Consumer 206 10%
Auto 131 12%
Computer 542 12%
Gov't / Military 173 6%
Industrial 170 8%
Consumer Instrument 116 8%
TOTAL $1,814 10%
Source: Electronic Outlook Corp., Electronics Industry Outlook Q4 2007
Computer
Auto

Electronics is a $1.8 Trillion Market Growing at 1.5-2X GDP…
No Longer Dominated by Computer
14

ECB Has Improved Business & Financial Footprint…
…Driven by a Simple Strategy
Market focused / Customer centric go-to-market structure
Growth Successful NPI program based on VOC and technical differentiation
Aggressive geographic expansion
(Customers)
Selective acquisitions

Supply chain shift…Closer to the customer
Competitiveness Productivity: Lean Six Sigma, supplier management, indirect costs,
cycle time reduction
(Shareholders)
Maniacal focus on service and channel partner intimacy

Engaged International human capital investments
Employees Leadership localization
Technology driven growth…back to “3M DNA”
(Energized)

Simple Approach has Yielded Good Results…Full Speed Ahead
15

ECB Market-Focused / Customer-Centric Approach
EMMD Focused on Key Electronic Segments / Customers…
Segment
Market

Semi-conductor HDD MHH Display Printer
TSMC Seagate Nokia LG HP
Customer
Examples

Intel Western Digital Motorola Philips Lexmark
IBM Hitachi Apple Samsung Canon
Freescale Samsung Sharp Brother

…Yielding Growth at 2x Market Rates… Revenue $625
$556
$501
+14%
$452
CAGR
$367
$ Millions

2004 2005 2006 2007 2008E

Incorporating “Classic 3M Technology” into VOC Based
Customized Technology Differentiated Solutions…
Running with the Winners
16

Accelerating ‘VOC’ Based New Product Growth
Re-Engineered the NPI Effort…
$800 +
5-Year New Product Sales*
+25% $656
CAGR
$ Millions

$491
$457

$336
$255
$206

2002 2003 2004 2005 2006 2007 2008E

% of Sales 9% 12% 14% 18% 18% 24% 30+%

Prioritizing on high probability VOC projects
Capitalizing on international human capital investment (Tech)

3M Technical Expertise Providing Differentiated
Products / Solutions to Customers
17
*Sales of products released within past 5 years.

Focusing on 2-Year New Product Sales*…
Ensuring the Sustainability…
$407
2nd Year
NPI % Origin
1st Year $311
216 5-Year 2-Year
$ Millions

$237
’07 ’08 Chg. ‘08
181
120
U.S. 64 47 39
Asia 22 31 37
191
130
117
Europe 11 18 21
LA/C 3 4 3
2006 2007 2008E

Lab Headcount:
U.S. 44% 38% 32%
Int’l 56% 62% 68%
Int’l Revenue 70% 71% 74%

Shifting Activities Closer to Customers:
- Local ‘Centers of Excellence’
- Platform Specific Technology Roadmaps
18
*Sales of products released within past 2 years.

Global Centers of Excellence Investments
in 2008

Neuss
High Speed Interconnect
China
Regional Applications Dev.
Russia Electronic PSA Tapes
Indoor Copper Connectors
Tech Service Component Transport
Security Systems
Low-Cost I/O Intercon
Resins
High Voltage Acc.
MV Splices
Passive Cabinets
Poland
Tech Service
Tilton
Korea
Paper
EMI/EMC Tapes
Insulation
Russia Battery Matls.
Germany
Poland OCAs
Korea
St. Paul, MN France
Tilton, NH
St. Paul Japan
Austin, TX China
Composite Conductor
Semicon Finishing
Electronic Adhesives
MHH Interconnect
FC Fluids
India Consumer Circuits
Cluses
Battery Mtls.
Taiwan Fiber Connectors
Cross-connect blocks
Textool
Gels & Greases
Austin Singapore
Closures
MV Cable Accessories
Taiwan
Elec. Tapes/Supplies
Semicon pkg
Copper & Fiber Connectors
OEM Tapes
Test & Measure Instrumentation Singapore
Brazil E-Cabinets
Closures Consumer Circuits
India
Specialty Circuits SC Liquid Adhesives
Heat Shrink
Brazil
Static Control Electronic Adhesives
MV Acc.
Rubber Tapes CMP Abrasives
FTTH
PVC Tapes

Technology & Development Expertise Close-to-the-Customer…SPEED to Drive Growth
19

Technology Roadmaps – EMC…
Market (Customer) Priorities
Regulations broadening from 0-1GHz to 0-3GHz. Miniaturization causing greater EMI issues Driving need for multi functional component
EMI Metal Particle
Pads and Foams

EMC Hybrid
EMD Sheets & Films NTF EMC New Foam

EMD Mesh & Sleeving EMI Metal Oxide
Conductive Cushion EMI New Foam Gasket
Particle
EMD Gaskets & Cushions Film Impedance
Focused roadmaps for each
Low Frequency
Advanced EMC
Material
Absorber
EMI Absorbers
RFID Absorber Liquid EMC Material
High Frequency
Hybrid

product family… Absorber
Absorber
AB5000
Compressible
Multi-layer Adhesive
Adhesive Structural EMC Adhesive
Hybrid Adhesive
EMC Adhesive Thin Adhesive High Pitch Acid Free Adhesive
Adhesive Transfer

Clearly maps out technologies
Transparent EMI Tape
Single Coat and

EMD Foil & Fabric Tapes
EMC Absorbing Tape
EMI Label
EMD Anti-Static Tape EMC Conformal & In-

in-house, being developed,
Mold Solutions
300PL Foil Shield EMI/EMC Engineered
EMD High Temp Tape
Flex Circuits
Cap Shield
Z-Axis Acrylic, Epoxy
and what we need to go get
Particle based XYZ-Axis Legend
Tape Conductive Foam Tape
XYZ-Axis Acrylic, Si
Post Launch/Core
NPI/Development
Measure

2 mil XYZ-Axis Tape
Advanced Modeling
Test &

Basic Material
& Computation Concepts
Property Testing
Engineered Design
Idea Hopper
Capability
Technology

Advanced Product & Performance
Legend
Precision Particle Alignment Multilayer Manufacturing
Test Capability
Gaps

Existing
EMI Functional Transparent EC Polymers Precision Pattern Coating Complex Converting
In-Development
In-
Nano Layers Capability
Need/Gap
Corrosion Electrochemistry Galvanic Series Materials
Metallurgy Expertise Expertise Expertise
20
Core 2007 20083M Investor Conference2009 2011
2010
© 3M 2008. All Rights Reserved. 2008

International Expansion…Our Biggest Opportunity
Shifting Assets Closer to the Customer…
Capex Human Capital
120
+725
800
$102
(Cumulative)
$93
100 700
600
$76

Headcount
80
$ Millions

+415
$63 500
60 400
$46 +300
$43
300
$34
40
200
20
100
0
0
'06 '07 '08E
'02 '03 '04 '05 '06 '07 '08E

OUS
2/3 of $ CapEx Int’l 90% of Additions Int’l
US

International growth plus competitiveness Building global technical expertise
Establishing regional sources of supply Strong local leadership development
Rationalized / sold 7 facilities 75% of electronics business moved to Asia
‘Lean’ mentality everywhere NPI no longer dependent on US

Provides Local Customer Intimacy, Source of Supply, and Speed to Market
21

International Growth
Investing in Higher Growth Regions…Close to the Customer
APAC Sales Europe Sales L.A. / Canada Sales
+9% CAGR* +8% CAGR* +28% CAGR*

’05 ’06 ’07 ’08E ’05 Europe /’07 ’08E
’06 ’05 ’06 ’07 ’08E
LA/CAN
APAC MEA

Key Subs CAGR Key Subs CAGR Key Subs CAGR
China 15% CEE 17% Canada 14%
India 59% Middle East 36% Brazil 22%
Taiwan 8% Germany 3% Columbia 17%
Korea 7% France 4% Venezuela 30%
Singapore * 5% Spain 12% Chile 13%
Japan * 6% UK / Ireland * 5% Mexico 2%
*Excludes
Recent Investments Gaining Traction…Growth Continues as
Flex Sales
Organizational Competencies Develop
22

Opportunistic M&A
Expanding Electronics Footprint… ’08E Rev.
Static Control (Sanford / Santa Cruz) $35
Medical Flex (Siemens) $20

…Adjacent Markets…
Innovative Paper Technology $30

…Geographic Expansion
Mahindra & Mahindra $8
Giglio $25

Watching Environment Closely…in Parallel with ECB Growth Strategy
23

ECB Performance Improvement – 2004 to 2007
Lean Six Sigma Benefits… …Supplier Management Savings…
$155 $44
$42
$39
$36
$147 $147
$144

'04 '05 '06 '07 '04 '05 '06 '07
% to Rev. 6% 6% 6% 6% % of Buy 6% 6% 5% 5%

…Drives Lower Factory Costs… …And High ROIC% 21%
60%

18% 18%
57%
56%
55%

13%

'04 '05 '06 '07 '04 '05 '06 '07
1 Point is Worth ~ $26 Million

Productivity Critical to Maintain ECB Competitiveness
24

ECB Service Initiative Correlates to Growth
Electrical Markets Example…
’99 – ’04 ’05 – ‘08
100 15%
12% 97
Rev. CAGR 0% 12% 11%

LC Rev. Growth %
OTIF 81% 95%
95 10%
10%
95
OTIF %

4%
90 5%
1% 1% 1% 1%
0% 90
83
85 0%
82
81 81 85
80 80
80 -5%
-8%

75 -10%
'99 '00 '01 '02 '03 '04 '05 '06 '07 '08E
OTIF LC Rev. Growth %
Share Gains Continue in 2008…
Analysis indicates 1/3rd of growth Customers Cust. Growth 3M Growth Difference
Commercial 5% 19% +14 Pts.
attributable to OTIF improvement Utility 2 21 19
OEM 8 50 42
Service now a 3M differentiator Acq. (IPT) 0 28 28
Core OEM (2) 2 4

Service Benefits Growth, Cost, and Cash
25

A Healthier Platform Provides Opportunities
High Capacity Conductors
Fiber Solutions
Novec™ Fluids
Form in Place Gasket
Lithium Ion Batteries
Optically Clear Adhesives
Electromagnetic Compatible (EMC) Materials
Transport Tape / Universal Cover Tape
Wind Farms / Solar / Mining

Key Components in a Robust Product Line
26

High Capacity Conductors
Emerging Market Demand for Power Transmission…
Unique technology enabling 2x transmission with
50% sag vs. traditional cable
Value add applications
Constrained transmission corridors
Aging infrastructure
Lower installation costs
Long river / gorge crossing
$1B addressable market today with 6% CAGR
…3M Uniquely Positioned as Scale-up Increases
+43%
$ Mfg Cost / Foot Revenues
+17%
+50%
(38%)

$ Millions +167%
(36%)
(22%)
(21%)

2004 2005 2006 2007 2008E 2004 2005 2006 2007 2008E

Production Scale-up & Cost Productivity will Drive
Market Leadership in Transmission Cable
27

Fiber Solutions…An Emerging Platform
ECB accelerated organic development for core
fiber and connectivity platforms in 2004
$2.3B market with 20% CAGR
Expanding geographic and product footprint
Full functioning Euro & APAC labs
Transitioning from supplier to consultant

CMD Solid in Copper…Cash Cow… …With Growing Fiber Presence…
Sales CAGR Sales CAGR
$600 20% $200 25%
’04–’07 = 1% ’04–’07 = 19%
20%
’08–’12 = 5% ’08–’12 = 20%
$500 15% $150
Rev ($ Millions)

Rev ($ Millions)
15%
$400 10% $100
10%
$300 5% $50
5%

$200 0% $0 0%
2004 2005 2006 2007 2012E 2004 2005 2006 2007 2012E
Copper Sales Copper OI% Fiber Sales Fiber OI%

Organic Position Capitalizing on 3M NPI Expertise…Classic 3M DNA
28

Novec Fluids…Unique Technology in High Tech Apps
Fluorinated fluids for semiconductor
manufacturing, electronics processing, and
fire suppression
Safe, sustainable, responsible chemistry
Halon replacement technology
Best EHS position vs. competitors
Growing 20+% in $1B, 3% CAGR market

Revenue
+13%
+14%

2006 2007 2008E

New Applications in Wafer Cleaning & High Boilers…
29
Plus Geographic Share Gains (APAC) Drives Growth

Optically Clear Adhesive (OCA)
Provides optical bonding for consumer electronic
products in touch and key pad applications
Enables OEMs / ODMs design flexibility for
thinner, more attractive devices with improved
contrast / brightness
Provides cost savings in processing due to fewer
layers in display stack
$350M market with 20% CAGR
Revenue
+21%
+850%

2006 2007 2008E

New Applications with Opportunity for Larger Format Applications
30

Lithium Ion Battery Materials
Growing rapidly with expansion of multiple 3M
products and technology platforms
Fluorinated electrolytes
NMC Cathode powders
Electrolyte

Silicon alloy anodes
Micro porous films
Strong IP positions provides licensing on
manufacturing options
Revenue +44%

+50%

2006 2007 2008E

Continued Development of Specialty Formulations & Additives in $3.8B Market
31

Electromagnetic Compatible (EMC) Materials
Classic 3M tape and adhesive technology applied
to rapidly growing EMC & RFID
Current applications in consumer electronics,
security, medical, and industrial markets
Customized applications in $1.5B, 9.5% CAGR
market
Revenue
+13%
+89%

2006 2007 2008E

Growing Opportunity Across Multiple Divisions
32

Transport Tape / Universal Cover Tape
Packaging media for surface mount technologies
High quality / High performance market position
Enhancing portfolio to capture mid-tier
performance market

Revenue
+6%
(3%)

2006 2007 2008E

$300M Market Growing at 6% CAGR
33

Wind Farms
Tailor made applications for
electrical construction
Penetrating the global market with
cable accessories and supplies in
wind farm networks
Opportunities from design to build
phase:
Premium performance products
1 2 7
3 4
Technical training expertise
Splicing Terminating Grounding Value-add custom kits
5 8 9

Taping Securing & Labeling Marking & Locating

Just the Beginning…$12M 2008E Revenue in a Market Growing at 20%
34

Solar
Objective is to become the
preferred global solar solutions
provider
Integrated with “Big 3M” solar
effort
‘Bench-to-Bench’ technical support
System
Ingot, Wafer &
Module / Panel Installation &
for improved module efficiency
Cell
Manufacture Operation
Manufacture
through integrated materials
technology
On-grid utility and installation
• Conductive &
Insulation Tapes
support
• Wafer Process • Environmentally
Aides • Splices
Protective Resins
Offering customized solutions in a
• Terminations
• Wafer / Cell • Electrical
Transport Connectors
• Wire
dynamic environment
• Light
• Anti-static Management
Concentration
Solutions Solutions
• Optically Clear
Adhesives

$600M Market Growing at 30%...
• Thermal
Management
Massive Opportunity for 3M
• Interconnect
35 solutions

Mining
Opportunity for the electrical
construction market

Increased global penetration of
tapes, cable accessories, and
splice solutions

Expanded portfolio of new products
Solving cable repair, splicing, and
insulation needs

ECB service differentiation
compliments product technology

$225M Market Opportunity…
$31M in 2008 ECB Revenues
36

Electro and Communications Business
Positioned for Accelerating Growth…
Stronger business footprint yields stronger financial results…
Core revenues forecast at 5-8% CAGR
Since 2004…Factory cost down 5%, OI up 7%, and ROIC +12%
Growth initiatives materializing nicely
New products at 30+% of revenues…strong pipeline
Geographic asset shift yielding top line and productivity (RSS)
Legacy assets pruned…replacing with selective acquisitions
Operational excellence embedded in ECB culture
Continued productivity gains imperative
Market dynamics in infrastructure and electronics favor 3M
technologies…time for offense

Focusing on the Customer…Driving to be the
Supplier of Choice for Our Industries
37


Positioned
For Accelerating Growth

2008 3M Investor Conference

Joe Harlan Presentation

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