1) Mike Kelly, Executive Vice President of 3M, gave a presentation on the Display & Graphics Business to the 2008 3M Outlook Meeting. 2) The presentation discussed the business blocks, strategies, markets, and financial data of the Commercial Graphics and Traffic Safety Systems Divisions. 3) It also provided an outlook on the LCD industry, optical film industry, and 3M's perspective on the future of displays.

1. Mike Kelly
Executive Vice President
Display & Graphics Business
1
2008 3M Outlook Meeting

2. Display & Graphics Building Blocks
Leading core businesses
Foundational
Sound historical financial performance
Strong customer relationships across markets
Manufacturing excellence and scale
Substantial IP
Investment in Optical Systems in 2008
Stabilizers
LCD market stabilization
Continued “cost-out” emphasis
Robust market space with significant growth potential
Growth
Enablers Healthy pipeline of new products and technologies across all
regions and markets
Supply chain gravity shifts and R&D globalization
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2008 3M Outlook Meeting

3. Key Strategies for Display & Graphics
Accelerate international penetration of Traffic Safety Systems and
Commercial Graphics core products
Expand Traffic Safety Systems and Commercial Graphics service and
software segments
Maximize LCD film profitability and share through targeted film segmentation
Extend the Optical Systems franchise and horizon through new film
development
Align and leverage projection systems platforms
Leverage stewardship role of microreplication technology and film
manufacturing for 3M
Our Customers’ Preferred Supplier of Innovative Solutions
for Light Management and Visual Communications
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2008 3M Outlook Meeting

4. Global Mega Trends Drive Our Display & Graphics Strategies
Aging Population
Evolution From Mass
Communication to
Infrastructure:
Targeted
Building in Emerging
Communication
Countries / Rebuilding
in Developed Countries
Continuous Technology
Increased Emphasis on Evolution Toward Flat
Energy Conservation & Displays & Wireless
Sustainability Communication
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2008 3M Outlook Meeting

5. Moving to an Expanded Opportunity Footprint
- Expansion into new segments of
2-Step Adjacencies Light Management and Visual
Communication
- New business models
20X
- Organic and inorganic growth
strategies
- International penetration
1-Step Adjacencies - Organic growth platforms
- Benefit from M&A synergies
- Services expansion
4X
- Building on a solid foundation
Core - High shares in core spaces
Market - Strong OI% and ROIC relative to
industry
1X
Expanding Our Addressable Product and Service
Segments Into Faster Growth Spaces
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2008 3M Outlook Meeting

6. 3M Display & Graphics: Key Financial Data
Excludes Special Items & Includes Restatements
Sales Operating Income
$1,500
$Billions & YOY % Chg $Millions & YOY % Chg
$3.8 $1,083
$1,148
$4.0 $1,116
$3.5 $1,200
$3.4
$2.9
$2.9 +6% +3%
$873 $872
+28% -6%
$3.0 $900
+5%
+16% +4% +6%
+58%
+34%
$2.0 $600
$1.0 $300
$0.0 $0
2003 2004 2005 2006 2007 2003 2004 2005 2006 2007
Q3- Q3-
YTD YTD
OI
LC
27.8% 11.4% 4.6% 6.0% 2.9% Margin 29.9% 33.0% 32.4% 28.7% 29.7%
Growth
2006 Sales By Geographic Area
Europe 15%
U.S. 21%
LAC 4%
APAC 60%
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2008 3M Outlook Meeting

7. Commercial Graphics Division
Premium Films
#1 Market Position
Interior Architectural Films
# 1 Market Position
Digital Signage
Emerging Segment
Promotional Films
#4 Market Position
Program Management Services
Emerging Segment
The Leading Global Provider of Graphic and Image Management
Solutions for On-premise and Transportation Graphics
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2008 3M Outlook Meeting

8. Commercial Graphics Division
Markets Served
M&A / Re-branding
Commercial construction
Transportation
Advertising
Keys to Growth
Recreational vehicles
Maintain and grow core position in
films, inks, warranted graphics
Increase market focus
Broaden product portfolio to serve
new space
• Next generation films
• Digital signage
• “Image” program management
systems and services
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2008 3M Outlook Meeting

9. Traffic Safety Systems Division –
Reflective materials for …
… High-performance road signs
… Wet-reflective
pavement markings
… Safer work zones
… More visible vehicles
The Leader in Transportation Safety and Mobility Solutions
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2008 3M Outlook Meeting

10. Traffic Safety Systems Division –
Systems and Services for …
… Motor vehicle management software
… License plates, stickers
and production systems
… Roadway Maintenance Services
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2008 3M Outlook Meeting

11. Our Newest Display & Graphics Business…
Precision Advanced Optical
Optics Systems
Projection
Systems
Department New era projection
Smaller imagers
Visual
Solid-state light
Systems sources
Miniature optics
Shared technology,
market access and
infrastructure
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2008 3M Outlook Meeting

12. Optical Systems Division
Leading global supplier of brightness enhancement films
that transform the display of information anytime,
anywhere
Handheld devices
Computer Displays
LCD TV
Emerging applications – Ultra Mobile PC,
Automotive, Digital Signs
“Enhancing the Way You See the World”
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2008 3M Outlook Meeting

13. LCD Business Evolution
Past: The Simple Life
- 3M offered innovative, high value products, IP protected
- Industry grew rapidly
- Competition was limited
Present: Big Business
- $60 Billion display industry, partially enabled by 3M
- More LCD applications
- Highly segmented market
- Intense prism film competition
Future: Sustainable OI Growth
- $100 Billion display industry projected by 2012
- LCD will remain the leading display technology
- 3M has a new product pipeline to meet industry needs
- 3M will bring more LCD contents to more segments
- 3M will continue its cost down strategy
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2008 3M Outlook Meeting

14. BEF - Brightness Enhancement Film
BEF Recycles off axis light
Wasted Light
Without BEF
Dim
Light refracted
toward viewer
Wasted Light
Lamp
Wasted
off-axis light
reflected back
for recycling
BEF redirects
Bright light towards
the viewer
BEF Backlight
LCD
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2008 3M Outlook Meeting

15. DBEF - Dual Brightness Enhancement Film
Without DBEF, 50% of backlight output is absorbed by the LCD
Transmit P1
Dim
Absorb P2
LCD Backlight
DBEF increases brightness by Reflecting & Recycling polarized light
P1
P2
Bright
Reflect
Recycle
P1
LCD DBEF Backlight
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2008 3M Outlook Meeting

16. LCD Enhancement Films
2004 2008
Industry size $1.6 Billion Industry size $2.9 Billion
BEF+
APF
DBEF
BEF+DBEF
DBEF
DBEF
Prism Film
Coated Diffuser
Prism Film
Microreplicated Diffuser
*Source: DisplaySearch Coated Diffuser
Emergence of Value Segments
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2008 3M Outlook Meeting

17. Global Microreplicated Film Supply / Demand
000 sqm
180,000
3M Estimate
160,000
140,000
120,000
100,000
3M Capacity
Competitor Capacity
80,000
Global Demand
60,000
40,000
20,000
0
2004 2005 2006 2007 2008 2009
3 7 15 20 25 20
Estimated # of Competitors
Excess Microreplicated* Film Supply * prism films +
microreplicated gain diffusers
Will Likely Drive Consolidation, But Not Yet …
17
2008 3M Outlook Meeting

18. 2008 New Products Include
Two new diffuser films for low end displays
Environmentally-friendly, non-halogenated BEFs
Ultra thin films for hand-helds, including multi-functional films
BEF + Diffuser multi-function film
High Gain BEF
High performance DBEF for LED systems
DBEF for Notebooks and Monitors
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2008 3M Outlook Meeting

19. Value Proposition – By Application
Energy Quality Competition 3M Value
Performance
Handheld
• 3M quality enables • Lower quality ok
• Films extend • High
• Very high brightness
new delivery formats for bottom film
battery life
• Narrow view angle • 3M DBEF a very
26% important platform
• High resolution
• Thin
Monitor Notebook
• High brightness gain • Films extend • Low turning film • Turning film • Medium
17% • Narrow view angle battery life system yields • Growing prism
• Portability • 3M recognized film competition
• Thin & light quality advantage
• High brightness • Importance • Competitor films • Severe prism film • Low
12% • High contrast is starting to good enough competition
grow
LCD TV
• Difficult to yield large • Severe prism film • High/Medium
• Growing segmentation • TV power use
pieces competition
is high
• Wide view angle • 3M DBEF a very
45%
important platform
• Wide color gamut • DBEF lowers
power 30%
• High contrast
% of Total 3M LCD Sales

20. Display & Graphics 2008 Incremental OI Change
vs. Historical Average
($ in millions)
Inflation 2008
Lean Six Sigma Mix vs. 2007
Price Volume Cost Reduction All Other OI Change
$100
$40 to $60
$50 $10 to $30
$0
($50) ($30) to ($40)
($100)
($150)
($50) to ($150)
($110) to ($150)
($200) Most Likely = ($80M)
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2008 3M Outlook Meeting

21. Optical Systems Cost Savings Programs
($ Millions)
160
140
120
100
80
60
40
20
0
2005 2006 2007 2008
Accelerate Lean Six Sigma Savings to
Help Offset 2008 Price Impact
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2008 3M Outlook Meeting

22. 2008 Optical Systems Top Cost Reduction Projects
$25,000,000
$20,000,000
Lean $15,000,000 cost reduction projects generate > 10% cost of sales
Six Sigma
to help offset price down and material & labor inflation
$10,000,000
For example:
$21.5M Decatur DBEF yield improvement
$5,000,000
$14.5M Asia source of supply optimization
$0
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2008 3M Outlook Meeting

23. 23
Square Yards
Q3_03
Q4_03
Q1_04
Q2_04
Q3_04
Q4_04
Q1_05
Q2_05
Q3_05
DBEF Capacity
Q4_05
Q1_06
Q2_06
Q3_06
Q4_06
Q1_07
Q2_07
Q3_07
Q4_07
Q1_08
Q2_08
Q3_08
2008 3M Outlook Meeting
Q4_08
Q1_09
Q2_09
Q3_09
Q4_09
Q1_10
Q2_10
Q3_10
Q4_10
Q1_11
Q2_11
Q3_11
Q4_11

24. LCD Industry Outlook
Near term
Constrained supply
Accelerating capacity expansion
Low to moderate panel price down until 2009
Digital TV transition
Actual effect still unknown
TV demand will increase causing LCD mix to shift to TV
New capacity comes online in 2009 to meet new demand
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2008 3M Outlook Meeting

25. Optical Film Industry Outlook
Near term
Excess supply
Newcomers try to buy way in with aggressive pricing
Continued margin pressure
OEMs indicating need to consolidate prism suppliers in 2008
More industry consolidation expected by 2010
Excess capacity likely at least through 2009
Innovative, Stable Suppliers Will Weather
the Evolving Market Climate
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2008 3M Outlook Meeting

26. Foresight – 3M’s point of view on the future
LCD remains a substantial part of the portfolio
<20% of displays are non-CRT today so still a large opportunity , But…
• New products must reduce total delivered cost of displays!
• New products must be aligned to trends, such as energy consumption
• 3M is in the midst of reinventing LCD films
• Meanwhile, must fight for film share in 2008
New technologies are emerging and creating opportunity
Solid state lighting
•
New emissive displays
•
Digital signage and interactive environments
•
Optics will become even more ubiquitous
•
Thoughtful Diversification Can Drive Faster Growth
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2008 3M Outlook Meeting

27. 2008 Display & Graphics Outlook
Commercial Graphics and Traffic Safety Systems are expected
to deliver another good year of outstanding sales and profit
growth
• Mid-single digit top-line
Investing in Optical Systems franchise growth
Innovation: driving new products, becoming • Likely OI margin of
24.5% to 25.5% for D&G
even more important to our customers
• $50-150M reduction
Competitiveness: relentlessly attacking yield
in pre-tax income in 08
and waste in manufacturing via Lean Six
• Securing 3M leadership
Sigma; resetting prices to fully capture market
position in an important
trends and growth
growth market
We Remain Extremely Bullish on
Display & Graphics Business and Markets
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2008 3M Outlook Meeting

28. Thank you
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2008 3M Outlook Meeting