h.c. shin executive vice president, industrial and transportation business

3M Investor Meeting 2006 © 3M 2006 All Rights Reserved

H.C. ShinExecutive Vice President,

Industrial And Transportation Business

Growth Through Focus on Customers


Industrial & Transportation BusinessPromise To Our Customers

Understand your needs and your business

Improve the design, quality, productivity and safety of your products and operations

Support your business locally and globally, with the resources you need to get the job done!

Provide solutions to help you succeed and be more competitive

Make ourcustomers

morecompetitive


Industrial & Transportation Business Key Financial Data

$5.1

$6.1

$1.7

$5.7

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

$7.0

2003 2004 2005 Q1 2006

$823

$1,050$1,211

$381

$0

$300

$600

$900

$1,200

$1,500

2003 2004 2005 Q1 2006

2005 Sales By Geographic Area

LAC 10%

APAC 24%

Europe 28%

U.S. 38%

Sales Operating Income

LC Growth 2.0% 16.0%7.2% 6.5% 14.0% 18.4% 19.7% 22.4%OI Margin

$Billions & YOY % Chg $Millions & YOY % Chg

+7%+11%

+8%

+12%

+28%+15%

+24%

-1%*

*2002 estimated stock options, not restated.


Q1 2006 HighlightsIndustrial And Transportation Business

Industrial and Transportation Business market/platform synergy

Strong organic growth, robust new product flow

Top 9 Opportunities identified and resourced

CUNO integration well under way

General Industrial Diamond acquisition closed

Global Automotive Market Center initiative

I&TB BRICP Entitlement Growth Plan under way

I&TB Service and Quality Revolution initiative gaining traction


Adhesives BondingTapes

ConverterMarkets

Packaging Tapes

Single SidedTapes

Industrial Adhesives And Tapes Division


Abrasive Systems Division

3 Coated Abrasive Belts

3 Cubitron™ Ceramic Grain

3 Trizact™ CF Belts

3 Fiber Discs

3 Super Abrasives

3 Scotch-Brite™Surface Conditioning


Detailing and Appearance

Painting andPaint Finishing

MechanicalRepair and

Maintenance

Body Repair

Automotive Aftermarket Division


Body StructuresInteram™

Attachment

Design

Functional Graphics

Automotive Division, Automotive Market Center


Advanced material technologies to help customers make products lighter, stronger,safer – better.

Ceramic Fibers & Additives

Unique, high performance material solutions for harsh conditions and demanding environments.

FluoropolymersCreating cleaner environments and more efficient systems, inspired by a changing world.

Filtration Solutions

Specialty Materials Division


Industrial And Transportation BusinessFour Growth Strategies

Growth through market segments programs– Transportation, Electronics, Metalworking, – Oil and gas, MRO, Building contractors, Food and Beverage

Growth through new platform– Supply chain execution, Filtration, Composite material

– Top 30 New Product Programs

Geographic penetration– China, India, Eastern Europe, Russia, Brazil (BRICP) – Developed economy

Growth by leveraging brand– Channel growth programs– I&TB Service and Quality Revolution



Growth through market segments programs– Transportation, Electronics, Metalworking,

– Oil and gas, MRO, Building contractors, Food and Beverage

Growth through new platform – Supply chain execution, Filtration, Composite material– Top 30 New Product Programs




Industrial And Transportation BusinessServing Diverse Market Segments

ElectronicsBuildingContractors

Metalworking

Food & Beverage

Paper & Packaging

Appliance &Furnishings

Maintenance& Repair

Oil and Gas

Transportation

Aerospace


Platform & Market Execution Model Focus On Market Segment And Customer Needs

Globally Managed Segments Geographically Managed Segments

TransportationMarkets

Auto OEMTiersAerospaceAftermarketMarine

Oil & Gas Food & Bev

Paper&

Print

MRO MetalWorking

App-liance

Wood-Working

CUNO ASD IATD SMD

ElectronicsDisplayAssemblyMHHSemicon

HighJumpAbrasivesSolutions

Adhesives andTape Solutions

SpecialtyMaterialsSolutions

FiltrationSolutions

Supply Chain

Solutions


Customer Process Mapping

Insulating Glass

Wood & Composites

Wood, Vinyl, & Metals

Window And Door Segment Team Activity

Glass Sheets

Optimized CutGlass

Glass Washer

Heat

Sash Attachment

Framing

Packaging

Shipping

Customer Pain Points


Single Sales Force Brings All 3M Solutions ToIndustrial And Transportation Market Centers

One face to the customersQuick Market Growth ( QMG )

Removing any internal barrierson a real time basisQuality Direct SystemIntegrated Customer CenterE-enabled front end CRM tools


CleaningFluids

Fluoropolymers for gaskets, seals, hoses

Electrical wire harness and heat-shrink protection

Hem flange bondingfor hood

3M™ Dimensional Graphics nameplate

Mirror buttonattachment

Roof ditchsealing

3M™ Fiber Graphics in

interior 3M™ Dual Lock™Fasteners in interior

3M™ Blackout Filmfor window surrounds

& Pillars

3M™ Acrylic FoamTape for weather-strip attachment

3M™ GlassBubbles for plasticweight reduction

3M™ Acrylic FoamTapes for exterior

attachment

3M™ Interam™Catalytic Converter

Mat MountThinsulate™ Acoustic

Insulation in doorFiltrete™ Cabin

Air Filter3M™ Vitrotrim™

badge 3M™ Solar Reflecting Film

3M™ Confirm™Security Labels

3M™ AdhesiveTransfer Tapes

in interior

Abrasives MaskingProducts

ProtectiveFilms

RespiratorsSorbents Floor Mats AcousticInsulation

3M™ PaintProtection Film

Fastener Adhesives

3M™ Scotchcal ™ High-Performance Graphic Films

Adhesivesin interior

3M™ Bumpon™ Protective Products in interior

3M™ LabelMaterials in interior

Vikuiti™Display

EnhancementFilms in interior

3M™DampingFoil Tape

VibrationDamping

HearingProtection

3M™ ElectricalTapes

Market Focus Is Our Go-To-Market StrategyGlobal Automotive Market Center 3M Solutions


Corrosion Management

StructuralAdhesives

Impact Protection

Electrical Connectors

Jet Blade Dove Tail Deburring

Protect from Shocks and Vibrations

Clear, Secure, Labels

AssembleSeatsRemove

Heavy Metal Gates

New Projects :- Lightening Protection - Flame Shield- Glass Bubble Filler

3M Solutions In Aircraft Manufacturing And Maintenance Industry


Refining

Gas Processing & Petrochem

Exploration &Production

Transportation Marketing

Oil and Gas Business Team represents the total3M Solutions to Oil and Gas industry

Abrasive Systems Solutions Corrosion Protection SolutionsIndustrial Tape and Adhesives Electrical ProductsOccupational Health & Safety Specialty Materials SolutionsFiltration Solutions Commercial Graphic Solutions

3M Solutions To Oil And Gas Market

3M SolutionsEntitlement:1 cent/GCurrent 3MPenetration:5 cents/G


Originating Sales Rep

Originating Manager

Country Process Owner Destination Manager

Destination Sales Rep

Draft Submit Acknowledge Transfer Acknowledge Complete

Global Business Transfer ProcessLaunched in Sept. 2003, Business retention 91% in 2005 Follow the business transfers globally




Growth through new platform – Supply chain execution, Filtration, Composite material





Strategy: Follow The Mega Trend

Expanding Urbanization

Water/Air in Danger

Threatened Safety and Security

Changing Health Care

Gender, Wealth, and Aging Population

Flattening World

The Energy Crunch


CUNO Liquid Filtration Platform,New Growth Platform


Seamless CUNO Global Integration

Global integration direction– Preserve CUNO’s business model

– 3M adds value in operational excellence & international business

Dec '05 Jan Feb Mar Apr May Jun Jul Aug

Site Re loca tio n3M Subs EmploymentSu pply Ch ain Sys. In tegrat ionBa ck Office Complete

N /A N ot A pplica ble

Taiwan Ind one siaVietn am Sri L anka

TBD

TBDTBD

Q4 '06

Conve rt ing t o Tha ila ndQ2 '0 6

H ong Kong

Kore a

Tha i la nd

Mal a ys iaPhil ippine s

Chi naIndia

J a pan

S inga pore

Aus t ral ia

APAC Milestones by Country

Robust Q1 sales growthCost/sales synergy kicking inIntegration on schedule95% mgmt. retention

Industrial Business3

9

Bringing Together Two Great Companies


High Jump Interactive Supply Chain SolutionsSmiley’s POS

Data: I just sold 1000 Cases of 3M

Masking Tapes

Information from TMS/Truck GPS: I have 300 cases

and I am in Milwaukee,WI

Factory Floor: I have 500 cases

finished by 4pm today

Information from WMS: I have 200

cases and capacity to pack

and ship

12

3

Turn right on I-90 in 13 miles and head

to Smiley’s DC

Visibility

Optimization

You will need 3 temporary workers and ship 200 cases to Smiley’s DC by

4pm tomorrow

Cross-dock your production to Smiley’s DC. Extend your

production run by 500 cases.

Wow! I did not even know I

needed these Masking Tapes

4

Connectivity


3M Composite Conductor – Energy Efficiency

2-3X gain in transmission capacityUse existing infrastructureQuick and easy solutionsProprietary 3M technology

©©3M 2005

Continuous CERAMIC Fibers Embedded in

Aluminum

Developed for Performance & Reliability

©3M 2005

3

Build new towers to carry conventional steel conductors

The traditional solution to bottlenecks:

The problem: High construction cost,

long permitting times, difficulty obtaining land, community

opposition


Addressing The Mega Trend, Construction SolutionsReinventing The Core Industrial Business

New roofing systemNew Wall protection systemHouse wrap tapesConcrete protection systemFlashing/Sealing system

MoldMildew

Illness

DamageLiabilityRemediation

MoistureIntrusion

Customer Pain Points

Window Roof Foundation


Glass Bubble for Low density cement

Fluoro-elastomer

Filter Bags

Oil And Gas, 3M Down Hole SolutionsEnhancing Productivity And Recovery




Growth through new platform – Supply chain execution, Filtration, Composite material





Industrial And Transportation BusinessBRICP Country Entitlement Growth Plan

Products that meet local market needsQuick response to customer needsSupply chain efficiencyKnowledge transferTalent management (hiring, training, retention)

Country 2004 Sales 2010 Entitlement

BrazilRussiaIndiaChinaPoland

Industrial Business3

10X Plan3 India

Critical Issues


Strategy is to position more in B & C Tierstoday

3M India 10X Plan Market AndPortfolio Strategy

3M will be in a better position to sell up and protect share as markets develop

A

B

C

India FutureIncreasing demand for quality

will drive A & B Tier growth

AB

C

India Market TodayLarge C Tier

Limited opportunity in A Tier


Strategy : Accelerate Localization AndPeople Investment

Local coating and convertingLocal raw material, local productsSupply chain simplification




Growth through new platform– Supply chain execution, Filtration, Composite material





Leverage 3M Brand : Industrial Channel Growth Plan

Leverage 3M BrandCategory managementProduct gap fillingCompetitive conversionChannel entitlement growth plan


Delivered when the customer wants.

In the right quantity and # of shipments.

With expected quality and performance.

The Right Products…..

1.

2.

Capable and aligned with the customer

On target with minimal variability and waste

Brand Leverage, I & TB Service and Quality Revolution

Target zero defect

Service as competitive advantage


Industrial And Transportation BusinessTop 9 Growth Opportunities

1. Oil and Gas Program

2. Composite Conductor Program

3. Liquid Filtration ( CUNO )

4. Paint Preparation Systems

5. Supply Chain Execution ( HighJump )

6. BRICP Entitlement Growth Plan

7. Channel Growth Plan

8. Maintenance and Repair Segment Plan

9. Top 30 Organic New Product Programs


Industrial And Transportation Business Summary

Strong core business

Excellent global reach

Sound operational discipline

Expanding to new adjacent markets

Expanding to high growth market space

Focus on growth – 5-8% near term LC growth

h.c. shin executive vice president, industrial and transportation business

Economy & Finance