2016 International Operations Investor Relations v69 · 2019-11-21 · Commodity prices fall Early...

1. All Rights Reserved.29 March 2016© 3M

International Operations

H.C. Shin, Executive Vice President3M Investor DayMarch 29, 2016


Agenda

Strategic framework and direction

Global landscape and our response

Execution roadmap through our strategic levers


We are driving corporate strategies to deliver efficient growth

Business Business Business Business TransformationTransformationTransformationTransformation

PortfolioPortfolioPortfolioPortfolioManagementManagementManagementManagement

Investing in Investing in Investing in Investing in InnovationInnovationInnovationInnovation

Delivering efficient growth in dynamic global environment


3M International Operations: Strong and sustainable growth platform

� $18B$18B$18B$18B in sales

� 24%24%24%24% operating income to sales

� 70707070 countries

� 53,000+53,000+53,000+53,000+ employees

� 127127127127 plant sites

� 35353535 country laboratories

� 4,0004,0004,0004,000 R&D headcount


Strategy to win in both developed and developing marketsStrategy to win in both developed and developing marketsStrategy to win in both developed and developing marketsStrategy to win in both developed and developing markets

Developed market Developed market Developed market Developed market trendstrendstrendstrends

Energy efficiency Sustainability

Basic Healthcare

Aging population

General ManufacturingInfrastructure

Developing Developing Developing Developing market trendsmarket trendsmarket trendsmarket trends

Air and water quality

InfrastructureFood safety Middle class consumer

Technology2015 2020e

Developed Developing

International Sales $BInternational Sales $BInternational Sales $BInternational Sales $B

3%-5%

CAGR$21-23

$18

~50%

47%

53%~50%


Leveraging these assets creates value; strengthening them ensures our future

TechnologyTechnologyTechnologyTechnology ManufacturingManufacturingManufacturingManufacturing Global CapabilitiesGlobal CapabilitiesGlobal CapabilitiesGlobal Capabilities BrandBrandBrandBrand

International Operations driving efficient growth through Fundamental Strengths

� 54 Customer Technical Centers

� Over 120,000 customer visits to technical centers annually

� 3 Supply Chain Centers of Expertise

� 70% regional source of supply

� 70 countries

� ~20,000 customer facing employees

� 3M brand recognized globally

� Superb reputation


Agenda





International Operations continuing to deliver during

uncertain time

Currency turmoil

China slowdownEmerging markets slowdown

Commodity prices fall

� Early response, act fast

� Control what we can control

� COGS, SG&A, pricing, asset turns

� Experienced local leaders


International Operations response in dynamic external environment

22.6%22.6%22.6%22.6%

23.6%23.6%23.6%23.6%

2013201320132013 2015201520152015

2013 2013 2013 2013 ---- 2015201520152015

Operating Operating Operating Operating IncomeIncomeIncomeIncome

100 bps100 bps100 bps100 bps

COGS & COGS & COGS & COGS & SG&A FocusSG&A FocusSG&A FocusSG&A Focus

COGS & COGS & COGS & COGS & SG&A FocusSG&A FocusSG&A FocusSG&A Focus

Balance Balance Balance Balance Sheet Risk Sheet Risk Sheet Risk Sheet Risk

ManagementManagementManagementManagement

Balance Balance Balance Balance Sheet Risk Sheet Risk Sheet Risk Sheet Risk


100% 100% 100% 100% ComplianceComplianceComplianceCompliance

100% 100% 100% 100% ComplianceComplianceComplianceCompliance

Scenario Scenario Scenario Scenario PlanningPlanningPlanningPlanningScenario Scenario Scenario Scenario PlanningPlanningPlanningPlanning

Disciplined Disciplined Disciplined Disciplined Pricing Pricing Pricing Pricing


Disciplined Disciplined Disciplined Disciplined Pricing Pricing Pricing Pricing


4.6 4.6 4.6 4.6

4.9 4.9 4.9 4.9

2013201320132013 2015201520152015

Inventory Inventory Inventory Inventory TurnsTurnsTurnsTurns

0.30.30.30.3


3M China – Responding to new reality via efficient growth

2014 2015 2016 – 2020

3M China sales* $2.03B $2.05B

Organic volume growth 6.5% 2.3% 4 – 7%

Operating income growth 2.7% 12.7%

China Plan (2015) reflects changing landscape in China

*3M China/HK sales ex-consumer electronics


Agenda




Business Transformation

PortfolioManagement

Investing in Innovation


Creating efficient growth across prioritized end markets

HealthcareHealthcareHealthcareHealthcare SafetySafetySafetySafety Consumer RetailConsumer RetailConsumer RetailConsumer Retail

SustainabilitySustainabilitySustainabilitySustainabilityInfrastructureInfrastructureInfrastructureInfrastructure TransportationTransportationTransportationTransportation

Focus on key segments to ignite growth engine and expand margin


2015 2020e

Health Care business strong and growing

5% - 8%

CAGR

Maximize coverage

Educate and train clinicians

Invest in supply chain and R&D

$2.8

$3.6-4.1

3M Actions3M Actions3M Actions3M Actions

Sales $B


Significant growth opportunities in safety and security markets

2015 2020e

Worker Safety

Traffic Safety Public Security

Public Safety$2.5

$3.0-3.74% - 8%

CAGR

Portfolio aligned with regional megatrends

Sales $B


Consumer retail business growth driven by growing middle class

2015 2020e

$1.7

$2.1-2.44% - 7%

CAGR

Accelerate in key Accelerate in key Accelerate in key Accelerate in key cccchannelshannelshannelshannels

Pharmacy

Home improvement

Omni-channel

Leveraging 3M brandsLeveraging 3M brandsLeveraging 3M brandsLeveraging 3M brands

Sales $B


We are aligning our plan to key growth regions2016201620162016----2020 GDP Growth2020 GDP Growth2020 GDP Growth2020 GDP Growth

Specific growth programs for:• China • Germany• India• South East Asia

Greater Greater Greater Greater China China China China AreaAreaAreaArea33%33%33%33%

AsiaAsiaAsiaAsia25%25%25%25%

WEWEWEWE15%15%15%15%

CEEMEACEEMEACEEMEACEEMEA16%16%16%16%

LACLACLACLAC11%11%11%11%

Source: Global insight

WE 2020 GDP

LACCEEMEAGCA2015 GDP

Asia

Incremental GDP growth ~ $10T

2016201620162016----2020 2020 2020 2020 % of GDP Growth% of GDP Growth% of GDP Growth% of GDP Growth

17@ 3M 2016. All Rights Reserved

$3.7B 3-6%

$4.2B 5-8% $5.2B 3-6%$2.8B 4-5%

$3.1B 5-7%$1.8B 8-11%

China plan focuses on six key markets

TransportationTransportationTransportationTransportation InfrastructureInfrastructureInfrastructureInfrastructure General IndustrialGeneral IndustrialGeneral IndustrialGeneral Industrial

ElectronicsElectronicsElectronicsElectronics HealthcareHealthcareHealthcareHealthcare ConsumerConsumerConsumerConsumer

2015 a2015 a2015 a2015 addressable ddressable ddressable ddressable mmmmarket arket arket arket ssssize ize ize ize / 2015/ 2015/ 2015/ 2015----2020 m2020 m2020 m2020 market arket arket arket CAGRCAGRCAGRCAGRSource: McKinsey & Co.; 3M China analysis


Growth opportunities in China transportation industry

SafetySafetySafetySafety

3M solutions to address 3M solutions to address 3M solutions to address 3M solutions to address ddddemand emand emand emand ttttrendrendrendrend

ComfortComfortComfortComfort Lightweight MaterialsLightweight MaterialsLightweight MaterialsLightweight Materials Maintenance/RepairMaintenance/RepairMaintenance/RepairMaintenance/Repair

2015 2020e

8% - 11%

CAGR

~$500

$340

Sales $M


Major eCommerce opportunity in China

Enhancing Enhancing Enhancing Enhancing ContentContentContentContent

WinningWinningWinningWinningPlatform SearchPlatform SearchPlatform SearchPlatform Search

Marketplace & eRetailersMarketplace & eRetailersMarketplace & eRetailersMarketplace & eRetailers

Channel Channel Channel Channel transformationtransformationtransformationtransformation

2015 2020e

~$500M

$125M


South East Asia: Key growth driver

$1.0

2015 2020e

$1.3-1.5

Consumer

Auto Aftermarket

Industrial & Safety

Electronics

Healthcare

Auto OEM

Growing regionGrowing regionGrowing regionGrowing region Key market Key market Key market Key market ppppenetrationenetrationenetrationenetration

Manufacturing capabilitiesManufacturing capabilitiesManufacturing capabilitiesManufacturing capabilities

5% GDP growth

Sales $B

6% - 9%

CAGR


Penetration in priority markets

Productivity focus

Key drivers

West Europe: A must-win geography

$4.7

2015 2020e

Transportation

Energy

Industrial

Healthcare

Sustainability

Customer First

eCommerce

COGS

SG&A

$5.2-5.5Germany

growth plan

2% - 3%

CAGR

Sales $B


Agenda





PortfolioManagement



Investing in Innovation – driving efficient growth through effective commercialization

$6.3

$7.8-8.6

2015 2020e

International new product sales* ($B)

Customer Inspired Innovation

Local / regional megatrends

54 Customer Technical Centers

4% - 6%

CAGR

*Sales of products launched in the last five years


Mexico

Security

Local megatrend commercialization opportunities are significant

Significant new growth opportunities over the next five years

Japan

National

resilience

Singapore

Urban

solutions

India

Smart cities

China

Clean air

Clean water

Food safety

UK

Energy

infrastructure

Belgium

BiopharmaGermany

Lightweight

solutions

Poland

Infrastructure

Korea

Semi

conductor


Agenda





PortfolioManagement



� Focus on Lean Six Sigma

� Supply Chain Centers of Expertise (COE)

� Footprint optimization

� Realize maximum value of ERP

Driving operational excellence to fuel efficient growth

Panama Pacifico COE – Panama

Asia Pacific COE – Singapore

EMEA COE – Switzerland

22.6%22.6%22.6%22.6%

23.6%23.6%23.6%23.6%

2013201320132013 2015201520152015

International Operating Income as % Sales


Summary

� Solid track record of consistent growth and margin expansion

� Effective response to global dynamics using our playbook

� Well poised to deliver efficient growth in the next five years

� Managing portfolio by focusing on key geographies and

businesses

� Investing in Innovation through mega-trend driven

commercialization opportunities

� Focusing on people and leadership development

2016 International Operations Investor Relations v69 · 2019-11-21 · Commodity prices fall Early...

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Transcript of 2016 International Operations Investor Relations v69 · 2019-11-21 · Commodity prices fall Early...