Electronics & Energy Business Jim Bauman Executive Vice President 2017 Outlook Meeting December 13, 2016 1 >
Agenda Who we are Improving our business Advancing a connected world 2
3M Vision 3M Technology Advancing Every Company 3M Products Enhancing Every Home 3M Innovation Improving Every Life 3M Electronics & Energy strategic intent Advancing a connected world 3
Electronics & Energy Business 2016e Sales $4.8B Electronics $3.0 billion High performance films $1.3B Energy $1.8 billion Connecting components $0.8B Electronics design materials $1.0B Electrical tapes & supplies $0.5B Sustainable chemistry $0.4B High performance films $0.3B Semiconductor solutions $0.3B Coatings & adhesives $0.2B 4
Relative Strategic Attractiveness Relative Strategic Attractiveness Improving our business through portfolio prioritization Actions Taken Consolidated businesses and strengthened our portfolio Operating Income Margins (% to sales) 2013 2016 ~21% 20.0% 21.1% 17.8% 17.8% Relative Financial Attractiveness Relative Financial Attractiveness 2013 2016e Results Enhanced customer relevance Reallocated resources to best opportunities Increased operating efficiency and productivity 5
Focused on differentiated, higher-value markets Consumer Electronics Utilities Construction Semiconductor Data Center Automotive Electrification Grid Automation Renewable Energy and Storage $60B 1-3% CAGR $11B 10-15% CAGR Growth rate: 5-year CAGR; Source: IHS, 3M estimates 6
Building strength on strength to access higher-value markets Leveraging existing customer relationships and 3M technology platforms Automotive Electrification Ad Adhesives Sm Specialty Materials Films and bonding Fi Films Mr Microreplication Di Display Electronic materials Em Electronic Materials Nt Nanotechnology Fe Flexible Electronics Lm Light Management Grid Automation Datacenter Mo Molding Systems and hard goods Fluoro- and Electrochemistry Sm Specialty Materials Es Electronics & Software Fl Fluoromaterials Is Integrated Systems & Design Ec Energy Components Se Sensors Renewable Energy And Storage 7
2017 outlook for Electronics & Energy Projecting organic growth of -3% to +1% Consumer Electronics Utilities Construction Semiconductor Data Center Automotive Electrification Grid Automation Renewable Energy and Storage Headwinds Slower consumer electronic device demand LCD displacement Portfolio exits Core growth LCD and OLED penetration Electrical construction share gain Semiconductor materials penetration Higher-value programs Interconnect in datacenter Auto electrification spec in Novec application expansion 8
Advancing a connected world By 2020: 25B connected devices 80% of internet traffic will be video 2x increase in broadband speed 9
How we advance a connected electronics world Enhancing visual experiences Enabling design and function Improving data networks Advancing a connected car Consumer Electronics Semiconductor Data Center Automotive Electrification $18B 1-2% CAGR $6B 2-3% CAGR $2B 13-15% CAGR $3B 13-15% CAGR Growth rate: 5-year CAGR; Source: IHS, 3M estimates 10
Enabling design and function. Enhancing visual experiences Smartphone Customer Roadmap Requirements Design Power efficient Color Thinness Flexible / foldable Proven 3M Differentiators 3M OLED Offerings Protective tapes and privacy filters Electronic finishing materials OLED Optically clear adhesive Noise, shock and vibration Innovation leader in optics and light management Significant breath of capability in electronic materials Ability to quickly scale high volume manufacturing Thermal management films Electromagnetic shielding materials Novec electronic coatings Water indicator tape Electronics bonding 11
Improving data networks Data center Market Drivers Growth in cloud and hyper-scale computing Increasing data rates and traffic Cost of power and cooling Increasing cost of downtime What we do Manage heat to improve energy efficiency Improve uptime and reliability Enhance signal integrity Enable higher density computing 3M Solutions $2B addressable opportunity 13-15% CAGR 3M Novec Fluids Fire Suppression 3M Novec Fluids Immersion cooling Optical Interconnect 12
Advancing the connected car Automotive electrification Market Drivers Larger, head-up, and high definition displays Electronics portion of total vehicle cost will be 50% by 2030 Plug-in hybrid and battery electric vehicles represent 25% of new car sales by 2030 What we do Improve display quality Increase battery power density and cycle life Manage heat and interference 3M Solutions $3B addressable opportunity 13-15% CAGR Display and Sensor Materials Battery Materials 3M Novec Fluids Thermal Materials Source: Lux Research 13
How we win with 3M Science in automotive electrification Glass Solar films Battery Battery materials Thermal materials Immersion cooling fluids Displays Films Adhesives Thermal materials Shielding materials Camera / sensor Thermal materials Underfills Adhesives Body electronics Thermal materials Underfills Shielding materials Tapes Drive motor Insulation paper Powder resins Inverter Insulation paper Thermal materials Adhesives Underfills Shielding materials 14
How we advance a connected energy world Connecting people at the speed of light Improving reliability & efficiency of energy delivery Advancing a distributed power network Communications Utilities Construction Grid Automation Renewable Energy and Storage $12B 1-3% CAGR $3B 1-3% CAGR $3B 1-3% CAGR $4B 15-16% CAGR $2B 8-11% CAGR Growth rate: 5-year CAGR; Source: IHS, 3M estimates 15
Improving reliability and efficiency of energy delivery Grid automation Market Drivers Aging infrastructure Growth in distributed energy resources Rising peak load demand Shift to underground grid assets What we do Locate and map utility assets Connect and measure electrical energy Protect assets against harsh environments Detect and locate faults 3M Solutions $4B addressable opportunity 15-16% CAGR Locating and Mapping Solutions Sensored Cable Accessories Underground Sensing and Communication 16
Advancing a distributed power network Renewable energy and storage Market Drivers Increasing intermittent renewables Growing demand for peak-load reduction Increasing demand for energy security and backup power What we do Improve efficiency Decrease $/watt Increase power density Increase durability and cycle life 3M Solutions $2B addressable opportunity 8-11% CAGR Solar Efficiency Materials Wind Materials Fuel Cell Components Flow Battery Components 17
Evolving our portfolio to advance a connected world Enhancing visual experiences Improving reliability and efficiency of energy delivery Advancing a connected car Enabling design and function Improving data networks Connecting people at the speed of light Advancing a distributed power network 18
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