2018 investor day...data centers •increased data loads and server speeds creating unique...

Ashish Khandpur, Ph.D.

Executive Vice President

November 15, 2018

2018 Investor Day Electronics & Energy Business Group

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Agenda: Electronics & Energy Business Group

2018 Investor Day | Nov 15, 2018

Overview

Journey so far and path forward

Platforms for growth

Summary

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2018e sales

$5.5B*

• Our customers are global leaders in the dynamic technology, automotive and energy industries

• We leverage 30 of the 46 3M core technologies to enable our customers’ next generation products

Electronics & EnergyAdvancing a connected world

Energy

$1.5BElectronics

$4.0B

*Includes partial year sales of divested communication markets buisness

Enhancing visual experiences

Enabling high-speed data processing

Improving reliability and efficiency of energy delivery

Advancing distributedpower network

Advancing the future of mobility

Advancing design and function

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Our journey

From 9 divisions to 3 ~900bps margin expansion

2018

Financial attractiveness

Str

ate

gic

att

rac

tiv

en

ess

2013

Financial attractiveness

Str

ate

gic

att

rac

tiv

en

ess

~18%

~27%

2013* 2018e

• Conducted extensive portfolio management, project prioritization, and footprint actions

• Created scale to drive efficiencies and took strategic cost actions

• Built an agile team and positioned for sustainable and profitable growth

* 2013 amount is on a different presentation basis than that of 2018; see 2018 Investor Day Appendix presentation for additional information.

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Our approach to growth

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This is what we do…

Televisions

OLED andfoldable displaysPhones

Wearables

Origins Established Emerging

Display solutions

LCD displays

Virtual realityoptics

Automotivedisplays

Head-updisplays

eMirrors

Augmentedreality

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Electronic and display materials

Segment opportunity

$25B

• Continued demand for enhanced display performance and functionalities

• 3M creating differentiated solutions for LCD displays and bringing game-changing innovation to OLED displays

• Expanding in new applications beyond displays

Display enhancement films (OLED & LCD), optically-clear adhesives, and electronics assembly solutions

Wireless power charging, EMI shielding, advanced finishing and enclosure materials for current and 5G networks

Growing 1% to 5%

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Segment opportunity

$10B

Utilities and modern grids

• Grid reliability and renewable energy adoption are driving modernization of power infrastructure

• Needs for underground asset management, real-time grid monitoring, load balancing, and fault location

• 3M innovating in easy-to-install cable connectors and sensored cable accessories for real-time asset monitoring and fault detection

Robust, easy-to-install 3M connectors

3M sensored cable accessories

3M products for underground asset monitoringGrowing 2% to 5%

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Segment opportunity

$8B

Auto electrification: focus on quality, safety and range

AutoDisplays(Human Machine Interface)

1Battery solutions

2Light-weighting and assembly solutions

3

Growing 8% to 10%

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• Demand for more information, connectivity and ‘consumer electronics like’ experiences

• Opportunity for rich and interactive displays that enhance visibility and safety

• 3M’s light-management expertise enabling glare free, evenly lit center stack displays, camera displays for rear- and side-view mirrors, and head-up displays that can span entire windshields

Center stack display, and camera displays replacing rear- and side-view mirrors

Auto electrification: capitalize on display growth

Head-up displays for smart signs and road furniture

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• Need to address EV design challenges around battery safety, efficiency, and assembly to maximize range

• 3M thermal management pads and fluids, insulation tapes, cushioning materials improve safety, life and performance of battery packs

• 3M adhesives and tapes provide bonding solutions in battery packs

Auto electrification: battery solutions

Novec™ sustainable performance fluids

Immersion cooling for EV batteries

3M battery bonding and assembly solutions

3M thermal interface and conductive materials

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• Artificial Intelligence, automation, cloud, and 5G driving semiconductor growth and wafer starts

• 3M Chemical-Mechanical Planarization solutions (pads and pad conditioners) improve wafer polishing and yield

• 3M high performance fluids are used in semiconductor in-process cleaning and preparation steps and to enable efficient heat transfer in chiller applications

Segment opportunity

$6B

Semiconductor

3M pads and pad conditioners 3M carrier and transport tapes3M high performance fluidsGrowing 5% to 8%

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Segment opportunity

$2B3M TwinAx™ interconnects for fast data transfers

Server immersion cooling with 3M performance fluids

Data centers• Increased data loads and server speeds creating unique challenges

for data centers

• Need for efficient cooling of servers, low latency, and reliable supply of power in data centers

• 3M high performance fluids for thermal management, interconnect solutions for high speed data transfer, and cable accessories to ensure reliable power supply

3M power cable accessoriesGrowing 15% to 25%

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Renewable energy

• Renewable energy continues to become a greater portion of the overall global energy mix

• 3M light redirecting films, tapes and materials enable high efficiency solar panels; 3M ultra-barrier film for flexible solar

• 3M wind protection tapes help improve turbine uptime; 3M cable accessories enable reliable power generation

Segment opportunity

$2B3M power cable accessories3M wind protection tapes protect

and improve performance3M light redirecting film improves solar cell efficiencyGrowing 5% to 10%

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Summary

Organic local-currency growth

2019 – 2023

2% to 6%• Expanding and extending our transformation journey

• Working closely with our customers, strengthening the core and accelerating expansion infast-growing segments

• Innovating for profitable and consistent growth by winning specs in long-cycle segments like automotive, semiconductor and data centers

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